but of little weight. Repco Corp Ltd v Scardamaglia

Court of Appeal (NSW)|1995-08-21|Before: Spender AJ, Kirby P

KIRBY P, MEAGHER and POWELL JJA 21 August 1995, 10 October 1995

PRACTICE and PROCEDURE - extension of time - relevance of availability of claim against solicitor - whether erroneous to take into account - held: Relevant but of little weight. Repco Corp Ltd v Scardamaglia (1995) ATR 81-330 (SCV) consd.

PRACTICE and PROCEDURE - extension of time - prejudice - death of eyewitness and loss of evidence - relevance of - held: Relevant and no error shown by Master - appeal allowed.

APPEAL - from Master to Judge - proper approach - need to show error.

LEGAL PRACTITIONERS - potential claim in negligence - duty to advise client

duty to advise change of representation.

PRACTICE and PROCEDURE - extension of time - relevance of availability of action against legal practitioners - whether irrelevant or relevant consideration - whether a relevant consideration but of little weight - held: The consideration is relevant, but of little weight. Birkett v James [1978] AC 297 (HL); Thompson v Brown Construction (Ebbw Vale) Ltd and Ors [1981] 1 WLR 744; [1981] 2 All E R296 (HL); Soper v Matsukawa [1982] VR 948 (FCV); McKenna v McKenna [1984] VR 665 (SCV); Morton v Jools (1992) ATR 81-164 (NSW SC); and Repco Corp Ltd v Scardamaglia (1995) ATR 81-330 (SCV) consd, explained and appld.

PRACTICE and PROCEDURE - application for substituted service and for leave to serve a statement of claim more than two years after filing - Master Malpass declines leave - on appeal Spender AJ grants leave - finds, inter alia, that Master's reference to possible claim against solicitors irrelevant - held: (1) The Judge was obliged to review the Master's discretionary decision in accordance with the established principles for the review of discretionary decisions on appeal; (2) The errors which were identified by the Judge did not authorise disturbance of the Master's decision; (3) In referring to the lack of an intervening limitation bar, the Judge erred in a consideration which he took into

APPEAL - from Master to Judge of Supreme Court - proper approach - discretionary decision in matter of practice - need to demonstrate error - need to avoid mere substitution of different opinion.

LEGAL PRACTITIONERS - negligence claim - contingent claim - duty to inform client - duty to suggest different legal representation - obligation to avoid conflict of interest and duty.

account in exercising his own discretion; (4) The Judge also erred in his consideration of the prejudice suffered by the defendants by reason of the delay, involving the death of a witness and loss of some evidence; (5) Accordingly, orders of the Judge set aside and orders of the Master restored. Compensation to Relatives Act 1897

Supreme Court Act 1970,s81 Supreme Court Rules Pt2 r3; Pt7 r7; Pt9 r10; Ptl1 r8.

Kirby P Before the Court is a summons by which Mr Robert Morrison and Mr Ronald Brown (the claimants) seek leave to appeal against certain orders made by Spender AJ in the Common Law Division of the Supreme Court. Contingent on leave being granted, the Court also has before it their appeal.

The orders appealed against were made by Spender AJ in allowing an appeal from a decision of Master Malpass, whereby the Master had earlier dismissed two notices of motion brought by Ms Andrea Judd (the opponent). By those notices of motion, the opponent had sought, first, an order for substituted service under Pt9 R10 of the Supreme Court Rules (SCR), and secondly, an order under s81 of the Supreme Court Act 1970 to the effect that service of a relevant statement of claim more than two years after filing constituted an irregularity which should be excused.

The substantive issue between the parties involves a motor vehicle accident which occurred on 2 May 1986 on the Pacific Highway, near Macksville. Ms Judd, was a passenger in a vehicle driven by her late husband, Mr Warwick Judd. Mr Evan Judd, the son of Mr and Mrs Judd, and another person were also passengers in the vehicle.

The accident involved a collision between the vehicle driven by Mr Judd, which was travelling in a northerly direction, and a semi-trailer which was being driven in a southerly direction. The semi-trailer was driven by Mr Morrison (the first claimant). It was owned by Mr Brown (the second claimant). Mr Warwick Judd received serious injuries in the accident. He died one week after the accident as a result of those injuries. Ms Judd and Mr Evan Judd were also injured.

On 25 November 1986, statements of claim for damages were issued out of the District Court on behalf of Ms Judd and Mr Evan Rudd. The statements of claim were for damages in respect of the personal injuries received by them in the accident. The named defendants were Mr Morrison and Mr Brown, and the Government Insurance Office of New South Wales, as the insurer of Mr Judd's vehicle. The statements of claim were served on Mr Morrison and Mr Brown at 33A Kensington Road, Kensington, Victoria, in December 1986. Those proceedings were settled on 6 July 1990. No evidence was presented to this Court, or apparently below, as to the terms of settlement or as to the source(s) of the payments.

The present proceedings concern a separate claim by Ms Judd for damages under the Compensation to Relatives Act 1897. That claim was commenced on 20 January 1987 when Ms Judd caused the relevant statement of claim to be filed in the Supreme Court. Mr Brown and Mr Morrison were named as the defendants. That statement of claim has never been served.

In a belated attempt to serve the statement of claim, the Ms Judd's solicitor sent it to Victoria on 29 June 1994. The exact reason for this delay have not been proved. It appears to have arisen from a default on the part of Ms Judd's solicitors. I will return to this consideration.

Between July and September 1994, attempts were made to locate Mr Brown and Mr Morrison. Those attempts proved fruitless. Accordingly, on 23 September 1994 Ms Judd's solicitors wrote to the Transport Accident Commission of

Victoria, as insurer of the vehicle driven by Mr Morrison and owned by Mr Brown, requesting that body to accept service on behalf of the named defendants. Service was not accepted.

On 21 February 1995, Ms Judd filed a notice of motion in the Supreme Court of this State. The relief sought included:

"An order pursuant to Pt9 R10 [SCR] permitting service of the Statement of Claim upon the Transport Accident Commission of Victoria"

Ms Judd also sought relief pursuant to s81 of the Supreme Court Act 1970 in respect of the failure to serve the statement of claim within the two year period prescribed by Pt7 R7 SCR. During the course of the proceedings before Master Malpass it was suggested to Ms Judd that it might, as a preliminary step, be appropriate to seek an extension of time within which to serve the statement of claim pursuant to Pt2 R3 SCR. This course of action was adopted.

On 5 April 1995, a notice of motion was filed on behalf of Messrs Morrison and Brown, presumably on the initiative of their compulsory insurer. It sought, inter alia, an order pursuant to Ptll R8 SCR that Ms Judd's statement of claim be set aside as invalid. It also sought an order that the proceedings be struck out.

Master Malpass gave his decision on 17 May 1995. First, he dismissed the motion brought by the defendants, who are the claimants in the proceedings before this Court. He concluded that the application to strike out Ms Judd's statement of claim as invalid was misconceived. Although, by virtue of Pt7 R7(1) SCR an originating process is valid only for two years for the purposes of service, failure to serve the originating process within this time did not make it a nullity. The period for service might be extended, pursuant to Pt2 R3 SCR.

Likewise, the Master determined that the issue of relief pursuant to s81 of the Supreme Court Act did not arise since the process had not been served.

In approaching the issue of whether relief should be granted pursuant to Pt2 R3 SCR, Master Malpass first noted that the relevant rule confered an unfettered discretion, which is to be exercised having regard to the facts and circumstances of the

case before the Court. He pointed out the applicant for relief bore the onus of satisfying the Court that an order should be made.

The first matter that the Master considered, as relevant to the exercise of his discretion, was the delay associated with the bringing of the proceedings. He stated that there had been "inordinate delay" which had not been satisfactorily explained. He concluded that this had occasioned actual prejudice to the defendants. In this regard, the Master found that the material provided to the Court to explain the delay was "inadequate and unconvincing". He expressed the opinion that Ms Judd had not shown much interest in the prosecution of the claim. The Master stated that:

"Tt may be that [the plaintiff's] lack of enthusiasm for the claim was due, at least in part, to concerns about liability."

The Master then proceeded to consider other matters relevant to the question of prejudice to the defendants (the claimants). These included, on the issue of liability, the fact that the precise whereabouts of defendants was unknown, and other evidentiary difficulties. In particular, he noted that the police officer who had investigated the accident had since left the police force, and that the police notebook had been destroyed. However Master Malpass stated that:

"He [the police officer] may be still available to give evidence."

After refering to some further evidentiary difficulties associated with bringing the case, in particular the death of Mrs Culley, a witness to the accident, the Master turned to the issue of the alternate remedy which the plaintiff could have against her legal advisers, by inference responsible for the "inordinate delay". Having considered some of the difficulties inherent in the determination of the value of such a claim, the Master said:

"Tt seems to me that I should have regard to that possibility [of a good cause of action against the plaintiff's solicitors], but it is not a matter to which the Court can give great weight."

The Master thus concluded that, on balance, Ms Judd had failed to convince him that the discretion should be exercised in her favour. He therefore declined to

grant an extension of time pursuant to Pt2 R3 SCR. Although it was not strictly necessary, given that he declined to validate the originating process, the Master went on to consider the issue of the power to order substituted service of the originating process. In the circumstances of the case, especially the fact that it was unlikely that the defendants would, in fact, be made aware of the originating process if the Court directed that it be served on the Transport Accident Commission of Victoria, Master Malpass stated that he would not have ordered substituted service pursuant to Pt9 R10 SCR. He derived support for this conclusion from the reasoning of Yeldham J in Chappell v Coyle (1985) 2 NSWLR 73 (SC).

Ms Judd then appealed from the decision of the Master to Spender AJ. His Honour upheld the appeal. He began his reasons by detailing the history of the matter, and the witnesses, and documentary evidence, which was available. He noted that "unexplained delay was conceded" by Ms Judd. He also supported the criticism which Master Malpass had levelled at Ms Judd's legal representatives. However Spender AJ concluded that there was sufficient error demonstrated in the Master's judgment to permit re-consideration of his orders.

His Honour felt that three matters, in particular, supported this opinion. First, the Master had referred to the fact that the former policeman who had investigated the accident "may" be available to give evidence. In fact, according to his Honour, the former policeman was certainly available to give evidence. Secondly, the Master had referred to supposition that Ms Judd might have been influenced to delay the proceedings by doubts concerning liability. Spender AJ concluded that this inference was not open to the Master on the material before him. Finally, Spender AJ referred to the consideration given by the Master to the possible cause of action which Ms Judd had against her solicitors. His Honour stated that this consideration was irrelevant, and that the Master should not have expressed any view on this issue whatsoever.

Spender AJ then considered whether he should himself grant the relief sought by Ms Judd. His Honour reviewed the relevant principles and noted that, in fact, a

great deal of the relevant evidence pertinent to the happening of the accident and the issues of liability was still available. He stated that "this is not a case where a defendant loses the benefit of a statute of limitations defence". Spender AJ then concluded that:

"Tn all the circumstances, I think the interests of justice are best served by allowing the matter to proceed"

His Honour therefore made an order allowing the appeal an order granting leave to the plaintiff, pursuant to Pt2 R3 SCR, to serve the statement of claim out of time, and an order for substituted service. Costs in the proceedings before Spender AJ, and those before Master Malpass, were made costs in the cause. Spender AJ made these orders:

".. Subject to and conditional upon the plaintiff submitting to an order, or giving an undertaking to this court, that no objection as to form or on any other basis will be made at any hearing on the merits to the tender by the defendants of any of the material referred to in paral to para8 on p3 and p4 of these reasons."

This condition was imposed upon Ms Judd (as distinct from upon the trial judge in his rulings on evidence). She is prepared to accept it. It was designed to ensure that no technical objections would be taken at the trial, on behalf of Ms Judd, to prevent the tender of contemporaneous documentary evidence which is still available to the claimants for tender.

From the orders made by Spender AJ, the claimants have sought leave to appeal to this Court. By agreement of the parties, the Court treated the summons for leave to appeal as the hearing of the substantive appeal, in case leave should be granted. The oral submissions of the parties were supplemented by helpful written submissions. This course was adopted by the Court in order to bring its part in this saga of litigation to the earliest possible close.

1 That Spender AJ had erred in identifying the purported errors on the part of Master Malpass and in his approach to his function in deciding an appeal from the Master's discretionary decision;

2 That when he turned to exercise his own discretion, in substitution for that of the Master, Spender AJ had erred in certain of the considerations which he took into account and in failing to take into account, or to take adequately into account, considerations relevant to the exercise of his own discretion. Specifically, he had erred in his consideration of the prejudice which the claimants would suffer, having regard to supervening events, if Ms Judd's proceedings were so belated to be permitted to continue;

3 That Spender AJ had erred in the condition which he imposed upon the order which he made; and

4 That Spender AJ had erred in granting Ms Judd leave to serve her statement of claim out of time by substituted service on the Transport Accident Commission of Victoria, as such service was not available upon a true construction of Pt9 R10(1) SCR. In raising this last point, the claimants sought to resile from a position which they had adopted before Spender AJ. In resistance to this argument, Ms Judd submitted that the claimants should be held to the manner in which they had argued the point of substituted service at first instance. See Metwally v University of Wollongong [No 2] (1985) 59 ALJR 481 (HC), 483. Suggested errors of the Master are not established.

I am prepared to accept that Spender AJ approached the appellate function appreciating that he was reviewing a discretionary decision of the primary decision-maker which should not be disturbed unless it was shown to be wrong in some relevant respect - ie, for failing to take into account a material consideration; for taking into account an immaterial consideration; for reaching a conclusion which was otherwise manifestly wrong; or for evidencing an error of principle. See Wentworth v Rogers and Anor [No 3] (1986) 6 NSWLR 642

(CA), 644. It is self-evident that, in appeals of this character within the Supreme Court, it cannot have been Parliament's intention that one member of the Supreme Court (a single Judge) should simply substitute his or her opinion on a discretionary decision concerning a matter of practice for that earlier determined by another member of the Supreme Court (a Master). If this were the principle of appellate review, few cases would conclude at a Master. Every contested case where the party had "a long pocket" would be taken for re-determination by a Judge. This Court in its own appellate review, must uphold the primacy of the original decision makers determination. But I am not prepared to infer that Spender AJ misconceived his function or took the wrong approach. He identified three suggested mistakes on the part of the Master which, he felt, authorised him to set aside the Master's decision and to proceed to exercise his own discretion.

With respect to Spender AJ, I do not find convincing the errors which he instanced as the basis for his authority to intervene.

So far as the statement that the policeman, "may still be available to give evidence", is concerned, I do not take this to mean any more than that the imponderables of any future event are such that absolute certainty of availability to give evidence cannot be guaranteed. In litigation which has taken the meandering course of this case, a degree of caution in the Master's expression was entirely understandable. There was no suggestion in the Master's reasons that the former policeman (former Constable Nicholas) might not be available to give evidence. With respect, Spender AJ read too much into the Master's phrase.

Similarly, I consider that the "inference" that Ms Judd might have been influenced by doubts concerning liability, for which it was said that there was no material, mistakes the evidence as it stood at the close of the hearing. I read the Master's speculation on Ms Judd's want of enthusiasm as nothing more than a comment, of no great importance, offered in a passage where the Master was endeavouring to explain the delay in the prosecution of her Compensation to Relatives Act claim in the absence of evidence from her camp. Whilst most (perhaps all) of the blame in this case appears to rest on the shoulders of Ms Judd's legal advisers, a litigant must take some responsibility for the timely prosecution of a claim. There was

certainly some evidence which indicated that Ms Judd was aware of the contention of the truck driver that her late husband had proceeded onto the incorrect side of the road at the time of the collision. In one affidavit there was attributed to her the comment:

"The truck driver said we were on his side and also the motor cyclist had given evidence against (sic)..."

To like effect was the statement by Mr Evan Judd, who stated:

"They said that a motor cyclist behind us witnessed the accident and thought we had drifted..."

Clearly, this material, which was known to Ms Judd, would have indicated certain difficulties, even to a lay mind, in establishing liability for damages against the claimants or their insurer. All that the Master was saying was that it might have provided a psychological explanation of Ms Judd's apparent want of energy in prosecuting her claim. I see no error in that comment, especially because it arose out of the virtually complete absence of explanation for the delay from Ms Judd or her legal representatives.

Then there is the Master's reference to the possibility that Ms Judd would have a remedy against her solicitor. It is important to remember that Master Malpass discounted this consideration as one "to which the Court [cannot] give great

weight". Spender AJ thought that it was an entirely impermissible factor. The claimants point out that, in referring to it, the Master did no more than to adopt one of the submissions which had been placed before him by Ms Judd's counsel. Those submissions stated:

"However, any remedy against a solicitor is seldom as satisfactory as that against the original tortfeasor and is, in any event, an irrelevant consideration... or a matter which should be given little weight."

The state of the law on this point is not entirely clear. In Allen v Sir Alfred McAlpine & Sons Ltd and Anor [1968] 2 QB 229 (CA), Diplock LJ had suggested, at 260, that the availability of the alternative remedy was a relevant consideration. In Birkett v James [1978] AC 297 (HL), his Lordship, then Lord Diplock, recanted. He stated, at 324, that upon further consideration of the difficulties which would be

involved if a court were to take into consideration the prospects of the plaintiffs having an effective remedy against his solicitors, he thought that he had been wrong in Allen in saying that it was relevant.

In the House of Lords in Birkett, Lords Russell and Edmund-Davies (at 336), agreed with Lord Diplock. However, Lord Salmon refused to accept that the consideration "never deserve[d] any consideration". But he agreed "it cannot carry much weight". Lord Simon agreed with all of the Law Lords and did not address this particular issue or the different speeches upon it.

In Thompson v Brown Constructions (Ebbw Vale) Ltd and Ors [1981] 1 WLR 744; [1981] 2 All ER 296 (HL), the House of Lords returned to the issue in the context of an application to extend a limitation period which had expired. It had expired, in part, because of a solicitor's negligence. In resistance, it was pointed out that the plaintiff would have a strong case against the solicitor to recover damages no less than would have been recoverable from the original tortfeasor. Lord Diplock (at 750; 301) appeared to return to his earlier opinion. He acknowledged that suing one's solicitor had certain disadvantages which a court, looking at the case realistically, could not completely ignore:

"...some prejudice, although it may be only minor, will have been suffered by him. He will be obliged to find and to instruct new and strange solicitors; there is bound to be delay; he will incur a personal liability for costs of the action up to the date of the court's refusal [to extend time]; he may prefer to sue a stranger who is a tortfeasor with the possible consequences that that may have on the tortfeasor's insurance premiums, rather than pursue his former solicitors with corresponding consequences on their premiums."

There has been a similar ambivalence of judicial authority on this point in Australia. In Victoria, in Soper v Matsukawa [1982] VR 948 (FC), Young CJ expressed the opinion that the availability of an alternative remedy against solicitors was not a relevant consideration. His Honour, at 951, simply followed the majority opinions in Birkett. On the other hand, Lush J, at 954 (with whom Gray J agreed) preferred the views expressed by Lord Salmon in Birkett. In McKenna v McKenna [1984] VR 665 (FC), McGarvie J, at 680, expressed the opinion that the availability of

an alternative remedy (against negligent solicitors) would usually be a relevant consideration.

In this State, there have been similar divergencies of judicial opinion. See, eg, Morton v Jools (1992) ATR 81-164 (SC); Morgan v Deanhurst Pty Ltd, Supreme Court (NSW), unreported, 16 November 1994, 10.

The most recent consideration of the issue is to be found in the opinion of Smith J in the Supreme Court of Victoria in Repco Corp Ltd v Scardamaglia (1995) ATR 81-330 (SCV), where his Honour reserved the point, but observed:

"While it might be said that on the evidence before the Court the rights against the legal representatives appear to be strong, there is no admission of negligence by the legal representatives and the issues that may arise in any such action have not been investigated or pursued fully in these proceedings. In any event, confining Mr Scardamaglia to an action against the legal representatives would carry with it its own prejudice. He would be able to seek compensation not in respect of his injuries but for his loss of his right to sue Repco. He would find himself haying to prove two cases - the original case against Repco and a further case, the case against the legal representatives. The proceedings would, therefore, be more time consuming and more costly. There would also be a real risk that, if successful, any sum recovered would be less than any sum that he would have recovered in the original proceeding; for any damages awarded would be for the lost chance to recover damages in the proceedings against Repco (Johnson v Perez (1988) 166 CLR 351; Nikolaou v Papasavas Phillips and Co (1988) 166 CLR 394)."

My own opinion is identical with that of Lord Salmon in the House of Lords and of Lush, Gray and McGarvie JJ in Victoria. The availability of an action against a negligent legal representative is relevant because common sense says that it is so. It means that the litigant, who may be wholly or mainly innocent, is not put out of court without some chance of redress, however difficult that chance may be to enforce. To that extent an injustice, which might otherwise occur to the litigant, may be capable of being avoided. However, precisely because of the kind of difficulties which Smith J listed in Scardamaglia, it is a consideration which "cannot carry much weight".

This was the alternative proposition advanced for Ms Judd before the Master. In the circumstances, it is unsurprising that the Master should have embraced it. It is more surprising that he should thereafter have been criticised for having done so. I see no error in the way in which he referred to, and used, this consideration.

Upon the basis of the foregoing analysis, none of the three considerations identified by Spender AJ as permitting him to set aside the discretionary decision of the Master are shown to be good. Certainly, none of them warranted the conclusion that the Master's exercise of discretion had miscarried and that his decision was wrong, inviting the exercise by Spender AJ of his discretion in substitution.

In addition to the foregoing, there are, I am afraid, a number of errors on the part of Spender AJ in the exercise of his own discretion which would, in any case, have caused it to miscarry.

The most significant of these is his Honour's statement that the claimants would not lose the benefit of a statute of limitations defence if the relief sought by Ms Judd were granted. Spender AJ said this in terms. But in this, his Honour erred. The limitation period for the claim by Ms Judd expired in May 1992. This much was conceded before this Court for Ms Judd. If Ms Judd had to commence again, the claimants would have available to them a limitation defence. Accordingly, in determining the matter for himself, Spender AJ took into account an incorrect assessment of the case. To the extent that this consideration (which

could be overcome by the appropriate extension) was relevant, it told (to some extent at least) against the exercise of discretion in favour of Ms Judd.

There were other errors in his Honour's consideration of the facts.

1 He was apparently influenced by the inference which he drew that the motor cyclist, who arrived on the scene after the accident, did not arrive until the accident was over. This does not appear to be a proper construction of the available evidence. For example, the full passage in the statement by Ms Judd's son reads:

"T was taken to hospital at Macksville. The police took a statement from me there. They said that a motor cyclist behind us witnessed the accident and thought we had drifted. I didn't see any motor cyclist. Apparently he skidded on out out (sic) debris."

The better interpretation of this evidence is that the contemporaneous record supported the suggestion that the motorist had actually seen what had happened. Otherwise, how could he have described the car driven by the late Mr Judd as having "drifted"?

2 One witness had certainly died during the delay in prosecuting the claim. This was Mrs Culley who died in July 1992. Spender AJ stated that there was nothing to indicate whether her evidence would have been helpful. With respect, the loss of an eyewitness to the collision is necessarily likely to be of some significance to parties, such as the claimants, resisting the claim. Of the eight known witnesses capable of providing evidence of what happened in the collision, the position, at the time the matter was before Spender AJ, in respect of each of them was as follows:

(i) Mr Morrison: He cannot be located, a fact agreed to for Ms Judd;

(ii) Mr Culley: He wrote all the details of the accident as he recalled it on paper shortly after the collision but discarded the document about two years before being interviewed in January 1995. This is a loss of a contemporaneous record which would otherwise have been available at the trial, had the hearing been brought on with due expedition;

(iv) Former Constable Nicholas: He has now left the police force. He went to great lengths to determine the correct point of impact. He recorded this information in his police notebook. His notebook is now lost. If his evidence at the trial were challenged, he would not now be able to refer to the contemporary notebook to refresh his recollection.

He cannot recollect Mr Culley, who was the driver in the third vehicle involved in the collision;

(v) The motor cyclist who saw the vehicle driven by Mr Judd "drift": He cannot now be identified;

(vi) Ms Judd: She is available. According to the claimants "conveniently for her claim she is able to rely on a statement recorded shortly after the accident";

(vii) The opponent's son, Mr Evan Judd: He too is available and able to rely on his statement; and

(viii) A friend of the opponent's son, Mr Correy Vincent: He too is available.

Even if the motor cyclist, whom it might have been difficult to identify with a proper prosecution of the case, is discounted, there is still significant prejudice to the claimant in the reduction in the availability and detail of the evidence of other relevant eye witnesses.

The Master was clearly right to take into account the absence of any explanation for the delay in prosecuting the claim. It is rudimentary, when evaluating the requirements of justice, to consider the explanations which a party offers (if any) for the failure to conform to the requirements of the Supreme Court Rules that cases be prosecuted with due diligence. Where there is no explanation, a party is left bereft of excuse. As between that party and the contesting parties, it is then more difficult to demonstrate that justice requires the relevant extension.

It is natural to a court, striving for justice, to be disinclined to exclude from a hearing on the merits, a person who has put her confidence in legal representatives and instructed them within time to bring her claim. It is understandable to have such a reaction in the present case where there was evidence that a personal injuries claim by Ms Judd was settled at a much earlier stage. From this fact it may be inferred that the claimants (or their insurer), probably performed some investigation of the circumstances of the accident and reached a view about it sufficient to dispose of that claim. It is also arguable that, if a real effort were made, it would be possible to track down Mr Morrison and to obtain his evidence for the trial. It was not suggested that he and Mr Brown had finally left the address which they still used for the purpose of receiving their mail. The investigating constable is still available to give evidence. The road accident report is available to tender. It would appear that it would be admissible at the trial under the general law. See Dimitry v McPhee, Court of Appeal (NSW), unreported, 30 June 1995. However that may be, the order actually made by Spender AJ would certainly ensure that it was received into evidence. I see no problem in that order which was, by its terms, binding on Ms Judd as a condition for the grant of extension sought, not a limitation on the judge conducting the trial.

So there were a number of considerations which could have persuaded the Master to reach a conclusion different from that at which he eventually arrived.

That is not the issue before this Court. Our attention must be addressed to the orders of Spender AJ and to whether they were justified by his Honour's reasons and authorised by the suggested errors on the part of the Master. In my respectful opinion, they were not. The identified errors were either inconsequential remarks or correct considerations. A significant error (as to the limitation period) appeared in Spender AJ's own reasoning. The weight given to the prejudice to the claimant appears, in particular respects, to have been erroneous.

I have therefore come to the conclusion that Spender AJ's exercise of discretion miscarried. Justice in a case such as this obviously includes justice to the claimants. This Court must set aside his Honour's orders. It should restore the orders of the Master.

Having come to this conclusion, it is unnecessary for me to consider the issue of substituted service and the problem which it presented by reason of the way in which the claimants conducted their case on this point before Spender AJ. I would reserve a consideration of whether Chappell v Coyle (1985) 2 NSWLR 73 (SC), 86, is affected by the later decision of Mason J in the High Court in Foxe v Brown (1984) 59

ALJR 186 (HC), 188. Consideration of those authorities should be kept for a case in which it is necessary to decide the point. I simply record the submission for the claimants, on behalf of the Transport Accident Corp of Victoria, that substituted service on that insurer was not available under Pt9 R10(1) SCR. It

was not an argument which immediately attracted me. But its correctness can be left to another day. Necessarily, and for the same reason, I do not have to consider whether, for procedural reasons, the claimants should be held to the way in which they conducted their case at first instance. See Habib v The Nominal Defendant, Court of Appeal (NSW), unreported, 26 September 1995; [1995] NSWLB 102.

In parting with the appeal, I call attention to the desirability, where a potential claim against legal practitioners for negligence hangs contingently on the outcome of proceedings, that such legal practitioners should withdraw from representing the party at risk because of the obvious potential for a conflict of interest and duty which can arise. For example, in the present case, the want of explanation for the delay, either in the failure of Ms Judd to prosecute her claim with diligence, or in the failure of her solicitors to show due diligence, led the Master to speculate that the blame may have been, in part at least, explained by a want of enthusiasm and conviction on the part of Ms Judd herself. This may have been unfair to her. She may, at all times, have assumed that her solicitors were prosecuting the case properly and that the delay was no more than the result of the notorious delays of litigation generally. One of the dangers of the continued involvement in a case of legal practitioners who are arguably in default is that there may sometimes be a disinclination to offer evidence completely exculpating the client and inculpating the legal practitioners. Yet such evidence might be in the client's own interest. I do not say that this occurred in the present case for the Court has no knowledge of what happened. It is enough to point out that there is such a risk as requires the severance of the professional relationship once the potential claim against a legal practitioner is identified.

When default of the kind that has apparently occurred here is revealed, it is the duty of the legal practitioners involved to draw it frankly to the attention of the client and, in my view, to suggest to the client that he or she should secure different legal representation. At the very least, the client should be aware of the fact that one possibility which must be contemplated is the prosecution of a claim against the legal practitioners who are in default.

1 Grant leave to appeal; 2 Allow the appeal; 3 Set aside the orders made by Spender AJ on 19 July 1995; 4 In lieu thereof, order that the appeal to Spender AJ from Master Malpass' orders be dismissed and that the Master's orders be confirmed. 5 Order that the costs before Spender AJ and the costs of the summons for leave to appeal and of the appeal, be paid by Ms Andrea Judd; and 6 Order that, in respect of the costs of the appeal, Ms Judd have a certificate under the Suitors' Fund Act 1951.

Given that the decision of the Master, which is now confirmed, rested upon the unexplained delay on the part of the legal practitioners in prosecuting the claim by Ms Judd, it may be expected that the legal practitioners, rather than Ms Judd personally, will bear those costs, unless there some consideration, unknown to the Court, which warrants a different conclusion. And that Ms Judd will now be sent to other legal practitioners to provide her with advice on her remaining entitlements.

Meagher JA I agree with Kirby P. Powell JA I agree with Kirby P.

3 Set aside the orders made by Spender AJ on 19 July 1995; 4 In lieu thereof, order that the appeal to Spender AJ from Master Malpass' orders be dismissed and that the Master's orders be confirmed. 5 Order that the costs before Spender AJ and the costs of the summons for 5 leave to appeal and of the appeal, be paid by Ms Andrea Judd; and 6 Order that, in respect of the costs of the appeal, Ms Judd have a certificate under the Suitors ' Fund Act 1951.

10 Solicitors for the Appellants: Carroll and O'Dea

At a glance

Court

Decision date

Before

Source

Judgment (107 paragraphs)

Parties

Cases Cited (7)

Cited By (2)