Fleming v Segal

[2002] NSWSC 961

CITATION:	Fleming v Segal [2002] NSWSC 961
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 20237/00
HEARING DATE(S):	4 October 2002
JUDGMENT DATE:	17 October 2002
PARTIES :	Brian William Fleming Alan Lewis Segal t/a Segal Litton & Chilton
JUDGMENT OF:	Sperling J at 1

COUNSEL :	Mr T Lynch for the Plaintiff Mr D Davies SC for the Defendant
SOLICITORS:	Hunt & Hunt Lawyers for the Plaintiff Ebsworth & Ebsworth Lawyers for the Defendant
CATCHWORDS:	Practice & Procedure - application for leave to amend Statement of Claim - no question of principle
DECISION:	1. Order pursuant to paragraph 1 of the plaintiff's notice of motion filed on 26 August 2002; 2. Defendant to pay the plaintiff's costs of the notice of motion save as to so much of the notice of motion as was consented to on 6 September 2002; 3. Defendant to file his defence on or before 30 October 2002; 4. Plaintiff to serve all lay and expert evidence on which he intends to rely by 22 November 2002; 5. Defendant to serve all lay and expert evidence on which he intends to rely by 13 December 2002; 6. Liberty to apply on three days notice.

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
Professional Negligence List

Sperling J

Thursday, 17 October 2002

20237/00 Fleming v Segal

Judgment

1 His Honour: In these proceedings, the plaintiff sued the defendant by statement of claim filed on 6 June 2000.

2 On 14 February 2002, Howie J held that a limitation defence to that claim failed.

3 An application for leave to appeal from that decision was heard in the Court of Appeal on 2 August 2002. The Court was constituted by Handley and Hodgson JJA and Young CJ in Eq. Mr Davies SC appeared for the applicant (defendant). Mr Lynch of Counsel appeared for the respondent (plaintiff). The leading judgment was given by Hodgson JA, with whose reasons for decision Handley JA and Young CJ in Eq agreed. The decision by Howie J was reversed. That disposed of the claim made in the statement of claim.

4 In the course of the argument on appeal, counsel for the plaintiff was asked whether the plaintiff had an alternative cause of action which would, arguably, not be statute barred. One was propounded, based on advice given in 1989. The following orders were made.

1. Leave to appeal granted and appeal allowed, subject to a Notice of Appeal being filed within 14 days.
2. Opponent to pay claimant's costs of the application and appeal, and to have a suitors’ fund certificate if otherwise entitled.
3. Orders below set aside, and in lieu thereof:
(a) Opponent to pay the claimant’s costs of the separate hearing.
(b) Leave to opponent to apply pursuant to Pt.20 r.4(5) to substitute a cause of action based on the facts alleged in the Statement of Claim but specifying the breach of duty referred to in paragraph 9 of the existing Statement of Claim as being negligence referable to the events of August 1989 referred to in the judgment, such application together with a Draft Amended Statement of Claim to be filed and served within 14 days.
(c) If no such application and Draft Statement of Claim is filed and served within 28 days, or if such application is dismissed, verdict and judgment for the defendant with costs.

5 Young CJ in Eq, whilst agreeing with Hodgson JA, said in a short supplementary judgment:

I think, however, I should make it clear that the Court required counsel for the respondent to specify the ambit of the amendment he might seek to make. Counsel specified a breach being negligence referable to the events of August 1989. No other amendment comes within the scope of the orders made in this Court.

6 Mr Lynch again appeared for the plaintiff (now the applicant) and Mr Davies again appeared for the defendant (now the respondent).

7 With commendable focus, the only basis on which the further amendment was opposed was that it is precluded by what occurred in the Court of Appeal.

8 I considered whether to refer the present application to the Court of Appeal. There was no consensus about that. In those circumstances, I thought it was best that I decide the application myself rather than put the parties to further cost which might otherwise not be incurred.

9 Counsel said they had no objection to my looking at the transcript of argument in the Court of Appeal. I record the following passages from the decision there. At page 23:

HODGSON JA: At least understand what it is you are proposing to do. The way the case was conducted, the ordinary result would be a verdict for the defendant but, if you want to do something to avoid that ordinary result, I think you’ll have to tell us why that should be avoided.
LYNCH: I accept what my friend says the way in which it was conducted before Howie J. In the course of the exchange today, I have refined the possibilities and I would seek leave to file a draft amended statement of claim.
HANDLEY JA: But you’re being asked to indicate what it’s going to contain in addition to what’s already there.

At page 24:

HANDLEY JA: Mr Lynch, if we adjourn for 15 minutes, you might be able to collect your thoughts and we’re getting you on the run which may be a little unfair of us but can we come back at 10 past 3 and, if I may say this, you’ve got to find something within the six years.
HODGSON JA: No, not necessarily. It would help to find something after settlement perhaps.
HANDLEY JA: Hodgson J is correct, so if you could identify any breaches of duty which you rely upon, other than those pleaded in the existing statement of claim.

At page 25:

HODGSON JA: And at this stage I think I would be minded to accede to Mr Davies’ submission that it alleges one breach, which is a breach having regard to the terms of para 4, was committed in connection with the carrying out of the sale.
LYNCH: Yes.
HODGSON JA: Do you want to specify any other breaches that you say you would like leave to rely on in an amended statement of claim?
LYNCH: Yes. I repeat what I said about special condition 11, I don’t need to go back to that. But additionally in agreed fact 14 your Honours will see a reference to a letter sent by Mr Segal to Mr Fleming in August 1989, we don’t have a precise date. The letters are attachment A.
HODGSON JA: You say that having regard to what had happened before, you want to allege that it was negligent of the solicitor at that stage not to take steps that would have brought about an application for rectification of the contract et cetera?
LYNCH: Yes, it was negligent advice which caused us not to seek rectification.
HODGSON JA: And your submission is that no damage flowed from that negligence until--
LYNCH: The loss of the chance to rectify.
HANDLEY JA: Is there anything else you want to say?
LYNCH: No, your Honour.

At pages 26-7:

HANDLEY JA: I don’t think we are minded to allow an amendment formally, but we would keep open the possibility if we thought there was a realistic possibility.
HODGSON JA: I suppose the order contemplated would be, on this assumption, appeal allowed, order below set aside, verdict for the defendant unless within a certain time the plaintiff obtains leave to amend the statement of claim to allege the following negligence, or something like that. That would be the scheme, as I would see it.
DAVIES: If that’s the scheme, then I have to put off to that day this argument that I want to make.
HODGSON JA: Except that if you have an argument that suggests that that application would be futile or doomed to failure or the like, then put it now and we will avoid further waste of costs.

10 In the reasons for decision published by Hodgson JA, the following passage appears after discussion of the claim foreshadowed by Mr Lynch.

In order to be able to rely on this cause of action, the opponent would need leave under Supreme Court Rules Pt.20 r.4(5), so that the commencement of the amended proceedings would relate back to the commencement of these proceedings. It is my opinion that such leave could be granted. This would I think be "a new cause of action arising out of the same or substantially the same facts "as in the current Statement of Claim: I noted earlier that the failure to cause the extinguishment of the 1976 right of way was generally pleaded, so this Statement of Claim would differ from the original Statement of Claim only in making it clear that the failure to secure removal of the right of way relied on was associated with negligence occurring in August 1989 rather than, as the present pleading tends to suggest, negligence occurring in about September 1986 or May 1987. In my opinion, the circumstance that the claimant has a good limitation defence to the whole of the present Statement of Claim does not preclude an order for amendment under Pt.20 r.4(5).

11 It is apparent that the Court refrained from entering judgment for the defendant because the plaintiff asserted an alternative cause of action (the 1989 claim), as to which, in the opinion of the Court, the plaintiff had a serious prospect of obtaining leave to amend.

12 It may be that Young CJ in Eq was of the opinion, as conveyed by his short supplementary judgment, that the plaintiff should not be allowed to amend otherwise than in accordance to the 1989 claim. However, the orders of the Court do not so state. Leave to apply to substitute a specified cause of action does not imply a prohibition against applying to substitute some other or further course of action. As I read them, nothing in the reasons for decision given by Hodgson JA (with which Handley JA and Young CJ in Eq agreed) or in the argument, conveys an opinion on the part of Handley and Hodgson JJA that the plaintiff should be so constrained.

13 In my view the plaintiff is not precluded by anything that happened in the Court of Appeal from adding the 1996 cause by amendment to the statement of claim.

14 Accordingly, I make the following orders:

1. Order pursuant to paragraph 1 of the plaintiff’s notice of motion filed on 26 August 2002.

2. Defendant to pay the plaintiff’s costs of the notice of motion save as to so much of the notice of motion as was consented to on 6 September 2002.

3. Defendant to file his defence on or before 30 October 2002.

4. Plaintiff to serve all lay and expert evidence on which he intends to rely by 22 November 2002.

5. Defendant to serve all lay and expert evidence on which he intends to rely by 13 December 2002.

6. Liberty to apply on three days notice.

-o0o-

Last Modified: 10/17/2002