FEDERAL COURT OF AUSTRALIA Beck v Corrs Chambers Westgarth [2010] FCA 552 Citation: Beck v Corrs Chambers Westgarth [2010] FCA 552 Parties: ANTHONY PATRICK SPALLA, ANDREW DAVID BENTLEY STILL, IRLMOND PTY LTD (ACN 066 314 870) (RECEIVER AND MANAGERS APPOINTED, IN LIQUIDATION) v ST GEORGE MOTOR FINANCE LTD (ACN 007 656 555), ST GEORGE WHOLESALE FINANCE PTY LTD (ACN 001 834 886), ANDREW WILLIAM BECK, ANDREW STEWART HOME, DELOITTE TOUCHE TOHMATSU, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, SIMON ALEXANDER WALLACE-SMITH AND ST GEORGE MOTOR WHOLESALE PTY LTD (ACN 007 664 217), ST GEORGE WHOLESALE FINANCE PTY LTD (ACN 001 834 886), ANDREW WILLIAM BECK, ANDREW STEWART HOME v CORRS CHAMBERS WESTGARTH (A FIRM) File number(s): VID 3203 of 2002 Judge: RYAN J Date of judgment: 2 June 2010 Date of hearing: 31 July 2009 Date of last submissions: 21 August 2009 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 36 Counsel for the Third Cross-Claimant: Ms C Button Solicitor for the Third Cross-Claimant: Mills Oakley Counsel for the Cross-Respondent: Mr D Collins SC with Mr K Lyons Solicitor for the Cross-Respondent: TressCox IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 3203 of 2002 BETWEEN: ANTHONY PATRICK SPALLA First Applicant ANDREW DAVID BENTLEY STILL Second Applicant IRLMOND PTY LTD (ACN 066 314 870) (RECEIVER AND MANAGERS APPOINTED, IN LIQUIDATION) Third Applicant AND: ST GEORGE MOTOR FINANCE LTD (ACN 007 656 555) First Respondent ST GEORGE WHOLESALE FINANCE PTY LTD (ACN 001 834 886) Second Respondent ANDREW WILLIAM BECK Third Respondent ANDREW STEWART HOME Fourth Respondent DELOITTE TOUCHE TOHMATSU Fifth Respondent AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Sixth Respondent SIMON ALEXANDER WALLACE-SMITH Seventh Respondent ST GEORGE MOTOR WHOLESALE PTY LTD (ACN 007 664 217) First Cross-claimant ST GEORGE WHOLESALE FINANCE PTY LTD (ACN 001 834 886) Second Cross-claimant ANDREW WILLIAM BECK Third Cross-claimant ANDREW STEWART HOME Fourth Cross-claimant CORRS CHAMBERS WESTGARTH (A FIRM) Cross-Respondent JUDGE: RYAN J DATE OF ORDER: 2 JUNE 2010 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The motion by the third cross-claimant on notice dated 18 June 2009 be dismissed. 2. On the motion by the cross-respondent on notice dated 15 June 2009, that the cross-claim herein by the third cross-claimant be dismissed with no order as to costs save for the costs referred to in paragraph 3 of this order. 3. The third cross-claimant pay the cross-respondent's costs of and incidental to the motions on notice referred to in paragraphs 1 and 2 of this order, such costs to be taxed in default of agreement. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 3203 of 2002 BETWEEN: ANTHONY PATRICK SPALLA First Applicant ANDREW DAVID BENTLEY STILL Second Applicant IRLMOND PTY LTD (ACN 066 314 870) (RECEIVER AND MANAGERS APPOINTED, IN LIQUIDATION) Third Applicant AND: ST GEORGE MOTOR FINANCE LTD (ACN 007 656 555) First Respondent ST GEORGE WHOLESALE FINANCE PTY LTD (ACN 001 834 886) Second Respondent ANDREW WILLIAM BECK Third Respondent ANDREW STEWART HOME Fourth Respondent DELOITTE TOUCHE TOHMATSU Fifth Respondent AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Sixth Respondent SIMON ALEXANDER WALLACE-SMITH Seventh Respondent ST GEORGE MOTOR WHOLESALE PTY LTD (ACN 007 664 217) First Cross-claimant ST GEORGE WHOLESALE FINANCE PTY LTD (ACN 001 834 886) Second Cross-claimant ANDREW WILLIAM BECK Third Cross-claimant ANDREW STEWART HOME Fourth Cross-claimant CORRS CHAMBERS WESTGARTH (A FIRM) Cross-Respondent JUDGE: RYAN J DATE: 2 JUNE 2010 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Before the Court are two motions on notice. The first, filed by the cross-respondent ("Corrs") on 15 June 2009, seeks the stay or dismissal of the cross-claim of the third respondent ("Beck") dated 12 February 2004. The second, filed by Beck, seeks, so far as is relevant, leave to file and serve a statement of claim substantially in the form of an annexure to an affidavit of Mr Hager of Beck's solicitors, sworn on 18 June 2009. 2 The central issue to be decided is, thus, whether Beck should have leave to prosecute a claim, in the form in which it currently stands, in an amended form, or at all. Background 3 The history of this proceeding is far from straightforward. Its background having been set out several times before, however, it is unnecessary to advert to it in detail. Beck and his colleague, Mr Home ("Home"), were appointed, in 1999, by the first and second respondents, St George Motor Finance Ltd and St George Wholesale Finance Pty Ltd, to be the receivers of two companies, Irlmond and APS. 4 The cross-claim currently at issue was issued by Beck and Home against Corrs, a firm of solicitors, in February 2004, and sought from Corrs an indemnity against any liability to the applicants. Corrs' defence to the cross-claim was filed in March 2004. That, as Mr Collins SC, who appeared with Mr Lyons of Counsel for Corrs on the present motions, pointed out, was the last step taken in relation to the cross-claim. Meanwhile, a series of interlocutory proceedings between the applicants and the respondents going to the strike-out of the proceedings had been heard and determined (see Spalla v St George Motor Finance Ltd [2004] FCA 1262 and Spalla v St George Motor Finance Ltd [2004] FCA 1699) as had an appeal from certain of the orders made in those proceedings (see Beck v Spalla [2005] FCAFC 82). "As a consequence of the appeal", Counsel for Corrs pointed out in writing, "the issues between the applicants and the respondents in so far as they related to the cross claim settled in 2005". 5 In his affidavit filed 15 June 2009, Mr Watson of TressCox Lawyers, the firm of solicitors on the record for Corrs in this proceeding, has deposed that, by letter dated 21 December 2007, Beck's solicitors had written to him "seeking to reactivate the Receivers cross-claim". The relevant parts of that letter were as follows: "Our client now wishes to reactivate the proceeding as he believes that he has suffered loss and damage as a direct result of the actions of Corrs Chambers Westgarth in relation to the Receivership. As your client will be aware our client was sanctioned by ASIC arising out of the Receivership, in particular the application of monies for which Corrs Chambers Westgarth had provided specific advice in the matter. As a result of the actions taken by ASIC his partnership status at Deloittes was altered, his share of the profit was reduced and he was required to resign from positions within Deloittes including the Deloittes Board and his leadership role within the insolvency and reconstruction group of Deloittes. This ultimately lead to his resignation from the partnership. Having reviewed a part of the file in relation to this matter we note that your client acted on behalf of St George and also provided advice to our client. One of the principal issues in the matter was the cross collateralisation of securities and the question as to whether or not funds could be applied in such a way as to maximise the benefit for St George" Having referred to advice allegedly given about the correctness of Finkelstein J's decision of 30 April 1999 (Spalla v St George Wholesale Finance Pty Ltd [1999] FCA 513), the letter from Beck's solicitors continued; Damages In August 2003 the Companies, Auditors and Liquidators Disciplinary Board (CALDB) ordered that: 1. [Beck] resign all current appointments 2. [Beck] not accept any other appointment as an external Administrator for 12 months 3. [Beck] not accept appointment as a sole external Administrator for the 12 month period commencing 9 August, 2004 4. [Beck] attend 10 hours of continuing professional development in relation to insolvency practice and procedures for three consecutive 12 month periods from 8 August, 2003 5. [Beck] pay ASIC's costs fixed at $50,000.00 The effect of the decision had a significant impact upon [Beck]'s reputation, his ability to attract work and to continue to operate on what is an extremely competitive field. As a result of the decision his equity points were reduced having a direct impact upon his earning capacity. A comparison of what he did earn as against what he would have earned had he remained on the same points as originally held shows a loss of income in the order of $200,000.00. Ultimately the whole process resulted in [Beck] having to resign as a Partner and leave the insolvency market which has ultimately reduced his earning capacity. His reputation has also suffered significantly as a result of the findings and publication of the matter. It is the intention to reactivate the proceedings if a negotiated settlement cannot be reached. 6 Mr Watson then deposed that, after receiving that letter, he had a "without prejudice conversation" with its author, but had heard nothing further from Beck's solicitors until January 2009. 7 On 12 March 2009, Beck issued a notice of motion seeking directions as to the conduct of the proceeding. On the return of that motion on 9 April 2009, I made the following orders: 1. The third cross-claimant file and serve by 8 May 2009 a statement of claim against the cross-respondent Corrs Chambers Westgarth ("Corrs") such statement of claim to stand in lieu of the cross-claim filed herein on 12 February 2004 and to embody all claims by the third cross-claimant against Corrs arising out of the advice and retainer alleged in the said cross-claim and to give as full particulars as practicable of the damages claimed to have been suffered by the third cross-claimant as a result of the negligence, breaches of retainer or other breaches of duty alleged against Corrs. 2. There be a directions hearing on 29 May 2009 in relation to any further proceedings in respect of the statement of claim referred to in paragraph 1 of this Order. 3. The costs of the third cross-claimant and Corrs of this day be reserved. 8 Beck failed to comply with paragraph 1 of that Order. On 15 June 2009, Corrs filed the notice of motion to which I have already referred, seeking the dismissal of Beck's cross-claim. Then, on 29 June 2009, as I have mentioned, Beck filed his motion for leave to file the proposed statement of claim. The proposed statement of claim 9 As mentioned, the statement of claim which Beck seeks leave to file and serve is annexed to the affidavit of Mr Hagar, his present solicitor, sworn on 18 June 2009. The substance of the allegations made against Corrs are set out at paragraphs 8 to 12 of that document which, omitting particulars, are in these terms: 8 Pursuant to the retainer [the existence and content of which is pleaded], Corrs advised Beck to the effect that the liabilities of Irlmond and APS to St George were cross-collateralised under the securities granted by Irlmond and APS to St George. 9 Pursuant to the retainer, Corrs advised Beck to the effect that the Finkelstein judgment [in proceedings V 74 of 1999: Spalla v St George Wholesale Finance Pty Ltd [1999] FCA 513] was wrong to the extent that it found that the liabilities of Irlmond and APS to St George were not cross-collateralised under the securities granted by Irlmond and APS to St George and would be successfully appealed on that point. 10 Pursuant to the retainer, Corrs advised Beck to the effect that, despite the Finkelstein judgment, they could conduct the receiverships as if liabilities of Irlmond and APS to St George were cross-collateralised under the securities granted by Irlmond and APS to St George. 11 Pursuant to the retainer, Corrs advised Beck to the effect that if they were unsuccessful in appealing the Finkelstein judgment on the question whether the liabilities of Irlmond and APS to St George were cross-collateralised under the securities granted by Irlmond and APS to St George, it was still open to St George to give Beck a direction as to where the proceeds from the sale of assets of Irlmond must be paid, and Beck was bound to comply with that direction. 12 Pursuant to the retainer, Corrs advised Beck to the effect that they could use proceeds from the sale of the assets of Irlmond to repay the indebtedness of APS to St George. 10 It is not without significance that an appeal from "the Finkelstein judgment" pleaded in paragraphs 9, 10 and 11 which have just been reproduced, was determined by a Full Court of this Court on 12 November 1999 when the judgment at first instance was upheld; see Spalla v St George Wholesale Finance Pty Ltd (1999) 95 FCR 359. The proposed cross-claimant's statement of claim then goes on to allege; 13 Beck relied on and acted in accordance with the advice set out in paragraphs 8 to 12 and applied proceeds from the sale of the assets of Irlmond to repay the indebtedness of APS to St George and otherwise conducted the receiverships of Irlmond and APS on the basis of the advice set out in paragraphs 8 to 12 … 11 The proposed amended statement of claim then goes on to allege a breach of the retainer agreement, in that; 17 Corrs breached the retainer in that they neglected or failed to perform services for Beck with due care and responsibility and/or with the level of skill that may be expected from a firm that is expert, and that employs practitioners who are pre-eminent, in areas of law including banking and finance (including securities), commercial litigation and corporate insolvency (including receiverships). There is then a claim in the alternative for breach of a duty of care said to be owed to Beck by Corrs as his solicitors in the relevant period. 12 By way of identifying the differences said to exist between the proposed statement of claim and Beck's cross-claim of 12 February 2004, Mr Hagar deposed, in an affidavit filed on 31 July 2009, that; 19 …In his proposed statement of claim Beck seeks damages which he has personally incurred and which he says flow causally from the negligent advice. The substance of the advice pleaded is the same as was pleaded in Beck's claim as originally formulated. 20 In summary, the claims relate to the actions Beck took on the advice of Corrs which were later the subject of an investigation by the [CALDB], the findings of which essentially meant that he could no longer act as an external administrator (and through his actions (taken on Corrs' advice) had exposed Deloitte to protracted litigation), his services were no longer of any use to Deloitte and he was eventually asked to resign, causing him loss and damage. It is this loss and damage for which he now claims. 13 If that be taken as the complaint embodied in Beck's proposed amended statement of claim, Mr Watson seeks to demonstrate, by these paragraphs of his further affidavit filed 27 July 2009, that it has no foundation; 27. Based upon discussions I had with Mr Jim Delany S.C. who informed me that he was Counsel for ASIC in the CALDB proceedings, I believe that the CALDB findings were a result of negotiations between CALDB, Home and Beck from June or July 2002. The causal link between any advice which Corrs gave the Receivers and the CALDB findings is significant for the purpose of the proposed claim. The details of these negotiations between Home, Beck and CALDB and the basis upon which the CALDB findings were made is a key factual issue. To the extent that the CALDB findings were made as a as a result of negotiations with Beck, and concessions made by him, any advice he received at the time will be relevant. 28. The CALDB findings appear to relate to issues which go beyond the subject of the alleged negligent advice of Corrs in the Receivers cross claim or the proposed claim. Indeed, the CALDB findings seem inconsistent with advice given by Corrs to the Receivers. Given my experience in acting for insolvency practitioners in matters before disciplinary and other tribunals, I would be surprised if CALDB would discipline a receiver for conduct where the receiver was relying upon legal advice as the reason for undertaking such conduct. 14 I have proceeded on the assumption that Beck's proposed amended cross-claim discloses a cause of action against Corrs. However, it will readily be apparent from its terms that it suffers from various formal deficiencies, most notably the lack of particularity in pleading the advice given by Corrs to the receivers. Each allegation of the giving of the advice is qualified by the formula that "it was to the effect that ….". As well, Beck is likely to encounter evidentiary difficulties in proving the new claim, not least because, as pleaded, it is inconsistent with, or not borne out by, certain contemporaneous documents identified in Mr Watson's further affidavit of 27 July 2009. 15 It is useful to set out the consequences of these formal and evidentiary deficiencies against the background of the principles established by the authorities as governing the grant of leave to amend. Leave to amend – Principles 16 Until recently, the preponderance of authority in relation to the amendment of pleadings was to the effect that leave to amend would only be granted where it would not result in prejudice to the other party for which costs and appropriate procedural orders could not adequately compensation; see Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146, per Dawson, Gaudron and McHugh JJ, at 154-5; per Kirby J, esp. at 167ff. However, the approach endorsed in J L Holdings did not entail, as Heerey J pointed out in GMCA Pty Ltd v Black & Decker Inc [2007] FCA 1680, at [4], that "procedural indulgences must always be granted and that the salve of costs will always be sufficient". At the margins, it has been a vexed question of how considerations of justice, in the sense of allowing a party to advance a reasonably arguable claim, at whatever point in the litigation it may be raised, are to be reconciled with principles of case management which may militate, in the circumstances of a given case, against allowing a party to bring, maintain or amend a claim. The question has excited differences of judicial opinion, often expressed in robust terms. Ordinarily, however, the question turns on an exercise of discretion in the light of the factual circumstances of the particular case. As was recognised in Sali v SPC (1993) 116 ALR 625, this has meant that the grant or refusal of an amendment is mot appropriately to be left to the trial (or docket) judge, who exercises a discretion conferred by the relevant Rules of Court, which will not "lightly be set aside on appeal", because the test to be applied by the appellate court is that identified in House v The King (1936) 55 CLR 499 as applicable to reviews of the exercise of judicial discretion. 17 After the hearing of the motions with which I am now concerned, the High Court handed down its decision in Aon Risk Services v Australian National University (2009) 239 CLR 175. Practitioners for the parties sought, by correspondence with my Associate, an opportunity to put further submissions as to the effect on the present motions of what had been said in Aon. I accorded them that opportunity, and a brief written outline was submitted on each side. 18 Aon arose from damage sustained by the Mount Stromlo Observatory in Canberra during a fire in January 2003. The Australian National University initially claimed an indemnity from its insurers for the expenses which had arisen from the damage. Later, it sought, successfully, to add as a defendant its insurance broker, Aon Risk Services Australia Ltd. Soon after the commencement before a Judge of the Supreme Court of the Australian Capital Territory of the trial of the University's action, the University reached an out-of-court settlement with the insurers, but not with Aon. It then sought further to amend its statement of claim to add various allegations against Aon. The primary Judge granted the necessary leave: Australian National University v Chubb Insurance Co of Australia Ltd [2007] ACTSC 82, an appeal from which was upheld by a majority of the Court of Appeal of the Australian Capital Territory: Aon Risk Services Australia Ltd v Australian National University (2008) 227 FLR 388. The primary Judge and the majority of the Court of Appeal reached their conclusion principally by taking the approach which had earlier been endorsed by the High Court in J L Holdings. 19 In allowing the appeal and ordering that the University's application for leave to amend be dismissed, Gummow, Hayne, Crennan, Kiefel and Bell JJ said, at 217 of their joint judgment in Aon that; An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future. (citations omitted) 20 Their Honours reached that conclusion after indicating their perception of the deficiencies of the approach ordained by J L Holdings and observing at 212-3; An important aspect of the approach taken by the plurality in JL Holdings was that it proceeded upon an assumption that a party should be permitted to amend to raise an arguable issue subject to the payment of costs occasioned by the amendment . So stated it suggests that a party has something approaching a right to an amendment. That is not the case. The "right" spoken of in Cropper v Smith needs to be understood in the context of that case and the Rule, which required amendment to permit the determination of a matter already in issue. It is more accurate to say that parties have the right to invoke the jurisdiction and the powers of the court in order to seek a resolution of their dispute . Subject to any rights to amend without leave given to the parties by the rules of court, the question of further amendment of a party's claim is dependent upon the exercise of the court's discretionary power. (citations omitted) 21 Contrary to the submissions advanced on behalf of Beck before the reasons of the High Court in Aon were published, I consider that I am now bound to take the approach outlined in that case. I also reject the further submission subsequently advanced by Counsel for Beck that the High Court did not intend the approach which it endorsed to be of general application. 22 As well as delay and an apparent lack of diligence in prosecuting the claim sought to be raised by the proposed pleading, another factor to which significant weight must be attached in balancing the considerations for and against leave to amend is any prejudice which would be suffered by the other party if leave were granted. "Prejudice", in this context, has a broad connotation and comprehends, for example, the disadvantage suffered by one party upon the other's late application for vacation of a trial date (as in Menzies v CRCI Pty Ltd [2007] NSWCA 118), or arising from very late production of evidence on affidavit (as to which see Black & Decker (Australasia) Pty Ltd v GMCA Pty Ltd [2007] FCA 1623, per Finkelstein J). 23 The specific prejudice which Corrs claim they would suffer if leave were granted in this case arises from the significant lapse of time, said to be akin to that discussed by McHugh J in considering, in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551ff, whether a statutory limitation period should be extended. The same point was made by Kirby J, at 566, where his Honour referred to "the erosion of memory; the loss of documents; and the death, departure or disappearance of witnesses". It was to prejudice of that kind that Counsel for Corrs directed their submissions, the advice at issue having been given, as mentioned, in 1999. It should not be forgotten, however, that McHugh J also emphasised that it is important for the of the court to identify on the evidence what prejudice would be caused by a grant of leave or an extension of time, rather than to make its assessment on: the basis of judicial generalities about time, the importance of finality and the usual desirability of prompt action for the fair trial of contested issues. 24 It may be accepted that prejudice of this type can be particularly acute where the claim sought to be raised impinges on the professional reputation, competence and probity of the party (see Australian Securities and Investments Commission v Lindberg [2009] VSC 70 per Robson J at [28]-[34]). At the hearing of these motions, however, counsel for Corrs did not point to any specific type of loss or erosion of evidence; it was merely put, as a hypothesis, that the memories of key witnesses will have faded. This is particularly significant here, as I mentioned, because much of what is alleged in the proposed pleading depends upon oral advice, some of it given almost ten years ago. 25 Where the facts are as clear as those in the present case I consider it open – and appropriate – to the Court to draw obvious inferences about the effect of the effluxion of time on a party's ability to defend or to respond to claims made against it. That approach finds support in Bishopsgate Insurance Australia Ltd (in liq) v Deloitte Haskins & Sells [1999] 3 VR 863, where Tadgell and Ormiston JJ, with whom Brooking J agreed, said, at 875; Although there are many cases in which the necessity to establish prejudice has been stated as a condition precedent to the exercise of the power to dismiss for want of prosecution on the basis of delay, it is not correct, in our opinion, to say that the defendant is obliged to allege that prejudice upon affidavit as opposed to asking the court to infer from all the circumstances of the case that prejudice has been or will be likely to be suffered. This is not to deny that prejudice, actual and potential, must be established: it is merely a reminder that proof of any issue can be established by circumstantial evidence and of the necessary process of inference from such evidence. Nor are we suggesting, for it would be contrary to authority, that it is for the plaintiff to disprove prejudice; but the defendant is entitled to point to undisputed facts and ask the court to draw necessary logical inferences from them for this purpose. 26 Considerations of the type which they envisaged led their Honours to say, at 887, in terms which, I consider, apply with some force to the circumstances of this case, that; this is a case where by its very complexity there has been shown to be a substantial risk that the defendant, in relation to the events made the subject of the present statement of claim, will suffer far more than minimal prejudice additional to that which it would have suffered had there not been the inordinate and inexcusable delay to which we have referred. 27 Against that background, it is convenient now to consider the respective positions of the parties and whether, in all the circumstances, Beck ought to have leave to file the proposed amended pleading exhibited to Mr Hagar's affidavit of 18 June 2009. Should Beck have leave to file his proposed pleading? 28 For the reasons which follow, and against the background of principle set out at [16]-[26] above, I have come to the view that to grant leave to Beck to file his proposed pleading would not be an appropriate exercise of the discretion conferred by O 13 r 2 of the Rules of this Court. In my view, the test which is to be applied to a situation like the present is that which was stated in Bishopsgate, supra, namely whether, first, there has been inordinate and inexcusable delay on the part of Beck, which, secondly, results in a substantial risk that it will not be possible to have a fair trial of the issues, or, put another way, that the delay has seriously prejudiced Corrs' ability to respond to the claim put against it. However the test be stated, I consider that the circumstances of the present case are likely to preclude a fair trial of the new allegations contained in the proposed pleading. Delay 29 It is not disputed that there has been a substantial lapse of time since a breach of retainer or breach of duty by Corrs is alleged to have occurred. During the time since the alleged breach between February and November 1999, various litigious steps have been taken in this matter between March 1999 and September 2006, Beck's solicitors have, in December 2007, written the letter to which reference is made above, at [5], and the present motions have been filed in June 2009. In my view, a delay of that type is inordinate when viewed in the context of the proposed pleading – particularly having regard to the nature of the damage said to have been sustained by Beck. The real question to be determined, then, is whether that delay has operated to jeopardise a fair trial of the issues between the parties. Would a fair trial of the issues be possible? 30 In his further affidavit filed on 27 July 2009, Mr Watson of Corrs' solicitors, deposed that he is "concerned that Corrs will suffer prejudice due to the delays in the prosecution of Beck's claim against Corrs". Mr Watson then refers to several difficulties which he perceives as having arisen from the passage of time, among which are; · The volume (30 archive boxes) of documents held by his firm in relation to the proceedings; · A paucity of file notes; "for example", he deposes, "I have not been able to identify file notes evidencing the particular conversations constituting the alleged negligent advice in the proposed claim…" – Mr Watson then deposes to conversations between himself and former partners and employees of Corrs, which have revealed that it was not their practice to take file notes, and, in any case, the "expedited timetable" in which they were then operating caused them to keep fewer records than they might otherwise have; and · The poor recollection of people formerly involved in the matter, several of whom are not longer in Corrs' employ (or are no longer partners of the firm). 31 As I understood her, Ms Button of Counsel, who appeared before me for Beck, submitted that the delay between the alleged accrual of Beck's claim against Corrs and his seeking to revive his cross-claim could be explained by reference to the progress of the "principal litigation", i.e. the proceedings between Spalla and the St George parties. In her written submissions, she expressed the point in this way; 16 The structure of the cross-claims as they then stood was inextricably wound up in the fate of the principal litigation. Those claims may have been filed in 2004, but it appears that all parties were happy for the claims to be in abeyance while the primary litigation was ongoing. It was only in December 2006 that the primary litigation was finally disposed of, leaving the fate of the cross-claims uncertain. In light of that, the relevant delay should be assessed from December 2006. It is only any additional deterioration in the memories of witnesses since December 2006 that is relevant. Any deterioration in the ordinary course between 1999 and December 2006 cannot be laid at Beck's door: Spitfire Nominees v Ducco [1998] 1 VR 242, at 248. 17 Further, Corrs did nothing either after March 2004 or after December 2006 to bring the outstanding cross-claims (both its own and that of the receivers and St George) to a head. That it was content to let the receivers' claims lie dormant (and indeed let its own cross-claims lie dormant) is indicative of the absence of the abuse of process that is now asserted. 32 Ms Button referred to Johnson v Gore Wood & Co [2002] 2 AC 1, where, at 34, Lord Bingham said of the respondent to the appeal that; its failure to take action to strike out over a long period of time is potent evidence not only that the action was not seen as abusive at the time but also that, on the facts, it was not abusive. The indicia of true abuse are not so obscure that an experienced professional party, advised by leading counsel… will fail to recognise them. That passage was said to support Beck's argument that Corrs could have perceived, when it was made, that Beck's claim was abusive, if it was. As it was not so perceived, the claim should not be taken to have been abusive when it was filed, and it cannot have become abusive by the mere effluxion of time. However, this argument misstates the essence of Corrs' contention which is not that Beck's claim was an abuse of process when made. Corrs' contention, rather, is that Beck's claim has been left so long in abeyance that a fair trial of the issues between him and Corrs is no longer possible. 33 In any case, Ms Button then submitted, none of the elements of prejudice alleged in the affidavits filed on behalf of Corrs – such as incomplete files, a long delay since any work has been performed in relation to the matter, the volume of documents involved, and a lack of any, or any accurate, file notes of relevant conversations (which I have noted at [30] above) – can be attributed to Beck's "fault". That much may be conceded as Beck can hardly be held responsible for the vagaries of the record-keeping practices and personnel retention of various law firms. On the other hand, many of the matters which it is said cannot be "laid at Beck's door", are the natural and probable consequences of the passage of time. 34 It is hardly surprising, for example, that a solicitor said to have given certain oral advice about ten years ago is now unable to remember the terms of the advice, especially when unassisted, in the first place, by any detailed allegation as to its content or surrounding circumstances, and, in the second place, by any written records of the terms in which it was given. In my view, the difficulties which now attend the litigation of Beck's claim have been brought about, in large part, by the inaction of himself and his advisers. 35 That is not to say that Beck's claim has never been tenable or that, were he to be granted the necessary leave, he would not now be able to mount a reasonably arguable case. It is merely to say that he has not prosecuted the claim with sufficient diligence, and, that, whatever be its underlying merits, he does not have anything "approaching a right", as the High Court said in Aon, to bring it at this late stage, in the circumstances in which he has sought to do so. The possibility of a fair trial of the issues raised by the proposed pleading has, I consider, been eroded to such an extent, that it would not now be an appropriate exercise of discretion to allow him to a file a pleading in the terms exhibited to Mr Hagar's affidavit of 18 June 2009. Conclusion 36 For the reasons which I have endeavoured to explain, the circumstances attending Beck's application for leave when viewed in light of the authorities as they now stand militate against his being allowed to file the proposed pleading. As I perceive it, Beck's cross-claim is not maintainable without being amended in the manner proposed. It follows that I should accede to Cross' motion that Beck's cross-claim should be dismissed. The costs of the two motions currently before the Court should follow the event and be paid by Beck. However, as it appears that the only other step taken by Corrs in relation to Beck's cross-claim has been the filing of a defence in March 2004, I do not consider it appropriate to make any further order for costs in consequence of the dismissal of the cross-claim. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 2 June 2010