Pangoulias (by his next friend Fiona Averil Pangoulias) v Minister for Health [No 2] - [2012] WADC 120

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: PANGOULIAS (by his next friend FIONA AVERIL PANGOULIAS) -v- MINISTER FOR HEALTH [No 2] [2012] WADC 120

CORAM: WISBEY DCJ

HEARD: 1 MAY 2012

DELIVERED : 3 AUGUST 2012

FILE NO/S: CIV 2791 of 2010

BETWEEN: PETER PANGOULIAS (by his next friend FIONA AVERIL PANGOULIAS)
Plaintiff
AND
MINISTER FOR HEALTH
First Defendant
HEALTHSCOPE LIMITED
Second Defendant
EMIL POPOVIC
Third Defendant
STUART MILLER
Fourth Defendant

Catchwords:

Practice and procedure - Appeal against order of deputy registrar's refusal to extend validity of writ - Application for extension made subsequent to expiration of 12-month validity and three-year limitation period

Legislation:

Limitations Act 2005 s 14A, s 35, s 39
Rules of the Supreme Court 1971 O 2 r 1, O 7 r 1

Result:

Validity of writ for service extended

Representation:

Counsel:

Plaintiff:     Mr T Hammond
First Defendant             :     No appearance
Second Defendant         :     No appearance
Third Defendant           :     No appearance
Fourth Defendant          :     No appearance

Solicitors:

Plaintiff:     Shine Lawyers
First Defendant             :     Not applicable
Second Defendant         :     Not applicable
Third Defendant           :     Not applicable
Fourth Defendant          :     Not applicable

Case(s) referred to in judgment(s):

Brealey v Board of Management Royal Perth Hospital (1999) 21 WAR 79
Hazart Pty Ltd v Rademaker (1993) 11 WAR 26
Pangoulias v Minister for Health [2011] WADC 231
Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337
Victa Ltd v Johnson (1975) 10 SASR 496

WISBEY DCJ: The plaintiff, Peter Pangoulias by his next friend, Fiona Averil Pangoulias (appointed plenary administrator of the plaintiff's estate on 23 April 2008 pursuant to the provisions of the Guardianship and Administration Act 1990) issued a writ with a general indorsement of claim on 10 September 2010 against the Minister for Health, Healthscope Limited, Emil Popovic and Stuart Miller.
The plaintiff's claim is for damages for personal injury as a result of the alleged negligence of the defendants in the provision of medical services during the period 14 September 2007 to 6 October 2007.
The limitation period prescribed by s 14 of the Limitation Act 2005 for a claim for damages for personal injury is three years. In this case however the plaintiff was at all relevant times under a mental disability and as a consequence the prescribed period did not commence to run until the appointment of his administrator on 23 April 2008. In the result he was at liberty to commence proceedings up until 22 April 2011 (s 35 Limitation Act). The writ was issued approximately three years after the alleged negligence, and approximately seven months before the expiration of the limitation period.
The writ was served on the Minister for Health on 9 September 2011 (being the final day of its validity for service) and an appearance was filed on 11 October 2011. Notwithstanding non‑service on the defendants Healthscope Limited, and Miller, notices of discontinuance were filed on 12 September 2011 in respect of each of them.
The third defendant, the neurosurgeon Mr Popovic, was not served during the 12‑month currency of the writ, and as it happens, died on 22 March 2011, probate of his last will and testament being granted to his wife Jane Elizabeth Popovic (the executor named therein) on 20 July 2011.
On 10 September 2011 the action was placed on the inactive cases list, no document having been filed in the preceding 12 months, the plaintiff thereby being in breach of the District Court Case Management Rules. Consequently on 29 September 2011 the plaintiff made application to:
(i)extend the validity of the writ to 10 November 2011;
(ii)substitute Jane Elizabeth Popovic as executor of the will of Emil Andrew Popovic as third defendant, in substitution for the deceased;
(iii)remove the action from the inactive cases list.
The application was filed after the service validity period had expired and outside the prescribed limitation period.
The application came before Deputy Registrar Harman on 7 November 2011, and on 18 January 2012 for the reason given in Pangoulias v Minister for Health [2011] WADC 231 he ordered that the action be taken off the inactive cases but refused to extend the validity of the writ. The plaintiff appeals against that refusal.
The appeal is a hearing de novo: Hazart Pty Ltd v Rademaker (1993) 11 WAR 26.
In an affidavit sworn 10 October 2011 filed in support of the application before the deputy registrar, Wendy Jane Nixson, a solicitor and partner with Shine Lawyers, solicitors for the plaintiff, relevantly discloses:
(i)on 16 June 2011 Shine Lawyers instructed the physician, Associate Professor Raftos, a specialist in emergency medicine, to provide an opinion as to whether there had been negligence in the medical management of the plaintiff's condition, and his report dated 4 August 2011 was received on 9 August 2011;
(ii)a file note dated 8 September 2011 indicates that Ms Nixson telephoned Avant Law Insurance at 14.53 on that day to ascertain if it insured the deceased;
(iii)on 8 September 2011 the plaintiff's solicitors faxed a letter to Avant Law indicating inter alia that the claim against the second and fourth defendants had been discontinued and enquiring as to whether it would accept service of the writ on behalf of the third defendant. The letter suggests that the solicitors were in possession of evidence sufficient to justify proceeding against the third defendant;
(iv)Ms Nixson deposed to her belief that she had done her best to effect service on the correct party, which if correct demonstrates a deplorable lack of understanding of the situation;
(v)By facsimile transmission on 19 September 2011, solicitors Pynt & Partners advised it had received instructions to act on behalf of the estate of Mr Popovic (deceased) and disputed that the purported service on Avant Law amounted to proper service on the estate (in any event it was not then, and is still not, a party to the proceedings);
(vi)in a facsimile transmission to solicitors Pynt & Partners, representing Avant Law, the plaintiff's solicitors advised of the plaintiff's intention to proceed against the estate of the deceased Popovic, and detailed the particulars of negligence that would be alleged.
It is apparent from the affidavit of Ms Nixson sworn 24 October 2011 that on 16 June 2011 she instructed a neurosurgeon, Mr Atkinson, to provide a report as to the propriety of the deceased's management of the plaintiff, and received a report dated 6 October 2011 on 18 October 2011.
Ms Nixson has filed an additional affidavit sworn 20 April 2012 in support of the appeal. She states that she took over conduct of the action on 27 April 2011, although Shine Lawyers received instructions from the plaintiff on 24 March 2009. She relevantly states:
(i)that there was 'unfortunate delay' due to the availability and suitability of experts;
(ii)the writ was issued on 10 September 2010, having regard to limitation issues;
(iii)neurosurgical opinion was not sought until 5 January 2011 and the surgeon approached advised on 16 June 2011 that he was unable to provide expert opinion. On that day another neurosurgeon, and a physician, were asked to provide their opinions. The physician, Associate Professor Raftos, provided a report dated 4 August 2011; and on 18 October 2001 a report was obtained from the neurosurgeon, Mr Atkinson. It was only upon receipt of the Atkinson report that Ms Nixson concluded it was appropriate to recommend to the plaintiff to proceed with the claim against the third defendant. It follows that at the time of the issue of the writ Shine Lawyers were not satisfied the negligence of the third defendant could be established and issued the writ because of the limitation issue, having decided not to serve it unless and until supportive evidence of negligence was available. This is not an uncommon practice by solicitors in this field of the law, but is to be deprecated;
(iv)Shine Lawyers had not communicated with the deceased or his executor during the period the writ was valid for service;
(v)notwithstanding that the plaintiff was aware on 4 May 2011 of the death of Mr Popovic, no steps were taken to seek an amendment to the writ to substitute his executor as the third defendant;
(vi)On 16 August 2011 Ms Nixson received instructions to proceed with the claim against the first defendant based on the opinion of Associate Professor Raftos, and to proceed against the third defendant if and when supporting evidence was received from the neurosurgeon Mr Atkinson. She had apparently received Mr Atkinson's preliminary verbal advice that there was a case to answer. She stated that she had practised in personal injury law for 10 years and it was her experience that it was premature to serve a claim 'and therefore expose a plaintiff to risk of adverse costs' on the verbal opinion of an expert who had not considered all of the material. As a consequence she advised the plaintiff to await a written report from Mr Atkinson before serving the writ and was given instructions accordingly. She claimed that attempts were made to obtain a written report from Mr Atkinson on 12, 15 and 31 August 2011, 19 and 27 September 2011 and 5 October 2011;
(vii)On 7 September 2011 a belated request for medical records was made to a significant number of medical practitioners.

The law relating to renewal of writ for service

In Van Leer Australia Pty Ltd v Palace Shipping KK (1981) 180 CLR 337, his Honour Stephen J discussed the law insofar as it related to an application to renew validity for service of a High Court writ. Under O 8 r 1(1) of the High Court Rules 1952 a writ only remained in force for 12 months, unless renewed for a further six months. The court had power to order renewal if satisfied that 'reasonable efforts have been made to serve the defendant, or for other good reason'.
His Honour adopted the reasons given by Bray CJ in Victa Ltd v Johnson (1975) 10 SASR 496 where he relevantly said:
It follows then that it is incorrect to talk about allowing a cause of action or a new cause of action to be set up after the expiry of the period of limitation. Once the writ is issued within the period, the Statute of Limitations is ousted or rather never comes into operation. It is not the statute, which the court must obey on what it thinks is its proper interpretation, but the rule of court which takes over then. That rule has the discretion built into it and that discretion is to be exercised judicially, indeed, but not fettered by inflexible prescriptions …
It is not correct to say that the defendant has acquired an absolute right to immunity when a writ issued within the limitation period is not served within twelve months of its issue and the limitation period has in the meantime expired. What has expired is in reality not the limitation period but the period which would have been the limitation period if no writ had ever been issued. What the failure to serve a writ within twelve months gives the defendant is no more than a right to contend that the Court in the exercise of its discretion should not renew the writ. The efficacy of the writ does not expire absolutely at the end of the twelve months, it only expires if and in so far as the Court sees fit not to renew it.
The rule first directs the Court to inquire whether reasonable efforts have been made to serve the defendant. If they have, it seems to me that the Court should renew the writ. If not, the court has to consider whether other good reasons exist for the renewal. I will not attempt an exhaustive category of such reasons. That would probably be impossible and would certainly be undesirable. Prominent, however, amongst the matters for the consideration of the Court, apart from whatever attempts have been made at service, will be the length of the delay, the reasons for the delay, the conduct of the parties and the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it.
In Brealey v Board of Management Royal Perth Hospital (1999) 21 WAR 79, his Honour the chief justice referred to and applied Van Leer. His Honour specifically addressed the relationship between the provisions relating to the effect of non‑compliance with the Rules of the Supreme Court 1971 (WA) contained in O 2 and the provisions of O 7 relating to the validity of a writ for the purposes of service. He stated [15]:
In my opinion, the exercise of the discretion is to prevent injustice and does not exist to indulge mere delay on the part of the plaintiff or the plaintiff's solicitors, which is inadequately explained. In this respect I agree with Ipp J regarding the policy reasons which lie behind O 7 r 1 and which should govern its application, as stated in his reasons, including, in particular, the approach adopted in Ramsay v Madgwicks (1989) VR 1, 5. As Lord Bingham MR said in Ward‑Lee v Linehan (1993) 1 WLR 754; 762; (1993) 2 All ER 1006, 1013:
'While O 2 r 1 gives the court jurisdiction to "treat the failure to extend the writ as an irregularity and to waive it accordingly", the wide discretion conferred by that rule must be exercised having full regard to the policy reflected in O 7 r 1 …'
… In the context of the interaction between O 2 r 1 and O 7 r 1(2) Slade LJ said in Leal v Dunlop Bio‑Processors International Limited at 885:
'It would have been an improper exercise of the Registrar's discretion under O 2 r 1 (the equivalent of O 2 r 1) to make good the irregular service of the writ retroactively in this case, where he could not properly have renewed the writ under O 6 r 8 (the equivalent of O 7 r 1).
His Honour observed that in a situation such as the present where the application for service validity renewal was made subsequent to the expiration of the 12 month period and the relevant limitation period, the plaintiff would be required to give a satisfactory explanation for failure to apply for an extension before the validity of the writ expired for the purpose of service. His Honour stated that the length of the delay in service of the writ, and the failure of the plaintiff to provide any satisfactory explanation for the failure either to serve the writ or to make a timely application to renew its validity, in circumstances where there would be significant prejudice to the defendant, constituted powerful reasons for not making an order in favour of the plaintiff either under O 7 r 1 or O 2 r 1.'
Ipp J said [45]:
… O 7 r 1 embodies a clear policy which should not be subvertent by mechanical resort to O 2 r 1. The policy in question is apparent from the time restrictions laid down by O 7 r 1 in regard to the validity of unserved writs, the finite periods for which the validity of unserved writs may be extended, and the finite periods during which applications may be made for such extensions. The reasons for the policy are obvious. It is undesirable to allow a plaintiff to issue a writ before the expiry of a limitation period and then to delay service for an indefinite period. Lengthy delays cause difficulties in the ascertainment of the truth. It is unfair to require potential defendants to contemplate potential litigation indefinitely.
In dealing with the exercise of discretion under O 2 r 1 and/or O 7 r 1, Ipp J said [52]:
In Van Leer Australia Ltd v Palace Shipping KK it was held that the discretion to renew a writ after a limitation period has expired should be exercised by reference to the general justice of the case taking into account all the relevant circumstances. These would include not only the provisions of any limitations statute applicable but also the relative hardships which a grant or refusal of renewal would impose upon the parties. Relevant factors include the length of the delay, whether the delay was caused by mistake and whether such a mistake is excusable, the nature of attempts made at service, and the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it. This approach was adopted in Bell Group NV (in liq) v Aspinall (1998) 19 AR 561, the court observing (at 575) that, under O 7 r 1(2), it has a wide and unfettered discretion to see that justice is done.

Factors relevant to exercise of discretion

In the supporting submissions it is stated that there was attempted service on 8 September 2011 one day before the expiration of the validity of the writ. To describe what then took place as an attempt is a conspicuous misstatement. The named third defendant was deceased and it was not possible to effect service on him or anyone else. In the then climate of desperation Ms Nixson either failed to comprehend or ignored that position. There was no basis for 'a mistaken belief that the third defendant's insurer had already responded to the claim to the effect that it had indicated it would accept service' which is put forward as a major reason for the delay in the service of the writ. The insurer was not approached until a day before the termination of service validity.
As already mentioned, in her affidavit of 20 April 2012 Ms Nixson deposes to the fact that a deliberate decision was made not to serve the third defendant until supporting evidence was received, the purpose being to ensure that the plaintiff was not exposed 'to a risk of adverse costs' in the event that there was no evidence to support a cause of action against the third defendant. That fails to explain why steps were not taken to substitute the deceased's executor as third defendant during the currency of the writ.
In the result I am satisfied that the writ was not served during the period of its validity due to a combination of a conscious decision to withhold service, a lack of proper attention to the file, and a failure to appreciate or alternatively address the ramifications of the death of Mr Popovic.
The application to extend validity of the writ was filed on 29 September 2011, 20 days after the expiration of service validity, and during that period there was correspondence between the plaintiff's solicitors and the solicitors for the deceased's indemnity insurer.
Since the expiration of the validity of the writ Shine Lawyers have taken steps to engage a neuropsychologist, an occupational therapist, a disability architect, received Mr Atkinson's report, and sought further neurosurgical opinion. All those steps were of course necessary in getting up the case in respect of the first defendant.
The plaintiff is significantly cerebrally compromised, and an award of damages in the event of a finding of negligence will be substantial.
There was no legal imperative on the plaintiff to serve the writ on the deceased before his death and in those circumstances any prejudice to the estate is confined to the loss of capacity to preserve medical records over a short period of time. It is probable that most of those records will have been accessed by the first defendant, and will be available to the executor.
It is a factor to be taken into account in the exercise of the discretion that the limitation period has expired and that the application for extension was not made during the original period of validity. There is of course a capacity to apply to extend the limitation period pursuant to s 39 of the Limitation Act if the plaintiff is able to establish that he was not aware of the physical cause of the injury; alternatively was not aware that the injury was attributable to the conduct of a person; although having issued a writ naming the deceased there may be some difficulty establishing either of those factors.
In accordance with the provisions of O 18 r 7 of the Rules of the Supreme Court 1971 I direct that Jane Elizabeth Popovic the executor of the Will of Emil Popovic be substituted as the third defendant.

Having considered all these matters and in particular the plaintiff's mental incapacity I am of the view that the justice of the case requires that the validity of the writ for service be extended until 31 August 2012.