Procedure - Courts and judges generally - Courts - Dismissal of proceedings for want of prosecution - Relevance of impecuniosity as excuse for inordinate delay - Whether substantial risk of prejudice established.

Closer Settlement Board v Thomas [1982] Tas R 179, applied.

Masel v Transport Industries Insurance Co Ltd & Ors [1995] VicRp 59; [1995] 2 VR 328; Department of Transport v Chris Smaller (Transport) Ltd [1989] 1 AC 1197; Roebuck v Mungovin [1994] 2 AC 224; Imaging Applications Pty Ltd & Anor v Sun Alliance Australia Ltd & Ors [1999] VSC 230, referred to.

v THE ATTORNEY-GENERAL FOR THE STATE OF TASMANIA,

PHILLIP JOSEPH CHANDLER and PETER LEONARD FAIRCLOTH (No 2)

1 This is an application by the first and second named defendants to dismiss for want of prosecution the action commenced by the plaintiffs on 8 May 1990. On that date, a writ was issued by Mack Investments Pty Ltd and the second, third and fourth named plaintiffs. Both the first and the third named plaintiff companies were deregistered on 24 June 1993, but again registered in July/August 1997, the first named plaintiff changing its name to Argo Pty Ltd. The statement of claim alleges a course of tortious conduct on the part of the defendants amounting to knowing and intentional interference with the business and the contractual rights of the plaintiffs which was unlawful and without justification and which occurred between 22 May 1984 and 25 June 1985.

2 The first named plaintiff was the sole trustee of the Tatlow Family Trust and was the owner of 10 of the 20 issued units in the Natureland Unit Trust. The second named plaintiff ("Wright") was the owner of the remaining 10 units in the latter trust. The third named plaintiff ("Natureland") was trustee of that trust, while Wright and the fourth named plaintiff ("Tatlow"), were the sole directors of Natureland and the legal and beneficial owners of all the issued shares in Natureland. The Attorney-General is sued on behalf of the Government of Tasmania, the second named defendant was incorporated pursuant to the provisions of the Tasmanian Development Act 1983 and the third and fourth named defendants ("Chandler" and "Faircloth") were respectively the managing director and an officer of the second named defendant.

3 According to the Statement of Claim, as at 22 May 1984, Natureland was the holder of a mining lease in respect of 100 hectares of land at Dublin Plains in Tasmania and had applied for three further mining leases comprising another 450 hectares. On 24 June 1984, Natureland applied for a licence under the Environment Protection Act 1973 to operate scheduled premises in respect of the mining lease at Dublin Plains. Pursuant to the provisions of the Mining Act 1929 and the Environment Protection Act 1973, the mining lease and the applications for further mining leases and a licence to operate scheduled premises were capable of transfer. On 22 May 1984, by an agreement in writing, the first, second and fourth named plaintiffs agreed to sell and Dranale Pty Ltd ("Dranale") agreed to purchase the total issued units in the Natureland Unit Trust and the shares in Natureland for the sum of $3,000,000. The following day, Tatlow, on behalf of the plaintiffs, advised the Government of Tasmania by telephone call to one Andrew Tilt (who was then head of the Premier's Office), of the terms and effect of the agreement with Dranale. On 24 May 1984, Tatlow, on behalf of the plaintiffs, advised the Tasmanian Development Authority ("TDA") and Chandler by telephone of the terms and effect of the agreement. From about 26 June 1984 until and beyond 11 July 1984, there were negotiations between the plaintiffs and Dranale in respect of the terms and conditions of an extension or variation of their agreement. It is alleged in par17 of the Statement of Claim that on or about 11 and 12 July 1984, the TDA, by letters signed by Chandler, directed and encouraged the Director of Mines and the Acting Director of the Department of the Environment to withhold the issue of any licences to Natureland. This is said to be conduct which was a knowing and intentional interference by them with the contractual rights of the plaintiffs and was unlawful and without justification. The particulars given of it are that the TDA and Chandler knew of the Dranale contract and having formed the view that the Government should share in any capital gain which might arise from the transfer of the mining lease and the other applications, intended to interfere with the performance of the Dranale contract. Alternatively, it is alleged that this conduct amounted to a deliberate and unlawful interference by them with the plaintiffs' business with the same object. The Statement of Claim goes on to assert that on 24 July 1984, the TDA, by letter signed by Chandler addressed to the then Premier, advised that the plaintiffs had been informed that the issue of licences was a matter for the Minister for Mines and the Department of Mines and that the government should consider the transferability of "peat mining licences" and the share of any capital gain which might arise from the sale of a project between Tatlow and Wright and the government. On about 27 July 1984, Chandler wrote again to the Premier advising that he had met with certain directors of Dranale on 24 July 1984, that they were "serious investors", that they had made an error in judgment in commencing negotiations with Wright and Tatlow without consultation with the government and that they would be prepared to pay the government significant royalties, either in a lump sum or on a per annum basis. On 31 July 1984, the Premier asked the TDA to prepare a draft Cabinet submission canvassing policy matters raised in the proposed sale of leases taken out by Natureland to Dranale and that those policy matters should include the transferability of peat mining licences and the sharing by the government of any windfall gain. It is alleged that the government withheld the issue of a mining licence in respect of the application concerning 200 hectares of land at Borriedale Plains and restricted the Director of Environmental Control from issuing licences to allow mining operations to commence there and at Dublin Plains until about 25 March 1985. Mala fides are alleged against the government in respect of the withholding of the leases and licence. In the latter part of 1984, it is alleged that the TDA, in an under-hand way, provided finance to Dranale for the purposes of preparing a business plan in respect of the mining of Tasmanian sphagnum peat resources. In January 1985, it is alleged that Faircloth, the fourth named defendant, attended a meeting with representatives of Dranale, who advised him that while the development of peat moss as an industry was only marginally viable, development of a sphagnum moss industry was potentially profitable. This information, it is claimed, was deliberately withheld from Natureland. On 24 January 1985, it is claimed that the TDA provided the plaintiffs with a copy of a report prepared by TDA and Dranale which stated that the mining and export of peat moss as an industry was only marginally viable, but did not refer to the potential profitability of the export of sphagnum moss and on the basis of that report, the TDA and the third and fourth named defendants recommended to the plaintiffs that they sell their interests to Dranale for a mere $20,000. On about 27 February 1985, the TDA and its two officers, knowing that the plaintiffs had been advised that all lease applications would be reviewed by the government if the full development proposal it had called for from Natureland was not submitted to the government by the following day, and without having passed on the information in their possession as to the profitability of sphagnum moss, purported to arbitrate between Dranale and the plaintiffs at a meeting which resulted in heads of agreement being concluded between Natureland and Dranale for the sale by Natureland of all its interests in the leases and applications referred to above for the sum of $160,000, together with agreed royalty payments. The plaintiffs accordingly claimed the loss of $2,840,000 in respect of the reduced purchase price, aggravated and exemplary damages and interest and other relief.

4 Following the issue of the writ, there was an exchange of pleadings in which the defendants joined issue with the substance of the plaintiffs' claims, and requests for further particulars were made. On 12 June 1990, the plaintiffs requested discovery from the first and second named defendants and served a notice to that effect the following day. The Director of Public Prosecutions ("DPP") who had entered an appearance for those two defendants, by letter of 21 June 1990 requested more time to make discovery and repeated such a request by telephone on 10 July 1990. A chronology of the progress of the matter thereafter is as follows:

Letter from the plaintiffs' solicitors to the DPP asking when discovery would be made.

Plaintiffs' solicitors filed an application to the Court seeking an order for discovery by the first and second named defendants.

By consent, the Master ordered discovery within 14 days.

A list of documents, 69 pages long, was signed by the DPP.

An affidavit verifying the list was sworn and filed in the Court.

The first and second named defendants having claimed privilege in respect of some of the documents, the plaintiffs' solicitors asked the DPP to identify the documents for which privilege was claimed and the basis for the claim of privilege. They foreshadowed an application for further and better discovery.

The plaintiffs applied to the Court for an order striking out the defence because of the alleged failure of the first and second named defendants to comply with the order of 13 September 1990 (sic).

The DPP identified the claims of privilege in respect of the documents.

The plaintiffs' application of 26 October 1990 was adjourned sine die.

The plaintiffs made application for orders against the first and second named defendants, filing affidavits as to the existence of certain documents (it is unclear what happened in respect of this application - no order appears to have been made).

The DPP, by letter, invited the plaintiffs' solicitors to inspect the documents, the subject of discovery.

The plaintiffs' solicitors sought inspection of the documents. It appears that the DPP had been away on leave for some of the intervening time. The documents were inspected by the plaintiffs' solicitors either in March 1991 or July 1991. It is not clear which, but the documentation was voluminous and copies were not made available of many of the documents which the plaintiffs considered ought to be made available to them.

The plaintiffs' solicitors advised the Australian Legal Aid Office that a challenge was to be made to the first and second named defendants' claim for privilege and sought funding in respect of that challenge.

The plaintiffs' solicitors, by letter, reminded the Australian Legal Aid Office of the request for aid.

The DPP, by letter, expressed concern about the plaintiffs' ability to meet any costs which they might be ordered to pay and foreshadowed the possibility of an application for security for costs.

Legal aid was granted by the Legal Aid Commission for the plaintiffs' solicitors to obtain counsel's advice on the merits of the action. The cost of obtaining advice was limited to the sum of $2,880.

The DPP advised the plaintiffs' solicitors of the deregistration of the first and third named plaintiff companies. He sought advice as to the status of the litigation and indicated that, failing a response within seven days, he would apply to the Court seeking orders against the first and third named defendants consequent upon their deregistration and against the other two plaintiffs for security for costs.

The plaintiffs' solicitors told the DPP that they had only recently received a grant of legal aid and affirmed the plaintiffs' intention to continue with the action. They indicated that they would need copies of the defendants' documents and said they would forward a list of those required within the next few days.

The plaintiffs' solicitors sent to the DPP a list of the documents which they said they required.

Reminder letter from the plaintiffs' solicitors to the DPP.

The DPP, by letter, advised the plaintiffs' solicitors to the following effect:

"I take it that the list of documents which you require are those detailed when we undertook the initial step of discovery in June/July 1991. If this is so then the copies of those documents have been made and I have them in this office available to you on payment of the appropriate cost associated therewith. The total number of photocopies is 1,239 at 60 cents a page totalling $743.40. On receipt of your cheque for this amount I will make the copy documents available."

The plaintiffs' solicitors demanded copies of the documents.

"Is your client in a position to meet the cost of this copying because I will certainly not be forwarding to you any copy documents without first receiving funds from your client for the copying."

The plaintiffs' solicitors made a plea to the Legal Aid Commission for additional funds to cover the cost of the documents which had been copied by the DPP.

The Legal Aid Commission agreed to pay for the copies.

The DPP was advised that the Legal Aid Commission was prepared to pay for the copies and requested their delivery. However, no tender of the cost was made or offered.

The plaintiffs' solicitors filed an application in the Court for an order that the first and second named defendants provide copies of the document. A copy of the application was sent by a letter dated 2 February 1995 (sic) to the DPP, but the evidence is silent as to what then happened and no order appears to have been made.

The DPP, in a letter to the plaintiffs' solicitors, identified documents available for inspection and said they would be available upon payment of $759.50.

The plaintiffs' solicitors sent a cheque for $759.50 to the DPP. Some time between that date and 12 January 1996 when Mr Estcourt of counsel engaged by the plaintiffs appears to have had them in his possession, they were provided by the DPP.

Mr Estcourt advised the plaintiffs' solicitors that he estimated his fees for giving an up-to-date review of the merits of the case and examining all the relevant documentation in the sum of $4,000.

The plaintiffs' solicitors wrote to the Legal Aid Commission sending a copy of Mr Estcourt's letter and seeking urgent advice as to whether aid was extended to procure Mr Estcourt's advice.

The Director of Legal Aid advised the plaintiffs' solicitors that aid in the sum of $4,000 would be granted to permit a proper canvassing of the issues by Mr Estcourt.

5 As between the parties, the matter has not progressed past the point at which the DPP, in late 1995, made available to the plaintiffs' solicitors the documents other than those for which he claimed privilege. In consequence of the withdrawal of legal aid, the plaintiffs' solicitors did not act any further in the prosecution of the case in the absence of proper arrangement about their fees; but in December 1996, at their suggestion, Tatlow approached the Melbourne firm of Slater and Gordon with the proposition that they undertake the carriage of the proceedings on a "no win no fee" basis. Thereafter the following has occurred:

Slater and Gordon, by letter, declined to accept instructions because of the fact that they did not have an office in Tasmania.

The plaintiffs retained Slater and Gordon for the limited purpose of opposing a mooted application by the DPP to have the case struck out for want of prosecution and for the purpose of further investigating the matter as a potential "no win no fee" case.

Slater and Gordon advised that they had formed the preliminary view that the action had merit. The deregistered companies were restored to the Register by 6 August 1997.

Slater and Gordon confirmed to the plaintiffs their view that the case had merit. Negotiations followed as to the basis of the retainer.

Agreement was reached with Slater and Gordon that they would act on "a partially funded and partially 'no win no fee' basis". From the cross-examination of Tatlow, it appears that the arrangement is that the plaintiffs are to meet all out-of-pocket expenses, including counsel's fees, irrespective of the ultimate result, but solicitors' fees are contingent upon the action succeeding. Tatlow paid them $2,000 in about February 1997 and a further $8,000 in September 1997. He appeared resigned to the prospect that this would not be sufficient to meet out-of-pocket expenses prior to the conclusion of the proceedings and that he would have to find further funds in an unspecified amount.

Abetz Curtis and Worsley were instructed to act as agents for Slater and Gordon.

After several months' disputation involving correspondence with the Law Society of Tasmania and the Supreme Court Registry as to whether Abetz Curtis and Worsley could be noted as solicitors on the record as agents of Slater and Gordon, the former firm filed a notice of change of solicitors, nominating themselves as solicitors on the record without any reference to being agents for Slater and Gordon.

An application was filed by the plaintiffs' solicitors seeking leave to take a further proceeding in the action, namely to make an application for directions pursuant to the Rules of the Supreme Court 1965, O32A, and seeking an order that the first named plaintiff's name be changed to Argo Pty Ltd.

6 The plaintiffs' claim involves allegations of deliberate and fraudulent conduct by government, its agencies and servants. Tatlow's affidavit concludes with his deposing to a belief that "the statement of claim discloses a good cause of action in negligence against the defendants for interference with contractual rights and/or relations; breach of fiduciary duty; conspiracy; interference with trade or business by unlawful means and breach of duty of confidence". The circumstances giving rise to the action occurred in a 13 month period over 15 years ago and the action itself was not commenced until more than five years had elapsed from the end of that period. The DPP has placed before the Court evidence that Chandler died in 1994; that Mr Tilt (the head of the Premier's Department at the relevant time) now lives in Surfers Paradise and has no connection with the State Government; that in July 1984 the Director of Mines was Hugh Mackie (who retired in about 1989 and is believed to live in Queensland); that in July 1984 the Acting Director of the Department of the Environment was Brian Healey (who is retired and is believed to live in Hobart); that the Minister for the Environment in July 1984 was Geoff Davis (who has retired and lives in Queensland); and that Jim Rickard, a person mentioned in the particulars as an agent of the first named defendant, died in the early 1990s. The DPP also deposed to an inability to obtain information as to the whereabouts of a number of persons associated with Dranale, namely Dorothy Auyeung, Ray Conyngham, Glenn Thiess and John Miedeche, none of them now holding any office with Dranale, which has now been renamed. On the other hand, Tatlow filed an answering affidavit in which he deposed to having found the addresses of Messrs Tilt, Murchie (not Mackie), Healey, Davis and Thiess and verified them by direct telephone call. He also indicated the whereabouts of Mr Miedecke (not Miedeche). I find that all these potential witnesses can be located, although four of them live in Queensland or New South Wales. The whereabouts of the other two persons connected with the management of Dranale, viz Dorothy Auyeung and Ray Conyngham, are not presently known.

7 An application of this kind calls for the exercise of a discretion. The considerations by which the exercise of that discretion should be guided were referred to in Masel v Transport Industries Insurance Co Ltd & Ors [1995] VicRp 59; [1995] 2 VR 328 in the judgment of Brooking, Teague and Hedigan JJ where, at 332, they said:

"Despite the body of authority that has grown up since the middle of the 1960s on the considerations by reference to which a court should exercise its inherent discretionary power to dismiss proceedings that have not been reasonably prosecuted, and despite the recognition by the courts of guidelines which might be mistaken for rigid rules, there has been no departure from the fundamental principle which informs the exercise of the discretion, stated long ago by O'Bryan J as a member of the Full Court in Shepperdson v Lewis [1966] VicRp 59; [1966] VR 418 at 419:

'The guiding principle for the exercise of such a discretion may be stated broadly in terms that an order for dismissal will be made if the justice of the occasion demands it ... '

His Honour went on to observe that relevant considerations included the length of the delay, whether a credible and excusable explanation had been given for the delay and what prejudice to the defendant, if any, had arisen or might arise as a result of the delay. In the same case Smith J at 423 said that the judge's discretion must be exercised judicially upon the facts of the particular case after weighing all relevant considerations and that it was not permissible for the courts to fetter the discretion by laying down rules which must be observed in its exercise. At 425 his Honour posed as the question for a primary judge whether justice required that the action should be dismissed. Shepperdson v Lewis in fact concerned an order made under a rule of court empowering the court to dismiss an action for want of prosecution if notice of trial was not promptly given, but the statements of principle in it have always been regarded as applicable also to the inherent jurisdiction to dismiss for want of prosecution."

In Department of Transport v Chris Smaller (Transport) Ltd [1989] 1 AC 1197, Lord Griffiths said, at 1203:

"The power should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, eg disobedience to a peremptory order of the court or conduct amounting to an abuse of the process of the court; or (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, and (b) that such delay will give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is such as is likely to cause or to have caused serious prejudice to the defendants, either as between themselves and the plaintiffs, or between each other, or between them and a third party."

These principles have been accepted by the Supreme Court of Victoria in Bishopsgate Insurance Australia Ltd v Deloitte Haskins and Sells (unreported, Full Court, 9 September 1994), Masel v Transport Industries Insurance Co Ltd & Ors (supra) at 332 and Sacco v Renault (Wholesale) Pty Ltd (unreported, Victorian Court of Appeal, 8 September 1995).

8 The plaintiffs concede that this case has been attended by inordinate delay, but contend that it is excusable. They concede that pre-writ delay is relevant in that it compels them to proceed with expedition in the prosecution of their claim (Bishopsgate Insurance Australia Ltd v Deloitte Haskins and Sells (supra); Sacco v Renault (Wholesale) Pty Ltd (supra) and see also Closer Settlement Board v Thomas [1982] Tas R 179 at 183.

9 In my view, the delay in this matter is not only inordinate but also inexcusable. The corporate plaintiffs were never in possession of adequate resources to fund the institution of the proceedings and on the evidence, neither was the plaintiff Wright. The plaintiff Tatlow seems to have been the prime mover in instructing the plaintiffs' previous solicitors to issue the writ, but it is clear from his cross-examination that when he did so, he made no arrangement with them for the payment of their fees, or for putting them in funds to meet any necessary out-of-pocket expenses. At no time did he pay them any moneys for this purpose. After about eight months, by which time the pleadings had been exchanged and a list of documents had been delivered by the first and second named defendants, an application was made to the Law Society of Tasmania and/or the Australian Legal Aid Office for legal aid. Eventually the application was processed by the Legal Aid Commission and aid was granted on a piecemeal basis commencing in July 1993. Between at the latest July 1991, when the plaintiffs inspected the first and second named defendants' documents, and late 1995, when, on tender of the cost of reproducing them they obtained copies thereof, the plaintiffs' action bogged down completely. The plaintiffs' solicitors wrote numerous letters demanding production of the documents and threatening proceedings which challenged the claims for privilege, but the legitimate demand for payment of the cost of reproduction was not met, nor was a challenge in respect of privilege undertaken. Tatlow claims that the reason for this inability to advance the proceedings at all was the impecuniosity of all of the plaintiffs. In his own case, however, the evidence shows that he was in receipt of a gross income of $32,720 in 1992, of $37,427 in 1993, of $21,993 in 1994 and of over $35,000 in 1995. In 1994, Tatlow and his wife purchased a house jointly for $295,000, subject to a mortgage of $167,000 and in the same year they travelled overseas to Prague, seeking to establish an Amway dealership there, at a cost of $13,000. I do not accept that he was unable to find the $800 or so necessary to obtain copies of the documents held by the DPP. I find that he was not prepared to invest any funds towards advancing the litigation, notwithstanding an ability to meet at least some of the necessary expenses. I do not doubt that he did not have the immediate ability to produce all the funds his solicitors would like to have had as security for their costs and out-of-pockets, but I infer from their level of activity in seeking to persuade the DPP to release copies of the documents without tender of the latter's expenses and to procure a continuation of legal aid that they were prepared to carry on with the proceedings, notwithstanding the absence of funds or security for them. Clearly they were not prepared to meet out-of-pocket expenses and when legal aid was ultimately refused, were not prepared to take any further part in the prosecution of the plaintiffs' claim; but I have no doubt that Tatlow had the ability to produce sufficient funds to retain their services in preparing the case for trial.

10 While it is true that a plaintiff should not be penalised in the prosecution of his case by his impecuniosity and that the policy of the courts is not to require an impecunious natural person to lodge security for costs merely because he may not have the ability to meet an adverse costs order (Cowell v Taylor (1886) 31 Ch D 34), impecuniosity alone could rarely be, in my view, an excuse for a plaintiff's failure to advance a case which he knew all along he could not afford and was not prepared to advance in person. In Tatlow's case, however, I find that he could have produced the necessary out-of-pocket expenses which his solicitors required and were not prepared to meet themselves. Furthermore, I am not satisfied that had he made full disclosure of his resources to the legal aid authorities, assistance, taking into account what he could afford to contribute, would not have been granted. In Imaging Applications Pty Ltd & Anor v Sun Alliance Australia Ltd & Ors [1999] VSC 230, an unreported judgment delivered in the Supreme Court of Victoria on 24 June 1999, Hedigan J made the following observations about the relevance of impecuniosity, at pars43 - 44:

"43 ... In Donovan & Anor v ANZ Bank & Ors (unreported, 24 September 1985) Nicholson, J (then of this Court) took the view that there was no case that declared impecuniosity might not be an excuse for delay, and was not prepared to take the view that delays brought about by it (in this case coupled with the bureaucratic requirements of the Legal Aid Commission) should be regarded as inexcusable. There are cases to the contrary of that proposition. It would appear that Master Evans thought that Duncan v Lowenthal [1969] VicRp 21; [1969] VR 180 (at 185-186) supported impecuniosity as a relevant issue in determining whether a credible excuse existed for inordinate delay. Although, in my view, Duncan v Lowenthal is not an authority in the authority in support of the proposition advanced by the plaintiff, it is to be doubted that it positively rejects impecuniosity as a legitimate element in the consideration of excusability. Clearly enough Beach, J in Country and Urban Real Estate v Nucleus Mining (unreported, 13 March 1998) thought that impecuniosity was not an excuse for a plaintiff's inaction to take steps to bring the proceedings to trial, making a similar finding in another case of Tsolakkis Nominees Pty Ltd v Low & Duff Developments Ltd (20 March 1998). In A & S Oayda Investments Pty Ltd v Burns Philp Trustee Company Co Ltd (In Liq) (unreported, 22 August 1997), Emmett, J of the Federal Court when considering this in another context, stated: 'The only excuse provided is impecuniosity. The excuse is credible but I query whether it is in fact an excuse for the delay.'

44 The difficulty with respect to the reasonable disposition of litigation, the orderly and economic dispatch by courts of their business, of permitting protracted delay as a consequence of impecuniosity of plaintiff litigants as an excuse is self-evident. It is another matter to say that impecuniosity could never be a relevant factor in determining whether a delay in the prosecution of litigation is excusable. It would rarely be a stand-alone ground. Since the principle underwriting the exercise of the discretion to strike out is the attainment of justice in the circumstances, and the needs of the particular case, it would be an unacceptable view to conclude that impecuniosity could never be a ground, perhaps, even standing alone, and even more dubious to state that it could not be taken into account in conjunction with other reasons for delay. In this case, in my judgment, I need go no further than to take the view that the impecuniosity of the plaintiffs, in my view established on the material, is a relevant matter to take into account in conjunction with other features raised by the affidavits. As a general principle, I would regard it as being a rare case in which impecuniosity, standing alone, could amount to a reasonable excuse for the failure to prosecute a proceeding. In a legal-aid denuded legal world, one in which the cost to plaintiffs of maintaining litigation has become prohibitive, serious delays could thus always be explained away. I take the view that impecuniosity is a matter appropriate to be considered, in conjunction with other matters, here raised, in determining whether the delay in the progression of this litigation is excusable."

I respectfully adopt what he said. In all the circumstances of this case the financial position of the plaintiffs individually or collectively does not constitute an excuse for the inordinate delay which has attended these proceedings.

11 The crucial question in my mind is whether it is a reasonable inference that the plaintiffs' delay is likely to cause or has caused serious prejudice to the defendants. More recently than the Chris Smaller (Transport) Ltd case (supra), Lord Browne-Wilkinson, in a speech concurred in by the other members of the House of Lords, said in Roebuck v Mungovin [1994] 2 AC 224 at 230:

"My Lords, in Birkett v James [1978] AC 297 this House held that a judge has a discretionary power to strike out an action for want of prosecution if two preconditions are satisfied, viz (1) that the plaintiff has been guilty of inordinate and inexcusable delay and (2) that such delay gives rise to a substantial risk that it is not possible to have a fair trial or is likely to cause or to have caused serious prejudice to the defendant."

While in my view the first condition has been met, I am not persuaded that the second one has been.

12 Among the allegations of fact as to which evidence of conversations is likely to be led are the following.

* Paragraph 14 of the Statement of Claim alleges a telephone conversation on 23 May 1984 between Tatlow and Andrew Tilt of the Premier's Department in which he advised of the terms and effects of the agreement of Wright, Natureland and Tatlow with Dranale. The call is admitted by the first named defendant, but the rest of the allegation is denied. As I have said, the evidence suggests that Mr Tilt is living in Queensland and could be called. There is no evidence as to the state of his recollection.

* Paragraph 15 alleges a similar conversation with Chandler the next day. The first named defendant states that he is unable to plead to the allegation. The call is admitted by the second named defendant, but the rest of the allegation is denied and the same plea was relied on by the third named defendant, Chandler, in his defence delivered in June 1990, some four years before his death. There is no evidence whether he made any documentary record of it or whether any one else was present when he took the call. Particulars of each of these paragraphs are as follows:

"5 Under Paragraph 14 of the Statement of Claim

(a) It is not alleged that the fourth named plaintiff claimed when he spoke to Mr Tilt that he was acting on behalf of the plaintiffs. It was well known to the Government through its dealings with the second and fourth named plaintiffs in relation to the grant made by the Department of Industrial Development and in relation to the various applications to the Department of Mines and the Department of the Environment that the second and fourth named plaintiffs were directors and shareholders of the third named plaintiff and the Government ought to have known that the fourth named plaintiffs interest in the third named plaintiff involved or may involve a family company if it did not in fact know. Such involvement on the part of the first named plaintiff was known to the inaugural chairman of the second named defendant Mr J A Rickard.

(b) The fourth named plaintiff advised Mr Tilt that an agreement had been entered into with a company known as Dranale Pty Ltd for the sale of the interests of Natureland of Tasmania Pty Ltd in its mining lease and applications to Dranale Pty Ltd for $3,000,000.00.

(c) Mr Tilt was the holder of the position known as 'Head of the Premiers Office'. Mr Tilt took the telephone call from the fourth named plaintiff after the fourth named plaintiff had asked to speak to the Premier. Mr Tilt told the fourth named plaintiff that the Premier was interstate and that he would advise him of the subject matter of the call immediately upon his return. Mr Tilt subsequently did so advise the Premier.

(a) It is not alleged that the fourth named plaintiff claimed when he spoke to the third named defendant that he was acting on behalf of the Plaintiffs. The fourth named plaintiff had the actual authority of the plaintiffs to act generally in relation to dealings with the second named defendant.

It was well known to the second named defendant through its dealings with the second and fourth named plaintiffs in relation to the grant made by the Department of Industrial Development and in relation to the development of the peat mining industry in Tasmania that the second and fourth named plaintiffs were directors and shareholders of the third named plaintiff and that the third named plaintiff held and or had applied for mining leases and a licence from the Department of the Environment.

The inaugural Chairman of the second named defendant Mr J A Rickard knew that the fourth named plaintiff was the managing director of the first named plaintiff and that the first named plaintiff was interested in the affairs of the third named plaintiff.

(b) The fourth named plaintiff advised the third named defendant that an agreement had been entered into with a company known as Dranale Pty Ltd for the sale of the interests of Natureland of Tasmania Pty Ltd in is mining lease and applications to Dranale Pty Ltd for $3,000,000.00.

(c) The third named defendant was the Managing Director of the second named defendant."

The defendants complain that as Mr Rickard died "in the early 1990s", the state of knowledge attributed to him cannot be refuted and they have the same complaint in respect of Chandler.

* Paragraph 16 alleges negotiations between the plaintiffs and representatives of Dranale. It appears that the whereabouts of two of the persons named as representatives of Dranale, namely Mr Thiess and Mr Miedeche are known, but that they have not been approached by the defendants in order to locate the other two, namely Dorothy Auyeung and Ray Conyngham. Particulars delivered under this paragraph indicate that most of the negotiations were conducted or recorded in writing which is identified.

* Paragraph 17 alleges that by letters signed in July 1984, Chandler directed and encouraged the Director of Mines (Hugh Mackie or Murchie) and the Acting Director of the Department of the Environment (Brian Healey) to withhold the issue of any licences to Natureland.

* Paragraph 18 alleges that that conduct was a knowing and intentional interference by TDA and Chandler with the contractual rights of the plaintiffs.

As to these last two paragraphs, it is clear that the plaintiffs are relying on the contents of certain letters and not on oral communications to establish the intentions of the writer (who is now deceased) and the result upon the minds of the recipients, the whereabouts of both of whom are known. The state of mind attributed to Chandler and through him the TDA was that they had formed a view that the government should share in any capital gain which might arise out of the grant of the licences to Natureland. Similar allegations are made later in the statement of claim as to the knowledge and intentions of the government, TDA and Chandler and as to a conspiracy to harm the plaintiffs in respect of which Chandler's evidence, if available, would undoubtedly be material. Nevertheless, the impression I obtain from a perusal of the pleadings and the particulars supplied is that the states of mind alleged are to be proved by way of inference from existing documents rather than from admissions made by any agent of the government or the TDA and that in consequence, the absence of express evidence from Mr Rickard or Chandler refuting the drawing of such inferences is not likely to be unduly prejudicial to the defendants given that the fact that their having died is common ground.

13 In Closer Settlement Board v Thomas (supra), a soldier settler was in dispute with the Board which claimed from him arrears of rent. In a separate action brought by him, he alleged negligent misrepresentation by government agents in respect of the anticipated income of the farm and that the Board had fixed the rent too high contrary to a relevant statutory provision. The Full Court declined to interfere with the primary judge's decision not to dismiss the soldier settler's case for want of prosecution. Some of the comments of Nettlefold J are of relevance to the present case. At 193 - 194 he said:

"A serious defect in the appellant's case is that it is not persuasive on the question of prejudice. A consideration of the pleadings and the evidence creates the impression that the likelihood is that there is sufficient documentary material in the possession of or available to the defendant to lay an adequate foundation for a brief to counsel. No doubt opinion evidence will be necessary but the impression one gets, after considering the issues, is that those expert opinions are available or can be obtained. One gets the impression that the critical matters relate to the nature, size and potential of the property and the respondent's management of it. Presumably, the appellant's knowledge, opinions and advice concerning these matters are the subject of adequate records.

If these impressions are incorrect the appellant should have given sufficient information to dispel them. The appellant is not an ordinary litigant but a government instrumentality which owed duties to the respondent, a soldier settler. It was not sufficient for it merely to confine itself to generalities. The mere circumstance that people have died who had knowledge of the matters in issue does not show that the defence case cannot be put to the court adequately. Their knowledge may be the subject of an admissible record or be possessed by others. It does not appear that anyone was prepared to pledge his oath to the precise extent or nature of any alleged prejudice. That was left to inference on materials which do not compel the drawing of that inference."

14 In the present case, likewise, I think the defendants cannot confine themselves to generalities. This is not a case where fraudulent behaviour is alleged against public officers for personal gain. Were that so, a lack of documentation might be expected; but although the alleged behaviour is reprehensible, it does not seem to have been motivated by anything other than over-zealousness for the interests of government and there does not appear to have been any occasion to be surreptitious in the making and maintaining of factual records on the part of the relevant actors. Furthermore, any tribunal of fact assessing the claims would be guided by the principles laid down in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361 - 362 and could be expected to take account of the inability of the defendants to produce direct proof from persons who are no longer alive. As to fading recollection, this phenomenon is no less likely to affect the plaintiffs as the defendants and their respective witnesses.

15 There is, of course, a general prejudice to all parties due to the length of time which would expire before this matter can be brought to trial. The effect of delay of this kind on the likelihood of procuring a fair trial is adverted to by McHugh J in Brisbane South Regional Health Authority v Taylor (1996 - [1996] HCA 25; 1997) 186 CLR 541 at 550 ff, but the court in that case was considering the justice of granting an extension of time within which to revive a cause of action which had, by virtue of a limitation statute, prima facie been put to rest. Somewhat different considerations apply where an action duly commenced within time (albeit even on the death knock) is sought to be struck out without a hearing on the merits. The contrast between the two situations is shown in this passage at 555:

"If the action had been brought within time, it would have been irrelevant that, by reason of the delay in commencing the action, Dr Chang might have had little independent recollection of his conversation with the applicant and that the defendant might have had difficulty in fairly defending itself. But once the potential liability of the defendant had ended, its capacity to obtain a fair trial, if an extension of time were granted, was relevant and important. To subject a defendant once again to a potential liability that has expired may often be a lesser evil than to deprive the plaintiff of the right to reinstate the lost action."

While acknowledging, therefore, that delay is likely to have an effect on the quality of justice, non-specific prejudice to a defendant due to delay has less weight in an application to strike out for want of prosecution than in resisting an application to extend time to commence proceedings prima facie barred.

16 In all the circumstances I am not persuaded that the delay for which the plaintiffs are responsible will give rise to a substantial risk that a fair trial cannot be held or that it has otherwise resulted or is likely to result in serious prejudice to the defendants. The application is dismissed.