Brozinic v PHC Operations Pty Ltd t/as Hyatt Hotel Canberra [2008] ACTSC 20

2. The plaintiff was on the date of her injury, 11 December 2002, a casual employee of the defendant, which operates the Hyatt Hotel in Canberra, in the housekeeping area. She had worked in that capacity for some years. She was injured when she stepped on a bedsheet under an ironing board and lost her footing while walking from the laundry to the uniform room at the hotel. The day after the accident she filled in an injury report form for the hotel, in which she gave the name and telephone number of a witness to the incident, a fellow employee.

3. She claims that she injured her right shoulder and arm and her lower back. She did not take the matter further until March 2004, some sixteen months after the injury, when she made a claim with the hotel's workers' compensation insurer, CGU Workers Compensation Insurance. She came under the care of Dr Chris Roberts, orthopaedic surgeon, in May 2004 and remained under his care, seeing him on a number of occasions over the years until in April 2007 she underwent surgery to the right shoulder.

4. She first consulted a solicitor in relation to the injury on 11 October 2005. The solicitor realised that the limitation period was only about two months away. She explained the ramifications of that to the plaintiff. The plaintiff's affidavit evidence about that is that she wanted to continue to work for the defendant. She thought her injuries would improve, and only wanted her medical expenses paid for. The solicitor told her that after the limitation period expired it would be very difficult to bring common law proceedings. At that time she did not wish to commence common law proceedings against her employer.

5. The solicitor confirmed her advice about the limitation period in writing a week later. At the same time she wrote to the workers' compensation insurer. She obtained instructions during November 2005 to institute proceedings in the Magistrates Court, claiming workers' compensation on behalf of the plaintiff. The application was filed and served later in that month. The insurer instructed solicitors who wrote to the plaintiff's solicitors on 1 December 2005 about the workers' compensation claim. Ten days later, on 11 December 2005, the limitation period expired.

6. Negotiations continued in relation to the workers' compensation claim. In March 2006 the insurance company engaged new solicitors. They are the solicitors for the defendant in the present action. The plaintiff's solicitor wrote to the solicitors for the insurer in July 2006 enclosing a draft originating process in this Court claiming damages, but the proceedings were not commenced at that stage.

7. The workers' compensation proceedings came before the Magistrates Court in November 2006. The matter was resolved by consent, the award being limited to the plaintiff's medical expenses. Correspondence between the solicitors continued. On 14 November 2006 the present proceedings were commenced, the originating process being served on the defendant a week or two before the settlement of the workers' compensation proceedings.

8. In early April 2007 the plaintiff underwent the surgery I have mentioned. The solicitors for the defendant delivered a defence on 5 June 2007, in which they pleaded that the action was statute-barred pursuant to the Limitation Act. They also pleaded in the conventional manner to the statement of claim, including pleading a defence of contributory negligence. At about the time they delivered the defence they made an offer to the plaintiff not to seek costs if the action was discontinued at that time.

9. The solicitors for the defendant issued a number of notices for non-party production of documents addressed to various treatment providers, and they prepared and filed and served an affidavit of documents in August 2007. Also in August 2007 they made an appointment for the plaintiff to be medically examined for the purpose of a report, and that examination took place in October 2007.

10. The present application was not made until February 2008. In summary, proceedings were commenced a little short of one year after the expiry of the three-year limitation period, but in circumstances where the defendant had been aware of the injury within twenty-four hours, the insurer had been aware of the injury in general terms since March 2004, and the insurer had been represented by solicitors since November 2005.

11. The principles to be applied in exercising the discretion conferred on the Court were set out by the High Court in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541. The plaintiff in that case claimed damages for negligence and breach of statutory duty in respect of a failure by an employed gynaecologist to give proper medical advice. Her case was that on the recommendation of the gynaecologist she had undergone a hysterectomy which had been unnecessary and inappropriate. Those events had taken place in 1979. By the time the plaintiff made her application the gynaecologist was living in Hong Kong and attempts by the solicitor for the Health Authority to contact him had been unsuccessful. It was apparent that if the proposed action were to proceed to trial the crucial issue would be what had been said during a conversation then more than seventeen years earlier between the plaintiff and the gynaecologist. The limitation period was three years. An application for extension of time had been refused at first instance by the Queensland District Court but granted on appeal by the Queensland Court of Appeal.

12. The High Court, by majority, allowed the appeal and restored the orders made in the District Court. As Toohey and Gummow JJ said at page 548:

The material consideration was whether, by reason of the time that had elapsed, a fair trial was possible.

This was a question to be answered by reference to the situation at the time of the application. It was no answer to a claim of prejudice to say that, in any event, the defendant might have suffered some prejudice if the applicant had not brought proceedings until just before the limitation period expired.

14. McHugh J at page 552-553 identified four broad rationales for the enactment of limitation periods. First, relevant evidence was likely to be lost as time went by. Second, it was oppressive to a defendant to allow an action to be brought long after the circumstances which gave rise to it. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims could no longer be made against them. Insurers had a particular interest in knowing that they had no liabilities beyond a definite period. Fourth, the public interest required that disputes be settled as quickly as possible.

15. McHugh J made it clear at page 551 that a statutory provision such as section 36 of the Limitation Act was not to be read as giving an applicant a presumptive right to an order upon satisfying a list of conditions. The applicant bore an onus of showing that the justice of the case required the exercise of the discretion in her favour. The longer the delay in commencing proceedings, the more likely it was that the case would be decided on less evidence than had been available to the parties at the time the cause of action arose. In the case before the High Court, quite apart from proven prejudice, the long delay gave rise to a general presumption of prejudice. It was probable in the ordinary course of events that the plaintiff had discussed her operation and the reasons for it with friends and relatives, and perhaps nursing staff. If the action had been commenced within the limitation period, one or more persons in those categories might have been able to provide evidence or information favourable to the defendant. By the time the application for extension was made it was likely that any such conversations would no longer be in the memory of the participants. The finding of actual prejudice and the possibility of other prejudice gave rise to an overpowering case for refusing the application.

17. In a case like Brisbane South v Taylor, where success in the action depends on findings of fact about a conversation which took place many years ago, the prejudice is obvious: the longer the delay the greater the prejudice, particularly in cases where evidence about conversations is crucial.

18. I should make reference to a decision of Connolly J in Nguyen v Jajic [2007] ACTSC 12 in which his Honour dismissed an appeal from a magistrate who had refused to extend a limitation period in relation to a motor accident. In that matter the plaintiff had served a personal injury insurance form a month after the accident but had done nothing more until five years later, when he instructed solicitors. The applicant gave evidence before the magistrate but the solicitor did not, and the magistrate found that there was no explanation for the delay between instructing the solicitor and the expiry of the limitation period. The solicitor had had about eight months to start proceedings, had not done so and had given no explanation for that delay. There had been no medical evidence to support the application. Connolly J found that the magistrate had not fallen into appealable error in holding that the applicant had not satisfied the burden of establishing that the discretion should be exercised in her favour.

19. There have been other cases which have fallen on the other side of the line, in which extensions have been granted in this Court, for example, Hamilton v Madden [2007] ACTSC 89, in which I granted an extension in circumstances where proceedings had been commenced a matter of months after expiry of the limitation period and I was satisfied that there was no actual prejudice to the defendant.

20. It seems to me that the present application is distinguishable from Brisbane South v Taylor and also from Connolly J's decision in Nguyen v Jajic. The defendant and its insurer have been in possession of as much information about liability and about damages from a relatively early period, as they would have been if the proceedings had been commenced very much earlier. I am satisfied that there is not likely to be any significant prejudice to the defendant in relation to either liability or quantum if the extension is granted.

21. The insurer, in particular, knew about the event, the asserted injury and the fact that the plaintiff was represented by solicitors. This is not a case where the insurer could reasonably have assumed when the limitation period expired that its liability had been extinguished. An originating process after being filed need not be served for up to a year. A prudent insurer would wait for a year after expiry of the limitation period before arranging its affairs on the assumption that its liability had been extinguished.

22. Section 36 requires the Court to take into account a number of specified factors, including the length of and the reasons for the delay on the part of the plaintiff, the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant, and the conduct of the defendant after the cause of action accrued. The list is an inclusive rather than a complete one. The factors in the present matter are relatively finely balanced, but on balance, I am satisfied that the circumstances make it just and reasonable that the limitation period should be extended. I order that the period within which the action may be brought be extended to 14 November 2006, the date of filing of the originating claim.

23. As to costs, the plaintiff comes to the Court seeking an indulgence. The defendant has acted reasonably in opposing the application and is entitled to an order for costs. The costs should not be recoverable immediately but on the making of final orders in the action. The appropriate order is that the defendant's costs of the application for extension be the defendant's costs in any event.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.