Harriton v Macquarie Pathology Services Pty Limited and 4 Ors (No 6)
[1999] NSWSC 469
•21 May 1999
CITATION: Harriton & Anor v Macquarie Pathology Services Pty Limited & 4 Ors (No 6) [1999] NSWSC 469 revised - 21/05/99 CURRENT JURISDICTION: Common Law FILE NUMBER(S): 20254/96 HEARING DATE(S): 6 May 1999 JUDGMENT DATE:
21 May 1999PARTIES :
Olga Harriton
(First plaintiff)George Constantine Harriton
(Second Plaintiff)Macquarie Pathology Services Pty Limited
(First Defendant)Dr Martha Zoltan
(Second Defendant)Paul Richard Stephens (as executor of the estate of the late Dr Max Stephens)
(Third Defendant)Dr Paul Richard Stephens
Miroslav Hruska (as executor of the estate of the late Dr Gabriel Rose)
(Fourth Defendant)
(Fifth Defendant)JUDGMENT OF: Master Harrison
COUNSEL : Mr G Segal with Ms L Whalan
Mr N Perram
(Plaintiffs)
(Fifth Defendant)SOLICITORS: Mr D Hirsch of Cashman & Partners
Ms T Iskra and Mr M Lee of Corrs Chambers Westgarth
Sydney
(Plaintiffs)
Sydney
(Fifth Defendant)CATCHWORDS: Leave to re-open after judgment has been given but not entered ACTS CITED: Limitation Act 1969 (NSW
Supreme Court Rules - Pt 40 r 6CASES CITED: The University of Wollongong & Ors v Metwally (No 2) (1985) 59 ALR 481, 60 ALR 68
Autodesk Inc & Anor v Dyson & Ors (1992-1993) 176 CLR 300
Dietz v Lennig Chemicals Pty Limited [1969] 1 AC 170
Adams & Ors v Alemite Lubrequit Pty Ltd & Ors (NSWCA, unreported, 15 May 1995)
Smith v The New South Wales Bar Association (1992) 176 CLR 256
Briginshaw v Briginshaw & Anor (1938) 60 CLR 336DECISION: See para 39
17
THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISIONMASTER HARRISON
FRIDAY, 21 MAY 1999
20254/96 - OLGA HARRITON & ANOR v MACQUARIE
PATHOLOGY SERVICES PTY LIMITED
& 4 ORS (No 6)
JUDGMENT (Leave to re-open after judgment has been
given but not entered)1 MASTER: By notice of motion filed 15 December 1998 the plaintiffs seek that my order made on 7 July 1998 (where I refused to extend the period of time for the bringing of proceedings against the estate of the late Dr Rose (the fifth defendant)) be set aside; that the orders for costs made in favour of the fifth defendant on 7 July 1998 and 30 October 1998 be set aside; that the fifth defendant not be permitted to rely on the affidavits of Karin Nicole Rose sworn 5 December 1997 and 6 February 1998 unless that deponent is available for cross examination; that the fifth defendant and Karin Rose be ordered to pay the costs of the plaintiffs’ motion filed 11 October 1996 (the application to extend time) on an indemnity basis and that the fifth defendant and Karin Rose be ordered to pay the costs of this motion on an indemnity basis. The
plaintiffs relied on the affidavits of David Hirsch sworn 19 December 1997 and 14 December 1998, affidavits of the first plaintiff sworn 14 November 1996 and 19 December 1997 and affidavits of Karin Rose sworn 5 December 1997 and 6 February 1998.2 The plaintiffs seek that the case be reopened to permit further evidence to be adduced on the issue of the destruction of the fifth defendant’s medical records by Ms Karin Rose. Until recently the plaintiffs alleges that they, their legal representatives and the court were under a misapprehension as to the circumstances under which Ms Rose destroyed the records of her father. According to the plaintiffs, the further evidence may make a material difference to my reasoning for declining to grant them an extension of time in relation to proceedings against the fifth defendant. The defendant opposes the application on the basis that firstly, the plaintiffs have not shown sufficient reason as to why the case should be reopened and secondly, if they have shown a reason as to why the case should be reopened they have not demonstrated that it will make a material difference to my decision.
3 The plaintiffs have filed an amended reply which alleges that Dr Rose fraudulently concealed the results of blood tests and that the first plaintiff had contracted rubella in the first trimester of pregnancy. These allegations pleaded in the amended reply will be argued at the trial and are not the subject matter of this application. The plaintiffs have not included a pleading of fraudulent concealment in relation to Ms Rose in the amended reply at this stage for two reasons: firstly, as Ms Rose is not a party to the proceedings she may not fall within the provisions of s 55 of the Limitation Act 1969 (NSW) and secondly, it may be argued at trial that this was a relevant matter to have been agitated at the hearing of the extension of time application.4 The plaintiffs rely on Part 40 r 9 of the Supreme Court Rules. The relevant parts provide as follows:
The Law
“Setting aside or varying judgment or order
(1) The Court may set aside or vary a judgment where notice of motion for the setting aside or variation is filed before entry of the judgment.
(2) …
(3) The Court may, on terms, set aside or vary an order-
(b) where notice of motion for the setting aside or variation is filed before entry of the order.
(a) …
(4) In addition to its powers under subrules (1), (2) and (3), the Court may, on terms, set aside or vary any order (whether or not part of a judgment) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and excepting an order for dismissal of proceedings or for dismissal of proceedings so far as concerns the whole or any part of any claim for relief.
(5) Nothing in this rule affects any other power of the Court to set aside or vary a judgment or order.”5 The parties agree that I have the power to vary the order to allow a re-hearing to take place over limited issues. It is common ground that the judgment has not been entered.
6 The parties referred me to the authorities of The University of Wollongong & Ors v Metwally (No 2) (1985) 59 ALR 481, 60 ALR 68; Autodesk Inc & Anor v Dyson & Ors (1992-1993) 176 CLR 300; Dietz v Lennig Chemicals Pty Limited [1969] 1 AC 170; Adams & Ors v Alemite Lubrequit Pty Ltd & Ors (NSWCA, unreported, 15 May 1995) and Smith v The New South Wales Bar Association (1992) 176 CLR 256.
7 In Metwally (No 2) at p 483 the High Court in a joint judgment stated at p 483 that it was “elementary a party is bound by the conduct of his case. Except in the most exceptional circumstances it would be contrary to all principles to allow a party, after a case has been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had the opportunity to do so.”
8 In Smith the majority of the High Court (Brennan, Dawson, Toohey and Gauldron JJ) at p 265 referred to Part 40 r 9 of the Supreme Court Rules. Their Honours stated that the power is discretionary and although it is in existence up until the entry of judgment, it is one that is exercised having regard to the public interest in maintaining the finality of litigation. Thus if the reasons for judgment have been given, the power is only exercised if there is some matter calling for review. And there may be more or less reluctance to exercise the power depending on whether there is avenue of appeal. It is important that it be understood that these considerations may turn against the reopening of a case, but they are not matters which are beyond the nature of the review to be undertaken once the case is reopened. Once a matter has been reopened, the nature and extent of the review must depend on the error or omission which has led to that step being taken.
9 The High Court in Smith stated that if an application is made to reopen on the basis of new or additional evidence being available it will be relevant to enquire why the evidence was not called at hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. Assuming that hurdle is passed, different considerations may apply depending on whether the case is simply one for which the hearing is complete or one which reasons for judgment have been delivered. According to the High Court, is difficult to see why in the former situation, the primary considerations should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rule relating to fresh evidence may provide a useful guide as to the manner in which the discretion to reopen should be exercised.
10 In Autodesk Inc Mason CJ at p 300 stated that the exercise of the discretion to reopen a judgment and to grant a rehearing is not confined to circumstances in which the applicant shows that by accident and without fault on the applicant’s part he or she has not been heard but that the jurisdiction is to exercised with great caution having regard to the importance of the public interest in the finality of litigation. Mason CJ stated that what must emerge in order to enliven the exercise of jurisdiction is that the court has apparently proceeded according to some misapprehension of the facts or relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the parties seeking the rehearing.
11 In Adams it was alleged that the Court of Appeal got some facts wrong. At p 3 of the judgment the Chief Justice said that the difference between the correct facts and the facts stated in the reason for judgment is not a difference that he regarded material to the outcome of the case and for that reason the application was dismissed with costs.
12 In Dietz the House of Lords held that where a consent to the settlement of a compensation to relatives matter proceeded on the basis that the plaintiff was a widow, the parties and the court were induced by an innocent representation. The plaintiff was not in fact a widow but married. As the consent given on the behalf of the respondent was a misapprehension the settlement was set aside. I did not find this case helpful.
13 The defendant submitted that to impugn a solicitor’s professional reputation is a serious matter and one to which the test of Briginshaw v Briginshaw &Anor (1938) 60 CLR 336 applies. While I agree that proposition is correct, I do not read these cases as establishing that this is the test to apply when determining whether a case should be reopened. If there was to be a rehearing, the Briginshaw test would be applied there.
14 Some of these facts appear in my earlier judgments, but it is convenient to refer to them here. Dr Gabriel Rose died in 1984. The fifth defendant is Miroslav Hruska. He is sued as executor of the estate of the late Gabriel Rose. Dr Rose was the father of Karin Rose. Karin Rose is a beneficiary of her father’s estate. Karin Rose was admitted to practice as a solicitor in 1988. Ms Rose and Mr Hruska as executor of the the fifth defendant’s estate, are legally represented by Michael Lee a solicitor of the firm Corrs Chambers Westgarth. The first plaintiff, Mrs Harriton and the plaintiffs’ solicitor, Mr David Hirsch started making enquires as to the whereabouts of the records of Dr Rose in October 1995. These proceedings were commenced in March 1996. Ms Rose caused her father’s records to be destroyed on 4 and 5 January 1996.
15 This case came before me on 1 December 1997 in relation to subpoenaed documents. On that day orders were made and the limitation and strike out motions were specially fixed to be heard by me on 12 and 13 January 1998.
16 At the hearing that commenced on 12 January 1998 the fifth defendant relied on two affidavits sworn by Karin Rose namely of 5 December 1997 and 6 February 1998. On 15 December 1998 the plaintiffs’ solicitor had notified Ms Rose’s solicitor that she was required for cross examination. On 12 February 1998 the plaintiffs’ legal representatives made a decision not to require Ms Rose for cross examination.
17 On 7 July 1998 I delivered judgment in relation to the limitation application and the strike out motion. I did not extend the limitation period against the fifth defendant and ordered that the plaintiffs pay the fifth defendant’s costs. On p 64 of my judgment I wrote:
“Dr Rose died in 1986 and has been dead for 12 years. The plaintiff’s solicitors started making enquiries about this matter in October 1995. It is regrettable for all parties, that the fifth defendant’s daughter Karin Rose destroyed her father’s medical records on the 5 January 1996 before, she says, that she became aware that such enquiries were being made. Had she become aware of these enquiries at an earlier date she, as a solicitor, would have appreciated the importance of retaining these records.”
18 Since I delivered this judgment it has come to my attention that Dr Rose died on 28 October 1984 not 1986. Probate was granted on 8 April 1986.
19 I turn now to the background facts which caused the plaintiffs’ legal representatives to make the decision on 12 January 1998 not to cross examine Ms Rose. The plaintiffs’ solicitor met the first plaintiff in early October 1996 and at that time he received instructions to investigate this claim. After making arrangement with the Royal Hospital for Women to produce its documents, he met with Mrs Harriton on 16 October 1995 and reviewed the hospital records. He subsequently advised Mrs Harriton that he would need to obtain the records from Dr Rose. The plaintiffs’ solicitor was advised by Mrs Harriton on or about 17 October 1995 that she had telephoned three of Dr Rose’s business associates namely, Dr Oscar Horky, Dr Robert Diamond and Dr Alex Szirt. She asked them about Dr Rose’s records. She was advised by those doctors that they did not have the records of Dr Rose. She passed this information on to her solicitor. On 7 December 1995 the plaintiffs’ solicitor wrote to Doctors Horky, Diamond and Szirt. He subsequently had telephone conversations with Doctors Horky and Diamond. Mr Hirsch was advised that they did not have Dr Rose’s records relating to Mrs Harriton and did not know where they were. On 14 December 1995 the plaintiff’s solicitor spoke with Dr Szirt and was advised that he did not have Dr Rose’s notes nor did he know who did.
20 The plaintiffs’ solicitor subsequently discovered that the executor of the late Dr Rose’s estate was Mr M Hruska. He wrote to Mr Hruska on 12 and 19 January 1996. In reply to those letters the plaintiffs’ solicitor received a letter dated 21 February 1996 in reply to those letters from Ms Rose. In this letter, Ms Rose advised the plaintiffs’ solicitor that her father died in 1984, she did not know whether her father had insurance in 1980 and that he should make his own enquiries. She informed Mr Hirsch that she had none of her father’s records but did not mention that she had had them destroyed them just 6 weeks earlier. It is clear that by 30 April 1996 Ms Rose knew that her father had a policy with the Medical Defence Union (MDU) in 1980 (see Ex D).
21 By September 1996, the plaintiffs’ solicitor understood that Mr Lee was instructed by Ms Rose and not Dr Rose’s MDU. Mr Hirsch also understood that Mr Lee and Ms Rose were friends and that Karin Rose had been a bridesmaid at Mr Lee’s wedding. Mr Lee had also advised Mr Hirsch that Ms Rose was not happy about her father’s name being dragged through the mud.
22 On 26 November 1996 Mr Lee solicitor swore and filed an affidavit, and at para (3) he said that he had made enquiries as to the existence of medical records held by Dr Gabriel Rose and that no medical records of Dr Rose were in the possession, custody or control of the fifth defendant or the beneficiary of the estate of Dr Gabriel Rose. Once again, there was no mention of the records being destroyed.
23 After documents were produced before the court on 1 December 1997 the plaintiffs’ solicitor received an affidavit of Karin Rose sworn 5 December 1997 (the first affidavit). In that affidavit Ms Rose deposed that in 1987 when she moved to shared accommodation in Glebe she had insufficient storage space to accommodate material delivered to her in 1984 so she arranged for it to be stored in a storage facility operated by Eric’s Pty Limited (Eric’s). She started making enquiries with Eric’s in November 1995. At paragraph (6) she deposed:
“By December 1995 I had moved to my current home which has larger area for storage than my immediately preceding residence.”
24 Ms Rose filed a further affidavit sworn 6 February 1998 (the second affidavit) which the plaintiffs’ solicitor first saw on the morning of 10 February 1998, two days prior to the hearing. After receiving the second affidavit, Mr Hirsch ordered a property search in respect of Ms Rose’s current property to ascertain whether in fact this property has more storage space than her former premises. He attempted to test the veracity of Ms Rose statements.
25 On 11 February 1998 the plaintiffs’ solicitor sent an urgent fax to Mr Lee seeking details of Ms Rose’s accommodation immediately before she moved into her new apartment. Mr Lee responded to that fax as follows:
“In or around December 1988, she moved into an apartment at … Kirribilli. This property was also initially shared for approximately 12 months. Karin Rose remained in the Kirribilli apartment until 1995 when she moved into her present residence ... ”
26 Meanwhile, on 29 January 1998 Ms Rose had booked a ticket to Singapore. She departed for Singapore on 8 February 1998 and was due to return on 23 February 1998. This trip was apparently due to work commitments although there is no evidence from Ms Rose as to the circumstances that gave rise to the necessity to travel. However, it appears that she was willing to return to Sydney to attend court for cross examination because Mr Lee in the same fax (referred to above) asked for confirmation as a matter of urgency of the plaintiffs’ instructions as to whether Karin Rose would be required to leave Singapore to be present in Sydney for the purpose of cross examination. The plaintiffs’ solicitor formed the view that Ms Rose did in fact retrieve the records in late 1995 because of her moving at that time to her larger premises where she had enough room to accommodate her father’s property. In those circumstances, Mr Hirsch was satisfied that there was no evidentiary basis upon which Ms Rose’s version could be attacked, so rather than require her to fly from Singapore for a hearing that commenced the next day he obtained instructions and advised Mr Lee that Karin Rose would not be required for cross examination.
27 Prior to the plaintiffs’ solicitor receiving that information on 11 February 1998, the plaintiffs’ counsel intended to put a submission to the court that it was entirely fortuitous that Karin Rose decided to retrieve her father’s medical records from storage within two weeks of enquires first being made of Dr Rose’s colleagues and in those circumstances certain adverse inferences should be drawn. As events later transpired, including the filing of the second affidavit, these submissions where withdrawn and not put before the court (Ex 1).
28 More recently it has been ascertained that the telephone was connected at Ms Rose’s new premises on 23 December 1994 (Ex G) and that she moved into her current premises around that time. It is my view that Ms Rose knew when swearing her affidavits, that her explanation of the timing of the destruction of her father’s records was critical and that it would bemore than likely that she would be cross examined on the topic. She would have also been aware that her explanation to the court should be accurate, frank and truthful. Yet the answer given in her second affidavit and the letter written by Mr Lee on 11 February 1998 gives rise to the inference that she moved into her current premises at the end of 1995 rather than at the end of 1994 or beginning of 1995. She would have known that this inference made plausible her explanation for the timing of the destruction of those records. Mr Hirsch was cross examined. I found his evidence to be truthful and I accept it. I accept that Mr Hirsch would have required Mr Rose to travel back from Singapore had he been aware that the timing of the move and the destruction of the records was not one of a few weeks but rather one of about 12 months.
29 Aside from my comments above relating to Ms Rose’s affidavits, Ms Rose’s conduct in relation to the production of her diary records is perplexing. She produced in answer to a subpoena, copies of her diary entries for the period from 29 December 1998 to the end of March 1999. She initially produced to the court diary records with blackened out entries. No objection was taken to this course provided the plaintiffs’ counsel upon undertakings was allowed to examine the marked copy together with the unaltered copy. I had assumed that some entries were blackened out for reasons of privacy and were not relevant to the subject matter before me. However when the unaltered copy was put into evidence (Ex F) it was not apparent why certain entries were blackened out and others not. One of the entries that was blackened out relates to a lunch arranged on 20 January 1998 (a week after the motions were heard) where Ms Rose was to meet with Michael Lee (her solicitor in this matter). It is curious as to why Ms Rose sought to delete this entry from the diary records presented to the court particularly when she was aware of the serious allegations made against her.
30 While I do not regard Ms Rose’s statement about when she moved as entirely accurate, and I find her decision to black out the diary entry for 20 January 1998 perplexing, her conduct falls a long way short of being able to establish that she, when seized with knowledge of impending legal proceedings against her deceased father deliberately destroyed his records.
31 There is no direct evidence that Ms Rose was told that the proceedings were foreshadowed prior to her having the records destroyed. On the contrary, Ms Rose deposes that she last had written and verbal communication with Dr Szirt in 1984/85 and Dr Horky in about 1990 and Dr Diamond in or around 1985. Mr Hirsch confirmed that after having spoken with the doctors himself, that Ms Rose had not spoken to Doctors Horky and Diamond from at least October 1995 to 5 December 1997. He says that after 5 December 1997 he spoke with Doctors Horky and Diamond and was advised by them that they do know Karin Rose but they did not recall speaking to her after October 1995. This enquiry was not made of Dr Szirt because Dr Szirt did not return Mr Hirsch’s calls.
32 Also in her second affidavit Ms Rose also deposes that prior to the destruction of her father’s medical reports on 4 and 5 January 1996 she had no knowledge whatsoever that anyone was seeking to contact either Dr Szirt, Dr Horky or Dr Diamond or anyone else in relation to her father’s medical records or any possible claim in relation to her father’s practice (including this claim the subject of these proceedings). She also says that prior to the destruction of her father’s medical records on 4 and 5 January 1996 she had no knowledge whatsoever of the claim of the plaintiffs that is the subject of these proceedings, nor that such a claim was being consider or nor was she aware of any claim against her father in relation to his former medical practice.
33 Mr Hirsch, in cross examination, conceded that even with the information that he has to date, he could not establish that Ms Rose destroyed her father’s records in circumstances where she had knowledge that these legal proceedings either were to take place or were already on foot. It seems that even with the knowledge the plaintiffs now have, Ms Rose could not have been asked by counsel in cross examination whether she destroyed her father’s records when she knew of the foreshadowed legal proceedings. Counsel would not have been able to ask her this question unless he had reliable information to warrant the suggestion which the question conveyed. However, if during cross examination Ms Rose fared badly it may have transpired that counsel would have been put in a position where he could ask Ms Rose that question.
34 It is my view that as at 12 January 1998, the plaintiffs’ solicitor was under a misapprehension of the facts and this was brought about by Ms Rose being less than frank in her first affidavit. This is a factor which supports the plaintiffs in having the case reopened to allow Ms Rose to be cross examined. This misapprehension of the facts cannot be said to be attributed solely to the neglect or default of the plaintiffs’ solicitor.
35 On the other hand, the plaintiffs do not have any direct evidence that Ms Rose destroyed her father’s records when she was aware of the impending legal proceedings. Rather the direct evidence goes to establish that she had not spoken to at least two of the doctors. The plaintiffs’ counsel as the evidence stands, would not be able to put the question to Ms Rose that she knowingly destroyed the records in these circumstances, unless she fared badly in the witness box. Any finding of serious impropriety must be established on the Briginshaw test. These are factors which go against reopening the case.
36 Even if it is assumed that the plaintiffs were able to establish that Ms Rose destroyed her father’s records once she was aware that legal proceedings were intended or actually on foot, would it have made a material difference to my decision? At p 67 of my judgment of 7 July 1998 I stated:
“It is the lack of records together with the doctor’s death that satisfies me that the fifth defendant (and his estate) will suffer significant prejudice and the chances of it having a fair trial is unlikely.”
37 It must be remembered that it was the fifth defendant’s daughter who caused the records to be destroyed not the fifth defendant himself. Dr Rose is dead and cannot give evidence. Even if I found that the fifth defendant’s documents were destroyed by a beneficiary of the fifth defendant’s estate and their loss should be disregarded when considering whether the fifth defendant would suffer prejudice, it does not overcome the problem that the doctor cannot give evidence as to any conversations he had with the first plaintiff. Nor can he explain what decisions he made and why. The plaintiffs submitted that if this caused prejudice they would not rely on any conversations but merely the documents themselves but again I do not see that this would overcome the prejudice. The fifth defendant would not be in a position to properly prepare its case without the evidence of Dr Rose.
38 Even if the loss of the fifth defendant’s records is excluded as a consideration, I am satisfied that the fifth defendant and his estate will suffer significant prejudice and the chances of it having a fair trial are unlikely. Therefore I am not satisfied that even if it could be established that Ms Rose destroyed the documents it would have made a material difference to the outcome of the case. After careful consideration of all these factors, it is my view that justice is best served if the case is not reopened. For these reasons I dismiss the plaintiffs’ notice of motion with costs.
39 The orders I make are:
(2) The plaintiffs are to pay the fifth defendant’s costs.
(1) The plaintiffs’ notice of motion filed 15 December 1998 is dismissed.**********
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