Bolonja v Simmons Wolfhagen

[2001] TASSC 131

[2001] TASSC 131

CITATION:                 Bolonja v Simmons Wolfhagen [2001] TASSC 131

PARTIES:  BOLONJA, Sime
  v
  SIMMONS WOLFHAGEN

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  1355/1998
DELIVERED ON:  20 November 2001
DELIVERED AT:  Hobart
HEARING DATES:  5 November 2001
JUDGMENT OF:  Master Holt

CATCHWORDS:

Procedure - Supreme Court procedure - Tasmania - Amendments - Statement of claim - Whether proposed amendment, if allowed, would introduce an otherwise statute barred cause of action.

Renowden v McMullin & Anor (1970) 123 CLR 584; Weldon v Neal (1887) 19 QBD 394, distinguished.
Aust Dig Procedure [276]

REPRESENTATION:

Counsel:
             Plaintiff:  B R McTaggart
             Defendants:  R C Mackay
Solicitors:
             Plaintiff:  Jennings Elliot
             Defendants:  Dobson Mitchell & Allport

Judgment Number:  [2001] TASSC 131
Number of Paragraphs:  15

Serial No 131/2001
File No 1355/1998

SIME BOLONJA v SIMMONS WOLFHAGEN

REASONS FOR JUDGMENT  MASTER HOLT

20 November 2001

1. The plaintiff has applied for an order granting leave to amend the statement of claim, but I have been advised by counsel for the plaintiff that the final form of the proposed amendment is yet to be settled.  Counsel for the defendants has submitted that regardless of the content of any proposed amendment, the application should be dismissed.  Counsel have agreed that I should deal with this submission as a preliminary matter.  If the defendants' argument succeeds, the plaintiff's application will be dismissed.  If the defendants' argument fails, the further hearing of the matter will await delivery of the final draft of the proposed amendment.

1. The plaintiff's action was commenced by writ filed on 27 October 1998.  The writ was endorsed with a claim for damages for negligence and breach of contract.  In about November 1998, a statement of claim was delivered alleging that the plaintiff had suffered personal injuries in 1986 whilst working for J M K Constructions Pty Ltd in the construction of the Trafalgar Car Park and had instructed the defendant solicitors to pursue a claim on his behalf for damages for personal injuries.  The statement of claim goes on to allege that the defendants filed a writ; obtained the opinion of counsel that the plaintiff would succeed and recover damages in the range of $180,000 to $200,000; failed to discuss counsel's advice with the plaintiff and, on 23 July 1993, advised the plaintiff to settle the action for $90,000, inclusive of costs.  The statement of claim goes on to say that the plaintiff settled the action in accordance with the defendants' advice in July 1993, and thereby suffered damage by way of the lost opportunity of settling the action or obtaining an award of damages for a greater amount.  The statement of claim alleges that the defendants' conduct of the litigation was negligent and in breach of an implied term of the retainer that the defendants would act with due care, skill and diligence.

1. The defendants' submission proceeded as follows:

(1)  The statement of claim contained no allegation of fact that but for the alleged lack of due care, skill and diligence of the defendants, the plaintiff would or might have recovered damages in excess of the settlement sum.  Such an allegation needed to have been made for any complete cause of action to have been formulated. 

(2)  Any cause of action which the plaintiff had, had accrued at the latest at the time of settlement of the personal injuries claim, namely July 1993.  An action for negligence or breach of contract could not have been commenced after July 1999 because of the effluxion by that time of the period prescribed for the institution of proceedings by the Limitation Act 1974.

(3)  The rule in Weldon v Neal (1887) 19 QBD 394 applies when a statement of claim is delivered which does not disclose a complete cause of action and thereafter the limitation period is allowed to pass by. The rule being as stated by Lord Esher MR at 395:

"If an amendment were allowed setting up a cause of action which, if the writ were issued in respect thereof at the date of the amendment, would be barred by the Statute of Limitations, it would be allowing the plaintiff to take advantage of her former writ to defeat the statute and taking away an existing right from the defendant, a proceeding which, as a general rule, would be, in my opinion, improper and unjust.  Under very peculiar circumstances the court might perhaps have a power to allow such an amendment, but certainly as a general rule it will not do so."

(4)  Applying what was said by the majority in Renowden v McMullin & Anor (1970) 123 CLR 584, the delivery of a statement of claim which fails to plead all of the facts necessary to formulate a complete cause of action amounts to an abandonment of all claims endorsed on the writ and after the limitation period has expired it is too late under the rule in Weldon v Neal to revive what has been abandoned.

1. For the reasons which follow, it is unnecessary for me to decide whether or not the existing statement of claim fails to formulate any complete cause of action.  I shall assume for the purpose of considering the defendants' argument, that the statement of claim suffers from the defect asserted, although (especially in relation to the contract claim where damage is not an essential ingredient: Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd & Ors (1996) 136 ALR 733 at 750), I am far from persuaded that it does.

1. The rule in Weldon v Neal is ambiguously expressed in the report of that decision.  Depending upon how it is interpreted, it may or may not preclude a plaintiff from amending his pleading to fill a gap so as to perfect the formulation of his cause of action after the period prescribed by the Limitation Act 1974 for the commencement of the action has elapsed. There was no need for the Court of Appeal in Weldon v Neal to consider this matter on the facts before it.  There, the plaintiff had commenced an action for slander.  Slander was not actionable without proof of special damages and no special damage had been alleged.  The plaintiff was non-suited and the trial judge refused leave to amend.  The matter went to the Court of Appeal and an order for a new trial was made, with leave to amend the statement of claim.  An amended statement of claim was delivered which presumably corrected the defect in relation to the claim for slander and added fresh claims in respect of assault, false imprisonment and other causes of action which, by then, would have been barred by the Statute of Limitations if fresh proceedings had been instituted.  When the matter came back to the Court of Appeal, it was only the causes of action, in addition to the slander claim, which were the subject of dispute.  The report does not disclose whether, by the time of the amendment of the statement of claim, the slander action would have been barred if the subject of fresh proceedings.

1. In what was described by Cox CJ as "an informative article" in Ritchie & Parker Alfred Green & Co & Woodberry v Gornalle [2000] TASSC 8, Susan Campbell, in her publication, Amendments and Limitations: The Rule in Weldon v Neal (1980) 54 ALJ 643 posed the question (which, upon a review of the authorities, she was unable to answer):

"At what point does an amendment cease to be merely an elaboration of the original pleading and become a new cause of action?"

As Crawford J observed in his dissenting judgment in Gornalle at par26:

"Since Weldon v Neal judges have grappled with the problem of defining, for the purposes of its rule, what a new cause of action is, but no definitive answer has been found.  Much of the judicial dicta needs to be read in the context of the facts and circumstances of the particular case.  It is often much easier to know a new cause of action when one sees it than to explain why."

The dearth of recent authority on the subject is explained by the fact that the rigidity inherent in the rule has been long since ameliorated by Rules of the Supreme Court in England and each of the Australian States, with the exception of Tasmania.  Rogers J noted in Australia and New Zealand Banking Group Ltd v Larcos (1987) 23 NSWLR 286 at 291:

"The matter is not free from doubt.  There has been considerable difference of opinion as to what constitutes a new cause of action for the purpose of the rule in Weldon.  It was believed that with the introduction of the Supreme court Rules 1970, Pt20, r4, that debate had become sterile in New South Wales.

1. The Full Court in Gornalle considered whether the rule only applied to new causes of action in the technical sense, that is to say, where proposed amendments alter the legal categorisation of the claim.  Cox CJ analysed a number of authorities and said, at par3:

"With two or three exceptions, they are all consistent with the proposition that an amendment will normally be refused if it introduces a new cause of action in a technical sense, or if, though not doing so, it introduces such significantly different facts that the defendant for reasons other than loss of a right to plead the relevant Limitation Act would be prejudiced by the amendment." [Emphasis added]

Wright J said at par12 "the modern version of the rule" is as follows:

"1   When an amendment is sought which seeks to set up a new cause of action which would be statute barred if made the subject of a fresh proceeding, it should normally be disallowed.

2    If the proposed amendment does not seek to set up a new cause of action, but seeks to set up a fresh set of facts or ideas, or involves a fundamental departure from the existing claim, to allow which would involve prejudice or injustice to the opposing party, which cannot be overcome by an award of costs, an adjournment or other procedural means, it should normally be disallowed.

3    If a proposed amendment offends neither of these principles, it should normally be permitted, upon appropriate terms if necessary."

1. The first part of the proposition of Cox CJ is a statement of the rule and the second part of his proposition is not put forward as an elaboration of the rule, but rather an acknowledgement of an ordinary principle which applies to amendment applications, not caught by the rule.  I note that Wright J, after setting out what he called "the modern version of the rule" as quoted above, said at, par13, that:

"Perhaps the real problem arises from regarding the rule in Weldon v Neal as embracing both principles (1 and 2) and that in reality the formulation by Barwick CJ in Black v City of South Melbourne (1964) 38 ALJR 309, should be seen as simply stating a broader general principle that fairness in litigation requires the exercise of judicial discretion in allowing or disallowing alterations to pleadings, …".

I do not think that there is any difference of substance in the judgments of Cox CJ and Wright J.  Both are saying that the absolute prohibition in Weldon v Neal is confined to pleading outside the relevant limitation period a new cause of action in the technical sense.  Where I use the term absolute prohibition in these reasons, it is to be read as being qualified by the acknowledgement in Weldon v Neal  that "very peculiar circumstances" may exist in rare cases justifying a departure.

1. Crawford J, in his dissenting judgment in Gornalle, regarded the rule as additionally embracing attempts to plead quite different ideas or facts, regardless of whether or not the amendment would cause any unfairness or injustice to the defendant.  It was because Crawford J regarded the departures in the proposed pleading in that case as although not changing the legal categorisation of the claims as being fundamental and so were absolutely prohibited by the rule, that he differed from the majority.

1. Counsel have been unable to refer to any decision dealing specifically with an instance where the rule in Weldon v Neal has been considered in relation to an attempt by a plaintiff to fill a gap where a complete cause of action has not previously been pleaded.  The matter did not require consideration in Gornalle.  The question is whether all such amendments, by definition, create new causes of action in the technical sense covered by the rule because if no complete cause of action has previously been pleaded, when the gaps are filled there will only then, and for the first time, be a formulation of a cause of action which must inevitably be new in all ways, including legal categorisation.

1. In every case where a pleading is changed, the cause of action is also changed, even though the legal categorisation of the claim or form of action may remain the same.  As Scholl J said in Harris v Raggatt [1965] VR 779 at 785 that such an analysis begs the question. He said:

"It may be that it would have made for greater clarity and certainty if the law had laid it down that after the statutory period of limitations no amendment at all could be made. … Of course it begs the question to say, and it therefore cannot be right to say, that the test is merely whether, if the plaintiff were now to make the particular claim for the first time in a new action, it would be statute-barred; for naturally it would, in every case."

There is no absolute prohibition, per se, on adding to or altering facts pleaded after a limitation period has expired.  This is inherently obvious from all the cases dealing with the rule.  Although obiter, as much, is by way of example apparent from what Barwick CJ said in Black v City of South Melbourne (1965) 38 ALJR 309 at 310, namely:

"I would however wish to say briefly that, in my opinion, the Full Court were in error in holding that the variation in the particulars which the plaintiff gave ought to have been disallowed and the plaintiff compelled to stand on his original particulars. It seems to me quite plain that, throughout, the plaintiff's cause of action did not change, though his particularizing of the facts by which he proposed to sustain that cause of action did significantly alter. It would, in my opinion, have been an improper exercise of judicial discretion for the trial judge in this case to have refused the plaintiff the opportunity to present his proofs of that cause of action differently to the manner in which he had originally proposed. Questions of surprise and disadvantage because of a change of course in proof can almost always be met by adjournment and appropriate orders as to costs. It would certainly have been so in this case. As there was, in my opinion, no new cause of action involved in the changed particulars, no question of the statute of limitations fell for consideration."

In the present case, the legal categorisation of the causes of action relied upon are, even if imperfectly pleaded, readily identifiable in the existing statement of claim, namely damages for economic loss occasioned by the defendants' negligence and damages for breach of contract.  If the amendments merely fill gaps or elaborate without altering legal categories previously relied upon, there is nothing in the judgments in Weldon v Neal and the cases which followed, which indicate, justify or set out, a rational basis for the invocation of the absolute prohibition.  That being so, the plaintiff's application is not bound to fail on this ground.

1. On behalf of the defendants it was submitted that the plaintiff, by delivering a statement of claim which failed to plead all of the facts necessary for a cause of action to exist, abandoned all of the claims endorsed on the writ.  It was submitted that no amendment, however minor, can now be made.  The limitation period has expired and, so the defendants say, that is the end of the matter.  Renowdenv McMullin is not authority for the proposition that a plaintiff who delivers a statement of claim incompletely pleading his causes of action abandons all his claims.  There is nothing in the delivery of such a document which would "entitle" a defendant to "assume" (Renowden v McMullin at 613) that all claims were abandoned. Where a plaintiff abandons all claims, the defendant could expect to receive a notice of discontinuance, not a statement of claim. The circumstances in which a claim is abandoned by delivery of a pleading were considered in Renowden v McMullin at 609. There, Owen J cited with approval the following passages respectively from Odgers on Pleading and Practice 19 ed (1966) at 171 and Bullen & Leakes Precedents of Pleading 9 ed at 33:

"… if a plaintiff in his statement of claim omits all mention of a cause of action or a claim for relief which is stated in his writ, he will be deemed to have abandoned it." [Emphasis added]

"… if the plaintiff when drafting his statement of claim omits all mention of a cause of action or a claim for relief which is stated on his writ, he will be deemed to have abandoned it …". [Emphasis added]

Where a plaintiff mentions some, but not all ,causes of action or parts, but not all, of the relief claimed in the writ, the obvious inference to the defendant is that the omitted causes of action or claims for relief have been abandoned.  That inference plainly does not arise in circumstances such as the present where the plaintiff delivers a statement of claim obviously mentioning by attempting to plead (albeit possibly imperfectly) the causes of action endorsed on the writ, and claims all of the relief sought on the endorsement, namely, in this case, damages. 

1. The plaintiff's application to amend is not bound to fail as offending the rule in Weldon v Neal.  Provided that the plaintiff's proposed amended statement of claim does not include new causes of action in the technical sense there is a discretion whether or not to permit the amendment which will be exercised in accordance with the principle stated in Commonwealth of Australia v Verwayen (1990) 170 CLR 394 where Dawson J said, at 456:

"The rules of court have always provided that leave to amend pleadings may be given for the purpose of determining the real question in controversy between the parties … and an amendment should ordinarily be allowed if any harm arising from so doing can be compensated for by the imposition of terms upon the party asking for the amendment … The usual terms which are imposed are an order for costs or an adjournment. In granting leave to amend, a court is concerned with the raising of issues and not with their merits. Of course, an amendment which is futile because it is obviously bad in law will not be allowed. But it is no ground for refusing an amendment that it raises a claim or defence which ought not to succeed. That will be an issue upon trial. An amendment may, however, be refused because it is made at such a late stage that neither costs nor an adjournment can compensate the other side for the failure to raise the issue at an earlier stage."

1. If the proposed amendments, although not changing in a technical sense, the causes of action previously attempted to have been pleaded, but do involve quite different facts, ideas or a fundamental departure, I will follow, as I must, what the majority said in Ritchie & Parker Alfred Green & Co & Woodberry v Gornalle (supra) and disallow the amendments only if to do otherwise would cause unfairness or injustice to the defendants.

1. I decline to dismiss the plaintiff's application at this stage as necessarily breaching the rule in Weldon v Neal.