TITLE OF COURT: SUPREME COURT OF TASMANIA (FULL COURT)

Limitation of Actions - Postponement of the bar - Extension of period - Cause of action in respect of personal injuries - Principles upon which discretion exercised - Explanation for delay - Prima facie case - Prejudice.

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, applied.

Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128; Knight v Smith [1975] Tas R 83; Klein v Domus [1963] HCA 54; (1963) 109 CLR 467; Parsons v Doukas (2001) 52 NSWLR 163; Marr v Green (1994) Aust Torts Reports 81-277, followed.

Limitation Act 1974 (Tas), s5(3).

Judgment Number: [2002] TASSC 113

RICHARD GRANT MANNERS HILL v ILUKA CORPORATION LTD

(ACN 000 048 464) and RENISON LTD (ACN 004 490 304)

2 Order dated 22 August 2002 allowing the appeal from the order of the Master dated 23 May 2002 quashed.

3 In lieu thereof order that the time within which the appellant may bring proceedings against the respondents for damages for personal injury arising out of an incident that occurred on or about 9 March 1998 be extended to 26 July 2001.

RICHARD GRANT MANNERS HILL v ILUKA CORPORATION LTD

(ACN 000 048 464) and RENISON LTD (ACN 004 490 304)

1 The issue on this appeal is whether error attended the exercise of the learned primary judge's discretion when he ordered that the appellant's application for an extension of time within which to commence proceedings against the respondent be dismissed. Four grounds of appeal were relied upon and one was abandoned:

"2 The Learned Chief Justice erred in law in that he failed to differentiate between the importance of delay in informing the discretion when the delay occurs within rather than outside the limitation period.

3 The Learned Chief Justice erred in law in failing to take into account the part played by the Appellant's solicitor when considering if the delay had been satisfactorily explained and the weight to be given to delay in the exercise of his discretion.

4 The Learned Chief Justice erred in law in giving the weight he did to arguments based on prejudice as he stopped short of deciding that by reason of the prejudice a fair trial had been thwarted.

5 The Learned Chief Justice erred in law in failing to undertake a weighing and balancing process of the arguable case, delay and prejudice in order to determine if, in the circumstances, he was satisfied that it was just and reasonable to extend time."

2 Counsel for the appellant acknowledged the constraints imposed upon the appellant by reason of the provisions of the Supreme Court Civil Procedure Act 1932, s45(1), which relevantly provides:

"45 - (1) A Full Court, on the hearing of any appeal from any judgment, order, or other determination (whether final or otherwise) of a judge, shall not reverse or vary any adjudication of the judge which is, or purports to be, only the exercise of a discretion which the judge was entitled by law to exercise, unless it appears to the Full Court that -

(b) the judge has proceeded on a wrong principle or otherwise contrary to law, or on irrelevant or insufficient materials, or has misapprehended the facts or has failed to consider any material fact;

(c) the adjudication is founded wholly or in part on an erroneous finding of fact or an erroneous determination in point of law; or

3 The proceedings came before the learned primary judge by way of an appeal from an order of the Master granting the appellant an extension of time. Apart from one affidavit, the proceedings before the learned primary judge relied upon the material that was before the learned Master, namely:

* an affidavit sworn by Mr Cruse, the appellant's solicitor in Perth, Western Australia;

* an affidavit sworn by Mr Eliott, an employee of the first respondent who was responsible for the day to day administration of the second respondent;

* an affidavit sworn by Mr Patterson, an employee of the second respondent and operations manager of the Renison Bell Ltd tin mine.

4 The appellant was the only deponent who was cross-examined upon his affidavit.

5 The uncontested evidence was that the first respondent was the ultimate holding company of the second respondent and that in September 1998, the second respondent sold its interest in its tin mine at Renison Bell to Renison Bell Ltd. Since that date, the second respondent has had no interest in the tin mine at Renison Bell and its affairs and business have been conducted entirely from Western Australia. Although separately represented upon the hearing of the application and on the hearing of this appeal, no distinction can be drawn between the two respondents upon a determination of whether the learned primary judge erred in refusing to grant the appellant's application for an extension of time within which he may bring proceedings against the respondents.

6 The appellant is now 34 years of age. At the end of 1991 he obtained the degrees of B Juris and LLB from the University of Western Australia. He undertook articles of clerkship at Clayton Utz in Perth and was admitted as a legal practitioner in that State at the end of 1991.

7 It appears that the practice of the law did not appeal to the appellant and he left the legal profession to pursue other interests. He studied geology at the University of Western Australia and graduated with a BSc in geology at the end of 1997. He subsequently obtained honours in his chosen discipline.

8 In February 1998, he commenced work at R G C Limited as a trainee geologist. He did a two week course in management and team building before being sent to work at the Renison tin mine. There he reported to a geologist, Mr Tim Hunter. As the affidavit which was read for the first time upon the hearing before the learned primary judge disclosed, Mr Tim Hunter presently resides in New South Wales and is available as a witness. Mr Hunter became the appellant's instructor and immediate superior. For the first week or so at the Renison tin mine, the appellant spent time underground learning various tasks.

9 On 9 March 1998, he had an accident. The following description of the accident is taken from the reasons of the learned primary judge at par2:

"The respondent to the appeal suffered injury when he fell off a ladder inside the mine then operated by the second named appellant on or about 9 March 1998. He was employed as a geologist by the first named appellant and had been so employed for a period of about one month. After a two week course in New South Wales dealing with team building and management issues, he was sent to Zeehan, in Tasmania, to commence work at the second named appellant's tin mine under the supervision of a geologist, Mr Tim Hunter. He had some below-ground safety training, but within about two weeks of commencing to work at the mine, he had the accident which is the subject of these proceedings. His clothing issue had not arrived and he was wearing apparel principally used by visitors to the mine, including a pair of steel-capped Wellington boots, which he claims were too big for him, the right size not being available. He had only been underground a few times and was not used to the environment. He was required to climb up an underground ladder about three metres long with a small group of others and thereafter to descend it. He was the last to descend the ladder and as he was part way down, he lost his footing and fell awkwardly onto some rocks about one metre below, injuring his back and right buttock. In his affidavit in support, he said that the ladder was quite wet, greasy, dirty and rusting and the environment was quite damp. There was no lighting at that spot and the party was reliant upon their helmet lamps to see where they were going. He managed, with some difficulty, to get to the top of the ladder, but in descending, his foot slipped and became dislodged and he fell. Although he lost no time off work at that time, since that time he has suffered from lower back pain with occasional periods of intense discomfort requiring complete rest."

10 At the time, it did not appear to be a serious accident, but a report of it was completed. The report formed part of the evidence. It showed that, two days after the accident, it was investigated by Mr Hunter and a recommendation was made that the appellant be re-instructed. The form was countersigned by a superintendent and a person described as the general manager of the mine. There is no need to dwell further upon the circumstances surrounding the accident, for the learned primary judge said, at par5:

"Given the nature of the particulars of negligence upon which the respondent intends to rely, I am satisfied that he has an arguable case."

12 Following the accident, the appellant went on light duties for about two days because of a sore back. In May 1998, about two months after the accident, the appellant mentioned the matter to his father who practises as an orthopaedic surgeon in Perth. In consequence, the appellant's father arranged for some x-rays to be taken. The films indicated "L5 pars defects associated with low Grade 1 spondylolisthesis". It appears that there is a family history of spondylolisthesis. This led to the appellant consulting one of his father's colleagues, Mr Woodland, on 8 November 1999. This time an MRI scan was taken. It was Mr Woodland's opinion:

"It certainly would appear that Richard's pre-existing condition of bilateral L5 pars defects with relatively minor spondylolisthesis, was rendered symptomatic by the significant fall March 1998 [sic]."

Mr Woodland expressed the opinion that the pars defects are probably developmental, ie, occurring at the age of 6 to 7 years. He wrote that often they are asymptomatic, but that can change as a result of a fall. Mr Woodland's report discusses a range of "possible treatments", states that "theoretically, surgery could be considered ...", and then opines:

"Having said that, I feel at this stage that he should continue conservatively in the hope that symptoms will eventually settle and I have strongly reassured Richard that it would be very unlikely for the condition to deteriorate and he never will be very badly disabled. However, at this stage he obviously does have ongoing significant symptoms."

13 In his oral evidence, the appellant said that on about four occasions during 2000 he experienced several periods of acute back pain which restricted him to his bed. He thought that the first of these occasions occurred at the beginning of 2000 when he was on holidays. In June 2000, after the appellant experienced a "flare-up", he saw Mr Woodland again. This report confirms the earlier diagnosis and concludes:

"I am still hopeful that with a regular self-motivated exercise programme, including the multifidus strengthening programme, Richard's symptoms should remain fairly stable. The worst case scenario is that from time to time he will have severe flare-ups of pain. Richard is aware of the various treatment options including pars defects injections and other pain clinic type treatments and also surgical treatment. However he and I still feel at this stage that it is most appropriate to continue conservatively.

I believe the judicious use of Celebrex is appropriate with increased doses during any periods of symptomatic aggravation.

Hopefully his new work appointment in Perth will enable a more consistent, regular exercise programme."

14 The appellant's written and oral evidence made it clear that he did not want to make a fuss about his intermittent back pain and he hoped that he would make a complete recovery with exercise, physiotherapy and the like.

15 During 2000, the appellant was employed in an office job and this aggravated his back pain. There were some periods off work. He said that he realised that his condition was not going to stabilise and at that stage decided he would make a claim. Accordingly, in November or December 2000, three or four months before the time for commencing proceedings as of right expired, he contacted a Kathy Butler of the first respondent's Perth office. She referred him to "QBE", the second respondent's insurer, and an assessor came to interview the appellant. In result, the appellant provided the assessor with a detailed account of all the relevant circumstances in the form of a statutory declaration.

16 On 9 February 2001, precisely one month before the time for commencing proceedings as of right expired, the appellant attended the Perth office of his solicitor, Mr Cruse, and instructed him "to protect his interests in regard to a claim for compensation arising from injuries which he sustained at work in Tasmania some three years before".

17 During his short period of practice as a legal practitioner, the appellant had no practical legal experience with claims like this one. However, he was aware that there was a time limit within which proceedings had to be commenced, but he believed that the period was six years, as that was the position in Western Australia.

18 Immediately upon receiving instructions, Mr Cruse made some enquiries to ascertain the identity of the potential defendant or defendants. It was not an easy matter, as the mine was owned and operated by a number of interlocking and related companies and a number of services, such as geological services, were provided by independent contractors. Before his enquiries were complete, Mr Cruse left for a pre-arranged overseas holiday on 24 February 2001. Whilst he was away, the time for commencing proceedings as of right expired. He returned to work on 15 March 2001 and on 3 April engaged Tasmanian solicitors to prosecute the appellant's claim. Those solicitors promptly advised of the provisions of the Limitation Act 1974, s5, and the need to make the application which is the subject matter of the appeal. The learned primary judge found at par10, "due to understandable difficulties in determining the identity of the respondent's employer and the occupier of the mine, the present writ and application were not filed in the Court until 26 July 2001."

19 It follows from that conclusion, which was not challenged upon the hearing of the appeal, that the learned primary judge was satisfied that there was a reasonable explanation for the delay between the beginning of April and 26 July when the writ and application were filed. With respect to the issue of a reasonable explanation for the delay, the learned primary judge referred to the appellant's background and said, at par11:

"Although he had had no experience of personal injuries litigation, he was aware that actions for negligence were subject to a limitation period which, like Mr Cruse, he believed to be six years, at least in Western Australia. He was advised by at least 28 December 1999 that his pre-existing asymptomatic condition had been made symptomatic by the accident. In these circumstances it is difficult to understand why he should have omitted to take any steps to seek legal advice, let alone to initiate any action, for almost three years when he was continually suffering fluctuating but nonetheless painful symptoms. Notwithstanding Mr Woodland's optimism that his condition would be ameliorated by conservative treatment, it must have been obvious to the respondent that the accident had caused him substantial damage, a remedy for which could well be available to him by way of an action against his employer and/or the occupier of the mine. The only explanation offered was that he was hopeful of substantial improvement in his condition and reluctant to 'make a fuss' having regard to the kind of industry in which he was engaged. I am not persuaded that the delay has been satisfactorily explained."

20 Upon an application to extend time pursuant to the Limitation Act 1974, s5(3), it must be remembered that the discretion is subject to no statutory fetters. The time may be extended if "in all the circumstances of the case it is just and reasonable so to do ...".

21 Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 concerned a limitation statute expressed, in part, in terms different from the Tasmanian legislation. In addition, the facts of that case were far removed from the facts of the present case. However, in Brisbane South, the court held that once an applicant had satisfied the conditions precedent specified by the Limitation of Actions Act 1974 (Qld), s31(2)(a) and (b), the exercise of the discretion was (like the Tasmanian Act) unfettered. McHugh J said at 552 - 553 that there were four broad rationales for the enactment of the limitation periods, viz:

(a) evidence is likely to be lost with the passage of time;

(b) it is oppressive to a defendant to allow an action to be brought "long after the circumstances which gave rise to it have passed" [emphasis added];

(c) people should be able to arrange their affairs on the basis that after the expiration of the time limit claims cannot be brought;

(d) the public interest demands that claims be settled as quickly as possible.

22 His Honour went on to say that upon an application for an extension of time, the issue of whether it is just to make the order sought must be evaluated with reference to the rationale for the legislation. In McHugh J's view, the most significant factor upon an application such as this is whether or not the defendant will be able to get a fair trial. Dawson J agreed with the reasons for judgment of McHugh J. The remainder of the majority also took the view that in the exercise of the discretion, whether there can be a fair trial is a matter of great weight; but it appears that McHugh J took that view a step further and held that time should not be extended if the defendant cannot get a fair trial. See Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 at 147.

23 In any event, it is clear that although the issue of whether the defendant will be able to get a fair trial is a significant, if not decisive, factor, it is certainly not the only relevant factor in the exercise of the discretion. The Limitation Act, s5(3), requires that consideration be given to all the circumstances of the case. In most cases this means that regard must be paid to whether there is an arguable case, the length of the delay, the explanation for it and the degree of prejudice the delay has caused and/or will cause the defendant. All of these matters require weighing to determine whether it is just in the circumstances of the case, to extend the time within which proceedings may be commenced. See Knight v Smith [1975] Tas R 83; Klein v Domus [1963] HCA 54; (1963) 109 CLR 467; Parsons v Doukas (2001) 52 NSWLR 163; Marr v Green (1994) Aust Torts Reports 81-277.

24 With respect to the delay in commencing proceedings and the appellant's explanation for it, the following things can be said:

(a) Having regard to the medical advice given to the appellant by Mr Woodland, and having regard to the appellant's belief, held until about the middle of 2000, that his condition may improve with conservative treatment, the appellant's wish not to "make a fuss" was in our view, more than reasonable. An early claim for compensation and/or damages by a trainee geologist for a non-disabling injury caused by what had the appearance of having been a trivial accident, would do little to enhance the appellant's future employment prospects in his chosen profession. In the current climate of concern about increasing litigation and the rising quantum of awards of damages, we find somewhat surprising submissions made by the respondents' counsel that the appellant should have made a claim earlier than he did, notwithstanding the fact that he hoped to make a recovery and avoid making a claim at all.

(b) In February 2001, he and his legal adviser in Western Australia believed that there remained three years within which to make a claim. There was an understandable basis for their mistaken belief.

(c) Notwithstanding that belief, the appellant's legal adviser acted promptly and any delay between, at the most, the third week of April 2001 (a little more than a month after the expiry of the limitation period) was said by the learned primary judge to have been due to "understandable difficulties in determining the identity of the [appellant's] employer and the occupier of the mine".

(d) The appellant instructed his legal adviser to bring proceedings before the limitation period expired. In this sense, it can be said that there was no delay on the part of the appellant. In Hall v The Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423, Barwick CJ described the issue of delay and the need to explain it at 435 as a "failure to sue in time which must be satisfactorily explained". See also Knight v Smith (supra) in which Green CJ referred, at 92, to the need to explain the failure to issue the writ within the limitation period.

(e) Delay by not bringing the proceedings within the limitation period was due to the appellant's Western Australian solicitor being unaware of the time limit prescribed by the Limitation Act, s5(1). With respect to delay by an applicant's legal advisor, Underwood J said, in Williams v Smith [1984] Tas R 176 at 186:

"Delay on the part of the plaintiff's legal advisers does not fall into the same category as delay on the part of the plaintiff. In Ulowski v Miller [1968] SASR 277, at pp282, 283, Bray CJ adopted the remarks of Diplock LJ in Allen v Sir Alfred McAlpine and Sons Ltd [1968] 1 All ER 543, [1968] 2 QB 229, and said:

'I agree that there may be a distinction between delay for which the plaintiff is personally responsible and delay for which his solicitors alone are responsible. The former will operate more severely against him than the latter when the question of his hardship is being considered.'

See also Mavra v Logan (1980) 24 SASR 567 and the cases cited therein."

25 In all these circumstances we find ourselves unable to agree with the learned primary judge's categorisation of the delay not having been satisfactorily explained.

26 With respect to prejudice occasioned by delay, regard must be had to the propositions enunciated by McHugh J in Brisbane South Regional Health Authority v Taylor (supra) and summarised earlier.

27 As already mentioned, in September 1998, about six months after the accident, the second respondent sold its interests in the mine and ceased operations in Tasmania. The workforce it employed disbanded. Also as mentioned, the appellant's supervisor, Mr Hunter has now been located. Although there is no evidence of his present memory of the relevant events, Mr Hunter was with the appellant when the accident happened. He assisted the appellant after the accident and he witnessed the completion of the incident form to which reference has been made. Mr Hunter investigated the circumstances of the accident and directed remedial action. All of this was disclosed to the respondents' insurance assessor early in 2001.

28 Also present at the time of the accident were two miners, but their present whereabouts are unknown. There is no evidence of any attempt having been made to find those two men.

29 With respect to the appellant's claim that due to a shortage of equipment the boots that were issued to him were not the right size and that this contributed to his fall from the ladder, there is affidavit evidence to the effect that it is likely that a record of the size of the boots issued to the appellant would have been made, but only kept for approximately one year. With respect to evidence of the safety training given to the appellant before he started work, the affidavit evidence was:

"It is likely that any records kept in respect of [the appellant] and his induction training would have been sent out of Tasmania to the place at which he was next employed within the RGC group of companies at or about the conclusion of his period of employment at the mine."

30 Although we are conscious that the appellant carries the onus of showing that the time should be extended, the respondents' affidavit material concerning these records did not indicate that any attempt had been made to locate them but proved unsuccessful.

31 The evidence concerning the man who countersigned the incident report under the heading "General Manager" was that he left the State when the mine was sold in September 1998. There is no evidence of any attempt having been made to find him, but a senior executive in the Australian mining industry should not be too difficult to find. In any event, there is no indication that he might have any useful evidence to give with respect to the appellant's claim.

32 With respect to damages, counsel for the respondents submitted that as it was claimed that the appellant's disability was caused by trauma to a pre-existing condition, the passage of time had made it difficult to challenge the claim that the trauma was the fall at work and not some other incident. It was said that the disability might have been caused by trauma whilst playing sport or by some other vigorous activity. This submission illustrates how the passage of time from the moment a cause of action arises per se causes prejudice, but in this particular case, the prejudice is diminished somewhat by the radiological evidence and histories that have been obtained from the appellant from time to time since May 1998, which was no more than a few weeks after the accident.

33 With respect to all these circumstances, the learned primary judge said, at par13:

"In my view, the evidence adduced by the appellants and the circumstances of the case make it likely that in answering the respondent's claims concerning the condition encountered by him at the site of his accident, of the equipment issued to him and of the instructions issued to him by way of warning against likely hazards he might encounter, the appellants will be at a disadvantage over and above that normally attendant upon a delay of nearly 3½ years from the accrual of the respondent's cause of action."

34 However, his Honour did not observe that with respect to the matters of prejudice on the issue of liability to which the respondents drew attention, all of them had arisen by March 1999 and thereafter the prejudice consisted of what is so often called general prejudice caused by the effluxion of time and consequential fading of memories.

"In all the circumstances, I am not satisfied that it is just and reasonable to extend the time for commencing proceedings against the appellants. The appeal is allowed and the respondent's application is dismissed."

36 His Honour did not expressly articulate the weight that he attached to the various relevant matters. He did not, quite correctly in our view, conclude that the respondents would not be able to get a fair trial if the orders sought were made. We have come to the conclusion that the likelihood is that the learned primary judge placed too much weight upon the appellant's delay in commencing proceedings by categorising it as not satisfactorily explained with the consequential result that the exercise of the discretion miscarried.

37 In our view, there was a reasonable explanation for the appellant's decision not to alert the respondents to his intention to make a claim until November or December 2000. There was a sufficient explanation for the appellant's Western Australian solicitor's failure to institute proceedings during the month left to him to do so after he received instructions. There was a reasonable explanation for the period between the expiry of time within which proceedings could be commenced as of right and the filing of the writ. The appellant has an arguable case. Although the lapse of time has caused prejudice, the majority of that prejudice had occurred well before the time limit had expired and well before the appellant's medical condition reached the stage where he had reason to decide to claim damages. It cannot be said that the respondent will be denied a fair trial if the time is extended by 4½ months. We conclude that error attended the exercise of the discretion in the sense described in the well-known passage of the joint judgment in House v R [1936] HCA 40; (1936) 55 CLR 499 at 505.

38 The submissions of counsel for the appellant as to ground 5 were to the effect that the learned primary judge failed to undertake a proper weighing and balancing process in relation to the arguable case, delay and prejudice - not that his Honour had failed to undertake any weighing and balancing process in relation to those matters at all. It was not submitted by counsel for either respondent that such submissions were beyond the scope of ground 5, or that ground 5 could not be interpreted in that way. Indeed, the appeal was in part argued upon that basis. In our view the learned primary judge did err in failing to undertake properly the required weighing and balancing process, in that he attached undue weight to (a) the respondent's delay between the day of his injury and the time in 2000 when his medical condition worsened to the extent that he decided to claim damages, and (b) the prejudice relied upon by the respondents, all of which had been suffered during that period of delay, prior to the appellant deciding to claim damages. On that basis, we think ground 5 must succeed

39 It appears that the learned primary judge did not consider the fact that all the matters of prejudice relied upon by the respondents were matters that arose well before 2000 when the appellant's medical condition worsened to a stage that made him decide to claim damages. His Honour thereby failed to consider a material fact, within the meaning of the Supreme Court Civil Procedure Act, s45(1)(b).

40 The appeal is allowed. The order of the learned primary judge dismissing the application to extend time is quashed. In lieu thereof there will be an order that the time within which the appellant may bring proceedings against the respondents for damages for personal injury arising out of an accident that occurred on or about 9 March 1998 is extended to 26 July 2001.