Mid North Coast Local Health District v Hickson

1. [1]

   BASTEN JA: The applicant (the defendant in a claim for personal injury damages) seeks leave to appeal from an interlocutory judgment of McCallum J in the Common Law Division. [1] That judgment upheld the plaintiff’s application to review a decision of the Registrar directing that the plaintiff provide witness statements addressing a limitation issue; the order made by the Registrar was set aside.

2. [2]

   The application for leave to appeal raises the dilemma faced by this Court in applying the principle of constraint with respect to a challenge to an interlocutory judgment dealing with practice and procedure, when the question is whether the judgment under appeal should have applied that principle. For reasons explained below, the proper application of the principle of constraint would have led to the dismissal of the application to review the decision of the Registrar. While this Court would usually apply the utmost circumspection in intervening in such a case, as it is desirable to restate the correct test, this is a case where this Court should intervene.

3. [3]

   Having determined to intervene, it is also appropriate to restate the test for permitting interrogatories in a case such as this.

Background to dispute

1. [4]

   On 6 November 2010, the plaintiff was admitted to the Coffs Harbour Hospital administered by the defendant, having taken an overdose of diazepam. She was observed overnight and released the following day. Various steps were taken by way of follow up; on 9 November she was visited at home by a mental health caseworker. The following day, 10 November 2010, she jumped from a six metre balcony and sustained serious and permanent injuries.

2. [5]

   More than six years later, on 28 November 2016 she commenced proceedings against the defendant alleging a negligent failure to take reasonable steps for her care and supervision to protect her from self-harm. The proceedings were thus commenced more than three years after the expiry of the three year limitation period for personal injury claims provided in s 18A of the Limitation Act 1969 (NSW). However, such a cause of action is maintainable if brought within a period of three years running from the date on which the cause of action was first discoverable by the plaintiff: s 50C(1)(a). Discoverability is relevantly defined in the following provision:

3. [6]

   It is common ground that where a proceeding is apparently brought out of time, it is for the defendant to plead and prove such facts as may establish the defence. [2] In the present case the critical issue for the defendant was when the plaintiff first knew, or ought to have known, that the injury was caused by the fault of the applicant.

4. [7]

   The defendant wishes to raise a limitation defence, but says it cannot properly do so without information as to what steps the plaintiff took to ascertain whether she had a cause of action and when those steps were taken. [3] By notice of motion dated 11 April 2018, it sought a direction that the plaintiff provide verified answers to a set of proposed interrogatories.

5. [8]

   Such an order is required pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 22.1:

6. [9]

   Thus there is a general requirement that the order be “necessary at the time it is made”, and, in a claim for damages arising out of bodily injury, an additional requirement that there are “special reasons” that justify the making of the order. Satisfaction of the latter requirement will usually entail satisfaction of the general requirement.

7. [10]

   The origin of the rule may be seen in Griebart v Morris, [4] in which the English Court of Appeal rejected the proposition that there was a general rule of practice not to allow interrogatories in running-down cases except for special reasons or special circumstances. The relevant rule required only that interrogatories must be “necessary either for disposing fairly of the cause or matter or for saving costs.” [5] The wording of r 22.1(3) was clearly intended to reverse the decision in Griebart v Morris and impose such a requirement. There is no material difference between the phrases “special circumstances” and “special reasons” (the phrases tend to be used interchangeably in the cases).

Decision of Registrar

1. [11]

   The Registrar approached the question by reference to two considerations. The first was whether it was “necessary” to direct answers to interrogatories in circumstances where the “issue” had not been identified in a pleading. The second was whether there were “special reasons” to make an order where the plaintiff was the only source of the information needed to establish the limitation defence.

2. [12]

   In substance, the Registrar was satisfied that there was a potential issue between the parties as to the limitation period, which the defendant could not properly plead absent further information. He concluded that the absence of a pleaded defence was not an answer to the question whether the order was then necessary; he was satisfied that it was necessary for the orderly disposal of the litigation. That conclusion was reached on the basis of the likely complexity of the issues going to the cause of action and that the material relevant to the limitation issue was separate and independent from that which would go to establishing the cause of action.

3. [13]

   With respect to the question of special reasons, the Registrar was satisfied that the requisite factual material was otherwise unavailable to the defendant and that the complexity of the subject matter would give rise to real prejudice to the defendant (in having to defend the substantive proceedings) without the possibility of reliance on the limitation defence. The specific requirement was therefore satisfied.

Reasoning of primary judge

1. [14]

   The primary judge identified three issues for consideration, namely (i) the approach to be taken on an application for review of a decision of the Registrar; (ii) whether the absence of a pleaded defence based on the Limitation Act should have led to refusal of the application and (iii) whether there were special reasons for the administration of interrogatories in this case. It is convenient to address these issues in turn.

Approach to an application for review

1. [15]

   The plaintiff sought a review of the orders made by the Registrar pursuant to UCPR, r 49.20. That rule does not set out the approach that the Court should undertake in conducting a review. The primary judge derived the relevant principles from the judgment of Button J in Horsnell by his tutor Horsnell v Allworth Constructions Pty Ltd. [6] Those principles were stated as follows:

2. [16]

   In Tomko v Palasty (No 2) [7] Hodgson JA (with whom Ipp JA agreed) stated:

3. [17]

   Although a review is not confined in precisely the same manner as an appeal, the principles of constraint identified in Will of Gilbert, approved in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc, [8] are apposite. Because they did not receive adequate reflection in the statement of principles in Horsnell, it is convenient to set out the well-known passage from Will of Gilbert: [9]

4. [18]

   This principle of constraint with respect to challenges to rulings on practice and procedure, whether by appeal or review, was not reflected in the principles set out in Horsnell which were adopted and applied by the primary judge in undertaking afresh the exercise of discretion.

5. [19]

   The importance of the principle of constraint identified in Will of Gilbert may be illustrated by reference to the approach taken to the two substantive issues, discussed below.

Absence of a pleaded defence

1. [20]

   With respect to the need for a pleading, the primary judge identified the limitation issue as one which “obviously arises”: at [6]. Further, she noted that the defendant had written to the plaintiff requesting details as to when she first sought legal advice on 26 June 2017: at [12]. The defendant wrote again on 30 January 2018 stating that it would be preferable to deal with the limitation issue prior to dealing with the amended defence: at [14].

2. [21]

   The judge rejected the proposition that the limitation defence was “an issue”, as not strictly correct: at [15]. She then stated:

3. [22]

   With respect to the defendant’s contention that it was necessary to obtain information from the plaintiff in order to properly raise a defence, the judge stated:

4. [23]

   The Registrar dealt with the matter somewhat differently. He noted that the plaintiff opposed interrogatories “as being unnecessary because there is no issue before the Court (there being no pleaded issue).” [10] He then noted that in Horsnell Button J had stated that “interrogatories must be relevant to the issues between the parties as revealed by the pleadings”. [11] He continued:

5. [24]

   The plaintiff in Schutt, then a six year old child, was injured when hit by a car on a public street in Bundeena. She sought to administer interrogatories to the driver of the car. At that time, the relevant District Court rules had no “special reasons” requirement for personal injury claims. Nevertheless, a request for interrogatories had been rejected as “unnecessary” because the plaintiff already had access to the defendant’s police statement. [12] However, Mason P noted that the police statement “is mainly if not wholly exculpatory” and offered “very little comfort to the plaintiff and it does not address a number of potentially relevant issues.”

6. [25]

   Mason P continued:

7. [26]

   The proposition to be derived from this reasoning is that it may be appropriate to interrogate another party “not to obtain evidence to support his case, but to discover whether he has a case at all.” It would be a strange conclusion that a party which believed it could not properly plead a case until it had received and considered answers to interrogatories could not obtain interrogatories without pleading the case which it could not support. The plaintiff in the present case took the view that it was not proper to plead a limitation defence on the material available to it. The Registrar thought that such a position was not fatal to a claim for interrogatories. He considered himself bound by Schutt to take that view. He was correct to do so.

8. [27]

   In this Court, the plaintiff did not contend that the Registrar was wrong in his view as to the effect of Schutt. She did submit that this was a “classic case of fishing” but, as noted by McLelland CJ in Eq, in the passage cited by Mason P in Schutt, there are cases in which what may otherwise be characterised as fishing will be legitimate.

9. [28]

   Referring to the order made by the Registrar, the primary judge concluded that it “also puts the limitation issue on the table prematurely in the absence of it being pleaded in any defence.” [13] That conclusion was inconsistent with Schutt.

Special reasons

1. [29]

   Schutt is also relevant to the question of special reasons, although the present rule was not then in force. As the discussion in Griebart illustrated, while there was no general rule of practice against interrogatories in personal injury cases except for special reasons, in many such cases interrogatories would not be allowed because they were not “necessary”. Fishing was not permissible under the general rule. In effect, however, there was a special circumstances exception to what may otherwise be described as a fishing expedition. Thus, in Commissioner for Railways v Small, [14] Jordan CJ stated: [15]

2. [30]

   The opening words recognise that there may be circumstances where fishing is acceptable. As explained by McLelland CJ in Eq, in the passage cited in Schutt, interrogation may be allowed where the area of factual inquiry is one concerning which the party seeking to interrogate can, in the nature of things, have no knowledge, but which is wholly, or at least substantially, within the knowledge of the other party. If such a case represents special circumstances to avoid the prohibition on fishing, logic would suggest that such a case may well constitute special reasons, for the purposes of interrogation in personal injury cases.

3. [31]

   The form of r 22.1(3) is not that of an absolute prohibition, but of a qualified prohibition. The criterion of “special reasons” is imprecise as to its scope and effect. It should be construed according to general principles governing the conduct of civil litigation. That means, that in giving effect to the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings, [16] the general rule should be followed that personal injury proceedings can usually be justly and fairly disposed of without the need for interlocutory steps, such as interrogation. On the other hand, the phrase “special reasons” should not be construed as so restrictive that it will prevent interrogation where the effect would be to render a claim or defence unavailable due to the inability to obtain information from the other party, in the circumstances identified in Schutt. That would tend to disadvantage the most seriously injured and allow a procedural hurdle to eviscerate a substantive right.

4. [32]

   It is not necessary for present purposes to consider the circumstances in which, for example, a plaintiff in a personal injury proceeding may be able to interrogate the defendant as to the matters relevant to the claim in negligence. It is sufficient that the interrogation sought to be undertaken by the defendant went to a defence which was independent of the factual inquiries relevant to maintaining or resisting allegations of negligence on the part of the defendant. The area of inquiring was limited to that relevant to the limitation defence and the factors required to be established by the defendant, bearing the onus of proof on the issues relevant to s 50D(1)(b).

5. [33]

   The primary judge accepted that there were things known to the plaintiff which were not known to the defendant, but concluded that the defendant knew sufficient to determine whether or not to plead a limitation defence. [17] Her rejection of the existence of special reasons turned on that finding as to the lack of a pleaded defence. That negative finding rendered unnecessary consideration of whether the Registrar should not have been affirmatively satisfied that there were special reasons warranting interrogation.

6. [34]

   The Registrar concluded that the special reasons criterion was made out in the following circumstances:

7. [35]

   The plaintiff’s solicitor’s letter of 9 January 2017 responded to a letter sent by the defendant’s solicitor little more than a week after the statement of claim was filed seeking advice as to why the claim was not statute barred. The response was to dismiss the request as not “a proper request.” Nevertheless, the response attached a report by a consultant psychiatrist dated 10 October 2016, said to identify the time from which the three year limitation period commenced to run. That is, a date some six weeks prior to the filing of a detailed statement of claim.

8. [36]

   As the defendant submitted on the appeal, provision of the psychiatric report of 10 October 2016 could not, and did not purport to, provide the factual material sought in the proposed interrogatories. That there was other material of potential relevance may be inferred from subsequent claims for legal professional privilege which the plaintiff’s solicitor said she would not waive “until such time as the defendant establishes a prima facie case as to when the defendant alleges the plaintiff’s cause of action was discoverable”. [18]

9. [37]

   It was open to the Registrar to accept that special reasons were established to his satisfaction in accordance with r 22.1(3).

Conclusions

1. [38]

   With respect to the absence of a pleaded defence, there was no reason to conclude that the defendant was acting inappropriately in declining to raise a defence in the absence of supporting material, in circumstances where it bore the burden of proof. The issue was not one which would arise in the course of a trial of the substantive issues. If interrogatories were appropriate and reasonably necessary for the disclosure of information which might support a defence, the Registrar’s view that the circumstances demonstrated special reasons for requiring interrogation was open.

2. [39]

   The primary question on this application for leave to appeal is not whether the Registrar or the primary judge was correct, or adopted a preferable approach, but whether there was sufficient material to warrant intervention on a review of an interlocutory judgment dealing with practice and procedure.

3. [40]

   There are, of course, cases in which a court is more likely to intervene even though the decision below is an interlocutory decision involving a question of practice or procedure. That may arise where the challenged decision effectively determines a substantive issue adversely to the interests of that party, whereas the alternative position would have allowed further steps to be taken, at limited cost and inconvenience to the other party. In this case the Registrar’s decision did not prevent the limitation issue being pursued; nor did it impose a prejudicial burden on the plaintiff. The primary judge should have taken that into account before reaching a decision which may have effectively foreclosed the limitation defence being raised.

4. [41]

   In seeking leave to appeal, the defendant recorded an undertaking that it would pay the plaintiff’s costs of the proceedings in this Court in any event. That undertaking was appropriate and should be given effect.

5. [42]

   There remain two subsidiary issues which should be noted. First, the plaintiff raised by way of notice of contention a complaint that interrogatory 3 sought an admission on a question of law, “namely when the requested matters were discoverable.” The question actually asked the plaintiff “when did [you] first discover” the matters identified in s 50D(1). The raising of this challenge to the orders made by the Registrar is a little curious, as there was no direct challenge to the wording of specific interrogatories in the plaintiff’s notice of motion seeking review. In submissions before the Registrar, however, the plaintiff had taken various specific objections to the form of particular interrogatories. She took objection to the use of the term “discover” because it is said to deal not merely with what the plaintiff knew, but with what she ought to have known.

6. [43]

   The objection could readily have been met by using the term “knew” or “first knew”. If the plaintiff had answered an interrogatory on that basis, it would be a matter for the defendant to determine whether it treated the answer as incomplete and, if so, for the Registrar to rule on the point. It is not an issue which this Court need determine.

7. [44]

   Secondly, the plaintiff complained that the Registrar was wrong to order written statements addressing the issues, rather than written answers to the questions, as the defendant sought. She submitted that neither party invited him to take that step. In fact, the Registrar stated that he did so in response to a submission by the plaintiff with respect to the filing of witness statements. [19] In any event, if the parties are in agreement as to how the interrogatories should be addressed, no doubt some common ground will be achieved.

8. [45]

   More importantly, the two issues now raised by the plaintiff demonstrate to perfection the wisdom of the statements by Jordan CJ in Will of Gilbert. It is also apt to repeat the observations of the High Court in the context of a mistaken disclosure of privileged documents as to the responsibility of parties to litigation in this Court: [20]

9. [46]

   It is, on occasion, necessary to allow applications for leave to appeal in respect of interlocutory judgments involving matters of practice and procedure, in order to emphasise the obligations of parties and solicitors, as well as the Court, in dealing with such matters.

Orders

1. [47]

   The Court should make the following orders:

   1. (1)

      Grant the applicant leave to appeal from the judgment in the Common Law Division of 22 November 2018.

   2. (2)

      Allow the appeal and set aside the orders made in the Common Law Division setting aside the orders of the Registrar made on 6 July 2018.

   3. (3)

      In place of those orders, order that the plaintiff’s notice of motion of 2 August 2018 seeking review of the decision of the Registrar be dismissed with costs.

   4. (4)

      By consent, order that the applicant pay the respondent’s costs of the proceeding in this Court.

2. [48]

   PAYNE JA: I agree with Basten JA.

3. [49]

   SIMPSON AJA: I agree that leave to appeal ought to be granted and the appeal allowed. I can state my reasons briefly.

4. [50]

   The relevant factual background is stated in the judgment of Basten JA which I have had the advantage of reading in draft. In these reasons, it will be convenient to refer to the parties as “the plaintiff” and “the defendant”.

5. [51]

   The plaintiff filed a statement of claim in November 2016, alleging that she had suffered personal injury (caused by the negligence of the defendant) six years earlier, in November 2010. In respect of claims for damages for personal injury, s 50C of the Limitation Act 1969 (NSW) prescribes a limitation period of three years “running from and including the date on which the action was first discoverable by the plaintiff”. What is meant by that is explained in s 50D. A cause of action is discoverable by a plaintiff when the plaintiff knows or ought to know of each of the following facts:

6. [52]

   Given the seriousness of the injury alleged by the plaintiff, it must be supposed that she had long known of the fact that the injury occurred, and that it was sufficiently serious to justify the bringing of an action. So much must also have been obvious to the defendant. What the defendant did not know, and had no means of knowing, was when the plaintiff knew or ought to have known that the injury was caused by the defendant’s fault.

7. [53]

   The limitation period provides a defence, the onus of proving which lies on the defendant. Since the availability of the defence depends upon information that is within the knowledge of the plaintiff, and ordinarily not within the knowledge of the defendant, more information will be required by the defendant before a defence invoking the Limitation Act can responsibly be pleaded. Clauses 2 and 4 of Sch 2 of the Legal Profession Uniform Law Application Act 2014 (NSW) (“the Uniform Law”) expressly impose on legal practitioners obligations that preclude pleading a defence unless the legal practitioner:

8. [54]

   Although the date on which the statement of claim was filed relative to the date of the alleged injury gave rise to reasonable grounds for believing that a defence under s 50C might be available, that was not sufficient to satisfy the requirements of cll 2 and 4 of Sch 2 of the Uniform Law. Accordingly, the defendant’s legal representatives were unable to file a defence pleading the limitation period. In those circumstances, they sought, by notice of motion, an order under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) r 22.1, that the plaintiff answer specified interrogatories designed to elicit evidence of that fact. By sub-r (3) of r 22.1, in the case of proceedings on a claim for damages arising out of personal injury, such an order is not to be made unless the Court is satisfied that special reasons exist that justify the making of the order. The interrogatories were designed to enable the defendant to evaluate the availability of a defence under the Limitation Act.

9. [55]

   The Registrar, who dealt with the application, indicated his intention of making an order, not in the terms sought, but requiring the plaintiff to provide written statements “limited to the limitation issue”.

10. [56]

    Pursuant to UCPR 49.19 the plaintiff sought review of that decision. That rule permits the Court, on the application of any party, to review a direction, certificate, order or decision of a registrar and to make such order by way of confirmation, variation, discharge or otherwise as the Court thinks fit. The plaintiff’s application came before the primary judge who made orders setting aside the orders of the Registrar and dismissing the defendant’s notice of motion. She did so because, in the absence of a defence pleading s 50C of the Limitation Act, there was no issue joined between the parties to which the proposed interrogatories related.

11. [57]

    The defendant now seeks leave to appeal against that decision. The application for leave to appeal and the appeal (if leave were granted) were directed to be heard concurrently.

12. [58]

    Plainly, the decision of the Registrar related to a matter of practice and procedure, in respect of which it is generally accepted that appellate restraint should be applied: In re The Will of F B Gilbert (1946) 46 SR (NSW) 318; 63 WN (NSW) 176.

13. [59]

    In this case there was no demonstrated reason to depart from that principle of restraint. The order of the Registrar for the provision of statements, limited as it was, was not onerous, and involved the plaintiff providing information that, sooner or later, she would have been obliged to provide. Accordingly, I am of the view that it was erroneous for the primary judge to take the course she did.

14. [60]

    Moreover, the approach taken by the primary judge to the issue was, in my opinion, unduly narrow. The defendant could not plead a Limitation Act defence until it had access to the information it sought in the interrogatories; denial of interrogatories foreclosed its access to that information, and, potentially, foreclosed its access to a basis for pleading a defence legitimately open to it. There was no obvious or apparent other way in which the defendant could inform itself sufficiently to enable it to assess its position in relation to the Limitation Act factors, and, if so advised, to plead the defence. Until it had information peculiarly within the knowledge of the plaintiff, the requirements of the Uniform Law precluded a pleading that would be based on that information. The decision of this Court in Schutt v Queenan [2000] NSWCA 341 recognises that there are circumstances in which the processes provided by the Rules by which the parties may obtain necessary information may be used flexibly.

15. [61]

    For these reasons I agree with the orders proposed by Basten JA.