New South Wales Supreme Court CITATION : Molnar .v. Stack & Others [2002] NSWSC 554 FILE NUMBER(S) : SC 20939/97 HEARING DATE(S) : 5 February 2002, 6 February 2002, 7 February 2002, 11 February 2002, 12 February 2002 & 22 March 2002 JUDGMENT DATE : 25 June 2002 Julie Anne MOLNAR - Plaintiff David Maurice STACK - First Defendant Raymond Thomas STACK - Second Defendant PARTIES : Timothy John STACK - Third Defendant Thomas GOUDKAMP - Fourth Defendant Julie MAHONY - Fifth Defendant John BESTON - Sixth Defendant JUDGMENT OF : Barr J at 1 Mr F.V. Fletcher for the Plaintiff COUNSEL : Mr W.G. Muddle for the First to Fifth Defendants Mr J.E. Sexton QC with Mr J.B. Turnbull for the Sixth Defendant Taylor & Scott for the Plaintiff SOLICITORS : Yeldham & Associates for the First to Fifth Defendants PricewaterhouseCoopers Legal for the Sixth Defendant CATCHWORDS : Legal practitioner - failure to inform injured client of time limit for commencement of common law proceedings without leave - whether breach of duty - whether plaintiff's loss causally related - Legal practitioner - commencement of common law proceedings after expiry of statutory time limit and without leave, extinguishing rights under Workers' Compensation Act - whether breach of duty - Legal practitioner - delay in commencing application for leave to commence common law proceedings - whether breach of duty - Legal practitioner - failure to explain delay in filing application for leave to commence common law proceedings - whether breach of duty - Legal practitioner - manner of preparation of application for leave to commence common law proceedings - whether breach of duty LEGISLATION CITED : ss 66, 67, 151D Workers' Compensation Act 1987 DECISION : See Judgment at Paragraph 93 IN THE SUPREME COURT REVISED OF NEW SOUTH WALES COMMON LAW DIVISION PROFESSIONAL NEGLIGENCE LIST Graham Barr J Tuesday 25 June 2002 20939/97 Julie Anne MOLNAR v David Maurice STACK & Ors JUDGMENT 1 HIS HONOUR: The plaintiff, Julie Anne Molnar, sues the first to the fifth defendants and the sixth defendant respectively claiming damages for their alleged breaches of duty towards her as her solicitors. The first, second, third, fourth and fifth defendants are the partners of the firm Stacks The Law Firm ("Stacks"), which she consulted in 1992 following an accident at work. The sixth defendant, Mr Beston, is the solicitor the plaintiff consulted after she terminated Stacks' services. Stacks have cross-claimed against Mr Beston seeking contribution or indemnity for any damages they may be found liable to pay the plaintiff. 2 During the hearing the plaintiff agreed with the defendants collectively that she should recover a particular sum, and her counsel was excused from taking further part in the proceedings. The only issue left to be determined was the proportions in which Stacks and Mr Beston should contribute to the agreed sum. Effectively the case for the liability of Stacks was put by counsel for Mr Beston and vice versa. Stacks and Mr Beston have agreed that if neither is held liable they will contribute equally to the plaintiff's damages. THE PLAINTIFF'S INJURY 3 In 1991 the plaintiff was employed by Sendex Pty Ltd trading as Daintrey House Nursing Home ("Sendex"). She worked as a nurse's aide at a nursing home and her duties included lifting and moving patients who resided there. The management of the nursing home introduced wheeled commode chairs in which seated patients had to be transported. The chairs gave trouble. Their wheels used to jam or lock up. When they did, the sudden stopping of a chair would put a strain on the back of the person pushing it. The plaintiff reported the problem to the matron. A maintenance worker unsuccessfully attempted to solve the problem. The plaintiff told the management that the chairs were still not working properly but nothing further was done about them. The plaintiff took to pulling patients along in the chairs because it was too hard to push them. Even so, the resistance of the chairs to movement put an unreasonable load on her low back and she suffered a series of straining injuries to her lumbar spine. The last and most serious happened on 30 December 1991. 4 The plaintiff was off work for a period of time and then resumed on light duties. She could not return to her former duties, however, and eventually her employer terminated her services. She received Workers Compensation benefits. THE PLAINTIFF'S REPRESENTATION BY STACKS 5 On 23 October 1992 the plaintiff had her first conference with Stacks. The solicitor was Mr Firth. She gave a history and instructions and on 29 October 1992 Mr Firth saw to the filing of an application for determination in the Compensation Court. On the same day Mr Firth wrote a letter to the plaintiff, referring to her injury and her receipt of Workers Compensation benefits and continuing - We confirm that we have advised you that were it not for the change to the law which came in on 1 July 1987 you would have had excellent prospects of success at common law because you are able to demonstrate that your injury was caused by your employer's negligence. Unfortunately, under the law as it stands today that is not where the matters rests (sic). To be successful in a common law action you have to be able to prove, in addition to the fact that your employer was negligent, that you have suffered a really serious injury. Unfortunately on the reports we have seen we doubt that you will be able to satisfy the legal test of really serious injury. That is not to say that your injury is not significant or even serious, it is just to say as a matter of law it probably does not meet the threshold of severity required to be able to bring common law proceedings. We confirm that we rather suspect that at the end of the day all you will be left with are your rights under the Workers' Compensation Act and we confirm that in addition to the benefits which you have been receiving up to this point you are entitled under the Worker's Compensation Act to a lump sum for disability and to a lump sum for pain and suffering, providing the level of impairment to your back is assessed at being at least 16% or more. At this stage it is probably too early for any doctor to certify that you have any permanent impairment in your back and therefore we will probably have to wait until about the middle of next year before they will be prepared to do that. 6 The law to which Mr Firth was referring was the Workers Compensation Act. The rights of the plaintiff, as the Act then stood, may be summarised as follows. By s 33 she could receive weekly payments. By ss 66 and 67 she could recover lump sum compensation for permanent injury and pain and suffering. The defendants have agreed that her lump sum rights were worth $32,500. 7 Part 5 Division 3 of the Act regulated the plaintiff's rights to recover common law damages. By s 151G the maximum amount she could then recover for non-economic loss was $203,350. The scheme under the section allowed no such damages for loss assessed up to a threshold of $50,850 and only a proportion, according to a formula, for loss assessed between that figure and $67, 800. She could recover all her non-economic loss if it were assessed at $67,800 or more. The assessed figure was to be calculated as a proportion of $203,350 according to the relationship between her case and a most extreme case. The effect of these limitations was that if damages were to be recoverable without discount the plaintiff's case had to be assessed at least as equivalent to one-third of a most extreme case. 8 By s 151H the threshold for an award of damages for economic loss was set at the same level. 9 By s 151A the plaintiff was required to elect whether to claim permanent loss compensation under ss 66 and 67 or damages limited in the manner I have described. By subs 3(a) a plaintiff was to be taken to have elected to claim damages if she commenced proceedings in a court to recover those damages. No relief was provided, however, for anyone who commenced proceedings which failed for any reason to lead to an award of damages. For such a person there would be no reinstatement of rights under ss 66 and 67. 10 On the other hand, the filing in the Compensation Court of an application for determination did not constitute an election. An election in favour of Workers Compensation payments would be effective only if the plaintiff accepted payment or an award were entered: s 151A (3)(b). 11 By s 151D there was a time limit for the commencement of proceedings for damages. Relevantly, the section was as follows - (2) A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation more than 3 years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken. (3) The Limitation Act 1969 does not apply to or in respect of court proceedings to which this section applies. 12 So the plaintiff had the right to commence proceedings without leave, but only if she did by so by 30 December 1994. 13 By the time the plaintiff consulted Mr Firth she had been suffering from chronic back pain for some time, with referred pain down both legs. Although she had sought advice and treatment from a number of medical practitioners she found herself unable to obtain lasting relief. She was seeing a pain management specialist. She was seeing a number of other specialists including Dr Sheehy, a neurosurgeon. After the consultation she continued under the care of the practitioners she had been consulting and saw a number of other practitioners at Mr Firth's suggestion for medico-legal reports. On 17 July 1993 Dr Graham, a neurosurgeon, performed a discogram. 14 Mr Firth retired at the end of 1993 and Ms Robertson assumed carriage of the plaintiff's claim. Their first consultation took place on 7 February 1994. Ms Robertson worked on the case during 1994, and seems to have done all that was necessary to advance the Workers Compensation claim, to obtain medico-legal advice as appropriate and to note the progress of the plaintiff's treatment. 15 On 8 August 1994 the plaintiff saw Dr Neil, orthopaedic surgeon, on the recommendation of Dr Sheehy. On 23 September 1994 she was admitted to hospital where Dr Sheehy and Dr Neil carried out decompression and fusion of the L5 – S1 joint. 16 On 14 November 1994 the plaintiff, accompanied by her father, attended a conference with Ms Robertson. No medical report was available dealing with the plaintiff's progress since surgery. The plaintiff told Ms Robertson that she felt that the doctors had identified the problem in her back. She knew the threshold she had to cross in order to recover damages and wanted to know what the chances were of doing so. Ms Robertson told her that her condition was not stable, so recent was the surgery, and that she felt that it was appropriate at that stage to proceed only with the Workers Compensation claim. 17 The plaintiff told Ms Robertson that she thought she had a case for damages. She was upset, she told the Court, that the nursing home through faulty equipment had caused injury to her back. 18 The plaintiff did not know that there was a time limit for the commencement of damages proceedings and Ms Robertson did not tell her that there was. The plaintiff told the Court that if Ms Robertson had told her that there was a time limit she would have asked her to commence proceedings for damages. She said that she would have done so because she felt as though she could get to the threshold required. 19 Ms Robertson's file note of the conference was tendered as Exhibit AB. It comprises brief notes of symptoms and particulars of relevant medical practitioners. There is a reference to the opinion of Dr Fuller, orthopaedic surgeon, that when he saw the plaintiff in September 1993 she had 30% permanent impairment of the back. Some calculations follow, apparently to estimate the lump sum likely to be recoverable under s 67 Workers Compensation Act. There is no reference to the limitation period. 20 Counsel for Stacks did not challenge the plaintiff's account of the conference. Nothing in Ms Robertson's file note suggests that it was inaccurate. Ms Robertson did not give evidence. Accordingly, I accept the plaintiff's account of what was and was not said. However, her account of what she would have said or done if the circumstances had been different needs to be considered in the light of certain answers she gave in cross-examination. I shall refer to them in due course. 21 The plaintiff's counsel drew her attention to a letter Ms Robertson had written to Dr Fuller on 23 January 1995, stating that since Dr Fuller last saw the plaintiff she had undergone the operation and that the plaintiff had instructed Stacks that she had had a good result from the surgery. The plaintiff told the Court that she remembered telling Ms Robertson that the fusion had been successful in that it was solid, as the doctors had told her, but that she would not have said that she had a good result, because it was too early to tell. She said that she was still quite tender after the surgery, that she was wearing a corset and that she still had leg pains, though they had eased a lot. She said that at the time she spoke to Ms Robertson it was too early to tell whether the result was good. 22 It was not submitted that the plaintiff's expression of opinion to Ms Robertson that she thought she had a case for damages was an instruction to commence proceedings. Obviously it was not. Ms Robertson was entitled to think that her instructions were to proceed in the manner she had advised, and that is what she did. She took appropriate action including requesting medico-legal reports from Dr Sheehy and Dr Neil. 23 The plaintiff told the Court that after hearing what Ms Robertson had to say she did not think that it was fair, so she took steps to get a second legal opinion. She saw Mr Beston on 7 February 1995 and he said that she could sue for negligence. She instructed him to deal with her affairs and he wrote to Stacks on 9 February informing them that he had assumed conduct of the matter. THE CASE AGAINST STACKS 24 It was submitted on behalf of Mr Beston that Stacks were in breach of their duty to the plaintiff in three respects, namely in not informing her about the limitation period, in not advising her to commence proceedings before it expired and in not protecting her position when it appeared that she would have to undergo surgery shortly before it expired. Failing to tell the plaintiff about the limitation period 25 In my opinion Ms Robertson, like Mr Firth, was justified in entertaining serious doubts whether, if the plaintiff took proceedings for damages, she would cross the threshold. Those doubts were not removed when the plaintiff underwent surgery only three months before the limitation period was due to expire. At the time of their conference on 14 November 1994 all Ms Robertson knew about the results of surgery was what the plaintiff told her. What the plaintiff was saying must have raised the distinct possibility of a resolution of her condition or at least a significant improvement in her symptoms and disabilities. Accordingly, the advice Ms Robertson gave was appropriate. As Ms Robertson must have realised, the chances of crossing the threshold in an action for damages was speculative. To commence an action would raise the real risk of failing in the action but at the same time of bringing to an end the plaintiff's rights to recover lump sums under the Workers' Compensation Act. 26 Even so, Ms Robertson ought to have told the plaintiff that the limitation period was soon to expire. It was the right of the plaintiff, not of Ms Robertson, to decide whether to proceed as Ms Robertson was advising or whether to commence an action for damages. The plaintiff could make a proper decision about that only if she knew all the relevant facts. It was not suggested on behalf of Stacks that Ms Robertson's failure was not a breach of her professional duty to the plaintiff. I find that it was. 27 The expiry of the time limit extinguished the plaintiff's right to sue without the leave of the court. That is not the end of the matter, however, for the plaintiff must prove that Stacks' breach of duty caused her loss. This raises the question of what the plaintiff would have done if she had been properly advised. I have said that Ms Robertson ought to have told the plaintiff about the limitation period, but that is not all she ought to have said. She had a duty to put the plaintiff in possession of all the relevant facts. That included a rehearsal of the relevant factors and arguments one way and the other capable of bearing on the decision what to do. I come now to the cross-examination of the plaintiff. 28 She agreed that by the time she saw Ms Robertson in conference on 14 November 1994 she understood the distinction between Workers Compensation rights and the right to sue for damages, that Mr Firth had had serious doubts whether she would cross the threshold under s 151G and that Ms Robertson was expressly stopping short of advising her to sue because of uncertainty about her probable final level of disability. She had been sent copies of reports furnished by several doctors who had seen her for treatment and for medico-legal advice, including those of Dr Champion, treating rheumatologist, of 8 March 1994, assessing the permanent impairment of the low back at 15%, of Dr Frith, medico-legal neurologist, of 13 September 1993, assessing permanent impairment of the whole back, resulting from incapacitating pain in the sacral area, of 50% and of Dr Fuller, medico-legal orthopaedic surgeon, of 17 September 1993, assessing permanent impairment of the back at 30%. All those reports pre-dated the surgery, of course. 29 The plaintiff conceded that she did not hold herself out as an expert in such matters and would have accepted the advice of Stacks. She was then asked to make a number of assumptions. They were recorded in writing and the resulting document was put into her hand. It became Exhibit 1.1 and the contents are as follows - That during December 1994, Ms Robertson of Stacks had said to Ms Molnar words to the effect: 1. That the law requires you to choose between claiming workers' compensation and suing for damages at common law. 2. That if you choose suing at common law, you will forever lose the right to workers compensation lump sums, which could amount to perhaps $40,000. 3. That if you choose to sue at common law you may ultimately end up with more money, but only if you pass the threshold test. If you fail the threshold, you will get nothing at common law and will also lose your workers compensation lump sums. 4. That Stacks did not know if you would pass the common law threshold, but thought that there was a risk that you may not – in which case you would get no damages and no workers compensation lump sums. 5. That Stacks did not know with certainty which course would be better for you, but that they were concerned that you may not pass the threshold. 6. That the law requires that if you choose to sue at common law, that you do so by 30 December 1994. After 30 December 1994 you would need the leave of the Court to sue for common law damages. 7. Whilst there could be no guarantee that the Court would give such leave, given that your condition has not stabilised from your recent surgery, Stacks opinion is that you would have good prospects of obtaining that leave after your condition has stabilised in 1995, if you decided then to choose to sue at common law. 8. That although there is no perfect or risk free course for you, Stacks would recommend that, to avoid the risk of losing forever your workers compensation lump sums and getting nothing at common law, you wait until 1995 when your condition should have stabilised to decide. If then in 1995 it appears that you are likely to pass the threshold, you could seek leave to sue at common law. 30 Counsel began by asking the plaintiff to make the assumptions without the benefit of such a document and to say what her attitude would have been to the commencement without further delay of common law proceedings. Some enquiry needed to be made whether the plaintiff was capable of bearing those matters in mind in order to answer such questions and ultimately the document came into existence. These questions and answers followed - Q. I want to ask you a number of questions based on the assumptions that what is set out in the paper I handed to you was said to you by Miss Robertson of Stacks in December 1994. I will read it out for the record? A. Are we assuming she said this to me? Q. Yes, during December 1994, she said words to the effect: That the law requires you to choose between claiming workers' compensation and suing for damages at common law. That if you choose suing at common law, you will forever lose the right to workers compensation lump sums, which could amount to perhaps $40,000. That if you choose to sue at common law you may ultimately end up with more money, but only if you pass the threshold test. If you fail the threshold, you will get nothing at common law and will also lose your workers compensation lump sums. That Stacks did not know if you would pass the common law threshold, but thought that there was a risk that you may not – in which case you would get no damages and no workers' compensation lump sums. That Stacks did not know with certainty which course would be better for you, but that they were concerned that you may not pass the threshold. That the law requires that if you choose to sue at common law, that you do so by 30 December 1994. After 30 December 1994 you would need the leave of the Court to sue for common law damages. Whilst there could be no guarantee that the Court would give such leave, given that your condition has not stabilised from your recent surgery, Stacks opinion is that you would have good prospects of obtaining that leave after your condition has stabilised in 1995, if you decided then to choose to sue at common law. Finally, that although there is no perfect or risk free course for you, Stacks would recommend that, to avoid the risk of losing forever your workers compensation lump sums and getting nothing at common law, you wait until 1995 when your condition should have stabilised to decide. If then in 1995 it appears that you are likely to pass the threshold, you could seek leave to sue at common law. Now do you understand those assumptions? A. Yes. Q. I think you told his Honour earlier that you did not regard yourself then as an expert in compensation and suing at common law? A. Definitely not. Q. If you had on the assumptions you had been told something to the effect of what is set out on that paper and given you were relying on Stacks for advice, may the Court take it you would have accepted that advice and waited until 1995 to decide? A. Can you re-word the question? So what you are actually asking me I don't understand the question. Q. I'm asking you to assume that Miss Robertson had given you advice to the effect which is set out on the paper in front of you? A. She had given me all the information needed. Q. I want you to assume she said words to the effect of what is set out in the paper which I have just read to you? A. Right. Q. Assuming she said all that, I am suggesting to you that given you were relying on Stacks as the expert, you would have accepted that advice and waited until 1995 when your condition stabilised before deciding whether to sue at common law or pursue workers' compensation? A. I think I am understanding the question. Just given me a minute, I am sightly confused, but I think I know what you are saying. You are asking me if I had stayed with Stacks and taken this course of action -- Q. Please don't worry about which firm of solicitors you might have retained for the case? A. If I was given this advice is what you're asking? Q. I'm not allowed to answer questions? A. Sorry Q. I want you to assume Miss Robertson had given you that advice and I don't want you to worry about the firm of solicitors you had retained or would have retained. Make the assumption you had been told that and what I am suggesting to you is if you had been told that, given they were the experts and you were relying on them, you would have accepted their advice to wait until 1995 when your condition had stabilised before deciding to sue at common law or to pursue workers' compensation? A. I don't know if I can answer that because I don't know what I would have done. Q. Doubtless it is a difficult question but can I ask you to do the best you can to put yourself back in the position you were in in 1994 when you knew probably a good deal less about the legal processes than you do now. Given that Stacks were the first solicitors you had gone to and given that you had retained them as the expert, it is the case if you had been told what I now put to you, you would have accepted their advice and waited to see the outcome of that operation? A. Yes. Q. That would have meant you would not have decided to sue in 1995 at common law because you would have risked losing the lump sums with workers' compensation and still got nothing at common law? A. It that was what I was advised, if that was the law. Q. If that was the advice given by Stacks that is what you would have done, isn't it? A. Yes. 31 It was submitted on behalf of Mr Beston that this evidence did not detract from the plaintiff's evidence in chief, which was not directly challenged. I do not accept that submission. It seems to me that the questions based upon the document implied a direct challenge to what the plaintiff had said in chief. 32 Then it was submitted that the evidence was equivocal. I disagree. 33 Then it was submitted that the plaintiff did not really understand what she was being asked to assume before saying whether she would have accepted Stacks' advice. I was somewhat concerned during the hearing, in view of the substantial number of things the plaintiff was being asked to assume, to try to ensure that she understood the substance of what she was being asked. I therefore observed her closely. It seemed to me that at first the plaintiff did not understand but that, after having had the document put into her hand and having been allowed a substantial time to read it, she did come to an understanding of its contents. 34 My impression was confirmed by this series of questions and answers in the re-examination of the plaintiff - Q. As at December 1994, you understood that if you did not commence, as at 1994 if you had been given those assumptions or if you had been told those things by Miss Robertson as at 1994, would your understanding have been that if you did not commence proceedings by 30 December 1994 that you may have waived those rights for all time? A. Waived the rights? Q. The right to sue at common law? A. Yes. Q. You would have understood – you are looking puzzled, Miss Molnar, if you don't understand something please tell me you don't understand what I am asking you? A. Yes Q. Put yourself back in your shoes in 1994? A. Yes. Q. Miss Robertson has told you all the things in exhibit 1.1, try to decide what your understanding would have been. Do you understand that is what I am asking you? A. Yes. Q. Is it the case had you been told all this in 1994 your evidence is, would have been you could have waived those common law rights for all time if you did not commence the common law proceedings by 30 December? A. But the advice I was given was you could have an extension. Q. I understand that. When you look at this exhibit, that is 1.1, the assumptions that were put to you, do you understand now those assumptions as meaning that after December 1994 you would have been able to obtain leave to commence your common law proceedings? A. Sorry, could you ask that question again? Q. Yes. When you read through the matters that were put to you in exhibit 1.1? A. Yes. Q. You read through it today, did you understand it as telling you, that what is in there as meaning that if you did not commence proceedings by 30 December 1994 that you would be able to obtain leave after 30 December 1994 if you chose to proceed at common law? A. It wasn't guaranteed? Q. It wasn't guaranteed? A. That's correct. Q. You understand that to be the case now and you would have understood that to be the case back in 1994? A. Yes. … Q. If Miss Robertson had said to you all of the things contained in exhibit 1.1 but had said to you, for example: "But we can send a letter to your employer's insurance company or to your employer telling them that we need to investigate the matter further in relation to the position of your back, telling them that your back had not stabilised and putting them on notice you may want to commence common law proceedings", if she told you sending a letter containing those matters might make your application easier, your application to proceed out of time. Do you understand? A. Yes. Q. You would have given her instructions to send such a letter? A. Yes, because she's the expert. That's the advice she would have given me. 35 I think that the plaintiff's final answer in cross-examination was an honest and an informed one. By that answer the plaintiff substantially qualified what she had said in chief about what she would have done, fully informed. 36 In view of that evidence I think that if she had been fully informed the plaintiff would have waited for medical advice about the prognosis of her case before deciding whether to commence proceedings for damages. Since advice of that kind was unlikely to become available until after the expiry of the limitation period her decision would have contemplated the expiry of the period and an application for leave to commence proceedings, if she decided to take that course. 37 It was submitted that there was no evidence that if Ms Robertson had given the plaintiff the advice to which she was entitled it would have been in terms of the assumptions and that even if the assumptions put to the plaintiff were relevant to causation, the argument against liability failed because the assumed advice was not the only correct advice which could have been given in the circumstances. 38 I disagree. The first assumption, the first part of the second, the third assumption, the fourth, fifth and sixth assumptions are all uncontroversial. The expressions of opinion in the second part of the second assumption was reasonable in the circumstances. In my view it would have been appropriate for Ms Robertson to assess the prospects of obtaining leave to commence proceedings at some time during 1995 as good in view of the recency of surgery, so the seventh assumption was reasonable. The substance of the first sentence of the eighth assumption is reasonable and the remainder follows. The assumptions in totality are consistent with the law as it stood and the view that Ms Robertson must have taken, assuming that she had in mind the imminent expiry of the limitation period. Accordingly, I am satisfied that if Ms Robertson had acted in accordance with her duty and had informed the plaintiff about the limitation period she would have rehearsed for the plaintiff a series of statements to the effect of those that the plaintiff was asked to assume in cross-examination. 39 The next two submissions may be summarised in the following way: there was no evidence that Ms Robertson knew that the limitation period was about to expire; there was no evidence that her advice to continue only with the Workers' Compensation proceedings was given in the knowledge that the limitation period was about to expire, so she may not have considered all the relevant factors in order to come to a properly considered view about how to advise the plaintiff. 40 It seems to me that whether Ms Robertson knew that the limitation period was about to expire and whether any advice she gave was or was not based upon that knowledge is beside the point. She was in breach of her duty because she ought to have known the fact and ought to have told the plaintiff about it. 41 Finally it was submitted that the "hypothetical" evidence about causation did not prevent the plaintiff succeeding against Stacks for failure to advise because the failure materially contributed to the loss of the plaintiff's rights, whether or not any other cause contributed. I do not accept that submission. When the plaintiff terminated the services of Stacks she was out of time to commence proceeding for damages without the leave of the court. She was in no position to formulate a claim for damages because she lacked the prognostic medical advice essential to her case. As far as was then known, that would not become available until later in 1995. If she had been appropriately advised by Ms Robertson she would have made a decision voluntarily putting herself in precisely the same position. She therefore suffered no loss as a result of Ms Robertson's breach of duty. 42 The first submission must fail. Not advising the plaintiff to commence proceedings before the limitation period expired 43 It was submitted that without even addressing in detail the medical evidence available at the time a competent solicitor in 1994 would have advised a woman in her early twenties who, as a result of an injury suffered at work, had not worked for nearly three years and had undergone major surgery to her back that there were good prospects of exceeding the Workers' Compensation legislation thresholds. Whatever the theoretical considerations based upon the precise medical evidence might have been, the practical considerations which must have been known to any competent practitioner in the personal injury field were that after such surgery the plaintiff had good prospects of exceeding the threshold. Any competent practitioner would have expected that the plaintiff would receive a sympathetic hearing from most judges. 44 I consider this a courageous submission. Even if it is accepted at face value, the statement that most judges would have been sympathetic to the plaintiff implies that some would not and imports the requirement for assessment and caution. The submission makes no allowance for the fact that the plaintiff's prognosis was simply not known. 45 Then it was submitted that it was clear in view of the available medical evidence that the plaintiff had good prospects of exceeding the threshold. Selective reference was made to a number of medical reports, including some of Dr Champion, Dr Frith, and Dr Fuller. In a report of 21 August 1992 Dr Champion said that he would not be surprised, despite a negative MR scan, to find that the plaintiff might have some internal disc disruption. In a report of 28 September 1993 he spoke of the plaintiff's quite severe pain and mentioned that the discograph suggested internal disruption at L5- S1. In his report of 8 March 1994 he raised the possibility that the plaintiff might need surgery. In Dr Frith's report of 13 September 1993 he expressed the opinion that he could not see the plaintiff being employed in any capacity in the foreseeable future. He gave his assessment of the degree of permanent impairment to which I have already referred. In a report of 17 September 1993 Dr Fuller thought that the plaintiff was permanently unfit for work as a nurse assistant or in similar work that would require back bending or lifting. I have also referred to Dr Fuller's assessment. 46 The submissions of Mr Beston did not refer to contrary medical opinions then known to Stacks. But putting that consideration aside, the opinions cited do not lead in my view to the conclusion that a competent solicitor in 1994 could not have come to any view other than that the plaintiff would be assessed at one-third or more of a most extreme case. 47 Reference was also made to a subsequent report of Dr Neil, dated 4 April 1995, and in that respect it was also submitted that Stacks were in breach of their duty by failing to obtain detailed medical reports as to the plaintiff's current and future condition, having regard to the operation, so that complete advice could be given to her before the end of the limitation period. I need not repeat the review of the detail of steps taken by Ms Robertson, before Stacks' services were terminated, to obtain such material. In my opinion there is no foundation for the submission that any reliable medical opinion could be made available by a day which would enable advice to be given to the plaintiff and for common law proceedings to be commenced, if that were her wish, by 30 December 1994, surgery having been performed as late as 23 September 1994. 48 Ms Robertson's decision not to recommend the commencement of common law proceedings has to be judged in all the circumstances. They include the assessment Ms Robertson was bound to make of the prospects of success if later medical evidence justified the commencement of common law proceedings in the opinion of the plaintiff. S 151D did not extinguish any right of suit; it raised a requirement for leave. Ms Robertson would have known that the earlier documented uncertainty about the plaintiff's ability to cross the threshold, the recency of surgery and its proximity to the expiry of the limitation period with the consequent contemporary uncertainty of prognosis would be given considerable weight by the court if an application for leave to commence proceedings were brought as soon as the plaintiff's condition stabilised. 49 In order to prove a breach of duty the plaintiff must show that Ms Robertson failed to do something that a competent solicitor in her position would have done. The plaintiff has failed to do so. In my opinion many, perhaps most, solicitors would have taken the view that the extinguishment of the plaintiff's rights to lump sum workers' compensation benefits was not justified at that time. 50 The second submission must fail. Not protecting the plaintiff's position when it appeared that she would have to undergo surgery shortly before the expiry of the limitation period 51 Two submissions were made under this heading. The first was that Stacks breached their duty to the plaintiff in that Ms Robertson failed to write to the solicitors for the Workers' Compensation insurer to say that common law proceedings would be commenced if the surgery turned out to be unsuccessful and advising the insurer to take steps to protect its position against that event. 52 It was submitted that such a step would have been easy and cheap and that if it had been taken before the expiry of the limitation period there would have been little prospect of the defendant to the common law proceedings resisting an application for extension of time on the basis of material prejudice. 53 No doubt such a letter could have been written, but the failure to write it does not to my mind constitute a breach of duty. There was no statutory requirement for such a letter. It would have been, no doubt, a sensible practical step to take at a convenient time. But nothing turns on the exact date of the expiry of the limitation period. There is no evidence to suggest that a letter sent within a reasonable time thereafter would not have had an equally beneficial effect. Ms Robertson may very well have decided to write such a letter if she did not within a reasonable time have a medical opinion to ground some firm advice to the plaintiff one way or the other. She was not to know that her instructions were about to be withdrawn. 54 The final submission was that Ms Robertson was in breach of her duty in failing before the expiry of the limitation period to seek leave pursuant to s 151D to commence proceedings after its expiry. It was submitted that there was nothing in the section to preclude such an application. 55 The section requires that an application for leave be made "in the proceedings". The submission made on behalf of Stacks was that that amounted to a requirement that the application for leave be brought in proceedings in which common law damages were sought, precluding the notion of a prospective grant of leave. Counsel were unable to point to any instance of such a prospective grant of leave. The submission of counsel for Stacks was that there had never been such a grant in the ten years since s 151D was enacted. 56 It is unnecessary to decide whether the section would authorise such a prospective grant of leave. There is a more practical answer to the proposition. The very uncertainty that the court would entertain such an application is in my view sufficient reason why a competent solicitor would not advise bringing one. As well, the remarks that I have made about the asserted breach in failing to write to the insurer apply to this contention, which must fail. 57 Accordingly, the plaintiff fails in her action against the first, second, third, fourth and fifth defendants. THE CASE AGAINST MR BESTON 58 According to the plaintiff, she instructed Mr Beston at their conference of 7 February 1995 to commence common law proceedings. However, records of conferences that took place later on show that her evidence in that respect was unreliable. 59 Mr Beston arranged for Dr Fuller to see the plaintiff again, which he did on 22 February 1995. In his report dated 23 February 1995 he said that overall there had been an improvement since surgery but that the back had not yet stabilised. He thought that the plaintiff would continue to improve but that it would be a further nine to twelve months before a final assessment of disability could be made. 60 On 2 May 1995 Mr Beston briefed Mr Levy of counsel to draft a statement of claim and to advise generally. On 20 May there was a conversation between Mr Beston and Mr Levy in which Mr Levy voiced doubts about the matter. On 24 May Mr Levy sent a memorandum enclosing the draft statement of claim and offering advice as requested. He drew attention to the limitation problem and suggested that Mr Beston obtain advice from a Workers' Compensation expert about whether the plaintiff's better course would be to pursue common law rights or Workers' Compensation benefits. 61 On 20 June 1995 Mr Beston sent a brief to Mr Jenkins, counsel experienced in the Workers' Compensation field. There was a conference with Mr Jenkins on 18 July at which Mr Macken, a solicitor employed by Mr Beston, attended with the plaintiff. A file note records that the primary issue discussed was whether the common law claim threshold was likely to be crossed. Mr Jenkins' advice in conference was to continue with the Workers' Compensation proceedings that were on foot. He was unsure about whether to institute common law proceedings. 62 On 19 July 1995 Mr Jenkins gave written advice, observing that common law proceedings could not be commenced without leave. He said that in view of the history and the probability of no real prejudice to the defendant in the institution of proceedings, the plaintiff would more likely than not obtain leave to commence proceedings. He observed that the plaintiff was unlikely to get over the one-third threshold, referring to the divergence of medical opinions. He offered the opinion that it was best for the plaintiff to pursue only her Workers' Compensation rights. 63 According to the plaintiff she and Mr Macken then had a conference in which he expressed his disagreement with Mr Jenkins' opinion and in which she agreed with Mr Macken. She said that she thereupon instructed Mr Macken to proceed at common law. There is no documentary evidence to support the evidence that any such thing was said or any such instruction was given at any conference between the plaintiff and Mr Macken. In fact the documentary evidence is consistent with there being no such firm instructions at that time. A file note made by Mr Beston on 8 August 1995 records things said at a conference between him, the plaintiff and her father on that day. It includes the note - No decision till 3/96. 64 It was not until a note was made on 9 February 1996, following a conference between Mr Macken, the plaintiff and her father, that there was any record of an instruction to commence common law proceedings. On 12 February 1996 Mr Beston wrote to Mr Jenkins informing him that he had been instructed to commence proceedings in the Supreme Court. 65 I think that it was not until 9 February 1996 that the plaintiff instructed Mr Beston to commence common law proceedings. 66 On 30 January 1996 Mr Macken wrote to Messrs Nevill & Edwards, solicitors for Sendex, to say that a statement of claim would shortly be filed. 67 On 24 May 1996 Mr Macken filed in this Court a statement of claim for damages and thereby extinguished the plaintiff's rights to lump sum compensation under the Workers' Compensation Act. There was no grant of leave to file the statement of claim. The need for leave, always an important consideration, thereby became critical. 68 There was a well-known method of seeking leave to commence proceedings in the Court without first filing a statement of claim, namely by summons annexing a draft statement of claim. If Mr Macken had taken that course the plaintiff's Workers' Compensation rights would have been preserved if leave to file the statement of claim were later refused. 69 On 1 July 1996 Mr Macken wrote to Nevill & Edwards. I assume that the statement of claim or a copy was enclosed. They replied on 9 August, referring to s 151D (2) and requesting that the claim be discontinued. On 12 August Mr Macken wrote to Mr Jenkins seeking advice about s 151D (2) and whether the plaintiff should proceed with the common law action. Nevill & Edwards wrote again on 5 November asking for a reply. On 16 December Mr Macken wrote to Mr Jenkins about the common law claim. His letter included this paragraph - Nevill & Edwards are getting quite toey because we have not discontinued the Supreme Court proceedings and then drafted (sic) a Summons to obtain leave to commence proceedings out of time. In this regard, please find enclosed herewith a copy of a draft Affidavit of Julie Anne Molnar for your consideration. 70 Nevill & Edwards wrote again on 21 January 1997. Mr Macken telephoned in reply and said that he would be filing and serving a notice of motion during the following week. On 23 January he asked counsel for the first time to advise whether he ought to file a motion for leave to bring proceedings out of time. On 27 February Mr Jenkins wrote enclosing a draft notice of motion and affidavit. 71 On 7 May Nevill & Edwards wrote referring to the telephone conversation of 21 January, noting that nothing had been received and stating the intention to move to strike out the statement of claim if there were no more news within twenty-eight days. 72 Mr Macken filed a notice of motion returnable on 21 May 1997 together with affidavits. The motion was heard by Master Malpass and dismissed in a judgment dated 23 June 1997. 73 Nevill & Edwards wrote about their costs, which the Master had ordered the plaintiff to pay, and Mr Macken wrote to Mr Jenkins on 1 July 1997 in the following terms - Herewith correspondence received and forwarded to Nevill & Edwards. They have indicated in discussions they may well deny a claim pursuant to section 66 and 67 of the Act as our client, through commencing litigation, made an election under the Workers' Compensation Act and consequently is not entitled to sections 66 and 67 payments! Boy, this litigation gets more and more complex and interesting with each turn. If we can sort it out we are great men! 74 The affidavits filed in support of the motion for leave contained little information. An affidavit of Mr Macken formally annexed a draft statement of particulars under Part 33 Rule 8A and reports of Dr Fuller of 17 September 1993 and Dr Frith of 13 September 1993 to which I have already referred. There was no report of any post-surgery medical opinion. 75 An affidavit of the plaintiff referred in the briefest possible terms to the accident in which she was injured, to the advice she received from Stacks not to commence proceedings at common law but to pursue Workers' Compensation rights. She said that she underwent a spinal fusion in September 1994 and that since ceasing work with the nursing home had been unable to do any lifting, carrying, bending, sitting for prolonged periods or standing for prolonged periods. She had also suffered anxiety, irritability and depression as a consequence of her post-accident disability. She said that particulars of the claim were known to the defendant. She referred to the Worker's Compensation proceedings. She enclosed a copy of the customary Workers' Compensation employees compensation claim form and employers report of injury form. 76 The respondent filed an affidavit of the director of nursing at the nursing home, Juliette Anne Walker. She said that she had been employed in various capacities at the nursing home since March 1989. She said that she recollected that there were approximately seven commode chairs in use at the time of the plaintiff's injury and that approximately three of them remained in use. She could not recall any of the chairs having wheels which jammed or which were otherwise defective. She was unable to identify which of the chairs was involved in the plaintiff's injury or whether or not it was one of the chairs which remained in use. She did not believe that there remained any record of maintenance or repair of the commode chairs. She said that there were no current nursing staff members who worked the same shift as the plaintiff and that she did not know where any such people were. 77 There were sound medical reasons why the plaintiff was justified in delaying until 1996 her instructions to Mr Beston to commence common law proceedings. Dr Neil had been seeing her and reporting on her condition from time to time. In his reports of 4 April and 24 August 1995 he was optimistic about what he saw as the plaintiff's continuing recovery in spite of an estimated 25% permanent impairment of the back. He thought that she would return to the work force. On 27 March 1996 he remarked that although nine months earlier she had been quite good and generally improving she was then "not so good". He remarked on the plaintiff's inability to obtain relief from pain in the low back and the right buttock and wondered whether the spinal implants themselves might be responsible. It was not until 31 July 1996 that he reported that he had removed the implants but that the plaintiff still had a fairly constant degree of low back pain, aggravated by sitting, was taking up to ten Mersyndol a day and needed Rivotral to help her sleep. He concluded that little further could be offered surgically and recommended pain management with consideration of a repeat epidural injection because of referred pain in the legs. 78 Mr Macken made no attempt to put forward Dr Neil's report or any explanation for the delay between the expiry of the time limit and the filing of the statement of claim. In my opinion the delay between the receipt of instructions to commence proceedings and the filing of the application for leave lacked satisfactory explanation. 79 In dismissing the motion the Master referred to the sparseness of material put forward and described as gross the deficiencies in the material offered to explain delay. He also observed that there was material in the medical reports tendered to support the view that there had been an improvement in the condition if the plaintiff since surgery. The Master was unassisted, of course, by any later opinion to suggest that that was not the case. 80 The Master referred not only to the general presumption of prejudice after significant delay but to the question of actual prejudice, as evidenced in the affidavit of Ms Walker. 81 The Master concluded that apart from presumptive prejudice there was at least the real possibility of significant actual prejudice. 82 In my opinion Mr Macken was in breach of his duty to the plaintiff in a number of respects. He failed altogether to inform himself that the mere filing of a Statement of Claim would extinguish the plaintiff's rights to Workers' Compensation lump sums; he failed to do what a competent solicitors would have done and file instead a summons annexing a draft statement of claim; he delayed without any proper excuse the filing of the critical Motion for leave; he failed to inform himself which matters needed to be dealt with on an application for leave, particularly the explanation of delay, and deal with them. 83 The manner of preparation of cases will vary from solicitor to solicitor and the omission of important material from a case will not necessarily imply a breach of duty on the part of the solicitor responsible for preparation of any case. However, the motion was so poorly prepared in every respect that I think that it can fairly be said that Mr Macken, and through him Mr Beston, breached his duty to the plaintiff. 84 I am also firmly of the view that if Mr Macken had researched the matter properly and presented to the Master evidence which was then available the result would have been different. 85 Mr Macken knew that a further, better prepared application for leave could be made and said so to the plaintiff. However, he did not concern himself to do so and concentrated instead the commencement of proceedings on behalf of the plaintiff against Stacks. 86 Later in 1997 the case was transferred to the District Court. It was not until 28 July 1998 that a further notice of motion and affidavits were filed in the District Court seeking leave to commence proceedings. There was a more extensive affidavit of the plaintiff and more extensive reliance on medical reports, including post-surgery reports. 87 The matter came before Blackman ADCJ on 30 October 1998. Her Honour expressed herself satisfied about the explanation of the delay but found that there was a real possibility of significant prejudice. Accordingly the motion was dismissed. 88 On 18 February 1999 a third application was filed, accompanied by further affidavits. In her affidavit the plaintiff spoke about complaints made and about a maintenance book. She said that she had complained at least twice to an employee called Kolo about the condition of the commode chairs and said that Ms Kolo was still employed by Sendex. In an affidavit Ms Kirstie Marie Gibson said that she had noted defects with the commode chairs between May 1991 and September 1992 and that on several occasions she had complained to the plaintiff about them. 89 The defendant read an affidavit of Ms Kolo denying any work contact with the plaintiff and saying that she was not familiar with commode chairs. She was unaware of any problem with them and could think of no reason why the plaintiff would complain to her about such matters. She had no recollection of the plaintiff's complaints or about her suffering any injury. 90 Bowden ADCJ concluded that the latest exchange of affidavits strengthened the defendant's case as to prejudice. His Honour noted that the book in which the complaint was said to have been recorded was no longer available and that the defendant was severely prejudiced because it had no way of testing the plaintiff's allegations. 91 His Honour observed that although this matter had been before the court on earlier occasions no reason was advanced why such evidence had not been given on those occasions. The motion was dismissed. 92 These short summaries of his Honour's judgment show that it was not until 1999 that Mr Macken was paying the kind of attention he ought to have devoted to the plaintiff's case since instructions were given to commence common law proceedings in February 1996. Nothing about the second or third unsuccessful application for leave causes me to change my view that if the first had been properly prepared the plaintiff would have obtained the leave she needed. 93 I think that the plaintiff is entitled to succeed in her claim against Mr Beston. 94 It is not necessary to deal with the cross-claim. 95 Counsel may bring in Short Minutes to give effect to this judgment, providing for a verdict for the first, second, third, fourth and fifth defendants against the plaintiff and a verdict for the plaintiff against the sixth defendant in the amount agreed. Costs will follow the result. ********** Last Modified: 07/02/2002 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. 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