McKinnon v Huxley & Anor

(a) may extend the limitation period mentioned in subsection (2) or subsection (3) to such an extent and on such terms as it thinks fit."

The facts 2 The circumstances giving rise to the application are as follows. On 23 June 2000 the plaintiff allegedly suffered injuries when the defendants' vessel, the Simon Barjona , collided with the plaintiff's boat, the Mahogany , which was anchored five and a half nautical miles south-east of Coffs Harbour. 3 On 3 July 2000, the plaintiff instructed a firm of solicitors (the "first solicitors") to take action on his behalf in respect of damage sustained to his vessel and personal injury which he himself sustained. On 31 July the first solicitors wrote to the defendants a letter advising of a potential claim for damages for personal injury. The letter gave particulars of the collision, sought confirmation of the identity of the owner of the Simon Barjona , and made further enquiries as to the factual circumstances of the collision. 4 By letter dated 14 August 2000 the defendants' solicitors confirmed ownership of the Simon Barjona , that the vessel was skippered by the first defendant at the time of the collision and that a deckhand was also on board. The letter otherwise declined to provide the information sought in the letter sent by the plaintiff's first solicitors. 5 On 5 September 2000, the plaintiff and the defendants entered into a Deed of Release whereby a claim for damage to the plaintiff's vessel was compromised. Thereafter, nothing seems to have happened with the plaintiff's personal injury claim until 20 August 2001, more than a year from the defendants' solicitors' response of 14 August 2000 to the plaintiff's first solicitors' letter of 31 July advising of a personal injury claim. 6 On 20 August 2001, the plaintiff's first solicitors wrote to the defendants' solicitors requesting the name of the insurance company for which the defendants' solicitors acted in the interests of the defendants. The defendants' solicitors replied by letter of 31 August 2001 advising that they did not hold instructions to act for any insurance company. 7 Again, nothing seems to have happened between the date of this letter and 10 July 2002, a period of almost a year. 8 On 10 July 2002, the plaintiff's first solicitors wrote to the defendants' solicitors, referring to their earlier letter of 31 August 2001 noting that the defendants' solicitors did not hold any instructions from an insurance company and requesting confirmation as to whether or not the defendants were insured for the purpose of the plaintiff's personal injury claim. It should be noted that by the time this letter was sent the limitation period of two years from the date of accident provided by s.22(2) of the Limitation Act had already expired. 9 On 17 July 2002, the defendants' solicitors responded, advising that the defendants had no policy of insurance for the purpose of the plaintiff's personal injury claim. 10 As far as the defendants were concerned, there was no further communication after that until 1 April 2003 when the plaintiff's second solicitors (who had taken over conduct of the matter at some time in October the previous year) wrote to the defendants advising them that the plaintiff intended to make a claim for personal injury and requesting information as to whether the defendants had any relevant insurance which might meet that claim. 11 The next thing that happened, according to the evidence, was that the Statement of Claim was filed by the plaintiff on 20 June 2003, three years from the date of the collision. 12 On 16 July 2003, the defendants filed a Notice of Motion seeking an order that "the plaintiff's claim be struck out" because it had been commenced outside the limitation period provided by s.22(2) of the Act. On 24 July 2003, the Court ordered the plaintiff to file any evidence in opposition to the Notice of Motion. On 25 November 2003, the Court directed the plaintiff to file any motion of its own in respect of the limitation issue. On 2 December 2003, the plaintiff filed his Notice of Motion seeking an extension of the limitation period under s.22(4). 13 The evidence filed by the plaintiff in support of his application is that he was never informed by the first solicitors of any limitation period in respect of his claim for personal injury. Otherwise, the affidavit is completely silent by way of any explanation as to the plaintiff's apparent inactivity in prosecuting his claim. In particular, there is no explanation for the plaintiff's inactivity between 14 August 2000 and 20 August 2001, between 31 August 2001 and 10 July 2002, and 17 July 2002 and 1 April 2003. Curiously, but perhaps significantly, the plaintiff does not say in his affidavit that had he been informed of the limitation period he would have ensured that proceedings were commenced within time.

The applicable principles 14 The discretion conferred on a Court to extend the limitation period under s.22(4) of the Limitation Act is a broad one unfettered by any specific considerations which the legislature has directed be taken into account. However, the discretion is exercised in the context of a policy consideration which is embodied in s.22 of the Act. Limitation on the liabilities of ship owners has a long history going back to the early seventeenth century in Europe. In England the first Act which adopted the notion of the limitation of liability for shipowners was the Responsibility of Shipowners Act , 7 Geo. 2, 15 of 1733, which made it clear by the preamble that the policy of the Act was: "To promote the increase of the number of ships and vessels and to prevent any discouragement to merchants and others from being interested and concerned therein." 15 The policy considerations favouring shipowners by limitation of liability, both in terms of the quantum of damages and in terms of the limitation period for the commencement of proceedings, have been embodied in legislation in the United Kingdom and in this country for many years. For example, the provisions of s.396 (1) and (4) of the Navigation Act 1912 (Cth) are in much the same terms as the provisions of s.22(2) and (4) of the New South Wales Limitation Act . 16 One starts, therefore, from the position that the applicant for an extension of time under s.22(4)(a) must show good reason in the interests of justice why the policy of the Act should be displaced. Numerous authorities show that what is a good reason depends on the facts of the particular case. However, there are some considerations which will commonly arise. They were discussed by Sheen J in The Albany and The Marie Josaine [1983] 2 Lloyd's Rep 195. There, his Lordship held that the factors to be taken into account included: the degree of blameworthiness on the part of the applicant, for the delay in commencing proceedings, the length of that delay, whether the circumstances which caused the delay were beyond the control of the dilatory party, and whether, if the application were granted, justice would be done between the parties. 17 Those considerations were regarded as relevant and proper to take into account by Sheppard J in Ling v The Owners of the Ship "Longevity" (unrep. Federal Court of Australia, 25.09.1995). I think that those broad factors are relevant to take into account in the circumstances of this case. Consideration 18 The only reason that the plaintiff has given as an explanation for the delay in prosecuting his proceedings diligently is ignorance on his part that there was any relevant limitation period to be complied with. He attributed his ignorance to the first solicitors' failure to tell him of a limitation period. From the correspondence which has been put into evidence there does seem to be a strong inference that the first solicitors themselves were ignorant of the limitation period in respect of a claim of this type imposed by s 22(2) of the Limitation Act. 19 However, ignorance of the limitation period in this case, in the absence of any additional explanation for the failure of the plaintiff to prosecute his claim diligently, does not explain the plaintiff's inactivity between 14 August 2000 and 20 August 2001, or between 31 August 2001 and 10 July 2002. It does not really explain why the plaintiff delayed between July 2002 and 20 June 2003 in commencing his proceedings. The distinct impression one gets from the very sparse evidence which is available, is that here is a plaintiff who was not particularly anxious to prosecute his rights expeditiously. 20 On the other hand, however, the plaintiff says that no prejudice has been shown by the defendants if the limitation period were to be extended by what is, in effect, only a year. The plaintiff says that the circumstances of the collision and the fact that a personal injury claim was contemplated were made known to the defendants very soon after the collision so that they would have had an opportunity of preparing such evidence as they thought fit to meet the apprehended claim against them. 21 Further, it is said, in October 2000 the first named defendant pleaded guilty to a charge of negligent navigation arising out of the collision. It is highly probable, the plaintiff submits, that in the course of those proceedings the defendants revisited carefully the circumstances in which the collision occurred and that they would now, presumably, still have the benefit of such endeavours to meet the plaintiff's claim against them. 22 Mr A.C. Casselden, for the defendants, submits that it is often not possible for a defendant to indicate what prejudice he or she has suffered by reason of the delay in the commencement of proceedings. He relies upon a passage in the judgment of McHugh J in Brisbane South Regional Health Authority v Taylor & Anor (1996) 186 CLR 541 at 551: "The enactment of time limitations has been driven by the general perception that '[w]here there is delay the whole quality of justice deteriorates' ( R v Lawrence [1982] AC 510). Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo ((1972) 407 US 514) 'what has been forgotten can rarely be shown' . So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now 'knowing' that it ever existed." 23 This case is a very finely balanced one. One feels a degree of sympathy for any plaintiff who is shut out of a cause of action for personal injury when, if he or she had known the relevant limitation period, he or she might have acted with more diligence. However, as I have said, I do not think that the plaintiff's ignorance, without more, explains the dilatory and desultory fashion in which his claim has been prosecuted. 24 Despite the very capable arguments of Mr J. Young of Counsel who has said everything possible on behalf of the plaintiff, I am not satisfied that the plaintiff's evidence has shown that the plaintiff has no, or little, degree of blameworthiness for the delay in the conduct of the proceedings, that the delay was beyond his control, or that there is sufficient reason why, in the interests of justice to both parties, the limitation period should be extended and the policy embodied in s.22(2) of the Act should be displaced. 25 I must give weight to the circumstance to which McHugh J refers in Brisbane South Regional Health Authority v Taylor . The prejudice caused by delay may well be something about which the defendants cannot presently give evidence. They may not know yet in what respects the delay has occasioned them some prejudice in preparing and prosecuting a defence. 26 For those reasons I think that the Notice of Motion filed on behalf of the plaintiff for an extension of time must be dismissed.

Application for leave to amend 27 The defendants seek leave to amend their Notice of Motion to seek an order that judgment be entered in favour of the defendants on the plaintiff's Statement of Claim. The plaintiff opposes leave to amend. 28 Mr Young submits that if the plaintiff's claim is simply struck out, as is sought in the motion, it may be open to his client to file another Notice of Motion upon fresh evidence seeking an extension of time and, he submits, I should not preclude his client from doing that. Mr Young does not seek an adjournment of the application for leave to amend. He quite fairly and frankly says that he has today said all he can say in opposition to the application for leave to amend the motion and in opposition to the entry of judgment. 29 It seems to me that if the proceedings in some way were left on foot, despite the fact the plaintiff's claim was "struck out", it would be an abuse of process on the part of the plaintiff to file another motion seeking an extension of the limitation period unless the plaintiff were able to rely upon a change of circumstances which had occurred between the hearing of the defendants' motion today and the filing of the plaintiff's second motion. He could not, in other words, bring a fresh motion on the basis that he wished to adduce evidence in support of the application that he could have adduced in support of the earlier application. The second motion would only be sustainable and would not be an abuse of process if he could point to events occurring after today which would or could support the exercise of the Court's discretion in favour of extending the limitation period. 30 I am unable to see, and Mr Young has not been able to suggest, any circumstances occurring after today which would possibly be relevant to the consideration whether the inactivity on the plaintiff's part in prosecuting his claim prior to 20 June 2003 should be seen in some other light, such as to warrant an extension of the limitation period. On the hearing of this Notice of Motion it was incumbent upon the plaintiff to put forward all of his evidence in support of an extension of time; that is, all of the facts and circumstances which explained the reason of his own dilatoriness in the proceedings which would justify the course that he took. 31 It does not seem to me that anything that happens after today can bear upon those circumstances and I would see it, therefore, as fruitless to continue these proceedings in existence for any purpose. It seems to me that the limitation period imposed by s.22(2) is a complete bar to the plaintiff's claim and that in the interests of justice to the defendants the proceedings should be brought to an end. 32 For those reasons, I will grant leave to the defendants to amend their Notice of Motion by seeking an order for summary judgment. As I have earlier indicated, the order I will make in respect of the plaintiff's proceedings is that judgment be entered for the defendants on the plaintiff's Statement of Claim. Orders 33 Accordingly, the orders of the Court are:

(1) The plaintiff's Notice of Motion filed 01.12.03 is dismissed.

(2) Grant leave to the defendants to amend their Notice of Motion filed 14.07.03 by seeking an order for summary judgment.

(3) Judgment for the defendants on the plaintiff's Statement of Claim.

(4) The plaintiff is to pay the defendants' costs of the proceedings, including the costs of the two Notices of Motion.

(5) The exhibits may be returned. - oOo -

Last Modified: 12/18/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.