Wacker v Van Dyke t/as Vandyke Racing; Wacker v Dr Albany

Supreme Court of NSW|2022-07-27|Before: Schmidt AJ

Solicitors: Herbert Weller (Plaintiff) Wotton + Kearney (Defendant)

2019/334332 Counsel: P Menzies QC (Plaintiff) K Tang (Plaintiff) M Windsor SC (Defendant) A Kumar (Defendant)

Solicitors: Herbert Weller (Plaintiff) HWL Ebsworth (Defendant) File Number(s): 2019/14510; 2019/334332

How the application came to be made

The proceedings against Mr Van Dyke were commenced in the District Court in January 2019 and transferred to this Court in 2020, where the proceedings brought against Dr Albany had been commenced. Orders for service of evidence were then made and a mediation took place in June 2021.
In October 2021 Cavanagh J listed both matters for hearing with an estimate of 10 days and made further orders for the service of additional evidence. Readiness was confirmed before his Honour on 22 April 2022 and without objection Mr Wacker's pleadings were later amended. The matter later came before me for further directions, on Mr Wacker's application, without further pleading amendment being pursued.
Despite this, at the commencement of the hearing it was announced that the possibility that Mr Wacker might also have suffered a brain injury had been raised and was being investigated. An MRI scan of his brain had only been served that morning. It was also then being considered by an expert, who could not provide a report until Wednesday.
If there had been such an injury, that had an impact not only on Mr Wacker's health, but also on the damages he had suffered and the case which he wanted to pursue. Despite these developments Mr Wacker's preference was for the hearing to commence. That was opposed, the possibility of the need for pleading amendment arising as it did.
After an adjournment so that the parties could discuss what had been raised, it was agreed that the hearing should be adjourned to the following day, to permit Mr Wacker to file and serve his motions. It then appeared that the hearing could still be concluded in the allocated 10 days, if it proceeded.
The following day the position was that by motions supported by affidavits sworn by Mr Wacker's solicitor, Mr Weller, leave to amend the statement of particulars to raise the claim of brain injury in Mr Van Dyke's case and both the statement of claim and the particulars in Dr Albany's case, had been served. That leave was also opposed.
Mr Wacker's preference was still for the hearing to commence, leaving the prospect that during its course advice might be received that he had suffered a brain injury, which he then proposed to pursue by evidence which had not yet been obtained. That would, as a matter of fairness, require an adjournment, while the case was part heard, so that such evidence could be considered and met by Mr Van Dyke and Dr Albany. That course was also opposed.
The hearing of the motions was adjourned after Mr Weller's cross-examination, to enable enquiries to be pursued with the expert whose report was awaited.
When the hearing resumed the position was that the expert had advised that she had been unable to express an opinion about brain injury, based only on the scans. The result was that this required further investigation, which Mr Wacker understandably wished to pursue. It was still proposed, however, that the hearing of the lay evidence should proceed, with the hearing then being adjourned until evidence of brain injury was obtained.
That course was also opposed.
In the circumstances I considered that Mr Wacker had to make an election. Either to proceed on his pleaded case, which was ready to be heard, or to seek an adjournment so that the possibility of a brain injury could be investigated, that being a case which was not ready to be heard.
That was because it was apparent that even the lay evidence could be affected if Mr Wacker had suffered a brain injury, suggested by the intercranial pressure referred to in both of Dr Ward's reports on the brain scans. That would not only have a potential impact on his damages, but also on other issues which already lay between the parties. They included the accuracy of histories which Mr Wacker had given medical and other experts and the credibility and reliability of his evidence.

The adjournment application

After instructions were taken, Mr Wacker sought the adjournment to permit the investigation of whether he had suffered a brain injury to be pursued, with the costs thrown away being ordered to be costs in the cause. That was also opposed.
Before the defence submissions were put the next day after an outline of submissions had been served, it was confirmed that the adjournment application was advanced on the basis of Mr Weller's evidence.
The defence case was that the hearing should proceed on the pleaded case and evidence which the parties had already served, that case being ready to be heard, because there was no evidence which could justly permit the exercise of a discretion to adjourn the hearing in order for Mr Wacker to pursue the proposed investigation of a brain injury. Indeed, the evidence of brain injury was so scant, that the discretion to grant the adjournment was not enlivened, the documentary evidence being confined to Dr Ward's reports on the two brain scans. Further, neither the requirements of the Civil Procedure Act 2005 (NSW) nor the considerations discussed in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27, permitted the adjournment, given the unfair prejudice which would result and the other inefficiencies which had to be taken into account: at [5]-[6], [98], [101]-[102] and [111]. There discussed includes the necessity of a just resolution of the proceedings, which has to be understood in the context of the need to minimise expense and delay
An application was then made to tender two further documents, Dr Batchelor's December 2020 report, which was contained in the court book and a letter just then received from Dr Batchelor. That leave was also opposed, but granted, with the eventual result that the documents were admitted and the adjournment granted, despite the submissions advanced about when the matter might proceed if adjourned.
Counsel explained that the failure to tender the December 2020 report when Mr Weller was cross-examined was the result of a misunderstanding of what was then in issue. It and Dr Batchelor's letter had to be taken into account, even though they were received over objection only after the defence submissions were made.
The defendants not only opposed the admission of the report and the letter, but also submitted that they supported the conclusion that the adjournment should be refused. It was submitted that Mr Wacker had in 2020 had the opportunity to have his possible brain injury examined, but he had not made the most of that and instead, had exaggerated, misled and perhaps lied about what his position was.
Another dispute then emerged, with Mr Wacker's case being that the hearing would take only five days, Mr Van Dyke's that it would still take 10 and Dr Albany's that it would take 12, with the result that if adjourned, it could not be heard until 2023, which also told against the adjournment. But the practical result was that even if the hearing then proceeded, it would not conclude within the time remaining and would have to be adjourned part heard.

Mr Weller

In his affidavits Mr Weller had explained that documents produced on subpoena by the GP Dr Cameron in June 2022 had included a file note referring to a report on an October 2020 MRI; that he had only received those documents on 17 July 2022; that the MRI report had been contained in documents produced by the workers compensation insurer EML, but it was only on 21 July that they had been discussed with counsel. Mr Wacker had then been advised to undergo a further MRI. The further report on the scan then undertaken was received on 22 July and was being pursued with the expert.
In cross-examination Mr Weller said that he first became aware of the first MRI report on 14 June 2022; that he was a sole practitioner; that he was aware that the workers compensation insurer had produced documents in 2021, which he had then downloaded, but did not review until shortly after 14 June 2022; that documents had also been produced by iCare in September 2021, shortly after which he obtained access to them; but he had also not assessed what was contained in them, because of the pressures of business.
Mr Weller also agreed that he should have assessed the documents at the time they were received. Given their importance to Mr Wacker's case, that concession was properly made.
Mr Weller also said that he had read the neuropsychologist Dr Batchelor's December 2020 report, which had been served, but he did not recall when he read it or aspects of what it contained. But he did recall it saying that Mr Wacker had given suboptimal performance on testing. He agreed that he had objected to the report being put before the conclave of experts because, he explained, he did not consider that it assisted Mr Wacker's case and he had discussed further testing with Dr Batchelor, which had not yet taken place. He also agreed that he had not discussed that report with Dr Cameron or any other neuropsychologist.

Dr Batchelor's report and letter

The procedural course which had been pursued was obviously problematic. But I was satisfied that there was no prejudice in the receipt of either the report or the letter, supporting as they did evidence which Mr Weller had already given. Both were plainly relevant to what lay in issue between the parties and there would be an opportunity given to address them. I was also satisfied that the other objections taken to their receipt, could not be accepted.
The report was argued to be inadmissible because the necessary rationale supporting the opinions expressed had not been disclosed in the required way: Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21.
I was satisfied that this could not be accepted, the basis of the opinions expressed having been disclosed by Dr Batchelor and given the purpose of her 2020 report.
In the report Dr Batchelor indicated the documents which she had been instructed with, which included a March 2020 report of the psychiatrist Dr George. Under the heading history, Dr Batchelor referred to information obtained from that report, about what Mr Wacker had told Dr George; the persistent depressive disorder with elements of PTSD which Dr George had diagnosed; and Dr George's view that "there appeared to have been significant personality changes which may be indicative of frontal lobe damage. Neuropsychological assessment and an MRI brain scan were recommended".
There was also an objection that the basis of Dr George's opinion had not been disclosed, but that was not for Dr Batchelor to deal with in her report. She had been instructed with his report, which formed a part of Mr Wacker's history and resulted in the investigation of the possibility of brain damage being commenced. That Dr Batchelor adequately disclosed what she had come to consider as a result, had to be accepted.
Dr Batchelor also referred to the October 2020 brain scan. Annexed to Mr Weller's affidavit was Dr Ward's report about that scan. It referred to "Clinical History: Hypoxic brain injury". It was accepted that did not evidence that Mr Wacker had suffered such an injury. But that was what had to be investigated. Dr Ward there concluded that "there are some changes which can be associated with raised intracranial pressure".
Dr Batchelor also explained her assessment, outlining Mr Wacker's responses on interview, before turning to the test results of tests she had administered, the full range of testing usually conducted not having been administered. This was explained by what Dr Batchelor considered to have been deliberate attempts by Mr Wacker to score poorly on testing, for reasons which she also explained.
The opinions which Dr Batchelor then expressed included that "[a]vailable information indicates that Mr Wacker sustained a possible hypoxic brain injury while in theatre and undergoing preparation for an operative procedure on 25 October 2016. Since the time of that event, he has described personality change and the possibility of frontal lobe damage has been raised." That was consistent with account being taken by Dr Batchelor of the reports and the scan she had been provided with.
Dr Batchelor then explained the results of the assessments which were undertaken, which she considered to have been potentially invalid, because of "a deliberate attempt to enact or exaggerate cognitive impairment". In her opinion "pain, sleep disturbance, fatigue, psychiatric disorder, medication or even a combination of those factors could not explain the nature or severity of the deficits evident during the current examination." It was for that reason that the testing "was discontinued prior to administration of the full range of measures typically included in an assessment conducted for medicolegal purposes". Dr Batchelor also observed that "when the individual is not working at their best, it is not possible to differentiate real from enacted impairment."
Dr Batchelor concluded that further examination of Mr Wacker was required, it not being possible to "arrive at any diagnosis in terms of whether he has sustained cognitive and behavioural change secondary to possible brain injury and specifically frontal lobe damage".
In the result, I was satisfied that the objection that in the report, including the executive summary which said that "available information indicates that Mr Wacker sustained a possible hypoxic brain injury", Dr Batchelor had not disclosed, in the necessary way, the basis of her opinions, could not be accepted.
Her opinion was that on the materials and information she had considered and explained, it was possible that Mr Wacker had suffered a hypoxic brain injury, but that this required further investigation.
In so far as that opinion was based on the tests Dr Batchelor had herself administered, the results were disclosed. In so far as they were based on the reports with which she had been instructed and what Mr Wacker told her, she explained the histories Mr Wacker had given, his diagnosis and how the possibility that he had suffered a hypoxic brain injury had arisen as a result.
There was no conclusion that he did suffer such an injury. Dr Batchelor considered that required further investigation, an investigation which unfortunately has only just begun to be pursued, for reasons Mr Weller explained. There is no suggestion that Mr Wacker had any personal responsibility for this.
In the result I was satisfied that the report was admissible, as was the letter received from Dr Batchelor on 27 July 2022, which confirmed her advice, communicated at the previous day's hearing. That is, that it was not possible to determine whether Mr Wacker had suffered permanent brain damage on the basis of the two MRI reports. That required valid neuropsychological test results.
The objection taken was that there was a lack of clarity in this letter, not rectified by tender of the 26 July letter sent to Dr Batchelor by Mr Weller. On Mr Wacker's case, consistent with Mr Weller's evidence, that was the correspondence to which she referred in her letter, as well as the discussions which Mr Weller said he had earlier had with her.
In the result I was satisfied that the letter was admissible, not suffering from the lack of clarity submitted for the defendants.

Why the adjournment had to be granted

On all of the evidence I was satisfied that the adjournment had to be granted, despite all of the considerable time, cost and effort in preparation for the hearing of the pleaded case and the regrettable adverse consequences which will undoubtedly result for the individual defendants, Mr Van Dyke and Dr Albany and the witnesses. The evidence established that this was one of those cases where despite the Court's practices being actively implemented to ensure that the parties drive the preparation of the matter for a proper and timely hearing, an error had been made, which required the adjournment, if justice was to be done.
The matter concerns a dispute over personal injuries suffered by Mr Wacker in 2016, since which he has not worked. Ten court books containing the pleadings, lay and expert evidence and submissions have been filed. Even at the time of the hearing, some experts were still meeting to produce their joint reports.
Undoubtedly all those affected by the proceedings were anxious to have them concluded. The adjournment which Mr Wacker successfully pursued, will thus have adverse consequences, not only in terms of additional costs and delay, but stresses of litigation which the adjournment exacerbates. There are also adverse consequences for the administration of justice, the Court and the public, which are all interested in the efficient conduct of proceedings, without unnecessary cost and delay.
All these and other considerations discussed in Aon, as well as relevant provisions of the Civil Procedure Act, which imposes obligations on the Court and the parties in relation to facilitating the overriding purpose specified in s 56, the just, quick and cheap resolution of the real issues in the proceedings, had to be considered in resolving the disputed adjournment application. That was a difficult balancing exercise.
Parties certainly have no right to amend their pleadings, or to have hearings adjourned when a late application such as this is made. Not even when costs orders can be made in relation to the consequences which result, which will ameliorate at least some of the consequences of the adjournment.
In this case the evidence is that necessary attention has not been paid to an important aspect of Mr Wacker's case. But still there will be situations which arise, where such errors have been made, which necessitate the grant of late applications for adjournment, if justice is to be done. I was satisfied that this was one of those cases.
While the defendants raised cogent arguments against the grant of the adjournment, in the end I was satisfied that Mr Wacker had met the onus of establishing that here there were circumstances which not only engaged the Court's discretion under s 66 of the Civil Procedure Act to grant the adjournment, but which required that it be exercised in his favour.
In Dekkan v Picciau [2008] NSWCA 18 an appeal against refusal of an adjournment was dismissed, even though the applicant was unwell and his solicitor unprepared. It was there explained that a lawyer's failure to prepare for a hearing may provide the basis for a claim against the lawyer by the client, "but, absent some particular justification, will not entitle a party to an adjournment to the prejudice of the opposing party." : at [51]. Further, that a lawyer's belief that the client was otherwise entitled to an adjournment, at least in the circumstances of that case, was insufficient. "Were it otherwise, litigants would often be at risk of a forced adjournment because a manipulative adversary was deliberately unprepared": at [51].
This was not such a case. Here there was a failure, but not deliberate unpreparedness. It resulted in a real, but uninvestigated possibility that Mr Wacker has suffered a brain injury, a matter of considerable importance in this litigation.
In Dubois v R & V Bergin Pty Ltd [2011] NSWCA 309 consideration was given to an appeal against the refusal of an adjournment of a hearing, to which the parties had consented, when there were also problems with the investigation of the extent of the plaintiff's injuries, caused in two separate accidents.
It was concluded by Giles and Young JJA that the discretion had miscarried in that case, despite the considerations which arose from Aon and the Civil Procedure Act.
It was concluded that despite any understandable unhappiness with the frustration of the court's management system and previous delays in the proceedings, the overriding factor was ensuring there would be a fair trial: at [49]. Further, that while there were unsatisfactory aspects about the conduct of the case and dilatory conduct on the plaintiff's side, as there were here, the refusal of the adjournment had led to injustice.
That was explained to be "a coloured word with pejorative overtones. What is meant is that the refusal of the adjournment must not set up a situation where there is a likelihood that there cannot be a fair trial unless that factor is outweighed by prejudice to the opposing party.": at [44].
One of the real difficulties with refusal of the adjournment was that the problems which Dr Batchelor had discussed in her report, a possible deliberate attempt to distort the results of the testing she had attempted, would remain relevant to the determination of issues lying between the parties, even on the case advanced on the current pleadings. But without the investigation which she considered was required into whether Mr Wacker had suffered a hypoxic brain injury, given the other information she had to consider, which might help explain what had occurred. Such an injury could thus not only shed light on his approach to the testing, but on various issues in the proceedings including, importantly, as to Mr Wacker's credibility and reliability.
It was this outcome of refusal of the adjournment, the result of acknowledged error in preparation of the case, rather than anything which Mr Wacker has done or failed to do about pursuit of an investigation into a brain injury, which persuaded me that justice could not permit the adjournment to investigate that possibility to be refused.
That was the justification for the adjournment, absent in Dekkan, but present in Dubois and I am satisfied, also in this case.

Costs

It was finally agreed that if the adjournment was granted, Mr Wacker would have to bear the defendants' costs of the hearing on 25, 26 and 27 July, as well as those thrown away as the result of the adjournment.
The defence case was that those costs would be ordered on an indemnity basis and that it would also be ordered that: "10. The proceedings be stayed until the costs in orders 8 and 9 are paid. 11. In the alternative to order 10, the parties be at liberty forthwith to agree or assess the costs the subject of orders 8 and 9, with those costs not to be payable until judgment in the proceedings. 12. In the event that the Plaintiff obtains a judgment against the defendant, that execution of the judgment be stayed until the costs in orders 8 and 9 have been agreed or assessed and that the sum so agreed or assessed be set off against the judgment sum ordered."

No stay can be ordered

It was urged that there having been no relevant conduct or fault on the part of the defendants, they ought to have the best partial compensation that the orders could provide. That was achieved by requiring Mr Wacker to pay the costs before the matter proceeded further and in the alternative, in the case of indigence, to provide a mechanism by which it could be ensured that costs were set off, to avoid the possibility of the sheriff turning up at Mr Van Dyke's stables, to take horses, if Mr Wacker's case succeeded.
Mr Wacker's case was that costs should be ordered on the ordinary basis and not made payable forthwith. But he accepted that they had to be set off against any judgment sum ordered in his favour.
Ordinarily costs of interlocutory applications are not payable until the conclusion of the proceedings: Uniform Civil Procedure Rules 2005 (NSW), r 42.7. The Court may order otherwise, for example where there is a disparity in the parties' ability to bear ongoing costs. But in this case it is Mr Wacker who appears to have limited means. In the circumstances I am not satisfied that justice would permit the proceedings to be stayed until he is able to pay those costs. That might unjustly stultify the proceedings.

Nor can indemnity costs be made

The usual order under the Rules is also that costs, as agreed or assessed, follow the event. The Court has a discretion to order indemnity costs under s 98 of the Civil Procedure Act. They will be ordered in cases of misconduct, such as when the successful party "by its lax conduct effectively invites the litigation (108); unnecessarily protracts the proceedings (109); succeeds on a point not argued before a lower court (110); prosecutes the matter solely for the purpose of increasing the costs recoverable (111); or obtains relief which the unsuccessful party had already offered in settlement of the dispute (112)": Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [69].
No case akin to this one had been identified. But indemnity costs were urged because there had been relevant delinquency on Mr Wacker's part, which should be deterred: Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd (1995) 36 NSWLR 242, per Kirby P, albeit in dissent. Reference was also made to Fountain Select Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, where hopeless appeals in commercial litigation proceedings which had no reasonable prospect of success arose to be considered. Reference was also made to Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 where Sheppard J considered at 233, circumstances, in which an indemnity costs order would be made because of "some special or unusual feature of the case" justifying departure from the usual order, although it was accepted that they did not arise for consideration here.
Still, it was submitted that an indemnity costs order would have a deterrent effect on other parties and their legal representatives, parties being bound by the delinquency of their solicitors. But it was not suggested that a costs order should be made against Mr Weller.
It was also submitted that how the problem of the uninvestigated, but groundless claim of brain injury had been raised only on the morning of the hearing, despite all of the earlier opportunities to raise that matter, including when it was before me for directions on 13 July, was also relevant. That provided a proper basis for the indemnity order. As did the need to have the experts consider further evidence about brain injury which might emerge after an adjournment and the resulting additional costs.
I am not satisfied that justice permits the indemnity costs orders sought to be made against Mr Wacker. It was not suggested that the problem which has arisen to be dealt with, or how it was pursued, was of his making; something of which he was or should have been aware; or as the result of misconduct of the kind discussed in Oshlack. It was the result of the mistake I have discussed.
I am not persuaded that an indemnity costs order against Mr Wacker could deter the making of such a mistake, even by a very experienced solicitor such as Mr Weller. From time to time everyone makes a mistake. I am thus not satisfied that what here occurred permits a departure from the usual rules, which requires Mr Wacker to bear the costs incurred by the defendants as a result, as agreed or assessed.

Orders

Other orders were agreed, including as to the production of documents and the set off of the costs Mr Wacker must pay against any judgment sum, if his cases succeed. The matter was adjourned to Cavanagh J's list on 5 August 2022 for case management, the parties being directed to confer and file proposed orders for his Honour to consider.
For the reasons given I now formally order: 1. By 29 July 2022 the plaintiff is to produce all records required in notices to produce of 19 April 2022 and 22 July 2022. 2. By 3 August 2022 Mr Weller is to provide the defendants with logs of all documents he produced under subpoena, packet S-29, over which privilege is claimed. 3. By 10 August 2022 the defendants are to notify the plaintiff of any dispute over any claimed privilege. 4. In the event of any dispute over privilege, on or before 17 August the plaintiff is to file and serve a motion, supporting affidavit and submissions, which will be heard on a date to be fixed. 5. The defendants are both granted access to documents produced on subpoena in the related proceedings which are being heard together. 6. The plaintiff is to pay the defendants' costs of the proceedings on 25, 26 and 27 July 2022, as well as those thrown away as the result of the adjournment of the proceedings, as agreed or assessed. 7. The parties are at liberty forthwith to agree or assess those costs, but they will not be payable before final judgment is given in the proceedings. 8. In the event that judgment is given for the plaintiff, execution of the judgment will be stayed until the costs ordered by order 6 have been agreed or assessed and they must also be set off against any judgment sum ordered in his favour.

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: 28 July 2022

At a glance

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Judgment (14 paragraphs)

Legislation Cited (2)

Cases Cited (11)