Eder v Malouf Solicitors [2012] NSWDC 8

District Court New South Wales

Medium Neutral Citation: Eder v Malouf Solicitors [2012] NSWDC 8 Hearing dates: 30/01/12-03/02/12 Decision date: 15 February 2012 Jurisdiction: Civil Before: Elkaim SC DCJ Decision: Verdict for the defendant with costs Catchwords: Professional negligence. Loss of chance to have a case for a loss of chance. Legislation Cited: Civil Liability Act 2002 Legal Profession Act 1987 Limitation Act 1969 Trade Practices Act 1974 Cases Cited: Arturi v Zupps Motors Pty Ltd (1980) 33 ALR 243 Johnson v Perez (1988) 166 CLR 351 Kitchen v Royal Air Forces Association & Ors [1958] 2 All ER 241 Category: Principal judgment Parties: Herbert Eder (Plaintiff) Malouf Solicitors (Defendant) Representation: S Bliim (Plaintiff) M T McCulloch SC (Defendant) Milne Berry Berger & Freedman (Plaintiff) Wotton & Kearney (Defendant) File Number(s): 2008/00318894 Publication restriction: No

Judgment 1The plaintiff was born in Austria on xx xx 1945. There is little information about his activities in Austria but he seems to have lived in Australia since 1977. There is also little detail of his life in Australia other than that he was self-employed as a roofer, lagger and air conditioning fitter from 1960. He has not worked since November 1993. His average taxable income in the previous 3 years was $33,153.67. He now describes himself as a disabled pensioner. 2The plaintiff says his life since early 1994, including his not working, has been dictated by the effects of an injury he suffered on 9 January 1994. On this date he had purchased a can of sausage and vegetable soup from the Coles supermarket at Merrylands. 3Later in the day he heated the contents of the can in a microwave. He then began to consume the soup. Very shortly he felt "something hard and sharp" lodge in his throat. He found it difficult to breathe and could not dislodge the obstruction. He tried to vomit but did not succeed. He panicked and lay down on the kitchen floor. He then drank some vinegar that led him to vomit into a sink. He looked at the contents of the food he had thrown up and found what he described as "yellow coloured wooden splinters each approximately 2cm long" . Later testing disclosed the splinters to be " hardened carrot ". 4The next day the plaintiff sought medical attention. The real problem has been a psychiatric reaction that continues to the present. Within a month of the injury he was diagnosed as a " depressed psychometer retarded patient " and prescribed anti-depressant medication (Dr Ali, 14 February 1994, Exhibit F). 5The proceedings before me are the third action that has arisen from the consumption of the soup. The first was a case brought in the District Court against Southern Country Food Australia Pty Limited ("SCF") and Coles Myer Limited ("Coles"). The pleadings are in Exhibit G. SCF was the alleged manufacturer of the soup. Coles owned the supermarket in which it was purchased. These proceedings ended on 18 August 1997 with verdicts, by consent, for the defendants against the plaintiff. 6The second set of proceedings, also in the District Court, was commenced against the Estate of John R Marsden and Others trading as Marsdens Solicitors and Barristers ("Marsdens") on 14 August 2003. Marsdens had acted for the plaintiff in the suit against SCF and Coles. These proceedings came to an end on 18 July 2007 when her Honour Judge Truss found that they had been commenced outside the limitation period prescribed by Section 14 of the Limitation Act 1969. The proceedings had been started by Malouf Solicitors ("Maloufs") on the plaintiff's behalf. 7The third set of proceedings (the current case) was started on 5 September 2008. The defendant is Maloufs, which is said to have been negligent in its conduct of the claim against Marsdens. 8The plaintiff is therefore suing Maloufs for not properly pursuing his claim against Marsdens who had in turn been negligent in dealing with the case against SCF and Coles. In other words the plaintiff is alleging a loss of chance to have an action for a loss of chance to recover damages caused by the injuries he suffered on 9 January 1994. 9Most of the evidence was presented in affidavit form. A number of objections were taken to parts of the plaintiff's affidavits. The passages that I struck out have a line drawn through them. 10The plaintiff was cross-examined on his affidavits. The deponents of the defendant's affidavits were not cross-examined. The defendant called an additional witness, Mr Woods, whose evidence in chief had not been reduced to affidavit form. 11Assuming success for the plaintiff on each step I think the following issues arise in (reverse) chronological order: (a)Was Maloufs negligent? (b)What damages would the plaintiff have recovered at the agreed notional date of the trial in the action against Marsdens? The notional trial date was agreed as being 26 August 2007. (c)The issue of damages includes consideration of the following: (i)Was Marsdens negligent in its dealings with the plaintiff? (ii)Would Marsdens have been liable in damages, assuming negligence, having regard to whether the plaintiff could establish he had lost a chance to successfully sue SCF and Coles? (iii)What damages, at the agreed notional trial date of 9 January 1999, would have been recovered against SCF and/or Coles? (d)What discount should be applied to any damages established against Maloufs, to reflect the loss of chance? 12Because of the conclusion I have reached that Maloufs was not negligent there is no strict need to address the other issues. However in fairness to the parties and in case I am wrong in my conclusion about Maloufs I intend to also deal with the plaintiff's chances of success had his case against Marsdens been 'in time' and finally the plaintiff's chances of success in the original litigation against Coles and SCF. I do not intend to assess the plaintiff's damages for reasons I give below. 13Before embarking on the above issues I think it necessary to state my conclusions on the plaintiff's reliability as a witness. I specifically use the word "reliability" rather than credit because I think my following comments are more a reflection on the weight that can be put on Mr Eder's evidence than an assessment of honesty. 14The defendant submitted that the plaintiff should simply not be believed. It was said that cross-examination had comprehensively destroyed his credit. The plaintiff submitted that I should take into account his language difficulties and " lack of sophistication " before reaching any conclusion. 15I certainly accept that the plaintiff does not have a sophisticated knowledge of the law. He is obviously not however an unintelligent man. Although he spoke with an accent his use of the English language was fluent and always understandable. There is nothing to suggest he has ever needed an interpreter in any of his dealings with lawyers. I also note that he has been involved in the legal process since 1994. He has consulted solicitors, dealt with Legal Aid and also with the Legal Services Commissioner. 16I also appreciate that his affidavits were obviously settled by lawyers who used more technical language than might have been used by the plaintiff. On one occasion he told me that he did not really understand some of the language attributed to him (T 106.8). He also said he had read the affidavits before swearing them. I endeavoured to ensure he had the opportunity to read his affidavit material before he gave answers arising from their contents. 17Nevertheless he gave a number of answers under cross-examination that plainly contradicted his affidavit evidence. Here are some important examples: (a)In paragraph 39 of Exhibit A the plaintiff states that he did not receive a letter from Marsdens dated 27 February 1997. When he was shown the letter (Exhibit 1) he said he had received it (T 95.40 and T 97.35) (b)In paragraph 41 of Exhibit A the plaintiff stated that Mr Marsden insisted he give approval to withdraw from the litigation proceedings and that he reluctantly signed a "typed up document" . This document is not in evidence but more importantly, under cross-examination, the plaintiff said the purpose of the letter as explained to him by Mr Marsden concerned issues with Legal Aid and the Legal Services Commissioner and did not concern the future of the legal proceedings (T 114.3). (c)In addition, in paragraph 41 the plaintiff stated that he gave his approval for the District Court claim to be discontinued. In evidence he said that Mr Marsden had told him on 3 July 1997 that his case would remain "alive" (T 128.13). (d)In paragraph 42 the plaintiff stated that the signature on the bottom right hand corner of Annexure K is not his signature. His counsel had said this was the position during opening discussions (T 55.29). When taken to the annexure the plaintiff said it was his signature (T 104.31 and 105.30). (e)In paragraph 44 the plaintiff referred to a letter dated 4 July 1997 said to have been sent by Marsdens confirming Mr Eder's instructions taken the day before. He stated, "I say categorically that I did not receive such a letter from Marsdens" . Under cross-examination the plaintiff said that he could not say if it was received or not (T 140.49). (f)The plaintiff said that he was not informed of his right to appeal from the refusal of Legal Aid until some months after July 1997. Even taking into account the postal error that occurred it is clear that he had this knowledge before 3 July 1997 and was also aware of the reason Legal Aid had been refused (see Exhibits 2 and 3). 18As mentioned above, the only other person to give oral evidence was Mr Harry Woods, now a barrister. He worked as a solicitor for Marsdens from 1994 to late 1997. He mostly did criminal work but did have some civil files in 1996 and 1997. He was based in Campbelltown but visited other Marsdens' offices from time to time. Besides the above facts his memory of anything relevant to the current matter was virtually non-existent. He did not remember the plaintiff, he did not remember the facts of the case or the file and a perusal of Exhibit 7 did not jog his memory. In addition he could not recall the practices at the firm in respect of meetings with clients, taking notes or recording daily events. 19I express no criticism of Mr Woods in saying that his oral evidence was of little assistance in determining the issues. The only positive assistance he could provide was in identifying the whole of the handwriting, besides the plaintiff's signature, on page 20 of Exhibit 7, as his own. 20It is also important that no suggestion was made to Mr Woods that the contents of Exhibit 7 had been manufactured or created to give a false reading of the dealings between Marsdens and the plaintiff. 21Despite Mr Woods' absence of memory, the contents of Exhibit 7 do give rise to a number of clear inferences and findings, some of which contradict the plaintiff's evidence. These include the following: (a)I am satisfied that Mr Woods did deal with the file from 30 January 1997. (b)His dealing with the file included meeting the plaintiff on 25 February 1997 (Exhibit 7, page 4), corresponding with the plaintiff (for example Exhibit 7, page 5), corresponding with counsel (Exhibit 7, page 8) and perusing the file and forming an opinion about it (Exhibit 7, page 3). (c)In addition I am satisfied that Mr Woods wrote the document at page 20 and witnessed the plaintiff's signature. (d)I am also satisfied that Mr Woods confirmed the plaintiff's instructions to discontinue the proceedings (page 21) and that he spoke to the plaintiff on 15 July 1997 in accordance with the file note on page 27. 22It is possible that the plaintiff's lack of reliability has been exacerbated by the many years that have passed since some of the relevant events occurred. In addition, his obvious obsession with, and belief in, his cause may have influenced his recollection of past events. In his report of 15 December 2011 Dr Oen, a psychiatrist, stated: "At interview he was a very loquacious and loud talking man. His mood was moderately depressed but his affect reactive, agitated at times and forceful. There was no psychomotor retardation or neglect. The content of his thought reflected his preoccupation with his change in lifestyle and personality. He was keen to tell me about the injustices that he felt had been done to him by the lawyers and the manufacturers of the food product. He was not overtly deluded or suicidal." (Exhibit F). 23A final point I would like to make about the plaintiff arises from his allegations of the injuries he continues to suffer as a result of choking. Counsel for the plaintiff (T 3.25 and 224.20) said the physical injuries had resolved. This is consistent with the plaintiff's facsimiles to Maloufs in June 2004 (Exhibit 6, pages110 and 112 of the annexure). However in paragraph 5 of his affidavit of 16 March 2010 (Exhibit E) the plaintiff has a list of the consequences still existing in 2010. There is no medical evidence to support the non-psychological injuries. While I cannot exclude the possibility that the complaints of physical injury are a product of a psychiatric injury the continuing complaints do not reflect well on the plaintiff's reliability especially in the light of the concession by his own counsel. 24For these reasons I do not find the plaintiff to have been dishonest, as advocated by the defendant, but rather find him unreliable. The result is that I do not accept his evidence where it is controversial unless corroborated by other independent acceptable evidence.