Carlos Medeiros v Island Construction Services Company Ltd

• Jurisdiction: Bermuda
• Judge: Ian RC Kawaley CJ
• Judgment Date: 25 November 2016
• Neutral Citation: [2016] SC Bda 103 Civ
• Docket Number: CIVIL JURISDICTION 2010: No. 55
• Court: Supreme Court (Bermuda)
• Date: 25 November 2016

[2016] SC (Bda) 103 Civ

In the Supreme Court of Bermuda

CIVIL JURISDICTION 2010: No. 55

Carlos Medeiros

Plaintiff

and

Island Construction Services Co. Ltd.

1 ^st Defendant

and

Antwone Leroy Simons

2 ^nd Defendant

and

The Bermuda Hospitals Board

3 ^rd Defendant/3 ^rd Party

and

Dr Steven Dore

4 ^th Defendant/1 ^st 4 ^th Party

and

Dr. Matthew Arnold

5 ^th Defendant/2 ^nd 4 ^th Party

Mr. Craig Rothwell, Cox Hallett Wilkinson Ltd., for the Plaintiff

Mr. Jeffrey Elkinson and Mr. Scott Pearman, Conyers Dill & Pearman Ltd., for the Defendants

Mr. Allan Doughty, Beesmont Law Limited, for the 3 ^rd Defendant/3 ^rd Party (‘BHB’)

Mr. Paul Harshaw, Canterbury Law Ltd., for the 4 ^th Parties and 5 ^th Defendants

Strike — out application — claim in negligence — contractual relationship — whether concurrent liability in contract and tort exists — judicial precedent

RULING ON STRIKE-OUT APPLICATION

(in Chambers)

The Application

1 By A Summons Dated June 22, 2016, Bhb Applies To Strike-out The Plaintiff's Amended Generally Endorsed Writ And Amended Statement Of Claim, As They Relate To The 3rd Defendant/3rd Party And The 1st And 2nd Defendants' Amended Third Party Notice On The Grounds That They Disclose No Reasonable Cause Of Action. The Application Arises Against The Following Background, Which Is Helpfully Set Out In Mr Doughty's Written Submissions.

2 The Plaintiff was seriously injured in a road traffic accident when his vehicle was struck by a truck owned by the 1 ^st Defendant and driven by the 2 ^nd Defendant. The Defendants admitted negligence but denied responsibility for the damage sustained by the Plaintiff subsequent to the operation on the Plaintiff on 10 December 2008. They issued a Third Party Notice against BHB on or about March 16, 2011 (which was amended on or about April 27, 2011) alleging that BHB was negligent. An indemnification was sought in respect of damage sustained by the Plaintiff ‘[a]s a consequence of the negligence and breach of duty of the Third Party’.

3 Paragraph 7 of BHB's Amended Defence dated June 21, 2012 averred as follows:

‘(d) That the relationship between the Plaintiff and the First Fourth Party and Second Fourth Party was contractual, therefore any cause of action against the First Fourth Party and Second Fourth Party by the Plaintiff should be pursued as being a breach of contract. The relationship between the Plaintiff and the Third Party was the subject of a separate contract whose implied terms allowed for the provision of drugs, dressings and whatever else was necessary to assist the patient in his recovery from the surgery. As the Third Party is a stranger to the contract between the Plaintiff and the First Fourth Party and Second Fourth Party, it is averred that the Third Party cannot be held liable for any breach of duty which did in fact transpire.’

4 This plea formally addressed the liability to the Plaintiff only, but by necessary implication addressed the corresponding liability to the 1 ^st and 2 ^nd Defendants as well, being pleaded in response to their Third Party Notice. BHB's Re-Amended Fourth Party Notice advanced the central plea that its relationship to the surgeons was merely contractual so that it could not be vicariously liable for their negligence in tort.

5 On January 22, 2014, I ruled that BHB owed the Plaintiff a non-delegable duty of care following, inter alia, the decision of Hellman J in Williams-v- Bermuda Hospitals Board [2013] Bda LR 1(at paragraphs 85–86). Hellman J's finding that this duty of care was breached (at paragraph s 93–108) was upheld by the Court of Appeal for Bermuda (Sir Austin Ward JA) and the BHB cross-appeal on the scope of the duty of care was summarily dismissed (Bermuda Hospitals Board-v-Williams [2014] Bda LR 22 at paragraphs 43–44). On July 21, 2014, the Plaintiff himself joined BHB as 3 ^rd Defendant alleging, inter alia, the breach of a non-delegable duty of care. On August 8, 2014 BHB sought Further Better Particulars of the Plaintiff's claim against it. On December 10, 2014 the limitation period for a contractual claim by the Plaintiff against BHB expired. On April 8, 2016, the Plaintiff finally served his Further and Better Particulars. Mr Doughty explained that service of these Particulars, combined with the long awaited judgment of the Judicial Committee of the Privy Council in Williams-v- Bermuda Hospitals Board [2016] UKPC 4 (January 25, 2016, a judgment which dealt solely with the issue of causation), focussed the attention of BHB once more on the significance of the character of the Third Party claim. BHB filed its Amended Defence to the Amended Statement of Claim on or about May 20, 2016.

6 It was in short contended by BHB in its present application that both the Amended Writ and Statement of Claim and the Amended Third Party Notice were liable to be struck-out because they pleaded the wrong claim, namely a claim in tort rather than a claim in contract.

The respective arguments

7 Mr Doughty argued that ‘ if one has a claim against a professional man with whom one holds a contract, a claim for breach of duty against that professional man should only be brought in contract’ (“Written Submissions of the Third Party/Third Defendant”, paragraph 3.2). He relied in this regard in terms of broad principle upon the speech of Lord Scarman in Tai Hing Cotton Mills-v-Liu Chong Hing Bank [1986] AC 80 at 107 (Privy Council) as approved by the Court of Appeal for Bermuda in White-v- Conyers Dill & Pearman [1994] Bda LR 9. More specifically, by way of illustrating the application of these general principles to the particular context of medical negligence claims, BHC's counsel relied upon their application by Hellman J in Snowden-v-Emery, Dyer and Bermuda Hospitals Board [2014] Bda LR 92 (at paragraph 52).

8 Mr Elkinson, after (to my mind unconvincingly) contending that a claim in contract had already been pleaded, vigorously contested the umbrella principle contended for by BHC's counsel. His arguments were adopted by the Plaintiff's counsel. In paragraph 7 of his “Submissions of the First and Second Defendants”, he argued that the true legal position was that ‘ a party can, in addition to its contractual duties, have also owed a concurrent duty of care in tort. However, the content of that duty of care would be determined by the terms of the contractual relationship.’ The current Bermudian law position was primarily supported by reference to the persuasive House of Lords decision in Henderson et al-v-Merrett Syndicates Ltd. et al [1995] 2 AC 145, the binding Privy Council decision in FFSB Limited-v-Seward & Kissel LLC [2007] WL 711470 and my own decision in Patton and Cook-v-Bank of Bermuda Limited [2011] Bda LR 34. The English law position was clearly articulated by “ Clerk & Lindsell on Torts”, 21 ^st edition (2014) at paragraph 10–06:

‘‘Since Henderson, it has been accepted that any professional is prima facie liable to his client in both contract and tort. However, a converse point should be noted; even if there is a contractual duty to the client, the duty in tort will not extend further than the contractual one, save in very exceptional circumstances.’

Legal findings

9 Mr Doughty seemed to beat the nationalist Bermudian law drum while Mr Elkinson seemed to raise the imperial English law flag. This application, however, turns on more prosaic orthodox legal considerations. The starting point in any analysis of decided cases is to clarify what the authorities relied upon truly decided. Common law courts are primarily concerned with the task of applying general legal principles to the facts of the case before them. It is often easy to blur the lines between binding operative findings ( ratio decidendi) and non-binding other judicial observations ( obiter dicta). It is also important to accurately identify the true nature of findings in decided cases, as well as to take into account the extent to which the force of the findings reached and relied upon may be weakened by the lack of full argument.

10 When all of these factors are taken into account and the key authorities relied upon by Mr Elkinson are carefully considered, it ultimately becomes apparent that there is no compelling support at all for the proposition that concurrent liability in contract and tort does not exist under Bermuda law. On the contrary, there is binding authority in support of the contrary position.

Tai Hing Cotton Mills-v-Liu Chong Hing Bank [1986] AC 80

11 The Tai Hing case's factual and legal focus is best illustrated by the opening words of Lord Scarman's judgment (at 96–97):

‘ This is an appeal by a company against a decision of the Court of Appeal in Hong Kong whereby its action to recover from three banks sums of money alleged to have been wrongfully debited against its current account with each was dismissed. The appeal raises a question of general principle in the law governing the relationship of banker and customer. Additionally, the appeal calls for consideration of a number of questions arising from the particular circumstances of the company's business relationship with each of the three banks.’

12 The central issue in controversy was not whether a party to a contract could only sue in contract and not in tort, but whether they could use the law of tort to impose a broader extent of liability than the contractual counterparty had agreed to accept. The crucial passage in Lord Scarman's judgment (at 107) subsequently...