Spitfire Nominees Pty Ltd and Anor v Hall & Thompson

Spitfire Nominees Pty Ltd and Anor v Hall & Thompson - [2001] VSCA 245 - VSCA 2001 case summary — Zoe

[17]

Before considering the individual periods of delay identified by the judge, it is convenient to turn to the principal case made for the plaintiffs. Counsel for the plaintiffs submitted that this was basically a simple action, in which it was prima facie unlikely that the passage of time would have caused any prejudice. There was a dispute between the parties as to the retainer, but there was evidence before the Court in an affidavit made by Issac Brott, that he gave initial instructions on behalf of the plaintiffs to Stan Shneider, and that he had been in contact with Shneider on a number of occasions during the last six years. He said that Shneider had told him that he had a good recollection of what took place at and shortly after the time at which Brott had given him initial instructions to act on behalf of the plaintiffs in relation to these transactions. Her Honour, it was argued, appeared to have disregarded or placed no reliance on this evidence and had not been justified in doing so. Since the case for the defendants was that the retainer was in writing, the passage of time ought not therefore to result in prejudice to any party. In so far as breach of the retainer was concerned, the principal allegation was that the requisite searches had not been made. As to this, both sides were agreed that no searches had been made. In relation to damage, the principal allegation was that the value of the business had been reduced. There again, it was argued, it was unlikely that the passage of time would make any real difference to the trial. Accordingly it was submitted that it was surprising to find that the action had been struck out. Furthermore the plaintiffs had twice served certificates of readiness for trial which the defendants had declined to sign, and, for that matter, a third in October 1998 after the proceedings to strike out had been commenced. The plaintiffs' counsel then submitted that in the consideration of delay, it was clear on principle that delay must be looked at in the context and in the overall pattern of the litigation, whereas the judge had treated sole responsibility as lying with the plaintiffs. Counsel submitted that the defendants plainly bore part of the responsibility for the matter not coming on for trial at various times. In particular, from the beginning of 1997 the action had become subject to case management by the Court. Thereafter the parties had attended a number of directions hearings, and mediation had been attempted between the parties but was unsuccessful. When all the facts said to amount to delay had been examined, it was submitted that it was not open to the judge to find that all delay had been caused by the plaintiffs, and furthermore, when the defendants' co-operation in the management of the litigation was examined, it was also inappropriate to find that the delay in bringing on the action was inordinate and inexcusable. Against this background, I now turn to the five individual periods of delay.

[64]

The judge did, I think, make it quite clear in dealing with prejudice of this kind that it was delay after the action would have been heard but for the plaintiffs' delay that her Honour was considering. In this context her Honour said expressly that "It is undesirable that courts be called upon to determine facts on the basis of witnesses' recollection of events that occurred so long ago when it was possible for evidence to be given when it was more fresh in the minds of the particular witnesses." But the plaintiffs cannot argue that the only witnesses whose recollection was important were Cain and Brett Young. As her Honour said the case required detailed attention to be given not only to the retainer of the defendants but also to the circumstances surrounding the purchase of the restaurant business. The particulars of loss and damage required in effect a reconstruction of the restaurant as it had existed 11 years before, together with the evidence of Issac Brott and the plaintiffs' other witnesses as to their views of the seating capacity of the restaurant, the car parking for it, and the restaurant's ability to comply with car parking restrictions by use of the wood yard. All of this depended at least to an extent on the recollections and oral testimony of witnesses for both parties. Furthermore the plaintiffs' relied on representations said to have been made by the vendors of the business as to the number of seats available in the restaurant at the time of sale. It followed that the plaintiffs' witnesses could be expected to make statements as to the number of seats that were in the restaurant at the time of sale, the physical capacity of the restaurant at the time, matters that were represented to them by the vendors and the type of enquiries that could and ought to have been made by the defendants. In my view her Honour could be well satisfied that the defendants and their witnesses would be placed at a distinct disadvantage by the plaintiffs' having allowed 11 years to elapse before evidence could be given at trial, (as opposed to, say, six or seven years). Her Honour was plainly entitled to take the view that the defendants might be unable to rebut or respond to such evidence in 1998 or 1999 as against the ability they might have had to do so in 1993 or 1994. Furthermore the transcript of the evidence of Norman Johns taken de bono in January 1996 clearly showed the difficulty the defendants' counsel had in eliciting evidence from him, as her Honour said. Her Honour found that the defendants were prejudiced because they were deprived of the opportunity of calling him at that earlier time, and that the death of Mr Johns was a substantial prejudice to the defendants' case, notwithstanding the fact that a transcript of some evidence from him was obtained in his lifetime. In my view no error is to be found in these conclusions.

[66]

The remaining element of prejudice found by her Honour raises the second of the legal issues as to which there was some dispute. The judge found that the fact that the defendants were a practising firm of solicitors meant that they suffered additional prejudice since they had been exposed to an allegation of negligence for a protracted period, relying on what was said in Bishopsgate.[24] The plaintiffs for their part argued that the defendant firm no longer exists and that the defendants are accordingly not subject to the same prejudice. The essence of the decision in Bishopsgate, as the defendants submitted in this Court, is in my view that professional people, and in particular solicitors, suffer special prejudice when professional negligence is alleged against them and the allegation is maintained unresolved and for inordinate periods. In this case the action for professional negligence had, when the application to dismiss for want of prosecution was brought on for hearing, remained pendant for in excess of seven years. It plainly reflected upon the competence and probity of the solicitors involved, and to that extent was relevant and entitled at least to some weight for the reasons given in Bishopsgate and quoted in her Honour's reasons[25]. This is not, with respect, a factor to which I would have attached great weight in the assessment of prejudice, so far as the defendants were concerned, but I accept that it was a matter that her Honour was entitled to bring into consideration. While I might have been prepared to attach less weight to this element than did her Honour, I do not accept that any error has been shown in the exercise of the discretion. The judge concluded that the plaintiffs' delay would give rise to a substantial risk that a fair trial is not possible and that the defendant would suffer prejudice and, further that there was real prejudice and injustice to the defendants in allowing the action to proceed further. Again in my view no error is to be found in her Honour's reasons for so deciding.

[75]

The evidence proposed to be given by Stanley Shneider takes the matter no further than the evidence already before the judge. The proposed fresh evidence adds nothing other than confirmation to the conclusion already reached by the judge, because the plaintiffs had already put before her Honour a conversation which had taken place between Brott and Shneider to the effect that Shneider had a good memory of the circumstances in which the retainer was given. There is nothing to suggest that her Honour did not approach the case on this basis. Exactly the same may be said of the proposed evidence of Mrs Dealehr. So far as Shneider's evidence is concerned, the fact that there was already in evidence before the judge details of the conversation had by Brott with Shneider makes it also very difficult for the plaintiffs now to establish that any evidence given by Shneider could not have been obtained with reasonable diligence for use at the trial. So far as the evidence proposed to be given by Jack Sher is concerned, his statements support the view that Brett Young had not obtained relevant certificates before completion of the purchase. But it had never been suggested at any stage in the history of this action that the defendants had obtained such certificates. The principal issue between the parties had for long been the question of loss and damage. Sher's evidence would not have assisted the plaintiffs to reduce the judge's perception that the defendants would be at a disadvantage in their relative ability to recall the events in issue. Furthermore, no evidence was put forward to show that the supposed new evidence of Jack Sher could not have been procured by the plaintiffs by reasonable diligence. No explanation was given on the part of the plaintiffs why it was that Sher did not reveal to Brott before the hearing before her Honour what was said now to have been revealed as soon as the hearing was over. There is nothing in any of the supposedly fresh evidence now tendered which makes it at all likely that the acceptance of such evidence would have led to a different result.

At a glance

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Decision date

Before

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Judgment (236 paragraphs)

Parties