Cummings & Anor v Davis & Anor [2001] QCA 293

SUPREME COURT OF QUEENSLAND

CITATION: Cummings & Anor v Davis & Anor [2001] QCA 293

PARTIES: ALLAN JAMES CUMMINGS and LYNN MARI CUMMINGS / (plaintiffs/appellants) / v / PETER J DAVIS and BRIAN T EGAN / (defendants/respondents)

FILE NO/S: Appeal No 5783 of 2000 / SC No 2099 of 1994

DIVISION: Court of Appeal

PROCEEDING: General Civil Appeal

ORIGINATING COURT: Supreme Court at Brisbane

DELIVERED ON: 27 July 2001

DELIVERED AT: Brisbane

HEARING DATE: 18 May 2001

JUDGES: McMurdo P, Thomas JA, Helman J / Separate reasons for judgment of each member of the Court; McMurdo P and Helman J concurring as to the orders made, Thomas JA dissenting.

ORDER: Appeal allowed with costs. Set aside the order of 7 June 2000, and order that the respondents’ application be dismissed with costs.

CATCHWORDS: PROCEDURE – COURTS AND JUDGES GENERALLY – COURTS – DISMISSAL OF PROCEEDINGS FOR WANT OF PROSECUTION – PRINCIPLES APPLICABLE – RELEVANT CONSIDERATIONS – whether primary judge erred in dismissing appellants’ proceeding in negligence against respondents for want of prosecution – where significant delays in proceedings on part of both parties – where respondents had not complied with rules of court – where dismissal of proceeding permanently denied appellants the opportunity to pursue their claim / Gronow v Gronow (1979) 144 CLR 513, applied / House v The King (1936) 55 CLR 499, considered / Mace v Murray (1955) 92 CLR 370, considered / Quinlan v Rothwell & Anor [2001] QCA 176; Appeal No 8426 of 2000, 11 May 2001, considered

COUNSEL: AJ Morris QC for appellants / GA Thompson SC for respondents

SOLICITORS: Saunders Downing for appellants / Minter Ellison for respondents

McMURDO P: I agree with the reasons for judgment of Helman J, and with the orders he proposes.

THOMAS JA: This is an appeal against a decision of Chesterman J who dismissed the appellants’ action for want of prosecution. The action was against the appellants’ former solicitors for damages for professional negligence. The relevant events occurred in the latter part of 1988.

The circumstances giving rise to the claim are not particularly complicated, but the question of liability depends upon the instructions that were given or not given by the appellants, the extent to which they were prepared to compromise to ensure the settlement of their transaction, and the reasonableness or otherwise of the solicitors’ response to such instructions as were given.

Helman J has set out details concerning the procedural steps which occurred after the appellants commenced proceedings in 1994. I shall not repeat those details. It will suffice for me to indicate the main matters which lead me to the view that the decision at first instance was not affected by material error, and was within the range of the discretion which it fell to his Honour to exercise.

The main factors are these:

The primary issue in the litigation will probably be decided substantially on oral recollection of events now more than 12 years old. So far as is known there are no conclusive or virtually conclusive documents or contemporary records that will provide a reliable basis for necessary findings.

There has been a substantial loss of parts of the relevant file formerly kept by the respondent’s solicitors. The appellant has had the file for a considerable time, but has not seen fit to provide evidence as to how substantial these losses are, or as to what remains.

The respondents, on 26 March 1999, requested access to the relevant files, but that request has gone unanswered. Even more surprising to my mind is the failure of the appellants to produce the files or at least provide some evidence of their contents in the context of an application to strike out the action when the question of prejudice was very much in issue.

The appellants’ action is nowhere near ready for trial. In this respect the case may be contrasted with that of Quinlan v Rothwell & Anor¹ where the plaintiff was virtually ready for trial when the defendant applied to strike out the action. This was regarded as a relevant factor against exercising the discretion to strike out. Indeed none of the four factors that I have so far mentioned as supporting the order striking out the action were present in Quinlan.

The inference of prejudice, or more accurately, the difficulty of thinking that a fair trial can now be had, is quite strong in this case. The probable absence of relevant documents, the apparent conflict in relation to oral instructions and the fading of memories over a 12 year period cannot be disregarded. Further evidence suggests difficulty on other issues such as damages, in that it is likely that the financiers have destroyed their files after 7 years.

The fact that the appellants were not currently in default under any particular rule of court is not a pre‑requisite to a striking‑out. Counsel for the appellants pointed out that the only currently relevant default under the rules was that of the respondents in that they had not delivered a defence pending a response from the appellants to their request for perusal of what remains of the original file. In a practical sense however his Honour was entitled to take the view that the delay after 26 March 1999 was primarily the result of the appellants’ inactivity. They simply failed to respond to the respondents’ request for perusal of the relevant files before delivery of defence. His Honour considered that this inactivity was further evidence of a lack of commitment on their part to the proper prosecution of the action. The criticism of his Honour’s statement that the appellants were responsible for the further delay after delivery of the amended statement of claim is not justified on the substance of the matter. His Honour was well aware of the formal default of the respondents under the rules but was addressing the real basis of the delay which his Honour regarded as continued inactivity following a sensible suggestion.

There is no reason to think that his Honour overlooked the fact that the limitation period has now expired, or take into account the consequences of the order for dismissal. Indeed his Honour expressly noted that the action was commenced on the last day before the limitation period expired. This is the second application that the respondents have brought to strike out the action. I do not think that the respondents’ decision not to proceed with the first such application on 9 March 1999 should be held against them on the present application. There are many reasons why such a course may have seemed appropriate at that time. The respondents may well have been prepared to give the appellants one last chance to show a serious intention to prosecute the proceedings in a reasonable manner. In the event the appellants showed no such intention.

It is apparent that the question whether this action should be dismissed for want of prosecution is a matter upon which different minds might reach different conclusions, although, as I see it, the factors favouring dismissal tend to outweigh those in favour of letting the proceedings continue. However that may be, I find it impossible to say that the matter did not lie within the range of a sound discretionary decision by the learned judge of first instance. It is important that this court does not in effect deal with such matters de novo when an appeal is brought.

Applying the principles recognised in Gronow,² I can find no wrong principle acted on by his Honour, no extraneous or irrelevant matters, no mistake as to the facts, no oversight of a material consideration, and neither do I infer that the result is plainly unjust. There is nothing unjust in terminating the right to litigate when a party is responsible for such delay that a fair trial is no longer possible. Accordingly, I do not think that this court should interfere in the matter.

Order

The appeal should be dismissed with costs.

HELMAN J: On 7 June 2000, on the application of the respondents, the learned primary judge ordered that a proceeding begun in 1994 by the appellants against the respondents be dismissed for want of prosecution. In doing so his Honour was exercising the inherent jurisdiction of the court without resort to any of the Uniform Civil Procedure Rules 1999. The appellants’ claim against the respondents was that they, as solicitors practising in partnership under the firm name Peter J. Davis & Associates, had been negligent in carrying out work for the appellants in connexion with the sale of two parcels of land to a company called Alimyawl Pty. Limited in late 1988.

His Honour found that the appellants’ cause of action was probably complete on 23 December 1988 when the land was conveyed to Alimyawl. That conclusion was not challenged before us. The writ was not issued until 22 December 1994, the day before the relevant limitation period expired, and was not served until 20 December 1995. An appearance was entered on behalf of the respondents on 3 January 1996. A statement of claim was not delivered until 28 July 1997. The respondents’ solicitors sought particulars of the statement of claim on 15 August 1997, and when they were not supplied promptly the respondents’ solicitors wrote letters requesting them on 29 September 1997, 30 October 1997, 6 February 1998, 5 March 1998, and 16 April 1998. On 3 December 1998 the respondents filed a summons seeking inter alia an order that the appellants’ action be dismissed for want of prosecution. On the same day the appellants delivered particulars of the statement of claim, but then, it appears, their legal advisers had second thoughts about it and on 5 February 1999 a draft amended statement of claim was sent to the respondents’ solicitors. The final version was sent on 25 February 1999.

On 9 March 1999 the respondents’ application of 3 December 1998 came before White J. The application for the order dismissing the action did not proceed, and her Honour made consent orders that the statement of claim delivered on 28 July 1997 be struck out and that the appellants have leave to deliver an amended statement of claim. Another application by the respondents - for an order that the appellants give security for costs, made by a summons filed on 15 January 1999 - was dismissed by consent. On 26 March 1999, the respondents’ solicitors sent a letter to the appellants’ solicitors inter alia requesting access to the respondents’ files. The relevant paragraphs of the letter were these:

In relation to our defence to the amended statement of claim, it is clear that we will need access to Mr Davis’ files (which you or your client has) before our defence can be delivered in a final form. In the circumstances, we would be grateful if you could allow us to have access to these files before requiring us to deliver a defence.

The alternative is that we deliver as detailed a defence as possible now, and then deliver an amended defence after discovery. If your client requires us to take this latter course, we will be seeking the costs of the application to deliver the amended statement of claim.

Clearly ‘the amended defence’ was intended in the last sentence of the second paragraph, rather than ‘the amended statement of claim’.

The appellants did not reply to the letter of 26 March 1999, and on 11 May 2000 the respondents filed the application seeking an order that the appellants’ action be dismissed, even though the respondents had not complied with the rules of court by filing a defence to the amended statement of claim.

In reaching the conclusion that the appellants’ proceeding should not be allowed to continue, his Honour considered a number of aspects of the case. He started with the appellants’ delays (in beginning the proceeding, serving the writ, delivering the statement of claim, responding to requests for particulars, and replying to letters designed to expedite the proceeding) and the sufficiency of the appellants’ explanation for the delays. Then his Honour considered the nature of the proceeding and the likely effect of delay upon its fair outcome, and finally the attitude of the appellants and their solicitors to the proceeding as that attitude indicated whether in the future the proceedings ‘might accelerate’.

His Honour noted that there had been a long delay in beginning the action and a further long delay before the delivery of the statement of claim in ‘proper form’. He rejected the sufficiency of the proffered explanation of lack of money. I see no reason to doubt the correctness of his Honour’s assessment of that excuse, in view of the long time that elapsed from December 1988 and the relatively small sums in question. His Honour recorded that, were it to matter, he would regard the delay as inexcusable.

The circumstances out of which the proceedings arose made it likely that the delay would substantially affect the prospect of a fair trial, his Honour concluded. The case would be, his Honour said, one of word against word: Mr Cummings’s against Mr Davis’s; and the first real intimation given to Mr Davis of what he was required to recall came in February 1999 with the delivery of the amended statement of claim. Furthermore, his Honour observed, it was probable that documents relevant to the settlement of the contracts and in the possession of third parties would no longer exist and there must be a real risk that the financiers involved had destroyed their files after seven years. The delay was such, and the nature of the proceeding was such, as to have been very likely to have caused prejudice to the respondents in the dimming of recollection and obtaining documentary records.

His Honour’s assessment of the attitude of the appellants and their solicitors as it indicated whether the proceeding might accelerate - also unfavourable to the appellants - was of particular relevance he said. It was not right to regard the lack of progress as the respondents’ responsibility, he concluded: the reason no defence had been delivered was that the respondents suggested a practical means by which time and money could be saved by providing limited disclosure before defending. Given the delay in delivering the statement of claim and the relative complexity of the allegations of fact it was clearly sensible to allow Mr Davis to look through his files before providing instructions for the defence. ‘The [appellants’] failure to respond positively (or at all) is the cause of this further delay and gives rise to the inference that they cannot or will not progress the action’, his Honour concluded: The appellants’ inactivity in the preceding fourteen months, their failure to respond to positive suggestions to expedite the proceeding, and their inability or unwillingness to cause it to proceed suggested strongly that the action would be allowed to loiter in the future as it had in the past. The failure of the appellants, even at the time of the hearing before his Honour, to respond to the proposal in the letter of 26 March 1999, or to make the files in question available, underscored that concern, his Honour said.

In Quinlan v. Rothwell & Anor [2001] Q.C.A. 176 there is in paragraphs 24 to 30 of the reasons for judgment of Thomas J.A., with whom de Jersey C.J. and Mackenzie J. agreed, a full discussion - unnecessary to repeat here - of the principles governing an application for dismissal of a proceeding for want of prosecution, with particular emphasis on cases in which a plaintiff is not shown to have failed to comply with a rule of court or a direction of the court.

In reviewing his Honour’s decision, which was a discretionary one, one must of course be mindful of the principles applicable to such a review: see House v. The King (1936) 55 C.L.R. 499 at pp. 504-505. There are however, in my respectful view, three reasons for concluding that his Honour’s discretion miscarried in this case. First, in reaching a conclusion as to the effect of delay on the likelihood of a fair trial, his Honour appears to have failed adequately to take into account the significance of the course adopted by the respondents before White J. on 9 March 1999. By then the respondents had had ample opportunity to consider the precise allegations made against them in the amended statement of claim, which first came to their solicitors with a letter dated 5 February 1999. Ten years had elapsed since the events in question, so had there been a legitimate issue as to the fading of Mr Davis’s memory one should have expected it to have been raised and persisted with then. One certainly should not have expected the respondents to have agreed to the disposal of the application that occurred. If then one concludes - as it is reasonable to do - that Mr Davis’s memory had not faded to such an extent as to render the continuation of the appellants’ proceeding after March 1999 unfair, it seems improbable that his memory should have deteriorated to any significant degree in the ensuing fourteen months. Secondly, his Honour was, it appears to me, in error in attributing as he did all the blame for the delay after 9 March 1999 to the appellants, because even if one takes the view of the facts most favourable to the respondents they must be regarded as more to blame than the appellants, in failing to deliver a defence within the time prescribed in the rules or at all. The appellants were, no doubt, as dilatory in that fourteen months as they had shown themselves to be before 9 March 1999, but the proposition that the responsibility for the delay in that period rests entirely with the appellants cannot in my view be accepted. A third material consideration to which his Honour appears to have failed to give sufficient weight was that the dismissal of the appellants’ proceeding permanently denied to them the opportunity to pursue their claim, which is now statute-barred.

For those reasons I conclude that his Honour’s discretion miscarried. Had the matters I have mentioned been given proper weight the respondents’ application should have been dismissed, in my view. I should therefore allow the appeal with costs, set aside his Honour’s order of 7 June 2000, and order instead that the respondents’ application be dismissed with costs.

Footnotes

1. [2001] QCA 176. ↩

2. Gronow v Gronow (1979) 144 CLR 513, 534. Cf Mace v Murray (1955) 92 CLR 370. ↩