Norris v Pedder
[2014] TASSC 10
•28 February 2014
[2014] TASSC 10
COURT: SUPREME COURT OF TASMANIA
CITATION: Norris v Pedder [2014] TASSC 10
PARTIES: NORRIS, Robert James
v
PEDDER, John
MOORE, Francis trading as Archer Bushby
FILE NO: 105/2011
DELIVERED ON: 28 February 2014
DELIVERED AT: Hobart
HEARING DATES: 18 December 2013 and 24 February 2014
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Torts – Negligence – Apportionment of responsibility and damages – Principles and mode of apportionment – Negligence causing economic loss – Proportionate liability - Limitation of liability of concurrent wrongdoer – Causation.
Civil Liability Act 2002 (Tas), s13.
Aust Dig Torts [70]
Procedure – Supreme Court Procedure – Tasmania – Practice under Rules of Court – Amendments – Defence – Whether material facts pleaded – Exercise of discretion.
Supreme Court Rules 2000 (Tas), r427.
Aust Dig Procedure [276]
REPRESENTATION:
Counsel:
Plaintiff: W A Ayliffe with L Howroyd (on 24 February 2014)
Defendants: S B McElwaine SC
Solicitors:
Plaintiff: Slater & Gordon
Defendants: Shaun McElwaine + Associates
Judgment Number: [2014] TASSC 10
Number of paragraphs: 45
Serial No 10/2014
File No 105/2011
ROBERT JAMES NORRIS v JOHN PEDDER AND FRANCIS MOORE
trading as ARCHER BUSHBY
REASONS FOR JUDGMENT HOLT AsJ
28 February 2014
The application
The defendants have applied for leave to amend their defence by pleading reliance on the proportionate liability provisions contained in the Civil Liability Act 2002.
The background
It is necessary to set out some background matters.
In the action the plaintiff claims against his former solicitors damages for economic loss suffered as a result of him losing the chance of pursuing a claim for damages for personal injury suffered when he was run over whilst walking along West Tamar Road on 4 November 2004. The primary time limit for bringing the action for damages for personal injury was three years from the date of the accrual of the cause of action. The Limitation Act 1974, s5(1).
The plaintiff had been walking along the vehicular travel way of the road in the early hours of the morning, apparently intoxicated. He was struck from behind by a vehicle travelling in the same direction.
The plaintiff consulted his former solicitors in July 2005. He told his solicitors that he had consumed 12 beers over a five to six hour period before the accident and that at the time he was run over he was walking from the left to the right side of the dual carriageway. The solicitors undertook some investigations. In early November 2005 the solicitors advised the plaintiff that a finding of contributory negligence against him of 25% (on a hypothetical calculation of damages) would result in his award being only about $5,800. An award of damages would terminate the plaintiff's entitlement to continue receiving scheduled benefits in respect of his injury. The advice was incorrect as the solicitors had failed to include in the calculation the scheduled benefits already paid, before deducting the same amount following the reduction by reason of a likely finding of contributory negligence. The plaintiff says that as a result of the incorrect advice he did not instruct his solicitors to commence an action.
The plaintiff engaged new solicitors, almost three years later, in August 2008. By then the primary limitation period had expired. Nonetheless, an action for damages for personal injury was commenced on 2 October 2008. The defendant pleaded the expiry of the limitation period and on 5 March 2009 the plaintiff applied for an order extending the limitation period.
The application for an extension of time was dismissed by Crawford CJ. Norris v McGeachy [2009] TASSC 110. The learned Chief Justice noted that the plaintiff had given no explanation for the delay between receiving the original impugned advice in late 2005 and consulting his new solicitors in August 2008. Further, the plaintiff had given no explanation for the delay between consulting the new solicitors in August 2008 and the filing of his extension of time application in March 2009. In dismissing the application the learned Chief Justice said at par[54]:
"The plaintiff has failed to discharge the onus. I am satisfied that the justice of the case requires that the application be refused for a number of reasons. They are:
1 He was made aware of the time limits in July 2005.
2 He made a conscious decision not to sue and on 4 November 2005 he communicated that decision to his legal practitioner.
3 On 27 January 2006, his legal practitioner formally advised the legal practitioner for the Board, which stood in the shoes of the defendant, that he had decided not to pursue a damages claim. The Board's legal practitioner then closed his file.
4 I infer that relying on that advice, nothing further was done by the Board or its legal practitioner to investigate or consider the plaintiff's common law claim until after his new legal practitioner wrote to the Board's legal practitioner on 15 September 2008 giving notice that there would be an investigation into "a potential common law claim for damages". By that time, the primary limitation period had expired about 10 months' earlier.
5 No explanation has been given by the plaintiff for the passage of time that elapsed between instructing his legal practitioner on 4 November 2005 that he would not sue and consulting another legal practitioner nearly three years' later, notwithstanding that he was aware of time limits.
6 Although of little weight in all the circumstances of the case, no explanation was given for the delay between first instructing his new legal practitioner on 25 August 2008 and making the application to extend time on 5 March 2009.
7 There is a possibility that the defendant has suffered prejudice because the witness, Jesse Harvie, cannot be located, and other indeterminable prejudice because of the passage of time."
An appeal to the Full Court was dismissed. Norris v McGeachy [2010] TASFC 4.
At the time of the presentation of the extension of time application it was well established that an explanation for delay will usually be required so that it can be considered and weighed amongst the other relevant considerations. In Hill v Iluka [2002] TASSC 113 the Full Court said at par[23]:
"In any event, it is clear that although the issue of whether the defendant will be able to get a fair trial is a significant, if not decisive, factor, it is certainly not the only relevant factor in the exercise of the discretion. The Limitation Act, s5(3), requires that consideration be given to all the circumstances of the case. In most cases this means that regard must be paid to whether there is an arguable case, the length of the delay, the explanation for it and the degree of prejudice the delay has caused and/or will cause the defendant. All of these matters require weighing to determine whether it is just in the circumstances of the case, to extend the time within which proceedings may be commenced. See Knight v Smith [1975] Tas R 83; Klein v Domus [1963] HCA 54; (1963) 109 CLR 467; Parsons v Doukas (2001) 52 NSWLR 163; Marr v Green (1994) Aust Torts Reports 81-277."
In explaining delay, an applicant for an extension of time need not show that he or she is without fault. In Knight v Smith (1975) Tas R 83 Neasey J observed at p92 that an applicant at fault may not be disentitled on an extension of time application. On the other hand, an applicant who fails to give an explanation deprives the Court of the ability to consider all of the circumstances of the case and so in most cases cannot expect to receive a favourable exercise of the discretion. In this regard, it is to be noted that in his reasons for refusing the application the learned Chief Justice did not draw the adverse inference from the failure to explain, that the applicant had been at fault. Consistently with authority, it was the failure to explain the delay which, of itself, weighed against a favourable exercise of the discretion.
The pursuit of the extension of time application was expensive. Counsel for the defendants has informed me that the plaintiff's claim for damages in the action against his former solicitors includes a claim of approximately $55,000 for solicitor's fees plus disbursements and counsel fees of approximately $26,000 for the failed application and appeal.
The proportionate liability provisions
The proportionate liability provisions are contained in Part 9A of the Civil Liability Act 2002. So far as is relevant for present purposes the part includes the following provisions:
"43A Application of Part 9A
(1) This Part applies to the following claims ("apportionable claims):
(a) a claim for economic loss … in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care (but not including any claim arising out of personal injury);
…
(2) In this Part –
concurrent wrongdoer, in relation to a claim, means a person who is one of two or more persons whose act or omission caused, independently of each other or jointly, the damage or loss that is the subject of the claim;
…
(7) The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Part.
…
(9) For the purpose of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).
43B Proportionate liability for apportionable claims
(1) In any proceedings involving an apportionable claim –
(a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just, having regard to the extent of the defendant's responsibility for the damage or loss;
…
(4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.
…
43E Subsequent actions
(1) In relation to an apportionable claim, nothing in this Part or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any damage or loss from bringing another action against any other concurrent wrongdoer for that damage or loss.
(2) However, in any proceedings in respect of any such action the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff.
43F Joining non-party concurrent wrongdoer in action
(1) The court may give leave for any one or more persons to be joined as defendants in proceedings involving an apportionable claim.
(2) The court is not to give leave for the joinder of any person who was a party to any previously concluded proceedings in respect of the apportionable claim."
The terms of the amendment sought
The proposed amendment is as follows:
"17 Further, the claim by the plaintiff against the defendants in this proceeding is a claim for economic loss in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care within the meaning of section 43A(1) of the Civil Liability Act 2002.
18 As such the plaintiff claim is an apportionable claim.
19 In respect of the plaintiff’s claims each of:
(a) Brian Hilliard Pty (ACN 099 902 833); and
(b) Lina Howroyd
were concurrent wrongdoers in that:
(c)Brian Hilliard Pty acted as the legal practitioner for the plaintiff in respect of the plaintiff’s application to extend time pleaded at paragraph 7 of the statement of claim in this action;
(d)Lina Howroyd at all material times was an employee of Brian Hilliard Pty and in that capacity at all material times was the legal practitioner responsible for giving legal advice to the plaintiff in respect to his application to extend time as pleaded at paragraph 7 of his statement of claim in this action.
20 As a consequence:
(a)Brian Hilliard Pty owed to the plaintiff a duty of care, in contract and in tort, to exercise a reasonable degree of skill, care and competence; and
(b)Lina Howroyd owed to the plaintiff a duty of care in tort to exercise a reasonable degree of skill, care and competence
each in relation to the giving of advice to make and the making and prosecution of the plaintiff’s application to extend time as pleaded at paragraph 7 of the statement of claim in this action.
21In breach of each such obligation Brian Hilliard Pty and/or Lina Howroyd were negligent in that in respect of the plaintiff’s application to extend time as pleaded at paragraph 7 of the statement of claim in this action, each of Brian Hilliard Pty and/or Lina Howroyd:
(a)failed to give any or any adequate advice to the plaintiff as to the necessity for him to explain, satisfactorily, the passage of time which elapsed between 4 November 2005 and August 2008 and as to why he did not, within that period, commence a proceeding within time or make an application to extend time in a timely way;
(b)failed to take any or any adequate instructions from the plaintiff as to whether he had an explanation for the period of delay between 4 November 2005 and August 2008;
(c)failed to include any or any satisfactory evidentiary material in any of the plaintiff’s affidavits filed and served in support of his application to extend time, as to the period of delay between 4 November 2005 and August 2008;
(d)failed to advise the plaintiff of his need to provide an explanation in his affidavits as to the period of delay between 25 August 2008 and 5 March 2009;
(e)failed to include in any affidavit filed and served by the plaintiff in his application to extend time any or any adequate explanation as to the period of delay between 25 August 2008 and 5 March 2009.
22Each failure was a reason why the plaintiff failed in his application to extend time.
23Each failure was an act or omission which caused the damage or loss which is the subject of this action within the meaning of section 43A(2) of the Civil Liability Act 2002.
24As a consequence the liability of the defendants in this action, as concurrent wrongdoers, is limited to an amount reflecting that portion of the damage or loss claimed that the court considers just, having regard to the extent of the responsibility of each defendant for that damage or loss."
Pleadings and amendments to pleadings
Rule 227 of the Supreme Court Rules 2000 governs the form of pleadings. It includes the following:
"Statements in pleadings
(1) A pleading is to –
…
(b)contain only a statement of all the material facts in summary form on which the party relies …"
Material facts are those facts necessary for the purpose of formulating a complete cause of action or a complete ground of defence. If any material fact is omitted the pleading is defective and unless amended liable to be struck out. Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712.
A conclusion drawn from unstated facts is not a pleading of a material fact. H 1976 Nominees Pty Ltd v Galli [1979] 30 ALR 181 at 186.
Rule 259 provides for pleadings which do not disclose a reasonable cause of action or answer to be struck out.
Under r427 the Court has a discretion to permit amendment. However, a proposed plea which is obviously bad in law will not be allowed. In addition, an amendment application, which if successful, would cause substantial injustice to another party will usually be refused. In Horton v Jones(No 2) [1939] 39 SR(NSW) 305, Jordan CJ, speaking of the then practice of ordinarily allowing amendments, said at pp309 – 310:
"The question for this Court is whether it would be proper to allow the amendments or any of them. It is now a commonplace that if a party to legal proceedings establishes to the satisfaction of the Court that he is genuinely desirous of amending his pleadings for the purpose of modifying or otherwise altering some existing claim or defence, or of introducing a new ground of claim or a new matter of defence, he should be permitted to do so, subject to the imposition of such terms as may be proper, unless the proposed amendment is so obviously futile that it would be struck out if it appeared in an original pleading, or unless it is one that it would be impossible to allow upon any terms without causing substantial injustice to another party to the proceedings. The question whether an amendment would cause substantial injustice must, of course, depend upon the circumstances of the particular case."
In considering the discretion to allow amendments, the effects of delay, wasted costs and the concerns of case management will be taken into account. This is particularly so where the litigation is in an advanced stage. In AON Risk Services Australia Ltd v Australia National University (2009) 239 CLR 175, 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.
…
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."
The grounds of opposition to the application
In general terms the grounds upon which the plaintiff opposes the amendment application are as follows:
(1)The proposed pleading does not contain a statement of the material facts necessary to establish a causative link between the alleged breach of duty of the solicitors acting in the extension of time application and the economic loss, being the value assigned to the lost chance of obtaining an award of damages for the personal injury suffered.
(2)The defendants have no hope of making out the proposed defence because to do so it would be necessary to adduce evidence of communications between the plaintiff and the solicitors instructed on the extension of time application. Such communications are, unless waived, the subject of legal professional privilege.
(3)The solicitor having carriage of the action is the same solicitor who had carriage of the extension of time application and so if the amendment is allowed the plaintiff may lose his current legal representation. Because the plaintiff is impecunious it is likely that he would need to find a solicitor willing to act on a "no win no fee" basis. Finding such a solicitor may be difficult.
(4)The defendants have not explained the delay in seeking to introduce the proposed proportionate liability defence.
Does the proposed pleading fail to plead the material facts linking breach to the plaintiff's loss?
The pre-requisite necessary for a person to be a concurrent wrongdoer, as set out in s43A(2) is that the person "caused … the … loss that is the subject of the claim".
Here, it is impossible to ever know whether the alleged breach (the solicitor's failure to include in the materials submitted in support of the extension of time application the plaintiff's explanation for delay) was the cause of the application being refused. Even with an explanation (regardless of whether it showed that the plaintiff was blameless or showed that the plaintiff was at fault) it could never be demonstrated at trial that the outcome would have been different. The extension of time application was lost as a result of the cumulative effect of a number of factors listed in the decision refusing the application. The failure to explain delay was merely one of a number of the considerations which resulted in the application being lost.
Notwithstanding the impossibility of it ever being demonstrated that the provision of an explanation for delay would have changed the outcome, counsel for the plaintiff put forward the following form of pleading which he submitted would be acceptable:
"To found the allegation of responsibility that is sought to be established it will be necessary to plead at least the following:
(i) There was an explanation for delay;
(ii) It was a helpful explanation in that it assisted the Plaintiff;
(iii) That the helpful explanation was communicated to the plaintiff's solicitors;
(iv)The solicitors consistent with their duty should have found out the helpful explanation;
(v)The solicitors were instructed to use the explanation that was supplied or in the alternative should have advised the plaintiff to put forward such an explanation; and
(vi)Had the explanation been put forward it would have made a material difference to the outcome of the exercise of the discretion."
This submission overlooks the fact that even an explanation for delay showing fault on the part of the plaintiff would have helped. On an extension of time application brought under the Limitation Act 1974, s5(3) "all the circumstances of the case" are to be considered in determining whether "it is just and reasonable" to extend time. As stated earlier in these reasons, an applicant who deprives the Court of the ability to take into account a relevant matter ordinarily cannot expect a discretion to be exercised in his or her favour.
Further, the submission from counsel for the plaintiff overlooks s13 of the Civil Liability Act 2002, which, relevantly, is as follows:
"13 General principles
(1)Prerequisites for a decision that a breach of duty caused particular harm are as follows:
(a)the breach of duty was a necessary element of the occurrence of the harm ("factual causation");
(b)it is appropriate for the scope of the liability of the person in breach to extend to the harm so caused ("scope of liability").
(2)In deciding in an exceptional case, in accordance with established principles, whether a breach of duty, being a breach of duty that is established but which can not be established as satisfying subsection (1)(a), should be taken as satisfying subsection (1)(a), the court is to consider (among other relevant things) whether or not and why responsibility for the harm should be imposed on the party in breach.
…
(4)For the purpose of deciding the scope of liability, the court is to consider (among other relevant things) whether or not and why responsibility for the harm should be imposed on the party who was in breach of the duty."
It would plainly be arguable at trial that factual causation, as described in s13(1)(a), cannot be established. This being so, a viable argument exists that this is an exceptional case to which s13(2) applies. For an exceptional case it is sufficient, on the question of causation, to plead the failure to properly advise about the need to explain delay and the failure to include the explanation in the evidentiary material. This has been done in the proposed pleading at par21. The conclusionary statement in par23 that the failures "caused the damage or loss" does not render the pleading defective.
I would not decline to allow the proposed amendment as failing to comply with pleading rules.
Is the proposed defence futile?
A pleading which "shows that the cause of action or defence is frivolous or vexatious" is liable to be struck out under r259. A claim or ground of defence which has no prospect of succeeding is frivolous or vexatious. Gunns Ltd v Alishah [2009] TASSC 45 per Porter J at par[23]. No purpose would be served by allowing a party to introduce a futile claim.
Counsel for the plaintiff submitted that the defendant's proportionate liability claim cannot be made out at trial because it is based on communications between solicitor and client which are privileged.
Counsel for the defendants submitted that the claim for recovery of the legal fees is inconsistent with the maintenance of the privilege and hence there has been waiver. In addition, it was submitted that the defence could be made out even without the disclosure of privileged communications.
I do not need to deal with the waiver point. In any event, it would be inappropriate for me to do so on a pleading application. What may be asked and what answers may be compelled is a proper matter to be left to the trial judge and not a matter calling for hypothetical analysis at the pleading stage.
I agree with counsel that the defendants might make out the defence without reference to any solicitor and client communications. The plaintiff can be asked what his explanation was, although even this might not be necessary. In light of the usual need for an applicant for an extension of time to explain delay, an inference may be open at the conclusion of all of the evidence presented at the trial that the plaintiff's failure to give an explanation was due to a failure by his solicitors to properly advise him and include the explanation in the evidentiary materials.
I would not disallow the proposed pleading as a futility.
Would allowing the amendment cause substantial injustice to the plaintiff by putting at risk his chance of retaining the solicitors of his choice?
The plaintiff's solicitors engaged to pursue the extension of time application were Hilliard & Associates. The plaintiff's current solicitors are Slater & Gordon. The letterhead of Slater & Gordon, on documents on the Court file, includes the words "In Association with Hilliard & Associates". The solicitor having carriage of the matter for Hilliard & Associates on the extension of time application was Lina Howroyd. She is the solicitor having carriage of the present action for the plaintiff.
There is a realistic possibility that, if the defence is amended as proposed, the plaintiff will need to engage new solicitors.
For present purposes, the defendants accept that the plaintiff is impecunious. It follows that if the plaintiff needs to engage new solicitors, and does not have a friend or relative willing to fund the litigation, he will need to find solicitors willing to act on a "no win no fee" basis. Counsel for the plaintiff asserts in submissions, with an acknowledgement that there is no supporting evidence, that "… the plaintiff may find it quite difficult to find other solicitors to take on his case at this stage and on terms that he can comply with".
I accept that with the amendment there is a possibility that the plaintiff will lose his current legal representation and may have difficulty in obtaining new solicitors. The question, however, is whether these possibilities, which if realised might result in substantial injustice to the plaintiff, would arise by reason of the amendment, if it is allowed.
The position would have been the same if the proportionate liability defence had been included in the defence at the outset. In that event, the plaintiff and his solicitors would need to have considered whether the retainer should be continued. If it was not continued the plaintiff would face the same potential difficulties in finding new solicitors. There is no evidence to suggest that the plaintiff would have been any better off if the proportionate liability claim had been made at the outset, rather than introduced by amendment.
I am not persuaded that the plaintiff will suffer any substantial injustice by reason of the amendment, if it is permitted.
The failure to explain the delay in raising the proposed defence
The defendants have offered no explanation for the delay in raising the proposed proportionate liability defence.
Counsel for the plaintiff referred to AON Risk Services Australia Ltd v Australian National University (supra). That case concerned an application to adjourn a trial, which had commenced, for the purpose of enabling an application to be made for substantial amendments to the statement of claim. It was held that in such circumstances an explanation for the delay was required.
Here the plaintiff filed an amended statement of claim in May 2013. A defence to the amended statement of claim was filed in June 2013 as was a reply. The amendment application was filed in November 2013. This was not long after the pleadings had closed. A trial date has not been set. There is no assertion that the amendment, if allowed, would substantially delay the case coming to trial. It follows that the case management objectives of litigation being conducted with minimum delay cannot be said to have been substantially compromised by the timing of the amendment application.
The circumstances of the present case are quite different than the circumstances pertaining in AON. I do not regard the circumstances of this case to be such as to require that an explanation for the delay be given before the amendment might be allowed.
Conclusion
The proposed amended defence is pleaded in sufficient terms and is not without prospects of success. Allowing the amendment will enable the defendants to pursue all of the available grounds of defence upon which they wish to rely. Allowing the amendment will not result in any substantial injustice to the plaintiff. It will not compromise case management principles and will not significantly delay the trial or adversely affect other litigants waiting for a trial date. In these circumstances, I am positively persuaded that the defendants should have a favourable exercise of the discretion.
There will be an order granting leave to the defendants to amend the defence in the terms proposed.
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