Stuart Stanley Brown v Lisa Dawn Hynd No. SCGRG 94/455 Judgment No. 4759 Number of Pages 10 Practice South Australia

[1994] SASC 4759

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Practice - South Australia - Appeal against an order extending the time within which to apply for the renewal of a summons and an order directing its renewal - in December 1986 respondent issued a summons in the District Court seeking damages from appellant for personal injuries sustained in motor vehicle accident - after several failed attempts to serve the summons it was left in abeyance by the respondent's solicitors until September 1993, when the file was passed on to new solicitors - respondent, during this period, kept in contact with her solicitors - SGIC, appellants insurers, were promptly notified of the accident and provided with medical reports from doctors consulted by respondent - thereafter followed unsuccessful negotiations to settle the matter - to succeed in opposing a renewal appellant required to demonstrate existence of prejudice, giving rise to a substantial risk that a fair trial would not be possible - evidence revealed respondent was not supinely inactive - despite the inordinate and inexcusable delay and default on the part of solicitors for respondent, appellant had not been able to point to prejudice of a sufficiently significant degree to warrant the denial of the renewal of the summons - appeal dismissed. Williams and Anor v F S Evans and Sons and District Council of Stirling (1988) 52 SASR 237 and Mahon v Frankipile (Australia) Pty Ltd (1990) 157 LSJS 52, applied.

HRNG ADELAIDE, 29 August 1994 #DATE 9:9:1994 #ADD 13:3:1995

Counsel for appellant:     Mr M G Steele

Solicitors for appellant:    Ward and Partners

Counsel for respondent:     Mr G L Muecke

Solicitors for respondent: Scales and Partners

ORDER
Appeal dismissed.

JUDGE1 OLSSON J This is an appeal by a defendant against an order of Thompson A/DCJ dated 4 February 1994, whereby he both extended the time within which to apply for a renewal of a summons issued in the District Court and then directed its renewal until 4 May 1994. The appeal comes before this Court by virtue of a certificate given by the learned Acting Judge as envisaged by SCR
96A.02(1)(b).

2. The factual history giving rise to this matter reflects a truly sorry state of affairs.

3. On 11 December 1986 solicitors for the plaintiff issued a summons in the District Court seeking damages for personal injuries said to have been sustained by the plaintiff as a consequence of a motor vehicle collision which occurred on 7 February 1985. The District Court was requested to effect service of the summons by post in accordance with the rules of court.

4. This attempted form of service proved ineffectual, apparently because the defendant had changed his address. The court advised the then solicitors for the plaintiff of that situation on 17 December 1986. Those solicitors further attempted to have the summons served by the Court by post on 24 March 1987 at an address care of another party, the initial court notification having been misfiled for some time. They were told that this was not possible.

5. The summons was returned to the solicitors in question on 13 May 1987 at their request. They forwarded it to a process server, on 21 May 1987, for service. The process server advised the solicitors, on 27 May 1987, that service had not been effected and that the defendant was understood to be in Western Australia.

6. The solicitors for the plaintiff appear thereafter simply to have totally neglected the matter for a prolonged period of time. It was said that, in 1990, they sold their personal injury practice to another firm. However, the file in respect of the present matter was, for some inexplicable reason, not handed over. In an affidavit sworn by him the principal of the solicitors for the plaintiff deposed that, in December 1992, he realised that there was a major problem with this matter. He says that he consulted counsel on 23 December 1992 and concedes that, on or about 11 January 1993, was advised that the file ought to be passed on to another practitioner for attention.

7. Even then there was further inexcusable delay, with the relevant principal simply procrastinating and not doing anything. It was not until late September 1993 that the file was eventually handed over to the present solicitors for the plaintiff. The former solicitors for the plaintiff have readily conceded their default in this matter and accept full practical responsibility for it.

8. In a separate affidavit sworn by her the plaintiff has deposed to this effect:-
    "7. Since instructing Stephen Haarsma I have always been
    ready willing and able to give instructions and whenever I
    have been requested to attend at their office I have done
    so. I have always provided information when sought and
    have attended at doctors when arranged for me, generally I
    have waited for my solicitors to contact me.
    8. I have heard that these types of claims take a long time
    to finalise and left the running of my matter to my then
    solicitors. I have from time to time contacted my then
    solicitors but my calls or letters were not always
    returned.
    9. Since early 1992 I have sent at least five letters with
    instructions or requesting information. In that period I
    have also left numerous messages but those calls were not
    returned.
    10. During the period of time that I instructed Haarsmas I
    advised them of each change in my address and phone
    number."

9. Against that background it should be noted that the former solicitors for the plaintiff notified SGIC, the compulsory third party insurer of the appellant's vehicle, of the accident and the plaintiff's injury on 2 July 1985.

10. By letter dated 10 July 1985 SGIC intimated that no report of the accident had been submitted to it by the insured driver and that any correspondence should be sent direct to the appellant. That was followed by a further letter dated 24 December 1985, indicating receipt by SGIC of a report of the accident and inviting submission, in due course, of relevant medical details. Copies of three medical reports dated 9 April 1985, 28 February 1986 and 13 August 1986 from three separate doctors consulted by the plaintiff were forwarded to SGIC by her then solicitors much later, under cover of a letter dated 13 March 1987.

11. This elicited a response, dated 23 March 1987, in which SGIC requested a formulation of claim, supported by appropriate documentation.

12. After a lapse of some 12 months, on 7 March 1988, the former solicitors for the plaintiff wrote to SGIC with a formulated claim. A total sum of $35,000 damages was sought. Certain medical reports were subsequently forwarded under cover of other letters.

13. On 27 April 1988 the SGIC wrote to the plaintiff's solicitors in these terms:-
    "27th April, 1988
    Our Reference: TP 8508123 CT
    Haarsmas,
    345 King William St.,
    ADELAIDE. 5000

Dear Madam
    Re: Motor Vehicle Accident: 7/2/85
    Our Insured: Timber Industries of S.A.
    Your Client: L. Hynd
    Your Reference:

We refer to your formulated claim of 7th March, 1988 and to
    more recent correspondence enclosing medical reports.

The Commission advises that it is prepared to apportion
    liability in this matter at 75/25% in your client's favour.

We are prepared to settle your client's claim in the sum of
    $8,000 by way of general damages, plus workers
    compensation, plus special damages, (less 25%,) plus $400
    towards your costs, plus disbursements. Kindly present
    this offer to your client.

We look forward to hearing from you in due course.
    Yours faithfully,
    (signed)
    Judy Millikan
    C.T.P. CLAIMS DEPARTMENT"

14. The plaintiff's solicitors replied on 2 May 1988, rejecting the offer made and making a counter offer of $30,000. SGIC would have none of that proposition and, by letter dated 17 May 1988, rejected the counter proposal and reiterated its original offer.

15. The documentation on file indicates that, by 4 October 1988 the SGIC offer had firmly been rejected and the plaintiff's solicitors were requested to serve any proceedings direct on the appellant. By letter dated 9 February 1989, SGIC was informed that proceedings had in fact been issued on 11 December 1986.

16. What thereafter transpired is not entirely clear, although it is to be noted that, on 17 July 1989, the plaintiff's solicitors wrote to SGIC referring to a telephone conversation with an officer of SGIC and stating:-
    "We confirm that our client is willing to accept your offer
    on apportionment of liability at 75/25%."

17. This prompted the following rejoinder from solicitors instructed by SGIC:-
    "Messrs Haarsmas
    Solicitors
    345 King William Street
    ADELAIDE SA 5000

Dear Sirs
    SGIC RE: TIMBER INDUSTRIES, BROWN AND L HYND

We refer to your letter dated 17th July 1989 to SGIC.

We have considered SGIC's file in the matter.

We note that in your letter dated 1st September 1988 to
    SGIC you rejected the offer of settlement made by SGIC in
    its letter dated 17th May 1988 which was a reiteration of
    the offer made in its letter to you dated 27th April 1988.

According to our instructions there was, from the time of
    your letter dated 1st September 1988 no outstanding offer
    by SGIC. Its offer's (sic) of settlement had been rejected
    and could not therefore have been accepted by you without
    being reput by SGIC.

We are further instructed that no further offers of
    settlement were made by SGIC after the 1st September 1988,
    either in an alleged telephone conversation with Mr David
    Williams on the 10th February 1989 or at all.

We would be grateful if you would urgently consider the
    matter and confirm that you agree that the issue of
    liability has not been settled at a 75/25, or any other
    apportionment. Any assertion by you to the contrary will
    be contested.

We look forward to hearing from you.
    Without prejudice.
    Yours faithfully
    WARD and PARTNERS
    Per: (signed)
    MICHAEL W MILLS"

18. By ex parte application dated 9 December 1993, the present solicitors sought orders extending time for bringing an application to extend time for service of the summons and extending the time for such service.

19. This came before the learned Acting Judge on 31 January 1994. The solicitor for the appellant appears to have been present on that occasion as "an observer".

20. The learned Acting Judge took time to consider the matter and, on 4 February 1994, made the orders now appealed against. He published written reasons for so doing.

21. The solicitors for the appellant accepted service of the renewed summons on his behalf on 22 March 1994, entered a formal appearance on 29 March 1994 and thereafter initiated the present appeal, the grounds thereof being stated as follows:-
    "1. the delay in service of the Summons in this matter has
    resulted in prejudice to the defendant to the extent that
    the Order extending time for service should not have been
    made.
    2. That no or no sufficient explanation for the delay was
    offered by the plaintiff.
    3. That having found that the attempts to serve the Summons
    by the plaintiff's then solicitors, His Honour should not
    have allowed the Application.
    4. That His Honour erred in finding that SGIC had made up
    its mind on the issue of liability by mid 1989.
    5. That insufficient regard was had to the mitigating
    effect of the plaintiff's entitlements to worker's
    compensation upon the prejudice suffered by the plaintiff
    if the Order had not been allowed.
    6. That His Honour erred in finding that there was not a
    substantial risk that a fair trial would not be possible."

22. In his published reasons the learned Acting Judge referred to the relevant authorities and then had this to say:-
    "It will suffice for the purposes of detecting these
    principles to look at Victa Ltd v Johnson or Gibb v
Williams (1971) 24 SASR 243: whatever way put, the
    considerations are -
    1. what attempts had been made at service?;
    2. the length of delay;
    3. the reasons for the delay;
    4. the conduct of the parties;
    5. the hardship or prejudice caused to the plaintiff by
     refusing the renewal;
    6. the hardship or prejudice to the defendant by granting
    it.

1. In this matter, the summons became stale 12 months after
    issue i.e. December 1987. This application is therefore
    brought some six years after that date.

The attempts that have been made at service by the
    plaintiff's former solicitors were at best insignificant
    and lamentable.

2. Under the heading 'conduct of the parties' the only
    relevant material is the fact that the SGIC had notice of
    the claim in 1985 and had been given particulars of
    injuries and at least by mid-1989 had made up its mind on
    the issue of liability see Mahon at pp70-80 and Williams at
    p238 supra.
    3. Reasons for the delay: These amount to appalling
    inaction on the part of the plaintiff's then solicitor.

4. There is nothing in the defendant's conduct - or in the
    conduct of his insurers - SGIC that has contributed to the
    present state of affairs. The conduct of the plaintiff's
    former solicitor is reprehensible. Mavra v Logan (1980) 23
    SASR 567 precludes those sins from being visited upon the
    head of a negligent solicitor's client.

5. On issue of hardship or prejudice to the plaintiff, it
    is an inescapable conclusion from the evidence that the
    accident occurred as a journey accident on the plaintiff's
    way home from work. No details at all have been deposed to
    as to the outcome of workers compensation proceedings that
    the plaintiff may have had a right to. Indeed, in an
    affidavit of her present solicitor filed herein there is a
    claim that special damages will amount to some $2,842.22.
    What if any of that amount has been recovered or is
    recoverable from the employer's insurers under the 1971
    Workers Compensation Act is not before me. I am also left
    in the dark completely as to what the position is with
    regard to any loss of earnings claim other than that the
    plaintiff had three weeks off work in 1985. Whether she
    was paid compensation for this, or whether she has any
    ongoing entitlement to 'makeup' pay is not disclosed. The
    evidence on affidavit as to the plaintiff's economic
    prejudice therefore exigious (sic) to say the least.
    Indeed, if the issue on liability remains alive it may well
    be that the plaintiff would not be prejudiced if the
    summons was not renewed. It seems to me that the plaintiff
    has to demonstrate something more than losing the right to
    litigate the action because it would be otherwise Statute
    bared (sic). It has been urged upon me by Mr Smith that it
    virtually goes without saying by losing the opportunity to
    litigate a damages action at common law the plaintiff has
    suffered a substantial loss. That is not a view that I am
    able to embrace wholeheartedly on the material before me.

6. On the question of prejudice to the defendant, I am at a
    disadvantage in not having had any submissions from the
    defendant for reasons outlined above. If the summons is
    renewed the defendant will firstly suffer the prejudice of
    having to litigate a matter in 1994 the facts of which
    occurred in 1985 and, secondly, it will have denied to it
    the opportunity of pleading the Limitation Act if this
    summons was not renewed. In some way the authorities that
    have been quoted are not exactly on the point that falls
    upon me to decide because they all appear to be matters
    that were decided where the defendant has had the
    opportunity of presenting evidence and the question of the
    prejudice to the defendant has therein been fully
    adumbrated. In Trattonicolas v Schaefer 106 LSJS p50, all
    members of the Full Court accepted the proposition that
    prejudice could be infered (sic) in the appropriate case
    from facts such as a very lengthy delay. That inference
    would, I imagine, be very readily open to me when the
    defendant is forced to litigate a matter involving three
    weeks only off work where the last medical report forwarded
    to it comes from Dr Dale Thomas dated 4 March 1988 which
    relates to four examinations the last of which related to
    October 1987 (Dr Thomas is now deceased). I note from the
    report of Dr F W Chan of 15 December 1987 that the
    plaintiff was originally a patient of Dr W H Lee who left
    Australia in March 1987. There is no up-to-date medical
    report. The reports that have been annexed to the
    affidavits are years out of date. In this respect an
    inference of prejudice to the defendant in dealing with the
    matter at this stage can be more easily drawn where one of
    the plaintiff's doctors is dead or another left the country
    nearly several years ago.

On the other hand I am bound by the decision of the Full
    Court in Williams v F S Evans and Sons supra and particularly
    at p243 per White J - ... 'The discretion not to renew a
    summons should only be exercised adversely to the
    plaintiff.
    1. where the plaintiff's default has been intentional and
    contumelious; or
    2. where there has been an inordinate and inexcusable delay
    on his or his lawyer's part giving rise to a substantial
    risk to the fair trial would not be possible or to a
    substantial risk of serious prejudice to the defendant.'

I take the view that there has been no default either
    intentional or contumelious.

I also take the view the delay on the part of the
    plaintiff's lawyers has been inexcusable.

I am just barely convinced that although there is a risk
    that a fair trial is not now possible, does not fall into
    that category of a 'substantial' risk. These are, of
    course, value judgments that I am expressing. I therefore
    come to the conclusion, and I do this with a significant
    degree of reluctance, that at least on an ex parte basis in
    interlocutory proceedings, the plaintiff probably has
    sufficient cause for me to grant the extensions of time
    sought pursuant to r10. I therefore make the orders sought
    in the summons that the time for bringing this application
    be extended and that the time for serving the summons be
    extended for a period of three months from this day's
    date."

23. In reality the major issue argued on the appeal was the question of whether or not the learned Acting Judge had, in his reasons, correctly approached and assessed the factor of prejudice to the appellant which resulted from the granting of the extensions sought. It became virtual common ground that all other relevant factors had correctly been identified and addressed in his reasons for decision on bases which could not now be impugned.

24. It is stating the obvious to say that the learned Acting Judge took as the touchstone in this regard what fell from White J in Williams and Anor v F S Evans and Sons and District Council of Stirling (1988) 52 SASR 237 at 243, where His Honour commented:-
    "... the discretion should only be exercised adversely to
    the plaintiff when the plaintiff's default has been
    intentional and contumelious or where there has been an
    inordinate and inexcusable delay on his or his solicitor's
    part giving rise to a substantial risk that a fair trial
    would not be possible or to a substantial risk of serious
prejudice to the defendant: Birkett v James (1978) AC 297
    at 318 F-G, 319A, 332 F-G, 330 B-C, 336 D-E, approving
Allen v Sir Alfred McAlpine and Sons Ltd (1968) 2 QB 229 (CA)
    ... "

25. Mr Steele, of counsel for the appellant, contended that such a test went beyond the authorities which preceded Williams and placed an evidentiary onus on the appellant which was too high and unduly adverse to it. He argued that "other good cause" for granting a renewal, as contemplated by DCR 10.03(3), was simply not made out when it appeared that a plaintiff had been supinely inactive (in the sense in which that expression was employed by Bray CJ in Napolitano v Coyle (1977) 15 SASR 559 at 569) and the grant of a relevant extension of time would result in even "slight" - or, at the most, "real" - prejudice to a defendant. (Cf Napolitano v Coyle (supra) at 571.) He submitted that White J had gone well beyond those expressions in his above dictum and that such a formulation of the test ought to be rejected in favour of a much lower level of demonstrable prejudice. Whilst he accepted that the appellant had not sought to adduce any positive evidence of prejudice (and, by virtue of the procedural approach adopted in the instant case of simply appealing against the original order, could not do so without leave), nevertheless he contended that the period of delay and general circumstances were such that at least "real" prejudice was necessarily to be inferred. (Cf Trattonicolas v Schafer (1983) 106 LSJS 50 at 53.)

26. In my opinion these submissions cannot be upheld.

27. In the first place, on her unchallenged affidavit (of which Mr Steele was initially unaware), excerpts of which I have cited, the plaintiff was not supinely inactive in the relevant sense. She attempted, on various occasions, to follow the matter up with her solicitor - to no avail. Ultimately she seems, not unreasonably in the circumstances, to have resigned herself to what she perceived as the apparently normal delays of the legal process.

28. Secondly, it simply cannot fairly be said that the test posed by White J and applied by the learned Acting Judge was idiosyncratic and out of step with published authorities. In Williams King CJ spoke of the need for a defendant to point to "significant" prejudice. More recently, in Mahon v Frankipile (Australia) Pty Ltd (1990) 157 LSJS 52, as a member of the Full Court, I suggested that (at 70):-
    "In general, the Court must be persuaded that there will be
    a substantial risk that a fair trial would not be possible
    or that there is such demonstrated serious prejudice to the
    respondent that it was unjust to permit the proceedings to
    be revived."

29. I further made the point that there can be no absolutes in cases of this nature and that each situation must be judged on its own facts, bearing in mind relative detriment likely to be suffered by the parties.

30. To my mind what fell from White J in Williams is entirely in accord with that approach, which was not dissented from by the other members of the Full Court, including White J himself - who presided in Mahon.

31. In the instant case critical considerations were:-
    - the appellant insurer was well aware of the plaintiff's
    claim from very shortly after the accident;
    - having received a formulated claim, SGIC, as insurer of
    the appellant, made a considered offer both as to liability
    and quantum of damages;
    - despite its original rejection, the plaintiff has for
    some time indicated acceptance of the appellant's view on
    apportionment of liability and continues to be content to
    proceed to judgment on that basis. There is thus no
    apparent prejudice whatsoever to the appellant on
    liability.
    - since the time of the formulation, SGIC has been aware of
    the nature of the plaintiff's claim for damages and the
    content of the various medical reports upon which it is
    based. That basis has not changed and, knowing of the
    existence and nature of it, that a dispute existed, and
    that proceedings had been instituted (albeit not served
    personally on the appellant, as demanded by SGIC), SGIC did
    not, at any relevant stage, seek to have timely check
    medical examinations carried out. Whilst it is true that
    one medical witness has died and another has left
    Australia, the fact remains that their reports are
    available and other relevant medical witnesses (who were
    involved in the treatment of the plaintiff at a relatively
    early stage) can still be called. The same arguments as to
    the validity of those opinions which were based on the
    vexed topic of thermography are still available to SGIC,
    which, by its own inaction at relevant times, has denied
    itself the opportunity of early check medical examinations.

32. In those circumstances, despite the inordinate and inexcusable delay and default on the part of the original solicitors for the plaintiff, I consider that it remained fairly open to the learned Acting Judge to come to the conclusion expressed by him. Indeed I think that I would have taken a slightly less sympathetic view than he did as to degree of prejudice likely to be suffered by the appellant.

33. In short, I am not persuaded that this Court ought to interfere with the exercise of a discretion which was properly open to Thompson A/DCJ. At the end of the day the appellant has not been able to point to prejudice of a sufficiently significant degree as to warrant a denial of the relief claimed. Whatever may be the situation as to onus of proof the situation is very much as described by Bollen J in Williams (at 249):-
    "Mr Debelle claimed that in considering prejudice Olsson J
    had, and this Court arguendo had, inverted and was
    inverting the onus of proof, requiring the appellants to
    prove prejudice. The facts which amount to prejudice are
    peculiarly within the knowledge of the appellant. I would
    not see much wrong in principle with such an inversion.
    But the truth is that I do not think that Olsson J did
    impose any such inversion of proof on the appellant. If no
    information about prejudice, no proof of the existence of
    facts which could amount to prejudice, is produced the
    Court may assume that there is none. To that extent there
    is an evidentiary onus on the appellants to put forward
    evidence about things which it says amount to prejudice.
    However, I am content to let it be said that the final onus
    is on the respondents. I think that the respondents
    discharged it."

34. As is so often the situation in these cases, there has been a good deal of rhetoric, but precious little substance - particularly having regard to the state of knowledge and the approach of the appellant's insurer over time.

35. The appeal must be dismissed.