Pomeroy v Thwaites Witham & Krantz

3 On 4 June 1991, the first defendant made an application to the Residential Tenancies Tribunal to terminate tenancy and possession on the grounds of rental arrears. On 12 June 1991, the Tribunal ordered that the tenancy agreement be terminated and that the owner be given possession of the premises, taking effect from Wednesday 19 June 1991 at 12 noon.

4 The plaintiff received notice of the order and sought an extension of time within which to remove her goods from the premises. The Tribunal advised that it was unable to grant such an extension.

5 The plaintiff alleged that upon returning to the premises from work on 19 June 1991, she found that the locks had been changed and she was unable to retrieve her goods and the first defendant sold her goods at auction in October 1991. The plaintiff claims she did not become aware of the sale until around February 1992. The plaintiff received approximately $700 by way of net proceeds from the auction.

6 The plaintiff said she attended retail shops such as John Martins and Ernsmiths in order to ascertain the replacement costs of her goods. On 4 August 1992, she applied to the Residential Tenancies Tribunal for compensation in the amount of $45,000. The Tribunal explained to the plaintiff that its jurisdiction was limited to $25,000 or less and gave the plaintiff leave to withdraw her application and advised her that she could pursue her claim in the appropriate court. The Tribunal further explained to the plaintiff that its jurisdiction could be extended with the consent of all parties and gave leave to the plaintiff to reinstate the application should all parties consent to the necessary increase in jurisdiction.

7 Some five years elapsed before the plaintiff in October 1997 attempted to revive the application in the Tribunal. On 27 October 1997, the plaintiff was given seven days in which to quantify her claim and did so in the amount of $48,000. On 6 November 1997, the first and second defendants advised the Tribunal that they were not prepared to agree to the Tribunal determining the claim and, subsequently, the plaintiff's application was struck out for want of jurisdiction.

8 By this time, the plaintiff's right of action had expired under the Limitation of Actions Act 1936.

9 The plaintiff commenced proceedings in May 1998, claiming damages totalling $33,744. The plaintiff made a preliminary application, which was heard on 7 April 1999, seeking an extension of time in which to bring proceedings. The application was made pursuant to section 48 of the Limitation of Actions Act 1936 and relied on the following grounds:

"a) the plaintiff did not ascertain until July 1997 that Roger Kearns, auctioneer and valuer, was of the opinion that certain of the plaintiff's goods were valued at $27, 760; b) the plaintiff did not ascertain until October 1997 that Ernsmiths were prepared to replace certain of the plaintiff's goods for $3689.70; c) on 27th October 1997 the plaintiff ascertained for the first time that the defendants would not consent to her application to the Tribunal dated 4th August 1992 being re-instated; and d) on 6th November 1997 the plaintiff ascertained for the first time that the defendants would not consent to the jurisdiction of the Residential Tenancies Tribunal to her a claim by the plaintiff where the claim exceeded $25,000.000."

10 The extension of time was denied on the basis that the grounds relied upon by the plaintiff did not amount to "facts material" to her case for the purposes of section 48 of the Act. There was some difficulty in finding that the valuation made by Roger Kearns constituted a "material fact". The reason for this decision was that at the time the plaintiff received the Kearns valuation she "was aware of the of the variance in figures and the ongoing debate of the true measure of her loss. It (the Kearns valuation) can be seen as a more accurate assessment of her loss". Furthermore, upon consideration of the fact that the valuation was largely based on the plaintiff's description of her goods, it could not be seen as decisive and was open to debate.

11 Further, the defendants' refusal to consent to an extension of the jurisdiction of the Residential Tenancies Tribunal was not considered to be a "material fact" for the purposes of the plaintiff's application.

"The plaintiff has been aware since the order of September 1992, of the maximum jurisdiction of $25,000 of the Tribunal, and, in November 1997 her claim was struck out for want of prosecution. The defendant has never given any indication of a consent to confer jurisdiction on the Tribunal."

12 The plaintiff appealed this decision. On 3 March 2000 the Full Court upheld the appeal (with respect to the valuation being a "material fact") and remitted the matter for further hearing.

13 As mentioned in that decision, the High Court in Sola Optical Australia Pty Ltd v Mills [1987] HCA 57; (1987) 163 CLR 628, directed that the requirement to demonstrate materiality to the case as a "broad general requirement that is capable of satisfaction by objective inquiry", and:

"A fact is material to the plaintiff's case if it is both relevant to the issues to be proved if the plaintiff is to succeed in obtaining an award of damages sufficient to justify bringing the action and is of sufficient importance to be likely to have a bearing on the case."

14 Martin J ( Prior and Williams JJ concurring), in relying on that decision, found that the decision not to grant an order for an extension of time based on the view that the Kearns valuation did not amount to a material fact was erroneous:

"In my opinion, if his Honour regarded the appellant's knowledge of the distinction between replacement cost and market value which prevented the valuation by Mr Kearns from being a fact material to the appellant's case, his Honour was in error. The knowledge of the distinction was knowledge of the legal position It was not knowledge of the market value of the goods. Although the appellant had a knowledge that the goods possessed a market value, prior to the valuation she had not gained any information as to the amount of that market value. The market value of the goods was a fact material to the issue of damages. In addition, the existence and contents of the valuation was material to the appellant's case 'in the sense that the [valuation] represented available evidence that could be called in support of her case'."

15 The Full Court found that one limb of section 48 of the Act was satisfied by the plaintiff to the extent that she ascertained a fact material to her case (the Kearns valuation) within the specified time.

16 I am now obliged to determine, pursuant to section 48, whether it would be just in all the circumstances of the case to grant the extension. This includes a proper consideration of the original decision to sue, and, the significance of what the plaintiff later learnt from the valuation against her existing knowledge. Any decision concerning the discretion to grant an extension can only be exercised after a proper consideration of all the circumstances of the case.

17 The plaintiff alleged she became aware in February 1992 of the sale of her good, some four months after the sale and approximately eight months after leaving the premises. She then attended a number of retail stores in order to ascertain the new replacement cost of her goods. Subsequently, in August 1992, she applied to the Residential Tenancies Tribunal for compensation in the order of $45,000.

18 On 15 September 1992, the Residential Tenancies Tribunal advised the plaintiff of the limit of its jurisdiction. It further advised that its jurisdiction could be extended to hear claims over $25,000 only with the consent of all parties. The Tribunal gave the plaintiff leave to withdraw her claim and advised her to bring an action in the appropriate court. The plaintiff's next litigious step was in August 1997 when she attempted to revive her Tribunal claim. A delay in the order of five years.

19 The plaintiff's conduct in this period is relevant.

(a) The plaintiff sought legal advice from Mr Harley who advised her with respect to the distinction between the "market" value and the "replacement" value of the goods. I accept the clear advice to the plaintiff at that early period that the correct measure of her loss would be calculated on the former. This occurred in 1992.

(b) In 1992 the plaintiff sought further legal advice from Mr Bowler who wrote a letter of demand based on the replacement value of the goods from the information provided by the plaintiff claiming the sum of $45,000. The plaintiff then terminated Mr Bowler's instructions.

(c) In 1994, the plaintiff instructed Mr Baldock of the firm Grope Hamilton and continued to do so for some 18 months. In that time, the plaintiff said she remembered Mr Baldock mentioning something about the "need for a summons to be issued within a certain period of time". In fact, on 2 July 1997, Mr Baldock wrote to the plaintiff advising that the period in which she could bring an action would expire in September 1997, and, that if she did not issue proceedings within that time, being six years from what he described as, "the date of the negligence and/or breach of the Residential Tenancies Act", she would be unable to pursue her claim. She was again advised, this time by Mr Baldock, that the matter could only be re-listed in the Tribunal with the consent of the defendants. The plaintiff chose, to her detriment, not to take this advice. Mr Baldock's services were subsequently terminated.

(d) The plaintiff again sought legal advice from Mr Harley. Mr Harley again raised the issue of market value and replacement cost and referred the plaintiff to Mr Roger Kearns for a valuation of the goods. Upon receiving a description of the goods from the plaintiff, Mr Kearns provided a valuation of certain of the goods. In July 1997, approximately two months prior to the expiration of the period of time within which the plaintiff could have instituted proceedings, she received that purported valuation based on her description of the goods. Mr Kearns valued some goods at $9,735, which excluded jewellery. Mr Kearns valued the jewellery at $20,655. The jewellery valuation was taken directly from quotes supplied to the plaintiff by various jewellers in 1992. The market value of the goods was considerably less than her earlier estimation of her loss based on the replacement cost of the goods. However, as at July 1997, the plaintiff was aware that her claim would be in excess of $25,000.

(e) In October 1997, the plaintiff attempted to revive her application in the Tribunal and on 27 October 1997, she was asked to quantify her claim. At this stage the plaintiff was aware of the Kearns valuation and the jurisdiction of the Tribunal as well as the fact her claim in the appropriate court (other than the Tribunal) had expired in September. At that point in time she quantified her claim in the sum of $48,000.

20 As recited, both defendants advised that they were not prepared to agree to the Tribunal hearing the application and the application was struck out.

21 The following is apparent from the above matters:

(i) The plaintiff, prior to late 1992, had received legal advice both from Mr Harley and Mr Bowler and in her own probably rigid view at that time believed her loss from the alleged wrongful sale of her goods was $45,000.

(ii) The plaintiff maintained this was her loss throughout the 1994-1997 period of her instructions of Mr Baldock. She was specifically advised that the expiry date for her claim to be instituted was September 1997. This advice was certainly confirmed in writing to her on 2 July 1997.

(iii) As at 2 July 1997 the plaintiff was aware that:

(a) The Residential Tenancies Tribunal jurisdiction was limited to $25,000 and this had been explained to her by the Tribunal in August 1992 and that following that time she would be obliged to issue proceedings either in the jurisdictions of the Magistrates or District Courts.

(b) The plaintiff had continued since August 1992 to assert that her loss was in the region of $45,000.

(c) The plaintiff when again resorting to Mr Harley for advice was referred to Mr Kearns who in July 1997 on information she had provided then valued her goods and jewellery at $30,390.

(d) The plaintiff for reasons best known to her and despite the above factual matters in October 1997 attempted to revive her Residential Tenancies Tribunal application, a course which would never succeed on the alleged loss she had always maintained.

(e) The plaintiff, in May 1998, commenced these proceedings to recover her alleged loss.

22 As can be seen from the above summary this was seven years and four months from the date of the alleged wrongful conduct and in the region of eight months since the claim was statute barred.

23 It is difficult to provide any rational reason why the plaintiff delayed issuing her proceedings. The plaintiff in her mind had always maintained her loss was substantial. Her earlier allegation of loss in July 1992 to the Tribunal was a sum of $45,000, and, then repeated by her solicitors in October 1992. Again, her new solicitors, Grope Hamilton, on 21 February 1995, claimed a figure of $42,902.40 and then finally in July 1997 a valuation by Mr Kearns highlighted by the words, "This valuation is by description only. No items have been sighted", of some items of a personal nature and then a jewellery valuation of $30,390 from the information of various jewellers obtained by the plaintiff in 1992 and must be seen to be the bulk of her claim.

24 It is apparent that the plaintiff had this information in 1992, the substantive part of her claim, but despite cogent and direct legal advice did not cause her proceedings to be issued until May 1998.

25 Plaintiff's counsel has contended that I should accept that the plaintiff "left everything in Baldock's hands" and commented on the manner in which the Grope Hamilton retainer came to an end. The plaintiff said she was not getting the advice that she required from Mr Baldock. His evidence was to the effect the matter concerned the non-payment of fees. Counsel contended that, in any event, although there were criticisms the plaintiff should not be disadvantaged and accepting sufficient of her evidence would entitle me to find that she, at all times, required the matter to proceed, and, then on receipt of the Kearns valuation, there was a basis for cause of action against the agents and/or the landlord.

26 Plaintiff's counsel also submitted that there was no direct evidence of the plaintiff's knowledge of a time limit on the proceedings. At one stage, she said:

"No, I really wasn't aware that there was a problem until all this happened - the statutory time."

27 This must be seen in relation to the clear assertion of Mr Baldock that he had advised the plaintiff of the time limit. Counsel submitted that perhaps this information did not make any impact on the plaintiff or a requirement that Mr Baldock do everything that was necessary.

28 Having heard the evidence of Mr Baldock on his dealings with the plaintiff, where there is any disparity between his evidence and the plaintiff, I prefer his evidence particularly as the same is supported by the evidence in his file.

29 Finally, it was submitted that there was no suggestion of any prejudice to the defendants, and, consequently in all the circumstances it was just to grant an extension of time.

30 Defendant's counsel pointed out the manner the plaintiff consulted three solicitors, initially Hume Taylor and subsequently Mr Harley then Condon & Co and finally Grope Hamilton. What is apparent in that litany of instruction and what is clear, and, I accept the evidence of Mr Harley, is that in 1992 Mr Harley advised the plaintiff that she should "only sue for the market value .... of the goods" and indeed at that time he "pushed very hard that she should issue proceedings".

31 In 1992 the plaintiff was aware of her legal rights and such rights may include recovery from the agent of the market value of her goods. I accept the evidence of Mr Baldock supported by his letter of 2 July 1997 that such advice was given. That letter, being Exhibit D4, gives Ms Pomeroy very detailed directions confirming matters that she discussed with them. In the fourth paragraph Mr Baldock said:

"If they do not agree to do so and if the Residential Tenancies Tribunal will not hear the matter on that basis (other than to a limited amount) then you will have to issue a claim in the Magistrates Court and/or District Court as we have previously advised you. Any such action must be instituted by September 1997 - 6 years from the date of the negligence and/or breach of Residential Tenancies Act. If you do not so then you will not be able to issue a claim as the time limit for issuing a claim (6 years) will have expired."

32 This date was highlighted in the letter and the six year period explained. I would have to reject the plaintiff's evidence that Mr Baldock did not give any specific advice about time limits. It would be my finding that Mr Baldock clearly gave very specific advice to the plaintiff who, for some reason, simply chose to ignore that advice.

33 The action was issued in May 1998, as I mentioned in my prior judgment, approximately nine months after the valuation of Mr Kearns.

34 Counsel for the defendant has submitted the plaintiff was advised in 1992 by Mr Harley quite specifically about her rights. I accept this advice was given to the plaintiff at this time.

35 I accept Mr Harley's evidence that in 1992 when the plaintiff attended him that she advised him she believed her loss was in the order of $40,000 to $60,000, but, he endeavoured to explain to her that the value was on "replacement" value rather than "market" value. He said:

"I attempted to explain to her she could only sue for the market value. She told me I was wrong, that when she put in an insurance claim she'd got a replacement value. I pointed out to her that was because insurance policies have what's called a new for old clause but in this case general principles applied and she would have to sue for market value only. She rejected that advice and the meeting terminated."

36 It would appear from that period until 1997 the plaintiff had done very little to support that advice. It was in 1997 that Mr Harley referred her to Mr Kearns, a period of almost five years, and then Mr Kearns prepared his assessment of her loss at that time. What cannot be contradicted is, by 1997 the plaintiff was advised that proceedings must be instituted by September 1997. Subsequently the issue of proceedings was issued in May 1998 and indeed based on the Kearns valuation, contrary to the opinion she had received as early as 1992.

"The plaintiff, in the year following her eviction, had a detailed list of all of her missing goods and had spent considerable time ascertaining retail values of the same as well as replacement values of jewellery and clearly was of the view that her loss was in the region of $45,000. ........ The plaintiff, since 1992, has been aware of the distinction between the actual cost of new items as distinct from their actual market value. The plaintiff was obviously loathe to accept this advice ...."

38 I think it is apparent from the nature of the proceedings that the plaintiff has never accepted that advice, which advice I believe is accurate. A significant proportion of the Kearns valuation was based on quotations obtained by the plaintiff early in 1992. I accept that the valuation may amount to a material fact for the purposes of section 48 and in my view has been prepared or manufactured for the purpose of the issue of the proceedings but in reality adds nothing new to the plaintiff's actual knowledge of her loss. This is a matter which must be borne in mind in exercise of discretion.

39 There is always some prejudice to a defendant where there is an attempt to litigate events which have happened nine years ago. In this time memories of exact events or description of goods, the nature of goods, becomes almost fraught with great problems of identification and/or description. I do not accept the submission that any person in the defendants' position is not prejudiced by such a long delay. It is not a case where a plaintiff has been without legal advice. Clearly in that long period the plaintiff sought much advice and, in my view, accurate legal advice including being advised specifically of the time limit. However, the plaintiff ignored that advice and nine months later issued her proceedings.

40 In all the circumstances of this case I view it as one where I should not exercise my discretion to enable the plaintiff to proceed with her claim and the action stands dismissed.