Nicholls v State of New South Wales [2005] NSWSC 1234

New South Wales Supreme Court

CITATION : Nicholls v State of New South Wales [2005] NSWSC 1234

HEARING DATE(S) : 2, 3 & 4 February 2005 24 November 2005

JUDGMENT DATE : 2 December 2005

JURISDICTION : Common Law Division

JUDGMENT OF : Associate Justice Malpass at 1

DECISION : The application is dismissed; the plaintiff is to pay the costs of the application; the exhibits may be returned.

CATCHWORDS : Lengthy delay - delay not satisfactorily explained - actual and presumptive prejudice - application brought outside prescribed three year period - application to amend statement of claim which if granted would have the effect of defeating intention of parliament.

LEGISLATION CITED : Limitation Act 1969

Shane Paul Nicholls (Plaintiff) PARTIES : State of New South Wales (Defendant)

FILE NUMBER(S) : SC 20619 of 1994

Mr P Barham (Plaintiff) COUNSEL : Ms J Lonergan (Defendant)

Martin Bell & Co (Plaintiff) SOLICITORS : I V Knight Crown Solicitor (Defendant)

LOWER COURT JURISDICTION :

- 17 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Associate Justice Malpass

2 December 2005

20619 of 1994 Shane Paul Nicholls v State of New South Wales

JUDGMENT 1 His Honour: The plaintiff was born on 3 October 1957 (he is now 48 years of age). Since the commencement of the proceedings, he has changed his surname to Bell. 2 The plaintiff became a ward of the state on 21 February 1973 (when he was about 16 years of age). He remained as such until 1979 (when he was 22 years of age). He did not return to the family home. 3 In 1971, he was brought before the Penrith Children's Court on a charge of being uncontrollable. He was declared to be an uncontrollable child within the meaning of the Child Welfare Act 1939. 4 In October of that year, the plaintiff was committed to an institution. He remained institutionalised until 1979. During this period, he exhibited certain symptoms (one of which was nocturnal enuresis). He was still bedwetting at the age of 20. His appearance disclosed, inter alia, constant smallness of stature and excessive thinness. He was treated as being mentally retarded and his education was neglected. 5 Prior to institutionalisation, he had suffered an unfortunate home life. He was one of eight children in a household of poor financial circumstances. He suffered, inter alia, sexual and other abuse (see Exhibit 1). After institutionalisation, he had little contact with his mother. 6 During the institutionalisation, he spent periods at various institutions (including Yasmar, Daruk, Minda, Werrington Park, Mittagong and Royalston). Certain institutional records are no longer available (see affidavit sworn by John James Sharman). 7 A renal biopsy was performed at St Vincent's Clinic on 29 April 1985. There is medical evidence to the effect that this confirmed that the plaintiff was suffering from Bartter's Syndrome (which is a rare disease). During institutionalisation, he underwent one blood test only (at a hospital, and the test was of a general nature). 8 In July 1993, the plaintiff was given a medical certificate from Dr Chan. The plaintiff says that he then became aware that he had been suffering from a life-threatening condition. He says that prior to that time, he had only understood that his condition involved low blood potassium levels which caused him to feel lethargic and fatigued. 9 The certificate was obtained when he was living in South Australia. Subsequently, he returned to New South Wales. He made contact with the Department of Community Services (the Department) and spoke to Julie Harrison. She advised that the plaintiff should speak to Dr Michael Ryan. He was the senior medical advisor to the Department between 1991 and 1995. 10 At some time thereafter, the plaintiff came to speak with Dr Ryan. The plaintiff says that Dr Ryan said to him words to the effect, "You should see a solicitor. I think you can sue the Department". Dr Ryan provided a memorandum to the Department. It was dated 23 August 1993. The contents were as follows:- I had a call from Mr Nicholls today. He was ringing from Adelaide. He tells me that he was diagnosed as having Bartter Syndrome some two or three years ago and believes the Department neglected to diagnose the condition. He wants a medicated settlement of his claim of neglect. Bartter syndrome is rare, there are two paragraphs on the condition in my standard Paediatric Textbook. It is a condition characterised by a low blood level of potassium that is caused by a kidney abnormality. Characteristically children who have this condition would have short stature. When Mr Nicholls was in the care of the Departmental [sic] a simple blood test would have detected the low potassium level. Treatment involves the simple taking of Aspirin, which was known when my textbook was written in 1979, it thus was probably know to specialists for sometime before that as it takes many for [sic] textbooks to catch up with research. I have written to Mr Nicholls asking for his permission to obtain medical details from St Vincent's Hospital where the condition was diagnosed. 11 Dr Ryan also wrote a letter to the plaintiff. It was dated 23 September 1993. The contents were as follows:- Dear Shane, You can be assured that I am doing everything that I can to seek an early settlement of your claim. I have given advice to the Department that your condition should have been diagnosed when you were in the departments care. I will be endeavouring to ensure that we move as quickly as possible on the matter. It would help if you, through your legal advisor could make a formal claim on the Department. 12 The plaintiff first consulted a solicitor on 20 August 1993 (the firm of G H Healey & Co). A notice of demand was served on the Department. A conference was had with Senior Counsel (Mr Semmler QC) on 20 October 1993. He gave advice (including advice to file a statement of claim as a matter of urgency). A statement of claim was drafted by counsel. It was not filed until 5 September 1994. A defence was filed on 5 October 1994 (it pleaded, inter alia, a limitation defence). 13 Certain information as to what happened (or what did not happen) whilst the matter was in the conduct of G H Healey & Co may be found in affidavits sworn by Messrs Hogan and Cortese. The day to day conduct of the matter seems to have passed through a number of hands. 14 During 1995, three conferences were arranged with Mr Semmler. The plaintiff failed to attend the first two conferences. He finally attended one held on 8 June 1995. On 13 June 1995, Mr Semmler gave advice in relation to an application for an extension of the limitation period. The material suggests that absence of funds hampered the prosecution of the claim. Also, the plaintiff has blamed the Department for delay in the production of documents. 15 On 26 September 1996, the plaintiff filed a notice of motion (seeking, inter alia, an extension of the relevant limitation period). The retainer of G H Healey & Co came to an end in about 2000. Thereafter, Jan Robinson had the conduct of the plaintiff's matter. Subsequently, her retainer was terminated. A manager of her practice was appointed. The plaintiff's present solicitors (Martin Bell & Co) were retained on 17 May 2002. 16 The plaintiff is now proceeding with an extension of the relevant limitation period. The hearing of the application commenced on 2 February 2005. The application was opposed by the defendant. The hearing proceeded over a number of days. 17 The plaintiff initially moved on what was described as the second amended notice of motion which was filed on 13 June 2003. Annexed to this notice of motion was a proposed amended statement of claim. At the commencement of the hearing of his application, the proposed amended statement of claim was said to set forth the case which the plaintiff wished to ventilate in the proceedings. Before dealing with the hearing, I should mention certain of the activity that preceded it. 18 Since the filing of the original statement of claim, the plaintiff's case has undergone a number of changes and various notices of motion have been filed. At this stage, it is convenient to have a brief look at what has happened. 19 The original process purported to plead a cause of action founded on negligence. Generally speaking, it pleaded the making of complaints and the failure to provide adequate medical treatment. The specific allegation was a lack of diagnosis and treatment of his condition (Bartter's Syndrome). 20 The original notice of motion (which was filed on 18 September 1996) sought an extension of the cause of action pleaded in the original process. 21 An amended notice of motion was filed on 8 August 2002. It had annexed to it a proposed amended statement of claim. The relief then being sought was an order in respect of the cause of action pleaded in that document. The document pleaded a duty to exercise all reasonable care, skill, diligence and competence with respect to the plaintiff's health, both physical and psychological, education, social development and general well-being. It added an allegation that the plaintiff displayed and suffered from certain particularised psychological and intellectual deficits. 22 On 11 November 1996, the plaintiff filed another amended notice of motion. It sought an order in respect of the cause of action pleaded in an amended statement of claim annexed to it. It sought leave to file such an amended statement of claim. 23 The amended statement of claim was in substantially different form and added allegations of sexual abuse. 24 It appears that the plaintiff did not proceed with the amended notice of motion and it was superseded by the filing of an amended notice of motion on 8 August 2002. It sought relief in respect of the cause of action pleaded in the amended statement of claim that was annexed thereto. Leave was also sought to file an amended statement of claim in that form. 25 This document was substantially different to that which was annexed to the earlier amended notice of motion (inter alia, it deleted the allegations of sexual abuse). 26 It appears that the plaintiff did not proceed with that document and that it was superseded by the second amended notice of motion now relied on. This notice of motion also sought relief in respect of the cause of action pleaded in the amended statement of claim annexed thereto. It also sought leave to file an amended statement of claim in that form. This proposed pleading was also substantially different to that which had been annexed to the earlier notice of motion. It pleaded a duty to exercise all reasonable care, skill, diligence and competence with respect to the plaintiff's health, both physical and psychological, education, social development and general well-being. It alleged that during the periods that the Department had the care, custody and control and was in loco parentis of the plaintiff, the plaintiff was observed by servants and/or agents of the defendant to suffer from both problems of a physical and/or medical nature and from certain psychological and intellectual deficits. It purported to add a further cause of action founded on a misdiagnosis (it purported to allege that the plaintiff had been misdiagnosed as mentally retarded and consequently regarded by the Department as being beyond education or remedial education). 27 Generally speaking, the plaintiff says that when he was discharged from the wardship, he was functionally illiterate. It is said that he had few, if any, life skills. He has never held a serious job for any length of time. It is put forward that he is now realistically unemployable. He is now of reasonable height and is no longer regarded as being mentally retarded. 28 The application for extension of time is founded on provisions of the Limitation Act 1969 (the Act). Reliance was originally placed on both ss60C and 60G. Ultimately, any case pursuant to s60C was abandoned. Some reference was made to s58. However, it seems to be accepted by the parties that if the plaintiff cannot succeed under either of ss60C or 60G, he will not succeed under s58. 29 The application was said to have been ready for hearing by 2 August 2004. On that day it was referred to a call up. On 13 August 2004, the court allocated a hearing date for the application. 30 I now return to what happened on 2, 3 and 4 February 2005. A large number of affidavits were relied on by the parties. There has been an accumulation over the years. Certain of them were filed as early as 1996. They are directed to the issues raised by the plaintiff's case as it was at the time of filing. The changes in the plaintiff's case have seen material lose relevance. 31 In addition to affidavits sworn by himself, the plaintiff relies on affidavits sworn by his solicitor (Mr Bell), a solicitor employed in his office (Brigitte Simeonides), an affidavit sworn by Dr Ryan and affidavits sworn by his former solicitors, Messrs Hogan and Cortese. Zarina Dara Braybrooke, Gai Buchanan, Jane Marcia Graham, Jennifer Lupe Chambers, John James Sharman and Peter Maxwell have deposed to matters on behalf of the defendant. 32 The plaintiff was briefly cross-examined. The defendant gave notice to Dr Ryan to attend for cross-examination. He is unwell and was unable to attend court. Ms Braybrooke and Mr Sharman were also cross-examined. 33 The initial taking of evidence concluded on 3 February 2005. By that stage, the hearing had been considerably disrupted by reason of the plaintiff giving late notice for the attendance of deponents for cross-examination and the defendant giving notice to produce a few days before the hearing. The hearing was disrupted by delays occasioned by the unavailability of witnesses and documents and the need for counsel to inspect the documents before the case could further proceed. 34 At the conclusion of the evidence then taken, it had become apparent to counsel for the plaintiff that there were potential difficulties confronting his client. The proposed amended pleading had technical difficulties. The defendant was opposing the leave to amend. The proposed pleading was also cast in a form that created difficulties on a principal issue on the application (prejudice). 35 Counsel for the plaintiff indicated an intention to amend the proposed amendment and further time was required to implement that intention. The application was then stood over to 10am on 4 February 2005. Counsel was unable to prepare a fresh draft within that time and the hearing was further adjourned to a date to be fixed (after the application had been case managed and the Registrar was satisfied that it was then ready for hearing). 36 The hearing did not resume until 24 November 2005. At that time, the amendment process was still to be finalised. Subsequent to the previous hearing, a further amended process had been prepared and the defendant did not object to it being filed. However, on the day of the resumed hearing, the plaintiff appeared with a second further amended notice of motion. It had attached to it yet a further proposed amended statement of claim. 37 This recent activity was apparently motivated by the defendant giving notice of an argument that it intended to present in relation to the provisions of s60I(1)(b) of the Act. The proposed amendment involved the addition of a prayer for relief which was intended to seek an extension of the relevant limitation period. 38 The notice of motion was filed in court without objection. However, objection was taken to the proposed further amendment to the statement of claim. The decision on that question was deferred so that it could be considered when the court was apprised of all the evidence and had heard the submissions from the parties. 39 The court then received further evidence from both parties (including material relied on by the defendant on the question of prejudice). 40 Section 60G appears in subdivision 3 of Division 3 of the Act. The subdivision has the heading "Discretionary extension for latent injury etc". The section confers a power to extend the relevant limitation period where the court decides that it is just and reasonable to do so. 41 Where the court is exercising the power conferred on it by s60G, s60I prohibits the making of an order unless the court is satisfied of the matters set forth in paragraphs (a) and (b) of subs (1) thereof. These are threshold requirements to the making of an order. When the threshold requirements have been satisfied, the power to make an order may then be exercised. The plaintiff bears the onus of satisfying the court of his entitlement to the relief sought. 42 Section 60I is as follows:- 60I Matters to be considered by court (1) A court may not make an order under section 60G or 60H unless it is satisfied that: (a) the plaintiff: (i) did not know that personal injury had been suffered, or (ii) was unaware of the nature or extent of personal injury suffered, or (iii) was unaware of the connection between the personal injury and the defendant's act or omission, at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted, and (b) the application is made within 3 years after the plaintiff became aware (or ought to have become aware) of all 3 matters listed in paragraph (a) (i)–(iii). (2) Subsections (2), (3) and (4) of section 60E apply, with any necessary adaptations, in relation to applications for orders under this Subdivision. 43 Prior to the commencement of submissions, the defendant had made known to the plaintiff that it did not contest for the purposes of this application that the plaintiff had an arguable cause of action. Also there was no dispute that the plaintiff had satisfied the threshold requirements set forth in s60I(1)(a). I now turn to the matters that were in issue. 44 There was issue as to whether or not the threshold requirements of s60I(1)(b) had been met. It was an issue as to whether or not the application had been made within three years after the plaintiff became aware (or ought to have become aware) of all three matters listed in paragraph (a)(i) – (iii). There was also issue as to whether or not it was just and reasonable to make an order. 45 It was common ground that the relevant limitation period expired in February 1985. The defendant contended that the plaintiff had the knowledge or awareness contemplated by s60I(1) by at least 23 August 1993. Whilst there was dispute concerning this contention, it seems to me that what was argued by the plaintiff in opposition thereto was devoid of substance. 46 There is no dispute that an application for extension of the limitation period was not made until 18 September 1996 (the date on which the first notice of motion was filed). 47 The defendant contended that, accordingly, the plaintiff was unable to satisfy the requirements set forth in s60I(1)(b). 48 It is because of this submission that the plaintiff has sought to amend the statement of claim by adding a prayer for relief extending the relevant limitation period. If the amendment is granted, the amendment will take effect as of the date on which the statement of claim was filed (5 September 1994). The plaintiff is desirous of having the court follow what was done in State Rail Authority v Gaudron (New South Wales Court of Appeal, unreported, 12 August 1997). 49 It is said on behalf of the plaintiff that he was unaware of the connection between his personal injury and the defendant's act or omission until 20 October 1996, when the first conference was had with Mr Semmler. I do not accept that submission. 50 The evidence supports a finding that the plaintiff was aware of the connection between such injury and the defendant's act or omission at least by 23 August 1993. 51 The evidence as to what information was imparted by Mr Semmler falls within the meagre category. The plaintiff failed to attend the conference. However, some telephone communication took place between Mr Semmler and the plaintiff. The plaintiff has not given evidence as to what was said to him by Mr Semmler during the course of that telephone communication. Information obtained from the file reveals that Mr Semmler advised that the claim had severe problems with limitation periods and that a statement of claim should be filed as a matter of urgency. 52 It was suggested that the court should infer from this material that the plaintiff was told his claim had good prospects of success. Whilst I do not accept that contention, it was not one that would assist the plaintiff in this case. 53 On the evidence before me, I find that the plaintiff failed to make his application for relief within the requisite three year period prescribed by subs (1)(b) of s60I. In these circumstances, the application is doomed to failure unless the proposed amendment to the statement of claim is allowed and such amendment remedies the problem. I shall return to this question in due course. 54 The relevant delay is lengthy. It is a period during which the plaintiff has been confronted with a variety of problems. Despite the mass of material placed before the court, the delay has not been satisfactorily explained. 55 It appears that, inter alia, the plaintiff has been badly served by certain of his legal advisers. Whilst there may be the possibility of an alternative remedy against some of them, the authorities support the view that this is a circumstance that should be accorded little weight. 56 The question of prejudice is a real issue between the parties. The defendant contends that there has been both actual and presumptive prejudice. It has led evidence of actual prejudice. It adopts the position that a fair trial cannot now take place. 57 The plaintiff's case as presently pleaded raises the potential for prejudice. It identifies 16 people alleged to be involved in his care during the period of his wardship. Paragraph 4 of the existing pleading identifies servants and/or agents who had knowledge that the plaintiff suffered from problems of a physical and/or medical nature and that he suffered from problems from certain psychological and/or intellectual deficits. In most of the pleaded instances, a report prepared by the particular servants and/or agents is particularised. This is not the case in respect of Mrs Czak and Mrs Clothier. The defendant has caused enquiries to be made in respect of each of the 16 persons. The defendant's evidence reveals that only seven of these people have been both located and are able to be called as witnesses (see affidavit sworn by Mr Maxwell). The unavailable include persons who would appear to have afforded the plaintiff medical treatment and others who may have participated in the obtaining of treatment that he did receive. 58 What has been referred to as the plaintiff's "B" file (which is his wardship file) largely seems to remain available. However, there are records which appear to be no longer available. 59 The medical record care which normally could be expected to form a part of the "B" file is missing. Relevant records concerning treatment which may have been received by the plaintiff outside the Department (such as at the Western Suburbs Hospital) have been lost. 60 The plaintiff's claim concerns a period that took place between 34 and 26 years ago. It is a case which alleges failure to investigate symptoms (see paragraph 4 above). Relevant memories could be expected to have either disappeared or at least to have been substantially diminished by now. 61 The plaintiff contends that the case will be determined on the documentation and the evidence of experts and that there will be no factual issue on certain matters (including matters such as his bedwetting, his being treated as mentally retarded, the non-diagnosis of Bartter's Syndrome and that this condition caused him problems). There is force in the submission. 62 However, what has been lost may be detrimental to the defendant's prospects of dealing with what is thrown up by the remaining documentation. The defendant has to meet a case of failure to investigate symptoms. There may be uncertainty as to what relevant evidence, if any, that unavailable witnesses might have given. Be that as it may, it seems to me that there has to be a real possibility that the defendant may be at a disadvantage because of what has been lost. 63 There is evidence that up to the time when the plaintiff was 14 years of age (when he became a ward), he had suffered severe physical abuse, sexual abuse and emotional and physical neglect from members of his family (including his brother). Evidence as to his experiences may be found in statements that he made to the police. There is evidence that what happened to him prior to him becoming a ward had substantial impact on the plaintiff. It may well have significant relevance to the condition that he now finds himself in and his claim for damages (which, inter alia, contains heads of damage relating to psychological matters). The unscrambling process may be a very difficult task. 64 In a report dated 13 March 2003, Dr McMurdo said:- I cannot put any percentage on his level of impairment in relation to the failure to diagnose the Bartter's Syndrome or failure to educate. 65 In a report dated 17 March 2005, Dr Parmegiani, opined as follows:- Summary of findings Mr Shane Nicholls suffered severe physical abuse, sexual abuse and emotional neglect until age 14. He reported being wrongly diagnosed as intellectually impaired whilst under the care of DOCS, and not receiving appropriate education. He suffered a rare kidney disorder, called Bartter's Syndrome, which was not detected or treated. Drs McMurdo and Jolly wrote at length about the impact of Mr Nicholl's experiences whilst in institutional care. Unfortunately, neither Dr Jolly nor Dr McMurdo had the opportunity to consider the psychological impact of emotional neglect, physical abuse and sexual abuse on Mr Nicholls' development. Persons suffering the degree of abuse described by Mr Nicholls often develop debilitating psychological problems during childhood. When abuse occurs during one's formative years, it has a damaging impact on relationship formation, emotional control and behaviour. The abuse might explain why Mr Nicholls was illiterate by age 14, a time when most peers would be expected to read and write proficiently. It is difficult to determine whether Mr Nicholls was depressed by the time DOCS took over his care. In summary, it is not possible to determine with any degree of accuracy the degree to which Mr Nicholls' psychological problems were exacerbated by the events that occurred whilst under the care of the Department of Community Services. 66 Dr Parmegiani was not required for cross-examination. Save as to what appears in reports from Drs Jolly and McMurdo, the contents of his report are not otherwise challenged. The reports of Drs Jolly and McMurdo were prepared by way of response to the report of Dr Parmegiani. Their reports do not take issue with the opinion expressed by Dr Parmegiani. 67 It seems to me that the defendant has demonstrated that it may suffer both actual and presumptive prejudice. I consider that it is now unlikely that a fair trial can take place. 68 In the relevant circumstances of this case, it seems to me that the plaintiff falls short in discharging the onus of satisfying the court that it would be just and reasonable to make an order. 69 There remains the question of leave to amend. In the light of what has just been said, it is no longer necessary to determine the question. However, it seems to be a matter on which I should express a view. In my view, if the question had to be determined, leave to amend should not be granted. 70 Initially, it was propounded that the amendment should be granted pursuant to s65 of the Civil Procedure Act 2005. As I understand the position, this course was abandoned and the amendment was sought pursuant to s64 thereof. 71 Section 64 confers the general power of amendment. Section 65 expresses specific amendments that may be made thereunder. It is expressed to be a provision that does not limit the powers of the court under s64. 72 In my view, s65 has no application in the present case. It seems to me that the plaintiff must look to s64 for relief. This section confers a discretionary power which is expressed having regard to the relevant circumstances of the case and so that the dictates of justice are met. The onus rests with the party seeking the amendment. 73 I do not consider that the plaintiff has discharged that onus. In the light of what has been earlier said in this judgment , it would be futile to grant leave. Even if a different view were to be taken on that matter, I consider that the amendment application should fail for other reasons. I shall mention certain of them. The statement of claim was filed more than 11 years ago. The delay in moving for the amendments is not satisfactorily explained (inter alia, although the plaintiff was receiving advice from Senior Counsel on the limitation question, the failure to file the application within the required three year period is not satisfactorily explained). 74 I also consider that the granting of leave would have the effect of defeating what Parliament had in mind when s60I of the Act was drafted. It was the intention of Parliament that the application had to be made within the requisite three year period. 75 The application is dismissed. The plaintiff is to pay the costs of the application. The exhibits may be returned. **********