Wells v Green [2002] ACTSC 38 (17 May 2002)

Last Updated: 11 June 2002

Stuart Wells v Wayne John Green [2002] ACTSC 38 (17 May 2002)

CATCHWORDS

LIMITATION OF ACTIONS - contribution proceedings within time - limitation period expires - whether third parties can be joined as defendants

Limitation Act 1985 s. 21, s. 36, s. 36(2)

Law Reform (Miscellaneous Provisions) Act 1955

Supreme Court Rules O61A r 1(z)

Archie v Archie; Smythe Third Party (1980) QldR 546

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541

Klobucar v Neocoat Pty Ltd [1999] ACTSC 96

Nelson v Council of the Shire of Wyong (1992) Aust Torts Reports 81.177

Noja v Civil and Civic [1990] FCA 135; (1990) 26 FCR 95

Weldon v Neal (1887) 19 QBD 394

No. SC 495 of 1991

Coram: Master T. Connolly

Supreme Court of the ACT

Date: 17 May 2002

IN THE SUPREME COURT OF THE )

) No. SC 495 of 1991

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: STUART WELLS

Plaintiff

AND: WAYNE JOHN GREEN

Defendant

AND: MMB PTY LTD

Second Third Party

AND: DIAT HOLDINGS PTY LTD

Third Third Party

ORDER

Coram: Master T. Connolly

Date: 17 May 2002

Place: Canberra

THE COURT ORDERS THAT:

1. The plaintiff's notice of motion of 22 February 2002 be dismissed

1. This is an application by the plaintiff for leave to join the second and third third parties as defendants in this action. The application was heard on 18 April 2002, and the parties were given leave to file supplementary submissions. The last of these was filed on 13 May 2002.

2. The substantive action is a claim for damages for personal injuries arising from a motor vehicle accident which occurred on 13 July 1990.The plaintiff sustained very serious injuries in this accident, which occurred when the defendant, who was driving the plaintiff's motor vehicle, struck street lighting in Parkes in the Australian Capital Territory. The plaintiff's injuries have been profound, and the litigation has been conducted on his behalf by his parents. It is common ground that the plaintiff and the defendant had been consuming alcohol on the night of the accident.

3. Proceedings were commenced by writ of summons on 16 July 1991. An appearance was entered in January 1998 and a defence was filed in May 2000. It was common ground that these delays were consented to by the plaintiff, whose legal advisers were in contact with the insurer of the defendant. In May and July of 2000 the defendant issued third party notices to companies who conducted licensed premises in 1990, and who it alleged were negligent in serving alcohol to the plaintiff and the defendant, and allowing them to leave licensed premises in an intoxicated state. There was some confusion as to the appropriate identity of the companies, and one third party notice is no longer relevant.

4. The third third party was at the relevant time, being the day of the accident, the licensee of licensed premises at Fyshwick in the Australian Capital Territory known as the Molonglo Tavern. The second third party was at the relevant time the licensee of licensed premises at Manuka in the Australian Capital Territory known as El Rancho.

5. The third party claims were brought just within the limitation period laid down by the Limitation Act 1985 in respect of contribution claims pursuant to the Law Reform (Miscellaneous Provisions) Act 1955, which is the basis for the third party claims. The Limitation Act provides in s 21 that such a claim must be brought before four years after the expiration of the original cause of action, or two years after entry of judgment or settlement of the original cause of action, whichever occurs first. As this cause of action arises from a motor vehicle accident in on 13 July 1990, the ordinary limitation period for the cause of action expired on 13 July 1996, and so the limitation period for the bringing of a third party claim expired on 13 July 2000. The claim against the third third party was brought on 11 July 2000, and the claim against the second third party was brought on 23 May 2000.

6. The plaintiff now seeks leave pursuant to s 36 of the Limitation Act 1985 to extend the time to bring an action against the second and third third parties, joining them as defendants to the action. The proposed amended statement of claim was annexed to an affidavit by the plaintiff's solicitor. It alleges against both DAIT Holdings Pty Ltd and MMB Pty Ltd that they failed to have in place a system to prevent under age persons from obtaining liquor, and to have in place a system to prevent intoxicated persons from obtaining liquor, and failed to have in place a system to ensure intoxicated persons safely left the premises. It should be noted that the defendant was not yet 18 at the time of the accident. There was material in an affidavit that indicated that the defendant had with him at the time a drivers license in the name of a person who was 18.

7. This application was opposed by both third parties. The principles applicable to an application to amend proceedings to add a new defendant after the expiration of a limitation period, the rule in Weldon v Neal (1887) 19 QBD 394, were set out by Higgins J in Klobucar v Neocoat Pty Ltd [1999] ACTSC 96. It was common ground, there as here, that an order extending time is necessary in order to avoid an amendment of the pleadings being futile.

8. The court may extend a limitation period in a personal injuries claim if it is "just and reasonable" so to do (Limitation Act 1985 s 36(2)). This is a power that may be exercised by the Master (Supreme Court Rules O61A r 1(z)). The Limitation Act provides guidance as to the exercise of the discretion conferred by s 36(2) as follows:

"s36(3) In exercising the powers conferred on it by subsection (2), a court shall have regard to all the circumstances of the case including (without derogating from the generality of the foregoing) the following:

a) the length of and reasons for the delay on the part of the plaintiff;

b) the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant;

c) the conduct of the defendant after the cause of action accrued to the plaintiff, including the extent (if any) to which the defendant took steps to make available to the plaintiff means of ascertaining facts which were or might be relevant to the cause of action of the plaintiff against the defendant;

d) the duration of any disability of the plaintiff arising on or after the date of the accrual of the cause of action;

e) the extent to which the plaintiff acted promptly and reasonably once he or she knew that the act or omission of the defendant, to which the injury of the plaintiff was attributable, might be capable at that time of giving rise to an action for damages;

f) the steps (if any) taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice he or she may have received.

9. The respondents to this application filed affidavits setting out material relevant to the question of prejudice. Mr McGrath, Director of MMB Pty Ltd the second third party, deposed that the company had been the licensee of the El Rancho premises in 1990, but had disposed of the business in 1993. He said that there are no records in existence relating to any incident on or about 13 July 1990. He said that staff employed in July 1990 are not known to him. A company of course is required to maintain employment records for taxation periods for a certain period, but this period has expired, so no criticism can be made of the company for disposing of the 1990 records.

10. Ms Blue, a solicitor for DAIAT Holdings Pty Ltd, the third third party, deposed that the company was placed into receivership in 1990 and de registered in 1993. She said that upon service of the third party proceedings her firm sought to investigate the incident. These investigations failed to discover any records relating to the period such as wage books etc. The former directors were identified, and through them a Mr Swale was identified as the person who provided bar services. He could not recall the names of other bar staff. Ms Blue's affidavit also contained copies of police records at the time. This contained a statement from a Ms Clarke, who said that she was part of a group of young people who where drinking at the Molonglo Tavern, including the plaintiff and the defendant. She said that after they decided to leave those premises and go to Manuka she formed the view that the plaintiff and the defendant were both too intoxicated to drive, and she took the plaintiff's car keys and drove the plaintiff and the defendant in the plaintiff's car to Manuka. Another statement by Ms Music also states that Ms Clarke drove the plaintiff and the defendant from the Molonglo Tavern. Ms Blue deposes that the investigator was unable to locate Ms Clarke or Ms Music, both of whom would be important witnesses for DAIAT Holdings, as their police statements would indicate that the plaintiff and the defendant, who were by then intoxicated, did not drive from the premises themselves but were driven by a sober driver.

11. In Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 McHugh J said at 555

"Legislatures enact limitation periods because they make a judgment, inter alia, that the chance of an unfair trial occurring after the limitation period has expired is sufficiently great to require the termination of the plaintiff's right of action at the end of that period. When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case."

12. It seems to me that the respondents in this matter have proved that there would be prejudice to them in seeking to meet the allegations made against them at trial. They do not know and can not find out who were the bar staff on duty on the night in question, and they do not know and can not find out what arrangements were in place in relation to the service of alcohol to intoxicated persons or minors, or what arrangements were in place in respect of persons leaving the premises. In the case of DAIAT Holdings Pty Ltd, they have further established that they have police statements from persons who were present at the time of the incident some twelve years ago that would indicate that the plaintiff and the defendant left the premises in the company of a sober adult who drove the plaintiff's vehicle, and that those witnesses cannot now be located.

13. Mr McDonald the solicitor for the plaintiff in his affidavit states that it did not occur to the plaintiff and his family or his legal advisers to join the taverns to these proceedings until the defendant had conducted enquiries and issued the third party notices in 2000. In evidence, however, Mr McDonald said that after swearing that affidavit he reviewed the file carefully, and located a letter to the former solicitor at his firm who had carriage of the matter from the plaintiff's father dated 25 March 1993. The letter states in part :

"With regard to your suggestion at our last meeting re pursuing a claim against the business which sold alcohol to Stuart immediately prior to the accident, Audrey and I have given careful consideration to this proposal and have decided that we do not wish to pursue this matter."

14. The letter then goes on to say that an inquiry agent should not proceed to make enquiries about the circumstances of the service of alcohol, and requests return of funds apparently lodged with the solicitors for this purpose.

15. It seems to me that this letter establishes that the plaintiff was properly advised about the availability of a potential cause of action against the sellers of alcohol, and decided against bringing such an action. This decision also involved not proceeding with enquires into the circumstances of such sale, enquiries which, if they had taken place in early 1993 less than three years after the accident, may well have established facts which today are lost to time. Where a plaintiff has received proper advice about the availability of a cause of action within time, and has made a decision not to pursue it, it is difficult to then seek the exercise of a discretion to allow the plaintiff to revisit that decision and commence the action after the limitation period has expired. Where the decision not to proceed also involved a decision not to compile evidence or undertake enquires, this factor also weighs against the exercise of the discretion to extend time.

16. I should point out that Mr McDonald acted most properly and responsibly in disclosing the existence of this letter to the Court and the respondents. There has been considerable public concern recently following a finding in Victoria that a firm of solicitors concealed certain material, and it seems to me that, by way of contrast, the conduct of this solicitor complies fully with the legal and ethical duties owed to the Court and the community by a member of the legal profession. It is the standard of conduct that this Court expects, and generally finds, from members of the Canberra profession.

17. If this was an application to join the respondents to these proceedings in the absence of the third party proceedings it seems to me that I would safely come to the conclusion that the prejudice to them is such that it would not be possible for a fair trial to take place. The plaintiff argues, however, that as the two companies are in any event involved in the proceedings by reason of the third party notices that were served within time, there is no additional prejudice to them in being brought in as defendants.

18. While this is not a factor set out in s 36(3) I am satisfied that the section is not meant to be exhaustive, and it seems to me that this is an argument that can properly be considered. Mr Mildren referred me to the decision of the Full Court of the Federal Court, on appeal from this Court, in Noja v Civil and Civic [1990] FCA 135; (1990) 26 FCR 95 where in considering an application for an extension of time for a widow to bring a claim pursuant to the Compensation (Fatal Injuries) Act 1968 the Court (Sheppard, Neaves and Miles JJ) said

"a further important factor is that his Honour gave no weight at all to the fact that the action in so far as it is brought on behalf of and for the benefit of the children of the deceased will proceed against the respondents and will raise, in relevant respects, the same issues as would arise if the action were allowed to proceed on behalf of, and for the benefit of the appellant. The same issues will also arise under the claims for contribution made against the respondents by other defendants in the action." (at 110)

19. The fact that proceedings raising similar issues was properly on foot was also a factor which was considered relevant to an extension of time application by Giles J in Nelson v Council of the Shire of Wyong (1992) Aust Torts Reports 81-177. The substantive proceedings in that case involved a claim by a home owner for damage due to subsidence of land, with the defendants being the council, the adjoining landowners, a contractor who laid pipes under the land and the builder. Various claims for contribution were issued by the council and the builder, and the adjoining landowners sought leave to bring contribution proceedings against the contractor and the builder. Giles J granted leave, saying

" In the present case I consider that leave should be given.. The questions of the liability in tort of each of the second defendants, the third defendant and the fourth defendant will have to be determined in the case as it presently stands. The third and fourth defendants will not be prejudiced by having thrust upon them the determination of new questions of fact, and it should not come as a surprise to them that the second defendant seeks contribution: a claim for contribution would be expected by any defendants in the position of the second and third defendants."

20. In Archie v Archie; Smythe Third Party (1980) QldR 546 the Full Court of the Queensland Supreme Court allowed a third party to be joined as a defendant after the expiration of the limitation period, finding that notice of such a course had been given before the expiration of the limitation period, and that there was no prejudice.

21. While I am satisfied that this is a factor that can be taken into account in deciding whether to grant an extension of time, I am not satisfied that it is a factor which overrides a finding of actual prejudice.

22. In Noja the Court had made the observation, also at 110, that

"the prejudice to the respondents did not extend beyond the general prejudice which would result from their being deprived of a defence under the Limitation ordinance to which they would otherwise be entitled."

There was no express finding of prejudice in Nelson's case. While Noja was decided before Brisbane South Regiaonal Health Authority v Taylor, this seems to me to be consistent with McHugh J's description of presumptive prejudice. In the present case, the respondents have put on evidence which satisfies me that there is actual prejudice. In Archie v Archie the majority held that the third party should only be joined as a defendant in "special circumstances" (at 561), and found that joinder in that case would lead to no detriment to the third party (at 566).

23. I accept that the presence of the respondents to an application to be joined as defendants as third parties is a factor that can be relevant to the exercise of the discretion contained in s 36 of the Limitation Act 1985, but it seems to me that Brisbane South Regional Health Authority v Taylor stands as authority for the proposition that significant prejudice is fatal to an application to exercise the discretion, and the evidence in this case has established such prejudice. As McHugh J said in that case

"the justice of a plaintiff's claim is seldom likely to be strong enough to warrant a court reinstating a right of action against a defendant who, by reasons of delay in commencing the action, is unable to fairly defend itself or is otherwise prejudiced in fact ..."(at 555).

24. Both defendants have no records of the time of the incident, and no ability, I am satisfied, to bring witnesses going to their practices as to sale of alcohol, identification of minors, and control of intoxicated persons. It is true that they are both involved in the litigation by reason of the defendant's contribution notices. But the issues there may of course be different to the issues confronting the respondents if they are joined as defendants. The defendant has pleaded a defence, including voluntary assumption of risk, and of course if successful this would mean that no contribution issue would arise. It is conceivable that such a defence could be made out by the first defendant against the plaintiff, but could not be made out by the respondents if they were joined as defendants. The argument for the plaintiff is that an order extending time would not make the respondents much worse off than they already are due to the commencement of the contribution proceedings within, but just before, the end of the limitation period. This approach, it seems to me, falls into the error which McHugh J said the Court of Appeal fell into at 554 and 555.

25. Counsel for the second third party argued in supplementary submissions that the potential liability of the Third Parties as Third parties is not the same nor co-extensive with the potential liabilities of the companies as Defendants. The proposed amended pleadings make it clear that it is proposed to allege that the companies, by providing alcohol, caused an impairment to the Plaintiff's ability to make sound judgments in respect of his own safety. Mr Pappas argues that, if the allegations could be made out, the companies might be held liable even where a defence of volenti non fit injuria succeeded on the Defendant's case. Mr Pappas put it thus:

"put another way, if the plaintiff freely and voluntarily with full knowledge of the nature and extent of the risk he ran impliedly agreed to incur that risk but did so because his capacity to make a judgment in that regard was impaired by the over ingestion of liquor the presently named Defendant would escape liability but MMB Pty Ltd might not"

26. It seems to me that this reasoning is sound, and it follows that, as the liability the companies would potentially incur as defendants is not coextensive as the potential liability they face as Third Parties, the companies would be prejudiced if joined out of time as Defendants.

27. The plaintiff of course has on foot his action against the defendant, and so is not denied a remedy.

28. The plaintiff's application to bring in the second and third third parties as defendants should be dismissed. I will hear the parties as to costs.

I certify that the preceding twenty eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master, Mr T Connolly

Associate:

Date: 17 May 2002

Counsel for the Plaintiff: Mr R Mildren

Solicitor for the Plaintiff: Vandenberg Reid

Counsel for the Defendant: Mr C Blain

Solicitor for the Defendant: Abbott Tout Harper Blain

Counsel for the Second Third Party: Mr J Pappas

Solicitor for the Second Third Party: Howes & Kaye

Counsel for the Third Third Party: Mr A D M Hewitt SC

Solicitor for the Third Third Party: Phillips Fox

Date of hearing: 18 April 2002

Date of judgment: 17 May 2002