Minh v Van Lil No. DCCIV-00-473

[2002] SADC 139

MINH v VAN LIL

[2002] SADC 139

Judge Lunn
Civil

REASONS ON APPEAL AGAINST MASTER’S ORDER REINSTATING THE ACTION

1. On 15 April 1997 the plaintiff was involved in a motor vehicle accident. He alleges that he was sitting in his stationary motor vehicle at Wingfield when it was hit from the rear by a motor vehicle driven by the defendant. That allegation has not been put in issue by the defendant. In August 1997 he instructed the legal firm of Andersons to represent him in a claim for damages for injuries which he alleged he had received in the accident. Andersons were already acting for him in a claim for injuries received in an earlier motor vehicle accident which had occurred on 24 September 1995.  That claim was settled on 29 May 1998. On 26 August 1997 Andersons wrote to the State Government Insurance Commission (“SGIC”) giving it notice of the plaintiff’s proposed claim for damages arising out of the 1977 accident. On 27 October 1997 SGIC wrote to Andersons stating it had received a report of the accident from the insured and requesting further information about the plaintiff’s claim. On 31 August 1998 Gun & Davey, lawyers acting for SGIC, wrote to Andersons informing them they were acting in relation to the claim. On 6 May 1999 there was a medical examination of the plaintiff by Mr Eriksen which was arranged by Gun & Davey. I infer the plaintiff attended at that examination and Gun & Davey received a report from Mr Eriksen. In October 1999 the solicitor in Andersons who had been handling the file left the firm. It was taken over by another solicitor who also left the firm in February 2000. The matter was then taken over in Andersons by the solicitor who now has the conduct of the matter. That solicitor saw the plaintiff for the first time on 29 February 2000 and obtained instructions to issue a summons.

2. The summons was issued on 13 April 2000. On 26 April 2000 Andersons wrote to Gun & Davey enclosing the summons and requesting that they accept service. On 3 May 2000 Gun & Davey wrote to Andersons returning the summons. They indicated they were unable to accept service and that their instructions had been terminated. On 22 May Ward & Partners (now Hunt & Hunt) informed Andersons that they were acting for SGIC and reiterating that the summons should be served personally on the defendant.  On 28 June Ward & Partners wrote to Andersons making an offer in settlement.  (The terms of the offer are included in the documents exhibited to an affidavit by the plaintiff’s solicitor but those terms should not have been put before the Court.  I ignore them.)  Andersons did not then inform the plaintiff of the offer or obtain instructions about it.  No response was made to it.

3. On 12 July 2000 the solicitor then handling the matter in Andersons attended at the address shown for the defendant in the summons.  He had with him a Vietnamese interpreter who spoke to a woman at the house who said she was the wife of the defendant.  She said the defendant was not at home but she would hand the summons to him and ensure that it was sent to SGIC.  It is not now suggested that this was effective personal service of the summons on the defendant.  No further attempt was made to serve the summons.  No affidavit of service was filed.

4. Shortly after 12 July the solicitor then handling the matter in Andersons ceased active involvement in the matter expecting that it would be taken over by another solicitor.  A Vietnamese paralegal who had some involvement in the matter placed the file relating to this matter in a box of files for other matters relating to the plaintiff.  Subsequently correspondence from the Court and Ward & Partners relating to this action was placed into that box without any action being taken in relation to it.

5. On 14 July 2000 the Court sent to Andersons a notice of intention to enter the action into the list of inactive cases pursuant to R10.06(1).  

6. On 15 and 17 August 2000 a solicitor in Ward & Partners rang the solicitor in Andersons who had been handling the matter but her calls were not returned.  On 18 August 2000 that solicitor wrote to Andersons inquiring whether service had been effected, referring to the notice of intention to place the matter into the list of inactive actions and inquiring whether the plaintiff was intending to proceed with the claim.  On 5 October 2000 that solicitor again telephoned Andersons about the matter, but there was no response to her request for the solicitor to return her call.  On 27 October 2000 the court sent a notice to Andersons stating that the matter had been dismissed under R10.06(5) for want of prosecution.  On 12 December 2000 Ward & Partners wrote to Andersons referring to the dismissal of the action and seeking confirmation that the plaintiff was no longer pursuing the claim.  There was no response.  On 6 February 2001 Ward & Partners closed its file.

7. From 12 May 2000 until 18 December 2001 there was no communication between the plaintiff and Andersons concerning this claim.  In about December 2000 the plaintiff had apparently spoken to the Vietnamese paralegal employed by Andersons but he did not depose whether anything was then said about this action.  The plaintiff believed Andersons were dealing with the claim on his behalf.  The delay did not concern him as his previous claim had taken a long time to finalise.

8. On 16 December 2001 the solicitor now handling the matter in Andersons came across the papers relating to the dismissal of the action which were in the box mentioned earlier while he was looking for documents relating to another matter.  On 18 December he wrote to the plaintiff informing him of the offer made in June 2000.  The plaintiff did not see the solicitor until 23^rd February 2002 as he had been incapacitated for some time due to another injury.  In the meantime on 8 January 2002 Andersons had issued an application to seek the reinstatement of the action.  By a letter of 9 January 2002 to Hunt & Hunt  Andersons informed them that the claim was being pursued.  On 15 February 2002 Hunt and Hunt filed a notice of acting, but not an appearance, in this action.

9. On 5 August 2002 after a contested hearing a Master made, inter alia, the following orders:

   “1.   .... I order that the action be reinstated pursuant to DCR 10.06(6).

   2.the plaintiff’s solicitors will pay the defendant’s costs thrown away as a result of the delays occasioned by their default.  They will also pay the costs of an incidental to the application.

   3.The defendant’s solicitors are entitled to payment of their costs on an indemnity basis.

   3.1The defendant’s solicitors are at liberty to seek directions as to the manner in which the costs will be taxed.  At this stage it will not be necessary to prepare a short form or long form bill.

   4.The plaintiff’s solicitors are to have no costs on the claim from the date of the issue of proceedings until after the date of this order.

   5.Any interest on the claim from 14 July 2000 to the date of this order if calculated by the trial judge, is not payable by the defendant.

   5.1The plaintiff’s solicitors are to acknowledge that any interest payment will be made by them for the period referred to.  This will have to be raised with the trial judge.

   6.Defence to be filed within 21 days of these Reasons.

   ....”.

10. By a notice of appeal dated 20 August 2002 the defendant has appealed against the reinstatement of the action on grounds that there were no special or exceptional circumstances as required by DCR 10.06(6) which justified the reinstatement of the action.  As it is an appeal against an interlocutory order under DCR 97.01 the appeal is by way of rehearing, and insofar as the application requires the exercise of a discretion under R10.06(6) I am to exercise the discretion myself without regard to the manner in which it had been exercised by the Master. 

11. The notice of appeal also complained of the order in paragraph 6 that the defence be filed within 21 days.  The defendant contended that the plaintiff should first have to serve the defendant personally before there was any obligation on him to file any document.  In the course of argument I raised R21.07 with the defendant’s counsel which provides:

    “21.07 Except with the leave of the Court no person other than a plaintiff shall be heard ... on any application, unless he has first filed an appearance”.

    The defendant did not take up my invitation to seek leave under R21.07 and he is filing an appearance.  By R12.01(d) the summons is deemed to have been served once an appearance is filed.

12. R10.06(6) provides:

    “Where an action has been dismissed by the operation of clause (5) hereof the Court may reinstate the action in special or exceptional circumstances”.

    This involves a threshold determination that there are “special or exceptional circumstances” which are causally related to the action having been struck out.  Here it is sufficient to consider whether the plaintiff has made out “special circumstances”.  It is not necessary to go into what, if anything, is meant by “exceptional circumstances” which are not also special circumstances.  If “special circumstances” are established, it is then necessary to consider whether in all of the relevant circumstances the judicial discretion should be exercised to reinstate the action.

13. The term “special circumstances” has no precise meaning.   As to the various authorities on its meaning in different contexts, see “Civil Procedure SA” paragraphs R55.09.5, R67.01.45 and R95.11.10; R v Simpson (2001) 126 A Crim R 525 at 543-5. The most recent decision in this State on what can constitute “special circumstances” is Carlin v Mladenovic Full Court, 13 March 2002, Judgment No. 2002 [SASC] 90, unreported.  That case dealt with R95.11(3)(a) of the Supreme Court Rules which only allowed the time for setting down an appeal to the Full Court, which had already expired, to be extended where there were “special circumstances”.  There the failure to set down the appeal within time was entirely the fault of the solicitor and the appellant personally was blameless.  In holding the necessary “special circumstances” had been established, and that the necessary extension of time should be granted, the Full Court referred three factors only, being the inexcusable conduct of the solicitor, the blamelessness of the appellant personally and that the proposed appeal was “not without merit”.  Although the Full Court did not discuss any definition of “special circumstances”, it is implicit in its decision that the three factors mentioned were there sufficient to constitute the necessary “special circumstances”.

14. On the facts of this case it was the conduct of Andersons which was the sole cause of the action being struck out under R10.06(5).  They have not sought to argue to the contrary.

15. On the evidence before the Court the plaintiff personally is blameless in the action being struck out.  While his affidavit is sketchy there is nothing in it which shows that he personally was aware, or should have been aware, that Andersons were not doing all that was necessary to prosecute the claim.  The defendant did not seek to have the plaintiff cross examined on his affidavit.  The fact that he had not heard from Andersons for 18 months did not place any onus on him to take any further steps for the prosecution of his claim.  His experience in a previous claim had been that there had been substantial delays in a similar legal process.

16. The plaintiff’s claim is “not without merit”.  His car was hit from the rear while stationary which would usually mean he could expect to recover the whole of his damages.  The accident was reported to SGIC by its insured.  It has not sought to adduce any evidence that the circumstances of the accident differ significantly from those alleged by the plaintiff.

17. Accordingly, the same three factors which led the Full Court to find “special circumstances” established in Carlin v Mladenovic also all exist in this matter.  While decisions are not binding precedents on their facts, nevertheless it would be incongruous,  and contrary to the proper administration of justice, for “special circumstances” not to be found on the facts of this matter when they were found to exist in Carlin v Mladenovic.  If the defendant wants to challenge the finding of “special circumstances” in this matter, he will have to persuade the Full Court to review what I have considered implicit about “special circumstances” in Carlin v Mladenovic.

18. There is earlier authority that the default of the party’s solicitor is not necessarily in itself “special circumstances”: Ryan v Becker Burley J, 29.6.92, Judgment No. S3491, unreported; Whelan v McMahon Lander J 4.5.95 Judgment No. S5061, unreported.  In combination with the other factors identified in Carlin v Mladenovic it would seem it must be special circumstances.  There are many authorities in similar contexts involving the exercise of a discretion to overcome a default that a party will not usually have to bear the consequences of the default where it was caused by a properly instructed solicitor: Langanis v Roberts Mullighan J, 15/7/93, S4043, unreported; Rem v Kargas Nyland J, 30/3/94, S4483, unreported; Mortimer v State of SA Gray J 9/3/01, [2002] SASC 37, unreported; John Tanner v Groth Olsson J, 31/1/91, S2697, unreported.

19. There is no mention in the Full Court decision in Carlin v Mladenovic, or in a number of the other cases, of the plaintiff’s undoubted right to recover his loss from his solicitors if the action was not reinstated as being a relevant factor.  In the analogous jurisdiction of striking out actions for want of prosecution there have been various views expressed about this factor; Ulowski v Miller [1968] SASR 277; McKenna v McKenna [1984] VR 665; Birkett v James [1978] AC 297; Williams v F S Evans & Sons (1988) 52 SASR 237. The defendant’s counsel did not rely upon it here. I assume that if it was a material factor it would have been expressly dealt with in Carlin v Mladenovic.

20. Even with special circumstances having been established it is also necessary to consider whether on all the relevant circumstances it is proper to exercise the judicial discretion to reinstate the action. If the action is not reinstated the plaintiff is apparently deprived of his claim against the defendant as there is no apparent basis for him to seek an extension of time under S48 of the Limitation of Actions Act now to commence another action against the defendant. This is particularly significant if his potential claim against Andersons is not a relevant factor. Even if it is a relevant factor he is likely to suffer some prejudice in delay and in additional legal costs in pursuing that claim.

21. The defendant’s counsel submitted that the defendant had suffered prejudice from the delay which is a factor weighing against the plaintiff succeeding.  I do not accept that any such actual prejudice to the defendant has been established on the balance of probabilities.   The defendant has not put forward any evidence about the reporting of the accident by the insured of the car being driven by the defendant.  (I infer from the different names on some of the correspondence from SGIC that the registered owner of the car driven by the defendant was not the defendant.)  There is no evidence of what the defendant’s wife did with the summons which was given to her on 12 July 2000.  The defendant has not disclosed what inquiries and investigations were made by him or on his behalf to prepare to defend a potential claim arising out of the accident.  No medical evidence has been put forward to suggest that if the action had not been struck out in October 2000, the defendant would have been likely to have taken any steps which might have better prepared him to answer the claim for damages.  Actual prejudice is not to be assumed or imputed merely because of delay: Trattonicolas v Schafer (1983) 106 LSJS 50. I am not satisfied that there has been significant prejudice to the defendant in defending the claim arising from the plaintiff’s delay. On all the relevant factors it is proper to exercise the Court’s discretion in favour of the plaintiff to reinstate the action. Accordingly the appeal is dismissed.

22. At the hearing of the appeal I raised the validity and propriety of paragraph 5 of the Master’s order which directed that any interest on the claim from 14 July 2000 to 5 August 2002 was not to be payable by the defendant. The Master had no power to make this order. Under S39(1) of the District Court Act the assessment of pre-judgment interest is solely in the province of the trial Judge. No other Judge or Master on an interlocutory order can restrict how the trial Judge assesses that interest. The trial Judge is entitled to make his or her own assessment of what, if any, consequence delays by the plaintiff should have on his entitlement to pre-judgment interest for any period of delay. The only reported authority I am aware of on the point is Matusiewicz v Matusiewicz (1979) 84 LSJS 303, which did not decide the question of jurisdiction but said the practice was generally undesirable. However, there have certainly been instances in the Supreme Court of Judges there on the equivalent S30c of the Supreme Court Act refusing to accept interlocutory orders of Masters purporting to confine a plaintiff’s right to pre- judgment interest.