Legislative framework
80 Section 60C is found in Part 3 (Postponement of the Bar), Division 3 (Personal injury cases arising before 2002 amendments), Subdivision 2 (Secondary limitation period) of the Act. Subdivision 2 and s 18A of the Act were inserted into the Limitation Act 1969 by the Limitation (Amendment) Act 1990. Subdivision 2 relevantly provides:
"60A Purpose of this Subdivision
The purpose of this Subdivision is to provide a procedure for a 5 year (maximum) extension of the 3 year limitation period for personal injury cases. It applies to causes of action that accrue on or after 1 September 1990.
This Subdivision does not apply to a cause of action to which Division 6 of Part 2 applies."
Division 6 of Part 2 did not apply to the appellant's case because the act or omission alleged to have resulted in his injury occurred before the commencement of that Division which was inserted by the Civil Liability Amendment (Personal Responsibility) Act 2002: see s 50A.
81 Section 60C applies to a cause of action, founded on negligence, nuisance or breach of duty, for damages for personal injury: s 60C(1). Subsection (2) provides:
"(2) If an application 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, not exceeding 5 years, as it determines."
82 Section 60E relevantly provides:
"60E Matters to be considered by court
(1) In exercising the powers conferred on it by section 60C or 60D, a court is to have regard to all the circumstances of the case, and (without affecting the generality of the foregoing), the court is, to the extent that they are relevant to the circumstances of the case, to have regard to the following:
(a) the length of and reasons for the delay,
(b) the extent to which, having regard to the delay, there is or may be prejudice to the defendant by reason that evidence that would have been available if the proceedings had been commenced within the limitation period is no longer available,
(c) the time at which the injury became known to the plaintiff,
(d) the time at which the nature and extent of the injury became known to the plaintiff,
(e) the time at which the plaintiff became aware of a connection between the injury and the defendant's act or omission,
(f) any conduct of the defendant which induced the plaintiff to delay bringing the action,
(g) the steps (if any) taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice the plaintiff may have received,
(h) the extent of the plaintiff's injury or loss."
Extending a limitation period
83 This case concerns Subdivision 2 of the Act. Many of the cases counsel relied upon were decided in different statutory contexts. While some of those authorities are useful, as I shall seek to explain, for their exposition of general principles which might be regarded as fundamental to the exercise of a discretion to extend a limitation period, they should not be applied in a manner which will displace the statutory criteria identified in s 60C and s 60E: Sydney City Council v Zegarac (1998) 43 NSWLR 195 per Mason P (at 199); Bluescope Steel Ltd v De Caires; ABB EPT Management Ltd v De Caires [2005] NSWCA 431 (at [29]) per Mason P (Handley and Hodgson JJA agreeing); Smith v Grant [2006] NSWCA 244; (2006) 67 NSWLR 735 (at [44]) per Basten JA (Handley and McColl JJA agreeing).
84 In considering the circumstances to which s 60E refers a court must have regard to the rationales for the existence of limitation periods identified in the Attorney-General's Second Reading Speech to the Bill which led to Subdivision 2's introduction as well as the matters to which McHugh J (at 551-553) and Kirby J (at 563-564) referred in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541: Zegarac (at 197) per Mason P; see also Itek Graphix (at [87]) per Ipp AJA (with whom Spigelman CJ agreed).
85 Brisbane South concerned s 31(2) of the Limitation of Actions Act 1974 (Qld), which permitted a court to grant an extension of time for the bringing of proceedings where, in substance, a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation for the action.
86 McHugh J (with whom Dawson J agreed) observed (at 551) that "the enactment of time limitations [was] driven by the general perception that '[w]here there is delay the whole quality of justice deteriorates' ". He said (at 552 - 553, footnotes omitted):
"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 … 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.
In enacting limitation periods, legislatures have regard to all these rationales . A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society….A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. The purpose of a provision such as s 31 is 'to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced.' But whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension ." (emphasis added)
87 Kirby J (at 564) was also of the view that a provision permitting extension of the period of limitation was "an exceptional entitlement" and that although the applicant for an extension might be "innocent of fault", even if the applicant established the two preconditions in s 31(2), the court might properly refuse the extension "either because the proposed defendant affirmatively establishe[d] that irreparable injustice would be done by requiring it to face a belated trial or because, in balancing the material placed before the court, the judge [was] not convinced that an extension order would be just".
88 It is unnecessary to repeat the extracts from the Second Reading Speech to which Mason P referred in Zegarac. They were critically analysed by Priestley JA (Zegarac, at 216 - 221; see also Powell JA, at 238 - 240). The rationales for limitation periods identified in the Second Reading Speech, in my view, substantially accord with those identified by McHugh and Kirby JJ in Brisbane South.
89 Zegarac involved an application for an extension pursuant to s 60C of the Act. Both Mason P (at 200) and Priestley JA (at 222) doubted whether the reasoning in Brisbane South which appeared to turn on the provisions of the Queensland legislation applied to Subdivision 2. Mason P said it was unnecessary to decide the point. Subsequently, in Australian Croatian Cultural & Educational Assoc 'Braca Radici' Blacktown Ltd v Benkovic [1999] NSWCA 210 (at [2]) ("Braca Radici") his Honour expressed doubt about a concession by counsel that a trial judge dealing with an application under Subdivision 2 erred in confining himself to presumptive prejudice during the (two and a half year) period starting from the date on which the primary limitation period expired. He observed:
"It is clear that this would have involved error of law in the application of the Queensland statute ( Limitation of Actions Act 1974 (Qld), s31) considered in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. As I pointed out in Sydney City Council v Zegarac (1998) 43 NSWLR 195 at 200, it is not clear to me that there would be error of principle in choosing to take that position in a particular case in New South Wales in the light of s 60E(1)(b) of the Limitation Act 1969"
90 His Honour did not decide the point. Cole AJA (with whom Meagher JA agreed) approached the case on the basis that (at [13]) it was an error of principle for the primary judge to have determined the application by reference only to the presumptive prejudice for the two and a half years after the expiry of the limitation period, rather than prejudice throughout the entire five and a half years after the cause of action accrued.
91 I prefer, with respect, the approach Cole AJA took in Braca Radici. I accept that in focusing on the prejudice to a defendant arising from the delay by reason of the fact that evidence that would have been available if the proceedings had been commenced within the limitation period is no longer available, s 60E(1)(b) looks to the period between the expiration of the limitation period and the time of the extension application. However the governing requirement (s 60(1)) is to have regard to "all the circumstances of the case". The attention drawn in s 60(1)(a) to the "length of and reasons for the delay" requires the court to examine the period which has elapsed since the cause of action accrued. This approach takes into account the rationales for limitation periods identified in Brisbane South which focus on the time which has elapsed since the cause of action accrued, rather than since the limitation period expired.
92 In considering a s 60C application, the court is required to take the s 60E factors into account to the extent that each is relevant to the circumstances of the case: Zegarac (at 197). Thus Mason P (at 199) held that "proof of prejudice, even 'significant' prejudice does not dictate the rejection of an application to extend time" and that while "[e]vidence of actual or significant prejudice may lead to refusal of the application, depending on the particular circumstances of the case … [i]n weighing prejudice, its impact upon a fair trial is the primary focus". Priestley JA (at 221) was also of the view that the court "had power, in the proper exercise of its discretion in a particular case, to order an extension of time, notwithstanding either the presumptive or proved prejudice to the defendant which would be caused by that extension".
93 In Schering-Plough Pty Ltd v Page (at [15]) Sheller JA (with whom Meagher JA agreed) after referring with approval to Mason P's statement in Zegarac concerning the significance of proof prejudice, added that the Court should also be mindful of the matters referred to in Gleeson CJ's judgment in Salido v Nominal Defendant (1993) 32 NSWLR 524 (at 532-3), observing (at [16]) that ss 60C and 60E spelt out expressly matters which to some extent, at least, were embraced by the Chief Justice's remarks. He said:
"15…The discretion conferred upon the Court is to be exercised judicially in a manner that furthers the purposes of the statutory context, the immediate purpose, as with any limitation period, being to protect defendants against the injustice of stale claims and to promote forensic diligence. Bearing those matters in mind, the question is whether in the circumstances of each individual case the applicant for leave has demonstrated that it is just and reasonable that leave should be granted. The diligence or lack of diligence shown by a plaintiff or a plaintiff's representatives in ascertaining and asserting his or her rights will ordinarily be a material factor, as will the extent of the relevant delay, and the reason for it. The nature and extent of any forensic disadvantage to a defendant resulting from a plaintiff's delay will also be material. The effect, if any, of the delay upon the defendant's ability to defend an action is a matter to be taken into account, and may in some cases be of decisive importance."
94 Of particular relevance to the present case is Gleeson CJ's observation in Salido (at 532) that statutes concerned with limitation periods have, as their immediate purpose, protecting defendants against the injustice of stale claims. His Honour concluded from the terms of s 52(4) of the Motor Accidents Act 1988 that that Act was also concerned with promoting forensic diligence and that in considering whether to grant leave under s 52(4) "[t]he diligence, or lack of diligence, shown by a plaintiff or a plaintiff's representatives, in ascertaining and asserting his or her rights will ordinarily be a material factor, as will the extent of the relevant delay, and the reason for it." As I understand Sheller JA's judgment in Schering-Plough, his Honour regarded forensic diligence as a matter arising for consideration either under the chapeau to s 60E(1) or under s 60E(1)(a), a proposition with which I would respectfully concur. It may also arise under s 60E(1)(g).
95 Subsequently, in Blackburn v Allianz Australia Insurance Ltd [2004] NSWCA 385; (2004) 61 NSWLR 632 (at [14]), another s 52(4) case, Sheller JA (Mason P and Hodgson JA agreeing) held that in speaking of "forensic diligence" and the diligence or lack of diligence shown by a plaintiff or a plaintiff's representatives in ascertaining or asserting the plaintiff's rights in Salido, Gleeson CJ was "speaking of diligence in the sense given to that word in the Macquarie Dictionary namely, 'constant and earnest effort to accomplish what is undertaken', accompanied by the exercise of reasonable care".