Commonwealth of Australia v Covington-Thomas [2005] NSWCA 299 (1 September 2005)

CITATION: Commonwealth of Australia v Covington-Thomas [2005] NSWCA 299

FILE NUMBER(S):

40769/04

HEARING DATE(S): 1 September 2005

JUDGMENT DATE: 01/09/2005

PARTIES:

Commonwealth of Australia - Claimant/Appellant

Peter Norman Covington-Thomas - Opponent/Respondent

JUDGMENT OF: Giles JA Tobias JA Campbell AJA

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 21243/95

LOWER COURT JUDICIAL OFFICER: Dowd J

COUNSEL:

R Williams QC & M Dicker - Claimant/Appellant

G Melick SC & W Walsh - Opponent/Respondent

SOLICITORS:

Australian Commonwealth Solicitor - Claimant/Appellant

James Taylor, Myrtleford, Victoria - Opponent/Respondent

CATCHWORDS:

Amendment - judge's discretion miscarried, but further amended pleading provided and leave granted to file it - costs of application for leave to appeal - no question or principle. ND

LEGISLATION CITED:

DECISION:

Grant leave to appeal. Direct notice of appeal be filed within seven days. Appeal allowed. Amended statement of claim filed pursuant to orders of Dowd J and points of claim similarly filed struck out. Opponent granted leave to file further amended statement of claim a copy of which is now to be marked for identification 1 and placed with the papers. Opponent should pay the claimant's costs of the application for leave to appeal up to and including 26 August 2005. No order for the costs thereafter incurred, to the intent that each party shall bear his or its costs. Opponent have a certificate under the Suitors Fund Act if otherwise qualified.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40769/04

SC 21243/95

GILES JA

TOBIAS JA

CAMPBELL AJA

Thursday, 1 September 2005

COMMONWEALTH OF AUSTRALIA v COVINGTON-THOMAS

Judgment

1 GILES JA: The collision between HMAS Voyager and HMAS Melbourne on 10 February 1964 has produced much litigation. This is a facet of one of the cases it generated.

2 The opponent was an Able Seaman on the Melbourne. He claims to have suffered psychiatric injury, with consequential physical effects, as a result of the collision. Having obtained an extension of time, he brought proceedings against the claimant in 1995. In 2003 he applied for leave to amend his statement of claim. There were hearings before Dowd J spread over a number of days in the latter part of 2003. After reserving his decision, on 17 August 2004 his Honour granted leave ”on conditions" involving the filing of points of claim and points of defence.

3 The claimant applied for leave to appeal from his Honour's decision. The application for leave was listed for hearing today as a so-called wrapped up application, that is, with full submissions as if on appeal. We had the benefit of written submissions from the parties, and when the matter was called on for hearing we indicated a tentative view that the decision of Dowd J was open to doubt and may well warrant the grant of leave and the upholding of the appeal. We invited the opponent to consider propounding a further amended statement of claim which might overcome some of the difficulties asserted against him.

4 That brought the information that on 9 August 2005 a further amended statement of claim had been provided to the claimant, with the request that there be consent to its filing. Matters developed from there to the point where the opponent was content to maintain his claim upon the further amended statement of claim, and after its counsel obtained instructions the claimant indicated that it would not take any objection to its form, particulars having been requested and provided, and would not apply to strike out the new para 7 material to the application for leave to appeal.

5 That appeared to us to be a very sensible outcome which the Court should make orders to implement, but there was left the question of costs of the application for leave to appeal. It is necessary to explain a little more before returning to that matter.

6 The 1995 statement of claim was in fairly conventional form, alleging in six paragraphs a duty of care and breach of duty in the happening of the collision and the suffering of loss and damage as a result.

7 The amended statement of claim with which Dowd J was concerned, at least the version which came into existence in October 2004 in the course of the application before his Honour, proposed additional paras 7 to 11. Paragraphs 7 to 9 took the form of alleging a duty of care and breach of duty in the period following the collision, essentially in failing to provide the opponent with psychological counselling and in allocating him to service in the Vietnam conflict in which it was alleged he was exposed to events exacerbating his psychiatric injury. It was then alleged in para 10 that the breach of duty "aggravated the Plaintiff’s injury, loss and damage, referred to in paragraph 6 and the Plaintiff claims aggravated damages." Paragraph 11 then alleged that the conduct detailed in paras 7 to 9 was in contumelious disregard of the rights and of the health and safety of the opponent and that the opponent was entitled to exemplary damages.

8 The application before Dowd J involved a number of issues. The first was whether the amended statement of claim was defective because it alleged a further cause of action which the opponent was not entitled to bring. The second was whether aggravated damages could be claimed, as at least in terms they were, in consequence of negligently inflicted psychiatric injury. The third, although perhaps it was not to the fore, was whether exemplary damages could be claimed. As to both aggravated damages and exemplary damages, it fourthly seems to have been in question whether or to what extent the post-collision events in paras 7 to 9 could be taken into account for those purposes.

9 Early in the course of the hearings before Dowd J the opponent emphatically disclaimed that he relied on a further cause of action. At a later point he disclaimed any claim to aggravated damages. But he did not propound an amended document which changed the framing of the amended statement of claim in accordance with those disclaimers, and a claim to exemplary damages appears to have been left alive.

10 Dowd J's decision-making, with respect, was not satisfactory. His Honour really did not determine the issues before him, and there is some difficulty in seeing what he decided. However, while expressing considerable dissatisfaction with the amended statement of claim, his Honour did not refuse leave to amend in the respects of which the claimant complained or direct further amendment in order to reflect the opponent's disclaimers. Rather, his Honour granted leave to file the amended statement of claim “on conditions" that would "complement" it, relevantly that the opponent file and serve points of claim "setting out succinctly and in a comprehensive and adequate manner limited to short sentences or phrases expressed in point form of matters being claimed by the Plaintiff in these proceedings." His Honour's order included that "[t]he points of claim were not intended to replace a formal pleading in this matter."

11 The tentative view to which I earlier referred, which I think it would be difficult to displace, included for my part that this left the proceedings in an entirely unsatisfactory state. The amended statement of claim would be on foot, saying what the opponent maintained it did not mean. What the opponent really did mean was obscure, but so far as to be found in the points of claim it was not to displace the pleading, which was to remain. At the time he made the orders, Dowd J did not know what the points of claim would say.

12 The points of claim which were in due course filed did not remove the unsatisfactory state; they compounded it. Although they made evident that the claims to aggravated and exemplary damages were abandoned, they contained a general assertion that the opponent relied on all matters set out in the amended statement of claim with the exception of the paragraph dealing with the exemplary damages. If the proceedings had gone to trial in the state in which they were left, in my opinion, there could only have been the greatest of confusion.

13 The opponent nonetheless submitted that leave to appeal would not have been granted, because his Honour's decision attracted the appellate restraint appropriate to a discretionary decision in a matter of practice and procedure. I think that counsel for the opponent implicitly accepted, with respect correctly, that there were difficulties in the decision of Dowd J and the regime which resulted from it, but it was submitted that the position would have become clear prior to or at the time of the trial by a further amendment or in the manner the trial was conducted. I do not think that is a reason for declining now to face the problems in the decision of Dowd J and the position which it generated. The opponent submitted that the points of claim made clear that the only matter left in contention was whether the amended statement of claim did allege a further cause of action and that, in the light of the emphatic disclaimer before Dowd J that the opponent relied on a further cause of action, no harm was done in leaving things as they were; hence leave to appeal was inappropriate and costs should not fall upon him.

14 I am unable to agree. In my opinion, the claimant was well entitled to apply for leave to appeal even after the filing of the points of claim, and the case for leave to appeal and setting aside Dowd J's orders on appeal was all but overwhelming. That points, in my opinion, to an order for costs such that the opponent should pay the costs of the application for leave, but subject to the qualification to which I now come.

15 The further amended statement of claim to which I earlier referred was sent by the opponent's solicitor under cover of a letter dated 9 August 2005. It deleted paras 7 to 11 and, apart from some other amendments which are not contentious, replaced them with a single para 7 in which it was alleged that the opponent’s injuries as earlier outlined "were aggravated by his overseas service in Vietnam."

16 This made clear that the claims of aggravated and exemplary damages were no longer maintained, and was apt to allege aggravation of the opponents injuries as something which could be taken into account as a matter of causation in working out what loss and damage was caused by the collision. Whether or not it was necessary to plead such a matter, no harm was done in pleading it and particulars were requested and provided which the claimant considered satisfactory.

17 The letter of 9 August 2005 sought the claimant's consent to the amendments and said, "This letter will be used on the question of costs of the forthcoming appeal." The particulars were requested by a letter of 15 August 2005, and were provided by a letter of 24 August 2005. The last mentioned letter explained the reason for the addition of para 7 by reference to the decision of State Government Insurance Commission v Oakley (1990) Aust Tort Rep 81-1003, and invited the claimant to agree with the law as set out in that case whereupon “the proposed amendments relating to aggravation are otiose and we would be content to remove the same." The claimant replied to this by a letter of 26 August 2005. Its solicitor said that it was inappropriate to attempt to agree the law, and rejected “any understanding as to the meaning or intent of the pleading”. The letter concluded, "If you are no longer pressing paras 7-11 of the amended statement of claim, considered and allowed by Dowd J and the subject of this appeal, you should so indicate. The appeal would then be allowed by consent with appropriate consent orders and subject to your client paying the costs of the appeal."

18 This letter was not a particularly appropriate response to the invitation to consent to the further amended statement of claim. It did not address the new para 7. That, however, was where matters were left until the application for leave came on for hearing today.

19 On behalf of the opponent it was submitted that the claimant could and should have consented to the further amended statement of claim on 26 August 2005, and that if it had done so at least the costs thereafter would not have been incurred. On behalf of the claimant it was submitted that it could only have been expected to consent on the basis that the opponent paid the costs to that time, as it had indicated although not with the necessary focus in the letter of 26 August 2005, and that there was no reason to think that the opponent would have agreed to that course. Rather, it was suggested, there was reason to think that the opponent would not have agreed: first, because exposure to the costs had not been recognised in the letter of 9 August 2005, and secondly, because an affidavit of the opponent's solicitor included that he considered that leave to appeal was unlikely to be granted. Each party submitted that the other should be ordered to pay his or its costs after 26 August 2005.

20 In my opinion, these circumstances repeated what appears to have earlier occurred, a failure in communication between the parties which cannot be sheeted home as the fault of one or the other but rather was a combined fault. Neither made his or its position sufficiently clear to the other. The need for the hearing, after the entirely appropriate although far too late steps to arrive at a sensible solution early last month, arose from both parties’ failures.

21 In the result, in my opinion the opponent should pay the claimant's costs of the application for leave to appeal up to and including 26 August 2005, and there should be no order for the costs thereafter incurred to the intent that each party shall bear his or its costs.

22 Orders should be made granting leave to appeal, together with the direction that the notice of appeal be filed within seven days. The appeal should be allowed. The amended statement of claim filed pursuant to the orders of Dowd J and the points of claim similarly filed should be struck out. The opponent should be granted leave to file the further amended statement of claim, a copy of which is now to be marked for identification 1 and placed with the papers. There is no occasion to alter the costs orders made by Dowd J, and I do not think we have been asked to do so. As to the costs of the application for leave to appeal, which should be regarded as encompassing the consequent appeal, the orders should be as I have earlier indicated. The opponent should have a certificate under the Suitors Fund Act if otherwise qualified.

23 TOBIAS JA: I agree.

24 CAMPBELL AJA: I also agree.

(Mr Melick sought an order for expedition of the listing for trial, or an order for priority. Discussion ensued.)

GILES JA: We do not think that we should, even if we could, make an order for expedition, or if a different avenue is available, an order for priority. Subject to anything Mr Williams might say, we would certainly be prepared to say that from our knowledge of the matter, it is one which should be brought to a hearing as soon as conveniently may be, and that is something that you may use in any endeavour to cause that to occur.

(Mr Williams had nothing to say about it.)

We will be taken to have said that formally.

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LAST UPDATED: 06/09/2005