Eastbury v Genea Limited

[2015] NSWSC 198

Supreme Court

New South Wales

Medium Neutral Citation:	Eastbury v Genea Limited [2015] NSWSC 198
Hearing dates:	On the papers
Date of orders:	12 March 2015
Decision date:	12 March 2015
Jurisdiction:	Common Law
Before:	Hall J
Decision:	Order that costs be costs in the cause.
Catchwords:	COSTS – Extension of limitation period application – s 60G Limitations Act 1969 - Whether departure from UCPR Rule 42.1 (General rule that costs follow the event) warranted where applicant successful in obtaining an order extending a limitation period – Whether the applicant on an extension of limitation period application is required to pay costs regardless of outcome – Whether applicant’s fault is relevant - Necessary to consider whether the opposition of the respondents to the application was unreasonable - Costs in the cause ordered – PROCEDURE – civil – application to extend limitation period –s 60G Limitation Act 1969 – appropriate costs order
Legislation Cited:	Limitation Act 1969
Cases Cited:	Commonwealth of Australia v Lewis [2007] NSWCA 127 Commonwealth of Australia v Lewis [2007] NSWCA 127 Commonwealth v Smith [2005] NSWCA 478 Dibley v Sydney West Area Health Service [2009] NSWSC 856 Galea v Commonwealth of Australia (No 2) [2008] NSWSC 260 Holt v Wynter [2000] 49 NSWLR 128 Salvation Army (South Australia Property Trust) v Graham Rundle [2008] NSWCA 347 Williams v Commonwealth of Australia [2007] NSWSC 1342
Category:	Costs
Parties:	Leighee Eastbury (First Plaintiff) Philip Eastbury (Second Plaintiff) Genea Limited (formerly known as Sydney IVF Limited) (Defendant)
Representation:	Counsel: J Anderson (Plaintiffs) DA Lloyd (Defendant) Solicitors: Catherine Henry Partners (Plaintiffs) Kennedys Lawyers (Defendant)
File Number(s):	2014/74655

Judgment

1. The first and second plaintiffs commenced proceedings against Genea Genetics by way of Statement of Claim filed on 11 March 2014 in respect of genetic screening performed by the defendant in 1999.

2. By way of Amended Notice of Motion filed on 29 September 2014, the plaintiffs sought an order that the limitation period for the causes of action pleaded in the proceedings be extended until 11 March 2014 pursuant to s 60G of the Limitation Act 1969 (NSW).

3. On 17 December 2014 I handed down my decision on the Notice of Motion: Eastbury v Genea Genetics [2014] NSWSC 1793. I made orders that the limitation period for the causes of action pleaded in the Statement of Claim be extended to 11 March 2014.

4. In relation to costs I noted that in the ordinary course costs would be awarded in favour of the plaintiffs pursuant to UCPR rule 42.1 but allowed a period of seven days for the defendant to make an application arguing against the making of that order if they chose to do so.

5. Both the plaintiffs and the defendant have now made submissions as to the appropriate costs order to be made in relation to the application for extension of the limitation period.

Background

6. The plaintiffs’ claim arises from genetic testing performed by the defendant in 1999.

7. The first plaintiff, Mrs Eastbury, consulted a general practitioner on or about 27 September 1999 to discuss her concerns about being a carrier of Fragile X Syndrome, a condition suffered by her uncle. Mrs Eastbury was referred for chromosomal testing and attended Macquarie Pathology on or about 28 September 1999 to undertake that testing.

8. On or about 7 October 1999 Mrs Eastbury was informed that the result of the testing was negative. Mrs Eastbury married the second plaintiff in 2006 and, on the understanding that she was not a carrier of Fragile X, the plaintiffs started a family.

9. The plaintiffs’ first son, Hayden, was born on 30 August 2008. Their second son, Jacob, was born on 12 March 2011.

10. In August 2012, following multiple blood tests, the plaintiffs were informed that Hayden had a full mutation sized expansion of Fragile X consistent with a diagnosis of Fragile X Syndrome. The plaintiffs’ second son, Jacob, was tested soon after and was also found to have a full mutation of the Fragile X gene, consistent with a diagnosis of Fragile X Syndrome.

11. Both children suffer from significant speech and language delays, behavioural and language difficulties and neuro-developmental and physical features of Fragile X Syndrome. The plaintiffs claim that it is unlikely that either child will be able to live independently as an adult.

12. As mentioned above, the plaintiffs initiated proceedings on 11 March 2014. The plaintiffs claimed damages on the following bases:

1. That they have suffered and will continue to suffer economic and non-economic loss.

2. That they have suffered mental harm in consequence of the matters pleaded in the Statement of Claim including those matters referred to in paragraphs [6]-[8] of the Statement of Claim.

Submissions

13. The ordinary rule for costs is contained in UCPR rule 42.1 which provides:

42.1 General rule that costs follow the event

(cf SCR Part 52A, rule 11)

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

Submissions for the Plaintiffs

14. The plaintiffs submitted that the defendant should pay their costs on the application made by Notice of Motion, because they were successful on that application and the defendant had not discharged the onus of satisfying the Court “that some other order should be made.”

15. Alternatively, the plaintiffs submitted that costs should be costs in the cause.

Submissions for the Defendant

16. The defendant submitted that the plaintiffs should be ordered to pay the defendant’s costs of the motion ‘on the ordinary basis.’

17. The ‘ordinary basis’ for awarding costs in an application for an extension of time under the Limitation Act 1969, according to the defendant, is a departure from r 42.1 of the UCPR.

18. The defendant relied on a number of authorities to contend that ordinarily, in an application for extension of a limitation period, the applicant should pay the respondent’s costs regardless of the outcome.

19. In particular, the defendant relied on statements made by Beazley JA (as her Honour then was) in Commonwealth of Australia v Lewis [2007] NSWCA 127. In that case, her Honour referred to statements made by Sheller JA in Holt v Wynter [2000] 49 NSWLR 128. The principles established in these and other relevant authorities and their utility to the present matter will be considered further below.

Consideration

20. The cases relied upon by the defendant to establish the basis for the award of costs in extension of limitation period applications were concerned with the application of Part 52A, Rule 17, Supreme Court Rules 1970 (NSW) which has now been repealed. That rule was in the following terms:

17 Extension of time

Where a party applies for an extension of time, unless the Court otherwise orders, he or she shall, after the conclusion of the proceedings, pay the costs of and occasioned by the application, or any order made on or in consequence of the application.

21. In Commonwealth v Smith [2005] NSWCA 478 Santow JA noted the following in relation to that rule at [157]-[158]:

“The Commonwealth submitted that the primary judge erred in not applying Pt 52A r 17 Supreme Court Rules…

…However, an application for an extension of a limitation period is not an application for an extension of time within the meaning of the Rules. Part 52A r 17 applies to procedural matters arising under the Rules (for example, an extension of time to lodge a notice of appeal) and has no application to proceedings under a statute for the extension of a limitation period. “

22. In Commonwealth of Australia v Lewis [2007] NSWCA 127, Beazley JA (as her Honour then was) noted the opinion of Santow JA in Smith but stated at [94]:

“Accepting this to be correct, I am of the opinion, in any event, that in the ordinary course, a court would order a successful applicant for an extension of time to pay the costs.”

23. Though her Honour mentions an ‘extension of time,’ since the facts of Lewis concerned an extension of a limitation period under the Limitations Act her comments apply to cases such as the present.

24. In Holt v Wynter at [121] Sheller JA stated that:

“…ordinarily, a successful applicant who has allowed him or herself to get out of time should pay the costs of the application unless the respondent’s opposition was wholly unreasonable.”

25. The defendant relied upon the statement of Beazley JA in Lewis as well as the statement of Sheller JA in Holt v Wynter to establish a rule for costs to be awarded in relation to applications for extensions of limitation periods under the Limitations Act which differs from the presumption in UCPR Rule 42.1.

26. Though those cases concerned rule 17 of the Supreme Court Rules, the defendant submitted that the observations were general in nature and apply regardless of the UCPR presumption: Defendant’s Written Submissions on Costs at [4].

27. The principle identified in Holt v Wynter and Commonwealth of Australia v Lewis was applied in Williams v Commonwealth of Australia [2007] NSWSC 1342 and Galea v Commonwealth of Australia (No 2) [2008] NSWSC 260. In Dibley v Sydney West Area Health Service [2009] NSWSC 856 James J made the following remarks in relation to those decisions:

[74] In Williams Adams J emphasised the part of Sheller JA’s statement in Holt v Wynter in which his Honour referred to a successful applicant “who has allowed him or herself to get out of time” and expressed his personal view that it would not be just to order a plaintiff who is out of time through no fault of his or her own and who is forced to make an application for an extension of time and who succeeds on the application, to pay the defendant’s costs of the application. Adams J proceeded to inquire whether the opposition of the defendant to the application for an extension had been unreasonable and concluded that the opposition to the application had not been reasonable and this conclusion by his Honour was the basis of the order made by his Honour that the defendant pay the plaintiff’s costs of the application.

[75] In Galea v Commonwealth (No 2) [2008] NSWSC 260 Johnson J at [11] referred to Adams J’s judgment in Williams. Johnson J said:

With respect, I have difficulty with that part of his Honour’s reasoning concerning a plaintiff allowing himself to get out of time. As I understand the principles considered in Commonwealth v Lewis, it may be taken that the present plaintiff allowed himself to get out of time given that it was necessary for him to make application under the Limitation Act 1969. I do not see that any inquiry as to fault on the plaintiff’s part would assist on the question of costs.

[76] I do not consider that I should give the words used by Sheller JA in Holt v Wynter, “who has allowed him or herself to get out of time”, the interpretation placed upon those words by Adams J in Williams. I consider that I should apply what I understand to be the principle stated by the Court of Appeal in Holt v Wynter and Commonwealth v Lewis that the normal rule is that the plaintiff pay the costs of an application for an extension of a limitation period, even if the plaintiff’s application has been successful, unless the defendant’s opposition to the application was wholly unreasonable or at least unreasonable.

28. Though the authorities are instructive as to the relevant considerations to be taken into account when making costs orders in cases of this type, it should be noted that the award of costs remains a matter of discretion for the Court. Accordingly, it may not be appropriate to identify a stringent rule or ‘ordinary basis’ applicable to these types of applications such as the basis relied upon by Genea in their submissions. As Basten JA observed in Salvation Army (South Australia Property Trust) v Graham Rundle [2008] NSWCA 347 at [146]:

Whether there is an ‘ordinary course’ may be open to doubt. In Commonwealth of Australia v Smith [2005] NSWCA 478, Santow JA noted the statement in Holt v Wynter but continued that there was “no rule that binds the judge to deny costs to an applicant for an extension of the limitation period”: at [159]–[160].

29. Similarly, in Holt v Wynter Priestley JA (with whom Meagher JA agreed) observed at [104] that the appropriate costs order in these cases depends ‘very much on the circumstances of the case.’

30. Nonetheless, the authorities outlined above establish that the fault or otherwise of the applicant for an extension of limitation period is not relevant to determining the issue of costs. That said, I note that in this case it cannot, in any event, be said that the plaintiffs ‘allowed themselves to get out of time’ in any sense.

31. The question then, according to Holt v Wynter and Commonwealth v Lewis is whether the defendant’s opposition to the application was unreasonable.

32. In Williams v Commonwealth Adams J found that the opposition by the respondents in that case to the extension application was unreasonable. In reaching that conclusion, his Honour made the following observations at [12]:

“…Certainly, the Commonwealth had arguments which were capable of being articulated and properly presented but whether resistance to such an application is reasonable requires more in my view than the articulation of a merely arguable case. In my view, the opposition was essentially a fishing exercise in which the Commonwealth dangled a line in the hope that a substantial fish might be landed, though the practical reality was that the best that might be caught was a minnow. Of course, I am not for one moment suggesting that it was not entirely proper for the Commonwealth to require the plaintiff to establish proper grounds for an extension of time and to test those grounds in so far as this could be done. But the question whether opposing an application of this kind is unreasonable…depends on somewhat different considerations. The test is one of practical judgment as to the likely outcome of the application. The overwhelming likelihood of its success made opposition to it unreasonable (emphasis added).”

33. By contrast, in Dibley v Sydney West Area Health Service at [77], James J considered it relevant that the plaintiff in that case had ‘succeeded only on fairly narrow grounds’ in determining that the respondent’s opposition was not unreasonable.

34. In this case, the defendant opposed the extension of time on the basis that they would suffer irremediable prejudice if time was extended. The prejudice, it was submitted, would be the result of certain types of evidence and, in particular, correspondence from 1999 which could be relevant to factual issues of significance on liability being unavailable.

35. A key issue was said to be the fact that in 1999 Genea did not have the capacity to undertake the testing sought by the first plaintiff that is, testing for carrier status of Fragile X Syndrome. The defendant submitted that any evidence that might establish that Macquarie Pathology, who referred the testing to them, knew of the limitations in their testing capacity was no longer available.

36. The submission on behalf of Genea as to asserted prejudice, actual or constructive was ultimately found to be one that lacked support. In the judgement on the extension application I recorded the followings findings and conclusions:

81   There is no suggestion that Genea would be prejudiced by the loss of any other particular class of documents that could be expected to have existed. The submissions directed to establishing that Macquarie Pathology have no documents (Defendant’s Written Submissions at [34]) and the fact that Dr Curtotti’s notes are no longer available and “may” shed light on these matters (Defendant’s Written Submissions at [36]), do not identify any additional matters beyond those which were conveyed by Dr Curtotti in his written referral which might be capable of placing a different complexion upon the actual written communications constituting the relevant dealings between Dr Curtotti, Macquarie Pathology and Genea.

82   The mere possibility that there may be other unspecified documents that may shed some further light on the dealings or communications between the parties does not, in the particular circumstances of this particular case, establish, in my assessment, either actual prejudice or presumptive prejudice.

…

84   In assessing the issue of prejudice and the associated issue of a fair trial, it has been necessary to closely consider whether the abovementioned assumptions as to the significance or importance of the factual matters referred to in the preceding paragraph is well-founded. In circumstances where, as discussed above, the dealings between the referring doctor and Macquarie Pathology, and between the latter and Genea, proceeded in writing in accordance with an established system for testing based upon the doctor’s request or instructions given by him in Mrs Eastbury’s case, I do not, with respect, consider that the prejudice contended for by the defendant has been established.

85   The determination of this application is to be undertaken in accordance with established principles, including in particular, those enunciated in the High Court’s judgment in Brisbane South Regional Health Authority, supra. These require the particular facts and circumstances of a case, as known at the time of the application, to be closely examined for the purposes of determining and resolving any suggested issue of prejudice and the chances of a fair trial.

86   I have concluded, upon the analysis set out above, that the defendant has not established that this is a case in which discretion should be exercised against an extension of time on the basis of the claimed actual or presumptive prejudice. The possibility of there being some evidence, other than the documentary material that is available, in my opinion does not establish that the defendant is unlikely to have a fair trial.

37. Although Genea’s submissions as to prejudice were not, on analysis, particularly strong and the plaintiffs could not be said to have succeeded only on ‘narrow grounds’ as was the case in Dibley, I do not consider that it could be said there was any ‘overwhelming likelihood’ of the plaintiffs’ success such as to make their opposition unreasonable in the sense described by Adams J in Williams.

38. The circumstances in which the application for extension was made in this case include the fact that the relevant testing occurred a long time ago and Macquarie Pathology have now been deregistered. Genea relied upon detailed affidavit evidence as to such matters, and the alleged possible Determining who should pay the costs of the application in question in these unusual circumstances has required balancing the faultlessness of the plaintiffs in being outside the limitation period with the concerns of the defendant as to the availability of evidence. I consider these to be legitimate concerns despite not being sufficient to establish a basis against an order extending the limitation period. Accordingly I do not consider that the defendant’s opposition was unreasonable in the circumstances. I note that the plaintiffs made no submissions to that effect.

39. As such, I have reached the conclusion that the appropriate order is that costs should be costs in the cause.

Orders

40. I order that costs be costs in the cause.

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Decision last updated: 12 March 2015