In brief - Defendants must take appropriate formal steps in
third party proceedings
Medina v Electro Industry Group Queensland Ltd and Anor 
QSC 143, Justice Martin of the Supreme Court of Queensland
found that there had been an inexcusable delay resulting in
prejudice in the third party proceedings commenced by Electro
Industry Group Queensland Ltd (EIG) against O'Donnell Griffin
Pty Ltd (ODG). ODG sought a declaration that EIG may not take a
step in the proceedings or, alternatively, an order dismissing the
third party proceeding for want of prosecution. The Court found in
ODG's favour and the third party proceedings were struck
Rule 389 of Uniform Civil Procedure Rules considered, as well
as if "proceeding" can mean third party proceeding
The incidents giving rise to the claim occurred in 2003 and
2004. Pre-procedural steps were undertaken between 2004 and 2009,
with ODG being joined as a contributor by EIG during this time.
Litigation commenced in 2009 and a third party statement of claim
was issued to ODG by EIG around this time. Informal negotiations
were attempted and further disclosure was undertaken from around
2010 to early 2012. EIG changed solicitors in October 2013. Shortly
afterwards, ODG's solicitors advised EIG's solicitors they
were closing their file. In 2016, EIG filed an amended third party
statement of claim against ODG which expanded the allegations
that if no step has been taken in a proceeding in one year, a
new step must not be taken without serving a notice of intention to
proceed on the other parties, and
that if no step has been taken in a proceeding in two years, a
new step must not be taken without the order from the Court
In the present case there were several instances in which
periods of one and even two years had elapsed without EIG taking
steps in the proceedings against ODG. The Court considered whether
any steps taken between the plaintiff, Mr Medina, and EIG were
relevant for determining whether any steps had been taken in the
third party proceedings between EIG and ODG.
It was found (at ) that "any steps taken in the main
proceeding which solely affect the plaintiff and defendant are not
steps for the purposes of the third party proceedings. ..."
The relevant "proceeding" was not the entire dispute
involving the plaintiff, the defendant and the third party. It was
the activity of the defendant vis-ŕ-vis the third party that
was the relevant consideration.
Third party proceedings dismissed for want of prosecution
ODG's major complaint was that the lapse of time put it in a
position of difficulty because of the absence of a witness. In
particular, ODG contended that a witness they had made contact with
some nine years earlier was unable to be contacted. At the time of
contact in 2007, ODG obtained diary notes from the witness. It was
considered that the site diaries may well be admissible under
section 92 of the
Evidence Act 1977 (Qld).
the current inability of the third party to locate witnesses,
the inevitable deterioration in the memories of any witnesses
who might be found
The Court held that ODG had been prejudiced by EIG's delay
as the witness could not be called to give evidence about the diary
notes. Even if the witness could have been located, ODG would still
be prejudiced in that his recollection of events would have
deteriorated substantially after the passage of some 13 years.
There was a suggestion that if the third party proceedings were
to be struck out, EIG may seek to rely on
section 40(1)(a) of the Limitations of Actions Act 1974 (Qld), which would
allow it to commence third party proceedings against ODG within two
years from the date of judgment. While the Court was not required
to determine the issue, it referred to a decision of
Bendeich v Clout  QDC 305 and hypothesised that this
may amount to an abuse of process.
Defendants should not neglect third party proceedings
Even where a principal proceeding is not being meaningfully
progressed by a plaintiff, the defendant must ensure that it takes
appropriate formal steps in any third party proceedings and serves
notices of intention to proceed at the intervals mandated by the
UCPR. This will avoid having to seek the Court's leave to
continue the third party proceedings in long running matters. If
the defendant does not do this, and a third party can establish
prejudice, the defendant may lose its right to pursue its
contribution claim against the third party.
EIG has filed a notice of appeal and the matter is before the
Queensland Court of Appeal.
The route to the Amendment Act has been a rather arduous.
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