Negligence claim against solicitor is a relevant factor in a limitation period extension application, part II

I posted about this issue, as it arose in a 2007 decision of Justice Forrest, here. Since May 2003, certain Victorian actions for personal injury must be brought within 3 years after the injury was discovered to be attributable to the defendant’s negligence, or 12 years after the allegedly negligence conduct, whichever comes first.  Previously the limitation period was six years.  The period may be extended by the Court. In Delai v Western District Health Service [2009] VSC 151, Justice Beach explained why he granted the medical negligence claimant’s application.  The defendants argued that she had good prospects of suing her solicitor for negligently allowing the limitation period to go by, but that was not a sufficiently cogent consideration to get in the way of the success of the application. I reproduce the whole of the relevant discussion from the judgment:

’26 In this application, the defendants raise the issue of the plaintiff’s prospects of successfully suing her solicitor for negligence in relation to the mistake he made concerning the time within which he had to apply for an extension of the period of validity of the County Court writ. Accordingly, it is necessary to consider the principles to be applied in relation to this issue. Prior to the Full Court’s decision in Repco Corporation Limited v Scardamaglia,[53] there was a reluctance in this Court to express any concluded view about the relevance of the consideration of alternative causes of action that might be open to a plaintiff who failed to obtain an extension of the limitation period. In Scardamaglia, Smith J[54] said:[55]

“In the present case, if the section does require consideration of the possibility of Mr Scardamaglia’s right to sue his legal representatives, I am not persuaded that that possibility is something that should affect my view that on balance it would otherwise be just and reasonable to exercise the discretion in his favour. While it might be said that on the evidence before the Court the rights against the legal representatives appear to be strong, there is no admission of negligence by the legal representatives and the issues that may arise in any such action have not been investigated or pursued fully in these proceedings. In any event, confining Mr Scardamaglia to an action against the legal representatives would carry with it its own prejudice. He would be able to seek compensation not in respect of his injuries but for his loss of his right to sue Repco. He would find himself having to prove two cases – the original case against Repco and a further case, the case against the legal representatives. The proceeding would, therefore, be more time consuming and more costly. There would also be a real risk, that, if successful, any sum recovered would be less than any sum that he would have recovered in the original proceeding; for any damages awarded would be for the lost chance to recover damages in the proceedings against Repco (Johnson v Perez (1988) 166 CLR 35; Nikolaou v Papasavas, Phillips and Co [1989] HCA 11; (1988) 166 CLR 394).

27 In Tsiadis [v Patterson [2001] VSCA 138; (2001) 4 VR 114] the Court of Appeal resolved the question, concluding that it was appropriate to determine in an application under s 23A to have regard to the plaintiff’s ability to recover damages from a former solicitor where that solicitor’s negligence had made the application necessary. This, of course, does not mean that in every case where there is the possibility of successfully bringing proceedings against a solicitor, that the discretion contained in s 23A (or in this case s 23K) should be exercised against the plaintiff. As Forrest J said in Gordon v Norwegian Capricorn Line (Australia) Pty Limited:[56]

“It follows that a potential claim against former solicitors is a relevant consideration, but that the question of what weight is to be given to it depends on the circumstances; a court must be careful in ascribing weight to the prospect of such a claim, given that the full circumstances surrounding such a claim may not be known. A Court may also take into account the prejudice to the plaintiff in prosecuting the claim against the solicitors as opposed to prosecuting the claim that is potentially statute barred. That prejudice may take several forms — diminution in the value of the claim as well as any added costs and the complexity of the proceeding against the former solicitor.”

28 Before turning to an analysis of the matters required to be taken into account by s 27L and the competing considerations in the circumstances of this case, it is necessary to say something concerning the strengths of a suggested possible cause of action the plaintiff might have against her solicitors.[57]

A potential claim by the plaintiff against her solicitors

29 Substantial reliance is placed by the defendants upon the fact that the plaintiff has a cause of action against her solicitors in which (they say) negligence has been admitted. The solicitor (Mr [C]) is described by the defendants as “plainly at fault” and having admitted that it was his “ineptitude that caused the plaintiff to be in [her] current position”.[58] In summary, the defendants contend that Mr [C] was negligent when he overlooked the order of Judge Duggan and thereby wrongly believed he had until 4 November 2007 to file the statement of claim and serve the writ. The defendants describe the potential claim against Mr [C] as “extremely strong”.[59] However, closer analysis is required.

32 With the benefit of hindsight, it can be seen that the preferable course was, knowing a report would be received shortly, to serve the County Court writ. However, Mr [C] obviously did not have the benefit of hindsight. His decisions fall to be examined as the facts unfolded. If the plaintiff’s present application for an extension of time under s 27K fails, she certainly has an arguable claim in negligence against Mr [C] in relation to the failure to serve the County Court writ on or before 3 October 2007. However, such a case would not be (to use the words of Senior Counsel for the plaintiff) “a lay down misere”. As Megarry J said in John v Rees:[63]

“As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; of unanswerable charges which, in the event, were completely answered; of inexplicable conduct which was fully explained; of fixed and unalterable determinations that by discussion, suffered a change.”

34 In this case there is no relevant admission of negligence on the part of Mr [C] or the potential defendants to an action by the plaintiff against her solicitors. That is, there is no admission by Mr [C] that he should have served the writ before he obtained the report of Associate Professor Marshall, or that he negligently took too long to investigate and prosecute the plaintiff’s proceeding. Whilst it might be said that the plaintiff’s prospects in such a case are reasonable, in reality there is insufficient material before me to enable a definitive conclusion as to the plaintiff’s likely prospects of success in such a proceeding. While the existence of a potential claim is relevant, it is not, in my view, a matter to be accorded great weight in the performance of the synthesis required by s 27K. Further, there are two additional reasons why only limited weight should be accorded to this matter. They are:

(a) First, any damages recovered from the plaintiff’s solicitors would only be for the loss of the right to sue the current defendants rather than damages for the injuries actually sustained.

(b) Secondly, there are added costs and an added complexity associated with bringing a new claim against the plaintiff’s solicitors, rather than the present proceeding.[64]’

[53] [1996] 1 VR 7.

[54] With whom Brooking and J.D. Phillips JJ agreed.

[55] At p.15.

[56] [2007] VSC 517 at paragraph [86].

[57] And in particular Mr Cramp.

[58] See paragraph 5(h)(ii) of the second defendant’s outline of submissions dated 17 April 2009 and paragraph 32 of the first defendant’s outline of submissions dated 16 April 2009.

[59] See for example paragraph 32 of the first defendant’s outline of submissions dated 16 April 2009.

[60] See Savcor Pty Ltd v Catholic Protection International APS [2005] VSC 213.

[61] Reasons of Judge Wodak at paragraph [13].

[62] See Savcor, supra and the reasons of Judge Wodak at paragraph [25].

[63] [1970] 1 Ch 345 at 402.

[64] See generally Gordon v Norwegian Capricorn Line (Australia) Pty Limited [2007] VSC 517 at paragraph [86].

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