Humphries v McDermott Drilling Pty Ltd

Humphries v McDermott Drilling Pty Ltd - [2019] NSWSC 508 - NSWSC 2019 case summary — Zoe

[3]

The applicable principles

Sub-section 151D(2) precludes proceedings for damages under the Workers Compensation Act being commenced against an employer more than 3 years after the date on which the injury was received, "except with the leave of the court in which the proceedings are to be taken".
There are circumstances in which time does not run for the purpose of s 151H specified in s 151DA, including in (1)(a), while a medical dispute as to whether the worker's degree of permanent impairment is at least 15% is determined by the Workers Compensation Commission. Section 151H (1) also precludes damages being awarded, "unless the injury results in the death of the worker or in a degree of permanent impairment of the injured worker that is at least 15%".
Given the special provisions relating to workers "in or about a coal mine", of which it is now agreed that Mr Humphries was one, made in Part 18 of Schedule 6 Savings transitional of the Workers Compensation Act, it is also now common ground that this limitation did not apply to Mr Humphries.
In Salidio v Nominal Defendant (1993) 32 NSWLR 524 Gleeson CJ explained in relation to a similar provision to s 151D, in s 54(4) of the Motor Accidents Act 1988 (NSW), that the immediate purpose of the Court's discretion is to "protect respondents again the injustice of stale claims and to promote forensic diligence": at 532. Consideration must also be given to the diligence, or lack of diligence, of Mr Humphries' solicitors in asserting his rights; the extent of his delay; the reason for it; and the resulting forensic disadvantage for McDermott and its ability to defend his claims.
In Salidio reference was also made to what was said by the High Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 547, 550 and 555; [1996] HCA 25, which may be summarised as: that it is for the respondent to adduce evidence that leads the court to conclude that actual prejudice would result and for the applicant to show that this does not amount to material prejudice; that the real question is whether the delay has made the chances of a fair trial unlikely, so that if it has not, there is no reason why the discretion should not be exercised; but that if actual prejudice of a significant kind is shown, the extension discretion should not trump the limitation period.
As explained in Itex Graphix Pty Limited v Elliott [2002] NSWCA 104 at [3] by reference to Salidio the proper question for a judge to ask in dealing with an application for leave to proceed under s 151D is whether it would be fair and just to grant that leave. There a fully informed decision not to proceed within the 3 year limitation period fixed by s 151D and a further significant delay before the plaintiff changed her mind, weighed heavily against the grant of the leave, particularly given the absence of any explanation for the course taken: at [4].
While undoubtedly McDermott will have suffered prejudice, given the time that has elapsed since Mr Humphries' accident, it is not suggested that granting the leave sought would be futile.
It is thus relevant that Mr Humphries not only notified his claims within the limitation period and commenced the 2012 proceedings within time, he also gave an explanation not only of how those proceedings came to be discontinued, but also of how the delay in bringing these proceedings occurred. Whether the explanation was adequate, is in issue.
Various provisions of the Civil Procedure Act are also now relevant. They include s 56, which imposes obligations on the Court, the parties and their representatives, to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56. The Court's practices and procedures must be implemented:

to eliminate delay in final determination, beyond that reasonably required for the interlocutory activities necessary for the fair and just determination of the issues in dispute and the preparation of the case for trial: s 59; and
with the object of resolving the issues in such a way that cost is proportionate to the importance and complexity of the subject-matter in dispute: s 60.

Section 57 requires that the proceedings be managed having regard to: "(a) the just determination of the proceedings, (b) the efficient disposal of the business of the court, (c) the efficient use of available judicial and administrative resources, (d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties."
Section 58 requires that in deciding whether to make any order or direction for the management of the proceedings, the Court must seek to act in accordance with the dictates of justice, taking into account the matters specified in s 58(2), which relevantly include the degree of expedition with which the parties have approached the proceedings and the degree to which they have been timely in their interlocutory activities; the degree to which any lack of expedition has arisen from circumstances beyond their control; and the degree of injustice that would be suffered by the parties, as a consequence of any order or direction.
Despite the emphasis in these provisions on timeliness and the elimination of delay, there is no question that if it be concluded that justice requires that the leave sought be granted, that the Court has the discretion to grant that leave.

[4]

The circumstances in which the application for leave was made

After the 2009 accident Mr Humphries pursued a claim which resulted in workers compensation payments being made to him by GIO. He then required various treatment, which including surgery to his spine in April 2010, an L4/5 discectomy, also paid for by GIO. That surgery did not alleviate Mr Humphries' symptoms and so he required further treatments.
Disputes later emerged over liability for Mr Humphries' other surgical treatment, GIO contending that it was Coal Mines Insurance, rather than it, which was the appropriate insurer. Coal Mines Insurance did not, however, accept that it had such liability, there being a disagreement over whether McDermott was an employer in the NSW Coal Industry. Despite this GIO has continued making workers compensation payments under the Workplace Injury Management and Workers Compensation Act 1998 (NSW).
In these proceedings there is now, however, no issue between the parties that when he was injured, Mr Humphries was a "worker in or about a coal mine": Part 18 Schedule 6 Savings, transitional and other provisions Workers Compensation Act.
Prior to the commencement of the 2012 proceedings his solicitors, PK Simpson & Co, engaged an investigator to locate Mr Botica, who was present when Mr Humphries was injured.
In April 2012 the investigator advised that Mr Botica, who was then still employed by McDermott, had provided information about what had happened to Mr Humphries and had also agreed to provide a statement, despite his initial reluctance, given his employment. Mr Botica later failed to attend the appointment made to take his statement and numerous further attempts to contact him also failed to generate any response.
There is no issue that the statement of claim which commenced the 2012 proceedings against both McDermott and Mr Botica was later served on Mr Botica. No defences were ever filed, but a notice of appearance was filed for both McDermott and Mr Botica, before they were discontinued in 2015, after transfer to the District Court.
These proceedings were commenced by statement of claim filed in March 2018, without leave first being obtained. While this statement of claim has not been served on Mr Botica, both a notice of appearance and a defence has been filed for both him and McDermott, by TurksLegal.
On the evidence of Mr Vorbach of TurksLegal, it appears that no statement has been taken from Mr Botica by GIO, the solicitors who acted in the 2012 proceedings, or TurksLegal. It also appears that Mr Botica has never himself given TurksLegal instructions, either to enter an appearance for him in these proceedings, or to file a defence. On Mr Vorbach's evidence, no contact has ever been made with him, despite the efforts of an investigator engaged by TurksLegal after these proceedings were commenced, which Mr Vorbach described, to locate him. Its instructions have only ever come from GIO.
That evidence raised obvious questions about TurksLegal's retainer to act for Mr Botica, given the contractual nature of the relationship between a solicitor and client, which ordinarily requires agreement: Beach Petroleum NL v Abbott Tout Russell Kennedy [1999] NSWCA 408; (1999) 48 NSWLR 1.
There may be circumstances in which such an agreement may be implied from conduct, courts generally accepting the existence of a retainer when a solicitor has performed work on behalf of a person with his or her knowledge and assent, in circumstances which are consistent with that person being the solicitor's client: Shaw v Yarranova Pty Ltd [2011] VSCA 55 at [19].

[5]

The procedural history

Mr Humphries' case is that it was not only contrary to the advice originally given by Mr Gross QC and Mr Jurisch of counsel, but also to that later given by Mr O'Rourke of counsel, that the 2013 proceedings were discontinued in 2015. On his case, this occurred because of a misunderstanding of Mr O'Rourke's advice, by the solicitor then acting.
The relevant history includes that: 1. On 7 September 2012, within 3 years of having been injured, Mr Humphries first brought proceedings in this Court against McDermott and Mr Botica. He there claimed that at the time he was injured he was a worker in or about a coal mine, that reflecting advice given by Mr Gross QC and Mr Jurisch. Mr Humphries sought damages for non-economic loss; past and future economic loss; and past and future medical expenses. 2. Those proceedings were transferred to the District Court in May 2013 and in August, Mr Humphries made an application to the Workers Compensation Commission to resolve a dispute, which was discontinued in October. 3. In his August 2013 statement Mr Humphries said that when he was injured, he had been working at a BHP mine, where coalmining was scheduled to commence. 4. In March 2014 Mr Humphries filed another statement of claim in the District Court, in its residual jurisdiction, against AJ Lucas Coal Technology Pty Ltd, for his operation costs and medical treatment, there then being a question as to the true identify of his employer. 5. In May 2014 Mr O'Rourke was briefed to provide advice and Mr Humphries attended a conference with him, although in his unchallenged affidavit, Mr Humphries said that he was not sure why he had then changed counsel. 6. In his written May 2014 advice, Mr O'Rourke advised that further steps should be taken, including issuing subpoenas against McDermott and the proceedings against Mr Botica being discontinued, with a view to obtaining from him a statement about the circumstances of Mr Humphries' accident. 7. In his June 2014 written advice Mr O'Rourke noted that Coal Mines Insurance had not accepted that Mr Humphries had been a worker in or about a coal mine, which would thus have to be determined by a Court. He advised that the proceedings brought to establish that the disputed surgical procedure was reasonably necessary and the nature of Mr Humphries' employment, should be prosecuted as quickly as reasonably possible. 8. In December 2014 Mr Humphries instructed that 90% of the work he undertook as a core driller at the time of the accident was carried out at mine sites outside the Sydney catchment area, generally for the purpose of exploring for coal and gas, which were both being sought, whenever he undertook his work on those sites. The drilling was undertaken on sites fenced off from areas where production was being undertaken. He understood that all of the sites on which he had worked were mine sites, because a mine permit was required for the drilling work which he undertook. 9. In December 2014 Mr O'Rourke advised that McDermott was unlikely to have been an employer in the coal industry as defined in s 7A Workers Compensation Act and that Mr Humphries was not working in or about a mine, but the issue was not without doubt, for reasons which he explained. He thus advised that the appropriate way forward was to: 1. commence proceedings in the Workers Compensation Commission to obtain a declaration that surgery proposed was reasonably necessary, that question there being decided by a medical specialist; 2. adjourn or discontinue the proceedings commenced in the District Court's residual jurisdiction and to refile those proceedings, if the Commission determined that Mr Humphries was a coalminer; 3. hold in abeyance the 2012 common law proceedings, until "the Commission had determined the matter"; and 4. advise Mr Humphries that if he was ultimately found to be a coal miner, the filing of the District Court proceedings constituted an election under s 66 and s 67 of the Workers Compensation Act. 1. The District Court's residual jurisdiction proceedings were discontinued in February 2015 and contrary to Mr O'Rourke's advice, the 2012 common law proceedings were discontinued in March. On Mr Humphries' unchallenged evidence, he gave no instructions that those proceedings should be discontinued. 2. A December 2014 file note records that Mr Humphries was dissatisfied with the conduct of his claims and was considering obtaining a second opinion, but instructed that proceedings in the Workers Compensation Commission should be pursued. 3. A 30 January 2015 file note recorded instructions that the District Court proceedings should be discontinued. 4. Another application to resolve a dispute about medical expenses was filed in the Workers Compensation Commission in September 2015. 5. In November 2015 Mr O'Rourke returned his brief. 6. In November 2016 Mr Vaughan was again briefed. 7. In March 2017 Mr Humphries instructed that he wished to proceed with a 23% whole person impairment claim under s 66 of the Workers Compensation Act. 8. In March 2018 these proceedings were commenced, advancing claims similar to those pleaded in the 2012 proceedings. 9. Attempts at settlement failed.

[6]

The parties' cases

For Mr Humphries it was contended that not only had he promptly notified his claim after the accident, he had also brought common law damages proceedings in 2012 within the limitation period. It was only as the result of the representative error made in 2015, that those proceedings, which advanced claims which he still wishes to pursue, given the ongoing consequences of his injuries, were discontinued.
McDermott has long been on notice of his claim in circumstances where the whereabouts of Mr Botica, who was carrying the drill with Mr Humphries when he was injured, could readily be ascertained by various means available to TurksLegal, which had not yet been taken, with the result that there would be no injustice in the leave he sought being granted.
For McDermott and Mr Botica it was submitted that Mr Humphries should not be granted the indulgence which he seeks, given the time which has lapsed since his accident in 2009; that he has himself offered no explanation for the delay in making this application; that the evidence of his solicitors provides only a chronology of events and documents which establish the acts and omissions of his solicitors in the conduct of his case up to early 2015.
But there is no evidence from the solicitors with contemporaneous carriage of his matter, to explain the forensic decisions which they had taken. There is also no explanation either from Mr Humphries personally, or from his solicitors, which explain the further delay in bring this application, beyond early 2015.
It was also contended that to grant the leave would result in actual prejudice to McDermott, given not only the effluxion of time, but that Mr Botica, the only witness to his accident, has not been able to be located. That has had the result that there is no available evidence from him, to challenge Mr Humphries' evidence.
Further, apart from what appears in Mr Humphries' evidentiary statement, in all that time he has not provided evidence to support his claim of breach of duty, about which there is a significant dispute, given his claim that what he was lifting and carrying weighed some 150kg and what the investigator TurksLegal had established, that it weighed only some 30kg to 40kg. Accordingly, leave should be refused.

[7]

Mr Botica

What lies in issue has to be resolved in circumstances where Mr Botica is not only a party to the proceedings, but he is represented by TurksLegal and has filed a defence. He was also represented by McDermott's prior solicitors in the 2012 proceedings.
Under the relevant conduct rules, Mr Humphries' solicitors are ordinarily not entitled to deal directly with Mr Botica, without TurksLegal's consent: Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015. That well explains why efforts to obtain a statement from Mr Botica were not pursued by Mr Humphries' solicitors, after the 2012 proceedings were commenced.
Given Mr Vorbach's evidence that since the 2018 proceedings were commenced, he has not been located, it may of course be that TurksLegal is not truly retained by Mr Botica. He was recalled to give evidence about the underlying facts. Then he said:

his instructions had come from Mr Mulray of GIO, the workers compensation insurer;
an appearance was filed for Mr Botica, because it was conceded that he was an employee of McDermott for whom it was vicariously liable;
he had not had direct contact with either McDermott or Mr Botica;
he was disappointed to find that in the 2012 proceedings, the solicitors engaged by GIO, initially Hicksons and then Gillis Delaney, had focussed entirely on the status of McDermott as an employer in the mining industry, rather than the injury itself; and
GIO's file had been subpoenaed and produced, apart from privileged documents.

The circumstances in which a legal practitioner's retainer may be challenged arose for consideration in Doulaveras v Daher (2009) ALR 627[2009] NSWCA 58. There it was concluded, after an extensive review of the authorities, that a challenge to a retainer cannot be properly raised by a defence, although it can become an issue in the proceedings, if raised by a party, even informally: at [76] to [153].
There it was also observed at [150] that it is a "clear" abuse of the process of the Court to bring litigation supposedly in the name of a person, when that person has not authorised the litigation and that the Court will deal with such an abuse, once it is established that a supposed plaintiff has not given authority for the litigation to be brought. It is difficult to see that the position is any different, if it is an unauthorised appearance and defence which has been filed in the proceedings.
On Mr Vorbach's evidence it is McDermott's insurer, GIO, who has instructed TurksLegal, as the result of which an appearance has been entered not only for the insured, McDermott, but also one of its employees, Mr Botica.
The basis upon which a contact of insurance between an employer and an insurer could entitle the insurer to enter an appearance for such an employee, is not immediately obvious, despite what was submitted for McDermott, as to its vicarious liability for the negligent acts or omissions of Mr Botica. But the employee could certainly consent to the insurer acting for him or her, as was the case in Le v Williams [2004] NSWSC 645; [2005] NSW ConvR 56-109.
But it was not Mr Vorbach's evidence that there had been such authorisation given by Mr Botica. To the contrary, his evidence was that no contact had been able to be made with Mr Botica, since these proceedings were commenced.
It clearly does not follow in these circumstances, that at trial it would be expected that Mr Humphries would call evidence from Mr Botica. After all, he is a defendant in the proceedings legally represented by the same solicitors as act for McDermott. In the result, how Jones v Dunkel inferences could be drawn against Mr Humphries, if he did not call Mr Botica at trial, is not readily apparent.
That principle was explained in RHG Mortgage Limited v Rosario Ianni [2015] NSWCA 56 at [75] - [96]. The three relevant considerations are: first, that the missing witness would be expected to be called by one party, rather than the other; secondly, that this evidence would elucidate a particular matter and thirdly, that the absence is unexplained.
If those conditions are satisfied, then the inference may be drawn that the witness' evidence would not have helped the party's case. That inference may then be used in two ways. Firstly, in deciding whether to accept any particular evidence given, either for or against that party, which relates to a matter about which the person not called as a witness could have spoken. Secondly, in deciding whether or not to draw inferences of fact, which are open in relation to matters about which that person could have spoken.": at [79].
Mr Botica being an active party to the proceedings, if he did not give evidence at trial, the inference available to be drawn would be that his evidence would not have assisted the case which he advanced by his defence.

[8]

The leave sought should be granted

There is no issue that McDermott has been on notice of Mr Humphries' serious injury since 2009. Since then workers compensation payments have continued to be made to him.
Mr Humphries was injured in a workplace accident which occurred at a time when McDermott had obligations to ensure the safety of its employees under the Occupational Health and Safety Act 2000 (NSW). It also had an obligation to give WorkCover notices of incidents which resulted in certain injuries, including those which resulted in a "person being unfit, for a continuous period of at least 7 days, to attend the person's usual place of work, to perform his or her usual duties at his or her place of work": Regulation 341(a), Occupational Health and Safety Regulation 2001 (NSW).
It may sensibly be inferred from these obligations and Mr Vorbach's evidence about GIO's file, which included a report of injury made by McDermott in relation to Mr Humphries' accident, that even if it had not taken a statement from Mr Botica, that McDermott must have undertaken an investigation into the accident in 2009: Part 18 Schedule 6 Savings, transitional and other provisions Workers Compensation Act. Further, a subpoena was issued in the 2012 proceedings requiring McDermott to produce relevant documents in relation to the accident, although whether that subpoena was answered, as it should have been, is unclear
There is thus also no evidence from which it can be concluded that relevant records are no longer in existence, or not now available to McDermott.
While neither McDermott nor Mr Botica responded to the 2012 common law damages proceedings by the filing of a defence, they were both then legally represented by the same firms instructed by GIO, one of which filed notices of appearance for both of them.
If, despite the absence of a filed defence, McDermott and Mr Botica had intended, before the 2012 proceedings were discontinued in 2015, to defend the proceedings, it must have been obvious to them and their legal representatives, that resolution at trial of what lay in issue would depend on the evidence which Mr Humphries and Mr Botica could give about the circumstances in which Mr Humphries came to be injured.
Mr Vorbach's evidence included that he had not been in contact with Hicksons, who he understood had carriage of the 2012 proceedings, because he believed that whatever Mr Cameron, the solicitor who had carriage of the matter, had created was on the GIO file although other evidence suggests that Gillis Delaney also acted for McDermott and Mr Botica. He had also not contacted the solicitors engaged by Coal Mine Insurance, because they were focusing on the indemnity issue and had assumed that they had made no investigation.
Mr Vorbach's evidence was also that in 2018 investigators TurksLegal had engaged made contact with Mr Botica's parents, but not with Mr Botica, even though they were informed by his mother that he then lived in Wollongong and visited his parents once a week. Mr Vorbach said that he had concluded from his father's advice, that he either did not know of his son's whereabouts, or that he was not prepared to disclose Mr Botica's whereabouts.
As was contended for Mr Humphries, that evidence does not establish that Mr Botica, the only witness to his accident, cannot be located, or that he cannot be subpoenaed to give evidence, if that be necessary. What is in issue in relation to the weight of the drill Mr Humphries was carrying, does not appear to depend on his evidence.
There being no other forensic disadvantage to which the defendants point to flowing from the grant of the leave sought, it seems to me that both Mr Humphries and the solicitor who again currently has carriage of his matter, Mr Petrovski, having given evidence and been cross-examined about the circumstances in which the 2012 proceedings came to be discontinued in 2015 and these proceedings commenced in 2018, that justice requires that the leave sought be granted.

[9]

There was no issue that the 2012 proceeding were discontinued in error

Mr Humphries' cross-examination confirmed that before the 2012 proceedings were commenced, he had received advice from Mr Gross QC; that while Mr Petrovski had then had carriage of his matter, subsequently there were a series of other solicitors who took over; that he had been given advice about whether he was a coal miner, before the proceedings were commenced; as far as he understood, he worked in the mining industry, but he accepted the advice he received, there having over time, been dozens of people working on his matter.
Mr Petrovski's oral evidence confirmed that he had carriage of the matter in 2010 when PK Simpson & Co were first instructed; others took over in 2011 when he left the firm and he resumed carriage of the matter after he returned. It was not suggested that it was his error, which resulted in the discontinuance of the proceedings.
In cross-examination Mr Petrovski also said that he was not involved in the decision to make Mr Botica a party to the proceedings. He had reviewed the file, which included evidence that the 2012 statement of claim had been served on Mr Botica. It did not contain any statement he had provided, but he understood attempts to contact Mr Botica had been made. He also agreed that in November 2014 positive assertions were being advanced, that Mr Humphries was a coal miner.
Mr Petrovski also said that he considered that whether or not Coal Mines Insurance was going to extend indemnity to McDermott was material to Mr Humphries' claim and to where the claim was advanced, although this was disputed.
I accept that the evidence establishes that the discontinuation of the 2012 proceedings was the result of representative error on the part of one of the solicitors who acted on Mr Humphries' matter as to counsel's advice, and not as the result of his desire to abandon his common law claims.
The delay in the initiation of these proceedings after 2015 appears to be the attention given to the question of the law applicable to coal miners and whether it applied to Mr Humphries, about which the parties are now agreed. It was submitted for McDermott and Mr Botica, that had involved further representative error, but from the correspondence it is apparent that it was not only Mr Humphries' solicitors who were districted by this issue, before it was finally agreed.
It is also relevant that from what is in evidence and the submissions advanced, it is apparent that had defences been filed in the 2012 proceedings as they ought to have been, before those proceedings were discontinued, given the applicable Rules, what has now been agreed about Mr Humphries being a coalminer is likely then to have emerged. The error made in the discontinuation of those proceedings, is likely, thereby to have been avoided.
That issue also had an impact on other steps taken to pursue Mr Humphries' claims, by the proceedings initiated in the Workers Compensation Commission, although it is now accepted that the 15% whole person impairment threshold does not apply to him.
I thus do not accept that the evidence establishes that there has been the lack of forensic diligence in ascertaining Mr Humphries' rights submitted for McDermott and Mr Botica. Not only his solicitors appear to have contributed to the further delays since 2015, which have undoubtedly had an adverse impact on all parties.
Nor am I convinced that there is a doubt about the "viability" of the proceedings, despite the unfortunate delay which has resulted from all that I have explained.
In the result, I am satisfied that the circumstances which have here arisen for consideration are far removed from those which arose for consideration in Itex Graphix Pty Limited. I am also satisfied that it has not been established that actual prejudice would result for Mr McDermott or Mr Botica, if the leave sought were granted, let alone material prejudice, or that the delay has made the chances of a fair trial unlikely.

At a glance

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Judgment (12 paragraphs)

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Legislation Cited (8)

Cases Cited (13)