Drummond v Ansto [1999] NSWSC 20 (5 February 1999)

Last Updated: 18 February 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Drummond v ANSTO [1999] NSWSC 20

CURRENT JURISDICTION:

FILE NUMBER(S): 20399/96

HEARING DATE{S): 27/11/97

JUDGDMENT DATE: 05/02/1999

PARTIES:

Bryn Drummond

Australian Nuclear Scientific and Technology Organisation

JUDGMENT OF: Dowd J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

Dr. Renwick

Mr Davies

SOLICITORS:

McCourt Charlton

Abbott Tout

CATCHWORDS:

Tortious act in and out of jurisdiction

Jurisdiction

Where tort occurs

No compliance with reciprocity test

Stay of proceedings

ACTS CITED:

Accident Rehabilitation and Compensation Insurance Act 1992 (NZ)

DECISION:

Extension of time granted

Proceedings stayed in respect of general damages claim

Plaintiff pay defendant's costs

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

(COMMON LAW DIVISION)

DOWD J

FRIDAY 5 FEBRUARY 1999

NO. 20399/97 - DRUMMOND v ANSTO

Reasons for judgment

1 In this matter application has been made by the Australian Nuclear Science and Technology Organisation ("ANSTO"), the defendant in these proceedings, by Notice of Motion filed 19 June 1996 for orders that ANSTO be granted an extension of time to bring this application; that this Court set aside the originating process; or alternatively, that this Court decline, in the Court's discretion, to exercise its jurisdiction in the proceedings; or, alternatively, that the proceedings be stayed on the basis that the respondent, the plaintiff, Bryn Drummond ("Drummond"), has instituted the originating process in an inappropriate forum, and further that Drummond pay ANSTO's costs of the motion and of the proceedings.

The Facts Alleged

2 For the purposes of this application, Drummond's allegations in the statement of claim filed herein were that he was being treated for hyperthyroidism at Taranaki Base Hospital ("TBH") in New Zealand in May 1994. Batches of radio active iodine were sent to New Zealand on the same day and the address labels and dangerous goods declarations were placed on the wrong containers as a result of which it is contended by Drummond that he was administered a dose 30 times that which is prescribed. The two doses of therapeutic Iodine - 131 were packaged at ANSTO's New South Wales premises and although the label stating the contents was correct on each package and on each container, the address labels on the outside and the two dangerous goods declaration forms (which also contained the delivery address) for each of the two packages were swapped.

3 The two packages passed through both the cargo handling at Sydney Airport and customs at Auckland Airport without the error being detected, and it was not until they taken by a courier for delivery to the intended hospitals that the discrepancy was noted. The activity on one of the two forms addressed to Palmerston North Hospital ("PNH"), was crossed out and changed from 6,000 to 200 MBq (the unit of measurement of radiation). The other form was however, unaltered.

4 During a routine check on 9 May 1994, at PNH the package marked at 200 MBq had been delivered that morning was recognised as a mistake as that belonging to TBH. The technologist, Peter Gene, tried to telephone TBH but the lines were engaged until after 9 am. TBH received the 6,000 MBq package on the same day. The senior nuclear medicine technologist at TBH was not working on 9 May 1994 but there were two technologists (Ms Mia le Blanc and Ms Victoria Brooks) working. The 6,000 MBq package was first measured at the surface using a survey meter by Ms le Blanc and was recorded. Ms le Blanc failed to notice that the capsule was in a larger lead pot than those usually delivered. Ms le Blanc opened the package, filed the packing slip and placed the inner container (a tin) behind lead shielding but failed to note the activity level on the packing slip.

5 Ms Brooks, the second technologist opened the tin and noticed that the lead pot was larger than normal but failed to appreciate the significance of this. Ms Brooks placed the vial containing the capsule in the well counter and read the number as 385. The activity prescribed is often 400 MBq, so she took this reading to be 385 MBq. Ms Brooks then took the prescription form, identified the patient, Drummond, by his photo attached to the form, and read him the instructions for I - 131 patients. After ensuring that he understood she gave him the capsule. At 9.05 am Drummond, an outpatient, took the capsule with a glass of water and then went home. Ms Brooks had not checked to see if the prescribed dose was administered.

6 At 9.10 am the Ms Brooks removed the label from the vial to attach to the prescription form and saw a disagreement between the prescription (200 MBq) and the label (she read it as 600 MBq), she then phoned the licensee, Dr Michael Carr, in Palmerston North. Dr Carr consulted with the nuclear medicine physician at PNH, Dr Kevin Smidt. Telephone contact was made with Richard Neale of Alphatech, the importer of the medicine and Peter Gene at PNH whereupon it was realised that the activity was 6,000 MBq (not 600 MBq). Drummond was brought back to TBH immediately and was admitted to an isolation ward and placed under the care of Dr Murray Hunt, the medical officer at in oncology at TBH.

7 Vomiting was induced, under the instruction of Dr Carr at 10.40 am, approximately 1 hour and 35 minutes after administration. 885 mls of vomitus was recovered. A 2 ml sample was measured to contain 11.25 MBq of I - 131 suggesting that about 5,000 MBq or 80% of the dose had been recovered. A copy of the standard nursing instructions used for the care of high-dose I - 131 patients at PNH was faxed to TBH. At 1.00 pm thyroid blocking with a substance known as Lugol's solution was initiated.

8 On 10, 11, and 12 May 1994 Drummond remained at TBH in the isolation ward. Except for some nausea caused by the Lugol's solution, Drummond remained physically well. On 13 May 1994 Drummond was discharged from TBH.

The orders Sought in this application

9 ANSTO sought an order that it be granted an extension of time to bring the application, such extension not being opposed by Counsel for Drummond. I make that order granting extension of time to bring this application.

10 ANSTO further seeks an order that the Court set aside the originating process, or, in the alternative that this Court decline in its discretion to exercise its jurisdiction in the proceedings. The Applicant submits that the matter presently before the Court is not justiciable because the wrong that is alleged to have occurred did not occur in New South Wales, but in New Zealand.

11 ANSTO also submitted that since the wrong occurred in New Zealand, Drummond is not entitled to bring proceedings in New South Wales as he is not entitled to bring them in New Zealand under the choice of law rules which were set out by the High Court by Brennan J (as he then was) in Breavington v. Godleman [1988] HCA 40; (1988) 169 CLR 41 at pp. 110-111 which judgment was applied in McKain v. R.W. Miller & Co (S.A.) Pty. Limited [1991] HCA 56; (1991) 174 CLR 1 and also by the majority in Stevens v. Head [1993] HCA 19; (1993) 176 CLR 433, holding at p.433 that:

"A Plaintiff may sue in the forum to enforce a liability in respect of a wrong occurring outside the territory of the forum if

1. the claim arises out of circumstances of such a character that, if they had occurred within the territory of the forum, a cause of action would have arisen entitling the Plaintiff to enforce against the defendant a civil liability of the kind which the Plaintiff claims to enforce; and by the law of the place in which the wrong occurred, the circumstances of the occurrence give rise to a civil liability of the kind which the Plaintiff claims to enforce."

12 Before the choice of law rules can apply however, it is necessary to determine whether the wrong occurred outside New South Wales, namely in New Zealand or whether the wrong occurred in New South Wales.

13 Drummond submitted that the wrong occurred in New South Wales, not in New Zealand, that while the damage occurred in New Zealand, the act on behalf of ANSTO which gives Drummond his cause of complaint, took place in New South Wales. This being the case, ANSTO submitted that the tort is not a foreign tort. In order to accept this submission it is necessary to determine where the wrong actually took place.

14 The correct test to determine where a tort has been committed is set out in the Privy Council decision in Distillers Co. (Biochemicals) Limited v. Thompson, [1971] 1 NSWLR 83 which was confirmed by the High Court in Voth v. Manildra Flour Mills Pty. Limited [1990] HCA 55; (1990) 171 CLR 538 at 568. In Distillers Co. (Biochemicals) Limited v. Thompson the Privy Council held at p.90 that:

"The right approach is, when the tort is complete, to look back over the series of events constituting it and ask the question, where in substance did this cause of action arise?"

15 Distillers involved a purchase by an Australian company from an English company of a pharmaceutical preparation, the drug thalidomide manufactured and packaged by the appellant, in England but marketed and sold in Australia. The printed matter that accompanied the drug described it as harmless, safe and effective sedative with no side effects. The plaintiff, an infant, was born with disabilities alleged to be due to her mother having taken the drug whilst pregnant. The plaintiff alleged the defendant was negligent in that it failed to warn the mother that the product would be dangerous if taken during the first three months of pregnancy. The Supreme Court of New South Wales was asked to consider whether it had jurisdiction to entertain the action.

16 For the Court to have jurisdiction the plaintiff had to show that "there is a cause of action which arose within the jurisdiction" within the meaning of s.18(4) of the NSW Common Law Procedure Act 1899. Lord Pearson, delivering the judgment of the Privy Council in Distellers' referred at p. 87 to three possible theories:

"(i) that the `cause of action' must be the whole cause of action, so that every part of it, every ingredient of it, must have occurred within the jurisdiction; (ii) that it is necessary and sufficient that the last ingredient of the cause of action, the event which completes a cause of action and brings it into being, has occurred within the jurisdiction; and (iii) that the act on the part of the defendant which gives the plaintiff his cause of complaint must have occurred within the jurisdiction."

17 After analysing each of the theories, Lord Pearson rejected the first and second, finding theory (iii)

"inherently reasonable, as the defendant is called upon to answer for his wrong in the courts of the country where he did the wrong."

18 As to theory (ii) Lord Pearson stated at p.89C;

"The last event might happen in a particular case to be the determining factor on its own merits, by reason of its inherent importance, but not because it is the last event...But when the question is which country's courts should have jurisdiction to try the action, the approach should be different: the search is for the most appropriate court to try the action, and the degree of connection between the cause of action and the country concerned should be the determining factor."

19 The Privy Council in Distellers' concluded that it was the omission of the warning from either the packaging of the product or at the point of sale to the consumer which constituted the tort. The Privy Council further held that the warning should have been communicated in New South Wales, thereby giving the necessary jurisdiction.

20 In Castree v. E.R. Squibb & Sons Ltd [1980] 1 WLR 1248, a decision involving a claim by a plaintiff for damages for personal injury sustained in the course of her employment while using a defective machine manufactured in Germany, Ackner L.J, in determining whether the plaintiff had a cause of action in an English Court cited Lord Pearson's test in Distillers with approval and concluded at p.1252 that:

"...That which gave, or gives, the plaintiff her cause of complaint is not the mere manufacture of the defective machinery, which of course took place in Germany; the mere manufacture of the defective machinery is not in my judgment even the beginning of tort. That manufacture might have been manufacture for experimental purposes, or it might have been for the development of some part of the machinery. The substantial wrongdoing in this case alleged to have been committed by the appellants is putting on the English market a defective machine with no warning as to its defects. That being, in my judgment, the position, and applying the test which is accepted on all sides to be the appropriate test, namely, to look back over the series of events constituting the tort and to ask the question where in substance this cause of action arose, I would conclude that it arose in this country."

21 In D'Ath v. T.N.T Australia Pty Ltd (1992) 1 Qld R. 369, White M following the substance test in Distillers held that the plaintiff whose husband was killed when the car which he was driving was struck by a freighter dog-trailer after the drawbar had fractured on the trailer and the trailer had broken from the truck had established jurisdiction despite the manufacturer of the drawbar being German. Master White held that jurisdiction was established in respect of that part of the third party claim which alleged the breach of a positive duty arising at the point of sale within the jurisdiction to warn or advise with respect to safety chains or other devices and mode of installation of the drawbar.

22 As indicated above, the decision in Distillers has also been confirmed by the High Court in Voth v. Manildra Flour Mills Pty Limited [1990] HCA 55; (1990) 171 CLR 538 and followed by the Court of Appeal in England in Metall & Rohstoff v. Donaldson Inc. [1990] 1 QB 391, the Courts applying in both cases the test "where, in substance, did the cause of action arise."

23 As Slade L.J. commented in Metall & Rohstoff v. Donaldson Inc.:

"In our judgement, in double locality cases our court should first consider whether, by reference exclusively to English law, it can be properly said that a tort has been committed within the jurisdiction of our courts. In answering the question, they should apply the now well familiar "substance" test previously applied in such cases as Distillers Co. (Biochemicals) Limited v. Thompson [1971] 1 NSWLR 83 Castree v. E.R. Squibb & Sons Ltd [1980] 1 WLR 1248 and Cordoba Shipping Co. Ltd v. National State Bank, Elizabeth, New Jersey [1984] 2 Lloyd's Rep. 91. If on the application of this test, they find that the tort was in substance committed in this country, they can thenceforth wholly disregard the rule in Boys v. Chaplin [1971] AC 356; the fact that some of the relevant events occurred abroad will thenceforth have no bearing on the Defendant's liability in tort. On the other hand, if they find that the tort was in substance committed in some foreign country, they should apply the rule and impose liability in tort under English law, only if both (a) the relevant offence would have given rise to liability in tort in English law if they had all taken place in England, and (b) the alleged tort would be actionable in the country where it was committed."

24 ANSTO argued cogently that the place of the wrong should be New Zealand considering that the only act that took place in New South Wales was the incorrect affixing of address labels. ANSTO refer to Annexure "A" in the Affidavit of Ivan Griscti sworn 4 November 1996, in particular at p.5 - the section headed "What went wrong", as well as the items listed 5 - 10 and submit that every one of those acts could have put an end to the initial mis-labelling nullifying the incorrect affixing of address labels.

25 ANSTO sought to distinguish the present case from the facts in D'Ath v. T.N.T Australia Pty Ltd, submitting that in the present case the radioactive material had not been sent over to New Zealand to be sold or marketed, unlike that in D'Ath v. T.N.T Australia Pty Ltd, but that the material was designated to a particular hospital, for a particular patient, and was precisely manufactured for this patient. The patient, ANSTO submits was a New Zealand resident who went to a New Zealand hospital to be treated. The only fortuitous thing was according to ANSTO the fact that that the material came from Australia and was not manufactured in New Zealand. ANSTO submits that for those reasons the mere wrong addressing of labels in New South Wales was only one factor and was not a sufficient factor to say the tort took place in New South Wales.

26 ANSTO submits that the test of the place of the last ingredient of the cause of action, although rejected in Distillers, supra, is relevant to the present case and neither fortuitous nor accidental, considering that the sale of radioactive material was specifically directed to New Zealand; that the material was directed for the use of the hospitals concerned; and, it could reasonably be assumed, for this particular Plaintiff, in the case of one package. ANSTO concludes therefore that when looking at the cause of action from the beginning to the end the wrong occurred could only be said to have occurred in New Zealand.

27 Drummond submits that the wrong occurred in New South Wales, not in New Zealand. Drummond submitted that the Court must look at what the essential act of the conduct complained about was, which Drummond contended was clearly the mis-labelling of the vials that occurred in New South Wales. The fact that there were ten steps, all but the first occurring in New Zealand, therefore amounting to the conclusion that the tort must have been committed in New Zealand, is, according to Drummond, an artificial way of putting the matter.

28 Drummond contended that whilst there were a series of separate tortious acts, there existed a duty of care by ANSTO to label the medicine correctly, and the damage that flowed from the mislabelling was entirely foreseeable. Drummond submitted that this case is not a negligent misrepresentation case, there being no allegations in the pleadings of detrimental reliance by the applicant. Drummond asserted that if the case is one involving negligent misrepresentation would it wrongly assume that the primary duty of ANSTO when misdirecting the goods was to advise about their contents when in actual fact ANSTO's duty was simply to direct the goods to the correct place.

29 The facts of the present matter deal with a series of tortious acts. This series of acts consisted first of the incorrect typing of the address labels in New South Wales; the failure by cargo handling at Sydney Airport and Auckland Airport to identify an inconsistency between the dangerous goods form and the activity on the package label; the failure by the courier freighting the packages to PNH and TBH to notice the inconstancies; the failure to note the activity being heavier than normal when opened and removed from its container at TBH; the mis-reading of the measured activity by the technologist at TBH and her failure to check the activity prescribed against the activity administered; the failure to treat Drummond with appropriate urgency cause by the mis-reading of the measure of activity (which was thought to be 600 MBq but was really 6,000 MBq and therefore the failure to administer proper medical attention (vomiting should have been induced much sooner, or a stomach pump should have been used which would have been more effective and would have allowed the administration of stabilising agent, iodine, much earlier.

30 In Mahoney v. J. Kruschich at 522, the majority (Gibbs CJ, Mason, Wilson, Brennan and Deane JJ) at p.528 stated the following in relation to who is liable, where a series of torts have been committed:

"A negligent tortfeasor does not always avoid liability for the consequences of a plaintiff's subsequent injury, even if the subsequent injury is tortiously inflicted. It depends on whether or not the subsequent tort and its consequences are themselves properly to be regarded as foreseeable consequences of the first tortfeasor's negligence. A line marking the boundary of the damage for which a tortfeasor is liable in negligence may be drawn either because the relevant injury is not reasonably foreseeable or because the chain of causation is broken by a novus actus interveniens: M'Kew v. Holland & Hannen & Cubitts. But it must be possible to draw such a line clearly before a liability for damage that would not have occurred but for the wrongful act or omission of a tortfeasor and second tortfeasor's negligence alone: see Chapman v. Hearse. Whether such a line can be drawn is a matter of fact and degree."

31 However the decision went on to hold that minds may differ as to whether a subsequent injury was foreseeable or too remote to be regarded as a consequence for which an earlier tortfeasor may be liable. It was also held that an exacerbation such as caused by medical treatment may easily be regarded as foreseeable, applying the law of the workers compensation cases that a compensible injury when exacerbated by medical treatment is to be treated to the original accident.

32 Subsequent to the hearing of this application the NSW Court of Appeal in James Hardie & Co Pty Ltd v Putt (1998) 43 NSWLR 554 held that although s.17 of the Accident Rehabilitation Compensation Insurance Act 1992 of New Zealand, being an amendment to the legislation which establishes the New Zealand no fault liability scheme, in form, bars an action to enforce a right to damages. It's effect is to substitute cover under the statute for the right to recover common law damages and it is therefore a substantive not a procedural law (p.579B and 585D). That case involved an action against a parent company in respect of an injury sustained by an employee of a New Zealand subsidiary of the Australian parent company. The Court held in that case where manufacturing occurred in New South Wales that to provide a safe system of work, the place of the tort would have been the foreign jurisdiction, where the warning would have operated to protect the employees and the system of work should have been safe.

33 Putt was applied in James Hardie & Co Pty Ltd v Grigor (NSW Court of Appeal, unreported 18 June 1998) in which the plaintiff was exposed to asbestos dust where there had been a failure to warn him of the danger of that dust. Both decisions were to the effect that it was in New Zealand where the plaintiff suffered the injury and it was in New Zealand that there was a failure to warn.

34 ANSTO submitted that, of the items listed in the evidence of Ivan Griscti of 4 November 1996, there is set out a series of tortious acts of which the last six occurred in New Zealand. It is submitted by ANSTO that the James Hardie decisions of the Court of Appeal are binding in the present case which submission is conceded by Counsel for Drummond. It is put to the Court however, by Dr Renwick, Counsel for Drummond, that the findings of the Court of Appeal in Putt and Grigor are wrong, but accepts that the Court is bound by the decision. It seems to me that the in circumstances of the present case, the nature of the tortious acts which occurred in New Zealand as against those which occurred in New South Wales more clearly demonstrate that the tort occurred in New Zealand, applying the "substance" of the tort test in Distillers' to the number of separate events which were particularised by Drummond show the tort to have occurred in New Zealand. ANSTO was supplying the hospitals not Drummond.

35 ANSTO submitted that the majority judgment on this issue in Grigor has no relevance, citing Mason P at p.20;

"This case is distinguishable from James Hardie & Co Pty Limited v. Putt, Court of Appeal unreported, 27 May, 1998, in that there is evidence that the plaintiff may not be barred by the Accident Compensation Rehabilitation & Insurance Act, 1982 (NZ) if he establishes actionable negligence occurring before 1974. That distinction is significant to me in the balancing exercise that needs to be performed, albeit that the Court is not ultimately concerned with the substantive rights of the parties as distinct from the appropriateness of litigating in the chosen forum"

and it is submitted that no such possibility arose in the present case. Grigor related to the issue of when injury commences by the inhalation of asbestos in a death as a result of mesothelione.

36 ANSTO also cites Mason P at p.21;

"With some hesitation, I regard section 25(3) of the Dust Diseases Tribunal Act, 1989 as offering more than a mere legitimate personal or juridical advantage to the plaintiff...The potential savings of time and cost offered by this provision are significant, even if used with proper circumspection and close attention to the Defendant's right to insist on clear prior indication of the particular use to be made of the voluminous section 25(3) material that is often tendered. So long as the power is fairly used it cannot, in my opinion, be viewed as a source of prejudice to one party over another. Since section 25(3) is a matter of procedure, it is, I consider, appropriate to take into account in focusing on "the advantages arising from the continuation of the proceedings in the selected forum" (which is acceptable: Voth at 559. See also at 571) while avoiding "assessment of the comparative procedure or other claims of the foreign forum (which is not: ibid)."

37 It is submitted on behalf of ANSTO that there is nothing to make Grigor relevant in the current proceedings.

38 It is put on behalf of Drummond that there is a distinction to be drawn between Putt and Grigor, these proceedings. It is argued on behalf of Drummond that the particulars of negligence and breach of duty of care pleaded in the statement of claim, to which there is no defence filed, took place in New South Wales. Drummond asserted that ANSTO's characterisation of these proceedings as negligent failure to warn assumes that the primary duty of ANSTO when misdirecting goods was to advise as to their contents. Counsel for Drummond submitted that ANSTO was to direct the specific goods of the patient on whose specific part they had been sought.

39 I accept the submission of ANSTO in relation to Grigor. Those circumstances do not apply here.

40 In my view the wrongful act of administration occurred, on the pleadings, in New Zealand. It was the system in New Zealand which caused the injury to Drummond. The tort therefore occurred in New Zealand and the plaintiff is barred effectively, as a matter of substantive law from bringing proceedings in New Zealand and thus fails the second test in Breavington and thus is precluded from bringing proceedings for tort for general damages in this State.

41 In my view the proper exercise of jurisdiction by the Court is, since Drummond has come into this jurisdiction, is to stay the proceedings in so far as there is a claim for general damages.

42 There remains, however, one other issue of damages. In his submissions, Dr Renwick for Drummond submitted that exemplary damages were not precluded and that the New Zealand legislation only applies as to general damages. Although his submission was put to the Court in terms of "exemplary damages" I note that the Statement of Claim does not refer to exemplary damages but refers to "aggravated compensatory damages". It has not been argued before me and I do not decide the issue of whether there is any distinction to be drawn for these purposes between aggravated and exemplary damages. It may be that aggravated damages are subsumed into a general damages claim and that exemplary damages are not, but it appears on the evidence before me that there is no bar to a bringing of a claim for other than general damages. There was admitted before me the evidence of Linton Lawrence Stevens of 12 February 1997 omitting paragraphs 6(b), 24,25, 26, the last two sentences of paragraph 30 and the third last sentence in paragraph 31 and paragraph 22 was to be taken as a submission. That evidence as to New Zealand law, which I accept, restricts actions seeking "damages or compensation". I also, in relation to exemplary damages, accept the evidence of Colin William Bright admitted before me that the New Zealand legislation does not prevent a person from issuing proceedings seeking exemplary damages, although the matter is yet to be clarified by the New Zealand courts. Mr Bright makes the comment that he doesn't consider the report which was furnished to him revealed a basis for a successful claim for exemplary damages against the defendant. I make no finding in relation to that matter although it appears that the acts relied on fall somewhat short of than what would normally be a basis for exemplary damages.

43 In the light of the orders that I propose to make it is not necessary for me to make any comment as to the submissions on forum non-conveniens.

44 The orders therefore that I make are as follows;

1. That ANSTO be granted an extension of time to bring this application.

2. I stay these proceedings to the extent that the proceedings claim general damages against ANSTO.

3. I order that Drummond pay ANSTO's costs of these proceedings.

LAST UPDATED: 05/02/1999