Johnson v Trustees of the Roman Catholic Church

[2009] NSWSC 309

CITATION:	Johnson v Trustees of the Roman Catholic Church & Anor [2009] NSWSC 309
HEARING DATE(S):	04/03/2009; 17/04/2009
JUDGMENT DATE :	27 April 2009
JUDGMENT OF:	Hoeben J
DECISION:	Pursuant to UCPR 28.2, the question of the defendants’ liability (including the question of whether any negligence on the part of either defendant caused any damage) be decided separately from the question of quantum. I order the plaintiff to pay the defendants’ costs of this motion.
CATCHWORDS:	PRACTICE AND PROCEDURE - Defendants' application for separate hearing on liability - applicable principles - effect of Civil Procedure Act 2005.
LEGISLATION CITED:	Civil Procedure Act 2005 Uniform Civil Procedure Rule 28.2
CATEGORY:	Procedural and other rulings
CASES CITED:	Barbara O’Sullivan v Challenger Managed Investments Limited [2008] NSWSC 602 Commonwealth Bank of Australia v Clune & Anor [2008] NSWSC 1125 per Johnson J Integral Home Loans Pty Limited & Anor v Interstar Wholesale Finance Pty Limited & Anor [2006] NSWSC 1464 Tepko Pty Limited & Ors v Water Board (2001) 206 CLR 1 at [168] – [170] Vero Insurance Limited v Tran [2008] NSWSC 166
PARTIES:	Ebony Johnson by her tutor Blake Johnson - Plaintiff Trustees of the Roman Catholic Church for the Diocese of Wollongong - First Defendant State of New South Wales - Second Defendant
FILE NUMBER(S):	SC 20141/2006
COUNSEL:	Mr B Watson, solicitor, as agent for the Plaintiff Ms Anna Katzmann SC/Ms Anne Horvath - Defendants
SOLICITORS:	RMB Compensation - Plaintiff McCabe Terrill Lawyers Pty Limited - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

HOEBEN J

Monday, 27 April 2009

20141/2006 – Ebony Louise JOHNSON by her tutor Blake JOHNSON v Trustees of the ROMAN CATHOLIC CHURCH for the DIOCESE of WOLLONGONG and Anor

JUDGMENT

1 HIS HONOUR:

Nature of proceedings
The defendants seek the following order from the Court:
“That pursuant to UCPR 28.2, the Court orders that the question of the defendants’ liability (including the question of whether any negligence on the part of either defendant caused any damage) be decided separately from the question of the quantum of the plaintiff’s damage, if any.”

2 The plaintiff opposes the application.

Factual background

3 The plaintiff, who was aged twelve, attended a school camp from 20 to 24 July 1998. She was developmentally delayed. It is the plaintiff’s case that while at the camp, she consumed some antihistamine tablets (pheniramine). She alleges that the tablets were provided by another student and caused her to hallucinate.

4 The plaintiff’s case is that during the camp she was entrusted by her parents to the school and that the school through its teachers failed to properly take care of her. That failure to take care is put on a number of bases – a failure to take into account that she was developmentally delayed and therefore vulnerable to irresponsible actions by other students and a failure to act promptly when it was clear that the plaintiff was not well and was behaving in an unusual and bizarre manner.

5 It is common ground that since her return from the school camp, the plaintiff has been subject to psychotic episodes which have required her to be hospitalised for long periods of time. The most recent hospitalisation was between 9 December 2008 and 7 March 2009. The plaintiff requires constant observation.

6 A major difficulty in the plaintiff’s case is the question of diagnosis. The medical profession has had difficulty in diagnosing her condition. As a result there are difficulties to be overcome on the question of causation. There are also unexplained anomalies in relation to how and when the pheniramine was ingested by the plaintiff. Urine samples taken on 25 July 1998 and on 3 August 1998 showed the presence of pheniramine. A difficulty for the plaintiff is to explain the presence of pheniramine in her system more than ten days after her illness developed when under normal circumstances, that substance would have been fully excreted from the body within 48 hours.

7 These proceedings were commenced on 27 April 2005. Thereafter the plaintiff and her legal advisers have experienced difficulty in putting together her case on liability. Orders for the service of reports and evidentiary statements have not been complied with. This resulted in an application by the defendants in 2008 to have the proceedings dismissed for want of prosecution and for failing to comply with Court orders. That application was unsuccessful.

8 Following the dismissal of that application, the plaintiff’s legal advisers were given more time to file and serve the evidence upon which she wished to rely to on the issue of liability. That process was completed in December 2008.

9 It is clear from that material that the plaintiff’s case on liability will comprise subpoenaed documents from the school together with:

(a) Several reports from the plaintiff’s treating doctor, Dr Vaughan Turnbull;
(b) Three reports by Dr Keith Tronc, a consultant in educational administration.
(c) Two reports from Professor Starmer, a consultant pharmacologist.
(d) A statement by Margaret Johnson (the plaintiff’s mother).
(e) A statement by Michael Johnson (the plaintiff’s father).
(f) A statement by Concetta Newnes (a classmate of the plaintiff).

10 The defendant estimates that making a generous allowance for cross-examination of the plaintiff’s witnesses, the liability hearing would complete within five days. If damages were also to be included in that hearing, another five days would be involved. It is also clear from the plaintiff’s most recent period of hospitalisation that her case on damages is not yet complete and that further evidence needs to be obtained. It is not clear when the plaintiff’s case on damages will be ready to proceed to a hearing.

Submissions and consideration

11 The defendants rely upon the overriding objects of the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules, i.e. “to facilitate the just, quick and cheap resolution of the real issues in the proceedings” (CP Act s 56(1)). They submit that since the plaintiff’s liability evidence is complete, there is nothing to stop a hearing date being allocated. If the liability issue is decided adversely to the plaintiff, this will bring the proceedings to an end.

12 The defendants submit that there is little or no overlap in the evidence to be called on liability and quantum. They submit that in worst case it may be necessary for the plaintiff’s parents to give evidence on a second occasion if quantum is argued and Dr Turnbull might also be required to give some brief evidence although insofar as treatment is concerned, his evidence is unlikely to be controversial.

13 The defendants submit that if damages were to be dealt with at the same time as liability, it would be necessary for the following additional issues to be dealt with:

(a) What was the level of the plaintiff’s disability (if any) before she attended the camp in July 1998?
(b) What was the plaintiff’s likely future before she attended the camp in July 1998?
(c) What is the plaintiff’s future prognosis? What course is her life likely to take?
(d) What is the impact of the events that were alleged to have occurred at the July 1998 camp on the plaintiff’s future?
(e) What impact have unrelated events (that have occurred since July 1998) had on the plaintiff?

14 The defendants submit that considerable delay has already been experienced and that almost eleven years have passed since the events relating to liability occurred. An inevitable result of the passage of time is that the memory of witnesses deteriorates and the quality of evidence degrades. If liability is dealt with separately, a hearing can take place in the near future whereas if liability and quantum are heard together, there will be substantial further delay since the plaintiff’s damages case remains incomplete. They submit that further delay may adversely affect the ability of a fair trial to take place.

15 The final submission by the defendants is that if liability and quantum were heard together, the costs of the trial would effectively be doubled. They submit that this would be unfair to the defendants since if they were successful in the proceedings, neither the plaintiff nor her tutor would be able to meet their costs.

16 The plaintiff submits that all of the plaintiff’s evidence, both from her parents and other lay witnesses, together with the documents produced on subpoena from the school and medical evidence, are closely intertwined in relation to just what happened at the school camp in July 1998 and its continuing effect on the plaintiff’s life since. The plaintiff’s submission is that when assessing the issue of liability, it will be necessary for the Court to take into account the full course of her psychiatric condition since July 1998. This is particularly so because the medical profession has experienced such difficulty in coming to a precise diagnosis of the plaintiff’s continuing condition and its relationship to the ingestion of pheniramine by the plaintiff in July 1998.

Consideration

17 UCPR 28.2 provides:

“28.2 The Court may make orders for the decision of any question separately from any other question, whether before, at or after any trial or further trial on the proceedings.”

There is no issue that the Court has power to make the order sought by the defendants.

18 Under the common law, courts have been reluctant to order separate hearings on liability unless there is a clear line of demarcation between that issue and damages. A clear example of that reluctance can be seen in Tepko Pty Limited & Ors v Water Board (2001) 206 CLR 1 at [168] – [170] where Kirby and Callinan JJ said:

“[168] The attractions of trials of issues rather than of cases in their totality, are often more chimerical than real. Common experience demonstrates that savings in time and expense are often illusory, particularly when the parties have, as here, had the necessity of making full preparation and the factual matters relevant to one issue are relevant to others, and they all overlap.
[169] The second and related comment is this. A party whose whole case is knocked out on a trial of a preliminary or single issue, may suspect, however unjustifiably, that an abbreviated course was adopted and a decision reached in the court's, rather than the parties', interests.
[170] Thirdly, there is an additional potential for further appeals to which the course of the trial on separate issues may give rise. Indeed, that could occur here were this appeal to be allowed and a retrial had in which the remaining issues of causation and damages were decided. Single-issue trials should, in our opinion, only be embarked upon when their utility, economy, and fairness to the parties are beyond question. “

19 As the defendants have pointed out, since those observations in Tepko, the Civil Procedure Act 2005 has come into force in New South Wales. Sections 56 - 62 of the Act make it clear that considerations of justice have to be tempered by the objectives of case management and the need for proportionality of costs.

20 This change in emphasis was succinctly summarised by Brereton J in Integral Home Loans Pty Limited & Anor v Interstar Wholesale Finance Pty Limited & Anor [2006] NSWSC 1464:

“[6] While much has been said against the resolution of separate questions in Courts of high authority, nonetheless, since the (NSW) Civil Procedure Act 2005, it is my view that the Court should take a more interventionist role in identifying and separating important issues which can resolve significant parts of the litigation expeditiously.”

21 His Honour’s comments have been adopted and applied in a number of other first instance decisions: Commonwealth Bank of Australia v Clune & Anor [2008] NSWSC 1125 per Johnson J; Barbara O’Sullivan v Challenger Managed Investments Limited [2008] NSWSC 602 per Einstein J; and Vero Insurance Limited v Tran [2008] NSWSC 166 per Hamilton J.

22 The plaintiff’s evidence on liability has been conveniently collected in a folder of documents entitled “Plaintiff’s Liability Documents”. I have had the opportunity of examining those documents. It is clear from them that with the addition of the reports from Professor Starmer, the plaintiff’s case on liability is complete. What those documents also reveal is that the plaintiff’s case on causation is going to be a difficult one to make out. This is because of the difficulty experienced by the medical profession in diagnosing the plaintiff’s condition. That, however, has been the situation ever since the plaintiff’s first admission to hospital. There are no indications that it is going to change.

23 What that folder reveals is that apart from the question of diagnosis (which obviously affects quantum as well as liability), there is a clear demarcation between the evidence to be called by the plaintiff on the issue of liability and that relating to quantum. Contrary to the submissions by the plaintiff there was almost no overlap in the evidence to be called on those two issues.

24 That folder also makes clear that apart from diagnosis, all of the factual evidence relating to liability relates to what happened in July 1998. Although statements were taken at the time from students and teachers, I accept that after almost eleven years the recollections of key witnesses must inevitably be adversely affected. Further delay in the hearing of that issue will adversely affect the likelihood of a fair trial taking place. This is particularly so when some of the witnesses were children of twelve at the time.

25 Given the effluxion of time which has already occurred, there is now some urgency in having the issue of liability determined. If quantum were to be heard with liability, further delay would occur as the plaintiff’s legal advisers have frankly conceded. That delay is likely to be substantial since there is no indication of when the plaintiff’s case on damages will be ready.

26 There is also considerable force in the defendants’ submission that a liability hearing would be considerably shorter than a hearing involving both issues. If the defendants were successful on liability, the costs incurred by both sides would be significantly less. On the other hand, if the plaintiff were to be successful on liability there is a strong likelihood, given the rather tragic circumstances of this case, that the defendants would adopt a pragmatic approach and seek to settle the quantum issue.

27 I have concluded that the “just, quick and cheap resolution” of this matter will be significantly facilitated if liability is heard separately to damages. When referring to liability and the order which I propose to make, I intend the word to encapsulate the questions of duty of care, breach of duty and causation, leaving only the question of loss and damage to be determined in a later hearing if necessary.

28 The orders which I make are as follows:

(1) That pursuant to UCPR 28.2, the question of the defendants’ liability (including the question of whether any negligence on the part of either defendant caused any damage) be decided separately from the question of quantum.

(2) I order the plaintiff to pay the defendants’ costs of this motion.

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