A James Pty Ltd v Douglas & Ors; Douglas, Daly & Bottger v. A James Pty Ltd & Ors [1990] QSC 19

10 20 30 40 50 60 IN THE SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION BEFORE MR. JUSTICE AMBROSE BRISBANE, 23 FEBRUARY 1990 No. 3749 of 1983 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of theChief Court Reporter,court Reporting Bureau.) 10 BETWEEN: Plaintiff A. JAMES PTY. LTD. -and- 20 WILLIAM LEONARD DOUGLAS, PETER JOSEPH DALY and RAYMOND JOHN BOTTGER (Trading under the firm name of Douglas Daly Bottger) First Defendant -and- J.P. CORDUKES PTY. LTD. -and- WILLIAM LEONARD DOUGLAS, PETER JOSEPH DALY\ and RAYMOND JOHN BOTTGER (Trading under the firm Second Defendant name of Douglas Daly Bottger) Plaintiffs -and- A. JAMES PTY.LTD. -and- PHILLIP STUART CHURVEN and DAVID BENJAMIN SMITH JUDGMENT First Defendant Second Defendant HIS HONOUR: I dismiss the action and I publish my reasons. I order the plaintiff to pay the defendant's costs of and incidental to the application to be taxed. -Govt. Printer, Qld. .r.. - 't 0 ;(-- .,_ 30 40 50 60 -- 1 of 19 -- IN THE SUPREME COURT OF QUEENSLAND BETWEEN: BETWEEN: No. 3749 of 1983 A. JAMES PTY. LTD. WILLIAM LEONARD DOUGLAS, PETER JOSEPH DALY and RAYMOND JOHN BOTTGER trading under the firm name of DOUGLAS DALY BOTTGER Plaintiff First Defendant J.P. CORDUKES PTY. LTD. Second Defendant - and - WILLIAM LEONARD DOUGLAS, PETER JOSEPH DALY and RAYMOND JOHN BOTTGER trading under the firm name of DOUGLAS DALY BOTTGER A. JAMES PTY. LTD. Plaintiffs First Defendant PHILIP STUART CHURVEN and DAVID BENJAMIN SMITH Second Defendants REASONS FOR JUDGMENT - AMBROSE J. Delivered the Twenty-third day of February, 1990. Counsel: Mr. R.C. Morton for Plaintiff Mr. R.R. Douglas, Q.C. and Mr. B. O'Donnell for Defendant Solicitors: Messrs. Churvan & Co. for Plaintiff Messrs. Thynne & Macartney for Defendant Hearing date: 2nd February, 1990. -- 2 of 19 -- IN THE SUPREME COURT OF QUEENSLAND BETWEEN: BETWEEN: No. 3749 of 1983 A. JAMES PTY. LTD. WILLIAM LEONARD DOUGLAS, PETER JOSEPH DALY and RAYMOND JOHN BOTTGER trading under the firm name of DOUGLAS DALY BOTTGER Plaintiff First Defendant J.P. CORDUKES PTY. LTD. Second Defendant - and - WILLIAM LEONARD DOUGLAS, PETER JOSEPH DALY and RAYMOND JOHN BOTTGER trading under the firm name of DOUGLAS DALY BOTTGER A. JAMES PTY. LTD. Plaintiffs First Defendant PHILIP STUART CHURVEN and DAVID BENJAMIN SMITH Second Defendants REASONS FOR JUDGMENT - AMBROSE J. Delivered the Twenty-third day of February, 1990. -- 3 of 19 -- 2 This is an application by a plaintiff under RSC 0. 90 r. 9 for leave to take a fresh proceeding in the action because more than three years has elapsed since the last proceeding was taken. The writ of summons was issued on 10th August, 1983. In paras. 7 and 8 of the statement of claim delivered on 25th October, 1983 the following facts, inter alia, are alleged:- (a) the plaintiff and the first defendants ("the defendants") .entered into a contract in about September 1981 whereunder the defendants agreed to prepare plans, specifications etc. for the construction of a residential home unit complex on a block of land on the slope of a hill having a frontage to Benjamin Street, Toowoomba. (~) one of the terms of the contract was that the defendants would design the complex in such a way that certain units at the rear of the complex would be sufficiently elevated on the hill slope to be above the other buildings at the front of the complex - lower down the hill presumably - to enable extensive views of Toowoomba to be enjoyed by the buildings at the rear. (c) that the buildings at the rear of the complex - presumably on the highest part of the land would be so designed that a retaining wall behind them would not exceed two metres in height. (d) that the defendants would supervise the construction of the complex and administer the building contract so that practical completion should occur not later than 13th August, 1982. -- 4 of 19 -- 3 Paragraph 32 of the statement of claim provides particulars of the breach of duty in contract and tort alleged against the defendants. It is unnecessary to set them out. It suffices to say that they allege breaches involving the design and the supervision of persons involved in design work and failure to have the land surveyed and to inspect the land properly before preparing the design. There is no allegation in the statement of claims as far as I can discover which asserts as an alleged breach of contract that the defendants failed properly or adequately to supervise the construction of the residential complex in accord with the design in fact provided by them. The statement of claim is a long one and for the purpose of this application it is unnecessary I think for me to refer in more detail to the allegations contained in it. The defendants delivered a defence on 23rd November, 1983 denying generally allegations (b) and (c) (supra) made against them and they also counterclaimed for non-payment of some of the fees allegedly owing to them for services they provided to the plaintiff. After close of pleadings interlocutory steps proceeded at a very leisurely pace. In January 1984 the defendants delivered a notice requiring discovery upon oath and three months later delivered their affidavit of documents. The plaintiff failed to make discovery and eventually in September 1984 the defendants threatened to make an application to the court if discovery was not made forthwith. Eventually in February 1985 the defendants did make application for an order for discovery and the plaintiff -- 5 of 19 -- 4 delivered an affidavit of documents a couple of days before the return date of the summons. Eventually after much toing and froing the solicitor for the plaintiff attended upon the solici tars for the defendant to inspect the defendant's documents in January 1986. Throughout the first half of 1986 correspondence passed between the solicitors for the plaintiff and the solicitors for the defendant concerning the obtaining of copies of discovered documents etc. Towards the end of June 1986 copies of various of the plaintiff's documents were delivered to the solicitors for the first defendants. No step was taken by the plaintiff in the action involving the solicitors for the defendant subsequent to the delivery of the copies of those documents on 25th June, 1986. The last proceedings taken by the plaintiff was the filing of a supplementary affidavit of documents on 18 April, 1986. In about August 1989 the solicitor for the plaintiff mentioned to one of the solicitors for the defendant that the plaintiff was contemplating proceeding with the action. This was confirmed in writing on 15 November, 1989 - three months after the solicitors for the defendant had sought an intimation of the plaintiff's intentions in this regard and the summons seeking leave to proceed was eventually filed in this court on 8th December, 1989. It came on for hearing on 2nd February, 1990. The only matter offered as an explanation for the delay in the letter from the plaintiff's solicitor dated 15th November, 1989 was an assertion that "quantification of damages is yet to be finalised". This "explanation" is also developed in the affidavit of the solicitor for the plaintiff filed in support of this application. It is -- 6 of 19 -- 5 also asserted that the plaintiff has also been occupied in litigation with other persons arising out of the construction of the home unit complex in issue. The authorities are clear that the question which I must determine upon this application is whether the applicant has shown that there is good reason for making an order extending time. One must keep in mind that the rules impose a general prohibition on a plaintiff proceeding with his action if he has not taken any proceedings upon it for a period of three years. There is an onus on such a plaintiff to show that there is good reason for making the order sought. While it is undoubtedly correct that there is no obligation upon a plaintiff to show that there was a reasonable excuse for the delay before he may obtain the order sought it is also correct in my view that the absence of reasonable excuse is certainly one of the matters to be taken into account in determining whether as a matter of indulgence discretion ought be exercised to except the particular action in question from the general prohibition which 0. 90 r. 9 imposes. I refer only to Wilson v. Bynon (1984) 2 Qd. R. 83. On behalf of the applicant in this case it was conceded that there were two issues to be considered - prejudice, if any, to which the defendant would be subjected should the plaintiff now be permitted to continue with its action and secondly, that on the material, the plaintiff had a case strongly supported by certain documents - plans and a pictorial representation drawn shortly after the making of the alleged contract. Indeed the solicitor for the plaintiff who had the carriage of the action was also the agent of the plaintiff apparently who -- 7 of 19 -- 6 negotiated the contract containing the alleged terms denied by the defendants. He gave evidence by leave upon the application contradicting affidavit evidence filed on behalf of the defendants denying the existence of terms in the oral contract of the sort alleged by the plaintiff in its statement of claim. Now it is clear that on an application of this sort it is not appropriate to determine allegations of fact put in issue by the pleadings for the purpose of determining how discretion under O. 90 r. 9 ought be exercised. What the evidence of the solicitor for the plaintiff did establish however is that there will be very significant conflict between him at least and perhaps a real estate agent retained by the plaintiff and between the defendants as to the terms of the oral contract in issue on the pleadings. It emerges clearly from the affidavit of two of the defendants that their unaided recollection of the details of discussions and events which surrounded the making of the contract under which they were retained to design the complex and supervise its construction has been significantly dimmed over the years that have passed since they were retained in 1981 by the plaintiffs. For reasons which are set out at some length in the affidavits filed to demonstrate prejudice two of the defendants at least assert that they will be severely constrained in the giving of evidence by reason of the passage of time. Both defendants were available for cross examination on this point but counsel for the plaintiff having indicated that the plaintiff did not accept that the defendants were prejudiced and required them -- 8 of 19 -- 7 for cross examination elected not to cross examine them when they were made available for cross examination. In considering this application I adopt with respect the approach of Williams J. in Appleby v. Smith & Ors. in Action No. 3084 of 1976 delivered on 19th April, 1983 where at p. 10 of his unreported judgment he observed:- "In determining whether or not the applicant has established such 'good reason' the length of the delay, the reason for the delay, possible prejudice tothe defendant in consequence of the delay and the merits of the plaintiff's claim are relevant considerations. Such matters must be considered together; it is not appropriate to consider any one or more of those factors in isolation and assess how it affects the exercise of discretion." His Honour pointed out in that case that while more often than not relevant prejudice to a defendant relates to his capability to conduct his defence effectively upon trial after a lengthy delay prejudice was not limited to such considerations. He adopted the approach of Lush J. in Bourke v. Keeskes (1967) V.R. 894 at 897-8 and of Kaye J. in Berrigan v. Mciver (1974) V.R. 811 at p. 815-6. In those cases it was observed that prejudice includes the hazard of being kept at risk in respect of the subject matter for an unreasonably long time. A defendant has an interest in the reasonably prompt determination of his position and the fact that a defendant has already been kept at risk for a long time is relevant to the exercise of a discretion to subject him once more to that risk by relieving the plaintiff of the prohibition imposed upon him by O. 90 r. 9 by reason of his delay. As Kaye J. observed in Berrigan v. Mciver:- "Any hardship to the defendant flowing from the nature of the action and the relief claimed against her are -- 9 of 19 -- 8 proper factors to be taken into account in comparing the prejudice which the plaintiffs will suffer in being denied trial of their action and the prejudice already experienced by the defendant by reason of the delay." It is asserted in the letter from the solicitors for the defendant to the solicitors for the plaintiff dated 23rd August, 1989 that they were surprised to learn from the plaintiff's solicitor that the plaintiff intended to proceed with the action not having taken any proceedings in it for well over three years. It emerges from the affidavits relating to prejudice filed on behalf of the defendants that they have already spent a good deal of time initially in the preparation of their defence and that this affected their capacity to practice their profession. It is clear that if the plaintiff obtains leave to pro9eed they will have to go through the whole matter again and their practice will again be the subject of the inevitable imposition of once more attempting to prepare for trial by recalling matters of detail that occurred nearly nine years ago. In considering the plaintiff's application I have come to the conclusion that firstly no acceptable explanation for delay has been given. Secondly, I am persuaded upon the uncontradicted evidence of two of the defendants that there will be a degree of prejudice to them at this stage gearing up once more to be in a position to give evidence as to the .terms of the oral contract made so long ago. Thirdly, I am also satisfied upon the uncontradicted evidence of the defendants that they have been "at risk" for many years while the plaintiff's action has been pending against -- 10 of 19 -- 9 them and that this has had a deleterious effect upon them and upon their business. It is nothing to the point in my view that statements may have been taken many years ago as to the terms of the oral contract nor is it to the point that at this stage the defendants have even the clearest recollection as to the "effect of" what was agreed. The difficulties of recollection of elderly gentlemen who must rely to a significant extent upon the content of statements taken from them many years ago to give persuasive oral evidence is a matter which I take into account. I turn then to the second point which was argued vigorously on behalf of the plaintiff that reference to plans etc. contained in the material and tendered (exs. 1, 2 and 3 upon the hearing of the application) showed that the plaintiff's allegations in the statement of claim were supported by those documents which were prepared if not contemporaneously with the making of the alleged contract then certainly shortly after it was made. The plaintiff tendered these documents and referred to another cross sectional elevation plan prepared by the defendants described as Job 861 Drawing S2 and dated April 1981. This plan, which appears to have been prepared five months before the making of the contract in the terms alleged in the plaintiff's statement of claim, makes it almost unarguable in my view that there would be a very significant impediment of the views of the rear units occasioned by the roof of the units near the road frontage in Benjamin Street. On my evaluation of this - document upon which so much reliance was placed by the plaintiff -- 11 of 19 -- 10 it is clear that somebody would when standing up at a window in one of the units in issue have views towards Benjamin Street and over that street presumably towards parts of Toowoomba very significantly obscured. The same appears clearly from ex. 3 tendered on behalf of the plaintiff. It seems apparent that there would be distant views above the roof level of the unit buildings closest to Benjamin Street but there is no evidence as to what such views might be. It would be clearly impossible on any view of the plans and represeptational drawing placed before me to contend that anybody in the rear units would have a view of any part of Benjamin Street over the roof line of units near that street. Looking at the plans it seems equally clear that any person looking out what windows were contained at the rear o,f .. the units in issue ( they were designed so that the main entrance and lounge room looked away from Benjamin Street rather than towards it) would have a view through a window the sill of which perhaps was about level with the roof line of the block of units on Benjamin Street designed to be constructed in such a fashion that the highest part of the units facing Benjamin Street would be about 15 metres removed from the windows giving a view towards those units. This emerges clearly from a plan drawn in September 1981 described as Job 861 Drawing WD7B. This plan also was tendered by the plaintiffs and is ex. 3. The plan on its face was signed by one of the directors of the plaintiff and by one of the defendants. Exhibit 3 has marked upon it plainly the floor level of the unit blocks facing Benjamin Street and the floor level of the units at the rear of the block which the plaintiff alleges ought -- 12 of 19 -- 11 to have views over that roof. The plan certainly demonstrates that the "battered bank" proposed for the front entrance of the units at the rear of the block was to be less than the crib wall height shown in ex. 1. It is interesting to note however that much of the crib wall shown in ex. 1 seems to be level with or not much higher than the eaves of the roof of the rear units and the height of the bank which was to be battered shown in ex. 3 also seems to be approximately the height of the eaves of the building shown on that drawing. There is no issue between the plaintiff and the defendant that amendments to the initial plans were made. The issue is whether they were made with the consent of the plaintiff or without such consent. This is a matter which no doubt if it must be determined upon trial will depend upon the recollection of the various parties as to discussions and. agreements, if any, reached at an early stage in the development of this project in issue - probably in September or October 1981. Upon the application I asked counsel for the plaintiff whether or not there were any approved building plans showing amendments and so on but for whatever reason the only plan that was tendered was ex. 3 which bears the interesting endorsement upon it "this is one of the documents referred to in the contract signed by us and dated 6th January, 1982". No explanation was offered as to whether that date referred to the date of another contract (perhaps variation) or the date merely when ex. 3 was signed by a director of the plaintiff and one of the defendants. The plan in issue bears date September 1981 and -- 13 of 19 -- 12 an amendment endorsed upon it is stated to have been made on 10th October, 1981. Put shortly therefore it is my view that all the plans and indeed the representational drawing prepared for the selling agent (ex. 2) make it quite clear that the front units would significantly obstruct the view of units towards the back of the block. They would, it is absolutely plain, obstruct completely the view of Benjamin Street. There is nothing from the contour plans that indicates that any feasible design of residential apartments of the sort contemplate could conceivably have permitted the units at the rear of the block to have a view over the roof of those nearest Benjamin Street of that street itself. What does emerge however, from the exhibits and the plans in particular, is that if one were to stand on the floor of the units to the rear of the block about which the plaintiff complains and look through the windows at the rear of those units towards Benjamin Street eye level would be above the roofs of the units closest to Benjamin Street. One would have an unobstructed view over the top of those units of whatever part of Toowoomba could be observed. I must say it seems to me that what is demonstrated on the plans tendered by the plaintiff and upon which so much reliance was placed on its behalf is that in fact the design of the complex as shown on the plans did provide the rear units with a view of Toowoomba over Benjamin Street which was obstructed only by the top of the roof of the units closest to Benjamin Street and on my examination of ex. 3 the top of that roof would be a -- 14 of 19 -- 13 metre or thereabouts lower than the eye level of a person standing at a window and looking through it. Similarly when one looks at the representational drawing which is ex. 2 it is perfectly clear from that drawing which was prepared apparently by the defendants for the selling agent for the plaintiff so that the units might be sold off the plan as they were being constructed, that there is a high wall between the rear units and the rear boundary of the lot - that furthest from the Benjamin Street front boundary - which comes to about the height of the eaves of the roof of that building. When one looks at ex. 1 which is a photo of a steeply battered bank on the rear boundary of the allotment one sees that there is constructed on or near it a concrete crib wall the top of which is roughly level with the eaves of the roof of the building units. The crib wall is not of uniform height. Part of it seems to be below the level of the eaves and part of it slightly above. I keep in mind that the representational drawing to which I have referred was really only prepared to assist in the sale of the units and no doubt there was a degree of artistic license involved in its preparation. However what is clear is that on any view of it it demonstrates that what was proposed with respect to the rear unit blocks was a high wall between the main entry and the rear boundary of the block which came to about eaves level of the building and also a very significant obstruction of the view of those units from their rear towards Benjamin Street. is ex. "A" to The relevant plan prepared in April 1981 which the affidavit of Mr. Douglas sworn on 1 st -- 15 of 19 -- 14 February, 1990 indicates in the clearest possible terms the extent of the view that occupants of unit 19 at the rear of the proposed complex would .have over unit 8 on the Benjamin Street frontage. When these matters were debated upon the hearing of the application I was informed that the plaintiff proposed, if granted leave to proceed, to seek leave to make further amendments to the statement of claim to allege in the alternative to the particulars of negligence and breach of contract already pleaded further particulars involving a failure on the part of the defendants to properly supervise the construction of the complex to ensure that in fact when it was completed the rear units would have views of the sort that might be obtained if the complex were constructed in conformity with the elevation drawing prepared in April 1981 to which I have referred. I have already indicated that there is no assertion in the statement of claim delivered in October 1983 of any such failure or breach of duty on the part of the defendants. Indeed there has never been as far as the material indicates any such assertion made until the hearing of this application on 2nd February, 1990. Nowhere does it appear in the material that the complex was in fact constructed otherwise than in accord with the elevation plan which is contained in ex. 3. That elevation plan shows that the ground floor of the Benjamin Street frontage units was on RL 15 and the floor of the units behind them was on RL 21. If it be assumed that the views over Toowoomba from the rear -- 16 of 19 -- 1 5 units in fact constructed were less "panoramic" than they would have been had the units been constructed according to what was indicated in the elevation plan of April 1981 or the elevation plan prepared in September 1981 and amended in October 1981 then of course it would be open to the plaintiff to argue that the units had not been constructed strictly in accordance with those elevation plans and that therefore the defendants were in breach of their obligation to properly supervise the construction of the complex. To my mind such a case is completely different from the one that was mounted in 1983. The pleadings are quite silent on this matter and one can anticipate I expect that if there were departures from the plans of the sort suggested upon the application the plans would have to be amended and no doubt approved by Toowoomba City Council. If an application had been made to amend the statement of claim in the way it is now proposed to do before the plaintiff's action was affected by the operation of 0. 90 r. 9 then provided the application was made so as not to interfere with the preparation for the hearing of the trial one might expect that leave would be granted under RSC 0. 32 particularly keeping in mind O. 32 r. 1 ( 2) and ( 5). It could be argued I suppose on behalf of the plaintiff that para. 8E of the statement of claim sufficiently pleads a contractual duty to properly supervise the construction of the complex in accordance with the plans and specifications and that the only omission in the statement of claim is to plead that there was a breach of that obligation and to provide particulars of that breach. -- 17 of 19 -- 16 Whether or not an amendment to the statement of claim of the sort proposed would strictly involve "adding a new cause of action" it seems that it would certainly raise issues quite different from those issues appearing in the statement of claim as it presently stands. Keeping in mind the matters I have raised both with respect to what emerges from a consideration of the plans etc. and the proposal intimated by the plaintiff of an intention to seek leave to amend to raise new issues against the defendant, the plaintiff has failed to persuade me that the merits of its claim are such as to lend much support to the contention that good reason exists for accepting this plaintiff's action from the general prohibition to which it is subjected by 0. 90 r. 9. On my reading of it Wilson v. Bynon (1984) Qd. R. 83 was such a case where no prejudice whatever could be shown and the plaintiff's claim was a passenger's "quantum only" claim. In my view the plaintiff derives no assistance from that case. I take into account the length of delay, the absence of any credible explanation or excuse for it, the prejudice already suffered by the defendants and the further prejudice that will be suffered by them if the case now proceeds, the merits of the plaintiff's claim and the intention of the plaintiff if leave to proceed is granted to seek an amendment of its statement of claim to raise new issues quite different from and only peripherally related to the issues raised so far by the plaintiff and considering all these matters I hold that the applicant plaintiff has not persuaded me that there exists a good reason for excepting this action from the general -- 18 of 19 -- 17 prohibition imposed by O. 90 r. 9. application. I therefore refuse the I order that the plaintiff pay to the defendants their costs of and incidental to the application to be taxed. -- 19 of 19 --