NSW Sugar Milling Co-Operative Limited v Michael Gortley Cheetham

Court of Appeal (NSW)|2002-03-05|Before: Mason P, Meagher JA, Einstein J, Mr J

Reported Decision : (2002) Aust Torts Reports 81-650

CITATION : NSW Sugar Milling Co-Operative Limited v Michael Gortley Cheetham [2002] NSWCA 50 FILE NUMBER(S) : CA 40135/01 HEARING DATE(S) : 10/12/01 JUDGMENT DATE : 5 March 2002

PARTIES : NSW Sugar Milling Co-Operative Limited (Appellant) Michael Gortley Cheetham (Respondent) JUDGMENT OF : Mason P at 1; Meagher JA at 2; Einstein J at 3

COUNSEL : Mr J D Hislop QC, MJ Gollan (Appellant) KW Andrews (Respondent) SOLICITORS : Dexter Healey (Appellant) Kalpage & Co. (Respondent) CATCHWORDS : Practice and Procedure - Leave to appeal - Extension of limitation period in which to bring proceedings for damages for personal injury arising from industrial deafness suffered during employment - Whether just and reasonable to extend limitation period - Whether inadequate weight given to prejudice occasioned by claimant if limitation period extended - Proper construction of s60G(2) of the Limitation Act 1969 (NSW) - Relevant consideration of putative defendant's position Banking Act 1974 (Cth) LEGISLATION CITED : Factories (Health and Safety Hearing Conservation) Regulation 1979 Limitation Act 1969 Bates v Endrey-Walder (unreported, 30 July 1998, NSWCA, BC 9804812) BHP Steel (AIS) Pty Ltd v Lakovski (unreported, 24 November 2000, NSWCA, BC 200007381) [2000] NSWCA 334 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 CASES CITED: CSR Ltd and NSW Sugar Milling Co-op Ltd v Rendell (unreported, 7 August 1996, NSWCA, CA40090/96, BC 9603437) George v The Estate of the late Harry Richard Bailey (1998) AustTortsR 81 - 455 Holt v Wynter (2000) 49 NSWLR 128 Sydney City Council v Zegarac (1998) 43 NSWLR 195 Talga Ltd v MBC International Ltd (1976) 133 CLR 622 DECISION : The application for leave to appeal should be upheld. The appeal should be upheld.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA NO 40135/01 MASON P, MEAGHER JA, EINSTEIN J

5 MARCH 2002 NSW SUGAR MILLING CO-OPERATIVE LIMITED V MICHAEL GORTLEY CHEETHAM

JUDGMENT 1 MASON P: I agree with Einstein J. 2 MEAGHER JA: I agree with Einstein J. 3 EINSTEIN J: The Application 4 There is before the Court an application by the claimant for leave to extend the time for filing a summons for leave to appeal from the decision of the trial judge. The trial judge granted an application by the opponent for an extension of the time within which the opponent could bring proceedings for damages for personal injury arising out of industrial deafness acquired during his employment with the claimant. The opponent had sought the subject extension of time pursuant to section 60G of the Limitation Act 1969 [" The Limitation Act "].

The central question of principle 5 The central question of principle concerns the proper construction of section 60G(2) of the Act which provides: "If an application for an order under this section is made to a court by a person claiming to have a cause of action to which this section applies, the court, after hearing such of the persons likely to be affected by the application as it sees fit, may, if it decides that it is just and reasonable to do so , order that the limitation period for the cause of action be extended for such period as it determines". [Emphasis added] 6 Section 60I of the Act provides as follows: "(1) a court may not make an order under section 60G or 60H unless it is satisfied that: (a) the plaintiff: (i) did not know that personal injury had been suffered; or (ii) was unaware of the nature or extent of personal injury suffered; or (iii) was unaware of the connection between the personal injury and the defendant's act or omission, at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted, and (b) the application is made within 3 years after the plaintiff became aware (or ought to have become aware) of all 3 matters listed in paragraph (a) (i) - (iii).

The trial judge's reasons 7 The evidence before the trial judge established that the opponent had been employed by CSR Limited between 1969 and 1978 at the Harwood Sugar Mill on the Clarence River in northern New South Wales and thereafter by the claimant following the claimant's acquisition of the mill. 8 Clearly as the trial judge recognised, a necessary part of the opponent's claim, if the opponent is ultimately to succeed, is for the opponent to prove that his industrial deafness was in whole or in part caused by noises to which he was exposed as a consequence of the activities of the claimant during the course of his employment with the claimant. 9 The trial judge held that the opponent had satisfied section 60I(1)(a)(iii) of the Act in that the plaintiff had been unaware of the connection between the personal injury and the claimant's act or omission at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted. This holding which is not sought to be challenged if leave to appeal be granted, was based upon the proposition that it was sufficient for the opponent to show that the opponent was unaware of precautions and other safety measures which could have been, but were not taken at the relevant time, in terms of relieving the opponent of the risks of industrial deafness or taking appropriate measures to protect him against them. In this respect, the sources of the employer's obligation which had been relied upon by the opponent, involved both the Australian Standard 1269 (1976) and the report of the Commonwealth Acoustics Laboratory, known as CAL 19. The first time when, on the trial judge's holding, the opponent was informed of the existence and content of the Australian Standard and the Commonwealth Acoustics Laboratory Report, was in November 1997, a point in time following the expiration on 30 June 1993 of the six-year limitation period. 10 The decision of the trial judge turned on the question of whether or not it was just and reasonable within the meaning of section 60G(2) for an order to be made extending the limitation period. The claimant seeks leave to appeal on the basis that this exercise of the court's discretion is said to have miscarried in failing to give adequate weight or to have adequate regard to the prejudice which the claimant asserts would be occasioned to it if the limitation period be extended. 11 The trial judge carefully examined the submissions put by the claimant in support of a suggested conclusion that there was a risk of an unfair trial to the claimant if the extension of time sought was granted and the proceedings commenced. Clearly the trial judge treated with each of the circumstances proven in his attempt to determine whether, by allowing the proceedings to commence, the claimant would be exposed to the risk of an unfair trial. No error of principle is shown in relation to the trial judge's recognition of the appropriate principles expressed by him in the following passage: "It [referring to section 60G(2)] is that part of the Act which is understood to require a successful applicant to show that the granting of an extension of time would not cause prejudice to the prospective defendant in the conduct of the proceedings. The judgment of the High Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 has been refined, if that is the appropriate word, by the New South Wales Court of Appeal in the case of Council of the City of Sydney v Zegarac (1998) 43 NSWLR 195. The question which the Court must ultimately result in addressing the question of prejudice, is whether by allowing the proceedings to commence, the defendant would be exposed to the risk of an unfair trial. It is clear nonetheless, despite the shift in emphasis from the specific term prejudice to the concept of unfairness, that the general considerations underlying those terms are very similar and that the concern of both the High Court and the New South Wales Court of Appeal has been to underline the need to examine very closely the question of whether a prospective defendant, by being called upon to defend a matter which falls outside the limitation period, is exposed to the risk of some prejudice or unfairness as a consequence". 12 In substance the trial judge held that the evidence given by the opponent to the effect that his period of National Service undertaken prior to his leaving New Zealand to come to Australia, as well as his exposure to noise during the course of his earlier period of employment with CSR Ltd, constituted a prejudice confronting the claimant in now meeting the claims sought to be made the subject of the proposed proceedings. The trial judge was unable to distinguish the circumstances before him from those generally dealt with in CSR Ltd and NSW Sugar Milling Co-op Ltd v Rendell (unreported, 7 August 1996, NSWCA, CA40090/96) where this Court dealt with a hearing loss case, generally holding that it was a case where there was prejudice to the putative defendants in terms of the difficulty of unravelling the various possible causes of hearing loss. 13 In short, the trial judge's holdings were effectively that the opponent's history of having worked in noisy environments prior to commencing in his employment with the claimant might be responsible for at least the initiating causes of the opponent suffering a hearing loss and hence that a real prospect of prejudice to the claimant existed if the proceedings were commenced in terms of the risk of an unfair trial.

The claimant's suggested failure to comply with statutory obligations 14 The principal issue sought to be raised by the appeal, if leave to appeal be granted, concerns the approach taken by the trial judge to the failure by the claimant to administer a hearing test to the opponent upon his commencing employment with the claimant. The opponent's evidence was that no such test had ever been administered. 15 The argument which found favour with the trial judge was that it was inappropriate to allow the claimant to escape the possibility of having to defend the action sought to be instituted by dint of the claimant having refrained from compliance with what his Honour held to be its statutory obligations. Although the trial judge did summarise the opponent's claims in terms of the assertion that the claimant should in effect "be estopped from using prejudice as an argument in its favour", he ultimately held that the failure of the claimant to comply with what his Honour held to be the relevant statutory obligation, meant that there was no unfairness to the claimant in allowing the opponent the opportunity of testing his case by way of the extension of the limitation period. 16 In this regard the trial judge put the matter as follows: "What is being suggested in this case is that by a failure to comply with its statutory obligations the second respondent has denied itself the very source of information which would have resolved conclusively the question of whether there was hearing loss already evident at the time the applicant commenced employment with the second respondent. A clear report at that stage would have disposed of any argument about whether either National Service or the period of employment with [CSR] were the initiating cause or causes of the hearing loss or at least contributing causes to the hearing loss. It would be in my view a quite unacceptable application of the principles enunciated by the High Court and the Court of Appeal with regard to the question of prejudice, that an applicant should be denied the opportunity of demonstrating as the applicant has in this case, that such prejudice could have been removed simply by a proper compliance on the part of the respondent with its statutory obligations. If one looks at the broader principle of fairness, it would be quite inappropriate to allow a prospective defendant to escape the possibility of having to defend an action by refraining from compliance with its statutory obligations. In saying that I am not suggesting that this was in some way a preconceived or deliberate plan on the part of the respondent, but it so happens that it did not comply and it so happens that its failure to comply has now created the very prejudice of which it now complains. Surprisingly I am unable to find any authority to support that proposition but I am equally unable to find any to deny it. I am satisfied that there are real prospects of prejudice, and I accept in this regard what were put forward as very convincing arguments by Mr Gollan that there was and will be a very real difficulty confronting the second respondent in unravelling the causal contribution of these various possible contributors to the applicant's condition. Nonetheless all of those [sic] which I have decided on the facts are of any material consequence could have been isolated and their relevance accurately identified if the second respondent had complied with its statutory obligations. In those circumstances it is my view that there is no unfairness to the respondent in allowing the applicant the opportunity of testing his case by way of an extension of the limitation period" 17 Neither Counsel submitted that his Honour had a proper basis for holding that the claimant breached a statutory obligation in failing to test the opponent's hearing at the commencement of the opponent's employment by the claimant or thereafter on an annual or some other regular interval. The trial judge's finding in this regard was clearly in error.

The appropriate analysis 18 The discretion conferred upon the Court by section 60G(2) of the Act in terms of the standard imported by the words "just and reasonable" is plainly a wide discretion to be exercised in the light of all material facts and circumstances. Such a wide discretion has been said to be "a commonplace of the curial process": Talga Ltd v MBC International Ltd (1976) 133 CLR 622 at 634 per Stephen, Mason, Jacobs JJ [there dealing with the discretion conferred upon the Court by section 5(1) of the Banking Act 1974 (Cth) to hold transactions called in question by reason of failures to comply with the Banking (Foreign Exchange) Regulations, as never having being invalid if it be just and equitable that they should be treated as being valid]. 19 Notwithstanding the extensive consideration given in recent years in a number of the decided cases to aspects of the proper construction of section 60G(2), these authorities have generally focused upon an extremely close examination of the putative plaintiff's actual state of mind and/or awareness, and/or beliefs, primarily concentrating upon questions of what the putative plaintiff not only knew but ought to have known. Outside of the passage from the judgment of McHugh J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 555 set out below, virtually no consideration has been given to the putative defendant's side of the record in terms of the part which such defendant may have played in terms of creating or contributing on any parameter to difficulties which such defendant might then seek to rely upon as appropriate to be taken into account in the exercise. In short, the putative defendant asserts that notwithstanding its part played in creating or contributing to these difficulties, the same difficulties when seen in the light of the substantial delay in commencing proceedings, would prejudice such defendant in terms of achieving any likely chance of a fair trial. This is the substantive issue falling for consideration presently. 20 The passage from the judgment of McHugh J in Brisbane South at 555 reads: "… But the justice of a plaintiff's claim is seldom likely to be strong enough to warrant a court reinstating a right of action against a defendant who, by reason of delay in commencing the action, is unable to fairly defend itself or is otherwise prejudiced in fact and who is not guilty of fraud, deception or concealment in respect of the existence of the action " [emphasis added] 21 The passage from George v The Estate of the late Harry Richard Bailey 1998 AustTortsR 81 - 455 quoted by the trial judge does not materially depart form the above extract taken from Brisbane South. 22 The mischief, background and legislative history of many of the relevant portions of the Act are dealt with in detail in Sydney City Council v Zegarac (1998) 43 NSWLR 195 in the judgments particularly of Priestley and Powell JJA. The principles have also been the subject of careful consideration in Holt v Wynter (2000) 49 NSWLR 128 (where five judges of this Court dealt closely with the somewhat controversial question which had arisen as to the effect of the decision of the High Court in Brisbane South ); CSR Ltd v Rendell . Other decisions dealing with the principles and their application include BHP Steel (AIS) Pty Ltd v Lakovski (unreported, 24 November 2000, NSWCA, BC 200007381, per Meagher, Fitzgerald and Heydon JJA); Bates v Endrey-Walder (unreported, 30 July 1998, NSWCA, BC 9804812, per Handley, Beazley JJA and Sheppard AJA). 23 The trial judge clearly formed the view that the claimant's failure to administer hearing tests meant that it had denied itself what he regarded as the very source of information which would have resolved conclusively the question of whether there was hearing loss already evident at the time when the opponent commenced employment with the claimant. The holding was that a clear report at that stage would have disposed of any argument about whether either the National Service or the period of employment with CSR were the initiating cause or causes of the hearing loss or contributing causes to the hearing loss. 24 During the hearing of the application for leave to appeal close argument took place in relation to whether or not and if so in precisely what manner the claimants failure to take the measures recommended in the Australian Standard and/or in CAL 19 bore upon the instant application of section 60G(2) of the Limitation Act. 25 Mr Andrews appearing for the opponent took the Court to a number of provisions of both the Australian Standard and CAL 19 including the following: Australian Standard 1269 · "The detection of the early stage of noise-induced hearing loss is of crucial importance. Persons highly susceptible to noise-induced hearing loss will show a hearing loss quite early in their exposure history which may be detected by audiometric monitoring. By protecting such individuals in the manner referred to in this code, it is possible to avoid the danger of more serious hearing loss. Audiometric monitoring also serves as a valuable guide to the adequacy of a hearing conservation program." [Part of the "Preface" of the Standard (p 2)] · "This code describes the establishment of a hearing conservation program to protect persons who are occupationally exposed to noise. For the purposes of this code a hearing conversation program is a planned procedure to evaluate and control noise and to prevent impairment of hearing in individuals exposed to excessive noise. The components of the program are as follows: … (d) Provision of personal hearing protection and regular hearing testing if noise exposure remains excessive." ["Scope of Code" (p 5)] · "General. This Rule (5.6) applies to the audiometric testing of persons whose exposure to noise, without hearing protectors, may exceed the statutory limit. The Rule prescribes the conditions under which testing should be carried out, the forms of tests, and by whom they should be performed. It recommends the procedure for interpreting the test results, and for comparison of initial with follow-up audiograms together with the course to be adopted when deterioration of hearing is detected." [Introduction to Section 5.6 of the Standard (p 25) dealing with "Audiometry and the Assessment of Results" - see 5.6.1] · Test Results. The test results shall be made known to the person tested. Where significant hearing impairment is detected at initial or pre-employment audiometry, the person shall be requested to undergo a repeat test on a different day. If the hearing impairment is confirmed at this second examination, every encouragement shall be given to induce that person to seek specialist medical advice." [Section 5.6.4 (p 28)] · "Requirements for Audiometric Monitoring. For audiometric monitoring, the first audiogram shall be taken within 90 days of initial exposure for comparison with the pre-employment audiogram. In the absence of change, it should then be sufficient to repeat the test at yearly intervals." [Section 5.6.5 (p 28)] Commonwealth Acoustics Laboratories Report (CAL 19) · "This involves the measurement of hearing loss at the commencement of a hearing conservation programme to set the datum level and detect those who are susceptible to hearing damage." ["Reference Audiometry" (p 11)] · "Unless noise exposure has been reduced to safe levels it is advisable to check hearing at regular intervals to ensure that there has been no increased loss. The absence of such an increase is an indication that the exposure rate is sufficiently low or that protection is adequate. It is sufficient to perform this test annually, but if the worker's noise exposure increases, hearing should be tested at a shorter interval depending on the degree of increase." ["Monitoring Audiometry" (p 12)] 26 Mr Hislop QC appearing for the claimant took the Court to regulation 9 (1) of the Factories (Health and Safety Hearing Conservation) Regulation 1979 which provides: "If the Chief Inspector so directs, the occupier of a factory shall arrange to the satisfaction of the Chief Inspector an audiometric test, or medical examination relating to hearing, for a person, or all or any of the persons, employed in the factory". 27 This Regulation appears to negative any suggestion of a statutory obligation to arrange audiometric tests outside of a direction by the Chief Inspector. 28 The question arises as to whether (in the absence of appropriate evidence about common practice that would permit a finding of breach of duty of care if the procedures laid down in the Standards have not been followed) the mere existence of the Standards would permit an inference that such procedures ought normally to be followed by a prudent employer. My own view is that this question ought be answered in the negative. However where this form of evidence has in fact been adduced, a failure to comply with the Standards has the capacity of supporting the proposition that an employer' s actions had caused a trial to become unfair permitting a Court to find that it is just and equitable to order the limitation period to be extended pursuant to section 60G(2). McHugh J. was not in the above passage, listing closed categories which were not capable of being added to. The classes of conduct to which his Honour pointed in Brisbane South are capable of being extended whenever the defendant's own conduct caused or helped to cause the plaintiff's delay. 29 Ultimately however, the trial judge did not have before him evidence of the type referred to above. His Honour grounded his decision upon the incorrect proposition that the claimant had breached a statutory obligation in failing to test the opponent's hearing at the commencement of the opponent's employment by the claimant or thereafter on an annual or some other regular interval. 30 The application for leave to appeal should be granted. The appeal should be upheld. I certify that this and the preceding 11 pages are a true copy of the reasons for judgment of the Hon Justice C Einstein and the Court

5 March 2002 Associate

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Banking Act 1974(Cth)

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