Commonwealth of Australia v Smith

LEGISLATION CITED: Limitation Act 1969 Civil Procedure Act 2005

Blyth v Commonwealth of Australia [2005] NSWSC 721; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; Commonwealth of Australia v Diston [2003] NSWCA 51; Commonwealth of Australia v Lewis [2007] NSWCA 127; Commonwealth v McLean (1996) 41 NSWLR 389; Commonwealth of Australia v Shaw (2006) 66 NSWLR 325; Commonwealth of Australia v Smith [2005] NSWCA 478; Drayton Coal Pty Ltd v Drain (CA, 22 August 1995, unreported); Holt v Wynter (2000) 49 NSWLR 128; House v The King (1936) 55 CLR 499; Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151; Jones v Royal Hospital for Women (CA, 24 July 1998, unreported); Mahoney v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522; McLean v Commonwealth of Australia (Supreme Court of New South Wales, Sperling J, 18 June 1996; unreported); CASES CITED: McLean v Sydney Water Corporation [2001] NSWCA 1222; Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333; Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274; Parsons v Douglas (2001) 52 NSWLR 163; Pearce v Commonwealth [2005] NSWSC 359; Purkess v Critenden (1965) 114 CLR 164; Sauer v Allianz Australia Insurance Ltd [2006] NSWCA 364; Scott v Handley [1999] FCA 404; Smith v Morton [2004] NSWCA 84 South Western Sydney Area Health Service v Gabriel [2001] NSWCA 477; State of Queensland v Stephenson (2006) 226 CLR 197; Sydney City Council v Zegerac (1998) 43 NSWLR 195; Telstra Corporation Ltd v Rea [2002] NSWCA 49; Vairy v Wyong Shire Council (2005) 223 CLR 422; Watts v Rake (1960) 108 CLR 158.

PARTIES: Commonwealth of Australia - Appellant David Ronald Smith - Respondent

COUNSEL: C Barry QC & D Brogan - Appellant P G Mahoney SC & J L Sharp - Respondent

SOLICITORS: Australian Government Solicitor - Appellant Riordan Legal Lawyers (Vic) - Respondent

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT DATE OF DECISION: 6 July 2006 & 18 September 2006 (Costs)

LOWER COURT MEDIUM NEUTRAL CITATION: Smith v The Commonwealth of Australia [2006] NSWSC 689 & [2006] NSWSC 956 (Costs)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40742/06 SC 20785/97

GILES JA McCOLL JA STUDDERT J

Friday 13 July 2007 COMMONWEALTH OF AUSTRALIA v SMITH Judgment 1 GILES JA: On 10 February 1964 Mr David Smith was an ordinary seaman serving on board HMAS Melbourne when it collided with HMAS Voyager. By a statement of claim filed on 14 August 1997 he commenced proceedings against the Commonwealth, alleging that the collision was caused by negligence for which the Commonwealth bore responsibility and that as a result he had suffered loss and damage. The limitation period for bringing the proceedings was six years (Limitation Act 1969 ("the Act") s 14(1)(b)), and had expired on 11 February 1970. Accordingly, by a notice of motion also filed on 14 August 1997 Mr Smith applied for an order extending the limitation period pursuant to s 60G, s 58 or s 60C of the Act. 2 The application was heard by Adams J on 12 and 13 October 2005. The delay of over eight years is unsatisfactory, to say the least. The judge said of it - "64 Following the filing of the statement of claim and the notice of motion seeking an extension of time, the Commonwealth required the plaintiff's solicitors to provide further and better particulars. That request was made on 5 October 2001. It appears that there was some dispute between the solicitors as to the extent to which the material requested was required to provided. There was also, as I understand it, some delay in the provision of other information by the plaintiff's then solicitor Mr Taylor to the Commonwealth. It is difficult for me to ascribe responsibility for the delay. It is clear that the Commonwealth itself delayed substantially before seeking any information in the first place. It appears that Mr Taylor at one stage had a breakdown in his health and this might have contributed to delay, although this is rather speculative. I do not think however (and it is not suggested), that any of whatever delay is attributable to the plaintiff's side was the result of the plaintiff's failing to act reasonably or as expeditiously as in the circumstances he was able to do. In 2004 the file was transferred from Mr Taylor's firm to the plaintiff's present firm and it appears to be agreed that since then the matter has proceeded expeditiously." 3 Judgment was given on 6 July 2006: Smith v Commonwealth of Australia [2006] NSWSC 689. The judge ordered that the limitation period be extended until 14 August 1997. Although at the commencement of his reasons he referred to ss 58 and 60C of the Act, it was common ground in this Court that he extended the limitation period pursuant to s 60G. Mr Smith did not resurrect reliance on s 58 or s 60C. 4 The judge heard argument as to costs on 17 August 2006, and gave judgment on 18 September 2006. He ordered that the Commonwealth pay Mr Smith's costs of the application. 5 By a summons filed on 21 November 2006 the Commonwealth applied for leave to appeal against the orders extending the limitation period and as to costs, and for an extension of time within which to so apply. The application was heard as if an appeal, so that the appeal could be determined without a further hearing should leave be granted. 6 For the reasons which follow, in my opinion the time to apply should be extended, leave to appeal should be granted and the appeal should be allowed. Extension of the limitation period should be refused.

The statutory framework 7 Section 60G of the Act provides - " 60G Ordinary action (including surviving action)

(1) This section applies to a cause of action that accrues on or after 1 September 1990, founded on negligence, nuisance or breach of duty, for damages for personal injury, but does not apply to a cause of action arising under the Compensation to Relatives Act 1897.

(2) If an application for an order under this section is made to a court by a person claiming to have a cause of action to which this section applies, the court, after hearing such of the persons likely to be affected by the application as it sees fit, may, if it decides that it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period as it determines." 8 Extending the limitation period pursuant to s 60G is confined by s 60I of the Act; which relevantly provides - " 60I Matters to be considered by court (1) A court may not make an order under section 60G … 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 3 years after the plaintiff became aware (or ought to have become aware) of all 3 matters listed in paragraph (a) (i)-(iii). (2) … " 9 Section 60G does not in its terms apply to Mr Smith's cause of action, which had accrued well before 1 September 1990. The application of s 60G is expanded by cl 4 of Schedule 5 to the Act, which relevantly provides - " 4 Existing causes of action for personal injuries may be extended where latent injury etc

(1) Section 60G also applies to a cause of action, founded on negligence, nuisance or breach of duty, being a cause of action that accrued or would have accrued before 1 September 1990, but does not apply to a cause of action arising under the Compensation to Relatives Act 1897 .

(4) The court may make an order under section 60G … in relation to a cause of action referred to in this clause, if an application for such an order is made within: (a) the period of 3 years referred to in section 60I, or

(b) the period of 3 years commencing on 1 September 1990." 10 Accordingly, for Mr Smith to obtain an extension of the limitation period it was necessary that -

(a) the court be satisfied Mr Smith did not know or was unaware of one of the matters in s 60 I (1)(a) as at 11 February 1970 or at a time before that date when proceedings might reasonably have been instituted (s 60 I (1)(a));

(b) the application by the notice of motion filed on 14 August 1997 was made within three years after Mr Smith became aware, or ought to have become aware, of all three matters in s 60 I (1)(a) (s 60 I(1) (b); cl 4(4)(a) of Schedule 5); and

(c) the court decide that it is just and reasonable to order that the limitation period be extended to 14 August 1997 (s 60G(2)).

Mr Smith's claim 11 In the statement of claim Mr Smith alleged his employment by the Commonwealth as an ordinary seaman and his presence upon HMAS Melbourne, the collision, and that the collision was caused by the negligence of the officers and crew of HMAS Voyager, HMAS Melbourne or both "and other officers and servants of the Commonwealth of Australia or some of such officers and servants". Extensive particulars of negligence were given. 12 It was then alleged - "6. As a result of the collision the Plaintiff has suffered loss and damage. PARTICULARS OF INJURIES The plaintiff has suffered pain, suffering, shock and loss of enjoyment of life. Further particulars will be supplied prior to trial. PARTICULARS OF SPECIAL DAMAGE AND LOSS OF EARNING CAPACITY (a) The plaintiff was born on the 7th March, 1945.

(b)(i) The plaintiff first joined The Royal Australian Navy on the 29th July, 1963 and was discharged on the 28th July, 1972. Full details of his earnings during this time are within the knowledge of the defendant.

(ii) Since his discharge from the Navy the plaintiff has been employed in various capacities details of which will be supplied prior to trail.

(c) The Plaintiff has incurred medical and like expenses, full details of which will be made available prior to the trial of this action.

(d) Prior to the said collision the Plaintiff had anticipated a full naval career with regular promotional advancement and, thereafter, to [sic] commensurate DFRDB pension entitlements. His career was cut short by reason of his injuries. Further, as a result of his untimely discharge from the Navy and subsequent dislocation in civilian employment the plaintiff's earning capacity has been, and continues to be adversely affected. More precise particulars will be supplied prior to trial." 13 It is evident that the economic loss in the particulars of special damage and loss of earning capacity was said to have been suffered as a result of Mr Smith's injuries, but the particularisation of injuries was uninformative. At least from the materials before Adams J, better particularisation was not achieved in the ensuing eight years. The judge said at his [1] that Mr Smith "alleges that he suffered psychological injury (Post Traumatic Stress Disorder or PTSD) caused by his experience of the collision and its aftermath". The application before his Honour and the application for leave to appeal were conducted on that basis. 14 On Mr Smith's case for extension of the limitation period, he first became aware that he had suffered PTSD as a result of the collision when informed of the opinion to that effect of Dr Brendan Holwill in a report dated 17 November 1997. The opinion was relevantly - "SUMMARY & OPINION Mr Smith presents with a history of now chronic moderately severe post traumatic stress disorder dating from 1964 when he was serving on the HMAS Melbourne when it collided with the Voyager. A number of the crewmen on Voyager were well known to Mr Smith. As noted in the body of his report, that was a frightening and distressing event for Mr Smith and his colleagues. He subsequently continued to serve on HMAS Melbourne and there were further incidents when the HMAS Melbourne went through a typhoon in the South China Seas and then a large storm in the Great Australian Bight, during which Mr Smith became greatly alarmed fearing that the ship would break up and sink. Following this he served in South Vietnam for 12 months at a joint operations base, which was subject to rocket and mortar attacks. During that period of time the post traumatic stress disorder with associated depression and phobic anxiety worsened. He has subsequently not had any formal associated psychiatric or psychological treatment, and the moderately severe chronic post traumatic stress disorder has continued unabated over the following years. In addition to the post traumatic stress disorder, Mr Smith has a history of episodic alcohol abuse which commenced during his service in the navy. He also has a history of peptic ulceration which would be contributed significantly to by his chronic moderately severe anxiety state and episodic heavy drinking. Mr Smith is currently significantly incapacitated by his chronic psychiatric state and would be effectively unemployable on any regular basis and in any normal position. It is possible that he would improve with psychiatric treatment, although this cannot be guaranteed. His capacity to tolerate stress is quite limited, and even with helpful treatment, his capacity to tolerate stress would remain relatively minimal. Under those circumstances, I would now regard him as totally and permanently incapacitated for any 'normal' employment. I believe that his psychiatric conditions of chronic post traumatic stress disorder with associated moderately severe phobic anxiety, mild to moderately severe depression and substance abuse (alcohol) can be directly attributed to his service experience." 15 In the application to extend the limitation period Mr Smith relied also on a report of Dr Christopher Percival dated 17 December 2002, provided to the Department of Veterans' Affairs in connection with review of Mr Smith's disability pension. Dr Percival diagnosed PTSD, alcohol dependence and nicotine dependence according to the criteria in DSMIV. His report included - "Insofar as causality is concerned the causal relationship between the veteran's post traumatic stress disorder and his service, both aboard HMAS Melbourne and in Vietnam, is obvious and axiomatic. The temporal pattern of development of the veteran's alcohol abuse, that is progression from a tee-totaller in civilian life to a social drinker early in his time in the Royal Australian Navy, to frankly and obviously problematical drinking after the Voyager disaster, with a worsening of that pathological drinking during his service in Vietnam, is such as to raise a more than reasonable hypotheses that the specific stresses of the events in question have a causal relationship to the veteran's alcohol dependence. However, in the case of the veteran's nicotine dependence there is no particular reason to assume a similar association, as the temporal cause of the development of that condition is no different from that observed in many civilians who have lived uneventful lives." 16 These reports may be taken to indicate the case which Mr Smith intends to make out at trial. It is not clear from them, and absent particulars or other information it is left unclear, whether depression, phobic anxiety, alcohol abuse and peptic ulceration are said to be concomitants of PTSD or whether they may play an independent part in his case. 17 As appears from these extracts from their reports, Drs Holwill and Percival did not regard the collision as the sole contributor to Mr Smith's psychiatric condition. Mr Smith remained in naval service after the collision, including serving in Vietnam for a year from October 1969 as an armourer. A fear of flying developed during his training in 1968 in preparation for going to Vietnam. He was required to fly in the course of his service in Vietnam and his fear of flying became worse, such that he asked to be returned to Australia by ship; the fear was worse if he was in a confined space, and even when returning by ship he slept on deck. While in Vietnam he witnessed at close quarters or was involved in a severe motor accident, which had an effect on him. He was exposed to enemy action, in particular the rocket and mortar attacks to which Dr Holwill referred. 18 It is convenient to note at this point that, to the contrary of the opinions of Drs Holwill and Percival, Dr Jonathan Phillips assessed Mr Smith at the request of the Commonwealth's solicitor and, in a report dated 1 February 2000, expressed the opinion that - · Mr Smith "suffered no more than lower level psychological trauma at the time of the naval collision on 10 February 1964" and "probably suffered an increased level of psychological trauma during the period when he served in Vietnam, particularly when his base came under enemy fire and when he was injured in a truck accident"; · Mr Smith could be said to have a specific phobic disorder (aircraft in particular, public transport in general, tall buildings), but his other symptoms did not suggest anything more than ongoing lower level anxiety; · he could not verify that Mr Smith had a diagnosis of PTSD; it was possible that Mr Smith had more widespread psychological problems in the past, but he doubted that Mr Smith's symptoms were ever of breadth or depth sufficient to satisfy criteria for that diagnosis; and · I believe a link can be made between Mr Smith's experience in Vietnam and the development of his specific phobic disorder and to a lesser extent his more generalised but low level symptoms of anxiety. There is no evidence on my examination to suggest that his experiences at the time of the naval collision initiated his psychological problems, or added in any measure to those problems." 19 In Dr Phillips' opinion, Mr Smith's only psychological diagnosis was a specific phobic disorder which he attributed to adverse psychological experiences whilst Mr Smith was in Vietnam. He did not think that the collision had been of any causal importance in the aetiology of Mr Smith's ongoing psychological problems. 20 The particularisation of special damage and loss of earning capacity was little more informative than the particularisation of injuries. Mr Smith's case appears to be that - · the PTSD caused a premature end to his naval career, and his civilian earnings were less than his earnings would have been had he had a full naval career with regular promotional advancement; · the premature end to his naval career also meant loss of or reduced naval pension entitlements; and · the PTSD brought dislocation in civilian employment, with an adverse effect on the exercise of his earning capacity for the period after a hypothetical full naval career. 21 Mr Smith's affidavits in support of the application to extend the limitation period give some indication of the case he intends to make out at the trial. Mr Smith remained in naval service until July 1972. He was intermittently employed in a variety of jobs thereafter, and from 1979 he was self employed as a second hand dealer, drove a school bus part-time and had some other part-time employment. His evidence included that since 1987 "because of my injuries I have been unemployable in any meaningful sense", but he also gave evidence of this part-time employment. He ceased his second hand dealership business in 2002, and stopped driving the school bus in June 2005. It may be taken that at the trial it will be said that this "dislocation in civilian employment" was due to the PTSD and that, by regard to a more constant or more remunerative exercise of earning capacity, there should be compensation for economic loss. 22 From the opinions of Drs Holwill and Percival and the contrary opinion of Dr Phillips, there is obvious occasion for dispute at a trial over whether Mr Smith suffered PTSD and, if he did, the contribution which was made to it by the collision. So far as appears, on Mr Smith's case he is entitled to compensation in full for his psychiatric condition, but there are likely to be questions of disentangling the contributions of other stressors to his psychiatric condition and other aspects of his psychiatric condition, with an evidentiary burden on the Commonwealth (Watts v Rake (1960) 108 CLR 158; Purkess v Crittenden (1965) 114 CLR 164), and of the extent of the Commonwealth's responsibility for his condition (Mahoney v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522). The assessment of damages for non-economic loss, if it is found that Mr Smith suffered PTSD as a result of the collision, is unlikely to be a straightforward exercise. The assessment of economic loss, if it be found that Mr Smith suffered PTSD as a result of the collision, is also unlikely to be a straight-forward exercise. It will involve findings as to his likely naval career, including promotions, and as to the effect of the PTSD on his exercise of his earning capacity over a lengthy period. The assessment exercise could be complicated by the disentanglement of contributions to his psychiatric condition and other aspects of that condition.

The s 60 I (1)(a) gateway 23 Where psychiatric injury is in question, the knowledge of personal injury in s 60I(1)(a)(i) is knowledge of a recognised psychiatric illness (Commonwealth of Australia v Smith [2005] NSWCA 478 at [7] (Handley JA), [104] (Santow JA) and [181] (Basten JA)). Adams J found - "84 In short, I accept that the plaintiff was unaware until he saw Dr Holwill that he had PTSD and that it was at least in part caused by or attributable to his experiences during and immediately after the collision. In fairness, I observe that Mr Barry QC did not ultimately submit otherwise. The thrust of the argument before me related to the requirement that the limitation period can only be extended if (the other pre-conditions being satisfied) "it is just and reasonable to do so": s 60T [sic: s 60G]. Another way of putting this test is whether there has not been such prejudice to the defendant that a fair trial cannot be had." 24 In 1991 Mr Smith was told by Mrs Loretta Higgins, who was assisting him to complete a claim for a disability pension, that he may have PTSD and had to go to a psychiatrist. He said that he did not really understand it: I will return to this evidence later in these reasons. The judge said - "82 … I accept the evidence of the plaitiff as to his knowledge of the existence of a personal injury. I accept that he had not heard of the condition PTSD until seeing Mrs Higgins in November 1991. I am quite sure that the plaintiff did not understand the nature of this condition. I think that the most he made of it was that it was a description of his symptoms rather than a psychiatric injury. Indeed, I think that he was mystified rather than illuminated by Mrs Higgins' information. In other words, he was troubled by the symptoms described in the form filled in for him by Mrs Higgins for the purpose of seeking a pension but did not think of those conditions together as demonstrating a distinct or, indeed, any psychiatric illness. I accept the plaintiff that it was only when he spoke to Dr Holwill that he appreciated that he did suffer from an illness and that it was instigated by his experiences during the collision and its immediate aftermath." 25 It is not entirely clear whether in his [84] the judge found that Mr Smith was unaware that he had PTSD until he saw Dr Holwill, necessarily being unaware that the PTSD was at least in part a result of the collision, or whether he found that Mr Smith was unaware until he saw Dr Holwill that his PTSD was at least in part a result of the collision. It did not matter. Mr Smith did not know or was unaware of the matter in either s 60I(1)(a)(i) or s 60I(1)(a)(iii) until well after 11 February 1970. The Commonwealth did not contend to the contrary in this Court.

The s 60 I (1)(b) and cl 4.4(a) gateway 26 It followed that the application by the notice of motion filed on 14 August 1997 was made within three years after Mr Smith became aware of all three matters in s 60I(1)(a); indeed, it was made before he became aware of them. It was not suggested that there could not be premature application. That left whether the application was made within three years after Mr Smith ought to have become aware of those matters. 27 Actual awareness and whether a plaintiff "ought to have become aware" are distinct. In Commonwealth of Australia v Shaw (2006) 66 NSWLR 325 Basten JA, with whom Handley and Ipp JJA agreed, said - " 11 Paragraph (b) of the provision has two functions. The first is to ensure that, on the assumption that the plaintiff became aware of the matters listed in para (a) prior to making the application for extension of time, the Court must be satisfied that the application was made within three years of achieving that state of knowledge. The second function, implicit in the words in parenthesis, is that the application was also made within three years of the time at which the plaintiff "ought to have become aware" of all of the matters listed in para (a)." 28 Whether a plaintiff ought to have become aware has been said to involve whether the plaintiff took all such action as it was reasonable for him to take to find out: Telstra Corporation Ltd v Rea [2002] NSWCA 49 at [36] per Foster AJA, Mason P and Einstein J relevantly agreeing; Commonwealth of Australia v Smith at [103] per Santow JA, Handley JA agreeing; Commonwealth of Australia v Shaw at [31]. The Commonwealth submitted that the judge failed to address whether the application was made within three years after Mr Smith ought to have become aware of the matters in s 60I(1)(a). It submitted that the judge should have found, and this Court should find, that Mr Smith ought to have become aware more than three years before August 1997 of his personal injury, its nature and extent and the connection with the collision because - · Mrs Higgins told him in 1991 that he may have PTSD and had to go to a psychiatrist; · acting reasonably, he ought then to have gone to a psychiatrist (which he did not); and · if he had gone to a psychiatrist, on the probabilities he would have been told what Dr Holwill told him in 1997, and this would have occurred before August 1994. 29 The submission clearly enough owed much to the reasoning, to a finding adverse to the plaintiff, in Commonwealth of Australia v Shaw at [74]-[77]. 30 It is correct that the judge did not address when Mr Smith ought to have become aware of the matters in s 60I(1)(a), as appears from his [84] set out above. However, that was because, in the manner the application for extension of the limitation period was conducted, he was not called on to do so. The Commonwealth did not in the end put in issue that Mr Smith ought to have become aware of the matters in s 60I(1)(a) more than three years prior to August 1997, or submit that his application should fail for that reason. The conduct of the application was relevantly as follows. 31 In his opening counsel for Mr Smith identified ss 60G and 60I, and said - "The Court must be satisfied that the plaintiff did not know that the personal injury had been suffered or was unaware of the nature and extent of the personal injury suffered or was unaware of the personal injury by the defendant's acts or omissions at the expiration of the relevant limitation period or thereabouts. The Court in my submission will be satisfied, on the plaintiff's submission, of all the three matters referred to in s 60 I subsection (1) because the plaintiff didn't know he suffered the injury alleged, namely, the post-traumatic stress disorder related to the incident until he had seen Dr Holwill later in 1997. 32 This took up only s 60I(1)(a) and actual knowledge of awareness. Counsel did not advert to s 60I(1)(b) and what Mr Smith ought to have been aware of. Counsel for the Commonwealth did not add to this by way of opening. 33 There came a time in the cross-examination of Mr Smith when counsel for the Commonwealth asked what matters Mr Smith noticed about himself after the collision (nightmares et cetera), and - "BARRY: Q. these matters that concerned you, you recognised had the effect of involvement in the collision on you? A. No. Q. Didn't you told put [sic] one and one together? A. No. Q. Did you not work out in your own mind if you were not having such concerns before the collision, you were having such concerns after a collision, that the collision may have been the thing that made you more concerned? A. No. Q. I suggest to you that that was a connection that you did make? A. No, I didn't. Q. Do you agree with me that it is a reasonable connection to make in the circumstances? MAHONEY: I object to that. HIS HONOUR: That is just arguing. BARRY:l No it's not, your Honour, it is because of the subsection B of Section 60 I [sic]. HIS HONOUR: No, I won't allow it. Whether something ought to have happened is nothing a witness can give evidence about. BARRY: Well, I have given him the opportunity to deal with it; I suppose that is all I need to do. I just wanted to give him the opportunity of dealing with that matter. If your Honour takes the view I don't need to take it any further, then I won't." 34 The cross-examination did not take up with Mr Smith his appreciation of Mrs Higgins telling him that he had to go and see a psychiatrist or why he did not go to see a psychiatrist. 35 Counsel for Mr Smith in his submissions addressed Mr Smith's actual awareness. He did not address satisfaction of the "ought to have become aware" requirement in s 60I(1)(b). He did say - "MAHONEY: I apprehend the submission will be made by the defendant that the plaintiff does not pass the gateway as a result of the 1991 intervention [that is, Mrs Higgins' assistance] or alternative, the 1970, 1971 treatment. I think I have addressed both of those issues. I don't apprehend that it will be submitted that if the plaintiff first became aware in 1995 and subsequently in 1997 when he saw Dr Holwell [sic], he hasn't passed through the gateways provided in section 60G and the schedule to the Act. I reserve my position to address on that if that submission is made. I don't apprehend it will be but I would like to reserve my position on that." 36 This is not entirely clear, but was concerned with actual awareness. Counsel for the Commonwealth did not take up the implicit invitation to contest on other grounds passage through the gateway as a result of the 1991 intervention. He made submissions on "findings in questions of fact in relation to s 60I … what Mr Mahoney has called the gateway". He said that they involved "fundamentally a question of whether or not your Honour accepts the evidence of the plaintiff in relation to those questions of fact because that is the only evidence on the question". He said nothing about satisfaction of "ought to have become aware" in s 60I(1)(b). 37 The Commonwealth submitted in this Court that counsel had been prevented from cross-examining Mr Smith on what he ought to have become aware of, by the judge's rejection of the question about making a reasonable connection because "[w]hether something ought to have happened is nothing a witness can give evidence about". It said that the reason given by the judge reflected s 60I(1)(b), to which the judge's attention had been drawn. 38 I do not accept the submission. The rejection of the question did not preclude other questions; the reason for the ruling, understood against a question which asked for Mr Smith's abstract opinion of what was reasonable, did not preclude asking Mr Smith about the factual constituents of what was reasonable such as why he did not go to see a psychiatrist after what Mrs Higgins said to him. The cross-examination had not been concerned with that at all, but with whether what Mr Smith noticed about himself after the collision caused him to "put one and one together", it seems meaning link the nightmares etcetera with the collision. 39 Even if counsel perceived that cross-examination on what Mr Smith ought to have been aware of had been impeded, however, that did not prevent the Commonwealth from submitting that the judge should find that Mr Smith ought to have became aware of the matters in s 60I(1)(a) at a time more than three years prior to August 1997. Counsel observed that he had given Mr Smith "the opportunity to deal with it"; if in counsel's perception "it" was what Mr Smith ought to have been aware of, the submission could be expected. There was no such submission, and in particular there was no submission to the effect of the submission made in this Court. The submission made in this Court was not elaborate, and could readily have been made to the judge. 40 It is not incumbent on a trial judge either to trawl through the evidence or to enunciate legal issues in order to expose and deal with something which a party does not raise in submissions. Nor can the party expect that leave will be granted to appeal on the ground of failure to deal with something which it does not raise in submissions. In my opinion, in the circumstances I have described leave to appeal in relation to whether and when Mr Smith ought to have become aware of the matters in s 60I(1)(a) should be refused. 41 In any event, it is by no means clear that there is substance in the Commonwealth's submission earlier noted. 42 Mrs Higgins filled out for Mr Smith the form claiming a disability pension. The completion included that he claimed PTSD as one of his disabilities and that in late 1969 he was treated by an unnamed psychiatrist in Saigon for the condition PTSD. Mr Smith said that Mrs Higgins told him that he had PTSD, and that he had never heard of it before; he said that he told her of his anxiety, sleep disturbance and so on, and that she told him that in her opinion that amounted to a medical condition known as PTSD. At another point Mr Smith said that Mrs Higgins "said I may have PTSD and that I had to go to a psychiatrist". However, he said that he "didn't really understand the term", and also gave the evidence - "Q. In 1999 [sic], when Mrs Higgins told you that you were suffering from post traumatic stress disorder; what did you understand by those words? A. I didn't really understand it but I understand, understood the drift of it to be war neurosis type disease. It was a new term to me at the time." 43 I have set out the judge's finding in his [82]. It was not submitted that his view that Mr Smith was mystified, and did not think of his symptoms as demonstrating a psychiatric illness, was incorrect. In those circumstances, going to see a psychiatrist may not have been something which it was reasonable for Mr Smith to do. 44 Further, the application for a disability pension did lead to Mr Smith seeing psychiatrists. The Department of Veterans' Affairs arranged for psychiatric examination by Dr Marinovich. Dr Marinovich reported "Post-traumatic stress disorder - Due to war service, especially arising out of a truck accident during duty". He opined that the prognosis was poor and the condition was permanent. Mr Smith was then examined at the instance of the Department by Dr Ian Parkin, who reported on 4 November 1992. Dr Parkin's report referred rather discursively to Mr Smith's service in Vietnam, and in particular to there developing a fear of flying, but also to the collision and Mr Smith's involvement in getting the survivors on board which was said to be "a pretty grizzly [sic] experience" and to seeing air crashes and being subject to severe storms at sea. (In his evidence Mr Smith denied that he told this to Dr Parkin - it is not clear whether his denial was of both his involvement and its description as a grisly experience or only of the latter.) In Dr Parkin's opinion, Mr Smith satisfied the criteria for PTSD which "was related to the on-going traumas of his Navy experience", explained no further than "I believe that Vietnam was probably the most significant on-going trauma but he really has suffered a number of traumas". 45 The likelihood that, had he gone to a psychiatrist in response to what Mrs Higgins said to him, Mr Smith would have been told what Dr Holwill told him in 1997, may be tested by these attendances. Not by Dr Marinovich, and it is not at all apparent that Dr Parkin regarded the collision as a material contributor to the PTSD. It depends on who Mr Smith had gone to. By the time Dr Holwill was asked to report in 1997 there had come a new focus, because an advertisement led Mr Smith to consult a solicitor in 1995 and his proceedings against the Commonwealth had already been brought. If Mr Smith had gone to Dr Phillips, presumably he would have been told that he did not have PTSD and that his psychological problems were unrelated to the collision. 46 It is not appropriate to express a concluded view, amongst other reasons because what Mr Smith ought to have become aware of was not adequately dealt with in the evidence, but the doubt (at the least) as to the substance of the Commonwealth's submission is a further reason why leave to appeal should not be granted in relation to whether and when Mr Smith ought to have become aware of the matters in s 60I(1)(a).

The s 60G(2) discretion 47 Principles relevant to the exercise of the s 60G(2) discretion have become well established, and were not in contest on the application for leave to appeal. It is convenient to note them. 48 When it comes to discretionary extension of a limitation period, the discretion "must be exercised in the context of the rationales for the existence of limitation periods": Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551 per McHugh J. The rationales were explained by his Honour at 552-3 - "The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even 'cruel', to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period. As the New South Wales Law Reform Commission has pointed out: 'The potential defendant is thus able to make the most productive use of his or her resources and the disruptive effect of unsettled claims on commercial intercourse is thereby avoided. To that extent the public interest is also served.' Even where the cause of action relates to personal injuries, it will be often just as unfair to make the shareholders, ratepayers or taxpayers of today ultimately liable for a wrong of the distant past, as it is to refuse a plaintiff the right to reinstate a spent action arising from that wrong. The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible." (citations omitted) 49 In the exercise of the discretion, in determining whether it is just and reasonable to order that the limitation period be extended it is for the applicant for extension to satisfy the court that grounds exist for exercising the discretion in the applicant's favour: Brisbane South Regional Health Authority v Taylor at 547, 551; Sauer v Allianz Australia Insurance Ltd [2006] NSWCA 364 at [17]; Commonwealth of Australia v Lewis [2007] NSWCA 127 at [27]. The respondent may have an evidentiary onus of raising matters which tell against the exercise of the discretion in the applicant's favour, but the ultimate onus of persuading the court that an extension should be granted remains on the applicant: ibid. 50 The primary regard is to prejudice to the respondent if an extension of the limitation period is granted. If there would be significant prejudice, the extension should not be granted: Holt v Wynter (2000) 49 NSWLR 128 at [116]; Commonwealth of Australia v Smith at [127]; Commonwealth of Australia v Lewis at [29]; Commonwealth of Australia v Shaw at [36]. That does not mean that, absent a finding of significant prejudice, an extension must be granted, and the applicant must still discharge the persuasive onus: Parsons v Douglas (2001) 52 NSWLR 163; Commonwealth of Australia v Smith at [129]. Prejudice is not the only consideration; for example, it may be that although the applicant was unaware of one of the matters in s 60I(1)(a), he had such awareness that it would not be just and reasonable to grant an extension of time: Drayton Coal Pty Ltd v Drain (CA, 22 August 1995, unreported); Jones v Royal Hospital for Women (CA, 24 July 1998, unreported); McLean v Sydney Water Corporation [2001] NSWCA 1222 at [24]-[25]. 51 The prejudice is concerned with fairness of the trial. As was said by Hodgson JA, with whom Beazley JA and Rolfe AJA agreed, in South Western Sydney Area Health Service v Gabriel [2001] NSWCA 477 - "33 In the present case, it seems that the matter was fought on the basis that the only real issue was that concerning 'significant prejudice'. For the above reasons, I think the true issue on this matter is whether or not the applicant for the extension discharged the onus of satisfying the Court that there would not be such prejudice as would make the chances of an acceptably fair trial unlikely. In considering the primary judge's reasons, it is necessary to ask whether or not they indicate that this is in substance the question which the primary judge asked and decided."

See also Commonwealth of Australia v Smith at [128]; Commonwealth of Australia v Lewis at [28]-[30]. 52 A fair trial does not mean an ideal trial: Holt v Wynter at [142]; McLean v Sydney Water Corporation at [27]. It must be a question of judgment in each case whether the trial may be (in the words of Hodgson JA) "acceptably fair". These words do not provide a bright-line test, and "acceptably" reveals the judgment involved over and above the imprecision of "fair". As Priestley JA pointed out in Holt v Wynter at [79], trials are constantly held in which for a variety of reasons not all relevant evidence is before the court. But the passing of time commonly means that less evidence can be put before the court, and so there can be significant prejudice when, in the circumstances of the particular case, it is judged that the chance of a fair trial has become unlikely. 53 The judgment is necessarily an assessment of what might occur, and so Hodgson JA referred to "the chances of an acceptably fair trial". In Brisbane South Regional Health Authority v Taylor McHugh J said at 555 - "Legislatures enact limitation periods because they make a judgment, inter alia, that the chance of an unfair trial occurring after the limitation period has expired is sufficiently great to require the termination of the plaintiff's right of action at the end of that period. When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case. Even on the hypothesis of presumptive prejudice, the legislature perceives that society is best served by barring the plaintiff's action. When actual prejudice of a significant kind is shown, it is hard to conclude that the legislature intended that the extension provision should trump the limitation period. The general rule that actions must be commenced within the limitation period should therefore prevail once the defendant has proved the fact or the real possibility of significant prejudice. In such a situation, actual injustice to one party must occur. It seems more in accord with the legislative policy underlying limitation periods that the plaintiff's lost right should not be revived than that the defendant should have a spent liability reimposed upon it. This is so irrespective of whether the limitation period extinguishes or merely bars the cause of action." 54 See also per Toohey and Gummow JJ at 550, referring to "whether the delay has made the chances of a fair trial unlikely"; the obverse of the chances of a fair trial is reflected in McHugh J's language of whether there is a real possibility of significant prejudice. It is sufficient that there is the real possibility - certainty or strong likelihood is not necessary. And, the ultimate burden lying on the applicant for extension of the limitation period, the question is (as phrased by Hodgson JA) whether the applicant has satisfied the court that there would not be such prejudice as would make the chances of an accceptably fair trial unlikely. 55 The chances of an acceptably fair trial do not involve balancing the prejudice to the applicant and the prejudice to the respondent: Sydney City Council v Zegerac (1998) 43 NSWLR 195. Nor (and this was a matter upon which one of the Commonwealth's submissions rested) is there a comparison between the position the respondent would have been in if the proceedings had been brought within the limitation period and the respondent's position at the time of the application. In Brisbane South Regional Health Authority v Taylor McHugh J said at 554-5 - "The learned judges of the Court of Appeal met the prejudice point by holding that the test for prejudice was whether an order extending time would make the defendant any worse off than it would have been if the action had been commenced within, but towards the end of, the limitation period. But this analysis, with respect, treats the limitation period as little more than a point of reference. It suggests that all that is ordinarily relevant is the marginal prejudice created by the delay. It downplays, if it does not overlook, the second, third and fourth rationales of limitation periods to which I have referred. It treats the parties, subject to the question of prejudice, as if they were on an equal footing. The analysis gives no weight to the fact that the defendant's potential liability expired at the end of that period and that to extend the period may result in the imposition of a new legal liability on the defendant. Indeed, it seems to indicate that a limitation period is a provisional rather than a rigid limit.

If the action had been brought within time, it would have been irrelevant that, by reason of the delay in commencing the action, Dr Chang might have had little independent recollection of his conversation with the applicant and that the defendant might have had difficulty in fairly defending itself. But once the potential liability of the defendant had ended, its capacity to obtain a fair trial, if an extension of time were granted, was relevant and important. To subject a defendant once again to a potential liability that has expired may often be a lesser evil than to deprive the plaintiff of the right to reinstate the lost action. This will often be the case where the plaintiff is without fault and no actual prejudice to the defendant is readily apparent. But the justice of a plaintiff's claim is seldom likely to be strong enough to warrant a court reinstating a right of action against a defendant who, by reason of delay in commencing the action, is unable to fairly defend itself or is otherwise prejudiced in fact and who is not guilty of fraud, deception or concealment in respect of the existence of the action." 56 See also Smith v Morton [2004] NSWCA 84 at [39]; Sauer v Allianz Australia Insurance Ltd at 33]. 57 Going then to the Commonwealth's appeal, in an appeal against the judge's discretionary decision the Commonwealth had to establish error of the kind described in House v The King (1936) 55 CLR 499. In Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 Heydon JA, Sheller JA and Studdert J agreeing, said of a discretionary decision on a matter of practice and procedure - "45 … Any attack on decisions of that character must fail unless it can be demonstrated that the decision-maker:

(d) failed to take into account, or gave insufficient weight to, some relevant matter, or

(e) arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning.

Even though this Court might conclude that it would have exercised the discretion differently if the discretion had been conferred on it in the first instance … any such conclusion would be immaterial. The law committed the exercise of the discretion to Garling DCJ. The law permits interference with his exercise of the discretion in only the limited circumstances just described." 58 In summary, the Commonwealth submitted that the judge made errors of legal principle, and had been incorrect in finding as a matter of fact that there would be no actual prejudice to it in the conduct of a trial. The prejudice on which the Commonwealth relied before the judge was concerned with proof and disproof of PTSD, its origin in the collision and the part played by other contributors to and aspects of Mr Smith's psychiatric condition, and also with proof and disproof in relation to economic loss. A "Schedule of Prejudice" was provided to the judge, who reproduced it at [79] of his reasons. It included difficulties in identifying and locating contemporary servicemen who could give evidence of Mr Smith's condition in the period after the collision; the Commonwealth relied on similar difficulties in relation to Mr Smith's employment history. 59 Focussing for the present on PTSD, there was occasion for questioning that he suffered PTSD as a result of the collision. As later noted, the judge said that "legitimate criticism can be made of the reliability of [Mr Smith's] evidence", and there was a sound basis for that observation. In particular, in his evidence before the judge Mr Smith said that the nightmares et cetera which he also said immediately followed the collision began while he was in Vietnam, and that apart from his fear of flying and "some anxiety about being below deck in the ship, sleeping below decks and so on" were not present prior to his service in Vietnam. He said that the anxiety last mentioned was "nothing like the problems [he] had after [he was] in Vietnam". In a statement in August 1992 in support of his application for a disability pension Mr Smith said - "Due to my war neurosis I am finding that my medical condition is worsening and also my ability to cope. My bouts of depression, anxiety and poor sleeping pattern leave me feeling exhausted and I feel very sad and unhappy and often feel that I would just like to 'get away from everything'. I feel that my life is ruined due to my Vietnam service and without my wife and family I doubt that I would have any quality of life whatsoever. Over the years preceding my failing health I had been restless, unsettled and moving from job to job which has taken its toll on my and my family. I feel my condition is chronic and never ending and that no therapy or medicine can help. I am at a loss to feel or understand why I am like this but can guarantee that prior to my war service my life was satisfying and worthwhile so it leaves me with the conclusion that the war has caused all this and I can never been the man I once was ." (emphasis added) 60 Mr Smith saw the unknown psychiatrist in Saigon in 1969. (He said in his evidence that he did not think the person he saw was a psychiatrist). The development of his fear of flying and his other symptoms caused navy doctors to refer him to a psychiatrist, and in January 1971 he was examined by Dr McGeorge. He was thereafter reviewed by Dr McGeorge on a number of occasions. He was also referred for examination by a psychologist, Mr Van Daatselaar, in March 1971. The navy doctors themselves continued to assess Mr Smith for the purposes of referral for review. In July 1972 Mr Smith was examined by Dr P M Gill, a consultant psychiatrist, "[f]or review prior disengagement in August". 61 According to the psychiatrists' and doctors' notes and reports, phobias (at one point "secondary to neurotic personality") and anxiety depression were diagnosed. Mr Van Daatselaar's notes included that Dr McGeorge "is partly close if he called it an anxiety state with depressive features", and that Mr Smith was "emotionally disturbed to a moderate or serious degree". None of the notes or reports linked Mr Smith's condition with the collision. As has been seen, Dr Marinovich did not express the link, and Dr Parkin's report was not clear in that respect. 62 Dr McGeorge died in 1979. Dr Gill could not be found. Dr Marinovich could not be located. According to the Schedule of Prejudice, of six navy doctors four could not be located and two had no recollection of Mr Smith. 63 The Commonwealth submitted before the judge that, quite apart from the inevitable difficulties from the lapse of time, it was particularly prejudiced because Dr McGeorge was dead and Dr Gill could not be found. It said that Mr Smith's evidence left a real question whether his PTSD was a result of the collision, that if it was the Commonwealth had at least an evidentiary onus in the disentanglement to which I have earlier referred (Watts v Rake and Purkess v Crittenden), and that it was prejudiced in relation to the causation of Mr Smith's PTSD and the extent to which it might be held responsible for his condition. 64 The judge said - "76 In his submissions, Mr Barry QC said that the "real point in this case on the extension of time application is the difficulties associated with the Vietnam experience...and the onset of the conditions that led to psychiatric treatment initially in Saigon and then the reference when he was back in Australia..." He submitted that there may have been some minor psychological disturbance not amounting to a psychiatric condition prior to Vietnam which was exacerbated or the Vietnam experiences may have supervened. Mr Barry submitted that "the real issue is can there be a proper trial of these issues now - and this is our main point in this application - in the absence of Dr McGeorge specifically". Mr Barry submitted that "it's almost inconceivable he wouldn't have asked about the Melbourne/Voyager collision" because, as I understand the argument, the doctor would have had the plaintiff's file which would have disclosed that he was serving on Melbourne at the time of the collision.

77 I do not accept this contention. Given the content and number of the clinical notes to which I have referred, Dr McGeorge's evidence would be most unlikely to have been of much more than marginal assistance to the Commonwealth, even had the plaintiff's action had been commenced in time and the Commonwealth therefore having been able to consult with Dr McGeorge about the plaintiff's condition . I think that it may safely be inferred that Dr McGeorge noted, albeit briefly, everything that he regarded as material. In treating psychiatric conditions, perhaps more than physical injuries, complete histories are vital and notes of the history given by a patient are correspondingly important. Had Dr McGeorge obtained a history from the plaintiff that included his involvement in the collision and excluded that event as having being relevant to the plaintiff's condition, it is inescapable that he would have made a note to this effect; a fortiori if he had obtained such a history and regarded it as relevant. 78 I have mentioned that the Commonwealth has been unable to locate Dr Gill. Mr Barry QC did not refer to his absence. I note that Dr Gill's report is available. I would be surprised if he were able to recall any details of his consultation with the plaintiff. As with Dr McGeorge, I think that it is probable that, even had Dr Gill been contacted in the course of preparation for a trial where the proceedings had been commenced within time , he would not have been able to go any further than his notes." (emphasis added) 65 Immediately prior to acceptance in his [82] of Mr Smith's knowledge of the existence of a personal injury, see earlier in these reasons, the judge said more generally - "82 I regarded the plaintiff as a truthful witness, although legitimate criticisms can be made of the reliability of his recollections. These problems, however, rather reflect on his ability to make his case and are not, in a real forensic sense, prejudicial to the Commonwealth ." (bold added) 66 Later in his reasons the judge said - "91 As I have already mentioned, the nature of the plaintiff's case is not such as would have made it likely that anyone but the most perspicacious observer would have realised that anything was significantly amiss with him during the period up to, at least, the immediate pre-Vietnam training period. Even if the plaintiff's action had been commenced within the limitation period, it is unlikely that, given the nature of his condition and his description of what he then experienced, any of the persons whose lost identities the Commonwealth complains about would have been able to give significant evidence, one way or the other. I recognise that this analysis assumes the reliability of the history that the plaintiff has given. However, if his symptoms were more marked than he has asserted (so that the witnesses might have been able to given material evidence) then that would assist the plaintiff and not the defendant. It is difficult to see how anyone would have noticed that the plaintiff's symptoms were less marked than he has described, since he has in effect said that they were not such as would have led someone to notice, with the exception of course that he wished to sleep on deck. However, I think that too nice a logical analysis is inappropriate and that the approach should be one of practical judgment about the likely course of that trial. If I may say so with respect, this seems to me to be the approach adopted by Barr J in Smith v The Commonwealth [2004] NSWSC 873 and McDougall J in Gretton v The Commonwealth [2005] NSWSC 437, the Court of Appeal in the former case not suggesting that such an approach was mistaken. 92 The Commonwealth has access to the RAN's medical records relating to the plaintiff, which strike me as comprehensive. Although some of those doctors are dead, some have been able to be contacted and others who are alive do not recall the plaintiff. I do not think this leads to any actual prejudice. Even if the action had been brought in time, it is improbable that, having regard to the reasons for seeking treatment, the doctors involved would have recalled the plaintiff. More significantly, the nature of the consultations would have been most unlikely to have given rise to the obtaining of any history (either in a positive or negative sense) material to the issues in this case. Mr Barry QC virtually conceded as much in his submissions, focusing on the absence of Dr McGeorge as being productive of actual prejudice. For the reasons I have already given, I do not think that the absence of Dr McGeorge does give rise to any actual prejudice to the Commonwealth in its conduct of this case." (emphasis added) 67 His Honour's conclusion was - "95 I have concluded that there is no actual prejudice to the Commonwealth arising from an extension of time. Of course, that leaves the effect of presumptive prejudice and the expiry of the limitation period itself to be considered. Having regard to the issues in the case as I understand them, I do not think that the presumptive prejudice derived from the delay in bringing proceedings would render any trial of the plaintiff's claim unfair or unjust. Nor, bearing in mind the relative positions of the plaintiff and the Commonwealth, do I consider that the reliance, if any, by the Commonwealth on the lack of any action by this plaintiff (when he became aware of his condition) is of such a significance as to lead to a refusal of the extension. In this regard, I note that there have been many applications for extension of time in cases not dissimilar to that of the plaintiff arising out of the collision, many of which have been granted and some of which have been refused but in none of which has this latter consideration bulked large, although its relevance is undoubted." 68 The Commonwealth submitted that the judge erred in principle in that, in the emphasised portions of the passages, in assessing the prejudice to it he impermissibly applied the test of whether an order extending the limitation period would make it any worse off than it would have been if the proceedings had been brought within the limitation period. Mr Smith responded that the judge had in his [84] posed for himself the correct question of whether there had not been such prejudice to the Commonwealth that a fair trial could not be had, but the judge's error lay not in posing the question but in answering it. In my opinion, the Commonwealth submission should be accepted. 69 The Commonwealth further submitted that the judge erred in principle in that, having said in his [82] that legitimate criticisms could be made of the reliability of Mr Smith's recollections, in the sentence I have put in bold he had effectively put that aside as going to the fairness of a trial because "[t]hose problems … rather reflect on [Mr Smith's] ability to make his case and are not, in a real forensic sense prejudicial to the Commonwealth". In my opinion, this submission also should be accepted. Psychiatric opinions upon whether Mr Smith suffered PTSD as a result of the collision, and upon the materiality of his service in Vietnam and other matters to his psychiatric condition, significantly rest upon his account of his mental and physical state; so also the effect of his condition upon his well-being and the exercise of his earning capacity will largely depend on his evidence at a trial. His evidence at a trial will to a perhaps lesser extent bear upon his likely career in the navy. All aspects of his case will call for assessment of his reliability and credibility and, if there can be legitimate criticisms of his recollections, the Commonwealth will be prejudiced if it is unable properly to test and counter the recollections. There may be a problem for Mr Smith. There is also a different problem for the Commonwealth. 70 So in Commonwealth of Australia v Diston [2003] NSWCA 51 the applicant had given different histories to doctors of the incidence of his condition, and the Master had described his evidence as unreliable. It was said at [52] by Sheller JA, with whom Mason P and Grove J agreed, that inevitably the respondent was prejudiced to the extent that those matters could not properly be investigated, and that the prejudice was highlighted by the applicant's unreliability as a witness of truth. In Commonwealth of Australia v Shaw the primary judge had taken a like view to that of the judge in his [82], answering a complaint that the applicant was an unreliable witness by saying that the applicant's unreliability or inconsistency would lessen his chances of success with respect to issues on which the applicant had the onus of proof and that medical records seemed to be sufficiently precise that they could be relied on to test his assertions. Basten JA said - "81 With respect, these matters do not answer the gravamen of the complaint. The Commonwealth should not be required to rely solely upon inherent weakness or inconsistencies in the plaintiff's case. If it has been denied the opportunity, due to the lapse of time, to make any reasonable inquiry as to the accuracy of the plaintiff's assertions, that is an element of actual prejudice. The fact that medical records suggest that his current account was not given contemporaneously with the events or at any stage during his naval service may lead to an allegation of incomplete record-keeping or an explanation for his omission. It is unlikely that the Commonwealth will be able to rebut such an allegation or challenge effectively an explanation.

82 Secondly, as noted above, the Commonwealth itself has at least an evidentiary onus of disentangling other contributing causes, in accordance with the principles established in Watts v Rake and Purkess v Crittenden . Its prejudice will extend to an inability to undertake that task.

83 Thirdly, it is wrong to treat the apparent weakness of the plaintiff's case as a reason which favours the grant of an extension of time. As noted above, if the plaintiff's case is treated as weak, that should be a factor militating against an extension of time. If the trial judge was not prepared to treat it as a weak claim, he should have given more weight to the apparent prejudice to the Commonwealth in not being able to dispute a claim with reasonable prospects of success." 71 These two errors in my opinion were as to material considerations bringing the judge to the conclusion in his [94] that there was no actual prejudice to the Commonwealth. They vitiate the exercise of his discretion, and the latter alone provided what Basten JA called "an element of actual prejudice" whatever may otherwise have been thought of the absence of (for example) Dr McGeorge, Dr Gill and contemporary servicemen in relation to the chance of a fair trial. 72 The discretion must be re-exercised. This Court is in a position to do so, and no submission was made that it should not do so. In my opinion, it would not be just and reasonable to extend the limitation period. 73 Mr Smith will have to establish at a trial, on the balance of probabilities, an effect on him of the collision which expert evidence such as the opinion of Dr Holwill will say amounted to PTSD. That will be to the contrary of, for example, what Mr Smith put his signature to in the August 1992 statement in support of his application for a disability pension, and in the manner I have sought to indicate will be contestable as to the demonstration of symptoms of the psychiatric disorder prior to and apart from his service in Vietnam and, if he did suffer from PTSD, as to the contribution to his condition of his service in Vietnam. Questions of independent contribution of, for example, phobic anxiety (fear of flying) may arise. The conclusions at the trial will depend significantly on Mr Smith's evidence. 74 Even with contemporaneous service and medical records at its disposal, the Commonwealth will be prejudiced in its ability to dispute the case sought to be made out by Mr Smith. The judge was rather critical of the Commonwealth's endeavours to locate contemporary servicemen with a recollection of Mr Smith, but so far as it efforts went they demonstrated the not unexpected effect of lapse of thirty-five years and more on recollection. Drs McGeorge and Gill were important as potential sources of evidence on the histories given by Mr Smith, his psychiatric condition and the contributors to it, at a time reasonably close to the collision and of course of his service in Vietnam, and they are not available to the Commonwealth. It is not a sufficient answer, in my view, to say that they can not have asked Mr Smith about the collision and Mr Smith can not have said anything to them about it (as Mr Smith said in his evidence), otherwise they would have noted it, and so they could not have had opinions in relation to PTSD caused by the collision and could not have given useful evidence, which is as much part of what the Commonwealth can not effectively test or challenge as other evidence to be given by Mr Smith. That assumes the correctness of Mr Smith's evidence, which is as much part of what the Commonwealth can not effectively test or challenge as other evidence to be given by Mr Smith. It makes assumptions as to why neither psychiatrist noted something about the collision. Inferences could be made, but the absence of Drs McGeorge and Gill means that the Commonwealth will be exposed to inference rather than direct evidence. 75 There is, it seems to me, a real impediment to the chance of a fair trial, and the more so because the Commonwealth does not simply resist Mr Smith's claim but has an evidentiary onus in the disentangling of other contributing causes in accordance with the principles in Watts v Rake and Purkess v Crittenden. 76 The position will be similar in relation to Mr Smith having to establish economic loss by reason of his psychiatric illness. His evidence of his civilian employment, and in particular why it was "dislocated" and no doubt why his self-employment as a second hand dealer was not particularly remunerative, will implicate his psychiatric condition; after many years, the important period of intermittent employment being from 1972 to 1979, the Commonwealth will be exposed to acceptance of the evidence given by Mr Smith, hampered in its ability to test or challenge the evidence. It may be that the same can not be said in relation to Mr Smith's probable naval career, as to which records could enable the Commonwealth adequately to respond to Mr Smith's case, and for present purposes I put that aside. But again, there is an impediment to the chance of a fair trial. 77 In the judgment of the chance of an acceptably fair trial, I do not think that Mr Smith satisfied the burden of showing that it is just and reasonable to extend the limitation period. The chances of a fair trial are significantly compromised, and it becomes unlikely; put as the obverse, there is a real possibility that the trial will not be fair, even allowing for a fair trial being less than ideal. 78 Mr Smith submitted that his case was relevantly on all fours with Commonwealth of Australia v Smith, and should have an extension of the limitation period as had been upheld in that case. Each case must depend on its own facts; Handley JA agreed in Commonwealth of Australia v Smith that the extension of the limitation period should be upheld and in Commonwealth of Australia v Shaw that the limitation period should not have been extended. In Commonwealth of Australia v Smith there were not the errors of principle which call for a re-exercise of discretion, and the majority was of the view that the primary judge took account of all the evidence in relation to prejudice and that, the weight to be attached to a relevant consideration being a matter on which reasonable minds may differ, it could not be said that he had attached so little weight to particular aspects of the evidence that he effectively disregarded a material consideration or that the exercise of his discretion was so unreasonable or unjust as to point to appealable error: at [154] per Santow JA, with whom Handley JA relevantly agreed. The present case requires that this Court re-exercise the discretion, on its own facts. Accepting that, as Basten JA said in Commonwealth of Australia v Shaw at [73], it is desirable that similar cases arising from the collision between HMAS Melbourne and HMAS Voyager be decided consistently, the present case has greater similarity with Commonwealth of Australia v Shaw.

The result 79 The summons for leave to appeal from the order extending the limitation period should have been filed in early August 2006, but was filed in late November. No explanation for the delay was given. It may have been thought, wrongly, that appellate proceedings should await completion of the first instance proceedings by the costs judgment of 18 September 2006. A notice of appeal purportedly as of right was filed wrongly, on 13 October 2006. Mr Smith's submissions did not make anything of the delay, and notwithstanding the absence of an explanation I consider that in the circumstances an extension of the time within which to apply for leave to appeal should be granted. 80 The order extending the limitation period, although an interlocutory order, is fundamental to Mr Smith's claim and its defence. The judge's decision was flawed and, for the reasons I have given, in my opinion the order should not have been made. Leave to appeal should be granted, limited to appeal challenging the exercise of the s 60G(2) discretion; leave to appeal against the costs order should consequently be granted. 81 The appeal against the order extending the limitation period should be allowed. The costs order will fall consequentially, and does not call for separate consideration. 82 I propose the following orders -

Extend the time within which to apply for leave to appeal to 21 November 2006.

Grant leave to appeal limited to appeal challenging the exercise of the s 60G(2) discretion and the costs order and direct the filing of the notice of appeal within 14 days.

Appeal against the order extending the limitation period allowed.

Set aside the orders made on 6 July and 26 September 2006 and in lieu thereof order that the notice of motion filed on 14 August 1997 be dismissed with costs.

Respondent pay the appellant's costs of the application for leave to appeal and have a certificate under the Suitor's Fund Act if otherwise qualified. 83 McCOLL JA: I have had the advantage of reading in draft the reasons of Giles JA. I gratefully adopt his Honour's recitation of the facts. I agree with his Honour's conclusion (at [46]) that leave to appeal should not be granted in relation to the issue of when the opponent ought to have become aware of the matters in s 60I(1)(a), Limitation Act 1969. I am unable to agree, however, with his Honour's conclusion (at [71]) that the primary judge erred in the exercise of his discretion in relation to the s 60G issue. In my opinion his Honour did not err in this respect and the application for leave to appeal on the s 60G issue should also be dismissed with costs. 84 Giles JA has concluded that the primary judge made an error of legal principle because, in assessing whether or not the Commonwealth would suffer significant prejudice if the application for an extension of the limitation period was granted, he took into account whether the Commonwealth would have been any worse off if that order was made than it would have been if proceedings had been brought within the limitation period. The second error of discretion upon which the Commonwealth relied, which has found favour with Giles JA, is that the primary judge failed to take into account, or gave insufficient weight to, his conclusion that legitimate criticisms could be made of the reliability of the respondent's recollections. 85 In my view, with respect, when the primary judge's reasons are examined as a whole, he has not erred either as to a matter of principle or in failing to give due weight to the issue of the reliability of the respondent's testimony. In particular, in the latter respect, it was important to bear in mind the advantage the primary judge obtained from seeing the opponent give evidence: see Commonwealth of Australia v Diston [2003] NSWCA51 at [39]. 86 The primary judge recorded at the commencement of his reasons that the critical issue on the s 60G issue was "whether the delay and its consequences result in such significant prejudice to the Commonwealth as to render a trial unfair or, more precisely, whether the plaintiff has established that a trial held at the present time would be fair …": Smith v Commonwealth of Australia [2006] NSWSC 689 (Smith No 2) (at [17]); see also (at [84]) his Honour's observation that "[a]nother way of putting this test is whether there has not been such prejudice to the defendant that a fair trial cannot be had." 87 The primary judge referred again to the relevant test (at [86]), on this occasion by reference to the decision of Sheller JA (Meagher and Handley JJA and Brownie AJA agreeing) in Holt v Wynter (2000) 49 NSWLR 128 that: "… an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in a significant prejudice to the potential defendant." 88 His Honour also referred (at [85]) to the fact that "the notion of a fair trial is not a precise one" and that "for a trial to be fair it need not be perfect or ideal": Holt v Wynter (at [79]) 89 His Honour recognised (at [87]) that the opponent bore "the ultimate onus of satisfying the Court that it is just and reasonable to extend the period but the Commonwealth has 'an evidentiary onus to raise any consideration telling against the exercise of the discretion to extend'." 90 The Commonwealth does not criticise the primary judge's statement of the relevant legal principles. Nor could it. His Honour's statement accorded with the statement of the legal principles in such applications in Commonwealth of Australia v Smith [2005] NSWCA 478 at [127] - [129] (Smith No 1) per Santow JA (Handley JA agreeing at [21]; Basten JA (agreeing with the statement of principle (at [202]) although dissenting in the result) see also Commonwealth of Australia v Shaw [2006] NSWCA 209; (2006) 66 NSWLR 325 (at [34] per Basten JA (Handley and Ipp JJA agreeing)). 91 Notwithstanding the correct recitation of principle, the Commonwealth argues that the primary judge erred as a matter of legal principle in the observations he made (at [77], [78] and [91]) when dealing with the Commonwealth's complaint that it was prejudiced because of the unavailability of Dr McGeorge. 92 In those passages the primary judge was dealing with a submission (see [76]) made by Mr C T Barry QC, who appeared for the Commonwealth with Mr D Brogan at trial and on appeal, about the prejudice to which the Commonwealth was exposed. The Commonwealth's case, both before the primary judge and in this Court, was that it was Dr McGeorge's death in 1979 which caused it insurmountable prejudice in disentangling the causative effect of the Voyager collision from the causative effect of the opponent's Vietnam war service: cf Watts v Rake (1960) 108 CLR 158; Purkess v Crittenden (1965) 114 CLR 164. Mr Barry submitted before the primary judge that the absence of Dr McGeorge was critical because it was "…almost inconceivable he wouldn't have asked about the Melbourne/Voyager collision". 93 Gules JA has set out (at [64] and [66]) the passages of which the Commonwealth complains about the primary judge's observations in relation to Doctors McGeorge and Gill (primary judgment at [76]- [78]) and the opponent's contemporaries at the time of the collision, that even if the opponent had commenced his action within the limitation period, it was unlikely the Commonwealth would have been in any better position in relation to these witnesses than it would if the limitation period was extended. 94 The Commonwealth submitted that these passages revealed that the primary judge had fallen into the error identified by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 (at 554): "The learned judges of the Court of Appeal met the prejudice point by holding that the test for prejudice was whether an order extending time would make the defendant any worse off than it would have been if the action had been commenced within, but towards the end of, the limitation period. But this analysis, with respect, treats the limitation period as little more than a point of reference." 95 I do not understand the primary judge to have fallen into the same error. His Honour had already directed himself correctly as to the appropriate legal principles. I cannot discern from the passages of which the Commonwealth complains that he had departed from them. It is important to look at the context in which the comments appear. 96 The primary judge's reference to the position the Commonwealth would have been in if the proceedings had been commenced within time appears to have been made to deal with a matter which arose in the course of submissions. Mr Barry made the following submission to the primary judge (Black 96): "BARRY: Now there may have been some minor psychological disturbance not amounting to a psychiatric condition prior to Vietnam. There may have been an exacerbation. The Vietnam experience may be a supervening event which came over the top of the other matters. It's a very difficult question. The real issue is can there be a proper trial of these issues now and this is, if I may [say] so, our main point in this application, in the absence of Dr McGeorge specifically. HIS HONOUR: The difficulty that I see facing that argument and which is, perhaps you can't put it quite in that way, namely, even if Dr McGeorge were now alive, and assuming he was perfectly compos mentis and completely alert, it's virtually certain he would have no recollection of Mr Smith. BARRY: No, but it is likely. HIS HONOUR: Your real point is, isn't it, that this action was started at a time when such memory as Dr McGeorge had, if he were alive, would not have been of utility. Your real point is not so much that he is dead now but that this action should have been started within the limitation period because there was a chance then you might have got Dr McGeorge while he remembered stuff ? BARRY: We would say that … " 97 It is consistent with this exchange that the matter the primary judge was addressing at [77], [78] and [91] was the Commonwealth's illustration on the issue of prejudice that it would have been in a better position if the proceedings had been commenced within the limitation period as it was likely Dr McGeorge would have recalled matters relevant to the aetiology of the opponent's condition. I note, parenthetically, that while the Commonwealth had complained before the primary judge that it was prejudiced in the relevant sense by the fact that Dr McGeorge had died, it had not relied on Dr Gill's absence in this respect. The primary judge appears to have extended his consideration of the medical issue to Dr Gill and dealt with him in the same manner as Dr McGeorge. 98 In my view, his Honour was not disposing of the issue of prejudice in the passages of which the Commonwealth complains. In particular, he was not formulating a test of prejudice: cf Brisbane South (at 554). 99 His Honour was merely dealing with one aspect of the potential prejudice to which the Commonwealth might be exposed having regard to Dr McGeorge's absence. The gravamen of his disposition of the Dr McGeorge issue is found in the balance of par [77]. There his Honour made the eminently sensible observation that the content of Dr McGeorge's clinical notes were likely to be the best evidence Dr McGeorge could ever have given years after the event, that it could be inferred that Dr McGeorge had noted "everything that he regarded as material" and that if he had "obtained a history from the plaintiff that included his involvement in the collision and excluded that event as having being relevant to the plaintiff's condition, it is inescapable that he would have made a note to this effect; a fortiori if he had obtained such a history and regarded it as relevant." His Honour drew similar inferences in relation to Dr Gill (see [78]) and the opponent's contemporaries (see [91]). These are not remarkable inferences. They have been made in other like cases in which the Commonwealth has sought to rely upon the absence of, inter alia, Dr McGeorge to resist an extension application: see, for example, Blyth v Commonwealth of Australia [2005] NSWSC 721 (at [55] - [56]) per Studdert J. 100 These inferences had added force when it is appreciated that the aetiology of the opponent's condition was that he was unaware of the cause of his mental distress until the early nineties, a proposition the Commonwealth did not contest: Smith No 2 at [84]. In the light of that concession in my view the Commonwealth's submission that it would suffer prejudice if the extension application were successful due to the absence of Dr McGeorge was speculative. 101 As I have indicated the primary judge set out the appropriate principles of law relevant to the extension application to which he adhered throughout his judgment. In my view the Commonwealth's attempt to seize on remarks that were not determinative of the exercise of his discretion should be rejected. 102 The second matter Giles JA has concluded warrants this Court's intervention with the exercise of the primary judge's discretion concerns the statement underlined in the following passage (Smith No 2 at [82]): "82 I regarded the plaintiff as a truthful witness, although legitimate criticisms can be made of the reliability of his recollections. These problems, however, rather reflect on his ability to make his case and are not, in a real forensic sense, prejudicial to the Commonwealth. I accept the evidence of the plaintiff as to his knowledge of the existence of a personal injury. I accept that he had not heard of the condition PTSD until seeing Mrs Higgins in November 1991. I am quite sure that the plaintiff did not understand the nature of this condition. I think that the most he made of it was that it was a description of his symptoms rather than a psychiatric injury. Indeed, I think that he was mystified rather than illuminated by Mrs Higgins' information. In other words, he was troubled by the symptoms described in the form filled in for him by Mrs Higgins for the purpose of seeking a pension but did not think of those conditions together as demonstrating a distinct or, indeed, any psychiatric illness. I accept the plaintiff that it was only when he spoke to Dr Holwill that he appreciated that he did suffer from an illness and that it was instigated by his experiences during the collision and its immediate aftermath. I think it likely, moreover, that the plaintiff attributed his symptoms, centring on what I might describe as his quasi-claustrophobia (speaking as a layperson) of which his phobic fear of flying was perhaps the most intense, as essentially deriving from his experiences in Vietnam. Plainly enough, he was aware that to some degree these feelings were present before he went to Vietnam but they gained potency during and after his service there. It is probably self-evident that at no point did he attempt to objectively analyse his situation for the purpose of understanding the relative contributions particularly of shocking or troubling events made to the thoughts and feelings of a negative or troubling kind that he was feeling. Nor is it reasonable to expect that he should have done so. 83 The plaintiff said that he had not followed the press reports of the Royal Commissions and was unaware of the alleged negligence of the Commonwealth until he read what his solicitor had put in the statement of claim. I accept this evidence." 103 It is, with respect, not entirely clear to what the primary judge was referring when he opined that "legitimate criticisms can be made of the reliability of [the opponent's] recollections". Earlier in his reasons he had observed (at [59]), that in cross-examination the opponent said he did not remember any of the specific details he had given to a Dr Holwill to whom he was referred by his solicitor in November 1997. It was Dr Holwill who opined that the opponent's chronic post traumatic disorder could be directly attributed to his "service experience": Smith No 2 at [58]. Other matters to which his Honour may have conceivably been referring were the fact that the opponent did not attribute his symptoms to the collision when he gave histories to psychiatrists (I infer contemporaneously or shortly after the collision) nor did he do so on later occasions. 104 It is perhaps not surprising that his Honour did not elaborate on this point having regard to the fact that the Commonwealth barely relied on it at first instance, having submitted (see Smith No 2 at [76]) that the real issue on the application was Dr McGeorge's absence. Indeed it is notable that while the Commonwealth's written submissions on the leave application point to para [82] as revealing an error of principle, they do not identify what the issues of reliability are, nor how they would occasion difficulty for the Commonwealth at a trial. Nor did Mr Barry address such matters in his oral argument. 105 Ultimately, as the primary judge made plain, issues such as the opponent's failure to connect his early symptoms to the collision could fairly be explained, as the primary judge accepted (and as he noted, Mr Barry QC did not ultimately submit otherwise) by the fact that the opponent was unaware until he saw Dr Holwill in 1997 that he had PTSD and that it was in part caused by or attributable to his experiences during and immediately after the collision: at [84]. Subsequently his Honour said: "91 As I have already mentioned, the nature of the plaintiff's case is not such as would have made it likely that anyone but the most perspicacious observer would have realised that anything was significantly amiss with him during the period up to, at least, the immediate pre-Vietnam training period. Even if the plaintiff's action had been commenced within the limitation period, it is unlikely that, given the nature of his condition and his description of what he then experienced, any of the persons whose lost identities the Commonwealth complains about would have been able to give significant evidence, one way or the other. I recognise that this analysis assumes the reliability of the history that the plaintiff has given. However, if his symptoms were more marked than he has asserted (so that the witnesses might have been able to given material evidence) then that would assist the plaintiff and not the defendant. It is difficult to see how anyone would have noticed that the plaintiff's symptoms were less marked than he has described, since he has in effect said that they were not such as would have led someone to notice, with the exception of course that he wished to sleep on deck …" (emphasis added) 106 In my view the primary Judge's observation that issues such as the reliability of the opponent's recollection reflected on his ability to make his case and were not "in a real forensic sense, prejudicial to the Commonwealth", reflected how the application was run and, was "a statement of the obvious, namely, that if the respondent doesn't have a relevant memory, he may not be able to prove his case" see Commonwealth of Australia v Leonard Lewis [2007] NSWCA 127 (at [69] per Beazley JA (Santow JA and Ipp JA agreeing); see also Smith No 1 (at [151]). 107 The Commonwealth pointed to Basten JA's statement in Commonwealth of Australia v Shaw [2006] NSWCA 209; (2006) 66 NSWLR 325 (at [81]) that a statement by the primary judge that that "any degree of unreliability or inconsistency in [the plaintiff's] accounts will lessen his chances of success with respect to issues on which the plaintiff would have the onus of proof" did not: "…answer the gravamen of the complaint. The Commonwealth should not be required to rely solely upon inherent weakness or inconsistencies in the plaintiff's case. If it has been denied the opportunity, due to the lapse of time, to make any reasonable inquiry as to the accuracy of the plaintiff's assertions, that is an element of actual prejudice. The fact that medical records suggest that his current account was not given contemporaneously with the events or at any stage during his naval service may lead to an allegation of incomplete record-keeping or an explanation for his omission. It is unlikely that the Commonwealth will be able to rebut such an allegation or challenge effectively an explanation." (emphasis added) 108 Each case must obviously turn on its own facts. As I have sought to explain, in this case there was an explanation for the opponent not linking his psychiatric condition, and other complaints, to the collision until sent to see Dr Holwill in 1997. In Shaw, in contrast, the plaintiff appeared to have been aware from soon after the collision that he had suffered ill effects as a result of the collision: see [53]-[56]. In that light silence in contemporary medical records made Basten JA's observation pertinent to the critical issue of prejudice to the Commonwealth. That is not this case. 109 In my opinion the Commonwealth has not established that the primary judge failed to give adequate weight to the issue of reliability.

The Commonwealth's approach to s 60G applications 110 I return to the central point of prejudice upon which the Commonwealth relied, the death of Dr McGeorge. In Smith No 1 (at [148] - [153]), under the heading I have adopted, Santow JA (with whom Handley JA agreed) analysed the Commonwealth's approach in opposing s 60G applications made by 30 former members of the crew of the Melbourne, all opposition being on the ground (inter alia) that the Commonwealth would suffer significant prejudice by the effluxion of time. 111 His Honour referred to the only three cases in which the Court had declined to extend the limitation period: (Commonwealth v Diston confirming the decision of Harrison M; Pearce v Commonwealth [2005] NSWSC 359; Blyth v Commonwealth [2005] NSWSC 721) as follows: "149 In Blyth , significant prejudice to the Commonwealth arose primarily as a result of the difficulty that the Commonwealth would face in determining the applicant's loss of earnings and loss of earning capacity since leaving the Navy. However, Studdert J commented at [97] that the unavailability of witnesses who could give evidence of the applicant's behaviour before the collision, of the circumstances surrounding his discharge and of what the applicant was doing at the time of the collision would not have influenced him to refuse the application (although each would have contributed in some degree to the overall extent of the prejudicial exposure of the Commonwealth had the application succeeded). In Diston , the absence of medical and employment records was found to be significantly prejudicial in circumstances where the applicant's evidence was found to be unreliable, making it more difficult for the Commonwealth to investigate his claims. In Pearce , the judge found that the applicant had failed to pass the threshold test in s 60I but that there could have been a fair trial if leave were granted." 112 As to the balance, while recognising that each case turned on its own facts, Santow JA saw common themes in the Commonwealth's opposition to the applications which (without setting out the extensive list of cases his Honour had painstakingly assembled) were: "150… [T]he Commonwealth continues to contend that lack of medical and employment records and the unavailability of witnesses have created significant prejudice. This is despite the fact that these arguments have so frequently been rejected by the court in finding that it is just and reasonable to extend the limitation period. Similarly, the Commonwealth has consistently run (and lost) arguments that it would suffer significant prejudice resulting from the loss or destruction of defence records, principally consisting of the applicant's service records...

151 The Court has regularly found that sufficient evidence had been retained either by the applicant or the Commonwealth or both. This was either sufficient to allow a fair trial or the Court found that the difficulties were more likely to affect the plaintiff who bore the onus of establishing the injury. 152 The Commonwealth has also regularly failed in submissions that it would suffer significant prejudice as a result of: (a) being deprived of witnesses (due to their unavailability or inability to recall) who could give evidence of the applicant's behaviour during his service in the Navy before, during and after the collision; Fullarton v Commonwealth [2005] NSWSC 444; Gretton v Commonwealth [2005] NSWSC 437; Watkins v Commonwealth [1999] NSWSC 1127; Mancer v Commonwealth [1999] NSWSC 693; (b) the doctors and medical officers who examined the applicant and wrote medical reports being unavailable or unable to recall the applicant; Fullarton v Commonwealth [2005] NSWSC 444; Beasley v Commonwealth [2001] NSWSC 998; Andrew v Commonwealth [2001] NSWSC 733; Norman v Commonwealth [2000] NSWSC 931; Philippe v Commonwealth [1999] NSWSC 1118 (c) the absence of medical records for the applicant since leaving the Navy. Levis v Commonwealth [2001] NSWSC 725; Heffernan v Commonwealth [2001] NSWSC 687; Aussems v Commonwealth [2001] NSWSC 44; confirmed on appeal [2001] NSWSC 615; Mancer v Commonwealth [1999] NSWSC 693 153 In no case has the Commonwealth succeeded in discharging the evidentiary onus by establishing that it would suffer significant prejudice on the basis of the loss or absence of this evidence. " (emphasis added). 113 I would add to Santow JA's analysis the observation that the Commonwealth has been relying on the death of Dr McGeorge since what appears to have been the first case brought by a member of the Melbourne crew: see McLean v Commonwealth of Australia (Supreme Court of New South Wales, Sperling J, 18 June 1996, unreported, BC9602664 at 37, approved on appeal Commonwealth v McLean (1996) 41 NSWLR 389) and Smith No 1 (at [143]). 114 Since Smith No 1 this Court has decided two further cases brought by members of the Melbourne crew: Commonwealth of Australia v Shaw and Commonwealth of Australia v Leonard Lewis. 115 In Shaw, the applicant was successful in persuading a judge of this Court to extend the limitation period for the action to the date on which the statement of claim was filed pursuant to s 60G. That decision was reversed on appeal (Basten JA, Handley and Ipp JJA agreeing). Lewis also persuaded a judge of this Court to extend the limitation period for the action to the date on which the statement of claim was filed pursuant to s 60G. Beazley JA (Santow JA and Ipp JA agreeing) dismissed the Commonwealth's appeal against that order. 116 Shaw lost because it was held that he had not made his extension application within three years after he ought to have become aware of the three matters listed in s 60I(a)(i) - (iii): Shaw at [31], [71] and [74]. Although this was sufficient to dispose of the appeal, Basten JA went on to consider the s 60G question whether it was just and reasonable that the application be granted in case his conclusion that the plaintiff had not satisfied the normative limb in s 60I(1)(b) was not correct. No doubt because this part of his reasons was not essential to his decision, Basten JA did not dwell on why he reached the conclusion that Shaw failed the s 60G test. In essence, however, his Honour accepted (see [79] - [84]) the Commonwealth's arguments that: (a) it was impossible for it to call witnesses who might be able to comment upon Shaw's pre-collision conduct so far as the consumption of alcohol is concerned or to the change, if any, in his level of drinking after the collision and over the period leading up to the plaintiff resigning from the Navy": cf Smith No 1 at 152;

(b) the Commonwealth's prejudice extended to an inability to undertake the disentangling task; and

(c) it was wrong to treat the apparent weakness of the plaintiff's case as a reason which favours the grant of an extension of time: cf Smith No 1 (at [151]). 117 Thus if Shaw had been otherwise successful, he would have lost the s 60G issue on the basis of arguments on which the Commonwealth had substantially failed in at least 27 other Melbourne cases. 118 The irony of this position is highlighted when it is appreciated, as Giles JA has pointed out (at [78]), that Handley JA agreed in Smith No 1 that the Commonwealth should fail, and in Shaw, that it should succeed. 119 Turning to Lewis, I note that the Commonwealth relied, inter alia, upon the common issues identified in Smith No 1: lost evidence, including the death of Dr McGeorge, (see Lewis at [33]- [52]), the difficulty in investigation the plaintiff's life post collision (see Lewis at [53]- [63]) and the unreliability of the plaintiff's recollection (see Lewis at [64]- [70]). It failed on all counts. Again, it might be noted that Ipp JA agreed in the outcomes in both Shaw and Lewis.

Section 56(1) of the Civil Procedure Act 2005 120 I accept that proper use of precedent is to identify the legal principles to apply to facts as found and that while decided cases may give guidance in identifying the issues to be resolved and the correct legal approach to the resolution of those issues and assist in maintaining judicial consistency, each case turns on its own facts: see Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 (at [3]) per Gleeson CJ and Kirby J (at [31] per McHugh J); State of Queensland v Stephenson [2006] HCA 20; (2006) 226 CLR 197 (at [99]) per Heydon J. 121 Nevertheless the Commonwealth's repeated unsuccessful reliance on the same issues in Melbourne cases raised a real question as to its utilisation of the Court's resources. 122 Section 56(1) of the Civil Procedure Act 2005 requires this Court to facilitate the just, quick and cheap resolution of the real issues in the proceedings. Section 56(2) imposes a duty on parties to civil proceedings to assist the Court to facilitate the overriding purpose. Section 57 requires the Court to manage proceedings, inter alia, in a manner which involves the efficient use of judicial resources. I make the following observations in the spirit of these provisions. 123 Having regard to the commonality of issues identified by Santow JA in Smith No 1, which the Commonwealth still seeks to raise in these cases, it would be hoped that the time will soon come when the Commonwealth considers a practical resolution of cases involving the crew of the Melbourne as it did in the case of the Voyager crew. The Commonwealth initiated a mediation process in relation to the Voyager crew "which resulted in the claims being settled, with an average compensation figure of $350,000 and with substantial savings to overall costs": see The Report of the Inquiry into the Federal Government's Implementation of the Recommendations Made by the Human Rights and Equal Opportunity Commission in Bringing Them Home, November 2000, Senate Legal and Constitutional References Committee, Commonwealth of Australia, 1997 at 321 (at 3.49 - 3.51). 124 After 30 applications in this Court, only three of which have been successfully resisted, a time must come when the Commonwealth considers whether its current approach is consistent with ss 56 and 57 and with "the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects": Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 at 342 per Griffith CJ; and see generally the discussion of the "model litigant" principle by Finn J in Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 (at 196-197) and the Full Court of the Federal Court of Australia (Spender, Finn and Weinberg JJ) in Scott v Handley [1999] FCA 404; (1999) 58 ALD 373 (at [43 - [45]).

Orders 125 The application for leave to appeal should be dismissed with costs. 126 STUDDERT J: I agree with McColl JA. 127 I would only wish to add, in relation to the absence of Dr McGeorge, that the opponent's evidence before Adams J was that he was referred to Dr McGeorge after the opponent returned from Vietnam. The opponent said in his evidence that he did not recall the detail of what Dr McGeorge had asked him (Black 27 and following). The records of Dr McGeorge are available to the Commonwealth and invite the inference, which seemingly will not be challenged by evidence from the opponent, that all relevant matters of history were recorded by the doctor, and there is nothing recorded by Dr McGeorge that implicates the "Melbourne"/"Voyager" collision as being linked to the psychological complaints with which the opponent was presenting to Dr McGeorge in 1971.

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