Re Gregory v O'Neill

[1998] QSC 67

IN THE SUPREME COURT

OF QUEENSLAND
  No. 7990 of 1996

Brisbane

Before Mr Justice Shepherdson

[Re Gregory v O’Neill & Anor]

BETWEEN:
  ROSS WILLIAM GREGORY
  Plaintiff

AND
  GARRY MERVYN O’NEILL
  First Defendant

AND
  JULIAN R. THIRLWALL TRADING AS
  “KIRKES LAWYERS” (A FIRM)
  Second Defendant

REASONS FOR JUDGMENT  -  SHEPHERDSON J.

Delivered the 20th day of January 1998

CATCHWORDS:     PRACTICE - service out of the jurisdiction - O.11 r.1(2)(a),(g),(k),(l),(p) and (x).

Counsel:  Tim Matthews

Solicitors:  Quinlan, Miller and Treston

Hearing Date:              9 January 1998

REASONS FOR JUDGMENT  -  SHEPHERDSON J.

Delivered the 20th day of January 1998

The application before me is made by the plaintiff who seeks liberty to proceed in the action against the second defendant pursuant to O.11 r.4 of the Rules of this Court. The application has been heard ex parte.

The writ of summons in the action shows the second defendant’s address to be at Port Moresby in the country of Papua New Guinea. The plaintiff’s claim as endorsed on the writ is as follows:-

“The plaintiff’s claim against the first defendant and further or alternatively against the second defendant is for damages for breach of a contract of retainer and further or alternatively, negligence, together with interest thereon pursuant to s.47 of the Supreme Court Act 1995 on such sum and for such period as to the Court seems meet, and costs.”

The affidavit material before me shows that on 18 February 1997 a notice in lieu of writ was served on the above named Julian R. Thirlwall at a Port Moresby address. Service of a Notice of Originating Proceeding accorded with O.11 r.2 of the Rules of this Court although it appears that personal service may not have been necessary (see O.11 r.3(3)). The application before me filed on 17 December 1997 is made under O.11 r.4 which relevantly reads:-

“4.       The Court or a Judge, upon being satisfied by affidavit that the case is such that, under r.1, the originating proceeding, or notice thereof may be served out of the jurisdiction, and that it was served upon a party out of the jurisdiction ... may direct ... that the plaintiff ... shall be at liberty to proceed in the cause or matter in such manner and subject to such conditions as to the Court or Judge may seem fit.”

The applicant therefore has the onus of satisfying me that the case against the second defendant in respect of which the Notice of Originating Proceeding has been served is one to which O.11 r.1 applies.

By O.11 r.1(2) a process in relation to a proceeding may be served on a person outside Australia with the leave of the Court if any of the paragraphs numbered (a) to (x) in sub-rule 2 apply.  I shall refer to some of these paragraphs shortly but in the meantime note that in terms of O.11 r.1(3) “Each paragraph of sub-rule (2) is to be construed independently of the other paragraphs and the construction of a paragraph is not to be taken to affect the construction of another paragraph”.

The evidence before me shows that the plaintiff was employed by Ok Tedi Mining Limited as a maintenance fitter at its Ok Tedi Gold Mine in Papua New Guinea when on 25 September 1987 he was injured. A copy of his statement of claim which he has apparently delivered shows the injury occurred while he was working at the Ok Tedi Mine. The plaintiff presently resides at Brisbane.

The first defendant is said to have been at all material times a solicitor of the Supreme Courts of Queensland and New South Wales. It is alleged that prior to 10 May 1988 he was employed in and/or a member of a firm of solicitors named Mal Chalmers & Company of Palm Beach in the State of Queensland; that from 10 May 1988 until 20 August 1988 he was similarly employed and/or a member of a firm named Chalmers, O’Neill & Company of Palm Beach;  that from 20 August 1990 until 30 November 1992 he was principal of a firm of solicitors carrying on the business in the name of O’Neill Solicitors in the States of Queensland and New South Wales from premises at Tweed Heads and from 30 November 1992 was a member of a firm carrying on business as solicitors in the name O’Neill’s Solicitors in the States of Queensland and New South Wales from premises at Surfers Paradise and alternatively Tweed Heads.

The applicant plaintiff has sworn that on a date in 1988 prior to 27 May 1988, he first consulted the first defendant in relation to the injuries suffered by him on 25 September 1987 and that he did so at his office at Palm Beach in the State of Queensland. The applicant has tendered a photocopy of a letter dated 27 May 1988 signed by the first defendant, written on the letterhead of Mal Chalmers & Company referring to the applicant’s personal injuries claim against Ok Tedi Mining Limited. This letter which is addressed to the plaintiff includes the following:-

“We advise we have spoken to Counsel concerning your personal injuries claim and Counsel has advised us that the claim may be pursued here in Queensland even though the accident occurred in Papua New Guinea. However, he has advised us to contact a firm of solicitors in Papua and seek their advice on the procedure to institute proceedings in Papua New Guinea. In essence, Counsel recommends that we contract with a firm of solicitors in New Guinea to act as our agents at all times and to institute proceedings in New Guinea.”

I have a photocopy of a letter dated 21 June 1988 from Mal Chalmers & Company to “Kirkes” for the attention of “Mr Julian Thirlwall”. This letter refers to the applicant’s “personal injury claim (Workers’ Compensation Claim)” and it reads:-

“We advise we act on behalf of the abovenamed who has instructed us to write to you in relation to you acting as our Town Agents.

Our client was an employee of Ok Tedi Mining Ltd as a fitter and turner and as a result of this company failing to provide a safe system of work our client sustained injuries. 

We believe our client has a strong chance of success in his claim and we would ask that you liaise with Mr Joe O’Neill of our office. We are awaiting receipt of various medical reports and shall forward copies to you as soon as same come to hand.”

On 14 July 1988 the second defendant wrote to the Mal Chalmers & Company a letter which relevantly read:-

“In response to your letter of 21 June we will be pleased to act as your agent in the above matter. Please bear in mind that Mr Gregory should have reported the accident and must lodge a Workers’ Compensation claim within 12 months and a common law claim within three years”

The applicant’s solicitors have the first defendant’s file in relation to the plaintiff. The applicant swears that at no time was he ever advised as to there being any time limit or restriction upon his commencing proceedings against Ok Tedi Mining Limited in either Papua New Guinea or the State of Queensland.

His case against the first defendant, as appears from the statement of claim is that the first defendant negligently and in breach of his contract of retainer with the first defendant failed to commence any common law action in Papua New Guinea within the limitation period prescribed by legislation of Papua New Guinea.

And further or alternatively, he makes the same claim against the second defendant. He further alleges that the first defendant failed to commence any common law action in Queensland within the limitation period prescribed by Queensland legislation.  He alleges that his claim against Ok Tedi Mining Ltd has become statute-barred in Papua New Guinea and Queensland and that he has in effect lost the chance of succeeding in an action for personal injuries against Ok Tedi Mining Ltd. I am concerned only with the claims against the second defendant.

The plaintiff’s affidavit material exhibits a considerable number of photocopy reports and medical records from doctors and hospitals who and which treated the plaintiff in Queensland.  It is apparent from these documents that following his return to Australia, the plaintiff suffered complications to the injury initially suffered on 25 September 1987. For the purposes of these reasons for judgment I accept that damages for the initial injury suffered on 25 September 1987 include pain, suffering and loss of amenities (if any) resulting from complications to the initial injury which complications were suffered while in Queensland.

The second defendant has not entered an appearance, conditional or otherwise.

Mr Matthews, who appeared for the applicant, has submitted that the proceeding against the second defendant begun by the above writ of summons, falls within paragraphs (a), (g), (k), (l), (p) and (x) of sub-rule 2 of O.11 r.1. I shall deal with each of these matters seriatim.

(a)The proceeding is founded on a cause of action arising in Queensland.

Mr Matthews’s submission is that the contract of retainer was made in Queensland between the plaintiff and the first and second defendants. On the evidence before me the contract of retainer was between the plaintiff and the first defendant. The evidence before me fails to show that there was any contract of retainer between the plaintiff and the second defendant. The most that occurred was that the first defendant appointed the second defendant to be his Papua New Guinea agent. On the evidence before me, if the plaintiff were able to prove negligence in the second defendant the first defendant as principal is liable for any negligence of the second defendant acting within the second defendant’s authority. (See Re Ward, Simmons v. Rose, Weeks v. Ward (1862) 31 Beav. 1 at p.11).

I have emphasized the matter of contract of retainer between the first and second defendants because it is the plaintiff’s case that apart from the matter of negligence there was a breach by the second defendant of the contract of retainer between the plaintiff and the second defendant. As I have said the evidence does not satisfy me that there was such a contract of retainer. In Cordery on Solicitors (6th Ed.) p.65 the following definition of retainer appears:-

“A retainer is a contract whereby in return for the client’s offer to employ the Solicitor, the solicitor expressly or by implication undertakes to fulfil certain obligations.”

The material before me does not satisfy me that there was any breach of that contract (assuming it to exist). Apart from the two letters between the first and second defendants to which I have already referred, there is no sworn evidence as to instructions given by the first defendant for the second defendant to institute proceedings in Papua New Guinea although the Statement of Claim alleges that on 25 May 1990 the second defendant made application in Papua New Guinea for lump sum compensation pursuant to the Workers’ Compensation Act (PNG). This allegation is not verified on oath.

In my view paragraph (a) does not apply.

(g)This paragraph relevantly reads:-

‘The proceeding is to ... recover damages ... in relation to the breach of a contract that:-

(i)was made in Queensland; or

(ii)was made by one or more parties carrying on business or residing in Queensland; or

(iii)was made by or through an agent carrying on business or residing in Queensland on behalf of a principal carrying on business or residing outside Queensland.’”

Mr Matthews has argued that a contract was made in Queensland and that contract was in effect  a contract of retainer between the plaintiff and the second defendant made by the first defendant acting on behalf of the plaintiff and engaging the second defendant to act for the plaintiff in Papua New Guinea. In my respectful view this argument fails. The applicant has sworn that he made the contract of retainer with the first defendant at Palm Beach in the State of Queensland. In my view the first defendant’s appointment  of the second defendant as town agent did not amount to a contract of retainer between the plaintiff and the second defendant.

(k)The proceeding is founded on a tort committed in Queensland

Mr Matthews has argued that the tort is that of negligence in failing to advise the plaintiff of the three year limitation period. Again, in my respectful view, this argument fails. The evidence before me shows that the second defendant clearly did advise the first defendant of the three year limitation period within which the action was to be commenced in Papua New Guinea. The second defendant was at the time the town agent only. If there was a failure to advise the plaintiff personally, that failure lies at the door of the first defendant.

(l)The proceeding is for damage that was suffered in ...  part in Queensland and was caused by tortious act or omission (wherever happening)

There is no dispute that the plaintiff was injured in Papua New Guinea and that the damages in the sense of the injury suffered  in the 1987 accident were aggravated by complications which arose after the applicant returned to live in Queensland. However, those damages suffered in Queensland were damages referable to the personal injuries action. The action now before me is one of negligence and/or breach of contract based on the alleged failure to commence the proceedings within the time limitation prescribed. In my view, in the circumstances of this case, the word “damage” in paragraph (l) means damage in respect of the loss of the chance to recover on a cause of action for the personal injuries suffered on 25 September 1987 (see Nikolaou v. Papasavas Phillips & Co (1988) 82 A.L.R. 617 at p.619 per Mason C.J.). The quantum of that loss will be a matter for determination by the trial judge and he, in evaluating that loss will take into account the likely assessment of damages for personal injuries suffered as a result of the September 1987 incident that assessment being made as at the date judgment should have been obtained in the personal injuries action. In my view it is far from clear that the damage for loss of the chance was suffered in part in Queensland. I respectfully adopt the following statement by Carruthers J. in Darrell Lea Chocolate Shops Pty Ltd v. Spanish Polish Shipping Co Inc (1990) 25 N.S.W.L.R. 568 at 576-7:-

“Concisely stated `damage’ is used in the rule to encompass the disadvantage or detriment suffered by the plaintiff as a result of the previous act or omission of the putative defendant.  Accordingly it has a much wider meaning than `injury’.”

There are two limbs to paragraph (l) and the applicant must satisfy me that the damage in the proceedings, namely for loss of the chance was suffered in part in Queensland and was  caused by a tortious act or omission wherever happening.  In my view  that tortious act, namely the failure to commence the proceedings within the prescribed time was manifested by the failure to commence proceedings claiming common law damages  in Papua New Guinea.  In my view the requirements of sub-paragraph (l) have not been satisfied.

(p)The proceeding is properly brought in Queensland against a person and another person outside Queensland is a proper party to the proceeding.

On the material before me I am far from satisfied that the second defendant is a proper party to this proceeding.  To some extent I am repeating what I said in relation to paragraphs (a) and (k) but the fact remains that the most that has been proven is that the second defendant was Town Agent in Papua New Guinea of the first defendant and there is no evidence of any contract of retainer between the plaintiff and the second defendant. One can see from the correspondence to which I have referred that the second defendant did give advice to the first defendant. The second defendant notified the first defendant of the time limitation period and as I have said there is no evidence at all that the second defendant was ever given instructions to commence the necessary proceedings in Papua New Guinea.

(x)The proceeding, so far as it concerns the person falls partly within one or more  of paragraphs (a) to (w).

In my respectful view again this paragraph does not apply.

Order 11 rule 1 is in my view fairly strictly construed and courts are careful to see that foreign citizens are not improperly brought within the jurisdiction to litigate. A defendant outside

the jurisdiction should not be brought within the jurisdiction unless the case falls within
O.11 r. 1.

The cases also show that the jurisdiction which I am now asked to exercise in favour of the applicant is to be exercised “with great care and that any doubts should be resolved in favour of the foreigner”. (See Stanley Kerr Holdings Pty Ltd v. Gibor Textile Enterprises Ltd (1978) 2 N.S.W.L.R. 372 at 380 per Sheppard J.) I mention also, without quoting from it, the judgment of Lord Diplock in The Siskina (Siskina) Cargo Owners v. Distos Compania Naviera S.A. (1979) A.C. 210 at pp.244-5.

In the result, I refuse the relief sought and I order that the plaintiff’s costs of and incidental to this application do not form any part of its costs in the action against the first defendant.