McMILLAN v BEVAN

COUNSEL : D P M O'Dowd - Claimant A J Abadee - Opponent SOLICITORS : Stacks - Claimant Phillips Fox - Opponent CATCHWORDS : LIMITATION PERIOD - Limitation Act 1969 - ss60A, 60C and 60E - personal injury claims - three year primary limitation period - five year secondary limitation period LEGISLATION CITED : Limitation Act 1969 CASES CITED: Carlton & Anor v Hunter Valley X-Rays Pty Ltd [2001] NSWSC 109 Sydney City Council v Zegarac (1998) 43 NSWLR 195 DECISION : 1. Leave to appeal upon ground 1 in the draft notice of appeal; 2. Appeal allowed; 3. Set aside the order of his Honour Judge Coleman made on 17 August 2001, dismissing the claimant's application to extend time; 4. Remit the application for hearing to the District Court; 5. The opponent to pay the claimant's costs of the application for leave and of the appeal but to have a certificate under the Suitors Fund Act 1951.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40677/01 DC 4/99 (Kempsey)

MEAGHER JA SHELLER JA PEARLMAN AJA

Tuesday, 14 May 2002 McMILLAN v BEVAN Judgment 1 SHELLER JA: This is an application for leave to appeal from a decision of his Honour Judge Coleman given on 17 August 2001. The application is listed today for hearing, together with the hearing of the appeal if leave is granted. The claimant, Janet McMillan, was injured on 28 January 1996 when she fell while descending a set of wooden stairs or steps which collapsed under her weight in premises known as the Old Schoolyard Residence at Turner's Flat via Kempsey. 2 On 28 January 1999 her solicitors issued a statement of claim out of the District Court against Judith Bevan, who was alleged to be the occupier of the premises, as the first defendant, Winsome Real Estate Pty Limited which was the managing real estate agent as second defendant and C A Salkeld, an employee of the second defendant, as third defendant. 3 In March 1999 when the solicitors attempted to serve the statement of claim on Judith Bevan they became aware that she had died. On 22 February 2001 the claimant's solicitors conducted a probate search which revealed that probate of Judith Bevan's will was granted on 29 September 1995 to her children, Rhys Anthony Bevan and Margery Edna Matthews, her executors. 4 By notice of motion dated 15 March 2001 the claimant applied for leave to extend the time for service of the statement of claim on the opponent, Rhys Anthony Bevan as executor of the estate. On 22 June 2001 his Honour Judge Nield dismissed the claim against Judith Bevan and ordered the claimant to pay the costs. Judge Nield granted leave to the claimant to file in court a motion dated 22 June 2001 seeking orders:

1. The statement of claim be amended to include the estate of the late Judith Bevan as the fourth defendant. 2. An order under s60C of the Limitation Act 1969 to extend the time to sue the estate of the late Judith Bevan.

That application came before his Honour Judge Coleman. His Honour dismissed it and the claimant seeks leave to appeal from that decision. 5 Section 18A of the Limitation Act provides: "(1) This section applies to a cause of action founded on negligence, nuisance of breach of duty, for damages for personal injury, but does not apply to:

(a) a cause of action arising under the Compensation to Relatives Act 1897, or

(b) a cause of action that accrued before 1 September 1990. (2) An action on a cause of action to which this section applies is not maintainable if brought after the expiration of a limitation period of 3 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims." 6 The date of accrual of the cause of action was the date of the accident, 28 January 1996. The cause of action was founded on negligence or breach of duty and was for damages for personal injury. Section 18A is in Part 2 of the Limitation Act which is headed "Periods of Limitation and Related Matters". Part 3 of the Act, as its heading indicates, deals with postponement of the bar. Division 3 deals with personal injury cases and subdivision 2 is headed "Secondary Limitation Period". 7 According to s60A, the purpose of the subdivision is to "provide a procedure for a five year maximum extension of the three year limitation period for personal injury cases". The subdivision applies to causes of action which accrue on or after 1 September 1990. Section 60C provides as follows: 8 "(1) This section applies to a cause of action, 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 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, not exceeding five years, as it determines."

9 Section 60E(1) requires the court in exercising the powers conferred on it by s60C to have regard to all the circumstances of the case and in particular, to the extent that they are relevant, to matters set out in subparagraphs (a) to (h). 10 Subdivision 3 provides for a discretionary extension for latent injury. Section 60F provides that the purpose of the subdivision is to provide a procedure for a further discretionary extension of limitation periods where the plaintiff is unaware of the fact, nature, extent or cause of the injury, disease or impairment at the relevant time. Section 60J provides that an order may not be made under subsection 3 in relation to a limitation period unless the time has expired for the making of an order under Subdivision 2. 11 The opponent submitted to Judge Coleman that s60C(2) permitted an extension for a period up to five years from the date of the occurrence of the accident. According to that submission, the primary limitation period was three years and the secondary or extended limitation period was five years. 12 Counsel for the claimant submitted that on its true construction the section provided for a primary limitation period of three years which could be extended by five years, making a total possible secondary limitation period of eight years dating from the date of the accident. 13 His Honour referred to a decision of Master Harrison in Carlton & Anor v Hunter Valley X-Rays Pty Limited [2001] NSWSC 109. After quoting s60C, the master said: "The cause of action arose on 24 June 1992, five years from that date is 24 June 1999. The motion was not filed until 20 June 2000, which is outside the five year period specified by s60C(2). The plaintiff's claim under s60C and 60E fails." There was no further reasoning for this conclusion. 14 We were informed today that an appeal was brought from the master's decision which came before his Honour Acting Justice Cooper. His Honour gave judgment on 21 November 2001. In the course of his judgment, he referred to the passage from the master's judgment which I have just quoted. His Honour then continued: "I do agree that the closing clause of s60C(2) is ambiguous. Does it mean extend for such a period not exceeding five years on top of the three year time limit as it determines, or does it mean extend for such period not exceeding five years from the date on which the cause of action arose. This ambiguity is cleared up when one looks at s60A which states..."

15 His Honour then set out the terms of that section. He continued: "This section refers to an extension of the three year limitation period. Thus it must mean that the three year limitation period can be extended to a maximum of eight years." 16 Judge Coleman quoted from the decision of Powell JA in Sydney City Council v Zegarac (1998) 43 NSWLR 195 at 239, a lengthy passage from the second reading speech in the Legislative Assembly of Mr Dowd, as his Honour then was, Attorney-General on 14 November 1989. In that passage, Mr Dowd referred to the new limitation period for personal injury actions of three years, a reduction from the previous primary limitation period of six years, and said that it was in the public interest to require early prosecution of personal injury claims and it would be exceptional cases only that could not be accommodated by a primary period of three years. 17 Mr Dowd continued that the five year secondary limitation period would avoid injustice and hardship which might arise from the strict application of a three year limitation period. He said: "The discretionary extension will operate as a complement to and not in substitute for the primary limitation period." 18 Despite this, Judge Coleman accepted that the five year period substituted for the three year period. It should be noted that in Zegarac the plaintiff was injured on 21 November 1991 (page 201). His Honour Judge Kirkham on 15 November 1996 made an order extending time for the commencement of proceedings up to and including 29 November 1996, slightly more than five years later. 19 Priestley JA would have dismissed the appeal against this order. Powell JA, with whom the President agree, allowed the appeal, not because the order made was beyond power but because it was clear that if the respondent's claim against the city council was permitted to proceed, the council would, for a variety of reasons, suffer significant prejudice (see page 242). 20 Mr Abadee, who appeared today for the opponent, made the point that the construction of s60C(2) propounded by the claimant results in a limitation period of eight years from the date the cause of action arose. This in a sense has the odd result that the primary limitation period was reduced to three years from six years by s18A and yet can be increased to eight years under s60C(2). 21 Mr Abadee referred us to policy considerations discussed by Mr Dowd in his Second Reading Speech and also discussed by Priestley JA in Zegarac. Two particular matters referred to were uncertainty and hardship. 22 In my opinion, and with due respect to the trial judge and the submissions made by Mr Abadee, the language of subdivision 2 is plain. Its purpose as set out in s60A is to provide a procedure for a five year maximum extension of the three year limitation period. As a matter of language, that means the three year limitation period can be extended by a further five. Similarly, s60C(2) speaks of extending the limitation period for such period not exceeding five years as it determines. 23 Such a meaning is consistent with the passage I have quoted from the Attorney-General's Second Reading Speech. With due respect, I do not agree with Judge Coleman's conclusion that plainly there was to be a primary limitation period of three years which can be extended to five years. 24 I entirely agree with the view that his Honour Acting Justice Cooper took. Not that this matters, I do not find any great ambiguity in s60C itself. However, there is no ambiguity when one reads the subdivision as a whole. 25 In my opinion, his Honour erred when he concluded there was no power to extend the limitation period beyond 28 January 2001 and that, accordingly, the application must fail. 26 The proposed notice of motion includes four grounds, of which only the first is directed to the construction error. The other three are otiose or go to the merits of the application which Judge Coleman did not consider and which this Court is in no position to consider. 27 In my opinion, the following orders should be made: (1) Leave to appeal upon ground 1 in the draft notice of appeal. (2) Appeal allowed. (3) Set aside the order of Judge Coleman made on 17 August 2001, dismissing the claimant's application to extend time. (4) Remit the application for hearing to the District Court. (5) The opponent to pay the claimant's costs of the application for leave and of the appeal but to have a certificate under the Suitors Fund Act 1951. 28 MEAGHER JA: I agree. 29 PEARLMAN AJA: I agree. 30 MEAGHER JA: The orders of the Court therefore are the orders proposed by Sheller JA.

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