Marshall v Prescott; Marshall v Fleming

Judgment 1In 2009, the plaintiffs brought two sets of proceedings in this Court. The first, against an Australian solicitor, Mr Michael Prescott and the second, against the eleven members of a New York firm of solicitors, Kreindler & Kreindler. They had each acted for Mrs Marshall, the first plaintiff, (in Mr Prescott's case only for a certain period), in relation to proceedings which Mrs Marshall and a number of others pursued in the United States (in Pennsylvania), against the manufacturer of certain parts of an aircraft. That aircraft had been involved in an accident in South Australia in 2001. Mrs Marshall's husband was one of those killed in the accident. Mrs Marshall brought the Pennsylvanian proceedings in her own right, as executor of her husband's estate and on behalf of her son, the second plaintiff. Those proceedings were settled, with the result that the New York firm held settlement moneys in its trust account. 2Mrs Marshall then brought proceedings in this Court against her husband's former de facto partner, Ms Carruthers, in relation to a dispute over their respective entitlements to the settlement monies held by the New York firm. It appears that this litigation was resolved in Mrs Marshall's favour, in circumstances where it transpired that Ms Carruthers, who had not been a party to the Pennsylvanian proceedings, had no standing under Pennsylvanian law, to pursue a claim of the kind that those proceedings were concerned with. 3The plaintiffs brought the two sets of proceedings now before the Court, seeking to recover, by way of damages, the legal costs which Mrs Marshall did not recover from Ms Carruthers and in Mr Prescott's case, exemplary damages. Amongst other things, it is alleged that Mr Prescott conspired with Kreindler & Kreindler, with the intention of harming the plaintiffs' financial interests. That claim is advanced in circumstances where Mr Prescott had not only initially acted for Mrs Marshall in relation to her claim against the aircraft parts manufacturer, but where he later acted for Ms Carruthers, including in the proceedings which Mrs Marshall brought against Ms Carruthers in this Court. In those proceedings, Mr Prescott was injuncted from continuing to act for Ms Carruthers. 4In 2009, the plaintiffs elected to commence separate proceedings against Mr Prescott and Kreindler & Kreindler, even though originally similar claims were advanced in the two sets of proceedings. It appears that Kreindler & Kreindler only became aware of the Prescott proceedings in 2011. The reason for commencing separate proceedings were explained for the plaintiffs to have been because it was anticipated that the preparation of the Kreindler & Kreindler matter might be delayed because of the types of applications which they have in fact pursued; it was recognised that Mr Prescott was an Australian defendant and that his proceedings should not be held up. The result was that the Prescott case was expected to be ready for hearing, before the other proceedings. This forensic decision was also made against the background of the injunctive relief granted against Mr Prescott, which precludes him from to communicating with Kreindler & Kreindler. 5This judgment deals with motions by which the plaintiffs now seek orders under r 28.5 of the Uniform Civil Procedure Rules 2005, that the two sets of proceedings be heard by the one judge, one immediately after the other, with the Prescott proceedings being heard first and the Kreindler & Kreindler proceedings second. Those orders were opposed. 6The reason for that application was explained to be because of the commonality of the factual issues between the two sets of proceedings; the need in both cases to receive expert evidence about Pennsylvanian law; the need to consider common legal duties and their alleged breaches; the responsibility of Mr Prescott and Kreindler & Kreindler for the institution of the proceedings brought against Ms Carruthers; the need to obtain injunctive relief against Mr Prescott; and the conspiracy allegations. In large part the application was pressed because of the potential consequences of the defence which Mr Prescott has filed pursuant to s 34 of the Civil Liability Act 2002 and s 4 of the Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA), whereby he claims that Kreindler & Kreindler were joint wrongdoers. The plaintiffs are concerned at the potential outcome, that one judge will come to a differing conclusion to that reached by another judge, as to the respective contributions of Mr Prescott and Kreindler & Kreindler to the damages which they have suffered, with the result that they may not recover 100% of their damages, if the two proceedings are not heard consecutively. 7The last difficulty may be dealt with immediately. As soon as the plaintiffs commenced separate proceedings against Mr Prescott and Kreindler & Kreindler, the possibility arose that a defence of the kind Mr Prescott has raised would be relied on, with the potential consequences which now concern the plaintiffs. Given the explanation for the commencement of the two sets of proceedings, it was plainly always on the cards that the Prescott proceedings would be ready to be heard before the Kreindler & Kreindler proceedings. Indeed that was anticipated. It follows that the delay now proposed for the hearing of the Prescott proceedings, would not be just. Had the plaintiffs wished to guard against the possibility that they are now concerned about, clearly they should have commenced the one set of proceedings from the outset. 8The orders sought were opposed by both Mr Prescott and Kreindler & Kreindler in circumstances where it appears that the Prescott proceedings are likely to be ready to be given a hearing date this year, after a few outstanding procedural issues are resolved. The plaintiffs have recently amended their statement of claim in the Kreindler & Kreindler proceedings, to advance a different claim to that pursued against Mr Prescott. This is because the original claim is statute barred and the new claim advanced in quasi contract, is not. The service of the amended claim was considerably delayed, for reasons which need not be explained. Particulars of the new claim have just been provided, but as yet no defence has been filed. Consideration is presently being given by Kreindler & Kreindler to the filing of a strike out motion, based on New York law. The parties accept that there is a risk that whatever the result of that motion, there is a prospect of another appeal, with the result that the hearing of the Kreindler & Kreindler proceedings may well be delayed for a further 18 months, or more, if the strike out motion fails. 9The reason for this situation lies in large part with the course which the Kreindler & Kreindler litigation has taken. Rothman J gave judgment in favour of Mrs Marshall on a forum non conveniens application which Kreindler & Kreindler made (see Marshall v Fleming [2010] NSWSC 86). There was an appeal, which was unsuccessful, but during the course of which it was accepted for the plaintiffs that their statement of claim had to be amended, because common law claims which they sought to advance in negligence against Kreindler & Kreindler were statute barred under New York law (see Fleming v Marshall [2011] NSWCA 86 at [44] - [46]). 10It is apparent from the two sets of pleadings on which the plaintiffs now seek to proceed, that apart from the matters out of which the litigation arose, there is still some, but much less commonality between them than when the proceedings were commenced. Different types of claims are now advanced in the two proceedings, which must be resolved under different laws, those of New South Wales on the one hand and New York on the other, even though in each case it will be necessary to consider the relevant Pennsylvanian laws which governed the Pennsylvanian litigation. 11The Prescott proceedings are almost ready to be given a date; the Kreindler & Kreindler proceedings are not likely to be in that position for a considerable period of time. Had the Kreindler & Kreindler statement of claim not needed to be amended, this further considerable delay would not have arisen. Given that recent amendment and the very considerable resulting delay in the hearing of the Prescott proceedings, if the order sought is made, with the result that the hearing must await the fate of the foreshadowed Kreindler & Kreindler motion, I cannot see that justice permits the making of the orders sought, having in mind the overriding purpose specified in s 56 of the Civil Procedure Act 2005 and the issues in question. Preparation of the Prescott matter has plainly been held up while the plaintiffs dealt with developments in the Kriendler & Kriendler proceedings. The obvious injustice to Mr Prescott from any further delay by the making the orders now sought, is not consistent with what the requirements of justice demands. 12This conclusion does not preclude the plaintiffs later making an application to have the Kreindler & Kreindler proceedings dealt with by the same judge as heard the Mr Prescott proceedings, or that application being accommodated by the Court. At the moment however, given the very differing legal questions raised by the two sets of proceedings; the stage which the two proceedings have each reached; the possibility that the Kriendler & Kriendler proceedings might not proceed at all; and if they do, the very considerable delay which would result for the Prescott proceedings, if the order sought were made, I am unable to conclude that consistently with the overriding purposes prescribed by s 56 of the Civil Procedure Act , namely the just, quick and cheap resolution of the real issues in the proceedings, that the delay in hearing the plaintiffs' case against Mr Prescott which is, after all, concerned with events which began in 2001, may be permitted. Accordingly, the motions must be dismissed. 13The usual order as to costs is that they follow the event. Unless the parties approach within 7 days to be heard on costs, that will be the Court's order.