ROBERTS v STATE RAIL AUTHORITY of NSW known as RAILCORP PRICE v RAIL CORPORATION of NSW known as RAILCORP

Judgment 1HIS HONOUR: Nature of proceedings In each matter the defendant by Notice of Motion seeks the leave of the Court pursuant to s64 of the Civil Procedure Act 2005 (CPA) to file and serve an Amended Defence. In each case the plaintiff opposes the granting of that leave. 2The amendments sought relate to paragraphs 7A and 12 of the draft Amended Defence. In each case, the amendments in respect of which leave is sought are as follows: "7A In answer to the whole of the Statement of Claim, the Defendant says that: 7A.1 The proceedings are governed by the Motor Accidents Compensation Act 1999 (NSW) (MACA). Particulars (a) The Waterfall derailment is a motor accident as the train was a motor vehicle, being a vehicle built to be propelled by motor that forms part of the vehicle: section 3 Road Transport (General) Act 2005 (NSW) (by virtue of s3 of MACA); and (b) The deaths or injuries caused by the train's derailment during the operation were as a result of, and caused during, either the driving of the vehicle or the vehicle running out of control (definition of 'motor accident': s3 MACA). 7A.2 The Plaintiff has not complied with the procedural requirements in the MACA in relation to the commencement of the proceedings. 7A.3 The proceedings were commenced by the Plaintiff more than 3 years after the date of the accident without leave of the Court pursuant to s109 of the MACA and hence the proceedings are statute barred. ... 12. Further, in the event the Plaintiff did suffer injury, loss and damage as alleged (which is not admitted), the Defendant says that any damages to be awarded to the Plaintiff must be assessed pursuant to the MACA." Factual background 3On 31 January 2003, a passenger train derailed south of Waterfall train station at Waterfall in the State of New South Wales. All carriages on the train sustained severe damage from the derailment, seven passengers suffered fatal injuries and many other passengers were injured. The plaintiffs were at all material times members of the NSW Police who attended at the derailment site and participated in the rescue and providing of assistance to injured passengers. 4On 10 August 2010 the plaintiff Roberts filed his Statement of Claim in the Supreme Court claiming damages for psychological and psychiatric injuries sustained by him as a result of the negligence of the defendant giving rise to the train derailment. The Statement of Claim in respect of the plaintiff Price was filed on 30 August 2010 and raised the same issues. 5In the Roberts matter, the defendant filed its Defence on 7 December 2010 and pleaded, amongst other things, that the proceedings were statute barred and were not maintainable by reason of s50C of the Limitation Act 1969. In the Price matter the defendant filed its Defence on 10 December 2010 raising the same issues. 6In the Price matter, the defendant's solicitors advised the plaintiff's solicitors that it proposed to file an Amended Defence. On 18 February 2011 the Registrar directed that the Amended Defence was to be filed on or before 18 March 2011. On 16 March 2011 the solicitors for the defendant advised the solicitors for the plaintiff that they had not received the settled Amended Defence from counsel and that the filing of the Amended Defence might be a week late. The plaintiff's legal advisers advised that they would not object if only a week late, but might have to reconsider their position if more than that. 7In the Price matter, a further conversation took place on 29 March 2011 in which the solicitors for the defendant advised the solicitors for the plaintiff that they had still not received the draft Amended Defence from counsel. 8On 18 April 2011 the solicitors for the defendant received advice from senior counsel. As a result of that advice, the solicitors for the defendant prepared an Amended Defence in each matter. 9In the Price matter, by email dated 21 April 2011 the plaintiff's legal advisers consented to the defendant filing its Amended Defence by 4 May 2011. At that time the solicitors for the plaintiff had not seen a copy of the proposed Amended Defence. On 27 April 2011 an order was made by the Registrar allowing the defendant to file and serve an Amended Defence on or before 4 May 2011. By an oversight, the Amended Defence was not filed or served by that date. 10On 1 May 2011 in the Roberts matter, the defendant's solicitors caused a facsimile to be sent to the plaintiff's solicitors serving a copy of the proposed Amended Defence. This document included the amendments which are the subject of this application. 11In the Price matter on 5 May 2011 the solicitors for the defendant caused a facsimile to be sent to the plaintiff's solicitors attaching a copy of an Amended Defence in the same terms. 12In the Price matter, an Amended Defence was filed on 6 May 2011. It was agreed by the defendant's legal advisers that the Amended Defence should not have been accepted by the Court since it was filed outside the time limit provided for by the Registrar. On 6 May 2011 the plaintiff's solicitors objected to the Amended Defence. 13On 16 May 2011 in the Roberts matter, the defendant's solicitors received a letter from the plaintiff's solicitors stating that the plaintiff objected to the defendant filing the Amended Defence. 14On 30 May 2011 in the Roberts matter, the Notice of Motion the subject of these proceedings, was filed by the solicitors for the defendant. On 13 July 2011 in the Price matter, the Notice of Motion was filed on behalf of the solicitors for the defendant. Both motions were heard before me on 1 September 2011. Submissions 15The defendant submitted that it had explained the delay in filing its Amended Defence in each case, i.e. the need to receive the settled document from senior counsel, together with the advice of senior counsel. It submitted that the Amended Defence was served within a reasonable time after the receipt of that advice. 16The defendant's application was made pursuant to s64 CPA. That section relevantly provides: "64(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, correcting any defect or error in the proceedings and avoiding multiplicity of proceedings. (3) An order under this section may be made even if the amendment would have the effect of adding or substituting a cause of action that has arisen after the commencement of the proceedings but, in that case, the date of commencement of the proceedings, in relation to that cause of action, is, subject to section 65, taken to be the date on which the amendment is made. ..." 17The power under s64 must be exercised subject to s58 CPA which requires that regard be had to ss 56 and 57 CPA. Those sections provide: "56(1) The overriding purpose of this Act and of rules of court, in their application to a civil dispute or civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in the dispute or proceedings. (2) The court must seek to give effect to the overriding purpose when it exercises any power given to it by this Act or by rules of court and when it interprets any provision of this Act or of any such rule. (3) A party to civil proceedings is under a duty to assist the court to further the overriding purpose and, to that effect, to participate in the processes of the court and to comply with directions and orders of the court. (3A) A party to a civil dispute or civil proceedings is under a duty to take reasonable steps to resolve or narrow the issues in dispute in accordance with the provisions of Part 2A (if any) that are applicable to the dispute or proceedings in a way that is consistent with the overriding purpose. (4) Each of the following persons must not, by their conduct, cause a party to a civil dispute or civil proceedings to be put in breach of a duty identified in subsection (3) or (3A): (a) any solicitor or barrister representing the party in the dispute or proceedings, (b) any person with a relevant interest in the proceedings commenced by the party. (5) The court may take into account any failure to comply with subsection (3), (3A) or (4) in exercising a discretion with respect to costs. (6) For the purposes of this section, a person has a relevant interest in civil proceedings if the person: (a) provides financial assistance or other assistance to any party to the proceedings, and (b) exercises any direct or indirect control, or any influence, over the conduct of the proceedings or the conduct of a party in respect of the proceedings. (7) In this section: party to a civil dispute means a person who is involved in the dispute. 57(1) For the purpose of furthering the overriding purpose referred to in section 56 (1), proceedings in any court are to be managed having regard to the following objects: (a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties. (2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1). 58 (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, and (ii) any order granting an adjournment or stay of proceedings, and (iii) any other order of a procedural nature, and (iv) any direction under Division 2, and (b) the terms in which any such order or direction is to be made, 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: (i) the degree of difficulty or complexity to which the issues in the proceedings give rise, (ii) the degree of expedition with which the respective parties have approached the proceedings, including the degree to which they have been timely in their interlocutory activities, (iii) the degree to which any lack of expedition in approaching the proceedings has arisen from circumstances beyond the control of the respective parties, (iv) the degree to which the respective parties have fulfilled their duties under section 56 (3), (v) the use that any party has made, or could have made, of any opportunity that has been available to the party in the course of the proceedings, whether under rules of court, the practice of the court or any direction of a procedural nature given in the proceedings, (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." 18The defendant submitted that there was nothing in those sections which prevented its motions being successful. To the extent that those sections had been explained in Aon Risk Services Australia v Australian National University [2009] HCA 27, [2009] 239 CLR 175 they had been complied with by the defendant. The defendant relied upon the following observations by the plurality in that case: "103 The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings [174]. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case. ... 111 An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in J L Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases [176]. On the contrary, the statements are not consonant with this Court's earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future." 19Consistent with that guidance, the defendant submitted that it had provided a reasonable explanation for the delay. It submitted that while some delay had occurred, the delay was not substantial and would not significantly slow the proceedings. It submitted that the proposed Amended Defence was sent to the plaintiffs' legal advisers in May 2011 about eight months after the proceedings had been commenced. 20It submitted that there was no prejudice to the plaintiffs caused by the proposed Amended Defence. It accepted that there may be some prejudice to the plaintiffs in that they had failed to comply with the MACA before commencing proceedings, but that prejudice did not arise from the Amended Defences themselves. It submitted that, if, on the other hand, the amendment to the defence was misconceived, there was no prejudice to the plaintiff which could not be cured by the payment of costs. 21The defendant submitted that the proposed amendment to the Defences was important because it went to the question of jurisdiction. It submitted that the commencement of proceedings in circumstances where a plaintiff had not complied with the procedural requirements of the MACA went to jurisdiction ( Pender v Power Coal [2002] NSWSC 925 per Wood CJ at CL [15]; [58]). 22The defendant relied upon s108 MACA which provides: "108(1) A claimant is not entitled to commence court proceedings against another person in respect of a claim unless: (a) the Principal Claims Assessor has issued a certificate in respect of the claim under section 92 (Claims exempt from assessment), or (b) a claims assessor has issued a certificate in respect of the claim under section 94 (Assessment of claims). (2) The provisions of this section are in addition to those of section 109. Accordingly, both sections are capable of applying to a claim." 23It was common ground that the plaintiff had not taken the steps set out in s108(1). That being so, the defendant submitted that if the MACA applied, the plaintiffs had no entitlement to commence the proceedings. 24The defendant submitted that since a jurisdictional issue was involved, it was necessary for it to raise the issue as early as possible ( Pender [58]). This is what it had done. 25In anticipation of a submission by the plaintiff that the amendment to the Defences was futile, the defendant relied upon the observations by McColl JA in Sheehan v SRA; Wicks v SRA [2009] NSWCA 261 at [84] where her Honour said: " 84 It was common ground at trial and on appeal that those issues fell for determination under that Act by virtue of s 3B(2)(e) of the Civil Liability Act which renders Part 3 applicable to motor accidents, notwithstanding their prima facie exclusion in s 3B(1)(e). Although it was not debated it would seem the Waterfall derailment is classified as a "motor accident" because the train was a motor vehicle, being a vehicle built to be propelled by a motor that forms part of the vehicle: Road Transport (General) Act 2005, s 3; applied by virtue of s 3, Motor Accidents Compensation Act 1999 (the "MAC" Act) and the deaths or injuries caused by its derailment during its operation were as a result of and caused during either the driving of the vehicle, or the vehicle running out of control: definition of "motor accident", s 3, MAC Act." 26The defendant submitted that on the question of whether the proposed amendment was futile, its obligation was only to show that the proposed amendment was arguable. It was not necessary that it establish conclusively that the MACA applied to the facts of the plaintiffs' claims. 27The plaintiffs accepted that the defendant had adequately explained its delay in seeking to file the Amended Defences. 28The plaintiffs did not submit that as a matter of discretion, the Court should not allow an amendment which had the effect of making Chapter 5 (award of damages) of the MACA apply. They accepted that if there were a statutory direction as to how damages were to be assessed under s121 of the Transport Administration Act the Court would not have any discretion in deciding whether or not to apply the MACA. It would have to do so. 29The plaintiffs did, however, raise a number of deficiencies relating to the form of the proposed amendment to the Defences. They submitted that it was too broad to simply plead that "damages must be assessed pursuant to MACA". They submitted that it was necessary for the defendant to plead that the subject accident was a "public transport accident under the Transport Administration Act (NSW)" and that accordingly any damages to be awarded to the plaintiff must be assessed under s121(1) of that Act. 30The plaintiffs submitted that it was also necessary for the defendant to plead and in due course provide satisfactory evidence as to who the owner of the train was. They submitted that these pleading matters needed to be dealt with by way of further amendment before the Court granted leave for the Amended Defence to be filed. 31Despite making the above concessions, the plaintiffs adhered to their original position that the proposed amendment to the Defences was futile and should not be allowed. 32The differences between the plaintiffs and the defendant on this issue were as follows. The plaintiffs submitted that in accordance with the definition of "motor vehicle" in s3 MACA, it was necessary to look at the definitions in the Roads Transport (General) Act 2005 in order to determine whether the claims made in respect of this train derailment must comply with the MACA. The plaintiffs submitted that it was not sufficient merely to look at the definition of "motor vehicle" in the Roads Transport (General) Act 2005, but it was also necessary to look at the definition of "vehicle". They relied upon the note which appears immediately under the definition of "motor vehicle" in s3 MACA which provided: "The Roads Transport (General) Act 2005 defines a motor vehicle to mean a vehicle (within the meaning of that Act) that is built to be propelled by a motor that forms part of the vehicle. That Act defines vehicle to mean any description of vehicle on wheels (including a light rail vehicle) but not including other vehicles used on railways or tramways." 33In contrast, the defendant submitted that in accordance with the approach of McColl JA in Sheehan and Wicks it was only necessary to go to the definition of "motor vehicle" in the Roads Transport (General) Act 2005 and when one did so, it was clear that this definition picked up a train of the kind which was derailed. 34The other issue between the plaintiffs and the defendant on the issue of futility, was the application of s3B MACA. The effect of s3B, if it applied, was that Chapters 3 - 6 of MACA in respect of death or injury that results from the use or operation of a motor vehicle was limited to death or injury that caused by a motor accident for which the vehicle has motor accident insurance . The plaintiffs submitted that there was no suggestion that the train which derailed had such insurance and consequently the MACA could not apply. 35The defendant submitted that s3B MACA was inserted by the Motor Accidents Compensation Amendment Act 2006 (Act No 17 of 2006, assented to on 8 May 2006). It submitted that the amending Act made no provision for s3B MACA having retrospective effect. Since the derailment occurred on 31 January 2003, it submitted that s3B MACA did not assist the plaintiffs. Consideration 36It is not appropriate for the Court to decide the question of whether the amendment proposed by the defendant will have the effect sought to be given to it. It is also not appropriate to decide, on an application such as this, the effect of some of the amending Acts to which the Court was referred. As the parties freely conceded, these questions were not fully argued before me. 37In view of the appropriate concessions which were made by the plaintiffs, the only real issue to be decided is whether the prospects of success of the proposed amendments are arguable. For the reasons put forward on behalf of the defendant above, I believe they are. It is not clear that it is necessary to go beyond the definition of "motor vehicle" in the Roads Transport (General) Act 2005 to the further definition of vehicle. It is also not clear to what extent, if at all, the provisions of s3B MACA have retrospective effect. 38That preliminary view, which is restricted to the limited issue of arguability does not, of course, foreclose a subsequent application by either side to have the question of the applicability or otherwise of the MACA decided as a preliminary point. 39Accordingly, I propose to give to the defendant leave to amend its Defence in each matter. Having said that, it does seem to me that the criticisms made by senior counsel for the plaintiffs of the form of the proposed amendments has some force. Rather than have the matter come back before the Court yet again for a further amendment of the Defence, I propose to grant a general leave to the defendant to amend its Defence to raise the application of the MACA, but I will not restrict the form of the amendment to that set out in the Notices of Motion. A period of 28 days should be sufficient to allow the defendant to properly plead this issue in its Amended Defences. 40That leaves as the only outstanding issue the question of costs. I raised this matter specifically with counsel in the course of argument. 41As I see it, there are two competing approaches. On the one hand, the defendant can argue that it has succeeded in its motions, which the plaintiffs opposed. In those circumstances, costs should follow the event. 42On the other hand, there has been some delay on the part of the defendant and in the case of the Price matter, a failure on two occasions to comply with orders of the Registrar. In realty each motion sought an indulgence from the Court. Even though the defendant has been successful in obtaining that indulgence, it should still pay the costs of the motions, including the costs of the hearing before me. 43As I indicated in the course of argument, I favour the latter approach. It seems to me that such an order appropriately takes into account the position of the parties. Conclusion 44Accordingly, the orders which I make are as follows: (1) In each matter I grant leave pursuant to s64 of the Civil Procedure Act 2005 to the defendant to file and serve an Amended Defence which raises the application of the Motor Accident Compensation Act 1999 to each claim. (2) Such Amended Defence is to be filed and served on or before 4pm on Friday 28 October 2011. (3) In each matter the defendant is to pay the plaintiff's costs of the motion, including the costs of the hearing before me on 1 September 2011.