Wayne Sauer v Allianz Australia Insurance Limited

Court of Appeal (NSW)|2006-09-22|Before: Beazley JA, Santow JA, Bryson JA

CITATION: Wayne Sauer v Allianz Australia Insurance Limited [2006] NSWCA 364

JUDGMENT OF: Beazley JA at 1; Santow JA at 43; Bryson JA at 44

DECISION: 1. Appeal allowed; 2. Set aside the Orders of Geraghty DCJ made 12 August 2005; 3. Extend the time in which the appellant may commence proceedings up until and including 16 February 2006; 4. Order the respondent to pay the appellant's costs of the appeal and of the court below but to have a certificate under the Suitors' Fund Act 1951 (NSW) if eligible.

CATCHWORDS: LIMITATION PERIOD - expired limitation period - leave of court required to commence proceedings - whether delay gave rise to significant prejudice to the potential defendant - MOTOR ACCIDENT - time limitation in which to commence proceedings under Motor Accidents Compensation Act 1999 (NSW) - applicant sought extension of time limitation - where prejudice arose from death of insured and absence of their evidence - whether delay gave rise to significant prejudice to the potential defendant

Motor Accidents Compensation Act 1999 (NSW) Pt 4.4, ss 92(1)(a), 94, 108, 109, 113 LEGISLATION CITED: Motor Accidents Act 1988 (NSW) s 52(4) Limitation of Actions Act 1974 (Qld) s 31(2)

Salido v The Nominal Defendant (1993) 32 NSWLR 524 CASES CITED: Holt v Wynter (2000) 49 NSWLR 128; [2000] NSWCA 143 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Smith v Morton [2004] NSWCA 84

PARTIES: Wayne Sauer (Appellant) Allianz Australia Insurance Limited (Respondent)

COUNSEL: R I Goodridge (Appellant) I Harrison SC; J Sleight (Respondent)

SOLICITORS: Firths the Compensation Lawyers (Appellant) Hunt & Hunt (Respondent)

20 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40734 of 2005

BEAZLEY JA SANTOW JA BRYSON JA

15 December 2006 WAYNE SAUER v ALLIANZ AUSTRALIA INSURANCE LIMITED Headnote Facts On 15 September 2000, the appellant was driving his motor vehicle on the correct side of the road and within the speed limit when he struck another vehicle being driven by a Mr Cojocea. Moments before the accident Mr Cojocea's vehicle had been stationary and waiting to make a right-hand turn from the opposite side of the road when it was hit from behind by a third vehicle, being driven by a Mr Rodrigues, and was propelled into the path of the appellant's vehicle. The appellant sustained serious injuries and Mr Cojocea died in the accident. Mr Rodrigues had been tail-gating Mr Cojocea's vehicle and pleaded guilty to negligent driving causing death. His insurers, the NRMA, admitted liability for a claim lodged by the appellant. However Mr Rodrigues later alleged that the tail lights on Mr Cojocea's vehicle were not working, prompting the NRMA to withdraw the admission. Subsequently the appellant, for the first time, sought a claim against Mr Cojocea's insurers, the respondent.

Proceedings brought by the appellant against the NRMA reached settlement, while proceedings brought by the appellant against the respondent in the District Court were dismissed. The time in which to commence proceedings without leave had expired pursuant to s 109 of the Motor Accidents Compensation Act 1999 (NSW) and the trial judge refused to grant leave to commence proceedings on the basis that the death of Mr Cojocea gave rise to a prejudice against the respondent. The appellant appealed against this finding.

Held per Beazley JA (Santow and Bryson JJA agreeing):

(i) It is well established that in a limitation section similar to s 109 of the MAC Act that: a. The appellant seeking an extension of the limitation period must satisfy the court that grounds exist for exercising discretion in his or her favour; b. The evidentiary onus is on a prospective defendant to raise any consideration which might tell against the exercise of the discretion; c. The ultimate onus of establishing that the time should be extended at all times remains with the applicant. Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 (followed)

(ii) The delay resulting from commencing proceedings after a limitation period has expired gives rise to a presumption of prejudice to the potential defendant. If the effect of granting the extension would result in actual significant prejudice to the potential defendant, then the application for an extension should be refused. Brisbane South (followed); Holt v Wynter (2000) 49 NSWLR 128 (followed); Salido v The Nominal Defendant (1993) 32 NSWLR 524 (iii) Where there has been no significant prejudice to a potential defendant, there is no reason why the discretion to extend time should not be exercised in favour of the applicant. Holt v Wynter (followed) (iv) The test under s 109 of the MAC Act relates to prejudice caused by the delay, although other prejudice may be relevant. The trial judge erred in finding that because of the death of Mr Cojocea there had always been prejudice to the insurer and that that prejudice became insurmountable following the expiration of the time limitation. (v) In this case the delay did not cause any prejudice, nor significant prejudice, as the source of the prejudice was the absence of evidence of Mr Cojocea due to his death. That prejudice existed from the outset. Holt v Wynter (followed)

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40734 of 2005

BEAZLEY JA SANTOW JA BRYSON JA

15 December 2006 WAYNE SAUER v ALLIANZ AUSTRALIA INSURANCE LIMITED Judgment 1 BEAZLEY JA: On 15 September 2000 the appellant was seriously injured in a motor vehicle accident. The accident happened in somewhat unusual circumstances. The appellant's vehicle was struck by another vehicle which, just before the accident, had been stationary and waiting to make a right-hand turn. A third vehicle, driven by a Mr Rodrigues, ran into the rear of the stationary vehicle, propelling it into the path of the appellant's vehicle which was travelling towards the stationary vehicle on the correct side of the road and within the speed limit. The driver of the previously stationary car, Mr Cojocea, was killed in the accident. Mr Rodrigues, who was a friend of Mr Cojocea, had been "tail-gating" Mr Cojocea's vehicle when the accident occurred. Mr Rodrigues subsequently pleaded guilty to negligent driving causing death. 2 On 20 October 2000, the appellant lodged a claim with Mr Rodrigues' insurers, the NRMA. In January 2001, the NRMA admitted liability. In September 2003, the appellant made an application for claims assessment pursuant to s 94 of the Motor Accidents Compensation Act 1999 (NSW) (the Motor Accidents Compensation Act). However, in January 2004, the NRMA withdrew the admission of liability in circumstances where Mr Rodrigues alleged, apparently for the first time, that the tail lights on Mr Cogocea's vehicle were not working. The NRMA made an application for exemption from the claims assessment procedure of Pt 4.4 and, on 9 February 2004, the assessor issued a certificate under s 92(1)(a) of the Motor Accidents Compensation Act. 3 The effect of making application for an assessment is to suspend the time running under the limitation period for the commencement of an action. Pursuant to s 109(1), that time limit is three years from the date of the motor accident, subject to any period of suspension under s 109(2). The limitation is suspended pursuant to s 109(2) from the time a claim has been referred for assessment until two months after a certificate under s 92 has been issued. 4 Pursuant to s 113 of the Motor Accidents Compensation Act, a claim may be brought directly against an insurer where the person against whom the claim could otherwise be made is dead. Up until February 2004, the appellant had only pursued a claim against Mr Rodrigues. However, given the withdrawal of the admission of liability, the appellant gave notice of its claim to Mr Cojocea's insurer, the respondent herein. The respondent denied liability. 5 On 22 March 2004, the appellant commenced proceedings in the District Court of New South Wales claiming damages from Mr Rodrigues and the respondent, as insurer of the deceased, pursuant to s 113. On 14 July 2004, the appellant settled his claim with Rodrigues in the sum of $500,000 plus costs. 6 That left the proceedings against the respondent on foot. However, on 7 September 2004, the respondent filed a defence based on breaches of the Motor Accidents Compensation Act, together with a notice of motion that the proceedings be struck out against it pursuant to s 109 of the Act. That notice of motion was dismissed. 7 The respondent then filed a further notice of motion in which it sought that the statement of claim be struck out for the claimant's failure to first obtain a certificate under s 108(1) of the Motor Accidents Compensation Act. Section 108(1) provides: "(1) A claimant is not entitled to commence court proceedings against another person in respect of a claim unless: (a) the Principal Claims Assessor has issued a certificate in respect of the claim under section 92 (Claims exempt from assessment), or (b) a claims assessor has issued a certificate in respect of the claim under section 94 (Assessment of claims)." 8 The appellant had obtained a certificate under s 108(1) in respect of his claim against Rodrigues. He had proceeded against the respondent on the understanding that the certificate extended to his claim against the respondent. 9 However, Garling DCJ held that the certificate of exemption issued by the assessor pursuant to s 108 on the Rodrigues claim did not extend to the claim against the respondent. Thus, on 17 December 2004, Garling DCJ dismissed the proceedings insofar as they related to the respondent. As at the date of dismissal of those proceedings, the time in which such proceedings could be commenced without the leave of the Court had expired: see s 109, which provides, relevantly: "(1) A claimant is not entitled to commence proceedings in respect of a claim more than 3 years after: (a) the date of the motor accident to which the claim relates … except with the leave of the court in which the proceedings are to be taken …

(3) The leave of the court must not be granted unless: (a) the claimant provides a full and satisfactory explanation to the court for the delay, and (b) the total damages of all kinds likely to be awarded to the claimant if the claim succeeds are not less than 25% of the maximum amount that may be awarded for non-economic loss under section 134 as at the date of the relevant motor accident." 10 There was no dispute that the appellant had complied with and otherwise satisfied s 109(3). 11 The question for determination in this case is whether the trial judge erred in refusing the appellant leave to commence proceedings against the respondent. If this Court determines that his Honour did err, then the question remains whether this is a matter where leave ought to be granted. Both parties accept that it is appropriate for this Court to itself determine the question whether leave should be given.

The relevant law 12 Section 109 of the Motor Accidents Act is the successor to s 52(4) of the Motor Accidents Act 1988 (NSW) and its terms are relevantly the same. Section 52 has been the subject of consideration by this Court in Salido v The Nominal Defendant (1993) 32 NSWLR 524 and Holt v Wynter (2000) 49 NSWLR 128; [2000] NSWCA 143. In Holt v Wynter, a five judge bench of this Court was convened in circumstances where, between the two decisions, the High Court had delivered its decision in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 (Brisbane South). A question had arisen as to whether the approach of this Court in Salido was different from the approach taken by the Court in Brisbane South. The limitation period subject of consideration in Brisbane South was s 31(2) of the Limitation of Actions Act 1974 (Qld) which was in different terms to s 52(4) (and it follows, different to s 109). 13 The appellant accepted that the trial judge was bound by this Court's decision in Holt v Wynter. However, as the Court in Holt v Wynter spent considerable time analysing the Court's previous decision in Salido and the High Court's decision in Brisbane South to ascertain whether, and if so, to what extent the approach in Brisbane South was relevant to an application made under s 52(4) of the Motor Accidents Act, it is necessary to have an understanding of the judgments in Brisbane South. I do not propose to discuss the Court's decision in Salido, except to the extent that it has been continued to be referred to in the later decisions of this Court.

Brisbane South Regional Health Authority v Taylor 14 As I have already mentioned, in Brisbane South the Court was concerned with s 31(2) of the Limitations of Actions Act 1974 (Qld). The limitations period prescribed for an action for damages in negligence was three years from the date on which the cause of action arose: s 11. Part 3 of the Act made provision for extensions of periods of limitation. Section 31(2) which applied to the respondent's cause of action provided: "Where on application to a court by a person claiming to have a right of action to which this section applies, it appears to the court -

(a) that a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation for the action; and

(b) that there is evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation;

the court may order that the period of limitation for the action be extended …" 15 The respondent had brought a claim against a hospital for the failure of its doctor to give her proper advice. The respondent had undergone medical treatment on 5 June 1979. The respondent did not commence proceedings until 1994. In the intervening period, she had continuously suffered from pain following the operative treatment. The respondent's claim was based in negligence by reason of the doctor's failure to explain the medical options available to her. It was apparent on the evidence before the Court that the terms of the conversation during the consultation between the respondent and the doctor would be a crucial issue. 16 As at the date that the respondent sought to commence proceedings, the doctor lived in Hong Kong. The evidence before the Court indicated that attempts to contact the doctor had been unsuccessful and that all that was available to the appellant, whom it was alleged was vicariously liable for any negligence of the doctor, were very brief notes of a consultation. It was accepted that the appellant had established each of the matters required under paras (a) and (b) of s 31(2). The question for the Court's determination was what principles governed the exercise of the discretion given by s 31(2). The effect of the Court's decision was to refuse to exercise the discretion in the respondent's favour. The decision of the Court, by majority, is comprised of three separate judgments; the joint judgment of Toohey and Gummow JJ; a short judgment of Dawson J agreeing with McHugh J and that of McHugh J. The reasoning of their Honours in the joint judgment arguably differs from that of McHugh J in the ways I indicate below. 17 Before discussing their Honour's resolution of the question as to what principles governed the exercise of the discretion, the following matters may now be taken to be well established in a limitation section in similar terms to s 31(2) and, it can be said, for a section such as s 109. Those matters are as follows. First, the applicant seeking an extension of the limitation period must satisfy the Court that grounds exist for exercising discretion in his or her favour: Toohey and Gummow JJ at 547; McHugh J at 551. Secondly, there is an evidentiary onus on a prospective defendant to raise any consideration which might tell against the exercise of the discretion: Toohey and Gummow JJ at 547; McHugh J at 555. Thirdly, the ultimate onus of establishing that the time should be extended at all times remains with the applicant: Toohey and Gummow JJ at 547; McHugh J at 554. 18 Thereafter, the approach of the Court differed. Toohey and Gummow JJ rejected the notion that s 31(2) involved a consideration of the position that a defendant would have been in by comparing an action instituted within time but perhaps towards the end of the period of limitation and one instituted once the period had expired. In Brisbane South, the Court of Appeal had taken the view that it was unlikely that the doctor would have had an independent recollection of the conversation two and a half years after the commencement of the limitation period. Accordingly, on that reasoning, the defendant was not in any worse position once the limitation period had expired. Toohey and Gummow JJ held (at 548-549) that s 31(2) did not warrant that comparison. Rather, once an applicant had satisfied the provisions of paras (a) and (b),: "… the Court has a discretion to extend the time for a bringing of an action. A material consideration (the most important consideration in many cases) is whether, by reason of the time that has elapsed, a fair trial is possible. Whether prejudice to the prospective defendant is likely to thwart a fair trial is to be answered by reference to the situation at the time of the application. It is no sufficient answer to a claim for prejudice to say that, in any event, the defendant might have suffered some prejudice if the applicant had not begun proceedings until just before the limitation period had expired." 19 Toohey and Gummow JJ further rejected the notion that the Court was required to weigh the respective prejudices of an applicant for an extension of time and that of a respondent to such an application. As their Honours pointed out, in one sense, an applicant's prejudice was absolute if the application was refused. They said, however, that that was not of itself sufficient to warrant an extension of time and would, in effect, mean that there would be no room left on such an approach for the exercise of a discretion. Rather, their Honours held at 550: "The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent." (Emphasis added) 20 In Brisbane South, the applicant for an extension of time had claimed that it might still be possible to locate the medical practitioner and, in any event, he would always have been reliant upon his notes and that the medical records would be admissible. Their Honours considered, however, that the extent to which the medical practitioner would have to rely upon his notes itself related to the lapse of time involved. The Court considered, therefore, that there was some prejudice to the appellant by reason of the delay. 21 McHugh J placed considerable emphasis upon the notion of presumptive prejudice once the limitation period had expired. It will be necessary to understand precisely how his Honour analysed that concept. It must also be said that to the extent he did so, his view may be considered to be different from that expressed in the joint judgment. Having said that, however, the underlying premise of the notion of presumptive prejudice was the notion of whether a fair trial was possible. This was apparent from his Honour's statement at 554 that: "… when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension."

His Honour continued at 555: "… the justice of a plaintiff's claim is seldom likely to be strong enough to warrant a court reinstating a right of action against a defendant who, by reason of delay in commencing the action , is unable to fairly defend itself or is otherwise prejudiced in fact and who is not guilty of fraud, deception or concealment in respect of the existence of the action.

… When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case." (Emphasis added) 22 The basis for his Honour's reasoning is exposed in the preceding part of the paragraph in which the passage just quoted occurs, where McHugh J pointed out that if an action had been brought within time, then it was irrelevant to the continuation of the proceedings that the medical practitioner might, by reason of delay in commencing the action, have had little independent recollection of the conversation. However, once a potential liability of the defendant had ended by reason of the expiration of the limitation period, the capacity to obtain a fair trial if an extension of time was granted was relevant and important. His Honour said at 555: "To subject a defendant once again to a potential liability that has expired may often be a lesser evil than to deprive the plaintiff of the right to reinstate the lost action. This will often be the case where the plaintiff is without fault and no actual prejudice to the defendant is readily apparent."

His Honour concluded by reference to the paragraph with which I commenced this consideration. 23 Later, his Honour referred to the case of actual prejudice, stating that where actual prejudice of a significant kind had been demonstrated, it was hard to conclude that the legislature had intended that the extension provision should trump the limitation provision. He said, however, that "even on the hypothesis of presumptive prejudice, the legislature perceives that society is best served by barring the plaintiff's action". His Honour acknowledged that in Brisbane South, there was a case of actual prejudice such that the decision of the trial judge to dismiss the application was inevitable. He added, however, that the long delay, in any event, gave rise to a general presumption of prejudice. 24 Dawson J agreed with the reasoning of McHugh J. He added, at 544, that the discretion given by the section to extend the limitation period should only be exercised in favour of an applicant where "in all the circumstances, justice is best served by so doing". He considered that the onus was upon the applicant to establish that the commencement of an action beyond the limitation period "would not result in significant prejudice to the prospective defendant". His Honour also agreed with the notion that once the limitation period had expired, then it was prima facie prejudicial to a defendant to allow the commencement of proceedings after that time.

Holt v Wynter 25 In Holt v Wynter, as I have already explained, the Court was concerned as to the effect that the reasoning in Brisbane South had upon the proper construction of s 52(4) of the Motor Accidents Act. Priestley and Sheller JJA each gave separate judgments. Meagher and Handley JJA and Brownie AJA agreed with Sheller JA (Meagher JA also agreeing with the orders proposed by Priestley JA but for the reasons given by Sheller JA). Sheller JA analysed the respective views of the Court in Brisbane South. It is appropriate to set out his reasoning on this in full, as it explains his conclusion as to the effect of the judgments in that case. His Honour pointed out at [111] that in Brisbane South, the trial judge had found that the appellant was placed "in a position of serious prejudice", having regard to the lapse of time which had occurred. His Honour considered that the majority of the Court required that the application be refused. His Honour continued: "[111] … Quite clearly, McHugh J thought significant prejudice to the potential defendant was decisive. His Honour said (at 555): '… When actual prejudice of a significant kind is shown, it is hard to conclude that the legislature intended that the extension provision should trump the limitation period. The general rule that actions must be commenced within the limitation period should therefore prevail once the defendant has proved the fact or the real possibility of significant prejudice.'

The bite is in the next two sentences (at 555): '… In such a situation, actual injustice to one party must occur. It seems more in accord with the legislative policy underlying limitation periods that the plaintiff's lost right should not be revived than that the defendant should have a spent liability reimposed upon it.'

[112] I do not read Dawson J as differing from this. His Honour said (at 544): '… The onus of satisfying the Court that the discretion should be exercised in favour of an applicant lies on the applicant. To discharge that onus the applicant must establish that the commencement of an action beyond the limitation period would not result in significant prejudice to the prospective defendant. I agree with McHugh J that, once the legislature has selected a limitation period, to allow the commencement of an action outside that period is prima facie prejudicial to the defendant who would otherwise have the benefit of the limitation.'

[113] Toohey and Gummow JJ (at 547) adopted what had been said by Gowans J in Cowie v State Electricity Commission (Victoria) [1964] VR 788 at 793: 'It is for the respondent to place in evidence sufficient facts to lead the Court to the view that prejudice would be occasioned and is then for the applicant to show that these facts do not amount to material prejudice.'

[114] Their Honours did not treat an extension as prima facie prejudicial to the potential defendant. The prospective defendant must show some evidence of prejudice. But if the potential defendant did show significant prejudice and the applicant failed to show otherwise, I do not think that their Honours' view of the significance of that prejudice or its decisiveness was any different. Their Honours said (at 550): '… The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent.'

[115] Their Honours then quoted from the judgment at first instance where the Judge said that the respondent was placed in a position of serious prejudice having regard to the lapse of time which had occurred. Having said that the Judge did not err in his understanding of the relevant legislative provision, Toohey and Gummow JJ went on (at 550) '… Nor did he err in the way in which he dealt with the question of prejudice even though it was open to him to reach a different conclusion.' This was directed to whether or not it was open to the trial Judge to reach a different conclusion about whether the respondent was placed in a position of serious prejudice. In an earlier passage in the joint judgment (at 548) their Honours said, having referred to this part of the judgment at first instance: 'It was open to his Honour to take a different view on the facts but there can be no quarrel with the general approach he took.' I do not believe that their Honours intended to suggest that even if the respondent was placed in a position of serious prejudice it remained open to the Court to extend the time." 26 His Honour then referred to this Court's decision in Salido. In Salido, there were three separate judgments of the Court. Gleeson CJ had said at 532: "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." 27 The statutory purposes identified by his Honour were that of protecting defendants against the injustice of stale claims and the additional purpose of promoting forensic diligence. Sheller JA accepted that the question posed by Gleeson CJ might have been more broadly stated than the "real question" described by Toohey and Gummow JJ set out at [26] above. Sheller JA continued at [116]: "But bearing in mind the immediate purpose to which the Chief Justice referred, I do not think an applicant would demonstrate that it was fair and just that leave should be granted if to do so would result in significant prejudice to the potential defendant ." (Emphasis added) 28 His Honour considered, rather, that the test referred to by Gleeson CJ in Salido and their Honours in the joint judgment in Brisbane South was directed to the broader context where, even though there had been a long and unexplained delay, no significant prejudice had resulted to a potential defendant. His Honour said, at [116]: "It may be that in the absence of significant prejudice to a potential defendant … there is no reason why the discretion should not be exercised in favour of the applicant." 29 His Honour then referred to the decision of Kirby P in Salido, but noted that his Honour had repeated this view in his dissenting judgment in Brisbane South and that view was not consistent with the view of the majority of the High Court as to "the decisiveness of significant prejudice to the potential defendant". Sheller JA next referred to the approach of Powell JA in Salido but considered that his Honour did not address the circumstance of a finding of significant prejudice. His Honour then concluded, at [119]: "In my opinion, the effect of the decision of the High Court in Brisbane South Regional Health Authority is that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant." 30 His Honour accepted, therefore, that if the conclusion of the trial judge in Holt v Wynter that the respondent would have suffered significant prejudice was open to him, then the application for extension had been rightly refused. His Honour was of the view, however, for the reasons given by Priestley JA, that there had been no sufficient basis for that conclusion. 31 The essential basis for the alleged prejudice in Holt v Wynter had been the alleged unavailability of the records of a number of doctors whom the applicant had seen about her injuries. The insurer in Holt v Wynter had submitted to the trial judge that the applicant had failed to show that all relevant medical records still existed. There were six doctors whose records were in issue. Priestley JA noted that it had been established that the records of two of the doctors had, in recent times, been available, and that another of those doctors, a general practitioner, had a note of the advice given by the orthopaedic specialist to whom he had referred the applicant and with whom there had been but a single consultation. His Honour considered that it was likely that the records were available from at least two of the other doctors, given the time at which those consultations had taken place and the number of such consultations. As to the last doctor, whom the appellant had consulted once, probably five years prior to the hearing of the application for extension, his Honour considered that it was possible but not necessarily probable, that such records would still exist. Priestly JA concluded, therefore, at [94], that the materials before the trial judge and the inferences properly to be drawn from them were sufficient for a conclusion that the GIO would be able to properly prepare its case for trial with reasonable practicality.

Smith v Morton 32 In Smith v Morton [2004] NSWCA 84, Hodgson JA, with whom Giles JA and Stein AJA agreed on this point, drew attention to the fact that the legislature had, by enacting limitation legislation, drawn a line between cases that could be pursued to finality, notwithstanding "vicissitudes that may affect the availability of evidence" and those where, if commenced after the limitation period, the Court needed to be "affirmatively satisfied that it is fair to the defendant to permit" the claim to proceed. His Honour pointed out at [38] that it was: "… different where the loss of evidence has occurred by the time when a plaintiff seeks leave to commence proceedings after the expiry of a limitation period: in that circumstance, the loss of the evidence is not merely a realisation of a vicissitude that could equally have affected both parties to litigation proceeding in the normal way, but is a reality existing at a time when the plaintiff has a positive burden of showing that the trial would be fair to the defendant." 33 Hodgson JA continued at [39]: "It is in my opinion consistent with that approach that, in considering applications for extensions of limitation periods, the Court does not look just at the prejudice caused by the passage of time from the expiry of the limitation period to the hearing of the application for extension, but at all prejudice caused by all delay from the time of the events under consideration: see [Brisbane South] at 548-9, 554-5. However, it is also consistent with this approach that the Court gives greatest weight to prejudice occurring after the expiry of the limitation period, and gives greater weight to prejudice arising towards the end of the limitation period than to prejudice arising earlier, which would have been suffered even if the proceedings had been commenced very promptly."

This case 34 In this case, Geraghty DCJ, after considering Brisbane South, Holt v Wynter and Smith v Morton said: "The trial in this matter was never going to be fair because of the death of the driver, despite the fact that Rodrigues, a friend of the driver, gave a long interview which is available - and he is still alive. The claim to be made by Sauer is against the deceased driver. He is claiming that the driver was negligent and, if he is to succeed, he must prove that this driver was negligent. But this driver is now dead - and he has been dead since the accident.

This has always been a prejudice facing the insurer, the potential defendant in these proceedings, but, if the proceedings had been started within the period, it was a prejudice which that defendant had to face. The fact of the driver's death would not be a consideration, if the action had begun within the limitation period. It is only a consideration now that the limitation period has expired. And it seems to me [that] this is an insurmountable barrier to overcome for the applicant. I therefore refuse the leave sought." 35 The appellant submitted that his Honour erred in finding that because of the death of the driver there had always been prejudice to the insurer and since the expiration of the limitation period, that prejudice was insurmountable. It was submitted that that was the wrong test to apply and that rather, the test under s 109 relates to prejudice caused by the delay. 36 It was submitted that in this case it was the death of the driver that caused and continues to cause the prejudice in relation to any trial. No prejudice has been caused by the delay. The same evidence that was available at all times within the limitation period is available now. Accordingly, any trial that proceeded would not be on any less evidence than would have been the case at the time that the cause of action arose and the limitation period had not expired. Further, to the extent that there needed to be any focus on the extent of the prejudice, in this case any prejudice had occurred at the same time as the cause of action arose in respect of which the Court would attach less weight: see Smith v Morton above. 37 The respondent insurer submitted that it would suffer significant prejudice should the extension be granted: see Holt v Wynter per Sheller JA at [116], namely, that it does not have its own or any other independent witness to the accident. The only witness is Mr Rodrigues and it was submitted his availability would not necessarily obviate that prejudice. In making his submissions in relation to prejudice, senior counsel for the respondent conceded that the respondent had not made out a case of actual prejudice and it was relying on presumptive prejudice. 38 In my opinion, the trial judge erred in the respects alleged by the appellant. In the first place, it is apparent that the test in relation to the limitation period is one that relates to prejudice caused by the delay, although other prejudice may be relevant. Secondly, in Holt v Wynter it was said that in the absence of significant prejudice there may be no good reason to refuse an applicant leave to commence proceedings. In this case, of course, the delay has not caused any prejudice - the prejudice of not having the evidence of the deceased was there from the outset. But in any event, no significant prejudice has been demonstrated. 39 As the appellant has established error in the trial judge's determination, it is open for this Court to exercise the discretion itself. 40 I have already mentioned that the respondent conceded that it had not established actual prejudice. Reference was made to the possibility that the "trail may have gone cold" in respect to relevant avenues of inquiry - for example, as to whether the deceased had undertaken repair work to his tail lights at about the time of the accident. However, in light of the concession that this is a case of presumptive prejudice, those possibilities are matters of speculation that the Court does not need to consider further. 41 The appellant has satisfied the requirements for grant of leave stated in s109(3) and has evidence available which if accepted would make a prima facie case that he should recover damages. No significant prejudice to the respondent's position at the prospective trial has been caused by the delay: the respondent's position would always have been severely disadvantaged by the death of the driver of the insured vehicle and the delay in commencing the proceedings is not the source of its prejudice. In the circumstances there are sound grounds for granting leave and the respondent has not raised any sufficient ground for refusing leave. 42 Accordingly, I would propose the following Orders:

Set aside the Orders of Geraghty DCJ made 12 August 2005;

Extend the time in which the appellant may commence proceedings up until and including 16 February 2007;

Order the respondent to pay the appellant's costs of the appeal and of the court below but to have a certificate under the Suitors' Fund Act 1951 (NSW) if eligible. 43 SANTOW JA: I agree with Beazley JA. 44 BRYSON JA: I agree with Beazley JA. **********

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.

Suitors' Fund Act 1951(NSW)

Limitations of Actions Act 1974(Qld)

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Judgment (41 paragraphs)

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Legislation Cited (5)

Cases Cited (5)