SMN v WEM[2017] QSC 242

SUPREME COURT OF QUEENSLAND

1. In early 2006 the applicant (the plaintiff) commenced an action by claim and statement of claim (the proceedings) against the respondent (the defendant) claiming damages for “psychiatric and psychological injuries” suffered as a result of sexual assaults (of various types, including intercourse) committed upon her by the defendant while the plaintiff was a minor.
2. An amended statement of claim was filed on 16 October 2008 which alleged further sexual assaults. It also alleges “vaginal injury” in addition to the “psychiatric/psychological injuries”. On the plaintiff’s behalf it was conceded that the filing of the amended statement of claim was the last step taken by her in the action before the present applications were filed. This seems to me though to be wrong. A list of documents was filed by the plaintiff on 22 July 2009.  It was common ground that the list of documents was served on the defendant’s solicitors then on the record.^[1] That was clearly a step in the action.^[2]
3. The plaintiff applies: (i) under r 389 of the Uniform Civil Procedure Rules 1999 (Qld) (the Rules) for leave to proceed; and (ii) under r 376(4) for leave to amend the statement of claim to include new causes of action.
4. The new causes of action the subject of the application under r 376(4) are the claims for damages arising from the additional sexual assaults alleged in the amended statement of claim.
5. The defendant applies under r 280 of the Rules for the proceedings to be dismissed for want of prosecution, or alternatively, that the proceedings be permanently stayed.

Background

6. The plaintiff was born on 4 February 1985. She was therefore between the ages of 12 and 13 years in the relevant period, which was December 1997 to May 1998. Over that period the defendant was the plaintiff’s karate teacher and maintained an unlawful sexual relationship with her. While the fact that there were sexual acts performed by the defendant upon the plaintiff is not contested on the current pleadings, the extent and nature of the sexual acts are in contest.
7. In due course, the defendant was charged with four offences against the Criminal Code 1899 (Qld); one of maintaining an unlawful sexual relationship with a child with a circumstance of aggravation^[3] and three counts of unlawful carnal knowledge of a child under 16 years.^[4]
8. On 11 March 1999, the defendant pleaded guilty to the four charges and was sentenced to four years’ imprisonment on the charge of maintaining a sexual relationship with a child with a circumstance of aggravation, and three years’ imprisonment on each of the charges of unlawful carnal knowledge. Those sentences were ordered to be served concurrently and ordered to be suspended after the defendant had served a period of nine months’ imprisonment, for an operational period of five years.^[5]
9. The allegations made in the original statement of claim essentially mirror the particulars of the offending of the defendant which was the subject of the charges on the indictment to which he pleaded guilty.
10. The amended statement of claim contains allegations of many more sexual acts than were alleged in the original statement of claim. In particular, it is now alleged that intercourse occurred on approximately 20 occasions, that the defendant procured the plaintiff to perform oral sex on him, that he used threats and force against the plaintiff and that he took indecent photographs of her. In the original statement of claim there were allegations that the defendant touched the plaintiff on the breast and the vagina with his hands and had the plaintiff touch the defendant’s penis and masturbate him. The amended statement of claim alleges many more of those acts.  As already observed, the amended statement of claim alleges not only, “psychiatric/psychological injuries” but also “vaginal injury”.
11. An amended defence was filed on 6 November 2008, the effect of which was to make admissions consistently with the defendant’s pleas of guilty to the criminal charges. Save for the allegation that he took indecent photographs of the plaintiff, the defendant denied all the additional allegations in the amended statement of claim. He admitted the allegations of taking photographs. Quantum was also put in issue.
12. The amended statement of claim could not have come as a great surprise to the defendant because on 8 April 2008 an order was made by her Honour Judge Clare in the District Court in favour of the plaintiff against the defendant for criminal compensation. On that application the further allegations were made.
13. After the amended defence was filed, no further step was taken in the proceedings until 22 July 2009 when the plaintiff filed and served a list of documents. There was, though, some other activity by the parties both before and after the filing and serving of the list of documents. In November 2008, there was a request for further and better particulars made by the defendant. On 17 November 2008, the plaintiff provided her tax returns to the defendant. On 9 December 2008, the plaintiff’s solicitors communicated to the defendant’s solicitors a refusal to further amend the statement of claim, and on 11 December 2009, the defendant’s solicitors communicated a refusal to sign a request for trial. Then, on 22 July 2009, the list of documents was filed and served. On 22 November 2009, the plaintiff delivered a copy of a further tax return to the defendant. On 20 September 2010, the plaintiff delivered details of Medicare benefits received by her. On 7 September 2011, an offer of settlement was made by the defendant to the plaintiff. A further offer of settlement was made by the defendant on 22 August 2014. Further correspondence about the offer was sent by the plaintiff to the defendant on 22 December 2014. Apart from the filing and serving of the list of documents, none of this activity was “a step” in the proceeding for the purposes of r 389.
14. Nothing appears to have occurred then until the application for leave to proceed was filed on 5 April 2017.

The Issues and Arguments

15. In my view, the plaintiff does not require leave to amend the statement of claim to make the new allegations. On a proper construction of r 376, leave is only required to add a cause of action which is otherwise time-barred. Any cause of action arising from the additional allegations became time-barred on 4 February 2006, three years after the plaintiff’s 18^th birthday.^[6] However, the limitation was removed by the Limitations of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016 (Qld). In my view, r 376 does not require a plaintiff to obtain leave to add a cause of action which could be the subject of new proceedings to which no time limitation could be pleaded.
16. If I am wrong about that construction of r 376 and leave is required then I would be minded to give leave to amend the statement of claim to make the new allegations if the plaintiff succeeded in her application for leave to proceed on the amended statement of claim.
17. The parties agreed that there were three possible outcomes to the present applications. They are:

1. Leave to proceed is denied. It will then follow (as was conceded by the plaintiff) that the defendant would succeed in his application, at least to the extent of having the proceedings stayed.

2. Leave to proceed is granted conditionally but the amendments to the statement of claim are disallowed. In other words the plaintiff would be given leave to proceed on the basis that damages could be recovered only on the allegations pleaded in the original statement of claim.

3. Leave to proceed is granted unconditionally so the plaintiff may pursue all claims in the amended statement of claim. Apart from the submission that leave should be granted subject to disallowing the amendments to the statement of claim, no submission was made that any other condition should apply to any grant of leave.

18. Both parties made extensive submissions in relation to the various discretionary factors identified by Atkinson J in Tyler v Custom Credit Corp Ltd & Ors.^[7] However, Ms Fitzpatrick also submitted that leave ought to be refused as the continuation of the proceedings would, it was submitted, constitute an abuse of the process of the court.

Abuse of process argument

19. There is no doubt that the court should stay civil proceedings where their continuance is unfair or would bring the administration of justice into disrepute.^[8]
20. The authorities were recently analysed by the Court of Appeal of Victoria in Connellan v Murphy,^[9] where in the joint judgment of all members of the Court this was said:

“In determining whether a proceeding should be stayed as an abuse of process, the authorities to which we have already referred disclose the following propositions:

1. In order to justify the grant of a stay, a defendant bears a heavy onus. A stay is ordinarily only granted in exceptional circumstances, because it effectively brings to an end litigation without adjudication.

2.  The categories of abuse of process are not closed.

3. In particular, the concept of an abuse of process is not confined to cases in which, if the action were to proceed, the defendant would not receive a fair trial.

4. The fundamental test is whether, in the circumstances, the proceeding would be manifestly unfair to the defendant or would otherwise bring the administration of justice into disrepute among right-thinking people.”^[10]

21. In my view the defendant cannot maintain that the plaintiff’s action on the original allegations would be unjust. Those allegations were admitted by his plea of guilty to the criminal charges and are admitted on the pleadings. There is nothing to suggest that there cannot be a fair trial of the issues relevant to quantum; nor that a trial on the issues relevant to quantum would bring the administration of justice into disrepute; nor that the continuation of proceedings on the original allegations would be manifestly unfair to the defendant.
22. As to the additional allegations which are the subject of the amended statement of claim, Ms Fitzpatrick points to presumed prejudice^[11] and also seeks to establish particular prejudice.
23. Ms Fitzpatrick submitted that the financial position of the defendant has deteriorated since 2008 and defence of the action (and its consequences) will now be more burdensome upon him. The defendant swore an affidavit to this effect and was cross-examined. Under cross-examination, it became clear that the defendant was receiving Commonwealth benefits in 2008 and is doing so now. There is no suggestion that his major asset (his house) has diminished in value and indeed in the last couple of years he received a modest inheritance from his mother’s estate. That inheritance was used to make improvements to the defendant’s house.
24. It was submitted on behalf of the defendant that had the action proceeded more diligently, the defendant may have not used his mother’s inheritance to improve the house but quarantined that money to pay costs or damages.
25. However, even though no formal step had been taken in the action since delivery of the list of documents on 22 July 2009, offers of settlement were exchanged, the last being sent on 22 December 2014. There was in my view no legitimate expectation held by the defendant that the proceedings were not to be pursued. The defendant could have chosen to isolate the money received from his mother’s inheritance.
26. It seems to me that the defendant’s financial position has, if anything, improved since the last step was taken in the action in July 2009 by receipt of the inheritance.
27. Ms Fitzpatrick submitted that two witnesses who may be relevant to the defendant’s defence of the additional allegations are no longer available. Those witnesses are AC and AD. Both AC and AD were karate instructors who worked with the defendant. It is said that both could (if available) give evidence as to the interaction between the plaintiff and the defendant over the period in which the sexual assaults are alleged to have occurred. This evidence would be relevant, so it was submitted, as the demeanour of the plaintiff as observed by AC and AD would be inconsistent with the allegations of threats and violence now made in the amended statement of claim.
28. AC is deceased. AD, it is said, is unavailable to give evidence but the only evidence of his unavailability is the defendant’s affidavit where he says “I have lost contact with AD and do not know his address”.
29. Under cross-examination, the defendant admitted that no real efforts have been made to locate AD. He also conceded that there were other karate instructors working with him over the relevant period and, of course, there were students who would have seen interaction between the plaintiff and defendant.
30. There is no evidence of what other witnesses may be available to give evidence similar to that which could have been expected to be given by AC and AD. It is therefore not possible to conclude that the death of AC and the unavailability of AD (if he in fact cannot be found) has inflicted any prejudice upon the defendant.
31. Ms Fitzpatrick also submitted that the defendant has a failing memory and is stressed. However, he gave evidence before me and I did not discern any significant difficulties with his memory. That the defendant is stressed does not render the proceedings an abuse of process.
32. In my view the continuation of the proceedings on the amended statement of claim would not constitute an abuse of the process of the court.

Leave to proceed, discretionary issues

33. After identifying 12 factors which are relevant to the exercise of discretion under r 389, Atkinson J in Tyler v Custom Credit Corp Ltd & Ors,^[12] said this:

“The court’s discretion is, however, not fettered by rigid rules but should take into account all of the relevant circumstances of the particular case including the consideration that ordinary members of the community are entitled to get on with their lives and plan their affairs without having the continuing threat of litigation and its consequences hanging over them.”^[13]

34. I have turned my mind to the 12 factors identified in Tyler, the fact that the case remains an ongoing burden to the defendant, and the overall justice of the case and I have concluded that leave to proceed should be given to the plaintiff to proceed on the amended statement of claim.
35. The action concerns events which occurred almost 20 years ago. The litigation has not progressed past the pleadings and delivery by the plaintiff of a list of documents, and there have been periods of delay. It has been a long time (almost eight years) since a step has been taken.
36. However, there is some explanation for the delay. The plaintiff’s solicitors may not have been completely diligent as a result of a number of staff changes within the plaintiff’s solicitor’s office. Some delay appears to have been experienced while the parties argued about amendments to the statement of claim and the parties did, as late as 2014, attempt to settle the action. The defendant terminated the retainer of his solicitors and some time was spent identifying his new solicitors.
37. The explanation for the delay is fairly vague, and in some respects unsatisfactory. However, there is at least a partial explanation, and other discretionary factors lead me to grant leave.
38. While there are difficulties in defending and prosecuting claims arising from events long in the past, I can see no particular prejudice to the defendant. The allegations of sexual misconduct in the original statement of claim have been admitted and the further allegations in the amended statement of claim have been known to the defendant since April 2008 when they were made in proceedings before her Honour Judge Clare in the District Court on an application brought by the plaintiff for criminal compensation.
39. While it is difficult on the material before me to assess the strength of the plaintiff’s case on the further allegations made in the amended statement of claim, the fact is that the defendant has admitted, by his plea of guilty, an unlawful sexual relationship with the plaintiff when she was a minor. Any assessment of the case against the defendant on the additional allegations is no doubt strengthened by that significant admission.
40. If the current proceedings were concluded by refusal of a grant of leave to proceed, fresh proceedings could be commenced.^[14] While that fact does not determine the issue against the defendant, it seems to me to be a significant discretionary consideration in favour of the plaintiff. This feature has added significance given my finding that the continuation of the present proceedings would not constitute an abuse of process. It is therefore difficult to see how any fresh proceedings could be stayed.
41. In all the circumstances, the discretion should be exercised in favour of the plaintiff and leave to proceed should be given.

Other matters

42. The parties agreed that if leave to proceed was given then any damages in the case would be within the jurisdiction of the District Court and should be transferred there. No application has been filed to transfer the case but there is clear power to do so.^[15] Given that the parties agree that the case should be transferred, I will do so.
43. I invited the parties to make submissions as to appropriate directions to progress the case. The parties provided a draft set of directions which I have altered slightly. The directions are not contentious between the parties.

Costs

44. The plaintiff should pay the defendant’s costs of the application for leave to proceed. While the plaintiff has been successful in the application, the failure to take a step in the action for more than two years necessitated the application. I see no reason to award costs on any basis other than the standard basis.
45. Given that leave to proceed will be given to the plaintiff, the defendant’s application to dismiss or stay the proceedings must be dismissed. However, it seems to me that the bringing of such an application was a reasonable step for the defendant to take. The bringing of the application empowered the court to finalise the action in the event that the plaintiff’s application for leave to proceed failed. There should be no order as to costs of the defendant’s application.
46. In argument, I raised with the parties whether recovery of any costs ordered against the plaintiff ought to be deferred until after the conclusion of the proceedings. The evidence shows though that the plaintiff’s financial position is superior to that of the defendant. In my view then, the payment of costs ought not be delayed.

Orders

47. I make the following orders:

1. That the plaintiff have leave to proceed on all causes of action pleaded in the amended statement of claim.

2. The defendant’s application to stay or dismiss the claim is dismissed.

3. By 10 November 2017 the plaintiff file and serve a further amended statement of claim, such amendments to be limited to allegations relating to quantum.

4. By 10 November 2017 the parties agree on a mediator for the claim.

5. By 8 December 2017 the defendant file and serve a further amended defence.

6. By 20 December 2017 the plaintiff file and serve a reply to any further amended defence.

7. The plaintiff file and serve a statement of loss and damage within 28 days of the close of pleadings.

8. Within seven days of service of the statement of loss and damage the defendant provide the plaintiff a list of three experts to assess the plaintiff for medico-legal purposes.

9. The plaintiff pay the defendant’s costs of the application for leave to proceed and leave to amend the statement of claim on the standard basis.

10. There be no order as to costs of the defendant’s application to dismiss or stay the action.

11. The proceedings be transferred to the District Court at Brisbane.