Dudycz v Vager Pty Ltd t/as Gerald Slaven Holden and Rolfe Motor Corporation No.6 Pty Ltd t/as Rolfe Classic BMW [2011] ACTSC 7 (31 January 2011)

Last Updated: 7 February 2011

ADAM DUDYCZ v VAGER PTY LTD ACN 008 548 865 T/A GERALD SLAVEN HOLDEN & ANOR

[2011] ACTSC 7 (31 January 2011)

LIMITATION OF ACTIONS – action for damages for personal injury – work injury – action against employer – plaintiff making considered decision early in limitation period not to sue – plaintiff suffering further injuries at work with another employer after expiry of limitation period – actual prejudice to defendant established – fair trial no longer feasible – extension refused

Court Procedures Rules 2006 (ACT)

Limitation Act 1985 (ACT)

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

Laws v Webb Scaffolding Pty Ltd [2010] ACTCA 3

Sessions v Phengsiaroun [2008] ACTSC 132

No. SC 690 of 2009

Judge: Master Harper

Supreme Court of the ACT

Date: 31 January 2011

IN THE SUPREME COURT OF THE )

) No. SC 690 of 2009

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ADAM DUDYCZ

Plaintiff

AND: VAGER PTY LTD ACN 008 548 865 T/A GERALD SLAVEN HOLDEN

First defendant

ROLFE MOTOR CORPORATION NO. 6 PTY LTD ACN 124 922 041 T/A ROLFE CLASSIC BMW

Second defendant

ORDER

Judge: Master Harper

Date: 31 January 2011

Place: Canberra

THE COURT ORDERS THAT:

1. the first defendant’s application in proceeding dated 23 October 2009 be dismissed.

2. the plaintiff’s application in proceeding dated 12 February 2010 be dismissed.

3. the first defendant pay the plaintiff’s costs of its application dated 23 October 2009.

4. the plaintiff pay the first defendant’s costs of his application dated 12 February 2010.

5. the second defendant’s costs of both applications be costs in the cause.

1. There are two applications before the court in this action for damages for personal injury. The first is an application by the first defendant for an order that the plaintiff’s action be set aside because it was commenced out of time and hence doomed to failure. The second application is by the plaintiff for an extension of the limitation period against the first defendant.

2. The plaintiff commenced this action against both defendants on 3 August 2009. His claim is that he suffered personal injuries on different occasions, in the course of his employment with each of the defendants.

3. In his statement of claim, he asserts that he was injured on 24 April 2002 whilst employed by the first defendant as an apprentice mechanic. The first defendant was a car dealer, and had sent the plaintiff to deliver two truck rear tyre assembly units to the premises of Molonglo Brake and Clutch Service Pty Ltd. They were loaded at the first defendant’s premises on to the back of a vehicle with the use of a forklift. The plaintiff drove the vehicle with the units to the delivery site. While he was unloading one of the units, it slipped from his grasp. In an instinctive attempt to prevent it from falling on his feet, he caught the unit and in the process injured his back.

4. Particulars of the negligence of the first defendant are set out in the statement of claim. I accept for the purposes of the applications that if the facts pleaded were made out, the plaintiff would have reasonable prospects of success in his claim against the first defendant.

5. The claim against the second defendant is in respect of three incidents, between October 2008 and March 2009. The claim against the second defendant was brought within time.

6. I am satisfied that on the day of the accident, or very shortly afterwards, the plaintiff reported the 2002 injury to his employer. The employer has produced a copy of an employee accident report, apparently completed by the plaintiff in his own handwriting, in which he gave a description of the incident causing his injury in terms consistent with the statement of claim. The report form is signed by the plaintiff and witnessed by a supervisor who records that the incident was reported to him by the plaintiff on arrival back from Molonglo Brake and Clutch Service.

7. On 7 May 2002 the plaintiff saw his general practitioner, and gave her the same history. He told her that he had had immediate pain in the lower back and was briefly locked in lumbar flexion. He returned to work, although in pain. Later in the same week, while lifting a wheel off a car, he had a recurrence of the severe lower back pain and had to be helped by a colleague to the lunch room. The general practitioner sent him to a radiologist for a CT of the lumbar spine, which showed mild reduction of disc height at L4-5 but no disc prolapse or foraminal impingment. The general practitioner diagnosed acute lumbar back pain due to disc bulging. She saw him on two further occasions during May 2002. She referred him for physiotherapy and recommend non-prescription painkillers. She anticipated full recovery within a month, and by August 2002, when she reported to the workers compensation insurer, not having heard from the plaintiff again she assumed that he had achieved full recovery, subject to the possibility that he might experience intermittent relapses of back pain which he could minimise with strengthening exercises. She did not expect any long-term problems or interference with his working capacity.

8. On 25 June 2002 the plaintiff completed a workers’ compensation claim form with CGU Insurance Ltd. The insurance company accepted the claim and paid pursuant to it amounts totalling $531.00.

9. In the plaintiff’s affidavit in support of his application for an extension of time, he deposes that he was born in February 1981. After leaving school he commenced an apprenticeship with the first defendant in 2001. He could recall no back problems prior to the incident in April 2002. He says that he continued working after the incident despite his back pain because he was concerned about taking time off work or upsetting his superiors, particularly the manager, Mr Gerald Slaven. After the aggravation a few days later which took him to his general practitioner, he had something less than two weeks off work. He says in his affidavit that he did not have any further time off or treatment because he could not afford it. He was not reimbursed for his medical bills for about six months.

10. He says in the affidavit:

Around this time, my father recommended I speak to a lawyer about any possible rights I might have had. I was aware, in a general sense, that I may have been entitled to workers’ compensation and other rights. However, from my perspective, the working environment in which I was employed was not one that looked favourably on workers’ compensation claims. As an apprentice I did not feel I could retain my position if it were known I had spoken to a lawyer about my situation.

11. The plaintiff continued to suffer pain in the lower back but did not seek treatment. He remained optimistic that he would recover over time.

12. In April 2003 the plaintiff resigned from his employment with the first defendant, and started another job with Commonwealth Motors. He was still an apprentice. He says that he remained concerned about the consequences of making a claim. He intermittently consulted his general practitioner about his lower back pain. Commonwealth Motors knew about his workers’ compensation claim and on some occasions his fees for seeing his general practitioner were reimbursed by Commonwealth Motors. He aggravated his back at home and at work on a number of occasions, and sometimes at Commonwealth Motors he was unable to complete a day’s work because of pain. He specifically mentioned incidents in 2006 and 2007 where he suffered acute lower back pain.

13. The plaintiff says that by October 2008 he had left Commonwealth Motors and was working for the second defendant. He injured his lower back while lifting a box at work. He completed a claim form which was accepted by QBE Insurance Ltd, the second defendant’s insurer at that time.

14. He says that ultimately in April 2009 he followed his father’s advice and decided to see a solicitor. He had had no legal advice prior to seeing his present solicitor in April 2009.

15. His solicitor acted promptly thereafter. I am satisfied that the time between the plaintiff’s first consultation with his solicitor in April 2009 and the commencement of proceedings in August 2009 is fully explained by the enquiries the solicitor needed to undertake before commencing proceedings. It might be said that the solicitor should have acted more quickly in bringing the present application for extension, but I am not persuaded that any delay in that regard is of any significance to the determination of the application. The solicitors for the first defendant, acting on instructions from CGU, instructed a firm of investigators to make enquiries into the plaintiff’s claim, and to identify and obtain statements from any witnesses. The investigators obtained information from Mr David Waters, apparently a senior employee of the first defendant. His recollection was that the plaintiff’s supervisor in 2002 was one Laurie Davis. Mr Davis was no longer employed by the first defendant and the investigators were unable to find him.

16. The plaintiff says in a subsequent affidavit that his supervisor in April 2002 was one Dave Morton, and that Mr Davis was assistant service manager. Some months after the accident Mr Morton left the company and Mr Davis took his job.

17. The supervisor’s signature on the employee accident report is not sufficiently legible for me to form a view as to whether it is that of Mr Morton, Mr Davis or someone else.

18. The investigator made contact with a Mrs Booy. She and her husband were the owners of Molonglo Brake and Clutch Service Pty Ltd in April 2002. Neither of them had any recollection of the incident, although their records confirmed that there was a delivery of truck wheel assemblies on 24 April 2002, to be machined. She said that wheel assemblies of that kind come to be machined with the wheels and drums in one unit, and are lifted onto a drum lathe machine using a gantry in the workshop.

19. In April 2002 the limitation period for a personal injury action, fixed by section 11 of the Limitation Act 1985 (ACT), was six years. The period, for claims of this kind, was reduced to three years with effect from 1 July 2002 by a newly introduced section 16A, but this did not have retrospective effect, and the limitation period for the plaintiff’s claim remained at six years. Hence it expired on 25 April 2008, some 15 months before the commencement of proceedings, and almost exactly one year before the plaintiff consulted a solicitor.

20. The principles to be applied in determining an application for extension of a limitation period were considered by the Court of Appeal in Laws v Webb Scaffolding Pty Ltd [2010] ACTCA 3. The Court endorsed the principle that the overall onus is on the plaintiff to demonstrate that it is just and reasonable to extend time. That onus remains on the plaintiff throughout. If a defendant wishes to rely on actual prejudice then it bears the onus of adducing or pointing to evidence sufficient to establish that fact. The critical question remains whether the plaintiff has shown that, notwithstanding the delay, a fair trial is possible.

21. The leading authority remains Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541. To quote Dawson J at 544:

The onus of satisfying the Court that the discretion should be exercised in favour of the 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 . . . Once the legislation 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.

22. Toohey and Gummow JJ said at 547:

The discretion conferred by the subsection 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.

23. McHugh J said at 551 that an applicant

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

And at 553 that the legislation imposing a limitation period

. . . 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 my 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.

And 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.

24. The proposition that an applicant for an extension has no presumptive right to it has been accepted in this court as applying to the operation of section 36 of the Limiation Act 1985 (ACT): Sessions v Phengsiaroun [2008] ACTSC 132 at [58].

25. The plaintiff in the present case has not put forward a convincing explanation for his failure to instruct a solicitor within the limitation period. His own evidence is that his father recommended that he speak to a lawyer about any possible rights he might have during the second half of 2002. He was aware in a general sense that he might have other rights beyond his entitlement to workers’ compensation. He decided not even to seek legal advice at the time because he thought this might have an adverse impact on his employment with the first defendant. During 2003, still well within the limitation period, he changed employers and that consideration was no longer relevant. There is really no explanation as to why he did not seek legal advice after he left the employment of the first defendant and commenced with Commonwealth Motors. It appears from his own evidence that he took a conscious decision not to pursue any rights which might have been available to him beyond those by way of workers’ compensation.

26. Additionally, I am persuaded that the first defendant would be prejudiced if required to respond to this claim so long after the event. True it is that the first defendant and its insurer were put on notice of the injury and its circumstances early on, but there was nothing at that stage to put them on notice of a possible claim for damages under the general law. On the contrary, they had a report from the plaintiff’s treating general practitioner expressing the view that complete recovery within a month was likely. The insurer was asked to make a few payments and did so, within less than six months of the injury, but heard nothing more about it for the next seven years. It is common knowledge that the vast majority of workers’ compensation claims are finalised in this fashion: a claim is made, payment of a relatively small amount is made to cover some time off work and some medical treatment, no proceedings under the workers’ compensation legislation are commenced in the Magistrates Court, and the insurer and employer hear nothing more about the matter. Neither the insurer nor the employer can be criticised for not having done more in 2002 to investigate the circumstances of the incident or to identify witnesses and obtain statements from them.

27. Over and above the presumption of prejudice discussed by McHugh J in Brisbane South, in the present case there is some evidence of actual prejudice. Persons who could have given evidence about the incident and surrounding circumstances are no longer employed by the first defendant and cannot be found. If some of them could be located, the incident is now so long ago that it would be unreasonable to expect them to remember relevant details about it in a reliable fashion.

28. Of particular relevance is that the limitation period expired prior to the injuries about which the plaintiff claims damages from the second defendant. If proceedings had been commenced against the first defendant in time, it would have had the opportunity for medical examinations of the plaintiff before those later injuries. As it is, there are no medical reports subsequent to that of the general practitioner in August 2002 until after the 2008 injuries. Thus the first defendant has lost any opportunity it might have had to obtain independent expert medical opinion about the plaintiff’s condition prior to those later injuries.

29. Gummow J explained in Brisbane South that it is not correct on an extension application to compare the existing situation with that which would have obtained if proceedings had been commenced just within the limitation period. The whole of the delay from cause of action to commencement of proceedings must be considered and explained.

30. In the somewhat unusual circumstances of the present case, I am satisfied that the first defendant has more probably than not suffered actual prejudice which would operate to its detriment in obtaining a fair trial of the action if it were permitted to proceed. I am also satisfied that the plaintiff, by then an adult and reasonably well informed, made a conscious decision during the early part of the limitation period not to pursue such rights as he might have had to damages under the general law, and only changed his mind about this when he first obtained legal advice well outside the limitation period.

31. The first defendant has satisfied the evidentiary onus in relation to prejudice, and the plaintiff has failed to provide the court with a satisfactory explanation for the delay, or to satisfy the court that in all of the circumstances it would be just and reasonable to extend time.

32. The plaintiff’s application for an extension of time will be refused.

33. The application by the first defendant to set the proceedings aside pursuant to rule 40 of the Court Procedures Rules 2006 (ACT) was in my view misconceived. The commencement of an action outside a limitation period does not necessarily mean it is doomed to failure. The bar must be pleaded by the defendant. Where a plaintiff commences proceedings outside a limitation period, a defence is filed pleading the limitation issue and the plaintiff does not within a reasonable time make an application for extension, the proper course for the defendant is to apply for summary judgment. It was not in my opinion open to the first defendant to make an application to have the proceeding struck out prior to the delivery of a defence. The first defendant’s application in that regard will be dismissed.

34. The plaintiff must pay the first defendant’s costs of his application for extension of time, that is the costs of the plaintiff’s application in proceeding dated 12 February 2010. The first defendant should pay the plaintiff’s costs of its application in proceeding dated 23 October 2009.

35. The second defendant has been represented on the hearing of the applications but has not taken an active part. The second defendant’s costs of both applications should be costs in the cause.

I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Associate:

Date: 31 January 2011

Counsel for the plaintiff: Mr W L Sharwood

Solicitors for the plaintiff: Maliganis Edwards Johnson

Counsel for the first defendant: Mr G A Stretton

Solicitors for the first defendant: Sparke Helmore

Counsel for the second defendant: Ms Meller

Solicitors for the second defendant: Dibbs Barker

Date of hearing: 5 March 2010

Date of judgment: 31 January 2011