Wilson v Rigg - [2002] NSWCA 246

No judgment structure available for this case.

CITATION: Wilson v Rigg [2002] NSWCA 246 revised - 12/08/2002

FILE NUMBER(S): CA 40113/00

HEARING DATE(S): 3 June 2002

JUDGMENT DATE:
26 July 2002

PARTIES :

Mark Robin Wilson - Appellant
Jack Rigg - Respondent

JUDGMENT OF: Giles JA at 1; Santow J at 60; Foster AJA at 61

LOWER COURT JURISDICTION : Supreme Court

LOWER COURT
FILE NUMBER(S) : CL 20364/98

LOWER COURT
JUDICIAL OFFICER : Sperling J

COUNSEL: D F Jackson QC & H W D Stowe - Appellant
D Davies SC - Respondent

SOLICITORS: Sweeney Waterford - Appellant
Mallesons Stephen Jaques - Respondent

CATCHWORDS: Limitations - motor vehicle accident - solicitor instructed - solicitor failed to commence proceedings within the time allowed under the Motor Accidents Act 1988 (date 1) - application for extension of time refused (date 2) - solicitor allegedly failed properly to conduct application - action against solicitor more than six years after date 1 but less than six years after date 2 - whether cause of action in relation to failure to commence proceedings statute barred - whether separate cause of action in relation to failure to properly conduct application. D.

CASES CITED:
Agryropoulos v Layton [2002] NSWCA 183;
Cartledge v E Jopling & Sons Ltd (1963) AC 758;
Cheney & Wilson v Duncan [2001] NSWCA 197;
Christopoulos v Angelos (1996) 41 NSWLR 700;
The Commonwealth of Australia v Mewett (1977) 191 CLR 471;
Doundoulakis v Antony Sdrinis & Co (1989) VR 781;
Hawkins v Clayton (1988) 164 CLR 539;
Registrar General v Cleaver (1996) 41 NSWLR 713;
Ronex Properties Ltd v John Laing Construction Ltd (1983) QB 398;
Sampson v Zucker (CA, 11 December 1996, unreported);
Scarcella v Lettice (2000) 51 NSWLR 302;
Scott v Echegaray (1991) Aust Tort Rep 81-120 at 69,133-4;
Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514;
Warmsley v Cosentino [2001] NSWCA 403;
Wilson v Rigg [2000] NSWSC 16.

DECISION: (1) Appeal allowed; (2) Set aside Sperling J's decision of the question and the verdict and judgment for the defendant and the order for costs made on 7 February 2000; (3) Answer the qustion that the appellant's claim against the respondent was answered by the plea in para 6 of the defence so far as the appellant relied on a cause of action for negligence in failing to commence proceedings by 1 July 1992 but not otherwise; (4) Remit the matter to the Common Law Division for hearing and determination conformably with that answer and these reasons; (5) Make no order as to the costs of the appeal or of the decision of the separate question before Sperling J.

CA 40113/00
CL 20364/98

GILES JA
SANTOW JA
FOSTER AJA
Friday 26 July 2002

WILSON v RIGG

Judgment

1 GILES JA: By a statement of claim filed on 24 September 1998 the appellant claimed from the respondent damages for negligence in acting as the appellant’s solicitor. The respondent’s defence filed on 2 June 1999 included in para 6 that the claim against him was statute barred by s 14(1) of the Limitation Act 1969. An order was made for separate decision of the issue raised by para 6 of the defence. Sperling J decided the question by holding that the appellant’s claim against the respondent was “answered in whole by the plea pursuant to s 14(1) of [the Limitation Act] appearing in para 6 of the defence”, and accordingly there was a verdict and judgment for the respondent (Wilson v Rigg [2000] NSWSC 16). The appellant appealed from his Honour’s decision.

Facts

2 The question was decided on agreed facts, albeit it seems facts agreed ad hoc as the parties made their submissions; this can not be regarded as satisfactory. Our knowledge of the agreed facts comes from what is said in the reasons of Sperling J plus copies of the appellant’s statement of claim, the appellant’s Part 33 r 8A particulars and the respondent’s defence. That facts beyond those so known to us might have been material to the decision of the question was raised more than once in the hearing of the appeal. It was not suggested that the agreed facts included material facts beyond those so known to us.

3 On 30 May 1989 the appellant was injured in a level crossing accident.

4 In January 1992 the appellant instructed the respondent. Beyond the fact of instruction, the appellant’s instructions were not stated in the reasons of Sperling J. According to the statement of claim, the appellant instructed the respondent “to act for him and to bring proceedings to recover damages in respect of the said occurrence and injuries”.

5 The Motor Accidents Act 1988 applied. Section 52(4) of the Motor Accidents Act provided -

“52(4) A claimant is not entitled to commence proceedings in respect of a claim more than 3 years after the date on which the claim must be made in accordance with section 43 except with the leave of the court in which the proceedings are to be taken.”

6 The period of three years referred to in s 52(4) expired on 1 July 1992.

7 On 13 September 1994 proceedings were instituted against the State Rail Authority (“the SRA”).

8 On 24 November 1994 the SRA filed a defence which included a plea that the appellant was “in breach of … s 52(4)”. On 7 August 1996 the SRA filed a notice of motion for an order that the proceedings be dismissed, or alternatively struck out. On 4 November 1996 the appellant filed a notice of motion pursuant to s 52(4) for an order that the appellant have leave to commence proceedings on 13 September 1994 nunc pro tunc.

9 The respondent continued to act for the appellant in relation to the motions. No more is known to us as to instructing him in that respect, and nothing is known to us as to the materials before the Master in support of the application for leave.

10 On 3 June 1997 Master Malpass refused leave and dismissed the appellant’s motion, and dismissed the proceedings. Nothing was revealed as to the Master’s reasons for refusing leave.

11 In para 5 of his statement of claim the appellant alleged -

“In breach of his duty to the Plaintiff in respect of the said claim the Defendant was negligent in that he did not commence proceedings on behalf of the Plaintiff in accordance with the provisions of the Motor Accidents Act and did not commence proceedings within the relevant limitation period.

Particulars of Negligence and breach of duty on the part of the Defendant

(a) Failure to commence proceedings on behalf of the Plaintiff within the relevant limitation period.

(b) Failure to advise the Plaintiff that proceedings had to be commenced within the relevant limitation period.

(c) Failure to provide sufficient information in Affidavits used by or on behalf of the Defendant in an Application brought before Master Malpass pursuant to Section 52(4) of the Motor Accidents Act.

(d) Delay by the defendant when he was alerted of the need to obtain leave of the Court following the filing of a defence by the State Rail authority in November, 1994.

12 Sperling J recorded that it was agreed at the hearing before him that para 5 and the particulars “could be read together as primary assertions, rather than the particulars being limited by the anterior pleading in para 5”.

13 By para 6 of the statement of claim the appellant claimed from the respondent “the damages to which he would have been entitled had [the respondent] brought his claim properly and expeditiously against [the SRA]”.

The Limitation Act

14 By s 14(1) of the LimitationAct, an action on a cause of action founded on contract (other than on a deed) or on tort -

“ … is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff … “.

15 By s 63 of the Limitation Act, on the expiration of the limitation period so fixed -

“ … the right and title of the person formerly having the cause of action to the … damages … is, as against the person against whom the cause of action formerly lay … extinguished”.

16 A limitation provision such as s 14(1) must be pleaded as a defence by the defendant, and if the defendant does not plead it the action can be maintained: see for example Ronex Properties Ltd v John Laing Construction Ltd (1983) QB 398 at 404. The traditional statement is that the provision bars the remedy not the right, and the bar is subject to exceptions such as acknowledgment of a debt or concealed fraud which can be raised by way of reply. Any added effect of s 63 is perhaps not settled, see The Commonwealth of Australia v Mewett (1977) 191 CLR 471 at 507-10, 514-6. It does not arise in the present case.

Failure to commence proceedings

17 The nub of Sperling J’s reasoning was -

“[18] … In the present case, the value of the cause of action was reduced by the prospect that the defendant would plead the statute in bar (a virtual certainty) offset by the prospect that an application for leave would succeed. Unless it could be said there was no chance of leave being refused and no loss otherwise flowing from having to apply for leave, the value of the cause of action was diminished and damage was sustained on 1 July 1992.

[19] It was not suggested, in the present proceedings, that a prompt application for leave would have been granted with certainty or that the plaintiff would not have been otherwise disadvantaged by having to apply for leave.”

18 I have noted the terms in which the appellant’s instructions to the respondent were alleged in the statement of claim. In the chronology prepared for the appeal it was said that the respondent was retained “to act on his behalf in relation to personal injury proceedings against the SRA”, and in the appellant’s written submissions it was said that the respondent was instructed “as his solicitor in relation to the commencement of proceedings against the SRA in connection with the accident”. For the present, it is sufficient that the instructions must have been of that nature.

19 In the absence of an explanation for the failure, in not bringing proceedings against the SRA by 1 July 1992 the respondent was in breach of his duty, whether contractual or tortious, owed to the appellant. So much was not in dispute.

20 So far as the duty was contractual, the appellant’s cause of action against the respondent accrued no later than 1 July 1992. The cause of action was not maintainable in proceedings brought after 1 July 1998.

21 So far as the duty was tortious, the appellant’s cause of action against the respondent accrued when he first suffered damage in consequence of the breach of duty. Damage is an element of a cause of action in tort for negligence, and the cause of action is not complete until damage is sustained but is then complete even though further damage is later sustained (see for example, Hawkins v Clayton (1988) 164 CLR 539 at 556-7, 559, 587; Cheney & Wilson v Duncan [2001] NSWCA 197 at [26]). In the hearing of the appeal, as before Sperling J, it was accepted that the appellant’s statement of claim pleaded a cause of action in tort, and the submissions were concerned with when the appellant first suffered damage in consequence of the breach of duty.

22 The respondent submitted that the appellant suffered damage on the expiry on 1 July 1992 of the period of three years referred to in s 52(4) of the Motor Accidents Act. If that were so, the appellant’s cause of action against the respondent would not be maintainable in proceedings brought after 1 July 1998. The appellant submitted that he did not suffer damage until Master Malpass refused leave on 3 June 1997, or alternatively until the filing on 24 November 1994 of the SRA’s defence pleading that his claim against it was in breach of s 52(4) of the Motor Accidents Act. In either event, the appellant’s cause of action against the respondent would be maintainable in the proceedings brought on 24 September 1998.

23 There must be actual damage, as distinct from the risk or prospect of damage or contingent damage (Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 at 527; Registrar General v Cleaver (1996) 41 NSWLR 713 at 719; Cheney & Wilson v Duncan at [24]), and the damage must be measurable or beyond what can be regarded as negligible (Cartledge v E Jopling & Sons Ltd (1963) AC 758 at 771; Wardley Australia Ltd v The State of Western Australia at 531; Scarcella v Lettice (2000) 51 NSWLR 302 at 306; Cheney & Wilson v Duncan at [25]). Within these guides, however, whether and when damage is suffered is a matter of fact.

24 The appellant submitted that, although the respondent’s failure to commence proceedings by 1 July 1992 was detrimental to him, he did not suffer damage because it was not inevitable that he would be unable to bring proceedings against the SRA. The failure to commence proceedings against the SRA within time did not extinguish the cause of action against the SRA, but brought contingent exposure to extinguishment – the cause of action would be extinguished only if the SRA pleaded that the appellant had not been entitled to commence his proceedings and the appellant failed in an application for leave under s 52(4) of the Motor Accidents Act. Neither event was inevitable, and in particular even if the SRA took the point, failure of an application for leave under s 52(4) was not inevitable. Therefore, the appellant submitted, damage was suffered only when the application for leave in fact failed, or at the least only when the SRA pleaded that the appellant had not been entitled to commence his proceedings.

25 The submission treated s 52(4) of the Motor Accidents Act as barring the remedy not the right, in similar manner to s 14(1) of the Limitation Act. There is no equivalent to s 63 of the Limitation Act. I am not content to assume this treatment in favour of the appellant.

26 In my opinion, the appellant’s submission does not sufficiently recognise that the suffering of damage is a matter of fact.

27 The appellant had a valuable asset, his cause of action against the SRA. When the respondent failed to bring proceedings by 1 July 1992, the value of the asset immediately diminished. It diminished because of the likelihood that the SRA would plead that he was not entitled to commence proceedings, and the likelihood that it would be necessary for the appellant to apply for leave under s 52(4) of the Motor Accidents Act and might not obtain leave. If the appellant were to assign his cause of action for valuable consideration, the consideration would be less for those reasons.

28 From what in fact happened, the only evidence on which an assessment could be made, there was a real likelihood that the SRA would plead that the appellant was not entitled to commence proceedings, and that the appellant would have to apply for leave under s 52(4) of the Motor Accidents Act and would not obtain leave. Sperling J found that the former was a virtual certainty and in effect that a grant of leave was not a certainty. As a matter of fact there was a diminution in the value of the appellant’s asset, and it was more than negligible.

29 This was more than a risk or prospect of damage, or contingent damage. It was actual damage, albeit that by a successful application for leave the appellant could regain his pre-1 July 1992 position. Damage which is suffered but which might or might not be alleviated if some further event occurs is distinct from a risk or prospect of damage which might or might not be suffered or damage which will be suffered only if a contingency is fulfilled (as in cases such as Wardley Australia Ltd v The State of Western Australia).

30 Without the need to distinguish between when the application for leave failed and when the SRA pleaded that the appellant had not been entitled to commence his proceedings, therefore, in my opinion the findings of Sperling J were open (and were not challenged) and his Honour’s conclusion was correct. It is not necessary to consider whether applying for leave under s 52(4) of the Motor Accidents Act would in the ordinary course cost the appellant more than a negligible sum of money, being costs payable to the SRA in respect of the application for leave even if the respondent bore the appellant’s costs of the application. There was no evidence to displace that as a finding of fact, so that arguably for that reason alone the appellant suffered damage. Perhaps the appellant would still be left with his alternative of when the SRA pleaded that he had not been entitled to commence his proceedings.

31 The reasoning to suffering of damage on the expiry of the period of three years referred to in s 52(4) of the Motor Accidents Act is in accord with that in Doundoulakis v Antony Sdrinis & Co (1989) VR 781. The issue was whether the client suffered damage when the solicitors failed to commence proceedings within time, or only when the defendant pleaded the limitation defence. It was held that damage was suffered at the earlier time. Ormiston J, with whom McGarvie and Marks JJ agreed, said (at 784-6) -

“Upon proper consideration the distinction drawn in argument, relying upon Vulic's Case, between the appellant's right and remedy against his former employer, is irrelevant to the decision whether and when a cause of action arises against a solicitor who fails to commence proceedings within time on behalf of his client. The negligent destruction or impairment of either right or remedy can sound in damages. Merely because the statute bars the remedy and not the right must not obscure the fact that each is valuable. As Isaacs J said, in comparing a section extinguishing a right with the ‘ordinary statute of limitations’: ‘The latter finds a person in possession of a right and a remedy. In some cases it abolishes the right, in others it simply bars the remedy. But in both cases it takes from the person something he already had independently of that statute.’: R v McNeil (1922) 31 CLR 76, at 100.

Australian Iron and Steel Ltd v Hoogland

Hewitt v Barr

Maxwell v Murphy

Yrttaiho v Public Curator of Queensland

Consequently, upon the expiration of the limitation period on 4 August 1978, the plaintiff was deprived of his remedy against his employer, subject only to the defendant pleading the statute, and to the presently irrelevant power to obtain an extension of that limitation period. That conditionally barred remedy was then substantially less valuable than it previously had been.

…

I cannot accept that the plaintiff suffers no damage in the relevant sense unless and until the defendant employer elects to take the defence. Neither the plaintiff nor the negligent solicitors are responsible for that election; it is left to the potential defendant employer. The employer's decision, and its effectuation, only makes certain the damage which the negligent solicitors have brought about.
…

32 The reasoning was reflected in the observation of Dawson J in The Commonwealth v Mewett (at 508-9) -

“As I have said, I think it is clear that s 14(1) of the New South Wales Act standing alone merely bars the remedy; it does not extinguish the underlying cause of action Thus s 14(1) does not of itself prevent a statute-barred cause of action from continuing in existence. Of course, the value of the property comprising the cause of action would be affected by the fact that the action was statute-barred and would further be affected by such factors as the likelihood of the limitation defence being pleaded or the likelihood of the limitation period being extended.” (footnotes omitted)

33 Although the matter does not appear to have been in dispute, in Cheney & Wilson v Duncan Ipp AJA, with whom Meagher and Handley AJA agreed, included in his statement of general rules relating to the statute barring of actions for professional negligence -

Nikolaou

Scarcella

Sampson v

Zucker

Registrar-General v Cleaver

Hetherington v Mirvac Pty Limited

Crisp v Blake

Toomey v WALS

Wilson v Rigg

Di Sante v Camando Nominees Pty

Limited

Doundoulakis v Antony Sdrinis & Co

34 A similar principle was stated by Powell JA, with whom Priestley and Beazley JJA agreed, in Walmsley v Cosentino [2001] NSWCA 403 at [46]. His Honour said -

Doundoulakis v. Antony Sdrinis & Co.

Registrar General v. Cleaver

Sampson v. Zucker

Scarcella v. Lettice

Cheney & Wilson v Duncan

35 The appellant submitted that these were no more than general principles, and permitted an exception in a case such as the present. He also submitted that the cases cited by Ipp AJA fell into two streams, one of which was and the other of which was not consistent with the position for which he contended. In any particular case, however, the suffering of damage is a matter of fact. I do not think it necessary to repeat the appellant’s detailed analysis of the cases. I accept that Ipp AJA and Powell JA stated general principles, in my respectful opinion correct general principles. To the statements in Cheney & Wilson v Duncan and Walmsley v Cosentino may be added Handley JA in Agryropoulos v Layton [2002] NSWCA 183 at [5]: I will come to that case later in these reasons. On the facts in this case, I consider that the result is in accord with the general principles.

36 The appellant submitted that he found support in the decisions of this Court in Christopoulos v Angelos (1996) 41 NSWLR 700, Registrar General v Cleaver and Scarcella v Lettice.

37 In Christopoulos v Angelos the damage was economic loss by diminution in value of a property because a right of way burdened the property. It was suffered only when the burden of the right of way was discovered and noted on the title. In Registrar General v Cleaver the damage was economic loss by diminution in value of a property because the benefit of a height covenant was lost. It was suffered only when the owners of the property which should have been burdened discovered that it was not, and asserted their rights and secured the removal of the notation of the benefit. In Scarcella v Lettice Handley JA said (at 308) that in these and other cases of prospective or contingent loss the result in each case depends on a finding that the particular form of economic loss has not been suffered when the plaintiff became committed to the risk, but only later when the risk actually accrued.

38 The facts in these cases were quite different from the facts in the present case. The defects in title were latent, and the values of the properties were not affected until they were discovered (see also my summation in Scarcella v Lettice at 310). The appellant was not just committed to a risk. His asset was patently of diminished value immediately after 1 July 1992. I do not think the decisions assist the appellant.

39 In his written submissions dealing with Argyropoulos v Layton the appellant made an added submission that the respondent was under a duty to inform him that the time to commence proceedings against the SRA had passed (citing Scott v Echegaray (1991) Aust Tort Rep 81-120 at 69,133-4 and Argyropoulos v Layton at [55]); that in those circumstances the limitation period would not begin to run until the appellant was aware that the time to commence proceedings against the SRA had passed; that the limitation period could not begin to run until after 24 November 1994 when the SRA pleaded that the appellant had not been entitled to commence his proceedings; and that “accordingly the appellant’s case was never statute barred”.

40 There are at least three flaws in the submission. One is that the appellant did not allege such a breach of duty; the submission referred to particular (b) in para 5 of the statement of claim, but it is concerned with advice prior to 1 July 1992. Another is that, if the respondent was under the duty asserted and breached the duty, the breach of duty was not delayed until 24 November 1994. Another is that the appellant suffered damage by reason of the failure to commence proceedings even though the respondent did not inform him that the time to commence proceedings against the SRA had passed. If the appellant intended to appeal to the construction of s 14(1) of the Limitation Act favoured by Deane J in Hawkins v Clayton at 588-91, which was far from clear, the breach of duty in failing to commence proceedings by 1 July 1992 did not preclude the timely commencement of proceedings (see Sampson v Zucker (CA, 11 December 1996, unreported); Scarcella v Lettice at 311; Walmsley v Cosentino at [49]). I do not think the added submission avails the appellant.

The conduct of the application under s 52(4) of the Motor Accidents Act

41 The body of para 5 of the statement of claim alleged negligence only in relation to failure to commence proceedings. The particulars went further, and by particulars (c), (d) and (e) took up negligence in the conduct of the application under s 52(4). By the agreement noted by Sperling J the deficiency in pleading was passed over, and the appellant’s claim against the respondent was treated as including a claim for breach of duty in negligent conduct of the application under s 52(4).

42 The appellant submitted that he had a cause of action for negligence in that respect separate from his cause of action for negligence in failing to commence proceedings by 1 July 1992, and that the cause of action accrued less than six years prior to 24 September 1998. He submitted that the respondent had a continuing duty in relation to the application under s 52(4), so that there were constant breaches of duty until the refusal of leave, but that even if that were not so any relevant breach of duty must have been after 24 September 1992. The respondent submitted that there was no separate cause of action.

43 Sperling J did not accept that there was a separate cause of action. His Honour said -

“[26] If the plaintiff had commenced the present proceedings within time but without applying for leave pursuant to s 52(4), it may be that he would have been met with a plea of failure to mitigate his loss, and might then have recovered only the value of his claim against the SRA discounted for the chance that an application for leave might have been successful. That, however, is not what occurred in this case, where the same solicitor has acted throughout, and where an application for leave - allegedly late and carelessly prepared - has failed. But for the expiration of the limitation period in relation to the cause of action which accrued on 1 July 1992, the plaintiff would have been entitled to recover as against the solicitor the undiscounted value of his claim against the SRA. A plea of failure to mitigate could not succeed because the plaintiff continued to be dependent on the advice and actions of the solicitor. Put another way, the loss of the value of the claim against the SRA was caused by the solicitor's failure to commence those proceedings within time, and there is nothing to be put in derogation of that.

[27] What damage can then be said to have resulted, in the events that have occurred, from the failure by the solicitor to mount an application for leave under s 52(4) promptly and carefully? The answer is that the plaintiff has suffered no additional damage as a result of the alleged later breaches of duty, and no further cause of action can, therefore have arisen.”

44 His Honour later said -

not

is

45 In my respectful opinion, the reasoning in the first passage I have set out is flawed. The respondent’s failure to commence proceedings within time did not cause the loss of the whole of the value of the appellant’s claim against the SRA. The appellant’s claim against the SRA still had a value, although a diminished value, because he could overcome the failure to commence proceedings within time by a successful application under s 52(4). Depending on the facts, the diminution may have been small or large.

46 Sperling J did not find that refusal of leave was a certainty; his effective finding did not go beyond a grant of leave not being a certainty. The deficiency in facts becomes particularly material. I do not see in his Honour’s reasons any suggestion that refusal of leave was a certainty, and in the absence of further information I do not think it could be so found. We should proceed on the basis that the diminution would not have been to a nil value. Assuming negligence in the conduct of the application for leave, the appellant suffered damage because the diminished value of his claim against the SRA became a nil value. The appellant did suffer additional damage as a result of the later negligence.

47 I am consequently unable to accept the second passage I have set out. It appears to assume that continuing to act can not give rise to a separate cause of action, and then to ask whether continuing to act enlarges the statute-barred cause of action. That is not to the point. If by continuing to act, and being negligent, the solicitor is liable to a separate cause of action, that the original cause of action is statute barred is of no relevance.

48 The issue, in my view, is not one of suffering separate damage. It is one of separate breach of a duty of care. Once more the deficiency in facts becomes particularly material. I have earlier referred to what little is known to us of the appellant’s instructions to the respondent. There was the initial retention of the respondent as the appellant’s solicitor, with instructions of the nature to bring personal injury proceedings against the SRA. We do not know what happened when the respondent failed to bring timely proceedings and the application was made for leave under s 52(4) of the Motor Accidents Act, in particular whether there were express instructions to make the application.

49 In Argyropoulos v Layton, decided after the hearing of this appeal but the subject of supplementary written submissions from the parties, the client instructed the solicitors to commence proceedings and later, in the belief that his claim was out of time under s 52(4) of the Motor Accidents Act and leave was required, instructed the solicitors to apply for leave. In fact the claim was not out of time when the second instructions were given. The solicitors neither commenced the proceedings within time nor applied for leave. The trial judge held that the client’s claim against the solicitors for damages for failing to apply for leave was statute barred, because there was one cause of action with damage first accruing when the solicitors failed to commence proceedings within time. On appeal, it was held that the client had a separate cause of action in relation to the application for leave which was not statute barred.

50 Handley JA said -

Howell v Young

Hawkins v Clayton

Wardley Australia Ltd v Western Australia

Scarcella v Lettice

Cartledge v Jopling & Sons Ltd

Republic of India v India Steamship Co Ltd

Hawkins v Clayton

Adams v Ascot Iron Foundry Pty Limited

Sheldon v McBeath

Hawkins v Clayton

51 Hodgson JA agreed with Santow JA. In additional remarks, his Honour said that the failure to carry out instructions to apply for leave, leading to the loss of obtaining a chance of obtaining such leave and recovering damages, constituted a cause of action which was not statute barred, and -

“[13] If in early June 1993 damages had been assessed against the respondents in respect of their earlier breach of duty in allowing the limitation period specified by s.52(4) to expire, such damages would have been reduced because of the chance which the appellant still had at that time to retrieve the situation. It was that chance which was lost by the failure to apply for leave, and for which the appellant was entitled to be compensated.”

52 Santow JA asked whether there were two distinct causes of action, or put another way whether there was breach of one indivisible obligation giving rise to only one cause of action or two distinct, albeit related, obligations each capable of giving rise to a separate action. His Honour’s conclusion, which involved extensive consideration of the cases, can best be found in -

Dunlop v McGowans

[61] One may readily accept that the damage in each situation completes a right of action for that distinct failure. But it is damage referable to a separate and distinct right of action in each case arising from distinct obligations. This is so, though there be a degree of commonality of fact underlying the essential ingredients of each claim and the respective obligations are not unrelated.

[62] Thus though it be the case that there be the same defendant and indeed the same Statement of Claim, I am satisfied that a statement of claim may, as this one did, identify the second failure as a separate and later cause of action based on common but also additional fact, distinct from that which arose from the first failure. The Appellant may therefore recover for it under a limitation period which runs from the time of the second failure.”

53 Santow JA specifically said in relation to the decision of Sperling J in the present case -

Wilson v Rigg

54 That the client in Argyropoulos v Layton had given express instructions to apply for leave was not essential to the reasoning of any of the members of the Court. On the authority of Argyropoulos v Layton, in a case such as the present the client can have a separate cause of action against the solicitor for negligence in the conduct of the application for leave under s 52(4). As earlier indicated , the damage in that cause of action is the final loss of the claim against the wrongdoer. More than that, in Argyropoulos v Layton Santow and Hodgson JJA considered that Sperling J’s decision in the present case was in error.

55 Imperfectly known as they are, in my view the appellant’s instructions to the respondent extended to whatever was reasonably necessary for the appellant to obtain from the SRA damages for personal injury, and included applying for leave under s 52(4) if that became necessary. That it might become necessary because the respondent was negligent in failing to commence proceedings within time was no doubt not present in the mind of either the appellant or the respondent at the time, but I see no reason why the instructions did not extend that far. The negligence alleged is distinct from the negligence in failing to commence proceedings by 1 July 1992, and if proved would bring additional damage. The statement of claim therefore properly includes a separate cause of action against the respondent for negligence in the conduct of the application for leave.

56 The cause of action accrued when there was breach of duty by the respondent and the appellant suffered damage. Neither the failure alleged in particular (c) in para 5 of the statement of claim nor the delay alleged in particular (d) can have occurred prior to 24 September 1992, and the failure alleged in particular (e) can not be assumed to have been failure prior to that date. We have no material knowledge beyond the allegations, and it can not be concluded that breach of duty and suffering of damage occurred prior to 24 September 1992. It is not necessary to consider whether there was a continuing duty.

The result

57 The question arose on an order for separate decision, not an application for summary disposal. Each of the appellant and the respondent must have put before the Court all that he wished to rely on, and the deficiency in facts should not deter us from coming to a result. Sperling J’s decision of the question should be set aside, as should the consequential verdict and judgment for the respondent. The question should be answered that the appellant’s claim against the respondent was answered by the plea in para 6 of the defence so far as the appellant relied on a cause of action for negligence in failing to commence proceedings by 1 July 1992 but not otherwise, and the proceedings should be remitted to the Common Law Division for hearing and determination conformably with that answer and these reasons.

58 The appellant has failed in part and succeeded in part. The two areas were discrete. In my opinion no order for the costs of the appeal should be made, leaving each of the appellant and the respondent to bear his own costs of the appeal, and there should be a like division of the costs of the decision of the separate question before Sperling J.

Orders

59 I propose the orders -

1. Appeal allowed.

2. Set aside Sperling J’s decision of the question and the verdict and judgment for the defendant and the order for costs made on 7 February 2000.

3. Answer the question that the appellant’s claim against the respondent was answered by the plea in para 6 of the defence so far as the appellant relied on a cause of action for negligence in failing to commence proceedings by 1 July 1992 but not otherwise.

4. Remit the matter to the Common Law Division for hearing and determination conformably with that answer and these reasons.

60 SANTOW JA: I agree with Giles JA.

61 FOSTER AJA: I agree with Giles JA.

**********

Citations

Wilson v Rigg [2002] NSWCA 246

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CITATION:	Wilson v Rigg [2002] NSWCA 246 revised - 12/08/2002
FILE NUMBER(S):	CA 40113/00
HEARING DATE(S):	3 June 2002
JUDGMENT DATE:	26 July 2002
PARTIES :	Mark Robin Wilson - Appellant Jack Rigg - Respondent
JUDGMENT OF:	Giles JA at 1; Santow J at 60; Foster AJA at 61

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :	CL 20364/98
LOWER COURT JUDICIAL OFFICER :	Sperling J

COUNSEL:	D F Jackson QC & H W D Stowe - Appellant D Davies SC - Respondent
SOLICITORS:	Sweeney Waterford - Appellant Mallesons Stephen Jaques - Respondent
CATCHWORDS:	Limitations - motor vehicle accident - solicitor instructed - solicitor failed to commence proceedings within the time allowed under the Motor Accidents Act 1988 (date 1) - application for extension of time refused (date 2) - solicitor allegedly failed properly to conduct application - action against solicitor more than six years after date 1 but less than six years after date 2 - whether cause of action in relation to failure to commence proceedings statute barred - whether separate cause of action in relation to failure to properly conduct application. D.
CASES CITED:	Agryropoulos v Layton [2002] NSWCA 183; Cartledge v E Jopling & Sons Ltd (1963) AC 758; Cheney & Wilson v Duncan [2001] NSWCA 197; Christopoulos v Angelos (1996) 41 NSWLR 700; The Commonwealth of Australia v Mewett (1977) 191 CLR 471; Doundoulakis v Antony Sdrinis & Co (1989) VR 781; Hawkins v Clayton (1988) 164 CLR 539; Registrar General v Cleaver (1996) 41 NSWLR 713; Ronex Properties Ltd v John Laing Construction Ltd (1983) QB 398; Sampson v Zucker (CA, 11 December 1996, unreported); Scarcella v Lettice (2000) 51 NSWLR 302; Scott v Echegaray (1991) Aust Tort Rep 81-120 at 69,133-4; Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514; Warmsley v Cosentino [2001] NSWCA 403; Wilson v Rigg [2000] NSWSC 16.
DECISION:	(1) Appeal allowed; (2) Set aside Sperling J's decision of the question and the verdict and judgment for the defendant and the order for costs made on 7 February 2000; (3) Answer the qustion that the appellant's claim against the respondent was answered by the plea in para 6 of the defence so far as the appellant relied on a cause of action for negligence in failing to commence proceedings by 1 July 1992 but not otherwise; (4) Remit the matter to the Common Law Division for hearing and determination conformably with that answer and these reasons; (5) Make no order as to the costs of the appeal or of the decision of the separate question before Sperling J.