Gordon v NSW Insurance Ministerial Corporation

Supreme Court of NSW|2007-11-23|Before: Hislop J, Grove J

Introduction 1 HIS HONOUR: The plaintiff was born in 1969. She was injured in a motor vehicle accident on 3 May 1986 when the vehicle in which she was travelling as a passenger left the road and struck an embankment. She sustained an injury to her face as well as other injuries. The facial injury was initially treated conservatively but, in May 1990, a right temporomandibular arthrotomy was performed and thereafter the plaintiff underwent multiple related surgical procedures. 2 The plaintiff had commenced proceedings in the District Court on 6 August 1986 to recover damages in respect of her injuries. The proceedings were brought against the third party insurer. Liability was denied. 3 On 19 October 2004 a notice of motion was filed by the defendant in the District Court seeking leave to join two of the plaintiff's treating specialists ("the specialists") as cross defendants in the proceedings. Leave was granted on 10 February 2005 and the cross claims were filed on 17 February 2005. The cross claims sought contribution from the specialists pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 on the grounds their treatment of the plaintiff had been negligent. On 15 June 2005 the proceedings were transferred from the District Court to this court. 4 On 1 May 2006 Grove J upheld an application by the specialists to dismiss the cross claims on the basis that the limitation period within which to commence the cross claims against them had expired on 11 June 1997 and there was no power to extend time. 5 In dismissing the cross claims, Grove J observed (NSW Insurance Ministerial Corporation v Gordon [2006] NSWSC 350 at [13]): "…liability of the defendant is not yet determined nor is there raised for determination any question of whether the treatment by the cross defendants was so unnecessary or extravagant as to make it proper to regard the exacerbation of the plaintiff's condition as solely due to their treatment: see Mahony [ Mahony v J. Kruschich (Demolition) Pty Limited (1985) 156 CLR 522] @ 530. Clearly any such latter issue would be a matter for trial and not summary disposal, however I observe that the content of some reports exhibited to the affidavit of Mr Crestani are suggestive that an issue of that nature may arise for contemplation ." 6 On 12 October 2007 the defendant filed a notice of motion in which it sought an order pursuant to s 64 of the Civil Procedure Act 2005, granting the defendant leave to amend the further amended grounds of defence in the terms of the second further amended defence attached to the notice of motion. 7 The proposed second further amended defence essentially sought to raise a defence that all injury, loss and damage sustained by the plaintiff on and from 8 May 1990 was caused, not by the negligence of the driver of the insured motor vehicle, but by the grossly negligent medical treatment afforded the plaintiff on 8 May 1990, 24 May 1991, 29 May 1991, 10 March 1992, 28 July 1992, 19 February 1997, 25 March 1998, 1 September 1999, 12 April 2001 and 13 April 2004. In short, the amendment sought to raise a defence of novus actus interveniens. 8 The defendant relies upon the principles in Mahony v J. Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 to support its application. In that case the High Court held: "Some degree of medical negligence in the treatment of an injury may well be a reasonably foreseeable result of the act or omission by which that injury was inflicted, and then no clear line can be drawn to limit the original tortfeasor's liability to exclude the consequences of medical negligence. However, in the ordinary case where efficient medical services are available to an injured plaintiff, the original injury does not carry the risk of medical treatment or advice that is 'inexcusably bad'…or 'completely outside the bounds of what any reputable medical practitioner might prescribe'…or 'so obviously unnecessary or improper that it is in the nature of a gratuitous aggravation of the injury'…or 'extravagant from the point of view of medical practice or hospital routine… In such a case, it is proper to regard the exacerbation of a plaintiff's condition as resulting solely from the grossly negligent medical treatment or advice, and the fact that the plaintiff acted reasonably in seeking and accepting the treatment or in following the advice will not make the original tortfeasor liable for that exacerbation." 9 The application to amend is opposed by the plaintiff.

The principles 10 Section 64 of the Civil Procedure Act provides that: "(1) At any stage of proceedings, the court may order: (a) that any document in the proceedings be amended, or (b) that leave be granted to a party to amend any document in the proceedings. (2) Subject to section 58, all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings…" 11 Section 58 provides: "(1) In deciding: (a) whether to make any order or direction for the management of proceedings, including: (i) any order for the amendment of a document… the court must seek to act in accordance with the dictates of justice. (2) For the purpose of determining what are the dictates of justice in a particular case, the court: (a) must have regard to the provisions of sections 56 and 57, and (b) may have regard to the following matters to the extent to which it considers them relevant…: (vi) the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction, (vii) such other matters as the court considers relevant in the circumstances of the case." 12 The statutory approach is consistent with well established principles concerning the proper exercise of the discretion relating to amendment. 13 As Waddell AJA observed in Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 at 107: "whether or not a proposed amendment should be allowed is a matter within the discretion of the judge dealing with the application, but the discretion is one that falls to be exercised in accordance with well-settled principles." 14 In Clough & Rogers v Frog (1974) 48 ALJR 481 at 482 the High Court held: "The principle according to which this power [to amend] is to be exercised was stated by Bowen LJ in Cropper v Smith : '…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… 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…as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right." 15 In Shannon v Chun (1912) 15 CLR 257 at 266 Isaacs J approved a statement from The Alert 72 LT 124 at 126: "…that if the Judge finds that owing to the mistake, or whatever it may have been, of the plaintiff, in not having put his pleadings right originally, there has been such an injury to the defendant, or such a change in the position of the defendant that he cannot get justice done, then, of course, it is equally clear that such an amendment ought not to be allowed… The question, therefore, in this case is, would the defendant be so prejudiced by this amendment that he would not have justice done."

The submissions 16 The defendant's submissions were essentially as follows:

(a) The report of Dr David David dated 20 September 2007 in which the doctor concluded that the treatment and advice afforded to the plaintiff by the specialists between 1990 and June 2004 was, in short, grossly negligent, established an arguable defence of novus actus interveniens.

(b) There had been little or no delay in bringing the application. In any event, delay, of itself, was not a basis for refusing the application.

(c) The plaintiff may or may not be statute barred in respect of any proceedings against the specialists. It is unclear if the plaintiff would wish to bring an action against the specialists. If proceedings were brought by the plaintiff against the specialists, they may or may not raise limitation defences and, if they did, the plaintiff may make an application for an extension of time in which to sue the specialists. It is not possible at present to know what the outcome of such an application would be.

(d) In any event, the degree of prejudice to the plaintiff was of a much lesser degree than the prejudice that would be sustained by the defendant if it was shut out of arguing the defence of novus actus interveniens. It would be unjust to do so as it could result in the defendant being liable for the negligence of others. Consistently with the dictates of justice, the amendment should be allowed. 17 The plaintiff's submissions were essentially as follows:

(a) The plaintiff had been regularly assessed by doctors qualified by the defendant from February 1987 save for a lapse between 1995/96 and 2001. The defendant was aware, from medical reports received in 1992/94, that there was medical opinion that further surgery was not warranted. It was also aware that further surgery was contemplated and was performed.

(b) It was clear from medical reports received by the defendant in 2003 and 2004 that there was direct evidence the specialists had been negligent in the treatment afforded the plaintiff. It was also clear from Dr David's report dated May 2003 that, although not expressed in the language Dr David used in his report of 20 September 2007, he nevertheless regarded the actions of the specialists as involving gross negligence. His report had concluded with the following comment: "It is glaringly obvious that the right temporomandibular joint then the left temporomandibular joint were progressively destroyed by a series of interventions undertaken by [one of the specialists]. In light of the principle primum non nocere, first do no harm, which is a fundamental tenet of medical and surgical practice, these manoeuvres failed the patient, her insurers and the community that supports her insurers."

In these circumstances, the defendant's failure to seek leave to amend its defence at that time amounted to a waiver or abandonment of the right to rely upon the defence of novus actus interveniens.

(c) If the plaintiff brought proceedings against the specialists in respect of any of the procedures performed by them, she would be liable to be met by defences under the Limitation Act 1969. It was probable that the specialists would raise such defences, as they had done so in respect of the cross claims earlier brought against them. The plaintiff's prospects of succeeding on an application for an extension of time under the Limitation Act were either poor or non-existent.

(d) Even if the plaintiff obtained an extension of time to bring proceedings against the specialists, she would be then faced with a very complex medical case, the preparation for which would be extensive, costly and would result in a further delay in the hearing which, in the absence of the amendment, would be likely to take place within the first half of 2008.

(e) The defendant was seeking an indulgence. If such indulgence was granted, it would create a real risk of irreparable damage to the plaintiff. The application should be refused.

(a) There is an arguable case that the specialists were grossly negligent in the advice and treatment which they afforded the plaintiff.

(b) If the application to amend is refused, the defendant will be denied the opportunity of obtaining the determination of a real question raised by the proceedings.

(c) In consequence, it is possible the defendant may be held liable for significant loss and damage to the plaintiff which was not a consequence of its negligence.

(d) It would be appropriate, but for the question of prejudice to the plaintiff, to allow the proposed amendment.

(e) In the absence of a defence of novus actus interveniens being raised, the plaintiff, subject to any other defences available to the defendant, would be entitled to recover damages for the whole of her loss from the defendant and there would be no reason for her to commence any proceedings against the specialists.

(f) If a defence of novus actus interveniens had been pleaded when the plaintiff was within time to sue the specialists, appropriate advice would have been for her to join the specialists as additional defendants thus ensuring that she would recover damages for the whole of her loss either totally from the defendant or partly from the defendant and partly from the specialists.

(g) In either case, the plaintiff, subject to any other defences available to the defendant, would have been entitled to recover damages for the whole of her loss. 19 The consequences of the amendment, if granted, would be that:

(a) If the novus actus interveniens defence was successful, the plaintiff would recover only a small proportion of her total loss from the defendant. A claim by her against the specialists would be prima facie statute barred and she would have no recourse to the specialists for the balance of her loss unless an extension of time in which to sue them was granted. It would be quite unrealistic to assume that the specialists, if proceedings were commenced against them by the plaintiff, would not raise defences under the Limitation Act , particularly as defences under that Act were raised by them in respect of the cross claims earlier brought against them.

(b) In my opinion an application for an extension of time in which to sue the specialists would involve the plaintiff in litigation which would be complicated, difficult and uncertain of success.

(c) In my opinion, to require the plaintiff to bring such an application at this stage would involve significant prejudice to the plaintiff which could not be cured by any order as to costs or other terms which might reasonably be imposed and would result in injustice to the plaintiff.

(d) Additionally, even if the plaintiff was to obtain an extension of time to sue the specialists, this would then involve her in a very complex medical negligence case, the preparation for which would be extensive, costly and would result in further significant delay in the hearing of this already protracted matter. It would also involve further strain upon the plaintiff with the anxieties occasioned by facing new issues with their attendant problems: see The State of Queensland v J L Holdings Pty Ltd (1996-1997) 189 CLR 146 at 155. 20 Although the defendant will be prejudiced by the refusal of the application, the proper exercise of the discretion, in my opinion, having regard to all of the circumstances, requires that the application be refused. 21 There was also listed with this application an application by the plaintiff seeking interim damages pursuant to s 82 of the Civil Procedure Act 2005. That application had come before the Court on a previous occasion and, as I understand it, the parties are agreed that the determination of the application to amend the defence will also be determinative of the application for interim payments. Accordingly, I make no order in respect of that application but grant liberty to the parties to apply.

The defendant's notice of motion filed on 12 October 2007 is dismissed with costs.

I grant liberty to the parties to apply on two days notice in respect of the application for interim payments. **********

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 : Gordon v NSW Insurance Ministerial Corporation [2008] NSWSC 52

NSW Insurance Ministerial Corporation v Gordon [2006] NSWSC 350 Mahony v J. Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522 CASES CITED : Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 Clough & Rogers v Frog (1974) 48 ALJR 481 Shannon v Chun (1912) 15 CLR 257 The State of Queensland v J L Holdings Pty Ltd (1996-1997) 189 CLR 146

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