Radulovic v Multiweld Engineering Pty Ltd

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

11337/99 - VOJKO RADULOVIC v MULTIWELD ENGINEERING PTY LIMITED

JUDGMENT (Withdraw election; Leave to commence proceedings -ss 151A & 151D WCA) 1 MASTER: By summons filed 3 June 1999 the plaintiff seeks firstly, an order pursuant to s 151A(5) of the Workers Compensation Act 1987 (the Act) to withdraw the election constituted by his acceptance of lump sum compensation pursuant to the consent award made in proceedings No 10591/95 in the Compensation Court of New South Wales between the plaintiff as applicant and the defendant as respondent. Secondly, the plaintiff seeks an order pursuant to s 151D(2) of the Act granting him leave to commence proceedings against the defendant for damages in respect of an injury suffered on or about 13 January 1995 during the course of his employment with the defendant. The plaintiff relied on his affidavit sworn 27 May 1999 and the affidavit of Martin H F Bell sworn 23 June 1999. The defendant did not rely upon any affidavit evidence. 2 I carefully observed the plaintiff being cross examined and I formed the view that his evidence was truthful. For the purpose of this hearing I find the following facts.

(1) The plaintiff was born on 13 February 1963. He is married with two children aged 6 and 5 years.

(2) In November 1990 the plaintiff commenced employment with the defendant as a fitter/welder.

(3) On or about 13 January 1995 the plaintiff sustained an injury to his lower back and left leg in the course of employment. His injury occurred while he was attempting to move approximately 50 metal bars across trellises onto metal rollers with another employer. The bundle of metal bars weighed approximately 300 kilograms.

(4) On 16 January 1995 the plaintiff's general practitioner Dr Nikolic attended the plaintiff at his house for consultation in respect of his severe low back pain which radiated down his legs. The plaintiff was unable to attend the surgery as the pain was so severe.

(5) In February 1995 Dr Nikolic referred the plaintiff to Dr Beer an orthopaedic surgeon. Dr Beer diagnosed a large disc protrusion and opined to the plaintiff that he may require surgery. He assessed that the plaintiff has permanent impairment of the back and he would have a loss of efficient use of the back of 7% of the whole person.

(6) In February 1995 the plaintiff saw Dr Segelov a neuro-surgeon who raised the option of spinal surgery. The plaintiff discussed this with Dr Nikolic and was reluctant to undergo any surgery. Instead the plaintiff decided to try conservative treatment and gradual rehabilitation. In September 1995 Dr Segelov assessed the plaintiff's permanent impairment of the back at 30% and a permanent loss of efficient use of the left lower limb at or above the knee taking into account the whole limb of 12%.

(7) In March 1995 the plaintiff spent five days in leg traction and after his discharge he felt worse.

(8) On 13 June 1995 the plaintiff consulted the solicitors Firths - The Compensation Lawyers. He spoke to Ms Jenny Fraser about his compensation rights and she advised him of the steps to be taken to obtain lump sum compensation.

(9) The plaintiff's solicitor did not at any time give him any advice in relation to his common law rights.

(10) On 11 July 1995 Dr Collins agreed that surgery should be carried out. Dr Collins assessed the plaintiff as having permanent impairment of the back at 20% and as having permanent percentage loss of efficient use of the left leg at or above the knee at 16%.

(11) In September 1995 Dr Blake diagnosed a significant disc prolapse at L4/5 producing damage to the L5 nerve root supplying the left leg. His most likely prognosis was gradual improvement over a period of months and there should be further consideration given to surgery. He assessed the plaintiff as having percentage permanent impairment of the back at 30% and the percentage permanent loss of efficient use of the left leg at or above the knee, taking into consideration loss below the knee at 15%.

(12) Throughout 1995 the plaintiff's symptoms of severe low back pain radiating into his legs remained constant.

(13) On 29 February 1996 upon the advice of his then solicitors the plaintiff agreed to terms of settlement in respect of 25% permanent impairment of his back and 10% loss of use of his left leg or above his knee. On 29 February 1996 an award was made. The plaintiff subsequently received $49,471.35 in settlement monies that he deposited into his bank account.

(14) The plaintiff was not made aware by his solicitors that by banking the monies he had made an election not to bring common law proceedings.

(15) In February 1996 the plaintiff did not believe that it was likely that he would be forced to undergo an operation. He knew that he was restricted in body movements such as sitting, bending and twisting. He knew that he had been told by Drs Segelov, Nikolic and Beer that he needed surgery to fix his back problems but he was not quite sure that it would do so. He did not think that without the surgery his back condition would get worse.

(16) From 1996 and 1997 the plaintiff's symptoms remained relatively constant.

(17) In April 1997 the plaintiff was referred to Dr Compton, a neuro-surgeon. In September 1997 after investigations Dr Compton held the view that the plaintiff required surgical treatment to maximise his chances of recovery to allow him to return to work.

(18) In July 1998 the plaintiff's symptoms became much worse and he again saw Dr Compton and had a myelogram which showed a very significant disc prolapse at L4-L5. The plaintiff still remained reluctant to undergo surgery.

(19) On 10 September 1998 the plaintiff suffered severe back and leg pain and was unable to walk and was taken to Liverpool Hospital by ambulance. He was diagnosed with caudia equina compression caused by the disc protrusion. The consequences were reduced mobility of lower limbs, faecal and urinary incontinence and erectile impotence. These consequences have led to the plaintiff suffering from significant depression (report of Dr Nikolic dated 30 March 1999).

(20) On 11 September 1998 Dr Compton performed a laminectomy and discectomy at Liverpool Hospital.

(21) On 26 February 1999 the plaintiff attended Martin Bell & Co solicitors and spoke to Mr Bell about his rights at law. Mr Bell raised the question of common law rights and this was the first time that such rights had been brought to the plaintiff's attention. Mr Bell arranged for the plaintiff to confer with Mr Jay Anderson of Counsel for the purposes of obtaining advice in relation to the bringing of common law proceedings.

(22) On 10 April 1999 Dr Brenner stated that the plaintiff suffered an acute injury to his back on 13 January 1995 but this deteriorated acutely with his disc protrusion around 11 September 1998. He said that this latter deterioration of the original injury had resulted in complete loss of sexual function (100%). There was also 100% loss of normal bladder function and that both were of a direct consequence of the plaintiff's original injury but the outcome of this was not fully manifested until September 1998.

(23) On 27 May 1999 the plaintiff had a conference with Mr Anderson who advised him that he had strong prospects of succeeding upon a common law damages claim against his former employer, subject to obtaining leave of the court to revoke his election and to bring the claim out of time.

(24) On 3 June 1999 the summons to withdraw election was filed. 3 Section 151A(5) of the Workers Compensation Act provides: "If: (a) a person elects to claim permanent loss compensation in respect of an injury, and (b) after the election is made, the injury causes a further material deterioration in the person's medical condition that, had it existed at the time of the election, would have entitled the person to additional permanent loss compensation, and (c) at the time of the election, there was no reasonable cause to believe that the further deterioration would occur, the person may, with the leave of the court and on such terms (if any) as the court thinks fit, revoke the election and commence proceedings in the court for the recovery of damages in respect of the injury." 4 The plaintiff referred to Brennan Taylor v State of New South Wales NSWCA 158 and Francis v Dunlop (NSWCA, unreported 16 December 1998). 5 The defendant submitted that the plaintiff's loss of sexual function was a result of the surgery and not caused by the accident and therefore it was not an injury as defined by s 151A(5)(a). However, Dr Brenner is of the opinion that the loss of sexual function and bowel and bladder control is a direct consequence of the original injury. Further the plaintiff suffered a caudia equina compression caused by the disc protrusion which led to faecal and urinary incontinence the day before surgery. It is my view that the loss of sexual, bowel and bladder control is attributable to the accident and not the surgery performed. If the loss of sexual, bowel and bladder function was not linked to surgery, the defendant conceded that the plaintiff had satisfied s 151A(5)(a) and (b). 6 In relation to s 151(c) the defendant submitted that as the plaintiff had firstly, been told by the doctors treating him that he needed surgery; secondly, understood the mechanism of injury and thirdly, there were significant restrictions placed on him, he would more probably than not have believed a further deterioration would occur. The defendant submitted that "the further deterioration" should be interpreted in the context of "like" deterioration. It is my view that the deterioration cannot be interpreted to mean that the deterioration has to be of the "same kind" or "like" the deterioration that had previously occurred to fall within the definition of "the further deterioration". 7 In Brennan Taylor the Court of Appeal considered the interpretation of s 151A(5) and referred to Francis where the court was divided on its meaning. Handley JA dissented in Francis and maintained his dissenting view in Brennan Taylor. An application for leave to appeal has been lodged in Brennan Taylor. In relation to s 151A(5)(c) Giles JA referred to a passage of Fitzgerald AJA in Francis namely: "'Would a reasonable person with the information available to the appellant when he elected to accept permanent loss compensation on 30 June 1993 have then had any cause to believe that his injury in respect of which such compensation was accepted would cause a further material deterioration in his medical condition that, had it existed at the time of the election, would have entitled the appellant to additional permanent loss compensation?' (Emphasis added) Because of the awkward phraseology of the section, I should elaborate briefly. The section required an absence of reasonable cause for belief. On the other hand, the belief with which it is concerned is not a belief as to what might occur, but a belief as to what would occur (Cf Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266, 291-292, per Barwick CJ; 303-304 per Kitto J). Knowledge of medical advice that further deterioration probably would occur provides reasonable cause to believe that deterioration would occur in the absence of any contrary opinion, but does not necessarily do so if there is other medical advice that further deterioration probably would not occur. In the latter event, the question which I have posed would be answered in the affirmative unless, on a consideration of all the advice, a reasonable person would conclude that, while further deterioration might occur it would probably not occur." 8 At paragraph (43) Giles JA stated that: "Paragraph (c) must, of course, be read as a whole. Regard to the composite notion of reasonable cause to believe that a future event will occur, in my view, means that the further deterioration must be more than a possible event (because it can not readily be said that a possible event will occur) but not a certain event (because cause to believe and the futurity deny certainty), and that the belief must be more than suspicion (because reasonable cause should found more than suspicion) but less than complete confidence (because reasonable cause and the futurity deny complete confidence). The reference to reasonable cause connotes the existence of facts sufficient to induce the relevant belief in a reasonable person (cf George v Rockett (1990) 170 CLR 104 at 112). Assuming without deciding the field of knowledge described above, the effect of para (c) is that it must be asked whether a reasonable person knowing what was known or ought to have been known to the worker would expect the further deterioration in fact suffered by the worker as something more probable than not. If the answer is no, para (c) is satisfied." 9 Sheppard JA stated that Giles JA preferred the approach adopted by Fitzgerald AJA and prefers generally the approach adopted by Giles JA. 10 It is conceded that loss of sexual function would have entitled the plaintiff to additional permanent loss compensation. 11 As at February 1996 when the plaintiff accepted the election to claim permanent loss compensation, he had been told by Drs Nikolic, Beer and Segelov that an operation to his spine was necessary (t 2.15) but he did not know that without surgery he would get worse. He knew that the material in the disc was extruding and putting pressure on his spinal cord. He knew that he could not do any heavy lifting, twisting and bending. Throughout 1995 and 1996 his symptoms of very severe low back pain and pain radiating to his legs remained relatively constant. None of the medical reports anticipated that the plaintiff would in the future experience a caudia equina compression which led to faecal and urinary incontinence and erectile impotence. As at February 1996 a reasonable man would not have had cause to believe that this material deterioration would have occurred. 12 However, a reasonable person who was appraised of the above information as at February 1996 would not have expected the further material deterioration in fact suffered by the worker as something more probable than not. The test in para (c) is satisfied. The plaintiff has satisfied the tests in s 151A(5)(a), (b) and (c). Accordingly leave should be granted to revoke the election made by the plaintiff in February 1996. 13 I turn now to consider whether leave to commence proceedings should be granted. Section 151D(2) of the Workers Compensation 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." 14 I turn to consider whether the plaintiff has established that he has a real case to advance. It has been held in extension of time applications pursuant ss 58 and 60G of the Limitation Act 1969 that the applicant bears an evidentiary and persuasive onus which, in the absence of concession, requires material to be adduced which demonstrates that the dilatory plaintiff has a real case to advance. (See Szerdahelyi v Bailey (unreported, NSWSC, 1 May 1997); Ortado v Bailey (unreported, NSWSC, 1 May 1997); Lewis v Bailey (unreported, NSWSC, 1 May 1997); Council of the City of Sydney v Zegarac (unreported, NSWCA, 26 February 1998) and Dow Corning Australia Pty Ltd v Paton, Meares v Paton (unreported NSW CA, 24 April 1998). 15 These cases accord with Hunt J's (as he then was) view in Martin v Abbott Australasia Pty Limited [1981] 1 NSWLR 430 at p 443 in relation to a s 58(2) application when he says that the plaintiff must make it appear that the evidence that establishes a cause of action exists and that it is available to be adduced at trial. I can see no reason why this rationale should not be applied to applications to extend time under s 151D of the Workers Compensation Act. It would be pointless to extend time and to put the parties and the court to the time and expense of a trial if the plaintiff does not have a real case to advance or that there is evidence to establish that a cause of action exists. The defendant submitted that the plaintiff has not established that there is a real case to advance. The plaintiff was employed by the defendant. On 13 January 1995 he injured his back while he was attempting to lift 50 metal bars which weighed approximately 300 kilograms across trellises onto metal rollers with a employee. It is not clear precisely how the accident occurred, however the employer owed a duty of care to the plaintiff when he was lifting heavy objects. There is medical evidence that links his injuries to the accident and that he is permanently and totally unfit for work. It is my view that the plaintiff has a real case to advance. 16 I turn now to consider whether it is just and reasonable to extend the limitation period. The nature of the discretion conferred by s 31(2) of the Queensland Limitations Act was considered by the High Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; 139 ALR 1. Section 31(2) is almost identical to s 58(2) of the New South Wales Limitation Act. The Court of Appeal has applied Taylor in relation to s 60G in BHP Steel (AIS) Pty Limited v Giudice; Commonwealth of Australia v McLean (NSWCA, unreported, 28 July 1997). Sperling J in McAndrew v Wyoming Nursing Home Pty Ltd (NSWSC, 21 November 1997; 5 December 1997 unreported) held that Taylor and Commonwealth of Australia v McLean (Court of Appeal 28 July 1997, unreported) were applicable generally to statutes of limitation which incorporate provisions for extension of time in the absence of any specific statutory restriction or requirement as to what particular consideration should or should not be taken into account. 17 I turn to consider the effects of delay. In Taylor McHugh J referred to the effects of delay in the now often quoted passage at p 8 which states: "The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Secondly, it is oppressive, even "cruel", to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Thirdly, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period." 18 McHugh J at p 10 continued: "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. Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension." 19 and at page 11 he continued: "Legislatures enact limitation periods because they make a judgment, inter alia, that the chance of an unfair trial occurring after the limitation period has expired is sufficiently great to require the termination of the plaintiff's right of action at the end of that period. When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case. Even on the hypothesis of presumptive prejudice, the legislature perceives that society is best served by barring the plaintiff's action. When actual prejudice of a significant kind is shown, it is hard to conclude that the legislature intended that the extension provision should trump the limitation period. In such a situation, actual injustice to one party must occur. It seems more in accord with the legislative policy underlying limitation periods that the plaintiff's lost right should not be revived than that the defendant should have a spent liability reimposed upon it." 20 Toohey and Gummow JJ (in their joint judgment) expressed themselves in the following terms. "The real question is 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." 21 The plaintiff is a relatively young man who has suffered a serious permanent injury which materially deteriorated in 1998. He had been in regular employment prior to the accident but since the accident he has been unable to work and cannot attend to normal domestic tasks. He is unlikely to work in the future. If the plaintiff is successful in his claim he would be entitled to a substantial award of damages. The defendant did not adduce evidence of actual prejudice. The accident occurred in 1995. The plaintiff has been paid workers compensation to date and there have been workers compensation proceedings. He has been continually assessed by the defendant's doctors since the accident occurred. There may be some presumptive prejudice. 22 After taking into account all of these matters I am not satisfied that the chances of the defendant obtaining a fair trial is unlikely. Nor am I satisfied that the defendant will suffer significant prejudice. The plaintiff has discharged his onus and satisfied me that it is just and reasonable to grant leave to commence proceedings. 23 Costs are discretionary. The factor that gave rise to this application is the plaintiff's unexpected deterioration of his back condition in 1998. The defendant opposed the orders sought. It is my view that the appropriate order for costs is that costs be cost in the cause. 24 The orders I make are:

(1) Leave is granted to revoke the election made in February 1996.

(2) Leave is granted to the plaintiff to commence proceedings for damages in respect of an accident which occurred on 13 January 1995 within 14 days.

(3) Costs be costs in the cause. **********

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