FRIZELLE v BAUER

3 August 2009 Kelly Renee FRIZELLE v Wolfgang BAUER & ANOR Judgment 1 McCOLL JA: I agree with Basten JA. 2 BASTEN JA: On 2 July 2003 the applicant suffered a serious fall in rented premises in Erskineville. The fall occurred at night, whilst she was seeking to negotiate a wooden staircase leading down from the bedroom, which did not have a handrail on either side. As a result of the fall she was knocked unconscious and fractured her left kneecap. Her knee was reconstructed at Royal Prince Alfred Hospital. 3 She sought legal advice on 17 July 2003 but did not commence proceedings for damages with respect to her personal injury until 5 April 2007. 4 The relevant limitation period within which to commence proceedings was three years from the date on which her cause of action was "discoverable": Limitation Act 1969 (NSW), s 50C(1). The operation of that section is conditioned upon the definitions contained in s 50D, which relevantly reads: " 50D Date cause of action is discoverable (1) For the purposes of this Division, a cause of action is discoverable by a person on the first date that the person knows or ought to know of each of the following facts: (a) the fact that the injury or death concerned has occurred, (b) the fact that the injury or death was caused by the fault of the defendant, (c) in the case of injury, the fact that the injury was sufficiently serious to justify the bringing of an action on the cause of action. (2) A person ought to know of a fact at a particular time if the fact would have been ascertained by the person had the person taken all reasonable steps before that time to ascertain the fact. (3) In determining what a person knows or ought to have known, a court may have regard to the conduct and statements, oral or in writing, of the person." 5 The first attempt to commence proceedings on behalf of the applicant involved the filing of a summons in the District Court on 19 October 2006, seeking an extension of time within which to commence the proceedings. That summons was misconceived, as no extension of time was available, the applicant's accident having occurred after the commencement of the Civil Liability Act 2002 (NSW): see Limitation Act, s 50A. Rather, the question was whether proceedings were commenced within three years of the cause of action being "discoverable": Limitation Act, s 50C. The proceedings were in fact commenced on 5 April 2007 and, on the motion of the applicant, a judge of the District Court (McGrowdie ADCJ) determined that the question whether the proceedings were commenced within time should be determined as a separate question pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 28.2. He held that the proceedings were not so commenced. 6 The litany of errors which has accompanied the applicant's claim continued. The judgment in the District Court was delivered on 27 November 2007. On 18 December 2007, the applicant filed what was then commonly described as a "holding appeal", the effect of which was to allow the applicant four months to file her notice of appeal. 7 There was then some vacillation whilst those advising the applicant considered whether an application for leave to appeal should properly have been filed. When the matter came before the Court for directions on 8 May 2008 the legal representatives of the applicant failed to attend. On 13 May 2008 the first respondent wrote advising the outcome of the hearing and noting that the matter required an application for leave to appeal. 8 At some time before 11 September 2008, counsel for the applicant had apparently advised that leave was required. 9 On 9 October 2008 the Registrar was advised that the applicant intended to proceed by way of a summons seeking leave to appeal and therefore ordered that a notice of discontinuance be filed, by 13 October 2008. That course was not in fact taken until 15 January 2009 when the summons seeking leave was also filed. 10 It was readily apparent that an extension of time was required within which to commence proceedings for leave to appeal. It was equally apparent that some explanation would be required in order to obtain an extension of time. However, it was not until 30 July 2009 that the solicitor for the applicant swore an affidavit setting out some of the history of the matter. That affidavit was served on the respondents on Friday, 31 July 2009. It was not filed or provided to the Court until the commencement of the hearing on Monday, 3 August 2009. It provided information that counsel's advice as to the need for an application for leave had been received prior to 11 September 2008 and it also confirmed that which appeared from the file, namely that the application was filed on 15 January 2009. No explanation, let alone justification, was provided for the lapse of a period in excess of four months, at a time when the application must have been known to be well out of time. 11 The respondents did not consent to an extension of time, but put on no evidence to suggest, nor submitted, that any prejudice had been caused by the delay. In fact, it seems unlikely that prejudice would have been caused in relation to the proceedings in this Court, which had, in one form or another, been on foot from within 28 days of the judgment in the District Court. However, whether an extension of time should be granted will also depend upon whether the application and consequent proposed appeal are reasonably arguable. 12 A draft notice of appeal was also filed on 15 January 2009 with the summons seeking leave to appeal. Consistently with the history of the proceedings in the solicitor's office, both documents were dated (incorrectly) 23rd December 2008. Whether the grounds in the draft notice of appeal bear any relationship to the grounds relied upon in the initial (misconceived) notice of appeal is not known. However, it is convenient to determine the fate of the present application by reference to the grounds in the draft notice. 13 The first ground asserted error on the part of the District Court in failing to find that the action was commenced by the filing of the summons for an extension of time on 19 October 2006. That ground was not pressed. 14 The second ground raised a number of complaints of error in respect of his Honour's conclusion that the cause of action was "discoverable" prior to 5 April 2006 and thus more than three years prior to the commencement of the proceedings. A number of particulars were identified in support of that broad complaint, but the one relied upon in the applicant's supplementary summary of argument dated 28 July 2009 depended upon error in applying s 50D(1)(c) of the Limitation Act. In the written submissions, it was said that the primary judge "ultimately directed attention only to the question of whether the applicant knew that her injury was 'serious' and failed to focus attention on the correct question, namely, whether the applicant knew, or ought to have known, prior to 5 April 2004, that her injury was "sufficiently serious to justify the bringing of an action". 15 A failure to apply the correct test, stated in those bald terms, was not pursued in oral argument. That was no doubt because, as will appear, there is little doubt that his Honour posed and sought to determine the correct question. Rather, the applicant focused on the operation of par (c) of the definition, concerning the seriousness of the injury. 16 This was dealt with by his Honour over a number of pages of his judgment, commencing at p14: "I did consider whether or not it might be the case that it was not before 8 April 2004 that all matters necessary to be known or which ought to have been known were in place. The date 8 April 2004, was when the plaintiff contacted McLellands Solicitors and spoke to a secretary. The proceedings were commenced within three years of that date." 17 In applying that test, his Honour focused on the question of the seriousness of the injury. He continued immediately after the preceding passage: "I do not think that the plaintiff's submission that the time would not run until after the plaintiff had had the surgery in 2006 can succeed. As I have said before, the surgery was to improve the plaintiff's situation. It would have been open to the plaintiff through her advisors to obtain medical evidence as to prognosis well before that time." 18 After reference to authority, his Honour noted that the applicant "accepted that she suffered a serious injury very shortly after the accident and that she would have a good cause of action": p 15. His Honour continued: "True it is that that action is an action in negligence and one subject to the provisions of the Civil Liability Act with its limitations. There may have been some question as to whether or not any action commenced by the plaintiff would have been such as to entitle the plaintiff to recover damages for non-economic loss given the threshold. However, the plaintiff by October of 2003, had been forced by reason of her injury to give up employment, which would appear to have been work which she enjoyed and which was well paying. She was out of work for four months or thereabouts before obtaining other employment in early 2004, and then, when she did obtain further employment it was only casual employment and at a time when she was under considerable financial stress. It seems to me that it would have been fairly apparent to the plaintiff, at least by early 2004, that she had an impairment of her earning capacity, certainly at that time, as a result of the injury. In early 2004 the plaintiff had developed crunching in the left knee (transcript p 25) that had not been present before. I think it is clear from the file note at McLellands in October 2003 that the plaintiff was aware that the likelihood was that she would require further surgery on the knee. She had been told, she says, that she had a good case. The conclusion I have reached is that it is more than three years before the filing of the statement of claim that the plaintiff knew all three matters in s 50D(1). To my mind the nature of the injury and the likelihood of some further surgery, albeit relatively minor surgery, the possibility of the development of arthritis, the development of the crunching and the substantial impact on her employment were such as would to the mind of a reasonable person have led to the conclusion that the injury was sufficiently serious to justify the bringing of an action on a cause of action prior to a date three years preceding the actual date upon which this statement of claim was filed." 19 Senior counsel for the applicant argued that the trial judge either misunderstood the test which was to be applied, or misapprehended the nature of the evidence. In the latter respect, he drew attention to a paragraph in an affidavit sworn by the applicant on 16 October 2006 concerning a telephone conversation with her then solicitor, Mr Michael Doherty, which occurred in October 2003. She had noted her concerns that one of the prospective defendants might be about to leave the jurisdiction: at par 45. She continued: "I queried whether a statement of claim could be filed in court as soon as possible to commence proceedings. I also advised Mr Doherty that I had left my employment with Country Road Australia and was under financial stress, photographs had been taken of the accident site where I fell and Dr Waddell had recommended that I undergo further surgery to remove the hardware from my left knee." 20 She then continued, in the paragraph to which senior counsel drew attention, par 46, as follows: "I recall that Mr Doherty advised me in the course of the telephone conversation with him in October 2003 that it was too early to commence proceedings against Mr Bauer as my left knee condition would not yet have stabilised. I was advised by Mr Doherty that it would be necessary to obtain a medical opinion prior to commencing proceedings that it would be necessary to wait six months following any further surgery before such an opinion could be obtained. I was also asked to send in photographs of the accident site as well as any documentation relating to my loss of income so that a claim could be prepared." 21 The next contact with her solicitor was not until 8 April 2004, in the course of which she spoke to Mr Doherty's secretary and advised that she would send in the photographs as well as documents relating to her loss of income. She did not in fact take that step until August 2006. 22 There was no express reliance on paragraph 46 of her affidavit or the allegations there set out, in either the particulars of the grounds of appeal or the supplementary summary of argument prepared five days before the hearing in this Court and on which the applicant was permitted to rely. 23 As counsel for the respondents noted, that paragraph was the subject of cross-examination in the course of the District Court proceedings. The key passages in the transcript of 9 November 2007 read as follows (p 50-51): "Q. In October 2003 you called Mr Doherty, your solicitor and said, you queried whether this statement of claim could be filed in court as soon as possible to commence proceedings, and you say in paragraph 46 that the advice you were given was that it was too early to commence proceedings as your knee condition would not yet have stabilised. Now, there was no suggestion, was there, by your solicitor that you would not commence proceedings because your injuries weren't so serious? A. No, I was under the understanding that I had to wait until my injury could be evaluated and if I needed to have another operation. So I was under instruction that I had to go through that process first before. Q. But the seriousness of your injuries, and that seriousness giving rise to a cause of action was never once doubted in the advice offered to you by your solicitors? A. No." 24 In the final exchange in the course of cross-examination, the following appeared (p 56): "Q. When you left the solicitor's office in the afternoon of 17 July 2003, Ms Frizelle, I suggest to you that you knew that your injuries were so serious that they would warrant commencing proceedings against the first and second defendant.? A. Yes." Q. You were in no doubt at all that they were sufficiently serious to warrant commencing proceedings? A. Potentially yes." 25 In re-examination, she was immediately taken back to that evidence and asked: "Q. Just on that last question, Ms Frizelle, you were asked whether you knew they were serious enough to justify commencement of proceedings and you said potentially, what do you mean by potentially? A. Well I knew my, my injuries were serious but I didn't know whether at that stage whether I was actually going to go anywhere with it, you know proceed in any way …. Q. What might have determined whether you did? … For example in July 2003 if you thought well they're potentially serious enough what kind of factors were you thinking might, if anything, alter that? A. The need for another operation, the pain." 26 So far as the legal test was concerned, senior counsel for the applicant argued that his Honour did not apply the construction of the section required by this Court in Baker-Morrison v State of New South Wales [2009] NSWCA 35, which was, of course, delivered after his Honour's judgment. 27 There are circumstances in which s 50D may only be satisfied where the applicant has taken all reasonable steps to ascertain a fact which may involve medical or legal evaluation. It was not in doubt in Baker-Morrison (and indeed was conceded) that the mother whose child had been injured did not know either that the injury was caused by the "fault" of the State or that it was sufficiently serious to justify bringing an action, if such knowledge required the application of any degree of professional expertise or assessment: at [24]. Nor was it established that there were any steps that she ought to have taken, but did not, within the period of 26 days following the accident, which was the period in issue in that case. 28 The present case falls into a different category. The period during which the necessary assessment had to be made was a period of some nine months after the date of the accident. The fact that further evidential material might need to be gathered was beside the point, so long as the seriousness of the injury could reasonably have been assessed within that period. Further, the issue was not the threshold in the Civil Liability Act with respect to non-economic loss, but the quantum of the applicant's economic loss. No doubt her prognosis remained somewhat uncertain in April 2004, but the primary judge was satisfied that the impairment of her earning capacity, and the likelihood that it would continue, was known to her at least by early 2004. On the evidence, that finding has not been shown to be open to significant doubt. 29 At the heart of the applicant's claim was the suggestion in the affidavit, not fully supported when taken into account with the cross-examination, that she did not believe that she had a cause of action in relation to an injury which was sufficiently serious to justify the bringing of the action because of advice received from her solicitors. His Honour found that the injury "obviously was a serious one and the plaintiff conceded that in her evidence": Judgment, p 8. He then noted that there was a further question as to whether it was sufficiently serious to justify the bringing of an action, and continued (pp 8-14) to consider whether that was so. In the passages set out above, he concluded that it was sufficiently serious and that the applicant appreciated that fact. 30 There may be a case in which the applicant has taken all reasonable steps to ascertain facts depending upon the advice of professional persons, but, having been given wrong advice, does not have the necessary state of mind. According to Baker-Morrison, the terms of s 50D(1) may not be engaged: see, Baker-Morrison at [59]. That, however, is not the present case and the correctness of that view does not arise. 31 In substance, his Honour's analysis of the evidence suggests that the delay in commencing proceedings was in part due to the dilatoriness of the applicant in maintaining contact with and providing information to her solicitors, and partly the dilatoriness of the solicitors. It is neither necessary nor appropriate to assess those elements further. 32 I would not refuse an extension of time on the basis that the application lacked reasonable prospects of success: the extension should be granted. Nevertheless, the application for leave to appeal should be dismissed with costs. **********

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