Boorman and Ors v Glaxo Wellcome Australia Pty Ltd

Supreme Court of NSW|2017-03-15|Before: Fagan J

Solicitors: Mr Peter Li, Stephen Smart & Associates (plaintiffs) Ms Helen Gill, Norton Rose Fulbright (defendant) File Number(s): 2014/130266; 2014/130257; 2014/130258; 2014/130259; 2014/130260; 2014/130261; 2014/130262; 2014/130263; 2014/130265; 2014/130267; 2014/130268; 2014/130462; 2014/130480; 2014/131377; 2014/131391; 2014/203737 Publication restriction: Nil

Judgment

Before the Court is an Amended Notice of Motion filed by the defendant in proceedings 2014/130266. In those proceedings Heather Boorman is plaintiff and sues a pharmaceuticals manufacturing company, Glaxo Wellcome Australia Pty Ltd. The defendant asks, and I will so order, that the Amended Notice of Motion be treated as claiming the same interlocutory relief in these and each of 15 related proceedings. Each proceeding is brought by a separate plaintiff against the same defendant. Two of the actions were commenced on 1 May 2014. All the others were commenced on 30 April 2014. The plaintiffs and file numbers of the proceedings are as listed on the title page of these reasons.

The substantive proceedings and separate question for determination

Each of the substantive underlying proceedings is a claim for damages in tort. On various dates in the 1970s and 1980s each plaintiff underwent a radiographic procedure known as a myelogram to obtain images of the spine and parts of the nervous system. Each plaintiff alleges that for the purposes of this procedure he or she was given an injection into the spinal column of an oil based contrast medium manufactured by the defendant under the name Myodil. It is alleged that this fluid caused inflammation of a layer of the meningeal sheath around the spinal cord, leading to the formation of scar tissue and causing adhesion of nerve fibres in the spine. This is a condition known as adhesive arachnoiditis. It has resulted in the plaintiffs' nerves clumping together and causing symptoms which have included severe pain in the lumbar spine and lower limbs.
The defendant has pleaded against each plaintiff that his or her claim is statute barred. For reasons published as Burbery & ors v Glaxo Wellcome Australia Pty Ltd [2015] NSWSC 820, on 14 July 2015 Garling J made an order in each proceeding that the defendant's limitation defence (pleaded in paragraph 21 of each of the defences it has filed) be heard separately from and determined in advance of all other questions in the proceedings. The subpoena issued to SS&A, which gave rise to the defendant's application to inspect the documents and, now, to its application for costs, was directed to obtaining evidence of the dates at which the plaintiffs gained knowledge that they may have a cause of action against the defendant. The knowledge (or means of knowledge) of each of them of facts relevant to their claim, during the many years between the dates of accrual of their respective causes of action and the dates when they filed statements of claim, will be the subject of an important factual contest on the hearing of the separate question.

Present uncertainty of accrual of causes of action

In twelve of the sixteen cases the law applicable to the running of time is that of New South Wales. Four of the cases are said to be governed by the Limitation of Actions Act 1974 (Qld). The plaintiffs' respective causes of action accrued upon the suffering of damage. In particulars they have asserted that this was "one to two years" after they received the Myodil injection: see Burbery v Glaxo Wellcome Australia Pty Ltd at [17]. The statements of a number of the plaintiffs describe symptoms of headache and back pain which occurred immediately upon the injections being administered. The plaintiffs however contend that their suffering of symptoms is not to be equated with the incurrence of damage, which they assert was not occasioned until tissue scarring and nerve fibre adhesion subsequently developed, constituting the condition of arachnoiditis.
The evidence before me on the present costs argument does not include any medical expert opinion which would explain whether the injection of Myodil would have caused immediate changes to or inflammation of cells or tissue in the spinal cord or in the sheath surrounding it. In due course evidence may be tendered to show that the subsequent development of arachnoiditis implies there must have been immediate changes or inflammation and that the subsequent onset of symptoms and establishment of the condition followed inexorably, without any subsequent additional external cause. If such evidence should be adduced then, consistently with the reasoning of the High Court in Alcan Gove Pty Ltd v Zabic (2015) 257 CLR 1; [2015] HCA 33, it might be found that the plaintiffs' respective causes of action accrued at or very shortly after the injections were administered.
On the other hand if the evidence should be that the Myodil caused no immediate changes or damage but merely created a susceptibility which only developed into arachnoiditis through the influence of some subsequent agency, it might be found that the plaintiffs' causes of action did not accrue until the contingency to which the Myodil exposed them was realised: Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; [1992] HCA 55.
Whether damage was suffered immediately upon the injections being administered or very shortly thereafter or only upon arachnoiditis becoming established after significant delay is not an issue necessary to be determined for the purposes of the present costs argument. It will fall for consideration in the separate determination of the defendant's limitation defence and the plaintiffs' applications to extend time. It is necessary to recognise the alternative possibilities only in order to appreciate the range of dates within which it may ultimately be shown the plaintiffs' causes of action accrued, which will be a fact relevant to the engagement of alternate groups of provisions in the Limitation Act 1969 (NSW) pursuant to which time may be extended for the commencement of litigation in respect of latent injuries.

Replies and statements for the separate hearing of the limitation defence

On 14 July 2015 Garling J ordered, by consent, that each plaintiff should plead a reply, either admitting that the limitation of actions statute relied upon by the defendant is applicable or identifying some other statute said to apply and stating the basis upon which the plaintiff seeks extension of time, if it is acknowledged that an extension is required. These latter directions with respect to replies have subsequently been remade, with amended dates for compliance, by the Registrar on 8 October 2015 and 5 November 2015. Replies appear to have been filed by all plaintiffs on 1 September 2015 (except in the case of No 10, Johnstone, whose original reply was filed on 10 September 2015) followed by amended replies on 26 November 2015. No 11, McMahon, filed an amended reply on 7 December 2015.
The directions referred to at [12] also required that each plaintiff file statements of the evidence relied upon with respect to the separate question of the limitation of actions defence and extension of time. Such statements were filed in December 2015 for all plaintiffs except No 8, Hardy.

Accrual of the New South Wales plaintiffs' causes of action

The twelve plaintiffs whose actions are said to be statute barred under New South Wales Law ("the NSW plaintiffs") apparently intend to claim orders under s 58 or alternatively under s 60G of the Limitation Act 1969 for extension of time. I will assume, without deciding, that each NSW plaintiff (except No 10, Johnstone) first applied for an extension order by filing his or her reply on 1 September 2015. Neither those replies nor the amended replies (filed on 26 November 2015 and 7 December 2015) contain explicit applications for orders under the Act. They merely assert that extension orders would not prejudice the defendant.
Orders for extension of time would not normally be sought in a reply but by notice of motion or by amendment of the originating process. Nevertheless the directions of 14 July 2015, 8 October 2015 and 5 November 2015 pursuant to which the replies were filed (as referred to at [12]) were all consented to by the defendant and were evidently drawn up and settled by both parties on the understanding that the plaintiffs' claims for extension orders could be made in these pleadings. The efficacy of the replies as applications for this relief will have to be finally decided in the determination of the separate question. For the purpose of deciding the present costs dispute it is sufficient for me to proceed on the assumption that the date of filing the original replies is in each case the date upon which the respective plaintiffs applied for extension orders.
The exception in the case of plaintiff No 10, Johnstone, arises because her original reply filed on 10 September 2015 did not make any reference to the Limitation Act 1969. Instead it pleaded sections of Victorian legislation concerning limitation of actions. I was informed on 3 April 2017 by counsel for the defendant that this was in error and that the position of the plaintiff Johnstone is governed by the Limitation Act 1969 (T 61). An amended reply was filed on 26 November 2015 and, for the first time in relation to this plaintiff, made reference to the New South Wales Act.
The NSW plaintiffs allege, so far as may be gathered from their pleadings, particulars and witness statements, that the date given in column B of the following table is in each case the latest date of the procedure in which Myodil was injected. The plaintiffs' statements are extremely imprecise. Where they refer to a month or a year only, I have assumed the last day of the month or year contended for. A B Plaintiff Date of last myelogram 1 Barton 20 April 1976 3 Boorman 31 December 1976 5 Clarke 23 June 1977 7 Davidson 12 February 1985 9 Johnston 31 October 1978 10 Johnstone 31 October 1978 11 McMahon 31 December 1975 12 McQuillan 31 December 1971 13 Murray 31 December 1977 14 Poulton 30 November 1972 16 Wellington 31 December 1980

Division 6 of Pt 3 of the Limitation Act 1969 (containing ss 50A - 50F) provides for a three year post-discoverability limitation period and a twelve year long-stop limitation period. That Division applies only to causes of action for acts or omissions which occurred on or after 6 December 2002 and are alleged to have caused injury. None of the plaintiffs has contended that his or her cause of action is founded upon any act or omission of the defendant occurring as late as that. The relevant limitation period is therefore six years from accrual as provided for in s 14(1), subject to postponement of the bar under Pt 3 of the Limitation Act 1969.
Having regard to the dates in column B of the table at [17], if the particulars are to be taken at face value (i.e. onset of arachnoiditis "one to two years" after injections) then all of the NSW plaintiffs' causes of action are alleged to have accrued before 1 September 1990. That is a significant date for the engagement of s 58 of the Limitation Act 1969, as considered below.
The witness statements of plaintiffs Nos 10, 13, 14 and 16 assert the onset of "acute and chronic symptoms" of arachnoiditis occurred much later than two years after receiving their injections. It may be that medical evidence will be adduced by one of the parties at the hearing of the limitation issues which will indicate whether a delay of that order is likely. The causes of action of those four plaintiffs may be found to have accrued after 1 September 1990 if it should be found that damage sufficient for the accrual of the cause of action was not sustained until adhesive arachnoiditis set in and that that occurred only when "acute and chronic symptoms" manifested themselves.

Section 58, Limitation Act 1969

Within Pt 3 of the Limitation Act 1969, Div 3, comprising relevantly ss 57 - 58, is the first group of provisions relied upon by the NSW plaintiffs for an order for extension of the limitation period for their respective causes of action. By force of ss 57 and 57A, Div 3 applies only to causes of action that accrued before 1 September 1990. It is possible that only plaintiffs Nos 1, 3, 5, 6, 7, 9, 11 and 12 will fit this criterion. The relevant provisions, extracted so far as relevant, are as follows: 57B Interpretation (1) For the purposes of this Subdivision: (a) (Repealed) (b) the material facts relating to a cause of action include the following: (i) the fact of the occurrence of negligence nuisance or breach of duty on which the cause of action is founded, (ii) the identity of the person against whom the cause of action lies, (iii) the fact that the negligence nuisance or breach of duty causes personal injury, (iv) the nature and extent of the personal injury so caused, and (v) the extent to which the personal injury is caused by the negligence nuisance or breach of duty, (c) material facts relating to a cause of action are of a decisive character if, but only if, a reasonable person, knowing those facts and having taken the appropriate advice on those facts, would regard those facts as showing: (i) that an action on the cause of action would (apart from the effect of the expiration of a limitation period) have a reasonable prospect of success and of resulting in an award of damages sufficient to justify the bringing of an action on the cause of action, and (ii) that the person whose means of knowledge is in question ought, in the person's own interests, and taking the person's circumstances into account, to bring an action on the cause of action, (d) appropriate advice, in relation to facts, means the advice of competent persons, qualified in their respective fields to advise on the medical legal and other aspects of the facts, as the case may require, (e) a fact is not within the means of knowledge of a person at a particular time if, but only if: (i) the person does not, at that time, know the fact, and (ii) in so far as the fact is capable of being ascertained by the person, the person has, before that time, taken all reasonable steps to ascertain the fact, and (f) limitation period means a limitation period fixed by an enactment repealed or omitted by this Act or fixed by or under this Act. (2) (Repealed) 58 Ordinary action (1) This section applies to a cause of action founded on negligence nuisance or breach of duty, for damages for personal injury, not being a cause of action which has survived on the death of a person for the benefit of the person's estate under section 2 of the Law Reform (Miscellaneous Provisions) Act 1944, and not being a cause of action which arises under section 3 of the Compensation to Relatives Act of 1897. (2) Where, on application to a court by a person claiming to have a cause of action to which this section applies, it appears to the court that: (a) any of the material facts of a decisive character relating to the cause of action was not within the means of knowledge of the applicant until a date after the commencement of the year preceding the expiration of the limitation period for the cause of action, and (b) there is evidence to establish the cause of action, apart from any defence founded on the expiration of a limitation period, the court may order that the limitation period for the cause of action be extended so that it expires at the end of one year after that date and thereupon, for the purposes of an action on that cause of action brought by the applicant in that court, and for the purposes of paragraph (b) of subsection (1) of section 26, the limitation period is extended accordingly. (3) This section applies to a cause of action whether or not a limitation period for the cause of action has expired: (a) before the commencement of this Act, or (b) before an application is made under this section in respect of the cause of action.
The claim by plaintiff No 11, James McMahon, relies upon s 2 of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW) because Mr McMahon died on 23 May 2014, shortly after proceedings were commenced in his name. Section 59 of the Limitation Act 1969, which applies to claims of this nature, is substantially to the same effect as s 58 except that the question of "means of knowledge" of material facts of a decisive nature is to be answered with respect to either the deceased or the applicant seeking to maintain the cause of action for the benefit of his estate. That distinction is of no significance here because the action had been commenced before Mr McMahon died and therefore, as with the other NSW plaintiffs, the only person whose means of knowledge of material facts could be relevant would be Mr McMahon himself.
By their amended replies each of the NSW plaintiffs has admitted that an extension of time is required. Each plaintiff has also pleaded that if the causes of action accrued on or before 1 September 1990, which they do not admit, then for the purposes of s 58(2)(a) a material fact of a decisive character was not within their means of knowledge until 28 November 2013. Namely the alleged fact that the defendant had "actual knowledge of the risk of harm of the administration of Myodil to a patient" from 1971. This alleged fact is said to be demonstrated by the terms of product information sheets issued by the defendant in 1971 and 1973 which the plaintiffs obtained from SS&A, for the first time, on 28 November 2013. It is alleged that SS&A obtained these documents at about that date in the course of a proceeding which the firm was then conducting against the defendant on behalf of a plaintiff named Jarrad.
Each NSW plaintiff also alleges that up to some unspecified date he or she was unaware of the fact that a class action had been brought against the defendant in 1999 (and settled) wherein the class of claimants had alleged the defendant was liable in damages for their having contracted adhesive anachroiditis following Myodil injection. This is said to be a "material fact of a decisive character". It is not alleged that the plaintiff lacked "means of knowledge" of the fact.
The extension of time which may be granted under s 58(2), if the Court is satisfied that the plaintiffs did not until 28 November 2013 have means of knowledge of material facts of a decisive character, would be an extension up to 27 November 2014 - sufficient to validate the filing of the statements of claim on 30 April 2014 and 1 May 2014. That is subject to the ultimate bar which arises upon the expiration of 30 years from accrual of the cause of action, in accordance with s 51. Whether that bar would operate to defeat an extension granted under s 58(2) will depend upon the Court making definitive findings as to the dates of accrual of the causes of action following the hearing of the separate question.
The dates of injection in column B of the table at [17] coupled with the particulars nominating a lapse of "one to two years" to the onset of the disorder and the witness statements, suggest that seven of the NSW plaintiffs would be subject to the ultimate 30 year bar: Nos 1, 3, 5, 6, 9, 11 and 12. The plaintiffs have served their witness statements on the basis that the operation of s 51 will not defeat them and that whether they had "means of knowledge" (see s 58(2)(a)) of all facts of a decisive character by 29 April 2013, more than one year before the filing of their statements of claim (see s 58(2)), is a live issue for the hearing of the separate question. That is one of the issues against which it is necessary to examine the relevance of the subpoenaed documents and to determine whether the plaintiffs' deployment of their replies and statements is conduct so obviously inconsistent with maintenance of legal professional privilege that production of the documents for inspection should never have been opposed.

Section 60G, Limitation Act 1969

The plaintiffs also rely upon ss 60G and 60I of the Limitation Act 1969 and cl 4 of Sch 5 to that Act: 60F Purpose of this Subdivision The purpose of this Subdivision is to provide a procedure for a further discretionary extension of limitation periods where the plaintiff was unaware of the fact, nature, extent or cause of the injury, disease or impairment at the relevant time. This procedure is available for causes of action accruing on or after 1 September 1990, and also (by the operation of Schedule 5) for causes of action that accrued before that date. 60G Ordinary action (including surviving action) (1) This section applies to a cause of action that accrues on or after 1 September 1990, 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 for an order under this section 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 as it determines. 60I Matters to be considered by court (1) A court may not make an order under section 60G or 60H unless it is satisfied that: (a) the plaintiff: (i) did not know that personal injury had been suffered, or (ii) was unaware of the nature or extent of personal injury suffered, or (iii) was unaware of the connection between the personal injury and the defendant's act or omission, at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted, and (b) the application is made within 3 years after the plaintiff became aware (or ought to have become aware) of all 3 matters listed in paragraph (a) (i)-(iii). (2) Subsections (2), (3) and (4) of section 60E apply, with any necessary adaptations, in relation to applications for orders under this Subdivision. Schedule 5 Savings, transitional and other provisions Part 1 4 Existing causes of action for personal injuries may be extended where latent injury etc (1) Section 60G also applies to a cause of action, founded on negligence, nuisance or breach of duty, being a cause of action that accrued or would have accrued before 1 September 1990, but does not apply to a cause of action arising under the Compensation to Relatives Act 1897. (2)[Extended application of s 60H, not presently relevant]. (3) Sections 60G and 60H so apply: (a) whether or not a relevant limitation period has expired: (i) before 1 September 1990, or (ii) before an application is made under either of those sections in respect of the cause of action, and (b) whether or not an action has been commenced on the cause of action before 1 September 1990, and (c) whether or not a judgment on the cause of action has, on the ground that a limitation period applying to the cause of action had expired before 1 September 1990, been given (whether before, on or after that date), and (d) whether or not a judgment in respect of legal professional negligence has, on the ground that a limitation period applying to the cause of action had expired before 1 September 1990, been given (whether before, on or after that date). (4) The court may make an order under section 60G or 60H, in relation to a cause of action referred to in this clause, if an application for such an order is made within: (a) the period of 3 years referred to in section 60I, or (b) the period of 3 years commencing on 1 September 1990. (5) For the purposes of this clause, a reference in Part 3 to a limitation period is to be read as including a reference to a limitation period as defined by this Part.
"Limitation period" in cl 4 of Sch 5 means "a limitation period fixed by an enactment repealed or omitted by this Act or fixed by or under a provision of this Act (including a repealed or omitted provision of this Act)". Thus, it includes the limitation period of 6 years provided for by s 14(1) and the ultimate bar of 30 years under s 51.
The NSW plaintiffs by their amended replies of 26 November 2015 (7 December 2015 in the case of No 11, McMahon) have pleaded in the alternative that if their causes of action accrued on or after 1 September 1990 (which, curiously, again they do not admit), then for the purposes of obtaining an order for extension of time under s 60G, at the time of expiry of the limitation period they were, respectively, "unaware of the connection between the personal injury [they had suffered] and the failure of the defendant to disclose or otherwise warn the plaintiff that … Myodil was capable of causing … adhesive arachnoiditis": see s 60I(1)(a)(iii). These plaintiffs each plead that they were "either unaware personal injury had been suffered and/or … unaware of the connection between the personal injury and the defendant's omission until on or around 28 November 2013". That is, until they learned through their solicitors of the defendant's product information sheets dated 1971 and 1973 which are said to demonstrate "the defendant had actual knowledge of the risk of harm of the administration of Myodil to a patient".
As a result of the operation of cl 4 of Sch 5 of the Limitation Act 1969 there appears to be no material difference in the operation of ss 60G and 60I as between plaintiffs whose causes of action accrued before 1 September 1990 and those whose causes of action accrued on or after that date. In each case the success of their applications under s 60G for orders for extension of time up to and including 30 April 2014 will depend upon proof that up until 3 years before their applications were made (that is, until 1 September 2012 for all NSW plaintiffs except No 10, Johnstone and until 26 November 2012 in her case) they were unaware of one or more of the matters listed in items (i) - (iii) of s 60I(1)(a) and there were no circumstances from which they ought to have become aware of the relevant matter or matters. The ultimate limitation period of 30 years is inapplicable to plaintiffs who obtain an extension on this basis.
Put another way, a factual issue critical to the plaintiffs' cases under ss 60G and 60I will be whether they did not know they had suffered personal injury or did not know the connection between such injury and any failure to warn on the part of the defendant until after 1 September 2012 (26 November 2012 for Johnstone). This is a further issue in relation to which the relevance of the subpoenaed documents and the plaintiffs' deployment of their pleadings and statements are to be considered.

The NSW plaintiffs' witness statements

The NSW plaintiffs allege that their solicitors received the defendant's product information sheets of 1971 and 1973, containing warnings of the possible risk of arachnoiditis from the use of Myodil, on 28 November 2013. They do not nominate a date or dates upon which they learned of the 1999 class action against the defendant. Although the plaintiffs characterise these pieces of information as material facts of a decisive character (for the purposes of s 58) and as revealing for the first time a connection between their injury and the defendant's alleged negligent omission to warn (for the purposes of s 60G and 60I), their applications for extension of time necessarily involve a sweeping negative proposition. Namely, that they did not know (and were not put upon enquiry such that they ought to have known) of the connection between Myodil and arachnoiditis or of the defendant's failure to warn about this from any other source at any time earlier than 28 November 2013.
The NSW plaintiffs acknowledge in their respective statements that they consulted SS&A from the dates shown in column B of the table following [34], below. Each of them states that on or soon after the first consultation they were told litigation of a claim for damages for the arachnoiditis would be difficult "due to the limitation period" and that there was "not enough information to determine who is responsible and that there was not enough evidence to demonstrate liability" - or words to similar effect. They state that they were told the Jarrad proceeding against the defendant was being run as a test case. Each of the statements is silent as to any further communication to or from SS&A until 28 November 2013.
Column C in the table below shows the approximate length of the period following each plaintiff's first consultation with SS&A during which the plaintiff is endeavouring to prove, for the purposes of s 58(2)(a) of the Limitation Act 1969, that he or she remained ignorant (and without means of knowledge) of some material fact of a character decisive to a cause of action against the defendant. That is, the period up to 29 April 2013, one year before the plaintiffs' actions were commenced. Column D shows the duration over which each plaintiff seeks to prove, for the purposes of ss 60G and 60I(1)(b), a lack of actual or constructive knowledge of the connection between the arachnoiditis and any omission of the defendant in breach of its common law duty of care. That is, the period up to 31 August 2012, three years before an application for extension of time was first made by filing a reply. A B C D Plaintiff First consultation with SS&A Duration up to 29.4.2013 (s 58, Limitation Act 1969 Duration up to 31.8.2012 (s 60I(1)(b), Limitation Act 1969) 1 Barton 2 May 2007 6 yrs 5 yrs 4 m 3 Boorman 9 Feb 2009 4 yrs 2 m 3 yrs 7 m 5 Clarke 8 Mar 2006 7 yrs 1 m 6 yrs 6 m 6 Cooper 10 Jul 2006 6 yrs 10 m 6 yrs 2 m 7 Davidson 1 Dec 2005 7 yrs 5 m 6 yrs 9 m 9 Johnston 1 Dec 2004 8 yrs 5 m 7 yrs 9 m 10 Johnstone 18 Nov 2013 1 yr 5 m N/A for this plaintiff 11 McMahon 7 Nov 2005 7 yrs 6 m 6 yrs 10 m 12 McQuillan 11 May 2007 6 yrs 5 yrs 4 m 13 Murray 12 Dec 2005 7 yrs 5 m 6 yrs 9 m 14 Poulton 8 Dec 2008 4 yrs 5 m 3 yrs 9 m 16 Wellington 3 Apr 2008 5 yrs 1 m 4 yrs 4 m

The principles of "issue waiver" of privilege

The sub-sections of the Evidence Act relevant to whether the plaintiffs waived legal professional privilege over the subpoenaed documents are as follows: 122 Loss of client legal privilege: consent and related matters ... (2) Subject to subsection (5), this Division [that is, Div 1 of Pt 3.10, providing for client legal privilege] does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120. 131A Application of Part to preliminary proceedings of courts (1) If: (a) a person is required by a disclosure requirement to give information, or to produce a document, which would result in the disclosure of a communication, a document or its contents or other information of a kind referred to in Division 1, 1A, 1C or 3, and (b) the person objects to giving that information or providing that document, the court must determine the objection by applying the provisions of this Part (other than sections 123 and 128) with any necessary modifications as if the objection to giving information or producing the document were an objection to the giving or adducing of evidence. (2) In this section, disclosure requirement means a process or order of a court that requires the disclosure of information or a document and includes the following: (a) a summons or subpoena to produce documents or give evidence, …
The High Court held in Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited (2013) 250 CLR 303; [2013] HCA 46 that what will amount to conduct inconsistent with maintenance of client legal privilege for the purposes of s 122(2) is governed by the same principles as those which apply at common law. That is, the principles expounded in Mann v Carnell (1999) 201 CLR 1; [1999] HCA 66. They include that the question of inconsistency is to be answered "where necessary informed by considerations of fairness".
In DSE (Holdings) Pty Limited v Intertan Inc (2003) 127 FCR 499; [2003] FCA 384 at [58] Allsop J (as his Honour then was) held that: "in most undue influence cases (and in Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347 when its circumstances are appreciated) the party entitled to the privilege makes an assertion (express or implied), or brings a case, which is either about the contents of the confidential communication or which necessarily lays open the confidential communication to scrutiny and, by such conduct, an inconsistency arises between the act and the maintenance of the confidence, informed partly by the forensic unfairness of allowing the claim to proceed without disclosure of the communication."
In his Honour's view the proper analysis of Thomason v The Council of the Municipality of Campbelltown (1939) 39 SR (NSW) 347 was: "that by [a deceased workman's widow] commencing the cause in negligence, in circumstances where that could only be done if the plaintiff's state of knowledge about her legal rights when she commenced her [previous] claim for statutory compensation was of a particular character, the plaintiff was acting inconsistently with the maintenance of the confidentiality of advice which was in all likelihood to be the only source of her knowledge about those matters. As a matter of substance she was bringing the cause in the plain and well understood circumstances that a central issue in the proceedings was, and would be, her state of knowledge about her rights as explained to her by Mr Brady [the solicitor in relation to the earlier statutory compensation claim]."
It had been held in Thomason v The Council of the Municipality of Campbelltown that in these circumstances the plaintiff/widow had waived her client legal privilege in communications with her solicitor. Waiver of privilege in circumstances such as this (including in the undue influence cases referred to by Allsop J) is commonly identified as "issue waiver".
Cases where plaintiffs sue former solicitors for negligence in the giving of advice are another example of issue waiver. A plaintiff who has commenced proceedings which necessarily open up to scrutiny communications between him or her and the solicitors cannot maintain a claim of privilege. The pleading of the cause of action is inconsistent with maintenance of confidentiality. See Lillicrap and Anor v Nalder & Son [1993] 1 All ER 724; [1993] 1 WLR 94; Paragon Finance Pty Limited v Freshfields [1999] 1 WLR 1183; Artistic Builders Pty Ltd v Nash [2009] NSWSC 102.

Waiver of privilege by the NSW plaintiffs

The plaintiffs are prosecuting claims for extension of time which involve positive assertions that they did not acquire knowledge of matters essential to their respective causes of action over protracted intervals during which they were under legal advice with respect to those very causes of action. I consider this a clear case of issue waiver.
There would be obvious unfairness in the plaintiffs relying upon their witness statements, which are silent as to any advice from their solicitors and as to any instructions provided to the solicitors over the relevant intervals, whilst denying to the defendant inspection of documents which came into existence during those times and would evidence or constitute communications which may contradict the impression conveyed by the witness statements. Informed by that consideration of unfairness I find that the plaintiffs' advancement of their claims for extension of time are inconsistent with their objection to produce for inspection the otherwise privileged documents caught by the subpoenas.
In submissions dated 1 April 2016 in opposition to the defendant's original notice of motion seeking access to the subpoenaed documents, the plaintiffs relied upon the "abject silence" of their witness statements with respect to any solicitor client communications during the period critical to their state of knowledge about causes of action. The plaintiffs asserted that such "abject silence" could not constitute implied waiver of privilege. The submission involved a misconception of the law relating to issue waiver. The conduct inconsistent with maintaining the privilege is the advancing, by pleading and by a claim for relief, of a case which depends upon the proposition that relevant knowledge was not acquired through communications with solicitors. The position would be the same if no statements had been served.

The Queensland plaintiffs

The four remaining plaintiffs ("the Queensland plaintiffs") seek extensions under s 31(2) of the Limitation of Actions Act 1974 (Qld). The section is as follows (extracted so far as relevant): 31 Ordinary actions (1) This section applies to actions for damages for negligence, … or breach of duty (whether the duty exists by virtue of a contract or a provision made by or under a statute or independently of a contract or such provision) where the damages claimed by the plaintiff for the negligence, … or breach of duty consist of or include damages in respect of personal injury to any person … . (2) Where on application to a court by a person claiming to have a right of action to which this section applies, it appears to the court - (a) that a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation for the action; and (b) that there is evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation; the court may order that the period of limitation for the action be extended so that it expires at the end of 1 year after that date and thereupon, for the purposes of the action brought by the applicant in that court, the period of limitation is extended accordingly. (3) This section applies to an action whether or not the period of limitation for the action has expired - (a) before the commencement of this Act; or (b) before an application is made under this section in respect of the right of action.
Section 11(1) of the Limitation of Actions Act 1974 provides for a limitation period of three years running from the date of accrual the cause of action. The Queensland plaintiffs have, like those from New South Wales, particularised the date of onset of arachnoiditis "one to two years" after receiving their injection of Myodil: Burbery v Glaxo Wellcome Australia Ltd at [16] - [18]. The Queensland plaintiffs and the dates of their injections are as follows: A B Plaintiff Date of last myelogram 2 Beesley 31 January 1978 4 Bradley 31 December 1975 8 Hardy 11 October 1979 15 Thompson 7 June 1982

The Limitation of Actions Act 1974 commenced on 1 July 1975. There is uncertainty in the statement of Bradley with respect to the date upon which he underwent a myelogram and with respect to when he suffered personal injury as a result. This is important because if damage occurred before 1 July 1975 the relevant Queensland limitations statute would be The Law Reform (Limitation Of Actions) Act 1956 (Qld) which also prescribed a three-year limitation period but made no provision for extension of time. It is arguable that s 31 of the Limitation of Actions Act 1974 would still permit a grant of extension. These are issues to be determined on the final hearing of the separate question.
The dates upon which the Queensland plaintiffs allege that they commenced to consult SS&A concerning possible legal action in connection with their suffering of arachnoiditis and the approximate length of the interval in which they must show that, whilst under advice, they did not acquire knowledge of facts essential to their causes of action are set out in the following table: A B C Plaintiff First consultation with SS&A Duration up to 30.4.2013 (s 31, Limitation of Actions Act 1974) 2 Beesley 30 Jun 2008 4 yrs 10 m 4 Bradley 26 Mar 2009 4 yrs 1 m 8 Hardy No statement (After 16 April 1980) No statement 15 Thompson 31 Jul 2012 9 m

For the Queensland plaintiffs the issues which will arise in the separate hearing are identical with those which arise under s 58(2) of the Limitation Act 1969 in the cases of the NSW plaintiffs. In 2016, when production of the documents for inspection was being contested, the Queensland plaintiffs and the defendant made submissions with respect to the original notice of motion upon the basis that the law of Queensland would govern these plaintiffs' claims of client legal privilege and waiver thereof. The parties also agreed that the law Queensland on these subjects is the common law. This appears to be borne out by the way in which McMurdo J dealt with such issues in Fletcher v Fortress Credit Corp (Aust) II Pty Ltd [2014] QSC 303 at [94] - [105]. As earlier stated the principles concerning conduct inconsistent with the continuing claim of client legal privilege, in particular in cases of issue waiver, are identical under the common law and under s 122 of the Evidence Act 1999 (NSW).
On the hearing of this costs argument the parties have adhered to their concurring submissions that the common law governs the Queensland plaintiffs' production of subpoenaed documents for inspection. Therefore my conclusions regarding issue waiver by the NSW plaintiffs and concerning their conduct inconsistent with the maintenance of client legal privilege are equally applicable to the Queensland plaintiffs.

Plaintiffs' resistance to production without reasonable cause

I am satisfied that the plaintiffs were not justified in resisting production of the subpoenaed documents for inspection and that they must pay the defendant's costs of and incidental to the notice of motion. The question whether SS&A should be ordered to pay to the plaintiffs such costs as the latter are required to pay to the defendant depends upon the operation of s 99 of the Civil Procedure Act: 99 Liability of legal practitioner for unnecessary costs (1) This section applies if it appears to the court that costs have been incurred: (a) by the serious neglect, serious incompetence or serious misconduct of a legal practitioner, or (b) improperly, or without reasonable cause, in circumstances for which a legal practitioner is responsible. (2) After giving the legal practitioner a reasonable opportunity to be heard, the court may do any one or more of the following: (a) it may, by order, disallow the whole or any part of the costs in the proceedings: (i) in the case of a barrister, as between the barrister and the instructing solicitor, or as between the barrister and the client, as the case requires, or (ii) in the case of a solicitor, as between the solicitor and the client, (b) it may, by order, direct the legal practitioner: (i) in the case of a barrister, to pay to the instructing solicitor or client, or both, the whole or any part of any costs that the instructing solicitor or client, or both, have been ordered to pay to any other person, whether or not the solicitor or client has paid those costs, or (ii) in the case of a solicitor, to pay to the client the whole or any part of any costs that the client has been ordered to pay to any other person, whether or not the client has paid those costs, (c) it may, by order, direct the legal practitioner to indemnify any party (other than the client) against costs payable by that party. (3) Before making such an order, the court may refer the matter to a costs assessor (within the meaning of Part 7 of the Legal Profession Uniform Law Application Act 2014) for inquiry and report. … (6) A party's legal practitioner is not entitled to demand, recover or accept: (a) in the case of a barrister, from the instructing solicitor or client, or (b) in the case of a solicitor, from the client, any part of the amount for which the legal practitioner is directed by the court to indemnify any party pursuant to an order referred to in subsection (2) (c).
Having regard to the way the costs issues have been argued, the question is whether the plaintiffs' resistance to production of the subpoenaed documents up to late October 2016 and the resulting incurrence of costs by the defendant in prosecuting its notice of motion occurred "without reasonable cause, in circumstances for which a legal practitioner is responsible". I infer that the plaintiffs as laymen would not have known whether production of the solicitor client communications could be resisted and that their stance in opposition to the defendant's notice of motion must have been taken upon the advice of SS&A. It is not apparent whether such advice was in turn based upon the opinions of counsel.
In answer to the claim under s 99 of the Civil Procedure Act SS&A has submitted that conduct of the plaintiffs amounting to an issue waiver of privilege "would not give the defendant the right to see every single piece of paper that has passed between the solicitors and their clients". On that basis they assert that it was reasonable to resist production for inspection under the subpoena and that they made concessions with respect to release of the documents "at an appropriate time".
I do not accept this submission. It is quite correct that the effect of the implied waiver is not universal so as to open up the files of the solicitors without regard to any demonstration of connection of their content with the factual issues raised by the litigation: Artistic Builders Pty Ltd v Nash at [62] - [75]. But here the plaintiffs have based themselves upon a misconception about the effect of their witness statements being silent with respect to solicitor client communications. They substantially refused any production until October 2016, nearly a year after the subpoena was returnable and eight months after the defendant had filed its notice of motion for access. They did not merely seek to resist the defendant's access to solicitor client communications which were peripheral or irrelevant to the issues raised by their extension of time applications.
Examples of the documents in respect of which access was opposed up to October 2016 were tendered on the hearing of the cost argument, some in relation to each plaintiff. It is readily apparent on the face of those documents that they have a significant bearing upon the knowledge which each plaintiff acquired of the existence of a cause of action against the defendant, prior to dates which are critical to their claims for extension of time. It should have been quite clear to SS&A that there would be unfairness in the plaintiffs relying upon their statements, which implicitly convey the impression that no material communication with their solicitors advanced their knowledge of their causes of action, whilst holding back such documents. It should have been equally clear that the issues raised by the replies could not fairly be litigated whilst access to these solicitor client communications was withheld. By the applicable standard of the reasonably competent solicitor it should have been evident to SS&A that their clients had acted in the litigation inconsistently with maintaining privilege over, at least, the significant number of documents tendered by way of example and that the defendant's notice of motion should not have been resisted.

Orders

For these reasons the Court orders: 1. The following orders are to take effect as orders made in each of the proceedings identified by Court File Number in the title page to the reasons of Fagan J of this date and are to apply to each of the plaintiffs in those several proceedings. 2. The plaintiffs are to pay the defendant's costs of and incidental to the defendant's notice of motion filed 27 January 2016 including the argument with respect to costs pursuant to the amendment to the notice of motion made by leave granted on 15 March 2017. 3. Smart Lawyers Pty Ltd are to pay to the plaintiffs the entirety of the costs which the plaintiffs are required to pay to the defendant under order (2).

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. Decision last updated: 22 May 2017

Law Reform (Limitation Of Actions) Act 1956(Qld)

Evidence Act 1999(NSW)

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