Smith v ACT
[2015] ACTSC 7
•5 February 2015
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Smith v ACT |
Citation: | [2015] ACTSC 7 |
Hearing Date(s): | 12 September 2014, 24 October 2014 |
DecisionDate: | 5 February 2015 |
Before: | Mossop M |
Decision: | See [81] |
Category: | Interlocutory application |
Catchwords: | PRACTICE AND PROCEDURE – application to amend statement of claim to add new cause of action – whether new cause of action arise out of substantially the same facts – whether appropriate within the meaning of Court Procedure Rules 2006 (ACT) r 503(4)(a) to permit the amendment – whether leave should be granted under rr 502 and 507 on the basis that it is arguable that the limitation period has not expired – whether the Court has a general power to make the amendment in circumstances where the limitation period has expired after the commencement of proceedings |
Legislation Cited: | Civil Procedure Act 2005 (NSW) Court Procedure Rules 2006 (ACT) |
Cases Cited: | Aon Risk Services Ltd v Australian National University (2009) 239 CLR 175 Archie v Archie [1980] Qd R 546 |
Parties: | Suzanne Smith (Plaintiff) Australian Capital Territory (Defendant) |
Representation: | Counsel: Mr G Segal (Plaintiff) Mr A Muller (Defendant) |
| Solicitors: Slater & Gordon Lawyers (Plaintiff) ACT Government Solicitor (Defendant) | |
File Number(s): | SC 713 of 2011 |
Introduction
The plaintiff has brought medical negligence proceedings against the defendant. She seeks to amend her statement of claim so as to allege additional causes of action against the defendant.
On 16 October 2008 the plaintiff underwent a breast reconstruction procedure at the Canberra Hospital, a hospital run by the defendant. Following the procedure there were some complications which led to some necrosis of the flesh involved in the breast reconstruction. The plaintiff was required to undergo further surgical treatment.
The Plaintiff made a complaint to the Health Minister in 2009. Arising out of the investigation of that complaint the ACT Medical Board provided the plaintiff with a letter written by the surgeon who performed the reconstruction operation (Dr Tonks) to an employee at the Canberra Hospital dated 14 April 2009. In that letter the surgeon said:
Essentially the surgery was uneventful. Regrettably her post-operative course on the first post-operative night was complicated by the ward nursing staff failing to follow their written and verbal instructions. They removed the Hugger from the patient which resulted in the patient becoming too cool. As a response to this the flap went into shut down and failed to perfuse. As a direct consequence of the staff’s inability to follow quite reasonable and clear instructions Ms Smith sustained partial loss of the flap resulting in necrosis.
The reference to a Hugger is a reference to a “Bair Hugger” blanket used to maintain a patient’s temperature.
On 12 October 2011 the plaintiff commenced proceedings in the Supreme Court alleging negligence in relation to her post-operative care. The pleaded cause of action was based on the information provided to the plaintiff in the letter quoted above. It alleged a duty of care owed to the plaintiff “in and about her post-operative nursing”. It alleged that the duty had been breached because the defendant:
(i)Failed to apply heat blanket for a period of time after the plaintiff was returned to the ward.
(ii)Failed to ensure that any heat blanket was applied ... at the appropriate temperature.
It then alleged that because the wound was not maintained at a proper temperature the wound suffered necrosis (Statement of Claim [12]).
The proceedings were only served on the defendant on 5 July 2012, almost nine months after they were commenced. The case then proceeded with the usual torpid languor. A request for particulars was made but not answered for 15 months. The proceedings were dismissed under r 75 of the Court Procedure Rules 2006 (ACT) (Rules) and then reinstated under r 76 by the filing of a Notice of Intention to Proceed in November 2013. A defence, which largely involved bare denials, was filed on 19 December 2013. The case was first listed for directions on 3 March 2014, almost two years and five months after it was commenced and 20 months after it was served on the defendant.
In August and September 2011, shortly prior to commencing proceedings, the plaintiff’s solicitor attempted to contact the plaintiff’s then treating surgeon, Dr Pucius with a view to obtaining an expert report. He was unsuccessful in contacting Dr Pucius. In October 2011 counsel for the plaintiff prepared a draft letter to Dr Pucius which was never sent but which indicates that, based on Dr Tonks’ letter, the inquiries of the plaintiff’s solicitors were clearly directed at post-operative care and the causal link between the failure identified by Dr Tonks and the adverse outcome from the procedure.
In August 2012 the solicitors attempted to get an expert report from a plastic surgeon practising in Canberra but that doctor did not consider that he had the particular expertise necessary to provide an opinion. He did, however, provide the names of some other surgeons who he considered did have the relevant expertise, one of whom was Associate Professor Harvey Stern. The plaintiff’s solicitors then decided, because it was cheaper, to first obtain an expert report from a nurse as to the post-operative care. In May 2013 they obtained a report from a Ms Gribbin in relation to the appropriateness of the post-operative care.
In June 2013 the solicitor with carriage of the matter changed because of the retirement of the solicitor who originally had carriage of the matter.
In October 2013 the plaintiff’s solicitors requested a report from Associate Professor Harvey Stern. The letter of instructions that he was sent asked questions directed to the post-operative maintenance of the plaintiff’s temperature and the causal link between what occurred in relation to her temperature and the necrosis and infection that occurred. It is clear that Associate Professor Stern’s opinion went in a direction that had not been anticipated by the plaintiff’s solicitors. In summary, he said that the adverse outcome suffered by the plaintiff was a consequence of the type of surgical procedure performed and the failure to treat the necrosis earlier, rather than the post-operative temperature of the plaintiff.
The reports of Associate Professor Stern
In his report of 5 November 2013 and subsequent supplementary report dated 12 May 2014, Associate Professor Stern identified the differences between various forms of reconstructive surgery using mycutaneous flaps. He explained the history of Transverse Rectus Abdominis Myocutenous (TRAM) flap surgery since it was first described in 1982. He explained the difference between a pedicled TRAM flap, a free microvascular TRAM flap and “delayed” procedures designed to promote and enhance the viability of a pedicled TRAM flap.
He explained the use of the “Bair Hugger” as a means of maintaining a patient’s temperature post-operatively and said that, having regard to the majority of the plaintiff’s post-operative temperatures being in the normal range, he did “not accept that all of the patients subsequent complications can be attributed to that single factor”.
He identified that the consent signed by the patient was for an operation described as “Right Breast reconstruction with supercharged TRAM flap”, “supercharging” being a microsurgical technique of enhancing the blood flow of a pedicled flap. He also identified that the operation record made no mention of any “turbocharging” technique.
He concluded that all of the complications experienced by the plaintiff
can be attributed to the surgical technique employed, that is TRAM flap breast reconstruction using only a single muscle to transfer skin and fat from both sides of the abdomen with no attempt to enhance the blood supply either by a preliminary delay procedure not by any supplementary microsurgical techniques at the time of reconstruction (supercharged or turbocharged) despite this having been the technique apparently discussed with the patient and for which the informed consent was obtained.
He also expressed the opinion that the post-operative response to “clearly documented evidence that the transferred flap was suffering venous congestion from early in the postoperative period” was inadequate. He identified that clear colour changes were noted but not acted upon, that good practice would have dictated that the wound be explored to ascertain the extent of flap compromise and that the plaintiff’s discharge from hospital on 25 October 2008 “does appear to have been an error of judgment as the patient required readmission within 24 hours to commence a series of surgical debridements.”
He expressed the view that the outcome for the plaintiff would not have been influenced to any significant extent by the incorrect use of a Bair Hugger but instead the subsequent events were set in train by the use of an operative technique “which remains basically acceptable but is usually supplemented by additional surgical precautions to avoid the well recognised complication of partial flap necrosis”. In his report of 12 May 2014 he elaborated on this saying,
I believe that prevailing surgical standards would expect that a reasonable plastic surgeon carrying out unilateral pedicled TRAM flap breast reconstruction using only a single rectus pedicle in which it is planned to include skin and fat from the contralateral side of the abdomen would employ either a preliminary delayed procedure or supercharging/turbocharging at the time of the reconstruction.
He also expressed the opinion that the outcome “may have been improved, but not certainly” by an early response to the clear evidence of venous congestion and that “it would certainly not be common surgical practice to allow a patient to remain for more than nine days with a partly necrotic infected flap causing febrile episodes without proceeding to a surgical debridement”.
In summary, the effect of the opinion of Associate Professor Stern was that the problems of the plaintiff did not arise from the post-operative issues relating to temperature as disclosed in the letter from Dr Tonks dated 14 April 2009, but instead from the inadequate surgical procedure adopted and the failure to respond appropriately when there were post-operative signs that things were going wrong.
The proposed amendments
The plaintiff now seeks to amend her pleading to accommodate the opinion expressed by Associate Professor Stern. She seeks to add a number of paragraphs to her claim. The amendments sought to be made are the italicised passages set out below.
3A. The plaintiff was admitted as a public patient.
...
4A. Prior to the said surgery, Dr Tonks advised the plaintiff and the plaintiff consented that Dr Tonks would perform a right breast reconstruction with supercharged TRAM flap.
...
5A. Dr Tonks did not undertake the procedures with a supercharged TRAM flap procedure being used.
5B. Dr Tonks did not undertake the surgery using any other appropriate method to ensure adequate blood supply to the plaintiff’s tissue.
...
9A. As from about 17 October 2008, the plaintiff exhibited on her body the appearance of venous congestion of the flap.
9B The appearance of venous congestion demonstrated that the plaintiff was undergoing necrosis of her tissue.
9C. The defendant did not, as and from 17 October 2008, take any step or steps to address the developing necrosis of the plaintiff’s tissue.
Duty of Care
...
10A. The defendant was further under a non-delegable duty of care to exercise all reasonable care and skill in and about the performance of the said surgery.
...
Particulars of breach of duty of care
...
(iii) Failed to ensure that appropriate steps were taken to ensure an adequate supply of blood to the plaintiff’s tissue at those parts of her body that were the subject of the surgical procedure.
(iv) Failed to take any or appropriate action upon the plaintiff developing venous congestion of the flap.
Causation
12. As a result of the surgical wound on the plaintiff not being monitored, treated and maintained at a proper temperature the wound suffered necrosis.
12A. As a result of Dr Tonks not undertaking, as part of the surgical procedure, steps to ensure adequate blood supply, the plaintiff suffered necrosis.
In summary, the amended pleading would add two additional causes of action:
(a)that relating to the type of surgery performed; and
(b)that relating to post-operative care not involving questions of temperature.
Evidence relating to the amendment
The plaintiff relied upon affidavits of Liam James Casey sworn 27 June 2014, 4 August 2014, 9 September 2014 and affidavits of Gerard Peter Rees affirmed 12 September 2014 and 20 October 2014. The defendant relied upon the affidavit of Kelly Annette Irvine sworn 13 August 2014. Two exhibits were also tendered.
Submissions
Plaintiff’s submissions
The plaintiff put her application on the basis of r 503 or, alternatively, rr 502 and 507 of the Rules. She also submitted that the Court had a general power of amendment following expiry of a relevant limitation period.
Rule 503 relates to amendments to documents in circumstances where the limitation period current when the proceedings were commenced has expired. Rule 503(4) permits the amendment of a document to include a new cause of action where it is appropriate to permit the amendment and “the new cause of action arises out of the same facts or substantially the same facts as a cause of action for which relief has already been claimed in the proceeding”. Where an amendment is made it takes effect from the date of the original document: r 514(1), and hence avoids the limitation problem.
Rule 502, in combination with r 507, permits the amendment of a document after the close of pleadings only with leave of the Court. Because r 502 is expressly made subject to r 503: r 502(6), it does not apply to amendments that add causes of action for which the limitation period, current at the time of the commencement of the proceedings, has expired. Therefore, for the purposes of this alternative application the plaintiff submits that the limitation period has not in fact expired. The plaintiff submits that that is because the plaintiff would, if a limitation defence was pleaded:
(a)be entitled to rely upon s 33 of the Limitation Act 1985 (ACT) (Limitation Act); or
(b)plead estoppel based upon the letter dated 14 April 2009 and correspondence between the solicitors for the parties in February 2010 that would prevent the Territory relying upon that defence.
The plaintiff also submits that it would be inappropriate to determine whether or not the limitation period has in fact expired at an interlocutory stage.
If the claim is amended under r 507 any limitation issue would not go away. So long as the Court ordered under r 514(4) that the amendment took effect from the date of the filing of the amended document (or some other suitable post-commencement date) then the limitation argument of the defendant would be preserved as would the plaintiff’s entitlement to contend that the limitation period had not expired or could not be relied upon.
As a consequence, the plaintiff seeks in the first instance to meet the requirements of r 503(4) and only if that is unsuccessful to obtain leave under rr 502 and 507.
For the purposes of the application of r 503 the plaintiff conceded that what was involved was a new cause of action and that the cause of action was statute barred but on the other hand, necessarily, applied under rr 502 and 507 on the basis that the limitation period had not expired.
The plaintiff submitted that the relevant principles were summarised in Naidu v Fergusson (2013) 8 ACTLR 150 and Meredith v Commonwealth of Australia [2009] ACTSC 168.
The plaintiff submitted that the amendments arose out of substantially the same facts as the cause of action already pleaded. She submitted that:
(a)the surgical and post surgical care are interrelated;
(b)even though the existing pleading limits the duty to post-surgical care, the duty of care is in fact a single one, as identified in Rogers v Whitaker (1992) 175 CLR 479 at 483.
(c)the resolution of any factual disputes in the present case will involve evidence and conduct of Dr Tonks, the treating surgeon;
(d)the injury is the same, the damage is the same damage and the quantum of damage is the same; and
(e)the overall transaction between patient and hospital is the same even if now the emphasis is sought to be shifted from post-operative treatment to the surgery.
In relation to prejudice to the defendant the plaintiff submitted that:
(a)there is no or no significant prejudice to the defendant, in particular because the case is not a failure to warn case but instead a case based on the actual steps taken during hospital treatment;
(b)the proceedings are not at an advanced stage and hence there will be no impact on any trial date or other prejudice that might arise if the case was more advanced.
As an explanation for the failure to earlier plead the causes of action now sought to be pleaded the plaintiff submitted that:
(a)the manner in which the case was pleaded was determined by the statements in Dr Tonks’ letter obtained by the defendant and disclosed to the plaintiff;
(b)it was only when the evidence of Associate Professor Stern became available that an alternative view of the case was available to the plaintiff and her advisors; and
(c)since that alternative view of the case has become available the plaintiff has acted promptly and appropriately.
She also submitted that the evidence discloses a strong case for the plaintiff both as to breach of duty and causation.
In relation to the application under r 507 the plaintiff concedes that a case of fraud or concealment as required by s 33 of the Limitation Act could not presently be pleaded but says that if a limitation defence was pleaded then it may be necessary to interrogate the defendant or, alternatively, require the defendant to put on its medical evidence prior to requiring a reply to be filed. She points to the discussion of fraudulent concealment in Commonwealth v Cornwell (2007) 229 CLR 519 at [40]-[45] and the approach taken to application to amend to include such a claim in Butterfield Services Pty Ltd v Bentley [2013] NSWSC 1217 at [37]-[46].
Finally, she submitted that there remains a general power of the Court to permit an amendment of the pleadings outside the particular circumstances contemplated by the Rules and points, in particular, to the discussion by members of the Full Court of the Supreme Court of Queensland in Archie v Archie [1980] Qd R 546.
Defendant’s submissions
In relation to r 503 the defendant submitted that the facts giving rise to the two proposed new causes of action were not the same or substantially the same as the existing cause of action. It submitted that, in effect, the original cause of action was being completely abandoned and substituted with a new cause of action. The defendant pointed out the distinction between the duty of care currently pleaded to provide “post-operative nursing” and the claim pleading deficiencies in the post surgical care going beyond questions of nursing. It points out that the investigations necessary to respond to such a claim are different. It pointed out that the case was different to Balnaves v Armellin [2011] ACTSC 67 because in that case the original pleading of facts was far more extensive than in the present case which was clearly confined to allegations concerning post-operative nursing.
It submitted that there would be significant actual prejudice to the defendant because the records relating to the pre-surgery consultation between Dr Tonks and the plaintiff, which occurred prior to any hospital admission, were no longer available. The evidence disclosed that they had been destroyed in February 2014, shortly before they were the subject of a Notice for Non-Party Production served in March 2014. It submitted that the “advice” referred to in proposed paragraph 4A of the pleadings was the advice that occurred during that consultation. It therefore submitted that the defendant would be prejudiced in its defence of the additional causes of action because it cannot know what Dr Tonks told the plaintiff in 2007 prior to her admission to the defendant’s hospital.
Finally, it pointed to general discretionary considerations which it submitted tell against any grant of leave. In particular, it submitted that, consistently with the decision in Aon Risk Services Ltd v Australian National University (2009) 239 CLR 175 a proper explanation for the delay in making the application was called for and that the evidence of the plaintiff’s solicitors fails to provide one. It submitted that it was not reasonable to rely upon the letter of 14 April 2009 and that the progress of the case reflected extended periods of inattention. It submitted that the plaintiff has failed to explain why, after February 2010 when, as a result of the correspondence between solicitors, it was clear that there would be an issue as to causation and damage, it took another three years to obtain a report from Associate Professor Stern. It submitted that the plaintiff had made a deliberate decision not to obtain expert evidence prior to the expiry of the limitation period and that it was now a substantial period since the limitation period has expired.
In relation to the alternative application under r 507 the defendant first submitted that s 33 of the Limitation Act could only apply if the Territory “was a party to the fraud or concealment”, which was not shown to be arguably the case. . It submitted that if evidence that arguably supported s 33 did emerge then an amendment could be made at a later stage. Second, it submitted that the correspondence between solicitors in 2010 provided no basis for any estoppel because the claim being responded to at that stage was that notified by the plaintiff in her personal injury claim form which identified infection rather than necrosis as the injury suffered. It submitted there was no unconscionability arising from that correspondence because the portion of the letter of 14 April 2009 relied upon by the plaintiff related to temperature and necrosis whereas the claim that had been identified to the defendant related to infection which the letter said did not exist.
It made no submissions in response to the submission based on Archie v Archie but that was probably because the argument was not made in the plaintiff’s written submissions and only developed briefly orally by counsel for the plaintiff.
Issues
The following issues arise:
(a)Do the new causes of action arise out of substantially the same facts for the purposes of r 503(4)(b)?
(b)Is it appropriate within the meaning of r 503(4)(a) to permit the amendment?
(c)Should leave be granted under rr 502 and 507 on the basis that it is arguable that the limitation period has not expired?
(d)Is there a general power to amend notwithstanding the terms of r 503(4)?
Do the new causes of action arise out of substantially the same facts for the purposes of r 503(4)(b)?
In Naidu v Fergusson (2013) 8 ACTLR 150 at [52]- [63] I reviewed the authorities as to what amounted to a cause of action that arises out of substantially the same facts as follows:
52.Unfortunately the authorities “do not provide precise guidance” on how to apply the statutory language: State of New South Wales v Radford (2010) 79 NSWLR 327 at [66]. In applying the statutory language there have been decisions which give a broad scope to the phase “substantially the same facts” and others which give narrow scope to that phrase.
53.A useful overview of the authorities is given in the decision in Meredith v Commonwealth of Australia [2009] ACTSC 168 at [29]-[33]. Whether or not the test is satisfied is essentially “a matter of impression”: Welsh Development Agency v Redpath Dorman Long Ltd [1994] 1 WLR 1409 or a matter of “degree and impression”: Sagacious Procurement Ltd v Mayne Group Ltd [2005] NSWSC 1238 at [24] or “a question of degree”: Borsato at [17].
54.The tests to be applied have been variously articulated: whether “[t]he same – or substantially the same – set of facts falls to be investigated” in relation to the two claims: Brickfield Properties Ltd v Newton [1971] 1 WLR 862 at 873 per Sachs LJ, whether “the overlap is so great that the new cause of action can fairly be said to arise out of substantially the same facts as the old cause of action”: Brickfield at 880 per Cross LJ, “whether the overlap between the essential facts on which each cause of action depends is so great that the two causes of action can be said to arise out of substantially the same facts”: Radford at [72].
55.Three of the cases referred to in Meredith provide examples of the situations that can be covered.
56.Brickfield involved permitting a new cause of action relating to negligent design of buildings in addition to negligent supervision of their construction. Adopting the tests set out above, the Court of Appeal permitted the amendment notwithstanding that the alleged faulty design was at least in part antecedent to the alleged negligent supervision.
57.Stone James v Pioneer Concrete (WA) Pty Ltd [1985] WAR 233 involved a claim pleading a failure to advise in relation to the exercise of an option and the preparation of a licence agreement in 1979. An amendment was permitted so as to permit allegations that the failure to advise in relation to the option agreement occurred in 1976. This was held to be a new cause of action, arising years earlier than had been previously pleaded (at 238, 239) but arising out of a single transaction occurring over several years and the subject to a single retainer (at 241).
58.In Adam v Shiavon [1985] 1 Qd R 1 an amendment was permitted on the basis that it arose out of substantially the same facts where a cause of action for personal injuries arising out of a motor vehicle accident was added to a claim for property damage. Campbell CJ (with whom the other members of the Full Court agreed) found (at 8) that although the plaintiff’s injuries raised a separate issue for determination that did not prevent the new cause of action arising out of substantially the same facts because there was a single accident, one duty of care and one breach of duty.
59.There are other authorities which illustrate how similarly worded rules have been applied.
60.Rodgers v Commissioner of Taxation (1998) 88 FCR 61 involved claims that a number of payments of group tax to the Commissioner were voidable transactions. A Full Court of the Federal Court allowed an amendment after the expiry of the relevant limitation period to include claims relating to further payments. The rule in that case was more specific than that present here in that it required that the “claim arises out of the same facts or substantially the same facts as those already pleaded to support existing claims for relief”. The Full Court permitted the amendment, pointing out that notwithstanding the payments involved separate transactions, the payments were in the same year, formed part of a pattern of regular remittances, and involved allegations identical in form to the earlier claims.
61.In Balnaves v Armellin [2011] ACTSC 67 at [55]-[56] Master Harper found that a new cause of action alleging negligence in the conduct of surgery arose out of substantially the same facts as a cause of action alleging negligence in post-operative care. Matters distinguishing the pleadings in that case from this case were that they were improperly extensive in their description of the facts, possibly making it easier to find that the new cause of action arose out of substantially the same facts and that the duty of care pleaded negligence in relation to both surgery and post-operative care although the original particulars were directed solely to post-operative care. The Master ultimately refused leave to amend for discretionary reasons. Higgins CJ allowed an appeal from the decision on the basis that, having regard to the scope of the pleading the new allegations of breach “raises a new case but not, in my view, a new cause of action”: Balnaves v Armellin [2012] ACTSC 52 at [13]. His Honour did not, therefore, need to consider whether substantially the same facts were involved.
62.There are cases which clearly take a narrow view of what amounts to substantially the same facts, particularly where a new allegation of fraud is perceived to be made: Darlington Building Society v O’Rourke James Scourfield & Mccarthy (A Firm) [1998] EWCA Civ 1664; [1999] Lloyd’s Rep PN 33; Sistrom v Rangott [2004] ACTCA 14. Similarly, where the material before the court is not sufficient to allow the relationship between the causes of action to be judged a court will not be able to be satisfied of the statutory requirement for the grant of leave: Radford at [72]. However those situations are not present here.
63.The decision of the Master in Balnaves illustrates how the redundant pleading of a broad duty can make it easier to find that a new cause of action arises out of the substantially the same facts as an old cause of action. Hamilton v Australian Capital Territory [2011] ACTSC 45, where the Amended Statement of Claim “could not be said to be the finest example of the pleader’s art”, is another example of a case where a broad statement of the negligence and a pleading which went significantly beyond material facts made it easier for a plaintiff to satisfy the test in r 503(4). In my view, parties should be encouraged to plead the case that they, based on the material available to them, actually want to run rather than, for fear of being locked into a case which turns out to be the wrong one, plead in generalities so as to preserve their capacity to accommodate new material or advice which becomes available to them.
To the cases that I reviewed in Naidu I would add the decision of White J in New Cap Reinsurance Corporation Ltd (in liq) v Reaseguros Alianza SA (2004) 186 FLR 175. In that case the plaintiff sought to recover a payment made to the defendant which was said to be a preference. The payment was made on 15 January 1999. It sought to amend its pleadings so as to make three further claims against the defendant in relation to payments made on 8 January, 20 January and 6 April 1999. White J considered, in obiter dicta, whether the three additional causes of action were causes of action “arising out of the same or substantially the same facts”. The payments were payments arising out of reinsurance obligations of the plaintiff incurred under contracts with the defendant. His Honour explained the relationship between the causes of action as follows:
89The only common facts on which the cause of action in the existing pleading and the causes of action in the proposed amended pleading are based, are the winding-up of New Cap and the appointment of the second plaintiff as administrator on 21 April 1999. Whether the facts on which the new causes of action are based are substantially the same as those on which the existing cause of action is based is a question of some difficulty. The contracts in question are different, but they arise from the same course of business. They are all reinsurance contracts. Two of them are in identical terms save as to premium, attachment point and layer of cover. The facts which gave rise to New Cap being liable under the reinsurance contracts may be different, but the “fact” that New Cap was liable under the contracts (if that is a question of fact), is likely to be common to each cause of action. The payments were made on different dates, but the dates were close, at least as to three of the four payments. At least as to those three payments, the evidence as to whether New Cap was insolvent at the time of payment is likely to cover the same ground on each cause of action.
His Honour then discussed the decision in Rodgers v Commissioner of Taxation and Brickfield Properties Ltd v Newton, noting that in the latter case,
[the] Court of Appeal applied the Rule to the substantial similarity of the evidentiary facts which would be examined at the hearing of the existing claim, rather than the ultimate facts to be proved by that evidence. Both Brickfield Properties Ltd v Newton and Rodgers v Commissioner of Taxation applied the expression to a substantially similar series of events.
His Honour concluded that “[t]he question is one of degree and impression” and found that, while the payments made in January were within the phrase, in relation to the April claim made three months after the others, “I do not think that the plaintiff has discharged the onus which lies on it to show a substantially similar identity of facts in relation to that cause of action”.
Finally, I note that the approach in New Cap Reinsurance was followed in Riverina Wines Pty Ltd v Tetra Pak Marketing Pty Ltd [2007] NSWSC 1014, where Fullerton J adopted White J’s expression that the question was one of “degree and impression”. In that case a claim of misleading and deceptive conduct had been made in relation to representations made as to the effectiveness of a system of wine packaging. The claim was then amended to assert negligence and breach of multiple contracts relating to the actual packaging of the wine subsequently carried out. It was clear that the circumstances surrounding the defective packaging would have had to have been investigated at trial in any event because of the claims of misleading and deceptive conduct. This was a more usual application of the substantially the same facts test.
In Kenjar v Australian Capital Territory [2014] ACTSC 69 at [45] I described as “very unsatisfactory” the phrase “arises out of... substantially the same facts as a cause of action for which relief has already been claimed in the proceeding”. The reason for that is that even with the benefit of the authorities the meaning of the phrase is uncertain. It can be interpreted narrowly or broadly and there is no clear test by which very important and commonly arising questions about amendment can be determined.
I note that the issue does not arise in New South Wales with the same acuteness because the relevant provisions (ss 64 and 65 of the Civil Procedure Act 2005 (NSW)) make it clear that even though there is a specific power to grant leave to amend to add a statute barred cause of action where it arises out of substantially the same facts, that specific power does not qualify the general power of amendment: see ss 65(4), 64(1). This has been interpreted as meaning that the general power of amendment can be relied upon even in circumstances where the specific power is not available. Therefore, in a practical sense, it is not essential in New South Wales to meet the threshold that the new cause of action “arises out of substantially the same facts”: see New Cap Reinsurance at [95]-[105]; Greater Lithgow Council v Wolfenden [2007] NSWCA 180.
In the present case the new causes of action relate to the nature of the surgery undertaken and failures (other than in relation to temperature) in post-operative care. The currently pleaded case is one targeted specifically at post-operative care relating to temperature. All causes of action are targeted at claims for the same damage. That damage is damage that arose out of the conduct of the breast reconstruction. While the process can be dissected into the operation on the one hand and the post-operative care on the other, they are in fact part of a single process designed to achieve a particular outcome. Although multiple parties are involved in various aspects of the process, the operator of the hospital is responsible for all of those parties. There is little point in one part of the process being performed successfully if other parts of the process are performed in a manner that undermines that success.
The pleaded claim would not have called into question whether the procedure carried out was one which should not have been. It would have involved an inquiry as to the adequacy of the post-operative treatment in relation to temperature and whether that was causally related to the tissue necrosis and infection that followed. The evidentiary material necessary for the proposed pleading in relation to inadequate post-operative care not related to temperature would clearly overlap with the evidence necessary for the temperature-related claim.
Treating the matter as one of degree and impression my conclusions are as follows.
In my view the new post-operative care claim clearly arises out of substantially the same facts as the post-operative temperature claim. Both relate to different aspects of the post-operative treatment of the plaintiff. The position in relation to the method of surgery is less clear. However, although it is possible to divide the hospital admission by reference to the operation on the one hand and post-operative care on the other I do not think that it would be appropriate to say that in a claim against a single defendant the cause of action arising out of the operation did not arise out of substantially the same facts as the post-operative care. As I have said, the operation and post-operative care were really part of a single process designed to achieve a successful breast reconstruction for the plaintiff. To hold that the two causes of action did not arise out of substantially the same facts would preclude the amendment under r 503(4). It would, in the circumstances of this case, have the effect of permitting the existing cause of action relating to post-operative care to be defeated by the defendant admitting and relying upon its own negligence (if it was such) in the performance of the surgery to prevent the plaintiff establishing the causal link between breach of duty and damage. In my view, the terminology in r 503(4) is not so narrow as to require that conclusion.
As a consequence I find that the two new causes of action sought to be pleaded arise out of substantially the same facts as the cause of action already pleaded.
Is it appropriate within the meaning of r 503(4)(a) to permit the amendment?
The amendments sought to be made are important ones for the purposes of the plaintiff’s case. If Associate Professor Stern is correct then the presently pleaded case will fail and the proposed claims are strong.
The delay in seeking to plead the claim now sought to be pleaded is substantial. The application to amend was made 32 months after the commencement of the proceedings and the expiry of the limitation period. The need for the amendment arises out of the failure of the solicitors for the plaintiff to obtain appropriate expert advice prior to commencement of proceedings or at any time prior to October 2013 to get a report from a plastic surgeon. The evidence ultimately provided a detailed history of first Mr Rees’ and then Mr Casey’s handling of the matter. There is no evidence to suggest that the slow pace at which the case was prepared was the result of instructions from the plaintiff to “go slow” or that there was any other reason precluding a more concerted effort to prepare the case. The explanation for the generally slow progress with the case is therefore unsatisfactory.
The leisurely approach to the case appears to at least have been acquiesced in by the defendant. The defendant took no steps to compel the plaintiff to progress her case in a timely fashion. While delay in the prosecution of a civil claim is often the problem of the plaintiff, the fact that a defendant has done nothing to avoid it is a relevant factor when delay and the lack of a proper explanation is relied upon for the purposes of an application such as this one. The leisurely pace at which the parties have pursued the resolution of this case should now be seen as reflective of a bygone era.
Although the explanation for overall delay on the part of the plaintiff and her failure to secure expert evidence prior to or at an early stage of the proceedings is unsatisfactory, the proposal to amend the pleadings appropriately reflects the expert opinion available to the plaintiff. As I said in Naidu at [63] it must be recognised that it is in the interests of the administration of justice that parties plead with some precision the case that they actually want to run rather than plead in defensive generalities for fear of being locked out of their case when, for legitimate reasons, the information available to them changes. Permitting parties to amend their pleadings when the expert opinion available to them changes will make it easier for parties to make their pleadings useful documents which actually outlines their case. I think that it is relevant that the pleading and amendment to the pleading reflect the approach that I see as desirable.
The destruction of documents by Dr Tonks is significant. As a matter of timing it can be seen that it only occurred because neither party took the step of giving him a notice for non-party production in the first 20 months after service of the proceedings.
The destruction of documents would tell heavily against the grant of leave to amend if the case was one dependent upon the advice given to the plaintiff or if there was evidence that the information in the notes would be significant for the defendant’s conduct of its case. I am not satisfied that the destruction of the notes is significant in either of these ways, for the following reasons.
Firstly, the case it not put as one related to advice. It is simply put that if the operation performed was the operation described in the surgeon’s report (and not the operation set out on the consent form or some other operation that enhanced the blood flow to the pedicle) then the performance of that operation amounted to a breach of duty by the defendant in so far as it provided specialist plastic surgery surgical services in 2008. This, on its face, is not dependent upon the advice given earlier by the surgeon who performed the operation even though the request for admission to hospital and the patient’s consent was obtained at that earlier time.
Secondly, in so far as the appropriateness of the surgical technique might be influenced by facts recorded in the destroyed notes, that is a matter which, upon the evidence before me, cannot rise above speculation. There was no evidence that Dr Tonks had no recollection of the circumstances of the patient or, indeed, that there was likely to be significant material in his notes. There was no evidence that, as a matter of practice, his notes were likely to have contained information that might explain or help him explain the apparent discrepancy between the consent form and the operation report or his reasons for not taking steps to enhance blood supply to the tissue. Indeed, there was no evidence that he had even been spoken to by the solicitors for the defendant for the purposes of this case.
Balancing these considerations it is in my view appropriate to grant leave to make the amendments sought.
Should leave be granted under rr 502 and 507 on the basis that it is arguable that the limitation period has not expired?
In the light of my conclusion above it is not necessary to answer this question. However in case I am wrong on either of the two preceding issues, I will briefly express my conclusions on this issue.
Any leave granted under r 502 would need to be confined so that it only took effect from the date which preserved the defendant’s capacity to argue that the claims were barred by the Limitation Act.
It would not, in my view be appropriate to grant leave to amend on the basis of the possible application of s 33 because, as counsel for the plaintiff accepted, there is not currently sufficient material available to permit it to be pleaded in reply to a defence raising the Limitation Act. Assuming, as the High Court did in Cornwell at [44]-[45], that the approach in Cave v Robinson Jarvis & Rolf [2003] 1 AC 384 reflects the correct approach to s 33, the material available does not provide an arguable basis for the proposition that there was a deliberate breach of duty or the taking of active steps to conceal a known breach of duty as opposed to a failure to disclose a negligent breach of duty that the actor was not aware of committing.
Similarly, I do not consider that the correspondence between solicitors provides an arguable basis for a claim of estoppel against the defendant. The correspondence between the plaintiff’s and defendant’s solicitors occurred prior to the commencement of proceedings. On 26 October 2009 the solicitors for the plaintiff had forwarded a personal injury claim notification under the Civil Law (Wrongs) Act 2002. That notice identified the injury as “1. Infection 2. Exacerbation of infection 3. Psychological injury”. In letters dated 1 and 15 February 2010, the plaintiff’s solicitors requested that the defendant admit liability based on that portion of Dr Tonks’ letter quoted above at [3]. In letters dated 9 and 18 February 2010 the solicitors for the defendant declined to admit liability and pointed out, correctly, that the claim made related to wound infection (rather than necrosis) and that in the same letter as the plaintiff relied upon Dr Tonks had stated that the wound was not infected. While there might well have been an appropriate response to this by the plaintiff’s solicitors, the matter was not pursued.
In my view this correspondence does not give rise to any arguable claim that the later reliance by the Territory on a limitation defence would be unconscionable. There is nothing in the letters indicating that it would not be relied upon or anything else in the letters that would mean that it was unfair for the Territory to rely upon a limitation defence. Further, in the absence of something more, it is not possible to turn a failure by the defendants solicitors to deny what was said by Dr Tonks in relation to the maintenance of temperature and necrosis into an admission of liability or a course of conduct which reasonably led the plaintiff to believe that breach of duty would not be denied. The defendant’s solicitors simply gave a negative response to a request for an admission. That cannot be construed as more than it is.
In my view, the appropriate course would be to consider any application to raise s 33 or an estoppel at a point where the plaintiff could put forward an arguable case, based on material available to her, that they could be made out. That point has not been reached.
A general power to amend
In the light of my conclusion above it is not necessary to answer this question. However, in case I am wrong on either of the first two issues, I will briefly express my conclusions on this issue.
I do not accept that there is a general power to amend equivalent to that found to exist in Archie v Archie [1980] Qd R 546. That is because Archie v Archie was a case dealing with rules different to those in the ACT Rules.
In Archie v Archie the relevant court rules permitted the amendment of documents after the expiry of a limitation period in particular circumstances, including where the new cause of action arose out of substantially the same facts. In that case a party had been joined as a third party and notice given of an intention to join her as a second defendant at the trial of the action. The trial of the action occurred after the limitation period had expired. The trial judge held that in the circumstances he had no discretion to permit the joinder because of the rule in Weldon v Neal (1887) 19 QBD 394, notwithstanding the power of amendment contained in the rules. The case did not fit within the scope of the specific sub-rules dealing with amendment after the expiry of the limitation period. In the Full Court DM Campbell J, who dissented in the result but not on this point, referred to the rule in Weldon v Neal that an amendment would not be permitted to set up a new cause of action if the effect of the amendment would permit the claimant to defeat the effect of a limitation statute. However, his Honour also noted that at the end of the passage stating that rule, Lord Esher MR said: “Under very peculiar circumstances the Court might perhaps have power to allow such an amendment, but certainly as a general rule it will not do so.” His Honour noted that no light has been shed, in subsequent references to this passage, to what constitutes “peculiar circumstances”. His Honour proceeded to decide the appeal on the basis that, as a matter of discretion, leave to join the second defendant should be refused. Hoare J, with whom Kneipp J agreed, quoted the same passage from Weldon v Neal. His Honour noted that in the passage referred to the rule as a being a “general rule” and the reference to “very peculiar circumstances”. Having discussed a series of cases his Honour concluded:
In my opinion, while it is no doubt that the general rule is as stated in Weldon v Neal (supra), it seems to me that on general principle the Court has a discretion. I would readily accept that the discretion should only be exercised “in peculiar circumstances” or “special circumstances” but it seems to me that it is contrary to principle to assert that the rule is of rigid application and that therefore there is no room for the exercise of a discretion. There could well be circumstances in which a plaintiff in an action could be deliberately mislead by the other party in such a way as to render it most unjust to refuse the addition of another party to the action even though the benefits of statutory limitation would be denied the party joined.
As a consequence, he considered that the trial judge had erred in holding that in the circumstances he did not have a discretion. He concluded that in the circumstances the plaintiff should have been permitted to join the second defendant.
In my view, any similar reasoning in relation to the ACT Rules is precluded by the terms of rr 502(6) and 503(1). Those sub-rules make it clear that r 503 is a qualification on the power in r 502. That means that in cases where the limitation period has expired after the commencement of proceedings the power of amendment is limited to the circumstances in r 503 (and any other rules apart from r 502 which may permit it: see Naidu at [29]). That precludes adopting reasoning similar to that in Archie.
As noted above, a broader discretion is available in New South Wales as a result of the fact that, contrary to the position in the Territory, the specific power of amendment is stated expressly not to qualify the general.
In Queensland, the current rules are in similar terms to the Territory but potentially qualified by the power of amendment in s 81 of the Supreme Court of Queensland Act 1991 (Qld): see Draney v Barry [2002] 1 Qd R 145 at [22]-[23]; Civil Procedure Queensland [376.15].
The effect of the Territory rules is that, although the terms of rr 503(2)-(4) sweep away the rule in Weldon v Neal, the terms of r 502(6) in combination with r 503(1) extinguish the residual discretionary capacity to grant leave to amend in peculiar or special circumstances that was recognised by the rule in Weldon v Neal. Thus, while expanding the capacity for amendments to documents after the expiry of limitation periods in some respects, r 503(6) has narrowed it in other respects.
As a consequence, so far as the Rules are determinative, they defeat the argument put forward by the plaintiff. The only way around the limitations in the Rules could be to dispense with them under r 6 to the extent necessary to permit an amendment outside the scope of r 503. It is not appropriate to consider whether or in what circumstances this would be an available or appropriate course because it was not subject to argument and any conclusion on the point is unnecessary having regard to the conclusions that I have reached above.
Conclusion and orders
Because of my conclusions on the first two issues, it is appropriate to grant the plaintiff leave to amend her statement of claim to include the two additional causes of action
In relation to costs it is appropriate that since the plaintiff is seeking an indulgence in the form of a late amendment of her claim she pay the costs of the application and the costs thrown away by reason of the amendments. I will reserve liberty for either party to apply for any supplementary costs order against the plaintiff’s solicitors in case such an application is considered appropriate.
The orders of the Court therefore are:
1. The plaintiff is granted leave to amend her Statement of Claim so that it is in the form of Annexure K to the affidavit of Liam James Casey sworn 27 June 2014.
2. The plaintiff is to pay the defendant’s costs of the application and the costs thrown away by reason of the amendment.
3. Liberty is reserved to either party to make any application for costs against a non-party in addition to or substitution for order 2.
4. The proceedings are listed for directions on 13 February 2015 at 10.00am at which time the parties should bring in agreed or competing directions for the preparation of the matter up to a hearing.
| I certify that the preceding eighty-one [81] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Master Mossop. Associate: Date: 5 February 2015 |
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