WHITING v JDS ENGINEERING & LABOUR SERVICES PTY LTD

LEGISLATION CITED: Uniform Civil Procedure Rules 2005 (NSW), r 51.10 Workers Compensation Act 1987 (NSW), ss 66, 151, 151A

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541 Coulton v Holcombe [1986] HCA 33; 162 CLR 1 Eggins v Brooms Head Bowling and Recreational Club Ltd (1986) 5 NSWLR 521 CASES CITED: Holt v Wynter [2000] NSWCA 143; 49 NSWLR 128 Jackamarra v Krakouer [1998] HCA 27; 195 CLR 516 Piening v Wanless [1968] HCA 7; 117 CLR 498 Taylor v Centennial Newstan Pty Ltd [2009] NSWCA 276 Tomko v Palasty (No 2) [2007] NSWCA 369; 71 NSWLR 61

PARTIES: Denis Whiting - Applicant JDS Engineering & Labour Services Pty Ltd - Respondent

COUNSEL: P A Ragattieri - Applicant J N Gleeson QC/P Menary

SOLICITORS: W G McNally Jones Staff - Applicant Sparke Helmore - Respondent

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2009/00298305 DC 15/2005

BASTEN JA MACFARLAN JA

4 MARCH 2010 Denis WHITING v JDS ENGINEERING & LABOUR SERVICES PTY LTD Judgment 1 JUDGMENT of the COURT delivered by BASTEN JA: On 6 February 2003 Mr Whiting, the applicant, claims he was injured in the course of his employment at Bulga Coal Mine, near Singleton. He obtained workers compensation payments. On 15 November 2004 he filed a claim in the District Court for a lump sum compensation payment for permanent impairment pursuant to s 66 of the Workers Compensation Act 1987 (NSW). Subsequently, on 19 April 2005 he commenced proceedings for damages against his employer in the District Court at Cessnock. 2 On 11 August 2005 Sidis DCJ dismissed the damages claim on the basis that the claim for "permanent loss compensation" had constituted an election, for the purposes of s 151A of the Workers Compensation Act, as then in force, which precluded him pursuing a claim for damages. 3 The applicant now seeks leave to appeal against that judgment in the District Court. As the summons seeking leave to appeal was not filed until 2 July 2009 the applicant requires a significant extension of time in order for the matter to proceed. The matters now before the Court are both the application for an extension of time and the application for leave to appeal. It is convenient to deal first with the extension of time. Extension of time (a) the issue 4 The only issue not in dispute is the merit of the proposed appeal. The construction of s 151A(3)(b) of the Workers Compensation Act, giving rise to the election, was addressed by this Court in relevantly identical circumstances in Taylor v Centennial Newstan Pty Ltd [2009] NSWCA 276. The Court held that, contrary to the views of Sidis DCJ, expressed in the judgement under appeal in that proceeding, the election was not effected by an application for compensation in the District Court, in circumstances where the statute required an application to the "Compensation Court", even though that Court had been abolished in 2004. The problem arises only with respect to coalminers. 5 The issues which were agitated on the present application were as follows:

(1) whether the applicant had provided any explanation for the delay in seeking leave to appeal; (2) whether such explanation as had been provided warranted such a significant extension of time; (3) whether it was necessary for the applicant to demonstrate an arguable case with respect to his substantive claim for damages; (4) whether in the absence of evidence of actual prejudice, the respondent could rely upon presumptive prejudice as a basis for resisting the extension of time. (b) explanation for delay 6 The respondent complained, with some justification, that the evidence before this Court, being an affidavit of the applicant's solicitor, Mr David Trainor, sworn on 11 June 2009, was almost devoid of any attempt to explain the delay in lodging the appeal. When confronted with the full force of this concern, counsel for the applicant sought an adjournment of the application. It was opposed by the respondent. 7 It would be an extraordinary case in which an applicant for a significant extension of time would not be required to put before the Court all relevant circumstances explaining the delay and seeking to justify the failure to apply at an earlier time. Further, the absence of such material could be expected to elicit an immediate response that the Court should infer that nothing that could be said would assist the applicant. In due course the respondent did put that submission. However, it is one of the many ironies of this case that, instead of being filed within 28 days of the white books, the respondent's summary of argument was in fact filed months late and less than three weeks before the hearing. Nevertheless, the submissions based on the inadequacy of the explanation for the delay should have come as no surprise to the applicant and even if they did, could have been the subject of further evidence if that course had been thought useful. 8 The application for an adjournment in the course of the hearing came far too late. For that reason, it was rejected. 9 Mr Trainor's affidavit provided one fact from which certain inferences could be drawn. As noted above, the statement of claim in the District Court was struck out on 11 August 2005. The applicant changed to his current solicitors in May 2006. It may be inferred that, in the course of that nine-month period, he was advised to seek a second opinion which, if adverse to the course taken by the first solicitors, might render their continued representation inappropriate. 10 It may further be inferred that he did obtain a second opinion because, on 28 August 2008, he commenced proceedings against his former solicitors claiming that they were negligent "in failing to advise [him] on the consequences of making a claim for lump sum compensation": affidavit of David Trainor, par 4. The premise underlying that action must have been that the judgment of Sidis DCJ was correct and the result should have been foreseen by his former solicitors and explained to him, presumably before the claim for permanent loss compensation was filed in the District Court on 15 November 2004. (That date is obtained from the applicant's summary of argument: neither those proceedings, nor the date of their commencement, appears in evidence in this Court.) 11 It may further be inferred that the underlying assumption, namely that Sidis DCJ was correct in striking out the common law proceedings, was maintained by the applicant's solicitors until 10 April 2009. On that date they received a letter from the solicitors for the defendants in the professional negligence proceedings, annexing a copy of an advice from Mr David Stanton, barrister, dated 9 April 2009. The substance of Mr Stanton's advice was that the making of a claim for permanent loss compensation may not have constituted an election in accordance with the legislation as then in force with respect to coal miners, because the claim was not made in the Compensation Court. His opinion was provided some two weeks before the argument in Taylor in this Court, which occurred on 25 June 2009. (The decision in that case, which was in conformity with Mr Stanton's advice, was delivered on 3 September 2009.) No doubt appreciating the significance of Mr Stanton's conclusion, the applicant's solicitors prepared a notice of motion seeking leave to appeal out of time, one day after obtaining a copy of Mr Stanton's advice. 12 In addition to his conclusion that no election had been effected, Mr Stanton also noted that the result appeared more curious than it was in practice. In its first emanation, pursuant to the amendments effected by the Workers Compensation (Benefits) Amendment Act 1989 (NSW), an election was made either by commencing proceedings to recover damages or by "accepting payment of … permanent loss compensation": s 151A(3). Mr Stanton noted that that provision was amended in 1998 to include, as an alternative means of effecting an election, the making of an award by the Compensation Court in respect of permanent loss compensation. Thus, prior to amendments made by the Workers Compensation Legislation Amendment Act 2001 (NSW), the commencement of proceedings for permanent loss compensation did not of itself constitute an election. 13 The appropriate inference to be drawn from this material is that, until 10 June 2009, two sets of solicitors acting for the applicant had accepted, and no doubt advised the applicant, that the commencement of proceedings for permanent loss compensation precluded any action for common law damages. Until Mr Stanton's advice, it may be inferred that no alternative legal construction had been considered or, if considered, thought to have merit. If the alternative construction had been identified and thought to have merit, it is unlikely that the negligence proceedings would have been commenced and maintained against the former solicitors. Immediately the alternative construction was proffered, the applicant, through his current solicitors, acted upon it by seeking an extension of time within which to appeal. (c) adequacy of explanation 14 The considerations relevant to an application for an extension of time within which to appeal were addressed by this Court in Tomko v Palasty (No 2) [2007] NSWCA 369; 71 NSWLR 61, particularly at [54]-[59]. There is no doubt that the length of the delay and the explanation for it are relevant considerations. However, depending on the circumstances, they can be relevant in different ways and to different extents: see Jackamarra v Krakouer [1998] HCA 27; 195 CLR 516 at [66] (Kirby J, albeit in dissent in that case). A statutory limitation period may be, as explained by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541 at 555, a reflection of the legislature's view that "the chance of an unfair trial occurring after the limitation period has expired is sufficiently great to require the termination of the plaintiff's right of action at the end of that period". (Somewhat different considerations will apply to rules fixing a period within which to appeal.) 15 Prior to that remark, McHugh J had stated: "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. But 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." 16 As Kirby J further explained, particular forms of delay may have different effects; some can disentitle a plaintiff who may otherwise have a reasonably arguable claim for an extension of time: Jackamarra at [66(7)], p 543. For example, that would be so if a strategic decision had been made not to pursue proceedings in a timely fashion because of an assessment of risk and likely cost, or if the plaintiff had been derelict in taking the necessary steps to pursue the matter. In such circumstances little by way of actual or potential prejudice to the defendant is likely to be required for the court to refuse the application. Where the plaintiff is not personally at fault, greater emphasis will be placed upon the ultimate test, which is the potential unfairness to the defendant if his or her previous state of immunity is revoked. 17 In a practical sense, cases where the plaintiff is not at fault may appear to turn on whether justice would be better served by leaving the plaintiff to any claims he or she may have against the solicitors who failed to advise as to the appropriate course of action, or, in the alternative, permitting the putative tortfeasor to bear the liability. However, that approach will not usually be appropriate. It would require the court to make some assessment, at least in broad terms, of the likelihood of success against either prospective defendant. That would be an inappropriate task in circumstances where the claim against the professional advisers may not be on foot and in any event where they will not be before the court. 18 While it is true, as the respondent states, that there is no evidence from the applicant himself, it seems improbable that he would have revealed relevant circumstances going beyond the inference proposed above. In the light of that inference, the delay, while extensive, does not reveal any dereliction or inconsistent decision-making on the part of the applicant. (d) relevance of arguability of substantive claim 19 The Court has before it the statement of claim for damages filed by the applicant in the District Court, which includes the standard certificate by his former solicitor that, on the material available to him, and on the basis of provable facts, the claim has reasonable prospects of success. That may not take the matter very much further, but it is clear that the claim is of a kind which may be available following a workplace injury. The payment of compensation following the accident provides a basis for inferring that an injury did in fact occur in the course of employment. How serious the injury was may be more difficult to ascertain, but the restrictions on workplace injury damages imposed by Part 5 of the Workers Compensation Act do not apply to coalminers. Mr Stanton's advice demonstrates that there is a reasonable basis for concluding that the applicant was a coalminer. 20 The applicant contended that the arguability of his substantive claim should not properly be a consideration in this Court. The leave to appeal and the appeal if leave were granted would turn upon the correctness in law of the judgment striking out the claim under the Workers Compensation Act. No issue of the substantive merit of the claim would arise in determining that question. Following the judgment of this Court in Taylor, success on the appeal would be almost certain.

21 Because the appeal is not concerned with the substantive claim, it is undoubtedly correct to say that the primary focus with respect to the merit of the applicant's claim must be on the subject matter of the appeal, namely the strike out application. On the other hand, if it could be said that the substantive claim was clearly lacking in merit, that would no doubt be a factor which might affect the exercise of the Court's discretion. It is not, however, a factor which requires the applicant to demonstrate arguability in the present circumstances. On its face, the claim is of the kind which appears arguable; it is supported by the appropriate solicitor's certificate and attracted compensation payments for some 1.5 years. (e) reliance on presumptive prejudice 22 The respondent tendered no evidence of actual prejudice. It maintained that there was no burden upon it to do so because the applicant bore the burden of demonstrating that an extension of time would not give rise to an unfair trial: see Brisbane South at 550 (Toohey and Gummow JJ). 23 That submission may be accepted in both parts, to the extent that the respondent relies, as it is entitled to do, upon a presumption of prejudice. However, if it seeks to rely upon actual prejudice, it has an evidentiary burden to raise considerations telling against the grant of the extension: Brisbane South at 547 (Toohey and Gummow JJ). As succinctly stated by Dawson J in that case at 544: "The section confers a discretion upon a court to extend time and that discretion should only be exercised in favour of an applicant where, in all the circumstances, justice is best served by so doing. 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." 24 It is possible to identify differences in emphasis in the three judgments of the majority in Brisbane South, but they have no direct bearing on the present case: cf Holt v Wynter [2000] NSWCA 143; 49 NSWLR 128 at [49]-[75] (Priestley JA) and at [111]-[119] (Sheller JA, Meagher and Handley JJA agreeing). 25 The case of presumptive prejudice is not strong for a number of reasons. First, the incident giving rise to the injury was immediately the subject of a claim for workers' compensation. It may be expected that at least a cursory investigation was undertaken at that time as to the circumstances of the accident. Secondly, so far as the substantive claim is concerned, the period during which the respondent was entitled to assume that proceedings would not be pursued was less than four years. Thirdly, the application for an extension of time was made approximately six years and four months after the accident. Fourthly, there was evidence tendered on the application which supported the conclusion that the workers' compensation insurer had obtained at least three medical reports in respect of the applicant between August 2003 and August 2004. On 9 September 2004 the insurer advised the applicant that, on the basis of the medical opinions it had obtained, it had formed the opinion that there was "no organic basis for your continuing symptoms" and declined liability to make further payments for compensation. The applicant disavowed any reliance upon the substance of the reports, but it tendered that information (and sought to tender the reports) to demonstrate the extent of the medical inquiries which had been undertaken and which would no doubt be available to the respondent for the purposes of a damages claim. 26 In these circumstances, a claim of presumptive prejudice with respect to the substantive damages claim is not strong. Even if it is not weakened, it certainly obtains no support from the failure of the respondent to call any evidence of actual prejudice.

(f) conclusions 27 In these circumstances, the Court is not persuaded that an extension of time within which to lodge an application for leave to appeal would lead to a real chance of an unfair trial on the substantive issues. 28 Perhaps inconsistently with the approach taken to the arguability of the plaintiff's claim, consideration with respect to prejudice to the respondent has been based on an assessment of prejudice with respect to the underlying substantive claim. If it were properly to be assessed with respect only to the interlocutory appeal, there would be no question of any prejudice arising. The prejudice flows from the possibility of the reinstatement of the damages claim. It is assumed for present purposes that that is the correct approach. Leave application: further discretionary considerations 29 The respondent resisted the claim on the basis that leave should not be granted in circumstances where the applicant had not himself applied in a timely way to challenge the decision in the District Court but had, in effect, sought to follow on the coattails of a timely application made in other proceedings between different parties, demonstrating error on the part of the judge below. (It was not entirely clear whether this was a separate factor relevant to a grant of leave, a matter supporting a refusal of an extension of time, or whether it was in effect an aspect of the delay which was not excusable.) The respondent called in aid the principles stated by the High Court in Piening v Wanless [1968] HCA 7; 117 CLR 498, and applied by this Court in Eggins v Brooms Head Bowling and Recreational Club Ltd (1986) 5 NSWLR 521. 30 The cases are difficult to apply because there are significant differences between their circumstances and the present situation. For example, both cases concern trials which had been run on an unchallenged assumption as to the law which later proved to be incorrect, as the result of other proceedings, and which would have necessitated a retrial on a different basis. Each involved a jury trial. As explained in Eggins, the principle identified in Piening v Wanless is that "a litigant cannot obtain a new trial because of a change in the law after the trial unless he has taken objection to the application of the old law at the trial": at 524-525 (McHugh JA). The principle bears a close relationship to that applied in Coulton v Holcombe [1986] HCA 33; 162 CLR 1, which precludes a party seeking to raise a new issue on an appeal after a trial, where the point raised might have been addressed by evidence not tendered below or might have resulted in the case being approached on a different basis. 31 The present case is far removed from that situation. There has been no trial on the merits; the proceedings were terminated on the basis of a decision in point of law where there was no factual dispute of any kind. These authorities provide no assistance beyond the considerations which have already been addressed above. In the final analysis, the relevant factor is that the applicant failed to appeal in a timely fashion because he did not obtain legal advice as to his rights and the possibilities of overturning the decision in the District Court for some four years. Conclusions 32 It may be only a rare case in which a limitation period of 28 days (extendable, at the time, to four months by filing a holding summons) should be extended to four years. However the power to extend time, as noted in Tomko, may be exercised at "any time" by this Court: see now Uniform Civil Procedure Rules 2005 (NSW), r 51.10(2). In addition to the factors set out above, which may suggest that this is an exceptional case, three further considerations should be noted. First, the claim for damages was commenced in time and, although an appeal is not truly a step in proceedings, but a challenge to the termination of the proceedings, the Court is more likely to grant an indulgence where proceedings have been commenced (and the respondent has had notice of a claim) than where the indulgence relates to uncommenced proceedings. Secondly, the failure to lodge an appeal did not leave the respondent in possession of the fruits of a judgment, but rather allowed it to avoid a trial. Thirdly, the result (erroneous in point of law) was reached as a consequence of the positive step taken by the respondent of having the claim dismissed without a hearing on the merits. These factors, taken with the absence of any disentitling conduct on the part of the applicant and with the absence of any demonstration of actual prejudice, in circumstances where presumed prejudice is slight, warrant the grant of an extension of time. 33 Once that conclusion is reached, there are no further considerations which would provide a substantial reason for refusing leave to appeal. The fact is that, whilst Taylor remains good authority, the appeal must almost inevitably succeed. Obviously it will be a matter for the parties to consider what steps to take next, in the light of the orders of the Court. Those orders should be:

(1) Grant the applicant an extension of time within which to file and serve the summons seeking leave to appeal to 10 July 2009.

(2) Grant leave to appeal against the judgment in the District Court of 11 August 2005. **********

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