Mirkazemi v Manns
[2009] TASSC 91
•14 October 2009
[2009] TASSC 91
COURT: SUPREME COURT OF TASMANIA
CITATION: Mirkazemi v Manns [2009] TASSC 91
PARTIES: MIRKAZEMI, Monna by her Litigation Guardian
Pedram Mirkazemi
v
MANNS, STEPHEN
McGRATH, Alby William Michael
MIRKAZEMI, Pedram
v
MANNS, Stephen
McGRATH, Alby William Michael
FILE NO/S: 895/2001 and 156/2003
DELIVERED ON: 14 October 2009
DELIVERED AT: Hobart
HEARING DATE: 30 September and 1 October 2009
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Procedure – Supreme Court Procedure – Tasmania – Practice under Rules of Court – Amendments – Statement of claim – Amendment introducing statute barred cause of action – Exercise of discretion – Relevant considerations.
Aon Risk Services Australia Limited v Australian National University (2009) HCA 27 referred to.
Supreme Court Rules 2000 (Tas), r427.
Aust Dig Procedure [276]
REPRESENTATION:
Counsel:
Plaintiffs: L K Mackey
Defendants: K E Read
Solicitors:
Plaintiffs: Ogilvie Jennings
Defendants: Hunt & Hunt
Judgment Number: [2009] TASSC 91
Number of paragraphs: 35
Serial No 91/2009
File No's 895/2001 & 156/2003
MONNA MIRKAZEMI by her Litigation Guardian PEDRAM MIRKAZEMI v STEPHEN MANNS and ALBY WILLIAM MICHAEL McGRATH
PEDRAM MIRKAZEMI v STEPHEN MANNS and
ALBY WILLIAM MICHAEL McGRATH
REASONS FOR JUDGMENT HOLT AsJ
14 October 2009
The application
This is an application for an order consolidating two actions in which damages for personal injury arising out of the same motor vehicle accident are claimed. There is also an application for leave to amend by adding the following paragraphs to what will be the statement of claim in the consolidated action:
"18At all material times and prior to the death of the deceased wife and mother the First and Second named Plaintiffs were dependent on the deceased wife and mother.
19The First and Second named Plaintiffs make claim against the First and Second named Defendants pursuant to the Fatal Accidents Act for their loss of dependency resulting from the death of the deceased wife and mother.
PARTICULARS FATAL ACCIDENTS CLAIM
To be provided."
The circumstances leading to the making of the application
Pedram Mirkazemi's 36 year old wife and 13 year old son were killed in a motor vehicle accident on Procters Road, Dynnyrne, on the afternoon of 14 December 2000. The couple's five year old daughter, Monna, was seriously injured. Mrs Mirkazemi's car was hit by a furniture removalist's truck, control of which had been lost as it came down the hill. Mrs Mirkazemi had been the major income earner in the household. She was a pharmacist and the sole proprietor of the business Magnet Court Chemmart. She had an annual income of about $100,000 per year. Mr Mirkazemi's income was about $20,000 to $30,000 per year.
Mr Mirkazemi promptly engaged a solicitor. He met with his lawyer on 3 January 2001 and instructions were issued to pursue all available avenues for compensation. On 7 February 2001 the solicitor wrote to the defendants' insurer. The letter included the following:
"As a result of this accident Soheila Mirkazemi was killed and I have instructions to make a claim on behalf of her spouse Pedram Mirkazemi. This claim will be based on two courses [sic] of action:
i The nervous shock that this tragedy has inflicted upon Mr Mirkazemi;
iiA dependency claim based on Mrs Mirkazemi's position as the chief income earner in the family.
My client's young daughter Monna also has been very badly injured in the same accident and it may be that she is left with permanent paralysis but this is still to be ascertained. It is likely that a very substantial claim will be made on her behalf."
The reference in the letter to a dependency claim is a reference to proceedings under the Fatal Accidents Act 1934 ("the Act"). Under the Act where death has occurred as a result of a wrongful act and the injured person would have been entitled to sue and recover damages had death not ensued, the wrongdoer is liable to the members of the family of the deceased for injury suffered by them as a result of the death.
The Limitation Act 1974, s5, provides for a primary limitation period of three years extendable to six years for the bringing of a claim under the Act.
On 1 August 2001 a writ issued on behalf of the injured daughter Monna. The writ was endorsed with a claim "for damages for personal injuries". On 2 April 2003 Mr Mirkazemi issued a writ which, like his daughter's writ, was endorsed with a claim "for damages for personal injuries". Due to the inadvertence of his solicitor the writ did not allege an entitlement to damages under the Act. Mr Mirkazemi had no knowledge of the oversight.
In late 2004 Mr Mirkazemi's lawyer ceased practice as a solicitor and commenced practice solely as a barrister. New solicitors were appointed with the Mirkazemi's original lawyer being retained as counsel. In December 2006 the six year limitation period passed by with no mention of a claim being made under the Act in either action. In March 2007 counsel realised there had been a failure to bring a claim under the Act. He informed the new solicitors, but they said nothing to Mr Mirkazemi about the omission until November 2007. In light of the prospect of Mr Mirkazemi bringing an action for damages for negligence against his solicitors and counsel another firm of solicitors was retained in February 2008. In July 2008 Mr Mirkazemi was advised that he might bring an application to amend his existing proceedings to introduce a claim under the Act. He issued instructions accordingly and the present application was filed on 6 August 2008. There was considerable delay in getting the application ready for hearing. Evidence needed to be obtained explaining the failure to include a claim under the Act and the delay. It took time to secure affidavits from the former solicitors and former counsel. The last of the affidavits was not sworn until September 2009.
The power to amend
The application is brought under the Supreme Court Rules 2000, r427. The rule includes the following:
(1) At any time before judgment, the Court or a judge may grant leave to a party to amend any process or pleading in such a manner and on such terms as may be just.
(2) Subject to subrule (3), the pleadings may be amended as necessary for the purpose of determining the real questions in controversy between the parties.
(2A) The Court or judge, despite the expiry of any relevant limitation period after the day on which proceedings commenced, may grant leave under subrule (1) if it is satisfied that any other party to the proceedings would not, as a result of granting leave, be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.
(3) If, at the trial of a proceeding to which Division 1 of Part 14 applies, an application is made for leave to amend a pleading, the Court or judge, if the amendment would cause the postponement or adjournment of the trial, may refuse the application in order to protect the integrity of the case management system as it is implemented by these rules and to implement the requirement that trials proceed at the appointed time, notwithstanding that any injustice to another party may have been avoided by an order for costs or some other order."
This rule replaced Order 31 r1 of the Rules of the Supreme Court 1965. The old rule was as follows:
"1 The Court or a judge may, at any stage of the proceedings, allow any party to alter or amend the endorsement on his writ or his pleadings, in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties."
As can be seen the rule in its old form made the making of certain amendments mandatory rather than discretionary. The operation of this type of rule was explained by French CJ in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 where he said at par14:
"There is a distinction between the discretion of a court to allow a party to amend its pleading on that party's motion and the requirement to make all such amendments as may be necessary to determine the real questions in controversy. That requirement engages with the authority conferred on the court to make amendments of its own motion. The point was made in 1887 by the Full Court of the Supreme Court of Victoria in Dwyer v O'Mullen (1887) 13 VLR 933 in relation to O XXVIII r 1 of the 1875 Rules. Higinbotham CJ said of the last clause of the rule that it:
'makes an amendment mandatory. The judge is under the obligation of making an amendment, but only for a certain purpose and in certain cases – for the purpose of determining the real question in controversy between the parties – that being expressed in many cases to be the question which the parties had agitated between themselves, and had come to trial upon.'
The position is different where a party seeks to set up, by amendment, a new case at trial Hipgrave v Case (1885) 28 Ch D 356 at 361 per Earl Selborne LC."
The distinction between sub-rules (1) and (2) of r427 is that sub-rule (2) only applies to amendments which are necessary for the purpose of determining the real questions in controversy. It does not apply to other types of amendment including amendments designed to set up a new case.
Although, necessary amendments, like other amendments are discretionary the fact that the two kinds of amendment are dealt with in separate sub-rules indicates that different considerations apply.
The sub-rule (2) type discretion was considered in Commonwealth v Verwayen (1990) 170 CLR 494, where Dawson J said at 456:
"The rules of court have always provided that leave to amend pleadings may be given for the purpose of determining the real question in controversy between the parties … and an amendment should ordinarily be allowed if any harm arising from so doing can be compensated for by the imposition of terms upon the party asking for the amendment: …"
There is no modern practice that amendments which are not necessary for the purpose of determining the real questions in controversy will generally be allowed. In Aon, Gummow, Hayne, Crennan, Kiefel and Bell JJ said at pars 111 – 112:
"An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future.
A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. …"
Further, where an amendment seeks to introduce a new claim after a limitation period has expired, r427(2A) mandates that the discretion to permit the amendment is not enlivened unless the Court or judge "… is satisfied that any other party to the proceedings would not, as a result of granting leave, be prejudiced in the conduct of his or her claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise".
Sub-rule (2A) was introduced to ameliorate the rigidity inherent in the rule of practice referred to in Weldon v Neal (1887) 19 QBD 394. That rule being that new claims could not be introduced by amendment after the expiry of a limitation period except, perhaps, in very peculiar circumstances.
As sub-rule (2A) is concerned with the bringing of claims after a limitation period has expired, the cases regarding the discretion to extend time under limitation legislation provide guidance as to the interpretation to be given to the rule. Upon an application for an extension of time a significant factor in the consideration is the issue of whether the delay would cost the defendant a fair trial. Hill v IlukaCorporation Ltd [2002] TASSC 113. As to the meaning of prejudice in a limitation of actions context "the real question is whether the delay has made the chances of a fair trial unlikely". Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 550. The rule is remedial and so should be given a beneficial interpretation. I interpret the reference in the rule to prejudice in the conduct of the claim or defence to be a reference to material prejudice in the sense that by reason of the delay the chances of a fair trial have become unlikely.
The arguments
The part of the application seeking consolidation was not controversial. The argument concerned the proposed amendment. Counsel for the plaintiffs submitted:
(1)Sufficient facts had already been pleaded to give rise to a cause of action under the Act. The amendments were only necessary to make it clear that a claim under the Act was being pursued. Accordingly, r427(2) applied so that the amendment was within the class of amendments which should ordinarily be allowed.
(2)Even if the amendment introduces a new claim, the defendants will not be prejudiced in the conduct of their defence and so r427(2A) is satisfied and the r427(1) discretion is enlivened. Having regard to all of the circumstances of the case and particularly the lack of prejudice to the defendants the justice of the case calls for an exercise of the discretion favourable to the plaintiffs.
A new cause of action
It was acknowledged on behalf of the plaintiffs that the existing pleadings were not intended to encompass a claim under the Act. But intention is immaterial. This is made clear in Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251 and Air Link Pty Ltd v Paterson (2005) 223 CLR 283. In Agtrack the widow of a man killed in an air crash brought an action for damages against the operator of the aircraft pleaded in negligence and breach of contract. The remedy, however, existed under Part IV of the Civil Aviation (Carriers Liability) Act 1959 (Cth) and not at common law. Gleason CJ, McHugh, Gummow, Hayne and Heydon JJ said at pars42 – 43:
"The analysis by Ormiston JA of the pleadings as they stood by 14 August 1999 demonstrates that, within the two year period, Mrs Hatfield had brought an action in exercise of her right to damages under Pt IV. She was the widow of a passenger who had died as the result of an aircraft accident. She claimed to have suffered damage by reason of the passenger's death and claimed damages from the carrier. The facts alleged in the pleadings showed that Pt IV applied.
Contrary to the submissions by Spring Air, it is unnecessary to show that within this period Mrs Hatfield had it in her mind, or her lawyers had it in their minds, that they were proceeding under Pt IV. …"
It is an element of a cause of action under the Act that injury has resulted to a family member from the death. Section 5 includes the following:
"… in every such action the jury may give such damages as they may think proportioned to the injury resulting from such death to the parties respectively for whom and for whose benefit such action shall be brought …".
The injury referred to in s5 is financial injury resulting from the loss of the chance of a material benefit had the deceased lived. Davies v Taylor (1974) AC 207 at 213.
The only injury referred to in the statement of claim delivered on behalf of Monna is physical injury. The only injury referred to in the statement of claim delivered on behalf of Mr Mirkazemi is psychological injury. In neither action is there an allegation that the mere fact of the death of Mrs Mirkazemi gave rise to any injury. There is no ambiguity. Even if there was, it would be resolved against the contention advanced on behalf of the plaintiffs. The endorsement of claim on each writ is for damages for personal injury only. The endorsement on the writ may be used as an aid to the interpretation of a statement of claim and there is no entitlement to deliver a statement of claim going outside the perimeter of the endorsement. The statement of claim is the specific way of stating the claim endorsed. Renowden v McMullin (1970) 123 CLR 584 at 595 – 596.
The amendment will introduce a new cause of action. No discretion to allow it will arise unless the requirement contained in r427(2A) is met. It must be shown that the grant of leave to amend will not result in the defendants being prejudiced in the conduct of their defence.
Prejudice
Particulars of the proposed claim under the Act have been given to the Court. The only family members on behalf of whom the claim is to be made are Mr Mirkazemi and his daughter Monna. In order to ensure that the particulars are not subsequently expanded to include other family members counsel for the plaintiffs has advised that any grant of leave can be conditioned upon the filing of an undertaking given on behalf of Pedram Mirkazemi not to deliver particulars under the Act, s7, identifying persons other than the plaintiffs as the persons on whose behalf the action is brought. The claim is for the "loss of expectation of the financial and domestic contributions that would have been made by the deceased" to each of them.
As to the benefit that might have been expected from the deceased's income, counsel for the defendants fairly pointed out that there was detailed accounting evidence verifying Mrs Mirkazemi's income and that survey information can provide a reliable basis for the apportionment. He referred to Hanlon v Hanlon [2006] TASSC 1 at par132 where Underwood CJ said:
"There was no detailed evidence of how the deceased's wages were actually spent. Mr Gunson submitted that this meant it was difficult, if not impossible, to make any assessment. With respect to this, Ms Taglieri relied upon the ABS, Household Expenditure Survey 1998 - 1999, Summary of Results, published in Lunz, Assessment of Damages for Personal Injury and Death, 4th ed, at 501. Mr Gunson submitted that I should not have regard to this, absent evidence as to how it was compiled. This submission overlooks the provisions of the Evidence Act 2001, s159, and the observation of McHugh J in De Sales v Ingrilli (2003) 212 CLR 338 at 373 that evidence from this survey was more sophisticated than evidence of actual expenditure from the surviving spouse. In my view, resort to the survey was an entirely appropriate course to follow with respect to this case, and likely to prove a more reliable basis than any figures produced from the plaintiff's memory of what was spent on what six years prior to her giving evidence. The Full Court of Western Australia in De Sales v Ingrilli (2000) 23 WAR 417 approved reliance by the trial judge on the ABS figures, subject only to some modification in the light of specific evidence given in the case. This issue was not the subject of the appeal to the High Court. Recourse to this table was also approved by the New South Wales Court of Appeal in RTA v Cremona [2001] NSWCA 338 See also the cases noted in Luntz at 499, footnote 142."
I conclude that on the issue of financial support the delay will not materially prejudice the defendants in the conduct of their defence.
Counsel for the defendants submitted that the defendants would be prejudiced in responding to the claim for damages in respect of the domestic services which might have been provided by the deceased. He pointed out that with the passage of time the quality of the evidence available is likely to have diminished. The defendants have lost the opportunity to promptly investigate the facts using pre-trial procedures including a request for particulars, interrogation and discovery of documents.
The assessment of the monetary compensation for the lost chance of the provision of domestic services does not call for precision. Exact compensation is not possible for what might have been. Accordingly, the range within which an appropriate award might be made in any particular case is likely to be considerable. This is so even in cases where precise evidence is available as to the level of domestic services which had been provided. In any event, the evidence of the domestic contribution of a deceased's spouse or partner to a home will often come from the survivor with the defendant, regardless of the effluxion of time, having a limited capacity by investigation to verify or refute the information provided.
Having regard to the nature of the assessment I conclude that on the issue of domestic services the delay and the general detriments which result are not such as to cause the defendants any material prejudice in the conduct of the defence.
Other matters necessary to give rise to the cause of action under the Act have already been raised by the pleadings. The primary question of who was at fault for the accident has always been there. The family relationship of the plaintiffs to the deceased has always been there as part of the foundation of Mr Mirkazemi's existing claim for damages for nervous shock.
I am satisfied that the grant of leave to amend will not result in material prejudice in the conduct of the defence. In other words, I am satisfied that delay has not made the chances of a fair trial unlikely. It follows that the discretion conferred by r427(1) is available.
The discretion
Counsel for the defendants has conceded that the proposed amendment raises an arguable claim. I have found that the delay will not materially prejudice the conduct of the defence. There is no trial underway to be adjourned. There is no trial date set down to be vacated. The failure to include a claim under the Act was the result of the neglect of Mr Mirkazemi's legal representatives and not due to a deliberate decision. This is not commercial litigation and so it is not a case where delay will have a detrimental affect on what is described in Aon at par137 as "the institutional framework of commerce".
Against this counsel for the defendants submitted that the failure to bring an action under the Act within time and the subsequent delay has not been fully explained when in the circumstances a full explanation is required. It was submitted that if leave to amend is withheld the plaintiffs will not be left without a remedy. They appear to have a strong case against their former legal representatives. Allowing the claim under the Act to be litigated in this proceeding will deprive the defendants of the time bar under the Limitation Act which otherwise would protect them. There is the public interest in the timely resolution of disputes to be considered. Due weight is to be attached to case management considerations and the efficient use of the public resource provided by the Court. The delay has been lengthy. There is the general deterioration in the quality of justice which results from delay including the adverse impact on the ability to investigate. An order for costs will not fully compensate the defendants in respect of resources applied to the litigation which may turn out to be wasted as a result of an amendment (Aon at par25). If the amendment is refused it is likely that the claim by Mr Mirkazemi can be wrapped up quickly. It is an agreed fact that Mr Mirkazemi has put forward a proposal to settle his personal injuries claim which has been accepted by the defendants subject to the parties entering into satisfactory heads of agreement.
In exercising the discretion all of the circumstances of the case must be considered and weighed in order to determine where the justice of the case lies. Assuming that everything which counsel for the defendants submits in relation to the discretionary features is correct and taking those matters into account I am nonetheless positively persuaded that the justice of the case lies with granting leave to make the amendment sought. This is because, in the circumstances of this case, I attach the greatest weight to the following facts. The proposed new claim substantially overlaps the existing claim and despite the lengthy delay can be litigated without the defendants being materially prejudiced in the conduct of their defence. The failure to bring a timely claim under the Act was not due to a tactical decision. A trial date has not been set. The result is that the balance is tipped in favour of the plaintiffs.
Orders
The consolidation application was not opposed. The proposed amendment to include a claim under the Act will be allowed. The perimeter of the claim as endorsed on the writs will need to be expanded to accommodate the amendment to the pleadings (Renowden v McMullin at 597). Rule 427 allows for the amendment of the originating process even after a limitation period has passed by. As amendment to the pleadings is appropriate so to is amendment of the process.
These will be the orders:
(1) The actions are consolidated.
(2)Action 156/2003 is to proceed as the consolidated action with "Monna Mirkazemi by her litigation guardian Pedram Mirkazemi" added as second plaintiff.
(3)Upon the filing of an undertaking given on behalf of the first plaintiff not to deliver particulars under the Act s7 identifying persons other than the plaintiffs as the persons on whose behalf the action is brought, the first plaintiff in the consolidated action shall have leave to amend the endorsement on the writ by adding a claim under the Fatal Accidents Act 1934 in respect of the death of Soheila Mirkazemi and shall have leave to amend the statement of claim by adding paragraphs 18 and 19 as set out in the application.
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