Saric v Holdmark

Judgment 1In this matter the plaintiff was injured on a building site on 30 August 2001. He initially commenced proceedings for common law damages against his employer, Holdmark (Australia) Pty Limited, and against the head contractor on the site, H Haserati and Co Pty Limited, on 23 November 2001. 2On 26 July 2004 the plaintiff discontinued the proceedings against Holdmark. After a protracted hearing in 2005 and 2006 her Honour Judge Gibson published her judgment on the claim against Haserati on 14 March 2006. She found against the plaintiff on the issue of liability. 3In dealing with issues of apportionment arising under s 151Z of the Workers Compensation Act 1987 her Honour expressed an opinion that there was negligence on the part of Holdmark that contributed to the plaintiff's accident and injury. 4On 6 July 2007 the plaintiff claimed lump sum compensation against Holdmark. The claim was initially rejected on the basis that pursuant to s 151(A)(3A) of the Workers Compensation Act 1987 the plaintiff elected to pursue a claim for damages on 23 November 2001 and could therefore not make any further claim, that he had not established that he had suffered whole person impairment of at least 15% and further that he was out of time to bring his claim. 5The plaintiff continued to pursue his claim for lump sum compensation, the main issue between the parties appearing to be whether the 15% threshold was met. After progressing through claims and dispute resolution processes, the plaintiff finally secured a determination that his whole person impairment was 15% pursuant to a certificate issued on 30 November 2009. Consent orders determining the claim for lump sum compensation were made in the Workers Compensation Commission on 29 March 2010. 6A pre-filing statement was served on 22 October 2010 and after undertaking the pre-litigation processes provided for in the Workplace Injury and Management Act 1998 , the plaintiff filed an ordinary statement of claim in this Court on 21 February 2011. 7The defence filed on 6 April 2011 denied negligence and denied liability in damages for any injuries suffered by the plaintiff. The defendants pleaded a limitation issue that resulted in the motion that is currently before the Court in which the plaintiff sought relief in two parts. Firstly, he sought leave to commence proceedings should it be required and secondly, he made application under s 6(4) of the Law Reform Miscellaneous Provisions Act 1946 to pursue his rights against Holdmark, now in liquidation, against its insurer. 8The defendant did not consent to the relief sought in paragraph 2 of the motion but offered no objection and therefore that relief can be granted if the matter goes forward. 9I concentrate therefore on the relief sought in paragraph 1, that concerned two aspects, firstly whether leave to commence proceedings was in fact required and secondly, if so, whether leave should be granted. 10As far as the question of the requirement for leave was concerned, I have already noted that the accident occurred on 30 August 2001, that proceedings were commenced on 23 November 2001 and that they were discontinued on 27 July 2004, a very short period prior to the expiry of the three year limit permitted under the Workers Compensation legislation, if it applied to the plaintiff's claim. 11At the time of the plaintiff's injury, s 151A of the Workers Compensation Act 1987 provided for a person to make an election whether to pursue a claim for permanent loss compensation or common law damages. 12The election was made by the commencement of proceedings in the Compensation Court in respect of permanent loss compensation, by proceedings in a court claiming damages, by accepting a payment of compensation or a payment in respect of damages. The election was irrevocable but leave to revoke could be sought from a court. These provisions applied until the legislation changing the Workers Compensation regime came into effect in November 2001. 13As a result of those changes, s 151C of the Workers Compensation Act required that six months elapse from the date a notice of injury was served upon an employer before proceedings were commenced. 14Thus in respect of injuries suffered within the six month period prior to 27 November 2001, it was not possible for injured parties to comply with the revised provisions of s 151C. At the same time by having commenced proceedings those person elected irrevocably to claim common law damages and were precluded from claiming permanent loss compensation. 15If the proceedings were struck out or discontinued because they failed to comply with the six months notice requirement, a plaintiff was left without remedy. Regulation 229A to the Workers Compensation Regulation 2003 was inserted by the Workers Compensation Amendment Transitional Regulation 2007 . It was introduced to overcome thus unfortunate consequence. It provided that the election provisions of s 151A of the 1987 Act that were in force at the time when proceedings were commenced did not operate as in the election to claim damages in the case of discontinued transitional proceedings . 16It further provided that s 151D of the 1987 Act did not apply to the commencement of proceedings that could not be commenced because of the operation of regulation 229A or could not otherwise have been commenced. 17The effect of the regulation was to permit the recovery under the Workplace Injury Management Act , notwithstanding that the proceedings were commenced prior to the commencement of the 2001 amendments. The result was that those who were caught in the hiatus were permitted to pursue, not modified common law damages as provided in the 1987 Act prior to the 2001 amendments, but on the basis of restrictions introduced through the amendments and the Workplace Injury Management Act. This meant that they could recover damages only if as a result of injury they suffered a whole person impairment of 15% or greater and their rights to recovery were limited to income loss. 18The exception provided for in regulation 229A applied to persons who suffered a transitional injury and who discontinued transitional proceedings . 19The term transitional injury was defined in regulation 229A as an injury of which notice was given immediately before the commencement of Schedule 1.1 of the Workers Compensation Legislation Further Amendment Act . That was prior to 27 November 2001. 20Discontinued transitional proceedings were defined as proceedings to recover damages in respect of a transitional injury that were commenced in the six month period immediately prior to 27 November 2001 and which were discontinued or struck out in connection with the application to the proceedings of s 151C of the 1987 Act. 21It was therefore necessary, to secure the benefit of the regulation, that three requirements be met. Firstly, that there be a transitional injury, in this case that was clearly established. Secondly, that proceedings be commenced prior to 27 November 2001, in this case that was clearly established. And thirdly, that the proceedings be discontinued or struck out in connection with the application to the proceedings of s 151C. 22It was not disputed that s 151C did apply and that the plaintiff commenced proceedings before the expiration of the six month notice period. However, I concluded that the plaintiff was not entitled to rely on regulation 229A to avoid the limitation provisions contained in s 151D for the reason that the evidence did not establish that the proceedings against Holdmark were discontinued or struck out because they were commenced less than six months after notice of injury was given. 23There was no evidence to indicate that Holdmark raised objection to the proceedings because of the breach of s 151C. In its decision in Berowra Holdings Pty Limited v Gordon [2006] HCA 32; (2006) 225 CLR 364, the High Court confirmed the decision of the Court of Appeal [2005] NSWCA 27 to the effect that s 151C was procedural in nature and that commencement in contravention of its requirements did not invalidate proceedings but rendered them vulnerable to an application by the defendant to strike them out or to move for summary dismissal. Until this was done the proceedings remained validly on foot. 24Although the proceedings were discontinued it was apparent from the material before the Court that the reasons for discontinuance were that the lawyers advising the plaintiff at the time did not consider that Holdmark was negligent and they considered that the plaintiff could not at that time establish that he suffered whole person impairment of at least 15%. 25I noted that regulation 229A(2) did not refer to proceedings that were vulnerable to action on the part of the defendant to have them struck out. It applied to proceedings that were in fact discontinued or struck out in connection with the application of s 151C of the Act . In this case in the absence of evidence to that effect, I was not satisfied that commencement in contravention of s 151C was the reason for discontinuance of the proceedings. I was therefore not satisfied that cl 229A(4) relieved the plaintiff of the obligation to commence his proceedings within the three year period provided for in s 151D of the Act. 26The defendant argued that if it applied, regulation 229A(4) could not be interpreted as conferring on a claimant an unlimited period within which to commence a proceedings. I did not accept this argument. It was apparent that the regulation was introduced to deal with a limited number of claims that were inequitably affected by the amendments. This was but one of those claims which for various reasons continued to be pursued long after the injury was suffered. 27The remaining issue was whether the plaintiff should have leave to bring proceedings in respect of an injury suffered in August 2001, or almost ten years ago. He argued that he should be allowed leave on a number of bases. He relied on the findings of her Honour Judge Gibson, that Holdmark's negligence contributed to the plaintiff's accident and his injuries. 28It was also evident that there had been a deterioration in his condition, in particular of his right shoulder requiring further surgical treatment that led to the assessment of whole person impairment of 15%. 29It was argued that the delay in the commencement of proceedings in 2009 was caused by the defendant's rejection of the claim's shoulder injury and the dispute concerning the level of his whole person impairment. 30The plaintiff also pointed to the absence of prejudice to the defendant because he had been paid weekly compensation since the time of his injury, the defendant was in possession of a full medical history and the defendant was in possession of the transcript of the evidence given before her Honour Judge Gibson. 31The defendant pointed to a substantial number of difficulties facing the plaintiff in his application for leave. It drew my attention to the similarities between this case and those confronting the plaintiff in Itex Graphics Pty Limited v Elliott [2002] NSWCA 104, in that this plaintiff elected to discontinue proceedings against Holdmark and to pursue his rights only against Haserati. I have already noted that there was no evidence that he was under pressure to discontinue because of action on the part of Holdmark. 32There was no affidavit evidence from the plaintiff concerning the advice he received or his appreciation of the advice he was given at the time he elected to discontinue proceedings against Holdmark. Nor was there evidence of his former solicitor or his senior or junior counsel who advised and represented him in those proceedings concerning the advice they gave to him and the basis upon which the proceedings against Holdmark were discontinued. 33Without further explanation it appeared that they considered that he could not succeed in a damages claim against Holdmark because of the liability issue and threshold considerations and that for those reasons he was advised not to risk continuing with proceedings that had very limited prospects of success. 34In the plaintiff's favour there was evidence that his condition deteriorated to the point where an approved medical specialist has determined his whole person impairment at 15% because of injuries that resulted from the accident. His situation was, that aside from the issue of liability, at the time of his decision to discontinue he had no right to bring a claim because his whole person impairment had been assessed at less than 15%. Only when he was certified at 15% was there any right to claim. 35His position was therefore not entirely identical with that of the plaintiff in Itex Graphics , who was at all times entitled to take proceedings but did not do so because of her understanding that her Workers Compensation rights were more valuable than her common law rights to damages. 36I considered carefully whether the deterioration in the plaintiff's condition rendered it fair and reasonable to exercise my discretion to grant leave to the plaintiff to commence proceedings. 37I decided that that factor did not persuade me that it was fair and reasonable for the following reasons 38Firstly, there was a very lengthy period of time since the injury and secondly there was no evidence of the advice given to the plaintiff concerning limitation periods. It was not suggested that he was advised that regulation 229A meant that he could bring his proceedings at any time. I was left entirely uninformed therefore, as to what attitude was taken to the limitation period. 39I considered it improbable that having discontinued at a time that was so proximate to the expiry of three years from the date of his injury, he was not given some advice of the risks he faced that he would lose his right to recommence proceedings. 40Finally there was evidence of actual prejudice to the defendant in that the claim was clearly stale after ten years. Although Judge Gibson suggested that Holdmark was liable, it was not a party to the proceedings in which she made that determination and her findings were necessarily made in the absence of hearing from Holdmark. Thus little reliance could be placed upon those findings. 41The verdict against Haserati precluded Holdmark from bringing a crossclaim. Holdmark itself is in liquidation and the insurer's capacity to secure information is thus limited. Holdmark's foreman, who was responsible for the work of the plaintiff on the day of his injury, is now residing in Lebanon. Telephone contact with him indicated that he does not remember the plaintiff and he does not remember the circumstances of his accident. 42I concluded therefore that notwithstanding the deterioration in the condition of the plaintiff, in the absence of satisfactory explanation I could not conclude that he had acted reasonably in delaying the commencement of proceedings for close to ten years. Coupled with the evidence of significant prejudice to the defendant to the point where I considered it unlikely that it would be able to secure a fair trial, I decided that leave to commence proceedings must be refused. 43The orders I make are as follows: (1)The proceedings are dismissed. (2)To the extent that the defendant is entitled to them, the plaintiff is to pay the defendant's costs of the proceedings including the costs of the motion filed on 21 April 2001. (3)The exhibits are returned. (4)The affidavit materials are returned.