Hoult v Gilbert; Illawarra Area Health Service v Gilbert

[2002] NSWCA 121

CITATION:	Hoult v Gilbert & Anor; Illawarra Area Health Service v Gilbert & Ors [2002] NSWCA 121
FILE NUMBER(S):	CA 40365/01; 40372/01
HEARING DATE(S):	18 March 2002
JUDGMENT DATE:	13 May 2002
PARTIES :	Ian Hoult Sonia Leigh Gilbert Illawarra Area Health Service Brian Hoolahan
JUDGMENT OF:	Beazley JA at 1; Giles JA at 58; Heydon JA at 59

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :	11001/97
LOWER COURT JUDICIAL OFFICER :	Bryson J

COUNSEL:	G Curtin (Claimants/Appellants) S M Kettle/L Byrne (Gilbert)
SOLICITORS:	Lynn Boyd (Claimants/Appellants) Paul J Donnelly (Gilbert)
CATCHWORDS:	Negligence - Medical Negligence - Non Delegable Duty of Care - Limitation Period - Extension of Time - Principle in Briggs v James Hardie Co Pty Ltd (1989) 16 NSWLR 549
LEGISLATION CITED:	Limitation Act 1969 (NSW), ss 58(2), 60G, 60I
CASES CITED:	Abalos v Australian Postal Commission (1990) 171 CLR 167 Devries v Australian National Railways Commission (1993) 177 CLR 472 Broken Hill Proprietary Co Ltd v Waugh (1988) 14 NSWLR 360 Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 Menzies v Australian Iron & Steel Ltd (1952) 52 SR (NSW) 62 Hummerstone v Leary [1921] 2 KB 664 Nesterczuk v Mortimore (1965) 115 CLR 140 James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347 Dow Corning Australia Pty Ltd v Paton (1998) Aust Torts Reps 81-485 Kondis v State Transport Authority (1984) 154 CLR 672 Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 Elliott v Bickerstaff (1999) 48 NSWLR 214 Lewis v Estate of the Late Dr Bailey (unreported, New South Wales Supreme Court, 1 May 1997)
DECISION:	See para 57

- 19 -IN THE SUPREME COURT

CA 40365/01
CA 40372/01
SC 11001/97

BEAZLEY JA
GILES JA
HEYDON JA

Monday, 13 May 2002

HOULT v GILBERT & ANOR

ILLAWARRA AREA HEALTH SERVICE v GILBERT & ORS

FACTS

Dr Hoult and Illawarra Area Health Service (IAHS) (the claimants) sought leave to appeal against a decision of Bryson J in which his Honour dismissed the appeals from Master Harrison extending the time in which Ms Gilbert could commence proceedings against each of the claimants and against a further party Dr Hoolahan. Dr Hoolahan has not sought leave to appeal.

Ms Gilbert was delivered of a stillborn child on 17 November 1990 at a hospital conducted by IAHS. Prior to the birth of her child and whilst hospitalised, Ms Gilbert had suffered significant health problems associated with her pregnancy. Both Dr Hoolahan and Dr Hoult treated Ms Gilbert during the relevant period. Expert opinions obtained by Ms Gilbert in the years after the birth were to the effect that on the available records Ms Gilbert should have been induced at an earlier point. Ms Gilbert consulted solicitors but proceedings were not commenced within time.

In April 1997 Ms Gilbert filed a summons seeking an extension of time within which to commence proceedings against the claimants and Dr Hoolahan pursuant to ss 60G and 60I of the Limitation Act 1969 (NSW) . Master Harrison accepted that Ms Gilbert was unaware that she had a cause of action against Dr Hoolahan until after the expiration of the limitation period and thus held that Ms Gilbert had satisfied the s 60I gateway provisions. In making this finding the Master did not distinguish between the positions of Dr Hoolahan, Dr Hoult and IAHS.

On appeal, Bryson J held in accordance with Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 that where a plaintiff sues multiple defendants, and shows a prima facie case that at least one could be held responsible, a court is bound to hear the whole of the evidence before dismissing any defendant from the proceedings. His Honour held that the Master’s reasoning in respect of Dr Hoolahan was correct and because of the principle in Briggs it was unnecessary to consider the individual positions of Dr Hoult and IAHS. His Honour dismissed the appeal.

On appeal from the decision of Bryson J, Dr Hoult contended that Briggs had no relevance in an application under ss 60G and 60I, and if it did, it was still necessary for an applicant for an extension of time to satisfy the gateway provisions of s 60I in relation to a particular proposed defendant. The IAHS made a similar submission and also claimed that there was no evidence of its negligence.

HELD
per Beazley JA (Giles and Heydon JJA agreeing)

(i) Generally:

(a) The gateway provisions (s 60I(1)) must be satisfied in respect of each proposed defendant.

(ii) In respect of Dr Hoult’s appeal:


(a) Ms Gilbert believed from the beginning that Dr Hoult was negligent.

(b) Ms Gilbert therefore did not satisfy any of the s60I gateway provisions.

(iii) In respect of IAHS appeal:


(a) Ms Gilbert was unaware of her position in respect of IAHS until after the expiration of the limitation period and she therefore satisfied the s 60I gateway provisions.

(b) The relevant question in respect of the IAHS appeal was whether there was any evidence of its negligence. In this case there was evidence of negligence as Ms Gilbert had a real case to advance on the basis that the hospital had a non-delegable duty in relation to her care: Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 and Elliott v Bickerstaff (1999) 48 NSWLR 214.


ORDERS

(i) In appeal 40365/01:


(a) leave to appeal granted and the appeal allowed with costs;

(b) the opponent/respondent is to bear the claimant/appellant’s separate costs of the application before Master Harrison and the separate costs of the appeal to Bryson J.

(c) the opponent/respondent to have a certificate under the Suitors’ Fund Act 1951 (NSW), if so entitled;


(ii) In appeal 40372/01, leave to appeal granted and the appeal dismissed with costs;

(iii) An amended Statement of Claim is to be filed and served within 14 days after the date of publication of these orders, so as to remove Dr Hoult as a defendant in the proceedings and to make any further amendments the opponent/respondent proposes to make;

(iv) The matter is transferred to the District Court Sydney Registry.

**********

CA 40365/01
CA 40372/01
SC 11001/97

BEAZLEY JA
GILES JA
HEYDON JA

Monday, 13 May 2002

HOULT v GILBERT & ANOR

ILLAWARRA AREA HEALTH SERVICE v GILBERT & ORS

JUDGMENT

1 BEAZLEY JA: The claimants seek leave to appeal from the decision of Bryson J in which his Honour dismissed the appeals from a decision by Master Harrison extending the time in which the opponent could commence proceedings against each of the claimants and against a further party, Dr Hoolahan. Dr Hoolahan has not sought leave to appeal.

2 The applications for leave to appeal and the appeals were heard concurrently.

Background Facts

3 The opponent, Ms Gilbert, was delivered of a stillborn child on 17 November 1990 by Dr Hoolahan at the Shoalhaven District Memorial Hospital, conducted by the Illawarra Area Health Service (IAHS). Ms Gilbert named her child Jessica. Prior to the birth of her child Ms Gilbert was admitted twice to the hospital as an outpatient, first on 23 October and again on 1 November 1990. She was admitted as an inpatient on 9 November 1990. At that time her blood pressure reading was such as to indicate that she was suffering from severe oedema and moderate proteinuria.

4 The original estimated date for delivery recorded in the hospital records was 30 October 1990. This was changed to 3 November 1990 and this date was confirmed by ultrasound on 4 November 1990.

5 In June 1993 Ms Gilbert recorded in a statement made to her then solicitors that around the 31st week of her pregnancy, her arms, legs, ankles, feet, face and hands became swollen, that her blood pressure was rising and that she had protein in her urine. At some stage she had come under the care of Dr Hoolahan, obstetrician and gynaecologist. She stated that Dr Hoolahan admitted her to Shoalhaven District Hospital for observation and bed rest. From later in the statement, she was admitted as a public patient. She stated that she weighed approximately 100 kilograms and was so heavy “with the fluid [she] was carrying around” that it was difficult for her to walk any distance. Whilst in hospital her blood pressure was checked every four hours, she had three urine samples taken each day and her baby’s heart beat was monitored daily. She described her health as deteriorating at a fairly rapid rate.

6 Ms Gilbert was seen in hospital by Dr Hoolahan until he went on leave on 12 November 1990. After that, she was seen by Dr Hoult.

7 Ms Gilbert said in her statement that after Dr Hoolahan went away she asked on several occasions to be induced or to have the baby delivered by caesarean section because she felt so unwell. She said the nurses and midwives were becoming “a little edgy” about her condition. Apparently the matter was mentioned to Dr Hoult, who declined to perform a caesarean at that time. Ms Gilbert records herself as being very confused because “on one side of the coin the midwives were convinced I should have been induced from a day after my due date. Whereas on the other hand Dr Hoult was just leaving me …”. She was very regretful for not demanding to see another doctor, but stated, “I was a public patient so I didn’t have much choice in the matter”.

8 Dr Hoolahan returned from leave on 16 November 1990. In her statement Ms Gilbert said he saw her in the ward that evening. He informed her, after viewing the baby’s heart monitor tracing, that the baby might be in danger and if there was no change the following morning action would be taken. She was in labour the following morning, heart monitor tracings were taken, and “the look on the nurses faces told me something wasn’t right”. Ms Gilbert underwent an emergency caesarean section, but, as already stated, the baby was stillborn.

9 In her statement Ms Gilbert blamed Dr Hoult for the stillbirth of her child and did not attach any blame to Dr Hoolahan or the hospital.

10 A few months after the birth of Jessica, Ms Gilbert attended solicitors in Nowra to commence legal action. There is no evidence as to what, if any steps were taken by those solicitors. On 11 November 1992 she approached another solicitor in Nowra, Brien & Associates, with instructions to commence proceedings against Dr Hoult. The limitation period for the commencement of such proceedings would expire in November 1993. It is not necessary for present purposes to identify the precise date in November.

11 Brien & Associates obtained two medico-legal reports on behalf of Ms Gilbert, one in 1993 from Dr Pfanner, obstetrician and gynaecologist, and one in 1995 from Dr Metcalf, psychiatrist.

12 Dr Pfanner, in a report dated 8 June 1993, noted from the hospital records that on admission on 9 November 1990 Ms Gilbert’s blood pressure was 158/76, and that there was severe oedema and moderate proteinuria. This indicated that there was “clearly … developing … a case of severe pregnancy induced hypertension or severe pre-eclampsia”.

13 Dr Pfanner expressed the view that he believed on those indications that:

“… by 10.11.90, when the signs had not abated after one day as an in-patient, steps should have been taken to deliver this patient urgently. As the state of the cervix was found to be unfavourable for induction then I believe caesarean Section should have been undertaken.”

14 Dr Metcalf was retained to provide an opinion as to any psychiatric injury Ms Gilbert may have suffered as a result of the stillbirth. He saw Ms Gilbert on 31 August 1995 and diagnosed a post traumatic stress reaction which complicated her natural grieving over the death of her child. He also noted that her condition was complicated by the depressive aspects of her loss.

15 Brien & Associates did not commence proceedings and in early 1996 Ms Gilbert changed solicitors to Paul J Donnelly & Associates, also in Nowra. It should be noted that, according to the evidence on the application for extension of time, from the time of Jessica’s birth until at least 1996, Ms Gilbert’s personal circumstances were frequently difficult. Her financial circumstances were not good. Her relationship with her then husband Kevin Gilbert, the father of the child, was unsatisfactory. He failed to give her any support in relation to her grieving for her lost child and did not provide practical support such as attending with her at the first appointment with the solicitor. Ms Gilbert became pregnant again in early 1991. That pregnancy went well and the plaintiff had a daughter Emily Leigh on 5 December 1991. However, around this time Ms Gilbert discovered that her husband was transsexual. In addition, she was suffering from significant stress and depression due the loss Jessica. She suffered anxiety attacks, had suicidal thoughts and experienced a general destruction of her own self-worth.

16 Ms Gilbert’s new solicitors took a number of steps in the matter including making certain enquiries of the Health Care Complaints Commission. As a result of those enquiries Ms Gilbert became aware she may have a claim against Dr Hoolahan and the IAHS.

17 Ms Gilbert’s new solicitors also obtained a medico-legal opinion in early 1997 from Dr Child, Director of Obstetrics and Gynaecology at King George V Memorial Hospital. He expressed the view that on the CTG tracings (as summarised by Dr Pfanner in his report) Ms Gilbert had severe pre-eclampsia and that with such a diagnosis it was not appropriate to continue observation of the condition past term. The only way of curing pre-eclampsia is by delivering the baby. He stated that would be considered optimal management for any patient with the condition after the 39th week of gestation. In particular, he said that, on the limited information that was available to him, he could see no indication for allowing the pregnancy to continue. As Dr Child had not reviewed the CTG performed on 16 November he could not say whether those results warranted urgent intervention that night or whether it was appropriate to suggest induction the following morning, as in fact was done by Dr Hoolahan.

18 Dr Child also made some general remarks about the condition of pre-eclampsia. He noted that blood pressure and proteinuria were two of the most obvious signs when the condition was present, but noted that there were also potential effects on the haematological system, liver function, the neurological system, the renal system and on the placental function in regards to supply of oxygen and nutrients to the baby.

Commencement of Proceedings

19 On 4 April 1997 a summons seeking an extension of time within which to commence proceedings pursuant to ss 60G and 60I of the Limitation Act 1969 (NSW) against Doctors Hoult and Hoolahan and the IAHS was filed on behalf of Ms Gilbert. Ms Gilbert had given formal instructions to her solicitors to commence proceedings by 14 January 1997. Prior to that date there had been difficulty in obtaining copies of the hospital records. The solicitors first sought those records in July 1996. They were not finally received until 20 January 1997.

20 Section 60G empowers the court to extend the limitation period, if “it is just and reasonable to do so, … for such period as it determines”.

21 Section 60I provides, relevantly:

“Matters to be considered by court
(1) A court may not make an order under s 60G or 60H unless it is satisfied that:
(a) the plaintiff:
(i) did not know that personal injury had been suffered; or
(ii) was unaware of the nature or extent of the personal injury suffered; or
(iii) was unaware of the connection between the personal injury and the defendant’s act or omission,
at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted; and
(b) the application is made within three years after the plaintiff became aware (or ought to have become aware) of all three matters listed in paragraph (a)(i)-(iii).”

22 The summons was heard by Master Harrison and determined on 9 June 2000. Ms Gilbert gave evidence that she did not attribute any responsibility for the death of her baby to Dr Hoolahan or to the hospital until such time as she was informed through the Health Care Complaints Commission that she may have a cause of action against each. She also said that she did not know she was suffering from a psychiatric condition until she read Dr Metcalf’s report, but was aware she was suffering various forms of psychological trauma.

23 The Master held that Ms Gilbert knew shortly after the birth of Jessica that she suffered from psychological trauma, and concluded that she was aware of both the nature and extent of her psychiatric injury prior to the expiration of the limitation period. The Master considered, however, that, despite vigorous cross-examination on the point, Ms Gilbert had not understood from Dr Pfanner’s report that Dr Hoolahan was negligent by not inducing the baby earlier, either on 10 or 11 November or the night of 16 November 1990. The Master concluded, therefore, that the plaintiff had passed through the “s 60I(1)(a)(iii) gateway”.

24 Having found that Ms Gilbert had satisfied one of the sub paragraphs of s 60I(1)(a), the Master held that it was just and reasonable to extend the limitation period. In reaching that conclusion she found that Ms Gilbert had a real case to advance. In particular, the Master considered that there was evidence of negligence on the part of Dr Hoolahan and Dr Hoult contained in the reports of Dr Pfanner of 8 June 1993 and Dr Child of January 1997. She was of the opinion that although there was presumptive prejudice, no actual prejudice had been suggested by the proposed defendants. She observed that the hospital records and those of Dr Hoolahan were available and that both Dr Hoolahan and Dr Hoult were alive and neither had deposed to the state of their recollection, by which it seems clear she meant neither had deposed to a lack of recollection. The Master made no comment about the position of the IAHS except to refer to the fact that the hospital records were available.

25 The Master did not more specifically distinguish between the position of Dr Hoolahan, Dr Hoult and the IAHS. Both doctors and the IAHS appealed. The appeal was heard by Bryson J.

Appeal Before Bryson J

26 Before Bryson J it was submitted on behalf of Dr Hoolahan, that given the contents of Dr Pfanner’s report, which Ms Gilbert had read, she ought to have been aware of the existence of a cause of action against him so that she had failed to satisfy the provisions of s 60I(1)(a), and in particular, sub-paragraph (iii). Bryson J considered, however, that the issue with which the Master was concerned under sub-paragraph (iii) was the actual state of awareness of the plaintiff. In that regard, the Master had accepted Ms Gilbert’s evidence that it had not been apparent to her on reading the report that Dr Pfanner was indicating that she had a cause of action against Dr Hoolahan. Bryson J considered that the Master’s reasoning was correct and that he would not interfere with her finding as to Ms Gilbert’s credit: see Abalos v Australian Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472.

27 Dr Hoolahan has not sought leave to appeal from Bryson J’s decision.

28 So far as Dr Hoult was concerned, the basic attack upon the Master’s judgment was that Ms Gilbert had also not satisfied sub-paragraph (iii). Bryson J said, in relation to this:

“if only Dr Hoult had been involved and there had been no other potential defendant it would not have been possible for the plaintiff to obtain an order under sub-div. (3) in proceedings commenced as these were on 4 April 1997.”

His Honour gave no further attention to the application in respect of Dr Hoult until later in his judgment.

29 His Honour then considered the case against the IAHS, and noted that it had challenged the Master’s determination against it on the basis that the Master made no finding dealing with any state of awareness under sub-paragraph (iii) in relation to the IAHS and there was no finding establishing that there was evidence of a cause of action against the IAHS. His Honour observed that the Master had given very little attention to the claim against the IAHS. He considered, however, that little attention was required because of the application of the principles stated by the Court in Broken Hill Proprietary Co Ltd v Waugh (1988) 14 NSWLR 360 (Waugh) and Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 (Briggs). As his Honour put it:

“… in my opinion very little attention was required, having regard to principles established by authority on the operation of sub-div. (3) under which the limitation period may be extended so as to enable proceedings to be brought against other alleged tort-feasors in addition to the alleged tortfeasor in respect of whom the plaintiff has passed barriers in s 60I.”

30 His Honour then concluded in respect of the applications directed to both Dr Hoult and the IAHS:

“The Master’s concentration on the application of s 60I(1)(a) in relation to Dr Hoolahan and her giving relatively little attention to the case against Dr Hoult or against the hospital in the context of s 60I(1)(a) were criticised and complained of as errors but in my view are quite sufficiently explained and justified by the application of the principle referred to by Hope JA in Briggs v James Hardie .”

The Appeal

31 On the concurrent hearing of the application for leave to appeal and the appeal, Dr Hoult and the IAHS both challenged the correctness of this conclusion. For Dr Hoult, it was contended first that that the principle in Briggs had no relevance to an application under ss 60G and 60I and secondly that, if it did, it was still necessary for an applicant for an extension of time to satisfy the gateway provisions of s 60I in relation to a particular proposed defendant. The IAHS challenged the application of Briggs on similar grounds and also claimed that there was no evidence of its negligence.

Principle in Briggs

32 There is a well accepted principle that, at least in negligence actions, where a plaintiff sues multiple defendants, one or more of whom may be liable, and shows prima facie that at least one could be held responsible, a court is bound to hear the whole of the evidence before dismissing any other defendant from the proceedings: see Menzies v Australian Iron & Steel Ltd (1952) 52 SR (NSW) 62, applying Hummerstone v Leary [1921] 2 KB 664. See also Nesterczuk v Mortimore (1965) 115 CLR 140 at 147-148; James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347 at 401-402.

33 In Briggs, Hope JA at 554 described the principle in these terms:

“As I would understand this principle, it does not mean that in no circumstances can one of a number of defendants be dismissed from an action. Indeed, such a course is often adopted. But where a plaintiff brings an action against two defendants alleging that one or both are liable, and there is some evidence to connect each defendant with the events the subjects of the action, then provided the plaintiff establishes a prima facie case against one of the defendants, the other defendant will not be dismissed from the action until the whole of the evidence has been heard. As it seems to me this means that a plaintiff is entitled to bring an action against two defendants if he has evidence to establish a prima facie case against one of the defendants, and also has evidence pointing to the possibility of the other defendant being liable.’

34 The principle had earlier been applied in Waugh, where Clarke JA, who delivered the judgment of the Court, stated at 372:

“The rationale of the rule, as explained in Menzies v Australian Iron & Steel … is that if the rule were otherwise the defendant against whom a prima facie case was shown might escape liability by addressing evidence to the effect that the defendant against whom the case had been dismissed was the party who was actually at fault. Indeed that is what occurred in Hummerstone v Leary … the case cited in Menzies . Obviously that result would be inimical to the interests of justice.”

35 The issue in both Waugh and Briggs was whether this principle had any operation in an application for extension of time under s 58(2)(b) of the Limitation Act. That section provided that the Court may extend the limitation period when:

“… it appears to a court that -
(a) any of the material facts of a decisive character relating to the cause of action was not within the means of knowledge of the applicant until a date after the commencement of the year preceding the expiration of the limitation period for the cause of action; and
(b) there is evidence to establish the cause of action, apart from any defence founded on the expiration of a limitation period…”

36 In Briggs, the trial judge had held that para (a) of s 58(2) had been satisfied. It is clear from the context that it had been satisfied in respect of all proposed defendants, as there was only one material fact of a decisive nature in question. The Court was thus concerned with satisfaction of para (b). Hope JA, having referred to the principle which applies at trial in respect of multiple defendants (what I have referred to above as the Briggs principle) asked at 554:

“What bearing does this principle have upon the determination of the question whether an applicant has satisfied the requirements of s 58(2)(b). …”

37 His Honour concluded:

“Applying this principle I am satisfied that even if the applicant did not succeed in establishing the existence of evidence upon the basis of which it could be held that the subsidiary was the agent of either of the principal companies, that the corporate veil could be lifted to make either of those companies liable or that those companies were otherwise liable in negligence, he did establish that there was a possibility that that evidence existed.” (emphasis added)

38 Rogers AJA said at 564-565:

“The process the section calls for is one of screening. The application is not a preliminary trial of the issues. The standard to satisfy is not that required to allow a case to go to the jury. It is only proof of the availability of the evidence which is required rather than the evidence itself. It is for this reason that hearsay is permitted. Inferences are open to be drawn. That is by the very nature of the purpose of the process. What is excluded is guesswork. Most importantly for present purposes, a special rule applies in case of multiple defendants where it is sufficient to prove the existence of evidence showing the possibility of a case against a particular defendant being made out .” (emphasis added)

39 Bryson J applied this principle. In doing so, he referred to this Court’s decision in Dow Corning Australia Pty Ltd v Paton (1998) Aust Torts Reps 81-485, where the Court proceeded on the basis that Briggs still applied to applications for extension of time under ss 60G and 60I, although considered it was not applicable in the circumstances of that case.

Dr Hoult’s Application

40 It was submitted on behalf of Dr Hoult, that the principle in Briggs does not relieve an applicant for extension of time from first establishing at least one of the conditions specified in s 61I as against each proposed defendant.

41 In my opinion, Dr Hoult’s matter can be disposed of briefly. Briggs was concerned with the second limb of s 58(2), that is, para (b) which required the Court to be satisfied that there was “evidence to establish the cause of action”, and not with the gateway provision of s 58(2)(a). The gateway provisions of s 60I are in different terms from s 58(2)(a), but they are, nonetheless, gateway provisions. It is clear, in my opinion, that they must be satisfied in respect of each proposed defendant. Ms Gilbert did not satisfy s 60I(a)(i), (ii) or (iii) in respect of Dr Hoult. On the facts as found by the Master, she could not. The Master had found that Ms Gilbert was aware that she had suffered personal injury and was aware of its nature and extent. She therefore did not satisfy paras (i) and (ii). Nor in Dr Hoult’s case did she satisfy para (iii). She both believed from the beginning that he was negligent and understood that the effect of Dr Pfanner’s report of 1993 was that Dr Hoult was negligent. Accordingly, I consider that Dr Hoult’s application for leave to appeal should be granted and the appeal allowed.

The IAHS’s Application

42 I have already indicated that the Master made no intermediate findings in respect of the IAHS. The IAHS submitted that, although there was evidence of Mrs Gilbert becoming aware through the Health Care Complaints Commission that she may have a claim against the IAHS, there was no evidence that she was previously unaware of acts or omissions of the IAHS founding a claim as distinct from the legal complexion of the acts or omissions. However, consistently with the finding against Dr Hoolahan, the effect of the Master’s decision must be that s 60I(1)(a)(iii) was satisfied in relation to the IAHS. Thus the IAHS’s appeal turns on whether there was no evidence of its negligence.

43 Theoretically, the IAHS may be negligent by some direct act, or omission, or vicariously, or because of some breach of a non-delegable duty of care. The pleadings do not expressly draw the distinction, although the particulars of negligence are wide enough to cover each basis of liability. Nor was the evidence very specific as to the hospital’s negligence. In particular, there was no evidence of the relationship between the hospital and either Dr Hoolahan or Dr Hoult. However, as already discussed, there was evidence sufficient to found a cause of action in negligence against each doctor: see the reports of Dr Pfanner and Dr Child.

44 For those reasons, I propose at least in the first instance, to consider the application in relation to the hospital on the basis of its non-delegable duty of care.

45 The existence of the non-delegable duty of care of a hospital was discussed in Kondis v State Transport Authority (1984) 154 CLR 672 (not itself a hospital case) and considered in Ellis v Wallsend District Hospital (1989) 17 NSWLR 553 and Elliott v Bickerstaff (1999) 48 NSWLR 214. In Kondis, Mason J said at 686:

“The liability of a hospital arises out of its undertaking an obligation to treat its patient, an obligation which carries with it a duty to use reasonable care in treatment, so that the hospital is liable, if a person engaged to perform the obligation on its behalf acts without due care: Gold [1942] 2 KB 293 at 304. Accordingly, the duty is one the performance of which cannot be delegated, not even to a properly qualified doctor or surgeon under a contract for services: Cassidy [1951] 2 KB 343 at 364.”

46 Mason J recognised that the consequence of finding a non-delegable duty of care was to depart from the basic common law duty to take reasonable care and move to “a more stringent duty, a duty to ensure that reasonable care is taken”. His Honour continued at 687:

“… when we look to the classes of case in which the existence of a non-delegable duty has been recognised, it appears that there is some element in the relationship between the parties that makes it appropriate to impose on the defendant a duty to ensure that reasonable care and skill is taken for the safety of the persons to whom the duty is owed. …
The element in the relationship between the parties which generates a special responsibility or duty to see that care is taken may be found in one or more of several circumstances. The hospital undertakes the care, supervision or control of patients who are in special need of care. … In these situations the special duty arises because the person on whom it is imposed has undertaken the care, supervision and control of the person or property of another or is so placed in relation to that person or his property as to assume a particular responsibility for his or its safety, in circumstances where the person affected might reasonably expect that due care will be exercised.”

47 Kondis involved an employer/employee relationship. The application of the principles enunciated in it in a negligence case against a hospital was considered in Ellis v Wallsend District Hospital. In seeking to determine whether a non-delegable duty of care existed, Samuels JA (Meagher JA agreeing) pointed out (at 600) that the basis of liability arose out of the hospital/patient relationship and not out of the hospital’s relationship with the doctors who attended the patient. After referring to the statement of Mason J in Kondis at 686 (set out above), Samuels JA added at 604:

“It can scarcely be supposed that Mason J was unaware of the limitations upon a hospital’s duty of care expressed in Gold and Cassidy , and in Roe as well to which he earlier refers (at 685). It is necessary therefore to read his judgment subject to those statements, so that a hospital is bound to ensure that reasonable care issued in providing the treatment which it undertakes to carry out; but that duty does not extend to treatment which is performed by a doctor pursuant to a direct engagement with the patient, and not on behalf of the hospital.”

48 In short, according to Samuels JA, the question which must be determined is “what medical services the hospital has undertaken to supply”. In that regard he had earlier noted at 603:

“… so far as the responsibility of hospitals to their patients is concerned, the matter has been well stated, if I may say so, by Houlden JA in the second dissenting judgment in Yepremian [ v Scarborough General Hospital (1980) 110 DLR (3d) 513]. His Lordship said (at 581):
‘First, a general hospital may function as a place where medical care facilities are provided for the use of a physician and his patient. The patient comes to the hospital because his physician has decided that the hospital’s facilities are needed for the proper care and treatment of the patient. This use of the hospital is made possible by an arrangement between the hospital and the physician by which the physician is granted hospital privileges. Where a hospital functions as merely the provider of medical care facilities, then, as the trial Judge pointed out, a hospital is not responsible for the negligence of the physician. The present case does not, of course, come within this classification.
Second, a general hospital may function as a place where a person in need of treatment goes to obtain treatment. Here the role of the hospital is that of an institution where medical treatment is made available to those who require it. The present case falls in this second classification. [The plaintiff] was brought to the Scarborough General Hospital because he was in need of treatment. Does a hospital in these circumstances have the duty to provide proper medical care to a patient? In my judgment, it does.’”

49 Samuels JA concluded at 605, that on the facts in Ellis v Wallsend District Hospital, the hospital fell into the first of the above categories. He said:

“The hospital … was merely the place in which the surgical procedures which [the appellant’s specialist treating doctor] had recommended and which the appellant had agreed to undergo, were performed by [the specialist treating doctor]. … The appellant looked to [the doctor] for surgical intervention and to the hospital for nursing care …”

50 His Honour added at 605-606:

“My conclusion does not impose differential duties on a hospital. Following Kondis a hospital owes an independent non-delegable duty to ensure that the treatment it undertakes to provide is performed with reasonable care. The question in every case is the nature of that undertaking …
In my opinion, therefore, in the circumstances of this case the relationship between the appellant and the hospital was not such as to generate a special independent or non-delegable obligation on the part of the hospital to ensure that the operation was performed with proper care. That being so, the hospital would not have been responsible for any negligence of [the doctor].”

51 Ellis was considered by this Court in Elliott v Bickerstaff. After referring extensively to the judgment of Samuels JA, Giles JA at 245 (Handley and Stein JJA agreeing) summarised the position as follows:

“It is necessary to first identify the scope of the hospital’s duty of care in the hospital/patient relationship because of the different roles of those involved in providing medical and associated services to the patient. If the hospital’s undertaking extends to provision of the surgeon’s services, the hospital must ensure that the surgeon exercises reasonable care in its place. But if the undertaking does not extend to provision of the surgeon’s services, categorising the hospital’s duty as non-delegable will not make the hospital liable if the surgeon (not being a servant or agent of the hospital) is negligent.”

52 In the present case, counsel for the IAHS submitted that the hospital was in the same position as the hospital in Ellis and was therefore not liable for the negligence of any of the doctors. In support of this submission, counsel sought to rely upon passages in Ms Gilbert’s 1993 statement to her then solicitors that:

“… Dr Hoolahan admitted me to the Shoalhaven District Hospital for observation and bed rest. My health was deteriorating at a fairly rapid rate. Dr Hoolahan was going on holidays for a week, so he referred me to Dr Gray , who watched over me for a few days then referred me to Dr Hoult .” (emphases added)

53 It was argued that this evidence demonstrated that the IAHS was merely a place where an in-patient’s treating doctor undertook the treatment, as had been found in Ellis. However, there was evidence which pointed to this case falling into the second category identified by Houlden JA in Yepremian. In particular, Ms Gilbert said she was a public patient and “didn’t have much choice” in whom she could consult as her obstetrician. If this is accepted to be correct (and the other evidence in the case suggested this to be so), her statement that Dr Hoolahan referred her to Dr Gray and then to Dr Hoult must be treated with some care. A likely explanation is that Dr Gray and Dr Hoult were the doctors available to tend to public patients, such as Ms Gilbert, who were in hospital pending childbirth. It might also be queried how Dr Hoolahan referred her to Dr Hoult when he, Dr Hoolahan, was away. There is another indication in Ms Gilbert’s statement that the hospital undertook her entire care. She stated that she expressed her concern as to her condition to the midwives who were urging Dr Hoult to take action. It is open to infer from this evidence that the hospital was responsible for Ms Gilbert’s pre and post natal care – including delivery of her child by caesarean section should that be required. Otherwise there would have been no occasion for the exchange between the midwives and Dr Hoult as recounted by Ms Gilbert.

54 In Lewis v Estate of the Late Dr Bailey (unreported, New South Wales Supreme Court, 1 May 1997) Badgery-Parker J accepted that in order to establish that it would be “just and reasonable” to extend the limitation period within s 60G, the plaintiff must satisfy the court that there is evidence available capable of establishing the cause of action which he asserts.

55 In my opinion, the evidence to which I have referred is sufficient to demonstrate that Ms Gilbert has a real case to advance on the basis that the hospital had a non-delegable duty of care in relation to her entire care and treatment once admitted to hospital pending the birth of her child. Accordingly, the challenge that there was no evidence of negligence against the hospital must fail. It was not suggested that there was any other reason to disturb the finding that it was “just and reasonable” to extend the limitation period.

56 In view of this conclusion, it is not necessary to determine whether Bryson J was correct in his reliance on Briggs in respect of the application to extend the time in which to commence proceedings against the IAHS. I would grant the IAHS leave to appeal but would dismiss the appeal with costs.

Orders

57 Accordingly, I propose the following orders:

(i) In appeal 40365/01:


(a) leave to appeal granted and the appeal allowed with costs;

(b) the opponent/respondent is to bear the claimant/appellant’s separate costs of the application before Master Harrison and the separate costs of the appeal to Bryson J.

(c) the opponent/respondent to have a certificate under the Suitors’ Fund Act 1951 (NSW), if so entitled;


(ii) In appeal 40372/01, leave to appeal granted and the appeal dismissed with costs;

(iii) An amended Statement of Claim is to be filed and served within 14 days after the date of publication of these orders, so as to remove Dr Hoult as a defendant in the proceedings and to make any further amendments the opponent/respondent proposes to make;

(iv) The matter is transferred to the District Court Sydney Registry.

58 GILES JA: I agree with Beazley JA.

59 HEYDON JA: I agree with Beazley JA.

**********