Supreme Court New South Wales Medium Neutral Citation: Jener Daluz v John McMahon [2016] NSWSC 202 Hearing dates: 14 October 2015 Date of orders: 10 March 2016 Decision date: 10 March 2016 Jurisdiction: Common Law Before: Hidden J Decision: Motion for summary dismissal dismissed. Catchwords: PROCEEDINGS FOR DAMAGES – Application for summary dismissal of medical negligence proceedings relating to treatment of injuries said to have been sustained by the plaintiff in a motor vehicle accident – settlement of separate proceedings relating to the accident itself – whether consent judgment in those proceedings concluded the issue of damage in the medical negligence proceedings – issues of res judicata, estoppel, abuse of process and double satisfaction Legislation Cited: Area Health Services Act 1986, Health Administration Act 1982 Health Services Act 1997 Motor Accidents Compensation Act 1999 The Law Reform (Miscellaneous Provisions) Act 1946 Uniform Civil Procedure Rules 2005 Cases Cited: Baxter v Obacelo Pty Ltd [2001] HCA 66, 205 CLR 635 Benton v QBE Workers Compensation (NSW) Ltd [2015] NSWCA 101 Blair v Currin (1939) 62 CLR 464 Effem Foods Pty Limited v Trawl Industries of Australia Pty Limited [1993] FCA 342, [1993] FCR 510 Liao v State of New South Wales: Zhang v State of New South Wales [2014] NSWCA 71 Mounsey v Findlay (1993) 32 NSWLR 1 Ramsay v Pigram (1967) 118 CLR 271 Walton v Gardiner (1993) 177 CLR 378 Category: Principal judgment Parties: Jener Daluz (plaintiff) Dr John McMahon (1st defendant) South Western Sydney Local Health District (2nd defendant) Representation: Counsel: R Sheldon SC with P Khandhar (plaintiff / respondent) M Hutchings (defendant / applicant) Solicitors: Brydens Lawyers Pty Limited (plaintiff) Avant Law Pty Ltd (1st defendant) Curwoods legal Services Pty Ltd (2nd defendant) File Number(s): 2013/115686 Judgment 1. HIS HONOUR: These are medical negligence proceedings brought by the plaintiff, Jener Daluz, against the 1st defendant, Dr John McMahon, and the 2nd defendant, the South Western Sydney Local Health District. The proceedings arise from the treatment of the plaintiff for injuries said to have been sustained in a motor vehicle accident. Before me is a motion by the 2nd defendant for the summary dismissal of the proceedings, pursuant to UCPR r 13.4. That rule provides for the dismissal of proceedings which are frivolous or vexatious, or which are an abuse of the process of the Court. The basis of the motion is that the plaintiff has previously been awarded damages for his injuries in proceedings brought against those bearing liability for the motor vehicle accident. I shall refer to these as the "MVA proceedings." 2. The accident occurred on 12 December 2008 on Hospital Road, Concord. Mr Grahame Reeves was reversing a car onto that road when it collided with a car driven by the plaintiff. The car was owned by Mr Reeves' employer, the Health Administration Corporation. The MVA proceedings were brought against Mr Reeves and that Corporation, initially by statement of claim filed in the District Court on 21 December 2012. On 27 November 2013, they were transferred to this Court. They were ultimately settled and, on 22 October 2014, consent orders were filed, expressed to be "without admission of liability", giving judgment to the plaintiff against both defendants for $350,000 plus an agreed amount for costs. 3. In the meantime, the present proceedings were commenced, again by statement of claim in the District Court, filed on 15 April 2013. They were transferred to this Court on 6 March 2014. 4. In the MVA proceedings the statement of particulars of personal injury, in their amended form in this Court, referred to injuries to the neck, right shoulder, right arm and right foot. Relevantly for present purposes, they also referred to injury to the left leg, left leg compartment syndrome and neurological damage to the left leg. For the left leg compartment syndrome the plaintiff underwent fasciotomy surgery. 5. The present proceedings allege negligence in the treatment of the plaintiff's left leg in April 2010 by Dr McMahon and by Fairfield Hospital, a facility of the 2nd defendant. Put shortly, it is pleaded that the plaintiff suffered an injury to his right leg in the motor vehicle accident which caused him to favour his left leg, leading over time to an injury to that leg. The negligence on the part of the defendants alleged is the misdiagnosis of his left leg condition as a deep vein thrombosis, when in fact it was a tear of the calf muscle. The mistaken treatment for the thrombosis led to extensive internal bleeding, for which he required the fasciotomy surgery. In those proceedings the injuries to the left leg particularised were the same as those in the MVA proceedings: injury to the left leg, left leg compartment syndrome, and neurological damage to the left leg. Again, reference was made to the fasciotomy. 6. For the purpose of the MVA proceedings the plaintiff underwent a medical assessment, pursuant to Pt 3.4 of the Motor Accidents Compensation Act 1999 ("MAC Act") on 7 June 2012. The assessor, Dr Nigel Marsh, certified a permanent impairment not greater than 10%, arising from an injury to the right foot. In his reasons Dr Marsh found that injuries to the right shoulder, right foot and the neck were caused by the accident. 7. It emerges from those reasons that the plaintiff first complained of injury to the left leg in 2010, some 18 months after the accident. Dr Marsh was of the opinion that this was not the result of the accident, noting that there was no contemporaneous evidence of any such injury and that, indeed, the plaintiff himself denied injuring his left leg in the accident. Accordingly, he recorded a finding that the left leg injury was not caused by the accident. When the MVA proceedings were launched in the District Court in December 2012, the statement of particulars of personal injury made no reference to any left leg injury. 8. For the purpose of his medical assessment Dr Marsh had access to a number of medical reports, and conducted his own examination of the plaintiff. It appears from his reasons that the possibility of a link between the left leg condition and the injury to the right leg in the accident was not addressed at all. However, medical reports obtained by the plaintiff's solicitors before that assessment had expressed the opinion that the left leg condition was the result of the plaintiff having favoured it as a result of the injury to the right leg: reports of Dr Julian Parmegiani of 3 August 2011 and reports of Dr G David Champion of 22 August 2011 and (briefly) of 16 September 2011. These reports, however, were not before Dr Marsh at the time of his assessment. 9. Dr Champion's view of the matter was somewhat tentative at first, but became more definite in subsequent reports of 3 November 2012, 15 October 2013, and 27 November 2013. In addition, Dr McMahon (the 1st defendant in the present proceedings) expressed the same view in a report of 20 October 2012. No doubt, it was in the light of this material that the particulars of personal injury were amended to incorporate the condition of the plaintiff's left leg. 10. The starting point of the submissions of counsel of the 2nd defendant, Mr Hutchings, was that on the issue of damage in the present proceedings the consent judgment in the MVA proceedings amounted to res judicata or, at least, gave rise to an issue estoppel. These two concepts, and the distinction between them, were elucidated by Dixon J (as he then was) in Blair v Curran (1939) 62 CLR 464 at 531-2, as follows: "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order. Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established." 1. The issue of res judicata and issue estoppel bind the parties and their privies. In Ramsay v Pigram (1967) 118 CLR 271, Barwick CJ stated the basis upon which an issue estoppel could arise at 276, as follows: "Long standing authorities, in my opinion, warrant the statement that, as a mechanism in the process of accumulating material for the determination of issues in a proceeding between parties, an estoppel is available to prevent the assertion in those proceedings of a matter of fact or of law in a sense contrary to that in which that precise matter has already been necessarily and directly decided by a competent tribunal in resolving rights or obligations between the same parties in the same respective interests or capacities, or between a privy of each, or between one of them and a privy of the other in each instance in the same interest or capacity." 1. Put shortly, that case involved consideration of two proceedings arising out of a motor vehicle accident in which one of the cars was a Police Department vehicle driven by a police officer. An issue was whether there was privity between the police officer, who was the plaintiff in one of the proceedings, and the person appointed as nominal defendant to represent the government of New South Wales in the other proceedings. Barwick CJ referred to the three classes of privies: of blood, of title and of interest, noting the relevant category in that case was privity of interest. His Honour found that there was no privity between the government and the police officer. He said at 279: "The basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy. Here it is quite clear that the Government had no interest in the action between the respondent and the police officer: nor can it be said that the action brought by the police officer was brought by him in any sense on behalf of the Government or that in relation to the defence of contributory negligence the respondent could have been treating the Government as the real "defendant" to that claim. In every respect the action between the respondent and the police officer was personal to each of them, neither being in any sense in relation to the action or any of the issues involved in it, representative of another. Nor can it be said that the Government in any sense claims under or in virtue of the police officer or of any right of his, or that it derives any relevant interest through him." 1. Res judicata or issue estoppel can arise from a consent judgment, although in a particular case it may be difficult to identify what issues were determined by that judgment. In Effem Foods Pty Limited v Trawl Industries of Australia Pty Limited [1993] FCA 342, (1993) FCR 510, in the context of issue estoppel, Burchett J said at [22] (537): "The difficulty of showing that some particular finding, as to which an issue estoppel is sought to be raised, was necessarily made by a decision which did not involve an identification of particular issues, and a decision upon them, was noted in the majority judgment in the High Court in Chamberlain v. Deputy Commissioner of Taxation (supra, at 508), where Deane, Toohey and Gaudron JJ said: 'The fact that a judgment is entered by consent may on occasion make it hard to say what was necessarily decided by the judgment ... .' Their Honours cited Isaacs v. The Ocean Accident and Guarantee Corporation Ltd (1958) SR(NSW) 69, where Street CJ and Roper CJ in Eq. said (at 75): 'It is clear that the mere fact that the judgment is by consent does not detract from its conclusive effect upon the issues determined by it ... . But a judgment operates by way of estoppel only as to those matters which are necessarily decided by it.' They proceeded to quote a passage from Spencer Bower on Res Judicata, as follows: 'Though consent judgments and orders are undoubtedly in every case decisions in the sense that the actual mandatory or prohibitive parts of the judgment or order are conclusively binding upon ... the parties ... it may often be a matter of legitimate doubt and debate as to what, if any, particular questions or issues of right, title, or liability were, expressly or impliedly, the subject of the consent, and of the decision.' They also referred to a further passage in the same work suggesting the necessity, in such a case, to look at pleadings or affidavits "in order to ascertain what, if any, decision of particular questions or issues was impliedly consented or submitted to by the party against whom such consent ... judgment or order was made." 1. His Honour also held that it does not matter that the consent judgment was expressed to be without admission: par [23] (537). 2. In written submissions Mr Hutchings noted that a claim for damages is the gist of both proceedings, and argued that the claimed injury and disability in the present proceedings are identical to those claimed in respect of the left leg in the MVA proceedings. That being so, the injuries suffered by the plaintiff and the cause of those injuries are issues relevantly common to both proceedings. He submitted that it was plain that the plaintiff's left leg injury, fasciotomy procedure and sequelae were the subject of the MVA proceedings and were brought to a conclusion upon entry of a judgment in his favour in those proceedings. 3. Mr Hutchings submitted that there was privity between the defendants in the two proceedings, the Health Administration Corporation and the South Western Sydney Health District, as both were agents of the Crown. 4. The Health Administration Corporation is governed by the Health Administration Act 1982. Section 9(2)(f) of that Act provides that the Corporation "is, for the purpose of any Act, a statutory body representing the Crown." The second defendant, South Western Sydney Local Health District, is subject to the Health Services Act 1997. Section 22(1)(e) of that Act provides that a local health district does not represent the Crown. 5. Mr Hutchings referred to the decision of Clarke JA (with whom Priestley and Cripps JJA agreed) in Mounsey v Findlay (1993) 32 NSWLR 1. That decision involved an examination of s 9(2)(f) of the Health Administration Act and s 11(1)(e) of the Area Health Services Act 1986, the predecessor of the Health Services Act. That provision is in the same terms as s 22(1)(e) of the current Act. At issue in the case was whether the respondent, who was employed by an area health service, was "employed in the service of the crown" for the purpose of the legislation governing the Government and Related Employees Appeal Tribunal (GREAT). By a process of reasoning which is not relevant for the present purposes, Clarke JA concluded that he was. Nevertheless, his Honour said (at 6) that s 11(1)(e) of the Area Health Services Act "represents a clear expression of a legislative intention that area health services are not servants or agents of the Crown." 6. Mr Sheldon SC, who appeared with Mr Khandar for the plaintiff, relied on that observation of Clarke JA for present purposes, submitting that that is a sufficient answer to Mr Hutchings' argument on this issue. Moreover, he pointed out that s 9(2)(f) of the Health Administration Act characterises the Corporation as a body representing the Crown not for all purposes but "for the purpose of any Act." He argued that the MVA proceedings did not involve any legislation, noting that in those proceedings the Health Administration Corporation was alleged itself to owe a duty of care to the plaintiff. The plaintiff did not rely upon agency between the Corporation and the driver. 7. Mr Sheldon's submissions should be accepted. I am not persuaded that there is relevant privity between the defendants in the two proceedings. 8. In any event, I accept Mr Sheldon's submission that a finding that the motor vehicle accident caused the injury to the left leg is not legally indispensable to the outcome of the MVA proceedings. To use the expression in the passage from the judgment of Burchett J in Effem Foods which I have quoted, that matter was not necessarily decided by that judgment. The left leg injury was not the only injury particularised in those proceedings. The consent judgment concluded the issues of duty, breach and damage, but not the issue of damages, that is, the quantification of that damage. Indeed, when one considers the medical reports considered by Dr Marsh for his assessment and the reports subsequently obtained, the experts have not spoken on this issue with one voice. As Mr Sheldon put it in written submissions, the nature and extent of the harm suffered was not necessarily decided by the consent judgment. 9. Accordingly, I am not persuaded that this matter is res judicata or gives rise to an issue estoppel. 10. Alternatively, Mr Hutchings submitted that, because of the disposition of the MVA proceedings, the pursuit of the present proceedings would be an abuse of process. The abuse alleged was that identified in Walton v Gardiner (1993) 177 CLR 378, in the plurality judgment at 393: "… proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings." 1. Mr Hutchings also cited a passage from the judgment of Barrett JA, with whom Beazley P agreed (Basten JA in dissent but not on this issue), in Liao v State of New South Wales; Zhang v State of New South Wales [2014] NSWCA 71 at [169] - [171]: "169. Although earlier findings of fact are unavailable for the purpose of proving those facts in subsequent litigation, a court may regard unwillingness to accept findings in earlier litigation as indicative of abuse of process. The decisions in Reichel v Magrath (1889) 14 App Cas 665 and, more recently, Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; (2001) 53 NSWLR 198 illustrate the point. In each of those cases, a person whose earlier claim as plaintiff had been dismissed sought to set up a like case on the same facts in subsequent litigation with another party and thereby to re-litigate issues that had already been decided adversely to the person. In Reichel v Magrath, a clergyman failed in litigation he brought against a bishop to establish his entitlement to a benefice; and, when later sued by a third party claiming the benefice adversely to him, sought to defend on the basis of the asserted entitlement that had been rejected by the court in the first action. In Rippon v Chilcotin Pty Ltd, a person brought successive actions against different defendants alleging that certain company accounts were misleading or deceptive and that he had relied on them to his detriment. The claim of detrimental reliance determined adversely to him in the first proceeding was asserted again in the later proceeding against another party. That was held to involve abuse of process. 170. In both these cases, the court intervened in the later action to protect the integrity of its proceedings on a basis stated thus by Lord Halsbury LC in Reichel v Magrath (at 668): '[I]t would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again ... [T]here must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure.' 171. In Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, French CJ (at [33]) described Reichel v Magrath as 'a long standing example of a re-litigation case decided on abuse of process grounds, rather than on the basis of res judicata or issue estoppel'." 1. Mr Hutchings also referred to the more recent decision of the Court of Appeal in Benton v QBE Workers Compensation (NSW) Ltd [2015] NSWCA 101, where the summary dismissal of proceedings as an abuse of process was upheld. The circumstances of that case were significantly different from the present case but, as is apparent from the judgment of Ward JA (with whom Meagher JA and Adamson J agreed) at [61] – [88], it involved an application of the principles considered in Liao. 2. In oral argument, Mr Hutchings submitted that it could not be said that the plaintiff had not received the whole of the compensation he was entitled to receive in relation to his left leg condition. He argued that there was nothing to support any attribution of blame to the defendants in the present proceedings that had not already been attributed to the defendants in the MVA proceedings. 3. This submission also must be rejected. As I have said, while there may have been a body of evidence for the proposition that the motor vehicle accident was the indirect cause of the injury to the left leg, the consent judgment did not necessarily determine that issue. Moreover, even if it be accepted that the judgment involved a finding of a link between the accident and the left leg condition, it did not determine the extent to which the negligence of the defendants in the present proceedings contributed to that condition. As Mr Sheldon put it in written submissions, it is a matter of evidence whether and, if so, to what extent, there is a correlation between the injuries and disabilities suffered in the motor vehicle accident and those visited upon the plaintiff by the alleged clinical negligence. There is no necessary finding about those matters. 4. It cannot be said, to adapt the formulation in Walton v Gardiner referred to, that the maintenance of the present proceedings would be unjustifiably vexatious and oppressive for the reason that it is sought to re-litigate an issue which has already been disposed of by the MVA proceedings. 5. The same fate must befall Mr Hutchings further alternative submission, invoking the notion of double satisfaction. This was addressed by the High Court in Baxter v Obacelo Pty Ltd [2001] HCA 66, 205 CLR 635. That was a case involving joint tortfeasors, the issue being whether the plaintiff could continue proceedings against one of those tortfeasors after having reached a settlement with the other. It involved an examination of s 5(1)(b) of the Law Reform (Miscellaneous Provisions) Act 1946, and the facts were very different from the present case. 6. What is relevant for present purposes is the statement by Gleeson CJ and Callinan J of the notion of double satisfaction where settlement has been achieved between the plaintiff and one of several tortfeasors, whether joint or concurrent. Their Honours said at [48] (656 - 7): " … If it would be unconscientious of the plaintiff to pursue a claim against another tortfeasor, or if the amount received pursuant to the settlement is, or ought to be regarded as, recoupment of the whole of the plaintiff's loss or damage, then action against another tortfeasor, whether in separate proceedings, or, where the other tortfeasor was a party to the original proceedings, by way of continuation of those proceedings, must fail. If, either expressly or by implication, a settlement agreement manifested a common intention of the parties to the agreement that the settlement sum was to be paid and received in full satisfaction of the rights of the plaintiff, against the defendant or anyone else, in relation to the loss or damage incurred, then, for both of those reasons, a further claim would fail. The most obvious way to negative such an intention would be by an express reservation of rights. While the effect of the settlement agreement, in the ordinary case, will be the most significant factor bearing upon either or both of the two possible grounds mentioned, it is not possible to eliminate any other circumstances which, in a given case, could indicate unconscientiousness, or loss of the subject matter of a claim. Bearing in mind the obligation to give credit for the amount already recovered, a defendant who could show that the actual loss or damage incurred by the plaintiff did not exceed the amount already recovered would succeed in any event. Leaving aside questions of onus of proof, to say that there is no such excess is simply to say that the loss has been fully recouped." 1. In the present case there is not a settlement agreement in the MVA proceedings from which the intention of the parties about the entitlement of the plaintiff to pursue the present defendants could be divined. However, for the reasons I have given, it cannot be said that the consent judgment should be regarded as recoupment of the whole of the plaintiff's loss or damage arising from the left leg condition. Accordingly, it would not be unconscientious of the plaintiff to pursue the present proceedings. Whether there has been recovery in respect of the left leg condition, either wholly or in part, in the MVA proceedings would be an issue at the trial. 2. Finally, I should record Mr Sheldon's supplementary submission that the certificate of the medical assessor, Dr Marsh, provides conclusive evidence that the motor vehicle accident was not the cause of the left leg injury, relying on s 61(2) of the MAC Act. This issue was raised at the hearing of the motion and was the subject of supplementary submissions. I need say no more from that, in the light of the supplementary submissions of Mr Hutchings, this issue is not as simple as Mr Sheldon would have it. However, as I have decided that the motion must be dismissed for reasons I have already given, it is neither necessary nor desirable that I determine that question. 3. The motion is dismissed with costs. ********** Amendments 29 March 2016 - On coversheet R Sheldon SC appeared with P Khandhar for plaintiff/respondent. [14] express changed to expressed [24] Baratt JA changed to Barrett JA 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. Decision last updated: 29 March 2016