Morris v Canberra Irish Club Incorporated [2007] ACTSC 48

3. The plaintiff's solicitors filed an application on 11 May 2007 seeking an extension of the limitation period. I heard the application on 25 May and reserved my decision. On 19 June the solicitors for the plaintiff filed a further application asking for leave to amend the statement of claim. This was not opposed by the defendant, and the Registrar granted leave on 25 June. In the amended statement of claim, the plaintiff alleges an injury to his lumbar back while lifting stock in the course of his employment with the defendant on 6 July 2004. The Registrar did not specify a time for the plaintiff to amend the statement of claim in her order: the amended statement of claim is accordingly required to be made within 14 days of the order if it is to be effective, and, I note, no later than 5 July 2007 if further limitation problems are to be avoided.

4. For many years the limitation period for actions for damages for personal injury was six years under s 11 of the Limitation Act. In September 2001 the Act was amended to insert s 16A, which became operative from 1 July 2002 and applies to injuries from that date. Section 16A applies to causes of action for personal injury also covered by the Workers' Compensation Act 1951 (ACT). The limitation period for such actions is three years. The Court has a discretion to extend the period under s 36 of the Limitation Act if it is just and reasonable to do so. In exercising the discretion, the Court must have regard to all of the circumstances of the case, including a list of factors. The relevant factors for the present application are:

s The length of and reasons for the delay on the part of the plaintiff;

s The extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant;

s The extent to which the plaintiff acted promptly and reasonably once he became aware that he might have a cause of action for damages;

s Any steps taken by the plaintiff to obtain medical, legal or other expert advice, and the nature of any advice received.

5. The solicitor for the plaintiff, Mr David Butler, took instructions from the plaintiff in December 2004. His explanation for his failure to commence proceedings within three years of 23 February 2004 is that he incorrectly notated his file, and thus overlooked the expiry date; and that the plaintiff had been in Papua New Guinea where Mr Butler had difficulty making contact with him to obtain instructions.

6. Documents in evidence establish that the plaintiff notified the employer of his injury on 8 July 2004 and lodged a claim form with the workers' compensation insurer on 22 July 2004. The insurer made periodical payments of compensation in respect of the period from 7 July to 12 September 2004, and paid treatment expenses over approximately the same period. During July 2004 the plaintiff prepared and provided to the insurer a five-page statement in which he set out at considerable length the circumstances of his injury on 23 February 2004, and of the aggravation on 6 July 2004.

7. The insurer arranged assistance with vocational rehabilitation during July and August 2004. This continued until the end of October 2004.

8. During July and August 2004 the insurer obtained copies of reports from the plaintiff's treating doctors, including Dr Garth Eaton, occupational physician, who saw the plaintiff on 12 July 2004 and took a detailed history.

9. On 13 December 2004 Mr Butler wrote to the defendant stating that he had been instructed to act for the plaintiff and to make a claim for damages under the general law. He attached a completed personal injury claim notification form signed by the plaintiff. The form is one prepared by the Law Society of the Australian Capital Territory to assist solicitors in complying with the Civil Law (Wrongs) Amendment Regulation 2004.

10. The insurer, Insurance Australia Limited trading as CGU Workers' Compensation, wrote to Mr Butler on 10 January 2005 confirming that the plaintiff had provided all information required under the Civil Law (Wrongs) Act 2002 (ACT) and that the notice of claim was accepted.

11. In July 2005 the plaintiff told Mr Butler that he would be moving to Papua New Guinea, where his wife had been posted for three years in the course of her employment. Mr Butler next heard from him in April 2006 by email. In October 2006 Mr Butler sent the plaintiff an email but received no response.

12. The limitation period expired on 22 February 2007. Mr Butler commenced the present action on 9 March 2007, about two weeks out of time. On 4 May 2007 Mr Butler received an email informing him that the plaintiff had returned to Australia. Mr Butler accepts that the plaintiff was not personally at fault in allowing the limitation period to expire, and that the responsibility to commence proceedings in time rested with him. It is clear from the evidence that Mr Butler had adequate instructions, and sufficient information, to enable him to commence proceedings within the limitation period, and that he failed to do so through inadvertence. His explanation for the delay is essentially one of human error within his practice.

13. The principles to be applied in determining an application for extension of an expired limitation period were expressed in some detail by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541. The plaintiff in that case claimed damages for negligence and breach of statutory duty in respect of a failure by an employed gynaecologist to give proper medical advice. On the recommendation of the gynaecologist, she had undergone a hysterectomy which, she said, had been unnecessary and inappropriate. These events had taken place in 1979: by the time she made her application, the gynaecologist was living in Hong Kong. Attempts by the solicitors for the Health Authority to contact him were unsuccessful. As Toohey and Gummow JJ explained at 546, it was apparent that if the proposed action was to proceed to trial, the crucial issue would be what was said during a conversation then more than seventeen years earlier between the intending plaintiff and the gynaecologist. The applicable limitation period was three years. The application for extension of time had been refused in the District Court, but an appeal to the Queensland Court of Appeal had been unanimously upheld. The High Court by majority (Dawson, Toohey, McHugh and Gummow JJ; Kirby J dissenting) allowed the appeal and restored the orders made in the District Court. As Toohey and Gummow JJ said at page 548, a material consideration was whether, by reason of the time that had elapsed, a fair trial was possible. This was a question to be answered by reference to the situation at the time of the application, and it was no answer to a claim of prejudice to say that in any event the defendant might have suffered some prejudice if the applicant had not brought proceedings until just before the limitation period expired.

14. McHugh J at 552 identified four broad rationales for the enactment of limitation periods. First, relevant evidence was likely to be lost as time went by. Second, it was oppressive to a defendant to allow an action to be brought long after the circumstances which gave rise to it had passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims could no longer be made against them. Insurers in particular had a particular interest in knowing that they had no liabilities beyond a definite period. Fourth, the public interest required that disputes be settled as quickly as possible.

15. McHugh J made it clear at 551 that a statutory provision such as s 36 of the Limitation Act was not to be read as giving an applicant a presumptive right to an order upon satisfying listed conditions. The applicant bore an onus of showing that the justice of the case required the exercise of the discretion in his favour. The longer the delay in commencing proceedings, the more likely it was that the case would be decided on less evidence than was available to the parties at the time the cause of action arose. In the case with which the appeal was concerned, quite apart from proved prejudice, the long delay gave rise to a general presumption of prejudice. It was probable in the ordinary course of events that the plaintiff had discussed her operation and the reasons for it with friends and relatives and perhaps nursing staff. If an action had been commenced within the limitation period, one or more persons in those categories might have been able to provide evidence or information favourable to the defendant. By the time the application for an extension was made, it was likely that any such conversations would no longer be within the memory of the participants. The finding of actual prejudice and the possibility of other prejudice gave rise to an overpowering case for resisting the application (at 556).

16. In a case like Brisbane South v Taylor, where success in the action depends on findings of fact about a conversation which took place many years ago, the prejudice is obvious. The longer the delay the greater the prejudice, particularly in cases where evidence about conversations in crucial.

17. As Dawson J said in Brisbane South v Taylor at 554, the onus of satisfying the court that the discretion should be exercised lies on the applicant, who must establish that the commencement of an action beyond the limitation period would not result in significant prejudice to the prospective defendant. To allow the commencement of an action outside the limitation period is prima facie prejudicial to the defendant.

18. Counsel for the defendant called no evidence, and there is no suggestion of actual prejudice to the defendant or its insurer if an extension is granted. The defendant relies, however, on the presumption that there may be prejudice. Counsel drew my attention to Connolly J's dismissal in Nguyen v Jajic [2007] ACTSC 12 of an appeal from the Magistrates Court against a decision to refuse an application to extend a limitation period in relation to a motor accident. In that matter the plaintiff had served a personal injury claim form on the defendant's insurer a month after the accident but had done nothing more until five years later when he instructed solicitors. The applicant gave evidence before the magistrate but the solicitor did not, and the magistrate found that there was no explanation for the delay between instructing the solicitor and the expiry of the limitation period. The solicitor had had about eight months to start proceedings, had not done so, and had given no explanation for the delay. There had been no medical evidence to support the application. Connolly J found that the magistrate had not fallen into appellable error in concluding that the applicant had not satisfied the burden of establishing that the discretion should be exercised in her favour.

19. It seems to me that the present application is factually distinguishable from both Brisbane South v Taylor and Nguyen v Jajic. In the present case the solicitor has accepted responsibility for the delay and explained how it came about. The defendant and its insurer have been in possession of extensive information about the claim, both as to liability and as to damages, since soon after the injury. The defendant was the plaintiff's employer, and its insurer is the workers' compensation insurer which attended to investigating and meeting his workers' compensation claim within months of the accident. The defendant and the insurer have been on notice since late 2005, within a year of the accident, that the plaintiff was represented by a solicitor and intended to claim damages under the general law. A prudent defendant or insurer, on receipt of Mr Butler's letter of 13 December 2004, would have commenced to investigate the potential claim for damages, and it seems that the insurer in fact did so.

20. The plaintiff has satisfied me that there would be no prejudice to the defendant in my granting the application.

21. I take account of the fact that to comply with the Limitation Act the important thing is that proceedings be instituted within the limitation period. The originating process need not be served within the limitation period. By virtue of r 74 of the Court Procedures Rules 2006, an originating process is valid for service for one year starting on the day it is filed. Thus, for all an insurer knows, an action may have been commenced within time but the process may not yet have been served. A prudent insurer would accordingly wait for a year after expiry of a limitation period before arranging its affairs on the assumption that a claim could be treated as statute-barred.

22. I am satisfied that it is just and reasonable to extend the period for the purposes of the present action. I order that the period within which the action may be brought be extended to 9 March 2007, the date of the filing of the originating claim.

23. The plaintiff comes to court seeking an indulgence. The defendant has acted reasonably in opposing the application, and is entitled to an order for costs. The costs should not be recoverable immediately, but on the making of final orders in the action. The appropriate order to achieve this is that the defendant's costs of the application be the defendant's costs in any event. The costs have been incurred by reason of an oversight by the plaintiff's solicitor. It is unnecessary for me to make any specific order to reflect this: I simply express, probably unnecessarily, my view that it is the solicitor rather than the plaintiff personally who should ultimately bear responsibility for the defendant's costs of this application. This is something which will no doubt be achieved by adjustment at the conclusion of the matter.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.