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Gordon v Norwegian Capricorn Line (Australia) Pty Ltd [2007] VSC 517 (14 December 2007)

Last Updated: 17 December 2007

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7057 of 2007

ROSS GORDON Plaintiff v NORWEGIAN CAPRICORN LINE (AUSTRALIA) PTY LIMITED (ACN 081 010 666) Defendant

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LIMITATION OF ACTIONS – Torts – Postponement of the time bar – s 60C and s 60E Limitations Act (N.S.W.) – Delay of solicitors in bringing claim – Existence of prejudice – Relevance of cause of action against former solicitors.

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APPEARANCES : Counsel Solicitors For the Plaintiff Mr B. Quinn Beck Legal For the Defendant Mr J.A. Redwood Mallesons Stephen Jaques

HIS HONOUR:

Introduction

1 The plaintiff suffered a serious heart attack on 16 July 2000 whilst a passenger on a cruise ship, the Norwegian Star (“the ship”). The ship was operated by the defendant.

2 The plaintiff’s primary allegation against the defendant is that he was not provided with thrombolytic medication to treat the heart attack directly after it occurred, as none was available on the ship. This would, it is alleged, have alleviated his condition.

3 The conduct of the plaintiff’s claim is coloured by delay and ineptitude on the part of his solicitors. Ultimately, on 5 July 2007, nearly seven years after the event, proceedings were issued in this Court seeking damages against the defendant.

4 The plaintiff now seeks an extension of time pursuant to s 60C of the Limitations Act 1969 of New South Wales (“the Act”). Absent such an extension, the plaintiff’s claim became statute barred on 16 July 2003.

The issue

5 It was accepted by both parties that the substantive law to be applied, including the application of any relevant limitation period, was that of New South Wales.[1]

6 The issue is narrow and well-defined. Should the plaintiff be given leave to extend time so that his claim is not statute barred? The test under the Act is whether it is just and reasonable to do so, having regard to all the circumstances of the case. Specific criteria are also identified by the Act: s 60F.

7 The Choice of Law (Limitation Periods) Act 1993 requires a Court in this State to characterise an interstate law as part of the substantive law of that State or Territory. In addition, s 6 requires that a Court exercise its discretion to extend time as far as practicable –

“... in a manner in which it is exercised in comparable cases by the Courts of that place”.

Factual matrix

8 The plaintiff is now 53 years of age, having been born on 3 January 1954. He is, by occupation, a dairy farmer and lives and works in Cohuna in northern Victoria.

9 The plaintiff and his wife initially visited a travel agent in Cohuna known as “Impulse Travel”. Subsequently, they arranged a cruise through Traveland Bendigo. A deposit was paid on 4 April and the balance paid on 16 May 2000.

10 According to the plaintiff, in mid June 2000, Traveland Bendigo forwarded to himself and his wife the tickets for the cruise, the cruise itinerary and “the passage terms and conditions” (“the conditions”).[2]

11 On 15 July 2000, the plaintiff boarded the ship at Sydney; the first port of call was to be Noumea in New Caledonia.

12 On 16 July 2000, the plaintiff experienced severe chest tightness, tingling sensation of both arms and vomiting. The plaintiff was admitted to the ship’s hospital and seen by a Dr De Kock, the ship’s doctor. He was commenced on nitro-glycerine spray, morphine and aspirin, as well as the provision of oxygen. He was treated in the hospital on 16 and 17 July 2000. The diagnosis made by Dr De Kock was that of “septal and antero-laterial [sic] myocardial infarction”.[3]

13 The report of Dr De Kock completed on 18 July 2000 does not, on its face, demonstrate that any thrombolytic medication was administered to the plaintiff.

14 The plaintiff was admitted to hospital in Noumea for several days and then returned home to Cohuna, where his treatment was managed by his general practitioner, Dr Barker. Dr Barker, in turn, referred the plaintiff to Dr George Leitl, a specialist cardiologist.

15 Dr Leitl reported back to Dr Barker on 5 August 2000 after that consultation.[4] He made the following observations in the report:

“His sickness persisted and was eventually diagnosed as an acute anteroseptal myocardial infarct.

They did not have a thrombolytic on the ship? I can’t believe that!

... His infarct was certainly substantial. He had a high grade anterior descending stenosis before any branches. His anterior wall, lateral wall and apex are all akinetic. ... His artery was directly stented with a 3.5mm stent. The end result was reasonable.

He has quite significant atheroma in all of his vessels.

... I’ve told him to do no work for a minimum period of a month. I’ll reassess him at that stage.

I suspect that most of his myocardium in the distribution of the anterior descending is gone. I hope I’m wrong. The echo will tell us in a few weeks.

I have written a letter to the shipping line regarding Ross and the lack of thrombolytics. I don’t believe, in this day and age, it can be justified. Slater & Gordon would have a field day with this is the sort of thing (sic).”

16 As it turned out, Dr Leitl’s prophecy (if it can be characterised as that) as to how Slater and Gordon would handle the claim was, unfortunately, unfulfilled.

17 Dr Leitl’s letter of 12 August 2000 was addressed to the medical director of the defendant.[5] It read as follows:

“Mr Gordon suffered a myocardial infarct on 16th July. He was a passenger on the cruise ship Norwegian Star.

It is my understanding that this man did not receive thrombolytics. It is also my understanding that the Norwegian Line do not carry thrombolytics.

As the standard treatment for myocardial infarctions these days is thrombolytics, I would suggest that a case for negligence could be made, based on the fact that he was not given thrombolytics.

This man suffered a substantial anteroseptal myocardial infarct. He will almost certainly be totally and permanently disabled as a result. He has extremely poor left ventricular function with an ejection fraction of approximately 15%.

I have recommended to the family that they seek legal advice with respect to your company. There can be no reason why life saving drugs should be withheld from a man of 46 years.”

18 On 13 September 2000, the plaintiff contacted Slater and Gordon. He rang and sought advice in respect of any rights that he might have against the owners of the ship or Dr De Kock.

19 The plaintiff then, pursuant to Slater and Gordon’s request, sent copies of both of Dr Leitl’s letters to the firm.[6] Telephone conferences took place on 10 October 2000 and 25 October 2000 between the plaintiff and Ms Greenberg, a Slater and Gordon employee.

20 In early January 2001, Slater and Gordon received a further medico-legal report[7] from Dr Leitl which stated:

“The use of thrombolytics would certainly have made a significant difference in this man. It may well have been a life preserving treatment.”

21 On 29 January 2001, the plaintiff and his wife conferred with Ms Greenberg. On that day, a letter was written by Irene Lawson of Slater and Gordon stating in part:

“I am of the view that you have a viable claim against N.C.L.”[8]

22 On 16 February 2001, a Mr Brendan Sydes (“Sydes”), a partner of Slater and Gordon in Sydney, took over the conduct of the file. The plaintiff was advised that it had been determined that the claim should be issued out of the Sydney office as “the contract that you entered into with NCL specifies that any claim for damages for personal injury is to be pursued in New South Wales”. On that day there was also discussion with the plaintiff as to whether the 185 day notice period stipulated in the conditions had been complied with.[9]

23 On 5 March 2001, Slater and Gordon forwarded a letter of demand to the defendant, which also enclosed a copy of Dr Leitl’s letter of 12 August. Part of the letter read[10]:

“I am instructed to investigate pursuing a claim against you on the basis that you were negligent in failing to ensure that proper treatment was available for my client on board the ship”.

24 On 27 June 2001, Sydes wrote to the plaintiff seeking further instructions. He raised with him the one year limitation period contained in the conditions, but nothing was done to issue the writ prior to that period expiring.

25 On 29 May 2002 (i.e. nearly ten months after the last piece of correspondence to the plaintiff), Slater and Gordon issued an ordinary statement of claim out of the District Court of New South Wales in Sydney against the defendant. The particulars of negligence read as follows[11]:

“The plaintiff alleges that the defendant was negligent in failing to ensure that thrombolytics were carried on board the ship and available for administration in the event that a passenger such as himself suffered a heart attack.”[12]

26 Shortly after 6 August 2002, Slater and Gordon received from the District Court a notice of listing in respect of “CML” review to be held on 28 August 2002.[13] No representative from the firm attended the hearing before Judge Bowden of the New South Wales District Court.

27 On 20 September 2002, Slater and Gordon received a notice advising that the matter was listed for a pre-trial conference to be held on 3 October at 10.00 a.m.[14] Again, no representative of Slater and Gordon attended.

28 On 30 October 2002, the CML directions hearing (which had been adjourned) came on for hearing again before Judge Bowden. Again, no Slater and Gordon representative. This was somewhat understandable, as no-one had attended the other two hearings. Judge Bowden dismissed the claim.

29 No process of any sort had been served on the defendant at the time the statement of claim was struck out, despite over two years having elapsed since the cruise and the chimes of the limitations clock ringing ever more loudly.

30 William Madden (“Madden”), a solicitor employed by Slater and Gordon, took over the conduct of the action on 3 April 2003.

31 On 16 April 2003, Madden advised the plaintiff in writing that:

“Unfortunately it seems that late last year one of our solicitors failed to appear at a directions hearing and the proceedings were struck out”.[15]

32 Five weeks after taking over the plaintiff’s claim, he arranged for the filing of a notice of motion seeking leave to file and serve a motion to reinstate the claim.[16] On 9 May 2003, Slater and Gordon purported to serve the defendant with the notice of motion but, apparently, no other accompanying material.

33 On 19 May 2003, Madden again wrote to the plaintiff stating:

“Through an oversight, a solicitor did not appear on your behalf when the matter was listed before the court late last year and the court made an order that the proceedings be struck out.”[17]

34 At the hearing on 13 June 2003, Judge Boyd-Boland of the District Court adjourned the notice of motion to 26 June 2003, apparently not satisfied that service had been effected adequately.

35 On 19 June 2003, Slater and Gordon served, or purported to serve, a large number of documents, including the Statement of Claim and a notice of motion as well as an affidavit in support upon the defendant.

36 On 26 June 2003, the application to reinstate the claim was heard before Judge Bowden; there was no appearance by the defendant. Judge Bowden dismissed the application. His reasons include the following:[18]

“The plaintiff has not complied with any of the directions contained within the Practice Note or contained within the court timetable handed to the plaintiff when the matter is filed. The time for service of the Statement of Claim has now expired.

The Part 9 particulars also filed with the Statement of Claim refer to matters that have not been particularised. These matters have still not been particularised or further particulars provided.

The Statement of Claim refers to acts of negligence that are narrow issues between the parties. Despite this, the plaintiff has not served any evidence on these points.

...

The plaintiff will not be precluded from recommencing proceedings if and when the plaintiff is in a position to comply with Practice Note 33.

The application is dismissed and the Court confirms the order made on 30 October 2002 striking out the matter”.

37 On 27 June 2003, the claims department of Norwegian Cruise Line Limited forwarded to Mr Maxwell Bonnell (“Bonnell”) of Mallesons Stephen Jaques the Slater and Gordon letter of 19 June 2003 with its attachments. Bonnell has had the conduct of the defence of the claim since proceedings were first threatened. His affidavit is coy as to exactly when he was first instructed.

38 On 1 July 2003, Slater and Gordon was advised by Bonnell that he had received instructions from the defendant in the proceeding. He was in turn advised by a Slater & Gordon employee of the events of 26 June 2003 before Judge Bowden.

39 On 4 July 2003, approximately 12 days before the limitation period expired, Madden advised the plaintiff that the application had been dismissed. He concluded[19]:

“As I indicated on the telephone, I appreciate that the position we now find ourselves in arises in part from an error on the part of our firm and so if you choose to abandon this proceeding you may wish to approach another firm of solicitors for advice on that aspect.”

40 On 9 July 2003, Madden sought advice from Mr O’Keefe of counsel at the Sydney Bar. Madden had been instructed by the plaintiff that he wished to pursue his claim. In the instructions, Madden identified two issues, namely, why there was a failure to appear before the court and, more importantly, why the statement of claim had never been served. Mr O’Keefe advised that an appeal against Judge Bowden’s decision would most likely fail.[20]

41 On 9 July 2003, Madden wrote to Bonnell[21] (via facsimile) setting out a number of the events that had occurred. Bonnell was asked whether it would be possible to approach the Judge’s associate in an endeavour to bring on the earlier motion. Alternatively, it was suggested that –

“Those earlier proceedings could be ignored and fresh proceedings instituted within the ordinary three year limitation period. Obviously, such an approach would require a concession on the part of your client”.

The imminent expiry of the limitation period was mentioned and the following was said:

“I would be grateful if you could seek your client’s instructions in relation to the above matters and indicate whether a consent approach to either alternative might be available.

Could I also remind you of our discussion concerning the status of the doctor on board the ship and in particular whether he may have been an independent contractor. That may be of no relevance unless the decision not to carry the thrombolytic agent was a decision of the doctor, rather than a policy of your client.

On the information presently available to us, the decision would appear to have been one based on the policy of your client and therefore the doctor ought not be a defendant, but again I would appreciate your comments in that regard.”

42 On 9 July 2003, Bonnell [22] wrote to Madden stating that the defendant would oppose any attempt by the plaintiff to revive the proceedings that had been which had been struck out. Nothing was done by Slater and Gordon to revive the proceeding or issue a fresh claim.

43 On 16 July 2003, the claim became statute barred without the statement of claim ever being served on the defendant.

44 Later in July 2003, Mr O’Keefe advised Madden that a second application to reinstate should be made.

45 On 29 August 2003, Madden spoke by telephone to Dr Leitl, apparently to gauge his further opinion about the strength of the plaintiff’s case. Dr Leitl’s views were then reduced to print and forwarded to Mr O’Keefe. Dr Leitl had not shifted in relation to his opinion. He apparently[23] –

“(a) expressed a firm and clear view ... that the benefits of use of thrombolytic therapy far outweighed any potential risks of use, even outside the hospital environment;

(b) was on the causation aspect ... assertive and maintained that the failure to administer thrombolytic agents made a significant difference to the outcome in Mr Gordon’s case.”

46 On 8 September 2003, Mr O’Keefe advised Madden that there was little point in seeking to reinstate the proceedings, given the limitation period provided for in the conditions.

47 On 15 September 2003, the plaintiff was advised by Madden that, in the light of the proceeding having been dismissed, it would be appropriate for him to approach another solicitor for advice.

48 On 13 October 2003, the plaintiff consulted Beck Legal in Bendigo, Victoria, and Mr Gilchrist (“Gilchrist”), a partner in that firm, took over the care and conduct of the proceeding.

49 In January 2004, a brief was delivered to counsel by Gilchrist and advice provided in April 2004 which included a recommendation to obtain a further report from Dr Leitl. It was also thought that information ought to be obtained from the Royal Flying Doctor Service and P & O Cruises.

50 On 27 September 2004 and 1 November 2004 (nearly a year after the plaintiff first saw Gilchrist), Dr Leitl provided two further reports[24] that simply confirmed, with a little more detail, the views that he had expressed over four years earlier – stating that he had “no doubt that liability for this case lies with the Norwegian Shipping Line”.

51 In January 2005, another member of counsel was asked to advise in relation to possible causes of action. It was suggested that there might be a claim under the Trade Practices Act.

52 In February 2005 and then in April 2005, counsel were again engaged by Gilchrist to provide advice relating to the plaintiff’s claim.

53 On 27 July 2005, Gilchrist conferred with counsel and gave instructions in relation to drawing a draft statement of claim pleading any available Trade Practices Act claim. At this time counsel was also asked to draft a letter which was to be sent to Slater and Gordon and the Legal Practitioners Liability Committee (“LPLC”) – Slater & Gordon’s professional indemnity insurer.

54 In September 2005, Gilchrist commenced a series of discussions with counsel and insurers concerning a potential claim against Slater and Gordon. The fifth anniversary of the plaintiff’s ill-fated cruise had now passed and still no writ had been served on the Defendant.

55 On 26 September 2005, Gilchrist forwarded a long letter to LPLC (“LPLC letter”)[25] relating the history of the matter - I will return to some of the contents of that letter in due course - the central theme of which was “as a result of that firm’s negligence Mr Gordon’s claim in negligence was permitted to become time barred”.

56 On 7 July 2006, an application and statement of claim was filed in the Federal Court on behalf of the plaintiff seeking damages under the Trade Practices Act against the defendant. The process was not served upon the defendant and directions hearings were held in September, October and December before Gray J of the Federal Court.

57 The Federal Court proceedings against the defendant were discontinued late in 2006 without ever being served.

58 After protracted discussions, on 11 May 2007, the solicitors for Slater and Gordon and LPLC advised Gilchrist that they would assist the plaintiff in paying the costs of this application.

59 The writ in this Court was issued on 5 July 2007. A summons for extension of time was also issued at that time. Although the particulars of negligence cover a number of issues, the core issue is that identified by Dr Leitl nearly seven years before the issue of the writ: the failure to have thrombolytic medication on board the ship.

60 On 10 July 2007, Star Cruises, the operator of Norwegian Cruise Line, received Gilchrist’s letter attaching the writ. On the following day, those documents were forwarded to Bonnell.

61 I pause to make an observation before turning to the other relevant matters; I hope that it is not tarnished with hindsight. This was a relatively simple a claim albeit that it occurred on a ship at sea. It turned on one issue and the treating cardiologist had, from the start, provided a ready impetus to the issue of proceedings, whether in New South Wales or in Victoria.

62 There is another observation. Although the defendant was on notice as to a potential claim from very early in the saga, it was not served with any originating process until July 2007.[26] Further, at no time prior to the issue of this writ was any informal request for discovery or request that the defendant retain relevant documents made by the plaintiff’s solicitors of the defendant.

The New South Wales limitation provisions

63 The Act provides for a limitation period of three years in relation to the plaintiff’s claim.

64 Part 3 of the Act is concerned with “Postponement of the Bar”. Division 3 of that Part is concerned with “Personal injury cases arising before 2002 amendments”. Subdivision 2 is concerned with “Secondary limitation period”. The relevant provisions provide:

“60A Purpose of this Subdivision

The purpose of this Subdivision is to provide a procedure for a 5 year (maximum) extension of the 3 year limitation period for personal injury cases. It applies to causes of action that accrue on or after 1 September 1990.

This Subdivision does not apply to a cause of action to which Division 6 of Part 2 applies.

60B Subdivision applies only to new causes of action

This Subdivision applies only to causes of action that accrue on or after 1 September 1990. This Subdivision does not apply to a cause of action to which Division 6 of Part 2 applies.

60C Ordinary action (including surviving action)

(1) This section applies to a cause of action, founded on negligence, nuisance or breach of duty, for damages for personal injury, but does not apply to a cause of action arising under the Compensation to Relatives Act 1897.

(2) If an application is made to a court by a person claiming to have a cause of action to which this section applies, the court, after hearing such of the persons likely to be affected by the application as it sees fit, may, if it decides that it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period, not exceeding 5 years, as it determines.

...

60E Matters to be considered by court

(1) In exercising the powers conferred on it by section 60C or 60D, a court is to have regard to all the circumstances of the case, and (without affecting the generality of the foregoing), the court is, to the extent that they are relevant to the circumstances of the case, to have regard to the following:

(a) the length of and reasons for the delay,

(b) the extent to which, having regard to the delay, there is or may be prejudice to the defendant by reason that evidence that would have been available if the proceedings had been commenced within the limitation period is not longer available,

(c) the time at which the injury became known to the plaintiff,

(d) the time at which the nature and extent of the injury became known to the plaintiff,

(e) the time at which the plaintiff became aware of a connection between the injury and the defendant’s act or omission,

(f) any conduct of the defendant which induced the plaintiff to delay bringing the action,

(g) the steps (if any) taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice the plaintiff may have received,

(h) the extent of the plaintiff’s injury or loss.”

Submissions of the parties

65 Mr Quinn, who appeared for the plaintiff, contended that it was just and reasonable to permit the extension of time. He pointed to two primary considerations which favoured the exercise of discretion. Firstly, that the plaintiff himself had acted reasonably at all times. He had entrusted his case to a well-known firm of litigation solicitors and subsequently to a firm of experienced regional solicitors. He was entitled to rely upon their expertise in terms of prosecuting his claim. Whilst he accepted that it was appropriate to take into account the availability of a cause of action against his legal advisers, he contended that such a consideration was by no means decisive and should be given little if any weight. Secondly, he contended that whilst presumptive or general prejudice was not disputed, there was no specific prejudice and certainly not “significant prejudice”. The defendant had been aware of the potential of the claim from the start and there was no suggestion that any witnesses were unavailable to give evidence. He contended that it was a simple claim and that the potential lack of documentary evidence was of minimal significance.

66 Mr Redwood, for the defendant, put two contentions. Firstly, in his written submissions he argued that the claim was contractually time-barred by reason of clause 15 of the conditions which formed part of the contract between the plaintiff and the defendant. This provision gave the plaintiff, on the face of it, one year in which to issue his claim. In oral submissions Mr Redwood abandoned reliance on this point other than to argue that the presentation of this defence at trial was prejudiced by the delay in bringing the claim. Secondly, he contended that, given the delay, the presumptive prejudice was significant to the defendant, as were certain aspects of specific prejudice. In terms of the weight to be given to the potential claim against the former solicitors, he identified what he called “the manifest incompetence of Slater and Gordon”, and said that considerable weight should be attached to the plaintiff’s ability to pursue a claim against that firm. He said that the claim was “clear and incontrovertible”. He emphasised that there was nothing on the part of the defendant which had led to the delay.

The first point: Cause of action barred by the conditions

67 This argument was not pursued by the defendant at this hearing, however given the prejudice issue, it is convenient to say something about it now.

68 Clause 15 of the conditions read as follows:

“No suit including, without limitation, suits brought in rem and suits brought in personam shall be maintained against the ... carrier for ... personal injury, illness ... of a passenger ... and in no event shall any suit for any cause be maintained against the ... carrier with respect to ... personal injury, illness or death unless suit shall be commenced within one year from the day when the ... personal injury illness... occurred, notwithstanding any provision of law of any State or country to the contrary.”

69 The defendant has not yet filed a defence. I was assured that its defence will include reliance upon this provision.

70 There was no issue that the conditions contained the above term and were provided to the plaintiff. The plaintiff’s response, however, is quite simple: The conditions were not provided to the plaintiff until after the booking and payment for the cruise. The tickets and the conditions were post-contractual documents: Baltic Shipping Co v Dillon[27] and Oceanic Sun Line Special Shipping Company v Fay [28] and therefore of no contractual significance.

71 I will return to this issue when I consider the issue of prejudice.

The second point: The exercise of discretion

Relevant principles

72 The seminal High Court decision in relation to an application for extension of time is that of Brisbane South Regional Health Authority v Taylor[29]. The majority in that case determined that, given the underlying purpose of a limitation period to preclude stale claims, it is prima facie prejudicial to the defendant to allow the commencement of an action outside that period. McHugh J explained the rationale for limitation periods as follows:[30]

“Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even ‘cruel’, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that the claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period. ... Even where the cause of action relates to personal injuries, it will often be just as unfair to make the shareholders, ratepayers or taxpayers of today ultimately liable for a wrong of the distant past, as it is to refuse a plaintiff the right to reinstate a spent action arising from that wrong. The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.”[31]

73 S 60C(2) of the Act permits the Court to extend time if “it is just and reasonable to do so”. Section 60E(1) requires the Court to have regard to all the circumstances of the case and, without affecting that general proposition, to have regard to the particular matters detailed in paragraphs (a) to (h) of s 60(E)(1).

74 The following principles emerge from a number of New South Wales decisions delivered since Brisbane South concerning the application of extension of time provisions of the Act in the light of that decision.

75 First, the principles in Brisbane South are relevant to applications pursuant to s 60C and s 60E of the Limitations Act: Sydney City Council v Zegarac[32].

76 Second, it is prima facie prejudicial to the defendant to allow commencement of an action outside the limitation period (“presumptive prejudice”): Commonwealth of Australia v Smith.[33]

77 Third, it is for the applicant to satisfy the Court that grounds exist for exercising the discretion in determining whether it is “just and reasonable” to extend time: Sydney City Council v Zegarac.[34] It is a “positive burden”.[35]

78 Fourth, prejudice is a highly relevant consideration. The presumptive prejudice is to be taken into account but may not of itself disentitle the plaintiff: Brisbane South[36]. If there is “significant” prejudice, an extension should not be granted: Holt v Wynter.[37] Even without a finding of significant prejudice, an extension need not be granted as the applicant is still required to discharge the persuasive onus: Commonwealth of Australia v Smith.[38]

79 Fifth, in determining whether there is significant prejudice, what is to be considered is whether there can be a fair trial. A fair trial does not mean an ideal trial, but one that is “acceptably fair”. A Court has to make an assessment of what might occur at the trial in terms of determining whether an acceptably fair trial can be had. The applicant must satisfy the Court that there would not be such prejudice as would make the chances of an acceptably fair trial unlikely. In South Western Sydney Area Health Service v Gabriel[39], Hodgson JA said:

“... The true issue on this matter is whether or not the applicant for the extension discharged the onus of satisfying the Court that there would not be such prejudice as would make the chances of an acceptably fair trial unlikely.”[40]

The key factor in determining the question of significant prejudice is that of an acceptably fair trial.

80 Sixth, in determining whether the asserted prejudice will prevent an acceptably fair trial, the Act by s. 60(E)(1) requires that such prejudice be assessed “by reason that evidence that would have been available if the proceedings had been commenced within the period is no longer available”.

81 Seventh, prejudice is not the only consideration: Zegarac,[41] McClean v Sydney Water Corporation.[42] Section 60E provides for other considerations and, in the course of any case, there may be other matters which arise requiring consideration in determining whether it is just and reasonable in the circumstances of the case to extend time.

82 Finally, in the context of this case, there is the issue of the weight, if any, to be given to the cause of action which a plaintiff may possess against his or her solicitors by reason of the conduct of the claim.

83 In Morrison & Anor v Judd[43] Kirby P. said:

“The availability of an action against a negligent legal representative is relevant because commonsense says that it is so”.

In Morrison [44] Kirby P. referred, with approval, to what had been said by Smith J in the Appeal Division of this Court in Repco Corporation Ltd v Scardamaglia[45].

“In the present case, if the section does require consideration of the possibility of Mr Scardamaglia’s right to sue his legal representatives I am not persuaded that that possibility is something that should affect my view that on balance it would otherwise be just and reasonable to exercise the discretion in his favour. While it might be said that on the evidence before the court the rights against the legal representatives appear to be strong, there is no admission of negligence by the legal representatives and the issues that may arise in any such action have not been investigated or pursued fully in these proceedings. In any event, confining Mr Scardamaglia to an action against the legal representatives would carry with it its own prejudice. He would be able to seek compensation not in respect of his injuries, but for his loss of his right to sue Repco. He would find himself having to prove two cases – the original case against Repco and a further case, the case against the legal representatives. The proceeding would, therefore, be more time consuming and more costly. There would also be a real risk that, if successful, any sum recovered would be less than any sum that he would have recovered in the original proceeding: for any damages awarded would be for the lost chance to recover damages in the proceeding against Repco: Johnson v Perez; Nikolaou v Papasavas Philips & Co (citations omitted).”

84 Subsequently, in Tsiadis v Patterson[46], the Court of Appeal in this State revisited this issue and stated authoritatively that the plaintiff’s right to sue his former solicitors was a relevant consideration in an application for extension of time. Buchanan JA said:

“The weight to be given to the availability of a cause of action against a solicitor will depend upon the circumstances of each case. The liability of a solicitor is not to be equated with that of the original wrongdoer, and accordingly I do not think it is correct to conclude that an applicant with a good prospect of successfully suing his solicitor will suffer no prejudice if his application is refused. The liability of the solicitor will be determined not only by the likelihood of establishing liability on the part of the original wrongdoer, but also by the terms of the solicitor’s retainer, the instructions given by the client from time to time and by the manner in which the solicitor’s work has been performed. If the plaintiff is successful in an action against the solicitor, the damages to be awarded are not based upon an assessment of the losses, pain and suffering caused by the injury sustained by the plaintiff, but are commensurate with the value of the lost chance to recover damages from the original tortfeasor. Proceedings against the solicitor will be more complex and expensive than proceedings against the original wrongdoer. Usually the likelihood that the applicant will succeed in an action against his or her solicitor cannot be known with any precision when an application under s.23A of the Act is decided. In the present case it appears that Turner was in breach of the obligations which he owed to the respondent, but that view is one based upon hearing only the respondent’s version of her engagement of Turner and the events of the succeeding years, for of course no evidence was led or submissions made on behalf of the solicitor. The matters referred to by Smith J in Repco Corporation Ltd v. Scardamaglia should not lead to a plaintiff’s potential cause of action against a negligent solicitor being completely ignored, but rather affect the weight to be given to the availability of the cause of action.”

85 Recently, the New South Wales Court of Appeal in Andresakis & Skouteris v Alexus Holdings Pty Ltd[47] considered the application of the principles set out in Scardamaglia and Tsiadis in the context of a notice of motion endeavouring to set aside a preliminary dismissal order made in the District Court. McColl JA then said:

“Accordingly, it is correct to say that the primary judge erred in dismissing the prospect that the respondent had a cause of action against its former solicitors as ‘an impermissible consideration’. It was a relevant consideration, though one whose weight depended on the circumstances. The authorities to which I have referred have accorded the prospect of a secondary cause of action little weight, partly because of the difficulty of evaluating the prospects of success.”[48] (My emphasis.)

86 It follows that a potential claim against former solicitors is a relevant consideration, but that the question of what weight is to be given to it depends on the circumstances; a court must be careful in ascribing weight to the prospect of such a claim, given that the full circumstances surrounding such a claim may not be known. A Court may also take into account the prejudice to the plaintiff in prosecuting the claim against the solicitors as opposed to prosecuting the claim that is potentially statute barred. That prejudice may take several forms – diminution in the value of the claim as well as any added costs and the complexity of the proceeding against the former solicitor.

87 I turn now to the competing considerations in the circumstances of this case.

Considerations in respect of the exercise of discretion

The length of and reasons for the delay

88 The proceedings were issued nearly seven years after the incident and nearly four years after the cause of action became statute barred. The primary reason for the delay is the ineptitude of the solicitors handling the plaintiff’s claim.

The plaintiff instructed solicitors promptly. He chose expert and/or experienced solicitors to conduct his case; he has no legal background or training. No blame can be attributed to the plaintiff.[49]

Prejudice

89 The starting point is the presumptive prejudice recognised in Brisbane South Regional Health Authority – the delay of nearly seven years, and probably somewhere in the region of nine years by the time of the hearing.

90 The next question is whether there exists significant prejudice which would make the prospects of a fair trial unlikely. If there is, the application must fail.

91 The defendant identifies the following matters as relevant to this consideration[50]:

(a) The defendant operated the ship. However, since 2000 it has not operated ships either by itself or in partnership in Australia with an organisation known as Norwegian Cruise Lines (“NCL”). The defendant remains incorporated in Australia but has no employees or assets and has not carried on business in Australia since the end of 2000.

(b) The ship is now known as the Albatross II and is operated by a German travel company.

(c) Dr De Kock is engaged by NCL and is currently employed on a ship operated by NCL Bahamas Ltd.

(d) The chief physician of NCL, Dr Tom Noto, who would apparently give evidence as to medical policies for the defendant, is no longer employed by NCL.

(e) Brayden Holland (“Holland”), the person apparently responsible for giving instructions to Bonnell, is not personally aware of the defendant’s medical policies or which documents were held on board the ship. Despite searches of several boxes (out of about 30) relating to the defendant’s business, he has been unable to identify documents relating to medical policies or supplies.

(f) Kelly Crawford, a senior associate of the defendant’s solicitors, has investigated, in a preliminary fashion, the dealings between Traveland Bendigo and the plaintiff as well as the current status of Impulse Travel at Cohuna. It has not traded for some years. She has spoken to a John Fitzpatrick, who worked at Traveland Bendigo in 2000. Her affidavit is silent as to whether Fitzpatrick has any knowledge of the plaintiff. Rather, his information relates to the standard practice of the business, which is of virtually no assistance in this case.

92 I have already remarked on what I consider to be the simple nature of this case. It is, effectively, a one issue case: Was it reasonable for the defendant not to carry thrombolytic medication on board the ship? Nothing has been adduced to suggest that it was carrying such medication. The existence of “policies” are, in my view, of little moment. If the policy was not to carry the medication, then that is either reasonable or unreasonable. Alternatively, if the policy was to carry the medication and it was not on board, then that failure might be seen as unreasonable.

93 It is not suggested that either Dr Noto or Dr De Kock are unable to give evidence. Each, undoubtedly, would be able to give evidence as to what the policy was or was not at that time. It is still not clear whether any relevant documents are missing or not. Holland’s search has been confined to a couple of boxes.

94 Whilst it is clear from the affidavit of Kelly Crawford that there may be difficulties in finding relevant persons at both Impulse Travel and Traveland Bendigo who could give evidence as to what the plaintiff and his wife may or may not have been told in relation to the conditions, there is nothing contained in her affidavit that makes it definitive that evidence to contradict the plaintiff’s assertion as to when he first became aware of the conditions has ever existed.

95 The restructuring of the defendant and associated companies is of little moment, as Holland, the director of sales and marketing of Star Cruises appears to have considerable familiarity with the way in which the defendant operated in 2000 and has access to its documents. The whereabouts of the ship is of no relevance.

96 In summary, I am not persuaded that the defendant has demonstrated that there is significant prejudice which would make an acceptably fair trial unlikely.

97 It does seem to me, however, that there is presumptive prejudice attaching to the defendant in its defence of the Plaintiff’s claim. In Zegarac,[51] Mason P said as follows:

“However, McHugh J’s judgment in Brisbane South (at 551) correctly reminds that time may ‘sometimes, perhaps more often than we realise’ cause the deterioration in quality of evidence that is not recognisable even by the parties. The capacity of a key witness to give a credible account and a defendant under cross-examination may be undermined by the lapse of time, especially if he or she did not make a contemporaneous written statement. While a tribunal of fact should be able to assess this disadvantage, this, too, can be difficult; it may not be fair to the defendant to put at peril of losing such a case when it has been commenced out of time.”

98 In my view, this is a relevant consideration in relation to a trial which will be conducted roughly nine years after the event. Whilst it is true that Dr De Kock compiled a report two days after the plaintiff’s heart attack, she will still be in the position of having to travel to Australia and give evidence about a number of matters concerning her treatment of the plaintiff, who must be one of many patients treated by her over the years. Dr Tan, whom I accept would be a relevant witness as to the operation of the ship’s hospital, may, I assume, also have to travel to Australia and give evidence about procedures and policies relating to this specific ship in 2000.

99 I also take into account that whilst no specific significant prejudice has been identified in relation to the conditions defence, the defendant’s ability to marshal evidence to meet the plaintiff’s assertion that he was not alerted to the conditions until after the contract had been entered into may be compromised by making such inquiries over seven years after the event. It cannot be put more highly than that.

100 In summary, I think that this is a case in which there is real presumptive prejudice to the defendant which must be taken into account in determining the outcome of the application.

Conduct of the defendant

101 There was no conduct on the part of the defendant which caused any delay in bringing the proceeding. None was suggested by the plaintiff.

Steps taken by the plaintiff to obtain advice and the advice received

102 The plaintiff acted reasonably and properly in obtaining legal advice. When advised to change solicitors, he did so shortly afterwards. In my view, he has acted reasonably throughout.

Extent of the plaintiff’s injuries and loss

103 The plaintiff suffered a serious heart attack with considerable ramifications for him as evidenced by Dr Leitl’s opinions. His case, insofar as it relates to the defendant’s conduct, is based upon a loss of opportunity to receive appropriate treatment which would have alleviated, so it would be argued, a number of the consequences which flowed from the original heart attack. [52]

The existence of a cause of action against the former solicitors

104 I am conscious of the cautionary remarks of both the New South Wales and Victorian Courts of Appeal in relation to assessing the likely prospects of success of the plaintiff in a potential claim against Slater and Gordon.

105 This case, however, is very different. In Scardamaglia, Smith J noted that whilst there was no admission of negligence by the legal representatives, the issues that may arise in a case against the former solicitors had not been investigated or pursued fully in that application. Similarly, in Tsiadis, Buchanan JA stated that “usually” the likelihood of success in such a claim will not be known. Moreover, his Honour subsequently observed that no evidence was led or submissions made on behalf of the solicitor. Such considerations do not arise in this case. Madden has sworn a comprehensive affidavit detailing Slater and Gordon’s handling of the file. Gilchrist’s LPLC letter details minutely the manner in which the file had been handled by Slater and Gordon.

106 In Gilchrist’s LPLC letter, he said as follows in relation to his review of Slater and Gordon’s file:

“In our view:

(a) the Victorian office of the firm was negligent in failing to give written notice to NCL of the claim, with full particulars, by 16 January 2001;

(b) the NSW office of the firm was negligent in failing to commence proceedings against NCL on or before 16 July 2001, and has acknowledged as much within the firm;

(c) whilst it is of little consequence in the light of (a) and (b) above, the NSW office of the firm was also negligent in:

(i) failing to serve the Statement of Claim when it was ultimately issued;

(ii) permitting the proceeding to be struck out;

(iii) conducting the proceeding in a fashion that attracted the criticism of Judge Boyd-Boland on 1 July 2003;

(iv) failing to take sufficient steps to reinstate the proceeding once it was struck out;

(d) Mr Gordon was significantly and permanently injured on 16 July 2000;

(e) that injury was caused, or at any rate substantially contributed to, by the conduct of NCL in failing to have thrombolytic treatment available on board the Norwegian Star;

(f) Mr Gordon’s case against NCL was viable and would have had good prospects of success, which was the view adopted by both offices of the firm throughout the period September 2000 to September 2003;

(g) Mr Gordon has a good claim in negligence against both offices of the firm.”

107 Nowhere is it suggested that Slater and Gordon have any answer for their conduct in permitting the claim to become statute barred. I think it fair to say that as against Slater and Gordon, the plaintiff has a powerful, if not overwhelming, case.

108 No explanation was proffered by Madden for its conduct.

109 I repeat that I do not believe that this case falls into that category of an application described by Buchanan JA in Tsiadis where “usually the likelihood that the applicant will succeed in an action against his or her solicitor cannot be known with any precision”. This is not a case where a solicitor did not issue the process because there was a concern about the prospects of success; or that there was trouble identifying potential defendants, or that there was a concern about establishing the quantum of damages. Apart from issuing the writ, the case was simply not prosecuted adequately – with no plausible explanation for the failure to do so.

110 I accept that any view I may take about the conduct of Slater and Gordon, in particular, is not a final determination of its liability. Contrary to Mr Quinn’s submission, I think that this is a case where the strength of the claim against the solicitors can be determined. Gilchrist’s LPLC letter sets out comprehensively the basis for any claim against Slater and Gordon. Apart from the fact that the claim (which had been on its books for two years and ten months at the time the three year limitation period expired) was not served within time and was struck out for failure to attend Court, the file is littered with admissions as to the conduct (ie failings) of Slater and Gordon. It is, in my view, not possible to see what defence Slater and Gordon could mount to a claim in professional negligence. It is, as I have already noted, significantly different to the facts in Scardamaglia and Tsiadis where neither Court had available to it, it would appear, evidence of the type presented to me.

111 As was pointed out in Scardamaglia and Tsiadis, there are other relevant factors in assessing the weight to be given to a potential claim against a negligent solicitor. The plaintiff will be confined to suing Slater and Gordon for the loss of his right to sue the defendant. He would have to prove two cases, and the case would necessarily become more time consuming and more costly. There may be a real risk that any sum recovered would be less than the sum he would recover in a claim against the defendant, given that it is a claim for the loss of the chance to bring the action.

112 In the context of this case these considerations are, in my view, not as strong as they might be. I accept that any case against Slater & Gordon will be based on the plaintiff’s loss of opportunity to pursue his claim against the defendant: That case is itself a loss of opportunity case. I accept for present purposes that there may be a diminution in the value of his claim if he is restricted to suing his former solicitors – although given the nature of the assessment of damages in that type of claim against the defendant it may not be of great significance. I am by no means satisfied that the prosecution of a claim against Slater & Gordon will be significantly more complex or costly than the prosecution of the claim against the defendant. If I am correct in my assessment of the strength of the claim against Slater and Gordon, that part of the claim against the firm will only take a short period of Court time, if any. Whilst I accept that the forensic processes may be more difficult, what will take up the substance of the hearing will be the same evidence which would be led against the defendant if this hearing was to proceed, i.e. evidence concerning the failure to have the thrombolytic medication on board, evidence relevant to the plaintiff’s ascertainment of the terms of the conditions, evidence relevant to the quantification of the prospect of a better outcome for the plaintiff if the thrombolytic medication had been provided and evidence as to damages.

113 I have formed the view that in the circumstances of this case rather than being a matter of little, if any weight, as it was in Scardamaglia and Tsiadis, the prospect of a successful claim against the former solicitors must be given real consideration.

Conclusion

114 The plaintiff carries the onus of persuading me that it is just and reasonable to extend time. I have taken into account the purposes which underlie the statutory prescription of limitation periods. I accept that the plaintiff has acted reasonably and that his claim for damages against the defendant may be one of some size. Although I am not persuaded that the defendant has suffered “significant” prejudice, in my view, the presumptive prejudice attaching to the defence of the case is real. I also regard the existence of a viable, indeed, strong cause of action against the plaintiff’s original solicitors as being a significant consideration. The defendant has played no part in contributing to the delay. I am ultimately not persuaded that in all the circumstances it is just and reasonable to extend the time for bringing the claim against the defendant.

Orders

115 The plaintiff’s application will be dismissed. I will consider any submissions the parties wish to make as to costs.

[1] John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36; (2000) 203 CLR 503

[2] Exhibit KTG1 to Affidavit of Kenneth Thomas Gilchrist of 18 July 2000 (“Gilchrist’s affidavit”).

[3] Exhibit KTG3 to Gilchrist Affidavit.

[4] Exhibit KTG4 to Gilchrist’s affidavit.

[5] Exhibit KTG4 to Gilchrist’s affidavit.

[6] Affidavit of William James Madden of 12 June 2007 (“Madden’s affidavit”), para 6.

[7] Exhibit KTG5 to Gilchrist’s affidavit.

[8] Exhibit KTG9 to Gilchrist’s affidavit.

[9] Exhibit KTG9 to Gilchrist’s affidavit.

[10] Exhibit WJM1 to Madden’s affidavit.

[11] Exhibit WJM2 to Madden’s affidavit.

[12] This sensibly and succinctly expressed the nub of the plaintiff’s claim.

[13] Exhibit WJM3 to Madden’s affidavit.

[14] Exhibit WJM4 to Madden’s affidavit.

[15] Exhibit KTG9 to Gilchrist’s affidavit.

[16] Exhibit WJM5 to Madden’s affidavit.

[17] Exhibit KTG9 to Gilchrist’s affidavit.

[18] Madden’s affidavit at [23].

[19] Exhibit KTG9 to Gilchrist’s affidavit.

[20] Exhibit KTG9 to Gilchrist’s affidavit.

[21] Exhibit WJM9 to Madden’s affidavit.

[22] Exhibit WJM10 to Madden’s affidavit.

[23] Exhibit KTG9 to Gilchrist’s affidavit.

[24] Exhibits KTG 6 and 7 to Gilchrist’s affidavit.

[25] Exhibit KTG9 to Gilchrist’s affidavit.

[26] The original Statement of Claim had been served with the notice of motion in June 2003 – but no formal service of any originating process was effected until July 2007.

[27] (1991) 22 NSWLR 1.

[28] [1988] HCA 32; (1988) 165 CLR 197.

[29] [1996] HCA 25; (1996) 186 CLR 541.

[30] Supra at p.552.

[31] Citations omitted; see also Clark v McGuiness [2005] VSCA 108 at [62]- [63].

[32] (1998) 43 NSWLR 195 at pp.197, 222-223.

[33] (2005) NSWCA 478 at [123].

[34] Supra at p.197.

[35] Brisbane South at p.554.

[36] Supra at p.555.

[37] [2000] NSWCA 143; (2000) 49 NSWLR 128 at [116].

[38] Supra at [129].

[39] (2001) NSWCA 477 at [33].

[40] This statement, in principle, has been adopted subsequently by the New South Wales Court of Appeal in Commonwealth of Australia v Smith [2005] NSWCA 478; Commonwealth of Australia v Lewis [2007] NSWCA 127 at [28] – [30]; Commonwealth of Australia v Smith (2007) NSWCA 168 at [50] and [51].

[41] Supra at p.198.

[42] (2001) NSWCA 122 at [24] – [25].

[43] NSWCA unreported 10 October 1995.

[44] See also Blackburn v Allianz Australia Ltd [2004] NSWCA 385; (2004) 61 NSWLR 632 at [47].

[45] [1996] VicRp 2; [1996] 1 VR 7 at p.15.

[46] [2001] VSCA 138; (2001) 4 VR 114 at [28].

[47] [2006] NSWCA 294.

[48] At [92].

[49] See Anisiena v H. Crane Haulage Pty Ltd [1974] VicRp 81; [1974] VR 670 at p.674, Millard v State of Victoria [2006] VSCA 29 at [41] and [42].

[50] See Affidavit of Brayden Holland of 10 August 2007

[51] Supra at p.197; see also Saad v J. Robins & Sons Pty Ltd [2003] NSWCA 87 at [33].

[52] In the course of discussion with plaintiff’s counsel it was accepted that despite the allegations in the statement of claim, the case was likely to be conducted on a loss of opportunity basis, i.e. the plaintiff had lost the opportunity to make a better recovery from the heart attack as a result of the absence of thrombolytic medication on the ship.

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