Pascoe v Edsome Pty Limited & 3 Ors

LEGISLATION CITED : Workers Compensation Act 1987(NSW) - s 151D

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Guest v Southern & Anor (NSWSC, unreported 22 September 1995) Holt v Wynter (2000) 49 NSWLR 128 Itex Graphix Pty Limited v Elliott [2002] 54 NSWLR 207 CASES CITED : Morton v Jools (1992) Aust Torts Reports 81-164 McAndrew v Wyoming Nursing Home (Sperling J, unreported, 5 December 1997) McLean v Sydney Water Corportion [2001] NSWCA 122 Sophron v The Nominal Defendant (1957) 96 CLR 469 Stollznow v Calvert (1980) 2 NSWLR 749

Joe Pascoe - Plaintiff Edsome Pty Limited - First Defendant PARTIES : Solitaire Pty Limited - Second Defendant Sea Coatings (Australia) Pty Limited - Third Defendant Sea Coatings Pty Limited - Fourth Defendant

Mr D W Elliott - Plaintiff COUNSEL : Mr Gracie - First Defendant Mr D J Hooke Third & Fourth Defendants

G H Healey & Co-Sydney - Plaintiff SOLICITORS : Vardanega Roberts - First Defendant N/A - Second Defendant Ellison Tillyard Callanan - Third & Fourth Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20726/2001 - JOE PASCOE v EDSOME PTY LIMITED & 3 ORS

JUDGMENT (Leave to commence proceedings - s 151D WCA) 1 HER HONOUR: There are four notices of motion before the Court. By notice of motion (1) filed 22 December 2003 the plaintiff seeks an order that leave be granted nunc pro tunc pursuant to s 151D(2) of the Workers Compensation Act 1987 (NSW) (the Act) to maintain the within proceedings in respect of any periods of injury earlier than 17 August 1998. It is as a result of this motion not being ready for Court determination that the following motions have been filed. By notice of motion (2) filed 12 May 2006 the plaintiff seeks an order that the hearing of the defendants' motion to strike out the plaintiff's claim be deferred until the plaintiff's motion to obtain leave pursuant to s 151D of the Act is heard. 2 By notices of motions (3 and 4) filed 29 March 2006 the first, third and fourth defendants seek an order that the Amended Statement of Claim (ASC) filed on 14 February 2003 be struck out or dismissed as against them. 3 It is the plaintiff's motion (22/12/2003) that is to be heard first and if this application fails, the amended statement of claim should be dismissed against the first, third and fourth defendants. I will adopt this approach. 4 The plaintiff is Joe Pascoe. The first defendant is Edsome Pty Limited (Edsome). The second defendant is Solitaire Pty Limited (Solitaire). The third defendant is Sea Coatings (Australia) Pty Limited (Sea Coatings (Australia)). The fourth defendant is Sea Coatings Pty Limited (Sea Coatings). The first, third and fourth defendants all, variously, carried on business as Marine Constructions Services, under the trading name of "Sea Coatings". The second defendant has recently filed a notice of appearance, and a defence but has not been served with the plaintiff's notice of motion, so orders cannot be made adverse to its interests. 5 The plaintiff relied on his affidavit filed 12 May 2006, the affidavit of Cassandra Tan sworn 17 May 2005, the affidavit of Gregory Healey sworn 21 August 2006 and the affidavit of Marguerita Pascoe filed 16 November 2006 and the affidavit of Richard Frederick Spencer sworn 18 May 2006. The first defendant relied on the affidavit of Michael Roberts sworn 16 March 2006. The third and fourth defendants relied on four affidavits of Barbara Nance Ames sworn 18 May 2005, 16 March 2006, 14 September 2006, 16 October 2006 and the affidavit of Bob Grounds sworn 18 October 2006. 6 The plaintiff, his solicitor, Mr Healey and Ms Ames gave evidence and were cross examined. It is important that I record that after carefully observing the plaintiff while he was giving evidence and being cross examined I formed the view that he was giving truthful evidence. For the purposes of this application, I have taken the plaintiff's evidence at its highest. 7 The plaintiff says he was employed by Edsome from 1990 as a fulltime employee until 1996 and thereafter on a casual basis until 1999. At various times from 1987 to 1990 he was employed by Sea Coatings (Australia) and by Sea Coatings. The plaintiff was employed by Edsome at various times between the years 1990 and 1996 as a fulltime employee and thereafter as a casual employee. Between 1 July 1996 and September 1999, the plaintiff was employed by Solitaire. His duties involved the repair of seawalls and bridges. During this time he had very little exposure to dust (t 6.30). 8 When the plaintiff was employed by Sea Coatings he was exposed to asbestos for a period of twelve months. He was also exposed to thinners and solvents. (t 8.57). While he was working at the CSR site at Kurnell he was exposed to the chemical known as MEK as he was involved in cleaning things such as jackets which are placed around poles to fill in the spaces. For about 18 months he was exposed to paint fumes that were identified as Armalock. The plaintiff says that he was exposed to dirty and dangerous work conditions and no provisions were made for adequate ventilation and respiratory protection. He was exposed to epoxies at Kurnell and Pyrmont between 1987 and 1989, but this falls outside one period of employment that has been pleaded. 9 The plaintiff pleads that from 1990 to 1999 during the course of his employment with the defendants he was exposed to harmful substances and as a result he now suffers from pneumonia, pulmonary alevitis and sarcordiosis. (ASC - 14/02/2002). On 17 August 2001, the statement of claim was filed. On 22 December 2003, the notice of motion was filed seeking leave to commence proceedings. About three years elapsed until this motion was ready for hearing. The hearing of this motion commenced on 16 November 2006 and concluded on 23 April 2007. 10 Between 6 March 2002 and 21 August 2006, the Court set numerous timetables (27) to get this matter ready for trial but the plaintiff did not comply with them. The plaintiff's solicitors, G H Healey, proffered two main reasons for the non-compliance. The first was the difficulty in obtaining an experts report. The second was the deregistration of two of the defendants. The plaintiff submitted that the matter was delayed by the non-availability of expert and medical reports by reason of the plaintiff's inability to fund his expert Mr Spencer, the necessary delays in obtaining access to multiple secure industrial premises for inspection by Mr Spencer and the requirements and ultimate retirement of Dr Gianoutsos, then replaced by Dr Crawford. Leaving aside the plaintiff's limited financial resources which were also a contributing factor for the delay, the lengthy delay in preparing this matter for trial, I regret to say has been largely caused by the plaintiff's solicitor. 11 In 1999 the plaintiff developed a respiratory illness but was not aware that it was connected to his work. Between 1995 and 2001 the plaintiff did not seek legal advice as he did not know how bad his condition would become. While his doctors told him that his condition would improve, it was actually in a state of flux. He had periods off work sometimes for three to six weeks at a time. Eventually, in 2001, it was the plaintiff's father who suggested that he seek legal advice. On 9 August 2001, Mr Pascoe first consulted his solicitors G H Healey & Co (see Ex C). At that conference the plaintiff provided a history of exposure to chemical substances. He also told his solicitor that in November 1995, he jumped into the sea to retrieve his wallet and as a result of that exposure he developed pneumonia. After pneumonia he developed a condition called pulmonary alveolitis (t 4 39-57). On 17 August 2001, shortly after the plaintiff first instructed his solicitors, the statement of claim was filed. 12 Associate Professor Bryant, who had been treating the plaintiff from 15 November 1995 to 2002 expressed the view that the plaintiff was suffering from an idiopathic fluctuating condition that was unlikely to be related to his work. The plaintiff, at the initial conference with his solicitor, handed him a copy of Professor Bryant's business card. Dr Hamor, a respiratory physician also saw the plaintiff in 1995 but as the plaintiff was under the care of Professor Bryant, Dr Hamor discharged the plaintiff from his care (Ex A). Dr Hamor reported that a formal study of the plaintiff's lung function showed abnormal figures, and as a chest x-ray showed generalised fine nodular shadowings throughout both lungs the possibility of hypersensitivity pneumonitis or occupational lung disease arose. It was not until 10 March 2003 that the plaintiff's solicitor obtained a report from Professor Bryant, and that report did not support the plaintiff's case that the plaintiff's condition was work related.

The expert's reports 13 On 17 March 2003, Dr Peter Gianoutsos wrote a report on the plaintiff's condition. Mr Gianoutsos proffered the following: "It would be to my advantage, and to that of your client, if I were to have information from Dr George Hamor in relationship to the diagnosis of asthma, and from Professor David Bryant in respect of the diagnosis of sarcoidosis. All I can say at this stage is that with the medical information made available to me this man with a family history of asthma, but no overt asthma prior to coming into contact with concrete dust and a variety of chemicals during the course of his employment with Sea Coatings Australia Pty Limited, might well have acquired occupation related asthma due to the inhalation of injurious agents at his place of work whilst in the employ of Sea Coatings Australia Pty Limited. If the information that I seek can be sent to me I would be prepared to provide a supplemental report but without this information I can say nothing more at this stage". 14 On 17 November 2003, Dr Gianoutsos wrote a further letter to the plaintiff's solicitors, suggesting once again that he might be assisted with information from Dr George Hamor in relationship to the diagnosis of asthma, and from Professor David Bryant in respect of the diagnosis of sarcoidosis. Dr Gianoutsos expressed dissatisfaction with the solicitor's suggestion that the samples of the substances should be inhaled by human beings, as in his view that might potentially precipitate an asthma attack which could lead to a fatality. Dr Gianoutsos concluded his letter by identifying the "outstanding issues" as his failure to access the correspondence of Dr Hamor and Professor Bryant, that he would not be a party to human testing of batch samples of potentially dangerous substances, but that he would be willing to comment as to whether such batch samples might have caused the asthma. The reports of Dr Bryant and Dr Hamor were never supplied to Dr Gianoutsos. The reports would not have been of assistance to Dr Gianoutsos as they were not supportive of the plaintiff's claim. 15 However at [34], the plaintiff's solicitor said this: "By late 2003, Dr Peter Gianoutsos who had earlier been retained indicated in a preliminary report dated 17 November 2003,

As to whether he thought exposure to concrete dust, resins, epoxy pains , and methyl ethyl ketone , may have caused sarcoidosis thought it a 'long bow' but indicated that he would be happy to comment as to the causal connection of industrial asthma if it can be unequivocally proven that the Plaintiff was in the time alleged exposed to concrete dust, resins, epoxy pains, and methyl ethyl ketone ." 16 Italics were used by Mr Healey. Italics usually denote that the writer is quoting verbatim from another source. The italics in paragraph [34] do not precisely reflect Dr Gianoutsos' view. In any event, the main reason for the delay in Dr Gianoutsos' reports was that he was never provided with the information that he requested from the plaintiff's solicitors. 17 Richard Spencer, a chartered safety and health practitioner, was retained to provide a report on causation. On 30 and 31 October 2003 he attended the work place sites at the Kurnell Oil Wharf, CSR Sugar terminal at Pyrmont, Manly Pier, the 16' Skiff Sailing Club at Manly, Glebe Wharf, Darling Harbour Wharf and Pyrmont Bridge and Bulk Liquid Terminal, Port Botany for inspections, with the plaintiff and respective legal representatives. In 2003 and 2004, the plaintiff's solicitors made unsuccessful attempts to arrange to take samples from three of these sites for analysis (Exs D & E). 18 Mr Spencer had a commercial disagreement as to the terms of his retainer with the principal of Safety Audit Services Pty Limited. In early 2005, Mr Healey, the plaintiff's solicitor, indicated to Mr Spencer that the plaintiff would make some contribution to his fees. Mr Spencer indicated that he would conclude the report. No moneys were ever paid to Mr Spencer by the plaintiff so Mr Spencer did not afford any more attention to the report. Most recently Mr Spencer was working on a project in New Caledonia with a consultancy to a Brisbane based joint venture. When Mr Spencer was made aware that the defendants had put on a motion to strike out the plaintiff's claim and that without his report the attending doctors could not give their diagnoses, an arrangement was made between the plaintiff's solicitors and Mr Spencer. A lengthy report dated 18 May 2006 has been completed and served. Mr Spencer's fee for the report, I understand, is in the vicinity of $12,000. 19 Mr Spencer expressed the view that while he was unable to determine the exact exposure, time and frequency of chemicals and hazardous substances to which the defendants allegedly expose the plaintiff to over an estimated 4 year period, the defendants "had at their disposal a wealth of guidance and direction in respect to unsafe exposure of the plaintiff" (page 40 of report, 18 May 2006, although pages 38 and 39 of this report are missing). While Mr Spencer could not provide any opinion of the protective measures taken in respect of personal protective equipment provided he says that it would have been reasonable to expect the defendants to include a Site Safety Work Plan in preparation for contract activity, and to ensure that the supervisors and managers enforced the company's safety policy and procedures. Mr Spencer stated that "this would have resulted in all 'at risk' employees, particularly the plaintiff being protected from health hazards and from failing to wear the prescribed lung protection". 20 Mr Spencer's opinion is that the plaintiff was at significant risk in using tools and equipment as well as hazardous chemicals whilst being seemingly unprotected from the harmful effects of inhalation of said substances. He set out a number of alternatives that the defendant should have implemented in order to lessen or avoid the lung illness suffered by the plaintiff, including compliance with procedures and a regular process of hazard identification. 21 On 20 August 2006, Dr Crawford, a consultant respiratory physician, opined that the plaintiff probably has occupation related asthma and if it is accepted that the plaintiff has asthma epoxy resin, products have been documented to cause occupation related asthma (Ex B). 22 It is my view that the reports of Dr Crawford, Mr Spencer and the evidence of the plaintiff establishes that the plaintiff has a real cause of action to advance against the defendants.

The reregistration of Edsome and Sea Coatings 23 On 2 April 2003, Edsome filed an amended defence. On 30 June 2003 Edsome was deregistered. On 1 June 2005 the plaintiff (in equity proceedings 3253/2005 and 3180/2005) sought to have Edsome and Sea Coatings reinstated. On 17 July 2005, these companies were reinstated to the register. There is no real explanation as to why it took the plaintiff's solicitors so long to take this relatively simple step.

The law 24 Section 151D(2) of the Act provides: "a person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay for compensation more than three years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken." 25 The plaintiff referred to Itex Graphix Pty Limited v Elliott [2002] 54 NSWLR 207 where the Court of Appeal referred to the "dilatory conduct of the applicant (was) at the heart of the argument." The injured employee in that case was found to have failed to act diligently in the prosecution of her claim despite the fact that the bringing of her action caused no prejudice to her former employer. The delay was caused by a deliberate decision to allow the three-year period under s 151D(2) of the Workers Compensation Act to expire, on a fully informed basis, and this weighed very heavily against the injured employee. This is not the case here. The plaintiff has not made a deliberate decision to allow the limitation period to expire. 26 The court has to consider the issue of prejudice. In Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Toohey and Gummow JJ said in relation to the exercise of a similar discretion, that the real test should be, at 550: "…whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent." 27 McHugh J said, at 553-554:

"A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated… The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question". 28 The principles concerning prejudice were considered in Holt v Wynter (2000) 49 NSWLR 128, by the Court of Appeal. At [119] the Court of Appeal stated that the effect of the High Court decision in Taylor's case is that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant. However, fairness is a matter of degree. The concept of a fair trial is a relative one. To be fair, it need not be ideal - see McLean v Sydney Water Corporation [2001] NSWCA 122. 29 The defendants submitted that they have suffered prejudice, as the passage of time has resulted in them having very little documentation on the plaintiff. I accept that with the passage of time there will be presumptive prejudice. The limitation period expired at the end of 1993 at the latest. On 17 August 2001 the statement of claim was filed. Hence the claim was brought about seven years out of time. 30 Mr Bob Grounds, managing director of Sea Coatings (Australia) Pty Ltd, deposed that the third and fourth defendants are unable to locate any records of the plaintiff's employment prior to 1 July 1991. There are group certificates indicating that the plaintiff was employed by Edsome Pty Limited from 1 July 1991 to September 1996 (Ex 3D/1). Mr Grounds recalled that Edsome had been purchased in 1983 as a shelf company for the specific purpose of employing all the site employees working in the business of Sea Coatings, while the employees engaged in the administrative and clerical activities of that business were employed by a separate company. This was done so that the workers' compensation premium would not be payable on the wages of employees engaged in purely administrative and clerical activities at the rates applicable to the wages of employees engaged in marine construction work. From memory, Mr Grounds believed that the plaintiff commenced to be employed by Edsome in about 1985/1986 and that it was the plaintiff's father, Barry Pascoe, who made the arrangements for the plaintiff to be employed. 31 However, as the plaintiff was not involved in administrative or clerical work Mr Grounds' evidence would suggest that the plaintiff was in fact employed by the third and fourth defendants. 32 Central to this debate about the plaintiff's periods of employment and who was the actual employer, is the plaintiff's father, Barry Pascoe. It is the plaintiff's father who possesses this knowledge. In 1986, Barry Pascoe was a director of Sea Coatings (Australia) Pty Ltd (then called Australian Marine Constructions Pty Limited). The plaintiff gave evidence that his father had been a substantial shareholder and a director of at least one of the companies in the Sea Coatings Group. His father had arranged his employment and was his supervisor for part of that time in the late 1980's. Mr Grounds' evidence was to the same effect. 33 The plaintiff said that he was still in contact with his father and that his father would be able to come to Court and give evidence. The third and fourth defendants submitted that as Barry Pascoe did not give evidence either by affidavit or viva voce, the Court should infer that any evidence Barry Pascoe could have given would not have advanced the plaintiff's case as against either the third or fourth defendants. Barry Pascoe's evidence at trial can be expected to fill in the gaps. Barry Pascoe certainly had some knowledge pertaining to his son's employment. 34 On 13 February 2002, the plaintiff wrote to G H Healey and stated: " At no time whilst working for Solitaire Pty. Ltd., was my health put at any risk, or was I asked to work without the appropriate safety equipment or protective clothing, all of which was supplied and used accordingly ." [Plaintiff's emphasis] 35 Mr Healey, the plaintiff's solicitor gave evidence that when he read this letter and thought that it was a "set up" as the plaintiff could not type. Hence he has done nothing about removing Solitaire as a defendant. 36 The typeface in this letter is the same typeface that appears on a letter by Barry Pascoe addressed to the GIO dated 18 February 2002. In that letter Barry Pascoe referred to Jody's letter (reproduced above). The plaintiff's father stated that his son was employed by Sea Coatings (Australia) Pty Ltd since he had left school and while he was employed by them. According to Barry Pascoe, the plaintiff got very ill due to the toxic chemicals he was using in marine structure and oil refinery maintenance. In these circumstances I would not draw the inference sought by the third and fourth defendants. 37 The first defendant submitted that the Court should not excuse the plaintiff on the basis that his lawyers are incompetent, as to do so would merely make the defendant suffer the remedy for that incompetence. However, it must be remembered that the defendants have had knowledge of this claim since shortly after 17 August 2001 when the statement of claim was served. 38 To put it succinctly, the conduct of the plaintiff's solicitor was not what it should have been. The first defendant's Counsel in submissions described Mr G Healey as presenting as "something of a confusing hybrid". This was because even though he was the solicitor with responsibility for the conduct of the litigation, he did not really know what was done and by whom in relation to the file. There was no supervision of the file which would have ensured there was adherence to Court timetables. In my view there has been a serious deficiency in the supervision of this matter within the office of G H Healey & Company. The shortcomings are set out more fully in the submissions of the defendants which I will not reproduce here. 39 I found the plaintiff's solicitor's evidence largely unhelpful. He was vague. Mr Healey's Counsel submitted that Mr Healey was to a degree impatient due to the strain of two cross examinations in parallel interest buts that his evidence was sound and understandable. Even though Mr Healey knew his cross examination was to continue on 23 April 2007, it did not occur to him to refresh his memory by perusing his file before presenting himself to Court. The result was that when he attempted to answer a question, the Court waited for him to rifle through his file for minutes at a time. It rarely yielded any positive information. 40 In Guest v Southern & Anor (NSWSC, unreported 22 September 1995) (which involves the extension of the limitation period under the Motor Accident Act) Studdert J held that the plaintiff was not personally responsible for the delay and considered it to be reasonable for the plaintiff to have relied upon his solicitors to the extent he did. The plaintiff's solicitors were essentially to blame for the delay. Studdert J held that this was a very material consideration and referred to Sophron v The Nominal Defendant (1957) 96 CLR 469 and Stollznow v Calvert (1980) 2 NSWLR 749. 41 It was in this context, that Studdert J said that the function of the provision s 52(3) is to require the claimant to explain that conduct in the course of providing a full and satisfactory explanation for the delay. It is not to provide a weapon which may enable an insurer to defeat the claim because of such conduct. Similar statements have been made in Morton v Jools (1992) Aust Torts Reports 81-164 and McAndrew v Wyoming Nursing Home (Sperling J, unreported, 5 December 1997) in relation to an extension of time pursuant to s 151D of the Workers Compensation Act. 42 According to Professor Keith Kennett, a clinical neuropsychologist, the plaintiff has suffered severe psychological injuries, and demonstrates deficits which are often of the most handicapping nature, as they interfere with the plaintiff's ability to use knowledge and skills fluently, appropriately and adaptively. In these circumstances, the plaintiff is entitled to rely on the knowledge and experience of his solicitor to prosecute his claim in a diligent manner. 43 The defendants' written submissions raised the issue of lack of service of notices. This issue was not raised when the case was heard, nor was there affidavit evidence to this effect. It was not made clear that this was an issue in this application. 44 This is a borderline case. After much reflection, I have reached the conclusion that the defendants will be afforded a fair trial and that leave should be granted to the plaintiff to commence proceedings against the first, third and fourth defendants pursuant to s 151D of the Workers Compensation Act 1987 (NSW). The notices of motion filed 29 March 2006 are dismissed. 45 I turn now to the issue of costs. The plaintiff has been granted an indulgence. The defendants' motions came about because of the plaintiff's solicitor's lack of diligence in prosecuting his application for leave. Costs are reserved.

(1) Leave is granted for the plaintiff to commence these proceedings pursuant to s 151D of the Workers Compensation Act 1987 (NSW) against the first, third and fourth defendants.

(2) The notices of motion filed 29 March 2006 are dismissed.

(3) Costs are reserved. **********

16/05/2007 - Date of judgment amended on coversheet from 14 May 2007 to 15 May 2007 - Paragraph(s) Coversheet 28/05/2007 - changed the word "preferred" to "proffered" - Paragraph(s) 10 - 2nd line

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