Gordon v NSW Insurance Ministerial Corporation [2006] NSWSC 350

New South Wales Supreme Court

CITATION : Gordon v NSW Insurance Ministerial Corporation [2006] NSWSC 350 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 12 April 2006

JUDGMENT DATE : 1 May 2006

JURISDICTION : Common Law

JUDGMENT OF : Michael Grove J at 1

DECISION : CROSS CLAIMS DISMISSED

CATCHWORDS : LIMITATION OF ACTIONS - CROSS CLAIMS - SUCCESSIVE TORTFEASORS - DEFINITION OF "PRINCIPAL CAUSE OF ACTION" IN s 26(3) OF LIMITATION ACT - FUTILITY OF CROSS CLAIMS IN LIGHT OF BAR - SUMMARY RELIEF APPROPRIATE

LEGISLATION CITED : Law Reform (Miscellaneous Provisions) Act 1946

Brambles Constructions Pty Ltd v Helmers 1966 114 CLR 213 CASES CITED : Hillebrand v Penrith Council [2000] NSWSC 1058 Mahony v J. Kruschich (Demolition) Pty Ltd 1985 156 CLR 522

PARTIES : Renee Cherie Gordon v New South Wales Insurance Ministerial Corporation (formerly Government Insurance Office of New South Wales), New South Wales Insurance Ministerial Corporation (formerly Government Insurance Office of New South Wales) (Cross-Claimant), Dr Alfred J. Coren (First Cross Defendant), Dr John Edgar de Burgh Norman (Second Cross-Defendant)

FILE NUMBER(S) : SC 20277/05

M. Fordham (Applicant/First Cross Defendant) COUNSEL : J. Downing (Applicant/Second Cross Defendant) D. Higgs SC with J. Lonergan (Defendant/Respondent)

Minter Ellison (Applicant/First Cross Defendant) SOLICITORS : Abbott Tout (Applicant/Second Cross Defendant) J.M. Crestani (Defendant/Respondent)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

MICHAEL GROVE J

Monday 1 May 2006

20277/05 - RENEE CHERIE GORDON v NEW SOUTH WALES INSURANCE MINISTERIAL CORPORATION (formerly GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES), NEW SOUTH WALES INSURANCE MINISTERIAL CORPORATION (formerly GOVERNMENT INSURANCE OFFICE OF NEW SOUTH WALES), (Cross-Claimant) DR. ALFRED J. COREN, (First Cross Defendant), DR JOHN EDGAR DE BURGH NORMAN, (Second Cross Defendant)

JUDGMENT 1 HIS HONOUR: There are before the Court two notices of motion by cross defendants seeking as principal relief the dismissal of the claims against them pursuant to UCPR 13.4(1) or the striking out of them pursuant to UCPR 14.28. It is necessary to detail some history of the litigation. 2 On 3 May 1986 the plaintiff, who had been born on 11 June 1969, was a passenger in a motor vehicle and she alleged that she suffered injury as a result of the negligence of the driver. By Ordinary Statement of Claim, and by her next friend, she commenced action in the District Court on 6 August 1986 against the insurer of the vehicle, the Government Insurance Office of New South Wales. A Defence was filed bearing date 31 October 1986 by Mr J. Crestani, solicitor. Amended Defences have been filed from time to time. Mr Crestani continues to be the solicitor on the record for the defendant, the identity of which has become the New South Wales Insurance Ministerial Corporation. 3 A limitation period applicable to the plaintiff in this case was suspended during her minority which concluded on 11 June 1987 when she attained her eighteenth birthday. Obviously, her own action was commenced well within the limitation period. 4 On 28 March 1990 the plaintiff consulted the first cross defendant (Dr Coren) a maxillo facial surgeon, who between that date and 18 February 2002 performed various procedures on her. On the latter date he removed a bone screw which he had inserted in the previous April and on the material before me this appears to be the last of the procedures. 5 In June 1994 the second cross defendant (Professor Norman) provided a medico legal report pursuant to arrangements made on behalf of the defendant. Further reports were later arranged and obtained from him. The material does not reveal how, after being retained in that fashion, he came to assist in three procedures performed by the first cross defendant but it was undisputed that he did so. His first involvement in surgery was on or about 19 February 1997, the second on 25 March 1998 and the third on 27 October 1999 (Ms Thompson's affidavit) or possibly 1 September 1999 (Ms Capelin's affidavit). The slight discrepancies in stated dates will not affect the outcome of the motions. 6 By 2004 the plaintiff's action had not been tried. On 19 October 2004 the defendant filed a motion seeking leave pursuant to District Court Rules Pt 20 r 10(2)(c) to join the cross defendants in the action. Neither was previously a party, although the action had been on foot by that time for over eighteen years and their involvement since the dates mentioned above. 7 The motion was heard by Neilson DCJ who, on 10 February 2005, granted the leave sought, following which an appropriate pleading was filed in the District Court on 17 February 2005. 8 The action was transferred to this Court by an order made on 15 June 2005. 9 It is plain from the reasons of Neilson DCJ which are exhibited to the affidavit of Ms Capelin that the issue of futility of the proposed cross claims by reason of statutory limitation provisions had been raised but he said: "….I believe it is more appropriate to consider questions of delay at another potential stage of this litigation, namely any application by the defendant to extend the limitation period if any defence is raised under the Limitation Act by either of the proposed cross defendants. I should add that it has not sought to be established on this application any actual prejudice suffered by either of the proposed cross defendants." 10 There is no provision in the Limitation Act facilitating an application for extension of time for a defendant to file a cross claim nor, specifically, for extension to file a cross claim against a person or persons who are not already parties to the litigation. 11 Whilst it would appear to have been procedurally regular to consider the issue of futility by reason of inevitable barring by limitation statute in determining whether leave to file a cross claim should have been granted, the parties have agreed that no point is to be taken in that regard on the present motions. This stance is consistent with the omission in the District Court judgment and the exchange of correspondence between the solicitors for the first cross defendant and the defendant which are annexures D and E to the affidavit of Ms Capelin. 12 Any claim by the plaintiff would have become statute barred on 11 June 1993. The intent of the cross claim is to obtain contribution from the cross defendants towards meeting any judgment which the plaintiff obtains against the defendant. The allegation of the defendant is that the plaintiff's injury sustained in May 1986 has been exacerbated by negligent treatment by the cross defendants. 13 The cross claims by the defendant are premised upon the assumptions that the plaintiff has suffered injury in 1986 and then suffered subsequent injury as a result of negligent treatment by the cross defendants, and that, although such subsequent injury was tortiously inflicted, the defendant may be liable for the consequences if they are properly regarded as consequences of its own tort: Mahony v J. Kruschich (Demolition) Pty Limited 1985 156 CLR 522. I say "assumptions" because liability of the defendant is not yet determined nor is there raised for determination any question of whether the treatment by the cross defendants was so unnecessary or extravagant as to make it proper to regard the exacerbation of the plaintiff's condition as solely due to their treatment: see Mahony @ 530. Clearly any such latter issue would be a matter for trial and not summary disposal, however I observe that the content of some reports exhibited to the affidavit of Mr Crestani are suggestive that an issue of that nature may arise for contemplation. 14 The short point of the cross defendants is that the cross claim against them is so obviously barred by the operation of limitation laws that they should effectively be released from the action. I am conscious of the wording of UCPR 13.4 and UCPR 14.28 but I see no reason why I should not approach the matter in conformity with the observations of Austin J (dealing with the predecessor rules SCR Pt 13 r 5 and SCR Pt 15 r 26) in Hillebrand v Penrith Council [2000] NSWSC 1058: "There is an obvious distinction between the pleading of a cause of action and the application of a limitation period which means that the cause of action is not maintainable. It is arguable that the words 'no reasonable cause of action' in the two rules have no application where the defect relied upon is the expiry of a limitation period. However, in my opinion the better view is that in an appropriate case if a cause of action is clearly statute barred, the Court may conclude that the cause of action is not reasonable for the purposes of these two rules and may act under the appropriate rule accordingly. The precondition to that conclusion is that on the pleadings, and without reference to any disputed questions of fact, the limitation period clearly applies and has expired. Although counsel have been unable to refer me to any case in which either of the rules has been applied because of the expiration of a limitation period, in principle it seems to me, having regard to the underlying policies of the rules as well as their wording, that they should be available in a very clear case." 15 A cross claim by a defendant is made available by s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 viz: "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." 16 The reference to the "same damage" limits the availability of the facility to circumstances where, in the case of exacerbation by subsequent injury by another tort-feasor, that subsequent injury was a foreseeable consequence of the initial tort in the accordance with the principles and within the ambits laid down in Mahony. 17 It is not in dispute that s 5 (1)(c) was authoritatively construed as if the words "at any time" were present after the words "if sued" and that consequently until the liability of the initial tort-feasor was determined, time did not run against that tort-feasor's capacity to seek contribution: Brambles Constructions Pty Limited v Helmers 1966 114 CLR 213. 18 However, the Limitation Act 1969 (which commenced 1 January 1971) made express provision in these terms: " 26 Contribution between tort-feasors (1) An action on a cause of action for contribution under subsection (1) of section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 is not maintainable if brought after the first to expire of: (a) a limitation period of two years running from the date on which the cause of action for contribution first accrues to the plaintiff or to a person through whom the plaintiff claims, and (b) a limitation period of four years running from the date of the expiration of the limitation period for the principal cause of action. (2) For the purposes of paragraph (a) of subsection (1), the date on which a cause of action for contribution first accrues is: (a) if the plaintiff in the action for contribution or a person through whom the plaintiff claims is liable in respect of the damage for which contribution is claimed by judgment in a civil action or by arbitral award – the date on which the judgment is given or the award is made, whether or not, in the case of a judgment, the judgment is afterwards varied as to quantum of damages, or (b) if, in a case to which paragraph (a) does not apply, the plaintiff in the action for contribution or a person through whom the plaintiff claims makes an agreement with a person having a cause of action for the damage for which the cause of action for contribution arises, which agreement fixes, as between the parties to the agreement, the amount of the liability in respect of that damage of the plaintiff in the action for contribution or a person through whom the plaintiff claims – the date on which the agreement is made. (3) In paragraph (b) of subsection (1), the expression the limitation period for the principal cause of action means the limitation period fixed by or under this Act or by or under any other enactment (including an enactment repealed or omitted by this Act) for the cause of action for the liability in respect of which contribution is sought. (4) Nothing in this section affects the construction of section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 . " 19 In my opinion, within the expression "the cause of action for the liability in respect of which contribution is sought" in subsection (3) the "liability" is a reference to the cause of action vested in the plaintiff against the defendant. That conclusion is not undermined by the observation to which attention was drawn by senior counsel for the defendant that, for example, a different expression "liable in respect of the damage" appears in subsection (2)(a). 20 If subsection (3) was to be construed to refer to the putative liability of the intended cross defendant on the cross claim, then it would not require the importation of reference to a "principal cause of action" in subsection (1)(b) and the limitation period could be fixed in direct language. 21 "Liability in respect of which contribution is sought" is not a novel statutory formulation. With the addition of the definite article it appears in s 5 (1)(c) set out above. As it there appears, I can find no reference to it having been construed inconsistently with the construction which I would attribute to subsection (3). 22 The bar will operate (in terms of the language used, a cause of action for contribution will not be maintainable) after the first to expire of the alternatives set out in subsections 1 (a) and 1 (b). 23 The limitation period for the principal cause of action on my construction of subsection 1 (b) expired on 11 June 1993 and four years therefrom expired on 11 June 1997. 24 In the absence of any available power to extend time, action by the defendant against the cross defendants ceased to be maintainable on the lastmentioned date. It therefore becomes irrelevant to establish the date upon which the cause of action "first accrued" in terms of subsection 1(a) and it is unnecessary to contemplate whether the contributory damage by the cross defendants occurred in 1990, 1997, 2002, at any other defined time, or in some pattern of continuing treatment. 25 There is substance in the ad misericordiam plea of the defendant that it may be perceptibly unjust in these circumstances that it should face the possibility of damages being payable by it for exacerbation to injury caused by negligent conduct of the cross defendants, but limitation statutes are of their nature arbitrary. The unambiguous provisions in s 26 show a legislative intention that, for example, after seven years, where a principal cause of action has an applicable limitation period of three years, or, after ten years, where the period has been six years (extended for a short period in this instance because it was, under legislation applicable at the time, suspended during the plaintiff's minority) the potential to be first called on to make contribution should be terminated. 26 The facts which are pertinent to the existence of the bar are manifest in the chronology of events including the steps in the litigation and it is clear that the cross claim is not maintainable in the sense of s 26. I see no basis for exercising discretion to refuse relief nor to leave an issue which has an inevitable fate to the trial. 27 In the light of my conclusion it is unnecessary to consider the claims for alternative relief. 28 On each of the motions I order the cross claim to be dismissed generally pursuant to UCPR 13.4. 29 Liberty to apply in respect of costs. **********

02/05/2006 - The word "Ministerial" was left off the party name in the title - Paragraph(s) nil 02/05/2006 - Word Ministerial added to the title of judgment on front page. - Paragraph(s) nil

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