New South Wales District Court CITATION: Mays as tutor for Mays v Hill [2009] NSWDC 342 HEARING DATE(S): 14 December 2009 EX TEMPORE JUDGMENT DATE : 16 December 2009 JURISDICTION: District Court - Civil JUDGMENT OF: Sidis DCJ 1. The defendant is estopped from withdrawing the admission of breach of duty of care. DECISION: 2. The defendant is to pay the defendant's costs of the application. 3. The proceedings are returned to the Taree District Court to be listed in the Registrar's call over list of matters to be listed in the March 2010 sittings. 4. The exhibits and affidavit evidence is returned. CATCHWORDS: ESTOPPEL - Withdrawal of admission 8 years after accident - Delay in informing plaintiff of proposal to withdraw - Prejudice - Reliability of witness statements CASES CITED: Commonwealth of Australia v Verwayen [1990] 170 CLR 394 Nominal Defendant v Gabriel [2007] NSWCA 52 PARTIES: Martin John Mays By His Tutor Lesley Anne Mays (Plaintiff) Graham William Charles Hill (Defendant) FILE NUMBER(S): 55/01 COUNSEL: A Stone (For the Plaintiff) P Cummings (For the Defendant) SOLICITORS: Stacks / The Law Firm Pty Ltd (For the Plaintiff) Ferguson Bolton Lawyers (For the Defendant) JUDGMENT 1 The matter of Mays v Hill involves a claim brought by a plaintiff in respect of a motor vehicle accident that occurred on 5 June 1996. At the time of the accident the plaintiff was five and a half years old. He is now nineteen. It was expected that the damages aspect of his claim would be heard at the Taree District Court in March 2010. 2 The plaintiff was struck by a motor vehicle driven by the defendant at a time when he was crossing Chambers Flat Road, Marsden, Queensland at approximately 3.15pm after leaving his primary school. Chambers Flat Road is a four-lane highway with two lanes travelling north and two lanes travelling south. The plaintiff is said to have moved from west to east crossing two north-bound lanes and one south-bound lane. He was in the second south-bound lane when the motor vehicle accident occurred. 3 The insurer was notified of the claim on 22 July 1997 and a claim form was lodged on 22 September 1997. After undertaking investigation including obtaining a number of reports from the investigator, Mr B Asher, in March and April 1998, the insurer advised the plaintiff's solicitor on 15 July 1998 that breach of the duty of care was admitted. 4 A statement of claim was filed in the District Court at Taree on 10 April 2001. The injuries were said to involve brain damage and the claim was placed in the court's inactive list pending completion of the plaintiff's secondary education. 5 On 18 June 2006 the plaintiff's solicitors were advised that the admission of the breach of duty of care was withdrawn. On 28 May 2007 a defence to that effect was filed. The motion before the court seeks an order that the defendant be estopped from withdrawing the admission. 6 The decisions of the High Court in Commonwealth of Australia v Verwayen [1990] 170 CLR 394 and that of the New South Wales Court of Appeal in Nominal Defendant v Gabriel [2007] NSWCA 52 are authority for the proposition that a party may, in appropriate circumstances, be estopped from withdrawing an admission. The plaintiff's application alleged that he would be prejudiced by the requirement, thirteen years after the accident, to secure the evidence necessary to establish fault on the part of the driver. 7 The decision in Verwayen indicated that what is required to establish an estoppel is the following: 1. A clear indication of a deliberate and considered decision and in some case an express representation. 2. Evidence that it was reasonable that the plaintiff assumed that the decision would not be changed. 3. Evidence of detriment. 8 It was pointed out in Verwayen that the fact that an action may fail as a consequence of a withdrawn admission was not in itself sufficient. It was said that a broken promise, although morally reprehensible, was not necessarily unconscionable. At p 416 Mason CJ pointed to two elements that went to the issue of unconscionability. The first was reliance upon the assumption for an extended period and the second was substantial and irreversible detriment that cannot be satisfactorily compensated or remedied except by holding the party to the promise. 9 As to the question of whether the change of position in this case was unconscionable, this matter involved some consideration of the conduct of the defendant. In this respect I noted that the admission was expressly provided to the plaintiff in writing. After the claim was investigated the investigator at the time suggested that legal advice be obtained. The statements secured by that investigator made clear the views of some of the witnesses to the accident that the driver was not at fault. Thus it appears that at the time the defendant made a fully informed decision not to dispute the claim of breach of duty care. 10 It was said that in deciding to withdraw the admission there was no more information available to the defendant. The decision was simply made because a fresh mind was applied to the matter. 11 The issue of fault on the part of the driver was described in submissions to this court as "red hot". However, the conduct of the defendant displayed, in my view, a remarkably relaxed attitude once the question of fault was revisited. A footnote dated 1 June 2001 indicated that the question of revisiting the admission was raised by the insurer's solicitors. In January 2005 senior counsel was briefed to advise on the question of liability. In January 2005 the defendant's solicitor was instructed to file a defence denying liability, but the insurer agreed in February 2005 to postpone the filing of the defence until the advice of senior counsel was received. That advice was not received until October 2005. 12 In October 2005 the defendant's solicitors recommended to the insurer on the basis of advice given by senior counsel that a defence denying liability be filed. The letter written at that time alerted the insurer to the "real possibility" that the plaintiff would claim that it was estopped from denying liability. On 18 January 2006 the defendant's solicitors wrote to the plaintiff's solicitors withdrawing the admission. In May 2006 the proposed amended defence was served. On 28 May 2007 the defence was filed. 13 Thus it was more than four years from when the question of fault was first revisited to the date upon which the plaintiff was informed that the admission was withdrawn. It was more than six years before the defence denying liability was filed. This conduct was in relation to the so-called red hot issue that as far as the plaintiff was concerned, at least until January 2006, was not even an issue. In my view that conduct leads to the position of unconscionability. 14 The second element required by the High Court in Verwayen was that it be reasonable that the plaintiff assumed that the decision would not change. It was not suggested that the plaintiff was unreasonable in this respect. Further, I noted that upon receipt of notification of the admission in July 1998 the plaintiff's solicitor responded in August 1998 to the following effect, In reliance upon that admission of breach of duty of care, we have now cancelled arrangements which were previously made to have a firm of safety engineers prepare a report on liability. 15 In my view I consider that both elements leading to unconscionability have been established in this case. 16 The question then became whether there was detriment in the sense that there was substantial and irreversible prejudice to the plaintiff. The defendant says there was not. The plaintiff pointed to prejudice arising from the deterioration in the quality of the evidence that will be available by the time this matter is heard at least fourteen years after the accident occurred. There is also the question of the general prejudice from stale memories and specific prejudice. In this case both, in my view, arise. 17 The evidence before the court indicated that a number of statements were taken shortly after the accident from witnesses. A statement was taken from a Ms O'Brien, now Ms Hallan, on 7 April 1998. She was re-interviewed in May 2008. In her subsequent statement she referred to changed road conditions that had occurred since 1998. She made reference to the presence of other children on the road who ran across the road ahead of the plaintiff immediately prior to the accident. There is no evidence that those children have been spoken to or identified. 18 The driver was interviewed apparently in November 1998 and again in November 2008. There were discrepancies between the two statements. In his first statement the driver said that he saw nothing of the plaintiff and was unaware of his presence on the road until he heard a thump and realised that he had struck a child. In 2008 he said he saw the child for a split second prior to impact when he was three metres away. He said he braked hard and the truck stalled. That evidence is inconsistent with the evidence obtained from a motor accident reconstruction specialist, Mr Griffith, concerning perception times involved in applying brakes. The driver made no reference to other children on the road. The driver in neither of the statements made reference to the presence of other children in the area or to the vehicle driven by Ms O'Brien having stopped in the right-hand lane to avoid the plaintiff. 19 Mr Pearman was the driver's passenger at the time of the accident. There was no evidence of a statement made by him at the time of the accident. There is a statement that he made in November 2008. He placed the position of the accident at thirty to forty metres from the traffic lights at a nearby intersection. The police report stated that the distance from the intersection was 200 metres. The driver, when revisiting the scene in 2005, said the distance was about 115 metres. 20 Mr Pearman also said that the plaintiff was three metres in front of the defendant's vehicle when he could be seen and the brakes were applied. That was also contrary to the expert evidence of Mr Griffith. Mr Pearman said nothing of Ms O'Brien's vehicle having stopped in the adjoining lane. He estimated the defendant's speed at the time at thirty kilometres an hour in a forty kilometre school zone. The police report stated the speed limit at the time to be sixty kilometres an hour. Ms O'Brien said that she was travelling at sixty kilometres an hour. Mr Pearman made no reference to the presence of other children in the area. 21 Ms Zvorak was travelling in the opposite direction. She had to bring her vehicle to a halt on an emergency basis to avoid the plaintiff. A statement of her evidence was prepared, but unsigned in 1998. Ms Zvorak made reference to other children in the area. She has made no subsequent statement. She has been contacted by solicitors for both parties who have been advised that she did not remember making a statement and she did not remember the accident at all. 22 The defendant, in response to the suggestion that this evidence indicated real prejudice to the plaintiff, stated that the admission had not been made until two years after the accident and therefore the plaintiff ought to have investigated the matter prior to that date. The fact is that the defendant has known since 1998 that investigations that were in train by the plaintiff were ceased at that time in reliance upon the admission. 23 It was argued that the onus was on the plaintiff to establish that the subsequent deterioration of the quality of memory would cause him irreversible prejudice. The evidence concerning Ms Zvorak's total lack of memory came from the defendant's solicitor who spoke to her by telephone and who had the opportunity to prompt her as to the matters raised in the unsigned statement of 1998. There was no evidence that this was done. 24 As far as the discrepancies in Ms O'Brien's subsequent statement concerning the condition of the road, it was noted that photographs were taken in 1998, copies of which were available, that dealt with the condition of the road at the time of the accident. That may well be, but it was apparent both from Ms O'Brien and Mr Pearman that their current views concerning what occurred were influenced by current conditions both as to the physical appearance of the road and as to the traffic regulations governing it. 25 The defendant argued that it was able to obtain the report of Mr Griffith, the expert in traffic accident reconstruction, in 2009 and therefore it was said it should be possible for the plaintiff to obtain a similar opinion. Looking at Mr Griffith's report, it is apparent that there are a number of deficiencies and that it would be of little assistance to a court in determining the issue of fault. Mr Griffith makes no reference to the question of whether there were other children in the area at the time of the accident. He assumed that the driver did not have time to brake in circumstances where both Ms O'Brien and Ms Zvorak were able to bring their cars to a halt. Ms O'Brien also noted that she heard a screech of brakes from the defendant's vehicle. Mr Griffith makes no reference to the halting of the vehicles by Ms Zvorak and Ms O'Brien and the extent to which the stopping of their vehicles may have alerted the defendant to danger in the area. 26 In addition to the problems relating to the quality of the evidence there is the loss of opportunity to identify other potential witnesses. The claim form prepared by the plaintiff's mother referred to someone known as Sandra Menzies, who was a witness to the accident, and to a number of students and parents who were present at the time of the accident. I would expect that, fourteen years after the accident, the prospect of locating those persons who would have a clear memory of what occurred would be minimal. 27 I have already noted the discrepancies concerning the precise location on the road at which the accident occurred. 28 The police officer in April 2005 said that he could not remember the accident or its exact position. He deferred to the memory of the driver because he said the driver was more likely to remember it. 29 The plaintiff also noted that he had lost the opportunity to have the question of fault decided by the court at an early stage. The defendant consented to the matter being placed in the inactive list apparently after the question of whether the admission should be revisited was first raised in June 2001. The matter has remained in that list until recent times. 30 The defence pointed to the prejudice to the defendant which I acknowledge will be serious if it is prevented from raising a defence to the issue of fault. The question of how the balance between substantial and irreversible prejudice on the one hand and the question of proportionality as far as the consequence to the defendant was concerned was dealt with by McHugh J in Verwayen at pp 500-501 where he suggested that the equitable right of the innocent party will take precedence over the strict legal rights of the party estopped. 31 In my view this was a case where the estoppel should be enforced. I note that such cases will be rare, but given the period of time that has passed from the date of the accident to the present and from the date of the original admission to the date of its withdrawal I have taken the view that it would not be possible for the plaintiff to secure a fair trial of the issue of liability and that to that extent the plaintiff, if he were required to establish liability at this stage, would be substantially and irreversibly prejudiced. ORDERS 32 The order therefore will be that the defendant is estopped from withdrawing the admission of breach of duty of care. 33 The defendant is to pay the plaintiff's costs of the application. 34 The proceedings are returned to the Taree District Court to be placed in the call-over list of matters to be listed in the March 2010 sittings. 35 The affidavit evidence is returned, and the exhibits. ********** 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.