Hsu & Ors v Wang & Ors [2004] QSC 324

[1] WILSON J: This proceeding was commenced by writ issued on 23 April 1993. The plaintiffs sued a number of defendants however the proceeding is now live against only the eighth defendant Mark Alexander O'Brien who is a solicitor. The last step in the proceeding was taken two and a half years ago in February 2002.

[2] The plaintiffs seek leave to proceed pursuant to rule 389(2) of the UCPR, which provides that if no step has been taken in a proceeding for two years from the time the last step was taken, a new step may not be taken without the order of the Court, which may be made either with or without notice.

[3] There is a cross-application by the eighth defendant that the Court exercise an inherent power to dismiss the proceeding for want of prosecution.

[4] The availability of Courts to resolve disputes according to law is an essential part of the rule of law. But litigation has the capacity for voracious consumption of both private and public resources.

[5] In Queensland the overriding obligations of parties and the Court are set out in rule 5 of the UCPR which provides-

"5 Philosophy - overriding obligations of parties and court

(1) The purpose of these rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

(2) Accordingly, these rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of these rules.

(3) In a proceeding in a court, a party impliedly undertakes to the court and to the other parties to proceed in an expeditious way.

(4) The court may impose appropriate sanctions if a party does not comply with these rules or an order of the court."

[6] The effect of rule 389(2) is to impose a prohibition on the further litigation of a proceeding where there has been a delay of two years or more since the last step. The applicant plaintiffs bear the onus of persuading the Court that there is good reason for exercising its discretion in their favour. The discretion is an unfettered one. It is for the Court to identify all the relevant factors and the weight to be assigned to each. See Dempsey v Dorber [1990] 1 QdR 418 at 420, per Connolly J, a decision of the Full Court on order 90 rule 9 of the former Supreme Court Rules. Relevant factors include the nature of the claim, when the cause of action accrued, when the proceeding was commenced, the stage the proceeding has reached, the extent of the delay over the whole period from the accrual of the cause of action to the making of the application for leave to proceed, any explanation for the delay and responsibility for it, as well as the prejudice which might be suffered by the respondent/ defendant if the applicant/plaintiff were allowed to continue the proceeding.

[7] While there is an evidentiary onus on the defendant to raise prejudice the ultimate onus is on the plaintiff to persuade the Court that any prejudice the defendant may suffer is not such as to cause injustice to the defendant should the action be permitted to proceed. See Tyler v Custom Credit Corporation Ltd [2000] QCA 178 at paragraph [46].

[8] The factors relevant to the application for leave to proceed are relevant also to the application to dismiss for want of prosecution. There, too, the Court has an unfettered discretion. In Birkett v James, [1978] AC 297, the House of Lords held that the power of the Court to dismiss an action for want of prosecution should be exercised only where the plaintiff's default had been intentional and contumelious or where there had been inordinate and inexcusable delay on his part or on the part of his lawyers, giving rise to a substantial risk that a fair trial would not be possible or to serious prejudice to the defendant. In the last 25 years or so that decision has been judicially considered many times. It is now recognised that their Lordships did no more than lay down guidelines which should not be rigidly applied as if they were rules of Court. Further, it has been recognised that the presence in the Queensland rules of rule 389(2), formerly order 90 rule 9, and its corresponding absence in the English rules, call for a somewhat different approach here.

[9] In Cooper v Hopgood and Ganim, [1998] QCA 114; [1999] 2 QdR 113 at 123-124, McPherson JA said:

"What has been said shows that the structure of the relevant procedural regime in Queensland differs, in some respects widely, from that in other Australian States and in England. Although there are points of identity, the provisions and effect of o:90 r.9 are sufficiently specific and special to make the underlying basis of the reasoning in Birkett v James not altogether relevant to proceedings in Queensland. Even if it were otherwise, I would not be prepared to regard what was said by their Lordships in that case as laying down particular rules controlling the decision of whether to dismiss an action for want of prosecution. The power so to dismiss is one that is confided 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 probably impact of procrastination on fading recollection; the death or disappearance of critical witnesses or records; costs already or likely in 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 hearing 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 underestimated."

[10] Early cases on order 90 rule 9 emphasised the need for an adequate explanation for the delay but in later cases the emphasis shifted towards whether there was material prejudice to the other party by permitting the action to proceed. Shifting emphases reflect at least to some degree the facts of cases which came before the Courts. They also reflect increasing recognition of the rights of defendants and of the practical limitations on public resources. Thus the right of a plaintiff to control the pace at which his proceeding approaches trial is to be tempered by the right of the defendant to get on with his life and plan his affairs without litigation and its consequences hanging over his head indefinitely and by the need for efficiency in the use of public resources.

[11] At the end of the day, on the application under rule 389(2) it is for the Court in the exercise of its discretion to apply the test so simply but so eloquently expressed by Connolly J in Dempsey v Dorber, and on the application for leave to proceed it is for the Court to determine in the exercise of its discretion whether a fair trial is possible in all the circumstances.

[12] Twelve to 15 years have passed since the events giving rise to this proceeding. Between 1989 and 1992 the first defendant known as Steven Wang perpetrated a number of acts of dishonesty against the plaintiffs. They fall into three categories:

(a) acts in relation to the purchase of land by Wang on behalf of the first plaintiff, Mr Hsu as undisclosed principal. He fraudulently altered contracts overstating the purchase price and misappropriated the difference;

(b) misrepresentations about the cost of the design and the construction of a house. Again, he inflated the cost and misappropriated the difference;

(c) misrepresentations leading to an apparent compromise.

[13] The eighth defendant acted as solicitor for Steven Wang in the property transactions. Originally it was alleged that he was knowingly concerned in the first category of dishonest acts. There was a protracted dispute about particulars of the claim against the eighth defendant and it was only during the oral hearing of the application now being determined that this claim was dropped. That was approximately eight and a half years after the proceeding had been commenced. The alternative allegation against the eighth defendant remains. It is in essence that he owed the plaintiff a duty of care by reason of knowing that Steven Wang was acting on behalf of the first plaintiff Mr Hsu and failing to take steps to ensure the transactions proceeded in accordance with Mr Hsu's interest.

[14] Paragraphs 84, 85, 85A and 86 of the statement of claim are in the following terms:

"84. Further or alternatively, at all material times the Eighth Defendant owed to Mr Hsu, a duty of care in relation to the purchase of the Santolina land, the Tanah Merah land, the Riverview land, the Bellbird Park land and the farm property.

The Eighth Defendant knew or ought to have known as was the fact

(a) that such land was being purchased by Steven Wang on behalf of Mr Hsu;

(b) that Steven Wang was not acting properly in the interests of Mr Hsu;

(c) that his retainer by Steven Wang was on behalf of Mr Hsu;

(d) that Mr Hsu was relying on the Eighth Defendant as a solicitor to exercise reasonable care towards him in relation to such purchases.

85. The Eighth Defendant breached such duty of care in that he negligently failed

(a) to take any or any adequate steps to ensure that such properties were being acquired in accordance with the wishes of Mr Hsu and/or for the prices particularised in paragraph 24 hereof;

(a) The Eighth Defendant was retained by Mr and Mrs Hsu to act as Solicitor in and around the conveyance of the Santolina land to Mrs Hsu from Steven Wang in or about May 1990.

(b) Further, in or about August 1991 Mr and Mrs Hsu retained the Eighth Defendant to act as Solicitor in relation to the conveyance of the Santolina land from Mrs Hsu to Steven Wang;

(c) In each such case, the Eighth Defendant was also retained by Steven Wang to act as his Solicitor;

(d) In each such case, Steven Wang used the name of the Third Defendant;

(e) The Eighth Defendant was retained by Mr and Mrs Hsu to act as Solicitor for the purchase by Mr Hsu of the farm property in or about July 1990;

(f) At the time of each of such retainers as aforesaid, the Eighth Defendant knew, as was the case that Steven Wang's real Taiwanese name was Yeh-Shing Wang;

(g) On or about 16 October 1989, Steven Wang gave instructions to the Eighth Defendant to prepare a Loan Agreement to record what was said by Steven Wang to be his substantial indebtedness to Mr Hsu;

(h) As at June or alternatively July 1990 or alternatively August 1991 the Eighth Defendant knew or ought to have known of the matters pleaded in paragraphs 6, 8, 8A, 13, 16, 28(a), 46(b) and 78 to 81 hereof;

(i) In the premises, the Eighth Defendant owed to Mr and Mrs Hsu a duty of care in relation to the retainers for the conveyance of the Santolina land and the purchase of the farm property as aforesaid;

(j) Further or alternatively, it was an implied term of the contracts constituting the said retainers that the Eighth Defendant would exercise a reasonable degree of care and skill in carrying out such retainers;

(k) In breach of such duty of care and/or in breach of such implied term the Eighth Defendant failed:-

(i) to take any or any adequate steps to ensure that Mr and Mrs Hsu's interests were protected;

(ii) to advise Mr and Mrs Hsu that they ought take independent advice;

(iii) to advise Mr and Mrs Hsu as to the effect of such conveyances in relation to their position and the position of Steven Wang;

(iv) To carry out for Mr and Mrs Hsu (and to provide them with the results of) searches of the Santolina land to ascertain the purchase price referred to in paragraph 16 hereof and/or to inform them of such purchase price;

(v) to take any or any adequate steps to ensure that the farm property was being acquired in accordance with the wishes of Mr and Mrs Hsu and for the price particularised in paragraph 44 hereof;

(vi) to seek instructions directly from Mr and Mrs Hsu;

(vii) to advise Mr and Mrs Hsu directly;

(viii) to obtain the informed consent of Mr and Mrs Hsu to his acting for both parties to the conveyances;

(l) The Eighth Defendant as Solicitor carried out the said conveyances and purchase;

(m) Had such advice been given or such action taken Steven Wang's fraudulent conduct pleaded herein would have been discovered by Mr and Mrs Hsu in June 1990 or alternatively in July 1990 or alternatively in August 1991.

86. As a result of such breaches of such duties of care and contracts of retainer as aforesaid Mr and Mrs Hsu have suffered loss and damage particulars of which are set out in paragraphs 29 to 31 and 46(b) hereof and/or loss consequential on the delay in discovering the fraudulent conduct of Steven Wang as pleaded herein."

[15] Paragraphs 10, 11, 12 and 13 of the defence are in the following terms:

"10. In relation to the allegations of fact contained in paragraph 84 of the amended statement of claim, the eighth defendant admits that he was retained by Steven Wang on behalf of Mr Hsu in relation to the purchase of the farm property and that he owed a duty of care to Mr Hsu in relation to the purchase of the farm property, but otherwise denies the allegations therein.

11. In relation to the allegations of fact contained in paragraph 85 of the amended statement of claim:

(a) insofar as those allegations relate to the purchase of the farm property, the eighth defendant denies that he was under any obligation to take the actions particularised and further denies any breach of duty to Mr Hsu whether as alleged or at all;

(b) insofar as the allegations relate to the Santolina land, the Tanah Merah land and the Riverview land, the eighth defendant denies the existence of any duty to Mr Hsu, alternatively denies any breach of duty whether as alleged or at all.

12. In relation to the allegations of fact contained in paragraph 85A of the amended statement of claim, the eighth defendant:

(b) admits that he acted for Steven Wang in connection with the transactions referred to in sub-paragraphs (a) and (b);

(c) admits sub-paragraphs (d), (g) and (l) and further admits that the was retained by Steven Wang to act for Mr Hsu in relation to the purchase of the farm property in or about July 1990;

(e) denies sub-paragraph (h), save that the eighth defendant admits that he knew the purchase prices alleged in paragraphs 16, 28(a) and 46(b);

(f) admits that he owed a duty to Mr Hsu in relation to the purchase of the farm property, but otherwise does not admit sub-paragraph (i);

(g) admits that it was an implied term of his retainer in relation to the purchase of the farm property that he would exercise a reasonable degree of care and skill in carrying out such retainer, but otherwise does not admit sub-paragraph (j);

(h) denies that he was under a duty to take the actions particularised in sub-paragraph (k) and further denies that he breached any duty of care or implied term whether as alleged or at all.

13. The eighth defendant denies that Mr and Mrs Hsu have suffered loss or damage as a result of any breach of duty or breach of contract on his part."

[16] In short, the eighth defendant denies that he knew Mr Wang was acting for Mr Hsu, except in relation to one of the properties described as the farm property. Accordingly, he denies any duty of care except in relation to that property. He denies any breach of duty.

[17] As I have recorded, the relevant events occurred between 1989 and 1992. The writ was issued in April 1993. The plaintiffs obtained an Anton Piller order which was executed on the eighth defendant's offices. The plaintiffs then took until June 1994 to decide whether they would proceed against the eighth defendant. They delivered a statement of claim described as "amended statement of claim" on 18 November 1994. That provoked a prompt request for further and better particulars on 30 November 1994. Some particulars were provided on 12 December 1994 but as I have said, there has been protracted dispute about the adequacy of them. On 17 January 1995 the eighth defendant delivered a defence. Approximately eight months later, the eighth defendant delivered a notice requiring discovery on oath.

[18] There was then a gap until 11 November 1997 when the plaintiffs delivered their first notice of intention to proceed. In December 1997, more than two years after being required to do so, the plaintiffs served a list of disclosed documents. The eighth defendant served a list of its documents on 20 April 1998.

[19] On 28 June 1999, the plaintiffs served their second notice of intention to proceed.

[20] On 1 July 1999, the Uniform Civil Procedure Rules commenced.

[21] In late July 1999, about 15 months after the eighth defendant had served its list of documents, the plaintiffs inspected those documents and requested copies.

[22] In January, February and April 2000, there was correspondence about the application of the UCPR and the requirement which had not previously existed for the plaintiffs to provide particulars of the eighth defendant's state of mind in relation to the claim that he was knowingly involved in the dishonesty of the defendants. It was ultimately conceded that there was then an obligation to provide such particulars.

[23] In the meantime, on 31 January 2000, the eighth defendant had made his first threat to apply to have the proceeding dismissed for want of prosecution. That threat was renewed in mid-June and early August 2000. On 10 August 2000, the plaintiffs provided some further particulars of relevant allegations in the statement of claim.

[24] Nothing happened then until September 2002, when the plaintiffs changed their solicitors. Not knowing of the change, the eighth defendant's solicitors wrote to the plaintiffs' former solicitors on 23 October 2000 informing them that they were not satisfied with the particulars which had been provided. In response, they were advised of the change of solicitors. By this time, it was almost 11 years since the conduct the subject of the proceeding and it was more than seven and a half years since the writ had been issued.

[25] The plaintiffs' new solicitor has sworn that it took him a number of months to read the documents and obtain instructions from his clients about the request for particulars. He has sworn that delay arose because Mr Hsu, who was the only plaintiff with knowledge of the matters, had poor English and spent most of his time attending to business interests in Shanghai.

[26] On 7 February 2001, the eighth defendant again threatened to apply to have the proceeding dismissed for want of prosecution.

[27] In April 2001 there was a conference with Mr Jarrett of counsel. I do not know whether that was attended only by the plaintiffs' solicitor or also by Mr Hsu.

[28] Mr Jarrett provided initial advice in August 2001. Between August and September 2001 the plaintiffs obtained non-party disclosure. On 23 August 2001, they served their third notice of intention to proceed. A week or so later, the eighth defendant again threatened to have the proceeding dismissed for want of prosecution and again sought particulars.

[29] Mr Jarrett of counsel was briefed to prepare the particulars in September 2001. He provided particulars and advice on 4 February 2002. The particulars were served about a week later, together with a request for trial date.

[30] It is common ground that the delivery of those particulars in February 2002 was the last step taken in the proceeding. By then, more than eight and a half years had elapsed since the issue of the writ. The pleadings had closed but the issue of proper particularisation of the statement of claim was still unresolved. The plaintiffs had provided particulars in a piecemeal fashion. Arguably, they were inadequate. They had still not provided any particulars of the quantum of their claim against the eighth defendant. The eighth defendant had made a number of threats to make applications to force the delivery of the particulars or to have the proceeding dismissed. But none of the threats had been carried out. Perhaps this was a tactical decision. To have made an application might have stirred the plaintiffs into action. There had been disclosure by the eighth defendant. In practical terms this had been done at the very beginning when the eighth defendant had responded to the Anton Piller order.

[31] There had also been disclosure by the plaintiffs. However, in circumstances where the quantum of the plaintiffs' claim against the eighth defendant had not been particularised, I wonder whether the question of disclosure had been put to rest for all time. The plaintiffs had delivered three notices of intention to proceed - on 11 December 1997, 28 June 1999 and 23 August 2001. The eighth defendant had threatened to apply to have the proceedings struck out four times - on 31 January 2000, 2 August 2000, 7 February 2001 and 3 September 2001. The plaintiffs had tendered a request for trial date which the eighth defendant had refused to sign.

[32] An extraordinary feature of the plaintiffs' present application is that they have provided absolutely no explanation for delays prior to their change of solicitors. There is no affidavit sworn by any of the plaintiffs. The only material comes from their present solicitor, who has made very general statements about the time it took to read the file and difficulties in obtaining instructions and advice from counsel.

[33] Two and a-half years have elapsed since the last step was taken in February 2002. On 23 July 2002 the plaintiffs' solicitors sought advice from Mr Jarrett of counsel whether expert evidence should be obtained. The next month a brief was sent to Mr Perry, a more senior counsel to advise on this point. The solicitor has sworn to having made numerous telephone calls to Mr Perry between December 2002 and January 2004, but being unable to obtain the requested advices or any firm indication when they would be forthcoming. He has sworn that he chose not to change counsel because the material briefed would take a new counsel some considerable time to read and this would result in further delays.

[34] In December 2003 Mr Jarret took an appointment as a Federal Magistrate.

[35] On 22 January 2004 there was a conference with Mr Perry and at least some of the plaintiffs. In consequence, Mr Hsu and the solicitor were to provide Mr Perry with information about quantum. This extra information was supplied on 6 May 2004 and advice from Mr Perry became available in July 2004. This application for leave to proceed and also for the matter to be referred to mediation was filed on 21 July 2004. The cross-application was filed on 23 August 2004.

[36] It is relevant to know where the responsibility for delay lies, because delay for which a client is responsible is often more difficult to explain than that for which legal representatives are responsible. However, in this case the facts are very spare, and I cannot form an opinion as to precisely where the fault lies. There would seem to be a number of possibilities: the plaintiffs' solicitor, their counsel, or the plaintiffs themselves.

[37] A solicitor must, of course, act in accordance with his client's instructions and those instructions may go to the comparative alacrity with which a claim is to be pursued, the choice of counsel, et cetera. Nevertheless, the solicitor has a duty to monitor progress regularly, to be mindful of the passing of time, to be aware of the effect of the Uniform Civil Procedure Rules, to keep in touch with counsel and if necessary to withdraw a brief, and of course he has an obligation to advise his client accordingly.

[38] Counsel has an obligation to attend to a brief in a timely fashion. It is not good enough simply not to attend to a brief because of pressure of other work. In such circumstances he is obliged to keep his solicitors informed of when it is likely he will be able to attend to the brief and perhaps even to return the brief.

[39] I do not know the nature of the instructions the plaintiffs' solicitor gave counsel, how meticulously the brief was prepared, what analysis the solicitor performed, or whether all the documents were simply bundled up and delivered to counsel with instructions to advise generally. It is impossible to assess the respective culpability of the solicitors and counsel.

[40] A client has a duty to give his legal representatives full instructions, not just at the outset of a proceeding, but as required to progress that proceeding through the interlocutory phases and trial. He has an obligation to keep in contact with his solicitors and to ask as to the progress of the proceeding where there has been no communication or where there have been other circumstances which would put a reasonable person on inquiry. Again, there is insufficient material for me to assess whether Mr Hsu is culpable in this regard.

[41] I turn to the question of possible prejudice to the eighth defendant. Twelve to 15 years have passed since the relevant events. There are two types of prejudice relied on, (a) deterioration in the quality of evidence through the very passing of time and (b) the loss of effective insurance cover.

[42] The mere passing of time may not mean that issues cannot be tried fairly, particularly where a case will for the most part be determined by contemporaneous documents. The plaintiffs submitted that this is such a case. They submitted further that the only likely contradicter to the eighth defendant's evidence, Steven Wang, has absconded.

[43] It is necessary to look to the nature of the case to determine whether it will be "a documents case". I have already set out relevant paragraphs of the statement of claim and defence. Particulars were sought of the eighth defendant's knowledge of the relationship between Mr Hsu and Steven Wang (inter alia).

"2. Of paragraph 84, state the facts and circumstances whereby the eighth defendant knew or ought to have known each of the facts alleged in sub-paragraphs (a)-(d).

3. Of each of the retainers alleged in sub-paragraphs (a) and (b) of paragraph 85A, state:

(i) who retained the eighth defendant to act for Mr and Mrs Hsu;

4. Of the allegation in paragraph 85A(f), stating the means of the eighth defendant's knowledge that the first defendant's real Taiwanese name was Yeh-Shing Wang.

6. Provide particulars of the damages claimed against the eighth defendant."

[44] The plaintiffs rely on actual knowledge and constructive knowledge. They concede that since the introduction of the UCPR they must give particulars of both. They rely on facts to be gleaned not only from formal documents but also from the eighth defendant's file notes. Some of those file notes are handwritten and some are more cryptic than others. They may serve to jog the eighth defendant's memory but it is unlikely that his recollection will be as encompassing as it would have been closer to the events in question.

[45] In Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, the High Court considered an application to extend the limitation period. McHugh J considered the rationale for limitation periods. At page 551 he said:

"The discretion to end time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that '(w)here there is delay the whole quality of justice deteriorates'. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo, 'what has been forgotten can rarely be shown.' So, it must often happen that important, perhaps decisive evidence has disappeared without anybody now 'knowing' that it ever existed. Similarly it must often happen that time will diminish the significance of a known fact or circumstance because its relationship the cause of action is not longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings but if the tribunal of fact had all the evidence concerning the matter an opposite result may have ensued. The longer the delay in commencing proceedings the more likely it is that the case will be decided on less evidence than was available to the parties at the time the cause of action arose."

[46] What his Honour said is equally true in an application for leave to proceed. I accept that in this case it is likely that the eighth defendant will be disadvantaged by a deterioration in his memory of relevant events caused by the delay in bringing the proceeding to trial.

[47] The eighth defendant is a solicitor. Until 27 August 2001 he held indemnity insurance for between $100,000 and $500,000 plus defence costs. Then his insurer went into liquidation and he effectively lost the benefit of the insurance policy. Perhaps some indemnity against the plaintiff's claim will be available through an ex gratia payment by the Queensland Law Society, but this is far from certain. Counsel for the eighth defendant contended that this is a relevant prejudice the quantum of which cannot be assessed because the quantum of the claim has not been particularised.

[48] I reject the submission made by counsel for the eighth defendant that there need not be a causal link between delay and prejudice. In my view, there clearly does need to be such a link.

[49] Counsel for the plaintiff submitted that the loss of the insurance cover was a private matter between the eighth defendant and his former insurer and not something attributable to his client's delay. A similar issue came before Martin CJ of the Northern Territory Supreme Court in Bjelica Investments Pty Ltd v TC Waters Pepper & Co Pty Ltd [2003] NTSC 67.

[50] There the plaintiff had purchased land and made claims against the vendor's agents and others in relation to representations made before the sale. There was an application for extension of the limitation period. The agent's insurer had collapsed and the agent submitted that he would be prejudiced by the loss of indemnity if the extension were granted. The collapse had occurred after the cause of action had accrued and after the issue of the writ. As in the present case, it had occurred during the period of relevant delay, and the prejudice to the defendant would crystallise if the plaintiff was successful in establishing liability and obtaining an award of damages. Martin CJ considered that this was not relevant prejudice. It was not brought about by the delay and even though it occurred during the period of the delay, it was an external matter having nothing to do with the plaintiff and having no sufficient connection with the plaintiff's procrastination. He said that to shut the plaintiff out because of default of an insurer would be unjust. Were it otherwise, a defendant could rely upon any circumstance occurring in the relevant period which left it financially worse off in order to resist the plaintiff's application for extension of time. I respectfully apply his Honour's reasoning to the present case. I do not regard the loss of insurance cover as relevant prejudice.

[51] Weighing up all of the factors, I am not persuaded that the plaintiffs have shown that there is good reason for accepting this case from the prohibition in rule 389. In short, the delays have been inordinate, there is no satisfactory explanation for them, and I do not know where responsibility for them lies. I am satisfied that if leave were granted, the eighth defendant would be prejudiced by deterioration in his memory of relevant events caused by the delay.

[52] Accordingly, I dismiss the plaintiff's application.

[53] The eighth defendant has persuaded me that the circumstances are such that there could not be a fair trial of the proceeding. The application to dismiss for want of prosecution is allowed.

1. That the application for leave to proceed be dismissed.

2. That the application to dismiss for want of prosecution be allowed.

3. That the plaintiffs pay the eighth defendant's costs of and incidental to the proceeding including reserved costs, if any, and including the costs of these two applications, to be assessed on the standard basis.