Plaintiff v Defendant

(a) Actions arising from employment before 4pm on 31 August 1985 (which was "the appointed day" under s4(1) of the Act) were governed by common law;

(b) Actions arising from employment between the appointed day and 12 November 1997 were governed by s135A of the Act;

(c) Actions arising from employment between 12 November 1997 and 20 October 1999 were regulated by s134A. That section removed the right to bring proceedings for the recovery of damages. This period was colloquially referred to by practitioners, including some witnesses in this case, as the "black hole" period;

(d) Actions arising from employment after 20 October 1999 had to comply with s134AB. That section reintroduced the right to recover damages.

8 It was common ground that Ms Stipanov was not entitled to bring proceedings in respect of any injury arising out of her employment between 12 November 1997 and her last day at work, namely 5 February 1998.

9 In respect of injuries arising from her employment prior to 12 November 1997, Ms Stipanov would have needed to establish that she had suffered a "serious injury" before she could commence proceedings for damages (s135A(2A)). There were three routes by which an injury could be found to be "serious". First, by establishing a degree of impairment of 30% or more using the AMA's Guides to the Evaluation of Permanent Impairment (s135A(3)). Second, by seeking a determination from WorkCover, pursuant to s135A(4)(a), that the plaintiff had suffered a serious injury within the narrative definition contained in s135A(19), which relevantly provided that "serious injury" meant "(a) serious long-term impairment or loss of a body function; or ... (c) severe long-term mental or severe long-term behavioural disturbance or disorder". Finally, by seeking a determination from a court, pursuant to s135A(4)(b), that the plaintiff had suffered a serious injury within the same narrative definition. It was common ground that Ms Stipanov's degree of impairment was less than 30% and that the most appropriate route to have adopted in her case would have been the last route, namely, seeking a court determination.

10 The next question to consider is any limitation period which would have applied to a damages claim by Ms Stipanov. Section 135AC was introduced by s48 of the Accident Compensation (Miscellaneous Amendment) Act 1997 in the following terms:

"Despite anything to the contrary in the Limitation of Actions Act 1958, proceedings in accordance with section 135 or 135A must not be commenced after -

(a) unless paragraph (b) applies -

(i) the expiration of the period within which, but for this sub-section, the proceedings could have been brought in accordance with the Limitation of Actions Act 1958; or

(ii) 31 December 2000 -

whichever first occurs; or

(b) if -

(i) the cause of action arose before 12 November 1997; and

(ii) the incapacity arising from the injury was not known until after that commencement -

after the expiration of 3 years after the incapacity was known."

11 In May 2000, the limitation period in s135AC was changed by s22 of the Accident Compensation (Common Law and Benefits) Act 2000 to the following:

"Despite anything to the contrary in the Limitation of Actions Act 1958, proceedings in accordance with section 135 or 135A must not be commenced -

(a) subject to the Limitation of Actions Act 1958, unless paragraph (b) applies, unless an application for a determination from the worker under section 135A(2B) has been made to [WorkCover] or a self-insurer before 1 September 2000; or

(b) if the cause of action arose before 12 November 1997 and the incapacity arising from the injury was not known until after 12 November 1997, after the expiration of 3 years after the incapacity was known."

12 Ms Stipanov's case is that she first developed physical symptoms (including breathlessness, loss of lung function, chest tightness, wheezing and coughing) around late 1994, certainly well before 12 November 1997. It is not clear precisely when she and her various experts say her psychological problems (including anxiety, depression and sleeplessness) first arose, but they either commenced or were seriously exacerbated in the first few days at the start of the 1998 school year, when she found that her classroom had not been properly cleaned and was affected by dust. It is said that she had a significant emotional reaction to the asthma, which was compounded by what she perceived to have been an unsympathetic and unsupportive response by the school administration. She had some sort of panic attack and left work on 5 February 1998, never to return.

13 Ms Stipanov's primary case was that she suffered loss due to Mr Mier's failure to advise her of the limitation period under s 135AC(a). In terms of that sub-section, it is common ground that in fact Ms Stipanov had until 1 September 2000 within which to apply for a serious injury determination. However, throughout Mr Mier's retainer, the relevant limitation period for commencing a damages proceeding was 31 December 2000, and it will be necessary for me to consider that date as well.

14 The statement of claim also pleaded in the alternative that Ms Stipanov's incapacity only became known on 5 February 1998, being her last day at work. Accordingly, by virtue of s135AC(b), it is said that the relevant limitation period expired on 5 February 2001.

C. The weekly payments claim

15 After leaving work in early February 1998, Ms Stipanov lodged a claim for weekly payments in late March 1998. In her claim form, she nominated 29 January 1998 as the date of her injury. WorkCover formally rejected her claim on 23 April 1998.

Ms Stipanov goes to Maurice Blackburn & Co

16 On the recommendation of her union, Ms Stipanov engaged Maurice Blackburn & Co ("MBC"), as they then were, as her solicitors in order to challenge the WorkCover decision.

17 She had an initial meeting with Steve Walsh from MBC on 24 April 1998. On 27 April 1998, MBC wrote her a letter of advice ("the MBC letter"), which noted that a file had been opened and informed her, amongst other things, that she may be entitled to receive a lump sum payment pursuant to ss98 and 98A of the Act if she was left with a permanent disability upon stabilisation of her injuries. The MBC letter correctly advised her that the relevant limitation period for common law damages for injuries that occurred prior to 12 November 1997 was 31 December 2000, and that it was necessary for her to establish that she was suffering from a serious injury as defined by the Act, prior to being able to recover common law damages. The MBC letter also advised that she could not bring a common law damages claim in respect of any injuries sustained after 12 November 1997, but said that it appeared that her injury pre-existed this date as she first began suffering from symptoms in 1994. The MBC letter is of some significance in this case and will be considered further later in these reasons.

18 Ms Stipanov, her husband, Lachlan McBain, and a union representative attended two conciliations with WorkCover, but by October the matter had not resolved and she was still not receiving weekly payments.

19 After the second conciliation, MBC sent a letter containing terms of engagement, which set out details of fees and disbursements. That caused concern to Mr McBain and Ms Stipanov, as they had understood that the union was going to underwrite all of MBC's costs.

Ms Stipanov goes to Mr Mier's firm

20 In late October 1998, Mr Mier was the sole principal in a small suburban law firm known as GCF Mier & Associates. He employed a solicitor called Angela Wilkinson and about 8 secretarial or other support staff. At that time, the majority of the firm's work comprised personal injuries matters.

21 Mr Mier was admitted to practice in April 1982 and set up his own firm in 1988. By the time Ms Stipanov became his client, he had significant experience in acting for injured workers in relation to WorkCover and common law claims, including acting for workers who had been exposed to dust in the course of their employment. Claims for common law damages were far more lucrative for the firm than WorkCover claims.

22 Ms Wilkinson was admitted to practice in 1993 and gained experience in WorkCover and common law claims at Anderson Rice (from 1993 until 1996) and then at Mr Mier's firm. She left Mr Mier's firm in late January or early February 2000, and has worked since then as a loss assessor.

23 In October 1998, Mr McBain telephoned Mr Mier, one of his old school friends. Mr McBain contacted Mr Mier because he and his wife were unhappy with the level of service she was receiving from MBC, as well as what they perceived to be a change in the MBC costing arrangements. He briefly explained Ms Stipanov's situation to Mr Mier, to see whether his firm would be able to act for Ms Stipanov in relation to an appeal against the WorkCover decision. They arranged to meet up for a lunch in the city a few days later, at which time they discussed the matter in greater detail.

24 Mr McBain described his role as being a "conduit" between his wife and Mr Mier's firm. This seems to have occurred partly because of his longstanding friendship with Mr Mier, partly because Ms Stipanov's anxiety was aggravated by dealing on a regular basis with matters relating to her injury, and partly because Mr McBain's office had facilities such as fax and e-mail, which meant it was easier for him to communicate with the solicitors from work. Whether Mr McBain acted as Ms Stipanov's agent in the giving of instructions, or merely as a messenger, will be considered later.

25 After the lunchtime meeting, Mr Mier organised a conference with a barrister, Lindsay Paine, at counsel's chambers, in late November 1998. The conference was organised on the basis that Mr Paine and Mr Mier would not charge for their time if counsel advised that it was not worth pursuing an appeal against the WorkCover decision. Mr Mier, Ms Wilkinson, Ms Stipanov and Mr McBain all attended the initial conference with counsel. Mr Paine advised that Ms Stipanov had a good case against WorkCover and he thought it likely that the claim would be admitted once proceedings had been instituted.

26 Following that conference, Ms Stipanov agreed to formally engage Mr Mier's firm. Arrangements were made to have the file transferred from MBC; that occurred in early December.

27 Mr Mier sent Ms Stipanov a formal letter of engagement dated 12 January 1999, which she signed and returned a short time later. The letter thanked Ms Stipanov for engaging the firm to act for her with regard to her claim for WorkCover benefits and explained the firm's fee arrangements.

28 Proceedings were issued in the Magistrates' Court in early February 1999. The statement of claim pleaded that:

"Over the course of the plaintiff's employment with the defendant since September 1985 and most particularly on the 5th February 1998 when the plaintiff suffered a panic attack, the plaintiff suffered injury ('the injuries').

PARTICULARS OF INJURY

Depressive anxiety reaction

Panic attacks

Development of agoraphobia

Aggravation of asthma

Nervous upset

Mental and behavioural disturbance."

29 Between the initial conference with Mr Paine in November 1998 and the hearing day in May 1999, Ms Stipanov and Mr McBain attended further conferences with counsel. One of those conferences, held in late April, was arranged because Ms Stipanov was concerned that the asthma part of her claim was being devalued in favour of the stress claim; she wanted to discuss that with counsel. Another conference was held the day before the hearing date, and there was a further brief one on the morning of the hearing.

30 Over this period, there were also various telephone conversations between Mr McBain, Mr Mier, Ms Wilkinson, and Ms Stipanov, some of which will be discussed in detail later. Steps were taken to arrange necessary medical examinations and reports, and to locate and speak to prospective witnesses. Ms Wilkinson had the day-to-day running of the file, but Mr Mier retained some involvement given his friendship with Mr McBain.

31 During April, Mr McBain returned to Ms Wilkinson a copy of a memorandum which Mr Paine had prepared in December 1998, which recorded the facts upon which counsel had drawn the statement of claim. Mr McBain and Ms Stipanov had made numerous detailed handwritten amendments to the memorandum. Mr Paine subsequently amended his original memorandum to reflect the client's amendments.

32 The proceeding was fixed for trial on 19 May 1999. It settled on the morning of the hearing. WorkCover agreed to make weekly payments to Ms Stipanov with effect from 5 February 1998 and to pay her reasonable medical expenses and party-party legal costs.

33 No complaint is made in respect of the firm's competence or diligence in the handling of the WorkCover weekly payments claim.

34 Under cover of letters both dated 4 June 1999, Ms Wilkinson sent the insurer's solicitors a party-party bill of costs and disbursements totalling $4,419.60, and Ms Stipanov a solicitor-client bill of costs and disbursements totalling $6,493.70. The letter to Ms Stipanov noted that there was some duplication in the disbursements, and said there would be an accounting to Ms Stipanov in so far as part of the disbursements was recovered from the insurer.

35 The solicitor-client bill was paid a short time later, after Mr Mier answered a few queries which Mr McBain had about the bill.

36 In June 1999, Mr Mier had a 40th birthday party, which is discussed below.

37 On 9 July 1999, Ms Wilkinson sent Ms Stipanov a letter which enclosed a cheque, being partial reimbursement from WorkCover of the disbursements she had incurred. The letter wished Ms Stipanov all the best and asked her to contact Ms Wilkinson if she required any further assistance.

38 After receiving the cheque and letter from Ms Wilkinson in July 1999, neither Ms Stipanov nor her husband contacted Ms Wilkinson or Mr Mier to discuss with either of them the bringing of a common law claim. The next time Ms Stipanov saw Mr Mier in a professional capacity was in April 2002 when she collected the file from his office and signed a file collection confirmation.

39 In early August 1999, Mr McBain contacted Mr Mier with a few queries about Ms Stipanov's weekly payments. Mr Mier answered the queries but did not charge for those telephone attendances.

40 Between August 1999 and April 2002, Mr Mier and his wife saw Ms Stipanov and Mr McBain socially on a number of occasions, including dinners in August 1999, September 2000 and February 2002. They also exchanged a few short, friendly e-mails during that period. Mr McBain and Mr Mier also saw each other at a school reunion in May 2001. These were all only social occasions and there was no discussion of any common law claim.

41 I will deal now with an alleged discussion about common law at Mr Mier's 40th birthday party on 5 June 1999. Mr McBain, Ms Stipanov and Ms Wilkinson were all guests at the party. It was the first time they had seen each other since the hearing date on 19 May 1999.

42 Ms Stipanov said that at the party she and Mr McBain "reminded" Ms Wilkinson about Ms Stipanov's personal injury claim and said that they wanted to "get on with it". She said that Ms Wilkinson replied "Don't worry, you've got plenty of time yet."

43 Mr McBain's evidence with respect to this conversation was:

"I said, that, you know, don't forget we want to take common law action and [Ms Wilkinson] said, 'Well, that's fine don't worry there's still plenty of time ahead of us'."

44 Given that on Mr McBain's (but not his wife's) evidence neither he nor his wife had ever previously asked the firm to commence a common law claim or even mentioned "common law" to them, the evidence that he used words such as "don't forget we want to take common law action" seems unlikely and somewhat self-serving. Later in these reasons, I discuss in detail a number of problems which I have in accepting some of Ms Stipanov and Mr McBain's evidence, particularly, their evidence as to her intentions and instructions with regard to a common law claim.

45 One further curious aspect of Mr McBain's evidence is this. Asked later why he never followed up on the common law claim with the firm after mid 1999, one of Mr McBain's explanations was that he did not think it appropriate to discuss such matters at a social function. Yet he could offer no satisfactory explanation as to why might have discussed the common law claim at the only social function where he saw the employee solicitor, but never mentioned it on the various occasions when he and his old school friend caught up between mid 1999 and April 2002.

46 In relation to this alleged conversation, I prefer Ms Wilkinson's evidence to that of Ms Stipanov and Mr McBain, for a number of reasons.

47 Ms Wilkinson had little recollection of Ms Stipanov's case. She remembered attending Mr Mier's 40th birthday party, but did not recall discussing Ms Stipanov's common law claim with Ms Stipanov and her husband. However, she said that had such a conversation occurred, then she would have addressed the issue when she was next at work, and would have put something in writing to confirm what the position was; she said that would have been her usual practice.

48 Overall, Ms Wilkinson impressed me as a witness who was careful not to overstate what she could and could not recall. She ceased working for Mr Mier in early 2000 and has no personal interest in the outcome of this litigation. Her evidence as to her usual practice was perfectly plausible and consistent with such of the firm's file as was tendered in evidence. The file reveals her to have been diligent in recording telephone and personal attendances and writing to the client about even fairly routine matters. The file contains no record of instructions to commence a common law claim.

49 The only letter Ms Wilkinson wrote to Ms Stipanov after the 40th birthday party was dated 9 July 1999. That letter enclosed the disbursement cheque received from WorkCover, and concluded:

"Julie it was great catching up with you at Greg's birthday. If you need any further assistance please give me a call. Otherwise, all the best!"

50 That letter is entirely consistent with a belief that she was only instructed to act for Ms Stipanov in relation to the weekly payments claim.

51 Mr Mier and Ms Wilkinson both agreed that the firm could make more money out acting for a client in a common law damages claim than in respect of WorkCover payments. Had Ms Stipanov or her husband instructed Ms Wilkinson at the 40th birthday party that they wanted to bring a common law claim, there is certainly no financial reason why the firm would not have wanted to do so.

52 There is a dispute as to when the firm's retainer ended. Mr Mier says the retainer ended with the letter of 9 July 1999. Ms Stipanov says the retainer did not end until around April 2002, at which time her husband requested the return of the file. This is an important issue, because it affects the extent of Mr Mier's duty of care.

53 The retainer is the contract under which the client employs the lawyer to undertake certain work for the client, and the lawyer agrees to carry out that work. Like any contract, its terms may be varied over time. It may be terminated prior to the completion of the agreed task, or it may naturally come to an end once the agreed task has been completed. In the latter case, it may be easier to pinpoint a time by which the retainer had come to an end rather than to speak of it ending "on" a particular date.

54 I am satisfied that the initial retainer was a retainer to act for Ms Stipanov only in relation to her weekly payments claim. That accords with Mr Mier and Ms Wilkinson's evidence. Mr Mier's letter of engagement confirmed that his instructions were to act "with regard to your claim for WorkCover benefits" and subsequent correspondence to her was headed "your WorkCover claim".

55 I find that Mr Mier's retainer had come to an end by mid-August 1999, at the latest. By then, the only legal issue in respect of which Ms Stipanov had ever engaged Mr Mier's firm, namely the WorkCover proceeding, had been resolved, there had been a final accounting and payment of all costs and disbursements, and all of the client's queries about weekly payments had been answered. The letter of 9 July effectively indicated that the file was complete as far as the firm was concerned and invited the client to contact the lawyer if she required any further assistance; she never did so. I find that Mr Mier had not received any instructions to act for Ms Stipanov in relation to any other matter, in particular, in relation to common law proceedings. In so far as these findings involve a rejection of the evidence of Ms Stipanov and Mr McBain, I will explain the basis for doing so later in these reasons.

D. Negligence

What ought a prudent solicitor have advised and done?

56 There is no dispute that Mr Mier owed both tortious and contractual duties to exercise due skill, care and diligence whilst acting as Ms Stipanov's solicitor. There was no suggestion that the extent or content of the tortious and contractual duties were different in the present case, or that any of the duties continued after the end of the retainer. There is also no dispute that the required standard or measure of care, skill and diligence is that of a qualified and ordinarily competent and careful solicitor ("a prudent solicitor").

57 The parties each called an experienced personal injuries solicitor to give expert evidence as to what a prudent solicitor ought to have done in Ms Stipanov's case. Ms Rosie Ross of Slater & Gordon was called on behalf of Ms Stipanov. Mr Matthew Maher of Wisewoulds was called on behalf of Mr Mier. Ms Wilkinson and Mr Mier were also asked questions in relation to these matters. There was general agreement between all of these witnesses as to most of the things that a prudent solicitor ought to have done at the relevant time.

58 Although Ms Stipanov had retained Mr Mier only in relation to her weekly payments dispute, Mr Mier admitted that he was nevertheless obliged to advise her of any entitlements she might have. He conceded that such entitlements did not just include weekly payments, and that any solicitor working in the workers' compensation area who was doing their job properly would also advise their client as to the possibility of obtaining a statutory lump sum payment or suing for common law damages. He agreed that in relation to a damages claim, such advice would include advice as to the steps that would have to be taken, including physical or psychological examinations and obtaining a serious injury certificate.

59 Mr Mier also accepted that on the instructions which Ms Stipanov had provided, he had enough material to indicate to her that "she may have a common law claim", although he felt it was too early to assess its strength. Ms Ross said she would have advised the client that the case was at least strong enough to investigate further.

60 It was also not disputed that a prudent solicitor working in the workers' compensation area ought to have been well aware of the "black hole" and relevant limitation periods under the Act, and advised a client in Ms Stipanov's position of those matters. That advice would include the fact that any claim would be limited to establishing both "serious injury" and negligence in respect of work events prior to 12 November 1997. Medical evidence distinguishing between pre- and post-November 1997 injuries would have been required in order to pursue any common law claim.

61 Depending on when the solicitor was acting for the client, a prudent solicitor should certainly have advised as to the relevant limitation period(s) under s135AC(a).

62 As previously mentioned, in May 2000 the relevant limitation period was brought forward from 31 December 2000 (for the issuing of proceedings) to 1 September 2000 (for the making of a serious injury application). A prudent solicitor acting in early to mid-2000 for a client who had a possible common law claim ought to have advised the client of the nature and effect of that change of deadline. However, for the reasons already given, I find that Mr Mier was not still acting for Ms Stipanov in 2000 and had no duty to advise her of that change.

63 The experts agreed in theory that if there was evidence that Ms Stipanov only became aware of the extent of her incapacity in February 1998, then a prudent solicitor ought to have also advised her that under s135AC(b) she would have until 5 February 2001 to take the relevant steps. However, in the present case, I am not satisfied that she only became aware of the extent of her incapacity in February 1998. True it is that she experienced serious psychological symptoms at that time. But at the heart of Ms Stipanov's case is her complaint that her asthma and physical symptoms were severe long before February 1998, indeed were so severe by the end of 1995 that she could only work part-time thereafter.

64 Although Ms Ross said she personally would have confirmed in writing any oral advice given in relation to such matters, I do not accept that the mere failure to give written advice would automatically constitute a breach of duty. What would be reasonable in any given case depends on a variety of factors, including the nature and complexity of the advice and the client's capacity to understand oral or written advice. As Ms Ross quite rightly acknowledged, a letter of advice may be prepared not only for the benefit of the client, but also to safeguard the solicitor in case of any claim arising from a misunderstanding of instructions received or advice given.

65 In this case, Mr Mier alleges that, after discussing the possibility of a common law claim on several occasions, Mr McBain instructed him that his wife did not want to pursue a common law claim at all. I agree with Ms Ross that, in such a case, a prudent solicitor should have advised as to the applicable time limits and confirmed the instructions directly with the client, in case she changed her mind subsequently. That might have been done by a face to face meeting with the client or by letter.

66 Ms Ross said that if the client said that they did not want to pursue a common law claim at that time, she would keep the file open and active and would ensure that ongoing file reviews were done. However, there is no suggestion in this case that Ms Stipanov or her husband ever gave such instructions.

67 In the first instance, the solicitor's duty of care requires the solicitor to give proper advice to the client, so as to enable the client to make an informed decision and give informed instructions. The solicitor would also have a duty of care in carrying out instructions given by the client. But a solicitor does not have a duty to take steps such as instituting proceedings without instructions from the client to do so. In so far as many of the particulars of negligence in paragraph 16 of the statement of claim seem to suggest otherwise, they are misconceived.

68 In the light of these observations, I turn to examine the evidence to determine whether Mr Mier discharged his duty of care to Ms Stipanov.

69 Ms Stipanov and her husband say that no advice was given to them by Mr Mier or Ms Wilkinson in relation to a possible common law claim. In particular, they deny that they were given any advice as to her prospects of success, the relevant time limits, the existence of the "black hole", the need to engage medical and occupational health experts, or the procedure for obtaining a serious injury certificate before commencing a common law proceeding. Mr McBain also denies ever having told Mr Mier that his wife did not want to make a claim for damages.

70 On the other hand, in general terms, Mr Mier says that he raised the matter of a common law claim several times and was told that Ms Stipanov was not interested in pursuing such a claim. Ms Wilkinson now has no independent memory in relation to Ms Stipanov's case.

71 In evidence-in-chief, Mr Mier said that common law was first touched upon in his first telephone conversation with Mr McBain in October 1998, before he had been formally retained to act.

"It wasn't a conversation in depth, it was part of a conversation where I explained to him how the system worked. You know, weekly payments, medical and like expenses, possible common law, et cetera. [Mr McBain] wasn't really interested in the common law aspect because what he was really seeking [an] opinion on was whether they should appeal and whether they might be successful in appealing the weekly WorkCover payments aspect."

72 Mr Mier prepared a brief typed file note of that conversation on 27 October 1998, at the end of which he recorded: "I told him what to bring along and gave him general advice regarding tactics, the system, procedure etc."

73 Mr Mier also said he had a couple of subsequent telephone discussions with Mr McBain in which he briefly raised common law and said it was something to keep in mind, that it was "something that was worth looking at", once the weekly payments were out of the way. Mr Mier could not say when those conversations occurred, save that it was during the course of the retainer. Whilst there are some typed file notes of subsequent conversations between Mr Mier and Mr McBain, none of them mentions common law as something that had been discussed.

74 In cross-examination, Mr Mier mentioned for the first time that a common law claim had been discussed at the first conference with Mr Paine on 24 November 1998. He said that Mr Paine explained to Mr McBain and Ms Stipanov "the pillars of the system", being weekly WorkCover payments, medical and like expenses and possibly a common law claim. Mr Paine told Ms Stipanov that she had to keep those things in mind because they had a "knock-on effect" against each other.

"... we would look at the common law claim further down the track, because really the main game and what he was instructed to advise on was the weekly payments and we needed to establish that causal link firmly before we moved on to look at the common law, but they should keep that in mind because a common law claim once made may wrap up some of the other benefits that we were then dealing with. But it wasn't - it wasn't in any way a detailed advice on common law."

75 Mr Mier said that after the weekly payments dispute was resolved, he had a telephone conversation with Mr McBain in which he again raised the possibility of Ms Stipanov bringing a common law claim against her former employer ("the post-settlement discussion").

"... after we had been successful [in the WorkCover case] I rang [Mr McBain] and asked him what he wanted to do about looking at whether there was a common law claim or not, whether he wanted to investigate that ... I told him that for us to investigate it we would require the workplace assessment by a specialist in that area. We would also require a medicolegal opinion from a respiratory specialist and I indicated that that would probably be a cost, I mean it's an estimate, but a cost in around about $1,500, something along those lines. I indicated to him that if we were to do that then we would need him to, or Julie to pay those funds into trust to protect the firm against the cost of those reports. He wasn't interested in pursuing common law. He made it plain that Julie, being quite stressed by the WorkCover case had really had enough of the court cases, and that he wasn't really minded to put those funds up."

76 In cross-examination, Mr Mier gave generally consistent evidence about the post-settlement discussion, which he said occurred within a few days of the completion of the Magistrates' Court proceeding.

77 In relation to the limitation period, Mr Mier said that in the post-settlement discussion, he told Mr McBain that "he didn't have forever to consider it". Asked what limitation period he advised about, Mr Mier said that he told Mr McBain that there was a limitation period for applying for a serious injury certificate, and at that stage it was 1 September 2000. Pressed as to whether 1 September was the date he mentioned, Mr Mier said that was his reflection today; he could not recall whether he mentioned 31 December. Mr Mier's evidence in this regard is improbable and seems to involve a degree of confusion or reconstruction. As at May 1999, the relevant limitation period was December, not September, and the period applied to the commencement of proceedings, not the application for a serious injury certificate.

78 Mr Mier said that the post-settlement discussion was the last conversation he had with Mr McBain about common law.

79 Senior counsel for the plaintiff submitted that I should find that the post-settlement discussion never occurred. He pointed to various matters in support of that submission, including the lack of a file note or letter referring to such a discussion, the omission of any such discussion from the final bill of solicitor-client costs, and the fact that the discussion was not particularised in the amended defence. For the reasons which follow, it is not necessary for me to resolve the factual dispute as to whether the post-settlement discussion occurred.

80 Mr Mier conceded that he did not discuss with Mr McBain any problems with respect to bringing a claim for psychiatric injury as distinct from asthma. Although Mr Mier was well aware that common law rights had been wiped out for a period, he did not discuss any problems associated with "the black hole" period.

81 Mr Mier also admitted that he never gave any advice to Ms Stipanov "in a one on one sense" with respect to her common law rights. In particular, he never directly advised her about any common law limitation period or the "black hole".

Was Mr Mier in breach of his duties of care?

82 Even if I accepted in its entirety Mr Mier's evidence as to the post-settlement discussion and the earlier conversations, in my opinion he did not take sufficient steps to discharge his contractual or tortious duties of care to Ms Stipanov.

83 A prudent solicitor in his position ought to have advised Ms Stipanov as to the problems with respect to bringing a claim for psychiatric injury as distinct from asthma and the problems associated with "the black hole" period, about which matters he gave no advice at all.

84 Even in relation to those matters in respect of which Mr Mier says he did provide advice, in my opinion Mr Mier failed to take reasonable steps to ensure that Ms Stipanov was in a position to make an informed decision about a common law claim. According to Mr Mier, the post-settlement discussion was the first occasion on which he advised as to the limitation period and provided any detail as to what would be involved in bringing a common law claim. He says that without even referring back to his wife, Mr McBain said that she was not interested in pursuing a common law claim. I accept that Mr McBain played the role of messenger, and probably also interpreter, between his wife and the lawyers. However, there is no evidence that Ms Stipanov ever informed Mr Mier that he could act solely on her husband's instructions or did not have to advise her of significant matters.

85 Mr McBain was a solicitor and a long-time friend of Mr Mier. Whilst Mr Mier might have justifiably felt confident that Mr McBain understood any advice he gave him, it was Ms Stipanov who was his client. A prudent solicitor ought to have had regard to the fact that, although an intelligent woman, she was clearly in an emotionally fragile state throughout the weekly payments proceeding. He should have made sure that any significant advice was conveyed to her in such a way as to ensure that she understood it. Written advice would have been one obvious way of achieving that result. Alternatively, he could have spoken to her personally about the matter.

86 Because I have found that Mr Mier's retainer ended by mid-August 1999, nothing turns on the fact that Ms Stipanov's potential common law claim was not discussed at the various social occasions over the next few years, or when Ms Stipanov collected her file from Mr Mier. After his retainer ended, Mr Mier had no continuing obligation to advise Ms Stipanov in relation to a potential common law claim.

E. Loss

87 Notwithstanding the breadth of the allegations in the statement of claim, it was not suggested, and no evidence was led, that Ms Stipanov suffered any loss as a result of any failure to advise her about the procedures for bringing a common law proceeding or obtaining a serious injury certificate, the need to obtain medico-legal or other evidence, or the problems of the black-hole. Her case was really argued on the basis that Mr Mier's failure to advise her as to the relevant limitation period caused her to lose the opportunity to bring common law proceedings within time.

88 In order for a plaintiff to establish that a negligent defendant's conduct has caused a valuable loss of opportunity, "he or she must establish by evidence that, but for the contravening conduct of the defendant, he or she could have and would have taken the opportunity and the benefit that it would have yielded."[2] That is to say, not only that the lost opportunity had a real value, but also that if the true position had been disclosed, he or she would have acted to secure that benefit.

89 Mr Mier denies that any breach of duty by him caused Ms Stipanov any loss. He relies on the following arguments:

(a) He pleads that she could have seen another lawyer about her damages claim at any time after 9 July 1999 and before the expiry of the relevant limitation period. She did not do so, therefore the cause of her loss is her own failure to see another lawyer before the limitation period expired.

(b) The MBC letter, which Ms Stipanov had received before she engaged Mr Mier, advised Ms Stipanov of the applicable limitation period and the need to seek a serious injury determination. Notwithstanding that advice, she took no relevant steps before the expiry of the limitation period. There is no reason to think she would have done anything different had Mr Mier given the same advice.

(c) One of her later solicitors, Slater & Gordon, advised her on 12 February 2003 of a way in which she could still bring common law proceedings in relation to her asthma. Notwithstanding that advice, she took no steps to do so. Her failure to do so is therefore the cause of her loss.

(d) Ms Stipanov was not interested in and would never have issued common law proceedings within time, even if he had not been in breach of his duties.

90 The arguments in (b) to (d) above will be examined below. The argument in paragraph (a) is fundamentally flawed. If a solicitor negligently fails to advise as to a limitation period, it is no answer to say that the client could still have learned of the limitation period at a later time by going and seeing a non-negligent solicitor.

91 For the reasons which follow, I am not satisfied on the balance of probabilities that, but for Mr Mier's negligence, Ms Stipanov would have issued proceedings for common law damages before the expiry of the limitation period.

The MBC letter

92 In April 1998, MBC gave Ms Stipanov the following written advice about her possible entitlement to bring a proceeding for common law damages:

"We advise that the Kennett Government has now amended the provisions of the [Act] to alter the limitation period for bringing Common Law damages claims. For all injuries that occurred prior to the 12th November 1997 you now have until 31st December 2000 within which to issue a Common Law claim for damages. If you wish to bring a Common Law damages claim then proceedings must be issued prior to the 31st December 2000. We advise that it is also necessary for you to establish that you are suffering from a serious injury as defined by the Act prior to being able to recover damages in a Common Law claim.

However, we note that MMI Insurance have listed the current date of your injury as being the 29th January 1998 which is the date that you lodged your new WorkCover claim form this year. The recent amendments to the [Act] made by the Kennett Government prohibit workers from bringing a common law damages claim against their employer for any injuries that have been sustained after the 12th November 1997. However it would appear that your injury pre-existed this date as you first began suffering from symptoms in 1994."

93 My conclusions in relation to the MBC letter are as follows:

(a) The advice in the MBC letter was correct at the time it was given in April 1998. It was still correct at the time that Mr Mier's retainer (and duties of care) ended around August 1999.

(b) Had Mr Mier given proper advice to Ms Stipanov about the limitation period, that advice need have gone no further than that contained in the MBC letter.

(c) Ms Stipanov and Mr McBain received and read the MBC letter. They understood the advice about the limitation period of 31 December 2000. They continued to have that understanding throughout the period of Mr Mier's retainer and beyond.

(d) Ms Stipanov took no steps to commence a serious injury application or a common law claim prior to the expiry of the limitation period. She and her husband offered several explanations for her failure to do so, none of which are attributable to negligence on the part of Mr Mier.

(e) In so far as Ms Stipanov or Mr McBain said that they believed that the firm was supposed to be pursuing the common law claim on her behalf, I do not accept their evidence.

94 Before I turn to their specific evidence, I wish to make a few general observations about Ms Stipanov and Mr McBain as witnesses. It is fair to say that there were some deficiencies or inconsistencies in the evidence of all of the principal witnesses. Some of that may be due to the fact that the relevant events occurred some 8 or so years before the trial. It is not uncommon for witnesses to experience problems recalling the details of conversations and events after such a period of time. However, the problems in respect of Ms Stipanov and Mr McBain went beyond those sorts of problems.

95 I have no doubt that Ms Stipanov found the experience of giving evidence terribly stressful. She complained of problems focussing on what was being asked of her. Her answers were frequently non-responsive and rambling. On other occasions her answers were vague or self-contradictory to such a degree that it was difficult to know just what she was saying had happened. I am not able to say to what extent these difficulties were due to her psychological problems, which are said to include anxiety, poor concentration, sleep problems, agoraphobia and "distortions of reality". I did not form the impression that Ms Stipanov deliberately lied in court, notwithstanding that what happened in relation to the part-time work request form did not reflect well on her credit[3]. Nevertheless, for the reasons already given, I have serious doubts about the reliability and accuracy of much of her evidence.

96 Mr McBain was in a different position. He is a qualified solicitor, although with no professional experience in personal injury litigation. An obviously intelligent man, he displayed no trouble understanding questions asked of him. Faced with difficult questions which presented a problem for his wife's case, some of his answers were evasive or non-responsive or argumentative. His apparent preparedness to say what would best advance his wife's case also led him at times into giving evidence which I found simply implausible. His smirking response, when asked about his wife's dishonesty in respect of the part-time work request form, also did no great favour to his own credit.

97 I will begin with the issue of Ms Stipanov's receipt and understanding of the MBC letter. In evidence in chief, she clearly acknowledged receiving the MBC letter and looking at it. She said her husband also read the MBC letter. She agreed that it informed her of the period within which she had to act in respect of any common law claim. In cross-examination, her answers were more qualified. It took a number of questions before she eventually agreed that she could even remember looking at the MBC letter and, even then, she volunteered that she didn't really understand it and it's highly unlikely that she got the gist of what he was saying.

98 It is difficult to conclude from Ms Stipanov's evidence just what she says was her understanding of the relevant limitation period at any particular time:

(a) On the one hand, she acknowledged receiving and reading the MBC letter, which clearly told her the deadline was December 2000.

(b) Elsewhere in her evidence, she said she understood there was a 6 year limitation period. She specifically said that at the time of the 40th birthday party, she "imagined" she had six years because that's the sort of date she was familiar with. Asked what gave her that belief, she said she thought it was her husband, but she wasn't sure. Pressed further, she said it was "a mixture of things on the basis of a belief because I think I had that belief for a long time" for "years and years". Given that her husband was well aware, at least after seeing the MBC letter, that the relevant limitation period expired in December 2000, it seems unlikely that as at the 40th birthday party her husband would have told her that there was a 6 year limitation period[4].

(c) Ms Stipanov said that when she went to see Slater & Gordon in 2003, she had "no idea" that there was any time limit or impediment to bringing a claim for damages.

99 Mr McBain said that he read and understood the MBC letter. He agreed that, as a lawyer, he was aware of the concept of limitation periods and their importance to lawyers. He confirmed that once he'd read the MBC letter, he clearly understood that the limitation period for bringing a common law damages claim was 31 December 2000. He agreed that he discussed the MBC letter with his wife. Most importantly, he confirmed that he was still aware of the December 2000 deadline at the 40th birthday party on 5 June 1999.

100 Mr McBain offered several explanations as to why his wife did not issue a common law proceeding before the end of 2000, even though (if one accepts their evidence) she always wanted to bring a common law claim. One explanation (with which his wife agreed) was that at some unidentified point after mid 1999, they had "lost track" of the deadline or "weren't paying attention to the deadline". He said that when December 2000 came along, he was "oblivious" to the fact that the deadline was expiring.

101 When first asked in cross-examination what he would have done if he had remembered the deadline, he said he couldn't say. He repeated that answer a little further on, adding "I imagine had I remembered the deadline, I may have done something but I just can't tell you what." Pressed further, he said that had he remembered the deadline, he would have discussed it with his wife closer to the deadline. He eventually firmed up to saying that they would have issued proceedings "for sure" if they'd kept the deadline in mind. In fact, I am not satisfied that that is the case, for reasons which I will discuss shortly.

102 But even if Ms Stipanov did intend to and would have issued common law proceedings had she and her husband not forgotten about the limitation period, that is not something for which Mr Mier is responsible. Had Mr Mier not been negligent, had he given Ms Stipanov adequate oral or written advice about the relevant limitation period, it need have gone no further than the MBC letter. When Mr Mier's retainer ended, Ms Stipanov still had the MBC letter, and her husband (if not also Ms Stipanov) still remembered and understood the contents of the MBC letter. There was no evidence to suggest some reason why they might have remembered advice from Mr Mier, when they did not remember the same advice from MBC. In that case, the cause of Ms Stipanov's loss is the fact that she and her husband forgot the legal advice they had been given about the limitation period.

103 A further, or further and alternative, explanation offered by Mr McBain (and possibly also his wife, depending on how you read her evidence) for the failure to commence proceedings before the end of 2000 was that he and his wife were waiting for Ms Stipanov's injuries to stabilise before making a common law claim. Mr McBain said that in May 1998 he had a discussion with "Roma", a law clerk at Maurice Blackburn. The discussion was mostly about the WorkCover claim, but Mr McBain said he also briefly discussed the issues raised in the MBC letter about claiming damages at common law. He said that Roma told him they should wait, or must wait, until Ms Stipanov's condition stabilised before doing anything about a common law claim.

104 In fact, the MBC letter only mentioned stabilisation of injuries in the context of a possible lump sum payment pursuant to ss98 and 98A of the Act, if Ms Stipanov was left with a permanent disability upon stabilisation of her injuries; it said nothing about stabilisation in the context of a common law claim. "Roma" did not give evidence at trial. It seems rather curious that Mr McBain would remember and act upon the brief oral advice of a law clerk, whilst forgetting the clear written advice from an MBC partner to the effect that there was a December 2000 deadline. But even if this explanation is accepted, once again, it is not something for which Mr Mier is responsible.

105 Ms Stipanov offered a further, or further and alternative, explanation for not acting on the advice in the MBC letter. She said:

"I think I mentioned before that we didn't know that the letter still applied. I - I can remember there was a change of government, that something was happening, there was a breaks and something was being reversed and I honestly didn't think that the law still applied."

106 There followed several pages of confusing answers, which are difficult to follow as an explanation for her belief that the law had been reversed or no longer applied. The gist of it, as best I can understand it is this. Asked why she thought the MBC advice "no longer applied", she said it was because she was no longer thinking about or had forgotten the MBC letter. Asked for clarification, she said the file was with Mr Mier and she thought he was looking after "that aspect of the case". Then she said she didn't think the limitation period still applied "because if it had applied [Mr Mier] would have alerted us to it." Finally, she conceded (as is apparent from reading her evidence) that she was "confused about that period." The unsatisfactory evidence of Ms Stipanov and her husband as to what they thought Mr Mier was going after August 1999 is discussed below.

Ms Stipanov's intentions prior to the end of 2000

107 The previous discussion has proceeded on the assumption that Ms Stipanov wanted to issue a common law proceeding at any time prior to December 2000. I have sought to explain why, even if that assumption is accepted, she has not persuaded me that but for Mr Mier's negligence she would have commenced a common law proceeding before the expiry of the relevant limitation period. In fact, for the following reasons, I am not even satisfied that the underlying assumption is true. That is to say, I am not satisfied that, but for Mr Mier's negligence, Ms Stipanov wanted to or would have issued a common law proceeding before the end of 2000.

108 Ms Stipanov's evidence was generally consistent: she said that after receiving the MBC letter, her attitude throughout the whole of the period leading up the Magistrates' Court hearing and thereafter was that she wanted a claim for damages for her physical injury to be commenced. She said she told Mr Mier and Ms Wilkinson of that fact.

109 In some parts of his evidence, Mr McBain said that after receiving the MBC letter his wife "always" wanted to bring common law proceedings; he assumed that Mr Mier's firm were acting for her with regard to common law. Elsewhere, he suggested that she wasn't interested in, or physically or mentally able to cope with, issuing proceedings before early 2002[5]. He understood (contrary to her evidence) that the reason she went and saw Wilsons Lawyers Pty Ltd in April 2002 was because she now wanted to pursue a common law claim. He also said that it was in early 2002 that his wife read in the paper of a case in which Slater & Gordon had got large damages for a plaintiff in relation to a respiratory type case "and she felt that we should start inquiring now into what her rights were and what type of action we may be able to take to get common law damages."

110 The MBC letter warned of the limitation period, the black hole and the need to obtain a serious injury certificate. It said nothing about the possible strength of Ms Stipanov's common law claim. However, it seems that she was given some oral advice about the matter. The end of the MBC file note of her initial conference with the lawyer at MBC says "c/law - unlikely". At first, Ms Stipanov said she could not remember what went on in that interview. Taken through various parts of the note, she agreed with the accuracy of them, before the cross-examiner moved onto the note about common law:

"Is that what you were told at Maurice Blackburn? Common law claim unlikely? - - - I can tell you what I remember.

I'm just asking you first of all to answer that question. - - - All right, he must have said that.

You know that don't you? - - - I know I went away feeling very unconfident by the interview. So, no, I actually don't know that.

You know he told you a common law claim was unlikely? - - - No. I can tell you what I do remember clearly though, because there's something that I remember he did say that put me off, having confidence in him as my lawyer.

Just tell Her Honour what he said which put you off? - - - Your Honour, at that stage I was highly agitated and I was giving the best to my ability, and in hindsight I can see that I was concentrating on the chalk dust, and he questioned how in his opinion that chalk dust couldn't give you asthma. And that was enough in my sensitive condition to really not have - come back home and not have much confidence in - in - in him or in the firm. That - that sort of made me think, well, you know, he doesn't believe me.

So you have a clear recollection of him saying how could chalk dust give you asthma? - - That stuck in my mind so well because it - yes.

Do you agree he may well have told you it was unlikely you had a common law claim? - - - I can't remember that.

You agree he may well have told you that? - - - he could of."

111 Mr McBain did not attend the meeting with MBC, so could give no direct evidence as to what may have been discussed about the merits of her common law claim.

112 I find that Mr Mier's firm were initially retained to act for Ms Stipanov only in relation to the weekly payments dispute. However, there is a significant difference between the evidence of Ms Stipanov on the one hand, and her husband and Mr Mier on the other hand, as to whether she even told Mr Mier or Ms Wilkinson that she was interested in bringing a common law claim.

113 Ms Stipanov was "adamant" that during the various conferences with Mr Paine she said she wanted to bring a common law claim and had raised the issue of damages as distinct from weekly payments. Her evidence was that, notwithstanding her wishes, Mr Paine and Mr Mier "were determined" to press the psychiatric rather than physical aspect of her injury at the Magistrates' Court hearing. Although she said that she was concerned that focussing on her mental state might have some influence on any lump sum compensation to which she would be entitled to in the future, that answer presupposes she knew and understood the MBC advice and the importance of focussing on pre-November 1997 injuries for a common law claim. Based on what Mr McBain and Mr Mier said was her concern at the conferences, I conclude that her real concern was that she believed that her lawyers did not understand just how serious her asthma was.

114 Mr McBain did not agree with his wife that she was adamant with Mr Paine and Mr Mier that she wanted to bring a common law damages claim. He said that he and Ms Stipanov made it clear to Mr Mier and Mr Paine that Ms Stipanov "wanted full compensation", but admitted that the words "common law damages" were never specifically discussed at any of the conferences with Mr Paine, nor at any other time, aside from the alleged conversation with Ms Wilkinson at Mr Mier's 40th birthday. Mr Mier agreed with Mr McBain that Ms Stipanov never raised with him the question of common law damages.

115 After August 1999, there was no further communication between Mr Mier or anyone else from his firm and Ms Stipanov or Mr McBain with respect to Ms Stipanov's legal situation until early April 2002, when Mr McBain telephoned Mr Mier and asked him to return Ms Stipanov's file. Ms Stipanov and Mr McBain gave a number of different explanations as to the circumstances in which the file was requested back; these will be considered later in these reasons.

116 Mr McBain's evidence as to what he thought Mr Mier's firm was doing in relation to the common law claim was riddled with contradictions and implausibility. On the one hand, he said that apart from the single comment at the 40th birthday party, a common law claim was never expressly discussed with Mr Mier or Ms Wilkinson. On the other hand, he said that he expected Ms Wilkinson to be "proactive" about the common law claim, that the matter was "in their hands" and the firm would be doing things (even in the absence of specific instructions). He went on to complain about the firm's failure to pursue the common law claim, and to eventually say that the firm's inactivity was the reason why he removed his wife's file in April 2002. All this from an intelligent man, an experienced solicitor, who must have been well aware of the importance of instructions for a solicitor.

117 The following transcript extracts give some flavour of the picture that Mr McBain was trying to portray.

"You retained Mr Mier to act on your wife's behalf specifically in relation to the obtaining of weekly payments and generally? - - - Yes.

Without identifying common law as an issue? - - - Yes.

He accounted to you finally with a bill saying, 'If I can do anything further let me know'? - - - Yes.

The only time common law was mentioned according to you was at a party where in a social context you said to the solicitor, 'Don't forget about the common law' and she said, 'You've got plenty of time'? - - - The only time common law in as many words, yes.

And you say that he's been derelict in his duty to your wife? - - - Well yes."

"So you were dissatisfied with the inaction by Mr Mier in relation to the common law when you asked for your file to be retrieved [in April 2002]? - - - I was.

Why didn't you just give him a call? - - - Well that was the call. I mean up to then - - -

No - - - Sorry, we felt we had time but we felt at that stage that time had gone on too long.

That's 2002? - - - That's right.

Over two years, nearly three years since the case at the, Magistrates' Court case had settled? - - - That's correct.

Did you ever think in that period of time to give him a call and say, 'How's the case going?'? - - - No, I didn't.

Why not? - - - Well I didn't feel there was any pressing need. We were waiting for things to settle, we thought we had a much longer period of time."

119 Asked why he removed the file from Mr Mier, he said "basically a dissatisfaction that we were getting any real advice."

120 Mr McBain was asked about a dinner he had with Mr Mier about seven weeks before he contacted him to retrieve the file:

"Didn't you think to mention to him when you were arranging dinner, how's the file going? - - - No.

Why not? - - - Well we really only thought about those issues afterwards.

All right so seven weeks before you'd asked for the file to be retrieved you weren't concerned about the inaction of Mr Mier, you or your wife? - - - No.

So was it immediately before the - at about the time you asked for the file to be retrieved that you became concerned? - - - Yes, not long before that time.

What was it that made you concerned? - - - Well we realised that time was pressing on and Julie had read about those cases in the newspaper.

On the occasions that you spoke to Mr Mier after the case had settled, I suggest to you on almost every occasion, he asked about Julie's health? - - - I believe he did.

That would have been a perfect opportunity to say, 'Well she's not too good and she's worried about her common law claim, how's that going,' or 'How's the common law claim going?'? - - - Well not necessarily.

It would have been a perfect opportunity to do so wouldn't it? - - - I don't agree."

121 Mr McBain also said that at a birthday dinner in September 2000, Mr Mier told him that his practice had run into financial problems and had been wound up or discontinued and Mr Mier had gone to work as an employee of another firm. Had Mr McBain thought that Mr Mier's firm was handling his wife's common law claim, it seems improbable that he would not have asked Mr Mier (if not at the birthday dinner, then shortly thereafter) what was going to happen to her claim now that the practice had been wound up. Yet Mr McBain made no such enquiry.

122 Even if I accepted Mr McBain's evidence that he felt some reluctance to raise his wife's legal problems with his old friend at social occasions, he could easily have sent a quick fax or e-mail asking what was happening with her common law claim, had he genuinely believed that the firm was acting for her in relation to that. He did no such thing in 2 1/2 years. Not one of the e-mails which Mr McBain did send to Mr Mier after August 1999 were anything other than friendly, or even hinted at the idea that he thought the firm was still acting for Ms Stipanov. Even the fax which Mr McBain sent to Mr Mier about the file collection was in cheerful, non-complaining terms:

"Attached is a copy of your letter signed by Julie. She will probably call in next week to pick up the file. Hope everything is going well!"

123 None of this seems consistent with Mr McBain being so dissatisfied at the lack of advice that he had the file retrieved from his old school friend.

124 Of course, the fact that I do not accept the evidence of Ms Stipanov and Mr McBain (that they instructed Mr Mier's firm to act for her in a common law claim, or that they thought the firm was so acting) does not of itself prove that Ms Stipanov did not want to bring a common law claim prior to the expiry of any relevant limitation period. But it goes very much to their credit as witnesses. The impression they were clearly trying to convey to the court was that ever since she saw MBC, she had wanted to bring a common law claim and had told Mr Mier and Ms Wilkinson that.

125 Some of the things which occurred after the expiry of the limitation period tend to support the conclusion that Ms Stipanov would not have issued a common law proceeding.

Ms Stipanov goes to Wilsons

126 On 4 April 2002, Mr McBain telephoned Mr Mier and asked him to return Ms Stipanov's file. During that telephone conversation, Mr Mier told Mr McBain that he would need to prepare the file for collection and would require Ms Stipanov to authorise the destruction of any documents which were his. He confirmed that arrangement in a letter to Ms Stipanov dated 4 April 2002, the final paragraph of which concluded:

"I understand that you are considering making a lump sum claim for the general damages aspect of your matter. Please let me know if I can be of any assistance to you in relation to same, and do not hesitate to give me a call if there is anything else that I can help you, your family or friends with in the future."

127 Ms Stipanov duly signed a document which acknowledged receipt of her file and authorised Mr Mier to destroy the various papers which remained the property of the firm. She collected her file a few weeks after the letter.

128 The documents which Mr Mier removed from the file and subsequently destroyed included the firm's internal memoranda and file notes, some of which were typed and some handwritten. In so far as such documents had been typed, Mr Mier was able to reproduce them from his computer hard-drive and discover them in this proceeding.

129 As discussed above, Mr McBain said that the file was retrieved because of dissatisfaction about Mr Mier's inactivity with respect to a common law claim. That is not what his wife said. She offered two different explanations as to what caused her to collect the file from Mr Mier and engage her new solicitors, Wilsons, in April 2002.

130 At first, she said that she'd been complaining to her psychiatrist, Dr Redmond, that she was feeling hard done by, because she felt her weekly payments should be 75% of a full-time wage, not a part-time wage. She said that Dr Redmond referred her to Megan Flack, a case manager at her union, about these concerns. In March 2002, Ms Flack referred her to Wilsons about this issue. She said that following a visit to Geoff Wilson at Wilsons, she determined to withdraw instructions from Mr Mier.

131 Later in her evidence, she said that before she went to see Mr Wilson, she had received a letter from WorkCover dated 29 April 2002 about the intensive case review program ("ICRP") which was being offered to workers who had been seriously injured between 12 November 1997 and 19 October 1999 (that is to say, in the "black-hole" period). The ICRP allowed workers who had received weekly payments for 2 years to apply for a lump sum in respect of future weekly benefits instead of receiving ongoing weekly payments. She said that when she received the letter, she contacted the union, who then contacted Wilsons about the ICRP. She said she went to see Wilsons because she was very confused about the ICRP process. If this version is correct, she had already obtained her file from Mr Mier before she even contacted Wilsons.

132 Nobody from Wilsons was called to give evidence at trial. However, the Wilsons file was tendered by the defendant at the request of Ms Stipanov's counsel. The first notes of a meeting with a solicitor of that firm are dated 15 May 2002. They commence by noting that Ms Stipanov was seeking advice with respect to the ICRP, for which she was keen to apply. They also record some advice about the common law limitation period, which will be discussed shortly.

133 Wilsons wrote to Ms Stipanov on 5 August 2002. The letter thanked her for asking the firm to provide advice in relation to "WorkCover", referred to the 29 April 2002 letter and explained the procedure for applying for a lump sum payment under the ICRP. It also noted that Wilsons had written to her union, asking if they would fund their services, failing which she would be liable for fees and disbursements as set out in the letter. Once the union agreed to fund her legal expenses, on 21 August 2002, Ms Stipanov signed the formal engagement letter with Wilsons.

134 It appears from correspondence on the Wilsons file that Ms Stipanov was interested in applying for both an ICRP lump sum (to replace her weekly payments) and a lump sum impairment benefit for non-economic loss or pain and suffering.

135 File notes on the Wilsons file suggest she was given advice (albeit incorrect advice[6]) about the common law limitation period, including a file note of 15 May 2002:

"6. She said wanted to know whether she could sue for asthma.

I advised her that in general that legal action must be commenced within 6 years of her first knowing that she had suffered injured [sic] and those injuries caused by employers act or omission.

On that basis I told her that all expenses prior to 15 May 94 out and the longer it went on w/o issuing rights lost.

She said her mental health was such she could not remember her story.

I told her I was concerned she understood this."

136 A further file note, dated 23 December 2002, contains the following:

"Now wants to pursue c/l

Only been able to deal w the issue since about 2 weeks ago due to her mental ill health.

I again told her must commence w/in 6 years of knowing had suffered injury and those injuries caused by DEETS acts or omissions.

This I emphasised was before establishing negl.

I told her ["therefore" symbol] that any injuries prior to 23/12/1996 probably not sue for.

I told her she must give me a history urgently.

I told her to make an appt in wk 21/1 and bring a detailed chronology."

137 If the file note is accurate, it tends to confirm my earlier conclusion that Ms Stipanov was not interested in pursuing a common law claim prior to the end of 2000. It is also consistent with some of the evidence of Mr McBain to the effect that it was only in 2002 that his wife really became interested in pursuing a common law claim.

138 A letter from Wilsons to the union dated 23 December 2002 said that the firm had now provided "detailed advice on her legal options including her access to common law damages, superannuation and ICRP settlement of her WorkCover entitlements and impairment benefit lump sums" and that Ms Stipanov wanted a final settlement of all her WorkCover entitlements.

139 According to the Wilsons' file, the last time Ms Stipanov met with the solicitor from Wilsons was in late December 2002, when she raised the issue of bringing a common law proceeding. Ms Stipanov postponed the appointment scheduled for January 2003. There is no evidence that Ms Stipanov prepared the chronology or took steps to give the history that her solicitor had requested that she provide "urgently". If the December file note is accurate, it shows that even when told (incorrectly) that time was running out, Ms Stipanov did not do what her solicitor asked her to do to enable a common law claim to be brought. That might lead one to have doubts about the seriousness of her intention, or perhaps her psychological ability, to commence a common law proceeding at that time.

140 The last letter on the Wilsons' file is dated July 2003, from Wilsons to Ms Stipanov, asking her to update them on her health and advise them whether or not she wished to pursue any further claims for compensation. There is no response from her recorded on the file.

141 Ms Stipanov gave no evidence of having discussed common law with Wilsons. She did not, for example, say that she had gone to see them because she was frustrated with Mr Mier's inactivity and wanted to pursue a damages claim. The only time when common law was raised in the context of Wilsons was in the following exchange:

"Did you tell [Wilsons] that nothing had happened on your common law claim for three years? - - - But I didn't have a common law claim. I had to have one - nobody had taken on the common law claim for me, so how could I have said that.

Did you tell them that nothing had happened on your potential common law claim for over three years? - - - I went along as a blank.

Did you or not? - - - I can't remember."

142 It is difficult to make any finding as to what, if any, discussion took place between Ms Stipanov and any solicitor at Wilsons about common law. Mr McBain did not attend any of the meetings which his wife had with that firm. Ms Stipanov's evidence barely touched the topic. Neither the union representative, Megan Flack, nor anybody from Wilsons gave evidence. The Wilsons file was produced in answer to a subpoena and was not available at the time Ms Stipanov gave her evidence. Accordingly, its contents were not specifically put to her for comment.

Ms Stipanov goes to Slater & Gordon

143 The next time Ms Stipanov consulted solicitors was in early February 2003 when she went to see Zo[lparentop] Liepa, a solicitor at Slater & Gordon. Ms Stipanov's and Mr McBain's evidence was that she decided to see that firm because she had been reading a number of newspaper articles about them acting for plaintiffs who were suffering various lung diseases. She said her husband had recommended that firm to her as well.

144 Ms Stipanov said that when she went to see Slater & Gordon, she did not think there was any time limit or impediment to her bringing a claim for damages. How she could have held that belief in the light of the MBC letter and the Wilsons' advice was never explained by her.

145 Slater & Gordon sent Ms Stipanov an 8-page letter on 12 February 2003, which confirmed the instructions they had received from Ms Stipanov and set out their advice with respect to, amongst other things, a permanent impairment claim, a common law negligence claim and weekly payments. The letter included the following advice in relation to common law:

"The Victorian Government has made a number of amendments that affect the rights of workers who were injured before 12 November 1997 to bring a common law negligence claim for damages (compensation).

I note that you suffered injury prior to 12 November 1997 but that the more serious nature of this injury did not become apparent to you until Winter 2002, when you spent a large proportion of the season in bed, due to asthma and respiratory difficulties.

Technical amendments to the WorkCover legislation provide that workers who suffered injury before 12 November 1997 must have made a preliminary application to the WorkCover insurer for permission to commence a negligence claim prior to 1 September 2000.

I note that you did not prepare and file the necessary application with the WorkCover insurer before 1 September 2000 and the time limit has now passed.

However, it may be possible to bring a common law claim on the basis that the nature and severity of your injury did not become apparent to you until after 12 November 1997. I advise that you have 3 years from the date that you became aware of your incapacity to bring a preliminary application for permission to commence a negligence claim.

Your instructions are that you first became aware of your incapacity in Winter 2002. Therefore the last date you may bring court proceedings is 1 June 2005."

146 The letter went on to explain that time had probably (but not conclusively) expired in relation to a claim for common law damages for psychological injury, because it appeared at face value that the "serious nature" of her psychological condition had became apparent on 28 January 1998. The letter also advised in relation to a number of other workers' compensation related issues, and concluded with a paragraph stating that the solicitor would take no further action with respect to Ms Stipanov's claim unless she advised the solicitor to do so.

147 Ms Stipanov confirmed in court that her condition had indeed got much worse in winter 2002. Given advice that there was still a possible basis for commencing common law proceedings in respect of her asthma, Ms Stipanov took no steps to follow this up with Slater & Gordon. Her explanation as to why she did nothing was as garbled and confusing as much of her other evidence:

"What did you do in response to that advice from the solicitor at Slater & Gordon? - - - I only ever went to Zo[lparentop] there and I explained, because right from the outset of the phone call, that I just wanted an opinion because I would be getting a second opinion, I felt lost in the situation I was in and I felt I was getting nowhere. I had noticed in the newspapers a lot of lung - - -

Is your answer you went and got a second opinion? - - - I was always going to go back to the union, but I wanted a second opinion from Slater & Gordon because of all the newspaper articles what I had seen their name and I felt that I was in a similar boat as those people. I was never going to engage her.

Did you act on that advice at all? - - - I acted on the advice by going to the union. Sorry, which advice?

Did you subsequently go to Holding Redlich? - - - Yes.

And did you show them the advice you'd received and discuss it with them? - - - No, I don't think I did.

And you've never taken steps to issue proceedings and you let the time limit expire, too, is that correct? - - - The time limit?

The time limit 1 June 2005 set out in the letter of advice from Slater & Gordon? - - - I'm getting very confused now. I didn't think that Zo[lparentop]'s information from what I understood was really addressing my whole issue and that is why I went to Megan Flack and that is why she took me to Holding Redlich and I did not show that on purposes when I went there, because I wanted a completely unbiased opinion. This is my final place. Zo[lparentop] - sorry, Megan told me that this firm was really reputable.

This is the fifth firm you've been to? - - - Well, obviously I hadn't gone to a firm that could handle my case properly."

148 Whether or not Ms Stipanov would have succeeded in a claim based on the worsening of her condition in winter 2002, is not a matter that I need to determine, given my other findings. But the fact that she did nothing when offered yet another opportunity to bring common law proceedings, tends to belie her evidence that she always wanted to and intended to bring common law proceedings.

149 For all of the reasons discussed in section E of these reasons, Ms Stipanov has not satisfied me on the balance of probabilities that, but for Mr Mier's negligence, she would have commenced the relevant proceedings prior to the expiry of the limitation period.

F. Conclusion

150 It follows that there will be judgment for the defendant.

151 I will hear from the parties as to costs.

[1] [2004] VSCA 55; (2004) 10 VR 361 at 365.

[2] Price Higgins & Fidge v Drysdale [1996] VicRp 22; [1996] 1 VR 346 at 355 per Winneke P, with whom Ormiston and Charles JJA agreed, applying Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 13; Sellars v Adelaide Petroleum NL [1994] HCA 4; (1994) 179 CLR 332 at 362.

[3] On 9 November 1995, Ms Stipanov completed an application form which requested a change from a 10/10ths to a 6/10th workload at school. The reason she gave on the form for the change was "I wish to start a family." In court, she said that the reason given in the form was false, that she had really wanted to go part-time because of the severity of her asthma. I did not find her explanation in court as to why she made the false statement particularly convincing, but need not decide which version is true. Either she made a false declaration to her employer about a serious matter, or she lied in court and the reason given in the form was true. Neither explanation reflects particularly well on her credit.

[4] It is possible that her belief as to the existence of a 6 year period was caused or contributed to by something said to her by Wilsons when she went to see that firm in 2002 and they apparently advised her, incorrectly, that she had 6 years from the injury within which to commence a proceeding.

[5] This is confirmed by Mr Mier's evidence.

[6] The advice was incorrect because the relevant limitation period had long since expired, in September 2000.