Van Der Borght v Memjet North Ryde Pty Ltd

District Court of NSW|2018-10-25|Before: Mr P

r P Menary (Plaintiff) Mr F Doak (Defendant)

Solicitors: Turner Freeman (Plaintiff) HWL Ebsworth (Defendant) File Number(s): 2018/125033 Publication restriction: None

Table of Contents Notice of motion [1] - [3] Issues [4] - [8] Evidence [9] Facts [10] - [13] Legislative framework [14] - [19] Approach to interpretation [20] - [24] Legislation [25] - [42] Subordinate legislation [43] - [48] Consideration of the issues [49] - [97] Issue 1 - Validity of service of pre-filing statement [50] - [69] Issue 2 - Whether strike out of defence is justified [70] - [75] Issue 3 - Plaintiff's explanation for delay [76] - [89] Issue 4 - Whether the defendant is relevantly prejudiced [90] - [97] Disposition [98] Costs [99] Orders [100]

Notice of motion

The plaintiff, Mr Gunther Van Der Borght, brings this notice of motion filed on 2 July 2018 pursuant to s 151D of the Workers' Compensation Act 1987. Despite the passing of the 3 year claim limitation period as provided by s 151D(2) of that Act, he seeks leave, nunc pro tunc, to extend the time to commence proceedings in order to pursue a work injury damages claim. His statement of claim was filed without leave on 20 April 2018.
The plaintiff's claim relates to incapacitating psychological injuries he sustained between 24 April 2013 and 10 September 2014 whilst he was in the employ of the defendant, Memjet North Ryde Pty Limited. If he succeeds in obtaining the leave sought, he also seeks consequential orders to the effect that certain portions of the defence filed by the defendant on 18 May 2018, be struck out.
These proceedings are governed by the Workers' Compensation Act 1987 ("WC Act") and the Workplace Injury Management and Workers Compensation Act 1998 ("WIM Act").

Issues

The issues calling for decision in this notice of motion may be conveniently summarised as follows: 1. Whether, on a proper construction of s 315(1) of the WIM Act, the plaintiff's pre-filing statement was validly served by his solicitors on 29 November 2017, when it was emailed to HWL Ebsworth, the solicitors representing his former employer and its insurer; 2. Whether relevant portions of the defendant's defence remain open to be relied upon by the defendant in answer to the plaintiff's claim. If the answer to this question is in the negative, the consequential questions which arise are whether the defendant is therefore precluded from relying on such defences, and whether those portions of the defence should accordingly be struck out; 3. Whether the plaintiff has provided a reasonable and satisfactory explanation for the delay in bringing his proceedings, which on an application of s 151DA(1)(a) of the WC Act, is agreed between the parties to comprise a computed delay of 60 weeks; 4. Whether there is general prejudice that would be likely to operate against the defendant so as to prevent the defendant from having a fair trial of the issues raised in the proceedings.
The first issue, as identified in sub-paragraph (1) of paragraph [4] above, arises because the plaintiff asserts that, on 29 November 2017, when his solicitors, Turner Freeman, sent a letter by email to the defendant's solicitors, HWL Ebsworth, enclosing by way of service, a pre-filing statement. This was an event that triggered the requirement for the defendant to serve a responsive pre-filing defence within 42 days thereafter. That 42 day period lapsed on 10 January 2018. The defendant's pre-filing defence was served after that date, on 24 January 2018. This gives rise to the second issues as identified in sub-paragraph (2) of paragraph [4] above.
Those circumstances raise the question of whether, on a beneficial and purposive construction of the legislative provisions, electronic service on behalf of a claimant, by email to a solicitor acting for an insurer under a right of subrogation from the former employer, constitutes proper service for the purpose of s 315 of the WIM Act.
In that regard, there were competing submissions. It was contended by the plaintiff that there was valid service when the documents were served by email on the defendant's solicitor. In contrast, the defendant contends that service was invalid as it did not comply with the specific requirements of s 315 of the WIM Act and the requirements of the Workers Compensation Rules.
In the course of argument, the parties informed me that this aspect of the operation of s 315(1) of the WIM Act has not previously been construed in litigated proceedings: T12.23 - T12.25.

Evidence

In the evidence in support of his notice of motion, the plaintiff relied on his own affidavit sworn on 2 July 2018 as well as on two affidavits from his solicitor, Mr Fady Dous, respectively sworn on 2 July 2018 and 18 October 2018. The defendant relied upon the affidavit of Mr Jason Thelander, the General Manager of the defendant company, sworn on 31 August 2018, and Ms Joanna Apostolopoulos, a partner in the firm HWL Ebsworth, sworn 25 August 2018. None of the deponents of those affidavits were required for cross-examination. Both parties produced voluminous documentary tender bundles. Exhibit "A" comprised the plaintiff's tender bundle. The defendant's two volume tender bundle comprised Exhibit "1".

Facts

The plaintiff, who is now aged 46 years, had been in the long-term employment of the defendant, having also been a longterm employee of the preceding entity which had been absorbed by the defendant. By May 2012, he had become the defendant's Director of Operations. He claims that in the period 24 April 2013 to 10 September 2014, he suffered debilitating psychological injury due to the nature and conditions of his employment following the alleged conduct of other staff members.
The plaintiff's claim is that his injuries were due to alleged bullying, harassment, ostracising, demeaning, aggressive and abusive behaviours that were directed at him in his workplace by various persons comprising the defendant's managerial staff. This resulted in him suffering stress, anxiety and panic attacks. In the context of those difficulties, his employment with the defendant was terminated on 11 September 2014. He now claims total incapacity for work. His pre-filing statement indicates a significant damages claim in the amount of $1,820,793.
At this interlocutory stage it is not necessary to further consider the detail or basis of those matters alleged against the defendant other than to note that the defendant denies all of the pivotal elements of the plaintiff's claim. Some of those details appear in the chronology annexed to the plaintiff's affidavit sworn on 2 July 2018: Exhibit "A", pp 7 - 9.
The relevant chronological events, as extracted from the evidence, are as follows: 1. 24 April 2013 - The plaintiff commenced in his role as the defendant's Business Development Manager; 2. 8 September 2014 - The plaintiff suffered what was later diagnosed as a major psychological breakdown that arose in the course of his employment; 3. 9 September 2014 - The plaintiff first sought medical treatment for those psychological problems; 4. 10 September 2014 - The plaintiff submitted a WorkCover medical certificate to the defendant; 5. 11 September 2014 - The defendant terminated the plaintiff's employment; 6. 25 September 2014 - The plaintiff completed and submitted a workers' injury claim form; 7. 13 October 2014 - The workers' compensation insurer, Allianz Australia Workers' Compensation (NSW) Ltd, issued a notice under s 74 of the WC Act, declining liability for the plaintiff's claim; 8. November 2014 - The plaintiff instructed his present solicitors to pursue a workers' compensation claim; 9. 3 December 2014 - The plaintiff embarked upon what transpired to be an extensive series of psychiatric consultations and treatments, which still continue to the present time. This included several hospitalisations and treatment by electro-convulsive therapy; 10. 28 May 2015 - The plaintiff lodged an Application to Resolve a Dispute with the Workers' Compensation Commission claiming weekly compensation and medical expenses; 11. 31 August 2015, 26 October 2015 and 6 November 2015 - The plaintiff attended a Workers' Compensation Commission conciliation / arbitration hearing on those dates; 12. 23 November 2015 - The plaintiff obtained a finding in Workers' Compensation Commission that he had suffered psychological injury in the course of his employment; 13. 18 December 2015 - The plaintiff obtained a Certificate of Determination issued by the Workers' Compensation Commission awarding him weekly compensation and medical expenses; 14. 11 May 2016 - The plaintiff was assessed Dr Bruce Westmore, a consultant psychiatrist, who considered the plaintiff to have a 22 per cent whole person impairment; 15. 13 May 2016 - The plaintiff served Dr Westmore's assessment of a 22 per cent whole person impairment on the insurer and on the employer; 16. 21 July 2016 - The insurer served a s 74 notice declining liability for the plaintiff's whole person impairment; 17. 29 December 2016 - The Registrar of the Workers' Compensation Commission referred the plaintiff to be assessed by an Approved Medical Specialist to determine the degree of his whole person impairment; 18. 29 December 2016 to 12 April 2017 - Pursuant to s 151DA(1)(a) of the WC Act, the running of statutory time stopped; 19. 12 April 2017 - The appointed Approved Medical Specialist, Dr Robert Gertler, a consultant psychiatrist, issued a Certificate which assessed the plaintiff's whole person impairment at 19 per cent; 20. 18 May 2017 - The Workers' Compensation Commission issued a Certificate of Determination confirming that the plaintiff suffered from a 19 per cent whole person impairment in accordance with the medical certificate provided by Dr Gertler; 21. 6 July 2017 - The plaintiff's solicitor served notices pursuant to s 281 and s 282 of the WIM Act on the employer on the plaintiff's behalf. On the same date the plaintiff's solicitor served copies on the defendant's insurer, Allianz Australia Workers' Compensation (NSW) Ltd; 22. 6 July 2017 to 6 August 2017 - Pursuant to s 151DA(1)(a) of the WC Act, the running of statutory time stopped for procedural purposes; 23. On 12 July 2017 - The insurer sought particulars from the claimant in a letter marked for his attention "C/- Turner Freeman", the plaintiff's solicitors. The plaintiff's solicitor then sent further correspondence directly to the insurer; 24. 7 September 2017 - HWL Ebsworth wrote directly to the plaintiff's solicitors stating "We represent Memjet North Ryde Pty Limited (insured) on instructions from Allianz Australia Workers' Compensation (NSW) Ltd as agent for the NSW WorkCover Scheme in relation to a work injury damages claim brought by Gunther Van Der Borght (plaintiff)". In response to the plaintiff's claim, that firm then arranged a medical examination and an earning capacity assessment of the plaintiff; 25. 7 September 2017 - HWL Ebsworth wrote to the plaintiff's solicitors seeking particulars and reiterating that the firm acted for the insured employer and the insurer; 26. 18 September 2017 - The plaintiff's solicitor sent the requested particulars to the defendant's insurer and to HWL Ebsworth, the defendant's solicitors; 27. 18 October 2017 - The defendant served a notice pursuant to s 74 of the WC Act declining liability. It did so by way of a letter from HWL Ebsworth addressed to the plaintiff's solicitors; 28. 29 November 2017 - The plaintiff's pre-filing statement was served on the defendant's solicitor and also the workers' compensation insurer. Therefore the plaintiff claims that at that time, he had adequately served his pre-filing statement, thus entitling him to bring his proceedings. This is a significant matter of contention to be determined in these proceedings; 29. 29 November 2017 - For procedural purposes, statutory time ceased to run for the purpose of s 151D of the WC Act by reason of the operation of s 151DA(1)(a) of that Act. That position remains current to the present time; 30. 10 January 2018 - This was the last day for the defendant to file its pre-filing defence if the view is taken that the plaintiff's pre-filing statement was effectively served on 29 November 2017; 31. 24 January 2018 - The defendant served its pre-filing defence on the plaintiff; 32. 20 April 2018 - The plaintiff's statement of claim and statement of particulars were filed in this Court; 33. 21 April 2018 - Copies of the plaintiff's filed statement of claim and statement of particulars were served on the defendant; 34. 18 May 2018 - The defendant's defence was filed in this Court denying the essential elements of the plaintiff's claim and raising a limitation defence pursuant to s 151D of the WC Act; 35. June 2018 - Mr Sloggett, the defendant's manager, passed away. The defendant has statements of the evidence he could otherwise have given; 36. 6 June 2018 - A search of the IT records of HWL Ebsworth revealed the 29 November 2017 email from the plaintiff's solicitors had in fact been received by that firm "but [the IT department] had no way of tracking the whereabouts of that email". That email search was conducted because Ms Apostolopoulos stated that she had no knowledge of receiving that email which had attached the plaintiff's pre-filing statement; 37. 7 June 2018 - The IT Support Department of the defendant company undertook a search of its email servers between "late November 2017 and 31 December 2017". That search did not reveal any emails to have been received from the plaintiff's solicitor, including any emailed pre-filing statements relating to the plaintiff; 38. 2 July 2018 - The plaintiff's present notice of motion was filed; 39. 25 October 2018 - Hearing of the plaintiff's notice of motion.

Legislative framework

The compensation scheme under which this claim is brought, comprising the WC Act and the WIM Act, is well recognised as involving potential procedural traps requiring significant strategic decisions to be made by both parties: Strasburger Enterprises Pty Ltd trading as Quix Food Stores v Serna [2008] NSWCA 354, at [37].
Those potential traps include timetables for defined procedural events to occur. Some of the adverse consequences of those traps, if triggered, may in some limited circumstances, be unsprung or neutralised by the exercise of the discretion of the court, provided the evidentiary circumstances justify such a course.
The scheme of the legislation is designed to promote timely settlement of claims by compelling parties to a work injury damages dispute to make early and full disclosure of their respective cases: Paper Coaters Pty Limited v Jessop [2009] NSWCA 1, at [49]. The scheme is also designed to ensure that not only employers, but also insurers of employers, receive timely notice of claims.
Once a prospective plaintiff, or to use the language of the statute, a claimant, has met the procedural requirements that are necessary to enable the conclusion that a valid pre-filing statement has been served on the prospective defendant, the prospective defendant must comply with what has been authoritatively described as an inflexible statutory timetable which requires compliance: Strasburger Enterprises Pty Ltd trading as Quix Food Stores v Serna [2008] NSWCA 354, at [44].
The fact that the plaintiff has filed these proceedings arguably out of time, does not mean the proceedings are a nullity. The proceedings remain on foot with the result that the jurisdiction of the Court becomes engaged until dispositive orders are made, either by striking the proceedings out, or by permitting them to continue to finality: Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364, at [33] - [39].
Where a court has a discretionary jurisdiction for exercising a power to either grant or to decline leave to permit a party to follow a particular procedural course that is otherwise impermissible because of a lapsed right, the outcome of an application for the exercise of such a discretion is not to be determined by notions of waiver, but rather, by the factors that either justify or contraindicate the exercise of the specific jurisdictional discretion conferred upon the court by the statute under consideration: Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364, at [24] - [27]; [39]; [52] - [54].

Approach to interpretation

Where there is doubt, ambiguity, or dispute about the meaning of a relevant legislative provision, it is beyond controversy that insofar as is reasonably possible, those legislative provisions should be construed beneficially so as they may be applied and operate according to their purposive intent: Department of Corrective Services v Mitchelson (1992) 26 NSWLR 648, at 654.
In cases of ambiguity arising within a legislative provision, it is appropriate to give to a disputed provision a meaning which advances and does not frustrate the purpose or objective of the legislation: X v Commonwealth of Australia [1999] HCA 63; (1999) 200 CLR 177, at [146].
Where there is ambiguity in legislation, it should be construed to provide the fullest relief which the fair meaning of the language used would allow: Bull v Attorney General (NSW) [1913] HCA 60; (1913) 17 CLR 370, p 384. In such cases, the disputed ambiguity should not be construed narrowly so as to deprive a claimant of a benefit to which that person would otherwise be entitled: Repatriation Commission v Hawkins (1993) 117 ALR 225, p 231.
In approaching the task of beneficially and purposively construing the disputed meaning of ambiguous or unclear legislative provisions, the function of the Court seeking to apply the natural and ordinary meaning of the words used, is not to attempt to overcome unintended consequences: Esso Australia Pty Ltd v The Australian Workers' Union (2017) 92 ALJR 106, at [52].
In interpreting legislation, a construction which leads to an absurd result should be avoided: Hall v Jones (1942) 42 SR(NSW) 203, pp 207 - 208. Instead, if construction of a legislative provision is required, it should have an ambulatory effect in order to qualify the language used to give effect to the purpose of the legislation: Tokyo Mart Pty Ltd v Campbell (1988) 15 NSWLR 275, at p 279 B-C.

Legislation

When considering the first issue calling for decision, it becomes necessary to identify some relevant legislative provisions. Those provisions, when read comparatively, include confusing, non-uniform, and discordant terminology appearing with the different legislative provisions concerning the identification of participant parties and the service of documents and notices. The references are, variously, to claimants and injured workers on the one hand, and employers, defendants, insurers, or a person on whom a claim is made, on the other hand.
Section 4 of the WIM Act defines claimant and employer non-exclusively, as follows: "claimant means a person who makes or is entitled to make a claim. … employer includes: (a) the legal personal representative of a deceased employer, or (b) a government employer, or (c) a former employer. Without limiting the meaning of the expression, an employer can be an individual, a corporation, a firm, an unincorporated body of persons, a government agency or the Crown."
It is significant that in s 4 of the WIM Act, the non-exclusive definition of employer neither includes nor excludes scope for a solicitor to represent and act on behalf of an employer, or an insurer of an employer by way of subrogated right.
Section 315 of the WIM Act sets out some important prescriptive requirements for a claimant. In that context a claimant must be seen to be a prospective plaintiff at that stage, which is before court proceedings can be commenced. Foremost amongst the requirements of a claimant in those circumstances is the need to serve a compliant pre-filing statement on "the defendant": s 315(1) of the WIM Act.
At first glance the reference to the term defendant, within s 315(1), could be taken to be a misnomer as at that stage of a dispute, there can be no party properly described as a defendant absent the filing of court proceedings brought by a known plaintiff against a named defendant.
Section 315 of WIM Act, provides as follows: 315 Requirement for pre-filing statement before commencing court proceedings (1) Before a claimant can commence court proceedings for the recovery of work injury damages, the claimant must serve on the defendant a pre-filing statement setting out such particulars of the claim and the evidence that the claimant will rely on to establish or in support of the claim as the Rules may require. Note. Section 314 prevents a pre-filing statement being served if there is a dispute as to whether the degree of permanent impairment is sufficient for an award of damages. (2) The pre-filing statement cannot be served unless: (a) the person on whom the claim is made wholly disputes liability for the claim, or (b) the person on whom the claim is made has made an offer of settlement to the claimant pursuant to the determination of the claim as and when required by section 281 and 1 month has elapsed since the offer was made, or (c) the person on whom the claim is made has failed to determine the claim as and when required by section 281. Note. The determination of a claim in accordance with section 281 requires the making of a reasonable offer of settlement (if liability is wholly or partly accepted). Failure to make a reasonable offer of settlement constitutes a failure to determine the claim. Section 74 requires notice of a dispute as to liability to be given.
It therefore becomes necessary to seek to make some schematic and practical sense out of the legislative provisions where non-uniform descriptive terms appear in various places in the language of the legislation.
There is a difference between the language of s 4 of the WIM Act, which refers to claimant and employer, and the language of s 315(1) and (2) of the WIM Act which refers to claimant, defendant, and the person on whom the claim is made.
Clarification of that terminology comes from s 311 of the WIM Act, which provides as follows: 311 Interpretation In this Part: claimant means a claimant for work injury damages. defendant means the person against whom proceedings for the recovery of work injury damages are commenced or are to be commenced.
Therefore, it becomes plain, but not immediately so, that a reference to defendant at the pre-litigation stage has a meaning that includes the person on whom the proceedings for the recovery of work injury damages are about to be commenced.
Given the labyrinthine complexity of this legislation it is unsurprising that both parties to a work injury damages dispute need to seek early retention of legal representation.
In my view, the term defendant as appearing within s 315(1) of the WIM Act includes not only the employer, to use the language of s 4 of that Act, but in my view it should also extend to include the appointed legal representative of the employer or the employer's insurer.
The reference to the term defendant in s 315(1) of the WIM Act is also replicated in s 316(1) and (2) of that Act, where triggering events appear. Section 316 of the WIM Act provides: 316 Defendant must respond to pre-filing statement (1) The defendant must, within 28 days after the pre-filing statement has been served on the defendant, respond to the pre-filing statement by: (a) accepting or denying liability (wholly or in part), and (b) (to the extent, if any, that the defendant does not accept liability) serving on the claimant a defence to the claim setting out such particulars of the defence and evidence that the defendant will rely on to defend the claim as the Rules may require. Note. A defence can be filed after 28 days but after 28 days the claimant can refer the claim to mediation under Division 4. (2) If the defendant fails to respond to the pre-filing statement as required by this section within 42 days after it is served on the defendant, the claimant can commence court proceedings for the recovery of work injury damages. Note. If the defendant fails to respond within 42 days, the defendant is prevented from filing a defence (see section 318) and the claimant can proceed to obtain summary judgment on the question of liability. If the defendant responds to the pre-filing statement within 42 days, the matter is required to proceed to mediation under Division 4 before court proceedings can be commenced.
Section 316(1) is a triggering mechanism that is potentially adverse to a proposed defendant in that a claimant cannot commence litigation before the expiry of the opportunity for the intended defendant to serve a pre-filing defence. In this case, absent the intended defendant serving a pre-filing defence within 42 days, a claimant plaintiff is entitled to commence court proceedings to recover work injury damages: s 316(2) of the WIM Act.
An intended defendant must comply with the notice provisions of s 317 of the WIM Act if it intends to assert that a claimant's pre-filing statement is defective for any reason, which I interpolate must include service. The term "otherwise" within s 317(1) must be read as being all inclusive in that regard.
Section 317 of the WIM Act provides: 317 Defective pre-filing statement (1) The defendant is not entitled to assert that a pre-filing statement served by the claimant is defective (by reason of incompleteness or otherwise) unless the defendant has notified the claimant, giving details of any alleged defects, within 7 days after the pre-filing statement is served by the claimant. (2) A dispute as to whether a pre-filing statement served by the claimant is defective may be referred to the Registrar for determination. (3) The Registrar may give a direction to the claimant as to the action necessary to cure any defect in the pre-filing statement served by the claimant. If the claimant fails to comply with the Registrar's direction within the time allowed for compliance, the pre-filing statement served by the claimant is taken not to have been served. Note. The effect of such a failure is that the claimant must serve the pre-filing statement again. (4) If the documents and information that comprise the pre-filing statement are furnished to the defendant at different times, the pre-filing statement is not considered to have been served on the defendant until the last of the required documents and information is served.
In the present case, the intended defendant did not within 7 days of service of the claimant plaintiff's pre-filing statement, assert that statement was in any way defective: s 317(1) of the WIM Act. The requirement to do so, if it was thought appropriate to do so, was at the pre-filing stage.
In the present case no arguments were made as to the existence of any material differences within the respective pre-filing statement of the pre-filing defence. I therefore proceed upon the premise those documents are otherwise in order.

Subordinate legislation

In its resistance to the plaintiff's application, the defendant relied upon a number of provisions comprising the subordinate legislation within the Workers' Compensation Commission Rules 2011.
Those Rules relate to proceedings in the Workers' Compensation Commission: r 1.4(1) and r 1.6. Insofar as those Rules have any application to a work injury damages claim brought in this court, in cases of ambiguity or inconsistency, those Rules must be considered as being subject to the provisions of the WC Act and the WIM Act.
In the course of argument the defendant placed reliance on r 8.2 which relates to the address for service in relation to proceedings. That must be a reference to proceedings commenced in the Workers' Compensation Commission, and not otherwise, because the language of the Rule refers to applicants and respondents, and not claimants, plaintiffs, employers or defendants, as referred to in the primary legislation: r 8.3(1).
Somewhat incongruously with the position taken by the defendant in the present case, those Rules provide for service by email at an address care of a legal representative or agent: r 8.3(3) and (4); r 8.4(2)(e).
In argument, the defendant also referred to r 17.3 which relates to the content and service of pre-filing statements, particularly r 17.3(2) which requires that a claimant must serve the pre-filing statement on both the employer and the employer's insurer. The Rule is silent as to how that service is to be effected. In light of the terms of r 8.3(2) and (3) and r 8.4(2)(e) I interpret that Rule to include electronic service on a legal representative as agent of a party.
In answer to the defendant's contrary position on the issue of service on the defendant's solicitor, the plaintiff referred to some provisions within the Uniform Civil Procedure Rules 2005 concerning electronic service of documents in circumstances where service is effected in accordance with an agreement, acknowledgment, or a binding undertaking, to constitute sufficient service: UCPR r 10.5; r 10.6. Whilst those UCPR provisions are of some guidance, they do not specifically apply to service of a pre-filing statement by electronic means.

Consideration of the issues

In the paragraphs that follow I set out my consideration of the issues identified at paragraph [4] above.

Issue 1 - Validity of service of pre-filing statement

The essential purpose of s 315 of the WIM Act is not to deprive a claimant of a right to seek compensation for work-related injuries but to establish a timetable for the occurrence of defined and entitling procedural events.
In my opinion, in view of the inherent complexity of the legislation when read as a whole, and in view of the procedural traps embedded within that legislation, it is reasonable to assume that prospective participants in the process of making and processing claims, whether they be claimants, employers, or insurers, would at important sentinel times, act through their lawyers as their agents to ensure that significant steps that are required to be taken in the process, are undertaken in a procedurally correct and compliant manner.
In that regard, it is pertinent to note that the legislation does not relevantly prohibit the involvement of lawyers. In fact the solicitor for the plaintiff and the solicitor for the defendant were in correspondence with each other about the plaintiff's claim well before the issue of the plaintiff's pre-filing statement, as is evident in the chronology at paragraph [13] above.
In its resistance to the plaintiff's application, the defendant asserts that there was no evidence of a specific agreement for service of the plaintiff's pre-filing statement on the defendant's solicitors. Whilst that may be so, on 7 September 2017, the defendant's solicitor advised the plaintiff's solicitor that it represented the defendant on instructions from its insurer. This was in circumstances where both of those entities were already well aware of the existence and the nature of the plaintiff's claim and the underlying circumstances which gave rise to that claim.
In my view, the reasonable inference to be drawn from the HWL Ebsworth letter dated 7 September 2017 and addressed to the plaintiff's solicitor is that further correspondence relevant to that claim could be addressed to the lawyers representing both the plaintiff's former employer and its insurer, and would be accepted as such. This is consistent with one of the requirements of the legislation aimed at ensuring claims come to the notice of employers and their insurers. That objective was met in this case well before the service of the plaintiff's pre-filing statement.
On 28 November 2017, the plaintiff's solicitor prepared a comprehensive and valid pre-filing statement on behalf of the plaintiff, who was then a claimant. The document had the required annexures, in which a monetary claim for damages was identified in the amount of $1,820,793: Exhibit "A", Annexure D, pp 26 - 75.
On the same day, and consistent with the course of correspondence that had passed between the respective solicitors concerning the plaintiff's claim, the claimant plaintiff's solicitor prepared a covering letter for service of the pre-filing statement. That letter was addressed to HWL Ebsworth, the solicitors who were then known to be acting for the employer's insurer, and therefore, the intended defendant, as named in these proceedings: Exhibit "A", Annexure D, p 25.
On the next day, 29 November 2017, at 1.16pm, the claimant plaintiff's solicitor emailed the documents comprising the pre-filing statement to the firm HWL Ebsworth: Exhibit "A", Annexure D, p 24.
The letter dated 28 November 2017 from the claimant plaintiff's solicitor to the solicitor for the intended defendant, as emailed on 29 November 2017, was in the following terms: "We note you are acting on behalf of Memjet North Ryde Pty Limited in relation to our client's Work Injury Damages claim. We confirm your client is yet to determine the claim. Accordingly, we enclose by way of service our client's Pre-Filing Statement, draft Statement of Claim and draft Statement of Particulars. We also enclose herewith by way of service the Medical report of Dr Selwyn Smith dated 11 September 2017 and Report of Dr Keith Tronc dated 2 November 2017. We note our client's right to serve the Pre-Filing Statement arises under Section 315(2)(c) of the WIM Act. We will note [sic for not] resend the documents previously served on you and your client. Should you require a further copy we can forward same to you. Pursuant to Section 316 of the Act, a defendant must respond to a Pre-Filing Statement within twenty eight (28) days by either accepting or denying liability, and where liability is not accepted, serving a Defence to the claim setting out such relevant particulars. If we do not receive your response within twenty eight (28) days, we are instructed and intend to proceed to file an Application for Mediation in the Workers' Compensation Commission. If we do not receive a response within forty two (42) days, our client may elect to commence proceedings in the District Court and seek a Summary Judgment on the question of liability. We look forward to hearing from you."
The opening paragraph of the plaintiff's solicitor's letter as cited above is clear confirmation of a claims process already in play and involved a course of communication between the respective solicitors, thus justifying the plaintiff's solicitor serving the plaintiff's pre-filing statement on HWL Ebsworth.
No request was made of the plaintiff's solicitor by HWL Ebsworth for any previously served documents to be re-sent, as was offered in the second paragraph of the plaintiff's solicitor's letter cited above. This is apparently because the defendant's email, although indisputably received by HWL Ebsworth, for some unknown reason, did not come to the attention of the partner responsible, as was stated by Ms Apostolopoulos in her affidavit.
At 11.39am on 24 January 2018, at the request of the solicitors acting for the then intended defendant, the solicitor for the claimant plaintiff provided HWL Ebsworth with emailed confirmation that a pre-filing statement had been served on 29 November 2018. That confirmation was acknowledged by an email from the defendant's solicitors at 11.42am on 24 January 2018: Exhibit "A", Annexure F, pp 78 - 80.
The defendant in these proceedings now takes the point that email service of a pre-filing statement on the solicitor for the intended defendant should be seen to be non-compliant and therefore an invalid form of service. That claim requires examination in conjunction with the relevant statutory terminology.
The starting point for the analysis, as already observed, is recognition of the practical reality that because of the complexity of the legislative scheme, claimants usually have solicitors to represent and act for them, as do insurers, when involved by way of subrogated right to a party liable to be sued.
A useful test of the defendant's argument as to the claimed invalidity of email service by the claimant plaintiff is to comparatively examine the course taken by the defendant's insurer concerning its obligations concerning the service of documents under s 74 of the WIM Act concerning the insurer's obligation to serve documents on a claimant. Those s 74 notices were served on 25 September 2014, 21 July 2016 and 18 October 2017.
Section 74 of the WIM Act provides: 74 Insurers to give notice and reasons when liability disputed (1) If an insurer disputes liability in respect of a claim or any aspect of a claim, the insurer must give notice of the dispute to the claimant. (2) The notice must contain the following: (a) a concise and readily understandable statement of the reason the insurer disputes liability and of the issues relevant to the decision (indicating, in the case of a claim for compensation, any provision of the workers compensation legislation on which the insurer relies to dispute liability), (b) such other information as the regulations may prescribe. (3) The regulations may make provision for the form of and for other information to be included in or to accompany a notice under this section. The regulations may require an insurer to give a copy of a notice under this section to the claimant's employer. (4) The regulations may create offences in connection with any failure to comply with this section. …
The terms of s 74, when read literally, required that notice be given to the plaintiff himself, yet the insurer did not take that course. Instead, on 18 October 2017, the defendant's insurer took the course of seeking to fulfil the requirements of s 74 of the WIM Act by serving a notice disputing liability on the claimant by way of correspondence between the respective solicitors, and not by way of service directly on the claimant.
In light of those events, it is somewhat paradoxical that, through its solicitor, the defendant's insurer complains that email service of the plaintiff's pre-filing statement on the defendant's solicitor is not valid service for the purpose of the requirements of s 315(1) of the WIM Act in circumstances where beforehand, the insurer took the position of serving a s 74 notice of dispute, on the claimant's solicitor on 18 October 2017, as identified in sub-paragraph (27) of paragraph [13] above, which on a literal interpretation, was required to be served directly on the claimant.
For the reasons outlined at paragraphs [43] to [48] above, I do not consider the provisions within the Workers' Compensation Commission Rules as cited by the defendant, assist the position argued by the defendant in this application.
In light of the foregoing analysis, on a proper construction of s 315(1) of the WIM Act, I find that the claimant plaintiff's pre-filing statement was validly served by his solicitors on HWL Ebsworth on 29 November 2017. This occurred at a time when all participants in the process well understood that firm was acting on behalf of the insurer of the then intended defendant, namely the present defendant, in circumstances of subrogation pursuant to a policy of insurance.

Issue 2 - Whether strike out of defence is justified

The defendant submitted that there should be no summary strike out of its defence in this case on an application of the test identified in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, at pp 128 - 129.
I do not accept that submission because of the specific provisions within s 318 of the WIM Act concerning the consequences of non-compliance with the identified statutory timetable within that provision.
Section 318 of the WIM Act provides: 318 Parties limited to pre-filing statement and defence (1) For the purposes of court proceedings on a claim for work injury damages: (a) the claimant is not entitled to file a statement of claim that is materially different from the proposed statement of claim that formed part of the pre-filing statement served by the claimant, except with leave of the court, and (b) the defendant is not entitled to file a defence that is materially different from any defence served on the claimant in response to the claimant's pre-filing statement within 42 days after service of the pre-filing statement, except with leave of the court, and (c) the defendant is not entitled to file a defence that wholly or partly disputes liability for the claim if the defendant has failed to serve on the claimant a defence to the claim as required by this Division within 42 days after the claimant served the pre-filing statement on the defendant, and …
As a consequence of the finding that the plaintiff has validly served his pre-filing statement, and on an application of s 318(1)(c) of the WIM Act, I conclude that the defendant is not entitled to file a defence that wholly or partly disputes liability for the plaintiff's claim. I accept the plaintiff's submissions in that regard: Plaintiff's written submissions; MFI "1", par 34 and par 35.
As the defendant's pre-filing defence was not served within 42 days after the plaintiff, as claimant, had served his pre-filing statement on the defendant, applying the prescriptive effect of s 318(1)(c) of the WIM Act, the defendant should not now be permitted to rely upon its filed defence insofar as it seeks to dispute liability for the plaintiff's claim.
Accordingly, those parts of the defence that dispute liability for the plaintiff's claim, namely paragraphs 3, 4, 5, 6, 11 and the word "Injury" in paragraph 7, are struck out.

Issue 3 - Plaintiff's explanation for delay

The plaintiff did not commence his work injury damages proceedings within the required 3 years.
Section 151D of the WC Act provides: 151D Time limit for commencement of court proceedings against employer for damages (1) (Repealed) (2) 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 that compensation more than 3 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. (3) The Limitation Act 1969 does not apply to or in respect of court proceedings to which this section applies. (4) This section does not apply to the commencement of court proceedings in respect of a claim within the meaning of Part 5 of the Motor Accidents Act 1988, Chapter 5 of the Motor Accidents Compensation Act 1999 or Part 4 of the Motor Accident Injuries Act 2017.
In an examination of the reasons for the plaintiff's delay in commencing his claim, two important features are apparent.
First, the plaintiff was only initially concerned to lodge and pursue a claim for workers' compensation payments, and not a claim for work injury damages. Secondly, it was not until 18 May 2017, when the plaintiff was issued with a Certificate of Determination for a 19 per cent whole person impairment based on the findings of an approved medical specialist, that he satisfied the threshold dispute requirement which had hitherto prevented him from making the present claim for work injury damages: s 313 of the WIM Act. Until that time, the pre-condition for instituting a claim for damages was not fully ascertainable: Gower v State of New South Wales [2018] NSWCA 132, at [18] - [20].
After making due allowances with regard to the running of time provisions of s 151DA when applied to the present factual circumstances, it is common ground between the parties that the delay requiring explanation is calculated to be 60 weeks outside the required 3 years limitation period.
It is evident from the chronology within paragraph [13] above, that from the outset when the plaintiff's psychological problems became known, and before the institution of litigation, the defendant's insurer was well aware of the plaintiff's claim of incapacity. Accordingly, it was on notice that an investigation of the plaintiff's claim was necessary. The insurer took those investigatory steps, as is evident from the statements that were obtained and the medical and allied appointments made for the examination of the plaintiff.
The discretion to grant leave to proceed as conferred by s 151D of the WC Act is a broad one to be exercised according to the requirements of the justice of the case by taking into account all the circumstances of the case: Itex Graphix Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207, at [87]; Howley v Principal Health Care Finance Pty Ltd [2014] NSWCA 447, at [45], [50].
In reviewing the chronology of events outlined at paragraph [13] above, and the underlying evidence for that outline, a number of matters become plain.
First, neither the plaintiff nor his legal representatives have engaged in any disentitling conduct or decisions that would contra-indicate a grant of the extension of time that is sought. There are no considerations of blameworthiness for the delay of the kind discussed in Smith v Grant [2006] NSWCA 244, at [31] - [33] and [60].
Secondly, on taking a fair overview of those events, it is plain that between the onset of the plaintiff's psychological illness, and the declaration of that illness being work-related, without fault on the plaintiff's side, significant time was taken to seek to comply with the labyrinthine requirements of the inherently complex legislative scheme.
Thirdly, once the plaintiff was formally assessed at a level of whole person impairment that otherwise permitted him to make a work injury damages claim, he and his solicitors acted promptly to advance that claim.
Fourthly, at a threshold level of analysis, the combined effect of the plaintiff's evidence, the matters set out in the medical evidence tendered, and the expert evidence relied upon, the plaintiff has a case fit to be tried: Sea Coatings (Australia) Pty Ltd v Pascoe [2008] NSWCA 54, at [49].
Fifthly, the plaintiff's case as presently documented reveals no inherent weaknesses within it that would militate against the grant of an extension of time: Commonwealth of Australia v Shaw [2006] NSWCA 209; (2006) 66 NSWLR 325, at [40], [83]; Sea Coatings (Australia) Pty Ltd v Pascoe [2008] NSWCA 54, at [51].
Accordingly, subject to the potentially overriding consideration of possible significant prejudice, on considerations of fairness and justice in the circumstances, I conclude that a grant of an extension of time is justified.

Issue 4 - Whether the defendant is relevantly prejudiced

The defendant's position on prejudice weighing against a grant of leave as sought by the plaintiff is that it "… does not rely on actual substantial prejudice flowing form [sic for from] the delay prior to the commencement of the plaintiff's proceedings on 28 April 2018 (sic for 20 April 2018)": Defendant's written submissions, MFI "3", p 1.
Instead, the defendant argued that because its former manager, Mr Michael Sloggett, died in June 2018, there is a potential general prejudice flowing from the delay of the kind referred to in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, at pp 554 - 556.
The unfortunate passing of the defendant's manager is an event that can occur whilst litigation is either anticipated or pending. In my view, those circumstances have not left the defendant entirely without evidence with which to defend itself from the plaintiff's claim.
Mr Sloggett's passing must be viewed as a matter of presumptive prejudice. The defendant has statements from him that had been obtained before the commencement of these proceedings. There are available mechanisms that permit the use of such statements: s 67 of the Evidence Act 1995. The defendant has availed itself of that course in this case.
In my view, the circumstances indicate that it cannot be reasonably said that a fair trial of the issues would be unlikely: Salvation Army (South Australia Property Trust) v Randle [2008] NSWCA 347, at [96]; Howley v Principal Health Care Finance Pty Ltd [2014] NSWCA 447, at [48].
Whilst the defendant will have to rely on statements for part of its case, and that is not an ideal circumstance, that is not a determinative contraindication for granting an extension of time to the plaintiff because to be fair, a trial need not be ideal or perfect: Holt v Wynter [2000] NSWCA 143; (2000) 49 NSWLR 128, at [79]; Salvation Army (South Australia Property Trust) v Randle [2008] NSWCA 347, at [96].
On the foregoing analysis, I do not see that any significant prejudice exists or operates against the defendant in this instance: Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, pp 552 - 553.
I therefore do not accept that the defendant is in this case relevantly prejudiced to the extent that a fair trial on the issues between the parties cannot be had so that the plaintiff should be denied the leave to proceed that he seeks in the present notice of motion.

Disposition

I have concluded that the plaintiff is entitled to the relief which he seeks in his notice of motion filed on 2 July 2018, and that an extension of time should be allowed.

Costs

As the plaintiff has succeeded in obtaining findings in his favour on matters in dispute, it follows that he should have his costs of motion paid by the defendant.

Orders

I make the following orders: 1. Pursuant to s 151D of the Workers' Compensation Act 1987, the plaintiff is granted leave, nunc pro tunc, to file a statement of claim seeking work injury damages from the defendant for injuries he suffered in the defendant's employ between 24 April 2013 and 10 September 2014; 2. It is noted that statement of claim has already been filed on 20 April 2018; 3. Those portions of the defendant's defence comprising paragraphs 3, 4, 5, 6, 11 and the word "Injury" appearing in paragraph 7, are struck out; 4. The defendant is to pay the plaintiff's costs of the notice of motion filed on 2 July 2018; 5. The exhibits may be returned; 6. Liberty to apply on 7 days notice if further or other orders are required.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 November 2018

At a glance

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Judgment (20 paragraphs)

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Cases Cited (27)

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