Spitfire Nominees Pty Ltd v Thompson & Hall [1999] VSC 12

5. The claims brought by the plaintiffs against the defendant relate to the purchase by the first named plaintiff ("Spitfire") of a restaurant and takeaway food business ("the business") called Giardino's Pizza at 341-343 and 345 Toorak Road South Yarra ("the premises"). The plaintiffs retained the defendant to act as their solicitors with respect to the purchase of the business. The plaintiffs allege that Spitfire specifically retained the defendant to act in relation to an assignment of a lease for the 341-343 Toorak Road property of which Norman Herbert Johns was lessor. It is alleged, also, by the plaintiffs that the second plaintiff ("Melibee") retained the defendant to act on its behalf in relation to the purchase of part of the freehold of the premises being the land at 345 Toorak Road South Yarra. The plaintiffs allege that the retainer of the defendant was partly oral and partly to be implied.

8. The plaintiffs claim that the defendant breached the retainer, alternatively, was negligent on a number of grounds. First, the defendant failed to ascertain and advise the plaintiffs that the premises did not comply with the relevant town planning permit for the 341-343 Toorak Road property in that there was a deficiency of eight car parking spaces. Second, the defendant failed to ascertain that the local municipal council had informed the vendor of the 341-343 Toorak Road property of the fact of non-compliance with the relevant town planning permit. The permit included conditions that imposed a limit on the number of restaurant patrons of 120 with a maximum of 110 patrons within the restaurant building and a requirement for the provision of eight car parking spaces. The third ground was that the defendant failed to inform and advise the plaintiffs of the status of a wood-yard at the rear of the premises and whether or not the wood-yard formed part of the 341-343 Toorak Road property. The wood-yard was important because if it in fact formed part of the 341-343 Toorak Road property it may have provided an opportunity for car parking provision and thereby overcome the alleged breach of the relevant town planning permit. There was a further allegation in the further and better particulars provided by the plaintiffs (but not specifically pleaded) that the defendant failed to ascertain and advise the plaintiffs that the number of seats within the business restaurant were less than the number represented to the plaintiffs prior to sale. There were additional allegations of breach of retainer and negligence on a broader basis but the allegations referred to were the specific and significant allegations for the purposes of the application before me. The plaintiffs allege that as a result they have suffered loss and damage. The plaintiffs allege that the defendant was retained in about July 1987, that the relevant town planning permit was issued on 6 May 1986 and it seems from the pleadings that the relevant contracts were entered into on about 19 September 1987.

11. The defendant alleges that it was retained on about 3 July 1987 by one Issac Brott to act for Mr Brott, Riad Hassan and Talal Hassan in relation to the purchase of the business and that the retainer was in writing by way of a letter from Issac Brott & Co to the defendant dated 3 July 1987. Mr Brott is a director of each of the plaintiffs and a solicitor with Isaac Brott & Co, the plaintiffs' solicitors. The defendant alleges that the terms of the retainer included the arrangement of the incorporation of Spitfire and the transfer of control of it to Mr Brott and Messrs Hassan and Hassan and the substitution of Spitfire as purchaser of the business. It is further alleged by the defendant that Mr Brott retained them to act for he and Messrs Hassan and Hassan in relation to the purchase of the property at 345 Toorak Road South Yarra.

14. Thereafter the facts become more complicated. The defendant alleges that after the sale of the business it was in fact conducted by a corporation known as Amlasam Pty Ltd ("Amlasam") and not Spitfire. It was submitted on behalf of the defendant that this was an issue that would effect the plaintiffs' case significantly and their entitlement to damages. The defendant claims that on 26 July 1993 Spitfire transferred all its interest in the 341-343 Toorak Road property to another entity, Hozsel Pty Ltd ("Hozsel") and that Hozsel thereafter received the income from the business. Again it is said that this factor effects the plaintiffs' case and their entitlement to damages The defendant says, also, that insofar as it was negligent, the plaintiffs were guilty of contributory negligence on three grounds. Firstly, in that Mr Brott did not require an express term in the contract of sale to the effect that the premises had a permit for a specific number of patrons; secondly, that the plaintiffs themselves attended the offices of the local municipal council but failed to inspect the relevant files for the premises; and, thirdly, failed to request a copy of any town planning permits that related to the premises.

17. In order to succeed the defendant must show inexcusable delay in the prosecution of the action and prejudice occasioned to the defendant as a consequence of that delay (see Spitfire Nominees Pty Ltd v. Dacco (1998) 1 VR 242, 245-6; Birkett v. James (1978) AC 297, 318; Neto v. Faul [1980] VicRp 3; (1980) VR 26, 30-31). In demonstrating delay on the part of the plaintiffs such delay need not consist solely of periods of complete inactivity. It may consist of a failure by the plaintiffs over an extended period of time to prosecute the claim with due and proper expedition (see Bishopsgate Insurance Australia v. Deloitte Haskins & Sells, unreported judgment of the Full Court of this court delivered 9 September 1994). Whilst delay before the commencement of the relevant proceeding is not a matter to be taken into account in calculating delay on the part of the plaintiffs in prosecuting the proceeding it nonetheless behoves a plaintiff where delay has occurred in issuing proceedings to prosecute the proceeding with full expedition (see Bishopsgate, supra, pp.21-23. In assessing the delay in this matter it is not sufficient to merely gross up the periods of delay and determine that the delay has been inordinate and inexcusable. Rather, I am obliged to consider the precise nature of the delay in each instance (see Spitfire Nominees P/L v. Ducco, supra, 248).

20. The Court of Appeal of this court has held that before dismissing a proceeding for want of prosecution it is appropriate to recapitulate the steps of the legal process which have occurred in aid of determining whether there has been inordinate and inexcusable delay (see Spitfire Nominees Pty Ltd v. Ducco [1998] 1 VR 242, 247). It is necessary, therefore, to set out in detail the history of the legal process of this matter over a period of 11 years.

23. The plaintiffs issued the writ on 31 July 1991 almost four years after the date when the defendant is said to have been retained to act for the plaintiffs and the relevant acts of breach of retainer and negligence are alleged to have occurred. Over the next ensuing seven year period the plaintiffs prosecuted their case in bursts of activity interspersed with long periods of dormancy. Following the issue of the proceedings on 31 July 1991 the defendant filed a notice of appearance on 5 September 1991 and delivered its defence together with a notice of change of solicitor on 4 October 1991. On 4 November 1991 the plaintiffs served a notice for discovery, on 14 February 1992 the plaintiffs filed an affidavit of documents and on 19 February 1992 the defendant issued a summons seeking security for costs. This application was adjourned on 11 May 1992 and the plaintiffs were ordered by the Master to pay the defendant's costs of the day. On 19 May 1992 the Master ordered that the plaintiffs pay into court the sum of $8,000 as security for costs and ordered the plaintiffs pay the defendant's costs of the application. On 11 November 1992 the defendant filed an affidavit of documents and on 9 December 1992 the defendant served a notice for discovery upon the plaintiffs.

26. On 4 March 1993 the defendant filed a notice of default in making discovery upon the plaintiffs. On 4 November 1993 the plaintiffs filed a notice of intention to proceed under Order 3.06 of Chapter 1 of the Rules of the Supreme Court. On 30 June 1994 the plaintiffs filed a summons seeking leave to amend their statement of claim. On 1 August 1994 the Master granted leave to the plaintiffs to file an serve an amended statement of claim and ordered the plaintiffs to pay the defendant's costs of the application. On 10 August 1994 the plaintiffs filed the amended statement of claim. On 9 September 1994 the defendant filed a defence to the amended statement of claim. On 23 November 1994 the plaintiffs served a certificate of readiness upon the defendant but the defendant did not sign the certificate. On 27 February 1995 the defendant delivered interrogatories for the examination of the plaintiffs and on 28 June 1995 the defendant served a notice of default in answering interrogatories upon the plaintiffs. On 4 July 1995 the plaintiffs swore answers to the defendant's interrogatories but did not deliver the answers to the defendant until about 24 July 1995. On 18 July 1995 the defendant issued a summons seeking an order that the plaintiffs provide answers to interrogatories. In this respect the Master ordered on 28 July 1995 that the defendant's summons seeking answers to interrogatories be dismissed but that the plaintiffs pay the defendant's costs of the application. Meanwhile, on 24 July 1995 the defendant filed a summons seeking an order pursuant to Order 41.01(1)(i) that the evidence of Norman Herbert Johns, the lessor of the 341-343 Toorak Road property be taken by an examiner on the grounds of the ill-health of Mr Johns. On 10 August 1995 the Master ordered that Mr Johns be examined and the examination occurred on 4 January 1996 at the nursing home where Mr Johns was located. On 19 July 1996 the defendant filed a summons seeking orders that the plaintiffs provide further and better particulars of loss and damage pursuant to Order 13.11. The application was adjourned by the Master on 2 and 7 August 1996 and on 16 August 1996 the Master ordered that the plaintiffs file and serve by 16 September 1996 further and better particulars of loss and damage and that the plaintiffs pay the defendant's costs of the application. On 14 October 1996 the plaintiffs filed further and better particulars of loss and damage claiming $350,000 damages in respect of the purchase of the business and $350,000 for damages for the purchase of the 345 Toorak Road property together with interest for loss of opportunity to invest the said sums of $350,000.

29. On 14 January 1997 the plaintiffs served a notice of trial and a certificate of readiness for trial upon the defendant. The defendant refused to sign the certificate. Furthermore, in early 1997 the proceeding came within the ambit of civil case management and generally under the direction of Teague, J.

32. As of 1 November 1996 the court introduced a new procedure for the management of civil cases that were not managed already in a specialist list. This proceeding was not in a specialist list and consequently came within the ambit of civil case management (in accordance with Supreme Court Practice Note No. 1 of 1996 Civil Case Management). The practice note stated, among other matters, that the purpose of the management scheme was to bring cases to a conclusion more quickly and efficiently than was then the case. It was noted in the practice note that the general scheme was to provide for directions twice in a proceeding, first, after a case has started and, second, when the case is ready for trial. The practice note observed that if a party failed to comply with the timetable fixed in the directions opposing parties were permitted to take any step open to them under the rules when a party defaults in taking a step. The practice note provided, further, that if a party remained in default after the expiration of seven days from the day fixed for the taking of a step the party in default was prohibited from taking that step without first obtaining the consent in writing of all opposite parties or the leave of a judge or Master.

35. On 20 February 1997 Teague, J made orders and directions including that the defendant was given leave to deliver an amended defence and the further directions was adjourned to 13 March 1997. On 13 March 1997 Teague, J made further orders and directions including that the defendant's amended defence be filed by 26 March 1997 and the further directions hearing was adjourned to 10 April 1997. In the latter order under "other matters" it was stated "The Court was appraised of a dispute as to discovery, and the Court urged that the dispute be resolved promptly". On 10 April 1997 Teague, J adjourned the directions hearing to a date in April 1997. On each of these occasions both parties were represented.

38. On 24 April 1997 the matter came before Teague, J for further directions and was adjourned until 3 June 1997. Only the defendant was represented on this occasion, by its solicitor. In the order made on 24 April 1997 it was noted under other matters that the defendant's solicitor "spoke of applications as to discovery and security for costs still to be made."

41. On 3 June 1997 Teague, J adjourned the further directions hearing until 10 July 1997. The adjourned directions in fact came on before Teague, J on 15 July 1997 and was further adjourned until 14 August 1997. In the order made on 14 august 1997 under "other matters" it was noted that "The Court was informed of a proposed application for the re-hearing of an application for discovery on behalf of the defendant when the applicants were not represented". The further adjourned directions hearing in fact came on before Teague, J on 19 August 1997 and was adjourned until 18 September 1997. The court order observed that the court "was informed of outstanding issues as to discovery, particulars and other matters" and that the court emphasised the desirability of prompt resolution of those issues and foreshadowed the fixing of a pre-trial directions hearing in February 1998. On 18 September 1997 Teague, J made orders and directions including the setting of a timetable for the delivery of interrogatories by the defendant by 10 October 1997, answers to such interrogatories by the plaintiffs by 21 November 1997, mediation by 12 December 1997, the filing of a notice of trial by 19 December 1997 and the fixing of a pre-trial directions hearing on 10 September 1998. At each of these directions hearings both parties were represented.

44. During the period that the proceeding was subject to the directions of Teague, J as part of civil case management other interlocutory steps ensued. On 24 April 1997 the defendant filed a summons seeking further and better discovery from the plaintiff. This application was adjourned on 12, 15, 26 and 28 May 1997 before the Master and eventually on 27 June 1997 the Master ordered that the plaintiffs provide further and better discovery of documents and that the plaintiffs pay the defendant's costs. The order was not complied with and on 24 July 1997 the defendant filed a summons seeking to strike out the plaintiffs' claim for failure to comply with the order of the Master made on 27 June 1997 for further and better discovery. On 28 July 1997 the plaintiffs issued a cross-summons with an affidavit in support seeking to set aside or very the orders of the Master made on 27 June 1997 for further and better discovery, principally on the grounds that orders were made in the absence of the plaintiffs. On 30 July 1997 the Master ordered that the orders made by the Master on 27 June 1997 be set aside, that the defendant's summons to strike out the plaintiffs' claim filed 24 July 1997 be struck out, that the plaintiffs file a further affidavit of discovery of specific documents and that the plaintiffs pay the defendant's costs. On 25 August 1997 the plaintiffs filed a further affidavit of documents. The discovery was considered inadequate by the defendant and on 27 August 1997 the defendant filed a summons seeking that the plaintiffs' claim be dismissed for failure to comply with the order of the Master made on 30 July 1997. On 2 September 1997 the Master ordered that by 9 September 1997 the plaintiffs file and serve an affidavit as to possession of a particular document referred to as "the Blue Sky Paper". On 16 September 1997 the plaintiffs filed an affidavit as to possession of "the Blue Sky Paper". On 14 October 1997 the defendant delivered further interrogatories for the examination of the plaintiffs. On 8 December 1997 the secretary to the Listing Master forwarded a Notice of Directions Hearing for the Civil Cases List to the parties. On 9 December 1997 the Master made an order on the papers that a directions hearing be convened before Teague, J on 16 December 1997. On 16 December 1997 Teague, J made orders vacating the deadline for further interrogatories for the examination of the plaintiffs and the answers thereto. On 30 January 1998 the defendant brought an application before the Master (pursuant to liberty to apply reserved on 19 May 1992) for further security for costs. The application was adjourned until 25 February 1998. On 6 February 1998 the plaintiffs served answers to the defendant's further interrogatories dated 12 September 1997. On the same day, the Master ordered that mediation of the proceeding be completed by 7 April 1998 and that a further directions hearing be held on 1 May 1998. Again on 6 March 1998 the Master ordered that Mr Brott and Natalie McAra-Brott pay to the defendant any costs that may be ordered to be paid to the defendant by the plaintiffs at the completion of the proceeding. On 20 April 1998 mediation of the proceeding was held together with a related proceeding No. 10047 of 1991. The mediation was adjourned to enable the plaintiff to prepare further and better particulars of loss and damage. On 1 May 1998 the Master adjourned the directions hearing adjourned to that day until 31 July 1998. On 22 May 1998 the plaintiffs filed an Order 44 statement of an expert witness together with the plaintiffs' further particulars of loss and damage upon the defendant. On 31 July 1998 the Master ordered that mediation of the proceeding conclude by 26 August 1998, that the plaintiffs file and serve any further interrogatories by 11 September 1998 and that the defendant answer those interrogatories by 16 October 1998. The Master ordered, further, that a notice of trial be provided by the plaintiff by 23 October 1998 and that a pre-trial directions hearing be held on 1 December 1998. On 21 August 1998 further mediation was held and terminated with the case unresolved. On 28 September 1998 the defendant filed the summons to dismiss the proceeding for want of prosecution. On 5 October 1998 the Master ordered that the defendant's application for dismissal be dismissed and that the defendant pay half of the costs of the plaintiffs. The Master further ordered on the same day that the plaintiffs file and serve amended particulars of loss and damage, including calculations as to how such loss and damage were made, by 12 October 1998. The order was complied with. The order of the Master made on 5 October 1998 is the subject of the present appeal. In the meantime, the plaintiffs filed a notice of trial on 23 October 1998.

47. The defendant asserts that analysis of the proceedings reveals five distinct periods of delay. The first period said to be between 11 November 1992 until June 1994; the second period said to be between 9 September 1994 until 25 July 1995; the third period said to be from 5 January 1996 until 30 September 1996; the fourth period said to be from 1 October 1996 until 25 August 1997; and the fifth period said to be from 1 October 1997 until 28 September 1998.

50. Analysis of the steps in the proceeding discloses that during the first period between 11 November 1992 until June 1994 there was total inactivity on the part of the plaintiff. With respect to this period the plaintiffs allege that the defendant took well over a year to serve its affidavit of documents, that the plaintiffs took a positive step by seeking discovery from an individual partner of the defendant (although such discovery was not pursued eventually), that the plaintiffs served a notice of intention to proceed and sought and obtained leave to amend their statement of claim. On close analysis the only positive step taken by the plaintiffs to expedite the proceeding during the first period of alleged delay (a period of 19 months) was when the plaintiffs sought and obtained leave to amend the statement of claim on 1 August 1994. The plaintiffs did not try to move the defendant along by an application under Order 29.11 to compel earlier discovery. They did not take any positive steps during the first period of delay in the proceedings save at the very end of the period by way of amending their statement of claim. In the expeditious prosecution of litigation a plaintiff ought do more than serve a notice of intention to proceed. I consider that the plaintiffs were guilty of inexcusable delay during the first period.

53. During the second period between 9 September 1994 until 25 July 1995, there was a further period of complete inactivity save for the plaintiffs serving a certificate of readiness upon the defendant. The defendant refused to sign the certificate as in its view the matter was not ready for trial. With respect to this period the plaintiffs allege that they filed a certificate of readiness which they pursued, that the defendant indicated its desire to interrogate within a week to ten days of 16 December 1994 but in fact did not deliver interrogatories until 27 February 1995, that the plaintiffs delivered sworn answers to interrogatories on 24 July 1995 (five months later) and, in particular, the defendant's solicitor indicated that as soon as sworn answers to interrogatories were provided the defendant would serve a certificate of readiness on the plaintiffs. The certificate was not provided. The plaintiffs allege that the only matter that delayed the signing of the certificate of readiness was the defendant's desire to interrogate and which interrogation could have occurred at any time during the period from 1992 - 1994. The plaintiffs emphasise that the defendant has not provided an explanation for the delay in delivering interrogatories. The plaintiffs concede that they took three months beyond the 42 day period for providing answers to interrogatories required by the Rules but assert that such delay is inconsequential given that the defendant delayed a period of two years in delivering interrogatories.

56. Whilst the defendant was entitled to serve interrogatories at any time after the close of pleadings pursuant to Order 30.02, the plaintiffs did not take any step to prompt the defendant into delivering the interrogatories earlier than it did. At any time it was open to the plaintiffs to seek directions from the court pursuant to Order 34 for directions to effect prompt determination of the proceeding, including an order for the delivering of interrogatories by the defendant by a specified date. Furthermore, upon the defendant failing to sign the certificate of readiness during this period, it was open to the plaintiffs at any time to apply to the court pursuant to Order 48.06 for an order that the proceeding be set down for trial and seek any necessary directions for the listing of the proceeding. Rather than avail themselves of the means of expedition under the Rules the plaintiffs allowed the proceeding to languish for months and then compounded the delay by taking months to answer the very interrogatories that they say prevented them from filing a certificate of readiness for trial.

59. On close analysis, during the second period of alleged delay (a period of ten months) the plaintiffs did not take any positive steps to expedite the proceedings (including utilisation of the Rules) save for serving a notice of certificate of readiness on 23 November 1994 and delivering very late answers to interrogatories on 24 July 1995. I consider that the plaintiffs were guilty of inexcusable delay during the second period. It was insufficient for the plaintiffs to sit on their hands awaiting service of interrogatories by the defendant. By the end of February 1995 almost four years had elapsed since the commencement of the proceeding and almost seven years had elapsed since the events that gave rise to the claims. The plaintiffs ought to have pressed the defendant to serve interrogatories quickly and have answered the same promptly.

62. During the third period from 5 January 1996 until 30 September 1996 there was a another period of intermittent delay as the defendant sought and eventually issued a summons seeking further and better particulars of loss and damage from the plaintiffs. Eventually, the particulars of loss and damage were provided on 30 September 1996 after the making of an order by the Master (although not filed until 14 September 1996). This period involved a further delay of nine months.

65. With respect to the third period of alleged delay (a period of nine months) the plaintiffs allege that they were active during this period. The plaintiffs rely upon the fact that they attended the giving of evidence de bene esse by Mr Johns on 4 January 1996. In particular, they rely upon their participation in the obtaining of evidence from Mr Johns de bene esse.

68. Mr Johns was an important witness in the defendant's case. He was the owner of the property of 341-343 Toorak Road, South Yarra and he leased that property to Giardino Pizza Pty Ltd. Mr Johns owned, also, the land at the rear of that property known as "the wood yard". The plaintiffs allege in the amended statement of claim that the defendants failed, among other matters, to inform the plaintiffs of the extent to which the wood yard formed part of the land subject to the assignment of the lease for the property at 341-343 Toorak Road, South Yarra. The allegation is made in the context that the plaintiffs allege, also, that the property that was the subject of the lease was in breach of the relevant town planning permit because of insufficient car parking. Whilst the amended statement of claim does not specifically plead that if the wood yard had been part of the land that was the subject of the lease it would have facilitated the provision of car parking, I was informed by counsel for both sides that this was intended to be the case. By summons dated 24 July 1995 the defendant made application pursuant to Order 41.01 for the evidence of Mr Johns to be taken by an examiner. In an affidavit in support of the application sworn 24 July 1995, Mr Stogdale, the defendant's solicitor deposed that the plaintiffs alleged that it was misrepresented to them that the wood yard formed part of the premises devised by the lease, that the allegation was disputed by the defendant and that it would be necessary to call Mr Johns to give evidence of any discussions he had with the plaintiffs as to the property to be included in the lease. Mr Stogdale deposed as to his information and belief that Mr Johns was seriously ill and may not have long to live. In particular, he deposed:

"Interlocutory steps in this matter are almost complete and as soon as the plaintiffs provide sworn Answers to the Defendant's Interrogatories I shall serve a Certificate of Readiness for Trial upon the Plaintiffs' solicitors. However, I am concerned that with the state of the Court List, that this matter may not come on for hearing for at least 12 months after the case is set down for trial, during which time Mr Johns' medical condition may have deteriorated to such an extent that he is incapable of giving evidence or further, that he may have passed away".

The plaintiffs did not appear on the return of the application on 10 August 1995 when the Master ordered that Mr Johns be examined as sought. Mr Johns was examined on 4 January 1996. There is no explanation for the delay of five months in the examination being held. In the absence of an explanation I have not attached any blameworthiness to the plaintiffs with respect to this delay. At the examination, both sides were represented by counsel. Questions were put to Mr Johns and answered concerning whether he had discussions with Mr Brott concerning use of the wood yard for the car parking purposes of the pizza restaurant. Mr Johns died subsequently in 1997.

73. The examination occurred at the behest of the defendant and clearly was necessary as a result of the protraction of the proceedings reaching a trial date. During this period the plaintiffs rely upon the fact that the defendant requested further and better particulars on 1 February 1996. Again, this action is a matter initiated by the defendant and not the plaintiffs. During February and March 1996 there was an exchange of correspondence between the solicitors until finally on 19 July 1996 the defendant issued a summons for further and better particulars before the Master. An order was eventually made by the Master on 16 August 1996 and the further and better particulars provided by the plaintiffs on 30 September 1996. Again during this period analysis discloses that no action was taken or initiated by the plaintiffs, rather, all activity was instigated by or carried out by the defendant. In my view the plaintiffs were guilty of inexcusable delay during the third period.

76. During the fourth period from 1 October 1996 until 25 August 1997 the defendant sought further discovery concerning loss and damage. With respect to the fourth period of alleged delay, the plaintiffs assert that they were active in attempting to expedite the proceeding. On 14 January 1997 they served a notice of certificate of readiness to which the defendant's solicitors responded by way of indicating that the defendant wished to amend its defence and seek further discovery. The plaintiffs submit that they awaited further action by the defendant. Again, the plaintiffs sat on their hands and did not utilise the provisions of Order 48-06 and seek to have the matter set down for trial. During most of this period the proceeding was subject to civil case management. Rather than use the court management to expedite the proceeding the plaintiffs allowed the matter to be adjourned repeatedly before Teague, J. Furthermore, the plaintiffs ignored the urgings of the court noted in "other matters" of the orders made by Teague, J on 13 March and 19 August 1997. During this period, also, the defendant failed to provide further and better discovery at all let alone promptly necessitating applications and orders against them, including the setting aside of one order because the plaintiffs failed to appear before the Master.

79. On close analysis it appears that the fourth period of delay (a period of almost 11 months) did not expedite the matter very much at all due to the actions and inactions of the plaintiffs. I consider, therefore that the plaintiffs were guilty of inexcusable delay during the fourth period of delay.

82. During the fifth period from 1 October 1997 until 28 September 1998 there was what can best be described as tardiness on the part of the plaintiffs. On 9 December 1997 directions and orders were made on the papers by the Master and the matter was adjourned further until 16 December 1997 before Teague, J when the dates for the delivery of further interrogatories by the defendant and the answers thereto were vacated. The relevant date for present purposes is the extension by Teague, J of the date for the delivery of answers by the plaintiffs to the defendant's further interrogatories until 30 January 1998. On 16 December 1997 the matter was adjourned by Teague, J until 6 February 1998 but does not appear so far as can be ascertained from the court file to have proceeded on that or any other subsequent date before Teague, J. The plaintiffs took from 14 October 1997 until 6 February 1998 to provide answers to interrogatories concerning loss and damage, took from 17 December 1997 until 23 March 1998 to notify an agreed mediator of a proposed mediation between the parties and did not provide further particulars of loss and damage until 22 May 1998 and additional particulars of loss and damage on 12 October 1998. With respect to the fifth period of delay the plaintiffs provided answers to interrogatories and which answers were six days late in breach of the order made by Teague, J. There were delays with respect to mediation but they were inconsequential in the overall scheme of things.

85. On analysis during the fifth period of delay (a period of 12 months) some positive steps were taken by the plaintiffs namely mediation and the service of particulars of loss and damage. However, the plaintiffs were slow in answering interrogatories concerned with loss and damage, were slow in ensuring arrangements were made for the prompt appointment of a mediator and slow in providing particulars of loss and damage. This slow approach of the plaintiffs was adopted at a time when the proceeding was over six years old and, furthermore, over ten years had elapsed since the events that were the subject of the claim. In essence, the plaintiffs failed to adequately prosecute their claim. I am satisfied that the plaintiffs were guilty of inexcusable delay during the fifth period of delay.

88. The defendant criticises the plaintiffs for continuous delay throughout the conduct of the proceeding to provide proper particulars and discovery of loss and damage. The defendant asserts that the plaintiffs have an obligation to provide such particulars and discovery and that the plaintiffs have consistently failed to do so. Indeed, analysis of the steps in the proceeding reveals that during the period from July 1995 until October 1998 the plaintiffs were persistently slow in providing particulars, discovery and answers to interrogatories in relation to loss and damage.

91. The defendant complains that the plaintiffs' particulars of loss and damage remain inadequate. It is emphasised that a witness statement setting out the most recent particulars of loss and damage demonstrate such particulars will be established by capitalisation of earnings however there are no documents on which such earnings can be properly established. The defendant submits that if the plaintiffs proceed to trial on the basis of the particulars provided to date such particulars will require further revision. Furthermore, the defendant apprehends that the plaintiffs' amended statement of claim will require further amendment as it does not plead representations as to seating capacity despite the fact that such representations are described in the further and better particulars. It is said on behalf of the defendant that the potential for the provision of further particulars of loss and damage and further amendments to the statement of claim are factors that ought weigh against the plaintiffs and be regarded as additional factors in finding inexcusable delay. In my view, such matters at this point are speculative. I can consider actual delay only. I, therefore, have not taken into account the potential for further, possible interlocutory steps in the proceeding as argued.

94. I turn now to consider the issue as to whether or not the plaintiffs have been guilty of inexcusable delay sufficient to warrant dismissal for want of prosecution.

97. The plaintiffs deny that there has been inexcusable delay or any prejudice to the defendant. The plaintiffs have addressed the alleged five periods of delay by asserting that there was in fact activity underway on the part of the plaintiffs during each period. The plaintiffs say, further, that insofar as there was delay such delay was caused by the defendant and that the defendant engaged in obstructive tactics.

100. In some respects the facts in this proceeding are closely related to those in Spitfire Nominees v. Ducco, supra, in that the Ducco case involved the same plaintiffs in the present proceeding suing the vendors of the business and the property for breach of a restraint of trade agreement together with other claims. Included in the allegations in the Spitfire Nominees v. Ducco proceeding was a claim for fraudulent concealment of the fact that the property did not comply with the conditions of the relevant town planning permit and which required eight car parking spaces. At first instance an application for dismissal for want of prosecution succeeded. The Court of Appeal set aside the dismissal. For various reasons I consider that the judgment of the Court of Appeal in Spitfire Nominees v. Ducco can be distinguished from the facts in the present proceeding for the purposes of determining an application for dismissal for want of prosecution. In the Spitfire matter if the dismissal application had succeeded it would nonetheless have left three remaining defendants. The Court of Appeal observed that it is a large step to cut out the plaintiffs from one defendant and leave the rest. Such circumstances do not arise in this matter. Further, in Spitfire Nominees Pty Ltd v. Ducco, there was a period of five and a half years from the date of the commencement of the proceeding to the time of the application before the court for dismissal. In this matter the relevant period is one of seven years. In the other matter there was a total period of delay of two years where here from the best perspective of the plaintiffs there has been an accumulated delay of three years and two months (taking only the first three periods of alleged delay) or from the worst perspective a period of delay of five years and one month (taking all five periods of alleged delay). Unlike the facts before the Court of Appeal in Spitfire Nominees v. Ducco, supra, I consider that the periods of delay and total inactivity on the part of the plaintiffs combined with their failure to take steps and initiative of themselves under the Rules to expedite the proceeding places the delay at the higher end of the scale of delay. I form this view on the basis of assessing each of the five periods of alleged delay individually and assessing the whole of the conduct of the proceeding since its commencement in July 1991 to the date of the application for dismissal for want of prosecution before the Master.

103. The plaintiffs allege that the delay or part of the delay has been brought about by the conduct of the defendant. The Appeal Division has stated that all delay is relative and must be seen in context and considered in the overall pattern of the litigation (see Masel and Ors v. Transport Industries Insurance Co Ltd & Ors, [1995] VicRp 59; (1995) 2 VR 328). In Roebuck v. Mungavin (1994) AC 24, the House of Lords considered a matter where the English Court of Appeal held that although there had been inordinate and inexcusable delay on the part of a plaintiff and which had prejudiced the defendant there was no discretion to strike out the claim as a matter of law as the defendant had subsequently urged the plaintiff to take steps required to bring the case to trial and the plaintiff had incurred minor expenditure in doing so. The House of Lords took a different view and considered that where a defendant induces a plaintiff to incur further expenses in pursuit of an action such conduct does not constitute an absolute bar in law to the obtaining of a striking out order. Rather, the House of Lords considered that such conduct by a defendant was a relevant factor to be taken into account by a judge in the exercise of his or her discretion in striking out a claim and should be allocated appropriate weight in all the circumstances. I am satisfied that there is no evidence in this proceeding that the defendant has engaged in a pattern of blocking and diverting conduct or that it has set up obstacles deliberately in the path of the plaintiffs to frustrate their efforts to reach a trial date. In my view it is clear from the facts that whilst from time to time the defendant did not take any steps in the proceeding or, alternatively, may have insisted upon its right of delivering interrogatories for the examination of the plaintiffs, the plain fact of the matter is that at all times it behoved the plaintiffs to expedite their own proceeding. They failed to do so and, furthermore, not only did they fail to take active steps on their part as plaintiffs, but also, failed to utilise the Rules in order to force the defendant along in the proceeding.

106. In addition, it is a relevant factor in the exercise of my discretion that the plaintiffs allowed about four years to pass from the date of the events giving rise to the alleged causes of action before issuing their writ. The courts have held that where a plaintiff waits until late in the limitation period to issue, the approach of the plaintiff must be expeditious thereafter; it is said that there is a special duty to prosecute (see Bishopgate, supra, pp.22-23). I am satisfied that upon viewing the five periods of alleged delay and given the four years that elapsed prior to the issue of the writ the plaintiffs have not fulfilled their duty to prosecute their claim expeditiously.

109. Furthermore, I consider that the plaintiffs have failed to satisfactorily explain the various periods of delay that have occurred. On the basis of the authorities they are obliged to do so particularly given the extent of the delay in the present matter (see Shepperdson v. Lewis [1966] VicRp 59; (1966) VR 418, 432). So far as the defendant is concerned it at no time was under a duty to stir up the inactive plaintiffs. The Full Court of this court has stated: "It is not for the defendant to prosecute the action and he is under no duty to stir up the sleeping dog" (see Duncan v. Lowenthal [1969] VicRp 21; (1969) VR 180, 186.

112. It follows from what I have said that I am satisfied that the delay that has occurred in this proceeding has been at the hand of the plaintiffs and that such delay meets the test laid down in the authorities as being inordinate and inexcusable.

118. In assessing prejudice I must look at the elements of delay in the context of when the matter might have been heard but for the delay and when the matter is likely to be allocated a trial date in the near future (see Bishopsgate Insurance v. Deloitte Haskin & Sells, supra, 25; Spitfire Nominees Pty Ltd v. Ducco, supra, 248). The defendant asserts that if the plaintiffs had not delayed the proceeding in the ordinary course of events it would have been set down for trial in December 1992 and been heard in 1993 or at the latest in 1994. This has not proved to be the case. Furthermore, since the matter did not reach trial about that time subsequently an important witness, Mr Johns, has died. There is then the question as to when the matter is likely to be allocated a trial date in the near future. On one view it might be said that the matter is nearing the end of its interlocutory steps. However, there remains the possible need for further and better particulars of loss and damage and further amendments to the statement of claim. In these circumstances I am satisfied that the delay of the plaintiffs has caused the matter to be brought on for trial much later than would have been the case but for the delays caused by the plaintiffs. Even if some generosity in time is allowed to the plaintiffs by way of accepting that some delays may have led to the matter not being heard before 1995 the fact is that many years have elapsed, approximately three or four years, since the matter should have been heard compared with when it is likely to be heard in the future.

121. In assessing prejudice I must also be satisfied that there is a substantial risk that a fair trial cannot be had eventually because of the inordinate and inexcusable delay on the part of the plaintiffs (see Spitfire Nominees Pty Ltd v. Ducco, supra, 248). What then is the prejudice suffered by the defendant in this proceeding? The plaintiffs rely upon an oral retainer. Accordingly, the evidence of the plaintiffs will rely upon the recollections of witnesses of events and conversations that occurred more than 11 years ago. It is undesirable that courts be called upon to determine facts on the basis of witnesses' recollections of events that occurred so long ago when it was possible for evidence to be given when it was far more fresh in the minds of the particular witness. Furthermore, the length of time that has elapsed since the events that gave rise to the alleged cause of action is important in assessing the risk of prejudice. The events of mid 1987 surrounding the purchase of the business and other matters will inevitably remain at the fore of the minds of the witnesses for the plaintiffs. By contrast, the key witnesses for the defendant are solicitors who in the intervening 11 year period will have dealt with many, many files and doubtlessly the events that occurred in 1987 will be difficult for them to bring to the fore of their minds.

124. This is a case requiring detailed attention at trial to all communications both oral and written between the plaintiffs and their witnesses and the defendant and its witnesses surrounding the retainer of the defendant and the circumstances of the purchase of the business. I am satisfied that the defendant and its witnesses have been placed at a distinct disadvantage by the plaintiffs allowing 11 years to elapse before evidence can be given at trial. In Marino Casauria & Ors v. Dekever & Ors (unreported judgment dated 21 November 1994) Hayne, J of this court, as he then was, considered similar circumstances in determining an application for dismissal for want of prosecution in a solicitors' professional negligence claim and observed (at p.14):

"It is however inevitable, in my view, that memories fade over time and that 11 or 12 years after the events concerned evidence to be given at trial is less reliable than it would be had it been given closer to the events concerned. I am of the view therefore that it is inevitable that there is some prejudice to the defendants in the conducting of their case at trial which follows from the bare fact of the passage of the time that has gone."

128. In addition, there is the issue of the wood yard and the evidence of Mr Johns. The circumstances in which Mr Johns gave evidence were not entirely satisfactory. He was very ill, living in a nursing home and required to give his evidence in circumstances that the transcript reveals were not entirely satisfactory. I am satisfied from a reading of the transcript of the examination of Mr Johns that there was difficulty encountered by the defendant's counsel eliciting evidence from Mr Johns possibly because of his age, his state of health, the environment in which he gave his evidence and the basic difficulty of taking evidence given all those circumstances. Mr Johns was examined in January 1996. If the matter had proceeded to trial and been heard as the defendant alleges it should between 1992 - 1994 the circumstances of Mr Johns may have been entirely different. The prejudice to the defendant is that it was deprived of the opportunity of calling Mr Johns to give evidence in the ordinary way before a court. In this regard I observe, furthermore, the judge at trial would not have the opportunity of observing Mr Johns in giving his evidence and therefore be deprived of the opportunity of assessing his credit in a way that may prejudice the defendant's case. The defendant, in all likelihood, would have to counter evidence for the plaintiffs that they had no knowledge that the wood yard was unavailable for car parking spaces prior to entering into the contract to purchase the business. The transcript of Mr Johns' examination is critical in this regard but because of the circumstances in which the evidence was taken his evidence may be limited in supporting the defendant's rebuttal of the plaintiffs' evidence. Hence the death of Mr Johns is a substantial prejudice to the defendant's case notwithstanding the fact that evidence was given by him during his lifetime.

131. Still related to the issue of recollection of events that occurred in mid 1987 is the fact that representations are alleged to have been made as to the number of seats available in the restaurant at the time of sale. Obviously the plaintiffs' witnesses will make certain assertions 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 have been made by the defendant. The defendant is in the position that it may be unable to rebut or respond in any way to such evidence or only in a very limited manner as 11 years have elapsed since the defendant's witnesses were concerned with the matter. Further, a reasonable inference can be drawn that insofar as a restaurant may continue to be operated on the premises at 341-343 and 345 Toorak Road South Yarra it may be different to the operation that was conducted there in or about July 1987.

134. Given that the defendant is a practising firm of solicitors they suffer an additional prejudice. They have been exposed to an allegation of negligence for a protracted period. It is undesirable that a defendant such as the defendant in this matter be subject to such professional prejudice. The Appeal Division in Bishopgate (at pp.52-53) observed:

"Where a claim is made against individuals relating to their probity of their competence, especially their professional competence, and the claim is for many millions of dollars, then it is not hard to infer that defendants against whom such allegations are made are under a heavy burden. When that burden is not merely deferred but then unjustifiably drawn out over many years, it is easier still to infer serious prejudice of the relevant kind to a defendant. It has sometimes been said that where a defendant is insured or likely to be insured then the prejudice is not so great and the risk of litigation has been said not to be so great in cases of compulsory insurance, such as that applicable to motor accidents, especially where the premiums cannot be increased if the plaintiff is successful. But where a claim extends beyond mere casual negligence to acts which reflect upon the competence or probity of a defendant, especially when that competence or probity is critical to the defendant's future livelihood, then the delay in bringing an action on for hearing will properly be held to impose severe additional prejudice on a defendant. This is particularly the case in claims alleging professional negligence, although such a description is not to be confined merely to the negligence of accountants, solicitors, doctors and the like for it is relevant to any person in respect of whom an unfavourable finding will be likely to place at risk his or her capacity to earn a living. No doubt this case, without delays, would have hung over the defendant's head for up to three years. We are, however, primarily here concerned with the additional and quite unnecessary

burden imposed in the later years while awaiting trial.

Thus, it is not so much the size of the claim as the effect on a person's reputation which is critical to prejudice of this kind. Nor are we suggesting that mere anxiety is sufficient, for that has been said to be a matter upon which too much weight should not be rested. See generally eg Duncan v. Lowenthal at 187-188, ANZ Banking Group v. Donovan at 13, Biss v. Lambeth Health Authority [1978] 1 WLR 382 at 389; The Chris Smaller (Transport) Case at 1208-1210."

138. I am satisfied that in the present matter it is inappropriate and unfairly prejudicial to the defendant for this proceeding to continue to be held over the solicitors in a professional context. In addition, there is the issue of accounting documents that relate to the quantification of loss and damage suffered by the plaintiffs. Evidence has been provided by Mr Brott on affidavit that relevant accounting documents were lost by accident shortly prior to the commencement of the proceedings. Mr Robson QC on behalf of the plaintiffs argued that the fact of the loss of the documents prior to the commencement of the proceeding is not a matter that can be weighed against the plaintiffs in assessing prejudice. It is unnecessary for me to determine whether the documents were deliberately disposed of for a mischievous purpose or lost accidentally. I cannot form a view on the fact of the loss of the documents and potential prejudice to the defendant without considering evidence of all particulars of loss and damage, how that damage is proved to have been suffered and by whom it was suffered. Whilst the disappearance or loss of the plaintiffs' accounting documents may prove inconvenient or even difficult for the defendant, it is not a factor that I have taken into account in assessing the prejudice to be suffered by the defendant if the matter proceeded to trial. I consider that such matter could only be determined at trial.

141. In all the circumstances I am satisfied that the inordinate and inexcusable delay of the plaintiffs in this proceeding will give rise to a substantial risk that a fair trial is not possible and that the defendant will suffer prejudice. The step of dismissing a proceeding for want of prosecution is a draconian one. A plaintiff should not be deprived of having an action tried unless there is real prejudice and injustice likely if the action remains on foot. I am satisfied that there is real prejudice and injustice to the defendant in allowing this matter to proceed further. There is prejudice at trial occasioned by the effluxion of 11 years since the relevant events, the death of an important witness for the defendant and the fact of a long delay in bringing a claim for professional negligence to trial. I acknowledge that this action is in many respects much further advanced than the circumstances in some of the relevant authorities, e.g., Bishopgate. However, I am satisfied that in the overall circumstances of this action justice requires that the proceeding be dismissed for want of prosecution. Accordingly, I allow the appeal from the Master and will further order that the proceeding be dismissed.