Tsiadis v Patterson [2001] VSCA 138

5. I have been most concerned about the consequence of taking into account the prospects of success in suing a legal practitioner allegedly responsible for a delay necessitating the making of the application for extension. In the end I have been satisfied by the reasoning of Buchanan, J.A. that it is a relevant factor but not necessarily one, at least in the Victorian legislative scheme, which should provide an immediate answer to an application of this kind. It might be said in the present case that the claim against the respondent's solicitor was clear beyond argument, so that the difficulties, as such, of making out her case against that practitioner ought not to be of great consequence for present purposes. That I believe to be an oversimplification, to the extent that I originally thought that it might be easier to say that such potential claims were irrelevant.

8. Problems may arise in the following way. In some cases (of which this may be one), the allegation of negligence would appear incontrovertible, the only possible difficulty being in the assessment of damages.[1] It is, however, in the interest of the applicant to blame the solicitor and to place as little qualification on that as possible, for it makes all the more clear that the applicant cannot be blamed for any delay: see para.(3)(a) and (e). But if a right to sue in negligence were an almost complete answer, as was here suggested because of the strength of the respondent's claim

against the solicitor, nobody would be interested in testing the extent to which blame should fairly rest on the solicitor, especially as the solicitor is not represented and rarely gives evidence, at least in the more obvious claims. If an unanswerable claim in negligence were held to be ordinarily a bar to a claim for extension, there would be a temptation to down-play the solicitor's role, but, artificially, only so far as necessary as to justify the applicant's delay. The respondent would, equally artificially, be trying to make the negligence claim stronger, but at the risk of making unanswerable the applicant's allegations justifying delay. At least treating negligence as irrelevant would make it possible for the applicant's claim in delay to be tested properly.

12. Although in practical terms that might be the simpler solution, I am not satisfied, on a proper reading of the section presently in force in this State, that it can be merely overlooked and set to one side as being irrelevant. The weight to be given to that factor is a different issue and it is sufficient in the present case to say that I agree that it was not such as ought to have deprived the respondent of her order for an extension of time.

17. The error below that re-opens the discretion is illustrated by the learned judge's statement, immediately following his quotation of the passage from the Brisbane South case[2] set out in Buchanan, J.A.'s reasons at [20], that he did not accept that it had been demonstrated that prejudice would be occasioned by the death of Mr Tsiadis so as to place any burden on the present respondent. The legislation with which the High Court was concerned was materially different from s.23A of the Limitation of Actions Act 1958, the language and structure of which require a synthesis of incommensurable considerations for the purpose of deciding whether it is just and reasonable to extend the limitation period. One of those factors is the extent

to which, having regard to the delay, there is or is likely to be prejudice to the defendant.

21. I agree with Buchanan, J.A. that we should re-exercise the discretion ourselves and, substantially for the reasons his Honour gives at [16] and [32], that we should do so favourably to the respondent. In doing so, I assume, without deciding, that the likelihood of her having a good cause of action against her former solicitor may be taken into account with due caution. On the facts of this case, as it was argued, that is an assumption in favour of the appellant. I express no opinion as to whether it would be a bar that a fair trial could no longer be had[3], because I am satisfied that a fair trial may still be had in this case.

26. On 2 December 1989 the respondent attended her daughter's wedding reception at the Navarone Reception Centre in Thornbury ("the reception centre"). The bridal party was seated at a table on a raised platform. The respondent alleges that a chair on which she was seated fell from the platform as a result of which she injured her leg and back.

29. In March 1990 the respondent wrote to the reception centre seeking reimbursement of her medical expenses and loss of wages for the time she had not worked due to her injuries. The respondent received a reply from Commercial Union Insurance ("the insurer"). She could not produce the letter, but said that she believed it contained an offer to pay her $600. The respondent gave the letter to her solicitor, one Turner, who advised her to reject the offer. The respondent accepted the advice and in about May 1990 instructed Turner to pursue her claim for compensation by issuing a writ.

32. 9 The respondent, who was described by the primary judge as "an honest and credible witness", said that she had not dealt with a solicitor before engaging Turner and was not familiar with legal proceedings. She said that she was not aware of the existence of any limitation on the time for commencing proceedings. Towards the end of 1990 the respondent inquired of Turner as to the progress of her case. Turner asked her to pay $300 so that he could obtain a surgeon's report. The respondent paid the money and the report was obtained. From time to time the respondent inquired of Turner as to the progress of her case and was put off with excuses such as that he was very busy and was awaiting reports. In July 1996 the respondent lost patience with Turner and engaged her present solicitors.

35. The respondent's new solicitors had difficulty extracting her file from Turner. The file was obtained at the end of 1996 or early 1997 after intervention by the Law Institute. The respondent was advised that no proceeding to recover compensation for her injuries had been instituted and it would be necessary to apply to the Court for an extension of time if the proposed defendant relied on the expiration of the limitation period. The solicitor wrote to the insurer and was informed by a letter dated 5 March 1997 that it would rely on the limitation defence.

38. On 7 March 1997 an application was made to extend the time for bringing an action by the respondent pursuant to s.23A of the Limitation of Actions Act 1958 ("the Act"). Those named as respondents to the application were two persons revealed by a business names search to be the proprietors of the reception centre in 1997. They were not the persons who owned the business at the date of the accident. Eventually, on 8 August 1997 the appellant, Christos Christopoulos and Sophia Christopoulos, who had been proprietors of the business at the date of the accident, were substituted as respondents to the application. Mr and Mrs Christopoulos resided in Greece. Difficulties were encountered by the respondent's advisers in finding Mr and Mrs Christopoulos. They were not served until 12 June 1998. The application was heard and determined in November 1999. There was no appearance for Mr and Mrs Christopoulos.

41. Section 23A of the Act applies to any action for negligence or breach of duty where the damages claimed consist of or include damages for personal injuries. Sub-sections (2) and (3) provide:

"(2) Where an application is made to a court by a person claiming to have a cause of action to which this section applies, the court, subject to sub-section (3) and after hearing such of the persons likely to be affected by that application as it sees fit, may, if it decides that it is just and reasonable so to do, order that the period within which an action on the cause of action may be brought be extended for such period as it determines. (3) In exercising the powers conferred on it by sub-section (2) a court shall have regard to all the circumstances of the case including (without derogating from the generality of the foregoing) the following - (a) the length of and reasons for the delay on the part of the plaintiff; (b) the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant; (c) the extent, if any, to which the defendant had taken steps to make available to the plaintiff means of ascertaining facts which were or might be relevant to the cause of action of the plaintiff against the defendant; (d) the duration of any disability of the plaintiff arising on or after the date of the accrual of the cause of action; (e) the extent to which the plaintiff acted promptly and reasonably once he knew that the act or omission of the defendant, to which the injury of the plaintiff was attributable, might be capable at that time of giving rise to an action for damages; (f) the steps, if any, taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he may have received."

45. The principal debate before the County Court judge who heard the application concerned the existence or likelihood of prejudice to the appellant caused by the delay.

48. 14 In an affidavit the appellant deposed that she, her husband and Mr and Mrs Christopoulos were the proprietors of the reception centre when the respondent was said to have been injured. The appellant's husband died on 20 May 1997. The appellant had no knowledge of the circumstances in which the respondent claimed to have been injured as her duties were confined to the kitchen.

51. The liability controller of the insurer deposed that the insurer received the letter written to the insurer by the respondent in March 1990 and thereupon engaged a loss assessor to investigate the claim. The assessor sent a report to the insurer which was described as "comprehensive". The report contained, inter alia, detailed statements by the respondent and Mr Christopoulos, who witnessed the accident. There was no evidence as to the willingness of Mr Christopoulos to give evidence for the appellant upon the trial of the respondent's action.

54. The primary judge found that the respondent "acted with reasonable promptitude in consulting a solicitor ... and having done so, I accept that her attempts to follow up with her solicitor were thereafter reasonable." The respondent's evidence that she had no previous experience of litigation and was unaware of the existence of any time limit within which to commence legal proceedings was accepted by the trial judge. It was submitted on behalf of the appellant that the finding that the respondent's conduct was reasonable was not open to the trial judge. The primary judge made his finding after hearing and considering the evidence adduced before him. Each case must turn upon its own facts, and in my view, in the light of the respondent's ignorance of the limitation period and her regular inquiries, while it certainly appears that the respondent was timid and forbearing, it was open to his Honour to conclude that she acted reasonably, that is, she was entitled to trust her solicitor to the extent she did once she instructed him to institute proceedings.[4]

57. Whether the respondent acted reasonably in failing to instruct new solicitors before July 1996 was neither a question to be considered in isolation nor an issue to be decided in absolute terms. Paragraph (e) of sub-s.(3) required "the extent to which the plaintiff acted promptly and reasonably" once she knew that the owners of the reception centre might be liable in respect of her injuries, to be taken into account in determining whether it was just and reasonable to extend the time for bringing an action.

60. The main thrust of the appellant's case was that she had suffered such prejudice as a result of the delay that it was unjust to extend the limitation period.

63. The prejudice occasioned by the delay relied upon by the appellant before the primary judge and upon appeal consisted of the passage of some ten years since the accident, the death of Mr Tsiadis, the absence from Australia of Mr Christopoulos and the apprehended difficulty and cost of bringing him to Australia, the absence of any medical evaluation of the respondent's alleged injuries at the time they were said to have been sustained and the lack of periodic reviews of her condition thereafter.

66. His Honour held that although the appellant had suffered prejudice as a consequence of the delay, it was not sufficient to warrant refusal of the application. He said:

"Whilst I accept that by reason of the lapse of time there would be prejudice to the [appellant] and to [the insurer] in defending any proceeding brought by the [respondent], I do not consider that any of the specific matters raised as indicia of actual prejudice is, of itself, established, or to the extent to which it does arise, to be of sufficient severity to preclude a fair trial of the issues between the parties."

His Honour's reference to failure to establish specific items of prejudice is explained by his use of the following passage from the judgment of Toohey and Gummow, JJ. in Brisbane South Regional Health Authority v. Taylor[5], where their Honours said:

"There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant. Where prejudice is alleged by reason of the effluxion of time, the position is as stated by Gowans, J. in Cowie v. State Electricity Commission (Vict) [1964] VicRp 103; [1964] V.R. 788 at 793 in a passage which was endorsed by Gibbs, J. in Campbell v. United Transport Pty. Ltd. [1996] Qd R. 465 at 474: `It is for the respondent to place in evidence sufficient facts to lead the court to the view that prejudice would be occasioned and it is then for the applicant to show that these facts do not amount to material prejudice.'"

72. The primary judge applied this test to rule out particular matters said to constitute prejudice to the appellant. Thus he held that as it had not been demonstrated that Mr Tsiadis could have given evidence helpful to the appellant, his death was to be disregarded. The possibility that his evidence might have been of assistance to the appellant did not cast any burden upon the respondent to show that his death did not amount to material prejudice. It appears that his Honour reached a like conclusion with respect to the absence of Mr Christopoulos: as it had not been shown that his absence would occasion prejudice to the appellant, it was not incumbent upon the respondent to show that the prejudice was not material.

75. In this approach I think the primary judge erred. The statutory provision which was considered in Cowie required leave to be obtained from the court if notice was not given within six months of the accrual of the cause of action against a public authority. Leave could be given "where the court considered that the failure to give the required notice was occasioned by mistake or by reasonable cause and that the prospective defendant would not be materially prejudiced in his defence or otherwise", and in addition, the court thought it just to do so. While such a provision[6] may render it appropriate to require a respondent to establish that prejudice would result from delay before an applicant is bound to deal with its materiality, s.23A(3)(b) requires the Court to have regard not only to established prejudice, but also to consider the extent to which there is likely to be prejudice. It is

not consistent with that requirement to rule out potential prejudice altogether because the fact that it has occurred or will necessarily occur has not been proven.

79. In my opinion paragraph (b) of s.23A(3) does not limit the Court's attention to prejudice which is present or is likely to occur in the sense that it is more probable than not that it will occur[7] and the word "extent" in the paragraph requires the Court to have regard to the degree to which prejudice is likely to eventuate. Thus, while it may be concluded that Mr Tsiadis could not have given direct evidence as to the circumstances of the alleged accident, the possibility that he may have been able to give evidence as to the layout of the reception centre, whether like accidents had occurred in the course of the business and the way in which its business was conducted should have been considered. Similarly, the potential difficulties in obtaining evidence from Mr Christopoulos should have been considered. Of course the influence of potential prejudice will decrease as its likelihood is reduced.

82. It was submitted on behalf of the appellant that the primary judge erred in failing to have any regard to the prospect of the respondent recovering damages from Turner, her former solicitor, for breach of his retainer or in negligence in failing to institute proceedings against those said to have been responsible for her injuries.

85. The primary judge relied upon the following passage from the judgment of Smith, J. in Repco Corporation Ltd v. Scardamaglia[8], where he said:

"While it might be said that on the evidence before the court the rights against the legal representatives appear to be strong, there is no admission of negligence by the legal representatives and the issues that may arise in any such action have not been investigated or pursued fully in these proceedings. In any event, confining Mr Scardamaglia to an action against the legal representatives would carry with it its own prejudices. He would be able to seek compensation not in respect of his injuries, but for his loss of his right to sue Repco. He would find himself having to prove two cases - the original case against Repco and the further case, the case against the legal representatives. The proceeding would, therefore, be more time consuming and more costly. There would also be a real risk, that, if successful, any sum recovered would be less than any sum that he would have recovered in the original proceeding; for any damages awarded would be for the lost chance to recover damages in the proceedings against Repco."

"I consider that on the evidence before the Court in this Application, most, if not all of the unknown facts identified and discussed by Smith, J. are in existence. I do not regard it as appropriate to pay attention to the possibility of a right of action against the former solicitor in this Application."

91. The relevance of a cause of action against a negligent solicitor has arisen in various contexts: extension of a period of limitation, dismissal of an action for want of prosecution and renewal of a stale writ. In those cases in which the nettle of a plaintiff's ability to successfully sue his solicitor has been grasped, there has been a divergence of opinion. Some judges have regarded the ability of the plaintiff to sue a solicitor as irrelevant[9], while others have taken it into account[10].

94. In my opinion it is appropriate in determining an application pursuant to s.23A of the Act to have regard to the ability of an applicant to recover damages from a former solicitor whose default has made the application necessary. The existence of a cause of action against a solicitor may enable the respondent to recover compensation partly as a consequence of the original wrongdoing. That may not be sufficient. An insurance policy availing the wronged person could have a like effect, and yet I do not think such a benefit should be taken into account in the exercise of the discretion created by s.23A of the Act. In my view the additional element which renders the availability of a cause of action against a solicitor relevant to the exercise of the discretion is that the cause of action arises from the barring of the right of action in respect of which an extension of time is sought. The Court is required by the section to have regard to all the circumstances of the case. The prospect of recovering damages from a solicitor who is responsible for the delay in instituting proceedings is a circumstance of the case, and in my view is one that is relevant to the exercise of the Court's discretion. An applicant with the ability to recover compensation from a solicitor responsible for allowing the limitation period to expire is not relevantly in the same position as an applicant who has no such prospect.

97. The weight to be given to the availability of a cause of action against a solicitor will depend upon the circumstances of each case. The liability of a solicitor is not to be equated with that of the original wrongdoer, and accordingly I do not think it is correct to conclude that an applicant with a good prospect of successfully suing his solicitor will suffer no prejudice if his application is refused. The liability of the solicitor will be determined not only by the likelihood of establishing liability on the part of the original wrongdoer, but also by the terms of the solicitor's retainer, the instructions given by the client from time to time and by the manner in which the solicitor's work has been performed. If the plaintiff is successful in an action against the solicitor, the damages to be awarded are not based upon an assessment of the losses, pain and suffering caused by the injury sustained by the plaintiff, but are commensurate with the value of the lost chance to recover damages from the original tortfeasor.[11] Proceedings against the solicitor will be more complex and expensive than proceedings against the original wrongdoer. Usually the likelihood that the applicant will succeed in an action against his or her solicitor cannot be known with any precision when an application under s.23A of the Act is decided. In the present case it appears that Turner was in breach of the obligations which he owed to the respondent, but that view is one based upon hearing only the respondent's version of her engagement of Turner and the events of the succeeding years, for of course no evidence was led or submissions made on behalf of the solicitor. The matters referred to by Smith, J. in Repco Corporation Ltd. v. Scardamaglia should not lead to a plaintiff's potential cause of action against a negligent solicitor being completely ignored, but rather affect the weight to be given to the availability of the cause of action.

100. In my opinion the exercise of the primary judge's discretion miscarried because in ignoring potential prejudice to the appellant and the availability of the remedy against the respondent's solicitor his Honour failed to act upon the correct principles. The question then becomes whether this Court should set aside the order granting an extension of time and remit the matter to the County Court to be determined anew, or whether this Court should itself exercise the discretion conferred by s.23A of the Act. As the primary judge has found the necessary facts, I consider that this Court can decide the matter and thereby save time and expense.[12]

103. Counsel for the appellant relied upon the decision of the High Court in Brisbane South Regional Health Authority v. Taylor[13]. According to the Court of Appeal in New South Wales the effect of the High Court decision "is that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant."[14] It was submitted that the death of Mr Tsiadis and the absence of Mr Christopoulos precluded a fair trial of the action, and accordingly the respondent's application should have been refused.

106. The legislation considered by the High Court provided that where a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until after the commencement of the year last preceding the expiration of the limitation period and there was evidence to establish the right of action, a court "may order that the period of limitation for the action be extended." The statute prescribed no matters the Court was required to consider in determining whether to extend the period of limitation. Section 23A of the Act is quite different. Section 23A does not belong to that class of legislation providing for extensions to limitation periods that depend upon the discovery of new facts[15] and, more importantly, requires the Court to have regard to all the circumstances of the case, one of a number being the extent to which, having regard to the delay, there is likely to be prejudice to the proposed defendant. The form of the provision in my view does not permit the conclusion that proof of prejudice considered alone must lead to the refusal of an application. Prejudice to the potential defendant is to be considered together with all the circumstances of the case, although in a particular case it may be very significant if it is so severe as to preclude a fair trial of the applicant's claim.

109. The lapse of time since the occurrence of the accident alone warrants an inference of prejudice. Not only do memories fade; evidence which might have been available may be lost without any knowledge of the loss.[16] The existence of actual prejudice in the present case is more doubtful. The absence of any examination of the respondent by a medical practitioner acting on behalf of the appellant may disadvantage the appellant in conducting her case, but the existence and significance of detriment will depend upon the precise nature of the respondent's original injuries and their development and upon the information available from those who treated the respondent. The respondent produced reports from her treating surgeon, which disclosed diagnosis of a straightforward lumbosacral disc prolapse and stable symptoms over a number of years. I think it unlikely that the lack of an opinion of a medical practitioner engaged by the appellant will significantly handicap the appellant in her defence of the respondent's claim. The death of her husband does not appear to have prejudiced the appellant's ability to defend an action by the respondent. A comprehensive report by loss assessors ignored Mr Tsiadis and there was no evidence from the loss assessors to suggest that nonetheless there was reason to think Mr Tsiadis would have been a helpful witness. The fact that Mr Christopoulos, a witness to the accident, is in Greece may, but will not certainly, handicap the appellant in conducting her case. It does not appear that any prejudice caused by to the absence of Mr Christopoulos is due to the delay on the part of the respondent in commencing proceedings, even if the delay is taken to have commenced on the date of the accident. For all the Court knows Mr Christopoulos may have departed from Australia immediately after the accident. Nevertheless the prejudice may have been aggravated by the delay if, with the passage of time, Mr Christopoulos has become less willing to assist the appellant, so that in that way there would be prejudice "having regard to the delay."

112. The matters which the Court is required by s.23A to take into account cannot all be weighed against each other. For example, prejudice to the respondent in being unable to recover any compensation cannot be measured against prejudice to the appellant in conducting her case.[17] Rather, the Court must synthesize a number of competing considerations in arriving at a conclusion that takes account of them all, bearing in mind that the respondent bears the onus of persuading the Court that it is just and reasonable to extend the limitation period. I agree with Brooking, J. in Bell v. S.P.C. Ltd[18] when he said:

"The question posed by s23A is whether, having regard to all the circumstances of the case, including the circumstances mentioned in paras (a) to (f) of subs(3), it is just and reasonable to extend the period. This requires consideration of the conduct and position of both parties, including the effect of the outcome of the application on each of them. ... It is for the plaintiff to satisfy the Court that it is just and reasonable to extend the period."

116. In the present case I have come to the conclusion that overall it is just and reasonable, notwithstanding the possibility of prejudice to the appellant and the

availability of a cause of action against the solicitor of the respondent, to extend the period within which proceedings may be brought by the respondent.

[1] Though in the present case difficulties arising from the concept of "loss of a chance" would be minimal, at least so it would seem.

[2] Brisbane South Regional Health Authority v. Taylor [1996] HCA 25; (1996) 186 C.L.R. 541.

[3] See Holt v. Wynter [2000] NSWCA 143; (2000) 49 N.S.W.L.R. 128 and compare, because the legislation was similar to s.23A, Sydney City Council v. Zegarac (1998) 43 N.S.W.L.R. 195.

[4] Cf. Anisiena v. H. Crane Haulage Pty. Ltd. [1974] VicRp 81; [1974] V.R. 670 at 674 per Starke, J.; Koumorou v. State of Victoria [1991] VicRp 66; [1991] 2 V.R. 265 at 273 per Brooking, J.; Smith v. Healthcope Pty. Ltd., unreported, 30 June 1994, Eames, J.

[5] [1996] HCA 25; (1997) 186 C.L.R. 541 at 547.

[6] The provision the subject matter of Brisbane South also was in a form that was different to that of s.23A. See below.

[7] See Boughey v. R. [1986] HCA 29; (1986) 161 C.L.R. 10 at 20-21 per Mason, Wilson and Deane, JJ.

[8] [1996] VicRp 2; [1996] 1 V.R. 7 at 15.

[9] See, for example, Birkett v. James [1978] A.C. 297 at 324 per Lord Diplock and at 366 per Lord Edmund Davies; Soper v. Matsukawa [1982] VicRp 96; [1982] V.R. 948 at 951 per Young, C.J.; Tavsanli v. Philip Morris (Australia) Ltd., unreported, Young, C.J., 18 September 1989, at 11.

[10] Birkett v. James, above, at 330 per Lord Salmon; Cory v. Simpson [1983] 3 All E.R. 369 at 374 per Stephenson, L.J.; Firman v. Ellis [1978] Q.B. 886 at 909 per Lord Denning, M.R., at 912 per Ormrod, L.J. and at 916 per Geoffrey Lane, L.J.; McKenna v. McKenna [1984] VicRp 58; [1984] V.R. 665 at 680 per McGarvie, J.; Noja v. Civil & Civic Pty Ltd [1990] FCA 135; (1990) 26 F.C.R. 95. In Thompson v. Brown Construction (Ebbw Vale) Ltd [1981] 2 All.E.R. 296 at 303 Lord Diplock said that in exercising a discretion to extend a limitation period the fact that a claimant had "a claim over against his solicitor ... must be a highly relevant consideration." (In Birkett v. James the House of Lords was dealing with an application to dismiss an action for want of prosecution.)

[11] Johnson v. Perez [1988] HCA 64; (1988) 166 C.L.R. 351.

[12] Cf. Lord v. Australian Safeway Stores Pty. Ltd. [1995] VICSC 212; [1996] 1 V.R. 614 at 622 per Phillips, J.A.; Sydney City Council v. Zegerac (1998) 43 N.S.W.L.R. 195 at 201 per Mason, P.

[14] Holt v. Wynter [2000] NSWCA 143; (2000) 49 N.S.W.L.R. 128 at 147 per Sheller, J.A., with whom Meagher, J.A., Handley, J.A. and Brownie, A-J.A. agreed.

[15] See the legislative history described by Priestley, J.A. in Sydney City Council v. Zegerac, above, at 202-222

[16] Brisbane South Regional Health Authority v. Taylor, above, at 551 per McHugh, J.

[17] Brisbane South Regional Health Authority v. Taylor, above, at 549-50 per Toohey and Gummow, JJ.

[18] [1988] VicRp 16; [1988] V.R. 123 at 125-6.