Callan v Healthscope Limited & Anor [2008] VSC 88

1 Noah Callan, the plaintiff, was born on 28 January 1997 at The Geelong Clinic at the Bellarine Hospital which was conducted by Healthscope, the first defendant. Noah Callan's father and litigation guardian is Mr Desmond Callan. His mother is Mrs Anna Callan. The second defendant, Dr Barker, was the specialist obstetrician engaged to medically manage Mrs Callan's labour and the delivery.

2 Noah Callan commenced the proceeding against Healthscope on 21 August 2006 and Dr Barker was joined as a defendant by leave granted on 29 January 2007. The statement of claim filed with the amended writ on 16 February 2007 claims damages, alleging that Noah Callan suffered a brain injury resulting in cerebral palsy and loss and damage as a consequence of the defendants' negligence in relation to his birth.

3 Paragraph 24 of each of the defences alleges that the respective claim is barred under the Limitation of Actions Act 1958 ("the Act"). Healthscope pleads the bar by operation of s 27E of the Act, whereas Dr Barker refers generally to the Act. Noah Callan now applies by summons filed on 27 July 2007 for orders striking out those paragraphs of the defences or, alternatively, an order under s 23K of the Act extending the time in which he is entitled to commence proceedings.

4 In support of the application, there are affidavits sworn on 19 July 2007, by Ms Paula Shelton of Slater and Gordon, and, on 25 July 2007, by each of Mr and Mrs Callan. There is no answering material from the defendants.

5 Each of the deponents was orally examined in the Court.

6 Noah Callan was Mrs Callan's second child and she was 28 years old at the time of his birth. Dr Barker had also been the attending obstetrician at the birth of her first child, Baxter Callan, on 10 August 1993.

7 On 27 January 2007, Mrs Callan was admitted to hospital at about 9.00 am, for induction of labour at 41 weeks. Dr Barker saw her at about 6.00pm. He allowed her to return home to await events. Early the next morning, at about 1.00am, she was re-admitted, in labour. Dr Barker was notified, but did not attend. By about 1.30am, cardiotocographic ("CTG") monitoring showed evidence of foetal heart rate deceleration.

8 Hospital notes record that Dr Barker was next contacted by the staff at about 5.10am and given a report of "profound foetal bradycardia". He attended and unsuccessfully attempted what is known as a "Ventous extraction", before Noah was delivered at about 5.47am with the assistance of forceps. The baby's heart rate had remained bradycardic until he was delivered.

9 Noah required resuscitation immediately after birth. A paediatrician, Dr Peter Hewson, was called. He reports that the baby developed neonatal seizures over the first few hours of life and required anticonvulsants over the first week. Noah and his mother were transferred to the Geelong Hospital, before they was discharged home when he was 10 days old.

10 During Mrs Callan's stay in the Geelong Hospital, she discussed the birth with her sister-in-law, a general nurse. Her sister-in-law made a comment to the effect that the birth did not "sound good". Mrs Callan understood this to be a reference to her bad experience during the labour.

11 When Noah Callan was about one month old, in February 1997, Dr Hewson told his parents that he suffered from athetoid cerebral palsy, indicated by back arching and tongue thrusting behaviours. Dr Hewson described this type of cerebral palsy as better than others, because muscle tension was likely to fluctuate and that the baby would not always be still. He stated that Noah would have a permanent level of disability, but told the Callans that children with the condition had a very wide range of abilities and could be mildly or very severely affected. He advised that Noah might possibly be only mildly affected and have normal intellectual function with only minor physical disabilities.

12 The baby had been alert and socially interactive from birth and his parents were reassured by what they had heard from Dr Hewson, notwithstanding their concerns as to the possible connection between the circumstances of Noah's birth and his condition. On the basis of that reassurance and his condition, Mr Callan was optimistic about the prospect that he would become an essentially normal functioning adult.

13 In about February 1997, the Callans consulted Dr Barker. They asked what had happened during the birth which Mr Callan described as "very violent and traumatic", when compared with that of his older brother Baxter. Mrs Callan had concerns about the management of her labour. She "felt" or "sensed" that the management of her labour was the cause of Noah's condition. Given her state and that of the baby, she believed that things had not gone well after the delivery. She was unsure whether there had been some mismanagement of the labour by the hospital or Dr Barker. She had concerns about her own condition in relation to any future births. She had questions she wanted to raise with the obstetrician. Dr Barker informed the Callans that his review of the medical file indicated that the medical management of the birth was within acceptable standards. The Callans had not sought the professional opinion of any other medical practitioner on the subject.

14 Noah Callan started receiving occupational therapy and physiotherapy treatment at the age of about two months. By his first birthday, on 28 January 1998, he was alert and interactive, but was not sitting or supporting his body alone. He was able to grasp objects with his left hand. At that stage, his parents continued to believe that his cerebral palsy was likely to be mild, that he would reach all the normal developmental milestones, but later than other children might do. They thought that he would be a vibrant child with mild cerebral palsy with effects perhaps such as lack of good co-ordination.

Dr Hewson's 8 May 1998 report

15 The Callans obtained a written report from Dr Hewson dated 8 May 1998. I will set out most of its contents because of the significance attached to them in the application:

1. Cerebral Palsy - mixed - spastic quadraparesis with some diplegia and athetoid elements.

Noah developed sudden foetal bradycardia during second stage labour and was delivered after urgent vacuum extraction and a forceps delivery. His APGARS were 11 and 25 and 615 minutes and required bag and mask oxygen. He was breathing well at 15 minutes with good oxygen saturations. He developed neonatal seizures over the first few hours of his life and required anticonvulsants over the first week.

Over the first weeks of his life he developed tongue thrusting, was hypotonic though was quite responsive. This pattern has continued with his current problems being:

1. Decreased movement of his lower limbs with increased tone and scissoring.
2. Poor voluntary control of his upper limbs and poor voluntary grasps.
3. Poor head control with excitement and persistent tongue thrusting making feeding and language development difficult.

At 15 months of age he was very responsive, smiling in response to personal contact though frequently losing control of head movements and upper limbs.

He has been seen by physiotherapist, speech pathologists, occupational therapists as well as Paediatric Neurologist, Dr Ian Hopkins from the Royal Children's Hospital in Melbourne. ...

His parents are very loving and keen to do whatever is necessary to ensure Noah's progress to the maximum degree possible, hoping that he will ultimately walk with assistance.

16 Mr Callan understood Dr Hewson's reference to "spastic quadraparesis" to mean a lack of co-ordination, rather than paralysis. He was not shocked by the report, being under the impression that Noah's lack of co-ordination or development could be rectified with therapy. He also thought that it was very early to determine the extent of any language delay. Mr Callan thought that it was possible that his son would never do more than walk with assistance. Nevertheless, he maintained a positive outlook. He believed that the situation could be a lot better and could be turned around.

17 At the urging of family members, the Callans consulted Slater and Gordon on about 4 June 1998 when their son was about 16 months old. Being a young couple, they were particularly influenced Mrs Callan's father who counselled them to consider the possibility of Noah suffering a more severe form of cerebral palsy than they then expected. At that time, Mrs Callan herself had continuing concerns about the adequacy of the management of her labour relating to the hospital's delay in contacting Dr Barker and the amount of monitoring of Noah's heartbeat if he had indeed been affected by a slow heart rate.

18 The Callans provided Dr Hewson's report to Slater and Gordon. They discussed a potential medical negligence claim in relation to the events surrounding his birth with Ms Irene Lawson of the firm. She advised that they would have to prove negligence in the conduct of the birth and would need clear evidence for the claim to succeed. Ms Lawson estimated the costs of investigating the claim at between $1500.00 and $2000.00. She correctly advised that (as the Act then stood) Noah would have until six years after his 18th birthday to pursue any claim. She also advised the Callans of the importance of preserving evidence.

19 At the time, the Callans were planning to leave Australia to work for several years as teachers in Japan. Mrs Callan sensed that Ms Lawson was concerned about the difficulty of proving such a case and that she was also of the view that there might be no reason for them to proceed if unsure about its existence. It would then have been difficult for the Callans to meet the costs of investigating the claim. Although they could have borrowed the money, they were not entirely comfortable with the idea of doing so.

20 The Callans decided in mid 1998 not to pursue a legal claim at that time, despite Mrs Callan's belief at that time that there were matters which warranted investigation. She wrote to Slater and Gordon on 22 July 1998 informing them of the Callans' decision to "re-think" in light of their move to Japan. Mrs Callan summarised the reasons for their decision under cross-examination when she said :

... when we went to see Dr Barker he stated to us that everything was done within the realms of care that was required, and when we went to see Ms Lawson she also stated that the cases were very hard to prove and that it would have to be something glaring in order for it to be a successful case, and with us going to Japan and the financial issues and hoping that Noah would be relatively okay, we decided at that point we would be best to wait and see.[1]

21 Mr Callan remained very optimistic about Noah's condition. He said to his wife words to the effect of: "imagine if Noah walks back through Customs when we come back from Japan."

22 The Callans left for Japan in July 1998 when Noah Callan was approximately 18 months old. Slater and Gordon wrote to them on 28 July 1998, confirming the instructions not to pursue the claim and noting that any proceedings had to be brought within six years from the date of Noah Callan's 18th birthday.

23 Noah Callan received occupational therapy and physiotherapy in Japan. By his second birthday, he was able to roll over on his own and he was no longer tongue thrusting. He could not, however, sit alone. The Callans were encouraged by his treating therapists to believe that he would progress, with therapy, and would eventually have a good outcome, with any physical disability from cerebral palsy being minor and his development being essentially normal, but delayed.

24 When the Callans saw Dr Hewson during a December 1999 visit to Melbourne he told them that Noah looked good and that he might start to "unfold". This too encouraged them to believe that his development would be essentially normal, but delayed. They ordered a "Hart walker" into which their son could be strapped and supported upright and which, they believed, would enable him to be trained to walk independently.

25 It was at about the time of Noah's fourth birthday on 28 January 2001 that his parents first realised that he was unlikely ever to be able to walk without the support of the Hart walker. They also realised that he was not going to attain normal developmental milestones and would have serious physical disabilities for the rest of his life. They did not then investigate the possibility of bringing legal proceedings because they believed that Noah had until he was 24 to do so. They were still living in Japan and also thought it would be difficult to conduct litigation from there. They intended to further investigate the possibility when they were about to return to Australia.

26 In 2004, the Callans expected to be returning to Australia in 2005. By then, they knew that Noah's serious physical disabilities meant that he would require extensive lifelong care and they considered that they would be able to conduct litigation once back in the country. Mrs Callan contacted Slater and Gordon by an email dated 17 November 2004 which articulated the concerns she had had since February 1997:

Son Noah born on 26 January 1997 has cerebral palsey (sic), due to complications at birth, the DR. once he had arrived tried to get him out but had great difficulty. The midwife may have been too late in getting the Dr to come in to assist with the delivery, it was also a national holiday. Monitoring of foetal heartbeat was perhaps not done regularly enough, the Doctor seemed annoyed with the nurse when he arrived. The midwife seemed as if she wanted to handle the delivery herself but things became very complicated and started to go wrong. We have waited this long because we wanted to see the extent of our son Noah's disabilities. We are currently living in Japan but will be returning in the next 12 to 18 months. The Doctor and hospital are from Geelong. The hospital is now a psychiatric hospital so I don't know if it is difficult to get our medical records. Someone told me once that the window was 7 years is this correct? My son has athetoid cerebral palsey, he is fully dependent upon us for feeding, bathing, dressing and toileting. He is quadriplegic and cannot speak. Can you help us? Before moving to Japan 6 years ago we spoke to one of the lawyers from your Lonsdale Firm, she was willing to assist us in preliminary investigations, but unfortunately we had to leave for Japan soon after so decided to wait until we returned. Thank you for your time and consideration. Anna Callan

27 Ms Shelton responded by a letter dated 3 December 2004, informing Mrs Callan of amendments to the Act which resulted in her opinion that a proceeding would be statute barred. The letter advised that an extension of time for the commencement of proceedings might be granted "in limited circumstances" and told the Callans to contact Ms Shelton's assistant if they wanted to proceed to investigate the possibility of a claim.

28 The Callans responded promptly by a 9 December 2004 email to the assistant, stating that they were very interested in pursuing an investigation in relation to Noah's injuries and enquiring about the circumstances in which an extension might be granted and as to whether their residence in Japan would complicate matters.

29 Mrs Callan emailed the assistant again on 27 January, noting that they had had no response and making enquiries in similar terms. The email included the following :

the reason for us actually waiting so long is that we wanted to have a clear indication of the extent of Noah's disability before taking it further. It is hard to know the extent of damage early in a child's development and cerebral palsy can vary so much in its intensity and type. Obviously it takes time for a child to grow and develop, to reach milestones etc. Now we have a good understanding of what the future holds for Noah and us as his caregivers. He is a very disabled little boy and requires constant care and attention as he can do nothing for himself.

I look forward to hearing from you. If there is a chance that the court would grant Noah's case an extension we would be happy to forward the initial funds to you.

30 On 9 February 2005, Mrs Callan emailed Ms Shelton directly, noting the failure of three emails directed to her assistant, indicating that the Callans would very much like to organise a time to discuss possible grounds for an extension of time and suggesting times on 11 February for a telephone conference.

31 Ms Shelton responded on the same day and a telephone conference was held on 11 February 2005. Notes of the conference record that Ms Shelton told the Callans that medical records and relevant medico-legal opinions from paediatric neurologist and an obstetrician would be required.

32 Ms Shelton then wrote to the Callans on 30 March 2005, describing the necessary steps in the investigation of the claim and asking them to make contact if they wished to proceed. She said that appropriate authorities would be forwarded for their signature. The letter nominated the issuing of a generally endorsed writ as the first numbered step, relevantly explaining :

This is a formal court document that protects Noah's right to bring a claim, as at the date it is issued. Whilst the claim may still be out of time it is one step that can be taken to show the court that action was taken as soon as reasonably possible once the possibility that a claim was available to Noah was recognised.

33 The Callans responded to the 30 March letter by email on the following day. They stated that they "definitely wanted to proceed" and asked for the necessary documents for signature. The authorities were forwarded under cover of a 5 April 2005 letter. Mrs Callan's signed authorisation for the release of her medical information and a cheque were received by Slater and Gordon between that date and 18 April 2005.

34 No writ was issued. Ms Shelton concedes that, with the benefit of hindsight, she would have issued a generally endorsed writ at about that time. She, however, considered the matter and decided to request the medical records first.

35 Between 21 and 25 June 2005, Slater and Gordon wrote to The Geelong Clinic, Dr Barker and the Geelong Hospital requesting relevant records and, in Dr Barker's case, records or a summary. Ms Shelton concedes that the delay in seeking the records is properly characterised as "undesirable". She also agrees that it would have been prudent to have told Dr Barker that the matter was urgent.

36 Dr Barker provided a report dated 26 July 2005 and the solicitors had received all the defendants 'records by mid August 2005. They sent the report and the records to Dr Ian Barrowclough, an obstetrician, seeking his opinion.

37 Dr Barrowclough reported by letter dated 27 September 2005. He answered a number of specific questions put by the solicitors. He stated the opinion that the initial CTG monitoring should have been continued throughout the labour after the observation of early heart rate decelerations. If the cervix had been favourable, it would have been wise to rupture the membranes as well, to monitor liquor. He said that Dr Barker did not need to take any action at 1.30 am, apart from having the patient carefully monitored, but that he had been entitled to expect to have been kept informed. Significantly, Dr Barrowclough expressed the view that :

With the [deceleration] shortly after [Mrs Callan's] admission to hospital, the monitoring was not appropriate as there was apparently no continuous CTG maintained.

38 As to whether earlier delivery had been indicated at any time during the labour, Dr Barrowclough said:

The only time urgent delivery was seen to be indicated was when there was a sudden bradycardia in the second stage of labour. At that time Dr Barker was informed and proceeded to deliver the babe using Kiellands forceps. From the times given this babe could not have been delivered any sooner by Caesarean Section.

39 Slater and Gordon then wrote to Dr Michael Harbord, a paediatric neurologist, seeking a medico-legal opinion. Ms Shelton delayed her initial contact with Dr Harbord because she considered it important to have had the opinion of an obstetrician as to whether the birth should have been expedited, before asking for the views of the paediatric neurologist as to whether birth at that time would have made a difference to the outcome. There was a further delay before Dr Harbord provided a report because he had requested additional information and Ms Shelton had then sought Dr Hewson's records on 16 November and again on 14 December 2005, before eventually receiving that doctor's report dated 16 December 2005. Slater and Gordon supplied the extra materials sought by Dr Harbord on 27 February 2006.

40 Dr Harbord provided a report dated 12 April 2006. He stated the opinion that Noah Callan's diagnosis of a dyskinetic athetoid type of cerebral palsy was highly likely to be due to birth asphyxia. His persistent bradycardia, without any intervening recovery, was consistent with a major hypoxic insult in the second stage of delivery. Dr Harbord noted that it was unclear when that "terminal bradycardia phase" had commenced because there was only intermittent foetal heart rate monitoring before 5.00 am. The report was provided to Slater and Gordon on 16 May 2005 after Dr Harbord's fee was paid.

41 Ms Shelton had asked for the expert opinions to be provided as soon as was possible.

42 Slater and Gordon advised the Callans on 5 July 2006 that they had obtained Dr Harbord's report. On 21 July 2006, Mrs Callan instructed Ms Shelton that they wished to issue proceedings and that she would advise who would be Noah's litigation guardian. On 15 August 2006, Mr Callan consented to act as litigation guardian.

43 As I have noted above, it was then on 21 August 2006 that the proceedings against Healthscope were commenced. Healthscope was served on 27 October 2006. The indorsement on the writ alleged that its negligent failure to manage Mrs Callan's labour and Noah's birth caused him a severe hypoxic injury and resulting injuries including cerebral palsy. Counsel advised that Dr Barker should be joined as a defendant and that application was made on 19 December 2006. Leave was granted for his joinder on 29 January 2007. The amended pleading was filed on 16 February 2007. The applications for the striking out of the limitation defences and the alternative application for an extension of the limitations periods were made on 27 July 2007.

44 The Act was relevantly amended with effect from 1 October 2003 by the Wrongs and Limitation of Action Acts (Insurance Reform) Act 2003. The amending legislation reduced the limitation period for a personal injury action brought by a minor who is a person under a disability by the operation of s 3(2).

45 At relevant times after 1 October 2003, the Act provided :

27E Limitation period for personal injury actions - persons under a disability

(1) This section applies to a cause of action to which this Part applies which is founded on a personal injury to a person who was under a disability at the date of the act or omission alleged to have resulted in the personal injury.

(2) An action in respect of a cause of action to which this section applies shall not be brought after the expiration of whichever of the following periods is the first to expire -

(a) the period of 6 years from the date on which the cause of action is discoverable by the plaintiff;

(b) the period of 12 years from the date of the act or omission alleged to have resulted in the personal injury with which the action is concerned.

(1) For the purposes of this Part, a cause of action is discoverable by a person on the first date that the person knows or ought to have known of all of the following facts -

(a) the fact that the death or personal injury concerned has occurred;

(b) the fact that the death or personal injury was caused by the fault of the defendant;

(c) in the case of personal injury, the fact that the personal injury was sufficiently serious to justify the bringing of an action on the cause of action.

(2) A person ought to know of a fact at a particular date if the fact would have been ascertained by the person had the person taken all reasonable steps before that date to ascertain the fact.

(3) In determining what a person knows or ought to have known, a court may have regard to the conduct and statements, oral or in writing, of the person.

27J Effect of legal incapacity on limitation period

(1) A person is under a legal incapacity for the purposes of this section while the person -

(a) is a minor, but not while the minor is in the custody of a capable parent or guardian; or ...

(3) In determining when a cause of action is discoverable by a person who is a minor or an incapacitated person and who is not under a legal incapacity, facts that are known or ought to be known by a capable parent or guardian of the minor or the guardian of the represented person are deemed to be facts that are known or ought to be known by the minor or incapacitated person.

capable parent or guardian of a minor means a person -

(a) who is a parent or guardian of the minor; and ...

(1) A person claiming to have a cause of action to which this Part applies may apply to a court for an extension of a period of limitation applicable to the cause of action under Division 2.

(a) may hear any of the persons likely to be affected by the application as it sees fit; and

(b) may, if it decides that it is just and reasonable to do so, order the extension of the period of limitation applicable to the cause of action for such period as the court determines.

(3) If a court orders the extension of a period of limitation applicable to a cause of action under this section, that period of limitation is accordingly extended for the purposes of an action brought by the applicant in that court on the cause of action that the applicant claims to have.

27L Matters to be considered in determining applications for extension of limitation period

(1) In exercising the powers conferred on it by section 27K, a court shall have regard to all the circumstances of the case, including (but not limited to) the following -

(a) the length of and reasons for the delay on the part of the plaintiff;

(b) the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant;

(c) the extent, if any, to which the defendant had taken steps to make available to the plaintiff means of ascertaining facts which were or might be relevant to the cause of action of the plaintiff against the defendant;

(d) the duration of any disability or legal incapacity of the plaintiff arising on or after the date of discoverability;

(e) the time within which the cause of action was discoverable;

(f) the extent to which the plaintiff acted promptly and reasonably once the plaintiff knew that the act or omission of the defendant, to which the injury of The plaintiff was attributable, might be capable at that time of giving rise to an action for damages;

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

(2) To avoid doubt, the circumstances referred to in subsection (1) include the following -

(a) whether the passage of time has prejudiced a fair trial of the claim; and

(b) the nature and extent of the plaintiff's loss; and

46 The two issues for the Court are as to whether the limitation period under s 27E(2)(a) of the Act expired before the proceedings were commenced and, if so, whether the limitation periods should be extended under s 27K.

47 Under the combined operation of s 27E(2)(a) and s 27J(3) of the Act, the limitation period in this case is six years from the date the cause of action was "discoverable" by either of the Callans, as Noah Callan's capable parents. The date of "discoverability" is the date upon which either of them knew or ought to have known of the matters listed in s 27F(1)(a)-(c). It is common ground that suspicion or awareness of facts which might have conveyed information to another would be insufficient to constitute the requisite knowledge.[2]

48 It is conceded in this application that the Callans knew both that their son had sustained an injury shortly after his birth and that his injury was sufficiently serious to justify the bringing of the actions, by about 8 May 1998, the date of Dr Hewson's first written report. They concede that the causes of action were then, therefore, "discoverable" under s 27F(1)(a) and (c) respectively.

49 The issue remains as to when the causes of action were discoverable in that either of the Callans ought to have known in the relevant sense that Noah's injuries were caused by the fault of the defendants within the meaning of s 27F(1)(b). I note that in this application no distinction has been drawn between the defendants in relation to responsibility for the management of Mrs Callan's labour. Further, it is common ground that the reference to "fault" in the subsection should be construed as a reference to a "causative act or omission".[3]

50 Counsel for Noah Callan argue that the Callans ought to be regarded as only having known of fault on the part of the defendants which caused their son's injury by on about 27 September 2005, the date of Dr Barrowclough's report. As a result, they argue, each of the proceedings was brought within time. Each of the defendants argues that the claims are statute barred.

51 Counsel for Healthscope points out that Dr Barrowclough's 27 September 2005 report was produced some six months after the Callans confirmed their instructions to the solicitors to proceed. On that basis he contends that, given what they actually knew and their suspicions, they would have known of the causal nexus between the circumstances of the birth and Noah's condition once they received Dr Hewson's 8 May 1998 report or within six months afterwards if they had taken all reasonable steps to ascertain that fact.

52 Counsel for Healthscope argues that those steps would have involved the Callans in carrying out or commissioning an investigation as to the existence and contents of any records of the labour and, in particular, determining whether those records revealed that the management of the labour was unreasonable and a cause of injury to Noah.

53 Counsel for Dr Barker note that, if at any time before 29 January 2001 (six years before the 29 January 2007 order permitting his joinder), the cause of action against him was discoverable by the Callans, the limitation period would have expired.

54 Counsel for Dr Barker do not assert that the Callans had actual knowledge of the causative link between the management of the labour and Noah's condition before 29 January 2001. They, nevertheless, contend that, in the circumstances, the couple reasonably ought to have taken the step of instructing Slater & Gordon to proceed with the investigation in mid 1998, for the following reasons:

(a) they knew that their son's injury was sufficiently severe to justify bringing proceedings, whether they thought his condition might improve or not;

(b) they had been told that such cases could be difficult and could be strenuously defended and that the only way to find out whether they had a basis to pursue the action would be to obtain the necessary records and consultant's opinion;

(c) although they were going to Japan for at least two years, they contemplated regular return visits to Australia;

(d) they acknowledged that they could have obtained any necessary funds for the investigation;

(e) their evidence as to the effect of Dr Barker's opinion on them should be considered in light of Mrs Callan's evidence as to her concerns and the views she held in May 1998 as to the way in which her labour was handled and the fact that they did consult the solicitors; and

(f) even though the Callans had been told that Noah had until the age of 24 to bring the proceedings, they had also been informed of the importance of preserving medical evidence and they had some concerns about possible destruction of records.

55 Counsel for Dr Barker submit that the solicitors had effectively advocated the investigation at the time, by noting the need to preserve evidence relating to a claim.

56 Senior counsel for Dr Barker says that because, eventually, some 18 months elapsed between the Callans' November 2004 instructions to Slater and Gordon to proceed and Drs Barrowclough and Harbord providing reports, relevant medical records and medico-legal reports would have been obtained by the end of 1999 if the Callans had given those instructions in about mid 1998. As a result, the action against Dr Barker was "discoverable" under s 27E(2)(a) by about the end of 1999 and became statute barred at the end of 2005.

57 Counsel for Noah Callan respond that the Callans' behaviour must be assessed in the context of the Act as it stood in 1998. The Act then gave Noah Callan six years after his 18th birthday to commence the proceedings. It was the subsequent shortening of the limitation period with effect from 1 October 2003 which brought about a dramatic change in the circumstances.

58 Senior counsel argues that the Court should not be persuaded that the Callans ought reasonably to have instructed the solicitors to proceed in about mid 1998, in the circumstances to which Mrs Callan referred in the passage from her evidence which I have set out above.[4] Counsel for Noah further maintain that the Court should consider that the couple's behaviour was consistent throughout and take account of the fact that Mrs Callan contacted solicitors in 2004, on her own initiative, before discovering that the limitation period had changed.

59 I first note that, in so far as counsel for Healthscope seeks to make any relevant point, the issue for the Court is as to what the Callans would have found out, had they taken the reasonable steps which they ought to have taken[5], rather than all steps which could be characterised as reasonable in the circumstances and which they might have taken.

60 I am persuaded that, before the Callans were aware of the contents of Dr Barrowlough's 27 September 2005 report, neither of them knew or ought to have known in the relevant sense, as a result of taking the reasonable steps which they ought to have taken, that Noah's personal injury was caused by the fault of either of the defendants within the meaning of s 27F(1)(b) of the Act. Dr Barrowclough's report indicates his opinion that the labour was not monitored appropriately. It is not contested by counsel for Noah Callan that, for present purposes, the causes of action were relevantly discoverable once the report was obtained. In my view, the causes of action were not "discoverable" by either of the Callans under s 27E(2)(a) before 27 September 2005. Each of the limitation periods, therefore, extends to 27 September 2011 and each of the proceedings has been commenced within time.

61 I am not persuaded that instructing the solicitors to investigate the potential claim by in about June or July 1998, or at any relevant time before November 2004, was a reasonable step which the Callans ought to have taken within the meaning of s 27F(2). They were then a young couple about to travel to Japan for several years. They were of the view that they would have some difficulty in conducting litigation from that country. They did not have the necessary funds for the investigation process, although these could have been obtained by them. Significantly, notwithstanding what Dr Hewson had written in his 8 May 1998 report, they did not know the extent of their son's disability. They hoped that he would not be severely affected by his condition and Mr Callan was optimistic that this would be the case. The Callans had also consulted Dr Barker and received his reassurance as to the management of the labour. They were further aware of the additional and, in my opinion, highly significant fact that Noah had until he turned 24 to commence proceedings.

62 It follows that, even if I were to take the view that, once they received Mrs Callan's 17 November 2004 email, the solicitors might have acted more quickly to obtain Dr Barrowclough's report and that any part of their delay was properly attributable to the Callans, the limitation periods would not have expired before 17 November 2010 at the very earliest.

63 Paragraphs 24 of each of the defences should be struck out.

64 It is appropriate that I also indicate my view as to whether I would have granted the alternative applications for the extensions of the applicable limitation periods under s 27K , if I had determined that either of the proceedings was statute barred because the respective cause of action was discoverable earlier.

65 Under s 27K(2)(b), the Court may only extend the limitation period if it decides that it is just and reasonable to do so and subject to its obligation to have regard to all the circumstances of the case, including the matters listed in s 27L(1) which themselves encompass those listed in s 27L(2). Section 27M gives the Court power to extend time even though the limitation period has already expired or an action has been commenced. It is the applicant for an extension who bears the onus of persuading the Court that it is just and reasonable to grant it.[6]

66 In Tsiadis v Patterson[7] Buchanan JA described the applicable approach to the determination as to whether the limitation period should be extended under s 27K. Dealing with an application under s 23A, his Honour said:

The matters which the court is required by s 23A to take into account cannot all be weighed against each other. For example, prejudice to the [plaintiff] in being unable to recover any compensation cannot be measured against prejudice to the [defendants] in conducting [their] case. (Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1997) 186 CLR 541 at 549-50 per Toohey and Gummow JJ.) Rather, the court must synthesise a number of competing considerations in arriving at a conclusion that takes account of them all, bearing in mind that the [plaintiff] bears the onus of persuading the court that it is just and reasonable to extend the limitation period.[8]

67 The defendants resist the applications for extension made in the alternative. They address factors including those listed in s 27L(1) and (2) with some overlap.

S 27L (1)(e) discoverability of cause of action; and

S 27L (1)(g) the steps taken by the Callans to obtain medical and legal advice.

68 It is common ground that the total period of delay between the date the cause of action was discoverable and the date of the application for extension on 27 July 2007 should be taken into account. The date of the issue of the proceedings is a matter to which the Court should have regard.[9]

69 Counsel for Healthscope calculates that period as one of some nine years in the case of his client. He argues that it starts in about mid 1998, when, he contends, the cause of action against Healthscope was discoverable. Counsel for Dr Barker maintain that the relevant period in his case is some seven and a half years, commencing in late 1999.

70 The defendants argue that the Court should characterise the respective delays as inordinately long. They cite authorities including the Court's decision in Ford Motor Co (Aust) Ltd v Kulik[10] in support of the proposition. It is conceded, however, that those authorities pre-date the introduction of the statutory long stop period of 12 years in s 27E(1)(b).

71 Counsel for Noah respond that neither alleged period of delay should be described as inordinate in the context of the length of the then applicable limitation period. They submit that the authorities relating to the characterisation of delay should be considered in the context of the comparable length of applicable limitation periods.

The uncertainty as to the extent of Noah's disability

72 Counsel for Healthscope submits that the evidence as to the Callans' uncertainty about the extent of Noah's disability should be considered in light of their concessions in relation to the factors in s 27F(2)(a) and (c). He also argues that the Court should consider the impact of that uncertainty in the context of the "gloomy" view expressed in Dr Hewson's 8 May 1998 report.

73 Counsel for Healthscope argues that the Callans were reconstructing events when they said that, before leaving for Japan, they had discussed the available time in which Noah could bring an action. He submits that the Court should consider that it is at least possible that the limitation period may not have been discussed at the meeting with Slater and Gordon because the solicitors' notes do not advert to it and Mr Callan was unable to specifically recall the solicitor's statement about the time limit. Counsel did not cross-examine Mr Callan to that effect, explaining that the only basis for his assertion is the interpretation he seeks to put on the Callans' evidence.

74 The defendants seek to minimise the effects of any knowledge the Callans may have had about the length of the limitation period. They refer to the Couple's knowledge of the need to preserve evidence and the impact of failing memories and their views that records might not, in certain circumstances such as the closure of a hospital, be kept for longer than seven years.

75 Those representing Noah Callan respond that there is no evidence to suggest that the Callans would not have instructed the solicitors to proceed within any shorter limitation period of which they had been advised. They go so far as to attribute the delay to 1 October 2003 to the length of then current limitation period.

The difficulties of conducting litigation from Japan

76 Counsel for Healthscope submits that there is no evidence as to the nature of any anticipated difficulties involved in the conduct of litigation from Japan. He argues that it is likely that those difficulties would have been more imagined than real. He makes the point that, as things turned out, all necessary preparatory steps were undertaken in 2005 and the first half of 2006 from Japan.

77 Senior counsel for Dr Barker agrees and argues that this was not a sufficient reason for not proceeding, given the Callans' intention to return to Australia for visits from time to time and their acknowledged ability to communicate by email, telephone or letter. He contends that there is no evidence that they sought any formal advice from the solicitors as to any relevant difficulties.

78 Each defendant argues that the Court should view the Callan's difficulties in raising the necessary funds as a minor factor in the reasons for delay, given their concessions that the money would have been obtainable.

79 Counsel for Healthscope argues that Dr Barker's view that the management of the labour was reasonable would have been unlikely to have carried any weight with the Callans by the time they saw their solicitors, given that he was a potential defendant and that they had decided to seek legal advice.

80 Counsel for Dr Barker also submit that the effect of any alleged reassurance from Dr Barker should be assessed in light of Mrs Callan's concerns and views about the management of her labour.

81 Counsel for Noah respond that, at the very least, Dr Barker's advice should be regarded as having obscured the issue as to whether the Callans should have proceeded at that stage, in light of the solicitors' advice that the case would be hard to prove.

82 Counsel for Healthscope submits that his client will be unlikely to have a reasonably fair trial of the claim in light of what he characterises as a nine year delay.

83 The defendants both concede that there is no evidence of specific prejudice, but refer to the presumptive general prejudice resulting from delay and to the disadvantages of failing memories and the like canvassed by McHugh J in Brisbane South Regional Health Authority v Taylor[11].

84 Counsel for Healthscope submits that the case will turn on a reconstruction of events on the 28 January 1997 between 1.00 am and 5.47 am. He argues generally that "written records only go so far" and that, given the likelihood of fading and unreliable memories, the situation might have been different if action had been taken in 1998.

85 Counsel for Noah respond that any prejudice is minimised because the defendants were on notice of the proceedings from mid 2005, once they received requests for their records. Further, the issue identified by the pleadings and the expert reports relates to a failure to conduct CTG or other appropriate monitoring of the labour - a matter covered by available hospital records.

S 27L(1)(c) the extent to which the defendants took steps to make available means of ascertaining relevant facts; and

86 As I have already noted, counsel for Noah Callan do submit that Dr Barker's reassurances as to the management of the labour did have the effect of obscuring the issue as to whether the Callans should have proceeded at that point.

S 27L(1)(f) the extent to which the Callans acted promptly once aware of the possible cause of action

87 Neither of the defendants contends that the Callans delayed once they had the requisite knowledge, conceding that it would not be inappropriate to say that they acted very promptly whenever they were asked to do something by the solicitors.

S27L(2)(b) The nature and extent of Noah's loss

88 The defendants concede that Noah Callan has sustained a substantial loss.

89 Senior counsel for Dr Barker also addresses the issue as to whether Noah might have an action against Slater and Gordon if he were to fail in the extension application. He contends that there were significant delays on the part of Slater and Gordon after they received Mrs Callan's November 2004 email. He refers to Ms Shelton's frank concessions about the undesirability of various delays in responding or acting on her part.

90 He, nevertheless, does concede that there was no evidence before the Court as to reasonable practice of solicitors or other matters which might enable it to assess whether or not Slater and Gordon were negligent and whether Noah Callan would have a cause of action against them. He refers to the relevant statement by Young CJ in Tavsanli v Philip Morris (Australia) Ltd where his Honour pointed to the impossibility of forming an opinion about the likely outcome of proceedings by a plaintiff against solicitors absent any investigation of the relationship between them.[12]

91 Senior counsel for Noah argues that, whilst it might be possible to criticise some of the identified delays which Ms Shelton concedes were undesirable, those delays were explicable in all the circumstances of the case. He contends that there is no basis on the evidence for concluding that this is a clear case where a plaintiff has a cause of action in negligence against Slater and Gordon.[13]

92 Even if I had concluded that Mr Callan, as Noah's litigation guardian delayed making the application for extension of the limitation period for as long as nine years after Noah's cause of action was discoverable under s 27E(2)(a), I would not have considered the delay to be inordinate in the context of the length of the limitation period up to 1 October 2003 and all the circumstances.

93 The Callans had many good reasons for their decision not to proceed in mid 1998. They were a young couple about to leave for several years of work as teachers in Japan with two young children, one of whom was disabled. They had been led to believe that it would be difficult to conduct litigation in Australia from Japan. They did not have the necessary funds to commission the investigations of a potential claim, although the money was available to them. They did not know the extent of their son's disability, even though they knew that his injury was sufficient to justify a claim. They were hopeful about his prospects. Although Mrs Callan had real concerns about the way in which her labour was managed, Dr Barker had told the couple that his review of the file had indicated to him that the management of the labour was adequate. (It should be clear from my findings of fact that I accept the Callans' evidence about the effect of Dr Barker's advice to them in this regard).

94 The Callans had consulted solicitors at the urging of family members and had received advice to the effect that they would need clear evidence of negligence. They had also been told that Noah or those representing him had some 22 ½ years to bring proceedings. (I have also indicated that I accept their account that this advice was given to them by Ms Lawson in conference.)

95 The extent of Noah's disability slowly became evident to his parents over the next few years. They took action late in 2004 when it was planned that they would return to Australia in 2005. They were then ignorant of the 2003 reduction of the limitation period. After instructing solicitors to proceed, they acted promptly at all times in response to any request from the firm and reasonably believed that the legal process took time. Although concessions were made by the solicitor that steps perhaps should have been taken more quickly, there is insufficient evidence to conclude that Noah Callan would have a right of action against Slater and Gordon in negligence if the proceedings were held to be statute barred.

96 The defendants failed to identify any specific prejudice, relying upon the general presumptive prejudice arising as a result of delay. It does appear, however. from the pleadings that the issues may well be confined to the management of the documented labour and, in particular, to the adequacy of the foetal heart rate or other monitoring. Although some recollection of events by witnesses might be required, it appears that relevant medical records will be available for use as evidence.

97 If I had concluded that the limitation periods had expired, because the causes of action were discoverable even as early as counsel for Healthscope contends, I would have been satisfied that the respective limitation periods should, nonetheless, have been extended to the dates sought. Noah Callan would have persuaded me that it would be just and reasonable to exercise the Court's power under s 27K(1)(b) to do so.

[2] See: Paget v JLT Workers Compensation Services Pty Ltd [2005] VSCA 144; (2005) 12 VR 692 at 699 [29] per Callaway JA.

[3] See: Caven v Women's and Children's Health [2007] VSC 7; (2007) 15 VR 447 at 464 [56] per Kaye J.

[5] See: Caven v Women's and Children's Health [2007] VSC 7; (2007) 15 VR 447 at 467 [69] per Kaye J.

[6] Bell v SPC Ltd [1988] VicRp 16; [1988] VR 123 at 126 per Brooking J.

[7] [2001] VSCA 138; (2001) 4 VR 114.

[8] [2001] VSCA 138; (2001) 4 VR 114 at 123 [33].

[9] See: Repco Corporation Ltd v Scardamaglia [1996] VicRp 2; [1996] 1 VR 7 at 11 per Smith J; Lord v Australian Safeway Stores [1995] VICSC 212; [1996] 1 VR 614 at 625 per Phillips JA.

[10] [1988] VicRp 20; [1988] VR 152 at 157.

[11] [1996] HCA 25; (1996) 186 CLR 541 at 551.

[12] Unreported, Supreme Court , 18 September 1989) at 11.

[13] In Repco v Scardamaglia [1996] VicRp 2; [1996] 1 VR 7 at 15 Smith J noted the significance of the absence of a relevant admission and full investigation of the issue; see also Tsiadis v Patterson [2001] VSCA 138; (2001) 4 VR 114 at 116 per Ormiston JA.