Segal v Young

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GILES JA IPP AJA ROLFE AJA

1 GILES JA: I agree with Ipp AJA. 2 IPP AJA: The appellant is a solicitor and, pursuant to a contract of retainer, he acted as such for the respondent in connection with the latter's claim for personal injuries arising out of a motor vehicle accident. The respondent contends that the appellant failed to commence proceedings timeously on his behalf and in consequence his cause of action for personal injuries was extinguished under s 16 of the Limitation Act 1969 or time barred under s 14(1) of the same Act. As a result, the respondent asserts, he suffered loss. 3 The respondent contends that the appellant's failure amounted to breach of the contract of retainer or negligence on his part. He instituted proceedings against the appellant for recovery of the loss he alleges he suffered in consequence. 4 The appellant contends that the respondent's action against him was also commenced too late. The appellant filed a defence to the respondent's statement of claim (whereby the latter claimed damages from him) and, asserted, in effect, that the respondent's claims were extinguished by s 63 or barred by s 14 of the Limitation Act. 5 Thereafter, the appellant applied to strike out the statement of claim pursuant to Pt 9 r 17 of the District Court Rules 1973. Sinclair ADCJ dismissed the motion on grounds that the respondent does not support and which cannot be supported. 6 The appellant appeals by leave against the dismissal of his motion to strike out. The appeal raises issues as to how time is to be computed in determining when a limitation period under the Limitation Act 1969 has expired and when a cause of action is extinguished or time barred. 7 The facts that are to be assumed for the purposes of the appeal are as follows:

(a) On 14 October 1986 the respondent was travelling in a truck on the Bruxner Highway in New South Wales when, as a result of the negligence of the driver or the owner, the truck left the road and the respondent was injured and sustained damage.

(b) In October 1990 the respondent instructed the appellant to act as his solicitor in suing the driver and the owner for the damage he so sustained.

(c) The appellant did not (on the respondent's behalf) commence proceedings against the driver and the owner by 14 October 1992.

(d) On 15 October 1998, the respondent commenced proceedings against the appellant, alleging that the appellant (by his failure so to commence proceedings) had breached the contract of retainer and the duty of care he owed to the respondent and claiming that he, the respondent, had in consequence suffered damage. 8 Section 14(1) of the Limitation Act provides: "14(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom he claims: (a) a cause of action founded on contract …; (b) a cause of action founded on tort … …"

Section 63(1) of the Act provides: "63(1) Subject to subsection (2), on the expiration of a limitation period fixed by or under this Act for a cause of action to recover any debt, damages or other money, the right and title of the person formerly having the cause of action to the debt, damages or other money is, as against the person against whom the cause of action formerly lay and as against his successors, extinguished".

Section 63(2) is not presently relevant. 9 It can be seen that s 63(1) provides for the extinguishment and s 14(1) for the time barring of a cause of action. Extinguishment destroys or vitiates a cause of action, whereas time barring results in the plaintiff's remedy being barred, while the cause of action, or right, remains in existence. There is no difference between s 14(1) and s 63(1) as regards the way in which time is to be computed and the references in these reasons, in this respect, to extinguishment apply equally to time barring. 10 One other statutory provision is relevant, namely, s 36(1) of the Interpretation Act 1987, which provides: "36(1) If in any Act or instrument a period of time, dating from a given day, act or event, is prescribed or allowed for any purpose, the time shall be reckoned exclusive of that day or of the day of that act or event". 11 On appeal, Mr Simpkins SC, for the appellant, relied on two arguments in challenging the order dismissing the appellant's motion to strike out. 12 Firstly, he submitted:

(a) By 15 October 1992, by reason of the failure to commence the personal injuries proceedings before that date, the respondent's cause of action in respect of his personal injuries claim had been extinguished.

(b) That is to say, there was no moment on 15 October 1992 when the respondent could have commenced valid proceedings in respect of his personal injuries claim. Accordingly, that claim had been extinguished before 15 October 1992 commenced.

(c) Therefore, the respondent's personal injuries claim must have been extinguished under s 63 (or time barred under s 14) by no later than the last moment of 14 October 1992.

(d) As the respondent's personal injuries' claim was extinguished on 14 October 1992, he is to be taken to have suffered damage on that date in consequence of the appellant's breach of contract or negligence.

(e) In the circumstances, the effect of s 36(1) is that the six year limitation period fixed by the Act is to be reckoned exclusive of 14 October 1992. The limitation period, therefore, is to be computed from 15 October 1992.

(f) Hence the six year period expired on 14 October 1998 and the respondent was too late when he commenced proceedings against the appellant on 15 October 1998. The respondent's claim against the appellant had been extinguished the day before, on 14 October 1998. 13 Secondly, in the alternative, Mr Simpkins submitted:

(a) On 14 October 1992 the District Court Registry in Sydney was only open until 4.00 pm.

(b) As no statement of claim in the respondent's personal injuries action was filed on 14 October 1992, a very strong prospect arose after 4.00 pm that day that, because the respondent would not be able to issue a statement of claim between 4.00 pm and midnight, his personal injuries action would be extinguished.

(c) Therefore, the respondent, having lost the opportunity to file originating process while the Registry was officially open on 14 October 1992, suffered relevant damage after 4.00 pm that day.

(d) Hence, the limitation period began to run on 14 October 1992 and expired on 14 October 1998 (which meant that the commencement of proceedings on 15 October 1998 was too late). 14 I turn now to Mr Simpkins' first argument. 15 Mr Simpkins accepted, rightly, that the respondent could have commenced his personal injuries action on 14 October 1992. He said, however, that on 14 October 1992 there was a moment in time, immediately before 15 October commenced, in which 14 October expired and the respondent's cause of action was extinguished. He described that moment as a "nano-second". 16 According to the Macquarie Dictionary, 3d edition, a nano-second is a "one thousand millionth part of a second". That, however, is not the smallest unit of time that is recognised. Giles JA has drawn my attention to "Planck time", said to have been invented by the illustrious quantum physicist, Max Planck. Planck time is calculated as the time it takes light to travel the distance of a Planck length. A Planck length has been described as the smallest measurement of length which has any meaning and is said to be 10-33 centimetres. Light apparently travels the distance of a Planck length in 10-43 of a second, this being the smallest unit of meaningful time: see the discussion in this regard in Time, Alexander Waugh, Headline Book Publishing, 1999, at 11. Presumably, therefore, on the appellant's argument, the limitation period expired and the respondent's cause of action was extinguished in a unit of Planck time on 14 October 1992 immediately before 15 October 1992 commenced. 17 Put in this way, the appellant's argument is metaphysical in nature and elusive and artificial in concept. The underlying elusiveness is illustrated by the following remarks. In Prowse v McIntyre (1961) 111 CLR 264. Kitto J said (at 274): "To use the words 'beginning' and 'end' in relation to a day as if parts of a day could be identified as the first and last parts of the day respectively is to misapply them. The beginning of a day is nothing but the end of the day before, and the end of the day is nothing but the beginning of the next".

Windeyer J commented to the same effect, saying (at 278): "A day for legal purposes is the mean solar day, a period of twenty four hours. These hours are reckoned from midnight to midnight, the instant of midnight being both the end of one day and the beginning of the next, for there are no rests in time, and as each instant comes it goes".

These observations suggest that, metaphysically speaking, when 14 October 1992 ended, 15 October 1992 simultaneously began. Were this to be accepted for the purposes of construing s 63(1) and s 14(1) of the Limitations Act , the difficulties of determining the precise moment on which the limitation period in respect of the respondent's cause of action expired, and the date on which that cause of action was extinguished, are manifest. 18 In my view, however, the metaphysical argument advanced on the appellant's behalf is not sound in law. It is not that the common law rejects Planck time, it is that "[i]n measuring lapse of time the common law eschews metaphysics": per Windeyer J in Prowse v McIntyre at 277. The common law prefers common sense. 19 On a common sense approach, the issue is not one of subtlety. The paramount principle is that the statutory period limitation period is six years and a plaintiff is entitled to the full period within which to bring proceedings. Anything less than the full six year period will result in a plaintiff not being granted the time afforded by the statute. At common law, a day is not divisible and fractions of a day are not recognised: Prowse v McIntyre. Thus, if a limitation period expires on a given day, the cause of action is regarded as having been extinguished as from the next day. 20 The approach that I propose is in accord with the principle that "[a] limitation provision, because it derogates from the ordinary rights of individuals, should be strictly construed" (per Mason CJ, Deane, Toohey and Gaudron JJ in Australian National Airlines Commission v Newman (1987) 162 CLR 466 at 471). In accordance with this principle, where ambiguity exists, limitation statutes are construed favourably to plaintiffs. 21 On the basis I have expressed, the six year limitation period applicable to the respondent's personal injuries cause of action commenced to run on 14 October 1986. By virtue of s 36(1) of the Interpretation Act, the six year period is to be reckoned by excluding 14 October 1986 and commencing on 15 October 1986. The six year period therefore expired at the end of 14 October 1992. The respondent's personal injuries cause of action was extinguished with effect from 15 October 1992. Accordingly, on 15 October 1992 the respondent first suffered loss as a result of the appellant's alleged breach of contract or negligence. Therefore, the six year limitation period applicable to the respondent's cause of action against the appellant commenced to run on 15 October 1992. By virtue of s 36(1), the six year period is to be computed by excluding 15 October 1992 and commencing on 16 October 1992. Accordingly, the six year period expired at the end of 15 October 1998. As the respondent commenced proceedings against the appellant on 15 October 1998, he was within time. 22 As regards Mr Simpkins' second argument, it is necessary to have regard to the District Court Rules relevant to the opening of the Registry. 23 The Registry is under the control and direction of the Registrar, subject to any direction by the Chief Judge or a Judge (Pt 2 r 4(1)). Part 2 r 4(4) provides that, generally, the Sydney Registry shall be

open to the public for business between 9.30 in the morning and 4 in the afternoon. Part 2 r4(5) provides: "A Registry shall, notwithstanding sub-rule (4), be kept open to the public for business, or closed for business, at such times on such days as the Chief Judge or a Judge shall direct." 24 It follows that in theory it was open to the respondent to commence proceedings after 4 pm on 14 October 1992 until the end of that day. On that basis, the appellant's failure to commence proceedings did not lead to the respondent suffering any loss until 14 October had expired (when it was no longer possible for proceedings to be commenced within the limitation period). 25 The District Court Rules do not provide expressly for any special payment required to be made by a party who wishes to use the court Registry after hours. Any other kind of legal expense that might be involved in arranging for the opening of the Registry after hours, would be minimal. In my view, there was no real significant difference in the value of the respondent's right to sue for personal injuries before 4 pm on 14 October 1992 and after that time on that day. Accordingly, in my opinion, nothing in Stefanovich v Curran, unreported, NSWCA, 24 October 1998 (relied on by the appellant) assists the appellant in this respect. I do not accept the submission that the respondent suffered relevant damage after 4.00 pm on 14 October 1992. 26 I would dismiss the appeal with costs. 27 ROLFE AJA: I agree with Ipp AJA. **********

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