New South Wales Court of Appeal CITATION : Shirriff v Nominal Defendant [1999] NSWCA 152 FILE NUMBER(S) : CA 40553/98 HEARING DATE(S) : 19/05/99 JUDGMENT DATE : 28 June 1999 PARTIES : Sylvia Jeanne Shirriff v Nominal Defendant JUDGMENT OF : Beazley JA; Fitzgerald JA LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : 3683/97 LOWER COURT JUDICIAL OFFICER : Bowden ADCJ COUNSEL : G R Waugh (Claimant) J Poulos QC/C Pinkerton (Opponent) SOLICITORS : Wright & Strickland (Claimant) Sparke Helmore (Opponent) CATCHWORDS : Personal injury; motor vehicle accident; commencement of action out of time; whether order made "against good faith". ACTS CITED : Rule 12A of District Court; Subs52(4) Motor Accidents Act. DECISION : Appeal allowed THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA40554/98 DC 7021/96 BEAZLEY JA FITZGERALD JA Monday, 28 June 1999 Sylvia SHIRRIFF v NOMINAL DEFENDANT 1 BEAZLEY JA: I agree with Fitzgerald JA. 2 FITZGERALD JA: The claimant, Sylvia Shirriff, claims that she was struck by an unidentified motor vehicle when crossing the Pacific Highway at St Leonards on 4 December 1992. 3 On 27 November 1996, the claimant applied for the leave of the District Court under subs 52(4) of the Motor Accidents Act 1988 to commence an action against the Nominal Defendant out of time. The order applied for was made by an Acting District Court Judge on 27 February 1997. 4 The claimant commenced an action in the District Court on 4 July 1997 and a defence was delivered on 18 September. On 27 November, the action was set down for arbitration on 16 March 1998. 5 As a result of subpoenae issued in connection with the arbitration, the solicitors for the Nominal Defendant ascertained that the claimant had not only been an inpatient at Royal North Shore Hospital for the period which she had deposed to in support of her application for leave to commence proceedings out of time, she had also earlier attended briefly at Sydney Hospital where a blood sample had been taken which, on analysis, disclosed a blood alcohol content of 0.133. Further, notes by Sydney Hospital staff recorded a query whether the claimant had been struck by a car or injured herself falling. The latter possibility, which was based on an assumption that the claimant had soft tissue injuries, can be ignored at this point in the litigation. The claimant's injuries included fractures of the right ankle, pubic ramus, right shoulder and coccyx, and she was not cross-examined on an affidavit in which she has sworn that she was struck by an unidentified vehicle. 6 On 17 July 1998, a District Court Judge set aside the order of 27 February 1997 giving the claimant leave to commence proceedings and struck out her application for leave and the action which she had commenced. This application for leave to appeal and, if leave is given, appeal are brought relative to the orders made on 17 July 1998. 7 The only source of power relied on for the orders of 17 July 1998 is Rule 12A of the District Court Rules, Cf Hoskins v Van Den-Braak (1998) 43 NSWLR 290. which, so far as presently material, authorises setting aside an order "made ... against good faith". 8 It was conceded by the Nominal Defendant, correctly, that the order striking out the claimant's application for leave and action was incorrectly made. 9 The Nominal Defendant sought to uphold the order setting aside the order giving the claimant leave to commence proceedings on grounds which tended to shift during the course of the argument. 10 At one point, there seemed to be a challenge to the finding of the Judge who set aside the order of 27 February 1997 that the claimant had not deliberately concealed the true facts from the Acting Judge who made that order. However, there is no basis for such a challenge. As earlier stated, the claimant was not cross-examined on her affidavit in which she swore that she had been struck by an unidentified vehicle crossing the Pacific Highway at St Leonards. Further, her unchallenged evidence was that her recollection of events between that time and her admission to Royal North Shore Hospital was "hazy", that the information she had provided to police, the Nominal Defendant and the Court accorded with her recollection, and that she had "not consciously sought to mislead" either the Court or the Nominal Defendant. 11 Another submission, not advanced below, was that an absence of good faith was established by the claimant's omission to obtain and disclose the information ascertained by the Nominal Defendant by its subpoenae, and, in particular, a subpoena to the Commissioner of Police. It was not explained why the claimant should have taken such action. She had obtained a copy of the police report from the North Sydney Police Station where the accident was reported and placed a copy of the report into evidence before the Acting Judge who made the order of 27 February 1997, and there was nothing in that report or other material then available to her to call her recollection into question. 12 The final matter relied on by the Nominal Defendant was that the claimant did not disclose to the Acting Judge who made the order on 27 February 1997 that she was intoxicated when she was injured, and that the material placed before his Honour would have induced him to think otherwise. 13 The Judge who set aside the order made on 27 February 1997 said that he was not attempting to determine whether the Acting Judge who made that order would have done so if he had known "that the facts were different indeed" and "nothing like the evidence that is now available". His Honour continued: "Acting Judge Fegan was considering an application for him to grant a special favour in the context of an Act that requires the giving to the opponent of as much information as possible as soon as possible. The order was made on the basis and faith that the evidence was the whole truth and was accurate. It was in fact and the evidence shows made on information that was materially incorrect ...". 14 His Honour then went on to consider that an order setting aside the order made on 27 February 1997 as "made against ... good faith" was justified by Roach v BMW Steel Pty Limited [1991] 23 NSWLR 110.. The judgment setting aside the order made on 27 February 1997 stated: "Two things can be said of this decision. The first is that the Court equated the making of an order against good faith with it being contrary to good faith for a client to attempt to retain the benefit of an order in the circumstances there existing. The second is that again the good faith test was satisfied if the party knew or ought to have known the relevant facts. In such a matter as asking for an extension of time to sue the Nominal Defendant, I think parties and their advisers ought to know all the relevant facts of which they can reasonably and properly be aware and they should all be before the Court when a decision is made. The defendant has satisfied me that in that sense the order was entered up against good faith." 15 Before proceeding, it is desirable to note that the only matters which concerned the Acting Judge who made the order of 27 February 1997 were whether there had been a satisfactory explanation of the claimant's delay and whether prejudice to the Nominal Defendant justified refusal of the application for leave to commence proceedings out of time. His Honour resolved those questions in favour of the claimant, and went on to say: "... There are still a lot of hurdles facing the [claimant] in the pursuance of this litigation and that includes what I have already described as the elusive character of actions against the Nominal Defendant. In reaching a decision, I am not in any way prejudging the outcome of the case either in terms of liability or in terms of the damages that might be recoverable ..." 16 The present case is plainly distinguishable from Roach, 23 NSWLR 110. which in turn distinguished Coles v Burke [1987] 10 NSWLR 429. In Roach, 23 NSWLR 110. an application which had been stood over on the basis that it would be restored to the list on proper notice to the other party's solicitors. One party caused the application to be restored to the list without proper notice being given to the other party's solicitors and, when the other party did not appear, proceeded ex parte and obtained an order. Not surprisingly, it was held by this Court Kirby P, Clarke and Handley JJA. that the ex parte order had been obtained against good faith. In its judgment, the Court said: p 114B. "In our judgment the history of the proceedings ... establishes that the legal advisers of the plaintiff 'knew or ought to have known' ... that the absence of the defendant from the court that day was the result of some mistake and did not reflect a deliberate decision on its party [sic] no longer to 'hotly contest' the making of [the] order .... ... the decision to proceed without inquiry of the defendant's solicitors was made by a barrister who was not aware of the history. In the result it may be that no-one was personally guilty of conduct 'against good faith'. Nevertheless the rule is satisfied if a party or his legal advisers knew or ought to have known of the relevant facts. A client cannot escape responsibility for the acts and omissions of his solicitor and barrister because neither was fully aware of the facts. In accordance with ordinary principles the knowledge of both will be imputed to the client." 17 On the uncontested evidence of the claimant, neither she nor her legal representatives knew or ought to have known that, after she had been struck by an unidentified motor vehicle, she had attended briefly at Sydney Hospital where a blood sample had been taken which, on analysis, disclosed a blood alcohol content of 0.133. Her omission to disclose those matters to the Acting Judge who made the order of 23 February 1997 does not lead to a conclusion that that order was made against good faith. 18 In Roach, 23 NSWLR 110. the Court said: 23 NSWLR 110, 113G. "It does not matter that the legal practitioner who acted to obtain the judgment or order was not aware at the time that his or her conduct was contrary to an earlier promise or representation made by or on behalf of the client. It would still be contrary to good faith for a client to attempt to retain the benefit of an order innocently obtained by his legal practitioner if it had been obtained contrary to a promise or representation binding on the client." 19 The latter statement must, I think, be regarded as an observation made by the Court in the course of proceeding to the real basis for its decision, which is set out in the passage first quoted. I do not consider that the passage last quoted is intended to express a general principle that, whenever it would be contrary to good faith for a party to attempt to retain the benefit of an order, that order must have been made against good faith. For example, a matter arising subsequent to an order, or fresh evidence which could not have been obtained with proper diligence prior to the order, might make it unjust for a party to retain the benefit of the order, but would not mean that the order was "made … against good faith." 20 In any event, I am not persuaded that it is contrary to good faith for the claimant to attempt to retain the benefit of the order made on 27 February 1997 in the circumstances of this case, which need not be fully repeated. It is sufficient to point to the basis upon which the order of 27 February 1997 was made and to mention once again the uncontested evidence of the claimant. 21 Roach 23 NSWLR 110. did not question the correctness of this Court's earlier decision in Coles v Burke [1987] 10 NSWLR 429. Kirby P, with whom McHugh JA and, materially, Samuels JA agreed, expressed the opinion that the phrase "against good faith" was concerned with "misconduct or dishonourable conduct of the person who procured the judgment which it is suggested undermines the authority of that judgment ...". 10 NSWLR 429, 437C. 22 Plainly, on the footing upon which the present matter has proceeded, namely the claimant's unchallenged evidence, her omission to inform the Acting Judge who made the order of 27 February 1997 that she had briefly attended at Sydney Hospital where a blood sample had been taken which, on analysis, disclosed a blood alcohol content of 0.133 did not involve "misconduct or dishonourable conduct". Nor is there any basis for attributing "misconduct or dishonourable conduct" to the claimant's legal representatives. 23 Accordingly, I am of opinion that the Nominal Defendant failed to establish that the order of 27 February 1997 was "made ... against good faith", and that an order should not have been made setting it aside. 24 I would grant leave to appeal and allow the appeal with costs, and set aside the orders made in the District Court on 17 July 1998. The Nominal Defendant should pay the costs of the appeal. 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.