Nunes v Sarri t/as Sails The Waterfront Pub [2004] ACTSC 6 (5 March 2004)

Last Updated: 1 February 2005

PAULA NUNES v ANDREW NICHOLAS SARRI T/AS SAILS THE WATERFRONT PUB

[2004] ACTSC 6 (5 March 2004)

LIMITATION OF ACTIONS - personal injury - limitation period - application for extension - onus of proof

Limitation Act 1985, s. 36

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541

No SC 229 of 2003

Coram: Master Harper

Supreme Court of the ACT

Date: 5 March 2004

IN THE SUPREME COURT OF THE )

) No SC 299 of 2003

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: PAULA NUNES

Plaintiff

AND: ANDREW NICHOLAS SARRI T/AS SAILS THE WATERFRONT PUB

Defendant

ORDER

Coram: Master Harper

Date: 5 March 2004

Place: Canberra

THE COURT ORDERS THAT:

1. The application be dismissed.

1. 1. This is an application for an extension of time within which to commence proceedings. An originating application has already been filed; the defendant has delivered a defence pleading that the claim is barred by the Limitation Act 1985. This is not in contention: the cause of action pleaded arose on 16 March 1997, and the originating application was not filed until 7 May 2003, some seven weeks out of time.

2. The plaintiff's claim is that she tripped and fell when leaving a tavern and nightclub, Sails, at Lake Ginninderra, fracturing her right ankle. She pleads that the injury was due to the negligence of the defendant as occupier. The plaintiff's case is that she tripped on a step which was broken and chipped. She relies on failure to inspect, failure to repair and failure to warn.

3. Following delivery of the defence, the plaintiff commenced the present application by notice of motion, seeking that time to bring the action be extended to 7 May 2003. The application is supported by an affidavit by the plaintiff, sworn on 6 November 2003. The plaintiff deposes that on 16 March 1997 she was injured when she tripped and fell on a broken step near the defendant's nightclub. She says that she initially instructed Mr Claxton of Stilling & Associates in about July 2000. Dissatisfied with the lack of progress in her case, she changed solicitors in August 2002, instructing Mr Andrews of Snedden Hall and Gallop. Mr Andrews obtained the file from the previous solicitors and briefed Mr Lunney, counsel who appeared for the plaintiff on the hearing of the present application, to settle a statement of claim. As to the crucial issue, the reason proceedings were not commenced in time, the plaintiff somewhat cryptically says in her affidavit:

By the time the State [sic] of claim was drafted and filing fee ordered, the limitation period had expired and I instructed my solicitors to proceed to seek the issue of the Statement of Claim.

4. The plaintiff, who lives in Queensland, was not cross-examined. Her application was supported by two affidavits by Mr Andrews, both sworn and filed on 27 November, the day before the return date of the notice of motion. Mr Andrew's evidence is that he received instructions from the plaintiff on 21 August 2002, and obtained the previous solicitors' file, following negotiations, in December 2002. While waiting for the file he visited the scene of the accident. In December 2002, he delivered a brief to Mr Lunney to settle the statement of claim. He was aware that the limitation period would expire the following March and intended to ensure that proceedings were commenced in time. On 29 January 2003, having received draft originating process from counsel, he asked the plaintiff to put him in funds to pay the filing fee. He had an attendance on her on 11 February 2003 and was told that a cheque for the fee would be forwarded shortly. The cheque did not arrive at his office until 6 or 7 May 2003. Mr Andrews accepts responsibility for not having followed up with the plaintiff between 11 February and the expiry of the limitation period. It is his usual practice to resubmit files to ensure that deadlines of this kind are not overlooked, but there was an oversight on this occasion.

5. There is no evidence as to whether Mr Andrews informed the plaintiff of the significance of the approaching deadline. She does not advert to this in her affidavit and may not have been aware of it. Mr Andrews on 11 February no doubt assumed that she would send the cheque promptly and thought that there was plenty of time before the limitation period expired.

6. Mr Andrews annexed to his second affidavit copies of letters from Stilling and Associates addressed to the manager, Sails Waterfront Pub, 80 Emu Bank, Belconnen ACT 2617, marked for the attention of Andrew Sarri, dated 26 July 2000 and 13 October 2000, giving notice of the claim and suggesting that Mr Sarri refer the letters to the relevant insurer. I am satisfied that the copies were extracted from the Stilling & Associates file and that the original letters were sent by post on or very shortly after those dates.

7. A number of affidavits were relied upon by the defendant. The defendant deposes that he was the proprietor of Sails, The Waterfront Pub, in partnership with his brother Anthony at 16 March 1997. He says that the first notice he received of the claim was when the originating application was served on him in about June 2003. He had no previous knowledge of the plaintiff or the alleged incident.

8. The defendant recalls a short flight of steps leading from Sails into the beer garden and a single step leading from Sails to the carpark. He is unable to recall the condition of the steps at the date of the accident, but does not recall ever noticing that any of the steps were chipped or broken or in need of repair, and does not recall any repairs being carried out to any of the steps. The defendant annexed to his affidavit a statement made to an investigator engaged by the solicitors acting on instructions from his insurer. In the statement, the defendant says that he operated the business in partnership with his brother from 1992 until July 2001, leasing the premises from GBT Corporation, a company of which he and his brothers were directors. There was no written lease. He has since sold his shares in GBT Corporation. There was an additional paved area leased from the ACT Government between Sails and Lake Ginninderra, but he no longer has a copy of that lease, which was disposed of with most other documents when the business ceased to trade. He says that on most nights, there were between 200 and 250 customers at Sails, generally aged between twenty and thirty. The staff comprised four bar staff, four kitchen staff, two waitresses, two staff collecting plates and glasses and three security staff. He thinks that the arrangement of the steps might have changed since 1997, both into the beer garden and into the carpark. The lighting around the steps at night was bright. The steps leading to the beer garden were not within the area leased by the business from GBT Corporation.

9. He says that the staff records for the period were disposed of in 2002, having been kept for five years for tax purposes. Most of the staff were part-time or casual, generally university students, and there was a fairly high turnover. He has no personal recollection of the names of staff who were working at Sails in 1997. He has been unable to locate any 1997 photographs of the premises. If he had been aware of the claim before 2002, he would have ensured that relevant documents were not disposed of, and would have taken photographs of the steps the plaintiff alleges she tripped on.

10. The defendant's brother, Anthony Christo Sarri, swore an affidavit generally consistent with that of the defendant, as did their father Nicholas Sarri. Anthony Sarri remembers an employee, Jamie Houghton, who might have been working there in March 1997. Mr Houghton was located by Ms Reilly, a solicitor with Hunt and Hunt, the solicitors instructed by the insurer for the defendant. She spoke to Mr Houghton on 25 November, three days before the hearing of the application. He confirms that he had worked at Sails but cannot remember when he stopped working there. He says that it was in either 1996 or 1997. He can no longer remember whether the tiles on the steps were chipped or broken or not. He gave Ms Reilly the names of five fellow employees. Ms Reilly swore on 27 November that she had attempted to locate and contact those persons, as well as another four staff members whose names she had been given, but without success.

11. Despite the fact that the application was heard on its return date, the flurry of activity in the days shortly before the hearing permitted time for some affidavit material to be put on in reply. Mr Andrews has been able to confirm that the response from the Registrar General's Office to his search in 2002 was wrong: the registered proprietors of the Sails business were Antony Christo Sarri and Andrew Nicholas Sarri. The defendant swore a further affidavit on the day of the hearing, to the effect that he was shown the copy letters from Stilling & Associates annexed to Mr Andrew's affidavit of the previous day. He does not believe that he has seen the letters before and does not recall receiving any notice of the claim prior to service of the originating process.

12. The defendant also relies on an affidavit by a claims officer to establish that the first notification received by the insurer of the claim was on 12 June 2003.

13. The discretion to extend time is conferred by s. 36 of the Limitation Act. The Court may extend time if it decides that it is just and reasonable to do so. The Court is required to have regard to all of the circumstances of the case, including, relevantly:

a. the length of and reasons for the delay on the part of the plaintiff;

b. the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant;

e. the extent to which the plaintiff acted promptly once she knew that the act or omission of the defendant might be capable of giving rise to an action for damages;

f. any steps taken by the plaintiff to obtain medical, legal or other expert advice and the nature of that advice (subsection 36(3)).

14. The power to extend may be exercised notwithstanding that the limitation period has already ended, and that an action has been begun: (subsection 36(4)).

15. The leading authority in relation to the exercise of the discretion is Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541. The application in that case was for an extension of time to bring an action arising out of alleged negligence by a medical practitioner in Queensland. The applicable legislation was in different terms. The High Court held that an applicant for an extension bears a legal onus of establishing that the justice of the case requires that the discretion be exercised in the plaintiff's favour. To achieve this, the applicant must prove that the extension would not result in significant prejudice to the defendant. The task to be undertaken is not a weighing process between the potential prejudice to the applicant and the defendant. McHugh J, with whom Dawson J agreed, held at 551 that compliance with conditions specified in the Queensland Act did not give the applicant a presumptive right to an order. The applicant had an entitlement to ask the court to exercise its discretion in his or her favour, but bore the onus of showing that the justice of the case required the exercise of the discretion. His Honour went on to say:

The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that `where there is delay the whole quality of justice deteriorates'. Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United Sates Supreme Court pointed out in Barker v Wingo, `what has been forgotten can rarely be shown'. So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now `knowing' that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose.

16. His Honour further pointed out at 552 that:

Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even `cruel' to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Thirdly, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period. ...Even where the cause of action relates to personal injuries, it will be often just as unfair to make the shareholders, ratepayers or taxpayers of today ultimately liable for a wrong of the distant past as it is to refuse the right of a plaintiff to reinstate a spent action arising from that wrong. The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.

In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It 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 which enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it. ...The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly, 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.

17. The present case is one where proceedings were commenced within a relatively short time after the expiration of the limitation period. The plaintiff argues that the period is so short that it would be unfair not to grant her the extension. Relevantly to this question, McHugh J said at 554:

The learned Judges of the Court of Appeal met the prejudice point by holding that the test for prejudice was whether an order extending time would make the defendant any worse off than it would have been had the action been commenced within, but towards the end of, the limitation period. But this analysis, with respect, treats the limitation period as little more than a point of reference. It suggests that all that is ordinarily relevant is the marginal prejudice caused by the delay. It downplays, if it does not overlook, the second, third and fourth rationales of limitation periods to which I have referred. It treats the parties, subject to the question of prejudice, as if they were on an equal footing. The analysis gives no weight to the fact that the defendant's potential liability expired at the end of that period and that to extend the period may result in the imposition of a new legal liability on the defendant. Indeed, it seems to indicate that a limitation period is a provisional rather than a rigid limit.

If the action had been brought within time, it would have been irrelevant that, by reason of the delay in commencing the action, Doctor Chang might have had little independent recollection of his conversation with the applicant and that the defendant might have had difficulty in fairly defending itself. But once the potential liability of the defendant had ended, its capacity to obtain a fair trial, if an extension of trial were granted, was relevant and important. 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.

Legislatures enact limitation periods because they make a judgment, inter alia, 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. 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. Even on the hypothesis of presumptive prejudice, the legislature perceives that society is best served by barring the plaintiff's action. 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.

18. Toohey and Gummow JJ, in a joint judgment arriving at the same conclusion, agreed (at 548) that:

It is no sufficient answer to a claim of 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. The plaintiff carries the onus of satisfying the court that it is in the interests of justice that the discretion to extend time be exercised in her favour. More than three years had passed since the accident when she first gave instructions to her original solicitors, Stilling & Associates. In some other jurisdictions, and indeed in the Australian Capital Territory in respect of causes of action arising since July 2003, the limitation period for personal injury actions is three years rather than six. The plaintiff does not suggest that she gave any notification to anyone associated with the defendant about her accident until the letters of July and October 2000. I think it more likely than not that the defendant received those letters, but I am satisfied that he did not provide them to his insurer. No reply having being received to those letters, Stilling & Associates appear to have taken no further steps; at all events, they had not commenced proceedings by the time Mr Andrews was instructed in August 2002. Nor did Mr Andrews, either upon receiving instructions, or upon obtaining the file, communicate with the defendant by letter.

20. The plaintiff may well have been personally unaware of the existence of a limitation period, but Mr Andrews was aware of it and allowed it to expire through oversight.

21. It would be naïve not to acknowledge that the primary motivation of the defendant's insurer, in the context of the present application, is to establish prejudice rather than to take all reasonably available steps to prepare for the possibility of a hearing of the action. It is unusual for a contested application of this kind to be heard on its return date. It would have been open to the defendant to seek an adjournment so as to pursue with greater industry the perfunctory steps taken thus far to locate and obtain statements from the staff members listed in Ms Reilly's affidavit of 27 November. I make no criticism of the insurer or the solicitors arising from the fact that so little was achieved between 25 and 27 November, though I suspect that if the extension were granted, efforts to locate these people and obtain statements from them would be likely to meet with a measure of success.

22. Nevertheless, I recognise that the defendant and his brother are no longer operating the business and have disposed of documentation which might have assisted the insurer in defending the action. The comparison is not between the position of the defendant now and his position if proceedings had been commenced a few months earlier. The comparison is between the defendant's present position and his position if action had been brought in a timely fashion. As McHugh J pointed out in Brisbane South Regional Health Authority v Taylor, the general rule is that actions must be commenced within the limitation period. A plaintiff seeking to displace the general rule bears the onus of satisfying the court that to grant the extension will not cause actual prejudice of a significant kind to the defendant. The defendant has satisfied me that to permit the extension would give rise to a real possibility of significant prejudice. In those circumstances, the plaintiff has not discharged the onus upon her which must be discharged if the general rule is to be displaced. The application must be dismissed.

23. I shall hear the parties as to costs and any other consequent orders.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Decision herein of Master Harper.

Associate:

Date: 5 March 2004

Counsel for the plaintiff Mr G J Lunney

Solicitors for the plaintiff Snedden Hall & Gallop

Counsel for the defendant Mr S H Pilkinton

Solicitors for the defendant Hunt & Hunt

Date of hearing 28 November 2003

Date of decision 5 March 2004