CENTRAL SYDNEY AREA HEALTH SERVICE v COOPER

Court of Appeal (NSW)|2001-08-16|Before: Mason P, Sheller JA, Studdert J

Background By a statement of claim filed in the District Court in 1999 Therese Cooper sued Central Sydney Area Health Service (the appellant) (as it happens under the wrong name, but this was later amended), to recover damages she said she had suffered as the result of an incident that occurred on 29 January 1998 when Ms Cooper was working in the appellant's employ. The proceedings were referred to arbitration under the Arbitration (Civil Actions) Act 1983; s63A of the District Court Act 1973. On 9 February 2000 the arbitrator made an award in favour of Ms Cooper in the sum of $227,302.36 in addition to weekly and s60 payments under the Workers Compensation Act 1987. 3 On 6 March 2000 the appellant applied for an order under s18(2) of the Arbitration (Civil Actions) Act for the re-hearing of the action "limited to the issues of liability and contributory negligence". On 14 April 2000 the matter was called over before the Registrar and an order made that the re-hearing be limited to liability. The case was estimated to take one day plus. It was set down for hearing on 17 July 2000. On that date the matter was listed for trial but not reached. It appears that a hearing status sheet was signed by counsel for the parties which, while not attaching schedules of medical and expert reports as required, contained handwritten information about the amount claimed for out-of-pocket expenses, future out-of-pocket expenses, past loss of wage, future economic loss/loss of earning capacity and a Griffiths v Kerkemeyer ((1977) 139 CLR 161) claim. 4 In August 2000 Ms Cooper served additional medical reports on the appellant. Before or after the service of those reports (which is not known) the appellant's solicitors sought an update of comparable wage earnings and worker's compensation payments from Ms Cooper's solicitors. On 5 October 2000 Ms Cooper's advisers notified the appellant's advisers that she intended to submit to the trial Judge that the matter should proceed as a full hearing on all issues. 5 On 11 October 2000 the proceedings were listed before His Honour Judge Mahoney QC. Mr G Little of counsel appeared for the appellant. Mr D Hooke, counsel for Ms Cooper, when asked the estimated duration of the case, said that that depended upon the determination of a preliminary issue which concerned the scope of the action. Counsel described that issue as one about whether the Registrar's order was a general order for re-hearing or whether it was a re-hearing limited to issues of liability and contributory negligence. Mr Little said: "The question as I understand it, that it may be a full re-hearing sought by the plaintiff respondent to this application. It was only raised late last week with the service of very recent medical material and the like. The matter has been previously listed for re-hearing and no suggestion was made at that time it was anything other than a re-hearing directed purely to liability and contributory negligence. If it's a full re-hearing the defendant applicant for the re-hearing has not prepared the case as a full re-hearing on all issues and I doubt, or certainly has gathered no evidence to refute the recent medicals that's been served presumably in support of a full re-hearing case. So we'd be caught short if it goes on as a full re-hearing, your Honour." 6 Part of the debate before his Honour was whether there was any need for the Court to make an order varying the scope of the re-hearing. However, by reference to the file, his Honour pointed out that at 14 April call-over the re-hearing had been limited to liability. 7 Judge Mahoney then gave a judgment which began as follows: "The order I make is as follows. This will be a full re-hearing of the arbitration. The order is made in the knowledge that the application for the re-hearing would be on the issue of liability and contributory negligence only. That expectation was founded upon the basis of the application signed by the solicitor for the defendant on 6 March 2000 in the form entitled 'Application for Re-hearing of Arbitrated Action' filed in the Court on 7 March 2000. That expectation no doubt was shored up by the minute of the order made at the callover on 14 April 2000 by the registrar where it is noted that the matter was for re-hearing 'limited to liability/contributory negligence', estimate one day plus." 8 Later in his reasons his Honour said: "The matter is further complicated by the fact that in August 2000 the plaintiff served what were taken to be updated medical reports on the defendant. I have not been told the terms of the letter under cover of which they were served, but bearing in mind the names of the legal representatives of the plaintiff and defendant respectively, and taking judicial notice of the fact that neither firm of solicitors is by any stretch of the imagination a stranger to the portals of this jurisdiction in this sort of litigation, it would have been as plain as a pikestaff, on receipt by the solicitors for the defendant of these reports, that they were being served with a view to being used at the hearing listed for today, 11 October 2000.

The defendant elected to take the view that it had only sought a re-hearing on liability and contributory negligence and that the plaintiff, having failed to make an application to expand the grounds of the re-hearing, would have to fail by virtue of its inactivity in seeking to expand the grounds of the re-hearing. Last week, apparently, the plaintiff's legal representatives informed the defendant's legal representatives that it was pressing on with the matter as, if I can put it this way, an all grounds hearing." 9 His Honour then dealt with the appellant's submission that it would be irretrievably prejudiced if Ms Cooper were allowed to contest all aspects of the re-hearing. His Honour continued: "This situation could engage the earnest attention of university classes year after year in the practice and procedure courses but what I propose to do, it having taken forty-five minutes of the court's time to get this far, is to apply commonsense and to note that the irretrievable prejudice mentioned by Mr Little is really only, with respect to him, a prejudice which is irretrievable because he let the cat out of the bag at the bar table as to what might happen if an adjournment was granted. It was open to him not to have let that cat out of the bag and just to have worked on the basis that the plaintiff's experienced lawyers no doubt would have told their client anyway that she would have been observed by the insurance company's investigating team with cameras and video recorders. So, then, the matter of irretrievable prejudice is of academic interest, as far as I am concerned, but it has got no persuasive value whatsoever in this case. I think the appropriate course is to give Mr Hooke the leave which he has elected not to pursue. That is to expand the sense of the order and to direct that this is a matter for re-hearing on all grounds." 10 Counsel let "the cat out of the bag" by indicating that his client may have organised investigations and observations if it had known that the Griffiths v Kerkemeyer claims were to be pressed. This brought from Judge Mahoney the observation "You'll never be able to do it now because you let the cat out of the bag from the bar table on behalf of your client". The last paragraph in the quotation refers to Mr Hooke's perseverance with the submission that he needed no amendment of the order for the re-hearing of the action. 11 Having delivered his judgment, his Honour asked counsel whether they were ready and Mr Little said "No your Honour, I don't have any of my medical evidence available. The matter will take three days now so I will be able to have it by next week, your Honour I would have to take instructions on that." 12 Mr Little sought a quarter of an hour to see what he could do about arranging evidence to meet the case. An opportunity was given to the instructing solicitor to leave the Court and seek to make "appropriate arrangements". Mr Little indicated that he was seeking instructions to withdraw the application for re-hearing in light of the Judge's decision. Mr Hooke then opened his case and in due course Ms Cooper was sworn and examined. At the conclusion of her evidence, Mr Hooke tendered a bundle of medical reports. Mr Little objected to one of those reports on the basis that the doctor had been asked to come for cross-examination that day. His Honour observed: "If it's a late service of a report and if he is not available for cross-examination if you still want it next Tuesday then I think you will have to do without him."

It was pointed out that the report was one which had been served in August. Counsel for the appellant remarked that his client would have asked for the attendance of the doctor had it been realised that there was to be a full hearing. His Honour said that he would admit the documents into evidence but hear submissions as to why they should be rejected. 13 The next witness was Marcia Lusted, a certified professional ergonomist. Her evidence continued for the rest of the day. The matter was adjourned to Monday morning 16 October 2000. By that date counsel for the appellant had changed. Mr McIntyre SC now appeared for the appellant. The transcript noted an application by Mr McIntyre for an adjournment on the ground that the appellant was not in a position to meet Ms Cooper's case on quantum without independent assessment. The argument is not recorded in detail. His Honour gave judgment. The reasons for judgment are short and it is appropriate to set them out in full: "This morning, Mr Little no longer appearing for the defendant for the reason forecast to me last week, is now replaced by Mr McIntyre of senior counsel. Mr McIntyre at the commencement of this morning's proceedings applied for an adjournment in a customarily thorough, measured, succinct form. Mr McIntyre articulated his application as being based upon the inability to meet the claim for personal care, what I will refer to as a Griffiths v Kerkemeyer claim, including its expanded Sullivan v Gordon component to encompass as much as 25.5 hours per week for the rest of the plaintiff's life. It was put that the author of the report upon which the claim is based is in an advanced state of pregnancy and unable to attend court for cross-examination. Despite Mr McIntyre's well known capacity to understand all about cleaning bathrooms and vacuuming carpets and so forth, he says nevertheless in view of the ramifications of this particular Griffiths v Kerkemeyer claim extending to the plaintiff's claimed inability to render erstwhile pre accident care and attention for her own mother, who is in an aged care unit, he is not able to adequately represent the defendant's case, and that this component of the plaintiff's claim could reach a figure as high as $400,000.

The Griffiths v Kerkemeyer component is based on evidence available from Miss Meury, an occupational therapist, Dr Condon a general practitioner, and Dr Phillip Marnie a consultant orthopaedic surgeon. Mr Hooke, learned counsel for the plaintiff, has drawn attention to the fact that the plaintiff's claim is only, on one view of it likely to be 25.5 hours per week, but that in any event the full ambit of the plaintiff's claim had been particularised in January this year, before the matter went to arbitration and the reports of doctors Condon and Marnie were served in August this year. Two months before the hearing began last week before me, his solicitors wrote to the solicitors for the defendant seeking up to date comparable wage earnings and workers' compensation payments. In short, Mr Hooke's proposition was that: (a) Any experienced firm of solicitors handling this matter for the defendant, and that is a category into which the solicitors for the defendant quite clearly fall, was fairly and squarely on notice that the plaintiff was treating this as a full re-hearing.

(b) That in the case, the name of which I can't recollect, but a decision a few years ago in the Court of Appeal, the then Chief Justice of this State, Chief Justice Gleeson said that defendants were not to be entitled to use arbitration hearings as a 'dry run'.

(c) That this Griffiths v Kerkemeyer ground for an adjournment application, if it had any merits at all, ought to have been raised last week rather than this week. Dealing with those three applications in reverse order, I can well understand how different minds appearing for the defendant at the bar table might see different chances of success in an application for an adjournment, based upon different considerations. So that the third attack on the application for an adjournment does not do much to blunt the force of the application. However, it seems to me that if it were wholly and solely a question of whether or not the defendant had used the arbitration hearing as a dry run, I would be disposed to reject the application for an adjournment." 14 It is useful immediately to comment. In the first place, Judge Mahoney seems to have accepted, and certainly did not reject, that counsel was not able adequately to represent the appellant's case in so far as it was based on Griffiths v Kerkemeyer. Secondly, the application seems to have been rejected because the appellant, in his Honour's mind, had used the arbitration hearing as "a dry run". To that may be added, from such of the interchanges between counsel and the Judge that occurred on 11 October, and the reasons for judgment themselves that the appellant's solicitors must have realised that the medical reports served in August 2000 were being served with a view to being used at the hearing on 11 October 2000. 15 The "dry run" reference related to what is apparently agreed, namely that the appellant called no evidence on damages before the arbitrator. However, understandably, the appellant was, if liable, prepared to accept the quantum of damages awarded. Its application was for a re-hearing limited to the issues of liability and contributory negligence. At no stage until 11 October 2000 did Ms Cooper apply for a re-hearing on damages. No reason was advanced for this beyond her solicitors' mistake about the nature of the order made. The error was her solicitors' error. 16 At the hearing before the arbitrator it was open to the appellant to call no evidence on damages. By calling no evidence the appellant obtained what was regarded in terms of quantum as an acceptable result. If the appellant had suffered what it regarded as an excessive award of damages and had then applied for a re-hearing on quantum, so far as I am aware, there was nothing to prevent it from calling such evidence on damages as it wished at the re-hearing. There was a costs risk in doing so. If it succeeded on the re-hearing where it failed in the arbitration because of evidence not tendered but available at the time of the arbitration, it may have suffered a penalty in costs on the basis that had the evidence been produced at the arbitration a re-hearing would have been unnecessary; see MacDougall v Curleveski (1996) 40 NSWLR 430. In that case at 433-4 Priestley AP observed: "What, to my mind, was the principal ground of attack, was that the trial judge had erred in law in saying that the defendants' decision not to call the bar manager before the arbitrator so as not to show their hand if the matter were later re-heard was 'wrong' and that it was 'not allowable to wait and see what is going to happen by not calling evidence'. If the trial judge has based his decision on these views, I would agree that he acted on a wrong basis. As Kirby P made clear in Quach [Quach v Mustafa (Court of Appeal, 15 June 1995, unreported)] it is open to a party to follow a course of the kind chosen by the defendants in the present case. There is no provision or practice, so far as I am aware, that can, as a matter of law, preclude a party from deciding what evidence that party will call in a District Court action referred to an arbitrator. The position adopted by the Court in Quach, as explained by Kirby P, which in my opinion is a sound one, is that although a party may choose such a course as was followed in Quach and analogously in the present case, if that course either caused or might have caused waste of public and private time and costs, then the fact that the party had chosen that course was something proper to take into account in considering the costs of the arbitration and the re-hearing; that is, a party adopts such a course at the party's risk as to the costs consequences. Further, in my opinion, the court considering the costs questions is entitled to take into account, in deciding what the consequences of such a course should be, the desirability of actions referred to arbitrators for determination being determined once and for all by the arbitrator. The whole scheme of referred actions in the District Court is aimed at speedier and cheaper decision of disputes, which by definition of the conditions subject to which actions may be referred to arbitration, are suitable for such decision. The scheme is not one designed to provide successive hearings by arbitrator and judge as a regular matter in which the first trial is to be regarded as a practice run, but rather one where the first trial is intended to be the final trial, subject to the re-hearing safeguard in the occasional, out of the ordinary, case. It seems to me, therefore, quite legitimate for courts in making costs orders, to promote, in appropriate cases, the use of the referred action system in what in my opinion is the intended way." At 438 Cole JA observed:

"It is clear that neither the Act nor the Rules compels a party to call evidence before an arbitrator or on a re-hearing. However where the court, here the District Court, has directed that an arbitration occur in an action before it, and a party decides for forensic purposes not to call available evidence at that arbitration but to reserve such available evidence for use at the trial if a re-hearing is requested, such action is likely to result in increased costs and delay. It is contrary to the intention and spirit of the legislation to which I have referred, enacted to reduce delay and reduce costs, that a party should act otherwise than by conducting the arbitration as though it were, as it is intended to be, a hearing of the action. That means that a party should call its evidence. If it does not do so and additional costs are thus involved, it can be expected that judges in exercising their unfettered discretion regarding costs of the hearing, and of the arbitration, will have regard to the factor of additional costs so incurred. If the trial judge forms the view that, had the withheld evidence been called at the arbitration, the result of the arbitration was likely to have been different, and the subsequent court proceedings thus were likely to be unnecessary, that is a factor which it is permissible to consider in the exercise of the discretion as to costs."

I do not read the third member of the Court, Simos AJA, as in any way differing from the views expressed by the other members of the Court. 17 Accordingly, in my opinion, if as Judge Mahoney seems to have accepted, counsel for the appellant was not able adequately to represent the appellant's case, the belief that it had used the arbitration hearing as a dry run was not a ground for refusing the adjournment. The appellant was entitled to defend the claim in the District Court on the re-hearing relying on such material evidence as it chose. 18 Further, with due respect, I do not regard the fact that the appellant's solicitors were fairly and squarely on notice that Ms Cooper was treating the hearing in the District Court as a full re-hearing, required that the appellant proceed without adequate preparation. The order for re-hearing was limited to liability and contributory negligence. Due to their error, Ms Cooper's solicitors apparently never applied to have the ambit of the re-hearing extended. Indeed, the argument put on behalf of Ms Cooper depended upon at best an ambiguous notation made in the Registry on the appellant's application form. The application form clearly stated that the application was "for the re-hearing of this action, limited to the issues of liability and contributory negligence." The notation read: "This application was filed on ………. and a re-hearing of the action before the Court is ordered.

The action will be listed before the Court for re-hearing on….."

Underneath that was the Registrar's signature and underneath that the words "Callover 14/4/00 2.30pm". 19 To my mind, the notation has to be read in the context of the application and fairly could mean no more than that a re-hearing on the limited basis applied for was ordered. In any event, it is clear enough from the District Court continuation sheet, which notes results or orders made, that the order made by the Registrar on 14 April 2000 was for a re-hearing limited to liability and contributory negligence. It is true that the appellant's solicitors might have asked why medical reports had been served. The fact that they wrote seeking up to date comparable wage earnings and workers compensation payments suggests that the solicitors believed that the quantum of damages was an issue yet to be determined. But any inquiry was almost certain to draw from Ms Cooper's solicitors the response, which they maintained until Judge Mahoney gave judgment on 11 October, that the order was for a re-hearing on all grounds. They would have been well advised to apply to have the order for re-hearing amended; s18A(6) of the Arbitration (Civil Actions) Act. 20 However all that may be, the fact remained that at short notice on 11 October Judge Mahoney amended the re-hearing order and that when the matter came back for hearing on 16 October, five days later with an intervening weekend, the appellant's counsel was not able adequately to represent the defendant. 21 Ms Cooper pointed out that no application for adjournment was made on 11 October and asserted that there was sufficient time to get ready between 11 and 16 October and that if an adjournment were granted a considerable time might elapse before Judge Mahoney could resume the hearing because of other commitments in the court's criminal jurisdiction. 22 On 16 October 2000 having given the judgment which I have quoted, his Honour continued: "It is not wholly and solely that because the plaintiff's witness upon whom reliance is based, namely Miss Meury is the subject of medical certificate to say that she is not fit enough to attend court because of her advanced state of pregnancy.

It seems to me that in this early part of the twenty first century what the court ought to do is to keep both feet on the ground and to provide the defendant with that level of opportunity to defend the case, which it would have had if Ms Meury was present at the court today or tomorrow and available to be cross-examined. Accordingly I am going to ask Mr Hooke why could not some telephone hook up be made so that Ms Meury could be cross-examined by telephone on her reports." 23 Counsel for the appellant reiterated his difficulty of not being in a position properly to cross-examine the witness. The following interchange took place: "McINTYRE: Your Honour at that time we had an order that the hearing be limited and accordingly nothing was done about it your Honour, that is the whole problem.

HIS HONOUR: With respect no you didn't, you thought you did but I have ruled on this last week. Mr McIntyre the form of the order was different. True it is the minute endorsed by the Registrar was liability only but if the order was made in accordance with the rules of court, and I have covered this in the ruling last week, he had no jurisdiction to make an order limiting the scope." 24 The transcript and reasons for judgment given by Judge Mahoney make no reference to any question about the Registrar's jurisdiction. Clearly enough, s18A(4) of the Arbitration (Civil Actions) Act provided that the Court or Registrar might in an order for re-hearing direct that the re-hearing be a full or limited re-hearing as the Court or Registrar thought appropriate. The following interchanges took place in the transcript: "McINTYRE: Apart from those questions the defendant does not suggest to the contrary, was anything other than but, under the impression that the hearing was to be so limited, but your Honour I don't feel I can appropriately go back over those grounds again.

HIS HONOUR: I would have to go over the same grounds of my judgment again. The only question I am inviting you to comment on Mr McIntyre is what could be wrong with Miss Meury sitting at a telephone, the conference line open, and we all hear what she would have to say in cross-examination, just the same as if I had said your application is refused, call Miss Meury. McINTYRE: Because for this reason your Honour, there would appear to be no reason why she could not attend court when she has given birth and is able to come to court and evidence from the witness box is always better than evidence in the fashion your Honour suggests, because your Honour can see the witness and form an impression of that particular witness.

HIS HONOUR: I think McHugh J had a few words to say about demeanour didn't he?

McINTYRE: Your Honour I don't recall them off hand, but my submission in response to what your Honour has said is that it would be different if the witness was unable to come to court for a period of six months or a year, but it seems that is not the case and in my submission the interests of justice would be better served if the matter were adjourned until she could come here. HIS HONOUR: Well perhaps those instructing you did not fill you in on the extra detail that I think I mentioned last Wednesday, namely that come close of business on Wednesday of this week, I am listed to sit in crime until the short vacation next year.

McINTYRE: Your Honour I hear that, I can't say anything in response to that. Your Honour I can't say anything more than I have said, it would be preferable to have the witness here and I just repeat what I said before that. The cross-examination will necessarily be based upon intuition without any assistance to me of any independent assessment of the care required. It would be different if there had been a formal notification by the plaintiff's solicitors months ago that they would be making an application to have this appeal dealt with as involving all issues. But the first we knew about it in that sense was last week. Mr Little came to court only armed with the brief to deal with liability, he did not even have the quantum aspects of the case in his brief. It has taken us totally by surprise your Honour. I would find it extremely difficult to conduct any meaningful cross-examination of any witness, particularly the occupational therapist because I have nothing upon which I can base my questions other than a feeling of intuition, which in this case involving an assessment of the plaintiff's residence and her mother's position, I just have no idea.

HIS HONOUR: Well Mr McIntyre, I made the order I made last week.

McINTYRE: I accept that your Honour, I will have to.

HIS HONOUR: You and your predecessor are entitled on the brief, and your instructing solicitors have had the time between then and now to get on top of the quantum evidence.

McINTYRE: With respect your Honour it is impossible to get on top of that aspect of the case without a visit to the plaintiff's house and an assessment of the plaintiff's mother, and that is not a matter that can be done in a couple of days. With respect your Honour I really would find it impossible to deal with the witness without some real basis to put questions, otherwise I will be putting hypothetical questions, and it is an impossible situation for me to deal with. HIS HONOUR: If we were talking about rocket science, and fixing up an inter-stellar vehicle remotely on the other side of the moon that no one could look at, there might be a lot more mileage in your submission, but Mr McIntyre you have got the disadvantage of me knowing how competent you are in these fields. I think I have had cases against you, I have certainly led you in that great case that I remember you talked me out of persisting with one particular point and then we re-instated in the Court of Appeal. You have been doing it for a long time and have got time to be adequately protected. But in any event you are not going to get an adjournment forthwith. Dr Marnie is outside, I assume he has walked into court in anticipation of being called in this case Mr Hooke?

HOOKE: Yes your Honour." 25 Dr Marnie then gave evidence. After his evidence was completed the following interchanges took place: "McINTYRE: Your Honour can I mention another matter, I understand from a list of documents given to me that a report last week was tendered, the general practitioner Dr Condon--

HIS HONOUR: Two reports, 28 November, 4 August, exhibit H(1) and H(2) respectively.

McINTYRE: Your Honour I don't know what Mr Little said last week in relation to the attendance of doctors, but Dr Condon has an assessment of the amount of domestic care that would be required, I understand that that doctor has not been requested to attend for cross-examination. There were no steps taken before last Wednesday of course by the defendant because it was not of the belief that quantum would be an issue. I would have wished to cross-examine that doctor in a similar fashion to the questions that I put to Dr Marnie. But under the new rules of course it is the defendant's obligation to obtain the doctor's attendance. In that event I would be forced to make an application for an adjournment to call that doctor, but I don't have any further submissions to put to your Honour in support of that application beyond those that I have already put. HIS HONOUR: In addition to dealing with your application the way I did earlier, I also indicate to you that when Dr Marnie was here I sought perhaps to intrude and to trial [sic trail] the judicial coat tails to indicate that I am no stranger to how to look after a house and particularly when you are downsized from a full home to a home unit, the constraints on size in laundries and matters of that nature. It may well be that these villas have a rule that you can't have clothing outside anyway.

McINTYRE: I am sure we will hear very soon your Honour.

HIS HONOUR: The reality of the matter is that even if I have got to go down the Sullivan and Gordon track as a matter of law, I have got to go down that track with both feet on the ground and use my commonsense.

McINTYRE: I will accept your Honour's, as I have to of course, your Honour's ruling on my early application, does apply to this as well, but in the same form I make the application.

HIS HONOUR: I am just in some sort of avuncular way dismissing it. Yes Mr Hooke?"

26 On 16 October the question about Ms Meury's evidence was taken up and a question put about arrangements for a telephone hook up. It was announced that there were various problems about arranging this. By 17 October an arrangement had been reached between counsel. This involved withdrawing part of the tender of Ms Meury's report, and counsel for the appellant withdrawing the requirement for the witness to be cross-examined without an admission that that degree of care was necessary and leaving open that issue. Counsel agreed that no Browne v Dunn (1894) 6 R 67 submission would be put in relation to the admission of that document in that form. At the close of Ms Cooper's case, Mr McIntyre announced that there had been difficulty in contacting a particular doctor. A further application was made for an adjournment to enable counsel to speak to the doctor. Counsel stated that he was not in a position to say whether or not he would have medical evidence to call. That application for an adjournment was refused. No evidence was called for the appellant. 27 On 17 October the learned Judge reserved his decision. On 11 December 2000 he gave judgment for Ms Cooper in the sum of $782,319. Included in the damages was an award of $288,900 for domestic assistance.

Grounds of appeal 28 In it supplementary notice of appeal, which the Court gave leave to the appellant to file, the appellant relied upon the following grounds: "2. His Honour erred in refusing the appellant/defendant's application for adjournment made at 10.00 am (or thereabouts) on 16 October 2000 in that he:

(c) failed to find that the refusal of the adjournment would prejudice the appellant/defendant in the presentation of its case;

(d) otherwise decided the application so as to deny the appellant/defendant procedural fairness. 3. His Honour erred in refusing the appellant/defendant's application for adjournment made on the morning of 16 October 2000 (see page 2.7 of the transcript of evidence) to enable Miss Meury to be cross examined in court in that the:

(c) failed to find that the refusal of the adjournment would prejudice the appellant/defendant in the presentation of its case;

(d) otherwise decided the application so as to deny the appellant/defendant procedural fairness. 4. His Honour erred in refusing the appellant/defendant's application for adjournment made on the morning of 16 October 2000 (see pages 9.7 to 10.3 of the transcript of evidence) to enable Dr Condon to be called for cross examination purposes in that he:

(c) failed to find that the refusal of the adjournment would prejudice the appellant/defendant in the presentation of its case;

(d) otherwise decided the application so as to deny the appellant/defendant procedural fairness. 5. His Honour erred in refusing the appellant/defendant's application for adjournment made on the afternoon of 16 October 2000 (see page 36.7 of the transcript of evidence) and renewed on the morning of 17 October 2000 (see page 8.5 of the transcript of evidence) to enable Dr Rushworth to be called for cross examination purposes in that he:

(c) failed to find that the refusal of the adjournment would prejudice the appellant/defendant in the presentation of its case;

(d) otherwise decided the application so as to deny the appellant/defendant procedural fairness." 29 The remaining grounds of appeal challenged aspects of the assessment of damages. The Court indicated that it would deal first with grounds 2 - 5. If the appellant failed on those grounds to have the judgment of Judge Mahoney set aside the Court would return to consider the other grounds relied upon. 30 Grounds 2 - 5 were directed to the events of 16 and 17 October 2000. But the appropriateness of the refusal of several applications for an adjournment on those days must be measured with regard to the scope of the Registrar's order for re-hearing and the appellant's state of readiness on 11 October 2000 to meet a re-hearing of Ms Cooper's case on damages. It was to the credit of counsel for the appellant that he attempted to be ready to proceed on 16 October. The attempt was not successful, or entirely successful, and by that date there were further problems. New counsel had been briefed for the appellant. A witness critical to the Griffiths v Kerkemeyer component of the damages case was unexpectedly unavailable for cross-examination. In the result, this appeal focuses on the events of those two days.

Justice - the paramount consideration 31 In Cropper v Smith [1884] 26 ChD 700 at 710 Bowen LJ, in a passage which has more than once been approved by the High Court, said: "Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. Speaking for myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace." 32 In Clough and Rogers v Frog (1974) 48 ALJR 481 an application, made two days before the actions were listed for hearing, to amend the defences by adding a new defence, had been refused. The High Court said at 482: "With the exception of the suggestion of prejudice arising in respect of the loss of the possible claim against the nominal defendant, the matters relied upon by the respondent in opposition to the amendment sought go at the most to delay and irregularity only, matters which are relevant to costs but do not constitute injustice to the respondent in the sense in which that expression is used." 33 State of Queensland v JL Holdings Pty Limited (1997) 189 CLR 146 was an appeal to the High Court from the Federal Court of Australia (Full Court). The judge, who had assumed management of the proceedings and was designated to hear them, refused leave to add a defence which it was said was likely to result in the vacation of the date fixed for the trial six months ahead. The judge had expressed the view that maintaining that date was a more pressing consideration than a party's right to present a further defence. The majority in the Full Court which heard the appeal from that decision, after referring to the judgment of Toohey and Gaudron JJ in Sali v SPC Limited (1963) 67 ALJR 841 at 849 in which their Honours said that the contemporary approach to court administration had introduced another element into the equation or, more accurately, had put another consideration on to the scales, remarked that "times have changed since 1884, and even since 1974", an allusion to Cropper v Smith and Clough and Rogers v Frog. Their Honours said. "The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard are pressing concerns to which a court may have regard." 34 In a joint judgment in the High Court (189 CLR at 154) Dawson, Gaudron and McHugh JJ said that this passage from Sali was not to be taken as sanctioning any departure from the principles established in Cropper v Smith and accepted in Clough and Rogers v Frog. Sali v SPC was a case in which at least one member of the Victorian Supreme Court (Full Court) had regarded the application for an adjournment, which the Full Court refused, as smacking of humbug. In Sali at 848 Toohey and Gaudron JJ referred to Carryer v Kelly (1969) 90 WN (Pt 1) NSW 566 at 569 where Asprey JA, dealing with an adjournment until a time later in the day because of the unavailability of counsel, remarked: "An adjournment which, if refused, would result in a serious injustice to the party applying for it should only be refused if that is the only way that justice can be done to the other party." 35 Their Honours also referred to Sydney City Council v Ke-Su Investments Pty Limited (1985) 1 NSWLR 246 where Kirby P, as his Honour then was, said of an application for an adjournment: " If not granted, although appeal courts will rarely intervene to review the refusal of an adjournment, they will do so if the discretion has not been exercised judicially or where its exercise was based upon the wrong principle or resulted in gross injustice." 36 In State of Queensland v JL Holdings Pty Limited at 154-155 Dawson, Gaudron and McHugh JJ said of Sali: "However, nothing in that case suggests that those principles might be employed, [principles of case management], except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim." 37 At 155 their Honours said: "Justice is the paramount consideration in determining an application such as the one in question. Save in so far as costs may be awarded against the party seeking the amendment, such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management, involving as it does the efficiency of the procedures of the court, was in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties. In taking an opposite view, the primary judge was, in our view, in error in the exercise of her discretion." 38 The fourth member of the Court, Kirby J, said at 164: "As the function of judicial directions to control substantial and complex litigation increases with new techniques of case management, it is appropriate that appellate courts should pay more than lip service to the primacy of the trial judge in such matters. They should do so out of a recognition that the pressures on appellate courts, and the techniques available for their decision making, will often deprive them of a full appreciation of all the factors which have led the primary judge to his or her conclusion." 39 In the present case, due acknowledgment must be given to the trial Judge's experience. There is force in wondering why no adjournment application was made on 11 October. But the decision of counsel for the appellant not to apply for an adjournment on that date appears to have been influenced by the fact that it was obvious that the trial would not finish that day and by the realisation that it would be adjourned part-heard to Monday 16 October. Moreover, courts should be concerned about a trial being conducted in a way which denies to one party its right properly to put its case. Ms Cooper's counsel did not suggest that anything said by the appellant's counsel to Judge Mahoney smacked of humbug. In any event, his Honour accepted that the appellant could not properly put its defence. The appellant was there to deal with liability and contributory negligence, the matters which the court order said would be dealt with on 11 October. The appellant was entitled to rely upon that order until it was amended. The plaintiff never sought to amend the order. Clearly Judge Mahoney thought that procedurally it should be amended. 40 On 16 October an adjournment was promptly sought but it was refused on grounds which did not, in my view, give proper weight to the appellant's entitlement in the interests of justice to an adjournment arising out of the order made on 11 October enlarging the issues for trial. The significance of the ensuing miscarriage of justice is indicated by the fact that the Griffiths v Kerkemeyer segment of the damages awarded was $288,900. 41 Where one party obtains an amendment which changes the issues before the court, it must be unusual to force on the other party if it is unprepared to meet the changed issues, as the appellant says it was. Moreover, it seems that his Honour's view was coloured by what he understood the court to have said about "dry runs" in arbitration and by Mr Little letting the "cat out of the bag". 42 In my opinion, the appellant was entitled to have an adjournment on 16 October. The issues before the court had been changed on 11 October. By 16 October, through no fault of the appellant, as a result of that change and intervening circumstances, it could not properly meet the new issue. I reiterate that the cause of all this was Ms Cooper's solicitors' error about the nature of the order. There was no basis upon which in that situation the court could compel the appellant to go on. On 11 October, no doubt in order to make use of the time, Mr Little, while protesting, proceeded with the matter as best he could. But as the result of the adjournment which followed he was unable to continue in the case. New counsel applied for an adjournment so that his client would not be forced on unprepared. The difficulties were not of its creation. The appeal must be allowed and a new trial ordered.

Conclusion 43 I propose that the following orders be made:

Verdict and judgment of 11 December 2000 set aside;

Remit the matter to the District Court for rehearing;

Costs of the first trial to be at the discretion of the Judge rehearing the matter;

The respondent to pay the appellant's costs of the appeal but to have a certificate under the Suitors' Fund Act 1951 if so qualified. 44 Studdert J: I agree with Sheller JA.

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

CITATION : CENTRAL SYDNEY AREA HEALTH SERVICE v COOPER [2001] NSWCA 329 FILE NUMBER(S) : CA 41008/00 HEARING DATE(S) : 16 August 2001 JUDGMENT DATE : 19 September 2001

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