Campbell v Biernacki

[2009] TASSC 117

[2009] TASSC 117

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Campbell v Biernacki [2009] TASSC 117

PARTIES:  CAMPBELL, Neil
  v
  BIERNACKI, Paul Stuart

FILE NO/S:  579/2007
DELIVERED ON:  18 December 2009
DELIVERED AT:  Hobart
HEARING DATE:  27 November 2009
JUDGMENT OF:  Blow J

CATCHWORDS:

Procedure – Supreme Court procedure – Tasmania – Jurisdiction and generally – Stay of proceedings – Personal injuries action – Refusal of plaintiff to authorise defendant's solicitors to inspect Centrelink records.

Edmeades v Thames Board Mills Ltd [1969] 2 QB 67, Lane v Willis [1972] 1 WLR 326, followed.
Donnelly v Shallard (1936) 53 WN (NSW) 121; Emery v Hobson (1944) 61 WN (NSW) 136, not followed.

Aust Dig Procedure [265]

Procedure – Discovery and interrogatories – Discovery and inspection of documents – Discovery of documents – Orders for further and better discovery – School reports relevant to claim for psychological impairment – Documents relating to social security benefits relevant to claim for economic loss.

Supreme Court Rules 2000 (Tas), rr388, 389.
Compagnie Financière du Pacifique v Peruvian Guano Co (1882) 11 QBD 55, applied.
Aust Dig Procedure [440]

REPRESENTATION:

Counsel:
             Plaintiff/Respondent:  C Law
             Defendant/Applicant:  R J Phillips
Solicitors:
             Plaintiff/Respondent:  Page Seager
             Defendant/Applicant:  Phillips Taglieri

Judgment Number:  [2009] TASSC 117
Number of paragraphs:  40

Serial No 117/2009
File No 579/2007

NEIL CAMPBELL v PAUL STUART BIERNACKI

REASONS FOR JUDGMENT  BLOW J

18 December 2009

1. There are two applications before me in relation to an action for damages for personal injuries.  The defendant is seeking orders enabling his solicitors to see the plaintiff's secondary school reports, and papers relating to his Centrelink benefits.

1. The plaintiff's case is that he was travelling in a vehicle driven by the defendant in April 2007; that the defendant negligently lost control of the vehicle; and that he was seriously injured as a result.  The defendant is disputing liability.  The plaintiff suffered a serious injury to his left eye, and that is not disputed.  According to particulars filed and served by the plaintiff's solicitors, he returned to work in September 2007 but, as a result of the accident, ceased work in November 2008 and has been unable to work since.  He contends that he became unfit for continuing work as a result of "ongoing problems with chronic anxiety, depression, fatigue and concentration as well as other continuing psychological problems caused by the accident".  Damages for future economic loss have been claimed on the basis that his earning capacity has been destroyed, and that he will never work again.  Understandably, the defendant's solicitors wish to investigate the impact of the accident on the plaintiff's mental health, and the extent of his incapacity for work.  It is in that context that the present applications have been made. 

School reports

1. One order sought by the defendant is, "That the plaintiff discover to the defendant his secondary school reports". 

1. The defendant's solicitors had the plaintiff assessed by a psychiatrist, Dr Sale.  Dr Sale saw him on 5 March 2009, and wrote a report about him on the same day.  That was before the plaintiff's solicitors had served the particulars that suggested that the plaintiff's earning capacity had been completely destroyed.  Dr Sale swore an affidavit for the purpose of the present applications.  Evidently the defendant's solicitors wish him to provide a further report.

1. It appears from Dr Sale's affidavit that he wants to make an assessment of the nature and extent of any pre-existing psychological or psychiatric difficulties encountered by the plaintiff.  In his affidavit, he said the following:

"During my examination of Mr Campbell I found him to be not particularly forthcoming and also found that he was a poor historian.  To enable me to properly advise my instructors in relation to this matter it would be of assistance to me to have access to the plaintiff's secondary school reports and to reports his pre-vocational training [sic].  If there were any personality disorder or antisocial traits that pre-existed the plaintiff's accident the subject matter of this litigation the school reports and the reports of pre-vocational training would provide some indication of the nature and extent of pre-existing difficulties encountered by the plaintiff."

The plaintiff was only 22 years old at the time of the accident.

1. When Dr Sale saw the plaintiff in March, he evidently detected no evidence of any psychological problems existing before the accident.  He wrote in his report that there had been "no earlier stress-related difficulties".  However, he was subsequently sent copies of reports by two psychologists who had seen the plaintiff.  Dr Watchorn, a clinical psychologist, stated in a report dated 18 December 2008 that he had seen the plaintiff in 14 counselling sessions.  He reported that there was evidence to suggest that the plaintiff was suffering with some symptoms of depression prior to the accident.  Two reports were provided by a consultant neuropsychologist, Mr Fourez, who had undertaken an assessment of the plaintiff at the request of his general practitioner in April 2009.  He reported, on the basis of information supplied, that before the accident the plaintiff had "experienced difficulties with his mood and abused alcohol", that his self-confidence had been poor, and that he had described suffering from social anxiety.  Mr Fourez said that those difficulties had been exacerbated by the accident.

1. If this action proceeds to trial, damages will need to be assessed for the alleged impairment of the plaintiff's earning capacity.  In my view, evidence as to the plaintiff's pre-accident psychological condition could be relevant to the assessment of damages under that head in two ways.  First of all, a full understanding of the plaintiff's psychological history could be relevant for the purpose of making findings as to his prognosis, particularly in relation to the likelihood of him returning to work, and the likely timing of a return to work.  Secondly, when adverse contingencies are taken into account in the course of quantifying damages for future economic loss, it would be relevant if, had the accident not occurred, the plaintiff would have continued to suffer from psychological problems which might have affected his willingness to work, or might one day have incapacitated him.  That is to say, any evidence as to his pre-accident psychological condition could be relevant in determining what allowance should be made for adverse contingencies, particularly in relation to unemployment, underemployment, or loss of earnings resulting from stress-related illnesses and the like. 

1. The defendant is entitled to discovery by the plaintiff of all documents that are, or have been, in his possession, custody or power relating to any matter in question in the action: Supreme Court Rules 2000, r382. The test of whether a document relates to a matter in question in the action is as stated by Brett LJ in Compagnie Financière du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 at 63:

" … every document relates to matters in question in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may – not which must – either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary." [Original emphasis.]

1. Having regard to the relevance of the plaintiff's pre-accident psychological condition and the evidence of Dr Sale, which was unchallenged and uncontradicted, I am satisfied that his secondary school reports may, either directly or indirectly, enable the defendant to damage the plaintiff's case, and that they are therefore discoverable.  There is no reason for them not to be discovered.  I will therefore make the order sought in relation to them.

Centrelink records — introduction

1. According to the plaintiff's particulars, he was unable to work from the date of the accident, 4 April 2007, until 3 September 2007, and has again been unable to work since November 2008.  It seems to be common ground that he has received benefits from Centrelink, the Commonwealth agency that administers the Social Security Act 1991 (Cth). I have no evidence as to whether the plaintiff received a Newstart allowance (ie an unemployment benefit), a sickness allowance, or a disability support pension. He might have received different types of benefits at different times.

1. The plaintiff made discovery in this action last year.  His solicitors filed a list of documents, verified by affidavit, and subsequently filed an amended list, also verified by affidavit.  Neither version of his list of documents contained any reference to income tax returns, group certificates, income tax assessment notices, documents received from Centrelink, or documents sent to Centrelink.  On 28 September 2009, the defendant's solicitors requested that the plaintiff authorise them to inspect his Centrelink records, but his solicitors wrote back on 2 October saying that the plaintiff's view was that his Centrelink records were private, and that no access to them would be authorised.

1. The defendant's solicitors have applied for the action to be stayed until such time as the plaintiff makes available an authority permitting them to obtain a copy of his Centrelink records.  They have also applied for an order under the Supreme Court Rules, r388, requiring the plaintiff to make, file and serve an affidavit as to documents in respect of applications by him for Centrelink benefits that are, or have been, in his possession, custody or power.

1. It is common ground that the documents held by Centrelink in relation to the plaintiff are not in the plaintiff's possession, custody or power: Rogers v Hougland, Zeeman J, A54/1991. The plaintiff contends that the documents sought by the defendant's solicitors are irrelevant and private; that it would not be appropriate to make the order sought under r388; that the Court does not have jurisdiction to make the stay order that has been sought; and, alternatively, that no such order should be made because the Centrelink records are private and irrelevant.

Discovery of Centrelink records

1. In my view, documents to which the r388 application relates could prove useful to the defendant in a number of ways. If the plaintiff has received, or applied for, a sickness allowance or a disability support pension, it is likely that he has submitted documents to Centrelink containing information about psychological problems. If he has received, or applied for, a Newstart allowance, it is likely that he has submitted documents to Centrelink containing information about the nature and extent of his attempts to find employment. I think it is reasonable to suppose that, whatever type of benefit has been granted or applied for, the documents in question may directly or indirectly enable the defendant to damage the plaintiff's case, perhaps as to the extent and duration of his incapacity for work, or perhaps as to whether he has taken reasonable steps to mitigate his economic loss. It follows that the documents in question must satisfy the Peruvian Guano test referred to above.

1. If the plaintiff has suffered an impairment of his earning capacity, and has claimed and received benefits under the Social Security Act in respect of periods when he has been unable to work as a result of the accident, he has thereby mitigated his damage. If he recovers damages in the action, or receives money as a result of compromising his claim, Pt 3.14 of the Social Security Act will enable the Commonwealth to recover certain amounts paid to him.  The amount recovered, or deemed to have been recovered, in respect of lost earnings will determine the length of the plaintiff's "lump sum preclusion period".  Any benefits paid in respect of that period will be recoverable from the plaintiff by the Commonwealth.  If that period extends beyond the date of the judgment or settlement, the plaintiff will continue to be ineligible for benefits until the end of that period.  Thereafter, if the plaintiff remains incapacitated for work as a result of the accident, he will have the right to receive benefits under the Social Security Act and thereby mitigate his loss.  The possibility that the plaintiff might be able to mitigate his damage by obtaining social security benefits after the end of the preclusion period is a contingency that should be taken into account in the assessment of his damages: Pasminco Australia Ltd v Gasu, A42/1996, per Zeeman J, at 10, Wright and Slicer JJ concurring. 

1. Documents in the class of documents to which the r388 application relates are likely to contain information revealing when the plaintiff did and did not receive social security benefits. Such information is potentially relevant to the assessment of damages. It can be used to establish the beginning, duration and end of the preclusion period. In the plaintiff's particulars, no allowance has been made for the possibility of him mitigating his loss by receiving social security benefits after the preclusion period. I think it follows that the documents in question may directly or indirectly enable the defendant to damage the plaintiff's case by having that contingency taken into account. It follows that they satisfy the Peruvian Guano test.

1. Counsel for the plaintiff submitted that discovery of the documents sought under r388 was not necessary, and relied on r389, which reads as follows:

"389   Discovery to be ordered only if necessary

On the hearing of an application for an order under rules 386 or 388 the Court or a judge may —  

(a)     dismiss the application if discovery is not necessary; or

(b)    adjourn the application if discovery is not necessary at that stage of the proceeding; or

(c)     refuse to make the order if discovery is not necessary for disposing of the proceeding fairly or for saving costs."

1. In my view, it is in the interests of justice for the defendant's solicitors to be able to inspect such of the documents in question as are in the plaintiff's possession.  That is because they are potentially relevant to his claim for damages for economic loss.  The total claimed in his particulars in respect of past and future economic loss, including the loss of past and future superannuation benefits, is over $730,000.  It is only fair that every aspect of such a large claim should be able to be thoroughly investigated.

1. If the documents in question were in the plaintiff's possession, custody or power at any time before his amended list of documents was prepared last year, they should have been referred to in it.  However that document was filed on 15 September 2008, before the plaintiff is said to have ceased work.  It may be that he did not receive any Centrelink benefits between the accident and the filing of that document.  In the circumstances, I am not persuaded that it would be appropriate to refuse to make the order sought on the ground that the discovery sought is not necessary.

Jurisdiction to stay proceedings

1. There are a number of reported cases concerning personal injuries actions in which questions have arisen as to whether a court has had an inherent power to stay proceedings.  Many of the reported cases have related to the situation where a defendant has sought to compel a plaintiff to undergo a medical examination, and there has been no legislation or rule of court enabling a defendant to require an unwilling plaintiff to submit to the desired examination. Different views have been taken in different jurisdictions as to whether a stay of proceedings can be ordered in that situation against a plaintiff who unreasonably refuses to submit to an examination.

1. In Donnelly v Shallard (1936) 53 WN (NSW) 121, Bavin J observed at 122, "The right to immunity from any interference with the person is a right which the law jealously preserves." A stay was refused. That case was followed by Maxwell J in Emery v Hobson (1944) 61 WN (NSW) 136.

1. Subsequently, the English Court of Appeal took a different view in Edmeades v Thames Board Mills Ltd [1969] 2 QB 67. Lord Denning MR, with whom Davies and Widgery LJJ agreed, said at 71:

"This court has ample jurisdiction to grant a stay whenever it is just and reasonable to do so.  It can, therefore, order a stay if conduct of the plaintiff in refusing a reasonable request is such as to prevent the just determination of the cause."

His Lordship went on to conclude that the request in that case was perfectly reasonable.  That case was followed in Lane v Willis [1972] 1 WLR 326 (Court of Appeal; Davies, Sachs and Roskill LJJ); Clarke v Martlew [1973] QB 58 (Court of Appeal; Lord Denning MR and Cairns LJ); and McGinley v Burke [1973] 1 WLR 990 (Bean J).

1. New South Wales has had rules of court enabling defendants to compel plaintiffs to submit to medical examinations for many years now.  If it did not, I doubt that cases like Donnelly v Shallard and Emery v Hobson would be decided in favour of plaintiffs today.  It is now well established that the Supreme Court of New South Wales has inherent jurisdiction to direct a temporary or permanent stay of proceedings whenever that is necessary to prevent injustice: Medaris v Lars Halvorsen & Sons Pty Ltd (1943) 44 SR (NSW) 71 at 76; Tringali v Stewardson Stubbs & Collett Ltd (1966) 66 SR (NSW) 335 at 344; Evers v Firth (1986) 10 NSWLR 22 at 26.

1. The point that arises in this case also arose in the recent case of Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council (2009) 230 FLR 336; [2009] NSWCA 59. That case concerned a worker who was hit by a bus on the way to work. The employer paid workers compensation, and claimed an indemnity from the bus company, alleging negligence. The bus company wanted the worker medically examined, but there was no legislation or rule entitling it to have him examined. It argued that the employer had a statutory right to have him medically examined, and sought a stay of proceedings until the worker exercised that right. A judge refused to order a stay. The bus company appealed. At par79, after referring to the current rules concerning medical examinations, Basten JA said:

"Before such rules were promulgated, the court had no power to order anyone to submit to a medical examination, but could direct that an action be stayed unless the plaintiff submitted to examination by doctors nominated by the defendant: see Baugh v Delta Water Fittings Ltd[1971] 1 WLR 1295; Edmeades v Thames Board Mills Ltd [1969] 2 QB 67 at 71 (Lord Denning MR). The court retains such a power."

Those comments were obiter.  Giles JA agreed with them at par1.  McColl JA, who dissented, would have granted a stay.  No express power to grant a stay was conferred by any statute or rule.

1. The English authorities were cited without disapproval by Neasey J in Weedon v Green [1978] Tas SR 117 at 119. They were cited with approval by Underwood CJ in Daly v Dransfield [2005] TASSC 43, a case in which a stay of proceedings was unsuccessfully sought by a defendant who wished to examine the plaintiff's motorcycle helmet.

1. In my view this Court should follow the modern New South Wales authorities as to stays of proceedings, and the English Court of Appeal's decision in Edmeades v Thames Board Mills Ltd and Lane v Willis.  That is to say, a stay of proceedings should be ordered if the refusal by a plaintiff to take some step in relation to the action will prevent a fair trial of the action, or of any issue in the action.

Should a stay be ordered?

1. There is Commonwealth legislation which makes it impossible, or at least impracticable, for the defendant to obtain access to Centrelink's records by means of a subpoena for their production, or by means of an order for discovery by the Commonwealth: Social Security (Administration) Act 1999 (Cth), ss201 – 210.

1. If the Commonwealth's records in relation to social security benefits and their recipients were not kept secret, needy individuals might be reluctant to apply for such benefits.  The Commonwealth Parliament has therefore legislated to maintain the secrecy of such records. Section 207 of the 1999 Act provides as follows:

"An officer must not, except for the purposes of the social security law or the Farm Household Support Act 1992, be required:

(a)  to produce any document in his or her possession; or

(b)  to disclose any matter or thing of which he or she had notice;

because of the performance or exercise of his or her duties, functions or powers under the social security law or the Farm Household Support Act 1992, to:

(c)  a court; or

(d)  a tribunal; or

(e)  an authority; or

(f)   a person;

having power to require the production of documents or the answering of questions."

1. However, if the plaintiff were to sign the authority sought by the defendant's solicitors, they could be permitted to obtain copies of Centrelink's records pursuant to s208(1)(b)(ii), which reads as follows:

"(1)Despite sections 204 and 207, the Secretary may:

…

(b)  disclose any such information:

…

(ii)to a person who is expressly or impliedly authorised by the person to whom the information relates to obtain it …". 

1. Counsel for the defendant referred me to a number of cases in which Australian courts have made orders for the signing of authorities for the obtaining of information from Centrelink.  The earliest of those cases was Attard v Hore [2002] QSC 437. That was another personal injury case in which a plaintiff was claiming damages for economic loss without any discount in relation to residual earning capacity. Dutney J ordered the plaintiff to execute an authority directed to Centrelink requesting the release of the Centrelink file to the defendant's solicitors. The power to make such an order was conferred by the Uniform Civil Procedure Rules 1999 (Qld), r367(1), which authorised the Supreme Court of Queensland to "make any order or direction about the conduct of a proceeding it considers appropriate". Dutney J rejected a submission that the disclosure of the Centrelink file would be an unwarranted intrusion into the civil liberties of the plaintiff, saying this:

"I am not persuaded that the civil liberties argument can be sustained in a case where a party comes to the Court seeking an order from the Court that she be paid a substantial sum of money as a result of injuries which she says she has suffered. It seems to me that the price of seeking such an order from the Court is disclosure of a great deal of material which in other circumstances would be considered confidential. Unfortunately for plaintiffs, that is the price they pay if they want to receive a substantial damages award."

1. In Merkuloff v Yalischeff [2003] NSWSC 1183, which concerned a property claim following the breakdown of a marriage-like relationship, the defendant sought an order compelling the plaintiff to apply to Centrelink under the Freedom of Information Act 1982 (Cth) to obtain certain information. The information in question related to a dispute between the parties as to the financial contributions made by the plaintiff. He contended that at certain times he had been employed as a consultant engineer, but the defendant contended that he had been unemployed and receiving Centrelink benefits. Young CJ in Eq ordered that the plaintiff's proceedings be stayed until the plaintiff forwarded to the defendant the information requested. He had the power to make such an order under the Supreme Court Rules 1970 (NSW), Pt 40, r1, which permitted the court to make whatever order was appropriate to be made in the circumstances of the case.

1. In Wray v Wray [2007] NSWSC 164, which concerned a claim for provision out of a deceased estate pursuant to the Family Provision Act 1982 (NSW), Gzell J ordered the defendant/executor to sign an authority addressed to Centrelink and the Social Security Appeals Tribunal. The plaintiff contended that the deceased and the defendant/executor had received age pension payments to which they were not entitled; that they had been obliged to repay money to Centrelink as a result of a decision of the Social Security Appeals Tribunal; and that their indebtedness had been fully discharged by the plaintiff and/or a company in which she held an interest. Gzell J relied on the Civil Procedure Act 2005 (NSW), s56(3), which imposes on a party to a civil proceeding a duty to assist the court to further the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in proceedings.

1. That case was followed by Harrison J in El-Helou v Smith [2009] NSWSC 741. The plaintiff in that case was claiming damages for personal injuries, including damages in respect of economic loss and domestic assistance. There was evidence that she had applied to Centrelink for a carer's pension, once on the basis that she was required to care for her husband, and on another occasion on the basis that she was required to care for one of her daughters. She was ordered to provide an authority addressed to Centrelink to enable the defendant to obtain information.

1. In my view it is significant that in this jurisdiction there are no provisions in any relevant legislation or rules to the effect that the overriding purpose of the rules of court is to facilitate the just resolution of the real issues in civil proceedings with minimum delay and expense; that litigants have a duty to assist the court in furthering that overriding purpose; and that a judge may make whatever order is appropriate in the circumstances of the case.  Such rules have become common in other jurisdictions following the introduction of the Civil Procedure Rules 1998 (UK).  Their absence in Tasmania has been noted by the High Court: Aon Risk Services Australia Ltd v Australian National University (2009) 83 ALJR 951 per Gummow, Hayne, Crennan, Kiefel and Bell JJ at footnote 153. The most modern case management provisions in the Supreme Court Rules, rr414 – 417, have not been made applicable to this action, but they would add nothing to the powers that I can exercise on hearing the present applications. The order sought by the defendant is an order for a stay. According to the common law authorities that I have referred to, the refusal of the plaintiff to provide the requested authority addressed to Centrelink should result in a stay only if his refusal will prevent a fair trial of the action, or of some issue in the action.

1. Counsel for the plaintiff referred me to the recent decision of Cavanough J in Psalidis v Norwich Union Life Australia Ltd [2009] VSC 417. In that case the defendant was seeking orders enabling it to inspect records held by a plaintiff's doctors. The principal question in the case was whether the doctors' records were in the patient's possession, custody or power following the enactment of the Health Records Act 2001 (Vic). However the defendant also sought, by way of a shortcut, a direction that the plaintiff "take such steps and make such requests and do such things as may be reasonably necessary to obtain and give to Norwich [the defendant] inspection of Psalidis' [the plaintiff's] medical records". That direction was refused. One of the factors taken into account by Cavanough J was that the defendant had not exhausted ordinary processes, and could apply for "third-party discovery".

1. I do not know what documents relating to Centrelink will be brought to light as a result of my making an order under r388. I do not know what information about the plaintiff's Centrelink benefits, his incapacity for work, or his attempts to find work might be brought to light by means of interrogatories. If the Supreme Court Rules enabled me to order the provision of a signed authority in order to expedite the proceedings, I would make such an order.  They do not.  I think it is too early to say whether the refusal to provide such an authority will prevent a fair trial of the action or of any issue.  I must therefore refuse to order a stay.

1. However I do think that this action might benefit from an order under r414(e) making the case management provisions of rr414 – 417 applicable to it. I will therefore make such an order of my own motion. That should facilitate the renewal of the stay application, before the associate judge, when and if the defendant's solicitors think fit to renew it.

1. Counsel for the defendant submitted that I had the power to grant a mandatory interlocutory injunction requiring the plaintiff to sign the desired authority addressed to Centrelink.  He did not rely on any provision in the Supreme Court Rules, but on the Court's general equitable jurisdiction.  In Rogers v Hougland (supra) at 8, Zeeman J concluded that there was no basis to make an order for the inspection of records held by the Commonwealth Department of Social Security under a rule of court then in force, and commented, "There is no other proper basis upon which to make such an order."  Counsel for the defendant argued that this comment was incorrect, because the possibility of a mandatory interlocutory injunction had been overlooked.  I will not grant such an injunction upon the present application, for a number of reasons.  For one thing, no such order was sought by either of the applications presently before me.  Further, the case law as to such injunctions, if any, was not explored by counsel in their submissions, and it remains to be seen what the ordinary processes of supplementary discovery and interrogatories might produce.

Conclusion

1. For the reasons stated above, my orders are as follows:

(1)       That the plaintiff discover to the defendant his secondary school reports.

(2)That the plaintiff make, file and serve an affidavit as to the documents in respect of applications by him for Centrelink benefits that are, or have been, in his possession, custody or power.

(3)That Division 1 of Part 14 of the Supreme Court Rules 2000 apply to this action.

(4)That the order sought by paragraph 1 of the interlocutory application filed on 9 October 2009 be refused.

1. I will hear counsel as to the time that should be allowed for compliance with orders (1) and (2).