New South Wales Supreme Court CITATION : Spring v Sydney South West Area Health Service [2009] NSWSC 420 HEARING DATE(S) : 18 May 2009 JURISDICTION : Common Law JUDGMENT OF : Adams J at 1 EX TEMPORE JUDGMENT DATE : 18 May 2009 The defendant is granted leave to withdraw the offer of compromise served on the plaintiff on 9 April 2009. DECISION : The withdrawal of the offer of compromise takes effect from 1 May 2009. Costs to be costs in the cause. CATCHWORDS : Medical negligence - difficult case for plaintiff on causation - stronger case on loss of a chance - defendant's offer of compromise accepted - Court of Appeal departs from earlier decision - whether offer can be withdrawn. LEGISLATION CITED : Uniform Civil Procedure Rules 2005 20.26 CATEGORY : Procedural and other rulings CASES CITED : Gett v Tabet [2009] NSWCA 76 Rufo v Hosking (2004) 61 NSWLR 678 PARTIES : Gail Louisa SPRING (Plaintiff) Sydney South West Area Health Service (Defendant) FILE NUMBER(S) : SC 2007/20419 COUNSEL : D W Elliott (Plaintiff) J Downing (Defendant) SOLICITORS : Gerard Malouf and Partners (Plaintiff) Francesca Menniti (Defendant) THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADAMS J MONDAY 18 MAY 2009 20419/07 - Gail Louisa SPRING v SYDNEY SOUTH WEST AREA HEALTH SERVICE EX TEMPORE JUDGMENT 1 HIS HONOUR: This is an application under the Uniform Civil Procedure Rules 2005 20.26, seeking an order that an offer made by the defendant in the principal proceedings be permitted to be withdrawn. As it happens, it was accepted during its currency but this is no impediment to make the order if it is otherwise appropriate. The facts are for relevant purposes, indeed for most purposes of litigation, not in dispute, and the following is a brief account taken from the plaintiff's written submissions. 2 The plaintiff's late husband, Mr Spring, had a history of heart disease and had undergone two previous bypass operations. On 23 November 2004 he presented at the Liverpool Hospital complaining of being unwell for about six weeks with upper respiratory tract infection-like symptoms, and a further history of rheumatoid arthritis, for which he was taking immuno-depressant medication, and recent pneumonia. He was admitted to hospital, and on 25 November 2004 a CT scan was taken, which revealed a suspected pericardial cyst. Given his history, this was a serious matter. However, his condition was not seen as urgent or worrying and, as it happened, the scan was not reported on until 2 December 2004. Mr Spring's antibiotics were changed from intravenous to oral on 26 November but he was feeling worse, remaining hypertensive throughout his admission. The condition was still unresolved on discharge on 27 November 2004. It will be seen that he was discharged before the radiologist's report was obtained. 3 It is not substantially disputed that, had the result of the scan been known by those charged with his care, Mr Spring would not have been discharged, but would have received intensive treatment. This was not realised, it seems, until 17 December 2004 when his general practitioner at last saw the scan. He was immediately admitted to the hospital but the cyst had matured by this time into a serious plural abscess/aneurysm. Surgery was undertaken, but tragically Mr Spring died of cardiogenic shock on 21 December 2004; he was aged 52. The crucial forensic question in the proceedings undertaken by Mrs Spring against the hospital relates to causation, essentially whether Mr Spring would have died anyway had the treatment proposed by the plaintiff occurred. It is likely that the trial will orbit around this central issue. In this context, the possibility that the plaintiff might receive damages on the basis of the loss of a chance, representing the increased risk of the delay in surgery, is plainly at the forefront when the matter is objectively analysed. 4 I have no doubt that the loss of a chance issue was considered by the legal representatives of both the plaintiff and the defendant. There are two reasons for this conclusion so far as the plaintiff is concerned. First, the plaintiff's legal advisers were, of course, highly competent and experienced lawyers, and the question of causation or loss of a chance must necessarily have been considered by them in advising the plaintiff. In this regard the decision of the Court of Appeal in Rufo v Hosking (2004) 61 NSWLR 678 to the effect that damages for loss of a chance in a medical negligence case were available, at least as a matter of principle, was of considerable significance. The second reason that I infer it was important also for the plaintiff is that, following settlement discussions, an offer of considerably less than the best case assessment of damages (I have been told by Mr Elliott, counsel for the plaintiff, something like one sixth) was accepted, a decision which is incomprehensible unless the plaintiff's lawyers accepted that, as a matter of reality, it was very likely that the plaintiff would get no more than the loss of a chance. 5 More significant, it seems to me, is the position of the defendant. There are three reasons for accepting that the defendant regarded the decision in Rufo v Hosking as a substantial factor in assessing its risk. The first two are identical to those which I have referred to in respect of the plaintiff's lawyers, namely, the law as it stood at the time, and the amount offered on settlement. A third reason, however, is that I have seen advices, with the consent of Mr Elliott, which clearly show that the question of loss of chance was regarded as a substantial risk, even if the defendant was to otherwise succeed on the causation argument upon which the defendant rightly concluded its case was strong. The solicitor having carriage of the matter has deposed to the fact that the defendant saw its risk, in substance, that it might have to pay damages based on the loss of a chance. 6 The defendant's offer of compromise was served on the plaintiff on 9 April 2009, as it happened, on the same day on which the judgment in Gett v Tabet [2009] NSWCA 76 was handed down but, not unreasonably, the defendant was at that time unaware of the decision itself. In Gett v Tabet the Court of Appeal held that Rufo v Hosking was wrongly decided as a matter of important legal principle, and declined to follow it. For obvious reasons, such a step is a most unusual one, and it was not unreasonable for the defendant to act upon the assumption, at the time when it made its offer, that Rufo v Hosking represented the law in this State. 7 I do not think, contrary to Mr Elliott's submission for the plaintiff, that the possibility that Rufo v Hosking might be departed from by the Court of Appeal so soon after it was decided was, or ought to have been, considered as a risk worthy of significant weighting in the assessment of the likely outcome of the case. I should add that the possibility that Rufo v Hosking might be overruled is not adverted to in the advices I have been shown. 8 On 1 May 2009 the defendant became aware of the decision in Gett v Tabet and applied for leave to withdraw the offer of compromise, giving the plaintiff notice of its application. Of course this did not affect the plaintiff's legal position and, as she was perfectly entitled to do, on 4 May 2009, she accepted the offer of compromise. The question is now whether an order permitting withdrawal of the offer should be made. 9 The structure of compromise created in the Rules reflects a public policy of considerable importance to the administration of justice. It is unnecessary for me to explain this proposition; it has been stated many times by many courts, including the High Court of Australia. The integrity of that system requires agreements to be adhered to. Given that early compromise is advantageous, negotiations will often occur where significant uncertainties remain as to the elements of any particular litigation, though these elements will almost invariably concern facts rather than the law. Often the question will be, however, whether any particular set of facts might present an opportunity for the elaboration, clarification or qualification of a legal principle hitherto considered to be reasonably clear. 10 It is evident that the law of torts has developed significantly, especially over the last twenty years, as a result of this process. Accordingly, those advising litigants in relation to compromise need to take into account the possibility that the particular circumstances of the case might lead to such a variation or qualification, although I suppose it is true that in some respects variations tend to expand rather than limit the ability to obtain damages for injuries. This is not invariably the case. Were the decision in Gett v Tabet a mere qualification of Rufo v Hosking, the defendant's position would be a difficult one and its application most unlikely to succeed. However, it was not a mere qualification; it was, in effect, a reversal of what had earlier been a categorical statement of the law. 11 In those circumstances, giving considerable weight, as I think I must, to the importance that agreements following compromise be enforced, even if some of the calculations made by the parties in coming to that agreement are shown to be mistaken, where the change is quite outside a risk which a sensible litigant would give significant weight to, it seems to me that the interests of the administration of justice do not require a party to adhere to the arrangement. I consider that the present circumstances fall well within the discretion given to the Court in sub-rule 20.26(11) which, of course, itself envisages that there may be circumstances where the interests of justice are appropriately served by permitting an offer of compromise to be withdrawn. 12 Mr Elliott pointed out that the defendant faced the risk, not only in respect of the compensation to relatives' claim, but also for nervous shock for Mrs Spring, and that the offer made by the defendant rolled up its risk in relation to both these matters and, accordingly, no great significance should be given to the loss of a chance consideration applying only to the course of treatment of Mr Spring. It may be that there is something in this argument, but I am nevertheless satisfied on the basis of the logic of the case, the material in Exhibit B, the affidavit of the defendant's solicitor, Ms Hoeben, as well as the other disclosed advices, that the question of the loss of a chance was the major risk faced by the defendant, as it itself perceived the litigation. 13 Accordingly I make the orders sought. Costs will be costs in the cause. ********** 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.