F Hannan Properties Pty Limited & Anor v Air Liquide Australia Limited & Anor

CITATION : F Hannan Properties Pty Limited & Anor v Air Liquide Australia Limited & Anor [2003] NSWSC 493 revised - 24/06/2003 HEARING DATE(S) : 15/05/03; 19/05/03 JUDGMENT DATE : 10 June 2003

JUDGMENT OF : Shaw J DECISION : (1) Appeal dismissed; (2) Subject to argument, the first defendant is to pay the costs of the first plaintiff in respect of this appeal.

CATCHWORDS : Procedure - pleadings - whether an amendment to an original cause of action or an addition of a new cause of action - appeals from discretionary judgments LEGISLATION CITED : Occupational Health and Safety Act 1983 (NSW) Asian Investments Corp v Symons (Unreported, NSWSC, Young J, 10 April 1996); Brisbane South Regional Health Authority v Taylor (1997) 186 CLR 541; Fox v Percy [2003] HCA 22; House v The King (1936) 55 CLR 499; Hurrell v Queensland Cotton Corp Ltd [2003] NSWIRComm 139; CASES CITED : Inspector Raymond John Mobbs v Air Liquide (Aust) Limited (Unreported, IRC in Court Session, Fisher P, 7 April 1998); Ipex Graphics Pty Ltd v Elliott (2002) 54 NSWLR 207; Ketteman v Hansel Properties Ltd [1987] AC 189; Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430; Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146; Robolledo v Royal & Sun Alliance Financial Services Ltd [2002] NSWSC 104; F Hannan Properties Pty Limited - First plaintiff PARTIES : General Newspapers Pty Limited - Second plaintiff Air Liquide Australia Limited - First defendant Willtrading Pty Limited - Second defendant FILE NUMBER(S) : SC 20344/99 COUNSEL : R Weber, SC with R Angyal - First plaintiff R Stitt, QC with G Seib - First defendant SOLICITORS : Holman Webb - First plaintiff PricewaterhouseCoopers Legal - First defendant

LOWER COURT Supreme Court (Master) JURISDICTION : LOWER COURT 20344/99 FILE NUMBER(S) : LOWER COURT Master Malpass JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20344 of 1999 F Hannan Properties Pty Limited (Plaintiff)

JUDGMENT 1 Shaw J: In this matter the first defendant appeals from a decision of Master Malpass given on 30 September 2002 dismissing an appeal from Deputy Registrar Haggett who made orders on 20 May 2002 allowing the plaintiffs to amend their statement of claim. 2 The plaintiffs' claim arise out of circumstances that occurred on Sunday 10 October 1993. According to the original statement of claim, filed on 28 July 1999, on 10 October 1993 an employee of the second defendant, Stephen Mallia, was loading cylinders containing acetylene and cylinders containing oxygen into a truck for delivery to ships berthed in Sydney, at the premises of the second defendant. 3 It is asserted that at least one of those cylinders exploded. Mr Mallia was killed. The incident was subject to an investigation and eventual prosecution of the first defendant resulting in a conviction under the then Occupational Health and Safety Act 1983 (NSW) ("the OHS Act"). 4 A prosecution under that Act does not create a cause of action at common law (see s 21 OHS Act) and neither party appeared to have any objection to me referring to the judgment of Fisher P in Inspector Raymond John Mobbs v Air Liquide (Aust) Limited (Unreported, IRC in Court Session, 7 April 1998) in which his Honour concluded that there was one 'extraordinarily dangerous cylinder, in a critical condition' that survived the process implemented by the defendant and that recording was essential to detect what is variously described as a 'rogue' or 'eccentric' cylinder. 5 Subsequently, by judgment of 9 April 1998, Fisher P imposed a penalty of $25,000 on the defendant to those proceedings. 6 By the statement of claim the first plaintiff, F Hannan Properties Pty Limited, claims compensation for property damaged as a result of the explosion. 7 On 23 May 2002 the plaintiffs filed an amended statement of claim. The amendments claimed, inter alia, that the first defendant negligently pumped oxygen into an acetylene cylinder and that this was a 'material cause' of the explosion. 8 This claim seems to be pursued in the alternative and/or in addition to the original claim that the first defendant was negligent in the manner in which it filled the cylinder with acetylene. 9 The first defendant submits that the amendment seeks to add a new cause of action to the claim and that the plaintiff is out of time. The first defendant also made that submission to Deputy Registrar Haggett and then Master Malpass. 10 The first defendant asserts that neither the Deputy Registrar, nor the Master, properly addressed their mind to the legal test for such an addition and, accordingly, that those decisions should be set aside and the plaintiffs' application be refused. 11 If the 'amendment' was in fact an 'addition' then, the first defendant asserts, it was incumbent upon the plaintiff to prove both: (a) an entitlement to leave for an extension of time; and (b) a justifiable reason for not bringing the action within the time prescribed by the Limitation Act 1969 (NSW): see Ipex Graphics Pty Ltd v Elliott (2002) 54 NSWLR 207. 12 The first defendant submits that the plaintiff has not demonstrated these two aspects of its claim for an amendment and that the Deputy Registrar and the Master were wrong in law to grant the first plaintiff relief without proof of these issues, and made a further error, by casting the onus upon the defendant to show that it suffered no prejudice as a result of the amendments. 13 This submission would have force if the amendments were 'additions' (in the sense of claiming a new, qualitively separate cause of action to that originally pleaded) rather than an 'amendment' (in the sense of a related change to the original claim pleaded). 14 The leading case in relation to extensions of time concerning personal injuries is Brisbane South Regional Health Authority v Taylor (1997) 186 CLR 541. 15 In Taylor, McHugh J noted at (533-554): A limitation period is the general rule; and extension provision is an 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…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. 16 I gratefully adopt the distillation of that case which is to be found in a judgment of the Full Bench of the Industrial Relations Commission of NSW in Hurrell v Queensland Cotton Corporation Limited [2003] NSWIRComm 139 (Wright and Walton JJ, McKenna C) at [17] - [19] and in particular their Honours reference to the principles espoused by McHugh J. 17 In my opinion the judgment of the learned Master ([2002] NSWSC 895) properly applied the observations of the High Court to which I have referred. In particular, it seems to me that the justice of the case does require an extension of time (if necessary) or amendment of the pleadings and that any evidence or argument suggesting 'significant prejudice' to the defendant is weak and unpersuasive. I consider the judgment of the Master unexceptionable and in particular where he says (at [15]) that: [i]t is really a case where the plaintiffs are in doubt as to the cause of the explosion… 18 I accept that position is correct, and indicative of the desirability of leave being granted to amend the pleadings. 19 Similarly, I think that the analysis of the Master in relation to any suggestion of futility, and his reference to the fact that experts have raised a number of possible causes for the explosion leading to the presumably sensible decision of the plaintiffs to seek to propound a case in their pleading which raises all of these possibilities are cogent and appropriate observations in the interests of a just determination of this controversy. 20 I am alive to the observations of Hunt J in Martin v Abbott Australasia Pty Limited [1981] 2 NSWLR 430 where his Honour referred to the provisions of the Limitation Act and articulated the proposition that it must appear to the court that there is evidence to establish the plaintiff's cause of action and that this criterion is satisfied when it appears that the evidence to establish the cause of action exists and it is available to be adduced at the trial. I accept the force of the arguments put by Mr Stitt, QC, on behalf of the defendant in reliance upon the observations of Hunt J to the effect that there needs to be finality of completed trials, and that the court should guard against litigants withholding their full case on the occasion of the initial hearing. I refer also to the consideration of these principles by Young J in Asian Investments Corporation v Symons (Unreported, NSWSC, 10 April 1996). 21 However, in the present case the relevant explosion occurred on 10 October 1993. Proceedings were commenced on 28 July 1999. Although that constitutes a significant delay, it is not suggested that the proceedings were out of time. On 11 December 2001 the plaintiffs received the advice of Associate Professor John Price, of the mechanical engineering department of Monash University. That advice appeared to have alerted the plaintiff to the possible relevance of oxygen in causing the explosion. The Associate Professor expressed a hypothesis that the cylinder was filled with oxygen gas at high pressure. Of course, the court dealing with this matter on an interlocutory basis is forming no conclusions about these matters but it does not seem unreasonable that having been so advised the plaintiff should then, a few months after the receipt of the advice, seek to amend its statement of claim. 22 It is difficult to see that the defendant is prejudiced by the proposed amendment. Once a proceedings is commenced within the limitation period, an amendment should more readily be granted than leave to commence our of time, at least where there is no obvious prejudice. 23 The Court received evidence from Mr Wayne David Brownlee, the Agency Development Manager of the first defendant. Mr Brownlee deposed to some apparent prejudice suffered by the first defendant as a result of the passage of time from the date of the explosion to the present. Mr Brownlee deposed that any documents that the first defendant may have had relating to the quality assurance of oxygen cylinders would have been destroyed after seven years. 24 However, in cross examination Mr Brownlee conceded that he had not considered other agencies that may have possession of such documents, such as the State Coroner's office, the WorkCover Authority and the first defendant's expert, Mr Trivolet. It appears that these documents may still exist. 25 I am therefore satisfied that the defendants suffer no substantial or identifiable prejudice as a result of the passage of time in this respect. 26 The first defendant then submitted that such documents, should they exist, could not amount to proof of the plaintiffs' claims since the system of work and quality assurance of the first defendant at the time of the explosion was not designed to track the progress of each cylinder being filled. Rather, the system employed by the first defendant was to track and test only one cylinder in a particular set, or 'ramp' of 40 cylinders. 27 The first defendant submits that without some proof of the plaintiffs' claims that the rogue cylinder was filled with oxygen and not acetylene that they suffer prejudice in being unable to prepare a defence. 28 However, it does seem that the first defendant has briefed an expert, Mr Trivolet, and has prepared a report into the possibility that the rogue cylinder was filled with oxygen rather than acetylene. 29 I am therefore not satisfied that the Deputy Registrar, or the Master, erred in finding that the proposed amendments were in substance amendments to the earlier filed claim. Two officers of this Court have determined that the claim was an action for damages based upon on incident occurring on 10 October 1999 in which a cylinder exploded causing damage to property and that a claim that the cylinder was negligently filled with oxygen is not a separate cause of action to a claim that the cylinder was negligently filled with acetylene. I agree. The amendment is one of particulars to the claim, not a separate claim. Even if the proposed amendment designed to raise the 'oxygen' point is not strictly a particular of the original claim, it nevertheless arises from the same incident and substratum of facts. 30 Accordingly, I am not satisfied that the Master erred in law in a way which would justify the first defendant to have that discretionary decision set aside. I am not convinced that the Master applied the wrong test to the matter he was to determine and thus, that there was an appellable error of the kind warranting intervention by the Court as presently constituted: see House v The King (1936) 55 CLR 499 at 505.

31 In an oft quoted passage of House at 504-505 Dixon, Evatt and McTeirnan said: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion.

32 Their Honours put the basis of this rule as resting on 'established principle'. As a matter of historical fact, appeal rights are limited to uncovering and correcting errors of law, rather than allowing scope for the correction of the methodological approach of the decision being reviewed. This is because the judicial power provides a judicial officer with sufficient discretion to interpret the law according to his or her understanding. Thus, provided there is no House error uncovered, an appellate court must give due deference to this understanding since the initial decision is as likely as any other produced by the appellate court. 33 However, it should be noted that this deference is not extended to those who are not invested with judicial power even though such officers must nevertheless exercise power judicially. 34 As one commentator recently noted: All legal rules…contain elements of uncertainty, because the circumstances in which the rules come to be applied cannot be precisely foreseen, nor can any rule, however detailed, describe in advance every possible future case. (S. Waddams, "Judicial Discretion" (2001) 1(1) Oxford University Commonwealth Law Journal 59 at 59.) 35 Appellate intervention is therefore required to craft a path for trial judges or officers of justice to follow, to settle uncertainty and to correct mistakes in following these paths. By definition such intervention cannot possibly occur in every journey undertaken. If one of the functions of appellate intervention is to settle uncertainty (see, for example, Waddams at 61) then it becomes necessary to erect limitations upon a litigant's right to appeal. Thus, appellate courts have established guidelines to direct the judicial discretion at an appellate level. 36 These are the established principles upon which House is founded.

37 However, there are also good policy reasons for limiting appeals in this manner. Practical considerations of case management and efficiency in the curial process give weight to the suggestion that parties should be satisfied with judgments properly issued by the courts at any level. These considerations reflect the public interest in the finality of litigation: see Fox v Percy [2003] HCA 22 at [29] per Gleeson CJ, Gummow and Kirby JJ for an analysis of the limitations of this approach. 38 Further, considerations of justice may require some respect for the idea that a busy court has less time to reflect and consider on the merits of an action, and the jurisprudence of the jurisdiction -and the quality of the administration of justice- therefore suffers. 39 However, it is clear that the function of courts is to administer justice, and as such, that matters of a financial nature can have only a limited role in the considerations of an appeal: Queensland v JL Holdings Pty Limited (1997) 189 CLR 146. In other words: …it is no part of the appellate function to be fiscally conscious. (The Rt Hon T Gault, "Whose Day in Court is it Anyway?" (2002) 33 VUWLR 1051 at 1055.)

40 Despite this apparent observation, courts are now well aware that the due administration of justice can be served by limiting adjectival certain rights that a litigant may be otherwise entitled to exercise. For example, in Ketteman v Hansel Properties Limited [1987] AC 189 Lord Goff opined that a court could take into account the strain of litigation upon a party facing an application for an adjournment. Such considerations may also be relevant when considering an application to amend pleadings: see Rebolledo v Royal & Sun Alliance Financial Services Ltd [2002] NSWSC 104 per Palmer J. 41 The principles of House therefore have solid legal and policy foundations. In this matter the applicant has appealed twice from discretionary decisions of officers of this Court. I am satisfied that no House error has occurred in either of these decisions.

Conclusions 42 I propose, subject to any further argument on the point, that the first defendant should pay the costs of the plaintiff in relation to this appeal and that the appeal should be dismissed.

Orders 43 The Court orders: 1) The appeal be dismissed; and 2) Subject to further argument, the first defendant is to pay the costs of the first plaintiff in respect of this appeal.

Last Modified: 06/24/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.