FEDERAL COURT OF AUSTRALIA

Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd

(ACN 005 932 654) [2001] FCA 703

PRACTICE AND PROCEDURE – summary dismissal – proceedings frivolous or vexatious – abuse of process – cause of action allegedly outside limitation period – effect of limitation provisions as bar to remedy – Trade Practices Act 1974 (Cth) ss 74J and 75AO – causes of action not extinguished – proceedings neither abuse of process nor frivolous or vexatious solely on basis that out of time – motion to dismiss action dismissed

LIMITATION OF ACTIONS  - bar to remedy or extinguishment of cause of action – question of construction – action commenced out of time – whether frivolous or vexatious or abuse of process – without more action not susceptible to be dismissed on those bases

TRADE PRACTICES – consumer protection – product liability – prosthetic heart valve – not reasonably fit for purpose – defect causing injury – commencement of action – whether barred by time limitation provisions – Trade Practices Act 1974(Cth) s 74J and s 75AO – nature of limitation provisions – whether proceeding frivolous or vexatious or abuse of process – motion to dismiss action dismissed.

Trade Practices Act 1974 (Cth) ss  74B, 74J, 75AD, 75AC, 75AO

Australian Iron & Steel Ltd v Hoogland (1962) 108 CLR 471, cited

McKain v RW Miller & Company (South Australia) Pty Limited (1991) 174 CLR 1, cited

White v Eurocycle Pty Ltd (1995) 64 SASR 461, followed

Fibreglass Pool Works (Manufacturing) Pty Ltd v ICI Australia Pty Ltd (1997) 146 ALR 120, cited

Commonwealth v Mewett (1995) 59 FCR 391, cited

Commonwealth v Verwayen (1990) 170 CLR 394, cited

Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398, cited

F v Wirral Metropolitan Council (1990) 2 WLR 1132, cited

Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514, cited

McGee, Limitation Periods, 3^rd Edition, Sweet & Maxwell (1998) p 29

KAREN CAREY-HAZELL vGETZ BROS & CO (AUST) PTY LTD

(ACN 005 932 654), PETER THOMPSON and TREVOR NICHOLLS

W75 of 2001

FRENCH J

PERTH

12 JUNE 2001

THE COURT ORDERS THAT:

1.         The First Respondent’s Motion filed 11 April 2001, and amended on 8 June 2001, is dismissed.

2          The First Respondent is to pay the Applicant’s costs of the amended motion.

3.         The documents produced under the subpoena dated 15 May 2001 are to be returned to Paynes Solicitors.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

ON MOTION TO DISMISS APPLICATION

Introduction

1                     By an application filed in this Court on 13 March 2001, Karen Carey-Hazell has commenced proceedings against Getz Bros & Co (Aust) Pty Ltd.  That company is said to be the importer into Australia of a prosthetic mitral valve known as the St Jude Medical mechanical heart valve model 31MEC-102.  It is otherwise known as the St Jude Mitral Valve.  The valve is manufactured in the United  States by St Jude Medical Inc which does not have a place of business in Australia.  On 20 June 1996 Ms Carey-Hazell underwent heart surgery at Sir Charles Gairdner Hospital, Nedlands during which a St Jude Mitral Valve was implanted into her heart.  She subsequently suffered complications resulting from thromboembolisms associated with the implantation.  She claims that the valve was not reasonably fit for its purpose within the meaning of s 74B of the Trade Practices Act 1974 (Cth)  and that it was defective within the meaning of s 75AC of the Trade Practices Act.  She claims compensation pursuant to s 74B of the Act and, alternatively, s 75AD. 

2                     By a motion originally filed on 11 April 2001 and amended at the hearing of the motion on 8 June, Getz Bros seeks orders for dismissal of the claims on the basis that they were commenced more than three years after Ms Carey-Hazell became aware or ought reasonably to have become aware of the deficiencies alleged in her statement of claim.

3                     Ms Carey-Hazell also brought claims in these proceedings for damages for negligence against Peter Thompson, formerly her treating cardiologist and Trevor Nicholls, the consultant cardio-thoracic surgeon who conducted the mitral valve implant in 1996.  The present motion does not touch upon the causes of action against the doctors.  No party has yet filed a defence.  This judgment involves no assessment of the merits of her claims.

The Nature of the Motion for Dismissal

4                     The motion for dismissal of the application against Getz Bros is said to be brought under O 20 r 2(1)(b) and (c).  Order 20 r 2 provides:

“2(1)  Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding –

(a)       no reasonable cause of action is disclosed;

(b)       the proceeding is frivolous or vexatious; or

(c)        the proceeding is an abuse of the process of the Court,

the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding.

2(2)  The Court may receive evidence on the hearing of an application for an order under sub-rule (1).”

5                     The application was commenced on 13 March 2001.  Getz Bros argues that Ms Carey-Hazell became aware or ought reasonably to have become aware of the defects she now alleges in relation to the St Jude Mitral Valve and that it was not reasonably fit for its purpose, more than three years before she filed the proceedings. 

6                     The time limit for commencing proceedings for compensation under s 74B or 75AD of the Trade Practices Act  in respect of defective products is three years from the date on which the applicant became aware or ought reasonably to have become aware of the want of fitness for purpose or the defects upon which the cause of action is based. Before turning to the material and the submissions upon which Getz Bros relies, it is convenient to have regard to the statutory basis of the causes of action which are in issue.

Statutory Framework

7                     Division 2A of Part V of the Trade Practices Act deals with actions against manufacturers and importers of goods.  If the goods are imported into Australia by a corporation that was not their manufacturer and, at the time of the importation the manufacturer does not have a place of business in Australia, then the corporation is deemed, for the purposes of the Division, to have manufactured the goods (s 74A(4)).

8                     Section 74B provides, inter alia:

“74B(1)  Where:

(a)       a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re-supply;

(b)       a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer;

(c)        the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any antecedent negotiations in connexion with the acquisition of the goods were conducted;

(d)       the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied; and

(e)        the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose;

the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction.

(2)  Subsection (1) does not apply:

(a)       if the goods are not reasonably fit for the purpose referred to in that subsection by reason of:

            (i)         an act or default of any person (not being the corporation or a servant or agent of the corporation); or

            (ii)        a cause independent of human control;

occurring after the goods have left the control of the corporation; or

            (b)        where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the corporation.”

9                     The time limit for commencing an action under a provision of Division 2A of Part V is specified in s 74J, which relevantly provides:

“74J(1)  Subject to this section, an action under a provision of this Division may be commenced at any time within 3 years after the day on which the cause of action accrued.

     (2)  For the purposes of this section, a cause of action shall be deemed to have accrued:

(a)       in the case of an action other than an action under section 74H, on the day on which the consumer or a person who acquired the goods from, or derived title to the goods through or under, the consumer first became aware, or ought reasonably to have become aware:

            (i)         in the case of an action under section 74B – that the goods were not reasonably fit for the purpose referred to in that section;

…”

10                  Part VA of the Act provides for the liability of manufacturers and importers for defective goods.  In particular, s 75AD provides:

“75AD  If:

(a)       a corporation, in trade or commerce, supplies goods manufactured by it; and

(b)       they have a defect; and

(c)        because of the defect, an individual suffers injuries;

then:

(d)       the corporation is liable to compensate the individual for the amount of the individual’s loss suffered as a result of the injuries; and

(e)        the individual may recover that amount by action against the corporation; and

(f)        if the individual dies because of the injuries – a law of the State or Territory about liability in respect of the death of individuals applies as if:

            (i)         the action were an action under the law of the State or Territory for damages in respect of the injuries; and

            (ii)        the defect were the corporation’s wrongful act, neglect or default.”

11                  The provisions of s 74A(4) whereby an importer is deemed to be a manufacturer if the manufacturer has no place of business in Australia are incorporated by reference in Part VA (s 75AB).  The term “defect” which appears in s 75AD is defined in s 75AC thus:

“75AC(1)  For the purposes of this Part, goods have a defect if their safety is not such as persons generally are entitled to expect.

      (2)  In determining the extent of the safety of goods, regard is to be given to all relevant circumstances including:

(a)       the manner in which, and the purposes for which, they have been marketed; and

(b)       their packaging; and

(c)        the use of any mark in relation to them; and

(d)       any instructions for, or warnings with respect to, doing, or refraining from doing, anything with or in relation to them; and

(e)        what might reasonably be expected to be done with or in relation to them; and

(f)        the time when they were supplied by their manufacturer.”

Subsections (3) and (4) are not material for present purposes.

12                  The time for commencing actions under s 75AD is limited by s 75AO thus:

“75AO(1)  Subject to subsection (2), a person may commence a liability action at any time within 3 years after the time the person became aware, or ought reasonably to have become aware, of the alleged loss, the defect and the identity of the person who manufactured the action goods.

      (2)  A liability action must be commenced within 10 years of the supply by the manufacturer of the action goods.”

The Statement of Claim

13                  The facts said to give rise to Ms Carey-Hazell’s claims are set out in the statement of claim filed on 14 March 2001.  It is sufficient to outline them so far as they relate to Getz Bros.  According to the pleading, Ms Carey-Hazell was found in 1975 to have suffered from a partial mitral valve prolapse and, as a result, a condition known as Barlow’s Syndrome.  This condition required ongoing and regular assessment of her mitral valve functioning. From 1984 until July 1997 that is said to have been provided by Mr Thompson, her cardiologist (par 7).  Mr Thompson conducted or arranged for the conduct of echocardiographs in 1986, July 1989, May 1991, December 1992 and December 1993.  By December 1993 her mitral valve function had deteriorated significantly.  She reported to her cardiologist at consultations over the period from 1986 to 1993 that she was suffering from loss of balance, said by a neurologist to be due to emboli from her mitral valve, markedly reduced energy levels and latterly palpitations and chest pains which significantly affected her ability to engage in recreational and day-to-day activities.  In 1995 she complained of dizzy spells, reduced energy levels and occasional fainting.  She says her cardiologist told her that she would at some future time need to have surgical repair performed to her mitral valve but there was no urgency in arranging such repair and her symptoms should  continue to be assessed annually.  In May 1996, she had felt weak and faint for an extended period of time and wished to proceed with repair of the mitral valve without delay.  Mr Thompson agreed that she should undergo such surgery.  He arranged for her to see Mr Nicholls in June 1996 with a view to the performance of a surgical repair of her mitral valve which was scheduled for 20 June 1996.  Mr Nicholls carried out an examination and advised Ms Carey-Hazell that she should undergo surgical repair of the mitral valve as soon as reasonably possible.  He warned her that there was a small chance that when surgery was commenced it might become evident that the valve had deteriorated to such an extent that he would not be able to repair it.  In that event he would have to replace the mitral valve with a mechanical valve and that if this were necessary he would use a St Jude Mitral Valve.  If the mechanical valve were inserted she would require life-long medication which would preclude her from having any further pregnancies.  She says that she inquired of Mr Nicholls as to the risks of the procedure and was told that she had about a 1% chance of death during such surgical procedure.

14                  On or about 20 June 1996 Ms Carey-Hazell underwent heart surgery performed by Mr Nicholls at the Sir Charles Gairdner Hospital.  In the course of that surgery he determined that her mitral valve had deteriorated to such an extent that it could not be repaired.  In the circumstances he proceeded to implant a St Jude Mitral Valve into her heart.  The valve is said to have been supplied by Getz Bros in the course of trade or commerce prior to its implantation in Ms Carey-Hazell’s heart.  Getz Bros is said, by implication, to have been aware that the St Jude Mitral Valve was acquired for Ms Carey-Hazell for the purpose of replacing her damaged natural mitral heart valve and for providing an effective, safe,  functioning mitral heart valve (par 22).  Ms Carey-Hazell alleges that while in hospital following the implantation she was given a booklet entitled “Living with your New Heart Valve” described on its cover as “an educational booklet for new heart valve recipients”.  It contained express statements relevant to the issue of anticoagulation, including a statement that her doctor might prescribe an anticoagulant to prevent blood clots from forming on or around the valve and that to maintain proper levels of anticoagulation she should take her medication as prescribed and follow up with blood tests as scheduled (par 24).  Following implantation of the valve she was prescribed and took anticoagulant medication known as Warfarin in accordance with directions from Mr Thompson and her GP.  In July 1996 she suffered double vision disturbances and splinter haemorrhages which persisted over several months and in October 1996 suffered on two separate occasions from severe pain in her left side and in each case collapsed.  These symptoms, as was subsequently discovered, were due to infarctions of her kidney and spleen.  On or about 21 March 1997 she suffered a stroke.  Between March 1997 and June 1997 she suffered repeated episodes of severe weakness and fainted.  In or about June 1997 she was identified as suffering from a dissected vertebral artery and a partially occluded left vertebral artery (par 25).  These symptoms and injuries are said to have been caused by a thromboembolism resulting from clotting upon the surface of the St Jude Mitral Valve and acute fibrin thrombus on it. 

15                  The thromboembolism, it is alleged, was at all material times a complication associated with the implantation of St Jude Mitral Valves occurring at the date of implantation in approximately two to five per cent of the patients with such valves implanted each year, even where such patients received optimal anticoagulation  (par 27).

16                  In June 1997 Ms Carey-Hazell underwent further open-heart surgery at which time Mr Nicholls removed the St Jude Mitral Valve and replaced it with a natural tissue valve.  This is said always to have been open as an alternative to the use of the prosthesis and carried a substantially lower risk of thromboembolism (par 30).  She alleges that the St Jude Mitral Valve did not, on its packaging or otherwise, contain any warning as to the possibility of thromboembolism from its use, that the booklet did not warn or advise of that possibility and that she did not, prior to 18 March 1998, receive any advice, instructions or warnings from Mr Thompson or Mr Nicholls or anybody else of that possibility (par 31). 

17                  Ms Carey-Hazell alleges that the St Jude Mitral Valve was defective as defined by s 75AC of the Trade Practices Act.  The defects are set out in par 32 of the statement of claim thus:

“a)      the lack of any warnings, instructions or advice in the St Jude booklet supplied to the Applicant or otherwise from the First Respondent, of the risk of thrombo-embolism associated with such mechanical valve’s implantation if patient’s took their anticoagulant medication as instructed (as the Applicant did at all material times).

b)         by its omission of any reference to such risk of thromboembolism and its express contents pleaded in paragraphs 23 and 24 herein, the St Jude booklet’s implicit suggestion that no such risk existed;

c)         the absence of any other warnings, instructions or advice otherwise from the Second Respondent, Third Respondent or any other person to the Applicant of the possibility of thrombo-embolism associated with her St Jude Mitral Valve if she took her anticoagulant medication as instructed (which she at all material times did);

d)         the Applicant’s reasonable assumption in the absence of such warning and in light of her reliance upon the express contents of the St Jude booklet that provided she took her anticoagulants in accordance with her doctors (sic) advice (as she did) there was not a risk that blood clots would form on or around her St Jude Mitral valve and hence pose a risk of thrombo-embolism;

e)         the facts pleaded in paragraph 27 herein;

f)         the facts pleaded in paragraph 31 herein;

g)         the fact that had the Applicant been warned of the potential for thrombo-embolism associated with the Applicant’s St Jude Mitral Valve while she took her anticoagulant medication as prescribed, she would have sought more urgent investigation of whether this was the cause for her symptoms and injuries pleaded in paragraph 25 herein.  By reason of the absence of such warning she lost the opportunity to make such investigation and potentially avoid some or all of such symptoms and injuries;

h)         the fact, as pleaded in paragraph 30 herein that the risk of thrombo-embolism in patients implanted with St Jude Mitral Valves is significantly higher than those implanted with tissue valves and even other mechanical heart valves;

i)          the nature and extent of the symptoms the Applicant suffered pleaded in paragraphs 25 and consequent need for surgical treatment pleaded in paragraph 28 herein.”

18                  In the alternative she alleges that by reason of the various facts pleaded relating to the valve it was not reasonably fit for its purpose as it caused her injuries and symptoms and had it not been removed might have caused her death or, at least, further serious injury.  By reason of the defects in the valve Ms Carey-Hazell says she has suffered injuries; splinter haemorrhages, the kidney and spleen infarctions, the stroke, the dissected and partially occluded vertebral arteries, loss of life expectancy resulting from the surgery necessary to remove the valve, scarring associated with the surgery and permanent visual injury.  The statement of claim sets out various heads of damage said to have been suffered by her and then claims, as against Getz Bros, compensation pursuant to s 74B of the Act and, alternatively, pursuant to s 75AD together with interest.

Evidence Relating to the Times at which the Limitation Periods Commenced

19                  In support of its contention that the application was commenced out of time, Getz Bros relies upon:

(a)        the allegations in the statement of claim;

(b)        Ms Carey-Hazell’s account of her medical history;

(c)        four letters which Ms Carey-Hazell received before 13 March 1998; and

(d)        two letters which Ms Carey-Hazell wrote before 13 March 1998.

The submissions for Getz Bros referred first to a copy of a booklet which was provided to Ms Carey-Hazell in hospital following the implantation of the mitral valve.  This booklet is referred to in par 23 of the statement of claim.  Getz Bros pointed to a passage from the booklet warning of the need for recipients of the St Jude mitral heart valves to take preventive measures against formation of blood clots on or around the implanted heart valve.  The relevant passage of the booklet was in the following terms:

“ANTICOAGULANTS

Your doctor may prescribe an anticoagulant medication to prevent blood clots from forming on or around your St Jude Medical heart valve.  The dosage will be closely monitored by blood tests.

To maintain proper levels of anticoagulation, take your medication as prescribed and follow up with blood tests as scheduled.  Take only those medications your physician prescribes.  Check with your doctor before taking any other medication, including over-the-counter products such as aspirin.

Always inform your dentist and physicians that you are on an anticoagulant medication.  Adjustments in your medication may be needed prior to any procedure.”

20                  The booklet also contained advice about the interaction between diet and anticoagulants and the need to obtain medical advice about dietary habits.  The reader of the booklet is also warned to consult a physician in relation to anticoagulants and if any of the following symptoms develop:

·        Excessive bruising

·        Excessive bleeding

·        Blood in your urine

·        Bloody or black, tarry bowel movements

·        Unusual nosebleeds

·        Bleeding gums

21                  As appears from Ms Carey-Hazell’s affidavit she suffered severe pain on her left side on or about 13 October 1996 and was readmitted to Sir Charles Gairdner Hospital where she remained until 27 October 1996.  She was treated by Dr Jeffrey Hamdorf, a general surgeon at the hospital.  A Computer Tomography scan showed that she had suffered infarctions in her left kidney and spleen.  Dr Kermode, a neurologist, told her that the infarctions had been caused by blood clots forming on the valve, flying off the valve and travelling through her blood stream to her left kidney and spleen where they caused a blockage in a blood vessel within that organ and, in turn, caused the surrounding tissue to die from lack of blood supply.  She understood that the process which caused the infarction was called thromboembolism.

22                  As the result of a car accident which she had suffered in 1993, Ms Carey-Hazell had engaged Paynes, Barristers and Solicitors to act for her.  On or about 6 March 1997, she  received from her solicitors copies of medical correspondence, including a letter dated 6 March 1997, from Dr Hamdorf to the solicitors which made reference to the infarctions of her spleen and kidney.  In relation to the infarction of the kidney Dr Hamdorf said:

“This is a condition which I elected to treat conservatively.  Infarction is caused by embolism and this was thought to be most likely from her artificial mitral valve (replacement was performed in June 1996 by Mr T Nicholls).  Following such surgery, anticoagulation using Warfarin is highly recommended if not considered mandatory.  At the time of her presentation, her level of anticoagulation was probably not within a satisfactory range therefore whilst under my care I submitted her to frequent clinical observation and re-institution of the anticoagulation therapy.

On presentation, Ms Carey-Hazell’s INR level was 2.4 whilst the day before that (14 October 1996) it was 2.0 and three weeks prior to this on 24 September 1996 it was 1.7.  This indicates that her level of anticoagulation was not adequate and further to this suggests that there was some trouble stabilising the level of Warfarin required.”

After reference to the interaction of Warfarin and other medication which she was taking for back pain following the motor vehicle accident in 1993, the letter went on:

“Because of the presence of a prosthetic mitral valve in the heart, Ms Carey-Hazell is at further risk of embolisation.  The risk is increased if Warfarin stabilisation is not perfect and the desired range for her INR is now 3.5 to 4.0.  In an effort to optimise the control of this, I strongly recommended that the medications she uses for her back pain be made regular and I took steps to institute this management during her admission and followed this up when I reviewed her on 1 November 1996.  Nevertheless, she remains at a moderately high risk given the presence of the prosthetic heart valve.  It should be noted that this risk is likely to be life long.”

23                  Getz Bros submission referred to the strokes suffered by Ms Carey-Hazell on 21 March 1997 and 12 June 1997 as appears from her affidavit evidence and the replacement of her mechanical valve by a natural tissue valve on 26 June 1997.  Reference was then made to a letter dated 11 October 1997 from Mr Thompson to Ms Carey-Hazell’s solicitors, which included the following statements:

“1.1     Karen had complications from her aortic valve surgery including multiple small strokes as a result of blood clots arising in the region of the valve.  Eventually the valve had to be replaced.

…

2.1       The reason for the surgery in 1997 was because Karen developed a most unusual complication from her initial valve replacement.  The valve developed a coating of blood clot which resulted in recurrent clotting despite vigorous attempts at anti-coagulation.  Fragments of the blood clot were breaking off and landing in various parts of her body including the spleen, kidneys and brain.  The blood clots to the spleen and kidney were self limiting.  One of the blood clots to the brain caused a stroke with interference with her co-ordination and eyesight.

…

5.         Karen’s life expectancy has been reduced as a result of her mitral valve disease which preceded the mitral valve replacement.  The unfortunate and rare complications from the mitral valve replacement, particularly the small strokes which resulted from the blood clots around the valve, may contribute to a shortening of her life expectancy.”

The same letter said that Ms Carey-Hazell would require careful long term cardio-vascular monitoring.  She required, at the time, potent anticoagulant treatment to prevent any further blood clots on the new natural tissue valve.  Inevitably she would be at risk of some complications although her current condition was stabilising and very encouraging.

24                  A report on the explanted valve prepared by St Jude Medical was sent to Ms Carey-Hazell on 24 November 1997 by Mr Mark Newman, the Head of the Department of Cardiothoracic Surgery at Sir Charles Gairdner Hospital.  In his letter covering that report, which itself was dated September 18, 1997, he said:

“I was sorry to hear that you had not heard the results of your valve tests.  I contacted Mr Nicholls who felt that you had been sent a copy of the report.  I have retrieved the report from him and include this for your information.  Basically I think it states that the valve was basically normal apart from the thrombus that was on it.  This amount of thrombus, despite anticoagulation, is quite rare, but has been described before with mechanical valves….”

25                  It is to be noted that the St Jude Medical letter forwarded by Mr Newman relied upon examination by Dr Jack L Titus, “an independent pathologist at the St Paul Heart & Lung Centre”.  According to the letter, fibrinous deposits were observed on the surfaces of both leaflets of the valve and large amounts detected in the recessed pivot areas.  Whitish tissue observed on the sewing cuff was normal fibrous tissue indicative of a healing reaction, most of which had been previously removed.  Dr Titus concluded that the restriction of leaflet motion was most likely due to deposits of acute fibrin thrombus in the recessed pivot areas.   The valve was then cleaned and visually examined under 10x magnification for anomalies on the surfaces of the leaflets and orifices which were found to be unremarkable.  It was  disassembled for performance testing, including pneumatic functional leakage testing and hydrodynamic functional testing, both of which were said to yield values within specifications and guidelines for normal operation of the heart valve respectively.  The  St Jude Medical letter went on to say:

“The results of our investigation indicated the mitral insufficiency the patient experienced was due to deposits of acute fibrin thrombus in the recessed pivot areas, which then caused restricted motion of both leaflets.  This is supported by the examination performed by Dr Titus.  The restriction of the leaflets was not due to an intrinsic valve defect, as supported by testing performed at St Jude Medical Heart Valve Division.  The cause of thrombosis remains unknown.”

26                  Ms Carey-Hazell wrote to Getz Bros on 12 December 1997 expressing concerns about the St Jude Medical letter.  In a passage relied upon by Getz Bros, she said:

“I have serious concerns regarding three aspects of the report.  The first is that it is my understanding, from both the medical team at the hospital and written reports from my own cardiologist, that the reason the valve was explanted was that it had developed a blood clotting tendency and was causing me to have multiple infarctions and multiple strokes.  Specifically the TOE showed that there were three significant blood clots formed and sitting on the valve that could fly off at any time and cause a major stroke.  The report by St Jude indicates that the reason the valve was explanted was due to mitral insufficiency.  Accordingly it appears that the main body of testing conducted on the valve related to failure of the leaflet to close properly due to the thrombus on the valve, rather than the cause for the valve developing the thrombus and blood clotting tendency.

Secondly, after the valve was removed one of the doctors told myself and my husband that the valve had been almost totally covered with a velvet or grass like growth which was the cause of the clots forming.…”

27                  The letter of 12 December 1997, in passages not relied on by Getz Bros, went on to say that one of Ms Carey-Hazell’s doctors told her that a possible cause of the growth was that the coating on the valve may have been faulty with tiny holes or dents that provided a hold for platelets which in turn allowed the growth and blood clots to form.  He had told her that a fault in the valve was likely because she was still having strokes despite a high level of anticoagulation.  She had been cleared of having any blood disorder that would cause a blood clotting tendency.  When she had requested the return of the valve her solicitor was told that it had been sent to St Jude Medical and that special equipment would be used to scan the surface of the valve, which equipment was not available in Australia.  When her solicitor had requested that the valve be returned to her after the testing was completed he was advised that the valve would be destroyed in the testing process.  Ms Carey-Hazell also complained in her letter of the limitation of the surface examination to a 10x magnification.  Her pathologist had indicated that to view a single platelet required a magnification of 400x.  Given that the problem was the aggregation of platelets it seemed to Ms Carey-Hazell to have been grossly inadequate to have limited the examination to a 10x magnification.  It brought into serious question why the valve had to be sent to St Jude Medical at all and why the valve was destroyed when the level of testing necessary could have been done locally with no damage to the valve. 

28                  Getz Bros also relies on a letter which Ms Carey-Hazell wrote to St Jude Medical, which was exhibited to her affidavit, and which she says was sent on 2 March 1998 although the date does not appear on the exhibit.  In that letter she responded to information from St Jude Medical that Dr Titus, who had examined the device, was “only available to answer my questions at your request and then only if you deem the questions to be appropriate”. Ms Carey-Hazell raised a question about the independence of Dr Titus given the conditions placed by St Jude Medical on her access to him.  She went on:

“Further, I am getting very angry at the treatment I have received from your organisation with regard to this matter.  Despite that (sic) fact that clotting problems with the valve have been acknowledged, your organisation provides no warning in your patient literature and once aware of the major clotting problems that I have had your organisation has taken no steps to investigate the cause, save to have provided a second hand report, about which serious questions have arisen.  I believe that ensuring patient safety is a much more important issue than legal liability and I think it would be shortsighted to sacrifice all patience (sic) safety in return for limiting your legal liability by failing to investigate fully when an incident occurs.”

29                  On 11 March 1998, Ms Carey-Hazell was sent a letter from the Medical Devices Section of the Therapeutic Goods Administration.  She had written to the Authority about her experience with the artificial heart valve.  In the letter, which was apparently received on 18 March 1998 although par 36 of the affidavit refers to 25 March 1998, it was said that because the Therapeutic Goods Administration did not have the opportunity to evaluate the valve which had been removed from Ms Carey-Hazell her correspondence was passed to Professor Cliff Hughes, Chairman of the Therapeutic Devices Evaluation Committee and who was also Head of the Department of Cardio-thoracic Surgery at Royal Prince Alfred Hospital in Sydney. 

30                  In his letter to the Therapeutic Goods Administration, which was dated 13 February 1998, Professor Hughes said, inter alia:

“Thrombo-embolism is a recognised and not infrequent complication of any mechanical prosthesis used for valve replacement.  It is generally accepted that approximately 2 to 5% of patients will have a recognised thrombo-embolic complication each year after cardiac surgery despite optimal anti-coagulation.  Such an incidence does not reflect a manufacturing fault on any particular valve type or, indeed, of any particular individual valve.  Rather it is a response of blood coming in to contact with artificial substances in the blood stream.  The majority of thrombo-emboli in fact come from the sewing ring but a significant number will come from the valve leaflets (or ball) from the hinge mechanisms or from supporting struts.

Warfarin is routinely used as an anti-coagulant in this situation but, despite optimal management of the INR, we still see patients in whom this complication occurs without warning and without reason.

It is not necessary to have pannus or vegetations on the valve for thrombosis to occur.  Thrombosis does not necessarily stay adherent to the valve and, in fact, it is for this very reason that the episodes described in Ms Carey-Hazell’s letter occurred.  Namely small pieces of thrombus broke off from wherever they had formed and lodged in distal organs.  Of course, if a patient does develop an infection and then develops vegetations on the valve, these are more likely to produce thrombo-emboli complications.  Valve infection is also a recognised complication of any prosthesis, mechanical or biological, placed with the heart. It does not represent a failure of the valve or a fault in its manufacture. 

It is also reasonable to expect that a detailed analysis of the valve could fail to show any faults at all and yet thrombosis could occur on any part of the valve.

Of course, once thrombus or fibrin begins to deposit on the valve, it may impinge mobility of the leaflet and cause the valve to leak (regurgitation).  The fact that fibrin etc was found in the “recess pivot areas” is not unusual as thrombus tends to occur in areas where there is stasis or turbulent flow such as in recess pivot areas.

In summary, from the information available, I recognise this unfortunate but recognised complication of mechanical prostheses as an accepted, recognised and published complication of any mechanical valve.  There is extensive literature on the management of mechanical prostheses, optimal anticoagulation levels and the management of these problems.”

31                  According to Ms Carey-Hazell’s affidavit she was not aware prior to the receipt of that letter on 18 March 1998, nor was she told by any of her doctors, that thromboembolism was a recognised and not infrequent complication of any medical prosthesis used for valve replacement.  Nor was she aware or told that it was generally accepted that despite optimal anticoagulation, 2 to 5% of patients each year would have a recognised thromboembolic complication after cardiac surgery.  Before that date, she said that she did not know or confidently believe that the St Jude’s mechanical heart valve which was used to replace her natural heart valve on 27 June 1996 was defective or not fit for the purpose of replacing her natural mitral valve and providing a permanent, effective, safe and functioning mitral heart valve.  She accepted in her evidence that she knew prior to 18 March that she had suffered from thromboembolism as a result of the implantation of the device but did not know that it was caused by the device being defective or not fit for its purpose.

32                  Getz Bros contends, however, that the fact that the thromboembolism was a complication of the implantation of the mechanical valve it was made clear in the letters from Doctors Handorf, Thompson and Newman.  It was to avoid the symptoms resulting from the complication that Ms Carey-Hazell underwent further surgery to replace the valve.  Dr Thompson described the complication as rare and unusual.  Professor Hughes’ quantification of the complication rate as between 2 to 5% of patients was said to be consistent with that characterisation.  His description of the process by which the complication occurs was said to be virtually identical with that which Ms Carey-Hazell gave in her letter of 12 December 1997.  There was said to be nothing in the letter she received on 18 March which was new to her.

33                  In the circumstances, according to Getz Bros, it was submitted that the action should fail because it was brought outside the three year limitation period set by ss 74J and 75AO of the Act.  On that basis, it was said, the appropriate course would be to dismiss her claim as against Getz Bros.

The Operation of the Limitation Period

34                  The question whether a statutory limitation provision operates to extinguish the cause of action once the time limit has expired or whether it only bars the remedy, is a matter of statutory construction.  Statutory time limit provisions “take different forms and have different purposes” – Australian Iron & Steel Ltd v Hoogland (1962) 108 CLR 471 at 488 (Windeyer J).  See the general review of the topic by Mason CJ in McKain v RW Miller & Company (South Australia) Pty Limited (1991) 174 CLR 1.

35                  The three year limitation period imposed by s 74J expressly assumes the existence of a cause of action under Division 2A of Part V of the Act.  It defines the time limited by reference to the day “on which the cause of action accrued”.  Section 75AO(1) does not use that explicit terminology but like s 74J has a facultative operation providing that “..a person may commence a liability action at any time within 3 years…”.  In each case the liability for compensation is defined in distinct provisions without reference to the time limitation – the relevant liability-creating provisions in this case being s 74B and 75AD.  Neither of the limitation provisions, s 74J or s 75AO, in terms makes compliance with the time limit an element of the cause of action to which it applies.  The expiry of the time limit is not said to extinguish the cause of action.  And the matters of awareness or constructive awareness addressed by these provisions are not logically congruent with the matters constituting the elements of the cause of action.  In each case the expiry of the time limit leaves the cause of action intact.

36                  As a matter of construction therefore neither s 74J nor s 75AO operates to extinguish the causes of action to which it applies.  The like conclusion in respect of s 74J was reached by the Full Court of the Supreme Court of South Australia in White v Eurocycle Pty Ltd (1995) 64 SASR 461 at 467-470 (Duggan J, King CJ and Nyland J concurring).  The question was left open by Moynihan J in Fibreglass Pool Works (Manufacturing) Pty Ltd v ICI Australia Pty Ltd (1997) 146 ALR 120.  For the reasons I have already expressed, in my opinion the conclusion in White was correct and applies also to s 75AO.  It is also doubtful whether the “long-stop” limitations in s74J(3) and s 75AO(2) have an extinguishing effect.  The question does not arise in this case save to illustrate, by way of contrast with s 11A(3) of the Consumer Protection Act 1980 (UK), the general point that it is a matter of statutory construction.  The UK section provides that the expiry of a like ten year long-stop period shall operate to extinguish the plaintiff’s right of action where that right has not accrued at that time.  The expiry of the three year period defined under that Act in a scheme similar to that in s 74J and s 75AO does not use the formula used for the long-stop provision. It would seem therefore, like the provisions of the Trade Practices Act, merely to bar the remedy – McGee, Limitation Periods, 3^rd Edition, Sweet & Maxwell (1998) p 29. 

37                  In Commonwealth v Mewett (1995) 59 FCR 391 at 398, Cooper J observed:

“Once a relevant limitation period has expired it is irrelevant until such time as a defendant raises the plea in bar to the remedy. Otherwise the question of limitation does not arise for consideration by the Court.”

That was true for the type of statutory limitation under consideration in that case, as it is true for the limitation provision under consideration here.  In such a case the section may be pleaded in bar to the remedy if the respondent choses to do so.  The respondent may waive that right or may be estopped from asserting it if the conditions for such estoppel are satisfied – Commonwealth v Verwayen (1990) 170 CLR 394.   It follows that in this case it could not be said of the statement of claim that it fails to disclose a reasonable cause of action on the ground that the cause of action accrued more than three years before the proceeding was instituted.  Nevertheless there is support for the proposition that in “a very clear case” of an action brought out of time a respondent can seek to strike out the claim on the grounds that is frivolous or vexatious or an abuse of the process of the court and that such an application may be supported with evidence – Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398 at 404-405, a passage from the judgment of Donaldson LJ cited with approval in Verwayen at 473 (Toohey J) and in Commonwealth v Mewett at 398-399 (Cooper J).  In the latter case, the Full Court was concerned with a motion to strike out a proceeding on the ground that the applicant had no reasonable cause of action because of the expiry of a time limitation under the Safety Rehabilitation and Compensation Act 1988 (Cth). Neither in Ronex Properties, nor in Verwayen, nor in Mewett was there any application before the court to strike out a proceeding as frivolous or vexatious or as an abuse of process by reason of expiry of a limitation period.  In F v Wirral Metropolitan Council (1990) 2 WLR 1132, the Court of Appeal upheld the striking out of a claim in negligence against a local authority primarily on the grounds that it disclosed no reasonable cause of action.  However, Purchas LJ also held that any claim in respect of the alleged breaches of duty would have been statute barred and properly struck out under R.S.C. Ord. 18 r 19(1)(b), the equivalent of O 20 r 2(1)(b).  That holding was, however, made without elaboration as to the application of the rule and was strictly obiter.  Stuart-Smith LJ, at 1176, agreed that the action in that case should be struck out “…both on the ground that the reamended statement of claim disclosed no cause of action and on the ground that, if it did, any such action is statute-barred”.  Ralph Gibson LJ, having upheld the primary judge’s ruling that the statement of claim disclosed no arguable cause of action, held it not necessary to give further consideration to the question of the barring of any arguable claim by the running of the period of limitation.

38                  To plead a cause of action which is, on the face of it, out of time cannot, without more, amount to an abuse of process where the expiry of the limitation period does not extinguish the cause of action.  For until the respondent has pleaded it is not known whether the statutory time bar will be raised.  And if the time limitation is pleaded, the applicant may raise in reply some plea such as waiver or estoppel on the part of the respondent.  It is not always the case that a respondent will plead the limitation point.  In some cases, particularly when the respondent has been aware of the applicant’s concerns for a long time and that action is a possibility, it may regard it as inappropriate to raise the plea.  For the same reasons, it cannot be said that the commencement of proceedings out of the time defined by a non-extinguishing limitation provision is frivolous or vexatious.

39                  As is said in McGee’s Limitation Periods at p 347:

“…it is not as a general proposition an abuse to bring an action on a time-barred claim, since there is always the possibility that the defendant will chose not to plead the statute.  Consequently an application on this ground will succeed only if the defendant is able to show something more, such as that a previous action on the same facts has been dismissed for disobedience to a peremptory order of the court – mere dismissal for want of prosecution is insufficient.  The inevitable conclusion is that reliance on Order 18, rule 19 will very rarely be appropriate. …”

40                  In addition to all of these considerations there is the express warning contained in the joint judgment in Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 at 533:

“We should…state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases.”

It was suggested that this was a warning confined to cases of causes of action whose accrual is defined by the incurring of loss or damage.  While that was the context in which it was given, the principle is of general application to cases which may turn upon contentious characterisation of matters of fact.

41                  Assuming that a defence is raised that the proceedings have been commenced out of time and that the limitation point is not conceded by Ms Carey-Hazell, there are likely to be questions of fact and law to be determined not readily susceptible of summary disposition.  The concepts of awareness and constructive awareness of the deficiencies pleaded, upon which the limitation periods turn, will require consideration and application to the facts of the case.  So too, will the defects and want of fitness for purpose which are alleged in respect of the product.  Their precise content will determine the point at which awareness or constructive awareness can be said to have crystallised for the purposes of time running.   The facts relevant to all of these matters will have to be found after hearing evidence.  The evidence will no doubt include the testimony of Ms Carey-Hazell and the letters which she sent and received.  It is not necessary here to comment upon the asserted inconsistency between the state of awareness to which she deposes and that disclosed by the correspondence.  That is an issue to be decided at trial, whether it be the trial of a preliminary issue or of the entire matter.

42                  In my opinion the matter is unsuitable for disposition in the way in which Getz Bros seek to have it disposed of.  A fortiori the documents produced under subpoena and the notice to produce documents filed previously in these proceedings have no further role to play in relation to the motion.  The documents produced under the subpoena must be returned.  The motion will be dismissed with costs.

Associate:

Dated:              12 June 2001