Argyropoulos v Layton & Anor

Court of Appeal (NSW)|2002-03-15|Before: Handley JA, Hodgson JA, Santow JA, Sperling J

INTRODUCTION 15 This is an appeal which originates in the negligence of a solicitor in a law firm (the Respondents) in failing to prosecute the Appellant's motor car accident claim. The solicitor concerned (Mr Burns) failed in his obligations to the client in two respects. First, he failed to bring his client's claim within the prescribed three years, so barring that claim unless the Court's leave were able to be obtained. Second, he failed to seek the Court's leave to commence such proceedings out of time though instructed to do so. The principal question for this appeal is whether the Appellant is statute barred from recovering for the Respondents' negligence in that latter respect. 16 The starting point was the Respondents' original negligence in failing to commence proceedings within the time prescribed by s52(4) of the Motor Accident Act 1988 ("MA Act"). The section relevantly provides as follows: "s52(1) … (3) If a claimant commences proceedings in respect of a claim more than 12 months after the date on which the claim must be made in accordance with s43, the claimant must provide a full and satisfactory explanation to the Court for the delay. (4) The claimant is not entitled to commence proceedings in respect of the claim more than 3 years after the date on which the claim must be made in accordance with s43 except with the leave of the court in which the proceedings are to be taken. (5) The Limitation Act 1969 does not apply to or in respect of proceedings in respect of a claim." 17 The Respondents then failed to apply for the court's leave (to bring these proceedings out of time) under s52(4) of the MA Act. 18 Considering himself constrained by authority of this Court (Wilson v Rigg (Sperling J, [2000] NSWSC 16, 7 February 2000, unreported) the trial judge (acting Judge Cripps QC) concluded that, though otherwise the Appellant would have been entitled to succeed in negligence against his solicitor, the Appellant was statute barred. That reasoning proceeded on the basis that (a) the Appellant's cause of action for negligence against the solicitor was a single undivided cause of action; (b) it covered both the failure to commence proceedings under s52(4) of the MA Act within the time prescribed (by 1 January 1993) and the later failure to seek leave to commence out of time when so instructed six months later (11 June 1993), such that (c) his damage first occurred on 1 January 1993 when his action under the MA Act became statute barred; (d) this had the consequence that the Appellant's cause of action against his solicitor for negligence must be taken to be complete at that point where the MA Act action first came to be out of time, so that (e) the time to sue the solicitor then commenced to run and thereafter expired, before the Appellant finally commenced those proceedings on 4 June 1999, more than six years after 1 January 1993. 19 For the Appellant to succeed, this Court must therefore first determine whether Wilson v Rigg was wrongly decided, at least as to its reasoning if not result. While it is understood that there is currently an appeal from that decision now heard, but still awaiting judgment, that does not constrain this Court from dealing with the present appeal though it involve examination of the reasoning of Wilson v Rigg.

ESSENTIAL FACTUAL MATTERS 20 It is convenient that I start with the chronology of the key dates and events. (a) On 10 March 1989, the Appellant was injured when his motor cycle struck a car. He was taken to hospital and discharged the same day. His injuries were not major, but he was away from work for a period of approximately eight weeks. He attended his local general practitioner, Dr Hall. His injuries included a fractured toe, cuts and abrasions and injuries to his back, shoulder and groin. In particular, he suffered bruising to his testicles as a result of which he was referred by Dr Hall to Dr Kortesis, who saw him twice, but who did not give evidence. (b) On 16 March 1989, the Appellant first called on his solicitors (the Respondents) seeking advice concerning his claim against the car driver who struck the motor cycle, Mr Apoifis. (c) On 1 July 1989 the MA Act replaced the Transcover Scheme. The effect of the new legislation was that if a plaintiff wished to maintain proceedings against a defendant (of the type contemplated by the Appellant against Mr Apoifis) notice had to be given to the defendant and his insurer, which in this case was the Government Insurance Office ("GIO"). Though the notice had to be given on or before 1 December 1990 and was not in fact given until August 1991, in the circumstances nothing turns on the delay, because the GIO accepted the notice. I should note here that the Respondent solicitor was of the view (erroneously) that the Appellant had only until September 1990 to commence proceedings against Mr Apoifis and that if proceedings were not commenced by that date, leave of the Court was required. (d) On 30 August 1991, the Appellant attended upon the Respondents' office and deposited the sum of $110 as earlier requested, in order to commence proceedings. The trial judge concluded that the Appellant at that time in September 1991 thought proceedings had been or would be shortly thereafter commenced (Red Book, 18, para 15 of Judgment). (e) As of December 1991, the Appellant was aware that proceedings had not been commenced, though still believing (erroneously) on account of advice given to him by the Respondent solicitor that he had been out of time since September 1990 and that if he wished to proceed against Mr Apoifis he needed the leave of the court. (f) On 8 June 1993, the Appellant first told the Respondent solicitor he wished to commence proceedings, these being then for leave, being then advised by the Respondent of what he saw as "the threshold problem". That was a reference to having his claim assessed as above 9% of a most extreme case and to the possible adverse consequences in costs should he be assessed below the 9% threshold. He was advised to confirm this with the Respondent solicitor (Mr Burns), which he did on 11 June 1993. (It must be questionable whether indeed there was a fresh or varied retainer thereby brought about to seek leave, or whether that was inherent in the original retainer.) (g) On 11 June 1993, having done so, the Appellant confirmed to the Respondent solicitor that he wished to take these proceedings. (h) If the six year limitation period for bringing proceedings commenced to run, not from 1 January 1993 but from 8 or 11 June 1993 when those instructions were given, these proceedings commenced against the Respondent on 4 June 1999 would have been in time. 21 1 January 1993 was the last date within the 3 years laid down for the Appellant to have brought his action under s52(4) of the MA Act, except with the leave of the Court. Hence only with the leave of the Court after 1 January 1993 could such a claim be brought by Appellant. The trial judge stated that he was constrained by Wilson v Rigg to conclude accordingly, "that the plaintiff is statute-barred from bringing an action based on any negligent conduct of the defendant before 1 January 1993. That is to say that he cannot maintain his action that Mr Burns caused him damage by not making a claim under s52(4) of the MA Act before 1 January 1993." (Red Book, 22, para 34 of the Judgment)

FINDINGS OF THE TRIAL JUDGE 22 I shall not repeat the findings of the trial judge insofar as they are reflected in the above chronology, save as is necessary to delineate the reasoning of the trial judge. Thus his relevant findings can be summarised as follows: (a) no argument could be based upon the following observations of Deane J in Hawkins v Clayton (1998) 164 CLR 539 at 590: "The reference in s14(1) [of the Limitation Act] to the cause of action first accruing should be construed as excluding any period during which the wrongful act itself effectively precluded the institution of proceedings." Here the effect of the Respondents' misleading advice (para 6(e) above) was negated by the fact that the Appellant knew by the end of the year 1991 and throughout 1992 and afterwards that the proceedings had not been commenced (Red Book, 22 Judgement para 33). The Appellant was in any event aware that leave could be obtained to commence proceedings, even if he held the view that the proceedings were out of time from an earlier date (September 1990) than in fact they were. Hence the trial judge found it unnecessary to decide whether the ratio of Hawkins was as enunciated by Deane J, who was alone in expressing that view. This is because there was no suggestion that the wrongful act in the present case precluded the institution of proceedings by the Appellant. (b) the Respondent was under a duty as at June 1993 to protect the Appellant by commencing the proceedings pursuant to s52(4) of the MA Act and in particular had a duty to make an application pursuant to s52(4) for leave to take those proceedings out of time, shortly after he received his instructions on 11 June 1993. (c) there was no basis for requiring contribution by the Appellant for the damage he suffered (Red Book, 22, Judgment para 35). (d) the trial judge then observes (Red Book, 23, Judgment para 36): "Uninstructed I would have concluded that the failure to lodge an application to seek the leave of the Court in June 1993 was actionable and that damage occurred at that time because every day of delay further prejudiced the plaintiff in the application he needed to make if he wished to have his claim litigated. If that view is correct the plaintiff, having commenced the subject action on 4 June 1999, would not be statute-barred from pursuing his claim." (e) the trial judge continues (Red Book, 23, Judgment para 37): "A proper assessment of the plaintiff's claim would mean that he had already lost his right to commence proceedings without seeking the court's permission but thereafter lost an opportunity to persuade the Court to grant leave and to litigate against Mr Apoifis or the GIO. If that view be correct, his damages would be assessed as at the 4 June 1994 in accordance with what would be his hypothetical trial towards the end of 1994 or the beginning of 1995 discounted by the possibility that leave may not have been given and that, in the light of the plaintiff's conduct up to that time, the prospect that the plaintiff may have been prepared to receive a sum from the GIO less than an amount that would have been ordered by a Court." (f) the trial judge continues (Red Book, 23, Judgment para 38): "If the plaintiff went to trial he would almost certainly have succeeded and I do not think there would have been any reduction of his damages on account of his contributory negligence …" (g) the trial judge then fixed the Appellant's entitlement to about 12% of a "most extreme case" entitling him to an amount of $8,140 over and above out of pocket expenses, noting that the Appellant did not see fit to call his specialist, Dr Kortesis, and, without giving further reasons, stated as to the two doctors whose ex post facto assessments were in evidence (Red Book, 23, Judgment para 39) "I am not impressed by assessments made by Dr Ellis and (sic) Dr Conrad who saw him on behalf of this litigation in 1999 and 2000 and who expressed opinions concerning his condition at the time of the examination." (h) the trial judge made only a small discount for the prospect that leave would not be granted, because liability was clear and the Appellant was only six months out of time; he therefore concluded (Red Book, 24, Judgment para 40) that: "I do not think he would have been prejudiced in the relevant sense if the Plaintiff had been permitted to present a case against it." (i) On the assumptions that the trial judge made and without a discount, he concluded that the Appellant would have received in all a verdict of $11,474.75 being made up of $3,334.75 together with general damages of $8,140; the trial judge thereafter made a small discount only, for the possibility that leave might not have been given and for the prospect that the Appellant may have settled for less; that led to his damages being fixed at $10,500 (with a set-off being allowed for $248.72 for work done on behalf of the Appellant in the early nineties) (Red Book, 24, Judgment paras 42-44). (j) the trial judge concludes: "in respectful reluctance, that authority compels me to follow the decision of Sperling J" [in Wilson v Rigg], finding no relevant distinction (Red Book, 28, Judgment para 53). (k) the trial judge thus made orders on 24 July 2000, of verdict for the Defendants on the Plaintiff's claim, verdict for the Defendants on their cross-claim in the sum of $248.72 with the Plaintiff to pay the Defendants' costs

GROUNDS OF APPEAL AND NOTICE OF CONTENTION 23 The Appellant's Grounds of Appeal are relevantly as follows: "1. His honour erred at law in holding that the Plaintiff's claim was statute barred six years after the date upon which a claim could be lodged pursuant to the Motor Accidents Act 1988 without leave pursuant to s52(4) of that Act because of the ratio and reasoning in the decision of His Honour Justice Sperling in the Supreme Court of New South Wales in Wilson v Rigg (Sperling J, unreported, Supreme Court 7th February 2000, [2000] NSWSC 16; BC 200000230). That is, His Honour erred in holding that the negligence of the solicitor on or after 11th June 1993 is statute barred because of the operation of s52(4) of the Motor Vehicle Act 1988 even though the proceedings were commenced on 4th June 1999. 2. The decision of the Supreme Court in Wilson v Rigg (Sperling J. unreported, Supreme Court 7th February 2000, [2000] NSWSC 16; BC 200000230) was incorrectly decided. 3. His Honour erred in finding that the plaintiff by reason of his injuries was about 12% of a 'most extreme case' and should have held that the plaintiff was about 30% of a 'most extreme case'." 24 The Respondents' Notice of Contention, after abandoning the First Ground, is as follows: "2. That as to the prospects of an application for leave to commence proceedings out of time pursuant to s52(4) Motor Accidents Act (NSW) 1988: (a) there was no evidence from the appellant, and indeed no finding was made by the trial judge, that the appellant would have definitely brought an application for leave; (b) no expert or other evidence put forward on behalf of the appellant as to the likelihood that any s52(4) application, if it had been made in 1993 or subsequently, would have been successful."

DETERMINATION OF APPEAL 25 Leaving aside matters of damages, this appeal ultimately turns on the correctness or otherwise of the reasoning of Justice Sperling in Wilson v Rigg. It is necessary to consider that reasoning against the circumstances applicable to the case before him. 26 In Wilson v Rigg, the plaintiff's solicitor did in fact file a Notice of Motion for leave pursuant to s52(4) of the MA Act (on 4 November 1996) but so belatedly that the application for leave appeared doomed to fail and in fact did fail. I should emphasise the word "appeared", since the full circumstances of that application are not before us and Wilson v Rigg is itself awaiting judgment on appeal. That Notice of Motion was for the necessary leave to commence proceedings out of time. In fact proceedings for leave were by then nearly five years out of time, the three years under s52(4) having expired on 1 July 1992. Moreover, even judging matters from the time the defence was filed (24 November 1994), which first took the limitation point under s52(4) of the MA Act, the leave application was made nearly two years after that defence was filed. What had brought matters to a head was that the defendant earlier filed a Notice of Motion for the plaintiff's Statement of Claim to be dismissed, which led to the belated leave application being brought. 27 Not surprisingly, the leave application was refused and the proceedings dismissed. The plaintiff later brought proceedings for negligence against his solicitor on 24 September 1998, the defendant pleading in response on 2 June 1999 that the claim against him was statute-barred. On 22 October 1999 Abadee J ordered that there be a separate trial of the issue whether the claim against the defendant was statute-barred. 28 The present case is distinct from Wilson v Rigg, where a belated leave application was in fact made, so late that it appeared doomed to failure. In the present case, no leave application was ever made. The present case was one where there had been specific instructions in June 1993 to start the proceedings for leave, this being some six months after the initial three years had expired. Yet despite that, no application was made then or at all. The Court was able to conclude that had a timely application then been made, it would have probably succeeded. The trial judge was able to assess damages on the basis that proceedings, if then commenced, would have been only some six months out of time. Hence only a small discount was required for the prospect that leave would not have been granted. 29 In Wilson v Rigg, the plaintiff's contention was that the relevant date for assessing damages was not when the original three years expired, so annulling the action (subject to leave) but later. That later date was either on 3 June 1997 when the dismissal of the leave application occurred, or on 24 November 1994 when the defendant first pleaded s52(4) of the MA Act against the plaintiff, the latter being some two years four months after the original period of three years had expired. 30 Sperling J rejected both dates in favour of 1 July 1992 when the plaintiff's entitlement to commence proceedings (without leave) first expired under the MA Act. Sperling J did not canvass the argument that there was a continuing breach of duty by the solicitor, one which occurred on each day after 1 July 1992 (the date the original three years expired under the MA Act) that the solicitor failed to apply for the necessary leave under s52(4). If that argument were made out, this would have meant that, taking the six year limitation period back from 21 September 1998 (when the plaintiff did actually commence proceedings against the solicitor) to 21 September 1992, had proceedings for leave then commenced, so discharging that continuing obligation, then the leave would have had very good prospects. This is because only just under three months would have elapsed from 1 July 1992. Thus the lost chance, from the solicitor's breach in failing at that time to seek such leave, required little discount for the prospect of failure. 31 Another way of considering the question is this. Was there a separate breach or separate cause of action for negligent failure to obtain leave, distinct from the earlier breach or cause of action for failure to proceed within the original three years? Or are they in reality the one breach or cause of action for failure to proceed in time? In other words, was there but one cause of action, that for failure to bring the MA Act proceedings in time, complete when damage first occurred, this being at the expiration of the original three years? If the former the negligence action is not out of time. If the latter it is out of time. Another way of posing the question is to ask, was the defendant solicitor under a separate (albeit not unrelated) obligation to apply for leave, having first failed in carrying out an earlier and distinct obligation to bring the original action within the three years? Or was there but a single, indivisible obligation, to bring the proceedings under the MA Act in time? The Scottish case of Dunlop v McGowans 1979 SC 22; 1980 SC(HL) 73 offers an instructive comparison. That case was concerned with the date when an obligation to make reparation arises. The Scottish legislation provides that the appropriate date for the start of prescription is when loss, injury or damage has been caused by an act, neglect or default (ss6(3) and 11(1)). In this case the defenders were a firm of solicitors who had acted for the pursuers. They failed timeously to serve on a tenant a notice to quit, with the result that the tenant was able to continue in occupation of the leased premises for a further year. Some years later the pursuers raised an action seeking damages from their solicitors. That action was founded on negligence and breach of contract. 32 While the pursuers accepted that by prescription they had lost any right to sue for loss sustained more than five years earlier, they argued that they could still sue for losses more recent than that. This required them to contend that on these facts there was not just a single obligation but a series of different obligations to make reparation. If there were a single obligation to make reparation, which merely had consequences in damages extending over a number of years, the pursuers' entire claim had prescribed. But if each item of loss rendered enforceable a separate obligation to make reparation for that particular item or loss, only part of their claim would have prescribed. The pursuers' argument was rejected. In the House of Lords, Lord Keith (at 81) said: "The language of section 11(1) [of the relevant prescription statute] affords no warrant for splitting up, in the manner and to the effect contended for, the loss, injury or damage caused by an act, neglect or default. An obligation to make reparation for such loss, injury and damage is a single and indivisible obligation, and one action only may be prosecuted for enforcing it. The right to raise such an action accrues when injuria concurs with damnum. Some interval of time may elapse between the two, and it appears to me that section 11(1) does no more than recognize this possibility and make it clear that in such circumstances time is to run from the date when damnum results, not from the earlier date of injuria." 33 The question this approach would pose here, is whether there is but a single and indivisible obligation to prosecute with due diligence the MA Act claim, including any later leave required, or a discrete set of obligations (albeit related), the first to bring the MA Act claim within three years and, the second to seek any leave were there failure in the first obligation. 34 In Wilson v Rigg Sperling J's reasoning proceeded on the following basis: (a) the claim against the solicitor for failing to institute proceedings before 1 July 1992 was statute barred because some damage had occurred at that date, even though the period within which proceedings could be commenced was capable of being extended by the Court. He here sets out to follow a long line of authority which declined to follow Vulic v Bilinsky [1983] 2 NSWLR 472 which had held that time did not commence to run until the defendant raised the plea as a defence; see in particular Doundoulakis v Antony Sdrinis & Co [1989] VR 781, a decision of the Full Court of the Supreme Court of Victoria; (b) thus while statutes of limitation do not operate to bar proceedings unless pleaded, barring as they do the remedy but not the right, that was not a relevant distinction because as from the time the limitation period expired the value of the cause of action was diminished by reason of the need to apply for leave thereafter to proceed; (c) thus the cause of action was complete when damage first occurred, here the damage by reason of the limitation period under s52(4) expiring on 1 July 1992, so debarring the remedy for that cause of action by operation of s52(4), in the absence of leave; (d) hence the plaintiff suffered no additional damage as a result of the alleged later breaches of duty, that is to say the breaches of duty in failing to seek leave, so that no further cause of action can therefore have arisen. 35 Sperling J sought to test the result in this way by the following hypothetical example which I quote below: "Assume a solicitor fails to commence proceedings within time and ceases to act immediately thereafter, without telling the client he had a cause of action or that he should now make an application for leave. Time to sue the solicitor runs out. The client is statute-barred. Now assume the solicitor, having failed to commence proceedings within time, continues to act, as in the present case, and does as the solicitor is alleged to have done in the present case. Can it be that the client is not statute-barred in the present case, where the solicitor has done something, but is statute-barred in the first case where the solicitor has done nothing? That would be an unreasonable result. A construction of the legislation leading to such a result is unlikely to have been intended and is to be avoided." 36 However, that result proceeds on the assumption that in the first assumed case, a solicitor who not only fails to commence proceedings within time but fails to tell the client he had a cause of action or that he should now make an application for leave, is not fairly and squarely within the principle enunciated by Deane J in Hawkins v Clayton (para 9(a) above). But clearly he is. For that principle would exclude from the period applicable under the relevant limitation statute, any time during which the wrongful act (here failing to advise as to the possibility of leave) effectively precluded the institution of proceedings. That situation would be very different from the situation before Wood CJ in CL in Hetherington v Mirvac Pty Ltd [1999] NSWSC 443; (1999) Aust Torts Reports 81-514 at 66-022 - 66-023. Wood CJ in CL applied what was said by Gleeson CJ in Sampson v Zucker (NSWSC, CA, 11 December 1996, unreported) so distinguishing the circumstances to which Deane J was addressing himself from the circumstances before him (as Sperling J points out at para 28 of his Judgment). 37 Moreover, another way of testing the result would be this. Assume in the first situation that not only did the solicitor fail to do those matters which are there assumed (that is, negligently failed to bring an action within the three years). Assume that then he ceases to act, and is replaced by another solicitor. Assume that the new solicitor then, negligently, failed to seek the leave to bring the action out of time. There would be no doubt that the plaintiff could sue the second solicitor without being met by the contention that the damage had already occurred when the original three year period had expired. Clearly enough, there is a separate cause of action with a new and separate defendant. 38 If that be right, it is hardly consonant with justice or common sense that the result would depend upon the adventitious circumstance of a change of solicitors. With no change of solicitors, on the Wilson v Rigg reasoning the plaintiff is deprived of any cause of action. This is despite there being a second act of negligence in failing to seek the leave following the first failure to bring action under the MA Act within three years. Yet with a change of solicitors the plaintiff can recover. 39 Does the law compel so incongruous and absurd a result, capable of working the kind of injustice that clearly troubled the trial judge in the present case? It was put in argument on appeal that there are indeed here two distinct causes of action, albeit related. The first cause of action is in failing to commence proceedings within the three year period laid down by s52(4). The six year limitation period for a negligence action against the solicitor concerned has clearly expired for that. However, it is then said that there is a separate and distinct cause of action in negligence. It is for failure to apply when instructed (8 or 11 June 1993) for the leave which s52(4) contemplates may be sought in those very circumstances. Here the six year limitation period did not expire, before that action was brought as is now before this Court. 40 This argument thus poses the question, are there here two distinct causes of action, or indeed continuous breaches with each day that passes? I return later to the alternative way of posing the question; is there here but one indivisible obligation breached, so giving rise to only one action, or, are there two distinct (albeit related) obligations each capable of giving rise to separate actions? 41 It is not always easy to identify and differentiate between distinct causes of action arising from a matrix of facts, or cluster of facts, grouped around the specific ingredients that make up title to the right sought to be enforced. Much of the case law on what is a separate cause of action arises in a pleading context where leave to amend is sought. There if one characterises the amendment sought as a separate cause of action, as distinct from an amendment to the original cause of action, that ordinarily leads to leave being refused. That may suggest a readier tendency on the court's part to characterise what is sought as not constituting a separate cause of action but simply an amendment embraced by the original cause of action. That reservation should be borne in mind in the analysis which follows. 42 A cause of action has been defined as being: "every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved." ( Coburn v College [1897] 1 QB 702 per Lord Esher MR at 707.

And see also Flower & Hart v White Industries (Qld) Pty Limited [201] 109 FCR 280 at 296 (full court). 43 A cause of action so viewed is: "simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person." ( Letang v Cooper [1965] 1 QB 232 per Diplock LJ at 242. 44 As Scholl J explained (in Patterson v Richards [1963] VR 179 at 187) in applying Lord Esher's dictum for the purposes of statutes of limitations: "it must be borne in mind that obviously every fact is not a separate cause of action, and to lead one or more new facts by amendment (especially of mere particulars) is therefore not necessarily to rely on a new cause of action at all." 45 The extent to which facts must differ so as to give rise to a separate cause of action is indeed a question of degree. Thus Lord Wright in Marshall v London Passenger Transport Board [1936] 3 All ER 83 observed that a change in character of something earlier pleaded may be brought about by alterations in a matter of law or of fact, or both. In his view, alterations of fact could possibly be so vital and important as by themselves to set up a new head of claim. However, he observed that more often alterations of fact do not affect the essence of the case brought against the defendant. In that case Lord Wright considered that the proposed amendment would have set up a new cause of action, involving quite new considerations, quite new sets of facts, and quite new causes of damage and injury, the only point of similarity being that the Plaintiff had suffered certain injuries (at 88). In his view whether an alteration of facts constitutes a new cause of action is a question of degree. 46 Cases discussing what constitutes a cause of action for the purpose of amending a pleading subject to a limitation bar have concluded that: (a) a new allegation of breach of statutory duty rather than the already particularised common law duty did give rise to a new cause of action; Smith v Wilkins and Davies Construction [1958] NZLR 958; (b) a plaintiff claiming as a widow of her deceased husband and seeking damages under the provisions of the Wrongs Act, who sought to amend by adding her children as persons for whose benefit the action was brought, did thereby bring about a new cause of action; Patterson v Richards (supra); but contrast (c) the absence of a new cause of action based on the claimed distinction between a contractual obligation arising between the plaintiff and the members of the committee of management of the association as compared to the plaintiff and the members of the association generally; Harris v Raggatt [1965] VR 779; 47 However, these cases all concerned whether or not an amendment should be permitted to a pleading. The rule governing such an amendment is that where the amended pleadings are considered to give rise to a new cause of action (or are not sufficiently related to present allegations) an amendment will not be allowed. That as I have said may tend to predispose the Court to a narrower view of what is a separate cause of action than other contexts. 48 In a different context, the High Court in Williams v Milotin (1957) 97 CLR 465 at 474 in determining whether there were in the circumstances two distinct causes of action, trespass and actionable negligence, essayed a more precise test. It asks what are the essential ingredients of the right enforced, and thus "every fact which it would be necessary for the plaintiff to prove, if traversed in order to support his right to the judgment of the Court" (Read v Brown (1888) 22 QBD 128 at 131). This test appears in the joint judgment (Dixon CJ, McTiernan, Williams, Webb and Kitto JJ): "[W]hen you speak of a cause of action you mean the essential ingredients in the title to the right which it is proposed to enforce". Similarly Carter v Egg Pulp Marketing Board (1942) 66 CLR 557 at 600. 49 Although "damage" is generally characterised as the "gist" of a cause of action in negligence, its essential ingredients also include a duty of care, and a breach of that duty (Williams v Milotin (supra) at 474). Thus the cause of action derives from the facts to be pleaded and proven to establish these ingredients. 50 Moreover, one cause of action is rendered distinct from another, if there is any ingredient of the respective causes of action which is distinctive, though that ingredient be simply the repetition of a continuing breach by a negligent architect on successive days; Sheldon v McBeath (1993) ATPR 81-209 at 62,073. The mere fact that the ingredient comprising "damage" might be similar or that "each cause of action may be identical for practical purposes" does not preclude the inference that the causes of action are distinct (per Priestley JA). 51 In Wilson v Rigg the failure to commence proceedings within three years involves a distinct ingredient, here that of "breach of duty", from the later failure to seek leave. Indeed, were it to matter, the damage for each distinct breach will differ, though can never exceed the total value of the cause of action, undiscounted. Thus ordinarily just after the expiration of three years, the damage for failure to bring the proceedings would be substantially discounted by the probability that a prompt leave application should succeed in reinstating the proceedings, given its likely prospects of success. Thereafter continued failure to seek leave must aggravate the damage in the point where the prospect of leave becomes zero. At that point the damage is no longer discounted, but corresponds to the full value of the (lost) right of action. That occurs where the application is either never made or made so late as to render failure inevitable. 52 In relation to any tort which is actionable without proof of injury, or in relation to a tort such as nuisance, where there is a continuing duty to abate, if the act which constitutes the tortious conduct is a continuing act, every continuance of that act gives rise to a fresh cause of action. Here though the cause in negligence is not actionable without damage as its gist. The failure to seek leave in time involves a continuing accretion to the damage suffered. This is as the chance or prospect of successful leave diminishes with each day's delay in seeking leave, till it becomes a practical impossibility. 53 On the other hand, if damage is inflicted only once, then there is only one single cause of action, completed when damage first occurs, notwithstanding a continuation of the breach of duty. Thus it is said that if a solicitor negligently allows a client's cause of action entirely to lapse, the client suffers injury only once, when the cause of the action lapses, notwithstanding the recognition of a continuing duty to advise the client of the loss of the action: Australian Torts Reporter [5-380 at 10,604]. 54 In Doundoulakis v Antony Sdrinis & Co (supra), the Victorian Full Court held that where a client's cause of action for personal injuries lapsed by reason of the defendant solicitor's failure to institute proceedings in time, the client's damage was suffered (and his cause of action complete) when the limitation period governing the action on the client's cause of action expired. The Australian Torts Reporter [5-360 at 10,601] says that the decision is authority for the principle that the client's damage was suffered once and for all when the limitation period governing the action on the client's cause of action expired. In my view the case only considers the issue of an extension of time in determining whether damage accrued at the time of the statute operated to bar the action. The right to apply for an extension was argued by the defendant as a reason that no damage occurred at the time of the barring. Accordingly, I do not understand the case to be authority for whether any further damage could be sustained post the limitation bar. I refer here to the impairment (or ultimate extinction) of the chance afforded by the right to apply for leave, when there is delay (or complete failure) so to apply. 55 Since this decision, the New South Wales Court of Appeal has held that in such a situation the solicitor owed a duty to inform the client that his cause of action had lapsed: Scott v Echegaray (1991) Aust Torts Reports 81-120. The failure so to inform the client constitutes a breach of this duty which continues for as long as the client remains ignorant of the fact that his cause of action has lapsed. However, the Australian Torts Reporter [¶536 at 10,602] notes that neither the client's former ignorance, nor the client's subsequent knowledge of this fact, constitute damage which can found a negligence action, because the damage occurred once and for all when the client's cause of action lapsed. Nonetheless, in Scott the failure to inform was held to constitute a breach of duty (whatever the true nature of the duty) and therefore wrongful conduct. Such conduct had the effect of concealing the existence of the client's cause of action against the solicitor, which accrued on the expiration of the limitation period governing the client's personal injury action. As such, the Australian Torts Reporter correctly suggests that it would appear to come within the principle identified by Deane J in Hawkins v Clayton, especially as the breach of the duty to inform was very closely connected to the duty (in negligence) to institute proceedings on behalf of the client within the relevant limitation period. However, it should be noted that the case itself does not refer to Deane J's judgment. 56 In any event, the present case involved no such concealment. Rather it involved the negligent failure to carry out his duty to fulfil the client's express instruction to apply for leave, with damage consisting of the consequent impairment and ultimate extinction of the prospect of maintaining the proceedings. That involved a breach of what can be characterised as a "continuing duty" upon the solicitor in the sense explained by Dixon J in Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 at 236. In Larking, Dixon J contrasts duties to maintain a state of affairs, such as "keeping the insurance of a life on foot", where there is a continuing duty, to the once and for all duty to perform a task by a particular time. In the present case, the latter aptly describes the duty to commence proceedings before three years expire. So too the situation in Bell v Brown [1990] 2 QB 495 where the negligent solicitor failed to execute a declaration of trust protecting the husband's interest at the time the relevant property was transferred. But the former aptly describes the continuing duty to maintain the state of affairs whereby the proceeding under s52(4) can, if leave is sought and obtained, still be brought outside the three years. The duty is to do all that can be done to obtain that leave so as to maintain the proceeding before it becomes impossible. 57 I turn finally to how the Appellant pleaded his cause of action in his Amended Ordinary Statement of Claim (filed 6 December 1999) to confirm that the pleading accommodates two distinct causes of action: 12. It was a term and condition of the said agreement that if the defendants did not commence proceedings in time they would expeditiously act so as obtain an extension of time from the Court in which to commence proceedings. 13. In breach thereof and during the said period the defendants never commenced proceedings for the plaintiff and never sought an extension of time in which to commence proceedings by reason whereof the plaintiff lost his right and entitlement to commence proceedings and to derive from those proceedings damages for his injuries including non-economic loss, economic loss and damages for out-of-pocket expenses… 14. Further and alternatively in the circumstances the defendants came to be under a duty of care to the plaintiff and were in breach thereof and were negligent. Particulars of Negligence (a) Failing to commence proceedings at all;… (d) Failing to issue a Statement of Claim within a period 3 years and 6 months from 1st July 1989; (e) Failing to inform or adequately inform the plaintiff that proceedings must be commenced within 3 years and 6 months from 1st July 1989; (f) Failing to inform the plaintiff that he was out of time in which to commence proceedings until 7th June 1993; (g) Having been instructed on or about 11th June 1993 to move the Court to obtain an extension of time in which to commence proceedings failing so to do… 58 I consider that such a pleading sufficiently identifies a distinct cause of action in negligence, based on the Respondents' failure to "expeditiously act so as to obtain an extension of time from the Court in which to commence proceedings". Though pleaded in conjunction with a pleading of negligent failure to issue the original Statement of Claim within the prescribed time, these remain distinct though related claims. There are here to be found, in terms of Diplock LJ's test, distinct factual situations upon which each claim in negligence rests, or "the essential ingredients in the title to the right" the subject of each claim. First, there is the factual situation of the failure to take out a statement of claim, within the three year statutory period. Second, there is the later factual situation of the failure to apply for leave expeditiously when instructed, after the three year period has expired. Though the same solicitor commits both breaches, these are each "a [distinct] factual situation the existence of which entitles one person to obtain from the court a remedy against another person" (Letang v Cooper (supra)). Similarly, a global claim for damages may be unbundled to identify distinct breaches or breaches of distinct obligations; compare Cassis v Kalfus [2001] NSWCA 460 per Hodgson JA (at para [82]). 59 The reciprocal of the title to the right is a corresponding obligation. Thus it has been said in this context that "the fundamental question is whether a particular legal relationship comprises a single obligation or several different obligations" in determining "which obligation (if any) has been extinguished …"; see "Prescription" by David Johnston (Edinburgh, 1999) at 2.05 and following, and as earlier discussed at paras 18 to 20 above. 60 Here there is a distinct obligation on a solicitor, more especially when requested so to do by his client, to apply expeditiously for leave, when otherwise barred by s52(4) MTA from commencing proceedings on behalf of the client. Breach of that obligation is capable of grounding a separate action in negligence that is distinct from an action for the earlier failure to file a statement of claim in time. That it is a distinct obligation (unlike the situation in Dunlop v McGowans (supra) is reinforced by the absurdity of supposing that this should otherwise depend on whether or not the same solicitor were acting in relation to each failure. 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. 63 I thus conclude, with the deference properly due to the closely reasoned judgment of Sperling J, that he was in error in Wilson v Rigg. This was in concluding that, as the plaintiff suffered no additional damage as a result of the alleged later breaches of duty, so no further distinct cause of action can therefore have arisen. Clearly enough, the plaintiff in that case did suffer additional damage from the failure to apply for leave till too late. That additional damage, and the ingredient of breach of duty based on a distinct obligation, gave rise to a separate and distinct cause of action in both cases. That damage was ultimately that the plaintiff lost the prospect of obtaining the leave which, if granted, would have allowed his action to proceed out of time and meantime suffered the increasing impairment of that prospect. There was also in the present case a continuing breach of duty on each day that the Respondent solicitor failed to take the proceedings for obtaining leave, promptly after instructions so to do.

Conclusion 64 It may be granted that a cause of action in tort accrues when measurable damage is first suffered, even though further damage continues to accrue (Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, 531; Scarcella v Lettice (2000) 51 NSWLR 302, 306, Cartledge v Jopling & Sons Ltd [1963] AC 758). But that result is here confessed and avoided. This is either on the basis of there being a separate and distinct cause of action giving rise to its own damage, or because there is a separate breach brought about by each further day of delay, until application for leave became impossible. Each day's delay in seeking leave diminished the chance of obtaining it. That augmented the damage, till the point was reached in this case that there was no longer any prospect of leave being granted. On either basis the Appellant must succeed on the statutory prescription point.

Damages 65 I am satisfied that the trial judge in this case was entitled to have regard to the failure to apply for leave, when the prospect of success of such application was a virtual certainty requiring but a small discount for the possibility that such application would have failed. 66 I should add that it is entirely within the trial judge's discretion to have assessed that only a small discount should be allowed. It was well open to the trial judge so to determine the prospects of such leave, and thus the value of the lost chance. There is no necessity for expert or other evidence to be put forward on behalf of the Appellant as to the likelihood that any s52(4) application would have succeeded if it had been made in 1993. 67 That then disposes of the Notice of Contention of the Respondent. It also disposes of the Appellant's countervailing contention that the court below excessively discounted the damages; see para 10 of the Appellant's written submissions (Orange Book, 5). In what was essentially a matter of estimation, it was open to the trial judge to apply some discount for the prospect that the Appellant may have settled for less than the Court may have awarded him. The trial judge was entitled to conclude that though the Appellant had very strong prospects of obtaining the leave, that was not an absolute certainty. The discount in consequence was small. 68 This leaves only the question of damages as to which the Appellant contends as follows (Orange Book, 5): "9. The Court below determined that there should be an assessment of the Appellant's damages based upon his injuries, which 'included a fractured toe, cuts and abrasions and injuries to his back, shoulder and groin. In particular, he suffered bruising to his testicles …' (Judgment - paragraph 8) The Court below had the benefit of assessments made by Dr Ellis and Dr Conrad and no other medical evidence is referred to by His Honour: Judgment para 39. His Honour determines that the plaintiff is 12% of a 'most extreme case'. The Appellant contended that he was about 30% of a 'most extreme case'. Given the findings as to injuries and the medical evidence was supportive, although the Court was not impressed by those assessments, it is submitted that the assessment was grossly inadequate." 69 These contentions ignore the limited scope for appeal to this Court against the trial judge's findings of fact. This is conveniently set out in the decision of Heydon JA in Damberg v Damberg and others (2002) 52 NSWLR 493: "89. It would be unusual to set aside, or order a new trial on the ground of, the trial judge's findings based on the husband's credibility unless it could be concluded that the trial judge failed to use or palpably misused the advantage he had of seeing and hearing the witnesses, or that the trial judge relied on evidence which was inconsistent with facts incontrovertibly established by the evidence, or that the trial judge acted on evidence which was glaringly improbable, or that the trial judge fell into some error of principle, or that the trial judge mistook or misapprehended the facts, or if the effect of the overall evidence was such that it was not reasonably open to make the findings he did: Abalos v Australia Postal Commission (1990) 171 CLR 167; Devries v Australian National Railways Commission (1993) 177 CLR 472; Rosenberg v Percival [2001] HCA 18 at [37]?[42] and [92] per McHugh J and Gummow J. However, it is possible to set aside, or order a new trial on the ground of, credibility-based findings in other circumstances, because "no short exhaustive formula" of the above kinds can meet every case: State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) (1999) 160 ALR 588 at [3] per Gaudron, Gummow and Hayne JJ, quoting Devries v Australian National Railways Commission (1993) 177 CLR 472 at 480 per Deane and Dawson JJ. Another instance where this appellate intervention can take place is "where in a complex pattern of events incontrovertible evidence can only be fitted into the pattern if a different view of the credibility of a witness is taken by the court on appeal": Agbaba v Witter (1977) 51 ALJR 503 at 508 per Jacobs J, approved in State Rail Authority of New South Wales v Earthline Constructions Pty ltd (in liq) (1999) 160 ALR 588 at [4] by Gaudron, Gummow and Hayne JJ." 70 A fair appraisal of the evidence before the trial judge reveals no such basis for appellate intervention. That evidence is summarised at paras 6.2 to 6.7 of the Respondents' written submissions which I quote below: "6.2 His Honour made a finding that, had proceedings been commenced and the matter proceeded to a hearing, the appellant was likely to have been assessed as 12% of a most extreme case for the purposes of quantifying damages for non-economic loss. It was agreed that, if proceedings had been commenced, the matter was likely to have been heard in the District Court of New south Wales in late 1994 or early 1995.

6.3 Following the accident, the appellant was hospitalised for one day. The appellant's injuries were not major, however, the appellant was absent from his employment for a period of approximately eight weeks. The appellant attended his local general practitioner, Dr Hor. His injuries included a fractured toe, cuts and abrasions to his back, shoulder and groin. In particular, the appellant suffered bruising to his testicles as a result of which he was referred by his GP to Dr Kortesis, who saw the appellant on two occasions only within the first 12 months of the accident. Notwithstanding the small number of visits to doctors, the appellant informed the respondents' solicitor that he was continuing to experience pain and discomfort. The solicitor advised the appellant to obtain a report from Dr Kortesis, however, the appellant did not do so.

6.4 At the hearing before his Honour, no report from Dr Kortesis was tendered. Further, if the matter had proceeded to hearing in late 1994 or early 1995, the only available medical evidence would have been as follows: (a) the radiological report of Dr Edward Oen dated 13 March 1989, which reported upon a slightly impacted fracture of the neck of the proximal phalanx (toe);

(b) the radiological report of Dr Sequeira dated 21 July 1992, reporting upon an x-ray and CT scan of the lumbar spine (which showed no evidence of disc protrusion or prolapse) and an ultrasound of the scrotum (showing a five millimetre cystic area outside the right testicle).

6.5 As the trial judge observed at paragraph 39, "the plaintiff has not seen fit to call his specialist, Dr Kortesis, who saw him twice after the accident and I am not impressed by assessments made by Dr Ellis and not Dr Conrad who saw him on behalf of his litigation in 1999 and 2000 and who expressed opinions concerning his condition at the time of examination".

6.6 In addition, the appellant was involved in an assault which was reported to the respondents' solicitor in a conference on 31 October 1991. The appellant informed the respondent that he had been hit by the police in the same area as his original injury and could not tell whether the present problem was as a result of the accident or resulting from the assault by the police.

6.7 It is submitted that it would have been open to a District Court judge hearing this matter in late 1994 or early 1995 to find on the basis of this evidence that the appellant failed to satisfy the requisite threshold and as such not be entitled to any damages for non-economic loss. The trial judge determined that the plaintiff was 12% of a 'most extreme case'. The appellant, it is submitted, failed to discharge his evidentiary onus. In these circumstances, 12% of a 'most extreme case' might have been thought to be somewhat generous. There is certainly no basis for the appellant's submission that the assessment was 'grossly inadequate'." 71 I am content to adopt those submissions and conclude that the assessment of damages disclosed no appealable error.

ORDERS 72 I propose that the following orders be made: 1. Appeal allowed and orders in court below set aside. 2. Judgment for the Appellant in the sum of $10,251.28 with effect from 24 July 2000. 3. Respondents to pay Appellant's costs of the proceedings in the court below. 4. Respondent to pay Appellant's costs of the appeal and to have a suitor's fund certificate if otherwise entitled.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

CITATION : Argyropoulos v Layton & Anor [2002] NSWCA 183 revised - 21/06/2002 FILE NUMBER(S) : CA 40646/00 HEARING DATE(S) : 15 March 2002 JUDGMENT DATE : 20 June 2002

COUNSEL : M R Aldridge, SC/ M W Anderson (Appellant) G M Gregg (Respondent) SOLICITORS : Maxwell Berghouse & Ives (Appellant) Corrs Chamber Westgarth (Respondent) CATCHWORDS : TORT - professional negligence - respondent failed to commence proceedings in prescribed time and failed to seek leave to commence proceedings out of time - whether more than one cause of action - continuing duty - CONTRACT - breach of duty under retainer - DAMAGES - general principle - discretion to discount award for the possibility that leave to commence out of time may have failed. LEGISLATION CITED : Motor Accidents Act 1988 s52(4) Bell v Brown [1990] 2 QB 495 Carter v Egg Pulp Marketing Board (1942) 66 CLR 557 Cartledge v Jopling & Sons Ltd [1963] AC 758 Cassis v Kalfus [2001] NSWCA 460 Damberg v Damberg and others (2002) 52 NSWLR 493 Doundoulakis v Antony Sdrinis & Co [1989] VR 781 Dunlop v McGowans 1979 SC 22; 1980 SC(HL) 73 Flower & Hart v White Industries (Qld) Pty Limited [201] 109 FCR 280 (full court) Harris v Raggatt [1965] VR 779 Hawkins v Clayton (1986) 5 NSWLR 109; (reversed by the High Court (1988) 164 CLR 539) Hetherington v Mirvac Pty Ltd [1999] NSWSC 443; (1999) Aust Torts Reports 81-514 at 66-022 - 66-023 Howell v Young (1826) 5 B & C 259 [108 ER 97] Larking v Great Western (Nepean) Gravel Ltd (1940) 64 CLR 221 CASES CITED: Letang v Cooper [1965] 1 QB 232 Marshall v London Passenger Transport Board [1936] 3 All ER 83 Patterson v Richards [1963] VR 179 Read v Brown (1888) 22 QBD 128 Republic of India v India Steamship Co Ltd [1993] 410 Sampson v Zucker (NSWSC, CA, 11 December 1996, unreported) Scarcella v Lettice (2000) 51 NSWLR 302 Scott v Echegaray (1991) Aust Torts Reports 81-120 Sheldon v McBeath (1993) ATPR 81-209 Smith v Wilkins and Davies Construction [1958] NZLR 958 Vulic v Bilinsky [1983] 2 NSWLR 472 Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 Williams v Milotin (1957) 97 CLR 465 Wilson v Rigg (Sperling J, [2000] NSWSC 16, 7 February 2000, unreported) DECISION : 1. Appeal allowed and orders in court below set aside; 2. Judgment for the Appellant in the sum of $10,251.28 with effect from 24 July 2000; 3. Respondents to pay Appellant's costs of the proceedings in the court below; 4. Respondent to pay Appellant's costs of the appeal and to have a suitor's fund certificate if otherwise entitled.

Held : In the appeal , per Handley JA and Santow JA with Hodgson JA agreeing: 1. The negligence of the Respondent involved two distinct causes of action. The first cause of action was the failure to commence proceedings within the time limit prescribed by the legislation. The second cause of action was the failure of the solicitor to expeditiously seek leave to commence proceedings out of time when first instructed to do so by the Appellant. The Appellant's claim in relation to the second cause of action was not statute barred as the claim was commenced within 6 years. - Wilson v Rigg (Sperling J, [2000] NSWSC 16, 7 February 2000, unreported) not followed.

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