Bowen Buchbinder Vilensky (A Firm) v Smith
[2001] WASCA 108
•4 APRIL 2001
BOWEN BUCHBINDER VILENSKY (A FIRM) -v- SMITH [2001] WASCA 108
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 108 | |
| THE FULL COURT (WA) | 04/04/2001 | ||
| Case No: | FUL:158/2000 | 22 MARCH 2001 | |
| Coram: | MURRAY J MILLER J | 22/03/01 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Application for leave to appeal dismissed | ||
| PDF Version |
| Parties: | BOWEN BUCHBINDER VILENSKY (A FIRM) STEPHEN PAUL SMITH |
Catchwords: | Practice and procedure Successful application to strike out statement of claim Leave to re-plead Whether leave granted so as to allow the reinstatement out of time of an abandoned cause of action Indorsement of writ referred to claim Whether statement of claim in narrower terms Whether an abandonment of a cause of action Effect on grant of leave to plead claim, if so "Cause of action" |
Legislation: | Supreme Court Rules 1971 (WA), O 21 r 5 |
Case References: | Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 Morgan v Banning (1999) 20 WAR 474 Smith v ANL Ltd [2000] HCA 58 Smith v Australian National Line Ltd (1998) 20 WAR 219 Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 Weldon v Neal [1887] 19 QBD 394 Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40 ANZ Banking Group Ltd v Larcos (1987) 13 NSWLR 286 Broome v Cassell & Co [1972] AC 1027 Cartledge v E Jopling & Sons Ltd [1963] AC 758 Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415 Dallas Development Corporation Pty Ltd v Western Australian Land Authority, unreported; FCt SCt of WA; Library No 980245; 7 May 1998 Hall v Meyrick [1957] 2 QB 455 Harries v Ashford [1950] 1 All ER 427 Kreuger v Jansen (1990) 99 FLR 403 National Mutual Life Association of Australasia Ltd v Chris Poulson Insurance Agencies Pty Ltd (No 3) [1997] Tas R 10 Quarmby v May (1999) 7 ACSC 98 Renowden v McMullin 123 CLR 584 Wilson v Metaxas [1989] WAR 285 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : BOWEN BUCHBINDER VILENSKY (A FIRM) -v- SMITH [2001] WASCA 108 CORAM : MURRAY J
- MILLER J
- Applicant
AND
STEPHEN PAUL SMITH
Respondent
Catchwords:
Practice and procedure - Successful application to strike out statement of claim - Leave to re-plead - Whether leave granted so as to allow the reinstatement out of time of an abandoned cause of action - Indorsement of writ referred to claim - Whether statement of claim in narrower terms - Whether an abandonment of a cause of action - Effect on grant of leave to plead claim, if so - "Cause of action"
Legislation:
Supreme Court Rules 1971 (WA), O 21 r 5
(Page 2)
Result:
Application for leave to appeal dismissed
Representation:
Counsel:
Applicant : Mr P C S Van Hattem
Respondent : Mr C L Zelestis QC & Ms N Owen-Conway
Solicitors:
Applicant : Freehills
Respondent : Slater & Gordon
Case(s) referred to in judgment(s):
Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234
Morgan v Banning (1999) 20 WAR 474
Smith v ANL Ltd [2000] HCA 58
Smith v Australian National Line Ltd (1998) 20 WAR 219
Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233
Weldon v Neal [1887] 19 QBD 394
Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40
Case(s) also cited:
ANZ Banking Group Ltd v Larcos (1987) 13 NSWLR 286
Broome v Cassell & Co [1972] AC 1027
Cartledge v E Jopling & Sons Ltd [1963] AC 758
Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415
Dallas Development Corporation Pty Ltd v Western Australian Land Authority, unreported; FCt SCt of WA; Library No 980245; 7 May 1998
Hall v Meyrick [1957] 2 QB 455
Harries v Ashford [1950] 1 All ER 427
Kreuger v Jansen (1990) 99 FLR 403
National Mutual Life Association of Australasia Ltd v Chris Poulson Insurance Agencies Pty Ltd (No 3) [1997] Tas R 10
Quarmby v May (1999) 7 ACSC 98
(Page 3)
Renowden v McMullin 123 CLR 584
Wilson v Metaxas [1989] WAR 285
(Page 4)
1 JUDGMENT OF THE COURT: This was an application for leave to appeal against a decision of acting Master Chapman, given on 29 August 2000 by which the learned Master struck out the respondent's statement of claim dated 25 November 1999 and gave leave to file and serve a fresh statement of claim. After hearing argument on the application for leave, we dismissed that application and refused leave to appeal. These are our reasons for that decision.
2 In 1988 the respondent was employed by Australian National Line Ltd ("ANL") as a merchant seaman. He claims that he suffered serious injuries to his back on 7 and 8 December 1988 as a result of the negligence and breach of his contract of employment with ANL. He claims that the injuries were suffered when, in the course of his employment, he was required to urgently rig and shackle a heavy pilot ladder on the particular vessel upon which he was employed on 7 December 1988, and when, on the following day, he was required to pull a heavy electric generator across the deck. As a result of the injuries so sustained, the respondent claims that he has suffered permanent and total incapacity for work.
3 He says that in about September 1993, nearly five years after the accident, the respondent entered into an agreement with the applicant, a firm of solicitors, to retain them to act for him to pursue a claim for damages at common law against ANL. The applicant issued a writ out of the District Court on 9 November 1994, about a month short of the expiration of the six year limitation period provided by the Limitation Act 1935 (WA), s 38(1)(c). By reason of the constitutional issues which became involved the proceedings were transferred to the Supreme Court. Those constitutional issues were raised by way of the defence by ANL. They arose in the manner following.
4 In 1988 the respondent's employment by ANL was governed, or at least aspects of it were provided for, by the Seamen's Compensation Act 1911 (Cth) which instituted a system of no-fault compensation for Australian seamen in respect of disabilities sustained as a result of accidents suffered by them which arose out of, or were in the course of, their employment, the right of compensation formulated very much in traditional terms for workers' compensation legislation. By that Act the capacity of an injured seaman to bring an action at common law for damages for tort or breach of contract was not interfered with, but, again in traditional terms for workers' compensation legislation, by s 10A there was a provision which effectively prevented "double dipping" and, relative to this case, s 10A(3) provided that a seaman who recovered
(Page 5)
- damages from an employer in respect of an injury was not entitled to compensation under the Act in respect of the same injury, and any sum received by way of such compensation was to be deducted from the amount of the damages recoverable from the employer.
5 However, in 1992 the Seafarers' Rehabilitation and Compensation Act 1992 (Cth) (the "Rehabilitation Act") and the Seafarers' Rehabilitation and Compensation (Transitional Provisions and Consequential Amendments) Act 1992 (Cth) (the "Transitional Provisions Act") were enacted. Both Acts were relevantly proclaimed to come into operation on 24 June 1993. Section 54(1)(a) took away a seaman's right to bring an action against his or her employer for damages at common law in respect of an injury sustained by the seaman in the course of his or her employment. At a political level it appears that it was put that the loss of the common law right of action was in return for a much improved seamen's compensation scheme. The abolition of that right of action applied to injury which occurred before, as well as after, the commencement of the section, but not to a case where an action had been instituted before the commencement of the section (which, however, was not this case).
6 In any event s 13 of the Transitional Provisions Act qualified the operation of s 54 of the Rehabilitation Act by preserving the seaman's right to bring an action for damages at common law for a period of six months after the commencing day. Therefore, the last day upon which the respondent could commence an action for damages at common law against ANL was 23 December 1993. As has been seen, his action was not commenced until well after that date and the limitation point was taken by way of defence.
7 The question of the validity of s 54 of the Rehabilitation Act in its application to the litigation before the Court was tried as a preliminary question. It was held to be valid and the respondent's action against ANL for damages at common law was dismissed. He appealed to the Full Court unsuccessfully: Smith v Australian National Line Ltd (1998) 20 WAR 219. The respondent appealed to the High Court by special leave and ultimately, s 54 of the Rehabilitation Act was found to be invalid in its application to the causes of action in negligence and for breach of contract for damages at common law pleaded by the respondent. Those pleadings and that action were therefore restored and so far as we are aware, are proceeding to trial on the merits. Those orders were made by the High Court on 16 November 2000: Smith v ANL Ltd [2000] HCA 58.
(Page 6)
8 In the meantime, after the decision of the Full Court given on 18 November 1998, the respondent issued a writ against the appellant, his former solicitors, on 16 September 1999. It was an action for damages and the indorsement of claim was in the following terms:
"The Plaintiff claims damages as a consequence of the lack of due diligence, breach of professional duty and breach of express and implied undertakings owed and given to the Plaintiff between approximately October 1993 and approximately March 1994. As a consequence of which, the Plaintiff has suffered loss and damage as a result of the loss of access to compensation entitlements and/or loss and damage suffered as a result of the loss of his entitlement to pursue an action for damages against his employer at common law."
- It will be seen that the cause of action pursued was in negligence and for breach of contract causing loss and damage in two separately identified areas, "the loss of access to compensation entitlements" and, or in the alternative, "the loss of his entitlement to pursue an action for damages against his employer at common law." There could, we think, be no doubt that the indorsement was wide enough to signal that damages might be claimed to arise out of the loss of the chance to succeed in a claim for compensation under the previously existing statutory scheme, as well as, or in the alternative, the loss of the chance to succeed in a claim for damages at common law.
9 The respondent's statement of claim dated 25 November 1999 contained the following pleadings:
"3. At all material times, the plaintiff was a seaman, within the meaning in the Seaman's Compensation Act 1911 (C'th) ('SCA').
4. On or about 7 December 1988, and whilst employed by his employer Australian National Line Limited, the plaintiff sustained certain personal injuries in the course of his said employment which gave rise to a right or entitlement in the plaintiff to make a claim against his employer for compensation ('plaintiff's compensation claim').
5. On 24 December 1992, the SCA was repealed and replaced by the Seafarer's Rehabilitation and Compensation Act 1992 (C'th) ('SRC').
(Page 7)
- 6. Pursuant to the provisions of s.54 of the SRC, s.2 and s.13 of the Seafarer's Rehabilitation and Compensation (Transitional Provisions and Consequential Amendments) Act 1992 (C'th), the plaintiff was precluded from pursuing the plaintiff's compensation claim unless he issued proceedings to commence such a claim in a court of competent jurisdiction by 23 December 1993 at the latest."
10 The respondent pleaded against the applicant that:
"11. At all material times, the defendant:
(a) failed to advise the plaintiff of the repeal and replacement of the SCA by the SRC as pleaded in paragraph 5 above;
(b) failed to advise the plaintiff that the latest date for him to commence proceedings in respect of the plaintiff's compensation claim was 23 December 1993;
(c) failed to advise the plaintiff to commence proceedings in respect of the plaintiff's compensation claim prior to 23 December 1993, or at all;
(d) failed to commence appropriate proceedings in respect of the plaintiff's compensation claim prior to 23 December 1993, or at all.
- 12. By reason of the matters pleaded in paragraph 11 above, the defendant acted in breach of the implied terms contained in the retainer and/or of the solicitor/client relationship and/or negligently and in breach of its duty of care, which conduct has caused substantial loss and damage to the plaintiff, full particulars of which will be provided prior to trial."
- Immediately following that plea the respondent made his claim for damages against the applicant.
11 On 15 December 1999 the applicant applied to strike out the statement of claim. Alternatively, there was an application to strike out par 4 and/or par 11 and/or par 12.
(Page 8)
12 The application was ultimately heard by the learned Master and his decision was delivered on 29 August 2000. The Master referred to the applicant's argument that the statement of claim only pleaded the loss of the right to compensation, a right which was not, in fact, interfered with at all (as indeed is the case) by the legislation to which we have referred. The Master noted that the applicant argued that the pleading in the statement of claim abandoned a claim for the loss of an entitlement to pursue an action for damages at common law, and as the statute of limitations now has expired in relation to such an entitlement, the statement of claim could not now be amended to correct the defect.
13 As to the argument that there had been an abandonment of a claim for the loss of an entitlement to pursue a claim at common law, the Master held:
"I am not persuaded that the [respondent] by the way he has pleaded his case has abandoned his claim for the loss of an entitlement to pursue his common law claim. If the word 'compensation' appearing in paragraph 4 of the statement of claim were to be given the confined meaning urged by the [applicant] then the plea in paragraphs 6 and 11 of the statement of claim would be without purpose."
- The learned Master also expressed the view that to amend the statement of claim to make it clear what was intended; a pleading alleging the loss of a chance to succeed in an action at common law, would not raise a cause of action of a kind different to that which was pleaded in the statement of claim. In the final analysis the Master concluded:
"I do consider the plea in its present form is confusing, but consider it is a case in which it would be appropriate to permit the [respondent] to amend the pleading to clarify the position."
"(a) holding that the statement of claim could with amendment disclose a reasonable cause of action, when he should have held that it could not;
(b) by implication, holding that the statement of claim included a claim for damages based on the plaintiff's loss of entitlement to pursue an action for damages (as
(Page 9)
- opposed to compensation), against his employer at common law, when he should have held that it did not;
- (c) by implication, holding that there was a discretion to allow an amendment to the statement of claim after the expiration of the limitation period, when he should have held that the claim for damages had been abandoned and there was no power to allow amendment in those circumstances."
15 Leave will not be granted to appeal against the interlocutory order of the acting Master unless there is a clear case for the exercise of the discretion of this Court. Speaking generally, the applicant must show that the Master's decision was wrong or at least attended with sufficient doubt to justify the grant of leave and, in addition, that substantial injustice would be done by leaving the decision unreversed. Those are not rigid criteria and if the interests of justice demand the grant of leave, the Court will do so: Western Australia v Bond Corporation Holding Ltd (1991) 5 WAR 40, 54 - 57. In a case such as this where an order has been made that if leave is granted the Court should go on to hear the appeal, in an appropriate case the appeal will be allowed and consequential orders made.
16 In the circumstances of this case, if the conclusion of the Court should be that the acting Master wrongly allowed amendment of the statement of claim to reinstate the respondent's capacity to rely upon a cause of action previously abandoned in circumstances where the limitation period had expired, there is no doubt that the interests of justice would require the intervention of this Court and in the circumstances we have described, it is therefore the case that the critical question is whether the applicant has established that Master Chapman fell into error in not striking out the statement of claim in its entirety and in not denying the respondent leave to amend. As we have intimated, it is our view that the error relied upon has not been demonstrated and indeed, in our opinion, the Master's judgment was right.
17 Before explaining why we came to that view, we note that the solicitors for the respondent recently served upon the applicant's solicitors a draft minute of a further proposed substituted statement of claim which, as we understand it, represents the respondent's final attempt to plead his case against the applicant. That document recites the events to which we have referred above. It adds to it by pleading facts alleged to constitute the negligence or breach of terms imposing a duty of care in the contract
(Page 10)
- of retainer, at least by implication. By reason of the pursuit and the outcome of the litigation described above between the respondent and ANL, the damages which the respondent would propose to claim from his former solicitors, the applicant, are much truncated and concerned, not with the loss of the chance to successfully pursue a common law claim against ANL, but with the costs thrown away in the litigation undertaken to establish the invalidity in relation to the respondent's claim of the Rehabilitation Act and the Transitional Provisions Act. He proposes to plead that the measure of damages in that regard is represented by the difference between the respondent's liability to pay legal fees to his solicitors on a solicitor/client basis and a capacity to recover such costs on a party and party basis from ANL.
18 Speaking generally, at the conclusion of the hearing we expressed the view that without addressing the way in which that proposed pleading was formulated in detail, it seemed to us that the content of such a pleading provided an appropriate expression of a manner in which a claim against former solicitors for professional negligence might be formulated.
19 We come then finally to express our reasons for our conclusion that the learned Master did not err in law in his conclusion that although the statement of claim before him should, by reason of its lack of clarity and its capacity to confuse, be struck out, leave should be granted to the respondent to plead his case anew. The application turns upon this question of the alleged abandonment of the cause of action in so far as it depends upon the supposed incapacity to pursue a claim for damages against ANL at common law.
20 As Wilson J said in Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 at 245:
"The concept of a 'cause of action' would seem to be clear. It is simply the fact or combination of facts which gives rise to a right to sue. In an action for negligence, it consists of the wrongful act or omission and the consequent damage."
- The same view has been taken in the present context where the applicant asserts that the orders of the acting Master effectively allowed amendment of the statement of claim so as to institute a cause of action which was barred by the effluxion of time: Morgan v Banning (1999) 20 WAR 474. At 476 Owen J referred to the phrase "cause of action" as meaning, "the basket of facts which give rise to the right to approach the court for relief rather than as the description of the right to sue by reference to the old
(Page 11)
- forms of action." The same view was taken by Wheeler J at 484, Ipp J agreeing.
21 According to the indorsement of the writ the cause of action then relied upon, within the limitation period expiring on 23 December 1999, by virtue of the Limitation Act 1935 (WA), s 38(1)(c)(v) as to the claim for the form of action for breach of contract, and by s 38(1)(c)(vi) as to the claim made in reliance upon the form of action in tort, was a claim that the respondent's former solicitors behaved negligently and in breach of the contract of retainer so as to cause the respondent loss and damage, which was then described as resulting from the loss of access to compensation entitlements and, or alternatively, the loss of the opportunity to recover damages at common law.
22 In our opinion, if the statement of claim before the acting Master is properly construed, it can be seen that although, as the Master held, the pleading was confusing and in need of clarification, when the document is read as a whole the cause of action relied upon in the statement of claim was that which was the subject of the indorsement on the writ, no part of which had been abandoned. The purpose of the pleading in par 3 that the respondent was a seaman within the meaning of the 1911 Act was no doubt to show that the respondent was a person to whom the Rehabilitation and Transitional Provisions Acts applied. Paragraph 4 of the statement of claim is not in our view apt to plead sole reliance upon the respondent's capacity to obtain "access to compensation entitlements" (as the indorsement of claim on the writ puts it) under the 1911 Act. The paragraph is not expressed in the language in which the statutory liability was expressed and it speaks only of the respondent's capacity generally "to make a claim against his employer for compensation", terminology which is apt to refer to the capacity to obtain damages at common law by way of compensation for the personal injuries suffered as well as the capacity to pursue an application under the Act.
23 Further, it seems to us that, having regard to the history of the matter, the repeal of the 1911 Act, its replacement by the Rehabilitation Act, the express reference to s 54 of that Act, and the reference to s 2 and s 13 of the Transitional Provisions Act, it is abundantly clear that the pleadings in par 5 and par 6 of the statement of claim were intended to plead the fact, arising out of the operation of those sections, that the respondent was precluded from pursuing a claim for compensation for his injuries in the form of an award of damages at common law. That view of the pleading is in our opinion reinforced by the consistently expressed par 11, leading to the allegation of loss and damage made in par 12 so as to express the
(Page 12)
- accrual of the cause of action relied upon to ground the claim then made against the applicant in which the principal relief sought was an award of damages. No question of the abandonment of that claim, nor any part of it, arises. Time ceased to run against the respondent upon the issue of the writ.
24 We have come to that conclusion, as has been seen, upon what we regard as a fair reading of the statement of claim itself. The respondent sought to rely upon an affidavit of his present solicitor by which it is sought to establish that counsel was instructed to draw the statement of claim against the applicant for its failure to institute proceedings for damages at common law. It is sought in the affidavit to establish that counsel intended the statement of claim to embrace such an action, and that correspondence between the parties and their solicitors would show that it was generally understood what the respondent was about. There was an attempt to settle the claim upon that basis. It is argued that there can be no suggestion that there was intended to be an abandonment of the claim so formulated. On the other hand, the applicant argues that such an affidavit is inadmissible because it is concerned, not with whether or not there has in fact been an abandonment of a cause of action, but whether the parties, both or individually, subjectively thought that was so, or in the case of the respondent, intended it to be so.
25 Although it is not strictly necessary to rule on the admissibility of the affidavit in view of the conclusion to which we have come from the terms of the statement of claim itself, we are of the view that the affidavit was inadmissible and we have not relied upon it. In our opinion "abandonment" in this context refers not to what was intended to be done, but what was in fact done. That is not to say that no evidence of the state of mind to be attributed to the pleading party would be relevant. Such evidence might be received, in our view, if that party argued that its pleading, which apparently involved abandonment of a cause of action, should not be taken to have done so because the abandonment occurred inadvertently and might therefore be said to be a nullity. We see no need to turn our minds to the question of whose inadvertence would bind the party whose pleading it was.
26 Further, in view of the conclusion to which we have come, it is unnecessary that we express a view upon the matter debated by counsel, of the effect upon the power to grant leave to amend when a pleading is struck out, of the conclusion that to do so would be to permit the reinstatement of a cause of action which had been abandoned and which was now time barred. What is described as the rule in Weldon v Neal
(Page 13)
- [1887] 19 QBD 394 that the court will not permit a new cause of action to be added once the limitation period has expired was relied upon and debated.
27 There was reference to the related question of the ambit of the power provided in the Rules of the Supreme Court, O 21 r 5(2) to amend a pleading "after any relevant period of limitation current at the date of issue of the writ has expired", including under r 5(5) an amendment the effect of which "will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed". That debate, left open by the Full Court in Stone James (A Firm) v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 was, it seems, settled in Morgan v Banning where the view was expressed that in relation to a cause of action, understood in the sense referred to above, which has become statute barred, that remains the fact thereafter whether or not leave is granted to amend and therefore, if there is a discretion, it should not be exercised so as to purport to reinstate such a cause of action except in exceptional circumstances.
28 We would summarise our conclusions in the following way. There has, we think, been no abandonment of any part of the cause of action relied upon in the indorsement of claim. Time stopped running in relation to that cause of action at that point. There was no impediment to Master Chapman granting leave to amend in the way that was then sought and, without foreclosing questions about the adequacy of the currently proposed statement of claim, there would be no impediment to granting leave in those terms.
29 The amendments sought to be made, in our view, merely differently particularise and clarify the cause of action which has always been relied upon. That remains the case, we think, despite the fact that in the light of the events which have ensued in the pursuit of the litigation between the respondent and ANL, the facts concerning the loss or damage which has allegedly been sustained are much more limited than was formerly alleged to be the case, the assessment now being confined to the difference between the party and party costs recovered and the solicitor/client costs incurred. It was for those reasons that we dismissed the application for leave to appeal.
0
9
1