Practice and procedure - Want of prosecution - Delay

Berrigan v McIver [1974] VicRp 96; [1974] VR 811

Biss v Lambeth, Southwark and Lewisham Area Health Authority [1978] 1 WLR 382

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541

Bristow Helicopters Ltd v Global Marine Drilling Co, unreported; SCt of WA; Library No 3042.1; 6 October 1980

Casauria v De Kever, unreported; SCt of Vic (Hayne J); 21 November 1994

Dzienciol v Logie Brae Pty Ltd, unreported; FCt SCt of WA; 25 February 1998; Library No 980078

Hipworth v Dowell Australia Ltd, unreported; SCt of Vic (McGarvie J); 8 February 1989

Lewandowski v Lovell (1994) 11 WAR 124

Leyburd Nominees Pty Ltd v Coates Brown, unreported; CA SCt of Vic; 12 September 1995

Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274

Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513

Sacco v Renault; unreported, SCt of Vic (O'Bryan J); 16 May 1994

Shtun v Zalejska [1996] 3 All ER 411

Tricon Industries Pty Ltd v Abel Lemon & Co Pty Ltd (No 2) [1997] QCA 376; [1998] 2 QD R 551

Tyler v Custom Credit Corp Ltd [2000] QCA 178

Witten v Lombard Australia Ltd (1968) 88 WN (Pt 1) (NSW) 405

1 MASTER BREDMEYER: This is an application by the second defendants dated 27 September 2001 to dismiss the plaintiffs' action for want of prosecution. The application is supported by an affidavit of Mr Matthew Smith sworn 26 September 2001, an affidavit of Mr Scott Crabb sworn 14 November 2001 and an affidavit of Mr David Angus Murray sworn 21 November 2001. The application is opposed by an affidavit of Mr Maurice Hickey sworn 9 November 2001.

2 Brixton Nominees Pty Ltd ("Brixton") is the trustee for the Hickey Family Trust. Mr and Mrs Hickey are business persons who, in the name of Brixton, purchased a poster business from the first defendants in 1986. Mrs Margaret Hickey died on 16 February 2000. Mr and Mrs Hardiman, who are the first defendants, sold the poster business to Brixton in 1986. They engaged solicitors to represent them in this action and they filed a defence on their behalf on 14 October 1992. They shortly afterwards sought and obtained further and better particulars of the plaintiffs' statement of claim and they in turn answered the plaintiffs' request for further and better particulars of their defence. In May 1993, they gave discovery.

3 In November 1992 the second defendant filed an indemnity/contribution notice against the first defendants on the grounds that the first defendants' negligent acts, omissions, misstatements, etcetera, contributed to, or were responsible for, any losses suffered by the plaintiffs in the purchase of the business by Brixton. In March 1993 the second defendants filed a statement of claim against the first defendants pursuant to that notice.

4 The second defendants are a national firm of accountants and it is alleged by the plaintiffs that they offered negligent advice to the plaintiffs which resulted in the purchase of the business.

5 A summary of the plaintiffs' claim against the defendants, as taken from the amended statement of claim filed on 10 March 1993, is as follows. In August 1986 a business was offered for sale through advertisement in The West Australian newspaper. It was the Daroji Poster Gallery which operated out of rented premises at Unit 3, 141 Russell Street, Morley. The advertisement stated that the business made a present net profit of $45,000 per annum and that the owner was then making a net profit of $900 per week after deduction of wages. Mr Hickey was interested in purchasing this business and made enquiries of Mr Anthony Hardiman, one of the vendors and of Mr Philip Josey, who was the real estate agent engaged by the Hardiman's to sell the business. During the course of a meeting with Messrs Hardiman and Josey, Mr Hardiman told Hickey that the business had approximately 40 agents throughout the State who distributed various products on behalf of the business. Mr Hickey was handed copies of two revenue statements, one for the six-month period ending 30 December 1985 and one for the six-month period ending 30 June 1986 ("the revenue statements") and a statement of assets and liabilities of the business as at 30 June 1986. These statements set out the sales, gross profit and net profit of the business for the two six-month periods. By combining the two together, the figures for the financial year 1985/1986 were as follows:

Total Sales $154,758.12

Gross Profit $113,221.07

Net Profit $45,559.02

Weekly Net Profit $876.00

6 The assets and liabilities statement contained a statement that as at 30 June 1986 the value of the stock of the business was $48,109.80.

7 In par 12 it stated that in or about June 1986 Mr Hickey on behalf of the plaintiffs retained the professional services of Ernst & Whinney by its servant David Angus Murray (known as Angus Murray) for the purpose of receiving advice from Murray on the suitability for purchase by the first plaintiff of various businesses then being offered for sale in the Perth Metropolitan area.

8 In par 13 it is pleaded that Hickey contacted Mr Murray about the purchase of this particular business. He told Murray that the business was being offered for sale at $53,000 plus stock at valuation. He gave Murray a brief description of the nature of the business. He requested Murray to inspect all the necessary and appropriate books of account and conduct all necessary searches to ascertain the true trading position of the business. He requested Murray to advise whether the business would generate sufficient income to fund borrowings. It was intended to borrow the whole of the purchase price. He requested Murray to recommend whether the plaintiff should purchase the business for $53,000 plus stock at valuation, or at all. All those instructions were given orally over the telephone. Murray orally agreed to carry out those instructions.

9 In about late July or early August 1986 Murray contacted Mr Hickey by telephone and stated that he had examined the books of account of the business and that, in his opinion, the income then being generated by the business was sufficient to enable the plaintiffs to meet all of its borrowing requirements.

10 A number of representations are then pleaded in par 13(d) which are said to be implied from that conversation, for example, that Murray had examined all necessary and appropriate books of account and source documents to enable him to give that opinion; that it was appropriate for the plaintiffs to offer to purchase the business for the sum of $53,000 plus stock at valuation; that the business was worth $53,000 plus stock at valuation; that it was appropriate for the plaintiffs to borrow 100 per cent of the money necessary to purchase the business and stock; and that it was appropriate for Mr and Mrs Hickey to mortgage their house at Lancelin and give personal guarantees to the bank to secure the borrowings necessary to buy the business.

11 The plaintiffs say that, in reliance upon the truth of the representations made by the first defendants and by Murray for the second defendant, they purchased the business by a contract of sale dated August 1986. They borrowed $85,645 from the National Australia Bank in order to purchase the business and stock, plus a further $25,000 on overdraft as initial operating capital. They also gave a mortgage to the bank over their home at Lancelin. They also executed a deed of guarantee indemnity in favour of the bank in the amount of $115,000.

12 It is pleaded in par 16 that the representations made inter alia by Murray were false. He failed to examine all necessary books of account and source documents of the business so that he could advise the plaintiffs properly on its purchase. He failed to take any adequate steps to check the information found in the financial statements. For example, he never saw their financial statements for the three previous years, or copies of any income tax returns, or copies of basic source books such as receipt books, payment books, bank statements, deposit books etcetera. In particular, he failed to notice discrepancies between the blue cash book and the brown stock book of the business, and the revenue statements given to him and statement of assets and liabilities. Details of those discrepancies are set out in par 16(a)(v) of the pleading:

"(a) Sales per cash book - $134,760.40,

Sales per revenue statements - $154,758.12;

(b) Wages and commissions per cash book - $2,813.99,

Wages and commissions per revenue statements - $22,811.71;

(c) Purchases per cash book - $49,146.95

Purchases per revenue statements - $68,646.95;

(d) Value of stock per assets and liabilities statement - $48,109.80;

value of stock after deducting items included in brown stock book which were not stock at 30th June 1986 - $32,959.00."

13 It is pleaded in par 16(d) that the business was not worth $53,000 plus stock at valuation. The business in fact had no goodwill and its net tangible assets were only worth $19,062, being the difference between the true worth of its assets ($48,782 represented by plant and equipment $21,765 and stock, $27,017) and its true liabilities ($29,720 represented by lease of plant $12,000 and stand deposits $17,720).

14 The defence of the second defendant of 12 October 1992 consists of a general denial. However, details of the second defendant's real case are contained in answers to interrogatories. Those answers are by an affidavit of Kimberley Stuart Wallman sworn 17 February 1994. Mr Wallman is a chartered accountant and partner of the defendant firm and, although it does not say so, I take it these answers are provided on the express instructions of Mr Angus Murray who dealt with the plaintiffs. Mr Murray was an accountant then employed by Ernst & Whinney but is now a real estate agent. Further answers are found in the affidavit of Dalton Leslie Gooding sworn 16 November 1995.

15 The answers to interrogatories state that Murray was asked to advise Mr Hickey on the purchase of the Daroji Poster Gallery. In July or early August 1986 his instructions were given orally and his advice was given orally. He advised Hickey that:

"1. The sales book appeared to support the accounts provided by the plaintiffs to Murray;

2. the accounts provided by the plaintiffs to Murray appeared to support a purchase price for the business of $45,000 plus stock at cost;

3. he had checked the sales figures in the accounts back to the sales figures in the Sales Summary Book and any checks required to prove the accuracy of the figures in the Sales Book had not been carried out, such as checks to bank statements and/or source documents;

4. the accounts checked by him were not audited and did not appear to have been prepared by accountants;

5. it was for Maurice Hickey to decide whether he felt he could run the business satisfactorily."

16 Prior to giving that advice, Murray was given the revenue statement for the six-month period ending 31 December 1985 and revenue statement for the six-month period ending 30 June 1986. He was also given two books for 1985 and 1986 which recorded sales. Copies of these statements and books remain in the possession of Ernst & Whinney and may be inspected at the offices of their solicitors, Clayton Utz.

17 He questioned Mr Hardiman in the presence of Mr Hickey about the business. Mr Hardiman told him, inter alia, that a number of agency or distribution agreements were in place; that some items were sold on consignment, particularly laminated posters which were on stands in newsagencies in country areas.

18 Mr Murray says that he was told that the first plaintiff intended to enter into loan contracts with the bank to raise 100 per cent of the money necessary to purchase the business. Murray prepared an application for finance for use by the plaintiffs to give to the bank. A copy of that has been kept and is at the office of the second defendants' solicitors.

19 Other than the documents already mentioned, Mr Murray said he did not inspect any other financial books, for example, cash receipt books, cash payment books, bank statements, bank deposit books, copies of income tax returns, details of leased equipment etcetera.

20 I return now to the history of this action. Interrogatories were administered by the plaintiffs to the first defendants. Those interrogatories attached the following documents:

"A. Sales records July 1982 - June 1986.

B. Sales records July 1982 - June 1986.

C. Price tickets.

C.[sic] 30.6.1985 Stocktake (5 pages).

D. Stocktake 30.6.1986 (4 pages).

E. Revenue statement six month period ending 31.12.85.

F. Revenue statement six month period ending 30.6.86.

G. Statement of assets and liabilities as at 30.6.86.

H. Income tax return 1986 A P Hardiman.

I. Income tax return 1986 A J Hardiman.

J. Agreement to purchase a business for $53,000 August 1986.

K. Assignment of lease of Unit 3, 141 Russell Street, Morley from the Hardimans to Brixton with Mr and Mrs Hickey as guarantors.

L. Income tax partnership return 1986 for A P & A J Hardiman trading as Beetaloo Vineyards and Ajaph Agencies.

M. A P & A J Hardiman trading as Ajaph Agencies profit and loss statement for year ending 30.6.1986."

Those interrogatories were answered by Mr Hardiman on 17 March 1994. A further brief answer to question 21 was given by Mr Hardiman in further answers to interrogatories of 27 June 1994.

21 The plaintiffs were dissatisfied with the adequacy of the answers given by the second defendant to two of the interrogatories. By a chamber summons brought in October 1995 they sought orders to compel the second defendant to provide further and better answers. Those orders were made by Master Adams on 30 October 1995 and two further answers were supplied in an affidavit of Mr Dalton Gooding sworn 16 November 1995. It is apparent from this affidavit that the source of the answers is Mr Angus Murray.

22 On 20 August 1996 Michell Sillar McPhee, who acted for Mr and Mrs Hardiman, advised by letter that they were no longer acting. They advised that they had written to Mr and Mrs Hardiman on several occasions advising that their files were ready for collection and enclosing a notice of cessation of solicitors to act, for them to sign. However they had not heard from the Hardimans. Eventually, on 10 October 1997, Michell Sillar McPhee filed a notice of ceasing to act for the Hardimans who advised that they would be representing themselves from that date and gave their address for service as being PO Box 7317, Cloisters Square, Perth 6850.

23 The affidavit of Mr Matthew Smith, already mentioned, outlines the attempts made by the second defendant's solicitors, Clayton Utz, to contact Mr Hardiman. Mr Smith is a solicitor employed by Clayton Utz. Apparently a phone call was made between an employed solicitor of that firm and Mr Hardiman on 1 December 1997, the contents of which said to be are privileged. On 1 December 1997 Clayton Utz sent a letter to Mr Hardiman, the contents of which are said to be privileged. Later attempts by the solicitor, Ms Viner, to contact Mr Hardiman were unsuccessful. She was able to leave a message on his answering machine. On 23 February 1998 Clayton Utz wrote a letter to the first defendants, the contents of which are said to be privileged. A further letter was sent to them on 10 March 1998. On 16 March 1998 Clayton Utz received a letter from the Hardimans and it is said to have been wrongly marked "without prejudice". Certain privileged matters in that letter have been removed but the balance of it is found at "MS 3" to that affidavit. It is a letter signed by Mr Tony Hardiman on behalf of himself and his wife from PO Box 259, Leederville 6903. I quote from that letter:

"May we take this opportunity to make the following points:

• Our legal advice to this point indicates we have a very strong defence - however we do not have the resources to maintain counsel.

• Our expert evidence would strengthen our defence even further.

• Our legal advice indicates that the plaintiffs' expert evidence is not at all strong.

• In the event of the plaintiffs succeeding, we as first defendants have no assets/resources to settle any judgment, but Ernst & Whinney as second defendant may be exposed to an unfavourable judgment.

• To strengthen the second defendant's position it would be desirable if the first defendants' case was strengthened as much as possible."

24 On 17 July 1998 Clayton Utz sent a letter to the first defendants, the contents of which are said to be privileged. However, the letter addressed to the Hardimans at PO Box 259, Leederville 6903, was marked "return to sender". On 23 July 1998 Ms Viner attempted to telephone the first defendants, but the number was no longer connected. On the same day she telephoned the solicitors who had previously acted for the first defendants to determine the Hardimans' current whereabouts. Those solicitors were not aware of their current whereabouts and were unable to provide another contact address. On the same date Ms Viner contacted Telstra Directory Assistance to determine whether the first defendants had changed their telephone number. She was informed by a Telstra employee that there was no current listing for the first defendants.

25 There has been no contact between Clayton Utz and the first defendants between 16 March 1998 and August 2001. A clerk in Clayton Utz conducted an electoral roll search. He could not find Anthony Paul Hardiman, but found an Anthony Hardiman of Lot 11, 5249 Basford Road, Boyup Brook, WA, 6244. He could not find any entry for Alison Joy Hardiman. Clayton Utz wrote a letter on 1 August 2000 to Mr Hardiman at the Boyup Brook address. On 3 August, Mr Matthew Smith, a solicitor with Clayton Utz, received a telephone call from Anthony Hardiman acknowledging receipt of Clayton Utz's letter of 1 August 2001 and saying that he was the first defendant in the action. During that conversation he said:

"(a) The letter dated 1 August 2001 was sent to the wrong address. He did not give the correct postal address;

(b) he did not have access to a 'landline' and was making this telephone call via a mobile telephone;

(c) he was very ill and not working; and

(d) he did not intend to respond to the solicitor's letter of 1 August 2001."

26 In about August 1995, the plaintiffs discovered the substance of their expert's report to the second defendant. It is a 12-page summary of that expert evidence. At p 1 of that summary it refers to the commission due on sales of O & K products which has been the subject of much correspondence between the parties. It is necessary to quote the reference to that matter. I quote from p 1:

"SUBSTANCE OF PLAINTIFFS' EXPERT EVIDENCE

Inaccuracy of the First Defendants' Revenue Statement for the two six month periods ending 31/12/85 and 30/06/86

The invoices and sales summaries from 'O & K' for the period from 01/07/85 to 30/06/86 indicate gross sales of O & K products for that period was $30,066. The Daroji Poster Gallery was entitled to a commission on sales in the sum of $6,481 on those sales of $30,066. The net payment due by the Daroji Poster Gallery to O & K was $30,066 less commission of $6,481 ie a total of $23,585. The net amount payable to O & K plus the Daroji Poster Gallery's commission was included as gross sales in the First Defendants' blue Cash Book and in the First Defendants' Revenue Statement for the six month period ending 31/12/85 and 30/06/86 when in fact only $6,481, being the amount due to the Daroji Poster Gallery, should have been included. This has had the effect of overstating the gross sales and gross profit of the Daroji Poster Gallery by $23,585.00 in the First Defendants' Revenue Statements for the six months' periods ended 31/12/85 and 30/06/86."

27 Clayton Utz wrote to the plaintiffs' solicitors Ilbery Barblett on 11 July 1996 and asked for a copy of the O & K Distribution Agreement. They sought discovery of it and, if not in the possession, custody or power of the plaintiffs, details of when the plaintiffs parted with it and what has become of it. A follow-up letter was sent on 8 August 1986. A detailed letter on the same topic was sent to the solicitors for the first defendants on 14 August 1996. On 20 August 1996 the solicitors for the first defendants advised that they no longer acted for Mr and Mrs Hardiman and were endeavouring to get off the record. They gave an address for the Hardimans as Lot 2902 Barrett Street, Herne Hill 6055.

28 On 13 August 1997 Clayton Utz wrote to Ilbery Barblett stating:

"We understand from discussions with Michelle Linley that your client does not now have (nor at any time has had) a copy of the Distribution Agreement for O & K Products. As you know this was a document requested in our letter of 11 July 1996. Please confirm."

29 Ilbery Barblett replied on 18 August that their client did not "currently" have the Distribution Agreement in its possession. On 7 November 1997 Clayton Utz again wrote to Ilbery Barblett for confirmation in writing that the plaintiffs had never had a copy of the Distribution Agreement for O & K Products. On 11 November 1997 Clayton Utz wrote to Mr and Mrs Hardiman at PO Box 7317 Cloisters Square, Perth 6850, for clarification of various matters relating to the O & K Products.

30 On 24 February 1998 Ilbery Barblett apologised for the delay in answering the query. They advised that they were seeking this information from the plaintiffs' expert witness who had unfortunately not yet provided the information sought. The plaintiffs advised Clayton Utz that they never had a copy of the O & K Distribution Agreement. The letter noted that the plaintiffs had not yet received a copy of the second defendants' expert report. In a letter dated 9 March 1998 Clayton Utz advised the plaintiffs' solicitors that they were unable to prepare their expert's report as they were waiting on certain information from the first defendants. On 10 March Clayton Utz wrote to Mr and Mrs Hardiman at PO Box 259, Leederville, advising that they needed certain information from the Hardimans before they could prepare their expert's report. It was that letter which produced the Hardiman's letter of 16 March 1998, part of which I have quoted above. I assume the first part of the letter, which is omitted as privileged is claimed, purports to deal with the solicitor's queries.

31 On 10 July 1998 the plaintiffs' solicitors wrote to Clayton Utz asking for the second defendants' queries on the plaintiffs' expert report to be annotated with queries raised by the second defendant. The letter also asks for a meeting with the second defendants' solicitors on a without prejudice basis.

32 On 17 July 1998 Clayton Utz replied, saying that their expert report was delayed because of missing information from the plaintiffs. In particular, the second defendants sought an explanation of the interest calculation in the summary of the plaintiffs' expert's report. They said this matter had been raised in letters of 13 August 1997, 6 October 1997 and 7 November 1997. By a letter from the plaintiffs' solicitors dated 24 February 1998 the plaintiff had referred the query to their expert and was awaiting on his reply.

33 On 5 August 1998 Ilbery Barblett answered the query about interest, and I quote:

"The further figures shown as 'add back interest and borrowing charges' of $18,188.00 refers to the total of the bank fees, interest expense and loan fees items as contained in the 1986/87 financial statements of the plaintiff prepared by the second defendant. This information is contained in the plaintiffs' discoverable document No. 130."

The solicitor's letter said they looked forward to receiving the second defendants' outline of expert evidence, as once that was received they were instructed to enter the action for trial.

34 A without prejudice meeting was held between Mr J Johnson, the solicitor for the plaintiffs and Mr S Crabb, the solicitor for the second defendants, on 27 August 1998. According to the plaintiffs' letter of 9 October 1998 this meeting ended with the second defendants' solicitor seeking to gain his clients' instructions on a proposal. No reply on this proposal had yet been received. On 14 October 1998 Clayton Utz advised that there were a number of matters which remained to be addressed before the action could be entered for trial and they would set those out in greater detail shortly. On 10 December 1998 Ilbery Barblett said they had firm instructions to enter the action for trial. On 15 December 1998 Clayton Utz wrote that there are a number of matters outstanding before the matter could be entered for trial. The principal one was the question of discovery. They considered the plaintiffs' discovery was deficient in the respects set out in an attached schedule. (The schedule is not attached in the copy I have.)

35 On 22 November 1999 the plaintiffs filed a notice of intention to proceed. In addition, in relation to Clayton Utz letter of 15 December 1998 and the schedules thereto, Ilbery Barblett enclosed informal supplementary discovery in relation to the further documents sought. They said that their client would shortly verify that on affidavit as complete: "As you will gather, there are a whole series of documents sought by the second defendant which the plaintiffs do not now, and do not believe they have in the past, had in their possession, custody or control."

36 On 17 January 2001 Clayton Utz set out their problems with the expert evidence:

"Our clients' expert has, for some time, been unable to finalise its conclusions in respect of the matters raised in this action for the following reasons:

1. a number of documents, especially the documents relating to the O & K Products agency, are critical pieces of information sought by our clients' expert;

2. your clients have failed to disclose any copies of such documentation in their discovery, apparently on the basis that all such documentation has been lost since the date on which these proceedings were commenced; and

3. while Mr and Mrs Hardiman are another potential source of this critical documentation, their current whereabouts is unknown and as such have not been contactable for some time.

This sequence of events has precluded the finalisation of our clients' expert evidence."

37 I am unable to say whether the second defendants are entitled to gain discovery of Daroji's distribution agreement with O & K Products. I do not know if such an agreement ever existed and, if it did, whether it has ever been in the hands of the plaintiffs. Their expert's report in the passage quoted does not refer to a distribution agreement. The report says, in effect, that these goods from O & K were sold on consignment and Daroji was only entitled to show as income the commission on those sales. For the year ended 30 June 1986 the commission on sales of O & K Products was $6,481 on sales of $30,066. The latter figure was shown in the revenue statements as the gross sales of this product, thus overstating the revenue by $23,585. I can see that it is important for the second defendant to examine whatever documents may be available to test these statements. I note that in the first defendants' affidavit of discovery (an affidavit of Mr Hardiman sworn 6 May 1993) item 43 reads:

Summaries of O&K Product sold by AP Hardiman during Oct, Nov, Dec 1986"

38 These documents may be relevant. I query the date. The Hardimans sold the business in August 1986, so I cannot see how they were selling this product in October, November and December 1986. I do not know if these documents have been inspected.

39 In the plaintiffs' affidavit of discovery of 5 March 1993, item 173 reads:

"Manila folder entitled 'O & K

Sales Returns and Commission'

containing various handwritten

notes O & K Imports and Exports

Pty Ltd invoices, summaries

of invoices, summaries of

deposits, commission and,

correspondence Various"

40 Those documents may be relevant. I do not know if they have been inspected.

41 In the first defendants' answers to interrogatories in the form of an affidavit sworn by Mr Hardiman on 17 March 1994, questions and answers 44 - 59 relate to products sold by Daroji Poster Gallery on behalf of O & K Imports and Exports Pty Ltd. In summary, Daroji acted as agent for O & K Imports in the period July 1985 to September 1986 and was remunerated on a commission basis, plus "some remuneration by way of margin over cost of sale" (answer 48). Commission was calculated at 22.5 per cent of the retail price. Exhibit "A" to those interrogatories was a handwritten sales summary which showed sales of O & K Products of $8,843.80 for the six months ended 31 December 1985 and sales of $21,222.69 for the six months ended 30 June 1986 - total sales of $30,066. Questions 49 - 52 ask Mr Hardiman if the figures shown in those columns represent commissions received by the business on sales of O & K Products. He answered the question, "No. Those figures represented retail sales of O & K Products." That is powerful admission evidence that those figures - purporting to be sales figures - are misleading. Those answers indicate misrepresentation on the part of Mr Hardiman. They do not necessarily indicate negligence on behalf of Mr Murray. It all depends on his retainer, on what he was asked to do. If his task was to check the revenue statements prepared by Mr Ian Horrocks - the Hardiman's accountant - against the sales book, then there is nothing on the sales book which would indicate that these figures totalling $30,066 were anything other than receipts from gross sales. If his task was to go deeper, then he may be at fault. He was told some goods were sold on consignment. Should he have asked: How were the goods sold on consignment recorded in the revenue statements? I note that the first statement to 31 December 1985 simply records "Sales $73,626.80". It does not have a second category "commissions".

42 In these circumstances, I fail to see how the second defendant can get much mileage out of the plaintiffs' failure to discover the O & K distribution agreement. It may be that the plaintiffs have never had the document and therefore are unable to discover it. It may be that their information on the commission comes from invoices, monthly reports to O & K, or from oral sources such as Mr Hardiman's answers to interrogatories.

43 The writ of summons was issued on 29 June 1992, very close to the expiration of the six-year limitation period. The action proceeded in a normal way until the end of 1994. There were 53 documents filed in court between June 1992 and October 1994. Pleadings were filed. There were requests for particulars of the statement of claim and of the two defences and in some cases requests for further and better particulars. There were requests for discovery and in January 1993 the plaintiffs took out a chamber summons seeking a springing order for discovery against the first defendant. No order was necessary as the discovery was provided late. The plaintiffs obtained leave to file an amended statement of claim. There were no strike-out applications. Interrogatories were filed by all parties and in some cases further and better answers were given to interrogatories. In October 1993 the second defendants filed and served a summons for security of costs. Affidavits were filed and the matter was heard at a contested hearing on 4 February 1994 when the application was dismissed with costs granted to the plaintiffs.

44 On 20 October 1994, the plaintiff took out a chamber summons for orders as to the exchange of expert evidence. Orders to that effect were made on 31 October 1994 by consent, giving the parties leave to adduce expert evidence at the trial of the action. Not less than 21 days from the date of that order the parties were required to serve on each other party a copy of any expert report on which it intends to rely at the trial. The plaintiffs were unable to meet that deadline and on 30 August 1995 filed a chamber summons for extension of time to adduce expert evidence. An order was made to that effect extending the time for the plaintiff to file its expert's report to 14 August 1995. The second defendant was given a further period of 56 days after that for the filing of its expert's report. The plaintiffs met that extended deadline. The second defendant did not.

45 The second defendant had a number of reasons why it did not, and has not, completed its expert's report. They are set out in par 7 of Mr Crabb's affidavit, as follows:

"(a) It took nearly 12 months (from 13 August 1997 to 5 August 1998) and a series of letters for the plaintiffs to answer second defendants' request for information on how the plaintiffs' expert had calculated interest;

(b) for a lengthy period (between July 1996 and February 1998) the second defendant had been unsuccessful in endeavouring to obtain from the plaintiffs other documentation requested by the second defendants' expert to finalise its report and, in particular, a copy of documents relating to the agency with O & K Products;

(c) the plaintiff served a supplementary list of documents undercover of its letter to Clayton Utz of 22 November 1999, that supplementary list has never been verified by affidavit;

(d) the first defendants were another potential source of missing documentation requested by the second defendants' expert to finalise its report but they have been uncontactable for lengthy periods of time; and

(e) the second defendant has been loathe to incur the expense of its experts finalising its evidence, particularly on the basis of incomplete information in circumstances in which the matter has been largely dormant for many years."

46 I have already discussed the relevance of the documents said to be missing in connection with the O & K sales. I should add that the plaintiffs' expert's report discusses four errors in the first defendants' revenue statements which are the O & K sales, agent's commission, stand deposits and incorrect opening and closing stock figures. Those same four errors are set out in the plaintiffs' answers to the first defendants' request for further and better particulars of statement of claim of 23 November 1992. The wording in some cases is almost identical.

47 The action went to sleep as at the end of 1994. It was woken up in October 1995 when the plaintiffs obtained orders against the second defendant to provide further and better answers to two interrogatories. Those answers were provided on 16 November 1995.

48 Nothing happened between that date and 11 June 1997 when the plaintiff filed a notice of intention to proceed. In October 1997 the first defendants' solicitors got off the record. In November 1999 the plaintiff filed a further notice of intention to proceed and on the same date filed a supplementary list of discoverable documents.

49 In October 2000 someone filed a notice of offer to compromise which is not on file in accordance with our practice.

50 In July 2001 the plaintiff filed a further notice of intention to proceed. The plaintiffs, in September 2001, filed a summons to remit the action to the District Court with an affidavit of Mr Hickey in support. That application was opposed because the second defendant countered with its chamber summons for dismissal of the action for want of prosecution filed on 27 September 2001, which is currently before me.

51 Mr Hickey's affidavit of 9 November 2001 sets out his explanations for the delays. He underlines the second defendants' failure to provide a summary of its expert's evidence as ordered in 1995, despite a number of letters written to it, particularly in 1998 on this topic. The second defendant countered by a letter dated 15 December 1998 setting out an extensive list of documentation which it alleged ought to be provided by way of further and better discovery.

52 Mr Hickey says that in March 1998 his wife was diagnosed as suffering from breast cancer with secondary cancer in her lymph nodes. Following that diagnosis his wife required extensive treatment, including a lumpectomy and removal of the affected lymph nodes, followed by chemotherapy and radiotherapy. She eventually died of cancer on 16 February 2000. During this two-year period his wife required extensive help in relation to day-to-day tasks, including meal preparation, self care and washing, which Mr Hickey performed. He says that during the period of his wife's illness, and due to the demands of providing for her care and the emotional distress associated with her illness, he was not in a position to deal with proceedings and particularly to provide advice to the plaintiffs' solicitors concerning efforts to negotiate a settlement. However, in November 1999 he instructed his solicitors to proceed with the action and they filed a notice of intention to proceed at that time. They also provided informal supplementary discovery in answer to the second defendant's solicitor's request. Unfortunately, he says, due to ongoing difficulties with his wife's health, he was not able to provide any further instructions until after her death. The second defendants, very fairly, do not contest that Mrs Hardiman's illness and death was a reasonable explanation for the delay during that period. In July 2000 he arranged to obtain some further expert accounting advice for the purpose of making submissions to the second defendant for a possible settlement of the action. His accountants provided this information in September 2000 and a detailed letter - I take this to be an offer - was sent to Clayton Utz on 24 October 2000. Clayton Utz responded with a without prejudice letter on 11 December 2000. On 11 January 2001 Ilberys wrote to Clayton Utz advising that they were instructed to enter the action for trial within seven days. They noted that, despite repeated requests, the second defendant had failed to serve any outline of its expert's evidence. Following that letter, a further settlement approach was received from the second defendant's solicitors in February 2001 which was not acceptable to the plaintiffs.

53 In relation to the plaintiffs' failure to provide a copy of the O & K Agency Agreement, Mr Hickey states that the Distribution Agreement was not included in the plaintiffs' list of discoverable documents and that the second defendant's solicitors were advised of that by letter dated 24 February 1998. He said that any difficulties the second defendant may have in obtaining a copy of the relevant agreement cannot be attributed to any delay in these proceedings.

54 I turn now to the law on this topic. In Birkett v James [1978] App Cas 297 at 318, Lord Diplock said:

"The power should be exercised only where the court is satisfied either (1) that the default has been intentional and contumelious, e.g., disobedience to a pre-emptory order of the court or conduct amounting to an abuse of the process of the court; (2)(a) that there has been inordinate and inexcusable delay on the part of the plaintiff or his lawyers, (b) and that such a 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 plaintiff or between each other or between them and a third party."

55 The Full Court of this State in Wan v Sweetman & Anor, unreported; FCt SCt of WA; Library No 960456; 14 August 1996 stated, per Malcolm CJ (with whom Rowland and Parker JJ agreed):

"There may well be circumstances where delay of itself may lead to an inference of prejudice. In Hughes v Gales (1995) 14 WAR 434 at 440 reference was made with approval to the observations of Bray CJ in Ulowski v Miller [1968] SASR 277 at 280 which had earlier been approved and applied in Lewandowski v Lovell (No 2) (1994) 11 WAR 124 at 133 per Murray J. In general the court considers the length of the delay, the explanation for the delay, the hardship to the plaintiff if the action is dismissed, and the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay and the conduct of the defendant in the litigation."

56 In a later judgment, Levy & Anor v Stirling Brass Founders Pty Ltd & Ors, unreported; FCt SCt of WA; Library No 970209; 9 May 1997, Malcolm CJ, Pidgeon and White JJ, in a joint judgment, referred to Hughes v Gales (1995) 14 WAR 434 and Wan v Sweetman, supra, and then quoted O 1 r 4(a) of the Rules of the Supreme Court, which provide:

"The practice, procedure and interlocutory processes of the court shall have as their goal the elimination of any lapse of time from the date of initiation of proceedings to their final determination beyond that reasonably required for interlocutory activities essential to the fair and just determination of the issues bona fide in contention between the parties and the preparation of the case for trial."

The Full Court in that joint judgment went on to say:

"In approaching this matter it is necessary to keep in mind the recent decision of the High Court in State of Queensland v JL Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 at 154 in which it was pointed out by Dawson, Gaudron and McHugh JJ that:

'Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of the court is the attainment of justice and no principle of case management can be allowed to supplant that aim.'

In our opinion, subject to the caveat mentioned in that passage, the principles of case management must be considered to apply to all matters pending in this Court, whether or not they have been expressly applied thereto."

57 The present case is a "late start case" in the sense that the action was commenced close to the expiry of the six-year limitation period. That matter was considered by Lord Diplock in Birkett v James, supra, at 322:

"It follows a fortiori from what I have already said in relation to the effect of statutes of limitation on the power of the court to dismiss actions for want of prosecution, that time elapsed before the issue of a writ within the limitation period cannot of itself constitute inordinate delay however much the defendant may already have been prejudiced by the consequent lack of early notice of the claim against him, the fading recollections of his potential witnesses, their death or their untraceability. To justify dismissal of an action for want of prosecution the delay relied on must relate to time which the plaintiff allows to lapse unnecessarily after the writ has been issued. A late start makes it the more incumbent on the plaintiff to proceed with all due speed and a pace which might have been excusable if the action had been started sooner maybe inexcusable in the light of the time that has already passed before the writ was issued."

58 The last sentence of that passage was quoted with approval by the Full Court per Steytler J, with whom Kennedy and Anderson JJ agreed, in Jakovljevic v Doslov [2000] WASCA 131 at [30] as to how the court should exercise its power to dismiss an action for lack of prosecution.

59 The passage quoted from Birkett v James, supra, at 318 has been criticised in England. In the Department of Transport v Chris Smaller (Transport) Ltd [1989] AC 1197 Lord Griffiths, with whom the other members of the House of Lords agreed, quoted at length views held in the Court of Appeal about the effect of the decision in Birkett v James, including the following:

"By far the major part of all delays stems solely from the ways in which litigation is conducted. In this connection our law needs to be changed both in substance and procedurally. The principles laid down in Birkett v James are unsatisfactory and inadequate. They are far too lenient to deal effectively with excessive delays. Moreover they then breed excessive further delays and costs in their application ... the regime of Birkett v James should be replaced by a system of rules which are much stricter, more effective and simpler to apply." (1204).

60 In that case the House of Lords rejected the invitation to revise the doctrine of Birkett v James, favouring rather "a radical overhaul of the whole civil procedural process and introduction of court controlled case management techniques ... " (1207). Lord Woolf in the House of Lords in Grovit v Doctor [1997] UKHL 13; [1997] 1 WLR 640, with whom the other Judges agreed, referred to what had happened in Department of Transport v Smaller, supra, and to the fact that there had not been any improvement in the problems caused by delay in the conduct of civil proceedings since then and he said that the introduction of the process of reform to which Lord Griffiths alluded was on the horizon. Lord Woolf stated:

"In this situation it is at least open to question whether it is not preferable to await the outcome of the implementation of the new rules before making a substantial inroad on the principles endorsed by Lord Diplock in Birkett v James."

61 The New South Wales Court of Appeal in Stollznow v Calvert [1980] 2 NSWLR 749, per Moffitt P, with whom Hope and Mahoney JJA agreed, decided not to follow Birkett v James slavishly. At 751 Moffitt P said:

"While useful guidance is provided by the manner of exercise of the discretion in other cases, and by the fact that it is considered in those cases to favour the exercise of the discretion in a particular way, each case must depend on its own facts. It would be contrary to what I understand to be the accepted law in this country, to confine the exercise of a judicial discretion by judge-made rigid formulae."

He went on to quote, with approval, the following words:

"The court's discretion should not be fettered by rigid rules but required a decision to be reached on a balance of the relevant circumstances ... Everything must depend upon the circumstances disclosed in each particular case. It is, of course, proper to consider whether any explanation or excuse has been offered for the delay, and whether any explanation or excuse that has been offered is credible and satisfactory. It is proper to consider whether or not there is evidence of particular prejudice to the opposing party by reason of the delay. When all relevant factors have been taken into account a decision is then to be reached as to the manner in which the discretionary power should be exercised."

62 Birkett v James is no longer followed in Queensland. That was decided by the Court of Appeal in Cooper v Hopgood & Ganim [1998] QCA 114; [1999] 2 Qd R 113. In that case the Full Court decided that the exercise of the Court's discretion to dismiss an action for want of prosecution should not be fettered by rigid rules but required a decision to be reached upon the balance of the relevant circumstances. The Full Court favoured the approach adopted by the Court of Appeal in New South Wales, as expressed in Stollznow v Calvert, supra. McPherson JA said, at 123 - 124:

" ... I would not be prepared to regard what was said by their Lordships in Birkett v James as laying down particular rules controlling the decision as to whether to dismiss an action for want of prosecution. The power so to dismiss is one that is confined to a judicial discretion, and, for that if no other reason, is incapable of being exhaustively defined or delimited in a detailed and binding fashion. Birkett v James suggests only some of the factors relevant in exercising the discretion, which include matters such as the duration of the time lapse involved; the cogency of any explanation for delay; the probable impact of procrastination on fading recollection, the death or disappearance of critical witnesses or records; costs already or likely in the future to be expended or thrown away; the apparent prospects of success or otherwise at a trial of the action; and the progressively growing problem of effectively viewing and determining questions of fact arising out of events that have taken place many years before. The list is not, and is not intended to be, exhaustive; and it takes no account of another factor that is often likely to be material, which is that ordinary members of the community are entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them. The psychological as well as the commercial effects of such a state of affairs ought not to be under estimated."

63 Finally, the passage from Lord Diplock in Birkett v James at 318, is not followed strictly in Victoria. See the opening words of headnote of Bishopsgate Insurance Australia Ltd (In Liq) v Deloitte Haskins & Sells (1999) 3 VR 863 quoted below. In that case, a company in litigation sued its former auditors for professional negligence. The defendant brought an application to have the action dismissed for want of prosecution. That application failed before a Master and that decision was affirmed on appeal by a single Judge. However, on appeal to the Appeal Division of the Court, the Court allowed the appeal and dismissed the action for want of prosecution. I quote from the headnote:

"1. Though not immutable or incapable of adaptation to the circumstances of the case, the principles by which a court should exercise the power to dismiss a proceeding for want of prosecution confine it to cases where:

(a) there has been intentional or contumelious default, e.g. disobedience to a pre-emptory order of the court or conduct amounting to an abuse of process of the court, or

(b) there has been inordinate and inexcusable delay on the part of the plaintiff or the plaintiff's lawyers which give rise to a substantial risk that it is not possible to have a fair trial of the issues in the action or is likely to cause or to have caused serious prejudice to the defendant.

Department of Transport v Chris Smaller (Transport) Ltd [1989] AC 1197 applied.

2. ...

3. In an application for a stay for want of prosecution based on delay, the relevant delay must be that which the plaintiff allows to lapse unnecessarily and without excuse after the proceedings have commenced. On the other hand, plaintiffs are obliged to move with greater speed if they have left the issue of proceedings until very late in the limitation period.

Birkett v James [1978] AC 297; Department of Transport v Chris Smaller (Transport) Ltd [1989] AC 1197, applied.

4. Relevant delay in an application to stay a proceeding for want of prosecution is not confined to periods of complete inactivity. It can be constituted by a failure to prosecute the action in a way which would enable the interlocutory steps to be concluded within a reasonable time.

5. Although prejudice to the defendant must be demonstrated, it need not be alleged upon affidavit if the court can infer from all the circumstances of the case that prejudice has been or will be likely to be suffered."

64 Mr Angus Murray, the accountant who advised the plaintiffs in this matter, has sworn an affidavit on 21 November 2001 in support of the second defendant's application. I quote from parts of that affidavit:

"6. From my review of the amended statement of claim and defence in this action it is apparent to me that the plaintiffs' claim is based upon the specific events of conversations between myself and [Mr Hickey] which form part of my everyday activities over 15 years ago.

7. At this point in time I cannot recall the specifics of those events or conversations and I am forced to refresh my memory or reconstruct events by relying upon documents which appear on the Ernst & Whinney file or on notes of interviews which took place in 1994 with the second defendant's solicitors. I am informed by the second defendant's legal advisers that the interview notes are privileged from disclosure and that the second defendant does not choose to waive that privilege.

8. Being forced to refresh my memory in this way is problematic for a number of reasons. First, the documents on the Ernst & Whinney file and the privileged interview notes simply do not cover all the events and the many conversations with Mr Hickey which took place in 1986 which are relevant or of potential relevance to these proceedings.

9. Secondly, in relation to the events which they do not cover, the documents on the Ernst & Whinney file in the privileged interview notes do not descend to the level of detail which I would consider to be desirable in order to answer the allegations made.

10. Additionally, in relation to events which are the subject of documents on the Ernst & Whinney file or are referred to in the privileged interview notes, with the passage of 15 years, it would be difficult for me now to say that I have any recollection of the details or specifics of relevant events which is independent of my review of those documents.

11. For obvious reasons, I am not in a position in this affidavit to identify relevant (or potentially relevant) facts which I have forgotten with the passage of time but of which I used to be aware or identified the points of which I used to be aware or identify the point or points in time in the last 15 years at which my memory became adversely affected in this fashion.

12. However, what I can say with certainty is that my recollection of events will clearly be worse now than if I had been required to give my evidence within a relatively short period of commencement of the action.

13. My memory of events and conversations with Mr Hickey which occurred in 1986 was much fresher when these proceedings commenced than it is now."

65 I note the reference in par 7 to the second defendant's solicitors claiming privilege for notes of interviews which they had with Mr Murray. I was puzzled about the basis for this claim. Counsel informed me that it was not intended that Mr Murray would not be allowed to see these notes. (I would be surprised if he was, as he is the principal witness for the second defendant.) I was told that the claim for privilege was inserted there to dissuade the plaintiffs from attempting to obtain discovery of these notes. I take it from this reference to the privileged interviews and to the lack of reference to the answers to interrogatories, that Mr Murray swore the affidavit without refreshing his memory as to what was stated in those notes and in those answers.

66 I accept in general terms that his recollection of events which occurred in 1986 has deteriorated with the passage of 15 years. However, the matters in dispute are within very small compass. There is not much to remember. According to the statement of claim, Mr Hickey phoned him and told him that the Daroji Poster Gallery was offered for sale at $53,000 plus stock at valuation. He was given a brief description of the business. He was asked to inspect the books of account, carry out necessary searches and inquiries to ascertain the true trading position of the business. He was requested to advise on whether the business would generate sufficient income to fund borrowings representing 100 per cent of the purchase price. He was asked to recommend whether the plaintiff should offer to purchase the business for $53,000 plus stock, or at all. He agreed to do those things. According to Mr Murray, he inspected the sales books for 1985 and 1986, the revenue accounts for the six-month period ended 31 December 1985 and the six-month period ended 30 June 1986 prepared by the vendor's accountant. I think it likely he also inspected the statement of assets and liabilities at 30 June 1986 also prepared by the vendor's accountant (second defendants' discovery item 47). He also held discussions with Mr Hardiman about the nature of the business. He said he reported to Mr Hickey, as follows:

1. That the sales book appeared to support the revenue statements.

2. That the revenue statements appeared to support a purchase price for the business of $45,000 plus stock at cost. He said he made no recommendation that the plaintiffs should buy the business but that if they did the accounts appeared to support a purchase price of $45,000 plus stock at cost.

3. He checked the sales figures in the revenue statements back to the sales figures in the sales books and they agreed. He had not carried out any checks to prove the accuracy of the figures in the sales book, such as by reference to bank statements and/or source documents.

4. The accounts checked by him were not audited and did not appear to have been prepared by accountants.

5. It was for Mr Hickey to decide whether he felt he could run the business satisfactorily.

67 I repeat, the factual issues in this case are within a very small compass. The first issue is what were the terms of the retainer. I have related the very brief terms of the retainer as asserted by the plaintiff. Mr Murray has to give evidence on that. The second issue is the work done by Mr Murray. The third is as to the advice given by him. It is not much for Mr Murray to remember and he has committed his recollections to paper on all three issues in his February 1994 answers to interrogatories. The plaintiffs have also pleaded a number of implied representations. Whether those representations should be implied or not is not a matter of evidence, but a matter for legal argument. The implied representations will not need to be addressed by evidence from Mr Murray.

68 Although I accept Mr Murray's general evidence that his memory has dimmed by effluxion of 15 years, I consider the case is a relatively simple one. The factual matters are within very small compass. The documents which Mr Murray saw are all available. They are all exhibited to the interrogatories. I would expect Mr Murray to give competent evidence in accordance with his answers to interrogatories on these matters.

69 I now propose to weigh up the relevant factors. I consider there has been no contumelious default by the plaintiffs. There has been no disobedience to a peremptory order of the court or conduct amounting to an abuse of process of the court. I consider, however, there has been inordinate delay on the part of the plaintiffs since the inception of this action in 1992, made worse by having made a late start and brought their action on the eve of the six-year limitation period. The plaintiffs were obliged to progress the action with greater speed than if they had commenced the action soon after the alleged negligence in 1986. The action has, in effect, gone to sleep since the end of 1994. The illness of Mrs Hickey in March 1998 and her death in February 2000 explains that two-year delay, but there is approximately three years of delay between the end of 1994 and the onset of her illness in March 1998.

70 The second defendant has been prejudiced by the delay. As stated above, the recollection of its major witness Mr Murray has diminished, although I consider he will be able to give worthwhile evidence. The answers to interrogatories will be of great assistance to him. I should think he would be unlikely to depart from them. There are no missing records. The documents he looked at are few, and are all in existence. I do not regard the missing O & K distribution agreement as of great significance. I have commented on that earlier. In addition to those comments I note that no attempts have been made to find that document from another source, or (I suspect) to inspect the invoices submitted by and to O & K Posters and/or the monthly reports sent to them, which are among the discovered documents, to see if the commission arrangements are set up in those documents. I would expect the invoices to state whether the goods were sold on consignment or not.

71 Another matter of prejudice to the second defendant is that it has apparently lost the whereabouts of the first defendants. Unless it can trace the current whereabouts of Mr Hardiman, in particular, it will be unable to call him as a witness. He is unlikely to be a particularly willing witness for the second defendant because the second defendant has issued a notice of indemnity and/or contribution against him and also has declined to provide any legal assistance to him. That latter decision is quite proper in view of the notice of indemnity and contribution issued against him. Had the case been heard much earlier, then Mr Hardiman would have been available to be called as a witness. I do not consider that he is totally untraceable. His name is on the Electoral Roll and he appears to still live in the State. He may own a property. A search of the land register could be made.

72 There is one matter which is against the second defendant's application, and that is, that, by virtue of orders made by Master Chapman on 31 October 1994 and 8 September 1985, the defendant was required to disclose in writing the substance of any expert evidence on which it intended to rely within 56 days of 14 August 1995, that is, by approximately 12 October 1995. The second defendant has not done that for a variety of reasons which I have already discussed. The proffered reason is that it was waiting for further documents and information from the plaintiffs, is, I think, without substance.

73 The order requires the defendants to produce the substance of any expert evidence on which it intends to rely. It might appear that the five or six year delay in producing this expert report suggests that the second defendant does not intend to rely on any expert evidence. However, that is not correct. It is clear from its correspondence that it does want to produce expert evidence and I suggest a major reason for the failure to produce this report is, as Mr Crabb stated, that the second defendant was loathe to incur the expense of finalising its expert evidence in this action which has been largely dormant for many years.

74 Another matter which favours the plaintiffs' opposition to this application is that the case is ready for trial, subject to the production of the second defendants' expert evidence.

75 The delays have been inordinate. The length of delay, nine years since the issue of the writ and 15 years since the cause of action arose, is exceptionable. The causes of the delay are largely at the feet of the plaintiffs. However, the second defendant has participated in that delay. It has, for the past five years, neglected to obey the orders of Master Chapman to produce its expert's report. I consider the reasons it is offered for that are not convincing. The diminution of memory of the second defendants' key witness, Mr Murray, is a factor, but in my view not a critical one. As stated, the evidence which he will give will be within small compass and can be given briefly and he has the benefit of interrogatories carefully drafted on his instructions in 1994 to assist him. As stated above, I consider his evidence is unlikely to depart from those answers. The loss of recollection will also affect equally, I consider, Mr Hickey who will be the principal witness for the plaintiffs. The two key issues in this case - the terms of the retainer and the advice offered - are the subject of telephone calls between Mr Hickey and Mr Murray. The apparent disappearance of the first defendants is a matter of prejudice to the second defendant. It would like to call Mr Hardiman as a witness. Whether called or not, findings of negligence could be made against him. In his answers to interrogatories he admits that the sales book, and hence the revenue statements which were based on it, overstates the income from the sales of O & K Products by $23,585. Mr Hardiman, in his last letter to the second defendants' solicitors claims that he is impecunious and not working. That may be so, but is not a prejudice for which the plaintiffs can be blamed. The second defendant must take its first defendant as it finds him. There is no evidence that he was particularly financial at any other time, except that up to 1997 he was able to afford a lawyer. The action is close to trial. As previously stated, all the interlocutory processes, and they have been numerous, have been gone through. 53 documents were filed up to the end of 1994. I consider the case could be argued in two days. It could be split into separate trials for liability and damages if that would save costs. Weighing up all relevant factors, I do not consider it is just to dismiss this action for want of prosecution. The action should be programmed to a speedy trial.

76 I will hear the parties on the orders and costs and on the plaintiffs' application for remission of the action to the District Court.