SAMPSON v ZUCKER

Court of Appeal (NSW)|1996-12-11|Before: Deane J, Gleeson CJ, Cole JA

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, COLE JA and Simos AJA

LIMITATION OF ACTIONS - PROFESSIONAL NEGLIGENCE - whether principle enunciated by Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 588-591 would extend the time for the commencement of the action.

The plaintiff sued his former solicitor for negligent advice. The action was commenced seven years after the advice was given and the damage was suffered. The plaintiff sought to rely upon the principle enunciated by Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 588-591. HELD - That principle had no application to the facts of the present case and the claim was clearly statute-barred.

Gleeson CJ This is an appeal brought by leave from a decision of his Honour Judge Patten in the District Court given on 12 December 1995. The background to the appeal is as follows.

The appellant was injured in a motor vehicle accident on 14 September 19S5. On 17 September 1985 the appellant retained the respondent, who is a solicitor, to act for the appellant in bringing an action against the Government Insurance Office of New South Wales for the recovery of damages for personal injuries.

The respondent, in accordance with his instructions, commenced proceedings in the District Court of New South Wales on 7 March 1986. Those proceedings came on for hearing in the District Court on 31 March 1988, on which date they were settled by agreement between the appellant and the Government Insurance Office. The appellant, acting on the advice of his solicitor, the respondent, accepted a sum of money in full satisfaction of his claim for damages.

The appellant, on 18 February 1992, consulted another solicitor, who is his present solicitor, and sought advice as to the adequacy of the damages which the appellant had received as a consequence of the settlement. That solicitor, after making certain inquiries and investigations, apparently advised the appellant that the damages he had received as a result of the settlement were inadequate. The solicitor advised the appellant to sue his former solicitor, the respondent, for damages for negligent advice.

On 16 May 1994 the appellant, represented by the solicitor whom he had consulted in February 1992, commenced proceedings against the respondent in the District Court, claiming damages for professional negligence. The particulars of negligence, in essence, involved an allegation that the respondent had acted negligently in advising the appellant that the settlement offer made by the Government Insurance Office was a reasonable offer in the circumstances and ought to be accepted. The particulars as expressed in the statement of claim were somewhat more elaborate than that, but the argument in this appeal has been conducted on the basis that what I have stated is a fair summary of the essence of the allegedly negligent conduct on the part of the respondent.

Counsel for the appellant acknowledges that the allegedly negligent conduct of the respondent upon which the cause of action was based occurred on or before 31 March 1988. Counsel also acknowledges that the alleged cause of action was complete and had accrued by 31 March 1988.

On the face of things the consequence of that is that, by reason of the provisions of s14 of the Limitation Act 1969, the appellant's cause of action against the respondent became statute-barred on 31 March 1994. As I said earlier, the statement of claim the subject of the present proceedings was filed on 16 May 1994, even though the appellant had consulted his present solicitor as long ago as 18 February 1992.

Patten DCJ, from whom this appeal is brought, had before him two applications. One was an application by the appellant for a discretionary order extending the period within which the appellant might commence proceedings against the respondent. The second was an application by the respondent to strike out the appellant's statement of claim pursuant to the provisions of Pt9 r17 of the Rules of the District Court.

Patten DCJ declined to make an order extending the limitation period. No appeal is brought against that decision. His Honour also made an order striking out the statement of claim upon the basis that the plaintiff s cause of action was, beyond argument, not maintainable, because it was statute-barred. It is against that decision that the present appeal is brought.

It is not suggested on behalf of the appellant that if the present cause of action is clearly statute-barred then the provisions of Pt9 r17 of the District Court Rules did not empower his Honour to make an order striking out the statement of claim. Patten DCJ directed his mind to the principles relevant to striking out the statement of claim, and made his order upon the basis that there was no reasonable argument that could be presented to overcome the respondent's contention that the appellant's alleged cause of action was statute-barred. It is the correctness of his Honour's decision in that respect which is the subject of the present appeal, and that is a matter to which I will turn presently.

It is also to be noted that it is not suggested, and counsel for the appellant has expressly disclaimed any suggestion, that the appellant hopes or expects at the hearing of this matter to adduce any evidence relevant to the issue of the limitation period going beyond that which appears from the bare facts which I have already stated. It is not suggested, for example, that the evidence will or might disclose any conduct on the part of the respondent after 31 March 1988 relevant to the issue about to be discussed. It is therefore not suggested that this is one of those cases in which the judge should have declined to strike out the statement of claim on the basis that the factor material before him was or might be incomplete.

The argument for the appellant is based entirely upon the proposition that the facts as I have stated them bring the present case within the principle enunciated and applied by Deane J in the High Court in Hawkins u Clayton (1988) 164 CLR 539 at 588-591. I turn to an examination of that principle and to its possible application to the circumstances of the Present case.

Before doing so, however, it should be noted that the Limitation Act 1969 contains a number of provisions which in various circumstances either postpone, or permit a court to make a discretionary order postponing, the bar created by s14 of the Limitation Act. It is not suggested on this appeal that any of those provisions are relevant to the present case. Counsel for the appellant does not attempt to bring the case within any of the provisions of Pt3 of the Limitation

Act. Rather, counsel relies upon the proposition concerning the true construction of s14(1) which was enunciated by Deane J.

In Hawkins v Clayton, as the case was analysed by Deane J, the relevant capacity in which the plaintiff sued the defendants was his capacity as executor of the will of a deceased testatrix. The alleged negligence of the defendant solicitors consisted of failure to take reasonable steps, following the death of the testatrix, to locate the executor her will, and put him in a position to commence administering the estate of the testatrix. The damage which was suffered in that case was principally the deterioration of certain property which might reasonably have been expected to maintain its value if the executor had entered upon the administration of the deceased's estate in due time.

As Deane J analysed the case, the duty of care of which the defendant solicitors were in breach was a duty which they owed to the testatrix, and following her death, to her estate. It was therefore a duty of care, 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 of the testatrix.

The relevance of that consideration is as follows. What the solicitors had allegedly done wrong was to fail to take reasonable steps to locate the executor and bring his attention to the necessity of obtaining a grant of probate and entering upon the administration of the estate. This, it should be remarked, had occurred in circumstances where, before the death of the testatrix, there had been a personal falling out between the testatrix and the executor, and the executor might not have been expected that he would even be mentioned in the will of the testatrix.

The consequence of this was that the tortious act alleged against the solicitors, that is to say the failure to take reasonable steps to locate the executor and put him in a position where he could obtain a grant of probate, directly made it impossible for the cause of action against the defendant solicitors to be pursued. The cause of action was a cause of action for breach of duty of care which was owed to the testatrix and her estate; it was a cause of action that could only be pursued by the executor after he had obtained the grant of probate. But the negligent act of the solicitors in failing to locate the executor made it impossible for him to obtain a grant of probate during the limitation period. In other words, the very tortious act upon which the defendants were being sued made it impossible to sue them within the limitation period.

In those circumstances Deane J held that the cause of action was not statute-barred. He construed s14(1) of the Limitation Act as excluding any period during which the wrongful act itself effectively precluded the institution of proceedings.

It is unnecessary for the disposition of the present appeal to go into the interesting question of the standing of the principle enunciated by Deane J. It was not one which was accepted by the other members of the High Court in Hawkins u Clayton, or, to be more accurate, it is not one which was applied by them.

In my view it is appropriate, for purposes of the disposition of the present appeal, for this court to proceed upon the assumption that Deane J was correct, and that s14 bears the construction he placed upon it. The problem is to understand how that assists the appellant.

This is not a case in which the tortious act for which the respondent is sued effectively precluded the appellant from doing anything. There is no suggestion of any relevant tortious act of the respondent which occurred at any time later than 31 March 1988. There was nothing to preclude the appellant at any time

thereafter from doing that which he in fact did on 18 February 1992, that is, seeking and obtaining independent legal advice concerning the adequacy of the compensation that he had received as a result of his settlement with the Government Insurance Office.

As I mentioned earlier, there is no suggestion that at the hearing of this action the appellant might seek to lead evidence of any conduct of the respondent following 31 March 1988 that precluded the appellant from taking independent legal advice and from doing whatever was necessary to pursue the cause of action now relied upon.

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.

Such a proposition itself would have amounted to a short answer in the case of Hawkins v Clayton.

There are certain provisions in the Limitation Act which in relation to persons who sue for damages for personal injuries provide for or allow a postponing of the bar, in certain circumstances which may involve ignorance of a relevant cause of action by a plaintiff. Those provisions however have nothing to do with the present case.

In my view Patten DCJ was correct in his conclusion that the facts and circumstances relied upon by the appellant did not bring the case within the principle stated by Deane J in Hawkins v Clayton. That being the only principle upon which the appellant relies in order to resist the argument that the appellant's claim is statute-barred, such argument must clearly prevail.

The clarity with which it must prevail is such as to warrant an order striking out the statement of claim. I propose that the appeal should be dismissed with costs.

Simos AJA I also agree. Gleeson CJ: The order of the court will be as I have enunciated.

Solicitors for the appellant: Andrew Fegent and Co Counsel for the respondent: CR Newlinds

Solicitors for the respondent: Colin Biggers and Paisley

At a glance

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Judgment (35 paragraphs)

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Cases Cited (2)

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