Gretton v The Commonwealth

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Commonwealth of Australia v Diston [2003] NSWCA 51 Commonwealth of Australia v McLean (1997) 41 NSWLR 389 Commonwealth of Australia v Nelson [2001] NSWCA 443 CRA Ltd & Costain Australia Ltd v Martignago (1996) 39 NSWLR 13 Harris v Commercial Minerals Limited (1996) 186 CLR 1 Hill v Commonwealth of Australia [2005] NSWCA 94 CASES CITED : Holt v Wynter (2000) 49 NSWLR 128 Parsons v Doukas (2001) 52 NSWLR 163 Salido v Nominal Defendant (1993) 32 NSWLR 524 Smith v Commonwealth of Australia [2004] NSWSC 873 South Western Sydney Area Health Service v Gabriel [2001] NSWCA 477 State of New South Wales v Judd [2003] NSWCA 355 Sydney City Council v Zegarac (1998) 43 NSWLR 195

Cecil Eric Gretton (Plaintiff) PARTIES : Commonwealth of Australia (Defendant)

J L Sharpe (Plaintiff) COUNSEL : P S Jones/W P Y Austron (Defendant)

Hollows Lawyers, Melbourne (Plaintiff) SOLICITORS : Australian Government Solicitor (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Wednesday 27 April 2005 Ex tempore (revised 4 May 2005)

20821/01 CECIL ERIC GRETTON v COMMONWEALTH OF AUSTRALIA JUDGMENT 1 HIS HONOUR: The plaintiff (Mr Gretton) served in the Royal Australian Navy from 30 June 1961 until 23 August 1968. He was serving as an engineering mechanic first class on board HMAS Melbourne when, on 10 February 1964, it collided with HMAS Voyager. Mr Gretton says that, as a result of the events of that dreadful night, he suffers from post traumatic stress disorder and other "injuries". He claims damages for those matters, and for their impact on his life. Before he can succeed, he must (among other things), obtain an order extending the limitation period to 9 October 2001, when these proceedings were commenced. These reasons deal with his application for that order. The nature of Mr Gretton's claim 2 Mr Gretton alleges, in substance, the matters to which I have referred. He gives detailed particulars of negligence. Some, but not all, of those particulars are admitted; the effect of that admission is that any trial will be limited to the issue of damages. 3 Mr Gretton says that as a result of the collision he was injured and has suffered loss or damage which aggravated, accelerated, exacerbated or resulted in the future deterioration of a number of conditions. They are set out as "Particulars of Injury" as follows:

(a) severe shock; (b) severe anxiety and depression; (c) difficulties with sleeping, nightmares and flashbacks; (d) irritability, fatigue and headaches; (e) night sweats; (f) difficulty in concentrating, making decisions and solving problems; (g) mood swings, frustration and isolation; (h) post-traumatic stress disorder with numerous re-experiencing symptoms, avoidance symptoms and arousal symptoms; (i) emotional detachment, insecurity and lack of confidence; (j) attempts to medicate himself by heavy use of alcohol with consequential impairment of body function; (k) chronic alcohol abuse disorder; (l) hypertension; (m) sleep apnoea; (n) cigarette addiction with consequential impairment of body function; (o) generalised anxiety disorder; (p) adjustment disorder. 4 Mr Gretton says that, but for the collision and the injuries sustained by him, he would have progressed through the ranks of the Navy and would have been promoted, ultimately, to the rank of a commissioned officer. He said he would have stayed in the Navy until he retired at the age of fifty five, and would have received very substantial benefits, including appropriate pension and other allowances. 5 Mr Gretton says, in short, that he has earned much less than he would have earned in the Navy and has lost other benefits that would have accrued. Relevant provisions of the Limitation Act 6 Mr Gretton relies on s 60G and s 60I of the Limitation Act 1969 (NSW) (the Act). The former gives the Court power, in cases to which it applies, to extend the limitation period for such period as the Court determines where it is "just and reasonable to do so". The latter specifies matters of which the Court must be satisfied before it can make an order under s 60G. 7 The sections read as follows:

(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. …

60I Matters to be considered by court (1) A court may not make an order under section 60G or 60H 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) Subsections (2), (3) and (4) of section 60E apply, with any necessary adaptations, in relation to applications for orders under this Subdivision." 8 On its face, s 60G(1) might be thought not to apply to Mr Gretton's case. However, as the defendant (the Commonwealth) accepted, the effect of cl 4 of Sch 5 of the Act is that s 60G applies in certain cases to causes of action that accrued before 1 September 1990. Section 60F makes it clear that this is so. I set them out: "60F Purpose of this Subdivision

The purpose of this Subdivision is to provide a procedure for a further discretionary extension of limitation periods where the plaintiff was unaware of the fact, nature, extent or cause of the injury, disease or impairment at the relevant time. This procedure is available for causes of action accruing on or after 1 September 1990, and also (by the operation of Schedule 5) for causes of action that accrued before that date." "Schedule 5 Further transitional provisions

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 . (2) Section 60H also applies to: (a) a cause of action for damages arising under the Compensation to Relatives Act 1897 by virtue of the death of a person caused by a wrongful act, neglect or default, or (b) a cause of action that would arise under the Compensation to Relatives Act 1897 but for the expiration as against the deceased of a limitation period, being a cause of action that accrued or would have accrued before 1 September 1990. (3) Sections 60G and 60H so apply: (a) whether or not a relevant limitation period has expired: (i) before 1 September 1990, or (ii) before an application is made under either of those sections in respect of the cause of action, and

(b) whether or not an action has been commenced on the cause of action before 1 September 1990, and

(c) whether or not a judgment on the cause of action has, on the ground that a limitation period applying to the cause of action had expired before 1 September 1990, been given (whether before, on or after that date), and (d) whether or not a judgment in respect of legal professional negligence has, on the ground that a limitation period applying to the cause of action had expired before 1 September 1990, been given (whether before, on or after that date). (4) The court may make an order under section 60G or 60H, 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. (5) For the purposes of this clause, a reference in Part 3 to a limitation period is to be read as including a reference to a limitation period as defined by this Schedule. …" Analysis of the legislative scheme 9 It is clear that a plaintiff seeking an order under s 60G must satisfy the requirements of s 60I. This burden requires the plaintiff:

(1) To show that one or more of sub-paras (i)-(iii) of s 60(1)(a) applies; and

(2) To show that the application is made within a time defined by reference to s 60I(1)(b). 10 Where those requirements are met, the Court turns to the question whether, in all the circumstances, it is just and reasonable to extend the limitation period; and, if satisfied that it is, the period of extension. 11 The following principles have been stated as relevant to the discretion conferred by s 60G and the "gateway" thereto found in s 60I:

(1) An application for extension should be refused if to grant it would cause significant prejudice to the defendant: Holt v Wynter (2000) 49 NSWLR 128.

(2) However, it is not the case that, absent a finding of significant prejudice, the court must grant an extension: Parsons v Doukas (2001) 52 NSWLR 163.

(3) The discretion conferred is one to grant, not to refuse, an extension; and the plaintiff carries the onus of satisfying the court that an extension should be granted: Parsons .

(4) Although s 60I(1)(a) requires proof (on the balance of probabilities) that the plaintiff did not know, or was not aware, of the matters specified, it does not require proof of those matters as facts: Commonwealth of Australia v McLean (1997) 41 NSWLR 389.

(5) An application for extension of time is not a trial, or a dress rehearsal for a trial, and requires proof only of a serious question to be tried as to the ingredients of the asserted cause of action: McLean. 12 In considering where the balance lies on the "just and reasonable" issue, the words of McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 are relevant. At 551, his Honour adopted with approval the proposition that "where there is delay the whole quality of justice deteriorates", and stated that "[p]rejudice may exist without the parties or anybody else realising that it exists". 13 At 552, his Honour pointed out that there were four broad rationales supporting the enactment of limitation periods. The first is that, with the passage of time, relevant evidence is likely to be lost. The second is that "[i]t is oppressive, even 'cruel', to even allow an action to be brought long after the circumstances which gave rise to it have passed". The third is people should be free to arrange their affairs and use their resources on the basis that claims can no longer be made against them. The fourth is the public interest in the prompt settlement of disputes. 14 I refer to these matters because, I think, they provide a valuable guide to the basis upon which the discretion conferred by s 60G should be approached. Other authorities on the Act 15 The fundamental question, in considering whether it is just and reasonable to extend a limitation period, is whether there can be a fair trial: Holt. Other matters include the diligence (or lack of it) of the plaintiff and the plaintiff's legal representatives; and whether it will be futile to extend time: Salido v Nominal Defendant (1993) 32 NSWLR 524. It may be queried whether there is a separate requirement for the plaintiff to give a full and satisfactory explanation for delay: Holt. 16 In considering the fundamental question, whether there can be a fair trial, it is necessary to bear in mind that "fair" does not mean "ideal": McLean. An analysis and resolution of that fundamental question requires a consideration of all the circumstances of the case: South Western Sydney Area Health Service v Gabriel [2001] NSWCA 477. It is not to be answered simply by balancing the relevant prejudice to the plaintiff and the defendant: Sydney City Council v Zegarac (1998) 43 NSWLR 195. The case for extension 17 I have set out above the particulars of injury alleged in the statement of claim. Of these, the "injuries" alleged in paras (b), (c), (e), (i), (j) and (k) (the first group) are, on Mr Gretton's evidence, conditions that manifested themselves within a relatively short time - no more than a year - of the collision. Mr Gretton says that these conditions have continued to date, and that he is still afflicted by them. 18 Mr Gretton says that survivors of the collision were offered no counselling or other support. Instead, they were:

(1) warned, on pain of disciplinary action, not to discuss the collision with anyone; and

(2) told to have a good drink and forget about it. 19 Mr Gretton says that he had been a light drinker before the collision, but that he began to drink heavily - to excess - afterwards. This, he says, he did in an attempt to cope with his problems of sleeplessness, nightmares and flashbacks. He says that he became withdrawn and avoided company. 20 It is, I think, clear that the matters in the first group to which I have referred amount to personal injury for the purposes of s 60I(1)(a). Indeed, that is Mr Gretton's case on the pleadings. His case on the application was put on the basis that some distinction should be drawn between "personal injury", as that phrase is used in the Act, and the injuries particularised in the statement of claim. I did not find that purported distinction convincing. I think it is inconsistent with the approach shown in cases such as Commonwealth of Australia v Nelson [2001] NSWCA 443, to which I shall refer later in these reasons. 21 I therefore approach the question on the basis that the matters in the first group are, as I have said, injuries, or "personal injury" for the purposes of the Act. On that basis, as to those matters, it is clear that Mr Gretton must have known of them as he was experiencing them; and I conclude from his evidence that he did know of them. Sub-para (i) is not satisfied. 22 Again, I think, it is clear on the evidence that Mr Gretton became aware, over the years, of the extent of those injuries. It may well be that he did not regard them as "injuries" - in contrast, for example, to physical injuries that, he says, he suffered in the course of his employment after he left the Navy. But he knew that he was afflicted by these conditions, and he must have been aware of them as they were afflicting him or, at the latest, as they became chronic. 23 There may be a question as to whether Mr Gretton was aware of the "nature" of those injuries. That would raise a difficult question of construction: as to whether the expression "nature or extent of personal injury" in s 60I(1)(a)(ii) is a composite expression; and as to whether there is a distinction between nature and extent. It might be that a resolution of this question would turn on whether what is necessary is an awareness of the condition (ie the symptom) or of the underlying physiological or mental cause. That question is dealt with in cases such as CRA Ltd & Costain Australia Ltd v Martignago (1996) 39 NSWLR 13 and Nelson. They show that one can be aware of the extent of injury without knowing its name. It may be, however, that the question is still left open, whether the same may be said as to the nature of the injury. 24 I do not need to express a concluded view, because, on the pleadings, for the reasons I have given, the answer should be that one need only be aware of the condition. On that basis, sub-para (ii) would not be satisfied. (Of course, if the answer were otherwise - ie what was relevant was the underlying physiological or mental cause - sub-para (ii) might be satisfied; but I express no concluded view on this.) 25 I do not think that the conclusions that I have expressed in respect of the first group of injuries alleged necessarily follow in respect of the second group. That group includes, as I have pointed out, post traumatic stress disorder, generalised anxiety disorder and adjustment disorder. I do not think that it follows, from the fact that Mr Gretton was aware of the symptoms, that he must be taken to have been aware that he suffered from those conditions, or that he was aware of their nature or extent. 26 In this context, there is evidence from psychologists and psychiatrists that Mr Gretton does suffer from those conditions. I do not need to conclude whether that evidence would be accepted at trial; it is sufficient to say, in the words of McLean, that the evidence raises a serious question to be tried. 27 Unless knowledge of those conditions is to be inferred from knowledge of the symptoms, I do not think that the evidence affords a basis to conclude that Mr Gretton knew that he suffered from the conditions in the second category, or that he knew of their nature and extent, before they were diagnosed in or after December 2000. Undoubtedly, Mr Gretton was aware of the symptoms or manifestations. But he was not aware, nor did he "know" to the extent that this involves a different level or kind of cognition, that the conditions of post traumatic stress disorder, generalised anxiety disorder or adjustment disorder were the reasons for, or the causes of, those symptoms. 28 Thus, I think sub-paras (i) and (ii) are not satisfied in respect of the first group of injuries but are satisfied in respect of the second group. 29 That does leave a third group of alleged injuries, namely, those alleged in paras (a), (d), (f), (g), (l), (m) and (n), in respect of which the evidence does not permit complete analysis. There is no doubt that, except perhaps for those referred to in paras (l) and (m), these conditions should have been known to Mr Gretton (as their nature was likely to have been known) as they manifested themselves. But the evidence is slight, and, as to paras (l) and (m), insufficient to enable me to express a finding. 30 I do not need to resolve this problem for two reasons. The first is that I have found, for some of the injuries (what I have called the second group), sub-paras (i) and (ii) are satisfied. The second, and more important, reason is that I am satisfied, as to all the injuries, that sub-para (iii) is satisfied. 31 The test for sub-para (iii) is whether a plaintiff knows the facts, not whether he or she is aware of the legal significance of those facts: State of New South Wales v Judd [2003] NSWCA 355. Further, I think, as with sub-paras (i) and (ii), the question is one of actual subjective knowledge or awareness: Harris v Commercial Minerals Limited (1996) 186 CLR 1. 32 Mr Gretton first sought legal advice in December 2000. He did so shortly after a workmate, who knew that Mr Gretton had served on board the Melbourne, referred him to a newspaper article concerning a survivor of the collision who had obtained damages for injury. 33 Thereafter, Mr Gretton was referred to psychologists and psychiatrists and, as I have said, his conditions were then diagnosed. I am satisfied that it was not until then - well within the three years before these proceedings were commenced - that Mr Gretton understood (because it was explained to him by the psychologists and psychiatrists) the likely connection between the collision and his symptoms, and that the likely existence of post traumatic stress disorder and other matters was the over arching explanation for, or cause of, those symptoms. 34 Indeed, I think, it was not clearly put to Mr Gretton that he had perceived, or should have perceived, the connection himself before this. He was asked whether he thought there was a connection, and he said that he did not. However, this was put in what might best be called a "post hoc propter hoc" fashion. What the Commonwealth said in submissions were the relevant passages of the transcript appear at p 22 and again at pp 24 to 26:

"JONES: Q. In terms of the actual collision itself, you are aware, are you not, that there were two royal commissions into the cause of the collision? A. I wasn't in the country at that time. I was in the United Kingdom and lost touch with things.

Q. Whilst in the UK, were you aware through looking at the newspapers or whatever that indeed, there were two royal commissions into the cause of the collision? A. Yes, but we didn't follow them.

Q. It would have been clear to you, would it not, the collision must have come about through the fault, mistake or carelessness of someone either on the Melbourne or on the Voyager? A. I wouldn't be familiar with this to decide this.

Q. I am not suggesting it is for you to decide. Clearly, ships aren't meant to collide at sea? A. That's correct.

Q. And if they collided at sea, it would have been clear to you that someone must have made a mistake? A. Well, you'd think something was wrong, wouldn't you?

Q. Was there discussion amongst the sailors be it whether you were in the UK or when you came back to Australia about the Royal Commission or the findings of the Royal Commission? A. No.

Q. It was clear by 25 February when you signed that statement there was going to be an inquiry in the circumstances of the collision? You must have known that? A. Yes, I would have known that.

Q. Were there discussions amongst the sailors as to what had happened and what had gone wrong? A. Not with me there wasn't, no. " … "Q. Before you went off to the UK at the end of 1964, did you go on drinking sessions with fellow sailors? A. We had been at sea for some eight weeks, ten weeks; we would go ashore and have half a dozen beers, yes.

Q. Who were the people you would go ashore with? A. Other fellows in the mess --

Q. Can you tell us their names? A. Not really, only I said earlier on Tom Flannagan, Nobby Nobes.

Q. You said in your affidavit that no counselling was available or offered after the collision? A. That's correct.

Q. Did you seek any counselling? A. No.

Q. By 1965 how much were you drinking? A. A fair bit.

Q. How much is a fair bit? A. Probably eight pints of beer a day, a couple of whiskeys.

Q. Beg pardon? A. Eight pints of beer a day and a couple of whiskeys.

Q. Were you drinking with any other people at that time? A. No, I was a loner.

Q. Why were you drinking that amount at that time? A. Why?

Q. Yes. A. Because at this time I had developed a lot of - couldn't sleep, dreams, recollection of the events of the collision.

Q. When did you first develop problems with sleep? A. It was something that happened, you know, quite soon after the incident.

Q. What were the problems that you had soon after the incident with your sleep? A. Well, waking up with nightmares.

Q. Nightmares of what? A. Of the collision.

Q. Now, when you say "soon after", are we talking in the days, weeks, months? A. Months.

Q. What other problems did you notice? A. As in?

Q. Your personality or your emotions or mental self, what other problems did you notice around about that time? A. Uneasiness, tension. Things like that.

Q. Just going back to the sleep, is the problem with your sleep a problem which continues up until the present day? A. Still does to this day, yes.

Q. So you have had that for about 41 years? A. Yes.

Q. What about the uneasiness, does that still exist? A. Yes.

Q. Much the same as it was soon after the collision? A. It got worse, it got worse over the years.

Q. When did it get worse, how long after the collision? A. Within a year.

Q. Did you notice any other problems? A. I became more confined to my own self; I didn't want to mix with anybody.

Q. How long after the collision did that occur? A. Well, I fitted into a different environment so it sort of worked in well because I didn't have to explain myself to anybody. I went to the UK and I don't know how many --

Q. I am sorry, I didn't mean to cut you off. I am just asking how long after the collision you noticed you tended to be a bit -- A. Different?

Q. Withdrawn or different, yes. A. Within a year.

Q. Does that remain a problem up until the present time? A. Yes.

Q. Is there anything else you noticed about yourself shortly after the collision? A. Not wanting to mix with people and things like that.

Q. Was that different from before the collision? A. Yes, I had always been easy to get on with and --

Q. Did you notice something about your ability to get on with people? A. I became, sort of, agitated and a short fuse type of thing, you know.

Q. When did that start? A. That started within a year of the collision too.

Q. Does that remain a problem up until the present time? A. Yes, it does, but not so bad now because I don't work any more.

Q. Were there other differences you noticed in yourself from shortly after the collision? A. Many.

Q. What were they? A. As I said, I didn't want to mix with people, I didn't go out, didn't take my wife out, things like that, kept to myself. I have trouble sleeping, I have nightmares, I have night sweats and all sorts of things like that that I never ever had before.

Q. In terms of the nightmares and night sweats, do I understand you to say you were seeing the collision? A. That is correct.

Q. So these are all things you noticed shortly after the collision? A. They have happened over the years, yes.

Q. It would have been clear to you, would it not, you felt different after the collision compared to before the collision? A. Most definitely.

Q. And it would have been clear to you that these differences were related to the collision? A. Well, there was something different, yes." 35 The concluding question in this cross-examination is as close as Mr Gretton came to being challenged on the connection. It was put to him, as will be seen, that it should have been clear that the differences in his personality were related to the collision. However, his answer cannot be accepted as an adoption of that proposition. The balance of the questioning pointed out to him the temporal succession, namely the occurrence of a collision and then the emergence of the symptoms. I do not think that either that cross-examination or Mr Gretton's responses to it demonstrate an appreciation of the connection. 36 Nor do I think that a layman, particularly one of Mr Gretton's relevantly modest educational attainments, should have perceived an issue of connection, or causation, from the mere fact of temporal succession. 37 In this context, it is interesting to note that there is evidence to suggest that the Navy itself considered, and rejected, the likelihood of psychological or psychiatric disturbance or illness, and rejected the proposition that psychological counselling should be offered generally to survivors of the collision. This attitude did not appear to change over the years; and, in litigation, the connection has been denied in some cases. It is very difficult to see why a greater degree of insight should be imputed to a rating who was involved in the collision than to those whose duty it was to deal with the consequences of the collision. 38 In any event, the test of sub para (iii) is whether Mr Gretton was unaware of the connection, not whether (contrast, for example, para (b)) he ought to have been, or become, aware of it. 39 It should be noted that (as one might expect) Mr Gretton has seen a number of medical practitioners over the years from 1964 to 2000. There is no basis for thinking that any of them was asked to, or did, consider the relationship between Mr Gretton's manifold symptoms and the collision; far less that any of them proffered advice to him on that subject. Conclusion on s 60I 40 I therefore conclude that s 60I(1)(a)(iii) is satisfied in respect of all the injuries that, to the relevant level of satisfaction, are shown to have been sustained by Mr Gretton as a result of the collision. 41 I conclude further that s 60 I(1)(a)(i) and (ii) are satisfied in respect of some - what I have called the second group - of those injuries. 42 There is no doubt, on those findings, that these proceedings (including the application for extension of the limitation period) were brought within the three year period prescribed by s 60I(1)(b). 43 It follows that I may make an order under s 60G. I turn to consider the question, whether it will be just and reasonable to do so. "Just and reasonable" - the Commonwealth's case 44 It is, of course, for Mr Gretton to show that it is just and reasonable for the limitation period to be extended, not for the Commonwealth to show that it is not. However, on this issue, the evidence and submissions revolved around the question of prejudice to the Commonwealth. Accordingly, and notwithstanding (nor in derogation from) the onus on Mr Gretton, I propose to consider this issue by reference to the Commonwealth's case. I wish to make it clear in doing so, that if the Commonwealth is not significantly prejudiced by reason of the delay in bringing these proceedings, the balance must favour an extension of the limitation period. Indeed, I did not understand the Commonwealth (on that hypothesis) to submit otherwise. 45 In considering this issue, it is necessary to bear in mind that the Commonwealth has admitted negligence (although not to the full extent alleged). But as I have said, if there is to be a trial, it will be limited to the assessment of damages. That confines in a significant way the area of debate. 46 The Commonwealth relied heavily on the passage of time since the collision, and the consequent difficulty of investigating and defending Mr Gretton's claim. It pointed to the fact that many potential witnesses had died or could not be located. Further, as to those who could be located, it pointed to the lack or paucity of their recollection (where indeed they were prepared to talk) and to the unwillingness of many to talk at all. 47 Further, the Commonwealth submitted, Mr Gretton was a witness who could not be relied upon to give a true account of events. Thus, the Commonwealth submitted, there was engaged what it said was the principle recognised in Commonwealth of Australia v Diston [2003] NSWCA 51. Prejudice apart from Diston 48 There was a real issue between the parties as to the extent of the prejudice. The Commonwealth's evidence showed that an inquiry agent, Mr Campanella, had sought to locate and contact many men who had known Mr Gretton, in different ways, in the Navy. That evidence showed that the majority of those identified as potentially relevant witnesses could not help - because they were dead, or otherwise could not be located, or had no recollection, or simply did not wish to help. 49 But the Commonwealth's evidence did not show that it could not make a case relying on those who did remember Mr Gretton and who were prepared to help. Indeed, the Commonwealth's evidence on this point was less than forthcoming. Its evidence simply showed, at best, whether or not Mr Campanella had located the potential witnesses and whether or not they recalled Mr Gretton. On cross-examination, however, three points became apparent. 50 The first is that it does not seem that any great attempt was made to jog the memories of those contacted. Mr Campanella said at first simply that he rang them, and asked them whether they recalled Mr Gretton. It became apparent later that something more was said, including whether the person had served in the Navy and (where relevant) whether he was serving on board the Melbourne at the time of the collision. But I am not satisfied that any real or thorough attempt was made to jog the memories of those contacted. Thus, I regard with some degree of suspicion the proposition that some of those contacted had no, or only a limited, memory. 51 The second point is that Mr Campanella's recorded conclusions in some cases could not be regarded as accurate. That can be seen by comparing two contacts, a Mr Wilson and a Mr Zemick. In Mr Campanella's final report, the statement in relation to Mr Wilson was "recalled plaintiff". In relation to Mr Zemick, the statement was "had limited recollection of the plaintiff". Mr Campanella in cross-examination produced his notes of those contacts. It is apparent on comparing the notes that in fact Mr Zemick had a greater recollection, and provided more information, than did Mr Wilson. Of course, Mr Wilson's evidence was that Mr Gretton was a "hooligan" whereas Mr Zemick's evidence was that Mr Gretton was "very sincere ... very sound bloke"; and is capable of supporting the inference that Mr Gretton's behaviour on the night of the collision was "outstanding". Not only do I regard those details as not supportive of the summary given in Mr Campanella's report, I note with some alarm that the attribution of limited recollection is to someone whose case, on what the Commonwealth called the "premorbid personality", might have been thought to support Mr Gretton. 52 In this context, there is a significant difference of substance between the vast majority of Mr Campanella's reports relating to Mr Gretton and those that were provided relating to some other plaintiffs. In those cases, Mr Campanella's reports show not only the result of an attempt to contact the potential witness. They show also that, where contact was made, what information the person could give. In almost all cases, the reports in relation to Mr Gretton do not do so, although it is apparent, from what I have just said in relation to Mr Wilson and Mr Zemick, that some information was conveyed. There is no explanation of why the reports were so much more limited in Mr Gretton's case. The inference is open that this was done to maximise the appearance of prejudice. 53 The third of the points to which I have referred is (as the second point makes clear) Mr Campanella went beyond what might be gathered from the reports that the Commonwealth has proved. He has made some inquiries as to what those who had a recollection could say. The responses have been proved in two cases. Without knowing what other responses (if any) have been gathered, and bearing in mind the difference between the "Gretton" reports and the other reports, it is not possible to make an assessment of the quality of the evidence that will be available to the Commonwealth. 54 It does not follow, simply because many of those thought to be relevant as witnesses have not (for whatever reason) been available or helpful, that no defence can be mounted from the evidence of those who are found to be available or helpful. It does not follow that the evidence based on Mr Campanella's investigations takes this category of prejudice from presumptive to actual. 55 At this point, it should also be noted that there was evidence that information is available from other sources, including the HMAS Melbourne Association, HMAS Voyager Association and the Returned Services League. There is no evidence of any attempt to locate relevant personnel through those sources. Nor was any attempt made to contact those who have made claims (or were making claims). At least for those whose claims have been finalised, I see no apparent reason why it would not be possible to contact them; of course, whether they would be prepared to help is a different matter. 56 The Commonwealth relied also on the destruction of Navy records relating to the period after the collision until Mr Gretton left the service in 1968. 57 The evidence shows that the Navy was aware by May 1964 of the existence, not just the likelihood, of psychological injury. The Commander of HMAS Sydney, to which ship many sailors from the Voyager had been posted, sent a signal requesting "psychological assessment of ex Voyager ratings". That request was refused:

"I am directed to inform you that, while cases to the contrary have occurred, the Naval Board believe that the majority of sailors are sufficiently stable and temporally robust to be mentally unaffected by the experiences in HMAS Voyager and therefore they may not wish to be subjected to psychological assessment.

To treat all the survivors as potential psychiatric cases might well imply ideas of such significance in minds hitherto free and it is therefore not intended to carry out a psychological assessment of survivors ex HMAS Voyager...". 58 The reply did, however, make it clear that close observation and sympathetic action was necessary where any rating showed signs of psychological trauma, and that all such cases were to receive appropriate assistance and treatment. 59 The Commonwealth submitted that this should not be generalised to extend to sailors who had been serving on board HMAS Melbourne at the time of the collision. Frankly, I do not understand why this is so. I said in the course of argument that commonsense suggests otherwise; and I remain of that view. 60 I therefore think that the question of destruction of Navy records has to be approached bearing in mind that the Navy was aware of the fact that some survivors from the Voyager were suffering psychological injury, and that it should have been aware the same was likely to be true of some survivors from the Melbourne. In that context, if the Navy went ahead and destroyed records, the Commonwealth, rather than prospective plaintiffs, should bear the consequences. It must have been apparent at the time of the collision that many hundreds of sailors, not just those from the Voyager, had been or were likely to be affected. If, in those circumstances, the Navy chose to destroy its records, with the result (whether or not intended) of making more difficult the assessment of future claims for compensation, the Navy must take upon itself the risk that it was thereby likely to be disadvantaged in defending such claims. 61 For these reasons alone, I do not think that the matters to which I have referred so far show real and significant, rather than presumptive, prejudice. 62 However, I think, there is another and complete answer to this category of alleged prejudice. I can do no better than quote from the judgment of Barr J in Smith v Commonwealth of Australia [2004] NSWSC 873 at [51]-[52]; substituting Mr Gretton's name for that of the plaintiff in that case: "51 But the answer to the whole of this category of complaints is that the nature of Mr [Gretton]'s injury is not likely to have been detectable either from records or from contemporary reports of fellow sailors. He did not know that he had been injured. He did not know that he was developing an illness. He was doing what his colleagues were doing, grinning as far as he could and bearing it, going out and getting drunk and not mentioning the collision at all. In the circumstances it would have been surprising if Mr [Gretton], or for that matter any of his colleagues, had given an account that might have been perpetuated in a record or the memory of a colleague, of the way he was feeling after the collision. It has to be remembered that the instruction which their superiors gave to Mr [Gretton] and his fellow sailors that they knew nothing and were not to talk about the collision was not a piece of friendly advice. It was an order. I accept Mr [Gretton]'s evidence that he never talked about the collision. 52 The Commonwealth has lost nothing because its case would not have been assisted if it had been able to call a succession of witnesses who said that they never heard Mr [Gretton] complain about the effects of the collision. Such of the symptoms as were manifesting themselves during the remainder of his service were not, as I have observed, likely to impress themselves on others because if they had been noticed they would not have been recognised as symptoms of an injury. Moreover, the symptoms would have been no more than any sailor might display from time to time: drinking too much and losing his temper from time to time. Nobody would have noticed his broken sleep. Nobody would have learned about his nightmares. His loss of enthusiasm for his job is not likely to have impressed itself on others. " 63 The question here is one of comparison of Mr Gretton's "premorbid/personality/presentation" or "premorbid personality and performance" (to quote from the Commonwealth's "Schedule of Prejudice") with the man Mr Gretton was after the collision. 64 The Commonwealth has some records of its physiological and psychological assessments of Mr Gretton, both before and after he joined the service, and before the collision. To the extent that Commonwealth records have been destroyed then, for the reasons I have given, that should not tip the balance against Mr Gretton. To the extent that the Commonwealth has those records, it is able to make use of them. It was submitted that in some cases the authors of relevant assessments had been contacted and had no recollection. That is hardly surprising, after the passage of more than 40 years. But it is not to the point. The whole purpose of making business records is to ensure that proof survives memory. If the records are inadequate then that, again, is hardly a matter that can be laid at Mr Gretton's feet. 65 The Commonwealth laid detailed emphasis, in its Schedule of Prejudice, on the unavailability of evidence as to Mr Gretton's employment both in the Navy (where its own records had been destroyed) and afterwards. So far as the former category of absence of records is concerned, I do not wish to add to what I have said. So far as the latter category is concerned, I accept that the absence of records will make assessment, both of the claim and, should it go to trial, of damages difficult. But this of itself is a problem with which courts often deal. It has been said many times that a court is not excused from assessing damages because the task of assessment is difficult. In the end, if Mr Gretton cannot come up with proof that is satisfactory to the Court, he will not succeed in recovering relevant heads of damages. I do not regard those matters as showing that a fair trial is impossible. They show, at best, that the hypothetical ideal trial will not occur. 66 Nor, I must say, is it apparent why this case is different to others, that on the evidence of Mr Gretton's solicitor (who has substantial experience in this class of litigation) the Commonwealth has defended or compromised. 67 With one exception, no submission was put based on the failure of Mr Gretton to provide proper particulars or of his failure otherwise to provide such information as the Commonwealth might reasonably require to enable it to track down potential witnesses. The exception to which I have referred relates to a request made of Mr Gretton to identify a medical practitioner who had treated him while he was living in Scotland. Mr Gretton's solicitors replied that the medical practitioner in question had died. They would not identify him (or her). I do not regard that as an appropriate response in the context of this case. But, I think, it is a matter to be dealt with on the basis of an application to the Court; on the evidence, no such application has been made. 68 There is one other matter which I should mention before I turn to the question of "Diston" prejudice. There was a dispute before me as to whether in 1964 it was foreseeable that a sailor on HMAS Melbourne at the time of the collision might suffer psychological injury. I have referred already to the evidence (or some of it) dealing with that dispute; and I should add that it is at least arguable that, by October 1964, the Cabinet recognised that claims might be made generally, and not merely by sailors from HMAS Voyager. I have also referred to what seems to me to be the commonsense answer to this question. It might be noted that, in Hill v Commonwealth of Australia [2005] NSWCA 94, a concession was made that it was foreseeable that sailors on board HMAS Melbourne, as well those on board HMAS Voyager, could foreseeably suffer psychological injury as a result of the collision. It is hard to see why this case should be different. But in any event, I do not regard this dispute as significant to the resolution of the questions for my decision. "Diston" prejudice 69 Diston was a case in which the Master had found that the plaintiff was an unreliable witness. She therefore concluded that, for this and other reasons, she was not satisfied that there could be a fair trial. See the judgment of Sheller JA (with whom Mason P and Grove J agreed) at [26]. 70 As Sheller JA put it at [28]: "28 The Master emphasised the two differing accounts that the opponent gave of the role he played on the night of the collision. She obviously regarded it as an important factor, in determining whether an extension of time should be granted, that the opponent's evidence was unreliable and therefore that it would be more difficult for the claimant to investigate his claims, particularly in relation to the most important issue of whether he witnessed the collision or was in bed. Accordingly, the Master was not persuaded there would be a fair trial between the parties. The claimant would suffer significant prejudice if a trial was to be held. The opponent had not discharged his onus. " 71 Sheller JA thought that it had been open to the Master to take this approach. His Honour said at [51]:

"51 Again, as I have said, it was open to the Master to find that the opponent could not be relied upon to give a true account of events. His unreliability may indeed tell against him in the eyes of the jury that will hear his claim if the time is extended. But what is relevant is that his unreliability makes it more important than usual that the claimant have available material against which it can test what the claimant says about his heavy drinking and his injuries and treatment. An example of the problem is the history he gave to Dr Seabridge at an interview on 12 December 2000 when he denied any anxiety-provoking or traumatic experiences during his naval career apart from the explosion on the Tarakan. In his affidavit of 26 October 2000 no mention is made of the Tarakan and he described his symptoms as those consequent upon the Voyager collision. He said in particular "my drinking had increased from that of being a moderate social drinker before the collision to drinking about seven stubbies a night in order to help me to get some restful sleep." Further, the opponent deposed "that prior to the collision I would smoke about five cigarettes per day on average. After the collision I quickly went up to about forty cigarettes per day." 72 Before me, the Commonwealth relied in its written submissions on three questions of fact which, it said, enlivened the "principle" said to have been approved in Diston. The first was that Mr Gretton's evidence that he did not commence chewing his fingernails until after the collision was incorrect having regard to his medical examination on his entry into the service. The second is that his evidence as to how he helped survivors from the Voyager come on board the Melbourne was not supported by his answers in a questionnaire to the Royal Commission. The third is that his assertion of continued sleep problems was not corroborated by some hospital admission notes in June 2002. 73 The Commonwealth sought to support these matters orally by reference to two other events, neither of which were put to Mr Gretton in cross-examination. The first was an alleged inconsistency between his evidence that he did not proceed with training as a clearance diver because of ear infections, when naval records suggest that this was because he suffered from venereal disease. The second was that the account of his alcohol intake was inconsistent with what was suggested to the hospital admission notes, to which I have referred. 74 Because these matters were not put to Mr Gretton in cross-examination and because, as to the former, I do not know whether ear problems may be associated with or as a result of venereal disease, I do not regard them as of great weight. 75 Of the other matters relied on, two are of minimal significance. As to the third: one does not know what, if anything, was asked of Mr Gretton to produce the response indicated by a tick (not said to be his) on the relevant admission form. Nor is the first of much greater significance except to show that the Commonwealth is able to check on some details of Mr Gretton's present complaints. 76 The second matter relied on is of more significance. At its highest, it may show an inconsistency between the account now given by Mr Gretton of his role in the rescue operation - a matter central to his case on psychological injury - and what he said in the questionnaire. But I do not see this of itself, or in combination with all the other matters, including the recent additions, as indicative of such unreliability as would show that a fair trial was impossible. 77 The relevant question in the questionnaire is "what part did you play in the rescue operations?". It is by no means clear that Mr Gretton should have understood that question as directed to helping survivors come aboard the Melbourne using the scramble nets, as opposed to attempts which were apparently made to get to the remainder of the Voyager (using the Melbourne's motor cutter) to secure it and to rescue any remaining crew. Indeed, the officer who apparently witnessed Mr Gretton's reply to the questions made a note "motor cutter driver in rescue", indicating that he too may have been of the view that the question was directed not so much to the immediate effort of helping Voyager survivors on board the Melbourne, but to attempts to be made thereafter getting to the Voyager using the motor cutter. 78 In circumstances where, necessarily, there has been no full examination of this matter, I do not regard it as indicative of real unreliability. It is undesirable that I should express any concluded view on Mr Gretton's credibility. All I will say is that, in giving his evidence before me, he gave no indication other than that he was seeking to recall, honestly and to the best of his ability, the relevant events. 79 The Commonwealth relied also on the evidence of a neuropsychologist, Ms Morriss, who has interviewed and assessed Mr Gretton. She said: "I do not believe that Mr Gretton is compromised in his ability to give evidence in Court. However, as the amount of time since the original event has increased, his accurate recollection of specific details, sequences of events may be compromised (because of both his ongoing alcohol consumption and the effect of aging)." 80 What Ms Morriss says is hardly surprising. It does no more than confirm that memory becomes unreliable with the passage of time. That is something to which McHugh J referred in Taylor. In Mr Gretton's case, the problem of fallibility may be increased, as Ms Morriss points out, by his consumption of alcohol. It is, of course, necessary to remember that on his case his excessive consumption of alcohol is a direct result of the shock and the trauma to which he was subjected. 81 These matters may mean that, if the proceedings go to trial, Mr Gretton's evidence will be scrutinised with greater than usual care. They may indeed mean that his evidence may not be accepted unless it is inherently plausible or is in some relevant way corroborated. But they do not mean, from the Commonwealth's perspective, there cannot be a fair trial in the relevant sense. Conclusion on the just and reasonable issue 82 I am satisfied that the fundamental question - can there be a fair trial (in the relevant sense) - should be answered "yes". 83 I am therefore satisfied that, although the Commonwealth will find it difficult in some respects to prepare and put its case, that does not amount to sufficient prejudice to justify extending the limitation period. In this respect I repeat that at least some of the asserted prejudice is of the Commonwealth's own making; and some of it or part of it is, on my analysis, irrelevant. 84 The other relevant considerations all favour an extension of the limitation period. There is no doubt Mr Gretton was serving on board the Melbourne at the time of the collision. It is admitted that the collision occurred as a result of the negligence for which the Commonwealth is liable. Mr Gretton has made out a serious question to be tried as to whether he suffered the injuries complained of, and as to whether these injuries were caused by the admitted negligence. Further, it is at least arguable that Mr Gretton's condition has been exacerbated by the Commonwealth's failure to provide psychological counselling, its alleged direction not to talk about the accident, and its advice (said by Mr Gretton to have been given through officers) to have a good drink and forget about the collision. 85 I therefore conclude that the limitation period relevant to the cause of action alleged by Mr Gretton should be extended up until and including 9 October 2001, when these proceedings were commenced.

Costs 86 Mr J L Sharpe, counsel for Mr Gretton, conceded that Pt 52A r 17 provided the prima facie rule. The rule states that where a party applies for an extension of time, the party should, after the conclusion of the proceedings, pay the costs of and occasioned by the application or any order made in consequence of it unless the Court otherwise orders. 87 Because of the concession that was made, I do not need to consider whether the expression "extension of time" was intended to be limited to an extension of time in respect of a time period fixed under the Act or rules or whether, (as the concession allows) it includes extension of a limitation period. 88 Barr J in Smith ordered the Commonwealth to pay Mr Gretton's costs on the basis that the question of extension of limitation period had been dealt with as a separate issue, and the plaintiff had succeeded. It does not appear that his Honour was taken to Pt 52A r 17. 89 For my part, I think that the framers of the rule must be taken to have understood that in some cases the question of extension would be dealt with separately; indeed, the rule seems to contemplate this. Thus, with respect, I do not think it is sufficient a basis to make a costs order otherwise than in accordance with the rule that the limitation question has been dealt with separately. 90 Equally, the framers of the rule must be taken to have had in mind that in at least some cases the limitation would be extended. Thus, and again with respect, I do not think that the factor of success of itself should produce an outcome otherwise than that contemplated by the rule. 91 The rule is consistent with the general principle in other areas - for example, a defendant seeking to set aside a judgment obtained regularly but by default - where an applicant for relief seeks the indulgence of the court. Ordinarily, the applicant, even if successful, pays the opponent's costs. In such cases, the opponent is entitled to test the case for indulgence; and would not ordinarily be deprived of its costs should it do so, even if it may be ultimately unsuccessful. 92 I think, at least, short of the limiting case where opposition has been taken to extravagant and unnecessary lengths, the ordinary consequence prescribed by the rule should follow. Thus, prima facie, I think that the Commonwealth should have its costs. 93 It was put by Mr Sharpe that the Commonwealth's opposition was excessive - that this was to be a "one day case". I agree that, in some respects, the Commonwealth's opposition - particularly in cross-examination - went beyond what I would see as the relevant circumstances. (I note, however, that no objection was taken to that cross-examination on that basis.) I do not agree that thereby, the hearing was forced into a second day; it is clear that this would have happened in any event. 94 Nor do I think that the Commonwealth's evidence on this question could be described as extravagant or excessive. The Commonwealth certainly did not seek to minimise the problem that it said it faced; and it certainly left no evidentiary stone unturned. But it was entitled to put before the Court all the circumstances that, it said, told against the success of the application. That it failed is not, for the reasons I have given, a basis for ordering otherwise than in accordance with the rule. 95 Mr Sharpe relied on an alternative argument based on s 60L of the Act. That section reads as follows: "60L Costs

Without affecting any discretion that a court has in relation to costs, a court hearing an action brought as a result of an order under Subdivision 2 or 3 may reduce the costs otherwise payable to a successful plaintiff, on account of the expense to which the defendant has been put because the action was commenced outside the original limitation period." 96 The section was said to justify an order that costs should be reserved (an order which, I note, has been made in other cases). 97 Section 60L deals with the costs of the action, not with the costs of a separate question relating to extension of a limitation period. The section assumes that an order has been made under (relevantly for present purposes) s 60G. On its face it does not deal with the costs of such an application. There is still room for s 60L to operate even where an order, on the application for extension of limitation period, has been made, and where the costs of that application have been dealt with. 98 I therefore conclude that the Commonwealth should have its costs.

(1) Order that the limitation period for the cause of action alleged in the statement of claim in these proceedings be extended up until and including 9 October 2001.

(2) Order the plaintiff to pay the defendant's costs of and occasioned by the application for extension of time, such costs to be payable after the conclusion of the proceedings in accordance with Pt 52A r 17.

(3) Reserve liberty to apply on seven days' notice. *******

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