IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG347 of 1997 BETWEEN: JOHN EDWARD JAKES Applicant AND: HOSPITAL CORPORATION OF AUSTRALIA PTY LTD Respondent JUDGE: WILCOX J DATE: 12 JUNE 1998 PLACE: SYDNEY EXTEMPORE REASONS FOR JUDGMENT WILCOX J: Application has been made to amend the Statement of Claim so as to expand the categories of persons on whose behalf this action is brought. The action is a representative proceeding brought pursuant to Part IVA of the Federal Court of Australia Act 1976. When the action was commenced on 6 May 1997 a Statement of Claim was filed which identified the group members as follows: "1. A group of identified patients who underwent surgical procedures. 2. A group of unidentified patients who underwent surgical procedures." The reference to surgical procedures was a reference to procedures undertaken at the Hills Private Hospital, a hospital allegedly conducted by the respondent, Hospital Corporation of Australia Pty Limited. The complaint made in the Statement of Claim was that instruments used in the surgical procedures were not properly sterilised, with the result that patients were put under the inconvenience and strain of having to undergo tests for possible infection for hepatitis B, hepatitis C and HIV. It was not suggested any of the patients had in fact contracted any of these viruses as a result of the surgical procedures, but it was suggested they were required to undergo three separate tests over a period of about nine months and this caused considerable inconvenience and concern to them. The action followed the usual Part IVA procedures. A notice was given to group members advising them of their right to opt-out of the proceeding. This notice was able to be sent directly to the people concerned; a list of the relevant patients was available. Some people filed opt-out notices pursuant to s 33J of the Federal Court of Australia Act, but many group members remained. In due course, pursuant to directions given, witness statements were prepared and filed and a hearing date was fixed for 20 April 1998. It was agreed the cases of ten patients would be selected for hearing during that week, it being hoped this would resolve issues of liability and provide some guidance on the measure of damages. When the hearing date arrived, I was informed the parties wished to discuss the possibility of settling one or more of the ten cases. I agreed to adjourn the hearing for a time while these discussions occurred. In the result, all ten cases were settled and consequently, there was no judicial determination of liability. Some assessments of damages were made, but they were made by consent. The question then arose as to the further conduct of the case. I was informed the representatives of the parties were in negotiation regarding disposal of the remaining cases and I was asked to stand over the matter in order to enable the negotiations to proceed. I did so. As I understand the position, during the six weeks that have since elapsed, the solicitors for the applicant have been supplying information to the solicitors for the respondent and there have been negotiations regarding the resolution of many, if not most, of the remaining claims. It appears that, during the discussions that have ensued, the solicitors for the applicant has become aware there are people, being close relatives of a patient - for example, a parent or spouse - who claim to have suffered mental or nervous shock as a result of the patient's experience. A question arose as to whether it is possible for these claims to be pursued in the proceeding, as presently constituted. The applicant's advisers formed the view this is not possible and the appropriate course is to seek to enlarge the description of the group set out in the Statement of Claim in order to include such people. This attitude caused the current application whereby the applicant seeks to add a third category of group members, namely: "3. A group of persons who have suffered mental or nervous shock from the patient being put in peril by the defendant's neglect or default and who are parents or husband or wife of the patient so put in peril. I have heard argument today as to whether I should permit this amendment. On behalf of the applicant, Mr Rowe contends there will be no practical difficulty if the amendment is allowed. There has not yet been a trial on liability, or indeed any judicial determination in respect of any of the issues in the litigation. He concedes the application is made belatedly, in the sense that it is a long time since the proceeding was commenced, but he says only recently did it become apparent this group of people existed. Mr Rowe points out it would be possible for a separate proceeding to be brought, if the application for amendment was refused; but he contends it is more economical and convenient to include these claims in the current action. Mr Rowe also concedes that, if the amendment is allowed, it will be necessary to give notice to people who might be within the new category of group members, in order to allow them an opportunity to file an opt-out notice if so advised. However, he says, this can be done by a suitably framed letter being sent to the patient, or in the case of a minor, the parents of the patient pointing out the effect of the amendment and the right of people who fall within the group to file an opt-out notice. Mr Williams, on behalf of the respondent, opposes the application. He emphasises the time that has elapsed since the proceeding was commenced and contends the amendment has the effect of changing the nature of the action. Mr Williams also says his client is under no liability to people who fall within the proposed additional category, even if it was negligent in relation to the patients and/or acted in breach of the Trade Practices Act in connection with them. As I understand him, Mr Williams contends there is no duty of care to people in the proposed additional group and/or any damage they have suffered is too remote to be recoverable. I do not think it is appropriate, at this stage, for me to form any view about the respondent's liability to people in the proposed new group. The respondent has never admitted liability, even to the patients. Although settlements have been reached, these have been done on the basis of an agreement, without any admission of liability. It is therefore open to the respondent, if so advised, to put in issue its liability in relation to any group member whose claim has not yet been finalised. This would, of course, include any group member who might fall within the new category if the amendment is allowed. Furthermore, even if the respondent decides not to put in issue its liability to the patients, it would be open to the respondent to argue there is no liability to any person who falls within the proposed third category, because of the absence of a duty of care, remoteness of damage, or for any other reason that might seem good to the respondent in framing its argument. The fact that there may be a good answer to the claim is, I think, not a reason for refusing the amendment. The real questions are whether the amendment would prejudice the respondent and whether it is convenient to permit the amendment. In relation to prejudice, Mr Williams argues the effect of the amendment will be to hold up the final disposal of the proceedings. As I understand his position, it is that negotiations are proceeding well in relation to the patients' claims; it is hoped these may be able to be resolved within the near future. Mr Williams has in mind that the Court might then make an order, in effect, closing the class and thus enable the respondent to put the whole case behind it. He says the proposed amendment would cause delay in this being done. It would first be necessary to give an opt-out notice, with an appropriate time for people to respond to the notice, and then to consider any claims, before there could be a closing order. I think this is correct; some delay would be involved. It could, I think, be relatively short. I have in mind that, if the amendment is allowed, the solicitors for the applicant should send a letter to the patients in a form to be approved by me within the next week, to be despatched not later than the end of June. Any opt-out notices should be required to be filed not later than the end of July. It would be appropriate for particulars of any new claims to be supplied, at the latest, by the end of August. This would enable the respondent to decide what attitude to take, either to inform the Court that liability generally will be put in issue or there will be argument about recoverability of damage or, if the respondent is so minded, to negotiate the settlement of one or more of the new claims. I think the net effect of the amendment would probably be to put back the disposal of the whole proceeding by a couple of months; nonetheless it should be possible to have it completed by the end of the year. As against that, the alternative would seem to be that a new proceeding may be instituted. I am informed by Mr Rowe that his instructing solicitors have already identified four or five people who would seem to fall within the new category, but the solicitors have not yet interviewed all the patients and their immediate family members. There may or may not be enough people in the new category to constitute a separate representative action, for which seven people would be required; but it would be possible for any one of these people to institute an individual action that would have to be dealt with by the Court. No doubt any such action would be consolidated with the present proceeding. In this situation, there is no advantage in denying the applicant the amendment he seeks. The policy behind Part IVA of the Act is that like claims are to be gathered together, so far as is possible, in one action and dealt with by the Court in the most efficient way. It is my view, and I have expressed this in a judgment handed down only today in McMullin v ICI Australia Operations Pty Limited & Anor, that there is power under Part IVA to make an order for notices, in effect, to close the class. I consider the day must be allowed to arrive, sooner rather than later, when both a respondent and the Court can regard the litigation as being behind them. When I mentioned this to Mr Williams, he said his clients were prepared to take a risk on there being further proceedings; they would meet any later proceeding, if it arose, as best they could. That may be so; the respondent's attitude shows a certain hardiness of approach. But the Court also has a vested interest in efficiency and in avoiding multiplicity of proceedings. The public interest in the efficient use of Court time is a large part of the rationale of Part IVA. If I thought the joinder of the new group of persons would take the case off in a different direction, I would refuse to allow the joinder, particularly given the time that has elapsed. If there had already been a judicial determination in respect of issues relevant to the new group of persons, I would definitely refuse the application; it would not be right to allow a new group of people to come along after there had been a judicial determination and have the benefit of findings that had already been made. But neither of those situations applies in the present case. I think it is appropriate to grant the application. This is the course most conducive to the efficient disposal of the proceeding. I grant leave to the applicant to file the Amended Statement of Claim. I direct that, by Wednesday next, the applicant's solicitors forward to my Associate a draft of a letter to be sent to patients or, in the case of minors, the parents of patients who underwent surgical procedures informing them of the amendment and the right of people who fall within the group to file opt-out notices. Opt-out notices will be required to be filed by the end of July. The letters should be sent to the relevant people not later than the end of June. The draft letter should be shown to representatives of the respondent. If they have any comments on its form, I direct these be submitted by the close of business on Wednesday next. I will then settle the final form of the letter and my Associate will notify it to the solicitors for the applicant in order that it can be sent without delay. I certify that this and the preceding five (5) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox Associate: Dated: 12 June 1998 Counsel for the Applicant: J E Rowe Solicitor for the Applicant: Coleman & Greig Counsel for the Respondent: D L Williams Solicitor for the Respondent: Minter Ellison Date of Hearing: 12 June 1998