New South Wales Supreme Court CITATION : Yovichevich v The Royal Australian and New Zealand College of Radiologists [2009] NSWSC 381 HEARING DATE(S) : 31 March 2009 JUDGMENT DATE : 22 May 2009 JUDGMENT OF : Smart AJ DECISION : Leave refused to plaintiff to file further amended statement of claim; plaintiff's action dismissed. CATCHWORDS : Pleading - fourth attempt to draft statement of claim - as to attempt to plead action in negligence, scope and attributes of duty of care not adequately pleaded - leave not given to raise alternate claim for judicial review - lapse of nine years LEGISLATION CITED : Uniform Civil Procedure Rules CATEGORY : Principal judgment Ashrafi Persian Trading Co Pty Ltd v Ashrafinia [2001] NSWCA 243 CASES CITED : Caltex Oil (1976) 136 CLR 529 Perre v Apand Pty Ltd (1999) 198 CLR 180 PARTIES : Stanko Yovichevich (Plaintiff) The Royal Australian and New Zealand College of Radiologists (Defendant) FILE NUMBER(S) : SC 20429/04 COUNSEL : M Hadley (Plaintiff) N Dawson (Defendant) SOLICITORS : Harrington Maguire & O'Brien (Plaintiff) Tress Cox (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Smart AJ Friday 22 May 2009 20429/04 Stanko Yovichevich v The Royal Australian and New Zealand College of Radiologists JUDGMENT 1 Consequent upon my judgment of 20 August 2008 argument ensued as to the adequacy of the proposed Further Amended Statement of Claim lodged and served about 16 September 2008. The Statement of Claim filed on 2 December 2004 came before Adams J. On 30 November 2005, in a judgment in which the Statement of Claim was given detailed consideration and the authorities reviewed, that Judge held at [33]: "33 It is essential that the plaintiff identify the particular attributes of the alleged duty, the breach of which demonstrates negligence." Adams J continued at [37] and [38]: "37 So far as the plaintiff's claim for relief is concerned, no facts matters or circumstances are alleged from which it is possible to identify the reasons for which the College is liable to compensate the plaintiff for the loss of the income claimed, let alone admit him to membership of the College. 38 It may be that the plaintiff is able to make good these defects. Accordingly, it seems to me that the proper order here is that I should give leave to the plaintiff to file and serve an amended statement of claim complying with the rules as to the allegations of material facts and giving appropriate particulars. He has twenty-eight days from the date of this judgment to do so, failing which the proceedings are to stand dismissed. The plaintiff is to pay the defendant's costs of the motion." 2 The plaintiff filed an Amended Statement of Claim on 23 February 2006. The College moved to strike it out. About 12 October 2006 the plaintiff propounded a Second Amended Statement of Claim. 3 When the matter came before Malpass AsJ, he, in a reserved judgment, dismissed the proceedings on 17 May 2007, having isolated a separate question. During the hearing before the Associate Judge he was told that the Statement of Claim needed to be further amended. 4 In my judgment of 20 August 2008 I disagreed with the approach of the Associate Judge. However, it was accepted during the hearing that the Statement of Claim required amendment. I directed the plaintiff to deliver a draft of its proposed further amended statement of claim ("PFASC"). This was done. This is the fourth version. 5 The defendant contends that it is significantly deficient. The PFASC contains allegations of negligence, wrongful conduct and denials of procedural fairness and natural justice. 6 As to negligence, it is alleged in paragraphs 2(d) and (e) that, when administering such exams, the College was under a duty to its candidates to take reasonable care to avoid foreseeable harm to them in the form of wrongfully grading the person as failed. In paragraph 5 of the PFASC it is alleged that, in breach of its duty (paragraphs 2(d) & (e) – incorrectly referred to as paragraph 3), the defendant negligently failed the plaintiff whereas it ought to have graded him as a pass or better. The following Particulars of Negligence were supplied: "The Plaintiff's entitlement to pass the said examination and hence the Defendant's negligence, is to be inferred from: i) the Plaintiff's uncontradicted assertions at the informal review on 16 December [1999] with Dr Perry described below; ii) the implied admissions of the Defendant at that time." The remainder of the substantive allegations as contained in paragraphs 6 to 26 of the PFASC are as follows: "6) In the alternative, the Defendant deliberately failed the Plaintiff, knowing that he deserved to pass and the Defendant thereby acted wrongfully: Particulars of wrongful conduct The Defendant implemented a policy of restricting the number of practitioners with overseas qualifications and experience irrespective of their fitness to practice. As part of this policy, the Defendant wrongfully failed certain candidates who deserved to pass. 7) The existence and implementation of this policy is to be inferred from: (a) The conflict of interests between the Members of the Defendant and potential practitioners. (b) The Defendant's failure to provide foreign candidates with information about the nature of the exams and how the candidate should prepare for them; whereas local candidates had access to such information during their residency training. In particular the foreign candidates were given no information about marking criteria. (c) The unexplained difference between the proportion of foreign and local candidates who pass the exams by the third attempt. 8) By implementing the policy, the Defendant: (a) acted ultra vires its Objects; (b) acted for an improper purpose; (c) acted with bias. 9) Alternatively, deliberate wrongful failure of the Plaintiff is to be inferred from the matters revealed at the meeting with Dr Perry on 16 December 1999, set out below. 10) By letter from Martin Bell and Co, at that time acting as the Plaintiff's solicitors, to the Defendant dated 18 November 1999, the Plaintiff requested: (a) a review and re-consideration of the Radiodiagnosis exam results, being the first step in the Defendant's Appeal Process; (b) a copy of the Radiodiagnosis exam questions and the Plaintiff's answers thereto. 11) By letter from the Defendant to Martin Bell and Co, dated 9 December, 1999, the Defendant: (a) asserted that the Warden of the Defendant had undertaken a review of the Plaintiff's performance of the Radiodiagnosis exam; and (b) stated that the Warden had advised the Defendant that: - he had examined the records of the various elements of the exam; - he was satisfied that each element was conducted and marked professionally and equitably; - he was satisfied that the exam records accurately and fairly reflected the Plaintiffs performance. 12) Contrary to the Defendant's duties at law and pursuant to its objects, the said Warden's review was conducted contrary to natural justice and without giving the Plaintiff an opportunity to be heard. 13) On 16 December, 1999 the Defendant by its agent Dr Perry purported to conduct a review of the Plaintiff's answers to the said examination and purported to give the plaintiff some opportunity to be heard. [I interpolate that Dr Perry was not the Warden.] 14) The Plaintiff and Dr Perry discussed questions put to the Plaintiff as part of the exam, and his answers. In relation to the fourth of sixteen questions, the Plaintiff referred to his written answer and asserted that his answer deserved a 9 or 10 out of 10; whereas he had been awarded a 3. Dr Perry could not explain or justify that mark stating that he could not 'embarrass his colleagues'. Dr Perry declined to discuss the matter further and terminated the meeting about 15 minutes after it had started. 15) The Plaintiff alleges that Dr Perry's conduct was an admission of negligence by the Defendant at the time of marking the exam; or alternatively was further implementation of the Defendant's policy against foreign practitioners and thereby involved: (a) conduct ultra vires the Objects of the Defendant; (b) acting for an improper purpose; (c) bias; and (d) lack of natural justice and procedural fairness. 16) By letter dated 17 December 1999 to the Defendant, the Plaintiff protested the inadequacy of the said meeting, repeated his assertions of being wrongly marked and asked to be remarked. The Plaintiff further put the Defendant on notice that he would be taking further action to exercise his rights. 17) By letter dated 6 January, 2000, the Defendant declared that the review process was completed and that there would be no change to the result. 18) From about September 1999, the Defendant purported to offer an appeal process, as recorded in a document entitled 'College Appeals Mechanism'. The process failed to provide natural justice or procedural fairness to the Plaintiff for the following reasons: (a) the Plaintiff, who bore the onus of proof, would not be given access to the examiners' notes and score sheets for the written component of the exam; (b) the Plaintiff was obliged to pay a fee of $500.00 (unless another amount were determined) - Clause 22. (c) the Plaintiff was obliged to pay 'all costs associated with convening the Appeals Committee, including without limitation, (1) accommodation, honoraria and recording costs …' - Clause 23. Albeit that the amount paid under Clause 22 would (2) be applied towards the amount imposed-by Clause 23, the Plaintiff estimated that the process could involve a cost to him (3) of $10,000.00 or more. 19) The Appeals Committee would consist of the Defendant's Chairperson, 2 Ordinary College Members and (if requested by the Plaintiff) an external person who the Chairperson would choose- Clause 2. There was no involvement by an external person chosen by the Plaintiff. 20) The Plaintiff declined to invoke the appeal process for the following reasons: a) Without access to the examination questions and answers, the Plaintiff considered that he could not properly prepare for the appeal and therefore had no reasonable prospect of success. b) by virtue of the conduct of Dr Perry at the review described above, the Plaintiff had no confidence of receiving a fair hearing; (c) the Plaintiff could not afford the anticipated costs. 21) Despite the complaints from the Plaintiff and notice of his intention to take legal action, the Defendant disposed of the exam records, at a time unknown to the Plaintiff and without prior notice to him. 22) In the premises, the Plaintiff was denied procedural fairness and natural justice with regard to any review of the November 1999 exam. 23) By virtue of the then applicable Defendant's guidelines (entitled 'Training and Postgraduate Examinations in Radiology in Australia') and as further confirmed by letter from the Defendant dated 25 November 1997, the Plaintiff was not permitted to sit the exam again. 24) By virtue of the Defendant's negligence and/or wrongful conduct as described above, the Plaintiff was denied admission to the Defendant College. The Plaintiff was thereby rendered prima facie unfit to practice as a radiologist. 25) The Plaintiff thereby suffered loss including the opportunity to earn income as a practicing radiologist from 2000. 26) To mitigate his loss, the Plaintiff took steps including: (a) Noting the powers of the New South Wales Medical Board pursuant to s.7 of the Medical Practice Act, 1992, the Plaintiff applied to the said Board for conditional registration, without success. (b) Similarly, applying to the Victorian Medical Board, without success. (c) Numerous applications to hospitals or clinics with 'Area of Need' status for a staff specialist position, without success." 7 Under UCPR 14.7 a party's pleading must contain only a summary of the material facts on which the party relies. In an action in negligence it is not sufficient for the plaintiff to plead general phrases referrable to the tort thereby leaving the defendant to establish why those general formulae would be insufficient to enable the plaintiff to be successful in the proceedings: Ashrafi Persian Trading Co Pty Ltd v Ashrafinia (2002) Aust. Torts Reports 81 – 636, [2002] NSWCA 243; BC 200104223, see per Heydon JA at [47], with whom Mason P and Handley JA agreed. 8 Many of the allegations made by the plaintiff are of a very general kind and unsupported by adequate particulars. I doubt if the Warden's review is subject to the rules of natural justice – see paragraph 12 of the PFASC. No sufficient basis is stated for the allegation that Dr Perry was the College' agent nor that his failure to contradict the plaintiff's assertions and his comments and conduct could be attributed to the College. The College cannot be expected to retain exam records once the Warden's review is completed and the appeal process is not invoked. The College has no duty to give the plaintiff prior notice of its intention to dispose of the exam records absent an appeal. It seems from the PFASC that the plaintiff is anticipating the result of the appeal process and the College's approach. It cannot be expected to modify its processes to suit the wishes, fears and approach of the plaintiff. 9 I was initially troubled by the use in the PFASC of the phrase "wrongful conduct". Counsel for the plaintiff told me that the concept of deliberate interference with economic interests was not at the front of his mind when he drafted the PFASC. It was intended that the PFASC raise a case based on common law negligence and one in which judicial review was sought. Counsel accepted that, if he was to succeed on the claim for judicial review, he would need to amend the relief sought. 10 The defendant pointed to the relief claimed, namely: 1. damages 2. a declaration that he ought to have been awarded a pass by the defendant when he sat its exam in November 1999 or at one of the defendant's purported reviews 3. an order that the defendant confer such a grading on the plaintiff and process any application he makes to be admitted to the College, in the normal manner. 11 Damages is the appropriate remedy for a cause of action in negligence. The Court has no jurisdiction to grant the relief sought in paragraphs 2 and 3. 12 Counsel for the plaintiff foreshadowed that he would seek an order that the College permit the plaintiff to sit a further exam in radiodiagnosis. 13 I will further consider the adequacy of the Statement of Claim as to a claim in negligence and as to a claim for judicial review. A separate cause of action based on "wrongful conduct" was not pressed. Negligence 14 The defendant complained that the PFASC does not plead the contents of the duty to take care. It does not set out the attributes and scope of the duty. 15 I have previously held that as to damages this was a lost opportunity case, the plaintiff having lost the opportunity to practise as a specialist in radiodiagnosis. As Adams J pointed out in [18], the relationship between a plaintiff and a defendant giving rise to a duty of care not to cause economic loss was the subject of extensive discussion in Perre v Apand Pty Ltd (1999) 198 CLR 180. At [7] Adams J thought that it was arguable that, if the College was the doorkeeper for granting to persons with appropriate professional competence the right to practise in a particular medical specialty, there might be a duty to conduct the examinations and the review of the examinations with due care. 16 In support of the claimed duty of care as to the examinations and their conduct the plaintiff alleged the College: (a) was recognised through Australia and New Zealand as the academic body setting the standards and administering the exams required to allow recognition and registration as a specialist in Radiodiagnosis; (b) permitted eligible candidates to sit for exams to be admitted as a Fellow; (c) when administering such exams was under a duty to its candidates to avoid foreseeable harm to them in the form of wrongfully grading the person as failed; and (d) had as one of its objects to conduct the examinations to grant to registered medical practitioners recognition of special knowledge in Radiology or Radiation Oncology. 17 The defendant submitted that a failure to avoid foreseeable harm does not of itself give rise to a duty of care: Perre v Apand Pty Limited, supra, especially per McHugh J at [94], [95], [104] and [105]. Adams J at [24] thought that "there appears to be an arguable case, at least, that the application of the criteria identified by McHugh J suggests that the College might owe a duty of care to [the plaintiff] to conduct its examination of him in a fair and proper manner. 18 Counsel for the plaintiff contended that the facts as set out in the PFASC showed that the parties were in a sufficient relationship for a duty of care to exist in relation to the conducting of exams amongst other things. 19 In Perre v Apand Gleeson CJ referred with approval to the speech of Lord Oliver in Kaparo Industries v Dickman that "in some cases the degree of foreseeability is such that it is from that alone that the requisite proximity can be deduced." Gummow J and Callinan J, and possibly Hayne J, were inclined to favour the approach of Stephen J in Caltex Oil in which his Honour "isolated the number of 'salient features' which combined to constitute a sufficiently close relationship to give rise to a duty of care owed to Caltex for breach of which it might recover [quaere for] its purely economic loss" (Caltex Oil (1976) 136 CLR 529 at 576 – 577), though there should be "an allowance for the operation of appropriate 'control' mechanisms" (Gummow J). Callinan J adopted the prediction of Stephen J that the law was still developing in a somewhat piecemeal fashion. 20 The plaintiff, to establish the duty alleged, relies on the College being the nationally recognised body for setting the standards and administering the exams required to allow recognition and registration as a specialist in Radiodiagnosis, permitting eligible candidates to sit for exams, conducting such exams and the plaintiff sitting for the exams. The College effectively determines whether a candidate will be able to practise as a specialist radiologist. As mentioned, there is an allegation of a duty to take reasonable care to avoid foreseeable harm to candidates in the form of wrongfully grading the candidate as failed. A little later it is alleged that the College negligently failed the plaintiff. The Particulars given in paragraphs 9, 13, 14 and 15, if that is what they be, are manifestly inadequate. 21 Many of the paragraphs in the PFASC relate to denials of natural justice and procedural fairness. 22 There is insufficient alleged in the PFASC to support the existence of a duty of care on the part of the College to the plaintiff. Denial of Justice and Procedural Fairness 23 In paragraph 6 by way of particulars it is alleged that the College implemented a policy of restricting the number of practitioners with overseas qualifications and experience irrespective of their fitness to practise and as part of this policy, the College wrongfully failed certain candidates who deserved to pass. Further general allegations are made in paragraph 7. The College is under no duty to explain the difference between the proportion of foreign and local candidates who pass the exams by the third attempt. The College holds its exams and makes, via its examiners, assessments as to who meets the standards of competence required. 24 Orders in the nature of prerogative relief are being sought some nine years after the last exam. On any view, having regard to the lapse of time, prerogative relief would have to be refused. 25 Counsel for the plaintiff told me that many of the allegations in the PFASC were inserted on the instructions of the plaintiff. Decision 26 The plaintiff's initial statement of claim received careful consideration from Adams J who indicated major deficiencies. This is the fourth attempt of the plaintiff to draft a Statement of Claim. 27 It is not fair to the defendant for the plaintiff to be given further opportunities to replead after the lapse of nine years from November 1999 – January 2000. All these exercises involve considerable expense. Finality is important. 28 I decline to grant the plaintiff leave to file the PFASC. In my opinion the plaintiff's action should be dismissed. As to costs, the defendant should not have its costs of the proceedings before Malpass AsJ or before me up to and including 20 August 2008. The defendant should pay those costs of the plaintiff so far as they relate to the separate trial of an issue. On the other hand the plaintiff should pay the costs of the defendant of the proceedings generally and those before me after 20 August 2008. I make orders in terms of the last and penultimate sentences. ********** 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.