Campbell v Coal Operation Australia Ltd

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW Division

13572/2001 - BRADLEY CAMPBELL v COAL OPERATIONS AUSTRALIA LIMITED (CHAIN VALLEY COLLIERY)

JUDGMENT (Extension of time - s 151D Workers Compensation Act) 1 MASTER: By summons filed 19 November 2001 the plaintiff seeks an order to grant leave within which to commence proceedings pursuant to s 151D of the Workers Compensation Act 1987 (the Act). The plaintiff relied on his affidavit sworn 17 May 2002 and the affidavit of Brendan Sydes sworn 2 May 2002. The defendant does not rely upon any affidavit evidence and opposed the orders sought. 2 The plaintiff seeks to commence common law proceedings against the defendant for negligence. On 23 May 1996 at about 11.50 am the plaintiff suffered physical and psychological injuries in an underground explosion at the Chain Valley Colliery, Munmorah when he was assisting in the operation of a continuous miner. He was working at the coal face with another employee David Barnes. There was a huge explosion at the coal face and the plaintiff was hit in the face by pieces of rock and knocked to the floor. He could hear David Barnes screaming and the plaintiff was unable to get up. A mine deputy helped the plaintiff to his feet and away from the area of the explosion. His face and hands were burnt. The deputy helped the plaintiff by running cold water over his face and hands. He could no longer hear David screaming. The plaintiff thought David had died. Later the plaintiff was told that David had survived but that he had severe burns. 3 The plaintiff was taken by helicopter to Royal North Shore hospital. The plaintiff remained in hospital for three weeks for treatment of his burns. After discharge from hospital the plaintiff became more and more irritable and suffered from nightmares. He sought assistance from a psychologist Ms Robyn Douglas of Raymond Dorling & Associates. The plaintiff continued seeing the psychologist until September 1997. 4 In March 1997 the plaintiff returned to work but could not contemplate going underground despite repeated efforts to do so. The plaintiff's employment was terminated on 5 December 1997 and the plaintiff has not been in regular employment since that date.

The law 5 I turn now to consider whether leave to commence proceedings should be granted. Section 151D(2) of the Act provides: "a person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay for compensation more than three years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken." 6 The authorities clearly establish that the onus is on an applicant for extension of time to satisfy the court that it is just and reasonable to extend the time. The starting point for examination of the way in which this discretion should be exercised is Salido v Nominal Defendant (1993) 32 NSWLR 524. Salido was considered by the Court of Appeal in light of the intervening High Court decision of Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; 139 ALR 1 in Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128; and Seib v Morton [2000] NSWCA 139, 26 June 2000. Salido concerned s 52(4) of the Motor Accidents Act but the principles have been held to be equally applicable to s 151D(2) of the Workers Compensation Act 1987. In Wynter the Court of Appeal held that the effect of the High Court decision in Taylor is that an application for an extension of time under the limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant. The concept of a fair trial is a relative one. To be fair, it need not be ideal - see McLean v Sydney Water Corporation [2001] NSWCA 122. 7 Itex Graphix Pty Limited v Elliott [2002] NSWCA 104 addresses the approach the court should adopt when exercising its discretion under s 151D(2) of the Workers Compensation Act in a case where the respondent has not suffered prejudice by the delay and the applicant has not diligently pursued his or her claim. Ipp AJA, rejected the view that the real question to be answered was that posed by Toohey and Gummow JJ in Taylor, namely, whether the delay had made the chances of a fair trial unlikely. Instead, the question that has to be asked is what is fair and just (per Gleeson CJ in Salido), or what does the justice of the case require (per McHugh J in Taylor). The justice of the case is to be determined with regard to its own individual circumstances, and the rationales of the limitation period that barred the action. The Court affirmed the application of the principles set out in Salido requiring the applicant to explain the delay, to deal with the question of prejudice, to show that the cause of action is not futile and to establish that it would be fair and just to grant the leave. 8 In Itex the court noted that often a failure to satisfactorily explain the delay will not be decisive, and ordinarily the issue of prejudice will be of paramount importance. Nevertheless, in the circumstances of the case, the court held that to grant leave to sue long after the expiry of a limitation period, when the applicant has made a deliberate and fully informed decision to allow the statutory period to expire, in the absence of special circumstances explaining satisfactorily the conduct of the applicant, would set at nought the purpose of the legislation. Accordingly, leave was refused. In Itex the plaintiff in the course of her employment was injured in a motor vehicle accident. She injured her neck, right knee and leg. When filling out the workers compensation claim form at her employers she slipped on some stairs and aggravated the injuries to her knee and sustained injury to her back. She did not suffer psychiatric or psychological injury. 9 The defendant did not submit that it suffers prejudice but rather that the facts of this case are similar to that in Itex in that the defendant received legal advice and made a conscious decision not to pursue his common law rights and then later changed his mind and in these circumstances it is not just and reasonable to grant leave to commence proceedings. In that context, the main issue to be addressed is the plaintiff's explanation for delay. 10 In Salido Gleeson CJ set out the principles to be considered in the exercise of discretion. They are: "1. Section 52(4) confers a discretion which is to be exercised judicially, in a manner that furthers the purposes of the statutory context in which it appears. The immediate purpose, as with any limitation period, is to protect defendants against the injustice of stale claims; the statute is also aimed at promoting forensic diligence.

2. Bearing in mind those statutory purposes, the question is whether, in the circumstances of each individual case, the applicant for leave has demonstrated that it is fair and just that leave should be granted.

3. The diligence, or lack of diligence, shown by a plaintiff or a plaintiff's legal representatives, in ascertaining and asserting his or her rights will ordinarily be a material factor, as will the extent of the relevant delay, and the reason for it.

4. The nature and extent of any forensic disadvantage to a defendant resulting from the plaintiff's delay will also be material. The effect, if any, of the delay upon the defendant's ability to defend an action is a matter to be taken into account, and may in some cases be of decisive importance.

5. Leave under s 52(4) may be refused if it would be plainly futile to grant it, and in that connection an applicant's willingness and ability to give a full and satisfactory explanation of any delays in reporting to police, notifying claims and commencing proceedings will be material." 11 These principles will be analysed in the light of the recent decision of the Court of Appeal in Itex and of importance will be the plaintiff's explanation for delay.

12 The cause of action accrued from 23 May 1996. The limitation period expired on 23 May 1999. The application seeking the extension of time was filed on 19 November 2001, ie. 2 years 2 months out of time. 13 Following the accident, the plaintiff returned to work in March 1997, only to have his employment terminated on 5 December 1997. In August 1997 the plaintiff first consulted Moroney Rutter and Mantach solicitors and received some preliminary advice about his workers compensation entitlements. As he was still being provided with alternative duties at that stage his main concern was maintaining his workers compensation rights and keeping workers compensation coverage for the future. In this context, the solicitors advised him that his rights under the WCA may be of greater value in the long term, particularly as they doubted greatly whether he would reach the necessary thresholds. 14 On 27 August 1997 the plaintiff's solicitor wrote to him. At paragraph 4 of that letter the solicitor gave the plaintiff advice concerning common law claims. It stated that he could have a claim for common law damages but these claims are reserved for the most seriously injured workers. The plaintiff was advised that there was a real danger that if he pursed common law damages he would have had to abandon his workers compensation lump sum disability benefit. 15 The next paragraph of the same letter specifically warns the plaintiff that any common law claim must be commenced within three years from the date of injury but then confirms advice that, in all the circumstances in the long term, the plaintiff's rights under the Workers Compensation Act may be of greater value to him particularly as there would be "grave doubts" as to whether or not the plaintiff would reach the necessary thresholds. It is my view that the effect of the advice given in that letter was such that the plaintiff did not have a good case at common law. At this time the plaintiff's psychological state made him reluctant to do anything about his workers compensation rights and he continued to put off the issue. However after he was made redundant in December 1997, his wife became concerned about their financial situation and encouraged him to attend a further appointment with the solicitors. 16 On 9 March 1998 the plaintiff attended a further consultation with his solicitor. The solicitor discussed with him the possibility of a common law claim and the thresholds that had to be satisfied in order to sue at common law damages. His solicitor compared the value of a common law claim with the value of a workers compensation claim. The plaintiff was advised that he would probably not satisfy the thresholds for the recovery of common law damages and he therefore instructed his solicitor that he was inclined toward staying with his workers compensation entitlements. Not surprisingly in the light of this advice the plaintiff agreed with his solicitor's recommendation to proceed with obtaining medical reports to investigate his entitlements. 17 On 7 December 1998 the plaintiff and his wife attended another conference with his solicitor, and were once again advised that before any common law proceedings could be commenced there were thresholds that had to be met. The solicitor told the plaintiff that he would probably not get over the threshold. The plaintiff was advised that he should wait until medical opinions had been obtained. The solicitor's file note records that common law was discussed, as was the three year time limit but the solicitor advised that at that stage the plaintiff would probably not get over the thresholds. He subsequently attended a medical examination arranged by his solicitors with a plastic surgeon, Dr W D Walker. 18 On 23 December 1998 Dr Walker, plastic surgeon, provided a report wherein he diagnosed the plaintiff as suffering from 35% superficial burns with post-operative scarring and post-injury stress syndrome. In that report, Dr Walker records the plaintiff's loss of the use of his right arm at 5%, loss of use of his left arm at 2%, his permanent severe facial disfigurement at 10% and his permanent severe bodily disfigurement at 3% (my emphasis added). The report has an internal but important inconsistency, namely a reference to 35% superficial burns but only a permanent severe bodily disfigurement of 3%. This inconsistency was not resolved until Dr Walker confirmed the severe bodily disfigurement was 30% in June 2000. It is most likely that the solicitor advised the plaintiff on the basis of a 3% bodily disfigurement as in a letter to the Coal Mines Insurance dated 17 February 1999 the plaintiff sought the sum of $10,584 s 66 compensation on the basis of a 10% bodily disfigurement. Further, when this advice was given to the plaintiff no psychiatric report had been obtained yet the plaintiff was made redundant because, despite repeated efforts he could not face going under ground again. Had these matters been attended to the solicitor's advice would have been different. 19 On 16 February 1999, the plaintiff's solicitor recommended to the plaintiff that he pursue a claim for weekly payments and lump sum compensation under the Workers Compensation Act. The possibility of a common law claim was discussed but the plaintiff got the impression from his solicitor's advice that such a claim was not open to him because the percentages in the medical reports were not high enough to meet the thresholds imposed by the Workers Compensation Act. The client was again advised of the common law time limit and declined to take common law action and stated that he wished to retain his workers compensation rights. At this conference he was also advised that the time limit for common law proceedings expired in March 1999 and they needed to do something quite quickly if they chose to proceed at common law. Again this advice was given with the Dr Walker report with the internal but vital inconsistency and on the basis that there was no psychiatric disability. 20 Workers Compensation proceedings were commenced and listed for hearing on 8 August 2000 but adjourned to obtain further medical advice. On 25 May 1999, two days after the expiration of the limitation period, the defendant's solicitors sent copies of certain medical reports and certificates to the plaintiff. 21 In June 2001 plaintiff became dissatisfied with his solicitor and sought the advice of the solicitors who had previously acted for his colleague David Barnes who was injured in the same explosion. At the conference in June 2001 Mr Sydes and the plaintiff discussed the importance of any psychological symptoms suffered by the plaintiff in meeting the thresholds under the WCA and the alternative criteria for meeting those thresholds. This was the first time that the plaintiff understood that the possibility of recovering common law damages was not determined only by reference to the percentages for disfigurement and loss of use of his hands and arms obtained for the purposes of his claim under the workers compensation scheme. The plaintiff and Mr Sydes also discussed the circumstances of the explosion and whether or not there was a case against the defendant for negligence. He advised the plaintiff that on the basis of expert evidence obtained in that case, there was a strong argument that the explosion occurred as a result of the defendant's negligence. This was the first time that the plaintiff became aware that there was evidence available supporting a claim for negligence against the defendant. 22 On 15 June 2001 Ms Douglass psychiatrist, concluded that the plaintiff suffered from chronic Post-Traumatic Stress Disorder. However she noted that she had last seen the plaintiff on 9 September 1997 and so was unable to comment on his current psychological condition. On 2 August 2001 Mr Sydes received the plaintiff's file from his previous solicitors. Arrangements were made for the plaintiff to consult another psychiatrist Dr Gertler. 23 On 3 September 2001 Dr Gertler stated that the plaintiff continues to suffer from chronic post traumatic stress disorder, and his prognosis is guarded. He states that the plaintiff is extremely unlikely to be able to return to work in the mining industry and employment of a more general nature is also problematic. On the basis of Dr Gertler's report the plaintiff's solicitor advised him that he had reasonable prospects of meeting the threshold requirements of the Workers Compensation Act 1987. It is my view that when the plaintiff consulted his current solicitors, and was given advice that he had reasonable prospects of success at common law he and his solicitor acted diligently in marshalling evidence and commencing these proceedings. 24 On 3 October 2001 the plaintiff attended conference with counsel. The plaintiff subsequently instructed Mr Sydes to seek an extension of time in which to commence a claim for common law damages. On 19 November 2001 the plaintiff filed a summons seeking such orders. 25 In addition to Itex, counsel for the defendant referred me to the statement of McHugh J in Gallo v Dawson (1990) 93 ALR 479 that "lack of legal knowledge is a misfortune, not a privilege." Counsel submitted that such legal knowledge included not only knowledge of time limits, but also of his entitlements. In circumstances where years had expired and the only thing that had happened was that a second opinion was obtained, counsel submitted that the defendant should not have to await the plaintiff's changes of heart indefinitely. The statement in Gallo is made in the context of an applicant who deliberately allowed the 21 day limit for lodging an appeal to expire, and then waited a further 16 months to file her application for extension of time. Her explanation for the delay was that she did not want to make a decision as to whether or not she would appeal until she had carefully researched the issues involved and satisfied herself that she could succeed. McHugh J held that to grant an extension would be to make a mockery of the extension of time provisions, and it was in that context that he stated that "lack of legal knowledge is a misfortune, not a privilege". 26 The present case is not a case of lack of legal knowledge as described in Gallo. For the reasons explained below, the plaintiff was entitled to rely upon advice proffered by his solicitor. 27 Counsel for the plaintiff sought to distinguish the facts in the present case to those in Itex on the grounds that the plaintiff was not fully informed at the time when he decided to pursue his rights under the workers compensation scheme and that the plaintiff's former solicitors did not properly investigate the possibility of a common law claim. I agree. As I have noted, the advice given by the former solicitors to the plaintiff who was badly burnt in a mine explosion and who was suffering PTSD was erroneous legal advice. Had the matter been properly investigated by his former solicitors, the plaintiff would have been advised at an earlier time that he had reasonable prospects of success in a common law claim and consequently he would have accepted the advice and commenced proceedings earlier. I accept that he was advised on two occasions about the existence of the common law limitation period but that advice was given in conjunction with the advice that he would not succeed at common law, as he would not meet the threshold requirements. The plaintiff relied upon his solicitor's advice and took workers compensation proceedings. The plaintiff had a limited education as he left school at 15 years. He would be reliant upon his solicitor's advice. The plaintiff would not have possessed the knowledge that he should have claimed for his psychiatric disability which meant that he could no longer mine underground and that the disfigurement figure was wrong. Hence the circumstances in this case differ from Itex. In Itex the plaintiff made a deliberate and fully informed decision to allow the limitation period to expire. In the case before me, the plaintiff did not make a fully informed decision to allow the limitation period to expire. Rather he relied upon his solicitor's advice that he did not have a case at common law. This legal advice was given when significant parts of the plaintiff's medical condition had not been investigated, namely the fact that the plaintiff was suffering from PTSD which meant that he could not return to working in the mining industry, a job he had had since he was 25 years old, and that his scarring was undervalued. It is a borderline case, but I have come to the view that the plaintiff has shown special circumstances and that he has satisfactorily explained the delay in commencing proceedings.

Prejudice 28 The defendant did not submit that there has been prejudice suffered by them in preparing their case for trial. There are documents available which relate to the plaintiff's claim by way of the workers compensation proceedings which were commenced. The relevant medical reports are also available, including the report of Ms Robyn Douglass, psychologist, dated 15 June 2001 and that of Dr Robert Gertler, psychiatrist, dated 3 September 2001. There is also material going to liability which is available as a result of the plaintiff's solicitors having acted on behalf of Mr Barnes in his common law proceedings. I am satisfied that there is no significant prejudice in this case. Futility 29 The plaintiff has a real case to advance. It is not futile to grant leave.

Fair and just to grant leave 30 Whether it is fair and just to grant leave is to be determined with regard not only to the circumstances of the individual case, but also with regard to the rationales of the limitation period that barred the action. In Taylor, McHugh J (at 552) identified four broad rationales for the enactment of limitation periods, generally. These were first, that as time goes by evidence is likely to be lost; second, it is oppressive to a defendant to allow an action to be brought long after the circumstances that gave rise to it have passed; third, it is desirable for people in the community to be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them, and many in the community have a significant interest in knowing that they have no liabilities beyond a definite period; fourth, the public interest requires that disputes be settled as quickly as possible. 31 In all the circumstances I am satisfied that the plaintiff has discharged his onus and that it is just and reasonable to grant leave to the plaintiff to commence proceedings pursuant to s 151D of the WCA. 32 Costs are discretionary. In Wynter, Sheller JA stated that in relation to costs ordinarily a successful applicant, who has allowed him or herself to get out of time, should pay the costs of the application unless the respondent's opposition was wholly unreasonable. The defendant's opposition was not wholly unreasonable. The plaintiff should pay the defendant's costs. 33 The court orders that:

(1) Leave is granted to the plaintiff to commence proceedings against the defendant for personal injuries in relation to an accident which occurred on 23 May 1996.

(2) The statement of claim is to be filed and served within 14 days.

(3) The plaintiff is to pay the defendant's costs. **********

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