Plaintiff v Defendant

Plaintiff v Defendant - [2005] VSC 488 - VSC 2005 case summary — Zoe

1 This is an application by the defendant in a proceeding instituted by writ seeking leave to amend its defence to withdraw an admission made. The application is opposed by the plaintiff.

2 In the proceeding the plaintiff seeks damages for personal injuries and loss of earning capacity arising out of a collision at sea. The plaintiff, Frank Carr Jeanes ("the plaintiff"), who is now aged 63 years, served in the navy for 12 years. The defendant, the Commonwealth of Australia ("the Commonwealth"), is sued because at all material times the officers and crew of the ships involved in the collision were acting in the course of their service with the Commonwealth as officers and employees of the Commonwealth.

3 On the evening of 10 February 1964 at approximately 8.56pm a collision occurred between two Royal Australian Navy ships, HMAS Melbourne and HMAS Voyager, upon the high seas about 20 miles south-east of Jervis Bay. As a result of the collision both vessels were substantially damaged and the HMAS Voyager suffered significant damage, eventually sinking. A number of personnel on board the Voyager were killed and many suffered injuries. At the time, the plaintiff was serving on the HMAS Melbourne as a shipwright. His rank was N/S 2nd class. He did not see the collision but heard and felt it and saw the aftermath. He was thereafter engaged in damage control on his vessel after the collision.

4 The writ was filed on 30 August 1999. The cause of action is common law negligence. It is alleged that as a result of the negligence of the employees and officers of the Commonwealth of Australia, the plaintiff suffered injury, loss and damage. Negligence has been admitted. The particulars of injury cover a number of what might be described as mental-type injuries, and the main injury alleged is post-traumatic stress disorder ("PTSD"). The plaintiff claims damages including loss of income. It is said that his capacity to earn had been significantly impaired by reason of his injuries.

5 Paragraph 8 of the statement of claim is as follows:

[9]

10 Since the Commonwealth made the admission in its defence filed 21 January 2000, there have been a number of cases considering whether post-traumatic stress disorder is "a disease or disorder" within the meaning of s.5(1A) of the Act.

11 The first was the case of Hickey v Women's and Children's Health Care Network[1], where Hedigan J raised doubts about s.5(1A) applying to injuries which were not workplace insidious diseases. The second was a judgment of the Court of Appeal in Mazzeo v Caleandro Gustalegname and Co.[2] In the course of giving reasons for judgment, both Winneke P and Chernov JA raised doubts whether s.5(1A) of the Act applied to a psychiatric injury, the view being expressed that it did not constitute a disease or disorder within the meaning of that section. Subsequently a Full Bench of the Court of Appeal considered the matter in Geoffrey Clark v Carol Stingel[3], and the majority of the Court held that PTSD contracted some years after the alleged tortious act was not "a disease or disorder" within the meaning of s.5(1A). Application for special leave was made to the High Court which, since the hearing of the present application, has granted leave to appeal. After the Full Bench decision was handed down, Ashley J (as he then was) in Carl Henning Wright (as executor of the will of Lyndsay John Stafford - deceased) v Commonwealth of Australia[4] held, following Clark v Stingel[5], that PSTD was not a disease or disorder contracted by the victim within the meaning of the sub-section. In that case the deceased had been serving on the HMAS Melbourne at the date of collision. His Honour's decision went on appeal and the Court of Appeal has heard the appeal, but has not delivered its decision.

12 The basis for the Commonwealth's decision to seek leave to amend the defence was that it had received advice from counsel that the Court of Appeal decision in Mazzeo had raised the question that s.5(1A) of the Act did not apply to a psychiatric injury.

13 The reasons in the Mazzeo case were delivered by the Court of Appeal on 12 December 2000. However, that was not the first time that doubts had been expressed as to the application s 5(1A) applying to a psychiatric injury. Hedigan J had expressed such doubts early in his decision delivered on 11 June 1998. At the date of issue of the proceeding in the present matter, namely 30 August 1999, there was at least one decision which had expressed some doubt about the application of s 5(1A) to an injury which was not an insidious disease type injury.

14 Richard Neish Boughton, a solicitor employed by the Australian Government Solicitor, filed an affidavit in support of the summons issued on 16 October 2001. In the meantime, the plaintiff's solicitors had discussions with the solicitor for the Commonwealth and a summons was issued by the plaintiff, also returnable on 1 February 2002, seeking, inter alia, an order that time to bring the proceeding be extended pursuant to s.23A of the Limitation of Actions Act 1958. As at that date it was not possible to make application to extend time pursuant to s.23A in a pending proceeding. To make an application it would have been necessary for the plaintiff to discontinue his proceeding and bring an application pursuant to s.23A. In any event, the plaintiff would have failed because of the passage of time; this is because his knowledge of all material facts arose at a date more than one year before the date of issue of his summons. Time passed in relation to both applications and the plaintiff's application has never been heard. A number of affidavits have been filed in support of and in opposition to the present application. The plaintiff and Mr Forster were cross-examined by counsel on behalf of the Commonwealth.

15 The Rules of Court permit amendment of a pleading at any time. Rule 36.03(b) provides:

[16]

20 The reason why the Commonwealth seeks to withdraw the admission is because of what was said in the Mazzeo case. In my opinion, in accordance with well established principles governing amendment, the Commonwealth should have the opportunity to argue the issue it now wishes to raise at trial and prima facie is entitled to amend its pleading. Whether it be permitted depends upon whether the plaintiff will suffer a prejudice which cannot be overcome. The principles I have stated are supported by the decisions in Cropper v Smith;[8] O'Keefe v Williams;[9] G L Baker Ltd v Medway Building and Supplies Ltd;[10] Queensland v J L Holdings Pty Ltd;[11] Commonwealth v Verwayen;[12] and Clarapede & Co v Commercial Union Association.[13] I now turn to the question of prejudice.

Prejudice

21 The affidavit material filed on behalf of the plaintiff raised three matters of prejudice. First, that the plaintiff and his advisers relied upon the admission and accordingly did not make application pursuant to s.23A of the Limitation of Actions Act for an extension of time to bring the proceeding. Secondly, that the plaintiff had the option of bringing a proceeding in New South Wales or the Australian Capital Territory and if the admission had not been made, consideration may have been given to bringing a proceeding in either of those jurisdictions. Thirdly, that the litigation has brought its usual stress and pressures to the plaintiff and his family, and that if the admission is withdrawn, the stress and pressure will increase. Evidence was given by Mr Forster that the legal costs incurred to date exceed $20,000. If the admission is withdrawn, then the plaintiff is faced with having to persuade the Court at the hearing that s.5(1A) applies to PTSD. But in any event, the factual question of his state of knowledge at the relevant time is a live issue which the plaintiff has to establish. That issue in itself can be a source of pressure and tension in litigation such as the present. Mr Forrest QC, who appeared with Mr R. Dyer on behalf of the Commonwealth, contended that the admission made no difference at all to the plaintiff's position, because when it was made it was not open to him to bring a s.23A application because he was aware during a period more than 12 months prior to the delivery of the defence of the necessary factual matters, which meant that time commenced to run with respect to any s.23A application more than 12 months prior to the said date.

22 The thrust of the cross-examination of the plaintiff was that he did have knowledge prior to the issue of the proceeding and as early as mid 1998 and at the latest late 1998, as is pleaded in paragraph 8 of his statement of claim. In evidence, he stated that he first knew that he had suffered PTSD as a result of the collision when a Dr Oleh Kay, a psychiatrist, informed him somewhere between May and August 1999. In cross-examination of the plaintiff, it was suggested that Mr Jeanes had been schooled by his solicitor and indeed a letter had been sent by the solicitor to him prior to him first seeing Dr Kay. However, I am prepared to accept the evidence of Mr Jeanes that what the solicitor told him was no more than pointing out in accordance with his instructions what he should tell the doctor. In my view, it is not appropriate on this present application to make any observations about the issue of whether or not the plaintiff does in fact suffer from PTSD which is attributable to the collision in 1964. The question is whether he would suffer prejudice if the admission was withdrawn. In this regard it is submitted by counsel for the Commonwealth that he would not suffer prejudice because when the defence was filed on 21 January 2000, it would have been too late for the plaintiff to bring an application under s.23A because he had knowledge of his condition at the latest at the end of 1998, as stated in the statement of claim.

23 When his solicitor issued the writ he was not to know whether the Commonwealth would admit that PTSD was a disease or disorder within the meaning of s.5(1A). The Commonwealth's approach in previous cases established that sometimes it did make the admission and on other occasions it did not. Clearly, any question of bringing an application under s.23A was abandoned by the plaintiff and his advisers at the time of the issue of the writ.

24 In my opinion, the Commonwealth carries the burden of persuading the Court that if the admission is withdrawn, the plaintiff will not suffer any prejudice.

25 The question of the burden in applications such as the present was discussed by the Court of Appeal in Hancock Shipping Co v Kawasaki Ltd.[14] Staughton LJ said:[15]

[19]

• The plaintiff's proceeding was issued in this Court on 30 August 1999.

• At the time of issue, it was known to both the plaintiff and his solicitor, Mr Forster, that an issue in the proceeding was whether the plaintiff's cause of action was statute barred.

• It was also known at the time by the plaintiff's solicitor that one avenue open to avoid a successful limitation defence was to make application pursuant to s.23A for an extension of time. If this course had been followed, it would be necessary to make the application prior to the issue of the writ.

• The plaintiff's lawyer elected to issue the writ and relied upon s.5(1A) as an answer to any limitation defence.

• The plaintiff's lawyer at the date of issue could not predict whether the Commonwealth would or would not admit anything in its defence. Indeed, the Commonwealth's conduct up to that time was inconsistent, in that sometimes the admission was made and at other times it was not.

• On 21 January 2005 the Commonwealth filed its defence. It admitted that PTSD was a disorder within the meaning of s.5(1A) of the Act. This still left the plaintiff the burden of establishing that the section applied.

• On 5 June 2001 the Commonwealth's solicitors informed the plaintiff's solicitors that the Commonwealth proposed to apply to the Court to withdraw the admission.

• The plaintiff's lawyers had to make a decision whether to seek to do anything to protect the client by either withdrawing and making an application under s.23A, or withdrawing and issuing proceedings in another court. No step was taken to do either.

• It is the contention of the plaintiff and his advisers that if the admission is withdrawn he will suffer prejudice in that he could have made application pursuant to s.23A when the defence was delivered if there had been a denial, and alternatively he could have withdrawn the proceeding and issued a proceeding in another state or territory.

• The Commonwealth asserts that its admission made no difference to the plaintiff and his lawyers because:

[21]

28 It is now necessary to turn to s.23A as it was at the relevant time.

29 Section 23A was first introduced into the Act in 1972. It was later amended by s.5 of the Limitation of Actions (Personal Injuries Claims) Act, No. 9884 of 1983. Section 11 of the latter Act dealt with transitional matters and the new section only applied to a cause of action arising not more than six years before the date of commencement of the Act (11 May 1983), and to a cause of action arising on or after the date of the commencement of that Act. Since the plaintiff's cause of action arose more than six years before 1983, the new section did not apply and if the plaintiff had sought to make application for extension of time during 1998-2000, it would have been necessary for him to make application under the old s.23A. Under the old s.23A, it was necessary to make the application prior to the proceeding being instituted. See Bestobel Overseas Ltd v Carden.[16] Hence at the time when the defence was delivered on 21 January 2000, if a denial had been pleaded to the relevant paragraph in the statement of claim, the plaintiff would have had to withdraw his proceeding in order to make his application pursuant to s.23A. It was submitted on behalf of the Commonwealth that he would not have done that based upon the approach of Mr Forster to other proceedings and, secondly, because a decision had been made at the time when the proceeding was instituted not to make such an application. It is unnecessary for me to decide that issue. It is clear that the plaintiff was placed in a very difficult position in the year 2000 when his solicitors informed him that the Commonwealth proposed to withdraw the admission, because by then he could not have made an application for extension of time under the relevant s.23A.

30 The question is, was he out of time in any event at the date when the defence was delivered? The answer to this question primarily turns upon his knowledge at the relevant time. It is necessary to set out s.23A as it was, when first enacted.

[43]

• The following day Mr Forster forwarded a letter to Mr Jeanes attaching a bundle of documents. The first document was a questionnaire for completion by a close personal friend or relative or former spouse of a Melbourne survivor. According to the introduction the questionnaire was to provide information to assist Mr Forster's firm in the preparation of a client's Melbourne-Voyager claim. The second document was what is described as a "Melbourne questionnaire". All told there were 31 pages of questions and the first two pages asked questions about the "impact of the collision". The questions are extremely suggestive; by way of example, "I have thought about the collision when I didn't mean to", "I have had dreams about the collision", and "I have stayed away from reminders of the collision". Mr Jeanes was asked to complete the questionnaire. The following pages asked questions about what happened just before and during the collision. One of the questions was, "Did you come close to dying during the collision?" I interpolate that this is an important piece of evidence in the diagnosis of PTSD. The other documents asked questions about health and lifestyle and again many of the questions are suggestive of emotional problems. The next bundle of documents asked a series of questions. Ninety questions were then asked about how much he was bothered by certain problems, for example, "feeling easily annoyed or irritated", and the plaintiff was asked to answer the questions by circling numbers 0 through to 4. The final documents were "two reports to give you some background re post-traumatic stress". They are reports dated 9 June 1995 and 17 July 1995, one from a professor who was head of the Department of Psychiatry at the University of Queensland and another from a medical practitioner. The reports refer to claims by persons involved in the Melbourne-Voyager collision and specifically refer to symptoms and diagnosis of PTSD. The letter of 17 April 1998 suggested that the plaintiff discuss the matter with his brother-in-law. Mr Forster stated that the plaintiff might find it helpful if he could write a letter to Mr Forster setting out how he believed his brother-in-law had been affected by the collision.

[59]

43 He was asked questions about talking to Mr Forster and whether he had had any discussions with his brother-in-law about his claim.

44 The plaintiff's evidence must be considered in the context of the evidence given by Mr Forster. What emerged was that the plaintiff had had a 20 minute discussion with Mr Forster about aspects of bringing a claim, PTSD, limitation defences, and whether he had suffered any particular symptoms. On top of that, the evidence reveals that in June 1998 whilst the plaintiff was in Melbourne he had a breakdown when he was confronted with the wreath at The Shrine. He knew about his brother-in-law's litigation. Furthermore, when the writ was issued, it was stated that he first had knowledge of his symptoms in "late 1998 early 1999". The latter piece of information I find was given by the plaintiff to either Mr Forster or somebody in his office prior to the issue of the writ. I refer to Exhibit DEF14. It would appear that the instructions were given prior to Mr Forster forwarding the draft writ on 11 June 1999. By this time the plaintiff had seen Dr Kay the psychiatrist.

45 It was submitted by Mr J. Forrest QC who appeared with Mr Dyer for the Commonwealth, that the Court should conclude that the plaintiff did have knowledge that he was suffering with PTSD by mid to late 1998, and that his knowledge was gained through his 20 minute discussion with Mr Forster and the documents that were forwarded to him, which included two reports dealing in some detail with PTSD. One then adds to that the breakdown in June when the plaintiff visited Melbourne with his wife, and the instructions given by the plaintiff to the solicitor some time prior to 11 June 1999 that he first knew of the symptoms in late 1998/1999.

46 The authorities establish that in respect of a s.23A application, the question of knowledge is to be determined by an objective test "to be applied to a person in the position of the claimant and with his background and understanding."

47 The plaintiff in his latter years was a marine surveyor employed by a government department in Perth. It is a responsible and demanding vocation. Further, the plaintiff was a shipwright in the navy and on his discharge in 1971 he was a naval shipwright first class, which is the highest rank a naval shipwright can attain prior to obtaining promotion to an officer. Mr Spittle, who appeared with Mr I. Fehring for the plaintiff, referred me to a number of cases which dealt with the question of knowledge in a particular context. I am not assisted by them. The Full Court had decided in McManamny v Hadley, supra, what test was to be applied in an application pursuant to s.23A. If the plaintiff had made an application at the beginning of 2000, he would have had to establish two negatives, namely, that a material fact was not known to him, and would not have been known to him if he had taken all reasonable steps in the circumstances to ascertain all the material facts until a date within 12 months of the issue of the proceeding seeking an extension of time.

48 The defence was filed on 21 January 2000 and contained an admission concerning PTSD being a "disease or disorder" within the meaning of s.5(1A) of the Act. The question is, if the Commonwealth had not made the admission what would the plaintiff have done to protect his interest? Would he, after taking the advice of his solicitor, have withdrawn his proceeding and instituted an application to extend time pursuant to s.23A of the Act? I think it is highly unlikely that his solicitor would have advised him to do that. I say that for the following reasons:

[65]

49 However, I do not make the finding because I think I should consider and determine the present application on the basis that, if the admission had not been made when the defence was filed on 21 January 2000, the plaintiff and his solicitor would have the option of discontinuing the proceeding and making an application pursuant to s.23A.

50 The second question is, if the proceeding had been withdrawn and the application made to extend time pursuant to s.23A, would the plaintiff have obtained an order for an extension of time? In such an application he would have the burden of establishing his right to an extension. However in the present proceeding the Commonwealth has the burden of persuading the Court that the plaintiff will suffer no prejudice if the admission is withdrawn.

51 The material facts which would have been necessary to prove were, first, the fact that the negligence which caused the collision caused personal injury, secondly, the fact that personal injury was caused and the nature and extent of it and, finally, the extent to which the personal injury was caused by the negligence. The personal injury was PTSD.

52 The plaintiff on such an application would have had to prove two negatives: that, first, a material fact was not known to him, and, secondly, would not have been known to him if he had taken all reasonable steps in the circumstances to ascertain all the material facts, and application for extension of time was brought within one year following the date when he knew of the material fact or facts relating to his cause of action. Whether he had the knowledge was to be determined by an objective test, that is, the reasonable person in his shoes knowing what he knew and what he should have known based on his observations and from what he had been told, and taking into account his intelligence, background and understanding.

53 In my opinion, he would not have been able to prove that he did not have knowledge of the material facts constituting his cause of action until on or after 19 January 1999.

54 I reach that conclusion because of the following facts. The plaintiff is an intelligent, able and disciplined person. During his career in the navy and also later as a marine surveyor, he was able to hold down and perform demanding and disciplined jobs. He knew prior to April 1999 that his brother-in-law, who was also on the Melbourne at the time of the collision, had brought a proceeding against the Commonwealth in the Victorian Supreme Court alleging that he had suffered PTSD as a result of the collision. He knew that the solicitors were Hollows in Melbourne. He had a 20 minute conversation with Mr Forster on 16 April 1998, during which discussion took place on the possibility of a defence of limitation, the nature of PTSD, the fact that Mr Forster had brought many proceedings on behalf of members of the Melbourne, that the Commonwealth admitted that negligence caused the collision for which it was liable, that the important issue was whether he had suffered any mental injury as a result, and that he should consider whether he had symptoms of PTSD. At that time the plaintiff was well aware that for a period in excess of ten years he had been suffering from a variety of symptoms that could have constituted PTSD. He was provided with questionnaires later in April 1998, which asked many questions that clearly were relevant to a diagnosis of PTSD, and he was given two reports from doctors discussing PTSD and the criteria which established the same, and relating the criteria to symptoms suffered by sailors involved in the aftermath of the collision. He was also aware that he should see a psychiatrist with respect to his symptoms and it was recommended that he see a Dr Kay, a psychiatrist practising in Perth, who had been retained on behalf of other plaintiffs in the proceedings against the Commonwealth.

55 In June 1998, during a visit to Melbourne, he suffered a nervous breakdown which, according to his affidavit evidence, should have alerted him to the effect of the collision upon his mental condition. The latter observation must be considered in the context that in his affidavit evidence and viva voce evidence, he was telling the Court that he first met Mr Forster on 25 April 1999.

56 In addition, when giving instructions, he informed his solicitors some time prior to mid June 1999 that he had first had knowledge of his mental condition and that it was related to the collision in late 1998/early 1999.

57 Given all that evidence, in my opinion he would have failed to have persuaded a judge to extend time pursuant to s.23A on the ground that he was unable to prove that a material fact was not known to him prior to 17 January 1999.

58 However, if I am wrong, in my opinion he would have failed to establish the second negative, namely, that the material fact would not have been known to him if he had taken reasonable steps in the circumstances to ascertain all material facts. Based on his understanding of his symptoms, the conversation he had with Mr Forster on 16 April 1998, the material that was provided to him, his discussions with his brother-in-law, the incident in June 1998, and the request by Mr Forster that he see the psychiatrist Dr Kay, a reasonable step in the circumstances would have been to accept the advice of Mr Forster and see Dr Kay in the latter part of 1998. That would have been a reasonable step to take in the circumstances to ascertain all material facts. In addition I refer to the letter which I have set out in the last dot point in paragraph 36, which was written by Mr Forster on 28 April 1998. Mr Forster recommended follow-up treatment. He then wrote that having that treatment stops an argument that you have not done anything about your medical problems. In my opinion, based upon the totality of the evidence, he would not have been able to establish the second negative if he had made the application. He would have known in the latter part of 1998 if he had done what Mr Forster suggested he should do.

59 Applying the objective test, it is my opinion that the plaintiff would have failed if he had sought to make an application on or after 21 January 2000.

60 Plaintiff's counsel also relied upon a discretionary matter, namely, the stresses and strains which litigation imposes on litigants and the anxieties occasioned by facing new issues. Reference was made to what Lord Griffiths said in Ketterman v Hansall Properties.[20] Lord Griffiths pointed out that the question of amendment was a matter for discretion, and that the judge in making his assessment should determine where justice lies. He said that relevant to the assessment were the strain that litigation imposes on litigants and the anxieties occasioned by facing new issues, the raising of false hopes and the legitimate expectation that a trial will be determined on the issues stated. His Lordship was referring to an application made to amend a defence during the course of closing speeches at the end of a trial. What his Lordship said I have no doubt is of potent effect when application is made at such a late stage. However, his Honour went on to observe:

At a glance

Court

Decision date

Before

Source

Judgment (69 paragraphs)

Parties

Cases Cited (4)