Web Scaffolding Pty Limited (ACN 069023392) v Laws [2009] ACTSC 79

1. The plaintiff (the respondent to the present appeal) suffered a work injury on 29 January 2001. He lodged a workers compensation claim on 14 February 2001. The insurer received an investigation report in April 2001 and a report from an orthopaedic surgeon, Dr Peter Battlay, to whom it had referred the plaintiff, in May 2001. The claim was accepted and some compensation payments were made but, apparently, no treatment expenses were sought.

2. Four years after the accident, in February 2005, the plaintiff instructed solicitors. A letter was sent to the insurer in March 2005 and then a personal injury claim notification form was served on the employer on 5 April 2005. There was some inconclusive correspondence between the solicitors and the insurer in April and May 2005. The plaintiff had not at this time made a decision to commence proceedings. He met with his solicitors again in July 2006. Proceedings were not commenced.

3. Under the Limitation Act 1985 (ACT) ("Limitation Act") the plaintiff had a period of six years from the date of his accident in which to commence proceedings. After that time it would be necessary to seek a court order extending time in which proceedings could be commenced. According to the evidence in the present case his solicitors were aware of that (as naturally they would be) and had explicitly advised the plaintiff to that effect during the first conference, when he came to see them, on 9 February 2005.

4. The limitation period under the Limitation Act expired on 29 January 2007. The plaintiff was in contact with his solicitors again in July 2007 and, finally, on 1 August 2007 the proceedings were commenced. Solicitors for the defendant (the present appellant) immediately responded that the claim was statute barred. There were further delays. The plaintiff did not see his solicitors again until late in November 2007. No application was made for an extension of the limitation period. During 2008 it would appear that the plaintiff had perfunctory consultations with his solicitors and counsel. Notwithstanding that a formal defence had been filed on 5 December 2007, pleading that the action was statute barred, no step was taken to seek an extension of time during the whole of 2008. On 6 December 2008, as no step had been taken in the action by either party for a year, the action was taken to be struck out pursuant to Rule 75(2) of the Court Procedures Rules 2006.

5. On 20 January 2009 an application was made to reinstate the proceedings. However, the proceedings which the plaintiff had purported to commence were already statute barred by s 11 of the Limitation Act. Section 36 of the Limitation Act provides that a court may extend a limitation period if it decides that it is just and reasonable to do so. The court is directed to pay regard to all the circumstances of the case including a number of specified factors. Those specified factors in turn include, as is usual, the length of, and reason for, delay on the part of the plaintiff and the extent to which there is likely to be prejudice to the defendant if an extension of time is granted.

6. As no extension of that period had been granted pursuant to s 36 of the Limitation Act, the defence relying on the limitation period was irresistible. Unless an extension of time was granted there would be no competent proceeding upon which Rule 75 could operate or to which the application for reinstatement of the proceedings filed on 20 January 2009 could relate.

7. However, notwithstanding an intimation from the defendant that the applicant should amend the application for reinstatement to include an application to extend the limitation period no such step appears to have been taken until the application for reinstatement was heard by Master Harper on 17 April 2009, at which time also he granted leave to file in court an application for an extension of the limitation period. By this time more than 8 years had passed since the injury upon which the plaintiff wished to sue.

8. Master Harper found the explanations given for delay until February 2005 to be reasonable, between May 2005 and August 2007 "not particularly persuasive" and the delay of a year after filing a defence "extraordinary". He said there was "no real explanation for it". In his final assessment of the application for an extension of time Master Harper regarded the considerations to be taken into account as "finely balanced". On the one hand "the explanations for the various delays [were] not particularly persuasive" but, on the other hand, he was not satisfied there was likely to be any significant prejudice to the defendant if an extension of time was granted or that the defendant had lost its right to a fair trial. He concluded, on balance, that an extension of time should be granted. On 5 June 2009 he made an order to that effect. He did not make any order that the proceedings be reinstated although that seems to have been implied. He ordered the plaintiff (or his solicitors) to pay the costs of both applications. The defendant has appealed from the orders made by Master Harper on 5 June 2009.

9. There has been some debate about the correct approach to apply on an appeal from a decision of the kind here under consideration. In particular, it has been questioned whether the principles stated in House v R [1936] HCA 40; (1936) 55 CLR 499 should be applied. In Certain Lloyds Underwriters v Giannopoulos [2009] NSWCA 56 the New South Wales Court of Appeal considered an appeal involving the provisions of ss 60C and 60D of the Limitation Act 1969 (NSW) which make similar provision to the legislation which requires attention in the present case. The Court of Appeal concluded that whether it is just and reasonable to extend a limitation period involves the application of a legal standard and that, although it should give respect and weight to conclusions at first instance, an appellate court was obliged to give effect to any conclusion it might reach that a decision at first instance was wrong, without regarding itself as confined by the principles in House v R.

10. It is unnecessary in this case for me to decide which of the competing approaches should be followed, although principles of comity would normally dictate that I respect and follow a relevant decision of an Australian intermediate court of appeal unless bound to take a different course. In the present case I am satisfied that there was an error of principle which requires attention and that if the principles stated in House v R apply to the present case they have been satisfied.

11. In Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 the High Court affirmed the principle that an applicant for an extension of time carries an onus to justify the exercise of a discretion to permit proceedings to be commenced out of time. Dawson J 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."

"The discretion conferred by the sub-section is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant."

"...bears the onus of showing that the justice of the case requires the exercise of the discretion in his or her favour."

"... represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it."

"...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."

14. The related proposition that an applicant for an extension of time enjoys no "presumptive right" to such an extension (see Brisbane South Regional Health Authority at 544, 551) has been accepted in this Court as applying to the operation of s 36 of the Limitation Act (see Sessions v Phengsiaroun [2008] ACTSC 132 at [58]).

15. In the present case, although the plaintiff, either personally or through his solicitors, offered no acceptable explanation for the delay in attempting to commence the proceedings the application for an extension of time was granted, it would appear, because the defendant had not shown there was likely to be any significant prejudice or that it had lost its right to a fair trial.

16. Master Harper said, by way of assessment of the competing factors:

"23 The considerations to be taken into account on the present application are finely balanced. The explanations for the various delays are not particularly persuasive. On the other hand, notwithstanding the general presumption that delay inevitably leads to some prejudice, I am not satisfied that there is likely to be prejudice to any significant degree caused to the defendant or the insurer if an extension is granted. I am not satisfied that the delay has resulted in the defendant losing its right to a fair trial.

1. On balance, it seems to me that the justice of the case favours the grant of the extension of time which is sought."

17. With respect, accepting these passages as a reliable indication of the analysis undertaken, it seems to me that the plaintiff's application was not assessed by reference to the onus which he carried. Rather, an onus was imposed on the defendant. That was an error of principle. The defendant did not bear the onus to defeat the application. There was, in accordance with Brisbane South Regional Health Authority, a clear and positive onus on the plaintiff to justify an extension of time.

18. My conclusion, that an error of principle was made, is sufficient to justify appellate intervention on any view of the applicable tests for such intervention but I would only disturb the order at first instance if I was satisfied, in addition, that the wrong result had been reached. In assessing that aspect appropriate weight should be given to the factual findings and conclusion reached, particularly when Master Harper had the benefit of oral evidence, including cross-examination, from the plaintiff and his solicitor.

19. I see no basis to disturb or depart from Master Harper's finding that the reasons for delay in commencing the proceedings were not particularly persuasive. The fact that not only had the limitation period passed but the proceedings after purported commencement had languished to the point of being struck out by operation of Rule 75 must have alerted the plaintiff's legal advisers to the necessity of providing adequate grounds for both an extension of time to commence proceedings and to reinstate them. So far as I can see, there was no satisfactory explanation, either from the plaintiff or from his solicitors, to excuse the initial delay or the subsequent delay.

20. As I earlier indicated, the evidence was that the plaintiff was advised by his solicitors of the effect of the limitation period on 9 February 2005. On the plaintiff's evidence he changed address in late 2006 but did not tell his solicitors. They managed to contact him in July 2007 (after the limitation period had expired) but he did not actually see them again until November 2007. Nevertheless, he instructed his solicitors to commence the proceedings. That step was taken by the filing of an originating claim on 1 August 2007. The plaintiff's solicitors were conscious that the proceedings were then out of time. On 13 July 2007 they wrote to the insurer drawing attention to the fact. However, no application was made for an extension of time to permit the claim to be filed. Such an application was not made either when the defendant filed its defence on 5 December 2007. It was not made until the last possible moment, when it was unavoidable, on 17 April 2009. The plain fact is that no acceptable reason was advanced, then or earlier, to explain the delay in commencing the proceedings.

21. Apart from the plaintiff's failure to provide a satisfactory explanation for the delay in commencing the proceedings (which might have gone some way to justifying an order in his favour extending time), I see no indication from Master Harper's judgment that the plaintiff succeeded in showing that the defendant would not be prejudiced by the delay for which the plaintiff was responsible.

22. In submissions on behalf of the plaintiff on the appeal it was contended that prejudice to the defendant was overcome, in part, because the plaintiff's medical records from about the time of the plaintiff's injury would be available. In my view such a circumstance is not simply to be taken as adequate to meet a defendant's ordinary right of investigation and preparation of its own case, including the right to seek interviews with potential witnesses to the actual events.

23. Counsel for the defendant also drew Master Harper's attention to the plaintiff's own evidence that he had held numerous jobs since his accident and to likelihood of a real issue, in any litigation, about whether the plaintiff's present symptoms could be causally limited to the earlier accident. The ability to investigate such possibilities necessarily diminished with the passage of time.

24. As I have said, once the plaintiff had allowed the limitation period to pass, the obligation to show the absence of the likelihood of a significant prejudice to the defendant lay with the plaintiff. The burden of establishing the contrary did not fall on the defendant. I can see nothing in the materials before Master Harper to show that this onus was discharged, or even seriously addressed. No better position was developed on the appeal.

25. As I assess the matter the plaintiff did not make out a case for an extension of time in which to commence proceedings. As a result I conclude that the error of principle I earlier identified has resulted in an erroneous outcome which should be corrected on appeal.

26. The appeal should be upheld. In lieu of the orders made at first instance it should be ordered that the application for an extension of time be refused with costs. The plaintiff should also pay the costs occasioned by his attempt to commence the proceedings and of the appeal.

I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Buchanan.

Counsel for the respondent: Mr R L Crowe SC with Mr S R Hausfeld

Solicitor for the respondent: Maliganis Edwards Johnson