Mclaughlin v Burrows and ors t/as Kells The Lawyers

[2020] NSWSC 1802

Supreme Court

New South Wales

Medium Neutral Citation:

Mclaughlin v Burrows & ors t/as Kells The Lawyers [2020] NSWSC 1802

Hearing dates:

19 November 2020

Date of orders:

18 December 2020

Decision date:

18 December 2020

Jurisdiction:

Common Law

Before:

Bellew J

Decision:

(1) The proceedings are dismissed.

(2) The question of costs is reserved.

(3) In the absence of agreement as to costs, I direct the parties to file written submissions with my Associate, not exceeding two pages in length, by 1 February 2021.

Catchwords:

PRACTICE AND PROCEDURE – Application for summary dismissal – Where plaintiff sought to bring an action against his former lawyers – Where proceedings statute barred – Whether plaintiff under a disability for any relevant period – Whether appropriate to make an order for summary dismissal in circumstances where a limitation issue arose – Where evidence did not establish that the plaintiff was under a disability for the relevant period – Where there was objective evidence supporting the conclusion that the plaintiff was able to manage his affairs – Where causes of action clearly statute barred – Proceedings dismissed

Legislation Cited:

Limitation Act 1969 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1

General Steel Industries Inc v Commissioner for Railways (NSW) & ors (1964) 112 CLR 125; [1964] HCA 69

Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369

Kotulski v Attard [1981] 1 NSWLR 115

Wardley Australia Ltd and anor. v State of Western Australia (1992) 175 CLR 514; [1992] HCA 55

Category:

Principal judgment

Parties:

Scot George Mclaughlin – Plaintiff
David Wilfred Burrows, Roger John Downs, David Laurance Potts, Paul Dante Magagnino, Peter John Chodat, Mario Quintilliani, Michael John Hatfield and Michael Paul Mantel t/as Kells The Lawyers – Defendants

Representation:

Counsel:
In person – Plaintiff
R Perla – Defendants

Solicitors:
Gilchrist Connell – Defendants

File Number(s):

2020/79589

Publication restriction:

Nil

Judgment

INTRODUCTION

1. Before the Court for determination are two notices of motion.

2. The first has been filed by the plaintiff seeking the following orders:

1. Default judgment for the plaintiff against the defendants for $19,441,143.00.

2. That the defendants pay the plaintiff's costs.

3. The second has been filed by the defendants seeking the following orders:

1. The proceedings be dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW).

2. In the alternative, the further amended statement of claim filed on 21 April 2020 be struck out pursuant to r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW).

3. The plaintiff to pay the defendants' costs of this motion and the proceedings.

4. Such other order as this Honourable Court deems fit.

4. The evidence relied upon by the parties in support of the respective notices of motion was contained in a joint Court Book (CB) which was admitted as exhibit A.

THE PLAINTIFF’S CASE AGAINST THE DEFENDANTS

5. The plaintiff filed a statement of claim on 10 February 2020. [1] An amended statement of claim was filed on 19 February 2020 [2] and a further amended statement of claim was filed on 21 April 2020. [3] For the purposes of determining the motion filed on behalf of the defendants, 10 February 2020 is to be taken as the date on which the proceedings were commenced.

   1. CB 28.

   2. CB 32.

   3. CB 42.

6. I have proceeded on the basis that the plaintiff seeks to bring his various causes of action against the defendants in negligence. In circumstances where a limitation issue arises, it is appropriate to note at this point that section 14(1)(b) of the Limitation Act 1969 (NSW) (the LA) is in the following terms:

14 General

(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims:

…

(b) a cause of action founded on tort, including a cause of action for damages for breach of statutory duty.

THE PLAINTIFF’S PLEADED CAUSES OF ACTION

7. The plaintiff has appeared on his own behalf in these proceedings, and has drafted the various statements of claim without legal assistance. By reference to the further amended statement of claim, the causes of action relied upon by the plaintiff appear to be as follows.

The 2003 Workers Compensation Advice Claim[4]

4. CB 43; [1].

8. On 29 September 2003 the plaintiff conferred with the defendants regarding his right of appeal against a decision of Commissioner Hogg in the Workers Compensation Commission. By letter of 1 October 2003, the defendants advised the plaintiff, in effect, that there were no prospects of successfully appealing against that decision. [5]

   5. CB 339.

9. The plaintiff conferred with the defendants again on 4 March 2004. In a letter of 8 March 2004, he was again advised, in specific terms, that there were no reasonable prospects of successfully appealing against the decision of Commissioner Hogg. [6] The plaintiff appears to assert that such advice was negligent.

   6. CB 341-342.

10. Assuming that the plaintiff asserts that he suffered a loss in not bringing an appeal against the decision of Commissioner Hogg, any such loss arose on 8 March 2004 (at the latest) when he was advised by the defendants, for a second time, that there were no prospects of success. That required him to commence proceedings no later than 8 March 2010.

The 1999 back injury claim[7]

7. CB 45; [2].

11. The plaintiff asserts that he suffered a back injury during his employment when he was required to lift sheets of glass. He appears to assert that the defendants settled his claim for damages without his consent. However, it is apparent that the defendants did not act for the plaintiff in relation to any claim arising from that injury. The plaintiff was represented by Taylor & Scott in respect of that matter. [8]

The Taylor & Scott claim [9]

8. CB 343.

9. CB 45; [2.14].

12. On the plaintiff’s instructions, the defendants sought advice from counsel as to the potential for a claim against Taylor & Scott arising from their representation of the plaintiff. [10] The plaintiff was advised that it was counsel’s view that he may have an action against Taylor & Scott. [11] It is apparent from other correspondence that such action was pursued by the plaintiff. A letter sent to the plaintiff by the defendants on 4 February 2008 confirmed that his case against Taylor & Scott had resolved in accordance with his instructions. [12]

    10. CB 343.

    11. CB 344.

    12. CB 345.

13. The plaintiff appears to assert that the proceedings were either settled without his instructions, and/or settled without regard to the whole of his loss. Any loss suffered by the plaintiff in respect of the Taylor & Scott claim arose on 4 February 2008, which required the plaintiff to commence proceedings no later than 4 February 2014.

The Employers Mutual Limited Claim[13]

13. CB 47; [4].

14. The Employers Mutual Limited Claim arises out of an incident which occurred in 1999. [14] The associated claim was resolved on 23 October 2009. [15] The plaintiff appears to assert that the defendants were negligent in not pursuing a separate claim for additional damages against Employers Mutual.

    14. CB 347-351.

    15. CB 354.

15. Any loss suffered by the plaintiff arose when he entered into the settlement on 23 October 2009. Accordingly, he was required to commence proceedings against the defendants no later than 23 October 2015.

The unethical behaviour claim[16]

16. CB 46; [3].

16. The plaintiff pleads a claim of “unethical behaviour” by reference to correspondence with one of the defendants, Mr Potts. The precise nature of the plaintiff’s claim is not clear. It appears to have been the subject of a complaint to the Legal Services Commissioner which I infer was dismissed.

17. Bearing in mind the terms in which it has been pleaded, any loss occurred, at the latest, on 4 August 2009, requiring the plaintiff to commence proceedings by 4 August 2015.

The CRS Australia Claim[17]

17. CB 48; [6].

18. Although not entirely clear, the plaintiff appears to assert that the defendants were negligent in failing to pursue a case against CRS Australia based upon documentary material that had been provided to them. Given the terms in which this cause of action is pleaded, all such material was provided by the plaintiff to the defendants by 4 March 2004 at the latest. Any proceedings against CRS would have been required to be commenced by 4 March 2007. [18] Any loss arising from the defendant’s failure to commence proceedings against CRS occurred on that date, such that the plaintiff had until 4 March 2013 to commence proceedings against the defendants for the failure to pursue that claim.

The Stenning claim and the Steward claim [19]

18. Section 50C(1)(a) of the LA.

19. CB 49; [7]-[8].

19. The plaintiff’s case appears to be that the defendants were negligent in failing to pursue claims for damages on his behalf arising out of surgery performed by Dr Stenning in January 2000 and Dr Steward in April 2001. Any proceedings against Dr Stenning would have been required to be commenced by January 2003. [20] Any proceedings against Dr Steward would have been required to be commenced by April 2004. [21] Any proceedings against the defendants would have been required to be commenced by January 2009 and April 2010 respectively.

THE PLAINTIFF’S ASSERTED DISABILITY

20. Section 50C(1)(a) of the LA.

21. Section 50C(1)(a) of the LA.

The statutory provisions

20. In answer to the defendants’ assertion that his various claims against them are statute barred, the plaintiff asserts that he was under a disability over the relevant period of time. In that regard, s 11(3)(b) of the LA is in the following terms:

11 Definitions

…

(3) For the purposes of this Act a person is under a disability:

(a) …

(b) while the person is, for a continuous period of twenty-eight days or upwards, incapable of, or substantially impeded in, the management of his or her affairs in relation to the cause of action in respect of the limitation period for which the question arises, by reason of:

(i) any disease or any impairment of his or her physical or mental condition,

(ii) restraint of his or her person, lawful or unlawful, including detention or custody under the Mental Health Act 1958,

(iii) war or warlike operations, or

(iv) circumstances arising out of war or warlike operations.

21. Section 52 of the LA is in the following terms:

52 Disability

(1) Subject to subsections (2) and (3) and subject to section 53, where:

(a) a person has a cause of action,

(b) the limitation period fixed by this Act for the cause of action has commenced to run, and

(c) the person is under a disability,

in that case:

(d) the running of the limitation period is suspended for the duration of the disability, and

(e) if, but for this paragraph, the limitation period would expire before the lapse of three years after:

(i) the date on which the person last (before the expiration of the limitation period) ceases to be under a disability, or

(ii) the date of the person's death,

(whichever date is the earlier), the limitation period is extended so as to expire three years after the earlier of those dates.

(2) This section applies whenever a person is under a disability, whether or not the person is under the same or another disability at any time during the limitation period.

(3) This section does not apply to a cause of action to recover a penalty or forfeiture or sum by way of penalty or forfeiture, except where the person having the cause of action is an aggrieved party.

The evidence

22. A series of ambulance reports document attendances by ambulance officers on the plaintiff between June and December 2011. [22] Those reports refer to the plaintiff suffering from (inter alia) anxiety, TIAs (Transient Ischemic Attacks) and stress. The plaintiff was not admitted to hospital as a consequence of any of those attendances.

    22. CB 175-180.

23. A report of Dean Harrison, Psychologist, dated 26 August 2020 was obtained by the plaintiff for the purposes of these proceedings. [23] The report included the following observations made by Mr Harrison at the time of the plaintiff’s presentation on 18 July 2020:[24]

He appeared tense and agitated. He was cooperative. His affect was limited in reactivity and range. His mood was anxious and angry. He was open and spoke freely. Speech was fluent, fast and garrulous. Perception was unremarkable. Thought content was appropriate although interpersonal sensitivity and a lack of trust of others was evident. Thought processes were unremarkable although focused on his pain and suffering. He was alert and well orientated to time and place. He reported some gaps in memory over several years but was otherwise unremarkable. Judgement and insight were unimpaired.

23. CB 268; [2].

24. CB 269; [21].

24. Mr Harrison noted the contents of a letter from Dr John King, Neurologist, of 17 May 2016 who had reported that the plaintiff had informed him that he had suffered from Post-Traumatic Stress Disorder since 1999 which “caused his divorce". [25] Mr Harrison did not undertake an assessment of the plaintiff's cognitive functioning as he did not consider it to be relevant. [26] He did, however, administer testing and found that the plaintiff had recorded inconsistent responses to questions asked. [27] He also found that there were indications that the plaintiff had “endorsed items that present an unfavourable impression or represented particularly bizarre and unlikely symptoms”. [28]

    25. CB 278; [85].

    26. CB 281; [109].

    27. CB 282; [114].

    28. CB 282; [116].

25. Mr Harrison ultimately diagnosed the plaintiff as suffering from Post-Traumatic Stress Disorder[29] and also noted a history of depression. [30] He concluded that on the evidence which was available to him, the plaintiff had complied with, and engaged in, all treatment recommendations. [31] Significantly, Mr Harrison also expressed the view that the plaintiff had “persevered” despite his functional limitations and chronic pain, a circumstance which Mr Harrison regarded as a “testament to [the plaintiff’s] resiliency”. [32]

    29. CB 289; [139]; CB 297; [170].

    30. CB 297; [168].

    31. CB 294; [153].

    32. CB 297; [166].

26. Also in evidence are a series of reports of Dr McGrath, Neurologist, to whom the plaintiff was referred by his General Practitioner, Dr Arif. The plaintiff saw Dr McGrath complaining of myoclonic jerks. In his first report of 12 April 2018, Dr McGrath noted a history that a relationship breakdown in 2006 had caused the plaintiff to have symptoms of Post-Traumatic Stress Disorder. [33] He concluded that there was very little likelihood that the plaintiff’s complaints were in the nature of epileptic seizures. [34]

    33. CB 72.

    34. CB 73.

27. In a report of 31 May 2018 following an examination on the same day, Dr McGrath commented that it was very difficult to determine whether the plaintiff’s complaints were epileptiform or of spinal origin. He prescribed Lamotrigine. [35]

    35. CB 70.

28. In a report of 8 January 2019 following an examination on the same day, Dr McGrath reported that the plaintiff’s consciousness was not disturbed and that he was “feeling a lot better” with Lamotrigine which he noted worked “well for his mood”. [36]

    36. CB 69.

29. A final report of Dr McGrath of 25 February 2020 following an examination on the same day noted that the Lamotrigine had produced “good effect”. [37] Dr McGrath also noted that although the plaintiff had reported significant depression, it was “nothing as bad as it was in 1999 following his injury where he was unable to get out of bed”. [38]

    37. CB 68.

    38. CB 68.

30. Exhibit CS2 to the affidavit of Chetan Shukla of 5 June 2020 annexes correspondence sent from the defendants to the plaintiff in relation to the various matters in respect of which the defendants were acting for him. [39] That correspondence was generated during the period 1 October 2003 to 27 October 2009. It establishes that during that period, the plaintiff was engaging with his lawyers, attending conferences, and providing instructions in relation to his various matters. [40]

SUBMISSIONS OF THE PARTIES

39. CB 337.

40. CB 338-354.

Submissions of the plaintiff

31. The essence of the submission advanced by the plaintiff in respect of each of his proposed causes of action was that the running of the applicable limitation period had been suspended because of his disability. As I understood it, that disability was said to manifest itself in Depression, Post-Traumatic Stress Disorder, and Epilepsy. The plaintiff stressed that he had been the recipient of a disability pension for a considerable period, and said that he had been “mentally ill" for 20 years.

32. The plaintiff denied that he had been capable of managing his own affairs, at least from January 2000 onwards. He submitted that his family had “disowned" him on the basis that he was mentally ill. He also asserted that he did not leave his house for a period of five years between 2009 and 2014.

Submissions of the defendants

33. Counsel for the defendants submitted that all of the causes of action which the plaintiff sought to bring were fundamentally defective because each had been commenced well after the expiration of the applicable limited period. In advancing that submission, counsel for the defendants acknowledged those authorities which make it clear that when dealing with an application for summary dismissal based upon a failure to commence proceedings within an applicable limitation period, particular caution must be taken. However, counsel submitted that the position in respect of the limitation periods in the present case was clear.

34. Counsel for the defendants further submitted that the evidence did not establish that the plaintiff was under any disability at any relevant time, notwithstanding the diagnoses to which reference had been made in the various medical reports. It was submitted that quite apart from the fact that the medical evidence did not establish the existence of a disability at the relevant time, there was objective evidence which made it clear that the plaintiff had been consistently capable of managing his affairs and was not disabled in the relevant sense.

CONSIDERATION

35. It is appropriate to address the defendant's motion for dismissal of the proceedings in the first instance. If I conclude that the orders sought by the defendant should be made, the plaintiff's notice of motion for default judgment will be rendered otiose.

36. The defendants seek an order pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) which is in the following terms:

13.4 Frivolous and vexatious proceedings

(1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings—

(a) the proceedings are frivolous or vexatious, or

(b) no reasonable cause of action is disclosed, or

(c) the proceedings are an abuse of the process of the court,

the court may order that the proceedings be dismissed generally or in relation to that claim.

(2) The court may receive evidence on the hearing of an application for an order under subrule (1).

37. It is well established that the power conferred by r 13.4 can only be exercised in circumstances where the Court is clearly satisfied that the plaintiff's claim is bound to fail. Whilst the test to be applied has been expressed in a number of different ways, the point to be emphasised is that the circumstances must be very clear to justify the summary intervention of the Court to prevent a plaintiff from submitting his or her case for determination. If it appears that there is a real question to be determined, then it is not appropriate for the Court to exercise the power conferred by the rule and dismiss the proceedings. [41] In the present case, the defendants submit that I should exercise such power on the basis that none of the plaintiff's causes of action can succeed because they are statute barred. The power to summarily dismiss proceedings in those circumstances must only be exercised where the position in relation to the limitation question is clear. [42]

    41. General Steel Industries Inc v Commissioner for Railways (NSW) & ors (1964) 112 CLR 125; [1964] HCA 69 at 128-129 per Barwick CJ, citing Dey v Victorian Railways Commissioners (1949) 78 CLR 62; [1949] HCA 1 at 91 per Dixon J (as his Honour then was).

    42. Wardley Australia Limited and anor. v State of Western Australia (1992) 175 CLR 514; [1992] HCA 55 at 533.

37. I have previously set out the provisions of s 11(3)(b) of the LA. [43] The plaintiff is obviously relying upon s 11(3)(b)(i). The word “substantially" which is used in the section has been the subject of judicial consideration.

    43. At [20].

38. In Kotulski v Attard [44] Slattery J took the view that the word “substantially" did not mean trivial or minimal, but at the same time it did not mean total.

    44. [1981] 1 NSWLR 115 at 117.

39. Subsequently, in Guthrie v Spence [45] Campbell JA observed:

[144] While I would not disagree with Slattery J’s view in Kotulski at 117 that in section 11(3)(b) “substantially” “does not mean trivial or minimal, neither does it mean total”, that still leaves open a wide range within which “substantially impeded” might fall. I do not read Slattery J as saying that falling anywhere within that range would suffice.

45. (2009) 78 NSWLR 225; [2009] NSWCA 369 at [144].

41. His Honour then said: [46]

[152] In the present context, whether the plaintiff has been “substantially” impeded is decided bearing in mind the context and purpose for which the court is called on to make the decision. It is for the purpose of deciding whether an as-of-right suspension of a limitation period will arise. It needs to be an impediment that has interfered with the ability of the plaintiff to commence the action within time to an extent sufficient to warrant the suspension of the limitation period.

[153] It is not as though there is a single theme that can be perceived in subparas (i)–(iv) of section 11(3)(b) that could provide assistance in reaching that conclusion. The matters in subparas (i) and (ii) are often matters that are outside the control of the person in question, but not always – something within subpara (i) could arise from deliberately carrying out an activity that had a risk of impairing the person, and being imprisoned could be an indirect consequence of a deliberate decision to commit a crime. Further, subparas (iii) and (iv) would be available to a volunteer soldier as well as to someone involuntarily caught up in a war or its consequences. In situations where there has been more than one contributing cause to the plaintiff failing to start the action within what would otherwise have been the correct limitation period, a court deciding whether the plaintiff has been “substantially impeded” by one of the matters in subparas (i)–(iv) is required to assess the significance that the particular cause that falls within subparas (i)–(iv) has had in the plaintiff’s failure to start the action earlier.

46. At [152]-[153].

42. In terms of a person having the capacity to manage his or her affairs, Campbell JA said: [47]

[140] In the context in which it occurs in section 11(3)(b), the relevant “affairs” are ones in relation to a particular cause of action. In a general sense, managing one’s affairs in relation to a particular cause of action includes doing the various things that would need to be done if that cause of action were to be dealt with. Thus, it includes seeking advice about whether a civil remedy exists for some perceived wrong, seeking advice about the difficulties, risks, cost and effort involved in pursuing any such remedy and the likely returns, comprehending and evaluating that advice, and, if the decision to commence proceedings is taken, thereafter engaging in the continuing process of co-operation, interaction and decision-making that exists between lawyer and client in running any civil action.

47. At [140]

43. Mindful of the constraints applicable to the exercise of the power conferred by r 13.4, I am nevertheless satisfied that the relief sought by the defendants should be granted.

44. To begin with, and leaving aside any limitation issue, the 1999 back injury claim is plainly untenable, given that the defendants did not act for the plaintiff in relation to it. The unethical behaviour claim, again leaving aside any limitation issue, is also untenable. The terms in which that claim has been pleaded in the latest iteration of the statement of claim do not disclose any cause of action whatsoever.

45. The remaining causes of action sought to be brought by the plaintiff against the defendants are clearly statute barred. In the circumstances I have set out, the plaintiff was required to bring proceedings by various dates between January 2009 and October 2015.

46. It is necessary to emphasise that when the LA speaks of a person being under a disability, it does so (in the circumstances of the present case) in the specific sense set out in s 11(3)(b)(i). The plaintiff’s bare assertion that he has been “disabled” since 2000 is deserving of little weight in the absence of evidence to support it. Even if it is accepted that the plaintiff has been in receipt of a disability pension for all, or even some, of the relevant time, it does not follow from that fact that he has been disabled in the relevant sense.

47. The medical evidence to which I have referred, and upon which the plaintiff relies, falls substantially short of establishing a disability of the kind contemplated by the LA. Neither the ambulance reports, nor the reports of Dr McGrath and Mr Harrison, establish that the applicant was either incapable of, or substantially impeded in, the management of his affairs in relation to the causes of action in respect of which he seeks to bring proceedings.

48. To the extent that the plaintiff asserts that he was under a disability by reason of an epileptic condition, it was Dr McGrath’s opinion that there was little likelihood that the plaintiff’s complaints were in the nature of epileptic seizures. Dr McGrath’s reference to the plaintiff suffering Post-Traumatic Stress Disorder in 2006 was not an expression of opinion, but a recounting of the history which the plaintiff had provided. The same is the case with Dr McGrath’s reference to the plaintiff’s depression. Even if such references were construed as diagnoses (a construction which is not reasonably open) there is no evidence that the plaintiff was, as a result, disabled in the manner contemplated by s 11(3)(b)(i).

49. For similar reasons, the opinions expressed by Mr Harrison (which followed a single examination conducted in 2020) provide no support for a conclusion that the plaintiff was disabled at the relevant time. Although Mr Harrison diagnosed the plaintiff as suffering from Post-Traumatic Stress Disorder, such diagnosis was reached in 2020. Mr Harrison’s report provides no support for a conclusion that the plaintiff was disabled at the material time. Indeed, the observations of Mr Harrison that the plaintiff “persevered” tend against a conclusion that the plaintiff was incapable of managing his affairs.

50. Finally, the correspondence which passed between the plaintiff and the defendants and which is in evidence tends completely against the proposition that the plaintiff was incapable of managing his affairs during the period over which that correspondence was generated. On the contrary, that correspondence demonstrates that during the period 2003-2009, the plaintiff was engaging with the defendants by attending conferences, attending hearings and providing instructions in relation to several separate sets of proceedings. Whilst I accept that such period predates that in which the plaintiff was required to commence proceedings against the defendants, the correspondence remains relevant. It tends completely against the plaintiff’s uncorroborated assertion that he has been mentally ill for the past 20 years.

51. For these reasons, an order dismissing the proceedings should be made.

52. In those circumstances, the plaintiff's notice of motion must fail. However, I should add that the order sought in that motion is misconceived in any event. The various claims which the plaintiff has sought to bring are not, on any view, liquidated claims. They are therefore not amenable to an order for entry of default judgment. [48]

    48. Rule 16.6.

ORDERS

53. I make the following orders:

1. The proceedings are dismissed.

2. The question of costs is reserved.

3. In the absence of agreement as to costs, I direct the parties to file written submissions with my Associate, not exceeding two pages in length, by 1 February 2021.

**********

Endnotes

Decision last updated: 18 December 2020