Jener Daluz v John McMahon

HIS HONOUR: These are medical negligence proceedings brought by the plaintiff, Jener Daluz, against the 1st defendant, Dr John McMahon, and the 2nd defendant, the South Western Sydney Local Health District. The proceedings arise from the treatment of the plaintiff for injuries said to have been sustained in a motor vehicle accident. Before me is a motion by the 2nd defendant for the summary dismissal of the proceedings, pursuant to UCPR r 13.4. That rule provides for the dismissal of proceedings which are frivolous or vexatious, or which are an abuse of the process of the Court. The basis of the motion is that the plaintiff has previously been awarded damages for his injuries in proceedings brought against those bearing liability for the motor vehicle accident. I shall refer to these as the “MVA proceedings.”

The accident occurred on 12 December 2008 on Hospital Road, Concord. Mr Grahame Reeves was reversing a car onto that road when it collided with a car driven by the plaintiff. The car was owned by Mr Reeves’ employer, the Health Administration Corporation. The MVA proceedings were brought against Mr Reeves and that Corporation, initially by statement of claim filed in the District Court on 21 December 2012. On 27 November 2013, they were transferred to this Court. They were ultimately settled and, on 22 October 2014, consent orders were filed, expressed to be “without admission of liability”, giving judgment to the plaintiff against both defendants for $350,000 plus an agreed amount for costs.

In the meantime, the present proceedings were commenced, again by statement of claim in the District Court, filed on 15 April 2013. They were transferred to this Court on 6 March 2014.

In the MVA proceedings the statement of particulars of personal injury, in their amended form in this Court, referred to injuries to the neck, right shoulder, right arm and right foot. Relevantly for present purposes, they also referred to injury to the left leg, left leg compartment syndrome and neurological damage to the left leg. For the left leg compartment syndrome the plaintiff underwent fasciotomy surgery.

The present proceedings allege negligence in the treatment of the plaintiff’s left leg in April 2010 by Dr McMahon and by Fairfield Hospital, a facility of the 2nd defendant. Put shortly, it is pleaded that the plaintiff suffered an injury to his right leg in the motor vehicle accident which caused him to favour his left leg, leading over time to an injury to that leg. The negligence on the part of the defendants alleged is the misdiagnosis of his left leg condition as a deep vein thrombosis, when in fact it was a tear of the calf muscle. The mistaken treatment for the thrombosis led to extensive internal bleeding, for which he required the fasciotomy surgery. In those proceedings the injuries to the left leg particularised were the same as those in the MVA proceedings: injury to the left leg, left leg compartment syndrome, and neurological damage to the left leg. Again, reference was made to the fasciotomy.

For the purpose of the MVA proceedings the plaintiff underwent a medical assessment, pursuant to Pt 3.4 of the Motor Accidents Compensation Act 1999 (“MAC Act”) on 7 June 2012. The assessor, Dr Nigel Marsh, certified a permanent impairment not greater than 10%, arising from an injury to the right foot. In his reasons Dr Marsh found that injuries to the right shoulder, right foot and the neck were caused by the accident.

It emerges from those reasons that the plaintiff first complained of injury to the left leg in 2010, some 18 months after the accident. Dr Marsh was of the opinion that this was not the result of the accident, noting that there was no contemporaneous evidence of any such injury and that, indeed, the plaintiff himself denied injuring his left leg in the accident. Accordingly, he recorded a finding that the left leg injury was not caused by the accident. When the MVA proceedings were launched in the District Court in December 2012, the statement of particulars of personal injury made no reference to any left leg injury.

For the purpose of his medical assessment Dr Marsh had access to a number of medical reports, and conducted his own examination of the plaintiff. It appears from his reasons that the possibility of a link between the left leg condition and the injury to the right leg in the accident was not addressed at all. However, medical reports obtained by the plaintiff’s solicitors before that assessment had expressed the opinion that the left leg condition was the result of the plaintiff having favoured it as a result of the injury to the right leg: reports of Dr Julian Parmegiani of 3 August 2011 and reports of Dr G David Champion of 22 August 2011 and (briefly) of 16 September 2011. These reports, however, were not before Dr Marsh at the time of his assessment.

Dr Champion’s view of the matter was somewhat tentative at first, but became more definite in subsequent reports of 3 November 2012, 15 October 2013, and 27 November 2013. In addition, Dr McMahon (the 1st defendant in the present proceedings) expressed the same view in a report of 20 October 2012. No doubt, it was in the light of this material that the particulars of personal injury were amended to incorporate the condition of the plaintiff’s left leg.

The starting point of the submissions of counsel of the 2nd defendant, Mr Hutchings, was that on the issue of damage in the present proceedings the consent judgment in the MVA proceedings amounted to res judicata or, at least, gave rise to an issue estoppel. These two concepts, and the distinction between them, were elucidated by Dixon J (as he then was) in Blair v Curran (1939) 62 CLR 464 at 531-2, as follows:

The issue of res judicata and issue estoppel bind the parties and their privies. In Ramsay v Pigram (1967) 118 CLR 271, Barwick CJ stated the basis upon which an issue estoppel could arise at 276, as follows:

Put shortly, that case involved consideration of two proceedings arising out of a motor vehicle accident in which one of the cars was a Police Department vehicle driven by a police officer. An issue was whether there was privity between the police officer, who was the plaintiff in one of the proceedings, and the person appointed as nominal defendant to represent the government of New South Wales in the other proceedings. Barwick CJ referred to the three classes of privies: of blood, of title and of interest, noting the relevant category in that case was privity of interest. His Honour found that there was no privity between the government and the police officer. He said at 279:

Res judicata or issue estoppel can arise from a consent judgment, although in a particular case it may be difficult to identify what issues were determined by that judgment. In Effem Foods Pty Limited v Trawl Industries of Australia Pty Limited [1993] FCA 342, (1993) FCR 510, in the context of issue estoppel, Burchett J said at [22] (537):

His Honour also held that it does not matter that the consent judgment was expressed to be without admission: par [23] (537).

In written submissions Mr Hutchings noted that a claim for damages is the gist of both proceedings, and argued that the claimed injury and disability in the present proceedings are identical to those claimed in respect of the left leg in the MVA proceedings. That being so, the injuries suffered by the plaintiff and the cause of those injuries are issues relevantly common to both proceedings. He submitted that it was plain that the plaintiff’s left leg injury, fasciotomy procedure and sequelae were the subject of the MVA proceedings and were brought to a conclusion upon entry of a judgment in his favour in those proceedings.

Mr Hutchings submitted that there was privity between the defendants in the two proceedings, the Health Administration Corporation and the South Western Sydney Health District, as both were agents of the Crown.

The Health Administration Corporation is governed by the Health Administration Act 1982. Section 9(2)(f) of that Act provides that the Corporation “is, for the purpose of any Act, a statutory body representing the Crown.” The second defendant, South Western Sydney Local Health District, is subject to the Health Services Act 1997. Section 22(1)(e) of that Act provides that a local health district does not represent the Crown.

Mr Hutchings referred to the decision of Clarke JA (with whom Priestley and Cripps JJA agreed) in Mounsey v Findlay (1993) 32 NSWLR 1. That decision involved an examination of s 9(2)(f) of the Health Administration Act and s 11(1)(e) of the Area Health Services Act 1986, the predecessor of the Health Services Act. That provision is in the same terms as s 22(1)(e) of the current Act. At issue in the case was whether the respondent, who was employed by an area health service, was “employed in the service of the crown” for the purpose of the legislation governing the Government and Related Employees Appeal Tribunal (GREAT). By a process of reasoning which is not relevant for the present purposes, Clarke JA concluded that he was. Nevertheless, his Honour said (at 6) that s 11(1)(e) of the Area Health Services Act “represents a clear expression of a legislative intention that area health services are not servants or agents of the Crown.”

Mr Sheldon SC, who appeared with Mr Khandar for the plaintiff, relied on that observation of Clarke JA for present purposes, submitting that that is a sufficient answer to Mr Hutchings’ argument on this issue. Moreover, he pointed out that s 9(2)(f) of the Health Administration Act characterises the Corporation as a body representing the Crown not for all purposes but “for the purpose of any Act.” He argued that the MVA proceedings did not involve any legislation, noting that in those proceedings the Health Administration Corporation was alleged itself to owe a duty of care to the plaintiff. The plaintiff did not rely upon agency between the Corporation and the driver.

Mr Sheldon’s submissions should be accepted. I am not persuaded that there is relevant privity between the defendants in the two proceedings.

In any event, I accept Mr Sheldon’s submission that a finding that the motor vehicle accident caused the injury to the left leg is not legally indispensable to the outcome of the MVA proceedings. To use the expression in the passage from the judgment of Burchett J in Effem Foods which I have quoted, that matter was not necessarily decided by that judgment. The left leg injury was not the only injury particularised in those proceedings. The consent judgment concluded the issues of duty, breach and damage, but not the issue of damages, that is, the quantification of that damage. Indeed, when one considers the medical reports considered by Dr Marsh for his assessment and the reports subsequently obtained, the experts have not spoken on this issue with one voice. As Mr Sheldon put it in written submissions, the nature and extent of the harm suffered was not necessarily decided by the consent judgment.

Accordingly, I am not persuaded that this matter is res judicata or gives rise to an issue estoppel.

Alternatively, Mr Hutchings submitted that, because of the disposition of the MVA proceedings, the pursuit of the present proceedings would be an abuse of process. The abuse alleged was that identified in Walton v Gardiner (1993) 177 CLR 378, in the plurality judgment at 393:

Mr Hutchings also cited a passage from the judgment of Barrett JA, with whom Beazley P agreed (Basten JA in dissent but not on this issue), in Liao v State of New South Wales; Zhang v State of New South Wales [2014] NSWCA 71 at [169] - [171]:

Mr Hutchings also referred to the more recent decision of the Court of Appeal in Benton v QBE Workers Compensation (NSW) Ltd [2015] NSWCA 101, where the summary dismissal of proceedings as an abuse of process was upheld. The circumstances of that case were significantly different from the present case but, as is apparent from the judgment of Ward JA (with whom Meagher JA and Adamson J agreed) at [61] – [88], it involved an application of the principles considered in Liao.

In oral argument, Mr Hutchings submitted that it could not be said that the plaintiff had not received the whole of the compensation he was entitled to receive in relation to his left leg condition. He argued that there was nothing to support any attribution of blame to the defendants in the present proceedings that had not already been attributed to the defendants in the MVA proceedings.

This submission also must be rejected. As I have said, while there may have been a body of evidence for the proposition that the motor vehicle accident was the indirect cause of the injury to the left leg, the consent judgment did not necessarily determine that issue. Moreover, even if it be accepted that the judgment involved a finding of a link between the accident and the left leg condition, it did not determine the extent to which the negligence of the defendants in the present proceedings contributed to that condition. As Mr Sheldon put it in written submissions, it is a matter of evidence whether and, if so, to what extent, there is a correlation between the injuries and disabilities suffered in the motor vehicle accident and those visited upon the plaintiff by the alleged clinical negligence. There is no necessary finding about those matters.

It cannot be said, to adapt the formulation in Walton v Gardiner referred to, that the maintenance of the present proceedings would be unjustifiably vexatious and oppressive for the reason that it is sought to re-litigate an issue which has already been disposed of by the MVA proceedings.

The same fate must befall Mr Hutchings further alternative submission, invoking the notion of double satisfaction. This was addressed by the High Court in Baxter v Obacelo Pty Ltd [2001] HCA 66, 205 CLR 635. That was a case involving joint tortfeasors, the issue being whether the plaintiff could continue proceedings against one of those tortfeasors after having reached a settlement with the other. It involved an examination of s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946, and the facts were very different from the present case.

What is relevant for present purposes is the statement by Gleeson CJ and Callinan J of the notion of double satisfaction where settlement has been achieved between the plaintiff and one of several tortfeasors, whether joint or concurrent. Their Honours said at [48] (656 - 7):

In the present case there is not a settlement agreement in the MVA proceedings from which the intention of the parties about the entitlement of the plaintiff to pursue the present defendants could be divined. However, for the reasons I have given, it cannot be said that the consent judgment should be regarded as recoupment of the whole of the plaintiff’s loss or damage arising from the left leg condition. Accordingly, it would not be unconscientious of the plaintiff to pursue the present proceedings. Whether there has been recovery in respect of the left leg condition, either wholly or in part, in the MVA proceedings would be an issue at the trial.

Finally, I should record Mr Sheldon’s supplementary submission that the certificate of the medical assessor, Dr Marsh, provides conclusive evidence that the motor vehicle accident was not the cause of the left leg injury, relying on s 61(2) of the MAC Act. This issue was raised at the hearing of the motion and was the subject of supplementary submissions. I need say no more from that, in the light of the supplementary submissions of Mr Hutchings, this issue is not as simple as Mr Sheldon would have it. However, as I have decided that the motion must be dismissed for reasons I have already given, it is neither necessary nor desirable that I determine that question.

The motion is dismissed with costs.