Luff v Australian Capital Territory
[2022] ACTSC 254
•16 September 2022
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Luff v Australian Capital Territory |
Citation: | [2022] ACTSC 254 |
Hearing Date: | 15 September 2022 |
DecisionDate: | 16 September 2022 |
ReasonsDate: | 11 October 2022 |
Before: | Kennett J |
Decision: | See [33] |
Catchwords: | CIVIL LAW – PRACTICE AND PROCEDURE – Legal professional privilege – implied waiver – where author of previous report declared conflict of interest and report not served – whether defendant waived privilege in report by disclosing author’s statement of conflict – privilege not waived CIVIL LAW – PRACTICE AND PROCEDURE – Application for extension of time to file expert report – where author of previous report declared conflict of interest and report not served – where non-compliance with Court timetable and matter not relisted – consideration of application of rules 1241, 1401 and 1404 – orders varied to extend time to file expert report |
Legislation Cited: | Court Procedures Rules 2006 (ACT) rr 306, 1241, 1401, 1404 |
Cases Cited: | Hinchcliffe v Carter’s Transport Australia Pty Ltd [2017] ACTSC 223 Stekovic v Australian Capital Territory [2015] ACTSC 385 |
Texts Cited: | Supreme Court of the Australian Capital Territory, Practice Direction No 2 of 2014: Case Management in Proceedings Commenced by Originating Claim, 18 September 2019 |
Parties: | Kirsty June Luff ( Plaintiff) Australian Capital Territory ( Defendant) |
Representation: | Counsel B Jullienne ( Plaintiff) A Costin ( Defendant) |
| Solicitors AC Lawyers ( Plaintiff) ACTGS ( Defendant) | |
File Number: | SC 330 of 2021 |
KENNETT J:
By an Application in Proceeding filed on 25 August 2022, the defendant (the Territory) sought an extension of time in which to file an expert report. The plaintiff opposed this.
I heard argument on the application on 15 September 2022. The following day, I made orders substantially in accordance with those sought by the Territory. I also ordered that the Territory pay the plaintiff’s costs of the application. What follows is my reasons for making those orders.
The plaintiff suffered an injury to her finger, for which she was treated by way of surgery in a hospital operated by the Territory. There is an issue concerning how competently that surgery was performed. Later, she obtained further treatment from another surgeon (Dr Vrancic) which apparently involved four further surgical procedures. She encountered problems including a serious infection in the finger that had been treated, and ultimately the finger was amputated.
The plaintiff commenced proceedings against the Territory by filing an Originating Claim on 12 August 2021. The Territory filed its Defence on 7 January 2022.
On 9 March 2022 (by which time the plaintiff had already served her evidence in relation to liability) the Court made timetabling orders which included the following:
6.Plaintiff to serve expert reports as to quantum by 1 April 2022 (noting the Plaintiff has served her primary liability evidence);
7. Defendant to serve any expert reports as to liability by 27 May 2022;
8. Defendant to serve any expert reports as to quantum by 1 July 2022;
9. Parties to have participated in a private mediation on or before 5 August 2022;
10. Plaintiff to file and serve her Statement of Particulars on 8 July 2022;
…
13. Matter be listed for listing hearing on 11 August 2022 at 10:30am;
Filing of the plaintiff’s expert reports on quantum was not completed until 3 May 2022. While that shows that the plaintiff does not come to the present dispute with a history of perfect compliance, it is not relied on by the Territory as an explanation for the lateness of its own expert report.
On 7 April 2022, the Territory engaged Dr Richard Lawson, a hand and peripheral surgeon, to provide an expert report as to liability. Some delay in Dr Lawson starting work on the matter was caused by the need to obtain clinical records and the original x-rays. The x-rays needed to be retrieved from the doctor who had prepared an expert report for the plaintiff. It was not until 4 May 2022 that all of the relevant material was able to be provided to Dr Lawson. On the day that his report was due to be filed and served (27 May 2022) Dr Lawson advised that his report would be completed on 31 May 2022, and the Territory’s solicitors informed the plaintiff’s solicitors of this.
Dr Lawson provided the solicitors for the Territory with a report on 29 May 2022. However, in this document he disclosed what he described as a “conflict of interest”. He advised that he had a professional relationship with Dr Vrancic, in which she referred several patients each year to him and he “often” referred patients requiring hand therapy to her.
It was not until 27 July 2022 that the solicitors for the Territory received instructions not to serve Dr Lawson’s report and instead to engage a second surgical expert. In the intervening period, the Territory had served its expert reports on quantum (on 13 July 2022, 12 days late) and there had been desultory correspondence between the solicitors concerning the Territory’s expert evidence on liability. On 28 July 2022, the plaintiff’s solicitors were informed that the Territory would not be serving the report of Dr Lawson; however, nothing was said at this stage about the plan to engage an alternative expert.
The solicitors for the parties then appear to have turned their attention to a mediation which was scheduled to occur on 10 August 2022 (even though the Court’s orders called for mediation to be completed by 5 August 2022). The plaintiff did not serve her statement of particulars for the mediation until 3 August 2022. The Territory’s solicitors considered it to be inadequate. Further correspondence ensued, resulting in the mediation being postponed. So far as the evidence before me shows, no mediation has taken place.
On 11 August 2022, a listing hearing occurred before a Registrar. Both parties filed affidavits the day before that hearing. The Registrar ordered that the Territory file any application for leave to serve a further expert report on liability, and any third-party notice, by 25 August 2022. The case was also listed for a listing hearing on 8 September 2022.
The application now before me, which seeks leave to serve the report of Dr Edmunds and to file a third-party notice to Dr Vrancic, was filed, together with a further affidavit, on 25 August 2022. The affidavit annexed both the report of Dr Ian Edmunds, upon which the Territory seeks to rely, and the third-party notice that it wishes to file and serve on Dr Vrancic.
Later, at the listing hearing on 8 September 2022, the case was allocated a trial date in March 2023.
As noted at the outset of these reasons, the plaintiff does not oppose the filing of a third-party notice in the event that the Territory is permitted to rely on the report of Dr Edmunds. Conversely, if the report of Dr Edmunds is excluded, there is no proper basis for the third-party notice and the Territory would not press that aspect of its application. The area of dispute therefore concerns only whether the Territory should be permitted to rely on the report of Dr Edmunds.
In this regard, the Territory relies principally on the power of the Court under r 1401 of the Court Procedures Rules 2006 (ACT). Subrule (1) of that rule allows the Court, at any stage of the proceeding, to give any direction about the conduct of the proceeding it considers appropriate, “even though the direction may be inconsistent with another provision of these rules”. In the exercise of that power, sub-r (3) provides that “the interests of justice are paramount”. Under sub-r (5), the Court is also permitted to have regard to various other matters, some of which I will mention below.
Counsel for the plaintiff noted that the present circumstances fall within the scope of r 1404, which applies where a party fails to comply with a direction about the conduct of a proceeding. In such circumstances, r 1404(2) empowers the Court, among other things, to “give the further directions it considers appropriate”. However, to this extent, r 1404 does not add anything to the broad power in r 1401. Rather, the importance of r 1404(2) is that it empowers the Court to take more drastic steps in response to non-compliance, such as dismissing the proceeding or ordering costs. Further, deciding what directions the Court considers “appropriate” would at least ordinarily involve consideration of the same issues as are referred to in r 1401.
The Territory relied in the alternative on r 1241; and the submission of the plaintiff was that it was in this rule, if anywhere, that power to permit reliance on the report of Dr Edmunds was to be found. In my view, this is not correct.
Rule 1241(1) requires each party to serve its expert reports on the other party in accordance with any directions made by the Court. That assumes the making of directions, which may occur under r 1401 or the more specific power in r 1205. The real force of r 1241, however, is in sub-r (3). It provides that an expert report “must not be tendered, and is not admissible, in the proceeding unless it has been served in accordance with this rule”. The only exceptions to this prohibition are where the Court grants leave or where all active parties consent. As to leave, sub-r (4) provides that leave must not be given (except in the case of a report that merely updates an earlier report) unless “there are exceptional circumstances that justify granting leave”.
Rule 1241(3) controls the tender of expert reports and their admissibility as evidence at the hearing of a matter. The effect of a grant of leave under that subrule, therefore, is to allow the tender of an expert report that has not been served in accordance with the applicable timetable, including potentially one that has not been served at all. Hence, r 1241(3) does not deal with the service of expert reports (although, potentially, leave might be granted in advance of the hearing on conditions including service). The Territory does not currently seek leave to tender a report that has not been served in accordance with directions. Rather, it seeks a variation of the timetable for service. It seeks that variation in circumstances where the trial is approximately six months away and it is difficult to see why the existence of “exceptional circumstances” should be regarded as a prerequisite. In my view, therefore, what is currently sought is best described as a variation of the timetable so as to allow further time for the service of an expert report, rather than a grant of leave under r 1241(3). (It was also suggested in submissions that the relevant source of power moved from r 1401 to r 1241 once a trial date was allocated, but I do not see any textual basis for that conclusion. It would be a somewhat capricious result in circumstances where the application was made before, but is being heard after, the allocation of a trial date.)
I turn now to consider whether, pursuant to r 1401, the Territory should be afforded an extension of time so as to allow it to serve and rely on the report of Dr Edmunds.
Counsel for the plaintiff submitted that, in order to determine the reasonableness of the Territory’s decision not to rely on Dr Lawson’s report, it was necessary to know more about the report itself, including to confirm the terms of the disclosure that he made and to see whether the Territory might have had other motivations for the decision not to rely on it. He made a call for the report, arguing that privilege in it had been implicitly waived by the disclosure of, and reliance on, part of what Dr Lawson said.
I decided to uphold the Territory’s claim of privilege. Although the present situation has some similarity with Stekovic v Australian Capital Territory [2015] ACTSC 385 (where the relevant principles are explained), I took the view that there was no inconsistency between disclosure of particular words in the document in order to explain why it could not feasibly be relied on as an expert report, and maintenance of a claim of privilege in the remainder of the document. In my view it is appropriate to distinguish between the substantive content of Dr Lawson’s report (his answers to the questions asked of him and supporting analysis) on the one hand, and his declaration of a conflict on the other. The declaration could quite properly have been contained in a separate communication, in which event no issue as to waiver of privilege in his report would have arisen. No assertion was made about the substantive contents of the report, reliance on which would have put those contents put in issue. Correspondingly, fairness to the plaintiff did not require that there be disclosure of the report—beyond the passage quoted—in order to test the reasonableness of the Territory’s proposed response to what emerged from that passage.
The evidence presented by the Territory is somewhat slender. I have hesitated over whether it amounts to a full account of the reasons for the change in position, as required by Mossop J in Hinchcliffe v Carter’s Transport Australia Pty Ltd [2017] ACTSC 223 (Hinchcliffe) at [15]. For example, the questions on which Dr Lawson was asked to opine were not tendered. However, I have concluded that the following findings and inferences can be made.
(a)Dr Lawson was the only expert engaged by the Territory to provide a report on liability. It would have been very unusual for him not to be asked to consider (or to have to consider as part of a broadly expressed question) the extent to which there was a causal link between the treatment provided to the plaintiff in the hospital and the harm that she ultimately suffered.
(b)The material provided to Dr Lawson must have contained information about Dr Vrancic’s involvement. There is no other explanation for him mentioning her name.
(c)For the purposes of this interlocutory application I am prepared to accept the evidence of Ms Moriarty, the solicitor for the Territory, that Dr Lawson’s report contained the statements summarised at [8] above.
(d)There was no reason for the Territory’s solicitors to doubt the truth of what Dr Lawson told them about his connection with Dr Vrancic.
(e)From the fact that Dr Lawson felt it appropriate to disclose this connection and describe it as a “conflict of interest”, it was reasonable to infer at least that Dr Lawson had identified the involvement of Dr Vrancic as potentially relevant to issues of liability—ie, that he saw her treatment of the plaintiff as a possible causative factor and apprehended that it might be called into question.
(f)It was reasonable to infer that, as a result of his link with Dr Vrancic, Dr Lawson had at least some doubt as to whether he could give impartial expert evidence on liability in the case. It was also reasonable for the solicitors to have grave doubts of their own as to whether, in these circumstances, his evidence could be impartial.
I have no direct evidence as to whether Dr Lawson in fact had a connection with Dr Vrancic of the kind described. However, the important issue is the reasonableness of the Territory’s response to his assertion to that effect. As I have indicated, I do not think there was any reason to doubt its truth.
I also have no way of determining whether the Territory might have had additional reasons for its decision not to serve Dr Lawson’s report. For example, I cannot rule out the possibility that the opinions he expressed were unfavourable to the Territory’s position and that, therefore, having a reason to dispense with his services and retain a different expert was convenient. However, I do not think that this affects the analysis. If it is the case (as I have found) that the revelation of a conflict of interest properly founded a judgement that his evidence could not or should not be relied upon, I do not think it matters whether there were other considerations that also supported that decision. It has not been, and could not be, suggested that the revelation of a conflict of interest had somehow been manufactured in order to achieve a result.
One aspect of Mossop J’s observations in Hinchcliffe that has apparently been taken to heart is that, when indulgences are sought, the explanation provided to the Court should include “confession of inadequacies in the conduct of the case on the part of the lawyers for the party” where such inadequacies are present: at [15]. Ms Moriarty’s first affidavit acknowledged that there were a number of points at which the matter ought to have been relisted in accordance with [29] of Practice Direction No 2 of 2014: Case Management in Proceedings Commenced by Originating Claim, 18 September 2019. This is correct. It should not need to be repeated that, where non-compliance with directions is likely to occur, the impending defaulter should not only alert the other parties but approach the Court seeking a variation of the order (with consent if that can be achieved) (see eg Crawford v Australian Capital Territory [2015] ACTSC 282 at [23]–[24]). Matters must not be allowed to drift for a period of weeks or months, even if (as happened here) the other side effectively reserves its position as to whether it will consent to an extension.
As noted above, Dr Lawson’s report was due to be filed on 27 May 2022. On that day, the solicitors for the Territory advised their counterparts that more time was needed. It was on 29 May 2022 (a Sunday) that Dr Lawson provided his report and disclosed the conflict of interest referred to above. The solicitors could not be criticised for not reading and considering the report on that day; however, the problem associated with the conflict ought to have leapt out at them when they did read it. On the Monday, the plaintiff’s solicitor indicated that he would respond formally once he had seen the report and considered any possible prejudice. At this point, if not earlier, the Court should have been informed that an important aspect of the timetable had slipped.
It was only on 27 July 2022 (almost two months after the problem had come to light) that instructions were obtained not to serve Dr Lawson’s report. This delay has not been explained. A decision was also taken on 27 July 2022 to engage another expert; but neither the plaintiff nor the Court was informed of this. It was on 3 August 2022, at the end of a letter dealing with the likely postponement of the mediation, that the plaintiff’s solicitor was told the reason why Dr Lawson’s report was not relied on and the fact that the Territory was seeking to engage another expert. The issue was only ventilated in the Court on 11 August 2022 (the date which had been fixed for the listing of the proceeding for trial).
This unfortunate history weighs against granting the Territory the indulgence that is sought. It is not neutralised by the fact that the plaintiff’s conduct of the proceeding is also open to criticism.
Nevertheless, I am persuaded that the Territory should be permitted to file the expert report which it has now obtained. In my view, the interests of justice so require. Having determined (reasonably in my view, and arguably inevitably) that the report of Dr Lawson should not be relied upon, the Territory was left without any expert evidence on the issue of liability. Clearly, that placed it at a very grave disadvantage. It is not in the interests of justice for a party to be placed in that position by the revelation of a conflict of interest (of which, so far as the evidence shows, it had no notice) followed by dilatoriness on the part of its legal advisers. The entitlement of each party to a fair hearing (cf r 1401(5)(a)) and the importance of the issues (cf r 1401(5)(d)) point to the same conclusion. Allowing the report of Dr Edmunds to be relied upon will naturally increase the volume of the evidence to be led (r 1401(5)(e)), but only so as to bring it back to the volume that would have been expected if Dr Lawson’s report had been served. Sufficient time remains before the trial for this delay in serving the Territory’s expert evidence to be accommodated.
Because I regard it as preferable to understand the application as seeking an extension of the time provided for in the directions made on 9 March 2022, rather than a grant of leave, I have adopted a different form of words to that proposed in prayer 1 of the Territory’s Application in Proceeding.
Although the Territory succeeded (over the opposition of the plaintiff) in obtaining substantially the outcome that it sought, I came to the view that it should pay the plaintiff’s costs of the application. The application sought an indulgence. The circumstances that led to the application being made occurred on the Territory’s side of the record. Further, the delay in explaining these circumstances to the plaintiff’s solicitors and bringing the issue before the Court has, at least, not assisted the parties’ prospects of dealing with the issue by consent.
Accordingly, the orders of the Court were:
(1)Order 7 of the orders made on 9 March 2022 is varied so as to permit the defendant to file an expert report as to liability by Friday, 23 September 2022.
(2)The defendant is granted leave to file a third-party notice substantially in the form of annexure B to the affidavit of Lauren Crystal Moriarty affirmed 25 August 2022 pursuant to r 306 by Friday, 23 September 2022.
(3)The defendant to pay the plaintiff’s costs of the Application in Proceeding, to be taxed if not agreed.
| I certify that the preceding thirty-three [33] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Kennett Associate: Date: |
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