BETWEEN : JUSTIN ROBERT HOLLAND by his next friend ROBERTA ASHWORTH HOLLAND

Pleadings - Third Party Notice - Conditional appearance by third party previously dismissed from suit as first defendant - High Court authority cited to court for first time showing once a defendant dismissed from the suit cannot be later joined as third party by another defendant - Motion to review previous interlocutory order permitting amendment of statement of claim which gave rise to the Third Party Notice - Power of court to review its own interlocutory decisions at any time - Motion to stay any orders on summons for Third Party directions.

Limitation Act 1935

Order permitting amendment to statement of claim recalled and motion to set aside adjourned sine die. Third party proceedings stayed pending appeals to Full Court.

Breavington v Godelman [1988] HCA 40; (1988) 169 CLR 41

James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (1998) 73 ALJR 238

McKain v R W Miller & Co SA Pty Ltd [1991] HCA 56; (1991) 174 CLR 1

Norman v Norman (1992) 6 WAR 372

Pelechowski v Registrar, Court of Appeal [1999] HCA 19; (1999) 162 ALR 336

Pioneer Concrete (NT) Pty Ltd v Watkins Ltd (1983) 48 ALR 365

Re Harrison's Share under a Settlement [1955] Ch 260 at 276

Smith v Australian National Line Ltd (1998) 20 WAR 219

Australian National Airlines Commission v Newman [1987] HCA 9; (1987) 162 CLR 466

Baxter v France [1895] 1 QB 455

Brambles Constructions Pty Ltd v Helmers [1966] HCA 3; (1966) 114 CLR 213

Castellan v Electric Power Transmission (1967) 69 SR (NSW) 159

George Wimpey & Co Ltd v British Overseas Airways Corporation [1955] AC 169

Hart v Hall & Pickles Ltd [1969] 1 QB 405

Harvey v R G O'Dell Ltd; Galway (Third Party) [1953] 2 QB 78

Morgan v Ashmore, Benson, Pease & Co Ltd [1953] 1 WLR 418

Oceanic Crest Shipping Co v Pilbara Harbour Services Pty Ltd [1986] HCA 34; (1986) 160 CLR 626

Smith v Australian National Line Ltd (1998) 20 WAR 219

State Energy Commission (WA) v Alcoa Australia Ltd (1996) 17 WAR 131

Unsworth v Commissioner for Railways [1958] HCA 41; (1958) 101 CLR 73

1 NISBET DCJ: The recent history of this matter can be seen from my reasons in [1999] WADC 5 and [1999] WADC 104. Following delivery of my reasons in [1999] WADC 104 on 29 October 1999 the defendant, on 5 November 1999, filed a third party notice directed to the Metropolitan Health Services Board together with a chamber summons for third party directions pursuant to O19 r5. On the return of the summons for third party directions on 10 November the third party appeared through its solicitors, undertook to file a conditional appearance and indicated that it would move to set aside the third party notice on the basis that counsel had advised that she wished to submit to the court that the third party could not be joined by reason of it having been discharged from the suit in a previous capacity by order of her Honour Judge Kennedy made 9 August 1995. I then adjourned the summons for third party directions to 23 November 1999 to hear the third party's submissions that the third party notice be set aside. Subsequently, on 12 November 1999, the third party entered a conditional appearance.

2 It should be pointed out that the name of the first defendant discharged from the suit pursuant to the order of her Honour Judge Kennedy was "The Board of Management of King Edward Memorial Hospital". Now, although argument was not addressed to me on this point by either the plaintiff or the defendant I invited further submissions, and in consequence it seems tolerably clear that amendments to the Hospitals Act 1927 established the Metropolitan Health Services Board as a single legal entity to manage all of the State's metropolitan public hospitals , and it is in law the same entity as the (former) first defendant.

3 This being said, I think it is fair to say that it was accepted by all those present when the plaintiff's application for leave to amend his statement of claim came on for hearing before me on 27 October 1999 that the defendant had a right to issue a third party notice to bring in the third party as the entity at law responsible for the management of the King Edward Memorial Hospital - p6 of my reasons at [1999] WADC 104 refers.

4 Since that time the third party has referred the other parties and me to the decision of the High Court in James Hardie & Coy Pty Ltd v Seltsam Pty Ltd (1998) 73 ALJR 238. Uninstructed by that high authority I would have read s7(1)(c) of the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947 such that the phrase "... who is or would if sued have been liable in respect of the same damage ..." as being referable to the existence of a substantive cause of action as opposed to a cause of action which had been barred by operation of a limitation statute, such statutes being regarded as procedural in effect, not destroying a cause of action. See for example Breavington v Godelman [1988] HCA 40; (1988) 169 CLR 41 and McKain v R W Miller & Co SA Pty Ltd [1991] HCA 56; (1991) 174 CLR 1. But clearly that is not the case as is made plain by the High Court in James Hardie. The liability referred to in the Act is liability to judgment to pay a money sum and not simply liability in negligence as a tortfeasor, the former being extinguished by a limitation provision, the latter not. There is no getting away from it. This interpretation, entrenched as the High Court has found, cannot be overcome by fine judicial tuning or, as Gaudron and Gummow JJ put it in James Hardie, there can be no judicial grafting of tissue to legislation which lacks it, as here. Further, the High Court acknowledges in James Hardie that this interpretation: "... may produce what appear to be unsatisfactory outcomes" (p245).

5 It seems therefore that the third party notice should be set aside and ordinarily I would so order. But this is no ordinary situation. Each of the plaintiff and defendant argue that if I set aside the third party notice, save for some arguments which may enable James Hardie to be distinguishable on account of the third party having been dismissed from the suit by reason of a limitation provision, then this will for all practical purposes be an unappealable decision made within jurisdiction thereby extinguishing the third party proceedings by way of a final, not interlocutory, order unable to be reviewed by this Court. This would render nugatory any application by the defendant for an extension of time within which to appeal from the order of Kennedy DCJ made 9 August 1995 (as a party affected by that order). [But I rather think it would not affect the rights of the plaintiff in this regard. If I recall my order permitting amendments to his statement of claim and quash that part of it which permitted a plea particularising acts of negligence allegedly performed (or omitted) by the defendant after his birth, the plaintiff could seek an extension of time within which to appeal the order of Kennedy DCJ and could appeal from my order.]

6 Additionally the plaintiff submits that it is premature to strike out the third party notice and I should order that a full set of pleadings be filed and insist upon the third party taking out an application for summary judgment dismissing the third party proceedings in which full and complete argument was more likely to refine issues capable of going to the Full Court in a form more conducive to their proper and final determination.

7 I do not think this is right. The Rules clearly contemplate that the return of the summons for directions in the third party proceedings is the appropriate time to dispose of matters such as may arise here: O19 r4(3)(c); Pioneer Concrete (NT) Pty Ltd v Watkins Ltd (1983) 48 ALR 365.

8 The third party (which erroneously continues to call itself the "prospective" third party) argues that the court has no power to stay the third party proceedings and that I should proceed to forthwith terminate the third party proceedings, relying on Pelechowski v Registrar, Court of Appeal [1999] HCA 19; (1999) 162 ALR 336. That case concerned the jurisdiction of the District Court of New South Wales to make a Mareva injunction following judgment, to protect the subject matter of an action for the judgment creditor. That is not this case. True it is that in its wider civil jurisdiction this Court is not a superior court of record possessing an inherent power to stay any proceedings. However in claims for damages for personal injury, this Court:

"... has the same jurisdiction to hear and determine, and may exercise all the powers and authority, that the Supreme Court has and may exercise from time to time in relation to all personal actions making a claim for damages in respect of the death of or bodily injury to a person and in relation to all proceedings arising with respect to those personal actions under the Law Reform (Contributory Negligence and Tortfeasors' Contribution) Act 1947." (District Court of Western Australia Act 1969, s50(2)).

9 This is such an action and in my opinion it follows that the court has the power to stay the third party proceedings, should it decide to do so, in the exercise of its discretion.

10 The third party submits that I should not exercise a discretion to stay the third party proceedings because this would be tantamount to depriving it of the fruits of its judgment in the order of Kennedy DCJ of 9 August 1995. And it further argues that there would be a real prejudice to it because without a final order on the summons for third party directions there could be no appeal ie, no appeal from an order staying the third party proceedings until further order.

11 Neither of these submissions seems to me to be correct. An order staying the third party proceedings isn't depriving the third party of the fruits of the order of Kennedy DCJ of 9 August 1995 in the sense that that phrase is generally understood. And there can be an appeal from an order for a stay, albeit with the leave of the Supreme Court or a judge thereof (District Court of Western Australia Act 1969, S79(1)(b)).

12 Where would this leave the defendant? Undoubtedly in a most invidious position. The balance which I tried to achieve in my decision permitting the proposed amendments - [1999] WADC 104 - has been disturbed, and disturbed to a significant degree.

13 Mr Wallace, as counsel for the defendant, submitted that I should revisit that decision, the final order not having been extracted and the matter still being before me as I have not dealt with motions for formal orders consequent upon its delivery. A court is never shut out of reviewing its own interlocutory orders at any time. See for example Turner v Bulletin Newspaper Co Pty Ltd [1974] HCA 25; (1974) 131 CLR 69 where Jacobs J said at 96, 97:

"The order striking out the statement of claim was thus not a consent order and furthermore it was an interlocutory order. Being an interlocutory order it was able to be reviewed by the court at any time before the final disposition of the action. The power of the court so to review it continued throughout the hearing of the subsequent motion to dismiss however unlikely it was that the exercise of that power would affect the result."

14 For completeness I should add that as Mr Wallace submitted, a judge retains control over a matter before him until the order pronounced is drawn up, passed and entered. See for example Re Harrison's Share under a Settlement [1955] Ch 260 at 276, 284 and, further, it is immaterial that an order may not have to be extracted: Norman v Norman (1992) 6 WAR 372 at 376.

15 It is perhaps for this reason that the solicitors for the third party, the same solicitors as acted for the first defendant when it was dismissed from the suit by order of her Honour Judge Kennedy on 9 August 1995, extracted that order only on 22 November 1999.

16 In the circumstances presently before me, I find that by reason of the position of the defendant having altered so dramatically since the plaintiff's application to amend his statement of claim was heard by me, it is appropriate for me to reconsider the application in the light of the prejudice that the (proposed) amendments may now work to the defendant.

17 Whilst it is probably the case that:

1. the defendant as a party interested in the decision of her Honour Judge Kennedy could apply for leave to appeal out of time from the order of her Honour Judge Kennedy of 9 August 1995 (if I was to permit the relevant amendments to the statement of claim to remain), on the basis that since the decision of the Full Court in Smith v Australian National Line Ltd (1998) 20 WAR 219 it may be argued that the matter before her Honour would now be decided differently, and

2. if I was to refuse the relevant amendments the plaintiff could apply for leave to appeal out of time from her Honour's order, on the same basis, the position remains that if I was to permit these relevant amendments to remain in the statement of claim, and discharge the third party notice, in the proceedings as they would then stand, the defendant could be severely prejudiced by a prejudice that may be irremediable. In this event, that prejudice, if found, would have to be balanced against the prejudice to the plaintiff of being refused permission to put his case forward as he now sees it.

18 As can be seen these are competing considerations of prejudice. The prejudice to the plaintiff of refusing the controversial amendments, to the defendant of allowing them and to the third party of delay in not knowing where it stands. It seems to me that these competing considerations are best balanced by my recalling the orders proposed by my judgment delivered 29 October 1999 such as gave the plaintiff leave to amend his statement of claim by the addition of further particulars of negligence in paras 11C(l)(m)(n)(r)(s) and (t) and adjourning the application to amend until such time as the Full Court has heard and determined any one of the two or three appeals that appear will inevitably arise in consequence of this decision. Likewise I adjourn the summons for third party directions and stay further proceedings on the third party notice until the resolution of all and any appeals in consequence of this decision. (This, I should make plain in the event I have not already done so, is because the prejudice to the third party is least.)

19 I will give all parties liberty to apply to re-list the matter in the event that either no appeal is entered or if entered, is not prosecuted diligently.

20 The final orders of the court I propose (subject to motions of counsel) are:

1. So much of my judgment and proposed orders of 29 October 1999 as gave the plaintiff leave to amend his statement of claim by the addition of further particulars of negligence in paras 11C(b)(m)(n)(r)(s) and (t) be and are hereby recalled.

2. The application of the plaintiff to so amend his statement of claim is adjourned sine die.

3. All proceedings on the third party notice are stayed until further notice.