Lyn Kathleen Ure v the National Mutual Life Association of Australasia Limited - [1999] QSC 10

IN THE SUPREME COURT
OF QUEENSLAND
No. 1095 of 1994
Brisbane
Before Williams J
[Lyn Kathleen Ure v The National Mutual Life Association of Australasia Limited]
BETWEEN:

LYN KATHLEEN URE

Plaintiff
AND:

THE NATIONAL MUTUAL LIFE ASSOCIATION OF
AUSTRALASIA LIMITED

Defendant

JUDGMENT - WILLIAMS J
Judgment delivered 29 January 1999

CATCHWORDS: Costs - Taxation - review - writ of non-party discovery - medical records - obligation of solicitor for medical practitioner to ensure records relevant to matter in issue in litigation - care required where records of sensitive nature - solicitor entitled to costs of fully perusing medical records and ensuring they were material to litigation.

Counsel: O’Brien for applicant.
Jesser (solicitor) for respondent

Solicitors: Forde Lawyers for applicant.
McInnes Wilson for respondent.

Hearing Date:              20 January 1999.
IN THE SUPREME COURT
OF QUEENSLAND
  No. 1095 of 1994
Brisbane
Before             Williams J
[Lyn Kathleen Ure v The National Mutual Life Association of Australasia Limited]
BETWEEN:

LYN KATHLEEN URE

Plaintiff
AND:

THE NATIONAL MUTUAL LIFE ASSOCIATION OF
AUSTRALASIA LIMITED

Defendant

JUDGMENT - WILLIAMS J

Judgment delivered 29 January 1999

This is a review pursuant to O.91 r.119 of a taxation of a Bill of Costs relating to a Writ Non-Party Discovery directed to Dr Joseph Keeping and issued by the defendant in the action. On receiving the Writ in question Dr Keeping consulted his solicitors, Forde Lawyers, and thereafter compliance with the Writ was in accordance with advice given by that firm. Those solicitors prepared a Bill of Costs which was submitted to the solicitors for the defendant and it was ultimately referred to taxation. Initially the Taxing Officer disallowed either wholly or in part certain items in that Bill and in accordance with the rules objections to those rulings were lodged. The Taxing Officer ruled on those objections, generally upholding his earlier decisions; in consequence this review was brought before a Chamber Judge by way of summons. On the hearing only some of the original objections were pursued.
It was the contention of counsel for the applicant solicitors that the Taxing Officer erred in principle in the way he approached the taxation of the items still in question. Generally he submitted that the exercise of discretion by the Taxing Officer should be reviewed applying the principles laid down in House v King (1936) 55 CLR 499; that appears to be the correct approach (Australian Coal & Shale Employees Federation v The Commonwealth (1953) 94 CLR 621 at 627). The Taxing Officer has a wide discretion and his decision should be affirmed unless the court is satisfied that it is clearly wrong. The amounts involved in this Bill are extremely small and the review is sought primarily to clarify the principles which should be applied in dealing with such a taxation as this. The solicitor who appeared for the respondent, the defendant in the action, agreed that if I considered there had been an error in principle I should substitute other figures for those allowed by the Taxing Officer. Though there was no formal consent broad consensus emerged as to the figures which should be adopted if I concluded that there had been an error in principle.
In the course of his “Answers to Objections” the Taxing Officer said that he had not had the “benefit of a perusal of the pleadings”; I do not know why that was so as a copy of the pleadings were on the file. In my view it is of critical importance to consider the Writ of Non-Party Discovery in the light of the pleadings. The following is a brief outline of the background to the taxation.
The statement of claim alleged that the plaintiff had a policy of insurance with the defendant described as a Vital Income Protection Plan Policy. One of the terms of that Policy was that if the plaintiff became continuously and totally unable to perform the normal duties of her usual occupation because of sickness and such inability lasted for 2 years the defendant would pay to the plaintiff the benefit specified by the policy. The statement of claim then alleged that in January 1988 the plaintiff developed “Systemic Lupes Erythemathosis”; I take that to be incorrect spelling for the condition Systemic Lupus Erythematosus. That disease is a degenerative condition which is destructive of bodily organs. The action was brought because the defendant denied liability under the Policy. The defence as delivered essentially denied or did not admit the relevant facts alleged by the plaintiff.
A glance at the file shows that the defendant caused some 10 Writs of Non-Party Discovery to be issued to medical practitioners or medical institutions. One of those was served by post on Dr Keeping; a copy was marked exhibit 1 on the hearing before me. By its terms it required the doctor to produce to the defendant, for copying if required, the following documents: “All medical records, documents, notes, charts, correspondence, memoranda, pathology results etc. relating to treatment of the above named plaintiff, Lynn Kathleen Ure (nee Stanton) (DOB 27.9.60)”. It was accepted by all parties before me that Dr Keeping was a gynaecologist and had only treated the plaintiff during pregnancies and with respect to gynaecological problems. A reading of the Answers to Objections would suggest that the Taxing Officer was not aware of that fact, though it has always been acknowledged by all parties to be the case; if the Taxing Officer had asked the question he would have been made aware of the agreed position.
Whilst the doctor-patient relationship does not provide a basis for a claim that communications passing between them are privileged from disclosure in a court of law, nevertheless courts are always sensitive to the fact that medical records contain material of a highly confidential and sensitive nature which ought to be compulsorily disclosed into the public arena only where the demands of justice require it. That is particularly so with respect to gynaecological records; understandably women do not want those personal details published except where it is necessary in the interests of justice that that be done.
In this case Dr Keeping was not informed, either specifically in the Writ or otherwise, of the nature of the action between the plaintiff and defendant or the nature of any illness which was the subject of that litigation. In those circumstances he would have been in dereliction of his duty to his client, the plaintiff, if he handed over his records to the defendant without making further enquiries, including the taking of legal advice, to ensure that there was a proper basis in law for the direction contained in the Writ.
Dr Keeping was clearly justified in seeking legal advice in the circumstances outlined. The solicitors whom he instructed were, of course, not in a position to give any advice until they had obtained a copy of the pleadings and were made aware with some particularity of the nature of the medical condition of interest to the court. Then it was necessary for them to determine whether or not the notes and records in the possession of Dr Keeping related “to the matter in question in the cause” (O.40 r.38A). The giving of the correct advice was more difficult because there was no prima facie connection between any pregnancy or gynaecological problem and the illness the subject of the litigation.
Item 3 in the Bill of Costs was as follows: “Perusing Medical File (106 folios)” and the amount claimed was $159. In his Answers to Objections the Taxing Officer referred to his earlier decision to allow only the sum of $45 for that item. With respect to that earlier decision he said:
“Upon my consideration of the documentation on the taxation it was apparent that it was inappropriate to allow the perusal of the material per folio. The degree of consideration which the records required did not warrant reading every word of every document. In my opinion an allowance for scanning the records was adequate remuneration for the nature of the work performed.”
However, when the matter was reviewed on dealing with the Objections the Taxing Officer determined that nothing should be allowed for that item. In addition he concluded that he should also disallow items 10 and 11 of the Bill in total; he had previously allowed them at a figure somewhat reduced from that claimed.
The reasoning of the Taxing Officer as disclosed in the Answers to Objections can be summarised as follows. There was no doubt the documents were in the possession of Dr Keeping. The only question for the solicitor to determine was whether the material related to the action and whether the doctor would be compelled to produce the material in answer to a subpoena at trial. He then went on:
“Although, I have not had the benefit of a perusal of the pleadings, if the cause of action arose as the result of a single specific illness suffered by the plaintiff which was treated by the respondent (the affidavit of Robert John Bax filed in the action on 23 April 1997 suggests that might be the case), then there will have been no necessity for the respondents solicitors to have perused the medical records for the purpose of determining that the records relate to the illness from which the cause of action arose. It will merely be a matter for the solicitors to confirm with the respondent. If the plaintiff was treated by the respondent in respect of only one illness and the respondent confirms the illness is “the matter in question” in the action a perusal of the documents will serve no purpose so far as [determining whether they relate to the matter in question] is concerned.”
He held that the onus was on the solicitor to show that the perusal was either necessary or proper and concluded that that onus had not been discharged.
With respect it seems to me that the Taxing Officer did err in dealing with that item. For reasons I have given above there was no necessary material connection between Dr Keeping’s treatment of the plaintiff and the illness the subject of the action. Given the sensitive nature of the reasons for the Plaintiff consulting Dr Keeping it would have been necessary to read the notes of each and every visit in order to arrive at a conclusion as to whether the particular notation had the requisite degree of materiality to the litigation. For that reason a more detailed perusal of all the notes than even the scanning initially allowed by the Taxing Officer was required.
Where a conclusion was reached that the material was of a sensitive nature so far as the plaintiff was concerned but that it might possibly have some slight relevance to the illness referred to in the statement of claim, it was a prudent course for Dr Keeping to obtain the consent of his patient (the plaintiff) before making the notes available to the defendant. That was the issue to which items 10 and 11 in the Bill related.
My real concern is whether or not the error made by the Taxing Officer is such as to permit interference by this court. It would appear from the passage quoted above from his Answers that he impliedly recognised that in some cases the facts would be such that a fuller perusal of all the records would be justified. His conclusion appears to have been that on the facts of this case that was not required. That appears to be essentially an error of fact, critical though it be. However, the error was largely occasioned because he failed to take into account vitally relevant considerations, namely the pleadings, the particulars of the illness which was the subject matter of the action, and the nature of the medical conditions for which the plaintiff consulted Dr Keeping. When those relevant considerations are given the force they deserve then it is clearly demonstrated that the Taxing Officer was in error. The failure to take into account relevant considerations is a well recognised basis for interfering with the exercise of a discretion, and that is established here. For that reason the determination by the Taxing Officer is reviewable, and to the extent outlined below should be varied.
In the course of argument it was agreed between the parties that 80 folios were involved in perusing the medical file. The parties agreed that the appropriate perusal fee, if allowed, was $120. For the reasons I have given I am of the view that it was not only reasonable, but necessary in the circumstances, for the solicitor to peruse carefully the whole of the medical records in question. On that basis item 3 should have been allowed at $120.
Further, there was no valid basis for disallowing items 10 and 11 entirely. Initially the Taxing Officer had allowed item 10 in the sum of $6.50 and item 11 in the sum of $9.00. It should also be noted that the Taxing Officer did not give the applicant solicitors any opportunity of making specific submissions in relation to items 10 and 11. They were not the subject of an objection, but on his review the Taxing Officer concluded that, along with disallowing item 3, he should disallow entirely items 10 and 11. That was not an appropriate procedure; a breach of natural justice occurred. In the circumstances the original assessment that $6.50 and $9.00 respectively were allowable should be restored.
Item 5 related to a claim for a telephone attendance upon the solicitors for the defendant. That was a call in which the solicitors sought particulars of the claim. It will be remembered that until that point of time the solicitors had no knowledge at all of the nature of the medical condition referred to in the action. The Taxing Officer was of the view that it was not necessary for that attendance to have been conducted by a solicitor because it did not involve the use of “skill or legal knowledge”. Again that decision ignores the issues to which I have previously referred. There were critical issues involved here and only a person with a reasonable degree of skill and legal knowledge would be able to determine the materiality of the records of Dr Keeping to the issues raised in the action. The circumstances were such that to be effective the attendance had to be solicitor upon solicitor. The item should be allowed as claimed.
The next objection was to item 16 for “care and attention”. An amount of $150 was claimed but only $60 allowed. That reduction was clearly based upon the assessment by the Taxing Officer that there was no need to consider carefully the whole of the contents of the records. Given the nature of the task which faced the solicitor in accordance with my findings the allowance was too low. In the course of argument it emerged that there was substantial consensus between the parties that if the solicitors task was of the nature that I have outlined above then an amount in the range of $80 to $90 should be allowed. Given my reasoning the allowance for care and consideration should be increased to $85.
The final objection related to the costs of preparing an affidavit which was relied on at the taxation. The solicitors for the defendant in their Notice of Objection Prior to Taxation required certain items in the bill to be vouched. That was necessary because only sparse records had been kept by the claimant solicitors as to the time spent on performing the work particularised in the bill. The affidavit in question was primarily prepared for the purpose of supporting claims in the bill for which the solicitors had not kept diary notes or adequate diary notes. In his Answers to Objections the Taxing Officer made the observation in relation to the affidavit that the claim was for “additional costs as the result of ... solicitor’s inadequate file management” and in consequence ought not be allowed.
I cannot see that there has been any error in principle by the Taxing Officer in dealing with this item such as would justify this court’s intervention. It was a conclusion which he was entitled to reach and there is no basis established for interfering with his exercise of discretion in so doing.
The taxation should therefore be varied by allowing the following amounts with respect to the items specified:
Item 3  $120.00
Item 10  $    6.50
Item 11  $    9.00
Item 5  $ 32.00
Item 16  $ 85.00