Rideout v Glaxo Group Ltd

[1995] QSC 29

IN THE SUPREME COURT

OF QUEENSLAND
  No. 1860 of 1992
[Rideout v. Glaxo Group Ltd & Ors]

BETWEEN:

WANDA BERENICE RIDEOUT

Plaintiff

AND:

GLAXO GROUP LIMITED

First Defendant
AND:

GLAXO LABORATORIES LIMITED

Second Defendant
AND:

GLAXO AUSTRALIA PTY LTD

Third Defendant
AND:

MALLINCKRODT MEDICAL PTY LTD

Fourth Defendant
AND:

NORTHERN REGIONAL HEALTH AUTHORITY

Fifth Defendant
AND:

DR RINO GEORGE ROSSATO

Sixth Defendant
AND:

DR LAKSHMAN SHANTHAKUMARA JAYASINGHE

Seventh Defendant

JUDGMENT  -  DERRINGTON J.

DELIVERED:  8 March 1995

CATCHWORDS:     PRACTICE - Service out of jurisdiction - Setting aside - Proof of jurisdiction of court - Onus - What is to be proved - Nature of evidence.

PRACTICE - Renewal of writ - Good reason - Practical approach - Delay due to need for legal aid.

PRACTICE - Notice of intention to proceed - No step within one year of "last proceeding" - Service of renewed writ more than 12 months after issue of original writ but less than 12 months after renewal - Whether notice of intention to proceed under O.90 r.9 necessary.

COUNSEL:P.E. Hack for the Plaintiff

A. Lyons for the First, Second and Third Defendants

SOLICITORS: Clayton Utz for the Plaintiff

McCullough Robertson for the First, Second and Third Defendants

HEARING DATES:  23-24 February 1995.
IN THE SUPREME COURT

OF QUEENSLAND
  No. 1860 of 1992

[Rideout v. Glaxo Group Ltd & Ors]

BETWEEN:

WANDA BERENICE RIDEOUT

Plaintiff

AND:

GLAXO GROUP LIMITED

First Defendant
AND:

GLAXO LABORATORIES LIMITED

Second Defendant
AND:

GLAXO AUSTRALIA PTY LTD

Third Defendant
AND:

MALLINCKRODT MEDICAL PTY LTD

Fourth Defendant
AND:

NORTHERN REGIONAL HEALTH AUTHORITY

Fifth Defendant
AND:

DR RINO GEORGE ROSSATO

Sixth Defendant
AND:

DR LAKSHMAN SHANTHAKUMARA JAYASINGHE

Seventh Defendant

JUDGMENT  -  DERRINGTON J.

Delivered the 8th day of March 1995

This is an application by the first three defendants, all of whom were served out of the State, to set aside the service of the process.  The first two defendants are English companies and the third is the wholly owned Australian subsidiary of the first defendant and is registered and carries on business in Victoria.  Consequently service on all three was effected out of the State, that on the first two under O.11 r.2 of the Rules of the Supreme Court, and that on the third under the Service and Execution of Process Act.  All have entered a conditional appearance under O.12 r.22 in order to pursue this relief.
           The grounds advanced for setting aside the service are that the plaintiff cannot show any jurisdictional basis for the action, and, as a separate issue, that no notice of intention to proceed under O.90 r.9 of the Rules of the Supreme Court was given prior to service, it being agreed that it was first issued on 10 December 1992, renewed on 8 December 1993 and served in October 1994.
           They also seek the setting aside of the order of this Court, made ex parte, renewing the writ on the ground that no good reason for renewal was shown.  If this is successful, the process would have been stale when it was served.
           The plaintiff's claim is for damages for personal injury alleged to have been caused by the negligence of, among others, one or more of the first three defendants as the manufacturer and/or distributor of isophendylate, a substance injected into patients to assist in the efficiency of radiological procedures, and marketed under the brand names of Myodil or Pantopaque.  The former seems to be relevant here. 
           The first defendant has denied that it is either the manufacturer or the distributor of the product, and there is no suggestion that evidence to the contrary exists.  It should therefore succeed in its application.
           Although these three defendants have common representation, there is no similar denial of their relevant activities by the other two, except that the third defendant is certainly not the manufacturer of the product.  It is probable that there is evidence that it is its distributor in Australia.
           Despite the absence of any such denial, much less evidence, from these defendants of their association with the product, the first feature of their argument is that the onus lies on the respondent plaintiff to demonstrate jurisdiction, and she has not here proved such association at the relevant time or at all.  They also claim that she has not proved any relation between the product and her injury.
           As it has been seen the question of onus is at the forefront of these matters, so the first issue for resolution is the allocation of the onus, which has some complication because this application is brought by the defendants who attack the service on the ground of lack of jurisdiction:  it is not an application by the plaintiff for liberty to proceed.  Cognate to this is the question of the precise subject matter and the nature and degree of the proof that is necessary for discharge of the onus.
           If a defendant fails to appear unconditionally the plaintiff is required by O.11 r.4 to obtain liberty to proceed, which needs justification of jurisdiction.  The alternative procedure provided for under O.12 r.22 is for the defendant, after entering a condition appearance, or without appearance, to make an application to set aside the service, which is of course what has been done here.  Although in the latter case it is the defendants who are seeking relief, these are simply two different ways to the same issue, and it would be surprising if there were any serious shift in the onus depending on the identity of the applicant.
           In Tricon Industries Pty Ltd v. Abel-Lemon & Co Pty Ltd [1988] 2 Qd.R. 464 the onus was found to fall upon the plaintiff, following BP Australia Ltd v. Wales [1982] Qd.R. 386 where at 393 the same judge was of the view that this was the result of W.A. Dewhurst & Co Pty Ltd v. Cawrse [1960] V.R. 278 at 281 and Deer Park Engineering Pty Ltd v. Townsville Harbour Board [1975] V.R. 338 at 341.
           Those authorities do not quite say that.  In the former, after considering the authorities to the contrary, the Court found that for the purposes of that case it would treat the onus as lying on the plaintiff.  In the latter case, although the Court had regard to what the plaintiff would need to prove in order to obtain leave to proceed, a discussion which may have given rise to some confusion in its interpretation, the Court found the onus to lie on the defendant who applied to set the service aside;  and the reference in that judgment to the plaintiff's obligations as to proof is made only in the context of describing what the plaintiff would need to prove when applying for leave to proceed.  This was relevant because the defendant bore the onus of showing that the plaintiff could not succeed in doing so in any application for leave to proceed:   See 340, 344.
           In Laughton v. McKenzie [1945] Q.W.N. 22 the issue was not discussed, the only finding being that the plaintiff succeeded in establishing a prima facie case on the facts. That does not imply that the onus necessarily rested there. In Gore v. Octahim Wise Ltd (unreported Q.S.C. 20 October 1989) it was found, following Tezirstvo v. Korner [1951] A.C. 869, that the onus lay on the plaintiff in an application such as this; but no reference was made to the above cases and the authority relied upon concerned a plaintiff's application for liberty to proceed. The view taken in Deer Park Engineering is logically the most attractive, so that technically the applicants must prove that on jurisdictional grounds the applicant would not obtain leave to proceed.
           Interesting as this technical argument may be, it is of little importance, having regard to the true subject matter of the enquiry, and taking into account the mobile state of a shifting evidentiary onus.  As for the latter, it must remembered that at the time of an application, which is an important factor, the defendant may not have a full or even any knowledge of the nature of the plaintiff's case;  and alternatively there may be facts peculiarly within the defendant's knowledge the proof of which may become available to the plaintiff only by interrogation or discovery of documents.
           It is in this context that all the judicial discussion of the subject has recognised that such an application, from whatever side, cannot be treated as the trial of the action or indeed of any part of it.  Although the terminology used in the relevant rule may vary in different jurisdictions, the concept adopted is relatively uniform in focussing upon the purpose of the enquiry, that is, whether there is a jurisdictional foundation for the action to proceed:  Tezirstvo v. Korner (supra) at 879 where Lord Simonds said that "a plaintiff can make it sufficiently appear that the case is a proper one for service out of the jurisdiction while falling short of the standard of proof which must be attained at the trial."  At p.880, he confirmed that the question is "whether upon all the materials then before him, the judge is of opinion that the case . . . is a proper one to be heard in our courts."  See also Deer Park Engineering (supra) at 341.  This involves an investigation of the plaintiff's case in order to determine whether there is a case that should be tried in the jurisdiction despite the difficulty that might be experienced by a defendant who is absent from it.
           As the result, this enquiry does not necessarily investigate the quality of proof of facts constituting the cause of action that may be available to the plaintiff at the time, although, if specific facts are available and put in issue so that it is suitable to determine them at that stage, the Court may embark upon an enquiry to that extent and in that direction.  This will depend upon the particular circumstances of the case, always having regard to the ultimate purpose of the enquiry referred to above, and the court's power to grant conditional liberty to proceed so that it is reviewable at a more suitable later time.
           It might also be remarked that although the quality of the case generally may be considered in order to remove frivolous or vexatious cases by this process, the major point of enquiry in these matters is usually directed at the feature which gives rise to the jurisdictional question, for example, whether a contract was made or was to be performed within the jurisdiction.  As the cause of action in the present case arose here because it relates to injury to the plaintiff alleged to have been caused by the administration of the substance to her within the State, there is no issue on that jurisdictional point here.  The terms of O.11 r.1 defining the circumstances supporting service out of the State clearly include such a case.  The contrary was not argued.
           This is really the answer to the application.  If the plaintiff establishes her case, the court will undoubtedly have had the jurisdiction to support service.  There may be dispute as to whether there is a good cause of action against these defendants, but that is a matter for the trial.  There is no issue as to whether any cause of action as may exist is outside the prescription contained in O.11 r.1 referred to above. 
           As the essential question in the application is this jurisdictional one it is erroneous to look generally to other issues that do not touch jurisdiction in order to see whether the plaintiff can discharge her onus of proof at this time: cf Deer Park Engineering (supra) at 341.
           The exception to this applying to frivolous or vexatious cases has already been adumbrated, and this should also be examined.  The evidentiary onus at least would be on the applicants here to lead evidence on the relevant issue.  Instead, as it has been indicated, in the case of two of them, without evidence (or even denial on the issue of association with the product) they seek to shut out the plaintiff by demanding proof by her of non-jurisdictional issues at this stage.  This may be contrasted with the position of the first defendant, which has effectively denied any association with the product, and after long notice of that denial the plaintiff acknowledges an inability to prove the contrary on this essential point.  The joinder of this party was probably precautionary and while that may have been justified at the time, it is no longer so.  For these reasons, the service on the first defendant should be set aside on this ground, but not the service on the others.
           It is however desirable, if not necessary, to take this matter further to consider whether there is sufficient evidence of the existence of a prima facie case overall, though the extension of the enquiry into these areas at this stage must influence the content and quality of the proofs to be expected.
           Although some of the authorities have referred to the need to consider whether a reasonable case or a good arguable case has been shown, this does not imply that the proofs establishing such a case must be provided.  Rather, having regard to the above factors, it must be shown only that there is evidence that such a case probably exists, and this does not necessarily involve the presentation of direct admissible evidence proving the prima facie case.  The mere proof that available evidence to that effect probably exists is sufficient for this purpose. 
           It is now suitable to consider the evidence in this matter in the light of these principles, but this will be confined to the case against the second and third defendants.  It is sufficient to confine the discussion further to the two issues raised by them.
           The first is the proof of their association with the product.  Because of their failure to deny their association with the product or the existence of any problems concerning it, they encounter the force of the observation in Morton v. The Nominal Defendant (Queensland) (unreported Full Court of Queensland 10 April 1975), which they themselves advanced.  This is that one may look at affidavits of a party for what is in them and to assume that what has been said is as much as can be said.
           Whilst the evidence led for the plaintiff on these points is relatively slight and indirect, requiring in some cases inferences of direct facts and in other cases inferences that evidence of the ultimate facts exist without proof of the facts themselves, it is enough for the plaintiff's purpose at this time.  In the absence of proof to the contrary and even of denial, there is no reason why the force of the rule in Jones v. Dunkel (1959) 101 C.L.R. 298 should not have full force, particularly in respect of matters that are within or likely to be within their peculiar knowledge. The result is that on the evidence there would appear to be a triable issue.
           As for the causal relationship between the use of the product and the harm caused, one matter of proof of the existence of a triable issue deserves special attention.  Part of the proof included a copy of the judgment of the Court of Appeal of this Court in Mary Alan Wood v. Glaxo Australia Pty Ltd (unreported Court of Appeal 30.3.93) where findings were made that the same product had produced a similar harmful effect to the plaintiff in that case.  Despite the argument of the defendants to the contrary, this is admissible and suitable evidence in respect of an enquiry of the present kind. 
           This same approach was followed in an analogous situation where an extension of time for limitation of an action was under consideration, particularly on the issue of the existence of an arguable case.  In Cuthill v. State Electricity Commission of Victoria [1981] V.R. 908, Starke and Anderson JJ said at 912-913: "It is to be remembered that the exercise is to ascertain whether evidence exists to support the plaintiff's claim. Where better to find such evidence than in the judgment of a court of coordinate jurisdiction? The truth of the facts stated is not proved but on the probabilities the existence of such facts is proved." The point of this reasoning is precisely consistent with the above analysis of the point of enquiry here, that is, whether it is shown that evidence supporting a case probably exists.
           The defendants argue in the alternative that as the cause of action in Wood's case antedated that in the present case by some nine years, it has no probative value.  In circumstances of this nature, such an interval is not such as to displace the probative effect of this evidence.  It is also supported by other slight evidence of earlier scientific concern as to the harmful effects of this product, and in the absence of any evidence to the contrary, the total effect is sufficient to justify the view that a prima facie case probably exists, at least sufficient to support the continuation of the action at this stage.
           For these reasons the application to set aside the service of the process on the second and third defendants should fail where it relies upon this ground.  However the final determination of that application will depend upon the result in the remaining two issues, for if either is successful in its own right then the setting aside of the service would follow consequentially upon it.
           The first of these lies in the claim that the writ should not have been renewed, and because the order was made on an ex part application, the defendants are entitled now to have the justification of that order examined.
           On the original application, the plaintiff relied on general merits relating to involuntary delay for justification.  She is entirely dependent on legal aid to finance her action, and demonstrated a lengthy process of application and delay in obtaining the necessary approval for it.  This does not imply any criticism of the legal aid authorities, for during that period she sold her house and was temporarily in funds until with supplementary mortgage finance she purchased a replacement.  During that period she was technically ineligible for legal aid.
           The material before the Court demonstrates assiduous pursuit of this necessary funding of her action.  Without taking the matter to cross-examination, the defendants were critical of alleged unjustified delays which they read into the process simply by reference to the dates of various letters and the bare facts stated in them.  Such an implication simply cannot be drawn from such equivocal material, and indeed it would be contrary to the whole tenor of assiduous persistence by the plaintiff's solicitors in this pursuit.
           Similarly some criticism was mounted that service was not effected between the date of the approval for legal aid and the date of the application for renewal.  The defendants are probably correct that the approval, when granted, covered the costs of such service of this process.  The plaintiff's argue that the broad terms of the letter of approval should be read down because of the existence of a later letter approving specifically of the costs of service of the process.  This is, with respect, in error because it fails to take into account the intermediate withdrawal and reinstatement of that aid, as indicated in the letter of the plaintiff's solicitors dated 31 January 1995.
           This does not affect the result.  The short delay between the time of the approval of legal aid and the application for renewal of the writ is insignificant.  It was proper precautionary prudence to obtain renewal prior to attempting service because of the propinquity of the date of expiry of the writ.  This was preferable to the risk of wasting the costs of attempted service before that date that could well be unsuccessful.  The difficulty in obtaining legal aid funds and their limited amount, completely justified such prudence. 
           Conversely, the defendants have not demonstrated any prejudice caused by the renewal.  Accordingly their application to set aside the order for renewal on this ground should also be refused.

           The remaining application seeks to set aside the service on the ground that no notice of intention to proceed under O.90 r.9 was given before that step was taken.  The relevant part of that rule requires such a notice where no step in the action is taken within twelve months of the "last proceeding".  It is common ground that the issue of the writ took place more than twelve months before the service and, although the application for renewal was made within twelve months of the issue of the writ, this, as the defendants argue, did not constitute a step in the action:  Musumeci v. Ferro Constructions Pty Ltd [1976] Qd. R. 135.
           There are two fundamental errors in this submission.  The first is that it confuses the issue of the writ, which commences the action, with a proceeding in the action, which is a step that is designed to advance the action commenced by the writ.  The rule requires notice of intention to proceed only where twelve months has expired since the last "proceeding", and if the writ is not itself a proceeding then the rule does not come into operation.
           The purpose of the rule is to afford additional warning time to a party who may otherwise be disadvantaged in the course of the action because the other party has allowed the action to go to sleep and thereby has caused the former to lose momentum in preparation for the next step.  This predicates prior participation in the action by the recipient of the notice.  It would have no relation to the purpose of the rule to serve a notice of intention to proceed on a party on whom the writ had not yet been served.  This is why in all the discussion in the authorities relating to the meaning of "proceeding" it is referred to a step that advances the action.  It will be seen then why in this context the step that brings the action into existence is not one that advances it.
           The consistency of this approach can be detected in the structure of the Rules of Court.  The writ is required to be served within twelve months and thereafter it ceases to be in force:  O.9 r.1.  On renewal, time begins to run again in respect of the same limitation. It is this provision, with ancillary rules for renewal, which controls delay associated with the service of the writ.
           This is consistent with the reasoning in Musumeci v. Ferro Construction Pty Ltd (supra).  There it was pointed out that it was only after the writ was renewed, it having gone stale, that a step could be taken.  The renewal of the writ, analogously with its issue, was not a step or proceeding in the action.  It was the means whereby it again came into existence.  It will be noted that, again consistently with this, there was on that application no suggestion of the need for a prior notice under O.90 r.9, although more than twelve months had expired since the issue of the writ.
           The expression "proceeding" in this context has been described as having the characteristic of carrying the action forward Citicorp Aust Ltd v. Metropolitan Public Abattoir Board [1992] 1 Qd.R. 592, 594 or being "some step taken towards the judgment or relief sought in the action" Keats v. Caelers [1966] Qd.R. 482, 489; or being "taken with a view to continuing the litigation between the parties to it" (Spencer v. Watts (1889) 23 Ch.D. 350, 358; or being "one that suggests something in the nature of a primal step in the prosecution of the action" (Mundy v. Butterly Co (1932) 102 L.J.Ch 23, 26).  These concepts seem to predicate something done within the action, that is, after its commencement by the writ.
           It is just not sensible to speak of the issue of the writ or its renewal as proceedings or as steps in the action in that context.  This was essentially the basis of the reasoning in Musumeci.  There may be some significance in the complete absence of any reported decision on the point, though service of the writ has been found to be a step in the action:  Webster v. Myer (1884) 14 Q.B.D. 231. There may also be some analogous feature in the result of those cases that indicate that the rule has no operation after judgment: Houlston v. Woodall (1884) 78 L.T.Jour. 113; and not even to the signing of the judgment;  Deighton v. Cockle [1912] 1 K.B. 206, though the latter decision is based mostly on the character of the act, which is not consistent with that of a step in the action.
           The implied suggestion in Browne v. Browne [1950] Q.W.N. 30 of a possible need for a notice of intention to proceed in that case, where the originating proceedings had not been served, is not inconsistent with the above reasoning. The matter was not decided or even discussed, and in any case the process consisted of a petition and not a writ.
           There is another answer to the applicant's submission that is even simpler, more fundamental and more direct.  Just as in Musumeci the court had exclusive regard to the renewal of the writ as the new starting point for obligations of the plaintiff, so too should it be regarded here.  When the writ was renewed, it was the renewed writ that was served.  Therefore as the service was effected within twelve months of that renewal, there was no interval of twelve months that would agitate O.90 r.0.  The submission fails to recognise the effect of renewal and begs the question by referring to the original issue of the writ as the relevant proceeding.   It had gone stale and its place was taken by the renewed writ for which time under the rule began to run only on renewal.  This, incidentally is why (as it was indicated in Musumeci) the application for renewal is not a step in the action.
           As that judgment further explains, because of this structure the application for renewal is analogous to an application for leave to proceed under O.90 r.9.  If leave is granted, it is not necessary to give a notice of intention to proceed before the next step although ex hypothesi more than twelve months would have passed since the last step.  This is all part of a consistent structure of the Rules relating to this topic.
           For both of these cognate reasons, the matter does not come within O.90 r.9;  and even if it did, it is a clear case where, the renewal of the writ having been confirmed, the Court's discretion under O.93 r.17 would have been exercised in favour of the plaintiff, for the service without notice would not have been a nullity.
           The applicants commenced to advance other applications or grounds for applications of a technical nature but abandoned these during the course of the hearing.  These applications should also be dismissed.

Orders

The service of the notice in lieu of writ on the first defendant is set aside and the plaintiff is to pay to the first defendant its costs of and incidental to the application to be taxed.

The remaining applications of the first defendant are dismissed with costs to be taxed.
           The applications of the second and third defendant are dismissed with costs to be taxed.

ADDENDUM
           My further researches reveal a decision by the High Court in Voth v. Manildra Flour Mills Pty Ltd [1990] 171 C.L.R. 538 where at 564 it was held that the onus of proof of jurisdiction lay on the plaintiff on an application by a defendant to set aside service out of the jurisdiction; but unlike the present case the plaintiff's application for leave to effect service was required in advance of service, and it had been obtained on an ex parte application.
           The decision turned on the proposition that in such a situation the plaintiff should not enjoy an enduring advantage as to onus by having secured leave by means of an ex parte application when, if the defendant had been represented, the plaintiff would have borne the onus of proof.
           That situation does not exist here.  However there is a somewhat analogous position in that in the course of time a plaintiff is required to obtain liberty to proceed under O.11 r.4 if the defendant fails to enter an appearance.  This may produce the acceptance of a wider view that in substance, irrespective of the form that the procedure may take, the onus should finally rest on the plaintiff, whatever the particular application may be.
           It is not necessary to decide this now for the above result remains whatever the answer may be.  The respondent plaintiff discharged the onus imposed upon her.  The finding that she has is fortified by the confirmation by the High Court on the same page of the report cited above that the matter to be proved is limited to jurisdictional issue and to any other feature that may involve an abuse of process such as might be considered relevant to an application of that kind.  This was the approach taken in the above judgment.