235 This provision which operates to bar the remedy, subject to the postponement provisions contained in Part 3, must be understood in the context of s 63 of the Act, which provides for extinction of the right or title to the cause of action upon "expiration of (the) limitation period fixed by or under (the) Act". The Section is in the following terms:
S 63(1) Subject to subsection (2), on the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt damages or other money, the right and title of the person formerly having the cause of action to the debt damages or other money is, as against the person against whom the cause of action formerly lay and as against his successors, extinguished."
236 The operation of SS 14 and 63(1) were considered in The Commonwealth of Australia v Mewett (1997) 191 CLR 471. Dawson J, there held the view (at 508-510) that, while S14 operated to bar the remedy (a cause of action in tort) it was not to be taken to have been "extinguished" until an application for extension of time had been brought and dismissed. Toohey J (at 516-517) and McHugh J (at 532-533) each took a different view, namely that once the initial time for commencing proceedings had expired, the cause of action was extinguished, but that if, at a later time, a successful application for extension was brought, then the earlier extinguishment of the right was "annulled" and it was to be treated as though it had never been extinguished. They noted that Hope JA had come to the same conclusion in The Commonwealth v Dixon (1988) 13 NSWLR 601 at 610, and it is one that gives, in my view, proper effect to S 63(1).
237 Gaudron J, in Mewett did not determine the precise status of the cause of action in the interim period, other than to say that the action is "not finally statute barred merely because the initial limitation period" has expired; "rather the action is thereafter maintainable if the limitation period is extended and the action commenced within the extended period." The judgments of the remaining members of the Court, Brennan CJ and Kirby and Gummow JJ, do not throw any further light on this issue. In these circumstances, I take the view that I should follow the approach taken by Hope JA and by Toohey and McHugh JJ.
238 Even if the cause of action could be regarded as being subject to conditional re-enlivenment, as Gaudron J appears to have considered, it would seem more appropriate, once the application for extension is dismissed, to regard the moment of extinguishment as the expiry of the original time for action, rather than the date of dismissal. This is more in accord with S 63(1) and with S 61, which provides:
"Where, after the expiration of a limitation period to which this Division applies, the limitation period is extended by order under this Division, the prior expiration of the limitation period has no effect for the purposes of this Act."
239 This provision contemplates that S 63(1) is of continuing effect unless an order to extend the limitation period is made.
240 Keddies and the Plaintiff placed reliance upon the principle enunciated by Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 588-591, to extend the time for commencement of the action. That case was concerned with an action brought by a plaintiff, as executor of the will of a deceased testatrix, against the defendant solicitors for their failure to take reasonable steps to locate the executor, so as to put him in a position to commence administering her estate. The damage suffered was the deterioration of certain property which, it was alleged, might reasonably have been expected to have maintained its value, had the executor been able to commence administering the estate in due time.
241 Deane J, categorised the duty of care as one owed to the testatrix, and following her death, to the estate. It was, upon that basis, a duty the breach of which could only be complained of by the executor after he had obtained a grant of probate and had entered upon the administration of the estate.
242 In discussing the application of the Limitation Act to such a case his Honour said, at 589-590:
"It is inevitable that a Statute of Limitations will, on occasion, lead to injustice in the special circumstances of particular cases. Such injustice, when it occurs, is an unavoidable cost of the benefits involved in ensuring that plaintiffs act promptly and that defendants are not subjected to the litigation of stale claims. The present case falls, in an anomalous category where the applicability of a limitation provision such as s 14(1) would invariably involve prima facie hardship and injustice and where any compensating public benefit, apart from protecting the courts from being required to determine issues of distant fact, is absent. If a wrongful action or breach of duty by one person not only causes unlawful injury to another but, while its effect remains, effectively precludes that other from bringing proceedings to recover the damage to which he is entitled, that other person is doubly injured. There can be no acceptable or even sensible justification of a law which provides that to sustain the second injury will preclude recovery of damages for the first. It would, e.g. be a travesty of justice and common sense if the law provided that a cause of action lay for damages for false imprisonment but then went on to provide that that cause of action would be lost if the false imprisonment continued for six years after the cause of action first accrued. Likewise, it would be a travesty of justice and common sense if the law imposed a duty upon a solicitor to take positive steps to inform a third person of the contents of a document of which the solicitor was alone aware and then provided that any cause of action against the solicitor for damage caused by a negligent failure to perform that duty would be lost if the negligence continued for six years. It is arguable that the notion of unconscionable reliance upon the provisions of a Statute of Limitations which provides the foundation of the long-established equitable jurisdiction to grant relief in a case of concealment of a cause of action until after the limitation period has expired (cf s 55(1) of the Limitation Act) should, by analogy, be extended to cover cases such as these where the wrongful act at the one time inflicts the injury and, while its effect remains, precludes the bringing of an action for damages. It seems to me, however, that the preferable approach is to recognise that it could not have been the legislative intent that the effect of provisions such as s 14(1) of the Limitation Act should be that a cause of action for a wrongful act should be barred by lapse of time during a period in which the wrongful act itself effectively precluded the bringing of the proceedings. On that approach, the reference in s 14(1) of the Act to the cause of action first accruing should be construed as excluding any period during which the wrongful act itself effectively precluded the institution of proceedings."
243 It can be seen that it was the tortious act complained of, ie the failure to take reasonable steps to find the executor, which was the event that made it impossible for the cause of action to be pursued during the limitation period. It was in those circumstances, that Deane J, held that the cause of action was not statute barred. As Gleeson CJ observed in Sampson v Zucker (Court of Appeal New South Wales 11 December 1996), the principal enunciated by Deane J, was not applied by the other members of the High Court.
244 In Sampson the plaintiff brought proceedings against his former solicitor for negligent advice in relation to the settlement of a claim for damages arising out of a motor vehicle accident. It was acknowledged that the alleged negligent conduct upon which the cause of action was based occurred on or before the date the original proceedings were settled. It was also acknowledged that the alleged cause of action was complete and had accrued by that date.
245 Without deciding whether the principle enunciated by Deane J in Hawkins was correct, Gleeson CJ (with whose judgment Cole JA and Simos AJA agreed) held it to have no application since the tortious act for which the respondent solicitors were sued did not effectively preclude the plaintiff from doing anything.
246 Of immediate relevance to the present case, is the observation of Gleeson CJ at 8:
"It should be mentioned in conclusion that the appellant does not present an argument based upon the proposition that the cause of action in the present case only accrued when the appellant became aware of the alleged negligence of the respondent. Deane J's judgment in Hawkins v Clayton is certainly not authority for any such proposition; on the contrary, at least by implication it rejects such a proposition. If such a proposition were true it would have been quite unnecessary for his Honour to formulate and rely upon the principle which I have already mentioned."
247 In Registrar General v Cleaver (1996) 41 NSWLR 713 at 719, Clarke JA similarly said that:
"A majority of the High Court has rejected the notion that a cause of action is not complete until a plaintiff discovers, or could on reasonable inquiry have discovered that it had sustained a loss."
248 I would regard this as a persuasive answer to the argument advanced, in the present case, that the cause of action was not complete, and that the time for action did not commence to run until the plaintiff discovered, or could on reasonable inquiry have discovered, the alleged negligence of Taylor and Scott. The decision in Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 does not provide any support for that proposition, (see Deane J at 540) nor does the detailed review of the English and Australian authorities undertaken by Mathews J in Crisp v Blake (1992) ATR 81-158. Her Honour there accepted that the "discoverability of damage" test was unlikely to be regarded as an acceptable criterion for determining the accrual of a cause of action, although upon its facts she reached the conclusion that the case properly fell within a qualification to the long line of authorities discussed. That decision went on appeal, but by consent her judgment declining to strike out the statement of claim as statute barred was set aside.
249 Counsel for Keddies however, sought to rely upon Wardley and in particular upon the approval by Mason CJ, Dawson, Gaudron and McHugh JJ, of the comments of Gaudron J in Hawkins (601/602) in support of the proposition that the plaintiff did not suffer a loss, so as to start time running, until his application under the Limitation Act for an extension of the limitation period failed. To that point, it was submitted, any loss was contingent, and akin to that under consideration in Wardley.
250 What their Honours said, in this regard (at 532/3) needs to be examined. It was in the following terms:
"The conclusion which we have reached with respect to the time when the plaintiff first suffers loss in respect of contingent loss or liability accords with the comment of Gaudron J in Hawkins v Clayton : (77)
"If the interest infringed is an interest in recouping moneys advanced it may be appropriate to fix the time of accrual of the cause of action when recoupment becomes impossible rather than at the time when the antecedent right to recoup should have come into existence, for the actual loss is sustained only when recoupment becomes impossible." (emphasis added)
Gaudron J went on to point out (78):
It would be too simplistic to restrict analysis of economic loss merely to a consideration of reduced value or increased liability."
The conclusion which we have reached is reinforced by the general considerations to which we referred earlier. It is unjust and unreasonable to expect the plaintiff to commence proceedings before the contingency is fulfilled. If an action is commenced before that date, it will fail if the events so transpire that it becomes clear that no loss is, or will be, incurred. Moreover, the plaintiff will run the risk that damages will be estimated on a contingency basis, in which event the compensation awarded may not fully compensate the plaintiff for the loss ultimately suffered."
251 This passage clearly does not support a proposition in the much broader terms for which Keddies contended.
252 A submission was also advanced that in so far as the plaintiff or Taylor & Scott sought to rely upon Doundoulakis, the correctness of that decision had been thrown into question by Wardley. It was argued, in this regard, that in their joint judgment Mason CJ, Dawson, Gaudron and McHugh JJ had distinguished at least some of the English decisions upon which reliance had been placed in Doundoulakis, and had said if they were not distinguishable, then they were wrong. (at 529 to 532).
253 These submissions need to be understood in the light of the very different factual situation which arose in Wardley. There the plaintiff's action was based upon misleading or deceptive representations that led the respondent State to enter into an indemnity in favour of a bank against a facility granted by that bank to Rothwells Limited. By the indemnity the respondent undertook to hold the bank indemnified against any net loss which might arise if Rothwells did not satisfy in full its liability under the facility.
254 In the joint judgment the liability was said to be "contingent and executory", their Honours observing (at 524-525):
"The indemnity was not one of a kind which generates an immediate non-contingent liability to pay upon execution of the instrument. It was neither a promise to meet a liability of the promisee to make a payment nor a promise to pay a debt owing by a third party to the promisee (47). In our view, the indemnity, on its true construction, was one which created a liability on the part of the respondent to the Bank to make payment if and when the Bank's relevant "net loss" was ascertained and quantified (48), subject to the making of a demand for payment by the Bank. The liability was, therefore, in conformity with the opinion of the Full Court, contingent and executory. The likelihood, perhaps the virtual certainty, that there would be a loss, in the light of Rothwell's actual financial position as it stood when the indemnity was executed, did not transform the liability into an actual or present liability at that time."
255 The English decisions which were examined were essentially those based on Forster v Outred & Company (1982) 1 WLR 86, which had been accepted and applied by the Full Court of the Federal Court in Jobbins v Capel Court Corporation Ltd (1985) 25 FCR 226. Forster was explicable, their Honours said, by reference to the immediate effect of the execution of the mortgage that had been given, following negligent advice from a solicitor, on the value of the plaintiff's equity of redemption.
256 That and the other decisions noted (in particular D W Moore & Co v Ferrier (1988) 1 WLR 267 and Islander Trucking Ltd v Hogg Robinson Ltd (1990) 1 All ER 826) it was said, "turned on the plaintiff sustaining measurable loss at an earlier time (ie on entry into the agreement) quite apart from the contingent loss which threatened at a later date".
257 What their Honours said in relation to this needs to be noted, in the light of the submission which went to the basis underlying Doundoulakis:
"If, contrary to the view which we have just expressed, the English decisions properly understood support the proposition that where, as a result of the defendant's negligent misrepresentation, the plaintiff enters into a contract which exposes him or her to a contingent loss or liability, the plaintiff first suffers loss or damage on entry into the contract, we do not agree with them. In our opinion, in such a case, the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual ; until that happens the loss is prospective and may never be incurred." (at 532)
258 Wardley and the kind of case mentioned in this passage, are very different from the present case. They were matters where, at the time of the negligent act, and at the time of expiry of the initial time for action, any loss was contingent or prospective. It might never be incurred.
259 In the present proceedings, once the cause of action against the carpenters was barred by expiry of time, the plaintiff suffered an immediate and quantifiable loss. The only possible respect in which any loss could be avoided was if a successful application could be later brought under the Limitation Act, to extend the period of time for action. I do not agree that this converted the loss into a contingent or prospective loss of the kind contemplated in Wardley; nor do I agree, for the reasons previously given, that Mewett stands as authority for the proposition that the loss remained prospective or contingent until an application for extension of the limitation period was brought and dismissed.
260 The next submission advanced by Keddies, although not by the plaintiff, rested upon the notion that there was an equitable duty which Taylor & Scott owed to the plaintiff, by reason of the fiduciary relationship in which they stood, which meant that it was unconscionable for them to plead the Limitation Act in answer to any claim for negligence. This was said to be a species of equitable fraud, not dependent on moral turpitude, and hence different from the concealed fraud for which provision is made in S 55 of the Limitation Act.
261 While it may be accepted that a solicitor owes a fiduciary duty to a client, Breen v Williams (1996) 70 ALJR 772, at 782 and 790; Boyce v Mouat (1983) 3 WLR 1021 at 1028, it does not follow that fiduciary duties and obligations attach to all aspects of the relationship, or to acts done in implementation of obligations arising from the contractual or tortious relationship of solicitor and client: Macedone v Collins (1996) 7 BTR 15,127 per Cole JA at 15,132.
262 No unequivocal authority was cited in support of the proposition that the existence of a fiduciary relationship prevents a solicitor from relying on a Limitation Act when sued. The differences in judicial opinion in the United Kingdom concerning the question whether, by reference to the equitable doctrine of concealed fraud, or the statute prior to the 1980 Act, a subsequent deliberate or fraudulent concealment of the cause of action could override the statutory time limit, or cause time to begin running again, were noted in Sheldon v RMM Outhwaite Ltd (1996) 1 AC 102, and particularly by Lord Browne-Wilkinson at 145. It is not possible to detect any consistent or clear line of authority in this regard. Such support as does exist for the barring of a plaintiff from relying on a limitation period seems to depend upon active concealment by the defendant: Ignorance of the wrong or of a breach of contract alone would seem not to be sufficient: Meagher, Gummow & Lehane Equity Doctrine and Remedies 3rd Ed para 3418.
263 I am not persuaded that Keddies or the plaintiff can derive from Sheldon or from the decisions there examined, a broad principle along the lines suggested. Further, so far as any of these decisions depend on deliberate or fraudulent concealment, I am not persuaded that the evidence in the present case would support such a finding.
264 As a related argument it was submitted that Taylor & Scott owed an equitable duty to exercise reasonable care, to which the same principle of concealed fraud applied. I confess to some difficulty in understanding this submission. By analogy the Limitation Act would apply to such a claim, since it is identical to the claim in tort and contract: Meagher, Gummow and Lehane, at para 3415, and see S 23 Limitation Act. Nothing said in Macedone would justify any different conclusion.
265 Further, so far as the argument rests upon the doctrine of unconscionability in equity, no circumstance has been identified that would here qualify as such, other than the asserted failure of Taylor & Scott to advise the plaintiff of his entitlement to sue them, after the initial time for action had expired. In the circumstances outlined, where an application to extend time was brought and the plaintiff was advised of its dismissal, and of the consequences, and where he had time to sue Taylor & Scott, I cannot see any basis upon which the doctrine of unconscionability could attach.
266 The final submission advanced on behalf of Keddies, was that Taylor & Scott owed a continuing duty, after expiry of the initial time for action, to advise the plaintiff of his rights, and of his entitlement to sue them. This it was submitted, was a continuing duty, the breach of which continued until the time that they ceased to act for him, so that a fresh cause of action accrued each day that there was a non disclosure. Even assuming that such a duty did exist, no such breach has been pleaded. Such a cause of action would be very different from the claim brought, which is confined to the asserted negligence of Taylor & Scott in failing to sue the carpenters. No amendment was sought to amend the Statement of Claim which was filed by Keddies themselves, and I am not prepared to allow the proceedings to be further expanded to accommodate this further submission.
267 In summary the present is not a case of the kind contemplated by Deane J in Hawkins. Nothing that Taylor & Scott did prevented the plaintiff from bringing an action against them. They were dilatory in considering whether or not to join the carpenters, but once the Master dismissed the application in November 1993, the plaintiff had another year to bring an action against them. He was aware of his entitlement to do so, and he had instructed Keddies accordingly.
268 In those circumstances I am unpersuaded that the principle enunciated by Deane J can apply. Nor am I persuaded that there was the form of "dishonesty or moral turpitude" of which McLelland CJ in Eq spoke in Hamilton v Kaljo (1989) 17 NSWLR 381, or the consciousness of wrongdoing of which Mahoney ACJ spoke in Seymour v Seymour (1996) 40 NSWLR 358 that would bring this case within S 55(1) of the Limitation Act.
269 Moreover, the case is not one where, as at the expiration of the time to bring action against the carpenters, the loss was contingent or prospective, as was the case in Wardley, or one that was dependent on some extrinsic circumstances, for example an action taken by a third party, as was the case in Cirino v Registrar General (1993) 6 BPR 97452, Registrar General v Cleaver (1996) 41 NSWLR 713, and Christopoulos v Angelos (1996) 41 NSWLR 700. At that point, assuming that the plaintiff previously had a chance of bringing successful proceedings against Taylor & Scott, the action was barred and the damage was actual. The present case is distinguishable from these decisions.
270 Finally, I am not persuaded that the plaintiff could maintain the action pleaded against Taylor & Scott, after expiration of the limitation period by reference to equitable principles.
271 For these reasons I am of the view that Taylor & Scott are entitled to rely on S 14 of the Limitation Act, as an answer to the claim brought by the plaintiff against them, and that neither Keddies nor the plaintiff can avoid that consequence by reference to the matters discussed.
272 For completeness, I observe that the plaintiff did assert negligence against Keddies in filing an amended Statement of Claim in which Dorgor and Maului were effectively dropped from the proceedings. Although no substantive argument was developed by the plaintiff in relation to this submission, there is no evidence that a cause of action against these companies would have had any value. There are two reasons for that.
273 First, having regard to the conclusions earlier expressed, I do not believe that there ever was a good cause of action against the carpenters. Secondly, even if there was a good cause of action, by the time Keddies were retained, those companies had been removed from the Register. No evidence has been called to show that they could be reinstated, or if they were reinstated, that access could be gained to the insurance policy, or to any other source of funds, from which a judgment might have been satisfied, or from which an offer of settlement might have been made.
274 There will be a verdict for the defendants in the principal proceedings, and for the cross defendants on each of the cross claims. I will hear further argument as to costs.
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