Blyth v Commonwealth of Australia

LEGISLATION CITED : Limitation Act 1969 Uniform Civil Procedure Rules 2005

Blyth v Commonwealth of Australia [2005] NSWSC 721 Commonwealth v. Diston [2003] NSWCA 51 Commonwealth of Australia v. Nelson [2002] QSC 274 Commonwealth of Australia v. Smith [2005] NSWCA 478 Cranbrook School v. Stanley [2002] NSWCA 290 Harris v. Commercial Minerals Limited (1996) 186 CLR 1 CASES CITED : Atikulla v. Sefton (2001) 53 NSWLR 574 Bray v. F.Hoffman-La Roche Limited (2002) 190 ALR 1 Sydney City Council v. Zegarac (1998) 43 NSWLR 195 Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541 Holt v. Wynter (2000) 49 NSWLR 128 South Western Sydney Area Health Service v. Gabriel [2001] NSWCA 477 McLean v. Sydney Water Corporation [2001] NSWCA 122

PARTIES : COMMONWEALTH OF AUSTRALIA v. LEIGH EVANS

COUNSEL : Plaintiff: J. Sharpe Defendant: P. Jones/D. Brogan

SOLICITORS : Plaintiff: Hollows Defendant: Australian Government Solicitor

LOWER COURT JURISDICTION : Supreme Court (Associate Judge)

LOWER COURT FILE NUMBER(S) : No. 20049 of 2002

LOWER COURT JUDICIAL OFFICER : Malpass As.J.

LOWER COURT MEDIUM NEUTRAL CITATION : LEIGH EVANS v. COMMONWEALTH OF AUSTRALIA [2005] NSWSC 280

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

1 HIS HONOUR: The appellant, the Commonwealth of Australia, appeals the decision and orders made by (then) Master (now Associate Justice) Malpass of 7 April 2005 whereby the limitation period for the cause of action in the proceedings was extended. The notice of appeal contains five grounds in relation to orders made by (then) Master Malpass pursuant to the Limitation Act 1969. One ground of the appeal relates to the decision to reserve the costs of the notice of motion for the extension of time.

2 Grounds 1 and 2 both relate to alleged errors in relation to the application of the provisions of s.60I(1)(i), (ii) and (iii) of the Limitation Act.

3 Ground 3 asserts error in the Master having rejected evidence relating to inquiries undertaken by the appellant as to the availability or non-availability of potential witnesses.

4 Ground 4 relates to an issue going to the respondent's reliability or credibility based upon a history given to a psychologist, Mr. Wilks.

5 Ground 5 asserts error on the question of prejudice, in particular the finding that the prejudice identified by the appellant was not significant and that a fair trial could nevertheless be had.

6 On 26 February 2002, the respondent, Leigh Evans, moved the Court for an order pursuant to s.60G of the Limitation Act seeking an extension of time for pursuing a claim arising out of the collision between the "Melbourne" and the "Voyager" that occurred in the early hours of 10 February 1964.

7 On 18 February 2002, a statement of claim was filed in which the plaintiff/ respondent claimed that as a result of the collision, he suffered injury, loss and damage, in particular, psychiatric injury in the form of a post-traumatic stress disorder and associated emotional and psychological problems including, in particular, alcohol abuse.

8 In the statement of claim, he alleges (and this is not in dispute) that he joined the Navy as a recruit on 11 April 1949 and was discharged on 10 April 1970.

9 The plaintiff contends in the statement of claim that his employment capacity had been impaired by reason of the injuries alleged and that, had the collision not occurred, he would have been likely to have become a commissioned officer and remained in the Navy until retirement at or about the age of 55 years. At that point, so the respondent claims, he would have received appropriate DFRB entitlements and other service benefits. There is a general claim of a diminution in earning capacity.

10 In the application heard and determined by (then) Master Malpass, the plaintiff/respondent relied upon two affidavits. His primary affidavit was sworn on 2 March 2002 and he swore an affidavit in reply on 27 August 2004. I will return to aspects of the affidavit evidence below.

11 The hearing before the Master took place on 1 and 4 April 2005. Judgment was delivered on 7 April 2005. In relation to that hearing, I note:- (a) Extensive reference was made in the judgment to the plaintiff's/respondent's two affidavits, including evidence as to his experience and recollection of events, his subsequent employment with the Navy and elsewhere and to medical evidence, including in particular, the psychological report of Mr. Wilks.

(b) Evidence of correspondence from investigators employed by the appellant was rejected on the basis that the material was in a form that made it inadmissible.

(c) An attack on the credibility of the respondent was made, in particular, on the basis of history given by him to Mr. Wilks.

12 The Master did not make an affirmative finding in relation to s.60I(1)(i)(a). A finding was made in favour of the respondent in terms of his lack of awareness of the connection between the personal injury alleged and the appellant's alleged act or omission.

13 On the issue of prejudice, whilst the Master accepted that there may be actual prejudice, as well as presumptive prejudice, he was not satisfied that a fair trial was no longer possible. In this respect, some reliance was placed upon:- (a) Favourable findings made as to the respondent's credit, notwithstanding the issue concerning the history given to Mr. Wilks. (b) The nature of the claim for economic loss was in the nature of a loss of opportunity and not total unfitness for work and for loss in that respect of full retirement benefits from the Navy. (The appellant contended that this was an erroneous understanding of the claim - see below).

(c) the well-investigated history of the disaster and the number of claims that have been brought before this Court by other former crew members who served on either the Voyager or the Melbourne. (A point also criticised by the appellant - see below).

14 I will return later in this judgment to the findings, analysis and evidentiary considerations concerning the bases upon which the Master ruled in the respondent's favour.

15 The application for an extension of time was pursued in reliance upon ss.60G and 60I of the Limitation Act 1969. The order sought was, as earlier mentioned, pursuant to s.60G of that Act. These sections are to be found in Part 3 Division 3(3) of the Statute. They provide for a procedure whereby discretionary relief from the limitation period may be granted where a plaintiff "was unaware of the fact, nature, extent or cause of the injury, disease or impairment at the relevant time": s.50F.

16 Section 60G provides the Court with a discretion to order that the limitation period for the cause of action be extended if it is determined that it is "just and reasonable" to do so.

17 Section 60I(1) is in the following terms:- "A court may not make an order under s.60G or s.60H unless it is satisfied that:- (a) the plaintiff:- (i) did not know that personal injury had been suffered, or

(ii) was unaware of the nature or extent of personal injury suffered; or

(iii) was unaware of the connection between the personal injury and the defendant's act or omission. At the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted, and (b) the application is made within three years after the plaintiff became aware (or ought to have become aware) of all three matters listed in paragraph (a)(i) - (iii)."

18 As has been pointed out by Studdert, J. in Blyth v. Commonwealth of Australia [2005] NSWSC 721 at [7], once a plaintiff satisfies the Court on one of the issues arising under s.60I(1)(a)(i) or (ii) or (iii) and passes through the "gateway provision", then the plaintiff must further satisfy the Court that it is "just and reasonable" to extend the limitation period under s.60G(2). There, as in this case, prima facie, the relevant limitation period expired on 10 February 1970, six years after the collision between the two vessels.

19 At the time of the Master's decision, an appeal from a Master to a judge was governed by Part 60 of the Supreme Court Rules. The comparable provisions are now to be found in Part 45, Division 3 of the Uniform Civil Procedure Rules 2005. The right of appeal is provided for in Part 45, Rule 4.

20 The accepted view is that in an appeal from a Master (now an Associate Judge) to a single judge, the same principles apply as those governing an appeal from a judge to the Court of Appeal: Commonwealth v. Diston [2003] NSWCA 51 at [29] per Sheller, JA. It was there observed:- "… subject to the impact of any fresh evidence admitted under Rule 15, the Master's primary findings of fact are binding on the court hearing the appeal unless those findings of fact, or the inferences drawn from them, by the Master are so flawed as to attract review by the court in accordance with the principles found in Warren v. Coombes (1979) 142 CLR 531 at 553; Do Carmo v. Ford Excavations Pty. Limited (1981) 1 NSWLR 409, in particular, at 420 per Cross, J."

History of the respondent/plaintiff's naval service

21 The evidence concerning the respondent may be divided into three segments:-

(b) the plaintiff's involvement in the Voyager collision;

22 The evidence in relation to the respondent's naval service establishes two facts of note which will be discussed later in this judgment. Firstly, the 20 year history of employment bespeaks a naval career orientated employee which is relevant to the economic loss claimed. Secondly, the contrasting nature of the employment duties of the respondent performed over the years up to the date of the collision and the nature of his naval duties subsequent thereto. The alteration in the respondent's duties after the collision is an objective matter that is, at least, consistent with the psychological impact which the respondent contends resulted from the Melbourne/Voyager collision.

23 The evidence before the Master established that there are a number of documents still in existence in relation to the plaintiff's service between 11 April 1949 and 6 July 1970. Before referring to that evidence it is, of course, essential for the purposes of this appeal to bear in mind that the learned Master was impressed with the respondent/ plaintiff as a witness (see paragraph [31] of the judgment).

24 The plaintiff stated in his affidavit that, even from a young age, he had decided to join the Navy. Over the opposition of his father, his mother agreed to sign the necessary papers to permit him to join the Navy, which he did one week short of his 19th birthday. At that time, he enlisted for a term of 12 years.

25 The respondent's evidence was that his early years in the service were "excellent" and that he gained promotion and made good friends and mates. He stated in his first affidavit, "it was a fantastic experience". Some of his workmates from these earlier years which the respondent named subsequently died on board Voyager.

26 Whilst the extent of the respondent's progress in the Navy should not be overstated, he does appear to have attained certain milestones by undertaking courses of study and practical training. He was trained in the electrical (power) branch, particularly in the use of telephones. He said that he was nominated to do a course in Sydney with the then PMG, training in the use of automatic telephone exchanges which became his speciality. He undertook the course in 1953.

27 In June 1960, as a leading electrician (power), shortly to be promoted to Acting Petty Officer, the respondent committed to a further three year enlistment period to take effect from the expiry of his initial 12 years which was due in turn to expire just after the date of the collision, that is, April 1964. He says at that time "I was thoroughly content with my life" (paragraph 4, affidavit sworn 2 March 2002).

28 Whilst Ms. Donna Ann Robinson, solicitor acting on behalf of the appellant, in her affidavit sworn 2 September 2002, paragraph 11, refers to the disadvantage/prejudice flowing from the lack of performance appraisals, there are a number of records that provide an insight into the respondent's RAN service career. There still exist a number of service records. Some of these are not entirely positive from the respondent's point of view. In an affidavit sworn 9 February 2004 by Ms. Robinson, there is reference to records still available regarding what are termed "offences and punishments" of the plaintiff in the RAN, copies of which are attached to her affidavit. The records relate to seven incidents that occurred between 19 October 1956 and 26 July 1964. Three of these relate to absence without leave or absence from duty. The nature of the "offences" referred to in the record appear to be relatively minor in nature.

29 Other records contain particulars of employment indicating the nature of electrical, communication and other duties including the completion of a leadership course. Although, as Mr. Kathner observed in his affidavit sworn 31 July 2003, paragraph 30, some records are incomplete, they nonetheless contain employment details. The records include:-

• Extracts of the respondent's certificate of service (assessment of character and efficiency). This record appears to contain various assessments of "character" between 1957 and 1965. The assessments of character range from "good" to "VG" (presumably, very good).

• An "ability record" containing remarks as to workmanship. There are various comments such as "improving", "average", "requires supervision", "keen and has proved very useful", "satisfactory", "will improve with experience", "an average LEM", "a good LEM", "a first class EM" etc.

• A conduct record sheet including assessment of character between 5 January 1961 and 10 April 1967 and between the years 2 June 1967 and 22 October 1969 as "VG".

• Result of examination for the rating of A/LEM (P) provisional "satisfactory" dated 8 December 1953.

• Certificate for educational test 1: 17 November 1953.

• Linesman's school report: 26 July 1957 "principles etc. good. Reading 100%".

• Recommendations for advancement and conduct record sheet.

30 The respondent refers to the events of the evening of 10 February 1964 in paragraphs [5] and [6] of his first affidavit. In paragraph [5] he describes the terrible aftermath of the collision which was visible to him and the desperation of naval personnel fighting for their lives.

31 In paragraphs [7] to [11] inclusive of his first affidavit, the respondent provides an account of his post-collision employment through until discharge in 1970. It is unnecessary here to detail that evidence other than to say that it highlights a history soon after the collision of a changed lifestyle with increased dependency upon alcohol and a withdrawal from social engagement. His evidence was that his attitude to the Navy changed and that he no longer felt comfortable at the thought of going to sea "as I could not feel safe" (paragraph [8]).

32 The respondent subsequently was drafted to instructional duties at HMAS Cerberus at Flinders Naval Depot on Western Port Bay in Victoria. He says that he there maintained his drinking habit which he developed since the collision and experienced sleep disturbance.

33 It is important to observe at this point that in paragraph [10] of his first affidavit he states:- "On several occasions, I have had an incredibly vivid dream of being enclosed in a pipe, unable to move, wrapped up in a sheet. I have woken from this dream sweating profusely and feeling terribly upset and distressed."

34 The question of the vivid dreams as so described is relevant to one of the grounds of appeal. That concerns an apparent conflict between the history given to Mr. Wilks and the account of his dreams as recorded in paragraph [10]. It is sufficient at this point to observe:- (a) That the reference to the vivid dreams in paragraph [10] of his affidavit is contained within a general description of symptoms that spans approximately 40 years and does not seek to restrict the symptoms therein referred to into any one period.

(b) The description contained in paragraph [10] is almost precisely the same description which the respondent provided to Dr. William F. Glaser, consultant psychiatrist, on 28 August 2002 (report dated 2 September 2002 at p.3) and to Dr. C. Slack in early 2003 (report dated 24 March 2004 at paragraph [3]). I will return to this matter in relation to the claimed inconsistency in the respondent's history to Mr. Wilks.

35 The respondent's evidence was that he subsequently resolved that he could not face returning to sea. He applied for a transfer to the Naval Dockyard Police located at HMAS Lonsdale in Melbourne. He stated that he took this employment even though it meant giving up his seniority in order that he could achieve 20 years employment with the Navy. The change in employment duties meant dropping his trade. He stated in his first affidavit (paragraph [11]) that:- "… I had lost my way. I no longer felt an affinity with the Navy. I did not know what to do for a career any longer. I was irritable and I did not care very much."

36 The respondent then set out certain employments which he held from approximately July 1970 until his retirement in April 1989. His affidavit in this respect contains particulars as to the identities of particular employers in that period and the nature of the duties undertaken by him (principally as a taxi driver and as a truck driver).

(a) Findings made pursuant to s.60I(1)(i), (ii) and (iii)

37 Grounds 1 and 2 are related grounds. I will, accordingly, consider them together. As indicated earlier in this judgment, no actual finding was made by the Master in relation to s.60I(1)(i) (see paragraph [34] of his judgment).

38 The appellant, in addition to subsection (i), challenges the statement in paragraph [35] of the judgment that there was no challenge in cross-examination of the respondent in relation to the issue arising under s.60I(1)(ii). The Master stated that "on any view" the respondent had satisfied that subsection. I note, additionally, that no specific finding was made in respect of s.60I(1)(iii).

39 The respondent's evidence was that soon after the collision, his life altered in material respects, including:-

• A considerable daily increase in alcohol consumption.

40 The respondent, in cross-examination, stated that soon after the incident he decided that he would seek a shore based job and that he commenced to experience symptoms that affected his sleep within a short time of the collision. The appellant, in its written submissions on this appeal, relied upon the decision in Commonwealth of Australia v. Nelson [2002] QSC 274 at [175], the submission was made that (at [17]):- "… the appellant … had been aware of the nature and extent of the personal injuries from which he was suffering and that in the circumstances, the fixing of a 'label' to the conditions did not alter the fact that he was aware of the nature and (more particularly) the extent of the personal injuries suffered. …"

41 In support of this submission, the appellant relied upon changes which the respondent said he noticed soon after the collision including, in particular, increased alcohol consumption and a range of other changes set out in paragraph 21 of the appellant's written submissions.

42 In the respondent's primary affidavit, he stated (paragraph 17) that prior to being put in contact with his solicitors he did not believe that he had suffered an injury. In paragraph 18 of that affidavit, he stated:- "Until recently when I had begun talking about the collision, I had not appreciated or even suspected that I had suffered a psychiatric injury as a result of the collision, and that this helped to explain and account for my changes since that event and the deterioration in my quality of life that occurred after it."

43 In Blyth (supra), a similar submission was made to the effect that the plaintiff had been aware of a substantial change in character, attitude and emotional and anxiety problems from a very early stage. It was submitted in Blyth that by reason of the awareness in 1964 of the changes in the plaintiff's wellbeing, the Court should conclude that his awareness amounted to knowledge that a personal injury had been suffered by him for the purposes of s.60I(1)(a)(i). Accordingly, it was submitted that it mattered not that the plaintiff did not at that time regard himself as having psychiatric injury as such.

44 Studdert, J. at [22], accepted the evidence of the plaintiff as to his lack of knowledge that he had suffered injury and accepted the submission made on his behalf and accordingly found in his favour on the "first gateway issue" arising under s.60I(1)(a)(i). Similarly, in the present matter, the Master accepted the respondent's lack of knowledge as to the fact that he had suffered injury as he had deposed in his affidavit.

45 There is no express finding by the Master that he accepted the respondent's evidence in paragraph [18] of the primary affidavit wherein he stated that he had not appreciated or even suspected that he had suffered a psychiatric injury. However, given the other findings made under s.60I(1)(a), it is implicit that the Master did accept his evidence in that regard, he having found him to have given truthful and reliable evidence.

46 In relation to the issue of knowledge of an "injury" under subsection (i), it is an important fact that there is no evidence of the respondent having, over the years, consulted a medical practitioner for psychiatric or psychological problems. In Commonwealth of Australia v. Smith [2005] NSWCA 478, Santow, JA. distinguished the difference between physical injury and psychiatric injury (at [118]):- "It is far harder to infer psychological illness from particular emotional feelings, even distressing ones …"

47 In this respect, Santow, JA. cited Cranbrook School v. Stanley [2002] NSWCA 290, wherein Heydon, JA. at [68] stated, inter alia:- "… while children or young adults can infer a physical injury from physical symptoms relatively easily, it is far harder to infer psychological illness from particular feelings. That is a field well outside ordinary comprehension. An inference is fairly open that the appellant was aware of signs and symptoms in his condition, but not that they revealed any 'personal injury'. His very inability to explain his distress and his feelings of guilt suggest that he thought his condition was the result of some personal inadequacy, as distinct from a more serious condition amounting to 'personal injury' …"

48 The evidence clearly established that it was not until Mr. Wilks furnished his report dated 18 January 2002 that the respondent was aware that he had suffered personal injury in the nature of a post-traumatic stress disorder. The case, in this respect, is not unlike Blyth (supra) and Smith (supra). It is, in my opinion, clear that the evidence relied upon by the respondent does satisfy subsection (i). The respondent was plainly unaware that he had suffered a psychiatric injury until he was told that by Mr. Wilks.

49 In relation to subsection (ii) (nature or extent of personal injury suffered), on the same basis, the respondent adduced evidence which was sufficient to establish the fact that he was unaware of the nature or extent of personal injury suffered within the meaning of that provision. As Studdert, J. stated in Blyth at [23], it is not enough to constitute awareness for the respondent to appreciate that he had emotional issues in the absence of an appreciation that this was other than a normal reaction to what had taken place. As his Honour there stated, what is relevant when considering the gateway provision is the plaintiff's own actual awareness: Harris v. Commercial Minerals Limited (1996) 186 CLR 1 at 9 to 10.

50 Accordingly, it is clear that the respondent did not appreciate that the symptoms he was experiencing constituted an injury and still less did he appreciate the nature or extent of his injury. He only became aware of those matters after he saw Mr. Wilks. Accordingly, the respondent must also succeed on the issue arising under s.60I(1)(a)(ii).

51 It is sufficient for a plaintiff to meet the requirements of only one of the provisions found in s.60I(1)(a)(i), (ii) or (iii). Accordingly, it is strictly unnecessary for me to consider s.60I(1)(a)(iii) as a discrete matter. That is the issue concerned with the connection between the personal injury and the appellant's act or omission. However, on the evidence, I am of the opinion that, on this issue, although the respondent conceded in cross-examination (transcript p.66) that dreams and nightmares referred to in evidence were associated with the collision, he was not aware of the connection between the appellant's act or omission and "the personal injury", for the same reasons as apply in relation to the issues under subsections (i) and (ii).

52 Whether or not the Master was correct in stating that the appellant had not challenged whether the respondent had passed through the "gateways" of s.60I(1)(a)(i) and (ii), it is plain that the evidence did satisfy the gateways of that section. The Master's ultimate conclusion that the "gateway" of s.60I(1)(a) was satisfied, was clearly correct. Accordingly, Grounds 1 and 2 of the appeal are rejected.

Ground 3: rejection of evidence in relation to inquiries

53 Counsel for the respondent objected to the appellant's affidavit evidence insofar as reports from Australasian Liability & Assessing were concerned. The reports related to investigations undertaken with a view to locating former employees who worked with the respondent or who knew him before and after the collision. The objection was taken that the reports were inadmissible in form and that the reports did not have any evidentiary value, for they did not disclose what inquiry had been made of individuals interviewed and there was no evidence as to what those individuals had stated. No statements of the persons interviewed were produced in evidence. The Master rejected the tender of the reports (at transcript p.23).

54 There were four reports of Australasian Liability & Assessing, namely:- (a) A report dated 27 July 2003 (Tab 2 of "GGK-1" to the affidavit of Gregory George Kathner sworn 31 July 2003.

(b) A report dated 2 February 2004 being Exhibit A to the affidavit of Donna Ann Robinson sworn 9 February 2004.

(c) A report dated 16 December 2004 being part of Exhibit "DAR-2" to the affidavit of Donna Anne Robinson sworn 17 December 2004.

(d) A report dated 17 December 2004 being part of Exhibit "DAR-7" to the affidavit of Donna Anne Robinson sworn 17 December 2004.

55 I have examined the contents of the reports. They are each in similar format and contain names of former Naval personnel who either were located in 4R wardroom on board the Melbourne or the same branch - electrical mechanic (P) or other branches. They also refer to persons who may have worked with the respondent after the collision. Against each name recorded in the reports is a brief statement as to the outcome of the investigation by simple references such as "did not recall plaintiff" or "deceased" or "moved from listed address". In some instances, former employees were noted as "had limited recollection of plaintiff" or "recalled plaintiff". The reports do not indicate whether those who did recall the respondent provided information which could be utilised by the appellant in relation to discrete factual issues subjacent to the respondent's case.

56 Counsel for the respondent opposed the admission of the reports into evidence upon the basis that they failed to disclose information that was necessary to permit the court to evaluate the actual basis and significance of the inquiries and the nature of the inquiries undertaken and any information gleaned from them.

57 The reports do no more than report on the ultimate outcome of inquiries directed to locating witnesses. They provided no information as to how the particular inquiry was expressed to persons interviewed and whether or not those witnesses who did recall the respondent were able to provide useful information on relevant issues. That was a matter of some importance in evaluating the probative value of the reports. In the written submissions on behalf of the appellant in relation to Ground 3 (paragraphs 40 to 50), it is contended that the reports were admissible, inter alia, by virtue of s.75 of the Evidence Act 1995 (NSW) and that the Master ought to have admitted the reports even if there had been some "technical failure" which the Master did not identify to comply with the requirements as to form.

58 The provisions of s.75 of the Evidence Act allow hearsay evidence in interlocutory proceedings. However, as Hodgson, JA. in Atikulla v. Sefton (2001) 53 NSWLR 574 at 585 observed, there may be cases where a judge takes the view that in certain circumstances evidence, for example, on information and belief of a solicitor, may involve a danger of unfair prejudice sufficient to exclude it under s.135 of the Evidence Act or may, in any event, consider it of insufficient weight to discharge an onus of proof on a party. See also as to s.135 the discretion to exclude evidence otherwise admissible under s.75; Bray v. F. Hoffman-La Roche Limited (2002) 190 ALR 1 at [117]. The Master, accordingly, had a discretion as to whether to admit the investigation reports which discretion could take into account any relevant disadvantage or unfairness.

59 In the interests of truth and as a matter of fairness, in order to evaluate the submission made that the evidence of the investigator was "critical to the question of whether the appellant suffered prejudice as a result of the lapse of time since the collision", the evidence by the authors of the investigation reports would need to have provided a great deal more information than is contained in the reports.

60 In an application for an extension under the Limitation Act, there is a need to distinguish between the party who bears the legal onus of proof and the party who has an evidentiary onus of proof. As Santow, JA. observed in Smith (supra), at [131], the plaintiff in those proceedings bore the ultimate onus of satisfying the court that it was just and reasonable to extend the limitation period but that the Commonwealth was subject to an evidentiary onus to raise any consideration telling against the exercise of the discretion to extend. The observations of Mason, P. in Sydney City Council v. Zegarac (1998) 43 NSWLR 195 were cited by Santow, JA. Those observations were as follows:- "Persuasive dicta in Brisbane South indicate that it is for the party opposing the application to adduce evidence of facts suggesting particular prejudice if the discretion were exercised in the applicant's favour … Failure to adduce such evidence may draw the unfavourable inference that specific prejudice is absent, due to the fact that it is very much in that party's camp to know of the existence, impact and 'extent' of such prejudice."

61 The observations in Zegarac (supra) and by Santow, JA. in Smith (supra) indicate plainly enough that evidence sought to be relied upon on the issue of prejudice should be cogent. Given that the reports did not contain the kind of information referred to in [57] above, I consider that it was open to the Master to exercise the discretion available to him to reject the reports on the basis that they were deficient as a matter of form and of substance. I accordingly reject this ground of the appeal.

Ground 4: dismissing or minimising discrepancies in the history provided to Mr. Wilks

62 I have earlier referred to the evidence given by Mr. Wilks and the issue as to the history obtained by him as to symptoms related by the respondent. The cross-examination of the plaintiff on this issue occurred at pp.70-73 of the transcript.

63 In the appellant's written submissions, it was contended there was a conflict between, on the one hand, the history provided by the respondent to Mr. Wilks and, on the other, his evidence in cross-examination (at [53] of the appellant's written submissions):- "There was thus a conflict between Mr. Wilks, what Mr. Wilks had said, the Respondent had said, and what the Respondent in cross-examination said he had told Mr. Wilks."

64 It is important to observe that in the appellant's written submissions it is asserted that the history given to Mr. Wilks was important for two reasons:- (a) It went to the reliability of the respondent as a witness.

(b) It went to whether the respondent had been aware of his psychiatric injury at any time prior to February 1999.

65 In relation to the second of these two issues, it is plain from what has been earlier stated in relation to Grounds 1 and 2 that there was clear evidence to establish that the respondent was not aware of psychiatric injury as distinct from symptoms. Accordingly, reliance upon the alleged discrepancy on the history given to Mr. Wilks is not a basis in support of point (b) in the preceding paragraph.

66 In relation to the issue in (a) above (reliability) to which it is said that the history is important, I have previously referred to the findings favourable to the respondent made by the Master who had the opportunity of hearing and seeing him whilst he gave evidence. In accordance with the principles which I have earlier set out in this judgment, the appeal, insofar as it raises an issue going to the respondent's reliability, can only succeed if the principles relating to discretionary judgments based upon the credit findings of first instance judges can be satisfied.

67 The important point on this issue is that the Master was alive to the issue of the inconsistency on the history recorded by Mr. Wilks and the respondent's evidence on the history of symptoms and that that was a matter he was required to evaluate in determining the respondent's reliability and credit.

68 The Master, in his judgment, observed that there may have been a problem in the history recorded by Mr. Wilks. He said that the evidence given by the respondent about the interview with Mr. Wilks indicated that it "may have been a stormy encounter" (paragraph 43).

69 The appellant challenges this finding. I observe in passing that the evidence of the respondent in cross-examination at p.87 could arguably provide a basis for such a finding. Whether that be so or not, the history as recorded by Mr. Wilks does seem to be at odds with the history obtained by the two medical practitioners who examined the plaintiff. I have earlier referred to the history obtained by Dr. Glaser on 28 August 2002 and by Dr. Slack recorded in the report of 24 March 2004. Both record in similar terms the respondent stating that he had experienced vivid dreams whilst thinking that he was trapped in a confined space. He gave similar evidence in cross-examination at transcript p.72, lines 30 to 35.

70 At the end of the day, the issue on the alleged discrepancy based on Mr. Wilks record is but one issue which may be relevant to credit. There was a very strong finding in favour of the respondent as to both his reliability and his credit. In those circumstances, it would not be open to me on this appeal to find that the Master's assessment was wrong or flawed. The evidence, in my opinion, enabled the Master to make the favourable findings on the issues of credit and reliability. Ground 4, accordingly, is not available as a basis for overturning the Master's findings and, accordingly, is rejected.

Ground 5: failure to consider the evidence of prejudice

71 The issue of prejudice to the appellant was raised both before the Master and on this appeal. In this respect, I have examined the oral submissions made before the Master on 4 April 2005 at pp.91 to 105 of the transcript of proceedings. The appellant produced to the Master a document entitled "Schedule of prejudice" and a copy of that document has been included in the material on this appeal (Volume 3, pp.739-747). Specific issues raised in that document are capable of being categorised. I will return to discuss them later in this judgment.

72 In the written and oral submissions, it is asserted that the Master failed to deal with the evidence of prejudice that was relied upon by the appellant and gave inappropriate attention and weight to two specific issues. The first was a reference to the fact that the collision was a well-investigated incident (paragraph 52). The appellant submitted that such investigations did not assist in relation to individual claims, in particular in relation to pre-collision and post-collision fitness or health. The second was a reference by the Master to the plaintiff's claim which, he referred to when stating that the claim itself "may be a relatively modest one" (paragraph 53). In that respect, the Master considered that the basis of the claim appeared to be largely a lack of opportunity claim in relation to a loss of full retirement benefits from the Navy. Counsel for the appellant in the present proceedings contended that the Master failed to have regard to the specific terms of the claim as set out in the statement of claim (paragraph 8). There, reference is made to the respondent having earned less than he would have been able to earn in his career in the Navy and a statement to the effect:- "His income earning capacity has been substantially impaired by reason of his injuries."

73 The appellant's further submission was that the Master's judgment indicates a failure to apply the appropriate or relevant test as set out by the High Court in Brisbane South Regional Health Authority v. Taylor (1996) 186 CLR 541. It was submitted in the written submissions (paragraph 73) that the Master should have found that there was actual prejudice of a significant kind and he should have rejected the application.

74 A court is required, in determining an application for an extension of the limitation period under the Act, to extend time, inter alia, "if it decides that it is just and reasonable to do so …": s.60G(2).

75 The relevant principles on the question of prejudice have been discussed in a number of authorities. The judgment of Santow, JA. in Smith (supra) conveniently reviews them and records the following propositions: - (a) There appears to have been a divergence of views as to whether the existence of actual or "significant" prejudice to the defendant (as opposed to presumptive prejudice) was decisive of a plaintiff's application to proceed out of time, such that the application should be refused.

(b) In Brisbane South (supra), Toohey and Gummow, JJ. considered that prejudice to the defendant was a factor to be considered in answering the ultimate question of whether "the delay has made the chances of a fair trial unlikely" (at 548, 550).

(c) However, McHugh and Dawson, JJ. in Brisbane South (supra) appeared to give more weight to actual significant prejudice to the defendant, treating it as decisive of the question of whether the court should extend its discretion to extend time.

(d) In relation to the apparent divergence in the judgments in Brisbane South (supra), the majority view is reflected in the judgment of Sheller, JA. (at 146 to 147). In Holt v. Wynter (2000) 49 NSWLR 128. Sheller, JA. concluded that:- "The effect of the decision of the High Court in Brisbane South Regional Health Authority is that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension should result in significant prejudice to the potential defendant."

(e) Santow, JA. in Smith (supra) at [128], stated that "significant prejudice" means such prejudice as would make the chances of a fair trial unlikely: see in this respect South Western Sydney Area Health Service v. Gabriel [2001] NSWCA 477 at [33] per Hodgson, JA. (with whom Beazley, JA. and Rolfe, AJA. agreed).

(f) For a trial to be fair, it need not be perfect or ideal: per Santow, J. in Smith at [129]. See also Holt (supra) per Priestley, JA. at 142; McLean v. Sydney Water Corporation [2001] NSWCA 122.

(g) It is not the case that in the absence of proof of significant prejudice the Court is bound to grant leave to commence proceedings as it must still be shown that it is just and reasonable to grant the necessary extension: per Santow, JA. in Smith at [129].

76 The evidence said to constitute actual or significant prejudice in the present case was said to fall into a number of categories. These were similar to some of the categories of matters the Commonwealth relied upon as supporting the submission of significant prejudice in Smith. These were:-

(a) The period of the respondent's engagement with the Navy up to the time of the collision.

(c) The period between the collision and the time the respondent was discharged from the Navy on 10 April 1970.

(d) The period between 10 April 1970 and the present.

77 The appellant relies upon the affidavit evidence of Ms. Anderson and Mr. Kathner in establishing the results of inquiries made. These were said to establish extensive gaps in records, in particular, medical, employment and financial records. The affidavits also establish that inquiries have been unproductive in locating witnesses in relation to various employment and health related issues. There are isolated references in the evidence to information which confirms the respondent's evidence as to the nature of his work activities after 1970. A letter from Savid Taxis (Australia) Pty. Limited (Exhibit DAR-T to Ms. Robinson's affidavit sworn 2 September 2002) dated 8 August 2002 confirms that the respondent was employed in taxi work "7 or 8 years ago" but there is no information as to actual earnings. Similarly, Exhibit LE5 to the respondent's affidavit sworn 27 August 2004 confirms the respondent's employment as a truck driver with G.J. Coles & Coy. Limited for a two year period (12 January 1977 to 1 December 1978). There may be indirect means whereby relevant earnings for truck drivers for those years can be ascertained. That, of course, will not necessarily equate to actual earnings of the respondent. The respondent has referred to other employment undertaken by him in his affidavit evidence.

78 The deficiencies in the information as to actual earnings is a matter of potential significance to both the respondent and the appellant. The respondent, of course, carries the onus of establishing his probable actual earnings if a general claim for diminution in earning capacity for the period 1970 to 1989 is to be pursued.

79 I have referred, earlier in this judgment, to the Master's rejection of the investigation reports as to inquiries made to locate former employees. It is clear, however, from other evidence before the Master that there has been difficulty in locating persons who worked with the respondent before and after the collision while in the service of the Navy and thereafter. Unsurprisingly, many such persons are either deceased or have no recollection of the respondent. In addition, there was evidence that persons involved in the respondent's post-injury employment with various employers were not available. Submissions were made on those matters to the Master in the pages of the transcript I have earlier recorded. In summary, the submissions related to the following matters:- (a) The unavailability of persons who could corroborate the respondent's state of health before and after the collision.

(b) The unavailability of persons who worked in the same area of the "Melbourne" on the night of the collision.

(c) The unavailability of records in the nature of performance appraisals and medical records.

(d) The absence of evidence to corroborate the respondent's condition when working with employers after leaving the Navy in 1970. (e) Gaps in the records available to corroborate the earnings of the respondent before he retired in 1989.

80 In respect of those and other matters, detailed submissions were made to the Master. Submissions were also made in relation to the "schedule of prejudice" document earlier referred to.

81 The latter document is referred to by the Master in his judgment (paragraph [44]). The Master refers to it in the context of the inability of the respondent to identify persons involved in various aspects of his personal history (including superior officers, past employers and those involved in personal relationships with him). That reference plainly enough indicates that the Master had applied his mind to the significance of the evidence which the appellant emphasised to him.

82 In paragraph [46] of the judgment, reference is made to the fact that it is understandable that the respondent would not remember details of identities and the whereabouts of those involved in his past history. There is also reference in the Master's judgment to the service history documentation and to the fact that there were only limited records available in respect of the period, after the collision, when the respondent worked for the Naval Dockyard Police. Such references reveal a consciousness by the Master as to the significance of documentation that still exists and the documentation that does not exist. The Master had particular regard to the fact that there was a gap in the medical records when the respondent was seeing Dr. Macbeth (paragraph [47]).

83 There also reference in the judgment to the submission made on the question of significant prejudice. The Master proceeded to state that he did not accept the submissions (paragraph [50]). He evidently had in mind the principles relevant to a fair trial, for he refers to the concept and to the proposition that a trial need not be ideal, citing McLean (supra) at [51].

84 The Master concluded that there may be "certain actual prejudice, as well as presumptive prejudice" but stated he was not satisfied that a fair trial was no longer possible ([51]).

85 I accept the point made on behalf of the appellant as to the references by the Master to the effect that the collision had been well-investigated and the fact that the claim was a relatively modest one were not factors which were directly relevant to the question of prejudice in terms of being able to establish the respondent's fitness and performance both before and after the collision.

86 Reference to paragraphs [44] to [47] do indicate that the Master had in mind the relevant principles on the question of prejudice, although there is little reference as to how the Master applied those principles to the facts of the present case.

87 Notwithstanding that deficiency, I am not satisfied that the evidence before the Master established that the chances of an acceptably fair trial are unlikely. There was evidence that established a degree of actual prejudice in circumstances where there was a lack of personnel and other records. However, it is necessary also to have regard to the context Handley, JA. referred to in Smith (supra) at [14], namely, in treating the case as it must be treated, as one where the plaintiff only discovered in recent years that he had suffered personal injury, its nature and extent and its connection with the events of 10 February 1964, "… (the) case does not differ in principle form that of a dust disease victim who learns of his illness decades after his exposure".

88 The assessment of prejudice has regard both to records that do not exist, as well as those that are available. Account must also be taken of the objective facts that provide a context in which the question of prejudice is to be determined. The objective facts that assist in the evaluation of prejudice in the present case include the following:- (a) The fact that the respondent was not a short term employee of the Royal Australian Navy. Objectively, he had established the Navy as a service career in the sense that he pursued it before and after the collision for some 20 years (in the case of Smith (supra), the plaintiff had been an employee for some 12 years).

(b) The fact that service records that are available provide some evidence of relatively favourable assessments of the plaintiff, notwithstanding that he was breached on seven occasions in relation to employee or disciplinary issues as referred to in paragraph [28] above.

(c) The evidence that establishes that the respondent achieved a number of career milestones and progressed through promotions during the period of his service prior to the collision.

(d) The evidence that reveals that the respondent undertook for many years sea-going duties up to the time of the collision. However, subsequent to the collision, his career underwent a significant change in direction. The evidence confirms that after the collision he undertook land-based employment at HMAS Cerebus at Flinders Naval Depot on Western Port Bay in Victoria and later was transferred on his own application to the Naval Dockyard located at HMAS Lonsdale in Melbourne.

89 In addition to the matters in (a) to (d), I note the following matters:- (a) The absence of records corroborating any symptoms of the injury is a matter that can be met with the same observation made by the primary judge and referred to by Santow, JA. in Smith (supra) at [78] whereby it was found that it was highly unlikely that such material would have played a role had the case been brought within a few years of the date of the collision. In the present case, given the nature of the post-collision symptoms related by the respondent (including social withdrawal), it is unlikely that such symptoms would have been reported.

(b) As to the absence of witnesses concerning the collision itself (again, as observed in the judgment of Santow, JA. in Smith at [79]), it would be surprising if anyone had noticed the effect of the collision on the respondent at a time when everyone would have been intent on self-preservation or otherwise responding to the dramatic events during the aftermath of the collision. (c) As to the period between the collision and the time the respondent left the Navy in April 1970, again there are limited records and no independent recollections by personnel. In Smith , Santow, JA. at [80] referred to the fact that the destruction of Navy records is a matter for which the Commonwealth must take the consequences of its own actions. It was obvious, as his Honour there noted, that there were hundreds of sailors affected who might bring claims in the future.

(d) The fact that there were limited records and no recollection by personnel, Santow, JA. observed at [81] is not prejudicial because the nature of the respondent's injury was not likely to have been detectable either from records or from contemporary reports of fellow sailors. The respondent's evidence is that he turned inward, withdrew from social interaction and did not talk about his experience following the collision. (Santow, JA. in Smith referred to the fact that the men were ordered not to talk about the collision). It is, accordingly, unlikely that any contemporary records would have recorded such symptoms or difficulties being encountered by the respondent.

(e) In relation to the period subsequent to his discharge from the Navy in 1970, the nature of the symptoms were such as to have been unlikely to have impressed themselves on others or be retained in the memory of a person.

(f) Whilst there are deficiencies in the financial records in relation to earnings subsequent to 1970, the respondent's employment included taxi driving work, truck driving and other low skilled employments. A relevant issue at trial is more likely to concentrate on whether the respondent suffered an incapacity after 1970 and, if so, the cause of any diminution in his earning capacity until his retirement in 1989.

90 There is a degree of prejudice resulting from the absence of medical and financial records. However, in the context of the matters to which I have referred, I consider, in terms of s.60G(2) of the Limitation Act, that it was just and reasonable for the Master to extend the limitation period. There is a sufficient body of evidence available to the defendant which establishes the essential nature of the lengthy history of service rendered by the respondent over some 20 years before and after the collision. That material indicates that there are objective matters that tend to corroborate the essential propositions underpinning the claim. This includes evidence that reflects an intent by the respondent to pursue a naval career and that the collision was followed by an immediate move away from sea-going duties and which effectively meant that he lost his trade as an electrician and pursued alternative, less rewarding, land duties with the Navy.

91 The evidence does not suggest that the respondent attended a medical practitioner for treatment in relation to any other trauma or incidents in his life likely to have caused psychological disability other than the significant trauma associated with the collision on 10 February 1964. Accordingly, there is no basis to suggest that the appellant has been deprived of the opportunity of proving some later unrelated psychological trauma.

92 I have, on the question of significant prejudice, had regard to the nature of the economic loss claimed and the position of the defendant in meeting the claim. In part, it is a claim for lost opportunity in being entitled to received DFRB entitlements and other service benefits and a form of general claim for a diminution in earning capacity, although not on a specific loss of earnings basis calculable by reference to actual earnings. There is not, accordingly, a claim for lost earnings for specified periods or for a specified amount on a partial incapacity basis. The general nature of that claim based at least partly on an alleged loss of opportunity is a matter to be considered in evaluating the degree and extent of prejudice associated with the absence of contemporaneous records.

93 On consideration, bearing in mind the particular evidentiary difficulties that face both the respondent and the appellant, I consider that a proper determination of the application is that it is both "just" and "reasonable", notwithstanding presumptive and some actual prejudice for the appellant to be permitted, as the Master has ordered, the extension of time to pursue the cause of action pleaded.

94 I, accordingly, have concluded that the learned Master did not err in his ultimate determination to extend the limitation period. The evidence establishes, in my opinion, that in balancing relevant considerations, he was correct in doing so.

96 In relation to the question of costs, I have borne in mind the provisions of s.60L of the Limitation Act. I consider, in all the circumstances, that a proper exercise of the discretion in relation to costs of this appeal is that the appellant should pay the respondent's costs of the appeal, and I, accordingly, so order.

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