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

Spitfire Nominees Pty Ltd v Thompson & Hall [1999] VSC 12 - VSC 1999 case summary — Zoe

[6]

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.

[12]

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.

[18]

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.

[38]

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.

[39]

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.

[50]

"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."

At a glance

Court

Decision date

Before

Source

Judgment (52 paragraphs)

Parties

Cases Cited (2)