Murgolo v AAI Ltd t/as AAMI

Solicitors: Fortis Law Group (Appellant) Moray & Agnew (Respondent) File Number(s): 2019/152571 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Division Citation: [2019] NSWSC 406 Date of Decision: 18 April 2019 Before: N Adams J File Number(s): 2018/164517

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

headnote [This headnote is not to be read as part of the judgment] In 2012 Mr Murgolo was a sub-contractor working on a building site at Miranda Public School. On 19 January 2012, Mr Murgolo was injured when two workers were allegedly negligent in failing to secure an acrow prop, which fell and caused an injury to Mr Murgolo's arm. Mr Murgolo understood that the workers were employed by a business known as "Class Welding". He consulted solicitors, who commenced proceedings against Class Welding Pty Ltd in February 2013. On 26 June 2013, solicitors for the insurer of Class Welding Pty Ltd wrote to the plaintiff's solicitors to advise them that it was likely that another company with the same directors, Class Welding (NSW) Pty Ltd, had employed the workers. Several documents indicating that Class Welding (NSW) Pty Ltd was the contractor on the building site were attached. On 27 August 2013, the plaintiff's solicitors substituted Class Welding (NSW) Pty Ltd as the defendant in the statement of claim. A default judgment was obtained in February 2014, but the amount was not paid. At a creditor's meeting of Class Welding (NSW) Pty Ltd in March 2016, a director asserted that the relevant entity was in fact Class Welding Pty Ltd. Documents were obtained which supported that view. The plaintiff commenced proceedings against Class Welding Pty Ltd on 25 May 2018. The respondent insurer sought to have the proceedings struck out on the basis that the three-year limitation period prescribed by ss 50C and 50D of the Limitation Act 1969 (NSW), which commenced when the cause of action was "discoverable", had begun by February 2013, when proceedings were initially commenced. The plaintiff's claim was summarily dismissed on 18 April 2019. The plaintiff appealed against the summary dismissal. The appeal raised two issues, namely whether: (i) a belief once formed answered the test of knowledge for the purposes of s 50D(1); and (ii) this case should have been disposed of summarily. The Court (Basten JA, Macfarlan JA and Leeming JA) allowed the appeal and held: (i) as to the first issue: (by Basten JA, Macfarlan JA and Leeming JA):

1. Numerous difficulties arise when considering the operation of s 50D(1), including the determination of when a person ought to know a fact, the significance of a person's reliance on the beliefs of others, the context in which facts must be understood and the point in time at which knowledge is assessed: [40]-[47], [72]-[73], [96]-[102].
2. There was no evidence that the plaintiff knew of the two possible employers of the allegedly negligent workmen in 2013, and, once the existence of the second company was known, the documents provided supported a belief that it was the employer. Accordingly, the belief formed in 2013, based on incomplete information did not satisfy the test in s 50D(1).
3. Whether the information available to the claimant in 2013 was sufficient to establish knowledge of the identity of the employer was to be determined on the evidence available to the court when the issue was tried:
4. The plaintiff did not have knowledge that the proper defendant was Class Welding Pty Ltd until after the creditor's meeting in 2016: [60]-[61], [71], [125]. Accordingly the proceedings were not out of time. (per Leeming JA):
5. Given that "facts" may be reasonably held beliefs for the purposes of s 50D, the discovery of contrary information allows for a belief to change: [120]-[124]. (ii) as to the second issue (Per Basten JA, Macfarlan JA agreeing, and Leeming JA):
6. Given that limitation questions should generally not be decided in interlocutory proceedings, and there was a real question of fact or law to be decided, the primary judge erred in summarily dismissing the proceedings: [62], [71], [126].

Judgment

1. BASTEN JA: Gaetano Murgolo was seriously injured whilst working on a building site at Miranda Public School. The injury occurred on 19 January 2012. On 25 May 2018 Mr Murgolo (the plaintiff) commenced proceedings in the Common Law Division against, relevantly for present purposes, AAI Ltd, the insurer of the company which he believed was the employer of two workmen whose negligence was said to have led to his injury.
2. On 23 October 2018 AAI Ltd (the insurer) sought to have the proceedings struck out on the ground that they had not been commenced within the limitation period specified in Pt 2, Div 6 of the Limitation Act 1969 (NSW).
3. On 18 April 2019 N Adams J, in a carefully reasoned judgment, upheld the insurer's motion and summarily dismissed the proceedings against it. She ordered that the plaintiff pay the costs of the insurer's motion. On 15 November 2019 the last order was varied to include all of the insurer's costs of the proceedings. [1]
4. The plaintiff challenges the dismissal of his claim. It is common ground that the summary dismissal of the proceedings was an interlocutory order for the purposes of s 101(2)(e) of the Supreme Court Act 1970 (NSW) and accordingly the plaintiff needed leave to appeal. This matter was listed for a concurrent hearing of the leave application and, if leave were granted, the appeal.
5. The insurer opposed a grant of leave on the basis that the proposed appeal was hopeless. That submission cannot be accepted, for a number of reasons which will be explored more fully below. The reasons are, (i) the proceedings should not have been dismissed unless the conclusion that they were untenable was very clear and there was no real question of fact or law to be determined; (ii) care should always be taken before upholding a limitation defence in advance of a trial where there are factual issues to be explored; (iii) the construction and application of s 50D of the Limitation Act are by no means straightforward. Two further reasons support a grant of leave: first, although the order was interlocutory in legal terms, as a practical matter it disposed of the applicant's claim and, secondly, the Court had already accepted in related proceedings that his claim was worth in excess of $940,000. There should be a grant of leave to appeal.

Issues on appeal

1. Identification of the issues raised on the appeal turns on the language of ss 50C(1) and 50D of the Limitation Act, which relevantly read as follows: 50C Limitation period for personal injury actions (1) An action on a cause of action to which this Division applies is not maintainable if brought after the expiration of a limitation period of whichever of the following periods is the first to expire: (a) the 3 year post discoverability limitation period, which is the period of 3 years running from and including the date on which the cause of action is discoverable by the plaintiff, (b) the 12 year long-stop limitation period, which is the period of 12 years running from the time of the act or omission alleged to have resulted in the injury or death with which the claim is concerned. Note. The 12 year long-stop limitation period can be extended by a court under Division 4 of Part 3. … 50D Date cause of action is discoverable (1) For the purposes of this Division, a cause of action is discoverable by a person on the first date that the person knows or ought to know of each of the following facts: (a) the fact that the injury or death concerned has occurred, (b) the fact that the injury or death was caused by the fault of the defendant, (c) in the case of injury, the fact that the injury was sufficiently serious to justify the bringing of an action on the cause of action. (2) A person ought to know of a fact at a particular time if the fact would have been ascertained by the person had the person taken all reasonable steps before that time to ascertain the fact. (3) In determining what a person knows or ought to have known, a court may have regard to the conduct and statements, oral or in writing, of the person. …
2. These sections were introduced into Pt 2, Div 6 of the Limitation Act in 2002 as part of a suite of legislative amendments to the law governing claims for damages for personal injury, the bulk of which are to be found in the Civil Liability Act 2002 (NSW). These sections have not been amended since they commenced on 6 December 2002.
3. It may be observed that there are two periods specified in s 50C(1); the 12 year long-stop limitation period (which may in some circumstances be extended) is not engaged in the present case. This case depends upon identification of the date on which the cause of action against the insured company was "discoverable" by the plaintiff.
4. The issue in dispute may be shortly stated: the injury suffered by the plaintiff resulted from two workers undertaking activities on a building site for a different contractor, dislodging an "acrow prop" which fell and hit the plaintiff. The identity of the workers was known, as was the fact that they were employed by a business known as "Class Welding". The plaintiff sought to bring proceedings against their employer. The question was when did the plaintiff first know the identity of the employer?

Factual and procedural background

1. The principals of "Class Welding" were two men, Mario A Zammit and Mario P Zammit, who operated a business through companies of which they were each directors. Relevantly for present purposes, there were two companies, Class Welding Pty Ltd ("Class Welding") and Class Welding (NSW) Pty Ltd ("Class Welding (NSW)"). It was assumed that one, but only one, of these companies had contracted to undertake work at Miranda Public School with the head contractor, Proline Building Commercial Pty Ltd ("Proline"). The plaintiff's case now is that Class Welding was the party which contracted with Proline and employed the two workers whose negligence led to the plaintiff's injury.
2. There is no dispute that shortly after the accident in 2012, the appellant was fully aware of the injury that he had suffered and that it was sufficiently serious to justify the bringing of an action, thus satisfying pars (a) and (c) of s 50D(1). He had that knowledge at a point prior to 19 February 2013 when solicitors instructed by the appellant commenced proceedings against Class Welding. On 21 June 2012 members of Class Welding had appointed a liquidator. No leave of the court had been obtained pursuant to s 500(2) of the Corporations Act 2001 (Cth) to commence the proceedings; however, a copy of the statement of claim was sent, by way of service, to the liquidator. No leave was subsequently sought because proceedings against Class Welding were abandoned. Class Welding was later deregistered.
3. The significance for present purposes of the proceeding commenced in 2013 is that it provided an evidential basis for the insurer to assert that the plaintiff knew "the fact" that his injury was caused by the fault of Class Welding no later than the date on which the 2013 proceeding was commenced, for the purposes of s 50C(1)(b).
4. Shortly after commencing that proceeding, the plaintiff's solicitors discovered that Class Welding had public and products liability insurance with GIO General Ltd at the date of the accident. On 12 March 2013 the solicitors served GIO General with a copy of the statement of claim. On 10 April 2013 Moray & Agnew advised the plaintiff's solicitors that they acted for GIO General, and sought further information in relation to the claim.
5. On 26 June 2013 Moray & Agnew wrote again enclosing a number of documents and noting that their "understanding, based on the material listed above and enclosed with this letter is that the works carried out at the Miranda Public School were carried out by Class Welding (NSW) Pty Ltd rather than the original defendant sued, that being Class Welding Pty Ltd." They noted that Class Welding (NSW) was not in liquidation. The letter continued: "In the circumstances the proposed amendment to substitute GIO General Ltd for the existing defendant is of little utility but ultimately that is a matter for you to resolve on instructions from your client."
6. The first of the enclosed documents was a letter from Proline to "Class Welding (NSW) Pty Ltd" providing details of the contract requirements for the work to be undertaken. The second document, also prepared by Proline, was a schedule to a "trade contract agreement" which identified Class Welding (NSW) as the contractor, providing the ABN 74 125 758 769. The third document was a "safe work method statement" also prepared in the name Class Welding (NSW), by its director, Mr M P Zammit. It identified as the supervisor on site a Mr Younan in respect of whom there was later evidence that he was an employee of Class Welding, as was a second worker who signed the document. Fourthly, there was a subcontractor's safe work method statement checklist dated 20 October 2011 which also identified the subcontractor as Class Welding (NSW).
7. On 26 June 2013, the plaintiff's solicitors replied to Moray & Agnew demanding advice as to "which company was undertaking the work on the day of the injury, Class Welding Pty Ltd, Class Welding (NSW) Pty Ltd or both; and their respective roles."
8. On 27 June 2013 Moray & Agnew responded somewhat tartly to the "demand" and stated, amongst other things: "If the plaintiff was to successfully join GIO General Ltd ("GIO") in place of Class Welding Pty Ltd, we anticipate that we would file a defence suggesting that it was Class Welding (NSW) Pty Ltd that was doing the work given that the documents we supplied to you yesterday all suggest that was the position. If you were to provide us with evidence that suggested otherwise we might have to reconsider that position."
9. On 16 July 2013 a further letter from Moray & Agnew advised that the present respondent, AAI Ltd, had assumed responsibility for the former liabilities of GIO General.
10. The appellant's solicitors changed course and, on 27 August 2013, obtained leave to file an amended statement of claim replacing Class Welding with Class Welding (NSW), the amended statement of claim being filed the same day.
11. In February 2014 the appellant obtained a default judgment against Class Welding (NSW) and ultimately an award of damages in an amount of over $940,000. On 27 March 2014 a statutory demand was issued, which was not met. On 11 August 2014 Class Welding (NSW) was placed into liquidation.
12. Some 19 months later, on 11 March 2016, a meeting was held of the creditors of Class Welding (NSW). Mr Tayyar, the solicitor with Fortis Law Group having carriage of the plaintiff's claim, attended the creditor's meeting at which the directors of Class Welding (NSW) (who were also the directors of Class Welding) asserted that the contractor had been Class Welding.
13. On 12 February 2019, Mr Safi, who was the solicitor to whom Mr Tayyar was responsible, swore an affidavit stating that Mr Tayyar had left the firm in August 2018. After noting the statements of the directors at the creditors' meeting of Class Welding (NSW) Mr Safi continued: "38. It was not until 11 March 2016 and following receipt of the report of minutes of the meeting dated 14 March 2016, that it was ascertained that Class Welding Pty Ltd was most probably the correct defendant in these proceedings. 39. On 10 August 2016 Class Welding Pty Ltd was deregistered. 40. On 26 August 2016 I directed Mr Tayyar to arrange for evidence to be compiled to strengthen the forensic case against Class Welding Pty Ltd."
14. Mr Safi also noted that on 26 August 2016 he had sent an email requesting documents which the directors had agreed at the meeting to provide, listing the categories of document. In a second affidavit, dated 19 February 2019, Mr Safi noted that he had later discovered that the firm was "in possession of some of the documents requested from the liquidator on 26 August 2016. This was an inadvertent oversight." The documents were attached, but no information was provided as to when the firm had obtained them.
15. The first of the documents in evidence was a "subcontractor's statement", dated 19 December 2011 stating that Class Welding "has entered into a contract with Proline …." Mr M A Zammit signed a declaration to the effect that Class Welding had worker's compensation insurance and was up to date with payroll tax obligations.
16. The second and third documents were invoices issued by Class Welding in relation to two of the three employees who had worked on the Miranda Public School site, demonstrating that they were employees of Class Welding and not Class Welding (NSW). The next two documents were invoices issued by Class Welding to Proline for progress payments, including bank accounts details for Class Welding. (The waters may have been somewhat muddied by the fact that the first and third documents provided the ABN for Class Welding (NSW); the employee invoices carried the correct ABN for Class Welding.)
17. At the time of the appellant's accident, Class Welding had both worker's compensation insurance and public liability insurance.

State of plaintiff's knowledge

1. There was no oral evidence before the primary judge. As a result, the evidence as to the plaintiff's knowledge was limited. There were, of course, facts alleged in the 2013 statement of claim, which was verified. As both parties accepted, it did not need to be verified under the applicable rules of court; more importantly, it was verified by the solicitor, not the plaintiff. A significant volume of correspondence and other material was annexed to an affidavit of the insurer's solicitor, Mr Brian Moroney of Moray & Agnew. He attached a statement signed by the plaintiff and dated 2 October 2018. The statement included the following: "22. I understand from working on the site for over four months, that Class Welding Pty Ltd (Class Welding) were contracted by Proline to erect scaffolding and acrow props at the school."
2. This statement may have provided some evidence of a belief on the plaintiff's part as to the employer of the men who caused his injury. However, the basis of the opinion or belief was not usefully identified and there is no reason to suppose that he was distinguishing between the two corporate entities potentially involved.
3. On 12 February 2019 the plaintiff swore an affidavit which included the statement that he "[i]n or about February 2012, I attended Fortis Law Group formerly known as Kacir Safi & Halligan and provided instructions to Zak Tayyar with respect to the incident on 19 January 2012." [2] The statement included, as part of the instructions given at that time, the following: [3] "On or about 19 January 2012, people who I knew to be or were to [sic] referred to as Class Welding were on Site supplying and installing the metal roofing and purlins devices known as 'acrow props'".
4. This statement may also be understood as providing some evidence of the plaintiff's beliefs and knowledge in February 2012. Again, however, the language used is vague (and is likely to be the lawyer's words) and neither provides information as to the source of the knowledge or belief, nor any attempt to distinguish between the two corporate entities which might have been known as "Class Welding".
5. That was the totality of the direct evidence indicating the plaintiff's knowledge in the period from January 2012 until the proceedings were discontinued in August 2013.
6. There may have been an inference available that the plaintiff was advised by Mr Tayyar as to the information he had obtained, which apparently led him to identify Class Welding as the relevant employer, rather than Class Welding (NSW). (Mr Safi did not disclose any role in that decision.)
7. The plaintiff's affidavit of 12 February 2019 referred to a conference in which Mr Tayyar asked him "whether he could file the statement of claim against Class Welding." The plaintiff said that he agreed to that. [4] He also referred to a telephone conversation in which Mr Tayyar "advised me that we had sued the wrong Class Welding and he told me that he going to change the name on the Claim [sic]."
8. According to Mr Safi, in his affidavit of 12 February 2019, Mr Tayyar ceased to work with Fortis Law Group on 1 August 2018; Mr Safi said he had had "no contact with Mr Tayyar nor have we communicated" since that date. [5] Mr Safi also stated that he had been informed by the plaintiff that "on or about 19 January 2012, Class Welding Pty Ltd ACN 003 796 825 … was engaged as contractor for Proline at the site…". [6]
9. Mr Safi did not state when the plaintiff told him that; in any event, the statement, in lawyer's language, was unlikely to have been the statement in fact made by the plaintiff. If the plaintiff knew the ACN (which is highly implausible) there is no information as to how and when he obtained that knowledge. Mr Safi stated that "[t]he plaintiff was at all time [sic] compliant with our advice and requests." [7]
10. Mr Safi also referred to a conference with Mr Baran of counsel, apparently in June 2013, "where we were advised that the proceedings be amended to substitute as the defendant, Class Welding (NSW) Pty Ltd." [8] Mr Safi did not assert that the plaintiff had any role to play in that decision, or that he (the plaintiff) was informed of the basis of the proposed change in defendant.
11. It is not clear how this affidavit evidence was deployed at the hearing before the primary judge. However, one further matter should be noted. The final paragraph of the plaintiff's affidavit stated: "20. If I had been advised in 2013 that the correct defendant to maintain the proceedings against was Class Welding I would not have given instructions to substitute the defendant to Class Welding (NSW)."
12. Objection was taken to this paragraph and it is not clear whether the objection was ultimately ruled upon, although it was noted. [9] Mr Murgolo's affidavit also stated that the decision to recommence proceedings against Class Welding was taken after Mr Tayyar had attended the creditors' meeting of Class Welding (NSW). That information was admitted without objection.

The legal test in s 50D(1)

1. While the language of s 50D(1) is beguiling in its simplicity, there are circumstances where its application is fraught with difficulty. There are a number of considerations to address in this case.
2. First, the critical question to be addressed in determining when the relevant limitation period commenced to run requires identification of what the injured person knows or ought to know of certain "facts". The question of what the prospective claimant ought to have known does not arise in the present case; there was no dispute that by immediately taking steps to instruct solicitors to act for him, the plaintiff had in fact taken all reasonable steps to ascertain relevant facts, for the purposes of s 50D(2). The present significance of s 50D(2) is that it contains implications that some facts may only be reasonably ascertainable with professional assistance and that there may be facts which involve an element of professional judgment.
3. Secondly, it follows that the concept of knowing a fact must be understood to include opinions or beliefs formed on the basis either of direct observation (and experiences) or of information supplied by others and accepted by the prospective claimant.
4. Thirdly, the concept of knowledge (that which is known) is inherently contextual. To a scientist, it may be the best current working hypothesis which has not been falsified. In the Limitation Act, it obtains its colour from its purpose, which is (at a high level of generality) to define when, balancing the interests of the injured person and the putative wrongdoer, the limited time within which a claim may be made should begin to run. That requires the identification of a position on a spectrum from baseless speculation to rational conviction.
5. Further, the point on the spectrum of levels of conviction as to a particular fact must be determined by the purpose (more precisely identified) for which knowledge is required. That purpose is to identify the time at which it is reasonable to require that a person should consider the commencement of proceedings, within the ensuing three years. That means that the level of conviction need not be as high as that required to commence proceedings, because a limitation period based on discoverability specifies the time within which to decide whether or not to commence proceedings. On the other hand, to warrant further investigation there must also be a reasonable conviction that upon further investigation the factual basis of the claim is likely to be strengthened by the collection of evidence, rather than undermined by further inquiries. In some cases, particular features, such as the apparent seriousness of the injury, and the cost of further investigations, may affect that assessment.
6. Fourthly, the question identified in the section has a temporal element: it requires the identification of "the first date" on which a person knows something. Where there is a process of investigation in order to determine a fact, the level of conviction as to the existence to the fact may vary over the course of the investigation. But even to state the issue in that way assumes there is a fixed process of investigation which will be completed at a particular point, rather than an ongoing process of inquiry which may give rise to fluctuating results, with no clear date at which the process is concluded.
7. This point can be illustrated by reference to subs (1)(c), dealing with the sufficient seriousness of the injury. Under the Motor Accidents Compensation Act 1999 (NSW), for example, the entitlement to claim non-economic loss for an injury suffered in a motor vehicle accident depends upon an assessment of permanent impairment. Medical practitioners and assessors are fully cognisant of the difficulty in determining whether a person's level of disability has stabilised. Until it has, it may not be possible to answer the question posed in subs (1)(c). Similar questions arise with respect to work injury damages, such as those suffered by the present plaintiff. [10]
8. The fact that s 50D(1) requires the court to determine the "first date" that the plaintiff knew something does not necessarily mean finding the first date on which the plaintiff believed that he knew something. Especially may that be so where the 'something' is a composite fact, such as the identity of the defendant or a causal connection between the injury and the defendant's act, or the characterisation of the defendant's act as involving fault. Each of these "facts" is encompassed by par (b). The identity of the defendant may not always be a composite fact, but it can be so described in a case where there is more than one possible defendant. In the present circumstances, the relevant "fact" required the determination of which of two potentially responsible parties was the employer of the two workers. That fact cannot be known until discovery of the existence of two companies, the contract with Proline and the employment arrangement of the workers. A belief based on ignorance of the choice to be made does not constitute relevant knowledge for the purposes of s 50D(1).
9. Fifthly, the question of knowledge is to be assessed when the defence that the claim is out of time comes to be resolved. The question is whether, at that time, the evidence establishes that what the claimant firmly believed at one point in time was false; if so, can it be said that, at that point in time, he knew the particular fact? That question arises with some regularity in circumstances where the relevant fact is an inference drawn from other circumstances which were, at an earlier time, uncertain or unknown. Similarly, if the claimant relies upon information supplied by another person, is his supposed state of knowledge vitiated by the lack of a factual basis for the information?
10. Once proceedings are commenced, different factors may enter into the equation, as they did in 2013 in relation to the first proceedings. Thus, if it appears on further investigation that the proceedings were commenced against the wrong party, for example, it may be appropriate, even necessary, to discontinue those proceedings promptly so as to avoid incurring costs, including costs which the defendant may seek to recover if proceedings are not abandoned promptly.
11. Experience suggests that the requirements of par (b), perhaps because they are multiple and of different kinds, are far more difficult to apply than the facts identified in (a) and (c). However, the reasoning adopted above can be illustrated by reference to the requirements of those paragraphs as to the existence and seriousness of an injury. Suppose, for example, that a worker who has been exposed to industrial dust consults a doctor about what he believes to be bronchitis. The doctor is concerned that he may have a more sinister complaint and carries out tests which indicate he has a form of lung cancer. Six months later, he consults a solicitor as to whether he has a cause of action in personal injury and is advised to have the tests repeated as his symptoms have abated. On repetition, the test results are negative, so he does not proceed with a personal injury claim against a former employer. He is, however, advised to have the test again if symptoms return. When the symptoms return two and a half years later, the test is repeated and is positive; the indicators of cancer are present. Medical evidence suggests that the indicators must always have been present and that the second test was a false negative. Three years and six months after the first (positive) diagnosis, he commences proceedings. He should not be precluded from suing by the three year limitation period, because, having regard to the purpose of the provision, it would be wrong to treat the plaintiff's knowledge as frozen at the point when he had the first positive diagnosis and to disregard the subsequent medical advice.
12. Of course, a different result might be achieved if, having obtained a positive diagnosis, he failed to act for a period of three years before obtaining the second (negative) diagnosis.
13. In short, it is true that the court must determine a fixed point in time at which a claimant knew certain facts; it does not follow that the first date on which the claimant thought he knew those facts was frozen in time as the relevant date, regardless of subsequent events revealed in the evidence. If that reasoning were wrong, and the only relevant fact was the first date on which the plaintiff thought he knew a fact, virtually all the subsequent evidence admitted without objection in the present case would have been irrelevant. That proposition should not be accepted.
14. This analysis demonstrates the inappropriateness of the submission for the insurer, accepted by the primary judge, that one cannot "unknow" something for the purposes of s 50D(1). That language assumes that a belief formed at a particular point in time is the sole and sufficient factor constituting knowledge for the purposes of s 50D(1). That is a false assumption.
15. Finally, there is a question whether, by focusing on the knowledge of the prospective plaintiff, the section envisages that the plaintiff will bear the prejudice of a misjudgement by his or her professional advisers. It is not necessary to pursue that question in the present case; it is sufficient to assume that the plaintiff was kept informed as to his solicitor's knowledge.

Application of principles

1. A critical step in the reasoning of the primary judge was expressed in the following terms: "[77] Turning to the first question, I am satisfied that Mr Murgolo believed that a case against Class Welding could be established on the balance of probabilities by the commencement of the 2013 proceedings at the latest. This means that I am satisfied that he knew of the relevant facts in s 50D(1)(b) of the Limitation Act at least five years prior to the commencement of the 2018 proceedings. I have based this finding on the following evidence."
2. In support of this proposition, the primary judge reasoned that acting in accordance with his obligations under the Legal Profession Act 2004 (NSW), s 347 and his verification of the allegations in the pleading, it may be inferred that the solicitor believed that the plaintiff had a case against Class Welding and that he commenced proceedings "based on instructions from Mr Murgolo." [11] She further relied upon the document signed by the plaintiff on 19 February 2013 and his evidentiary statement dated 2 October 2018. [12] She concluded that on the plaintiff's own case he "knew" Class Welding was the defendant as at the date of the accident. Addressing the changes in position which occurred over time, the judge further stated: "[82] Although it is to be accepted that a plaintiff can be wrong about who the defendant should be either prior to proceedings being commenced or during them, I am unable to accept the plaintiff's position that he 'knew' the relevant fact shortly after the accident, apparently 'un-knew' it at the time that Class Welding was removed as the defendant in the 2013 proceedings and then later still 'knew' it again sometime after the creditors' meeting in 2016."
3. The reasoning of the primary judge was consistent with the submissions put to her by senior counsel for the insurer, who maintained a similar position in this Court. There are however difficulties with accepting that reasoning.
4. First, the evidence revealed that there were in fact two possible employers of the negligent workmen, Class Welding and Class Welding (NSW). Given the relevant context, one cannot find that the plaintiff knew that the proper defendant was Class Welding, when he did not know of the existence of Class Welding (NSW).
5. Secondly, it is not known on what basis the plaintiff's solicitors originally decided that the employer of the apparently negligent workers was Class Welding. The judge made no finding as to that matter. It is possible, even probable, that they did not know of the existence of Class Welding (NSW) at the time proceedings were instituted.
6. The evidence did, however, reveal the basis upon which the solicitors changed their mind, although there was only the slimmest of inferences that the plaintiff knew or understood in 2013 why there was to be an amendment of the statement of claim. It is clear from the letter of 26 June from the plaintiff's solicitors to Moray & Agnew that they were then uncertain as to which company was undertaking work on the day of the injury. The request to Class Welding's insurer produced no substantive answer. The basis for the change in direction in August 2013 was the provision by the insurer of Class Welding of four documents, under cover of its letter to Fortis Law Group dated 26 June 2013.
7. Viewed as a whole, the evidence did not support an affirmative finding that the plaintiff had, in 2013, formed an opinion as to which of the two companies was in fact the employer of the workers he believed had been negligent. The only finding reasonably open on the untested material was that he relied on his solicitors. The only material that the solicitors are known to have had in August 2013, led them to conclude that Class Welding (NSW) was the employer and that their earlier assumption that it was Class Welding was mistaken. In the absence of evidence to the contrary, it should be inferred that the plaintiff's solicitors did not know of the existence of Class Welding (NSW) until they were provided by Moray & Agnew with the documentation referring to that company, on 26 June 2013. Before that date, their belief that Class Welding was the plaintiff's employer depended on the false negative assumption that there was no other contender. Once that assumption was falsified, the belief was abandoned. Given the absence of proof that the solicitor's had an informed view as to the employer, it is not necessary to consider whether the plaintiff's reliance on his solicitors allows their knowledge to be attributed to him for the purposes of s 50D(1).
8. As explained above, what a person thought he or she knew at a particular time may, when that belief comes to be assessed at a later point in time, be shown not to be a sufficient belief to satisfy the provision. Thus, viewed from the perspective of the trial, the plaintiff's belief as to the identity of the defendant in June 2013 (such as it was) was based on the false premise that there was no other potential defendant. When he came to know that there was another potential defendant, he changed his belief, because, it should be inferred, the available information pointed to the second company as the proper defendant. He did not then know of the material which suggested that the first company was in fact the proper defendant. His knowledge as to the proper defendant, as he correctly submitted, cannot have arisen until the further information was obtained in 2016. The insurer failed to prove that the proceedings were out of time.

Appropriateness of summary disposal

1. There is another basis upon which the same outcome could be supported. As the trial judge correctly noted, an application for summary dismissal of proceedings should only be upheld if the question is a clear one and there is no real question of fact or law to be determined. [13] As the primary judge further observed, quite correctly, "limitation questions should generally not be decided in interlocutory proceedings except in the clearest of cases". [14] There is, however, a possible qualification to that concern: the limitation period in question in Wardley commenced to run at the time the cause of action accrued, which was not until actual loss or damage was sustained. [15] The calling of evidence as to loss or damage would have been an essential feature of the trial and would not readily have been fully understood absent evidence of the wrongful conduct said to give rise to the loss or damage. The warning in Wardley was expressed in terms of "limitation questions of the kind under consideration", and need not be applied generically without appropriate reference to the factors in play under the legislative provision engaged in the particular case. Nevertheless, it may be doubted whether the judge gave sufficient weight to the caution necessary on such a summary dismissal application. In the result, a careful analysis of the evidence might have revealed that the insurer's case was deficient in a number of respects in establishing aspects of the knowledge said to have existed in June 2013. Furthermore, for the reasons set out above, there are questions of law involving the interpretation and operation of s 50D, the answers to which are by no means clear cut.
2. Those observations will not apply equally in all cases involving these provisions. There may be a valuable economy of resources to be achieved by disposing of proceedings which are clearly out of time without the need for a full trial. However, this was not such a case. Accordingly, the application should have been dismissed on this alternative basis.

Conclusions

1. Legislation introducing ss 50C and 50D derived from the Review of the Law of Negligence - Final Report published in September 2002 by a committee chaired by the Hon David Ipp. The report recommended adopting a "date of discoverability" approach, which gave sufficient flexibility to allow fairness to the prospective plaintiff, with a relatively brief non-extendable period, which provided a degree of certainty to potential defendants. The flexibility built into the commencement date was thought to render it "unnecessary and indeed undesirable to give the court a discretion to extend the limitation period." [16] The amendments therefore removed the discretionary power to extend time, based on the range of relevant circumstances which operate in cases not governed by ss 50C and 50D, in accordance with s 60E. However, the removal of that discretionary power may not have achieved the degree of certainty and predictability which the report envisaged. That is for two reasons which inhere in the current legislation.
2. First, the Report itself may have misunderstood a central aspect of its recommendation, if the recommendation were faithfully reproduced in the legislation, which appears to be the case. The report stated: "6.28 The fact that the test proposed for determining the date of discoverability is objective will make it easier to prove when the date for commencement of the limitation period occurs. The date of discoverability is not when the claimant in fact discovered the damage and that the damage was caused by the negligence of another, but rather when a reasonable person in the claimant's position should have made the discovery. Accordingly, the evidence about what individual plaintiffs knew will carry less weight, as the date of discoverability will depend on what a reasonable person in the plaintiff's position would have known, and not what the plaintiff personally knew."
3. That description reverses the apparent operation of s 50D. Section 50D(2) has been understood to mean that the objective test is only engaged if the person has not taken all reasonable steps to ascertain a particular fact. [17] A plaintiff, like Mr Murgolo, who seeks legal advice promptly after being injured and is compliant with his lawyer's instructions will have taken all reasonable steps. Accordingly, the test in his case is not objective, but subjective, turning on what "the person knows" of each of the identified facts. That is commonly the case. Because a potential defendant will often not know what the potential claimant knows, a large degree of certainty is missing.
4. Secondly, the Report, while identifying a series of critical "facts" gave insufficient consideration to the different kinds of "facts" identified. Paragraph (a) was primarily directed to allowing the flexibility necessary in the case of a latent injury, which may leave the victim symptom free for many years. By contrast, the concept of "fault" in par (b) immediately gave rise to difficult questions, almost inevitably requiring professional advice, as, for example, with respect to the possibility of an alternative method of conducting an activity, consistently with the exercise of reasonable care. [18] Where professional advice was required, the section was simply silent as to how the professional advice was to be attributed to the plaintiff's subjective knowledge, and as to how the negligence or mistakes of the professional adviser might affect the outcome.
5. Because of the variable factors affecting the commencement date of the period, some of which require evaluative judgment, the provisions have been aptly described as giving rise to a "floating limitation period", with varying degrees of uncertainty as to its commencement date. Accepting that these factors may undermine the element of certainty and predictability which were hoped to flow from the reforms, it is nevertheless not appropriate to adopt simplistic concepts of "knowing" and "unknowing".
6. For the reasons set out above, the appeal must be allowed and the judgment below set aside.

Orders

1. The Court should make the following orders: 1. Allow the appeal and set aside order (1) made on 18 April 2019 and order (2) made on that date as varied on 15 November 2019. 2. In place thereof, order that: 1. the notice of motion filed by AAI Ltd on 23 October 2018 be dismissed, and 2. AAI Ltd pay Mr Murgolo's costs of the motion. 1. Order that the respondent pay the appellant's costs of the proceedings in this Court.
2. MACFARLAN JA: I agree with the orders that Basten JA proposes, and with his Honour's reasons. I add the following observations.
3. The decisions in Vines v Djordjevitch (1955) 91 CLR 512 at 522; [1955] HCA 19, Unilever Australia Ltd v Petrevska (2013) 85 NSWLR 677; [2013] NSWCA 373 and the decisions to which I referred in Unilever (at [27] to [33]) support Basten JA's conclusion that what constitutes knowledge of a fact can in particular cases, such as the present, be a matter of some complexity. In Unilever, for example, the Court held that although the worker had earlier believed that her employment had caused her hearing loss, she did not become "aware" that it had until she received medical advice to that effect. In that case, I said at [34] (with the concurrence of Meagher JA and Tobias AJA) that: "because the determination of the cause or causes of sensorineural hearing loss ordinarily requires the application of medical expertise, the opinion of a medically unqualified worker about that issue will rarely be of value, or amount to knowledge of that worker that his or her hearing loss has been caused by the worker's noisy employment."
4. Likewise in the present case, the belief that Mr Murgolo arguably had when his solicitors commenced proceedings against Class Welding on his behalf that that company was the employer of the workers responsible for his injury did not mean that he knew that as a fact at that time. As Basten JA points out, there were a number of other matters, such as whether he knew that there were two Class Welding companies (see [57]), that were relevant to that issue.
5. LEEMING JA: Mr Gaetano Murgolo claims that on 19 January 2012 he was injured when an acrow prop on a building site in Miranda collapsed. At the time, he was the sole director and sole employee of Hysela Constructions Pty Ltd, which contracted with Proline Building - Commercial Pty Ltd ("Proline") to provide services including bricklaying and concreting on construction sites. On the same site, employees of another company, which appears to have been known as "Class Welding", had erected scaffolding and acrow props. Prima facie, that other company was vicariously liable for any negligence by its employees. But what was the other company's identity? In State of New South Wales v Gillett [2012] NSWCA 83 at [95] this Court noted that "[m]any cases come before the courts where a plaintiff is unaware of the identity of the actual employer". This is another case where the knowledge of the plaintiff as to the employer's identity is the critical issue.
6. I agree with the orders proposed by Basten JA, and with his reasons. Although what follows emphasises different aspects of the facts and the law, I do not think anything is inconsistent with Basten JA's judgment. I write separately in part because the issues are of general application, and in part because of what underlay Lord Reid's observations in Broome v Cassell & Co Ltd [1972] AC 1027 at 1084 as to the utility of separate judgments in a developing area of the law, views which reflected his experience of the contrasting practices in the House of Lords and the Judicial Committee of the Privy Council: see Lord Reid, "The Judge as Law Maker" (1972) 12 JSPTL 22 at 29. This interlocutory appeal cannot and should not decide many of the issues arising under ss 50C and 50D of the Limitation Act 1969 (NSW), which are quite complex and which are destined to recur. James Lee's counter-intuitive observation is apt: "Although it may seem that a single judgment might be of benefit to the lower courts, in reality it is likely to detract from the interpretative exercise of the principled development of the law": J Lee, "A Defence of Concurring Speeches" [2009] Public Law 305 at 324-325.

Class Welding Pty Ltd and Class Welding (NSW) Pty Ltd

1. The evidence establishes that there were two companies which might readily go by the name "Class Welding": Class Welding Pty Ltd and Class Welding (NSW) Pty Ltd. I shall refer to those companies as CW and CW(NSW). I am conscious that doing so introduces an artificial dissimilarity, divorced from the imprecision seen in the documents and what presumably was equally imprecise on site in 2012.
2. CW was incorporated in 1989 while CW(NSW) was incorporated in 2007. The companies have different ABN's and ACN's: those of CW end with "825"; those of CW(NSW) end with "769". It is an offence of strict liability for a company not to set out its ABN or ACN on any public documents: Corporations Act 2001 (Cth), s 153. It will be seen below that the ABN used on contemporaneous documentation, even documents prepared by CW itself, is an unsafe guide. On more than one occasion, a document on the letterhead of CW included the ABN of CW(NSW).
3. There were in January 2012 many similarities between the companies aside from their names: 1. Both had the same two directors: Mr Mario Albert Zammit and Mr Mario Peter Zammit. 2. Both shared the same registered office at Bella Vista. 3. Both had the same principal place of business in Wetherill Park. 4. In both cases, 50% of the shares were held by Mario Albert Zammit and the other 50% by Mario Peter Zammit (the share structure was different, in that CW has issued class A shares as well as ordinary shares, while CW(NSW) has merely issued ordinary shares; if this made any material difference to any aspect of their operations, it was not disclosed by the evidence). 5. Mario Albert Zammit was a secretary of both companies, although Mario Peter Zammit was also a secretary of CW. Once again, it is difficult to see how this could have made any material difference to their operations.
4. Subsequently, winding up orders were made in respect of CW and CW(NSW), although that occurred in quite different ways. 1. Mr Bruce Gleeson was appointed liquidator of CW by a members' resolution on 21 June 2012. In a way which is sadly familiar in the construction industry, the evidence showed that there were insufficient funds to pay employees and other priority unsecured creditors, and to that end the Commonwealth contributed $25,028.16, most of which was paid to employees. The evidence is that CW was deregistered on 10 August 2016. 2. Mr Andrew Wily was appointed liquidator of CW(NSW) on 11 August 2014 seemingly on the application of Mr Murgolo, who had obtained default judgment against that company on 20 February 2014 and had served a statutory demand on 27 March 2014 which was not satisfied.
5. There was one further significant difference between CW and CW(NSW). GIO General Ltd issued a certificate of currency in favour of its insured CW for the period 4 February 2011 to 4 February 2012 in respect of, inter alia, public liability insurance, in the amount of $20,000,000. The terms of the policy were not in evidence. It appeared to be common ground that CW(NSW) had no insurance which answered any claim against it by Mr Murgolo, and that CW's policy did not respond to his claim against CW(NSW). The litigation has been conducted on the basis that the respondent AAI Ltd succeeded to the liabilities of GIO General.

Three sources of primary facts

1. As Basten JA has explained, on 19 February 2013, Mr Murgolo commenced proceedings against CW, then in liquidation, and without seeking or obtaining leave, contrary to s 471B of the Corporations Act. It is well settled that the contravention did not render the proceedings a nullity: Re Testro Bros Consolidated Ltd [1965] VR 18; Re Sydney Formworks Pty Ltd [1965] NSWR 646; Bell Group Ltd v Westpac Banking Corp (2000) 104 FCR 305; [2000] FCA 439.
2. The most important matters bearing upon which of two similarly named corporate entities employed the "Class Welding" men at the Miranda site in January 2012 will, at least in the pre-litigation phase to which s 50D is directed, be the contemporaneous documents. Mr Murgolo's solicitors became aware of such contemporaneous documents in three main stages.
3. First, by letter dated 13 February 2012, Proline wrote to Mr Murgolo's solicitors, denying that it was liable as an employer (because it had contracted with his company Hysela) but saying that the incident "was the result of a contractor on a Proline site failing to secure an acrow prop" and continuing: "Please note, the contactor's who's acrow prop fell was Class Welding Pty Ltd of [address], please see attached their Public Liability insurance details." [sic]
4. Secondly, in June 2013, after proceedings had been commenced by Mr Murgolo against CW, and in the context of an application to join the insurer pursuant to s 6 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), Moray & Agnew acting for the insurer supplied four documents suggesting that the works had been carried out by CW(NSW), as follows. 1. A letter attaching various documents on the letterhead of Proline and dated 21 September 2011 was addressed to CW(NSW). 2. A "Trade Contract Agreement - Schedule" on Proline's letterhead describes the works as "to supply, fabricate and install all metalwork as per plans and specifications…" and quotes a contract price of $61,290.52 plus GST. The company name was given as CW(NSW) with the correct ABN of an 11 digit number ending in "769". The contact name is "Mario Zammit". 3. A "Safe Work Method Statement" likewise refers to CW(NSW) and gave that company's ABN ending with 769. it appears to have been signed by Mr Mario P Zammit, and also by Mr Ninos Younan, who was described as "Supervisor on site". Mr Younan, Mr Joseph Shalo and another man signed the document confirming they had read and understood it. I shall return to Mr Younan and Mr Shalo below. 4. A "Subcontractor/Supplier Safe Work Method Statement Checklist", once again a Proline document, identified the subcontractor in hand as CW(NSW). It appears to have been completed by someone performing contract administration on behalf of Proline. It was dated 20 October 2011.
5. By a further letter dated 27 June 2013, Moray & Agnew maintained that the firm had provided "all of the contemporaneous records available to us", and confirmed that the firm's interpretation was that CW(NSW) was doing the work. It will be noted that all four documents appeared to have been drafted by Proline.
6. However, the evidence discloses that there was considerably more contemporaneous documentation bearing upon the identity of the employer of the men who installed the acrow prop, including documents prepared by officers or employees or agents of CW and/or CW(NSW). It seems that this was only provided to Mr Murgolo's solicitors in August 2016, in response to a request made at a creditors' meeting earlier that year, after Mr Murgolo had obtained default judgment against CW(NSW). Those documents included the following. 1. Two payslips apparently reflecting work done by two employees on the site, Mr Younan and Mr Shalo. Both were dated 26 January 2012. Each refers to an "annual salary" and gives a cheque number. Each was issued under the name of CW. The ABN on each payslip was that of CW, ending in 825. 2. There were also two tax invoices in the amounts of $10,375 and $45,204.28 issued to Proline, dated 15 December 2011 and 26 March 2012. Each was issued under the name CW to Proline. However, each gave as the ABN of CW an 11 digit number ending in 769, which is the ABN of CW(NSW). Those invoices give the electronic funds transfer details as an ANZ bank account at Wetherill Park with the account name of "ClassWelding Pty Ltd". 3. A "Subcontractor's Statement regarding Workers Compensation, Payroll Tax and Remuneration" dated 19 December 2011 and apparently signed by Mr Mario Albert Zammit identified the subcontractor as "Class Welding Pty Ltd ABN: 74 125 758 769 of [address] Wetherill Park NSW 2164". Mr Zammit made a declaration that he was "a person authorised by the subcontractor on whose behalf this declaration is made" and stated that the "above mentioned subcontractor" maintained workers compensation insurance, and nominated a particular policy number and attached a certificate of currency dated 7/12/2011. The document stated that a subcontractor who provided a written statement which was false was guilty of an offence. The document also contained a warning that the statement "must be accompanied by the relevant Certificate of Currency to comply with section 175B of the Workers Compensation Act 1987." That section renders the principal contractor liable for the payment of any workers compensation premiums payable by the subcontractor unless a written statement has been given by the subcontractor to the principal contractor under that section. 4. It will be seen that despite the legal significance of the document, the named subcontractor was CW but the ABN was that of CW(NSW).
7. This is not the first time that deceptively similarly named companies have been brought into existence in the construction industry: see by way of recent examples Naumcevski v Deputy Commissioner of Taxation [2019] NSWCA 72 and BH Australia Constructions Pty Ltd v Kapeller [2019] NSWSC 1086. As noted in Naumcevski at [17], it might be expected that company directors who owned and controlled companies called Class Welding Pty Ltd and Class Welding (NSW) Pty Ltd would be careful when signing documents on behalf of one company as opposed to the other. But why the confusing corporate structure was established, and why care was not, so it seems, taken by those who established CW and CW(NSW) is not presently in issue. What matters is the position from the perspective of Mr Murgolo and his lawyers, which may be summarised thus.

Summary of the information as it became available to Mr Murgolo

1. The two companies created by Mr Mario Albert Zammit and Mr Mario Peter Zammit gave rise to a real potential for confusion and dispute in the event that scrupulous care was not taken in distinguishing CW from CW(NSW). Seemingly, insufficient care was taken by those preparing documents on behalf of those companies, including in confusing company name and ABN.
2. Mr Murgolo's solicitor was initially told by Proline that CW had done the work on the site. On the one hand, Proline might be thought to have known the company with which it had contracted. On the other hand, at that stage there is no good reason to think that Proline had turned its mind to the distinction between CW and CW(NSW) which has become so important now that both have been wound up and only one was insured. Following receipt of that advice, Mr Murgolo commenced proceedings against CW.
3. Some months later, Mr Murgolo's solicitor was told by Moray & Agnew, acting for CW's insurer, that in light of "all of the contemporaneous documents available to us", CW(NSW) had done the work. Moray & Agnew indicated that if CW's insurer was joined, "we anticipate that we would file a defence suggesting it was [CW(NSW)] that was doing the work". At that stage, CW(NSW) was substituted for CW as defendant to the existing proceedings. The proceeding was undefended, and in due course default judgment was obtained.
4. Much later, after 3 years had passed, Mr Murgolo's solicitor obtained documents which suggested that CW had done the work. CW's insurer, by its solicitors Moray & Agnew, having played a role in dissuading Mr Murgolo from maintaining proceedings against CW in 2013, now said that it was too late for Mr Murgolo to sue CW.

Legislative regime

1. Basten JA has reproduced the relevant parts of ss 50C and 50D of the Limitation Act 1969 (NSW). They apply to causes of action for personal injury or death accruing on or after 6 December 2002. The structure and the text are worthy of note.
2. The structure of the provisions departs from the previous regime. For the previous 12 years (for causes of action for personal injury accruing on or after 1 September 1990) there had been a three year period from the accrual of the cause of action, subject to discretionary extension: s 18A(1)(b) and ss 60C and 60E. (Before 1990, it was a six year period subject to discretionary extension.)
3. Under the current regime, a limitation defence for personal injury claims is now available after the expiration of the earlier of a (relatively short) 3 year "post discoverability" limitation period and a (relatively long) 12 year long-stop limitation period. The second period starts when the cause of action accrues, but the first period only starts when the cause of action is "discoverable" by the plaintiff. That will ordinarily be later in time, perhaps much later. Further, the 12 year long-stop limitation period can itself be extended in certain circumstances: see Division 4 of Part 3 where s 62B confers a broadly worded discretion. I shall return to the significance of this new structure below.
4. The 12 year long-stop limitation period presents no difficulties of construction. Not so the 3 year post discoverability limitation period. Despite its simple language describing when a cause of action is "discoverable" and thus when the three year period commences, s 50D(1) gives rise to a series of difficult questions of construction.
5. First, each of paragraphs (a), (b) and (c) identify a single "fact" which is known or ought to have been known by the plaintiff. The fact, while singular, must be understood as describing "a composite of inferences or the result of an evaluation", as Basten JA observed in Baker-Morrison v State of New South Wales (2009) 74 NSWLR 454; [2009] NSWCA 35 at [27], or "an evaluative judgment", as Meagher JA observed in Baggs v University of Sydney Union [2013] NSWCA 451 at [13]. I do not regard there to be any difference of substance between those two descriptions.
6. The composite nature of the "fact", in the case of s 50D(1)(b), has two distinct dimensions. 1. One flows from the threefold nature of the paragraph, whereby the singular "fact" incorporates causation, fault and identity. It is in sharp contrast with the separate "material facts" comprising "the identity of the person against whom the cause of action lies" and "the fact that the negligence nuisance or breach of duty causes personal injury" in s 57B(1)(b)(ii) and (iii) (which apply to pre-2002 causes of action). 2. The second is that each of causation, fault and identity is itself an evaluative conclusion, to be derived from primary facts. (In some decisions, reference has been made to the "key factors": see Baker-Morrison at [39] and Gillett at [94]; once again, I do not regard the different language as material.) It is obvious that causation and fault are themselves conclusions from primary facts, and so too, as this appeal well illustrates, is the identity of the corporate defendant.
7. I should elaborate why the element of the "fact" in s 50D(1)(b) which is central to this appeal, the identity of the defendant, is a conclusion which is not without its own complexity. Sometimes a plaintiff is injured and cannot identify a defendant. One example arises in cases for preliminary discovery "to sufficiently ascertain the identity or whereabouts of a person ... for the purpose of commencing proceedings against the person" under Uniform Civil Procedure Rules (2005) NSW, r 5.2. Another is a claim against the Nominal Defendant following a hit-and-run motor vehicle accident. But such cases are quite removed from the present facts. Here the only question was who was the employer of the "Class Welding" men on the Miranda site in January 2012. That is a question of law, turning on the particular artificial person which is vicariously liable for any tortious conduct of the men on site. And as it turns out, that question is a very precise one, involving a distinction between two separate albeit deceptively similarly named companies controlled by the same two men who were less than meticulously careful in distinguishing their companies.
8. The matters mentioned above depart from what might be thought to be the ordinary connotation of a "fact" in the real world - something which is objective, verifiable and relatively certain.
9. Secondly, the primary facts which contribute to the conclusions of causation, fault and identity may not all become known to a plaintiff at the same time. They may become known over a period of time. Where the primary facts point in different directions, the conclusion which is fairly to be drawn from those known at any particular point in time may differ from the conclusion to be drawn at a different time.
10. Thirdly, the "facts" identified in s 50D include conclusions which are apt to be in issue in many cases. Many defendants deny breach of duty, and deny that any breach caused loss or injury to the plaintiff. In many cases, those denials will be anticipated or have been foreshadowed before litigation commences. In such cases, the facts will only be established after trial, by the decision of a court and the issue estoppels created by it. After all, litigation is replete with surprises. Witnesses not uncommonly fail to come up to proof, and provide unexpected answers to questions in examination in chief or in cross-examination. Section 50D is to be construed in a context involving disputed claims as to conclusions to be drawn from primary facts, and on conventional principles a court should strain against giving it a construction which substantially denudes it of operation.
11. Fourthly, there are large questions as to the legal meaning to be given to "know" in s 50D. In what circumstances is the knowledge of someone other than the plaintiff imputed to the plaintiff - the section is silent in relation to parents, guardians, tutors, attorneys and solicitors? And what is required by "knowledge"? For the purposes of this appeal, which turns on when something is "known" and whether it may be "un-known", the first question may be passed over.
12. In some contexts, knowledge may be contrasted with belief and expectation. As Chesterman J said in Australian Hospital Care Pty Ltd v Swinbank [1999] QCA 247 at [9]: "Knowledge and expectation are both states of mind but are different and necessarily inconsistent. An expectation is a belief falling short of knowledge. It stands in contrast to knowledge."
13. But in some contexts knowledge and belief substantially overlap. Take the knowledge of a negative fact, namely, the knowledge that the identity of a motor vehicle could not be established, which enables a plaintiff to proceed against the nominal defendant. As Macfarlan JA observes, this was considered in Vines v Djordjevitch (1955) 91 CLR 512 at 522; [1955] HCA 19, where the joint judgment said: "The fact to be known is not a physical event or thing. It is negative in character, namely, the impossibility of establishing what car it was that caused her injuries. It is therefore a question of opinion or belief."
14. The distinction between positive and negative facts goes straight to one important difference between the current and former regime. Under the former regime, an extension of time was available three years after the cause of action for personal injury had accrued, if the plaintiff established a negative, namely, that "any of the material facts of a decisive character relating to the cause of action was not within the means of knowledge of the applicant" until the last year of the three year period: s 58(2)(a). Under the current regime, the 3 year post discoverability limitation period commences when the plaintiff "knows" or ought to know each of the three "facts" identified in s 50D(1).
15. That is to say, under the former regime, the onus rested on the plaintiff when seeking an extension of time to show an absence of knowledge on the part of the plaintiff. Under the current regime, the onus rests on the defendant when asserting a limitation defence to show a presence of knowledge on the part of the plaintiff more than 3 years before the proceedings were commenced.
16. Sometimes "know" and "knowledge" are binary. It is commonplace to say that a person either knows or doesn't know a particular fact. A plaintiff may either know or not know the occupier of a building, or whether a structure which collapsed causing injury had been built in accordance with the applicable standards. But "know" and "knowledge" can also refer to an opinion or belief, and in such cases there may be considerable refinements. Dixon J said in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361; [1938] HCA 34, immediately after the more famous statement about the tribunal of fact feeling an "actual persuasion", that "an opinion that a state of facts exists may be held according to indefinite gradations of certainty". This point was elaborated in Vines v Djordjevitch at 522: "The word 'know' is used in the provision in an ordinary sense, without any intention that it should be analysed or refined upon. But of course there are gradations of knowledge or belief upon such a matter. The gradations extend from a slight inclination of opinion to complete assurance. Here it seems to amount to an awareness or consciousness that no reasonable probability exists of ascertaining the identity of the car satisfactorily or with any certainty. Complete assurance is by no means necessary. When the plaintiff has come to think that the identity cannot be established that is enough. If the expression 'think' must be refined upon, it may be said to mean that the steady preponderance of his opinion or belief is that it cannot be done."
17. The gradations of knowledge and belief to which the High Court referred may be seen in many areas of the law. For example, the law has long held those who assist with knowledge in a fiduciary's dishonest and fraudulent design as accountable to those to whom the fiduciary duty was owed, and has developed an elaborate framework of "actual" and "constructive" knowledge: see Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [171]-[178]. Thus a third party with knowledge of circumstances which would indicate a breach of fiduciary duty to an honest and reasonable person is regarded as "knowing" of that breach for the purposes of being accountable for "knowing receipt", but merely having knowledge of circumstances which would put an honest and reasonable person on inquiry is insufficient. Examples in civil and criminal law could readily be multiplied.
18. Some aspects of s 50D have been resolved by decisions of this Court. For example, it is established that the objective aspect of the test, "ought to know", requires asking what the plaintiff should have inquired, as opposed to what the plaintiff should have been told: Baker-Morrison at [59], confirmed in Gillett at [99]-[104].

The respondent's submissions

1. The respondent's submission had the advantage of simplicity. It said that the purpose of ss 50C and 50D was to require a plaintiff to commence proceedings within three years after he or she knew or ought to have known of the facts giving rise to the cause of action, and thus it was sufficient if there was a belief which would entitle a plaintiff to commence proceedings including the certification, as occurred in the present case, to the effect that there were reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that the claim for damages in these proceedings has reasonable prospects of success: see (former) Legal Profession Act 2004 (NSW), s 347 and Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2 cl 2. That of course falls a long way short of what might ordinarily be understood to be knowledge of loss caused by the fault of the defendant. But it is a construction which is supported by the context that in most contested cases one or more of causation, fault and identity of the defendant will be in issue and it will not, prior to the certainty imposed by the court's judgment, be possible to know whether or not those matters are made out, in the conventional sense of that word.
2. It was on that basis that the respondent contended that the present was a sufficiently clear case for determination in advance of trial. Mr Murgolo had in fact commenced proceedings against CW in 2013. It followed according to the respondent that the cause of action was discoverable in 2013, in a way which was sufficiently clear-cut to warrant the limitation defence being determined in advance of the trial, contrary to the admonition in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 533; [1992] HCA 55 that such points not be decided in interlocutory proceedings in advance of trial "except in the clearest of cases".
3. The respondent's submissions went slightly further, relying on additional facts (including an evidentiary statement signed by the appellant). But this was not qualitatively different from its main point.
4. The respondent also contended that one could not "un-know" a fact for the purposes of s 50D. The point was that because a statement of claim had been filed, what followed thereafter could not affect the applicant's knowledge. The submission was accepted by the primary judge at [81]-[82] as follows: "Mr Murgolo's argument on this motion for summary dismissal was that he did not really know that Class Welding was the defendant until the creditors' meeting on 11 March 2016 at the earliest. The difficulty with this contention is that it requires the court to make a finding that although Mr Murgolo 'knew' that Class Welding was the defendant by 19 February 2013 at the latest, that he subsequently changed his position and, for the purposes of s 50D(1)(b) of the Limitation Act, he 'un-knew' it by the time his solicitor amended the 2013 statement of claim to remove Class Welding as the defendant in the proceedings on 25 August 2013. Although it is to be accepted that a plaintiff can be wrong about who the defendant should be either prior to proceedings being commenced or during them, I am unable to accept the plaintiff's position that he 'knew' the relevant fact shortly after the accident, apparently 'un-knew' it at the time that Class Welding was removed as the defendant in the 2013 proceedings and then later still 'knew' it again sometime after the creditors' meeting in 2016."
5. The respondent defended that reasoning in this Court: "What is sought to be argued is that in the events that have happened somehow, and consistent with s 50C and 50D that knowledge was set aside because of the intervening facts and in my respectful submission that's a complete fallacy. It cannot happen because that's not the way the section operates. Once it's triggered, it's a bit like setting a fuse off on a bomb. You can't turn it off."

Consideration

1. There is a superficial attraction to the respondent's submissions that (a) when Mr Murgolo sued CW in 2013, he had sufficient belief that CW was the defendant to satisfy the knowledge requirement of s 50D(1)(b), and (b) that once known, his knowledge could not be "un-known" for the purposes of the statute. But I have concluded that neither proposition is sound.

Knowledge that CW was the defendant involved knowledge of CW and CW(NSW)

1. First, contrary to the first aspect of the respondent's submissions, the knowledge of which of CW and CW(NSW) was the defendant includes, in the facts of this case, a knowledge that that "fact" involved a distinction between two similarly named companies. One cannot know that CW, as opposed to CW(NSW), was the defendant without knowing that those two companies existed. Test the matter this way. Suppose in answer to the question, "Who was the President of the United States of America who defeated Al Gore?" someone said "Bush". That is not sufficient to answer the question. And if the person answering was unaware that George Bush and his son George W Bush had both held office, then I would not consider him or her to "know" the answer.
2. Vary the facts underlying this appeal slightly, and suppose that Mr Murgolo's solicitors commenced proceedings against "Class Welding". He may well have been entitled to do so pursuant to UCPR r 7.20, which authorises proceedings against a person which carries on a business under an unregistered business name to be commenced by identifying the defendant as that name. Rules 7.20(1) and (2) provide: "(1) Proceedings against a person in respect of anything done or omitted to be done by the person in the course of, or in relation to, a business carried on under an unregistered business name may be commenced against that person, as defendant, under that name. (2) For the purposes of any such proceedings, the unregistered business name is taken to be a sufficient description of that person."
3. Service could readily be effected by personal service upon either of Mr Mario Albert Zammit or Mr Mario Peter Zammit. Quite quickly an issue would arise as to whether "Class Welding" denoted CW or CW(NSW). In that case, it is clear that the mere fact of commencing proceedings cannot give rise to knowledge that CW was the defendant. I find it difficult to see how the fact that proceedings were commenced against "Class Welding Pty Ltd" makes the position radically different for the purposes of s 50D.
4. There is nothing to suggest that when Mr Murgolo commenced proceedings against CW, he was aware of CW(NSW), just as there is nothing to suggest that Proline was aware of that distinction. Considerations of that nature lead me to conclude that Mr Murgolo's commencing proceedings does not entail that he "knew", for the purposes of s 50D, that CW was the defendant, in circumstances where it is not shown that he knew that CW(NSW) even existed and might have been involved in activities on the Miranda site. Insofar as the respondent points to other evidence bearing on Mr Murgolo's knowledge in early 2013, including an evidentiary statement, the position is no different.

Facts can be "un-known" for the purposes of s 50D

1. Secondly, contrary to the second aspect of the respondent's submissions, "facts" can be "un-known" for the purposes of s 50D.
2. It must be borne in mind that a "fact" in s 50D is something very different from a fact in the real world. It must also be borne in mind that "knows or ought to know" in s 50D is very different from "knowledge" in the real world. In order to make sense of the provision, in a context in which the "facts" involve issues of causation, fault and identity which are themselves contestable conclusions from primary facts, it is necessary to recall that the "fact" is a conclusion and "knowledge" is accordingly something falling short of what as a matter of ordinary parlance might be described as knowledge. The facts are conclusions which are drawn from primary facts which will themselves become known from time to time and which may be disputed. I see no difficulty in construing the ordinary English word "know" in the context of s 50D to involve a question of opinion or belief.
3. But that dilution of the legal meaning of "know" carries with it consequences. It is entirely possible that one may have a reasonably held belief on one day, but when new primary facts come to light, that belief may no longer be tenable.
4. This happens in litigation all the time. One expert's opinion may be refuted by another's, until a further report in reply explains a new basis for holding the original view.
5. Another way of explaining why I do not accept the respondent's submission is this. On the one hand, the respondent's construction dilutes the statutory requirement of knowledge to something like a reasonably held belief. I agree that knowledge in s 50D does not involve the certainty which is associated with knowledge of facts in the real world; here, as in Vines v Djordjevitch, complete assurance is unnecessary. On the other hand, the respondent's submission then seeks to return to the statutory language of "know" and "fact" to rely on an aphorism about the impossibility of un-knowing a "fact" in the real world. The respondent cannot have it both ways.
6. Once it is appreciated that knowledge of the "facts" in s 50D is satisfied by a reasonably held belief in the conclusions identified in that section, it is clear that when further information is provided, a belief that might formerly have been reasonably held may cease to be. It follows that the critical reasoning of the primary judge at [81]-[82] reproduced above cannot be sustained. The issue is not whether Mr Murgolo "un-knew" the identity of the defendant in 2013 and then in 2016 "knew" it again after the creditors' meeting. The question turns instead on Mr Murgolo's belief from time to time in light of the additional primary facts which became available. The material summarised above comfortably sustains the possibility that there was an insufficiently certain belief from mid-2013 until 2016 to proceed against CW, which altered when further material was provided in 2016.
7. That suffices to identify material error in the dispositive reasoning of the primary judge. It also demonstrates that this was not a sufficiently clear-cut case to warrant determination on an interlocutory basis in advance of trial.

Other decisions relevant to the construction of s 50D

1. I am conscious that there are aspects of the construction of s 50D which are left unresolved by that reasoning. But given the limited nature of the parties' submissions, and the fact that the issue may arise once more, this time at a final hearing, I do not think it is appropriate to express any concluded views on them.
2. The problems which arise under ss 50C and 50D are far from novel. The decisions to which Macfarlan JA referred in Unilever Australia Ltd v Petrevska (2013) 85 NSWLR 677; [2013] NSWCA 373 at [27]-[33] will be of assistance, to which I would add Gardiner v Motor Vehicle Insurance Trust (1955) 95 CLR 120 at 126-128; [1955] HCA 57. In particular, Field v Field is an unreported decision of this Court of 21 October 1981, dealing with the legal meaning of "know the fact" in a context similar to the present, the predecessors of the sections which are now ss 57B and 58 of the Limitation Act 1969 (NSW). The decision is not on CaseLaw. While parts may be found in the LexisNexis unreported judgments service (it is BC8111013), that service omits not only the concurrence of Glass JA, but also the entirety of page 8, which is the critical page of the reasons. Awareness of the judgment would probably have assisted the parties and the primary judge. For my part, I only discovered the judgment after writing most of these reasons, and would have been assisted by finding it sooner. Copies are not readily available, so I have reproduced the passage at the end of these reasons.
3. The "steady preponderance of opinion" mentioned by the joint judgment of the High Court of Australia in Vines v Djordjevitch has been applied in contexts not dissimilar from the present by Davies JA in Wood v Glaxo Australia Pty Ltd [1994] 2 Qd R 431 at 442, by Ambrose J (with whom McPherson JA and Moynihan J agreed) in Machan v Comalco Aluminium Ltd [1995] QCA 372 and by Keane JA (with whom Holmes JA and Wilson J agreed) in Castillon v P & O Ports Ltd (No 2) [2008] 2 Qd R 219; [2007] QCA 364 at [38].
4. The fact that the 12 year long-stop limitation period will eventually apply, even if the discoverability period never commences, bears upon the construction to be given to the knowledge to which s 50D refers.
5. Finally, aspects of ss 50C and 50D resemble the so-called "discovery rule" which is applicable in the United States to some actions under both federal and state law. Some of the decisions on federal claims, which commence with United States v Kubrick 444 US 111 (1979), may be reached via the reasoning in Morales-Melecio v United States 890 F 3d 361 (1st Ct). Standard texts address the claims under state law. In particular, the structure of a limitation period which is the shorter of a (short) period from discovery or a (longer) period from occurrence is also seen in the United States: see V Schwartz et al, Prosser, Wade and Schwartz's Torts (11th ed, Foundation Press, 2005) p 619, citing Tenn. Code Ann. s 29-26-116 (2004).

Annexure: Extract from Field v Field (New South Wales Court of Appeal, 21 October 1981), per Reynolds JA, Hope and Glass JJA agreeing "I would commence by giving consideration to the question of what facts were within the appellant's knowledge on the date specified by the respondents, 14th February, 1980. In this case no question arises as to the facts which it is alleged ought to have been known so it is simply a question of them being known. The use of the expressions 'know the fact' and 'knowing those facts' occasion some difficulty. Obviously there are gradations of knowledge. Some facts are plainly known to a person and cause no problem. If the physical happenings constituting the occurrence were seen and remembered by the plaintiff there is no difficulty in saying he knows those facts. If his injury causes him pain and disability he, of course, knows that. If search discloses the ownership of a motor vehicle of a particular registered number, it is not difficult to say he knows the fact of ownership. However, when the fact is only capable of establishment by the acceptance of qualified expert opinion the matter is not at all clear. It cannot be that the material facts in general and those enumerated in s 57(1)(b) are confined to those matters which are known by the direct observation of the person whose means of knowledge is in question and that these facts alone are to be interpreted, explained or amplified by "appropriate advice". The nature of the material facts included in the definition precludes this view. When the knowledge alleged depends upon the statements of others and in particular the statement of opinion of others, some test needs to be applied in order to answer the question whether it can fairly be said that he knew it because he was told it. The submission that the mere expression of an opinion that a fact exists means that the person to whom it is communicated knows that fact is untenable. It cannot rationally accommodate the case where diametrically opposed opinions are offered and accords a premium value to that opinion which is fortuitously first communicated. It seems to me that at one end of the scale a statement may emanate from such a source and in such circumstances that the person to whom it is communicated can fairly be said to know the fact asserted in the statement. The example of the result of a search as to ownership of the motor vehicle, which I have cited earlier, would seem to fall into such a category. Similarly, I would think that an unqualified opinion by an appropriate medical specialist that there was a relationship between a physical disability and an accident could, in general, result in the plaintiff knowing that there was such a relationship. In these cases, the plaintiff knows one thing for certain, that the maker of the statement has asserted the fact but he does not, in the same sense, know the fact asserted. In my view, the appropriate test in such cases is that suggested in Vines v Djordjevitch 91 CLR 512 at 522, ie whether the statement made in the circumstances would convey to a reasonable man that the fact exists. In my opinion, the word 'know' when used in s 57(1)(e) is used in an ordinary sense and as the High Court said in the case just referred to, 'without any intention that it should be analysed or refined upon'."

Endnotes

1. Murgolo v AAI Ltd t/as AAMI (No 2) [2019] NSWSC 1567.
2. Affidavit, 12 February 2019, par 4.
3. Affidavit, par 5(b).
4. Affidavit, par 8.
5. Affidavit, par 9.
6. Affidavit, par 10(b).
7. Affidavit, par 19.
8. Affidavit, par 26.
9. Tcpt, 20/02/19, p 3(4).
10. Workplace Injury Management and Workers Compensation Act 1998 (NSW), ss 313 and 314.
11. Judgment at [78].
12. The judgment at [80] refers to the date "2 October 2008", but that is clearly a clerical error.
13. Judgment at [57].
14. Judgment at [60], referring to Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 525 (and, more specifically, at 533); [1992] HCA 55.
15. Wardley at 525.
16. Report, par 6.27.
17. Baker-Morrison v State of New South Wales (2009) 74 NSWLR 454; [2009] NSWCA 35 at [57].
18. Baker-Morrison at [18], [26], [37].

Amendments 01 September 2020 - [98] - Ellipsis inserted in quotation after "whereabouts of a person". [103] - "Chesterman JA" replaced by "Chesterman J". [117] - In second sentence, "by using the identifying" replaced by "by identifying". [131] - In second sentence, "from" deleted after "in". 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. Decision last updated: 01 September 2020