TORTS - WORKPLACE INJURY - effect of recovery of damages from employer on payment of compensation - common law and other liability
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TORTS - WORKPLACE INJURY - effect of recovery of damages from employer on payment of compensation - common law and other liability
Judgment (7 paragraphs)
[1]
Judgment
By statement of claim filed 21 January 2014, the Plaintiff, Mr Salvatore La Malfa brings proceedings for work injury damages in respect of an injury said to have occurred in the course of his employment with the Defendant, Arnotts Biscuits Pty Ltd on 11 July 1989. The statement of claim alleges that on the said date, he was using a tyre lever to remove a rubber tyre from a metal rim using a "Ritch" tyre changer. Whilst applying force against the lever, he asserts that the locking pins on the tyre changer sheared off, and that he lost balance causing him to fall to the ground. [1] The Defence alleged that the Plaintiff is not entitled to recover damages against the Defendant, inter alia, by reason of s 151A of the Workers Compensation Act 1987 (NSW), [2] as was in force prior to 1 January 2012; and also because of s 151D of the same Act. In these circumstances, the Plaintiff moved the Court by motion filed 15 April 2014 for:-
1. leave to revoke a previous election to receive lump sum compensation orders made on 13 June 1985;
2. leave to enable commencement of the proceedings (being acknowledged that the commencement was out of time); and
3. various consequential orders.
The matter proceeded in advance of the hearing and following being raised by counsel for the Defendant, I agreed to reserve my decision in relation to the motion in advance of the trial; it being acknowledged that depending on the outcome, there may not be the need for a trial. [3]
The Plaintiff relied on his own affidavit sworn 25 March 2014 and various documents tendered as Exhibits A - Y. The Plaintiff also relied on an affidavit of Mr Scott Kingman dated 18 May 2016. Both the Plaintiff and Mr Kingman were cross-examined. The circumstances of Mr Kingman giving evidence will be discussed later in these reasons.
The Defendant relied on the affidavits of its solicitor Mr Najeh Marhaba sworn 7 July 2014, 28 July 2015, 4 April 2016 and 18 May 2016. Mr Marhaba was also cross-examined during the proceedings.
[2]
Section 151A
Section 151A of the 1987 Act was inserted by the Workers Compensation (Benefits) Amendment Act 1989 (NSW). [4] The section provided that a person to whom compensation was payable under the 1987 Act was not entitled to permanent loss compensation in respect of the injury and damages in respect of the injury from the employer, but was required to make an election to claim one or the other. [5] It is not in issue that the Plaintiff made the election shortly after 13 June 1995, when he accepted payment of permanent loss compensation pursuant to s 66 and 67 of the 1987 Act, as identified in the award of Moran CCJ in matter number 1087/1991. [6] The lump sum included compensation of $15,723 for 30% loss of use of the back resulting from the injury on 11 July 1989; $6551.25 in respect of 10% loss of use of the right leg resulting from the earlier injury of 9 May 1989 (unrelated to these proceedings) and s 67 compensation of $15,295.
The election having been made, the Plaintiff acknowledges that it is by the force of s 151A(4) irrevocable unless the Court grants leave for that election to be revoked. Such leave is to be given in accordance with s 151A(5), which provides:-
151A Election - damages or "Table of Maims" compensation
(5) 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.
Although counsel for the Defendant did not concede as much, no argument was raised that the requirements of s 151A(5)(b) were met.
The evidence discloses the following relevant further lump sum compensation awards:
1. 20 March 2003 - Settlement of a claim pursuant to s 66 of the 1987 Act being $23,933.90 in respect of 15% loss of neck impairment; 8% loss of right arm above the elbow; and 20% loss of left arm above the elbow, together with s 67 pain and suffering compensation of $7647.50. [7]
2. 20 July 2005 - Settlement of a claim pursuant to s 66 of the 1987 Act being $13,102.50 in respect of 20% loss of the left leg at or above the knee, $1,310.25 for 2% further loss of the right leg at or above the knee and $821.10 for the 2% loss of sexual organs, together with s 67 compensation for $8,986.15. [8]
3. 16 February 2011 - Settlement of a claim pursuant to s 66 of the 1987 Act being $8218.90 in respect of 20% loss of sexual organs, $4891.60 in respect of 7% further loss of use of the right arm over or above the elbow, and s 67 compensation in the sum of $10,500. [9]
4. 21 May 2013 - Settlement of a claim pursuant to s 66 of the 1987 Act being $8385.70 in respect 20% permanent loss of use of the right arm (8% credit in respect of previous claim) and s 67 compensation in the amount of $4000. [10]
In respect of the award of 20 July 2005, the claim in relation to a 2% further loss of the right leg above the knee was not related to the injury of 11 July 1989. [11] Although I requested that the Plaintiff establish how the loss to the left leg relates to the injury of 11 July 1989, no submission was ultimately made. [12] The Plaintiff asserted that the loss in relation to sexual organs partially relates to the injury of 11 July 1989. [13]
The medical evidence presented in the Plaintiff's case, [14] as well as a number of subsequent awards for further compensation clearly establishes that after 13 June 1995, there was a material deterioration in the Plaintiff's condition that, had it existed at the time of the election, would have entitled the Plaintiff to additional permanent loss compensation.
Sections 151A(5)(a) and (b) of the 1987 Act have thus been engaged.
Counsel for the Plaintiff drew attention to the medical evidence in the period surrounding the election to seek to establish engagement with s 151A(5)(c).
Dr Locke saw the Plaintiff on two occasions for the workers compensation insurer on 11 October 1989. He noted:-
"At the present time, he has constant low back ache. The pain is in the centre of his low back and radiates into the right sacroiliac region and sometimes into the right buttocks." [15]
Dr Locke concluded that the Plaintiff required an urgent referral to a back rehabilitation unit so that intensive and adequate treatment could be undertaken.
After undergoing physiotherapy, the Plaintiff returned to work following certification from Dr Strokon, orthopaedic surgeon. [16] Early in 1990, the Plaintiff was reported as developing very severe lower back pain and pain in the right leg. Before Easter in 1990, the Plaintiff is recorded as having developed severe lower back pain again and pain in the right leg, and was referred to Dr Bruce. [17] The Plaintiff saw Dr Bruce, on or around 11 April 1990. In a report of that day, Dr Bruce stated:-
"This patient has acute on chronic discogenic pain. This acute episode should recover with rest, physiotherapy, Digesic and Feldene. I will see the patient in a couple of weeks' time to assess his recovery but he will be off work until that time." [18]
On 2 May 1990, the Plaintiff saw Dr Locke for a second time. Dr Locke referred to Dr Bruce suggesting hospital, but the Plaintiff did not know what treatment was to be carried out. [19]
Under the heading "Complaints," Dr Locke recorded:-
"At the present time he has intermittent lower back pain but has now also developed some pain higher up the back just below the level of the shoulder blades. The pain he had in the right leg has now largely subsided. He is getting severe indigestion." [20]
Under the heading "Prognosis," Dr Locke recorded:-
"As with most disc lesions in people involved in heavy work, the prognosis is always uncertain. However, the natural history for disc lesions is for recovery over a period of months. Sometimes recovery does not occur and spinal surgery is necessary.
If Mr La Malfa undertakes an active programme of back rehabilitation he will probably be fit for some kind of work in the next six to eight weeks. On the other hand, it is likely to be three to six months before there is any chance of him resuming his pre-injury work and, I repeat, that a resumption of this kind of work may be in doubt but this, of course, will depend on what progress he makes with adequate treatment." [21]
On 7 June 1990, Dr Bruce reviewed the Plaintiff and stated that he had pain in the right lumbar area radiating to the right buttock. He stated:-
"As this patient is deteriorating, I have told him that an epidural steroid may be helpful. He will have this performed at the Westside Private Hospital next week." [22]
The procedure was carried out on 14 June 1990. Although there was some improvement, Dr Bruce noted on 6 July 1990 that the lumbar pain had got worse, but the thoracic spine was much better. Pain thereafter fluctuated, however on the 23 October 1990, Dr Bruce noted that there had been an exacerbation of associated pain down the legs. He referred the Plaintiff to Westside Private Hospital for traction and CT scans. Ultimately, the doctor did not proceed. [23]
After a difference of opinion with Dr Bruce, Mr La Malfa went to his wife's family doctor, Dr Teresa Angel-Hannibal who immediately referred him to Dr Paul Stalley, an orthopaedic surgeon. Dr Stalley examined the Plaintiff and he was informed that he had a disc problem but surgery was not necessary and that there was not a lot that could be done. Dr Stalley referred him to Dr John Ditton at the Camperdown Pain Management Centre. The Plaintiff said that Dr Ditton also told him that there was not a great deal that could be done for him and that he would have to learn to live with the pain. On 1 November 1990, a CT scan of the lumbar spine was carried out by Dr Harding-Smith, whose report records as follows:-
"There is some posterior bulging of the L4/5 and L5/S1 discs. The disc bulging is in contact with the thecal sac at both levels. Reference to scans from September 1989 shows that there is no acute disc herniation today" [24]
Plain X-rays of the cervical spine were carried out by Dr Hunter on 15 February 1991. Dr Hunter's report states that:-
"There are some very minor spondylotic changes in the lower cervical spine with a little disc space narrowing at C4/5 and C5/6. These changes are very minor however. The facet joints and the nerve root canals are well maintained. There is stability in flexion and extension. There are no cervical ribs." [25]
In his report of 2 April 1991, Dr Locke noted that since he last saw the Plaintiff he had made excellent progress and this seems to have been borne out by the CT scan. He noted that the Plaintiff was getting great relief from physiotherapy and he recommended that this continue for three to four weeks, and after which, the necessity for treatment would depend entirely on the progress. In summary, Dr Locke stated:-
"Mr La Malfa has made excellent progress since I last examined him and is now back at work. I believe he is fit to continue working but he may from time to time get attacks of back pain which require treatment such as physiotherapy or even admission to hospital for traction.
There is also the possibility of an acute flare up in his back condition with the necessity for surgery." [26]
On 31 July 1991, Dr Locke noted that the Plaintiff was working and his work was of a type that would aggravate a disc lesion and degenerative changes in the cervical spine. Dr Locke concluded:-
"It is now two years since his injury and he has had symptoms for this length of time, and it must now be doubtful that he will recover completely from his disc injury and his prognosis must be very guarded.
He could even be a candidate for surgical treatment." [27]
On 21 November 1991, the Plaintiff was seen by Dr Slezak who reported on 26 November 1991. Dr Slezak had noted that in August 1991, the Plaintiff had been referred to Dr Jay Leicester, a consultant neurologist, and no additional investigation or treatment was advised. [28] Dr Slezak opined:-
"Following on the work-related incident of the 11th July 1989, Mr La Malfa may have sustained a disc lesion at L5/S1. Despite various attempted conservative treatment measures, Mr La Malfa has continued to experience symptoms suggestive of disc instability with resultant lower lumbar discogenic pain. I consider that Mr La Malfa is fit to continue on with present selected work duties, specifically avoiding any activities necessitating any repeated bending or lifting of objects weighing in excess of 15 - 20 kg. It is likely that Mr La Malfa will continue to experience at time, unpredictable acute exacerbations of low back pain (not necessarily related to his day to day work duties). I would anticipate that any such acute exacerbations would respond promptly to rest and the judicious administration of proprietary analgesics.
I consider that Mr La Malfa's lower paracervical and inter-scapular discomfort is secondary to muscle spasm and not specifically related to his back injury." [29]
On 4 August 1992, the Plaintiff was examined was examined by Dr James Bodel. On 9 September 1992, Dr Bodel reported:-
"Historically this patient has sustained an injury to the lumbo-sacral spine as a result of a specific straining incident at work on 11.7.89. He has evidence of degenerative change in the lower lumbar regions and I believe it likely that there has been some disruption of one of the lower lumbar discs, probably the L4/5 disc, as a result of this injury.
The patient has no clear evidence of external rupture of the disc and no signs of nerve root tension although I do believe that he has genuine disc pathology.
The patient has been treated by conservative means and has coped reasonably well, although with continuing symptoms. At this stage I do not see any absolute indication for surgery, but it may be required in the future.
The patinet (sic) would benefit from weight reduction and exercises to strengthen the low back and abdominal muscles in order to optimise spinal function.
The patient's long term prognosis is therefore a little guarded and I believe that he will require some occupational retraining in order to return to the workforce. With this type of disc pathology it would be unwise for him to return to unrestricted work as a motor mechanic." [30]
In a further report of 27 February 1995, Dr Bodel stated in relation to investigations:-
"I have seen x-rays of the patient's cervical spine on 15.2.1991 and these are normal. A CT scan of the cervical spine on 15.4.1994 is also normal. A CT scan of the lumbrosacral spine on 1.11.1990 shows some minor bulging at L4/5 and L5/S1. A bone scan on 14.10.1994 shows some increased uptake in the region of L4/5 facet." [31]
Under the heading of " Examination," Dr Bodel stated:-
"This patient is a man now of 44 years who appears comfortable when sitting on a chair. He rises slowly. He is seen to stand erect and there is no spinal deformity. He is wearing a corset. He is overweight and physically unfit. There is tenderness in the trapezius muscles at the base of the neck on both sides but no involuntary muscle spasm. He actively resists neck movement to about 50% of the expected range but during the course of the interview he had a greater range of rotation. Full rotation however was never observed. There is full shoulder abduction but again discomfort is present in the trapezius muscles at the extreme of this movement and on resisted shoulder movement but there is no restriction of shoulder rotation. I can detect no lack of elbow, wrist or hand movement and no sign of neurological abnormality in either upper limb. There is no scoliotic tilt at the lumbosacral junction and the patient has some tenderness in this region. He reaches forward in flexion with his hands to the mid tibia. There is a backache at this point and also on extension and there is some crepitus on this movement. Straight leg raising is 80o and there is no sign of nerve root tension or neurological abnormality in the lower limbs. There is some retropatella crepitus in both knees. There is also some mild medial joint line tenderness in both knees." [32]
Dr Bodel concluded:-
"He has genuine mechanical backache associated with disc pathology at the L4/5 and L5/S1 levels. Clinically this disc pathology at the lumbosacral junction has arisen as a result of an injury at work on 11.7.1989. He has had further recurrences subsequently and has been managed conservatively with reasonable responses …
In the region of the neck he apparently injured this area while working under a truck about six years ago. There is no clinical indication that there is any structural damage in this region and I have no explanation for his apparent complaint of neck pain. Plain x-rays in 1991 were normal and his presentation is somewhat inconsistent in this area.
He has retropatella discomfort in both knees. The disability here is genuine.
Overall therefore the patient has a somewhat guarded prognosis mainly because of his back. He is fit for a wide range of lighter work tasks, avoiding unprotected bending, twisting or lifting but is not fit for unrestricted work as a Motor Mechanic. There is no indication for invasive tests or treatment but I would encourage weight reduction and improved physical fitness levels to optimise function." [33]
Counsel for the Plaintiff summarised the effect of the medical evidence for the purposes of his submission as to s 151A(5)(c) in the following terms:-
"That summary canvasses the medical material that was available, the objective material that was available before June 1995 when the plaintiff made his election. On any view of that medical evidence, in my respectful submission, the deterioration that has occurred since that date is not something that the doctors have alerted the plaintiff or indeed his legal advisers to. Dealing first with the back, it seems that whilst there was some fear that at any early stage surgery may be required, clearly by 1995 the specialists are saying to the plaintiff and the legal advisers that conservative treatment is the appropriate course, and the picture painted by the medical evidence is one of exacerbations being treated conservatively through medication or rest, and relief by reason of that treatment regimen.
Your Honour, as far as the neck and the arms are concerned, they don't loom large in the medical evidence, there's no doubt about that, and it seems to be when your Honour follows the reports through as I've just taken your Honour, that that is an emerging condition, but nevertheless the doctors didn't seem to think that it was anything of any great moment and, as I've taken you to, even Dr Slezak thought it had little to do with anything that happened in July 1989. So, your Honour, in my respectful submission, based on that material, your Honour would be satisfied that at the time the plaintiff made the election there was no reasonable cause to believe that further deterioration that has, in fact, occurred would occur." [34]
The Defendant for its part, contested that the Plaintiff had met the requirements of s 151A(5)(c).
To this end, counsel for the Defendant drew attention to the report of Dr Mills, general practitioner, dated 30 January 1995. That report notes the Plaintiff as suffering fluctuating pain levels in his back leading to the last occasion he was seen on 6 January 1995. On 14 October 1994, the Plaintiff stated that his back was getting worse and that he wanted an injection. Dr Mills refused and advised him to exercise and gave him 20 Panadeine Forte tablets. On 27 October 1999, the Plaintiff stated that his back was improving. The bone scan showed the L4 facet joint involvement of the left hand side (mild). On 14 November 1994, the Plaintiff was having recent episodes of increasing back pain and seeing a physiotherapist for shoulder pain and stated that he was getting frustrated because of the pain. On 7 December 1994, the Plaintiff was given 20 Panadeine Forte tablets as his right knee was locking, there was intermittent swelling and this was worse when having to do back exercises. On 3 January 1995, the Plaintiff was noted as getting bilateral shoulder pain worse on some movements. [35]
Counsel for the Defendant summarised his case based on a review of Dr Mills' report on the following terms:-
"On this view, the test for the Court is, given the medical condition of the applicant at the time of the election, and the expert opinions as to the prognosis of that type, would it be reasonable for a person to believe that the condition would further deteriorate as it had. The applicant for leave must prove a negative. He or she must show that it would be unreasonable for a person to hold that belief. That applicant will prima facie discharge that onus by tendering evidence indicating that such belief could not reasonably be held." [36]
In State of New South Wales v Taylor, [37] Gleeson CJ, McHugh and Hayne JJ referred to s 151A(5)(c) of the 1987 Act and held:-
"Hence it is the court's view of all the evidence and not the injured person's belief, reasonable or otherwise, that is decisive. On this view, the test for the court is: given the medical condition of the applicant at the time of the election and the expert opinions as to its prognosis at that time, would it be unreasonable for a person to believe that the condition would further deteriorate as it had? The applicant for leave must prove a negative. He or she must show that it would be unreasonable for a person to hold that belief. The applicant will prima facie discharge that onus by tendering evidence indicating that such a belief could not be reasonably held. If a prima facie case is established, the employer has the evidentiary burden of showing that there exists another body of evidence that indicates a contrary conclusion. Ultimately, it is for the court to determine whether "there was no reasonable cause to believe that the further deterioration would occur" in accordance with the test that we have formulated.
In determining the issue of "no reasonable cause to believe", the court does not determine whether, as a matter of probability, there was cause to believe that the further deterioration would occur. To approach the section in that way is to invert the negative proposition that it contains. On the evidence, two opposite beliefs may have been reasonably open as to whether the further deterioration would occur. If there was, the application for revocation fails. If on the whole of the evidence, whatever its source or sources, the court concludes that it would not be unreasonable to believe that the further deterioration would occur, the applicant fails. It is irrelevant that, on the same body of evidence, it would also be reasonable to believe that the further deterioration would not occur. In a case where the evidence admits of two reasonable, but opposing, conclusions, the applicant has failed to show that there was no reasonable cause to believe that the further deterioration would occur." [38]
After referring to State of New South Wales v Taylor, counsel for the Defendant concluded:-
"Your Honour, at best there are two possible conclusions to be drawn. Your Honour takes heed of what my learned friend had to say in the advancement of the plaintiff's case to suggest that there resided in the reasonable expectation of the plaintiff that there would be no deterioration, but as I've attempted to demonstrate by contemporary medical evidence shortly before the relevant June 95 date, there is evidence to point to the opposite. If your Honour, as is directed by the High Court, is left with two opposing causes, then much like the balancing of the scales on the balance of probabilities, there must be a failure on the part of the plaintiff to be seen to prove the case." [39]
In Corcoran v Tyre Marketers Australia, [40] Mason P and Grove J emphasised the importance of looking at the objective test adopted by the High Court at the time of the election, and stated:-
"38 The objective test adopted by the High Court in Taylor does not direct attention away from identifying clearly how the "medical condition" stood at the time of the election. Nor does the availability of later medico-legal opinion detract from the vital relevance of the informed opinions of the patient's treating doctors at the time. Contrary to the Defendant's submission the test on these authorities does not require the Plaintiff to present evidence that "such a belief could not reasonably be held." The test is whether the Plaintiff has discharged the onus of establishing that at the time of election there was no reasonable cause to believe that the further deterioration would (not could) occur."
Their Honours then discussed the majority decision in Taylor and held:-
"81 It is convenient at this stage to address the submissions of the respondent based upon par [14] of the majority judgment in Taylor (set out at par 47 above). In one of its manifestations, the respondent's submission drifted towards the proposition that the existence of some medical evidence indicative of probable deterioration meant that the appellant cannot prove the negative proposition required to be established.
82 It bears remembering that the ultimate issue is determining whether there was no cause for reasonably believing that the further (material) deterioration would occur. It is "would" not "could". The focus is upon a material deterioration because the definite article in the phrase "the further deterioration" in (c) points back to the words "a further material deterioration in the person's medical condition" in par (b) of the subsection (see also Taylor at [65]-[67] per Kirby J).
83 Paragraph [14] of the joint judgment in Taylor does not state that the mere existence of evidence favouring the employer on the critical issue spells doom to the application. Rather, it speaks of evidence which "admits of two reasonable, but opposing, conclusions" (emphasis added). The determination is to be made "on the whole of the evidence, whatever its source or sources" (Taylor at [14]). If, in light of the total evidence the issue is equipoised in the sense that "the court concludes that it would not be unreasonable to believe that the further deterioration would occur, the applicant fails" (ibid, emphasis added).
84 Merely because there is credible medical evidence against an applicant on the issue raised by s151A(5)(c) (on which the applicant bears the onus) does not mean that the applicant must fail. A tribunal of fact is capable of reaching a conclusion, even one beyond reasonable doubt, notwithstanding evidence to the contrary. It happens every day in the criminal courts and it can certainly happen where there is a clash of expert opinion in a civil case.
85 It would be a bold doctor who did not concede the possibility that his or her optimistic prognosis in a particular matter might not be falsified by later events. But such concession does not prevent a generally favourable prognosis from assisting an applicant seeking to revoke an election.
86 Surveying the totality of the evidence we are persuaded that the appellant sustained the burden which lay upon him. Viewed contemporaneously and with the benefit of expert hindsight, the signs of steady improvement were favourable as at October 1995. There was no reasonable cause to believe that the further deterioration that later occurred would occur. Everyone's hopes and expectations were falsified by later events, but that provided the context in which the present question came to be addressed, not the answer to that question" (emphasis in original).
The report of Dr Mills concludes by referring to complaints made by the Plaintiff in January 2015. Dr Bodel's report of 27 February 2015 postdates this although it is based on an examination on 9 December 2014. Even so there is nothing in Dr Mills' report which is inconsistent with the findings made by Dr Bodel on examination or the conclusion expressed after viewing the investigations. Whilst Dr Bodel expresses a guarded prognosis (mainly in relation to the back) this does not equate with a reasonable cause to believe that further deterioration would (as opposed to could) occur. Dr Mills' reference to the back on 14 November 2014 notes that the Plaintiff was getting frustrated. However, Dr Bodel saw no indication for invasive tests or treatment. Viewed as a whole the evidence supports the Plaintiff suffering from periodic exacerbations to his back which settled with conservative treatment. I accept that Dr Bodel's view at the time was consistent with the opinion of Dr Slezak, who in his report of 21 November 2014 stated that any acute exacerbations would respond promptly to rest and the judicious administration of proprietary analgesics. Whilst Dr Bodel found no neurological abnormality in either arm he found some restriction of movement but said the Plaintiff's presentation was somewhat inconsistent. He referred to the neck x-ray and CT scan as being normal and there being no indication of structural damage.
In my view consistent with the evidence at the time of the election, I am satisfied that the Plaintiff did discharge the onus under s 151A(5). Although its provisions are satisfied, the Court maintains the discretion as to whether or not to grant leave. Counsel for the Defendant did not advance any discretionary grounds (separate to those under s 151D(5)) for refusing the exercise of the discretion. However in view of the conclusion I have reached as to s 151D, it would be futile to grant leave under s 151A.
[3]
Section 151D
In Howley v Principal Healthcare Finance Pty Ltd, [41] McColl JA (with Meagher and Barrett JJA agreeing) summarised the relevant principles in relation to an application under s 151D stating:-
"43 A decision to grant or refuse an extension of time for the commencement of the proceedings is an interlocutory decision from which leave to appeal is necessary, such leave being given, among other reasons, where there are substantial reasons to allow an appellate review, such as where there is an error of principle which, if uncorrected, will result in substantial injustice: Dagg v Davis [2013] NSWCA 203; (2013) 64 MVR 240 (at [13]) per Ward JA (Barrett JA and Sackville AJA agreeing).
44 Section 151D(2) does not spell out specific criteria to be taken into account by the court when exercising the discretion to extend the time to commence court proceedings sought to be commenced more than 3 years after the injury was received: cf s 58(2), 60C(2) Limitation Act 1969 (NSW); s 109 Motor Accidents Compensation Act 1999 (NSW).
45 Rather, as Ipp AJA (Spigelman CJ and Sheller JA agreeing) explained in Itek Graphix (at [87]), in the passage to which the primary judge referred, s 151D confers a broad discretion to grant leave to sue after expiry of the limitation period, in which context "the general question that has to be asked is what is fair and just ... [or] what does the justice of the case require?"; see also Sheller JA (at [2]).
46 The "justice of the case must be evaluated by reference to the rationales of the limitation period that has barred the action" (Itek Graphix (at [87]), including those to which McHugh J referred in Brisbane South (at 552 - 553)), they being that as time goes by relevant evidence is likely to be lost; that it is oppressive to a defendant to allow an action to be brought long after the circumstances that gave rise to it have passed; the desirability for people in the community to be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them and the fact that the public interest requires that disputes be settled as quickly as possible.
47 McHugh J's rationales are those which underpin the notion of presumptive prejudice, a "prejudice [which] may exist without the parties or anybody else realising that it exists ... where important, perhaps decisive, evidence has disappeared without anybody now 'knowing' that it ever existed [where] ... time ... diminish[es] the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose": Brisbane South (at 551).
48 The effect of Brisbane South "is that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant": Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 (at [119]) per Sheller JA (Meagher and Handley JJA and Brownie AJA agreeing). "Significant prejudice means such prejudice as would make the chances of a fair trial unlikely": The Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 (at [96]).
49 In Itek Graphix following the passage to which the primary judge referred, Ipp AJA continued:
"I have pointed out that the justice of the case is to be determined by its own individual circumstances. Often, a failure satisfactorily to explain the delay will not be decisive. Ordinarily, the issue of prejudice will be of paramount importance: Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346 at [34] - [36]; Malone v New South Wales National Parks and Wildlife Service [2001] NSWCA 345 at [9]. Nevertheless, the justice of the case may be such that the failure to explain the delay and to prosecute the case with the requisite diligence will result in an extension of time being refused.
The rule that an applicant, who applies for leave to bring proceedings after a limitation period has expired, must provide a reasonable explanation for the delay (and show that there has not been an absence of diligence on his or her part) forms part of limitation legislation throughout the country and, independently, has long been recognised by the courts ...
The reason for this requirement is not hard to understand. A limitation provision is an expression of intent by Parliament that persons who wish to sue must do so within the stipulated time unless circumstances exist entitling them to obtain leave. A limitation provision is the general rule and an extension is the exception. In obtaining leave, a party is in effect obtaining an indulgence. To allow parties leave, when they have been careless of their rights and careless of the need to proceed with their disputes within the limitation period, would, ordinarily, be contrary to the justice of the case and would subvert the intent of Parliament. Just as the rules of court must prima facie be obeyed (Ratnam v Cumarasamy [1965] 1 WLR 8 at 12), so must the laws of Parliament."
[I note that her Honour also referred to [89], see [26] above.]
50 It should be borne in mind, as Whealy JA (Hodgson and McColl JJA agreeing) explained in Nominal Defendant v Harris [2011] NSWCA 70; (2011) 57 MVR 492 (at [45]), that Ipp JA's comments "were intended to provide useful and cautionary guidance as to the way a court exercising a broad statutory discretion to extend a limitation period will ordinarily respond [but] do not ... supplant the language of the statute [nor] ... override the broad discretionary exercise entrusted to a court to take into account all the relevant circumstances in determining what is fair and just."
51 Where an extension of time is sought to extend time to bring proceedings pursuant to s 151D(2), "it is for the person seeking to be freed from the constraint imposed by the limitation statute to show that the relevant delay is not likely to make the proceedings unfair or to cause real prejudice to the proposed defendant, that is, the person having the benefit of the time bar": Gallagher Bassett Services NSW Pty Limited v Murdock [2013] NSWCA 386; (2013) 86 NSWLR 13 (at [26]) per Barrett JA (Gleeson and Leeming JJA agreeing); see also Brisbane South (at 550) per Toohey and Gummow JJ; Sea Coatings (Australia) Pty Limited v Pascoe [2008] NSWCA 54 (at [27]) per Handley AJA (Hodgson and Tobias JJA agreeing) ("Sea Coatings").
52 Factors contributing to the justice of this case included the respondent's concession that the appellant had a prima facie case on liability. It would be otherwise if she had had a weak case, as "the apparent weakness of the plaintiff's case is a factor which militates against an extension of time": Commonwealth of Australia v Shaw [2006] NSWCA 209; 66 NSWLR 325 (at [40], [83]) per Basten JA (Handley and Ipp JJA agreeing), referred to with approval in Sea Coatings (at [51])."
[4]
Prejudice
On 14 September 1989, a workers compensation claim form was completed, [42] in respect of the subject accident which described the injury of 11 July 1989 under the heading "What happened":-
"While I was changing the tyre, the lever slipped and I injured my back." [43]
The claim form records that the accident was witnessed by Mr John Malcolm Johnston and reported to Mr Tom Carney.
On 14 September 1989, an employer's report of injury form was completed. [44] Under the heading "Injury details" and in response to the question: "How did the injury occur and what was the worker doing at the time? (eg slipped while working downstairs)", the following answer is supplied:-
"WORKER WAS CHANGING A TYRE WHEN THE TYRE LEVER SLIPPED AND HE STRAINED HIS BACK (sic)." [45]
The report of injury form records the accident as witnessed by Mr John Malcolm Johnston (leading hand) and forwarded to Mr Tom Carney (supervisor).
The statement of claim filed in this matter describes the mechanism of the injury in the following terms:
"On 11 July 1989 whilst in the course of his employment the plaintiff was using a tyre lever to remove a rubber tyre from a metal rim using a "Ritch" tyre changer (the tyre changer).
Whilst using the tyre changer the plaintiff exerted force upon a lever.
The application of force caused the locking pins on the tyre changer to shear off and in the result, the plaintiff lost balance causing the plaintiff to fall to the ground (the fall)." [46]
The assertions of the locking pins shearing off and the Plaintiff losing balance and falling to the ground not were specified in Exhibits C and D, and hence not drawn to the Defendant's attention at that time. Counsel for the Plaintiff conceded that the history of the accident recorded by medical practitioners who saw the Plaintiff were not consistent with the version of the accident pleaded in the statement of claim. [47] Further, counsel for the Plaintiff conceded that the notice to employer of the pleaded version of the accident was first given on 6 February 2013, when the pre-filing statement was provided. [48]
At paragraph [47] of the Plaintiff's written submissions, it was put:-
"Relevantly the employer completed a Declaration on 14 September 1989 that the information within the Employer's Report of Injury was true and correct in every particular. In order to do so a reasonable inference is that the author of the document, Mr McLain, Personnel Officer of Workers Compensation, had satisfied himself as to the accuracy of the matters recorded. Presumably he did so after confirming that Mr Johnson (sic) witnessed the accident." [49]
The force of this submission is dissipated by the difference in the account recorded in the claim form and employer's report of injury form, as compared to that in the Statement of Claim. Nevertheless counsel for the Plaintiff argued that the account in the claim form was consistent in some respects with the Statement of Claim. [50]
The Plaintiff's evidence was that at the time of the accident, he was working in the Defendant's workshop where there were: "may be three or four workers doing different things." The Plaintiff's evidence was that a Mr Nick Tsangaras was working close by where the Plaintiff was at the time and saw him straining on the tyre lever. The Plaintiff asserted that as far he could tell, this witness saw him fall after the tyre lever came away. [51] The transcript records the following exchange:-
"Q. Did he come to your help or aid?
A. Yes, he did.
Q. Did you show him what had occurred with the tyre lever?
A. Yeah.
Q. Did you describe to him how it came about that the lever broke away from the rim?
A. Yeah, I describe to him because we all knew what has happened with that machine.
Q. Was there anyone else there as well as Nick?
A. We all work in the workshop, all the mechanics.
Q. No, but, sorry, on the occasion that you had your injury? Right?
A. Yes, we all work in the workshop, all the mechanics.
Q. How many people were there?
A. Maybe about three or four work on different thing.
Q. As far as you can tell, were they all close enough to see what had happened to you?
A. Not necessarily.
Q. Nick was certainly close enough to see what had happened to you?
A. Yeah.
Q. Anyone else?
A. No.
Q. He was the only one?
A. Yeah, he was the only one because everybody else was working on the vehicles.
Q. After you fell, Nick came up to you to see what had happened?
A. Yes.
Q. Did he inspect the tyre lever?
A. Yeah.
Q. You showed him what had happened?
A. Yes. I said the pin broke again.
Q. What about the other people working there? Was there any discussion with them about the pin braking?
A. Yeah, the pin broke again.
Q. No, no. I know that you say the pin brake again.
A. Yes.
Q. My question, Mr La Malfa, is: did the other workers have a look at that at the time of your accident?
A. Yes, they did.
Q. Can you remember which of the workers did that?
A. There was Nick Sangaris (sic) and then there was this John Johnson (sic). That is about it. We all there when it happened.
Q. "We all" being you, Nick and Mr Johnson (sic)?
A. Mr Johnson.
Q. The three of you?
A. Yes." [52]
Mr Tsangaras was identified as a relevant witness in the Plaintiff's evidence before me. Although he had been identified as a witness in respect of an earlier injury to the Plaintiff, [53] it is clear from the Plaintiff's answers in evidence that Mr Tsangaras was working close by at the time of the accident, saw the Plaintiff straining and came to his aid after he fell. The Plaintiff stated that Mr Tsangaras was close enough to see what happened to him, and he inspected the tyre lever. The Plaintiff also said that Mr Tsangaras and Mr Johnston had a look at the pin break.
In an affidavit dated 18 May 2016, solicitor for the Defendant, Mr Najeh Marhaba, deposes that he caused inquiries to be made as to the whereabouts of Mr Tsangaras. However on 14 May 2015, Mr Marhaba was advised that the investigators were unable to make contact. The Plaintiff's evidence was that Mr Tsangaras may have retired from the Defendant in 1991 or 1992, [54] and passed away two years thereafter. [55]
The Plaintiff's evidence was that he had not asked Mr Tsangaras to make a written statement about what had happened. [56]
The Defendant's insurer (GIO) engaged Maurice J Kerrigan Associates Pty Ltd - a private investigation agency. [57] In his affidavit of 7 July 2014, Mr Marhaba stated:-
"On 28 January 2014, I received a report from Maurice J Kerrigan & Associates confirming that the defendant held no records in relation to the plaintiff and that the site of the injury had been demolished and now contains a shopping centre, offices and corporate offices of Campbell's Soup, a copy is annexed hereto and marked annexure E.
I verily believe that it would be difficult to investigate the claim made by the plaintiff in light of the factual investigation report provided by Maurice J Kerrigan." [58]
In the investigator's report [59] it was noted that the Defendant was taken over by Campbell's Soup in 1997 and due to a lapse in time since the accident, the current company has no record of the matter. It noted that the workers compensation officer of the Defendant, Ms Sherlyn Prakesh has no personnel file and cannot assist with any record of the claimant's former supervisor, Mr Tom Carney, nor any first aid records as these do not go that far back in time. The report notes that the current company has a file containing documents supplied by the Plaintiff's lawyers and GIO, and this was supplied to Ms Prakesh by the company's corporate legal division and Mr David Dwyer. The investigator's report notes that due to insufficient information about Mr Tom Carney, they have not been able to carry out further searches.
In a further affidavit of the 28 July 2015, Mr Marhaba deposed that he had received advice from the investigators that, following further inquiries, Mr John Malcolm Johnston was not able to be located. Counsel for the Plaintiff submitted that the Plaintiff's solicitor, Mr Chidiac, managed to locate Mr Johnston, and following this, the Defendant's representative spoke to him. [60] Mr Marhaba swore a subsequent affidavit on 4 April 2016 in which he deposed that following receipt of the affidavit of Mr Kurt Hippe dated 24 August 2015 confirming the location of Mr Johnston, he instructed the investigators to interview him. [61] In it, Mr Johnston states that he is now a truck driver and he left the Defendant at the end of April 1990. In 1985, Mr Johnston states that he was the fleet maintenance manager and did not spend a lot of time in the workshop in the morning. He recalled the Plaintiff from an old photograph. His statement relevantly provides as follows:-
"I have been informed that Sam had an accident in the workshop in July 1989 while he was changing a tyre on a wheel. I do not recall anything about that alleged accident.
I have never had any further contact with Sam since I left Arnotts.
I don't recall any special training that might have been provided to mechanics working for Arnotts.
After I got promoted we did not have another foreman but Scott Kingman was highly thought of and he might have taken over some of the responsibilities that I had. I don't know where Scott might be working now.
I really don't even recall what the tyre changing machine said to have been central to the accident.
I recall that 1n (sic) 2015 I was showed (sic) an incident report that had my name on it. I recall that at the time the person who showed the form to me I could tell that my name was not written in my hand-writing and further, the form was not even signed." [62]
Following the identification by Mr Johnston of Mr Scott Kingman, it appears that arrangements were made for Mr Kingman to attend Court. The Defendant however did not provide an affidavit or statement from Mr Kingman. [63] On the first day of the hearing, I permitted an adjournment to the Plaintiff's counsel to speak to Mr Kingman and to procure an affidavit. [64] An affidavit from Mr Kingman was obtained dated 18 May 2016 and read without objection. [65]
In his affidavit, Mr Kingman states that he did not witness the Plaintiff's injury but was somehow aware of it. [66] Mr Kingman stated that he was nonetheless familiar with a Richt tyre machine and the process of pulling on the lever to remove the tyre. Mr Kingman stated that in 1988 he was pulling a lever to remove a tyre on the Richt tyre machine when he felt pain in his lower back. [67] His evidence was that sometime afterwards, the Richt machine was replaced by a FMC 8500 tyre changer which removed the manual handling requirement to remove the rubber tyre from the trim. [68] Mr Kingman stated that he was contacted by the investigator, instructed by Hicksons Lawyers, two weeks earlier and this was the first time he was asked by the Defendant to provide information in the case. He stated that he was shown a letter from Hicksons Lawyers outlining details of the Plaintiff's case and he provided a statement to the investigator. [69]
Mr Kingman was cross-examined and stated that at the time of the alleged injury, he would have been working on the workshop floor. When asked about his recollection of being alerted by the Plaintiff to a problem of a pin shearing, the following exchange is recorded:-
"Q. I take it that Mr La Malfa never alerted you to a problem of a pin shearing
off the tyre machine?
A. I don't recall. I read the statement from - it was in the Hicksons Lawyers papers last week. That was the first that I knew of the pin breaking. That's my first recollection of it.
Q. Yes.
A. I have no recollection.
Q. So if there was a problem with a pin shearing off associated with Mr La Malfa's injury you would recall that, would you not?
A. Well, I would have thought so." [70]
Mr Kingman described the 1988 incident in which he was involved as not involving the tyre machine breaking or malfunctioning. [71] He could not confirm when the FMC tyre changer was brought into operation, beyond "sometime after Sam hurt his back." [72] Mr Kingman stated that he did not know whether the incident/accident log(s) still exist, backdated to 1989, and was unaware of any other accident involving a colleague using a Richt tyre machine. [73]
Counsel for the Plaintiff asserted that counsel for the Defendant did not contend that the Plaintiff should not be believed. [74] However the Defendant's Defence clearly puts the circumstances of the accident in issue, by not admitting paragraphs [4] - [7] of the Statement of Claim [75] and denying negligence. Whilst the Defendant has raised doubts as to the strength of the Plaintiff's case [76] in light of the variance in the accounts presented, in my view, the real issue is the Defendant's capacity to meet the allegation now made.
The variance between the reports of injury contained in Exhibits C and D and the Statement of Claim raise issues as to the ability of the Defendant to advance its case after over 26 years. Mr Tsangaras has passed away. Mr Johnston has no recollection of the accident. Mr Carney has not been able to be located. Mr Kingman has been located but he has no recollection of the actual accident scene.
In written submissions the Defendant raised further prejudice arising from the practical inability to join a Cross Defendant being the manufacturer or distributor of the tyre changer in light of the provisions of s 26 of the Limitation Act 1969 (NSW) and the fact that the tyre changer is no longer available. In support of its submission the Defendant cited Tekno Ceramics Pty Ltd v Zdenko Milat. [77] In that case the Court was satisfied on the evidence that there would have been a viable cross claim available to the Defendant had it been brought within time. However, in this case the only evidence before the Court is to be found in the report of Mr David Cockbain from Safety and Forensic Engineering Pty Limited dated 15 November 2012. That report states:
"With specific reference to the 'locating pin' (Figure 4) which catastrophically failed and which subsequently allowed the rim to rotate throwing the Plaintiff off balance, the Plaintiff reports that the pins were not supplied by the original equipment manufacturer (OEM) and were fabricated elsewhere I the Defendant's workshop by one of the fitters and turners employed by the Defendant." [78]
The Defendant did not advance any other evidence regarding this issue. In the circumstances I am not satisfied that any prejudice or unfairness of the kind that arose in Tekno Ceramics Pty Ltd v Zdenko Milat has been demonstrated.
In weighing the question of prejudice the Plaintiff says I should bear in mind the efforts undertaken by Mr Marhaba, and in particular:-
1. Mr Marhaba's contact with the employer to ascertain the existence of documents relevant to this case; and
2. The fact that Mr Kingman provided a statement to Hicksons two weeks earlier; a fact he had not disclosed to the Court in his affidavit evidence.
Mr Marhaba was questioned about the file in the possession of the Defendant and inquiries made of the Defendant in the following exchange:-
"Q. You'll see, in exhibit E, the reference, the fourth paragraph, "The current company has a file which contains documents supplied by the claimant's lawyers and GIO, which are produced." You've not seen that file, I take it?
A. I've certainly seen the GIO file.
Q. But you haven't seen the file that's referred to by the investigators, because it would seem that that was a file supplied to the investigator - as is the investigator describes, at the current company. Correct?
A. Correct. That's what it has been described as, yes.
Q. Then, if you go on to three paragraphs later
HIS HONOUR: What page are we talking about?
STANTON: Your Honour, this is on the first page of the report. Now I'm at the second-last paragraph: it starts with, "We liaised with the workers' compensation officer at the current company, Ms Sherlyn Prakash. A copy of the subject file had been supplied to her by the company's corporate legal division, Mr David Dwyer." It's exhibit E to the affidavit of - the July 2014 affidavit, your Honour. I think it's the second-last page of the affidavit, your Honour, if that helps.
Q. Well, again, the file that's identified by the investigators is not a file that you've ever seen. Is that correct?
A. No, I've never seen it.
Q. Seemingly, according to the contents of that paragraph, that file was provided to Arnotts' legal division, Mr David Dwyer?
A. That seems to suggest it is.
Q. Have you ever had any conversation with Mr Dwyer about this case?
A. No.
Q. Have you ever spoken to Ms Prakash about this case?
A. No, I haven't.
Q. So, following that attempt, you then swore the affidavit of 28 July 2015.
You have a copy of that?
A. Yes.
Q. You say, at paragraph 8, you understood that Tom Carney could not be located, because of insufficient particulars. That is, insufficient particulars that Maurice Kerrigan's had. Is that right?
A. That's correct." [79]
On the basis of this exchange, counsel for the Plaintiff criticised the Defendant's investigation of Mr Carney stating, in submissions:-
"STANTON: That's where it rests. And this is the same investigators who couldn't find Mr Johnson (sic). And it was only - and that's Mr Marhaba's second affidavit. And it was only when Mr Chidiac managed to locate Mr Johnson (sic) that they went and spoke to him. So your Honour wouldn't be persuaded on the evidence that Mr Carney is not available to the defendant and can't be located.
HIS HONOUR: Not available?
STANTON: Yes. That he can't be located. Why weren't they asked to undertake some further inquiries? With Mr Johnson (sic) they went and undertook electoral roll searches and matters of the type." [80]
This proposition of doing more to locate Mr Carney was not directly put to Mr Marhaba. Counsel for the Plaintiff conceded as much. [81] In particular, nothing was put about other things that he could or should have done to ascertain the whereabouts of Mr Carney. Further no attempt was made by the Plaintiff to obtain the Defendant's records. [82] The Defendant's counsel informed me without objection, that the Plaintiff had not issued a subpoena for the Defendant to produce any documents. [83]
In further support of its argument, the Plaintiff relied on the failure of Mr Marhaba to disclose the circumstances of obtaining a statement from Mr Kingman, two weeks beforehand in his final affidavit of 18 May 2016. This fact was revealed in circumstances which I have previously described. In cross-examination, Mr Marhaba acknowledged that a signed statement of Mr Kingman was dated 11 May 2016 [84] was obtained a week before the hearing. Mr Marhaba denied his failure to advise of the statement of Mr Kingman was an attempt to mislead the Court. [85]
The Plaintiff submitted that the circumstances were such that I should weigh the Defendant's case of actual prejudice in light of the fact that the Defendant conveyed a misleading impression as to the extent of that prejudice.
The Plaintiff sought support for its argument by relying on The Salvation Army (South Australia Property Trust) v Rundle. [86] In that case McColl JA stated:-
"102 The primary judge was entitled to weigh the appellant's case of actual prejudice in light of her conclusion that it had conveyed a misleading impression of the extent of that prejudice. As Hodgson JA said in Oran Park v Fleissig (at [66]):
'…evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted': Blatch v. Archer (1774) 1 Cowp 63 at 65, 98 ER 969 at 970 per Lord Mansfield. This principle is applied where one party fails to calls evidence which it could have called: Armory v. Delamirie (1722) 1 Stra 505, 93 ER 664; Jones v. Dunkel (1959) 101 CLR 298; Ho v. Powell (2001) 51 NSWLR 572. In my opinion it applies at least equally where the absence of evidence arises from deliberate lies told by a party who is in a position to tell the truth about the matter: I do not think such a party should be in a better position than one who refrains from giving the evidence. Indeed, the principle may operate more strongly in the case of deliberately false evidence than in the case of mere failure to lead evidence' (emphasis added)'"
These remarks were made in the context of a case where the Appellant raised the issue of prejudice arising from the death of witness in circumstances where they did not disclose that they had received a statement from the witness before his death. Further the allegation of prejudice was made in relation to unsuccessful attempts to obtain information from Dr Le Page, but it emerged in cross-examination that the doctor had only treated residents who had been referred to through a particular clinic and had never treated the Respondent.
McColl JA further stated:-
"103 It is apparent that her Honour had this principle in mind when (at [113]) after referring to the misleading impression the appellant's affidavit evidence conveyed, she remarked that a different picture emerged as to the extent to which the appellant would be hampered in meeting the claim. I can discern no error in the inference her Honour drew in this respect. The principle is also applicable to the weight her Honour gave to the respondent's discharge of his onus. Of particular significance in this respect, in my view, was the misleading impression conveyed by the statement that Major Huxley had died. Major Huxley and his wife were assistant managers at Eden Park from January 1961 to January 1966, substantially the entire period the respondent was a resident of the facility. Major Huxley died in 2004, but, as was extracted from the appellant's solicitor in cross-examination, a statement had been taken from him before his death. The appellant's statement that the solicitor was entitled not to disclose even the fact of having obtained a statement from Major Huxley in reliance on legal professional privilege is disingenuous. Privilege is not waived by the mere reference to a document in pleadings or an affidavit: Attorney-General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475. However what was of grave concern was to convey the impression to the Court that his death prior to the commencement of proceedings had foreclosed an avenue of inquiry.
104 The primary judge was also entitled to take a jaundiced view of the appellant's case of actual prejudice in the light of the misleading impression it conveyed in respect of Dr Le Page. In the light of this evidence, I am unable to conclude that even if, (at [68]) her Honour referred to a statement to which she was referred during a voir dire, she attached such weight to it as would invite appellate intervention."
Basten JA did not share this view [87] and stated:-
"137 … Her Honour describes the primary judge as having been "entitled to take a jaundiced view" of the appellant's case of actual prejudice: at [104]. That is a matter on which I would place no weight. The primary judge's description of at least one of the submissions put forward by the appellant as "somewhat disingenuous" - at [119] - may be thought to carry with it a connotation of lack of probity which, perhaps understandably, gave rise to challenge. Whether or not the connotation was intended, and whether or not it was justified, it was of little relevance to the exercise to be undertaken. However, I would not read her Honour's reasons as indicating that she was diverted in any material respect from the statutory task of assessing whether the extension of time was required by "the justice of the case", a task which it was conceded the primary judge had correctly identified in terms of legal principle."
It is useful in this context to re-state the principles which apply in relation to establishing prejudice.
In Brisbane South Regional Health Authority v Taylor, Toohey and Gummow JJ stated:-
"There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant. Where prejudice is alleged by reason of the effluxion of time, the position is as stated by Gowans J in Cowie v State Electricity Commission (Vic) [1964] VR 788 at 793 in a passage which was endorsed by Gibbs J in Campbell v United Pacific Transport Pty Ltd [1966] Qd R 465 at 474:
'It is for the respondent to place in evidence sufficient facts to lead the Court to the view that prejudice would be occasioned and it is then for the applicant to show that these facts do not amount to material prejudice'" [88]
In Uniting Church in Australia Property Trust (NSW) t/as Woodfield Retirement Village v Lea [89] , the Respondent was granted leave to revoke her election to claim permanent loss compensation under s 151D(5) of the Workers Compensation Act 1987 (NSW) and subsequently, the judge (at first instance) exercised his discretion under s 151D(2) of the Act and allowed for an extension of time. The Appellant pleaded that a key witness had now become a resident in China at an unknown address, and therefore, it was prejudiced. Further, there were other witnesses who were present at the scene of the accident who had become unavailable (now deceased).
Ipp AJA (with Powell and Beazley JJA agreeing), citied Brisbane South Regional Health Authority and held that this was sufficient to discharge the evidentiary onus on the Appellant. His Honour stated:-
"31 In my view, the appellant, by leading evidence that Ms Lin is now a resident in China at an unknown address and by claiming that, in consequence, it was prejudiced, discharged the evidentiary onus on it. It was then for the respondent to satisfy the Court that the justice of the case required that time should be extended, notwithstanding Ms Lin's absence.
32 Similarly, in my view, the appellant discharged the evidentiary onus upon it in regard to those persons who were present in the ward at the time the incident occurred and who had died by the time the respondent sought leave to revoke her election. Again, it was for the respondent to demonstrate that, despite the fact that these potential witnesses had died (without apparently having made any statements about the incident), time should nevertheless be extended."
Further, His Honour stated:-
"37 In my view, the inability of the appellant to lead the evidence of the other patients in the ward is also an important factor … The onus was on the respondent to prove that the appellant's inability to call these persons as witnesses would result in no prejudice to it, but it failed to do so."
In my view, the circumstances of the prejudice alleged in the present case do not convey a misleading impression of the kind suggested by McColl JA in the Salvation Army (South Australia Property Trust) v Rundle. At no stage did the Defendant assert any prejudice based on an inability to locate Mr Kingman. Whilst Mr Marhaba's affidavit did not refer to Mr Kingman, Mr Kingman attended Court on 18 May 2016 at the Defendant's request, a factor acknowledged by the Plaintiff. [90] The Plaintiff used the opportunity to put on evidence from him.
The Defendant discharged its evidentiary onus as to prejudice by referring to the limited documents in its possession, the unavailability of Mr Tsangaras and Mr Carney as well as the limited recollection of Mr Johnston. Clearly the accounts of these three witnesses have the potential to critically affect the outcome of the litigation.
The Plaintiff sought to respond to the claims of prejudice by referring to the evidence of Mr Kingman. However the pleaded allegation as to the mechanism of the injury is not one on which Mr Kingman is able to shed any light. I am also satisfied on the basis of Mr Marhaba's evidence that the records of the Defendant are limited. Whatever documentation relating to the injury might have once existed it cannot in any event be assumed that this would this would have involved investigation of the circumstances of the negligence alleged in view of the contents of the Exhibits C and D.
Overall other than criticising the Defendant's actions and presenting Mr Kingman's affidavit, the Plaintiff did little to indicate how the identified prejudice could be sufficiently addressed so as to allow for a fair trial.
[5]
Delay
The Defendant also cites delay as a factor militating against the exercise of discretion.
The Plaintiff's evidence was that he had not been advised of his entitlement to bring a claim for work injury damages prior to consulting his present solicitors - Mr Chidiac of Sanford Legal on 14 August 2008.
Schedule 1.2 of the Workers Compensation Legislation Further Amendment Act 2001 (NSW) [91] commenced on 1 January 2002. Its effect was to apply to the Plaintiff's case from that date, a threshold now set out in s 314 of the Workers Injury Management and Workers Compensation Act 1998 (NSW) as to a 15% whole person impairment. However, by reason of cl 9 (3) of Schedule 1 of the Workers Compensation Legislation Further Amendment Act 2001 (NSW), the provisions in ss 151G and H of the 1987 Act would not apply to any assessment of damages.
Counsel for the Defendant submitted that because the Plaintiff let time elapse for whatever reason, he had to put himself in the position where, it being a post-2001 circumstance, he would have to go through the path of establishing that he met the relevant threshold. [92]
The Plaintiff had instructed Bolzan and Dimitri Lawyers until around 2005. In about June 2006, he instructed Maurice Blackburn and Cashman Lawyers. [93]
The Plaintiff stated that at no time did any former lawyer advise him of his right to pursue a claim for common law/work injury damages and that he did not know that he had the right to claim for damages against his employer. [94]
He stated that he saw his present solicitor, Mr Chidiac, in relation to his workers compensation claim on about 14 August 2008 and Mr Chidiac explained to him that there were certain requirements he had to establish in order to be able to lodge a claim for damages, including reaching a 15% whole person impairment threshold and being able to establish negligence against the Defendant. [95]
Subsequent to that advice, the Plaintiff made two further claims for lump sum compensation arising from the accident on the 11 July 1989. Both of these claims were made on his instructions.
On or around 16 February 2011, Plaintiff states that Mr Chidiac informed him that he could bring a work injuries damages/common law action against the Defendant and he should "seriously consider it." [96]
In April 2012, the Plaintiff contacted Mr Chidiac and informed him that he was ready to pursue a claim for work injury damages to resolve his claim once and for all, and instructed him to act on his behalf for this claim. [97] Correspondence was subsequently written to the Defendant's solicitors on 26 April 2012 to ascertain whether or not the Defendant would agree to Dr Guirgis, orthopaedic surgeon, assessing the Plaintiff for the purpose of determining whole person impairment. [98] Eventually the Defendant's solicitors agreed to pay for Dr Pillemer to assess whole person impairment. [99] Dr Pillemer's report dated 14 June 2012 assessed the Plaintiff as suffering from a 30% whole person impairment. Dr Pillemer's assessment was accepted. [100] Counsel for the Plaintiff conceded that this was not the earliest time such an assessment could have been performed. [101]
The Plaintiff's solicitors then wrote to Mr David Cockbain of Safety and Forensic Engineering Pty Ltd on 4 September 2012 requesting an expert report. A report was supplied to the Plaintiff's solicitor via email on 17 December 2012. [102]
The Plaintiff then instructed his solicitor to serve the notice of claim pursuant to ss 281 and 282 of the Workers Injury Management and Workers Compensation Act 1998 (NSW) which was attended to on 8 February 2013. The said notice included the pre-filing statement, the statement of claim and statement of particulars. [103]
Counsel for the Defendant in cross-examination of the Plaintiff probed the circumstances of the instructions and the advice received from Bolzan and Dimitri [104] and from Maurice Blackburn and Cashman Lawyers. [105]
The Defendant submitted that it "beggar[ed] belief" that a firm such as Maurice Blackburn and Cashman (and to a lesser extent Bolzan and Dimitri), who were well known personal injury practitioners would not have turned their mind to a common law claim in circumstances where the Plaintiff had presumably told them that there was an act of negligence in the use of a machine that had defective pins in them. [106] The Defendant did not subpoena any records from either of the firms, nor did it seek production from the solicitors for the Plaintiff. It contended that had it sought to do so, then an application for privilege would have been raised on behalf of the Plaintiff. Whether this would be so and whether any privilege claim (assuming it was raised) would be successful in light of the evidence and issues before the Court are matters that need not be determined. In the end, the Court can only act on the basis of the evidence before it.
I have some doubts as to the Plaintiff's veracity however it is difficult to discount his evidence on this issue not knowing the full circumstances with his earlier solicitors. The Plaintiff clearly left both his previous solicitors in circumstances of disagreement. Further, even when he was subsequently informed of his rights to seek leave to revoke his election, he delayed.
The Plaintiff was advised on several occasions about the potential to bring a work injury damages claim but did not give instructions for this to be pursued until April 2012. This was approximately under four years after he was first advised by Mr Chidiac of a potential claim for damages. By reason of his delay, further delay was brought about by the need to meet obligations under amendments to legislation requiring a 15% whole person impairment, albeit that change came about at a time when he instructed Bolzan and Dimitri.
The Plaintiff was cross-examined extensively in respect of the delay in him giving instructions to pursue a common law damages claim. When questioned in relation to the advice given to him by Mr Chidiac, the Plaintiff stated that he did not give instructions straight away:-
"Because I thought that I was still getting paid from the insurance that that probable (sic) wouldn't be possible" [107]
He subsequently conceded that he was possibly told by Mr Chidiac on assessment of his instructions that there was a case in negligence. [108] Then when questioned as to his realisation that time was running away in 2011, he stated:-
"Yeah, but I'm not a lawyer. I don't understand. No-one ever explained to me exactly what was going and that - -"
And further:-
"Now I still was getting paid from the insurance and I was on WorkCover and that - I thought that's what it is." [109]
The Plaintiff was then questioned as to the timing of the advice he received from Mr Chidiac. The evidence discloses some deficiencies in his recollection [110] at various stages when questioned about his response to Mr Chidiac's advice. The Plaintiff stated:-
"I told him to do whatever is necessary to do because I don't know nothing about the law or anything like that. No-one ever told me before anything." [111]
"… I said to him, do whatever is necessary, whatever you think I am legally bound by." [112]
This evidence of instructing Mr Chidiac to do "whatever is necessary" and to do "whatever you think I am legally bound" implies that the Plaintiff was submissive to the advice he received. However this is inconsistent with the Plaintiff's affidavit evidence and the delay in instructions which followed.
The Plaintiff was asked why he did not react straight away when Mr Chidiac informed him of the time limit which applies and the following exchange is recorded:-
"Q. Yes. Well, why didn't you react straightaway when he told you?
A. What - I didn't see - because I still was getting paid from the insurance and I thought maybe it would not work. I don't know.
Q. So you were content, were you, to rely on the payments you were getting from the insurance company and not worry about the common law claim. Is that correct?
A. At that time probably yes. I was sort of more comfortable that way at that time and was getting whatever I was getting, you know.
Q. Right.
A. Because I didn't have not much choice, or that's what I thought.
Q. Mr La Malfa, may I ask you this question?
A. Yes.
Q. Is it the case that you had decided, after all things considered, that you were better off leaving your workers compensation rights in place rather than to pursue common law?
A. Well, I - that one there, the way it was, it was so many years that I was going like that so, you know, I said..(not transcribable)..nobody ever told me this thing. I was a bit, you know, undecide what I had to do.
Q. Because you knew, didn't you, that once the common law case was determined you would not be entitled to any more workers comp. You knew that, didn't you
A. No, I didn't know that.
Q. Yes.
A. I didn't know that at all.
Q. And were you told that your weekly payments would cut out when you reached 66 years of age?
A. Yes.
Q. And when did you turn 66?
A. On 3 September last year.
Q. And so is it the case, Mr La Malfa, that as you saw your 66th birthday coming up that you realised that you would get no more workers comp?
A. They told me. The insurance informed me by letter that I were going to get to 66 in..(not transcribable)..66.
Q. And is it the case that when you realised that your workers comp rights were going to be taken away because of your age it was then that you decided that you would pursue a common law claim?
A. It wasn't necessary because of that.
Q. Well, was it part because of that?
A. No, because I thought that when I will be 66 because I've been - I was working hard all my life I thought that I probably would not get any pension or anything like that.
Q. Yes.
A. So I had to rely on something.
Q. Could it be said--
A. And I had to live on it.
Q. Mr La Malfa, could it be said that you wanted to get every penny of your workers compensation benefits paid before you then turned around to make a common law claim?
A. No, to me it was comfortable for me to know that I can sort of live a reasonable comfortable life because this has been costing a lot of money in all these years that I didn't have an income or anything like that from anyone except the workers compensation that I was getting.
Q. Mr Chidiac did tell you, though, didn't he, that once you got your common law settlement or a judgment from the court no more workers comp.
A. ..(not transcribable)..about work, no more work. I knew that at 66 the work comp will be finished.
Q. Yes.
A. That I know, but I did not have - I would not necessary I will have any other income.
Q. Yes. But did you also know from what Mr Chidiac had told you or, indeed, any other solicitor, that once you received money from a common law claim, such as this one we're dealing with today, you would get no more workers comp, irrespective of what age you were?
A. Yes. Well, I--
Q. Was that explained to you?
A. Yes.
Q. Right.
A. But the - all right. Okay.
Q. That's correct.
A. That's what--
Q. So is it the case that you instructed Mr Chidiac not to pursue the workers comp because you wanted to maximise the benefits that you were entitled to under the workers compensation benefits?
A. Worker compensation, I don't know what this formal law is or what this WorkCover or anything like that. I was getting that bit of money for me every week and I was happy to get it at that time every week, but after 66 the point is that I will not have no more income from anything. I will not have not have no more income on everything and I have to live somehow.
Q. Well, now that we've discussed some aspects of this, Mr La Malfa, are you now able to let me know why it was in 2011 that you told Mr Chidiac to do nothing about the work injury damages claim?
A. Yes, because the insurance has sent me a letter that my WorkCover - that my payment would stop at 66.
Q. Yes. And so you thought you'd leave that go until your 66th birthday. Is that right?
A. Well, if it was necessary, yes." [113]
I am satisfied on the basis of this evidence that the Plaintiff's delay particularly after advice from Mr Chidiac in relation to the potential to bring common law proceedings from 14 August 2008 to April 2012 was largely brought about by a desire to retain his compensation entitlements, a factor which is further supported by the bringing of two further claims for lump sum benefits under ss 66 and 67 of the 1987 Act. However, bringing a work injury damages claim (assuming leave was granted) would not have affected his entitlement in the interim to weekly compensation and s 60 expenses. These would however come to an end had any work injury damages claim successfully concluded.
The deliberate decision of the Plaintiff to delay giving instructions when given clear advice from Mr Chidiac has not been satisfactorily explained. Although as at 14 August 2008 the limitation period had long expired, it reinforced the importance of acting quickly to seek leave.
Counsel for the Plaintiff contended that the power to grant an extension under s 151D does not have a long stop. Whilst this is correct, the statutory policy as expressed in Brisbane South Regional Health Authority v Taylor by McHugh J must be borne in mind:
"A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. …… whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. 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." [114]
[6]
Conclusion
In considering the four broad rationales referred to by McHugh JA in Brisbane South Regional Health Authority v Taylor [115] is clear that actual evidence has been lost and recollections have clearly faded in the years that have passed. The Defendant in my view has identified significant prejudice in circumstances where the Plaintiff has not established that a fair trial is possible. [116]
Whilst this in itself would be sufficient to refuse leave for an extension, [117] the delay in commencing proceedings has not been satisfactorily explained. Counsel for the Plaintiff conceded that in the time that passed and based on the lump sum claims made the Defendant would have arranged its affairs and resources on the basis of a common law claim not being brought against it. [118] To allow the Plaintiff an extension of time in line with what he saw as his interests in terms of retaining his workers' compensation rights would clearly be against the public interest in seeing disputes resolved quickly and the policy underlying the legislation.
In all of the circumstances I am not satisfied that it is fair and just for the extension of time to be granted.
The applications for leave to revoke the election under s 151A(4) and to obtain an extension of time under s 151D(2) of the 1987 Act are refused. The orders made are:
1. The Plaintiff's Notice of Motion filed 15 April 2014 is dismissed;
2. The Plaintiff is to pay the Defendant's costs of the Motion; and
3. I will hear from the parties before finalising orders in the substantive proceedings.
[7]
Endnotes
Statement of Claim at [5]
Hereinafter referred to as the "1987 Act"
T 58.41 - 60.28
Assented to 5 September 1989
s 151A(2) of the 1987 Act. Although s 151A was amended by the Workers Legislation Further Amendment Act 2001 (NSW), Schedule 6 cl 18(C) s 9(3) provided that an amendment made by Schedule 1.1 of that Act did not apply where a person had made an election under s 151A before the commencement. It was not in issue that this amendment did not apply in the circumstances of this case.
Exhibit B
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [16] - [17] and Annexure B
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [20] - [21] and Annexure D
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [32] and Annexure H
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [38]
T 63.29 - .32
T 63.36 - .43
T 63.45 - .48
Dr Searle's reports in particular, evidence deterioration in the Plaintiff's condition during the period from 2002 to 2010: see Exhibit W, Reports of Dr Alan Searle dated various dates, commencing 14 February 2002, and concluding 7 February 2010
Exhibit H, Report of Dr Gerald Locke dated 11 October 1989, p 2
Exhibit H, Report of Dr Gerald Locke dated 2 May 1990, p 1
Exhibit H, Report of Dr Gerald Locke dated 2 May 1990, p 1
Exhibit J, Report of Dr Warwick Bruce dated 11 April 1990, p 2
Exhibit H, Report of Dr Gerald Locke dated 2 May 1990, p 1
Exhibit H, Report of Dr Gerald Locke dated 2 May 1990, p 2
Exhibit H, Report of Dr Gerald Locke dated 11 October 1989, p 3
Exhibit J, Report of Dr Warwick Bruce dated 7 June 1990, p 1
Exhibit J, Report of Dr Warwick Bruce dated 8 November 1990, p 1
Exhibit K, Report of Dr John Harding-Smith undated, p 1
Exhibit L, Report of Dr Nigel Hunter dated 15 February 1991, p 1
Exhibit P, Report of Dr Gerald Locke dated 2 April 1991, p 3
Exhibit P, Report of Dr Gerald Locke dated 31 July 1991, p 2
Exhibit Q, Report of Dr Peter Slezak dated 26 November 1991, p 3
Exhibit Q, Report of Dr Peter Slezak dated 26 November 1991, p 4
Exhibit N, Report of Dr James Bodel dated 9 September 1992, pp 2 - 3
Exhibit N, Report of Dr James Bodel dated 27 February 1995, p 3
Exhibit N, Report of Dr Bodel dated 27 February 1996, p 3
Exhibit N, Report of Dr Bodel dated 27 February 1996, p 4
T 69.50 - 70.21
Exhibit M, Report of Dr Ross Mills dated 30 January 1995, pp 8 - 9
This is said to have occurred on 9 May 1989 see Affidavit of Mr Najeh Marhaba dated 7 July 2014 at Annexure A; and also Affidavit of Mr Najeh Marhaba dated 28 July 2016 at [3]
T 24.36
T 24.27
T 25.5 - .7
Hereinafter referred to as the "investigators"
Affidavit of Mr Najeh Marhaba dated 7 July 2014 at [10] - [11]
Affidavit of Mr Najeh Marhaba dated 7 July 2014 at Annexure E
T 88.14 - .17
The statement of Mr John Malcolm Johnston, dated 23 January 2016 is found in the Affidavit of Mr Najeh Marhaba dated 4 April 2016 at Annexure B
Affidavit of Mr Najeh Marhaba, dated 4 April 2016, Annexure B at [8] - [13]
T 14.22 - .24
T 15.3 - .15
T 16.11 - .13
See Affidavit of Mr Scott Kingman dated 18 May 2016 at [11]
Affidavit of Mr Scott Kingman dated 18 May 2016 at [6]
Affidavit of Mr Scott Kingman dated 18 May 2016 at [13]
Affidavit of Mr Scott Kingman dated 18 May 2016 at [14]
T 42.50 - 43.11
T 43.23 - .25
T 43.32 - .35
T 45.43 - .49
T 85.16 - .19
See [4] - [7] of the Defence (the practical effect of a non-admission is the same as a denial - see Warner v Simpson [1959] 1 QB 97 at 319)
See: Rutter v The State of New South Wales [2005] NSWCA 231 at [30] (McColl JA with Handley JA and Hunt AJA agreeing); and Martin v Abbott Australasia Pty Ltd (1981) 2 NSWLR 430, 443 (Hunt J)
[2003] NSWCA 254
Exhibit E, Report of Mr David Cockbain dated 15 November 2012, p 13 at [35]
T 49.7 - .50
T 88.14 - .24
T 87.40 - .44 and 91.30 - .36
T 87.1 - .17
T 58.36 - .40
T 53.10 - .11
T 52.18 - .24
[2008] NSWCA 347
However, Basten JA stated that for the reasons given by McColl JA, no error had been demonstrated in the primary judge's determination of the application. Bell JA agreed with McColl JA: [2008] NSWCA 347 at [156].
(1996) 186 CLR 541, 574 (Toohey and Gummow JJ)
[2002] NSWCA 55
T 8.14 - .16
No 94 of 2001
T 104.35 - .40
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [22] - [24]
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [25]
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [26]
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [33]
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [39]
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [41] and Annexure K
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [41]
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [41]
T 61.35-.43
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [45]
Affidavit of Mr Salvatore La Malfa dated 25 March 2014 at [47] and Annexure M
T 25.9 - 26.24
T 28.4 - .32
See T 111.26 - .35
T 31.11 - .14
T 31.23 - .25
T 31.35 - 40
T 32.1 - 33.15
T 33.20 - .21
T 34.1 - .2
T 34.26 - 36.35
(1996) 186 CLR 541, 553 - 554 (McHugh J)
(1996) 186 CLR 541, 551 - 552 (McHugh J) as cited in Howley v Principal Healthcare Finance Pty Ltd [2014] NSWCA 447 at [46] - [48] (McColl JA)
[2014] NSWCA 447 at [48] (McColl JA)
See Itek Graphix Pty Limited v Elliott [2001] NSWCA 442 at [88] (Ipp JA with Spigelman CJ and Sheller JA agreeing) and Tekno Ceramics Pty Ltd v Zdenko Milat [2003] NSWCA 254 at [29] (Foster AJA with Meagher and Handley JJA agreeing)
T 92.41 - 93.25
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Decision last updated: 18 May 2018