Wurzel v Minika Tappen Management Ltd [2001] FJLawRp 70; [2001] 1 FLR 275 (14 August 2001)

RENEE WURZEL v MINIKA TAPPEN MANAGEMENT LTD.

High Court Civil Jurisdiction

11 July, 14 August 2001

HBC180/95L

Practice and procedure - whether late amendment of defence to include the Limitation Statute be allowed – whether permitted - Institution of action for personal injuries after granting of leave to institute out of time - whether defence can still challenge at the trial – role of Judge in considering the requirements of sections 16 & 17 of the Limitation Act - whether omission of pleading was through inadvertence and not improper conduct – security for costs - Limitation Act ss16 & 17(1); High Court Rules O.18 r.7

The Defendant sought amendment of pleadings a week before the scheduled trial. By consent, both parties applied to vacate hearing dates to allow the Defendant to amend its pleadings. The Defendant filed a further summons to dismiss the Plaintiff's action and ask for security for costs. The Plaintiff's counsel had full knowledge that he had to adduce evidence to satisfy sections 16 & 17 of the Limitation Act, but the Defendant did not plead statute of limitations in its defence. A failure to plead would disallow the Defendant from leading evidence at the trial of limitations. The Court discussed its duty to ensure all matters in dispute are resolved to avoid multiplicity of legal proceedings. The Court held that even though the amendment sought was at a late stage, was inconvenient to the Plaintiff and unfortunate, the Plaintiff would not be prejudiced as all of the issues in the case would be before the court for its determination. In respect of the application for security for costs, the Defendant had failed to satisfy the court that the Plaintiff was a person without substance or property that the Defendant could pursue later for costs.

Held–(1) Notwithstanding that a defence of limitation is to be expressly pleaded, the failure to plead a defence is a curable error, a matter of procedure only. The issue of whether the claim is statute barred is fundamental to the efficacy of the action and late amendment of pleadings is allowed, so that all of the issues in the case are before the court, there being no prejudice to the Plaintiff.

(2) Once the Plaintiff obtains leave, the proper pattern of pleading is for the Plaintiff to make no mention of the limitation point in his statement of claim. If the defence pleads a statute-barred action, the Plaintiff then serves a reply raising the facts and contentions relied on, as to date and knowledge, and the power of the court to override the defence of limitation.

(3) Where there was no suggestion that the Plaintiff was a person of no substance, or that as a person resident in, with property in Victoria, the Defendant could not successfully pursue costs against her, application for security for costs declined.

Amendment of defence to include plea of statute of limitations allowed. Plea of time-bar to be determined as a preliminary issue at trial.

[Note: a Notice of Discontinuance was filed on 5 July 2005.]

Cases referred to in Ruling

Avonson v Liverpool Corporation (1913) 29 T.L.R. 325
Bower v Maxwell [1989] CA Transcript 472
Lubin v HTV Cymen Wales Ltd. [1991] CA Transcript 766
British Gas plc v Green Elms Ltd (1988) CA Transcript 89
Cartledge v E. Jopling & Sons Ltd. [1963] AC 758
Cozens v Northern Devon Hospital Management Committee [1966] 2 QB 318
Fiji Electricity Authority & Attorney-General v Miriama Ganilau [1999] ABU 0050/97
Henderson v Temple Pier Co. Ltd. [1998] EWCA Civ 690; [1998] 3 All ER 324
In the Clark Forbes Stuart (Thames 82) Ltd [1964] 1 WLR 836
McLellan v Leighton's Estate [1988] CA Transcript 433
Mitchell v Harris Engineering Co.Ltd [1967] 2 QB 703
Northern Devon Hospital Management Committee [1966] 2 QB 318
Ogunsanya v Lambeth Area Health Authority July 3rd 1985
Ronex Properties Ltd. v John Laing Construction Ltd. and Others [1983] 1 QB 398
Surya Deo Sharma v Sabolevu & 2 Ors [1995] HBC 539/94S 30 June 1995
Tildesly v Harper [1878] UKLawRpCh 284; (1878) 10 Ch. D 393.

Adish K. Narayan for the Plaintiff and third party
Gwen Phillips for the Defendant

14 August, 2001

RULING

[Late Amendment of Defence to include Limitation]

Gates, J

In December 1989 the Plaintiff spent a holiday at Plantation Island Resort. The resort was being run by the Defendant, a management company. During the holiday the Plaintiff was bold enough to go in for some parasailing or paragliding. Unfortunately when she did so the metal clasp and rope holding the Plaintiffs parachute and harness and the rope attached to the boat snapped virtually simultaneously. The Plaintiff dropped some 60 feet and as a result suffered injuries. She brought a claim in negligence against the Defendant. The Defendant denied the severity of the Plaintiff's injuries, denied the allegation of negligence, and stated in its Defence that such injuries were caused wholly or in part by the Plaintiff's own negligence.

The trial of the action was set down for 16th, 17th and 18th July 2001. The Defendant filed a summons dated 24 June 2001 seeking orders:

"1. That the Defendant be at liberty to amend its defence by adding to its existing amended Statement of Defence of 27 January 1997 a further paragraph as follows:-

"11. The Plaintiff's cause of action did not accrue within three years before the commencement of this action and the Defendant will rely on s.4 of the Limitation Act and;

2. That the trial of this action be adjourned to a date to be set."

The Defendant filed a further summons, dated 3rd July 2001 seeking the orders:

"1. That the Plaintiff's action against the Defendant being a cause of action in fort raising an action of the kind specified in the proviso to s.4 (1) of the Limitation Act in which the cause of action did not accrue within three years before the commencement of the action, be dismissed.

2. That the Plaintiff do within seven days give security/or the Defendant's cost in this action."

Both summons came on for hearing on 1 July 2001, a week before the scheduled commencement of the 3 day trial. The Defendant filed two affidavits in support deposed to by Robert Anderson Smith, a solicitor, who stated he had conduct of the Defendant's case from 1993. Mohammed Kazim Khan principal legal clerk with solicitors for the Plaintiff swore an affidavit on behalf of the Plaintiff in opposition to both summons. Mr. Khan's affidavit explained the difficulty of obtaining the Plaintiff's own affidavit from overseas in time for the application hearing. He exhibited a faxed copy of the Plaintiff's intended affidavit, which affidavit had been sworn on 4 July 2001. It was filed at court subsequently.

On the hearing date because of the need for an immediate decision to govern the trial a few days off. I made short orders and said I would publish my reasons later. This I do now.

The Affidavits
In his first affidavit, which was sworn on 26 June 2001. Mr. Smith frankly admits that he omitted to obtain particulars of the leave to institute proceedings out of time application from the Plaintiff's solicitors. He had noted that such leave had been pleaded in the Statement of Claim at paragraph 8. Unfortunately, as sometimes happens in the course of professional practice, the matter remained overlooked until 20 June 2001. Mr. Smith explained what had prompted a careful revisiting of the Statement of Claim. He deposed (at para.3):

"It remained overlooked, I regret to say, until on 20 June 2001, the Plaintiffs solicitor delivered a long awaited update of claimed special damages. This update notified a special damages claim of $536,548.00 in Australian currency. This seemed so wildly extravagant in respect of an incident causing relatively little physical injury that I went back to the statement of claim to see what had there been originally claimed. I noted that special damages nearly four years out from the incident had totaled only $555,008.00 (presumably) Fiji dollars. But as well as that, that time frame, and the information contained in paragraph 8 of the statement of claim, reminded me that the Limitation Act issue had received no attention.

Mr.Smith tendered his apologies to the court and to the Plaintiff.

The Plaintiff in her affidavit explained the circumstances as to how it became necessary for the second set of solicitors to seek leave of the High Court in Suva before Fatiaki J. to institute legal proceedings out of time. The order sealed on 27th September 1993 did not refer to the fact that such application had been made ex-parte. According to Mr. Smith the leave papers had never been served on the Defendants. However at paragraph 8 of the Statement of Claim the Plaintiff pleaded, albeit sparsely:

"That the Plaintiff has obtained leave from the High Court to bring this action"

This did not alert the Defendant, as perhaps it should, to plead that the Plaintiff's claim was statute barred. Limitation as between Plaintiff and Defendant was not raised at the pro-trial conference stage either. But as between Defendant and Third Party it had been listed in the minutes as an issue for trial [as at 12 February 1998].

Pleading Practice

Order 18 rule 7 of the High Court Rules provides:

"7. (1) A party must in any pleading subsequent to a statement of claim plead specifically any matter, for example, performance 'release' and relevant statute of limitation, fraud or any fact showing illegality:

(a) which he alleges makes any claim or defence of the opposite party not maintainable; or

(b) which, if not specifically pleaded, might take the opposite party by surprise;

The grant of leave to institute proceedings out of time on an ex parte application pursuant to Section 17(1) of the Limitation Act Cap. 35 allows a litigant to advance in the action the contention that he should not be limited by the Act. and that his complaint should not be restricted to matters falling within the 3 years prior to the issue of the writ. That does not dispose finally of the issue as to whether the late filed personal injuries claim, for which an extension of time, has been granted, is or is not statute barred; Cozens v Northern Devon Hospital Management Committee [1966] 2 QB 318 at p 320 et seq and In the Clark Forbes Stuart (Thames St.) Ltd. [1964] 1 WLR 836, per Lord Denning MR at p 840. Whether the Plaintiff fulfilled the requirements of sections 16 and 17 will be questions for the trial judge.

Once leave has been granted, need the Plaintiff refer to such leave in his Statement of Claim and plead the material fact? establishing fulfillment of the Limitation Act requirements? In an unreported English decision Bristow J. considered that the proper pattern of pleading is for the Plaintiff to make no mention of the limitation point in his statement of claim. This issue should be left to be raised in the defence. If pleaded, the Plaintiff would then serve his reply raising the facts and contentions relied on as to date and knowledge, and the power of the court to override the defence of limitation [see Ogunsanya v Lambeth Area Health Authority, July 3rd 1985 (unreported)].

By virtue of the High Court Rules, the defence of limitation is to be expressly pleaded. The Supreme Court Practice 1997 (Eng.), in providing authoritative guidance on what the Plaintiff should plead, concludes at 18/8/11 p300-1:

"... unless, the Plaintiff has good reason for believing that the defence of limitation will not be raised, the better practice is for the Plaintiff in his statement of claim to plead, in the alternative, if necessary, all the facts and circumstances relied on, with all necessary particulars, to invoke the power of (the Court to allow the action to proceed."

And on necessary facts and matters to be pleaded to support the claim on date of knowledge, states:

"As to the date of knowledge in an action for damages for personal injuries or under the Fatal Accidents Act 1976, the Plaintiff who alleges that he was entitled to commence the action within three years from the date of knowledge which is later than the date on which the cause of action accrued, must in his statement of claim plead the facts and matters on which he relies to support his contention. He should not wait for the Defendant to plead the defence of limitation and then serve a reply alleging the grounds entitling him to bring the action later than three years from the date of the accrual of the cause of action. In particular, the Plaintiff should plead in the statement of claim the date as precisely as he can when he first knew of each of the facts and matters specified in s. 14 and he should give particulars of the facts relating to such knowledge under 0.18 r.12(4)(a)

Normally the issue of a statute barred claim is dealt with at an early interlocutory stage of the action by way of summons and affidavit evidence from both parties. Sometimes the issue is left to be dealt with as a preliminary issue on the pleadings, or even as an issue in the action itself. In this case, the matter was not raised in the defence filed. Only in the summons of 3rd July 2001 did the Defendant seek to raise the matter at a very late interlocutory stage. Because at the time of the application the trial was set for the following week. I declined to hear the matter as an interlocutory application and dismissed the summons. If the matter were to be heard now it would have to be heard as a preliminary issue in the trial. As it happened, though I refused the Defendant's application to adjourn the trial, both counsel subsequently applied by consent to put off the trial, so that they could reconsider their respective positions, or if need be, attend to the necessity for further pleadings.

The failure of the Defendant to plead the Limitation Statute does not perhaps preclude it from raising the issue. If the Defence were to go to trial without amendment. it may be precluded however from adducing evidence on that which has not been pleaded. In Surya Dec Sharma v Sabolevu & 2 Others (unreported) Suva High Court Civil Action No. 539 of 1994; 30 June 1999 Pathik J. at p 8 of his judgment said:

"However, since the Plaintiff has applied for extension by virtue of the provisions of s17 ofthe Act, the Defendants are entitled to argue the point in issue and are not precluded from doing so merely because they have not pleaded it."

The Court of Appeal did not dissent from this view when the matter went on appeal (unreported) Court of Appeal, Fiji Civil App. ABU0043 of 1999; 27 August 1999 at p6: but a differently constituted Court of Appeal in Fiji Electricity Authority & Attorney-General v Miriam Ganilau (unreported) Court of Appeal, Fiji Civil App. No. ABU0050 of 1997S 14 May 1999 at p3 found otherwise and dismissed the Attorney's appeal on the basis that he should have applied to amend his defence first. FEA had pleaded the defence and succeeded on appeal with it. The Defendant here has chosen to apply to amend first and seeks to have the claim dismissed on the basis of the amended plea of statute-barred, later.

The issue of whether the claim is statute barred is fundamental to the efficacy of the action. The leave application if successful allows the late claim to proceed forward. No late action can proceed as an action without the grant of leave. The grant is a fundamental step. Though a reasonable cause or right may exist without the grant, statute has removed the remedy: Ronex Properties Ltd. v John Laing Construction Ltd. and others [1983] 1 QB 398 at p 404. The failure to plead a defence on the other hand is a curable error, a matter of procedure only: see Mitchell v Harris Engineering Co. Ltd. (1967] 2 QB 703. On the authority of Henderson v Temple Pier Co. Ltd. [1998] EWCA Civ 690; [1998] 3 All ER 324 there would appear to be an arguable case to be put forward on the plea. I turn next to consider whether to allow the late amendment of pleadings.

Amendment of Pleadings

In the Miriam Ganilau case (supra) the Court of Appeal referred to the statement in Halsbury at para 656 "to the effect that if the defence was not pleaded through inadvertence, the Court may allow an amendment if it considers the plea is not in the circumstances improper, citing Avonson v Liverpool Corporation (1913) 29 TLR 325 where leave was refused". In the matter before me counsel has explained how it came about that he discovered his client's case had not been fully pleaded to include what must be regarded as an obvious defence to this particular claim. His late application to amend therefore carries no sinister connotation (Easton supra at p 261d).

Dillon LJ in Easton at p 265 quoted from Staughton LFs judgment at some length in British Gas Plc v Green Elms Ltd. [1988) CA Transcript 89 5 February 1988 where his lordship had said:

"I start with what was said by Bowen LJ in Cropper v Smith [1884] UKLawRpCh 91; (1884) 26 Ch D 700 at 710-711: "It is a well-established principle that the object of the Court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or grace. "That passage is or ought to be engraved on the heart or lodged firmly in the brain of every practitioner. But it needs to be modified somewhat in the light of the recent decision of the House of Lords in Ketteman v Hansel Properties Ltd. There the majority held that leave to make a late amendment raising a defence of limitation should not have been granted during the final speeches at the end of a long trial. There is a passage in the speech of Lord Griffiths which makes it very clear that there are circumstances in which it is just to refuse leave to amend even though it can be said that costs and an adjournment will cure all (see [1988] 1 All ER 38 at 62, [1987] AC 199 at 220). That particular case was concerned with an amendment made during final speeches and what is more, an amendment to raise a plea of limitation for the first time. Those are particular features of the decision. I bear what Lord Griffiths said in mind, but this application has not been made at the end of the trial. It was made 18 months before the trial was due to begin. It is true to say that it is adding a new issue rather than clarifying the old issues. But the new issue is one which to anyone familiar with building contract cases was obviously liable to arise."

A few lines further on he said:

"But, even if there was reprehensible delay, I remind myself that courts do not exist for the sake of discipline or to punish mistakes but to decide the rights of the parties."

The next issue for consideration is the lateness of the hour at which this major amendment is sought. In the Ketteman case (supra) the making of a fresh defence hitherto neither a plea nor a matter in dispute between the parties at the stage of closing speeches was held to be far too late for amendment to be fairly allowed. In instituting the action the Plaintiffs solicitors were aware at the outset that the Plaintiff would have to prove by witnesses and documents that the requirements of section 16 and 17 of the Limitation Act had been met. Those witnesses and documents would have had to be identified and gathered up at the time of the institution of proceedings and of the ex parte application for leave. No solicitor could safely dispense with any of such vital material even though the defence had not responded to paragraph 8 of the Statement of Claim by pleading limitation. The necessity for the plea could have come to the attention of the Defendant's solicitors at any time. The Plaintiff's solicitors knew of this element of the claim that would need to be proved from the earliest, and could not be surprised by the consequences of this late application to amend.

There was undoubtedly inconvenience caused by the lateness of the application, precipitating as it has the loss of the trial dates. The matter will have to be heard as a preliminary issue before the trial proper can be commenced. A litigant arriving at court a few days prior to the listed trial date with an application to recast radically his pleadings may come upon an unsympathetic court. Applications have floundered where a Defendant has sought to introduce a late defence of justification in such circumstances before the listing judge in defamation suits Bower v Maxwell [1989] CA Transcript 472; Lubin v HTV Cymen Wales Ltd. [1991] CA Transcript 766.

In commenting on the Ketteman decision, O'Connor LJ in McLellan v Leighton's Estate [1988] CA Transcript 433 said:

"I do not understand Lord Griffiths as in any way criticising the well-established rule that in the ordinary course of litigation amendments are to be permitted so long as no injustice is caused to a party. Ketteman v Hansel Properties Ltd. itself was exceptional because the amendment was applied for at a time which was very, very late."

Some pertinent words were said in Tildesley v Harper [1878] UKLawRpCh 284; (1878) 10 Ch. D 393 by Thesiger LJ at p 397:

"The object of those rules is to obtain a correct issue between the parties, and when an error has been made it is not intended that the party making the mistake should be mulcted in the loss of the trial"

It is important "that the court shall so exercise its jurisdiction in any cause or matter before it so as to secure that as far as possible all matters in dispute between the parties are completely and finally determined and all multiplicity of legal proceedings with respect to any of those matters is avoided." (Easton supra at p261).

Another factor for consideration is the anxiety the Plaintiff may suffer from the raising of the new issue. Lord Griffiths in Ketteman (at p339H) said:

"... a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other."

This was canvassed also in Easton by the trial judge who disallowed the amendment. He was however overruled by the Court of Appeal. For the reason that this was a known and obvious defence from the outset albeit hitherto not relied on, I find that this is a compelling factor for allowing the amendment. The defence had never written expressly to the Plaintiff's solicitors stating this was to be a trial on the merits, and that they were not relying on the Limitation Act.

In Khalsa v Hepherd Winstanly and Pugh [1992] CA Transcript 450 8 May 1992 Mann LJ said:

"It was sensible and right that the arguments should focus upon prejudice, because undoubtedly in the absence of prejudice the would be amender is entitled to have his case before the court."

No question of estoppel arises. Nor does the issue of waiver. The amendment is clearly inconvenient to the Plaintiff and perhaps unfortunate but I find it does not prejudice her in having all of the issues in the case before the court, heard and decided. Accordingly I allowed the amendment. On the material, I declined the Defendant's request for an order for security for costs. It was not suggested that the Plaintiff was a person of no substance, nor that as a person resident in, and with property in the State of Victoria, she would be a person against whom costs could not be successfully pursued.

The possibility of suing her two previous sets of solicitors arose some years ago. Some damages would have been apparent then either from delay or from extra costs though the full cost of a valid claim being thrown away could not have been ascertained Cartledge v E. Jopling & Sons Ltd. [1963] AC 758. From the correspondence tendered the question of suing her previous solicitors was considered by her most recent advisers. She may have been advised not to pursue the claims. But the late application to amend has not prejudiced or affected such rights.

I conclude the amendment should be allowed.

Costs
I was not asked by the Plaintiffs counsel for costs to be awarded to the Plaintiff in the event I were to accede to the Defendant's application. On reflection, I may have been a little generous to the Defendant in making no order as to costs. However in view of the fact that the Defendant has perfected and sealed the order. I have no jurisdiction to rectify it on the matter of costs.

Application to amend pleadings granted.

Marie Chan