Stark v Dandala P/L

F1 Auto Body Pty Limited (previously Paddington Prestige Smash Repairs (Waterloo) Pty Limited) (Third Defendant) JUDGMENT OF : Master Harrison

Mr B McManamey (Plaintiff) COUNSEL : Mr Snell (Defendants) Turner Freeman (Plaintiff) SOLICITORS : Goldbergs (Defendants) CATCHWORDS : Leave to commence proceedings - s 151D WCA LEGISLATION CITED : Workers Compensation Act 1987 Salido v Nominal Defendant (1993) 32 NSWLR 524 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; 139 ALR 1 CASES CITED : Holt v Wynter [2000]] NSWCA 143; (2000) 49 NSWLR 128 Seib v Morton [2000] NSWCA 139, 26 June 2000 McLean v Sydney Water Corporation [2001] NSWCA 122 Parsons v Doukas [2001] NSWCA 128, (2001) 52 NSWLR 162 DECISION : (1) Grant leave for the plaintiff to commence court proceedings in respect of work injuries from 1987 to 1997. Such leave is granted up to and including 23 November 2001; (2) The plaintiff is to pay the defendants' costs.

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20937/2001 - JAMES STEPHEN STARK v DANDALA PTY LIMITED (FORMERLY PRESTIGE SMASH REPAIRS A'ASIA PTY LIMITED) & 2 ORS

JUDGMENT (Leave to commence proceedings; s 151D WCA) 1 MASTER: By notice of motion filed 23 November 2001 the plaintiff seeks an order pursuant to s 151D of the Workers Compensation Act 1987 extending the time for the commencement of action against such of the defendants and for such periods as the court deems fit. The plaintiff relied on his affidavit sworn 12 October 2001 and two affidavits of Gregory Anthony Horan sworn 5 December 2001 and 17 December 2001. The first defendant is Dandala Pty Limited (formerly Prestige Smash Repairs Australasia Pty Limited). The second defendant is Paddington Prestige Smash Repairs Pty Limited. The third defendant is F1 Auto Body Pty Limited (previously Paddington Prestige Smash Repairs (Waterloo) Pty Limited). The defendants relied on the affidavit of Michael Charles Moore sworn 7 March 2002. 2 I carefully observed the plaintiff when he was giving evidence and being cross examined, and I formed the view that his evidence was truthful. For the purposes of this application I have taken the plaintiff's case at its highest and I find the following facts.

(1) The plaintiff was born on 28 March 1963 and is currently 39 years of age.

(2) In 1979 the plaintiff left Dunheved High School, Mount Druitt during Year 11 and commenced a fulltime spray painting course through Ultimo Technical College, which he completed, together with an apprenticeship period, becoming a qualified spray painter.

(3) From about 1979 when he first started spray painting until about 1985, he worked in a number of small spray painting shops. At that time he was suffering from a degree of dermatitis on his arms, which he assumed was work related. Over time, he had developed a problem with sneezing and headaches but the headaches were only mild. The sneezing abated if the work premises were not dusty. The dermatitis seemed to lessen when he had breaks from work. The plaintiff believed some aspect of his work was causing his health problems.

(4) In 1989 the plaintiff commenced work with Personal Car Care at Coogee doing spray painting. He developed further dermatitis on his arms and continued to suffer from headaches.

(5) Between May 1989 and 1997 the plaintiff then commenced a long period of employment with a group of companies which he initially knew to be Paddington Prestige Smash Repairs (the second defendant). There were two spray shops in the same group, being at Paddington and Rosebery, and later a third shop at Waterloo. He initially worked in the Paddington shop, then Rosebery. He then returned to Paddington and finally worked in the Waterloo shop. However the plaintiff worked as a contractor through his own company Rose Wish Pty Ltd from 24 February 1992 to 11 January 1993.

(6) In the early years of his work in each of the three spray shops, the plaintiff experienced a return of the dermatitis symptoms in a more severe form than they had previously been. In 1989 the plaintiff visited Dr Dennis Duncan, general practitioner about his health problems. He cannot recall the exact findings. Dr Duncan did not refer him to any other doctor and the matter was not pursued by the plaintiff. During the middle period with these three shops (probably during 1996), the plaintiff began to notice problems with balance. Meanwhile he became aware that his headaches worsened.

(7) By early 1997 the plaintiff's problems increased. He was exhausted and depressed. He was developing other problems such as a return of night sweats (which had continued intermittently) and a sensation while drinking of drowning, and blackouts. The dermatitis had become so severe that the cracking on his hands had extended into the meat of his fingers. This meant that his hands were extremely painful and bleeding. He started to lose all the skin from his hands.

(8) On 29 July 1997 Dr Armstrong examined the plaintiff's hands and skin and advised him that he had to cease work as a spray painter. The plaintiff accepted this advice and decided that he could no longer pursue his chosen trade. Dr Armstrong wrote a medical certificate in which he stated that the plaintiff was suffering from severe industrial dermatitis and was unfit for panel beating indefinitely but could do other work from 29 August 1997.

(9) On 31 July 1997 the plaintiff resigned from his employment with the third defendant. It took approximately six weeks for the skin to grow back on the plaintiff's hands. His skin problems generally resolved after he ceased spray painting work.

(10) On 4 November 1997 the plaintiff made a claim for workers compensation. He received payments for about six weeks.

(11) The plaintiff consulted Dr Richard Baker about his headaches. The plaintiff was referred to Dr Mark Donahoe, who in turn referred him to Dr Richard Teo. Both Drs Donahoe and Armstrong furnished medical certificates which diagnosed that the plaintiff suffered from neurological deficit which caused memory and fatigue problems. Both doctors viewed these problems as likely to be permanent.

(12) The plaintiff believed that the choking and swallowing problems, in addition to the headache, might have been related to the fumes at work. There did not seem to be any significant improvement in his overall condition, except for the dermatitis. The headaches persisted and after a period of improvement, they seemed to worsen. The swallowing problems persisted and the balance problem became worse.

(13) In 1998 the plaintiff consulted Somerville & Company solicitors. On 9 November 1998 the solicitors wrote to the plaintiff advising him about a potential common law claim and workers compensation claim. The letter commenced by advising the plaintiff that he would experience problems with mounting a common law claim because it would be difficult to identify the correct defendants. Relevantly, it continued: "… if you were unable to identify the correct party or parties to sue, you would then face the problem that the 3 year time limit for commencing proceedings against all but your last employer has now well expired. This would mean that you would need to make an application to the court for leave or permission to commence your case out of time. Leave is only granted in special circumstances. In the event that leave were granted, you would then need to prove that your former employer(s) were negligent in allowing you to become exposed to certain chemicals and that negligence has caused you to suffer certain injuries. This would involve evidence from chemical and medical experts, necessitating a lengthy and expensive hearing. If you were unsuccessful in those proceedings you would be liable to pay the other sides' legal costs, which in a case involving such complicated issues could be upwards of $25,000.00. … Accordingly, in the circumstances, we do not recommend that you pursue your potential rights at common law. Instead, we recommend that you continue to pursue your rights under the Workers Compensation Act." The plaintiff gave evidence that he did not understand the difference between common law and workers compensation legislation. This I accept. In 1997 the plaintiff's powers of memory and concentration were not as good as they are now and I take this into account. Even so, the plaintiff acknowledged that he would have read the part of the letter that specifically advised him of the three year limitation period. At the time he received the letter the plaintiff was dissatisfied with the legal advice he had received from Somerville & Company and resolved to focus upon obtaining medical reports and then he felt he would be better able to make a decision as to which legal proceedings he should take.

(15) Since 1998, the plaintiff has obtained the medical reports of Ms Breen dated 3 July 2000, Dr J Walsh dated 21 August 2000, Dr E Thompson dated 11 September 2000, Dr Watson dated 26 October 2000, Dr Edwards Lobel dated 4 September 2001 and Dr Wai On Phoon dated 17 September 2001. On 26 October 2002 Dr Watson, neurosurgeon reported that the various abnormalities on testing are related to hydrocarbon exposure and it was recommended that the plaintiff undergo a further MRI scan in 12 months to ensure that he did not suffer from an active central nervous system process such as multiple sclerosis. He has been diagnosed with demyelination.

(16) In December 2000 the plaintiff changed solicitors to his present solicitors Turner Freeman. Turner Freeman then commenced various investigations and advised the plaintiff that he did have a right to bring a common law action, subject to being able to obtain an extension of time. The new solicitors identified the defendants, thus overcoming the problem foreshadowed by the previous solicitors.

(17) On 23 November 2001 the plaintiff filed a notice of motion seeking to extend the limitation period. A statement of claim was also filed on 23 November 2001.

The law 3 I turn now to consider whether leave to commence proceedings should be granted. Section 151D(2) of the Act provides: "a person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay for compensation more than three years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken." 4 The authorities clearly establish that the onus is on an applicant for extension of time to satisfy the court that it is just and reasonable to extend the time. The starting point for examination of the way in which this discretion should be exercised is Salido v Nominal Defendant (1993) 32 NSWLR 524. Salido was recently considered by the Court of Appeal in light of the intervening High Court decision of Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; 139 ALR 1 in Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128 and Seib v Morton [2000] NSWCA 139, 26 June 2000. In Wynter the Court of Appeal held that the effect of the High Court decision in Taylor is that an application for an extension of time under the limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant. The concept of a fair trial is a relative one. To be fair, it need not be ideal - see McLean v Sydney Water Corporation [2001] NSWCA 122. It is not disputed that the plaintiff has a real case to advance against the defendants. 5 In Salido, at 532 Gleeson CJ set out the principles to be considered in the exercise of the discretion. These principles were further discussed in Parsons v Doukas [2001] NSWCA 128, (2001) 52 NSWLR 162. Although these principles refer to s 52(4) of the Motor Accident Act, they are equally applicable to s 151D(2) of the Workers Compensation Act. 6 They are: "1. Section 52(4) confers a discretion which is to be exercised judicially, in a manner that furthers the purposes of the statutory context in which it appears. The immediate purpose, as with any limitation period, is to protect defendants against the injustice of stale claims; the statute is also aimed at promoting forensic diligence.

2. Bearing in mind those statutory purposes, the question is whether, in the circumstances of each individual case, the applicant for leave has demonstrated that it is fair and just that leave should be granted.

3. The diligence, or lack of diligence, shown by a plaintiff or a plaintiff's legal representatives, in ascertaining and asserting his or her rights will ordinarily be a material factor, as will the extent of the relevant delay, and the reason for it.

4. The nature and extent of any forensic disadvantage to a defendant resulting from the plaintiff's delay will also be material. The effect, if any, of the delay upon the defendant's ability to defend an action is a matter to be taken into account, and may in some cases be of decisive importance.

5. Leave under s 52(4) may be refused if it would be plainly futile to grant it, and in that connection an applicant's willingness and ability to give a full and satisfactory explanation of any delays in reporting to police, notifying claims and commencing proceedings will be material." 7 The first principle in Salido concerns the protection of the defendant against stale claims as well as the promotion of forensic diligence. The last day for the filing of the plaintiff's claim, as established by s 151D(2) of the Act was 4 November 2000 at the latest. The plaintiff filed his notice of motion and statement of claim on 24 November 2001, about one year out of time. 8 The second principle which must be considered is whether it would be fair and just, given the circumstances of the applicant's case, to grant an extension of time. 9 The third issue that this court must consider when determining the manner in which the discretion is to be exercised is the diligence of the plaintiff or the plaintiff's solicitors in ascertaining and asserting the plaintiff's rights. This diligence is to be a material factor. The symptoms that the plaintiff suffered were ones of gradual onset for many years. For a time they caused inconvenience but they did not prevent the plaintiff from working nor did they significantly affect his lifestyle. At times the symptoms such as dermatitis improved. It was only in 1997 that the plaintiff's headaches deteriorated to the stage where they were as he described "exploding headaches" which took weeks to culminate in the explosion. Once he vomited, the headaches resolved. At the same time the dermatitis on his hands became serious and prevented him from working. Further symptoms developed including memory loss and passing out while swallowing.

10 It was from 1997 that the plaintiff's problems became so serious that he had to accept that he no longer had a future in his chosen trade and that he needed to properly investigate the nature and extent of his medical problems. It seems that by leaving his chosen trade, the dermatis has largely resolved. His memory has improved. In 1997/1998 the plaintiff's memory was not so good. His then solicitors foreshadowed difficulties that the plaintiff would encounter if he took common law proceedings. Nevertheless, the plaintiff was warned of the limitation period by his solicitors in 1998 and took no immediate action to ensure that if he was to take common law proceedings, they would be within time. This is the most troubling aspect of the case. 11 The fourth consideration this court must take into account is the nature and effect of any forensic disadvantage. The plaintiff has obtained detailed medical analysis of his condition since 1997 to date. On 1 October 1993 Mr Hinkley of Prestige Smash Repairs Rosebery wrote a letter confirming that between 1989 and 1991 the plaintiff was employed on a permanent basis as a spray painter. Mr Hinkley is still a current director of the first defendant. There is a payment sheet dated 1 August 1997 from Paddington Prestige Smash Repairs (Waterloo) Pty Limited (third defendant). The defendants' solicitor has deposed that he has been advised by Ms Eilish O'Meara the office administrator of the third defendant that the management of the third defendant has changed since the date the plaintiff was employed by it and accordingly some information concerning the plaintiff's work duties is no longer available. 12 With the effluxion of 12 years I accept that there is presumptive prejudice. However, even if the third defendant does not now have some information about the plaintiff's work duties it does not in my view mean that the third defendant will not receive a fair trial.

13 The fifth and final consideration imposed on this court by Salido is that leave may be refused if it is futile to do so. As previously stated, for the purposes of this application it is not disputed that the plaintiff has a real case to advance. 14 This is a borderline case, mainly because the plaintiff did not act on his earlier solicitor's advice in relation to the limitation period but chose to obtain further medical evidence. After much consideration I have come to the view that the plaintiff has discharged his onus and it is fair and reasonable to grant leave to commence proceedings. 15 Costs are discretionary. In Wynter, Sheller JA stated that in relation to costs ordinarily a successful applicant, who has allowed him or herself to get out of time, should pay the costs of the application unless the respondent's opposition was wholly unreasonable. The defendants' opposition was not wholly unreasonable. The plaintiff should pay the defendants' costs. 16 The orders I make are:

(1) Grant leave for the plaintiff to commence court proceedings in respect of work injuries from 1989 to 1997. Such leave is granted up to and including 23 November 2001.

(2) The plaintiff is to pay the defendants' costs. **********

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