Beagan v Kidd and Anor [1999] NSWSC 549 (8 June 1999)

Last Updated: 8 June 1999

NEW SOUTH WALES SUPREME COURT

CITATION: Beagan v Kidd & Anor [1999] NSWSC 549

CURRENT JURISDICTION: Common Law

FILE NUMBER(S): 11376/89

HEARING DATE{S): 27 May 1999

JUDGMENT DATE: 08/06/1999

PARTIES:

Barbara Ann Beagan

(Plaintiff)

Iain Harrison Kidd

(First Defendant)

The Newcastle Western Suburbs Hospital now known as

The Hunter Area Health Service

(Second Defendant)

JUDGMENT OF: Master Harrison

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:

Ms Nomchong

(Plaintiff)

Mr R J Weber

(First Defendant)

SOLICITORS:

Mr T L Stern of

Stern & Tanner

Bondi Junction

(Plaintiff)

Mr D A R Munro of

Tress Cocks & Maddox

Sydney

(First Defendant)

CATCHWORDS:

Proceedings be set aside - s 81 SCA

ACTS CITED:

Supreme Court Act

DECISION:

See para 25

JUDGMENT:

16

THE SUPREME COURT

OF NEW SOUTH WALES

COMMON LAW DIVISION

MASTER HARRISON

TUESDAY, 8 JUNE 1999

11376/89 - BARBARA ANN BEAGAN v

IAIN HARRISON KIDD & ANOR

JUDGMENT (Proceedings be set aside - s 81 SCA)

1 MASTER: By notice of motion filed 22 January 1999 the first defendant seeks that the proceedings be wholly set aside or alternatively that the pleadings be wholly be set aside pursuant s 81 of the Supreme Court Act (the Act). The plaintiff Barbara Ann Beagan (now McCarthy) relied on her affidavit sworn 13 May 1999 and three affidavits of the her solicitor Terence Leland Stern sworn 8 March 1999, 8 April 1999 and 6 May 1999. The first defendant relied on the affidavits of Donald Allan Ross Munro sworn 20 January 1999 and 26 March 1999. The plaintiff opposes the orders sought and seeks an order pursuant to Pt 7 r 7 of the Supreme Court Rules (the Rules) that the service of the statement of claim be extended up to and including 2 December 1997. If the proceedings are not set aside against the first defendant, all parties consent to this matter being transferred to the District Court.

2 Section 81 of the Act reads as follows:

"Irregularity

81(1) Where, in beginning or purporting to begin any proceedings or at any stage in the course of or in connection with any proceedings, there is, by reason of anything done or left undone, a failure to comply with the requirements of this Act or of the rules whether in respect of time, place, manner, form or content or in any other respect -

(a) the failure shall be treated as an irregularity and shall not nullify the proceedings, or any step taken in the proceedings, or any document, judgment or order in the proceedings; and

(b) subject to subsections (2) and (3), the Court may, on terms, set aside wholly or in part the proceedings or any step taken in the proceedings or any document, judgment or order in the proceedings or exercise its powers under this Act and the rules to allow amendments and to make orders dealing with the proceedings generally.

(2) ...

(3) The Court shall not set aside any proceedings or any step taken in any proceedings or any document, judgment or order in any proceedings on the ground of a failure to which subsection (1) applies on the application of any party unless the application is made within a reasonable time and before the applicant has taken any fresh step after becoming aware of the irregularity."

3 The parties agreed that the relevant authority for extending the time for service of a statement of claim is Rust v Barnes (1980) 2 NSWLR 727. In Rust Yeldham J dismissed an appeal from Master Allen (as he then was). The Master asked the question whether the effect of Part 7 r 7 that there is no order which the court can make, or at least ought to make, to cure the defect that the originating process had become stale, for the purposes of service, before it was in fact served? His conclusion was that he did not think so. It should be noted that Part 7 has been amended since Rust. Part 7 r 7(2) which said that "the court shall not extend the period of two years" has been deleted and the time now allowed for service is one year. However, it is common ground that at the relevant time, the plaintiff had two years to effect service of the statement of claim.

4 Master Allen expressed the opinion that service of originating process more than two years after the same was filed is a failure in compliance with the requirements of the rules which fails to be dealt with under s 81 of the Act. In the case before Master Allen, if service was held to be invalid, the plaintiff was in trouble because the limitation period had since expired. Master Allen concluded that the discretion conferred by s 81 of the Act should be exercised in favour of the plaintiff. The service, albeit irregular, should not be set aside. The irregularity should be cured. He did not consider that there would be injustice to the defendant. Yeldham J agreed with this reasoning.

5 It is common ground that if this matter is allowed to proceed to trial, the plaintiff has an arguable case. The plaintiff submitted that the operation of s 81(3) of the Act is mandatory and as the first defendant has not taken action in a reasonable time and has taken fresh steps on this basis he cannot succeed under s 81(1).

6 For the purposes of this application I find the following facts.

(1) On 24 September 1987 the plaintiff made a complaint to Ms Walton, Manager, Complaints Unit Department of Health (CU). The plaintiff stated that she had received iron injections some of which had been prescribed by Dr Kidd over a period of 17 years. However the gravamen of her complaint appeared to relate to injections that she received in hospital in 1984. It appears that 6 iron injections were given over a period of six days in August in 1984 which are prescribed by Dr Kidd and administered by the nursing staff. The CU conducted a inquiry and obtained a statement from Dr Kidd, Dr Wijesena dated 18 November 1987 and Dr Lindsay March dated 2 January 1988. From the reports, Dr Wijesena gave the plaintiff two iron injections between 28 December 1983 and 23 January 1984 and Dr Marsh gave the plaintiff iron injections in 1984. The complaint was investigated and the CU found that there was insufficient basis for disciplinary action against Dr Kidd for professional misconduct.

(2) On 2 June 1989 the plaintiff filed a handwritten statement of claim in which she alleged that:

"I was receiving iron injections over a 14 year period every day on 1 occasion or then weeks other times. They were given every day for a week at a time and every day for 2 and 3 weeks at times. In 1984, I went to see my general practitioner, who after giving me a number of injections himself, refused to give me any more because of the state of my buttocks, then a few weeks later I went into hospital for an operation and I was given another week of iron injections."

The first defendant was Iain Harrison Kidd and the second defendant was the Hunter Area Health Service.

(3) From 1989 until 1991 the first defendant worked as a consultant gynaecologist and obstetrician at King Faisal hospital, Khamis, Mushayt, Saudi Arabia and then worked for several months as a locum in Australia. In 1991 until the end of 1992 the first defendant worked as a consultant gynaecologist and obstetrician at Curtis Memorial hospital, St Anthony Newfoundland Canada. From 1992 until approximately August 1996 the first defendant worked at the Red and White Medical Centre, corner of Pacific Highway and Argyle Street, Coffs Harbour. Details of the first defendant's positions of employment appeared in the 1990, 1993 and 1996 editions of the Medical Dictionary of Australia. On 19 November 1992 the certificate of registration in New South Wales referred to Iain Harrison Kidd's address as being care of Beaumont, 35 Wiley Street, Waverley.

(4) On 15 February 1990 Hendriks Keulemans solicitors came on the record as acting for the plaintiff.

(5) On 15 December 1992 the plaintiff's then solicitor wrote to Dr Kidd at the Waverley address referred to above and informed him that a directions hearing had been listed for 17 December 1992. He requested that the first defendant make contact with him (the solicitor).

(6) On 21 December 1992 the plaintiff's solicitor wrote to Mrs Beaumont at the Waverley address. The letter referred to a telephone conversation between them. Mrs Beaumont is Dr Kidd's eldest daughter. The solicitor requested that she either supply a forwarding address for the first defendant, an acknowledgment of service or seek instructions as to whether her father was prepared to authorise the Medical Defence Union to accept service on his behalf. No reply was forthcoming.

(7) In 1992 and 1993 this matter came before the court on a number of occasions for directions.

(8) In 1991 Counsel had provided advice to the plaintiff's solicitor. In January 1993 Mr Eric Peterson of Counsel also provided advice to the solicitor. On 14 July 1993 the Legal Aid Review Committee allowed an appeal against refusal of aid and granted an extension of legal aid to permit the obtaining of medical and experts reports.

(9) On 13 April 1993 an amended statement of claim (ASC) was filed pursuant to Pt 20 r 2 of the Rules. In paragraphs (3), (4) and (5) of ASC the plaintiff alleges that in August 1984 she was admitted by the second defendant to its hospital as a patient of the first defendant and the first defendant performed a hysterectomy on her. She alleges that for a number of days after the surgery, and while she remained in hospital, she was given a number of intramuscular injections of an iron supplement known as inferon by the second defendant's servants or agents acting under the direction of the first defendant. As a result of these injections she alleges that she suffers neuralgic injury to the right superior gluteal nerve and progressive atrophy of the gluteusmedius and severe gluteal muscle wasting on both sides and other injuries and disabilities.

(10) On 29 October 1993 the second defendant filed a defence to the ASC. So even if an order is made under s 81 of the Act in relation to the first defendant, this matter will proceed to trial as between the plaintiff and second defendant.

(11) On 17 April 1997 the plaintiff's solicitor wrote to the Medical Defence Union notifying it of the existence of the ASC.

(12) On 12 May 1997 the plaintiff's solicitor wrote to Tress Cocks and Maddox and asked them whether they had instructions to accept service of the ASC. Shortly after the first defendant's solicitor asked the plaintiff's solicitor for an explanation for the delay in serving the statement of claim. The first defendant later wrote to the plaintiff's solicitor saying the explanation was not satisfactory.

(13) On 26 May 1997 the plaintiff's solicitor wrote again to the first defendant's solicitor and stated that the plaintiff would apply for leave to serve a statement of claim outside the two year period pursuant to s 81 of the Act.

(14) On 11 September 1997 the first defendant's solicitor wrote to the plaintiff's former solicitor and said that it was impossible for the plaintiff to oppose any application pursuant to s 81 of the Act.

(15) On 17 October 1997, Mr Keulemans filed a notice of ceasing to act as solicitor.

(16) On 31 October 1997 the plaintiff's new solicitors Stern and Tanner, wrote to the first defendant's solicitor informing them that that firm now acted for the plaintiff. Regular correspondence has been exchanged between the plaintiff's current solicitor and the first defendant's solicitor.

(17) On 2 December 1997 the first defendant's solicitor advised the plaintiff's solicitor that it had accepted service of the ASC and a s 81 application should be brought by the plaintiff without delay.

(18) On 28 January 1998 the plaintiff's solicitor wrote to the defendant's solicitor and said that the service of the statement of claim after the expiration of two years from its issue was non-compliance with the procedural requirement and the failure to comply with the procedural step is an irregularity and does not nullify the proceedings or the steps taken. It put the first defendant on notice that the plaintiff considered that the obligation fell on the defendant to file the motion if it wished to have the proceedings set aside.

(19) On 22 January 1999 the first defendant filed this notice of motion.

7 The first defendant submitted that there is no evidence which would satisfy the court that there is an explanation for the plaintiff's gross delay. The first defendant also submitted that it is prejudiced by the delay. The plaintiff submitted that since her new solicitors took over much activity has taken place so that the plaintiff's case is now ready for trial. According to the plaintiff to set the proceedings aside now would be harsh and unjust.

8 The first defendant to the best of his recollection was first consulted by the plaintiff while he was a partner in Andrew Nash Clinic at Wallsend and he left this group practice to go into full time specialist practice as a gynaecologist and obstetrician at the end of 1970 and says that due to the effluxion of time he is heavily reliant on his notes and that the notes prior to 1980 no longer exist. However the clinic notes of the first defendant from after that date are available. These notes cover the period when the alleged cause of action occurred.

9 The Health Insurance Commission does not have records of consultations prior to 1 February 1984 and the first defendant cannot make further enquires as to who else may have treated the plaintiff prior to 1984. The plaintiff has received other injections of the same kind as the first defendant allegedly prescribed and these injections were given by Drs Wijesena, Pacey and Marsh. The plaintiff has been treated by at least 10 medical practitioners between 1970 and 1994. The defendant has subpoenaed the records of these doctors. Doctors Piddock and Stevens advised that there were no documents to produce. Dr Shortland and Dr Wijesena have not been located. However Dr Wijesena's report furnished in the Health Complaints Investigations is in existence. Dr Marsh and Dr McMahon have produced documents in answer to subpoena. Dr Goldshaft and Dr Pacey have not responded to the subpoena. Dr Addinall has sold his practice and the purchaser of the practice no longer has any files relating to the plaintiff. At this stage Dr Hardy's records cannot be located.

10 The first defendant also submitted that if the proceedings continue, his capacity to thoroughly explore the involvement of others will forensically deny him the opportunity to fully defend himself on the crucial issue of causation, insofar as that issue will involve the acts and omissions of others. He also submitted that he may not be able to seek contribution from others and a costs order will not overcome the prejudice. The first defendant also submitted that the plaintiff has been secretive to her own doctors which hampers his ability to prepare the case.

11 Section 81(1) states that failure to comply with the Act or Rules whether in respect of time, place, manner, form and content is to be treated as an irregularity and shall not nullify the proceedings.

12 I turn to consider my exercise of discretion under s 81(1)(b) of the Act. Although the plaintiff on her own evidence has had numerous iron injections over a period of 14 years, Dr Kidd in his letter dated 2 January 1988 denied administering any injections to the plaintiff in his surgery from 1970 to 1984. These records cannot now be located as I understand the plaintiff case she is not alleging that Dr Kidd gave her injections at his surgery. Rather the plaintiff confined her case to 5 or 6 injections she received by Dr Kidd while at Newcastle Western Suburbs hospital given by Sister Caber under instructions from Dr Kidd. The injections were allegedly given on 12 August 1984, 13 August 1984, 14 August 1984, 15 August 1984 and 17 August 1984. These clinical notes in relation to this period of time are available.

13 The plaintiff's cause of action arose in August 1984 some 15 years ago. The limitation period expired in August 1990 nearly 9 years ago. The plaintiff filed a statement of claim on 2 June 1989. She had until the 2 June 1991 to serve the originating process. On 13 April 1993 the plaintiff filed an amended statement of process but it was not served until 2 December 1997 when Tress Cocks and Maddox accepted service on behalf of the first defendant behalf. The originating process, namely the statement of claim was never served. The amended statement of claim (and I shall treat it as originating process) was served over 6 years out of time.

14 There are records concerning the cause of action in existence. In 1987 the plaintiff made a complaint about Dr Kidd to the CU of the Health Department. This complaint was investigated and copies of the investigation are available. The first defendant's version of events form part of this record. The clinical notes which relate to the iron injections in 1984 are in existence. It is not known if the first defendant' daughter informed the first defendant of the existence of these proceedings in 1992. The first defendant has not put on any evidence denying earlier knowledge of these proceedings. As previously stated the plaintiff filed the statement of claim in 1989. Her husband provided a statement on 22 March 1998 and she had counsel's advice in 1991. I accept that the first defendant may face difficulties if he claims contribution from other doctors who gave the plaintiff iron injections.

15 The plaintiff has employed at various times seven firms of solicitors. However it was not until 17 April 1997 that the plaintiff's then solicitor contacted the Medical Defence Union with whom the first defendant was a member, concerning these proceedings. Tress Cocks and Maddox the solicitors acting for the first defendant wrote to the plaintiff's solicitor on 17 April 1997. There is no satisfactory explanation as to why the plaintiff's then solicitor took no steps to serve the first defendant with the statement of claim and subsequently the ASC between 21 December 1992 and 31 October 1997. Nor is there a satisfactory explanation as to why the plaintiff's solicitor did not seek an order for substituted service on the plaintiff's daughter or the Medical Defence Union.

16 There is to be a trial between the plaintiff and the second defendant in any event. It is not clear whether the blame for this lengthy delay in serving the statement of claim lies with the plaintiff or her then solicitor or both. The plaintiff was having difficulties obtaining legal aid. In 1997 the plaintiff's then solicitor was requested to explain the delay in serving the statement of claim and amended statement of claim but did not satisfactorily do so. It is unfortunate for the parties that this delay occurred.

17 In Morrison & Anor v Judd (NSWSC, Master Malpass unreported 10 October 1995) the issue was whether an application for substituted service and leave to serve a statement of claim more than two years after the filing should be granted. The Master said that he should have regard to the possibility of a good cause of action against the plaintiff's solicitor, but it is not a matter to which the court can give great weight. On appeal to a single judge Spender J said that the consideration of an action against a solicitor was irrelevant. In the Court of Appeal, Kirby P wrote the leading judgment with which Meagher and Powell JJA agreed. Kirby P said:

"The Master was clearly right to take into account the absence of any explanation for the delay in prosecuting the claim. It is rudimentary, when evaluating the requirements of justice, to consider the explanations which a party offers (if any) for the failure to conform to the requirements of the Supreme Court Rules that cases be prosecuted with due diligence. Where there is no explanation, a party is left bereft of excuse. As between that party and the contesting parties, it is then more difficult to demonstrate that justice requires the relevant extension.

It is natural to a court, striving for justice, to be disinclined to exclude from a hearing on the merits, a person who has put her confidence in legal representatives and instructed them within time to bring her claim.

18 Kirby P also said:

"My own opinion is identical with that of Lord Salmon in the House of Lords and of Lush, Gray and McGarvie JJ in Victoria. The availability of an action against a negligent legal representative is relevant because common sense says that it is so. It means that the litigant, who may be wholly or mainly innocent, is not put out of court without some chance of redress, however difficult that chance may be to enforce. To that extent an injustice, which might otherwise occur to the litigant, may be capable of being avoided."

19 I have taken into account that absence of an explanation for the delay in prosecuting the claim and that the plaintiff may have an action against her former solicitor.

20 The plaintiff has served a large number medical reports since January 1998. These cover the plaintiff's medical condition between 1986 to date. It is my view that the first defendant is not significantly prejudiced by the delay. The exercise of discretion under s 81(2) of the Act in this matter is finely balanced. I have taken all the factors referred to above into account and reflected upon them carefully. It is my view justice falls on the side of the plaintiff. She should be allowed to proceed with her somewhat difficult case against the first defendant.

21 If I am wrong I turn to consider s 81(3) of the Act. The plaintiff submitted that the first defendant's solicitor foreshadowed a motion seeking to set aside proceedings since November 1997 yet did not do so until 22 January 1999, some 14 months later. This according to the plaintiff cannot be considered as occurring within a reasonable period. The plaintiff also submitted that the first defendant had elected to take fresh steps in the proceedings so the court is precluded from setting the proceedings aside by virtue of s 81(3). The first defendant submitted that 14 months was a reasonable period particularly as he sought an explanation from the plaintiff's solicitor for the delay prior to taking the foreshadowed action. The first defendant submitted that it has not taken a fresh step in the proceedings, but merely taken action consistent with preparing this motion for hearing.

22 In my view the defendant has not taken action beyond preparing this motion for hearing. The first defendant's solicitor accepted service of the ASC but before doing so had drawn to the plaintiff's attention that the statement of claim was stale. The first defendant put on an appearance, filed the motion and issued subpoenas to ascertain what medical records are still available. It is my view that the defendant has not taken a fresh step after becoming aware of the irregularity.

23 By 11 September 1997 the defendant's solicitor had decided that the plaintiff's former solicitor offered no satisfactory explanation for the delay in serving the originating process. However the defendant's solicitor did not take any action until 2 February 1999 when he filed the motion seeking an order pursuant to s 81 of the Act. A period of 15 months elapsed. In my view in the circumstances of this case the period of 15 months cannot be considered a reasonable period of time. It appears that the first defendant was waiting for the plaintiff to file a motion pursuant to s 81 of the Act but this does not excuse the first defendant's failure to act, particularly if he seeks to obtain the benefit of s 81(3).

24 I have read the notes appearing at the foot of s 81(3) in Ritchies Supreme Court Practice where it says that these two requirements are cumulative and cites recent examples of this proposition namely Brennan v Brennan [1953] HCA 28; (1953) 89 CLR 129 and Wentworth v Rogers (No 1) (1986) 6 NSWLR 642. Neither of these cases specifically refer to s 81 of the Act. It is my tentative view (as it was not argued before me) that in order for the defendant to be precluded from having proceedings set aside he must not have firstly made the application within a reasonable time and secondly must have taken a fresh step in the proceedings. As the defendant has fulfilled only one of the criteria he does not fall within s 81(3) and is not precluded from having the proceedings set aside. The same considerations that I have taken into account when deciding whether the proceedings should be set aside also apply to the determination of the issue as to whether time for service of the ASC should be granted. For the same reasons, it is my view that time for service of the amended statement of claim should be extended to 2 December 1997. The appropriate order for costs is that costs be costs in the cause.

25 The orders I make are:

(1) Time for service of the amended statement of claim is extended to 2 December 1997.

(2) The first defendant's notice of motion filed 22 January 1999 is dismissed.

(3) Matter to be transferred to the District Court, Sydney Registry.

(4) Costs be costs in the cause.

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LAST UPDATED: 08/06/1999