Sutton v Firth

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Dickinson v The Motor Vehicle Insurance Trust (1987) 163 CLR 500 Australian Securities and Investments Commission v Loiterton [2004] NSWSC 897 at [111] Dillingham Constructions Pty Ltd v Steel Mains Pty Limited (1975) 132 CLR 323 CASES CITED: Mahony v J Krusich (Demolitions) Pty Limited (1985) 156 CLR 522 Argyropoulos v Layton & Anor [2002] NSWCA 183 Wilson v Rigg [2002] NSWCA 246 New South Wales v Taylor (2001) 204 CLR 461 Saad v J Robins & Sons Pty Limited [2003] NSWCA 87

Renee Leslie Sutton (Plaintiff) PARTIES: Stephen Firth (Defendant/Cross Claimant/Respondent) Peter Kell & others (First Cross Defendants/Applicants) Deborah Ens (Second Cross Defendant/Applicant)

P Mooney (Plaintiff) COUNSEL: R Goodridge (Defendant/Cross Claimant/Respondent) D Priestley (Cross Defendants/Applicants)

ENS Lawyers SOLICITORS: Firths - The Compensation Lawyers(Defendant/Cross Claimant) Yeldham Lloyd Associates Lawyers ((First Cross Defendants/Applicants) Thomson Playford Lawyers (Second Cross Defendant/Applicant)

1 This is an application by the cross-defendants to strike out the cross-claim on the grounds that it contravenes either Rule 13.4 (Frivolous and vexatious proceedings ) or Rule 14.28 (Circumstances in which court may strike out pleadings) of the Uniform Civil Procedure Rules. The relevant parts of these Rules provide: 13.4 (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. 14.28 (1) The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or (b) has a tendency to cause prejudice, embarrassment or delay in the proceedings, or (c) is otherwise an abuse of the process of the court. 2 The major thrust of the applicant's submissions are that the cross action could not succeed. In other words it submits that the cross-claim does not disclose a reasonable cause of action.

3 The law governing an application to strike out is set out in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, esp. 128-130. There, Barwick CJ said: "8. The plaintiff rightly points out that the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. I have examined the case law on the subject, to some of which I was referred in argument and to which I append a list of references. There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r. 18, were the suggested source of authority to deal summarily with the claim in question. It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; "so obviously manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". 9. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance". 10. As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners (1949) 78 CLR 62. They must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process." Although I can agree with Latham C.J. in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings (1949) 78 CLR, at p 84, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim.. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed."

4 Those principles apply to the consideration of the grounds upon which the applicants seek to strike out the cross claims.

5 The cross-claim claims against each cross-defendant "1. Contribution and/or indemnity pursuant to section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW)".

6 The applicant says that the defendant/cross-claimant cannot be entitled to any contribution or indemnity for a number of reasons.

7 The cross-defendants now rely on several contentions in support of their application to strike out or dismiss the cross-claims: 1. A claim for contribution and/or indemnity under the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5, cannot be made because the loss or damage suffered by the plaintiff as a result of any negligence by the cross-defendants is not the same loss or damage as that which she claims to have suffered as a result of the negligence of the defendant; and 2 The matter is governed by the Civil Liability Act 2002 (NSW), ss 34-35, so that any loss suffered by the plaintiff must be apportioned as between the defendant and each of the cross-defendants. 3 The Workers Compensation legislation precludes revocation of an election because the deterioration in the plaintiff's condition was foreseeable at the time she made an election.

8 The plaintiff claims to have suffered injuries in the course of her employment in the years from 1994 up to and including 1998. She instructed the defendant to represent her in a claim for compensation, and he did so. She alleges that the defendant was negligent in the performance of his duties as a solicitor in particular ways. These are set out in the Statement of Claim. In summary form they are: a. Failing to advise the plaintiff that she had a worthwhile claim for damages pursuant to the provisions of Section 151 of the Workers' Compensation Act 1987. b. Failing to advise her that there was evidence of negligence on the part of her employer. c. Failing to advise her that her injuries were such that she would likely exceed thresholds in Sections 151G and 151H of the Act and so she should commence a claim for damages.

9 The statement of claim also alleges a number of other ancillary failures on the part of the defendant. 10 The defendant says that if the plaintiff suffered loss or damage as alleged, then that loss or damage was caused or contributed to by the negligence and/or a breach of retainer by the cross-defendants.

11 The plaintiff suffered an injury to her back. This is the reason that she instructed the defendant to represent her, which he did in 1998-1999. By 2004, the plaintiff's back condition had deteriorated. When the matter was first argued before me, it appeared that much would turn on the findings I make about the nature of that deterioration. That is now largely irrelevant for reasons I shall state later.

12 It is not in dispute that from some time in 2004, the first cross defendants represented the plaintiff. At that time the second cross-defendant was a solicitor employed by the first cross-defendant, but on 1 July 2004 she commenced practice on her own account and the plaintiff has been her client since that time.

13 The ways in which the defendant says that the cross defendants were negligent are, in summary: a. Failure to make an application to revoke an election pursuant to s 151A(5) of the Workers Compensation Act; b. Failure to commence a claim for damages; c. Failure to apply for an increase in lump sum benefits (Workers Compensation Act ss 66 and 67); and d. Failure to apply for increase in weekly benefits.

14 It is agreed that the defendant did commence workers compensation proceedings, though not a claim in the Compensation Court or any other court, on behalf of the plaintiff. There were conciliation/mediation proceedings under a provision of the legislation that has since been repealed. On 1 September 1999 the plaintiff and the workers compensation insurer entered into an agreement as provided under the workers compensation legislation then in force. This agreement related only to an injury that the plaintiff claimed to have suffered on a particular day. The defendant's position is that she also claimed for injuries suffered at other times over a period of 5 or 6 years, and she did not ever elect to resolve those claims. The plaintiff received a lump sum of compensation pursuant to that agreement. She did not elect to take a lump sum in lieu of a claim for continuing periodic payments as provided under the legislation. Neither cross-defendant appeared to understand that this was the position until after the matter had been argued before me. They continued to take the view that the plaintiff had elected to take a lump sum, and could not revoke it.

15 It is not in contention that if the plaintiff had made an election it would have been binding, unless and until leave were granted by the court to revoke the election pursuant to s 151A(5).

16 If I find that the plaintiff made no such election, or did not do so in relation to all injuries, I must find that the defendant must abandon his claim that the cross-defendants were negligent in failing to seek revocation of the election, and, despite their argument to the contrary, the cross-defendants must abandon their submission that no such application could succeed and therefore that such an application would have been futile. I accept that the agreement made by the plaintiff did not relate to all the injuries she claimed, but even if I am wrong on this point, for reasons I give later, I would still dismiss this application. Although there has been no change in any pleading, the facts as they now stand make it clear that any question of an application to revoke an election is irrelevant. The other particulars of negligence in the cross-claim remain and are pressed.

17 It is perhaps easier to deal with the questions arising under the Civil Liability Act first. The defendant argues that this provision does not apply. The relevant provisions of that Act, Part 4, read as follows:

(1) This Part applies to the following claims (apportionable claims): (a) a claim for economic loss or damage to property in an action for damages (whether in contract, tort or otherwise) arising from a failure to take reasonable care, but not including any claim arising out of personal injury, [my emphasis] (b) a claim for economic loss or damage to property in an action for damages under the Fair Trading Act 1987 for a contravention of section 42 of that Act.

(1A) For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).

(2) In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of two or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

(3) For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1).

(4) For the purposes of this Part it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.

35 Proportionate liability for apportionable claims

(1) In any proceedings involving an apportionable claim: (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss, and (b) the court may give judgment against the defendant for not more than that amount.

(2) If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim: (a) liability for the apportionable claim is to be determined in accordance with the provisions of this Part, and (b) liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.

(3) In apportioning responsibility between defendants in the proceedings: (a) the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law, and (b) the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.

(4) This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.

(5) A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise.

18 The principal contention of the defendant/cross claimant is that these provisions do not apply because the claim in negligence against him "arises out of personal injury". It is quite clear that the claim by the plaintiff against the defendant is not itself a claim for damages for personal injury, but the defendant argues that it arises out of a claim for personal injury.

19 In Dickinson v The Motor Vehicle Insurance Trust (1987) 163 CLR 500, which concerns the interpretation of the motor vehicle third-party insurance legislation of Western Australia, the Court said (at 505): "[T]he question is not whether the father's negligence was in the use of the motor car. It is whether the appellant's injuries were caused by or arose out of the use of the motor car. It is the failure to observe this distinction which appears to lie behind the decision of the Full Court and the submissions made on behalf of the respondent. Whether or not the appellant's injuries were actually caused by the use of the motor car, it is sufficient to say that they arose out of such use. The test posited by the words "arising out of" is wider than that posited by the words "caused by" and the former, although it involves some causal or consequential relationship between the use of the vehicle and the injuries, does not require the direct or proximate relationship which would be necessary to conclude that the injuries were caused by the use of the vehicle." [my emphasis].

20 Although the terms of the legislation cover different subject matters, the words used in the legislation here are the same and there is no reason to construe them differently. It follows that here, the defendant's cause of action has a causal or consequential relationship to the plaintiff's personal injury, which is sufficient to bring it within the scope of the phrase "'arising out of' the personal injury". In my view the relevant provisions of the Civil Liability Act do not govern such a claim.

21 If, however, I am wrong in law on this point, there is another reason why, in my view, it is inappropriate to strike out or dismiss the cross-claims on the basis that they are covered by these provisions of the Civil Liability Act. Part 4 requires the Court to apportion liability between the various persons whom it finds to be responsible for the damage. This requires a determination of many facts and the construction of a number of statutory expressions. Bergin J alluded to some of these difficulties in Australian Securities and Investments Commission v Loiterton [2004] NSWSC 897 at [111]. The facts necessary for the Court to perform the tasks required by Part 4 could not be determined without a hearing at which the defendant and cross-defendants should be represented, and findings made by the Court on issues of fact. Even if the applicants are correct, the determination of their liability to the plaintiff, if any, could not be determined without hearing. The General Steel principles, which I have set out above, would therefore incline me to dismiss the application.

The claim for indemnity under the Law Reform (Miscellaneous Provisions) Act

22 The cross-claim for indemnity is brought under the Law Reform (Miscellaneous Provisions) Act 1946, the relevant parts of which are as follows:

5 Proceedings against and contribution between joint and several tort-feasors

(1) Where damage is suffered by any person as a result of a tort (whether a crime or not): (c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise , so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought. [my emphasis]

(2) In any proceedings for contribution under this section the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage; and the court shall have power to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.

23 The cross-defendants/applicants say that they cannot be held liable under this provision because any loss or damage, which the plaintiff may have suffered as a result of their negligence, is not "the same damage" as the damage that she suffered as a result of the negligence of the defendant.

24 They rely on a number of authorities which suggest that where a person that suffers loss or damage as a result of the negligence of another person, and then that damage is exacerbated or compounded by the negligence of a third person, the additional damage caused by the third person is seen as separate from the original damage.

25 The cross defendants argue that the failures of the defendant, which the defendant attempts to sheet home, at least in part, to them, fall into two classes. The failure to apply for increases in benefits under the workers compensation legislation, as it applies to the plaintiff, is not a failure, merely a delay, as the right has not been lost. Therefore, there is nothing to stop the plaintiff recovering benefits in relation to both past and future losses.

26 The other failure alleged is that no claim has been made for damages under the "modified common law" provisions of the workers compensation legislation. It is not in issue that, although such claims have now been abolished, the plaintiff, even now, would have been able to recover such damages if she crossed certain thresholds. Unless it was commenced within the limitation period, which has long since expired, such a claim could only be brought with the leave of the Court in which the claim is pursued.

27 In seems beyond argument that when a person suffers an injury, as a result of the negligent act or omission by a second person and subsequently the act of a third person also harms the plaintiff, that the actions of the second and the third persons are regarded as different in law, that is, such actions cannot be regarded as being a "joint" or "concurrent" tort, but the second tort is regarded as a subsequent tort. The respondent argued that the damage is not the "same damage" in each case: see Dillingham Constructions Pty Limited v Steel Mains Pty Limited (1975) 132 CLR 323 especially at 326-7; Mahony v J Krusich (Demolitions) Pty Limited (1985) 156 CLR 522, 528-9. Mahony's case concerned the exacerbation of a work-related injury by the alleged negligence of a doctor. At the pages referred to in that case, the Court said: "6. A negligent tortfeasor does not always avoid liability for the consequences of a plaintiff's subsequent injury, even if the subsequent injury is tortiously inflicted. It depends on whether or not the subsequent tort and its consequences are themselves properly to be regarded as foreseeable consequences of the first tortfeasor's negligence. A line marking the boundary of the damage for which a tortfeasor is liable in negligence may be drawn either because the relevant injury is not reasonably foreseeable or because the chain of causation is broken by a novus actus interveniens ( M'Kew v. Holland & Hannen & Cubitts (1970) SC(HL)20, at p 25). But it must be possible to draw such a line clearly before a liability for damage that would not have occurred but for the wrongful act or omission of a tortfeasor and that is reasonably foreseeable by him is treated as the result of a second tortfeasor's negligence alone: see Chapman v. Hearse (1961) 106 CLR 112 at pp 124-125. Whether such a line can and should be drawn is very much a matter of fact and degree (ibid., p.122). . . 7. In particular circumstances, minds may differ as to whether a subsequent injury was foreseeable or whether it is too remote to be regarded as a consequence for which an earlier tortfeasor may be held liable. When an injury is exacerbated by medical treatment, however, the exacerbation may easily be regarded as a foreseeable consequence for which the first tortfeasor is liable. Provided the plaintiff acts reasonably in seeking or accepting the treatment, negligence in the administration of the treatment need not be regarded as a novus actus interveniens which relieves the first tortfeasor of liability for the plaintiff's subsequent condition. The original injury can be regarded as carrying some risk that medical treatment might be negligently given: [ authorities cited] . It may be the very kind of thing which is likely to happen as a result of the first tortfeasor's negligence (cf. per Lord Reid in Dorset Yacht Co. v Home Office [1970] AC 1004, at p 1030). That approach is consistent with the view taken in workers' compensation cases that the total condition of a worker whose compensable injury is exacerbated by medical treatment, reasonably undertaken to alleviate that injury, is to be attributed to the accident: [ authorities cited] , although medical negligence or inefficiency can be held to amount to a new cause of incapacity in some circumstances: Rothwell v. Caverswall Stone Co . (1944) 2 All ER 350, at p 365; Hogan v. Bentinck Collieries (1949) 1 All ER 588, at p 592. In the last-mentioned case Lord Reid, in dissent, expressed the opinion that there is a break in the chain of causation when a doctor is guilty of such negligence as would make him liable in damages. We think, with respect, that that test is too rigid. Some degree of medical negligence in the treatment of an injury may well be a reasonably foreseeable result of the act or omission by which that injury was inflicted, and then no clear line can be drawn to limit the original tortfeasor's liability to exclude the consequences of medical negligence."

28 It may be that the case of the exacerbation of a plaintiff's loss by reason of the negligence of a solicitor falls into the same category as medical negligence. The High Court appears to have left that open. However, the Court of Appeal in this State has considered the issue recently in two cases.

29 In Argyropoulos v Layton & Anor [2002] NSWCA 183, the Court of Appeal affirmed the view that where a person suffers loss as a result of the failure of a solicitor to commence action within the limitation period, the damage occurs at the time when the limitation period expires. This was the main issue in the proceedings. However, in the course of argument, Santow JA, with whom the other judges agreed, expressed the view that the failure of a solicitor to institute proceedings within time was a different act from the continuing failure to seek leave to institute proceedings. In the circumstances of that case there were two distinct causes of action, and by implication at least, the damage suffered by the plaintiff was different in each case.

30 Argyropoulos v Layton concerned the correctness of the decision at first instance in Wilson v Rigg, which was considered by a differently constituted Court of Appeal on appeal against the first instance decision: [2002] NSWCA 246. In that case, Giles JA, with whom the other judges agreed, said: "27 The appellant had a valuable asset, his cause of action against the SRA. When the respondent failed to bring proceedings by 1 July 1992, the value of the asset immediately diminished. It diminished because of the likelihood that the SRA would plead that he was not entitled to commence proceedings, and the likelihood that it would be necessary for the appellant to apply for leave under s 52(4) of the Motor Accidents Act and might not obtain leave. If the appellant were to assign his cause of action for valuable consideration, the consideration would be less for those reasons. . . 45 . . .The respondent's failure to commence proceedings within time did not cause the loss of the whole of the value of the appellant's claim against the SRA. The appellant's claim against the SRA still had a value, although a diminished value, because he could overcome the failure to commence proceedings within time by a successful application under s 52(4). Depending on the facts, the diminution may have been small or large. .. 48 The issue, in my view, is not one of suffering separate damage. It is one of separate breach of a duty of care."

31 The issue in these cases is not identical to the issue before me. It concerned the time at which the cause of action arose. The reasoning is, however, helpful, though it does not conclude the issue of whether consecutive torts may give rise to a claim for contribution or indemnity. In the case before me, if the plaintiff is correct, she has suffered loss. That loss is, taken as a whole, of a right to claim compensation for personal injuries coupled with a right to claim compensation for the loss of an entitlement to claim compensation. As the Court of Appeal has pointed out, with the passing of time, the right to claim compensation from her employer diminishes in value. She does, however, have a right whose value increases correspondingly over time, to claim compensation from a solicitor, should that solicitor be found negligent.

32 If the cross-claim succeeds, the plaintiff possibly has rights against each cross-defendant. There is no doubt that, in the contingency that the cross claimant is found liable to the plaintiff, the plaintiff would have had a right to claim compensation from each of the cross defendants. It is not so clear that each of the cross defendants owed a duty of care to the cross claimant. That is a matter, which could be determined only by the consideration of evidence presented at a hearing.

33 It is by no means clear that the claim for contribution and indemnity by the defendant against either or both cross-defendants could not succeed.

34 It follows that the plaintiff may have a right to claim some compensation from each of the cross defendants. It may also be that the cross claimant is able to establish that one, other or both cross defendants owed a duty of care to him, and there was a breach of that duty which caused him loss, in the event that he is found liable to compensate the plaintiff. It does not necessarily follow that this gives rise to a right to claim contribution or indemnity under the Law Reform (Miscellaneous Provisions Act) 1946, s 5(1), although that result is clearly anomalous.

35 The loss suffered by the plaintiff as a result of the negligence, if any, of the defendant/cross-claimant is the result of a different tort from the negligence, if any, of either or both cross defendants. That is not to say that each loss is not part of the same damage.

36 As I have said, the cases which determine that the claim against a solicitor for negligence in failing to commence proceedings within the limitation period establish that the tort committed by the solicitor is of a different character to the original tort (the tort which was not sued upon). It does not follow that the damage, which the plaintiff suffers, is not at least part of the "same damage"; rather, it can be seen as part of a total loss, to which both torts contributed. This is precisely the situation contemplated by s 5(1). "The same damage" as I read the section applies to the total loss, if it is caused by any number of tortfeasors, whether joint, several, concurrent or consequent. The relevant wording is "any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise." The last words quoted, "or otherwise", cover the situation where the tortfeasors commit consecutive, rather than joint, torts.

37 The evidence involved in any claim against either the cross claimant or the cross defendants (on either of them) would be identical to, or at least strongly overlapping with, the evidence in proceedings by her against the cross-claimant. It is extremely important that there will be no right in the plaintiff to claim against either cross defendant in respect of the damage unless and until the cross claimant' s liability to the plaintiff is established. Those proceedings should be determined at the same time.

38 That result would be consistent with the principle embodied in the Civil Procedure Act and the uniform Rules, namely that the proceedings should be determined in the most efficient manner and at least cost to the parties. That could not be done if proceedings against the cross defendants could not be commenced until the issues in relation to the defendant's liability to the plaintiff had been determined. In any event, those proceedings by now would be statute barred. If the cross defendants are liable to the cross claimant, and the cross claimant is liable to the plaintiff, the issues giving rise to the liability of the cross defendants could not be determined in isolation from those which would determine the liability, if any, of the defendant to the plaintiff. These are real issues which must be determined.

39 For those reasons also, the General Steel principles set out above would influence me not to dismiss or strike out the cross-claims.

40 The applicant says, contrary to the assertion by the cross claimant/respondent, that the agreement does in fact constitute an election by the plaintiff to accept lump sum benefits in substitution for a right to claim compensation under the "modified common law" provisions of the workers compensation legislation.

41 In my view, this argument cannot be maintained. The agreement that was registered resulted from the process of negotiation. Its terms are not clear, but whatever they may be, I cannot find that there was anything in the agreement that could constitute an "election", and certainly does not constitute "permanent loss compensation", the expression used in S 151A of the legislation as it then stood.

42 It follows that I find that there was no election to be revoked. However, if that conclusion is wrong, I should consider the consequences.

Was a revocation possible, if there was in fact an election?

43 The applicant argues that revocation of the election was never possible because the plaintiff could not show that, in the words of the section there was "no reasonable cause to believe that further deterioration will occur".

44 The applicant relies on the decision of the High Court, New South Wales v Taylor (2001) 204 CLR 461, 467, and was applied by the Court of Appeal in Saad v J Robins & Sons Pty Limited [2003] NSWCA 87. The respondent submits that this case is analogous to Saad's case. It makes this submission on the basis that the deterioration of the plaintiff's condition was of a totally different type to the possibility of deterioration alluded to in the medical reports available at the time of the election.

45 In evidence before me there are a number of medical reports obtained by the defendant in connection with the workers compensation claim. These reports refer clearly to the plaintiff's lower back pain and to the various examinations that had been carried out up until the time the agreement with the insurer was reached. There was a consensus among the experts as late as August 1999. The report of Dr Blake, dated 27 August 1999, reads, "Diagnosis is of a major extrusion of the L4/5 disc in the lower back, occurring gradually, and producing pressure and slight damage to the left L5 nerve root. A developmental condition (the effects of the arch at L5 with no apparent slippage but developmentally small L5 vertebral body) is found but appears not to be the main source of her present symptoms particularly involving the nerve root to the left leg. No injury as such has occurred, and symptoms have developed gradually . . . Prognosis is uncertain, it is possible spontaneous improvement will occur. It is also possible some deterioration will occur, in which case of surgical treatment will need more definite consideration. It is not possible to predict which way a particular person will go. At present she feels her condition is still deteriorating."

46 There are a number of other references in this report to possible deterioration. Dr Rosenberg, in a report to the workers compensation insurer, about a year earlier, talks about the possibility of an L4/5 discectomy, as does Dr Patapanian, in a report in September 1999. Dr McKenzie also contemplates the possibility of surgery if the plaintiff's condition deteriorates.

47 I emphasise that the medical material before me is not complete. On the face of the material that I have referred to, the test that the High Court prescribed in Taylor's case would seem to preclude the plaintiff from ever having the election revoked.

48 The respondent has referred to other medical reports, prepared after the agreement between the plaintiff and the workers compensation insurer. These reports refer to a condition which may be a different provenance from that referred to in the pre-agreement medical reports. This condition is described as a "slippage" of about 12mm magnitude. It appears to be in the same area (L4/5) of the plaintiff's spine as the previous condition but may be a different type of condition. Whether or not it amounts to a "deterioration" or whether it is a different pathology is a matter which could only be determined after hearing evidence. There is a genuine dispute about this because the medical evidence before me is not complete, I could not finally determine that issue on the pleadings and even then I am not certain that I could determine the issues. Again, the General Steel principles indicate that it would not be appropriate for me to strike out pleadings or dismiss a cross claim unless and until that issue had been determined.

49 I find that none of the pleadings objected to falls foul of either Rule 13.4 or Rule 14.28. On their face they are genuine and there are real issues to be determined.

50 The application does not succeed in any aspect. It is therefore dismissed in total.

51 My remarks may cause the parties to seek to amend the pleadings. That is something, which they may always do by leave, if it does not cause unfairness to other parties, and for that purpose, I propose to give all parties liberty to apply on 48 hours' written notice.

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