Ryan v Optus Networks

The applicant's claims

1. The applicant alleges that in 2014 he suffered loss by reason of the conduct of the respondents. Mr Ryan was a chiropractor and also had an interest in a nightclub called "Krave". Mr Ryan pleaded that he was intending to take up the chiropractic business full-time when his interest in the nightclub ceased.
2. Mr Ryan alleged that from March 2014 he lost business as a result of not being able to make phone calls.
3. Mr Ryan alleged that he suffered damage from the faulty repair of a telephone service. Phone lines were allegedly interrupted at the full time premises of the chiropractic business in Griffith, which was Mr Ryan's home, at the Krave Nightclub, and at his part time places of business in Queanbeyan, Aranda, and Canberra City. Optus and Telstra apparently contend that neither had an obligation to repair faults on Mr Ryan's side of the Network Boundary. Optus and Telstra contend that on multiple occasions tests were run and that no faults were found on the Network side of the Network Boundary. Any work on the customer side of the Network Boundary was open to competition and any licensed technician could, at the request of the customer, carry out work on a fee for service basis. Telstra asserts that it did not supply or have a contract to maintain Mr Ryan's Commander telephone system. Commander systems were supplied, maintained and serviced by an unrelated company, M2 Commander Pty Ltd.
4. Mr Ryan pleads that Telstra and Optus bills were not paid and his phone line was thereafter disconnected. By the time Mr Ryan had paid his telephone bills, the phone numbers he had used could not be retrieved.
5. In 2014, the applicant was successfully sued by the landlord of the nightclub premises and the applicant's countersuit was unsuccessful. A petition for bankruptcy was filed and the applicant entered bankruptcy on 30 June 2016. He was discharged from bankruptcy three years later. When asked why the causes of action on which he sued in these proceedings had not vested in his trustee in bankruptcy (Bankruptcy Act 1966 (Cth) s 58) he said it was because he was suing for damages for personal injury (Bankruptcy Act s 116(2)(g)). In Samootin v Shea [2010] NSWCA 371, Campbell JA said: "[79] The test of whether a cause of action seeks 'damage or compensation … for personal injury or wrong' has been held to be '… whether the damages or part of them are to be estimated by immediate reference to pain felt by the bankrupt in respect of his mind body or character and without reference to his rights of property': Cox v Journeaux (1935) 52 CLR 713 at 721 per Dixon J (applying in the Australian statutory context, Wilson v United Counties Bank Ltd [1920] AC 102 at 111 and 128-133, which was in turn applying Erle CJ in Beckham v Drake (1849) 2 HLC 579; 9 ER 12113 at 604, 1222), applied in Daemar v Industrial Commission of NSW (1988) 12 NSWLR 45 at 55-56 per Kirby P (with whom Clarke JA agreed); Mannigel v Hewlett Phelps [1991] NSWCA 186 at 2 per Handley JA (with whom Meagher JA agreed and Kirby P agreed 'generally'); Arnoya Holdings Pty Ltd v Metway Leasing Limited [1999] NSWCA 120 at [16] per Sheller JA (with whom Powell and Beazley JJA agreed). In Faulkner v Bluett (1981) 52 FLR 115 at 119 Lockhart J said: 'The common thread running through these cases is that where the primary and substantial right of action is direct pecuniary loss to the property or estate of the bankrupt, the right to sue passes to the trustee notwithstanding that it may have produced personal inconvenience to the bankrupt … Where the essential cause of action is the personal injury done to the person or feelings of the bankrupt the right to sue remains with the bankrupt.' … [81] The 'pain and suffering' for which Ms Samootin was claiming damages was pain and suffering that, on her pleaded case, allegedly arose from having lost her property through wrongful action of Ms Wagner. Thus any right of Ms Samootin to sue concerning Ms Wagner having caused her 'pain and suffering' in the way alleged in the statement of claim is a right that would also have vested in the Official Trustee."
6. It follows from Campbell JA's reasoning in para [81] quoted above that, in so far as Mr Ryan alleges that he suffered mental harm as a result of his loss of income and loss of property owing to the respondents' alleged fault, his cause of action vested in his trustee in bankruptcy. So does his claim for financial loss not attributable to the alleged mental harm. That vesting would not be affected by his discharge from bankruptcy (Bankruptcy Act, s 152; Daemar v Industrial Commission of New South Wales (No 2) (1988) 22 NSWLR 178 at 184-185). He has no title to sue for such alleged loss without an assignment from his trustee in bankruptcy. The cause of action could not now be assigned as it has been extinguished by the expiry of the limitation period (Limitation Act 1969 (NSW) s 63).
7. Mr Ryan pleads that the breaches of contract alleged against Optus and the negligence alleged against Telstra caused him to suffer "…much distress", contributed to his property loss, and aggravated health issues due to stress, such as depression and cognitive impairment.
8. Part 3 of the Civil Liability Act 2002 (NSW) applies to Mr Ryan's claim for damages for mental harm resulting from negligence, regardless of whether the claim is brought in tort or contract, or otherwise (s 28). Section 32(1) provides: "32 Mental harm - duty of care (1) A person (the defendant) does not owe a duty of care to another person (the plaintiff) to take care not to cause the plaintiff mental harm unless the defendant ought to have foreseen that a person of normal fortitude might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken."
9. Mr Ryan did not explain how he would seek to establish that the respondents ought to have foreseen that a person of normal fortitude might, in the circumstances of this case, suffer a recognised psychiatric illness if reasonable care in attending to the requested repairs were not taken.
10. The applicant's claim is limited to one for personal injury damages. The applicant pleads that since 2014, he has suffered cognitive decline secondary to major depression and anxiety. The applicant pleads that the failure by the respondents to repair faulty telephone equipment caused, or led to aggravation of, his cognitive impairment, depression, and anxiety. Before the primary judge, Mr Ryan alleged that his businesses declined because potential clients could not reach him by phone and were directed to a defunct number in the phone directory. Mr Ryan asserts that these business interruptions caused anxiety and depression. By reason of that anxiety and depression consequential losses were allegedly caused.
11. In particular, Mr Ryan alleges that he suffered significant losses when he sold properties in 2014 and 2015, which he would not have had to do if his businesses had not declined, which declines were allegedly the result of his depression and anxiety, which was in turn allegedly caused by the conduct of the respondents. Mr Ryan commissioned an expert report that estimated loss partly by estimating loss of profits up to the date Mr Ryan ceased to work, partly by estimating the profits he would have derived had he continued to work to age 75, and partly by calculating the value of the properties at the date of the report less the amounts for which they were sold.
12. Mr Ryan operated his chiropractic business from a room in a house in Griffith where he cohabitated with his domestic partner. That relationship ended in 2014. Mr Ryan sold the Griffith property and $700,000 from that sale was paid to his former partner as part of a family law property settlement. The primary judge found that the property was sold due to over $700,000 being owed in mortgages. In written submissions to this Court, Mr Ryan alleges, without referring to any evidence, that the mortgage company did not force a sale, but that the Griffith property was sold purely due to reduced income and his inability to service mortgage repayments.
13. The primary judge found that it is one thing to say that a loss occurred from a forced sale, and quite another to say that a loss occurred because of the opportunity loss occasioned by the fact that the property was not kept and sold as at the date of the report.
14. Mr Ryan's expert, Mr Bailey, provided an expert report on 19 September 2021 with an addendum on 8 August 2022. Mr Bailey estimated that the applicant lost in excess of $3.1 million as a result of Mr Ryan suffering personal injury as a result of the conduct of Optus and Telstra.
15. Mr Ryan amended his Statement of Claim twice, in July 2021 and January 2022. These later iterations of the Statement of Claim, in keeping with the original, also alleged damage of $100,000, which is within the jurisdictional limit of the Local Court.
16. On 23 March 2023, Mr Ryan filed a further affidavit before the primary judge which annexed a document which apparently contained written submissions authored by Mr Bailey.
17. The primary judge found that Mr Bailey's expert report put the losses in business profits at $20,086. The purported basis for an estimate of over $3 million in damages was principally based on the alleged loss calculated by the value of the properties at the date of the report less the amounts for which they were sold. It included an estimate of net profit foregone until retirement (said to be when Mr Ryan would turn 75) of $413,548. This figure alone, if allowed, would take the claim over the jurisdictional limit of the Local Court. But both parties placed before the primary judge the reasons for judgment of the ACT Supreme Court (Ryan v Bunnings Group Ltd [2020] ACTSC 353) in which, as the primary judge described it, that court dealt with a number of other personal injury claims including three arising from motor vehicle accidents in 2013, 2015 and 2018.
18. The primary judge found that there was no explanation in the expert report about how the alleged losses claimed in these proceedings were caused by the pleaded telecommunications interruptions.

Conclusions of the primary judge

1. The primary judge dismissed the Summons and held that the matter should be heard in the Local Court. The most important factor in his Honour's decision was the overriding purpose of the Civil Procedure Act. It is the function of the Court to facilitate the just, quick and cheap resolution of matters in dispute. The Local Court was ready to proceed on the matter and the proceeding had been before the Local Court for a long period of time. The calculation of damages by Mr Bailey in the vicinity of $3.1 million was questionable. Moreover, the amended Statement of Claim, filed after the expert report was obtained, continued to claim an amount within the jurisdictional limit of the Local Court of $100,000.
2. The primary judge was not satisfied that there was sufficient reason shown for hearing the proceedings in a higher court.

Consideration

1. The applicant seeks leave to appeal from the decision of the primary judge. This is a matter which requires leave because the primary judgment was interlocutory: Supreme Court Act 1970 (NSW) s 101(2)(e). Leave will ordinarily only be granted when the proposed appeal raises an issue of principle, a question of public importance, or seeks to address a reasonably clear injustice going beyond something that is merely arguable: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[38]; Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28].
2. A feature of this application for leave to appeal is that the applicant has chosen to put forward very little material in support of the claim that leave should granted. The applicant's draft Notice of Appeal contains multiple complaints that can be summarised as follows: 1. The Court Book, which was prepared by the respondents due to Mr Ryan's health issues, was prepared in such a manner as to create procedural unfairness towards the applicant in the following respects: 1. The Court Book confused the applicant in his submissions and in addressing the respondents' submissions. It was alleged there were irregularities with page numbering and tabs. It was said to be difficult for the applicant to locate relevant material while making submissions and for the primary judge to understand the material. 2. Some of the applicant's material in the Court Book was printed in a small size. This was unfair to the applicant with his vision difficulties and the Judge who wears glasses. The respondents' material was allegedly "full size". 3. Some of the applicant's material was at the back of the Court Book while the respondents' material was at the front. 1. The Court Book was provided to the applicant only five minutes prior to the hearing.
3. Other than assertion, there is no evidence before this Court that pages in the Court Book were printed in a small size or that the Court Book was numbered and tabbed incorrectly. The Court Book was compiled from documents provided to the respondents by the applicant. There is no evidence, beyond assertion, that there were any changes effected by the respondents in the size, font or legibility of those documents in compiling copies as part of the Court Book.
4. None of the applicant's complaints raises an issue of principle or a question of public importance. We do not accept that the applicant's complaints identify a reasonably clear injustice going beyond something that is merely arguable.
5. Further, we are not satisfied that any difficulties in the font size, compilation or sequence of the Court Book affected the primary judge. That is, there is no indication in any of the material before this Court, including his Honour's amended ex tempore reasons, that the primary judge suffered any difficulty by reason of the font size, compilation, or sequence of the Court Book. We are not satisfied that there was any injustice arising from the primary judge's asserted inability to use the Court Book.
6. As to the applicant's complaint that there was procedural unfairness by reason of the compilation of the Court Book, the applicant provided the material which was included in the Court Book and the applicant did not ask the primary judge for more time to consider the contents of the Court Book. It may be correct that by reason of the applicant's cognitive and vision impairments, he found it difficult to locate quickly and read relevant material. We are not satisfied that it has been demonstrated that the Court Book was confusing or difficult to read, much less that any procedural unfairness to the applicant was caused by the manner of its compilation or deployment before the primary judge. No issue of principle, question of public importance, or reasonably clear injustice going beyond something that is merely arguable has been shown.
7. To the extent that the applicant complains about the weight given to evidence led by him and the rejection of his submissions, we are not satisfied that any arguable matter warranting the grant of leave has been shown. Insofar as the applicant alleged that confusion arose because of his difficulty in using the court book, the crux of this submission is that the primary judge did not accept the applicant's submissions, and therefore there must have been confusion. We do not accept that this has even arguably been shown.
8. So far as timing is concerned, the material given to the respondents by the applicant was included in the Court Book. As we have said, no application for an adjournment was made by the applicant. No issue of principle, question of public importance, or reasonably clear injustice going beyond something that is merely arguable has been shown.
9. The applicant's claim is limited to one for personal injury damages. There are obvious causation issues about whether any or all of the damages claimed are properly recoverable as personal injury damages. The finding of the primary judge that no explanation was provided in the expert report of Mr Bailey about how the losses claimed by the applicant had arisen from telecommunications interruptions has not been shown, even arguably, to be wrong. The amended Statement of Claim, filed after the expert report was obtained by the applicant, continued to claim an amount within the jurisdictional limit of the Local Court, $100,000.

Conclusion and orders

1. We are not satisfied that the proposed appeal raises an issue of principle, a question of public importance, or seeks to address a reasonably clear injustice going beyond something that is merely arguable. Accordingly, the Court orders: 1. Leave to appeal refused; 2. The applicant pay the respondents' costs of the application for leave to appeal.

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. Decision last updated: 18 April 2024