Pomakis Investments Pty Limited v Sullivan [2010] ACTSC 139 (12 November 2010)

Last Updated: 25 November 2010

POMAKIS INVESTMENTS PTY LIMITED v SULLIVAN [2010] ACTSC 139 (12 November 2010)

LIMITATION OF ACTIONS – Appeal from decision of Master to extend limitation period for personal injury claim – Whether Master properly exercised discretion pursuant to s 36 of Limitation Act 1985 (ACT) – Discretion properly exercised – Appeal dismissed.

Limitation Act 1985 (ACT) ss 16A, 36

Workers Compensation Act 1951 (ACT)

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

Brozinic v PHC Operations Pty Ltd [2008] ACTSC 20

Robert Forrester v Harris Farm Pty Ltd (In Liquidation) [1996] ACTSC 1 (2 February 1996)

Hamilton v Madden [2007] ACTSC 89

House v The King [1936] HCA 40; (1936) 55 CLR 499

Laws v Web Scaffolding Pty Ltd [2010] ACTCA 3

Miletic v Capital Territory Health Commission [1995] HCA 13; (1995) 130 ALR 591

Noja v Civil and Civic Pty Limited and Others [1990] FCA 135; (1990) 26 FCR 95

Salido v Nominal Defendant (1993) 32 NSWLR 524

Sessions v Phengsiaroun [2008] ACTSC 132

James Sullivan v Pomakis Investments Pty Limited (ACN 091 535 296) [2010] ACTSC 66

No. SC 833 of 2009

Judge: Cowdroy J

Supreme Court of the ACT

Date: 12 November 2010

IN THE SUPREME COURT OF THE )

) No. SC 833 OF 2009

AUSTRALIAN CAPITAL TERRITORY )

APPEAL FROM INTERLOCUTORY DECISION OF MASTER HARPER

BETWEEN: POMAKIS INVESTMENTS PTY LTD

(ACN 091 535 296)

Appellant

AND: JAMES SULLIVAN

Respondent

ORDER

Judge: Cowdroy J

Date: 12 November 2010

Place: Sydney

THE COURT ORDERS THAT:

1. The appeal be dismissed.

2. The Appellant pay the costs of the Respondent of this appeal.

1. Before the Court is an appeal from a decision of Master Harper given on 9 July 2010 (see James Sullivan v Pomakis Investments Pty Limited (ACN 091 535 296) [2010] ACTSC 66). By such judgment the Master extended the limitation period pursuant to s 36(2) of the Limitation Act 1985 (ACT) (‘the Limitation Act’) to enable the respondent (‘Mr Sullivan’) to commence an action for personal injury against his former employer although such action was not brought within the three year period fixed by s 16A of such Act.

2. Section 36(2) of the Limitation Act relevantly provides:

If an application is made to a court by a person claiming to have a cause of action to which this section applies, the court, subject to subsection (3) and after hearing such of the persons likely to be affected by that application as it considers appropriate, may, if it decides that it is just and reasonable so to do, order that the period within which an action on the cause of action may be brought be extended for the period that it determines.

3. Section 36(3) provides the criteria which the Court must consider when an application under s 36(2) is made and is referred to later in this judgment.

THE FACTS

4. The facts are fully set out in the Master’s decision, and the Court summarises the salient facts hereunder.

5. Mr Sullivan worked at Mitchell Aluminium, a business which was then owned by the defendant company from mid 2003 until September 2004. His work involved lifting prefabricated glass frames, cutting glass, undertaking repetitive heavy lifting, loading and unloading trucks and helping with installations.

6. Some months after commencing work at Mitchell Aluminium Mr Sullivan experienced pains in his arms and on 3 June 2004 consulted his general practitioner Dr Smee who diagnosed tendonitis in both his arms. Dr Smee informed Mr Sullivan that nothing could be done for his condition. By 10 September 2004 the pain in Mr Sullivan’s arms was such that he was unable to continue to work and resigned on that day. Mr Sullivan was then without work for approximately 6 months.

7. On 26 October 2004 Mr Sullivan consulted Dr May, a sports physician. On 17 December 2004 a claim for workers compensation was made against Mr Sullivan’s employer which was accepted by the Workers Compensation Insurer, namely QBE Insurance (Australia) Limited (‘QBE’). Mr Sullivan was paid weekly payments from QBE in the period from 10 September 2004 to 25 January 2005 and his medical expenses were also paid.

8. On 25 January 2005 Dr May reported that Mr Sullivan had made a complete recovery.

9. In March 2005 Mr Sullivan returned to work at Mitchell Aluminium, which, by this time, had been sold to a new owner. In this employment Mr Sullivan worked in the same premises and undertook the same work as he had done previously. Mr Sullivan ceased such employment in July 2005. Mr Sullivan recommenced work in a causal capacity from about July 2006 until June 2009 when he ceased work completely.

10. Mr Sullivan stated that he did not contemplate making a claim for his injuries since he had been informed by his doctors that nothing could be done for his arms. In mid 2009 he consulted a new general practitioner who informed him that his injuries were serious and could require surgery. As a consequence Mr Sullivan consulted solicitors in August 2009. Mr Sullivan stated that he was not aware of any time limit for the making of a claim for compensation before consulting solicitors.

11. Pursuant to the provisions of s 16A of the Limitation Act, a cause of action for personal injury compensable under the Workers Compensation Act 1951 (ACT) is not maintainable if brought three or more years after the day the injury was sustained. Assuming in this instance that such date was, at the latest, September 2004 (the date when Mr Sullivan first ceased work), it follows that the claim was required to be made by September 2007. Mr Sullivan’s originating claim was filed on 30 September 2009, namely two years beyond the relevant limitation period.

12. Applying s 36 of the Limitation Act the Master concluded that both the employer and QBE had been aware of Mr Sullivan’s injuries since late 2004. Although they had reasonably assumed that it was extremely unlikely that the claim would be revived, that possibility could not have been excluded. It is convenient now to turn to the submissions of the appellant.

APPELLANT’S SUBMISSIONS

13. The appellant states that s 36(2) of the Limitation Act requires the Court to determine whether or not ‘it is just and reasonable’ to extend the limitation period, and refers to s 36(3) of the Limitation Act which contains a non-exhaustive list of factors relevant to the exercise of discretion under s 36(2). The appellant submits that it will suffer prejudice if Mr Sullivan is allowed to bring his claim. The Court considers hereunder the specific considerations relevant to Mr Sullivan’s application.

Delay by Mr Sullivan

14. The appellant points to the delay of Mr Sullivan in instituting the claim and stresses that after December 2004 (when the claim to QBE was made by Mr Sullivan) no further contact had been made by him until September 2009.

15. The appellant submits that because of the nature of Mr Sullivan’s injury, it is difficult to establish the specific date on which the injury was sustained. The appellant refers to a medical report by Dr P Endrey-Walder obtained by Mr Sullivan’s own lawyers which referred to the difficulty of ascertaining such fact. Accordingly the actual date when the injury was sustained is open to speculation.

16. The second matter relied upon by the appellant is the vagueness surrounding the cause of the injury. The Amended Statement of Claim refers to the duties undertaken by Mr Sullivan, but fails to define any specific instance in which it is said that the system of work undertaken was unsafe. The appellant refers to the decision of Miles CJ in Robert Forrester v Harris Farm Pty Ltd (In Liquidation) [1996] ACTSC 1 (2 February 1996) in which his Honour referred to the difficulties confronting a court when injuries are undefined and where there is a lack of definition upon the question whether there was any failure by an employer in a duty of care. At [30] his Honour referred to the fact that an expert report can never be of value where facts are not available to support the premise upon which the report is based.

17. The appellant submits that it is pointless for a proceeding to continue if the claim will ultimately fail. The appellant directs the Court to the observations of Gleeson CJ in Salido v Nominal Defendant (1993) 32 NSWLR 524 where his Honour observed at 532-533 that an application for leave for extension of time:

may be refused if it would be plainly futile to grant it, and in that connection an applicant’s willingness and ability to give a full and satisfactory explanation of any delays in reporting to police, notifying claims and commencing proceedings will be material.

18. Next, the appellant submits that it would be prejudiced if the proceedings brought by Mr Sullivan are allowed to continue. It refers to the observations of McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541, in which his Honour observed at 553-554 that the discretion to grant an extension of time should only be exercised in circumstances where the claimant has demonstrated that the case sought to be brought is ‘a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question’.

19. The appellant submits that Mr Sullivan’s lack of recall of events and the subsequent lack of details regarding the manner in which the workplace system was apparently defective raises severe difficulties for the appellant (see generally Miletic v Capital Territory Health Commission [1995] HCA 13; (1995) 130 ALR 591).

20. The appellant claims that such difficulty is exacerbated by evidence that the employment records relating to Mr Sullivan’s employment no longer exist and evidence that according to a fellow worker, no complaint was made by Mr Sullivan whilst he was working at Mitchell Aluminium. The appellant says it has no work rosters, records of hours worked, work allocation sheets, time sheets or records of any manual handling equipment. Accordingly the appellant submits that it has been deprived of the opportunity to meet some of the assertions raised against it by the Amended Statement of Claim.

21. Lastly, the appellant submits that in the period between 2004 and 2009 there is no medical evidence. Such fact further prejudices the appellant in defending Mr Sullivan’s claim.

CONSIDERATION

22. In Brisbane South Regional Health Authority, Toohey and Gummow JJ observed that the lower court in that proceeding had approached the question of prejudice by comparing the circumstances prevailing at the time of the proposed out of time application with the circumstances of the same action had it been brought in time toward the end of the limitation period. At 548 their Honours rejected such approach, stating that the Court was required to consider the position and to exercise its discretion based upon the time that had elapsed since the alleged injury had occurred and whether a fair trial was possible.

23. The facts in Brisbane South Regional Health Authority raise different considerations to those before the Master. In those proceedings, 17 years had elapsed from the date of the alleged injury to the date when the application was made for an extension of time. Further, the claim in such proceeding was based solely upon evidence of one conversation with a medical practitioner that had occurred 17 years previously and in circumstance where the medical practitioner no longer lived in Australia and where his whereabouts were unknown.

24. In holding that the Court of Appeal had erred in its approach McHugh J (with whom Dawson J agreed) observed at 554:

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.

25. In the circumstances of the present appeal, the Master, in the exercise of his discretion, was satisfied that interests of justice required a grant of extension of time to enable Mr Sullivan to pursue his claim.

26. In House v The King [1936] HCA 40; (1936) 55 CLR 499 their Honours Dixon, Evatt and McTiernan JJ stated the following principle at 504-505:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.

27. The issue for determination in this appeal is whether the Master correctly exercised his discretion in his application of s 36(3) of the Limitation Act. Paragraph 12 of the Master’s decision records that the Master correctly stated the factors to be considered when determining an application made pursuant to s 36(3). The Court will proceed to consider the Master’s decision in accordance with the requirements of that section.

Section 36(3)(a): Length of delay and reasons for the delay by Mr Sullivan

28. The Master clearly considered the aspect of delay in light of authorities referred to in Laws v Web Scaffolding Pty Ltd [2010] ACTCA 3; Sessions v Phengsiaroun [2008] ACTSC 132; Brisbane South Regional Health Authority; Noja v Civil and Civic Pty Limited and Others [1990] FCA 135; (1990) 26 FCR 95; Hamilton v Madden [2007] ACTSC 89 and Brozinic v PHC Operations Pty Ltd [2008] ACTSC 20.

29. The Master found that Mr Sullivan was unaware that he might have any right to claim damages until shortly before he instructed his solicitors. The Master also found that both Mr Sullivan and his solicitors had acted promptly since that time (see decision of Master at [15]). The Master accordingly considered the issue of delay.

Section 36(3)(b): Prejudice to the Appellant

30. The Master considered prejudice to the appellant at [16]. The Master found that both Mr Sullivan’s employer and QBE had been aware of Mr Sullivan’s injuries since late 2004 ‘although both could reasonably have assumed that they were extremely unlikely to hear anything more about it’. The Master observed that in the absence of a redemption or common law settlement, a claimant for workers compensation might return to the employer and insurer for compensation ‘years after the event if there is further incapacity or treatment made necessary by the original injury’: see [16] of the Master’s decision.

31. The Master also took into account the fact that notwithstanding the sale of the business, the appellant had potential witnesses available who might assist in countering the claim of Mr Sullivan. The Master found that QBE has its file from 2004 and such file would be available to GIO General Limited, the insurer who has now become the compensation insurer. Accordingly the Master considered that GIO General Limited would be in as strong a position as QBE would have been to defend a claim brought by Mr Sullivan.

32. From these observations it is clear that the Master considered the question of prejudice and found that the appellant had not lost its right to a fair trial.

Section 36(3)(c): Conduct of the Appellant

33. This subsection requires consideration of the steps taken by a defendant to make available to a plaintiff the means of ascertaining facts that might be relevant. This consideration does not arise in the present circumstances.

Section 36(3)(d): Duration of the disability after the accrual of the cause of action

34. Given the history of the proceedings as provided by the Master in his reasons, the Master plainly had regard to the apparently longstanding disability from which Mr Sullivan has suffered.

Section 36(3)(e): Whether Mr Sullivan acted promptly and reasonably, having knowledge of the alleged negligence

35. The Master was satisfied that Mr Sullivan acted promptly as soon as he received medical advice concerning his condition (see the Master’s judgment [15]). The Master thereby considered this requirement.

(f) Steps taken by Mr Sullivan to obtain advice

36. Evidence was before the Master concerning the advice provided to Mr Sullivan prior to consulting a different medical practitioner in September 2009. It may be inferred that Mr Sullivan did not seek legal advice prior to that date in the belief that it would have served no purpose. The Master observed as stated above that both the ‘plaintiff and the solicitors have acted promptly since then’: see [15]. The Master accordingly considered such requirement.

Expert Evidence Finding

37. The appellant has submitted that any expert opinion provided in the proceedings relating to the system of work will be compromised by the fact that Mr Sullivan’s own evidence, on which any expert opinion would be based, is vague. The appellant refers to the Master’s observation that Mr Sullivan was ‘not a particularly impressive witness’ although he had ‘no reason to doubt his honesty or genuineness’.

38. Unless the basic facts are available to support an allegation, an expert report based upon the presumption of such facts is of no evidentiary weight: see Robert Forrester at [30]. However, Mr Sullivan has not yet been required to submit all evidence in support of his claim. Before the Master he was only required to produce such evidence as would support his application for extension of time. The Court would be prematurely judging the merits of his claim if it relied solely upon that evidence. For this reason the Court does not consider that the evidence before the Master necessarily leads to the conclusion that Mr Sullivan’s claim has no prospects of success.

CONCLUSION

39. The Master duly considered the criteria prescribed by s 36(3) of the Limitation Act, and followed the principles recently referred to by the Australian Capital Territory Court of Appeal in Laws and of Higgins CJ in Sessions. It is not possible to discern any errors of the kind referred to in House v The King (see [26] above).

40. There being no demonstrable error in the exercise of the discretion of the Master, the appeal is dismissed with costs.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Cowdroy.

Associate:

Date: 12 November 2010

Solicitor for the Appellant: Mr A. Muller of Moray & Agnew Lawyers

Counsel for the Respondent: Mr D.P. Shillington

Solicitor for the Respondent: Blumers Personal Injury Lawyers

Date of hearing: 22 September 2010

Date of judgment: 12 November 2010