Ugle v DIRECTOR-GENERAL of the Department for Family and Children's SERVICES
[2020] WASC 262
•9 JULY 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: UGLE -v- DIRECTOR-GENERAL OF THE DEPARTMENT FOR FAMILY AND CHILDREN'S SERVICES [2020] WASC 262
CORAM: REGISTRAR WHITBY
HEARD: 19 JUNE 2020
DELIVERED : 9 JULY 2020
PUBLISHED : 9 JULY 2020
FILE NO/S: CIV 1182 of 2020
BETWEEN: STEPHANIE JUNE UGLE
Plaintiff
AND
DIRECTOR-GENERAL OF THE DEPARTMENT FOR FAMILY AND CHILDREN'S SERVICES
First Defendant
THE STATE OF WESTERN AUSTRALIA
Second Defendant
Catchwords:
Practice and procedure - Application to strike out writ and statement of claim - Bennett duty - Common law and/or fiduciary duty for guardian to obtain independent legal advice for ward - Whether duty is continuing - Whether claim statute barred - Limitation period in equity by analogy - Application of s 6(1) Crown Suits Act 1947 (WA)
Legislation:
Crown Suits Act 1947 (WA)
District Court of Western Australia Act 1969 (WA)
Limitation Act 1935 (WA)
Rules of the Supreme Court 1971 (WA), O 20 r 19
Result:
Defendants' chamber summons to strike out the amended writ and amended statement of claim dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | N F Morrissey |
| First Defendant | : | J F Bennett |
| Second Defendant | : | J F Bennett |
Solicitors:
| Plaintiff | : | CLP Legal Pty Ltd (East Fremantle) |
| First Defendant | : | State Solicitor's Office |
| Second Defendant | : | State Solicitor's Office |
Case(s) referred to in decision(s):
Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers-Western Australian Branch v Bell-A-Bike Rottnest Pty Ltd [2005] WASCA 157
Baker v Courage & Co [1910] 1 KB 56
Barker v The Duke Group Ltd (in liq) (2005) 91 SASR 167
Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127
Bennett v Minister for Community Welfare (1988) Aust Torts Reports 80‑210
Bennett v Minister of Community Welfare (1992) 176 CLR 408
Coe v Commonwealth of Australia (1979) 24 ALR 118
Collard v The State of Western Australia [No 4] [2013] WASC 455; (2013) 47 WAR 1
Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348
Dewar v Ollier [2020] WASCA 25
Dey v Victorian Railways Cmrs (1949) 78 CLR 62
General Steel Industries Inc v Commissioner for Railways (NSW) (194) CLR 125
Hewitt v Henderson & Anor [2006] WASCA 233
Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365
Howden v Truth & Sportsmen Ltd (1937) 58 CLR 416
In re Greaves (Dec) (1881) 18 Ch D 551
Insurance Commissions of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Limited (In Liq) [No 2] [2017] WASC 372
KM v HM (1992) DLR (4th) 321
KM v HM (1993) 96 DLR (4th) 289
Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251
Malacca Nominees Pty Ltd v Morrone [2006] WASC 226
Metcel Pty Ltd v Ralph Symonds Ltd [1969] 2 NSWR 201
Morgan v Banning (1999) WAR 474
Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628
Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405
Re Rules of the Supreme Court 1971 (WA); Ex Parte Gates [2018] WASC 213
Sterndale v Hankinson (1827) 57 ER 625
Superline Enterprises Pty Ltd v Palassis Architects [2019] WASC 414
The Duke Group Ltd (in liq) v Alamain Investments Ltd [2004] SASC 415
Wardley Australia Limited v Western Australia (Rothwells Loan Case) (1992) 175 CLR 514
Williams v Minister, Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497
REGISTRAR WHITBY:
Background
The plaintiff was born on 22 March 1966.
On 4 December 1974 the plaintiff was walking across Albany Highway (near its intersection with Coolgardie Street) in Bentley, Western Australia, when she was hit by a car on the right side of her body. As a result of the accident the plaintiff sustained injuries including a collapsed lung, abdominal trauma, bleeding from the liver, head injuries, concussion, fracture of two ribs, seizures and a nose bleed. The plaintiff was admitted to Princess Margaret Hospital, received medication and other medical treatment.
The accident was caused by the negligence of the driver.
From 3 August 1979 until 18 January 1982 the plaintiff was under the provisional care and protection of the first defendant and/or the second defendant.
The plaintiff did not pursue a claim against the driver for her injuries sustained in the accident. The limitation period to commence any action against the driver expired on 22 March 1990.
The plaintiff says she continues to suffer from the following as a result of the accident; trauma related symptoms, anxiety and stress resulting in somatic symptoms, deterioration in her academic performance, reduced learning capacity, diminished capacity to work and gain employment and low moods.
On 13 June 2018, the plaintiff filed a writ of summons in the District Court of Western Australia alleging that she suffered loss and damage as a result of the defendants' negligence and/or breach of fiduciary duty to her in failing to (a) commence legal proceedings against the driver prior to the expiration of the limitation period, (b) obtain independent legal advice for the plaintiff prior to the expiration of the limitation period to pursue an action against the driver; and (c) advise the plaintiff to obtain independent legal advice for a claim against the defendants.
On 8 August 2018, the plaintiff filed a statement of claim in the District Court of Western Australia, later amended on 3 September 2019.
On 23 September 2019, the first and second defendants filed a chamber summons to strike out the writ and statement of claim pursuant to O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA) (RSC).
On 4 February 2020, the action was remitted to the Supreme Court of Western Australia pursuant to s 77 of the District Court of Western Australia Act 1969 (WA). The District Court ordered that the summons also be remitted to the Supreme Court.
It is that summons that is before me for determination. For the reasons which follow the defendants’ chamber summons is dismissed.
The plaintiff's claims
The plaintiff pleads at par 9 of the amended statement of claim that the defendants owed her a general duty of care at common law to:
(a)take or cause to be taken any action reasonably necessary to protect her best interests; and
(b)take or cause to be taken any action to reasonably obtain or seek independent legal advice to protect any cause of action and/or legal right applicable to her pursuant to Bennett v Minister of Community Welfare (1992) 176 CLR 408 (Bennett).
Further, at par 10 of the amended statement of claim the plaintiff pleads that, by virtue of the relationship of guardian and child, the first defendant owed the plaintiff a fiduciary duty to:
(a)assert rights on her behalf; and
(b)to obtain independent legal advice on her behalf with respect to the existence of a possible cause of action arising out of the circumstances in which she sustained injuries as a result of the accident pursuant to Bennett.
At par 13 of the amended statement of claim the plaintiff pleads that, after her cause of action in the car accident claim became statute barred on 22 March 1990, the defendants owed her a duty to advise her to seek independent legal advice as to a potential claim against the first and/or second defendant.
At par 15 of the amended statement of claim, the plaintiff alleges that the defendants were negligent and/or breached the fiduciary duties owed to her as follows:
(a)the defendants had knowledge of the accident and the injuries that the plaintiff sustained and in those circumstances failed to give any adequate consideration to them when the plaintiff was in the defendants' care;
(b)the defendants failed to take steps to protect the plaintiff's position with respect to her claim against the driver on or before the expiration of the limitation period on 22 March 1990; and
(c)the defendants failed to advise the plaintiff or obtain legal advice or commence proceedings in relation to a claim against the defendants since 22 March 1990 and continuing.
Defendants' submissions in support of the summons
The defendants seek an order, pursuant to O 20 r 19(1) RSC, that the plaintiff's writ and amended statement of claim be struck out in their entirety on grounds that they disclose no reasonable cause of action, that they are frivolous or vexatious, and that they are otherwise an abuse of process of the court.[1]
[1] Defendants' outline of submissions filed 8 June 2020 [8].
The defendants submit that the plaintiff has no reasonable cause of action, that the statement of claim is frivolous or vexatious and/or that the proceedings are an abuse of process because:
1.the Bennett duty cannot be made out on the facts pleaded in the amended statement of claim;
2.even if the plaintiff can make out the Bennett duty, the plaintiff's claim against the defendants is statute barred; and
3.even if the plaintiff's claim were taken at its highest, there is no cause of action against the second defendant because the plaintiff has failed to comply with s 6 of the Crown Suits Act 1947 (WA) (CS Act).[2]
[2] Defendants' outline of submissions filed 8 June 2020 [18].
After identifying the relevant legal principles, I will consider whether any of the grounds proffered in support of the application are made out by the defendants.
Legal principles - Order 20 rule 19
Order 20 r 19(1) RSC provides:
1.The Court may at any stage of the proceedings, subject to subrule (3), order to be struck out or amended any pleading, or the indorsement of any writ in the action, or anything in any pleading or in the indorsement on the ground that –
(a)it discloses no reasonable cause of action or defence as the case may be; or
(b)it is scandalous, frivolous or vexatious; or
(c)…
(d)it is otherwise an abuse of the process of the court,
and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
In Insurance Commissions of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Limited (In Liq) [No 2] [2017] WASC 372 [31] (Bell), Pritchard J summarised the rules governing a strike out application as follows:
(1)The rule is intended to apply only to cases which are really not arguable and not to cases where under the previous practice demurrer would have been the proper course.
(2)On the application, not only must all the facts alleged in the statement of claim be accepted as true, but it must be taken for granted that on all other points the pleading is unassailable.
(3)Great care must be exercised to ensure that a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal.
(4)But the rule should not be reserved for those cases where argument is unnecessary to show the futility of the plaintiff's claim. Argument, even extensive argument, may be necessary to demonstrate that the plaintiff's case is so clearly untenable that it cannot possibly succeed.
(5)As a general rule, a plaintiff is 'entitled … as of right to have his case heard, to have the facts found and then to argue the question of law as it arises before the trial Judge upon the facts as found. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the plaintiff that the pleading should be struck out.
(6)A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops, it will be found that a cause of action will lie.
No reasonable cause of action
Where a defendant alleges that a statement of claim discloses no reasonable cause of action the question to be determined is whether it is open to the plaintiff, on the statement of claim, to prove facts at trial which give rise to a cause of action: Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers-Western Australian Branch v Bell-A-Bike Rottnest Pty Ltd [2005] WASCA 157 [54] (Automotive); Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405, 414 ; Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628, 631.
'Reasonable' means reasonable according to law. If the facts could give rise to relief, then the cause of action is reasonable: Automotive [54]
The fact that a cause of action may be considered weak is not a basis to strike out a cause of action: Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251, 256; Coe v Commonwealth of Australia (1979) 24 ALR 118, 127; Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348 [61].
Scandalous, frivolous or vexatious
An action is frivolous if it is so obviously untenable that it cannot possibly succeed: Re Rules of the Supreme Court 1971 (WA); Ex Parte Gates [2018] WASC 213 [30] ‑ [31]; General Steel Industries Inc v Commissioner for Railways (NSW) (194) CLR 125, 130. It may for the same reason be categorised as vexatious and it should generally be struck out rather than stayed.
Abuse of process
In order to establish an abuse of process it must be clear that there is a complete legal bar to the action such that it is bound to fail: Dey v Victorian Railways Cmrs (1949) 78 CLR 62, 109. A decision to strike out a cause of action on the basis of an abuse of process is a grave one and only to be exercised with circumspection: Howden v Truth & Sportsmen Ltd (1937) 58 CLR 416, 418.
Striking out a cause of action on a limitation issue
It is undesirable for an issue of limitation to be determined on a strike out application, in the absence of a trial. If such an issue is to be determined without a substantive hearing, it must be a very clear case: Wardley Australia Limited v Western Australia (Rothwells Loan Case) (1992) 175 CLR 514; Morgan v Banning (1999) WAR 474, 480 ‑ 482; Belgravia Nominees Pty Ltd v Lowe Pty Ltd [2017] WASCA 127 [33]
If there is any reasonable possibility that the law is developing, then the court should be careful not to risk stifling the development of the law by summarily rejecting a claim: Hospitals Contribution Fund of Australia v Hunt (1982) 44 ALR 365, 373.
Can the Bennett duty be made out?
In the Bennett case, Mr Bennett injured his left hand in a circular saw while he was at a detention centre and in the care of the Department of Community Welfare. At the time of the accident he was a ward of the State subject to the directions of the Minister and under the guardianship of the Director of Community Welfare. The saw itself was not properly guarded, and Mr Bennett had not been properly instructed or adequately supervised in its use.
There was a clear cause of action that Mr Bennett had against the Director of Community Welfare (through the negligence of its employees). However, Mr Bennett was not aware of that common law right of action until 1982, by which time that right of action had been extinguished.
At first instance in Bennett v Minister for Community Welfare (1988) Aust Torts Reports 80‑210, Nicholson J described what the parties refer to in this application as the Bennett duty, at [11]:
… the plaintiff is correct in his contention that the Director owed a fiduciary duty to him; that included in that duty was the obligation to assert rights on his behalf; that is relation to a possible action for negligence arising from the accident in the premises occupied by the guardian, the guardian was in a position of conflict with the plaintiff; and that being in such position it was the duty of the guardian to obtain for the plaintiff independent advice
Although a breach of fiduciary duty was not pleaded in Bennett, Nicholson J, at first instance, and the High Court recognised that a fiduciary duty existed: Bennett (McHugh J) [430].
The defendants submit the Bennett duty only arises where the following elements are present:
(a)firstly, there is a fiduciary relationship between the plaintiff and the guardian;
(b)secondly, there is a conflict between the guardian's interest in escaping liability for damage which results from the breach of some primary duty and the guardian's obligation to act in the best interests of the child;
(c)thirdly, there is a failure by the guardian to obtain independent legal advice in respect of that primary cause of action; and
(d)fourthly, the primary cause of action must become time barred which then gives rise to the secondary cause of action based on the breach of the Bennett duty.
The defendants says that, while a cause of action against the negligence of the driver is pleaded, no primary cause of action against the defendants is pleaded, nor could it arise on the facts. Without that primary cause of action, there cannot be a secondary cause of action to which the Bennett duty attaches. Therefore, the defendants say, the plaintiff's entire cause of action cannot be maintained.[3]
[3] Defendants' outline of submissions filed 8 June 2020 [22].
The issue to be determined is whether the defendants had a primary duty to assert the plaintiff's legal rights, including obtaining independent legal advice for the plaintiff, in relation to a claim against the driver prior to the expiration of the limitation period.
The plaintiff pleads that the defendants had a duty to assert rights on the plaintiff's behalf, which included arranging for the plaintiff to obtain independent legal advice in relation to a claim against the driver. The plaintiff accepts that the circumstances of her case differ from those in Bennett in that the alleged breach of duty, in the first instance, relates to a failure to assert her rights against the driver rather than against either or both of the defendants.[4] The plaintiff's case is that the existence of a Bennett duty does not depend upon the primary claim being a claim which is conflict with the interests of the defendants. The plaintiff relies upon the following passage from Bennett (per Mason CJ, Dean and Toohey JJ) [411] as authority for the proposition that the Bennett duty exists regardless of whom the primary claim ought to have been made against:
It is not now in question that there was a duty of care owed by the Director of Community Welfare … to the appellant and that there was a breach of that duty… in the Courts below, the duty of care appears to have been equated to, or even derived from, a fiduciary duty owed by the Director to the appellant arising out of his statutory office as a guardian. That fiduciary duty was a positive duty to obtain independent legal advice with respect to the possible existence of a cause of action on the part of the appellant arising out of the circumstances on which he sustained an amputation of four fingers of his left hand.
[4] Plaintiff's outline of submissions in opposition filed 15 June 2020 [52].
It was clear in Bennett that the potential claim for which the Director had a duty to obtain independent legal advice was a claim against the Minister. There was in fact a conflict. The defendants say that the conflict is a necessary element of the Bennett duty, while the plaintiff says that it is not.
Irrespective of whether the defendants owed the plaintiff a common law duty, the plaintiff says that the authorities clearly establish that the first defendant owed a fiduciary duty owed to the plaintiff. The plaintiff relies upon the following passage in Collard v The State of Western Australia [No 4] [2013] WASC 455; (2013) 47 WAR 1 (Collard) per Pritchard J, at [1191]:
The fact that the Director occupied the position of guardian of the Children under the Child Welfare Act from 1962, and stood in a position at least analogous thereto from the date when each of the Children was made a ward, means that the Director (and not the State) was in a fiduciary relationship with the Children once they were made wards.
The plaintiff submits that, the fiduciary duty having been established, the first defendant, having express knowledge of the accident and the plaintiff's injuries, caused loss and damage to the plaintiff by failing to assert her rights against the driver. It follows, the plaintiff says, that the defendants had a common law duty to obtain independent legal advice for the plaintiff in relation to that breach of the fiduciary duty.[5]
[5] Plaintiff's outline of submissions in opposition filed 15 June 2020 [48] and [53].
The defendants say that, where the plaintiff is unable to establish the Bennett duty on the pleaded facts, the amended statement of claim must be struck out on the basis that it discloses no reasonable cause of action, is frivolous or vexatious and/or is an abuse of process.
In accordance with the principles set out in Bell, the plaintiff's cause of action founded upon the existence of a Bennett duty must be so clearly untenable that it cannot possibly succeed. The defendants bear the onus of proving that the cause of action cannot possibly succeed. That is a high threshold for the defendants to meet. In my view, it has not been met. The plaintiff's proposition that the conflict that was in fact present in Bennett is not a necessary element of the Bennett duty is an arguable proposition. I do not express any view on the merits of the plaintiff's case and it is not relevant in any event because, even if the case were considered weak taken at its highest, it is arguable. The plaintiff is entitled to have her case heard and argue the question of law before a trial judge.
I do not consider that the cause of action pleaded by the plaintiff against the defendants in relation to the existence of a Bennett duty (at common law and/or fiduciary) ought be struck out pursuant to O 20 r 19(1)(a)(b) and/or (d) RSC.
Is the plaintiff's claim against the defendants statute barred?
The defendants submit that, even if they did owe the plaintiff a Bennett duty to assert the legal rights of the plaintiff and to obtain independent legal advice for the plaintiff, that duty is not a continuing one and the plaintiff's claim cannot be maintained as the limitation period has expired.[6]
[6] Defendants' outline of submissions filed 8 June 2020 [29].
The defendants submit that, taking the plaintiff's claim at its highest and assuming that the Bennett duty is established, the plaintiff's cause of action accrued against the defendants on 22 March 1990. This is the date on which the plaintiff's claim against the negligent driver became statute barred.
The defendants submit that the plaintiff's cause of action against the defendants is statute barred because her cause of action for breach of fiduciary duty is subject to a six year limitation period. The six year limitation period is obtained by applying the doctrine of analogy. Therefore, any cause of action the plaintiff has against the defendants was time barred as of 22 March 1996.[7]
[7] Defendants' outline of submissions filed 8 June 2020 [30].
The first issue to consider is when the plaintiff's cause of action for an alleged breach of a Bennett duty accrued – was it on 22 March 1990 (when the claim against the driver became statute barred) or is it some later date on the basis that the duty was a continuing one?
In Collard, Pritchard J held:
I am unable to see how the fiduciary duty to obtain legal advice (if it existed in the first place) could be regarded as a continuing duty, which endured long past the time when the wardship came to an end, and which continued to apply to the State until this litigation commenced in 2010. The argument was clearly intended to bypass limitation defences. While that may be an explanation for the argument, I am unable to see any principled justification for the conclusion that a fiduciary relationship continues long past the time when the fiduciary relationship itself comes to an end. [1513]
The State's secondary fiduciary duty to provide legal advice arose only in respect of the State's possible breach of its primary fiduciary duties. Whatever the nature of the acts, neglects or defaults of the State said to give rise to a breach of those primary fiduciary duties, those acts, neglects or defaults could only have occurred, or continued, until the end of each of the wardships. That is, once the wardships ended, the State could no longer perform its primary fiduciary duties (if that was what they were) as a guardian with respect to each of the Children, For those reasons, the very latest date on which the State could be said to have been subject to the primary fiduciary duties must have been the last day of each wardship. [1549]
After that date, irrespective of how may alleged breaches of the primary fiduciary duties occurred, the State's secondary fiduciary duty to provide legal advice would have been met by a single act: its engaging a solicitor to act for each of the plaintiffs to provide them with legal advice or representation in respect of any possible breaches of the primary fiduciary duties which had occurred during their wardships. The State cannot be said to have been under a fresh duty, day to day, to provide or obtain that legal advice or representation for the plaintiffs. The ongoing failure of the State to obtain legal advice or representation for the plaintiffs in my view therefore merely constituted a continuing breach of an obligation which was renewed each day. [1550]
In Collard Pritchard J, at [1554] ‑ [1556], held that the cause of action for any breach of secondary fiduciary duty accrued six years from the latest date on which the primary duties could have been performed (in that case that was the last day of each wardship). It then followed that the last date by which the plaintiff had to bring an action for breach of the secondary fiduciary duty was six years from the date of accrual of the secondary cause of action, being 12 years from the last day of the wardship.
To apply the terminology used by Pritchard J in Collard to the plaintiff's pleaded case:
(a)the primary duty is defendants' duty to assert the plaintiff's legal rights against the driver (including a duty to obtain independent legal advice in relation to a claim against the driver); and
(b)the secondary duty is the defendants' duty to obtain independent legal advice for the plaintiff in relation to a claim against the defendants for their breach of the primary duty.
It is on this basis that the defendants assert that the limitation period for commencing the action against the defendants for breach of common law and/or fiduciary duties expired on 22 March 1996 (six years from the latest date on which the primary duties could have been performed).[8]
[8] Defendants' outline of submissions filed 8 June 2020 [31].
The plaintiff submits that, in assessing the plaintiff’s delay in bringing a claim in equity, the running of time starts when the plaintiff discovers or, with the exercise of reasonable care, ought to have discovered that she was entitled to relief. It is only then that time starts to run.[9] The plaintiff relies upon Bennett and Baker v Courage & Co [1910] 1 KB 56 (Baker) in support of this contention.
[9] Plaintiff's outline of submissions in opposition filed 15 June 2020 [44].
In Bennett, McHugh J stated, at [430]:
The distinction between a duty which is broken once and for all on a particular day and a duty which is a continuing one despite its breach is never easy to draw. But here the particular duty to obtain independent legal advice arose out of the more general duty of the Director to care for the welfare of the appellant. Moreover, it arose out of the guardianship and out of the circumstances which occurred during the course of the guardianship. That being so, the better view is that it was a continuing duty to avoid economic loss to the appellant as the result of the injury occurring during the guardianship rather than a duty to obtain advice within a reasonable period or by 7 March 1975. Once the Director became charged with the duty, it continued to bind him until it was performed or discharged. It does not end on the day when the appellant was discharged from the Director's custody and care. The duty having arisen during the period of the Director's guardianship, continued while it could be fulfilled. Consequently the duty of the Director was still operative as at 22 May 1980.
In Baker, Hamilton J said:
In cases of fraud … they hold that the statute runs from discovery, because the laches of the plaintiff commences from that date, on his acquaintance with all the circumstances. In this Courts of equity differ from Courts of law, which are absolutely bound by the words of the statute. Mistake is, I think, within the same rules as fraud. … [W]here a party had not the means of knowing the truth equity would not consider laches to be attributable to him, and therefore the equitable period of limitation would not run against him.
The plaintiff also relies upon the affidavit of Golnoosh Azadi Ardakani sworn on 15 June 2020 (Arzadi Affidavit) in opposition to the application.
Evidence is not admissible on applications to strike out under O 20 r 19(1)(a) on the grounds that the statement of claim does not disclose a reasonable cause of action: O 20 r 19(2) RSC. However, to the extent that the application to strike out is made pursuant to O 20 r 19(1)(b) and/or (d), evidence is admissible: Superline Enterprises Pty Ltd v Palassis Architects [2019] WASC 414 [6] I therefore, have had regard to the Arzadi Affidavit in determining the defendants’ application pursuant to O 20 r 19(1)(b) and 9(d).
The plaintiff contends that her cause of action against the defendants for breach of the secondary fiduciary duty only accrued in 2016 when the plaintiff first obtained legal advice and became aware of the potential claim against the defendants.[10] The plaintiff says that, in these circumstances, there has been no expiry of any limitation period.
[10] Affidavit of Golnoosh Azadi Ardakani sworn 15 June 2020 [5].
The plaintiff also seeks to distinguish Collard on the basis that very different primary duties that were pursued by the plaintiffs in that case. In Collard, Pritchard J, at [1290], described the primary fiduciary duties contended for by the plaintiffs as follows:
… the primary fiduciary duties can be summarised by reference to the following themes: one, the preservation of the Collard family unit; two, placement with family members, or members of the Aboriginal community; three, assessment and supervision of foster placement; four, facilitate contact between the children, Don and Sylvia, members of their extended family, or members of the Aboriginal community; five, protect the children's physical and mental health – and five, avoid a conflict between the State's interests in housing the children in a facility readily available to the State, and the children's interests in being provided in-home environment in their family or the Aboriginal community.
The plaintiff submits that Collard is distinguishable for the following reasons:
(a)the primary duties in Collard were not made out;
(b)there can be no doubt in this case that the first defendant owed the plaintiff a primary fiduciary duty to assert the plaintiff's legal rights; and
(c)the primary fiduciary duty in this case related to the plaintiff's economic interests, which is in stark contrast to the duties contended for in Collard.
In my view, the plaintiff’s contention that any cause of action against the defendants accrued at some later time than 22 March 1990, being the latest date on which the primary duties could have been performed, is not so clearly untenable that it could not possibly succeed. The plaintiff has asserted that the Bennett duty is a continuing one and that the cause of action only accrues on the date that the plaintiff discovered, or with reasonable care ought to have discovered, that she was entitled to relief. To strike out the amended writ and amended statement of claim on this basis would have the effect of potentially stifling the development of the law where there is a reasonable possibility that, as the law develops, it may be found that there is a cause of action.
Given my finding that the plaintiff has an arguable case that the limitation period has not expired because her cause of action did not accrue until as late as 2016, the defendants' application to strike out the amended writ and amended statement of claim, on the basis that the plaintiff's cause of action is statute barred and therefore an abuse of process, fails.
However, if I am wrong in making that finding, it does not necessarily follow that the plaintiff's cause of action is statute barred. The plaintiff submits that, even if her cause of action accrued on 20 March 1990, there is an arguable case that the limitation period is not six years as contended for by the defendants.
That then leads to consideration of the second issue - 'what is the applicable limitation period to the plaintiff's cause of action against the defendants for breach of any fiduciary duty?'
Claims for breach of fiduciary duty are not expressly dealt with by the Limitation Act 1935 (WA). It may therefore, be appropriate for the court to apply the statutory limitation period to an equitable claim by analogy.
In Dewar v Ollier [2020] WASCA 25, the Court of Appeal (Beech, Vaughan and Archer JJA) said:
Under the Limitation Act 1935 (WA), there were many equitable causes of action to which no limitation provision directly applied. In some cases, even though the terms of the limitation statute did not make it directly applicable, where the equitable claim corresponded to an action at law that was statute-barred, equity would apply that limitation period by analogy.
The plaintiff relies upon a number of authorities as support for the proposition that, even where limitation legislation does apply by analogy, equity will not do so in circumstances where it is unconscionable or unjust.[11]
[11] The Plaintiff refers to the following cases at paragraph 39 of Outline of Submissions dated 15 June 2020: Hewitt v Henderson [2006] WASCA 233; Sterndale v Hankinson (1827) 57 ER 625; In re Greaves (Dec) (1881) 18 Ch D 551; Metcel Pty Ltd v Ralph Symonds Ltd [1969] 2 NSWR 201, 208; The Duke Group Ltd (in liq) v Alamain Investments Ltd [2004] SASC 415; KM v HM (1993) 96 DLR (4th) 289; Williams v Minister, Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497, 508; Barker v The Duke Group Ltd (in liq) (2005) 91 SASR 167; Malacca Nominees Pty Ltd v Morrone [2006] WASC 226 [42]
In KM v HM (1992) DLR (4th) 321, 330, LaForest J said:
However, even if an analogy could be drawn that is not to say that it must be applied. As I noted earlier, equity retains a residual discretion on this point, which is the point of distinction from acting in obedience to the statute. In this respect the analogy takes on the character of laches.
The plaintiff submits that it would be unconscionable for a limitation period to be applied by analogy with the result being that the defendants escape liability because:
(a)in 1979, when the plaintiff entered the first defendant's care, she was a 13‑year‑old aboriginal girl of low intelligence who had led a dysfunctional life and was reliant on the first defendant to protect her interests;[12]
(b)the plaintiff had knowledge of the accident and the plaintiff's injuries;[13]
(c)the first defendant owed the plaintiff a duty to assert her legal rights against the driver and failed to do so;[14] and
(d)the defendants have not, at any time, advised the plaintiff to obtain independent legal advice in relation to claims she may have against the defendants for failure to discharge the primary duties.[15]
[12] Plaintiff's outline of submissions in opposition filed 15 June 2020 [42a]; Arzadi Affidavit, Annexure GAA1 – Mt Lawley Reception Home Initial case Conference dated 23 August 1979
[13] Plaintiff's outline of submissions in opposition filed 15 June 2020 [42b]; Arzadi Affidavit, Annexure GAA1 – Mt Lawley Reception Home Initial case Conference dated 23 August 1979;
[14] Plaintiff's outline of submissions in opposition filed 15 June 2020 [42c].
[15] Plaintiff's outline of submissions in opposition filed 15 June 2020 [42e].
Only in rare circumstances will a court determine whether equity should apply a statutory limitation period by analogy on an application to strike out a writ and statement of claim.
In Hewitt v Henderson & Anor [2006] WASCA 233, Buss JA (with whom Steytler P and Pullin JA agreed) said:
… An application which is or is analogous to a strike-out application will rarely be a satisfactory process for determining whether equity should apply a statutory limitation period by analogy.
In the present case, the respondents have pleaded, relevantly, causes of action for breach of fiduciary duty and an account. The appellant's allegation that a limitation period should be applied by analogy would, in the ordinary course, be specifically pleaded in his defence, See O 20 r 19(1) of the Rules of the Supreme Court 1971 (WA). The respondents would then plead to that allegation in reply. The plea in reply would include any facts which, on the respondents' contention, make it unconscionable for the appellant to invoke the limitation defence. The appellant has not (yet) sought to amend its defence to raise limitation issues. In my opinion, the application before the learned Judge was not a satisfactory process for determining, on a summary basis, whether the respondents' pleaded cause of action for breach of fiduciary duty and an account are hopelessly barred. That issue should be determined at trial on the pleadings and after all material facts have been found.
In my view, given the plaintiff's circumstances as outlined in the Arzadi Affidavit, the plaintiff has an arguable case that the statutory limitation period should not be applied in equity by analogy. It is not appropriate for this issue to be determined upon a strike out application.
In summary, the defendants' application to strike out the amended writ and statement of claim on the basis that the plaintiff's cause of action is statute barred, and therefore an abuse of process, fails.
Is the plaintiff's claim against the second defendant barred by s 6 of the CS Act?
Section 6 of the CS Act provides (in respect of a cause of action accruing before 15 November 2005) that no right of action lies against the second defendant unless the party proposing to take action gives notice to the State Solicitor as soon as is practicable or within three months (whichever is longer) and the action is commenced within one year of the date on which the cause of action accrues. A prospective plaintiff can apply for leave to bring an action, or alternatively obtain the consent of the Attorney General to the bringing of an action, so long as either action is done within six years of the accrual of the cause of action.
In the case of a continuing act, neglect or default, s 6(1) of the CS Act provides that the cause of action did not accrue until the act, neglect or default ceased.
The defendants submit that, given that the plaintiff has not complied with s 6 of the CS Act, the plaintiff lost the right to commence an action against the second defendant on 22 March 1991, being 12 months after the date of accrual of the cause of action. Further, the plaintiff had until 22 March 1996 to obtain the consent of the Attorney General or apply for leave of the court to bring her action notwithstanding non‑compliance with s 6 of the CS Act. In circumstances where she has failed to do so by 22 March 1996, the plaintiff now has no right of action against the second defendant.[16]
[16] Defendants' outline of submissions filed 8 June2020 [27].
Given my finding that the plaintiff has an arguable case that her cause of action did not accrue until she became aware of her legal rights, that being as late as 2016, it follows that there is an arguable case that s 6 of the CS Act does not apply to the plaintiff's cause of action. Therefore, any failure to comply would not arise.
Orders
The defendants' chamber summons to strike out the plaintiff's amended writ and amended statement of claim pursuant to O 20 r 19(1) RSC be dismissed.
I will hear the parties in relation to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to Registrar Whitby9 JULY 2020
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