Baker-Morrison v State of New South Wales

[2008] NSWDC 129

Set aside by Appeal: 7 DCLR (NSW) 186

District Court

CITATION:	Baker-Morrison v State of NSW [2008] NSWDC 129
HEARING DATE(S):	17 June 2008
JUDGMENT DATE:	27 June 2008
JURISDICTION:	District Court Civil Jurisdiction
JUDGMENT OF:	Johnstone DCJ at 1
DECISION:	1. The Statement of Claim is struck out and the proceedings are dismissed. 2. The plaintiff is to pay the defendant’s costs of the proceedings including the motions that were filed, on the ordinary basis.
CATCHWORDS:	LIMITATION OF ACTIONS - 3 year post discoverability limitation period - when did the plaintiff discover the injury was caused by the fault of the defendant and that the injury was sufficiently serious to justify the bringing of an action so as to commence the running of time for the limitation period
LEGISLATION CITED:	Limitation Act 1969: s 50C and s 50D Civil Liability Amendment (Personal Responsibly) Act 2002 Civil Liability Act 2002
CASES CITED:	Caven v Women’s and Children’s Health [2007] VSC 7 Russo v Aiello [2003] HCA 53 at [121] Brisbane South Regional Health Authority v Taylor [1996] HCA 25 at [ 7] Halford v Brookes (1991) 1 WLR 428 Antonini v SRA (No 2) [2006] NSWDC133 Country Waste Systems Pty Limited v Wright [2007] NSWDC 287 Perez v Instant Access Australia Pty Limited [2007[ NSWDC 182 Ozturk v NSW Department of Housing (unreported, NSWDC, McGrowdie J, 24.8.07) Toppin v Coles Myer Ltd [2007] NSWDC 256 Frizelle v Bauer (unreported, NSWDC, McGrowdie J, 27.11.07) Bet v UTS Haberfield Club Limited (unreported, NSWDC, Elkaim J, 18.6.08) Rawle v South State Industrial Supplies Pty Limited (unreported, NSWDC, Goldring J, 17.4.08)
TEXTS CITED:	The Ipp Report
PARTIES:	Shakyra Toni-Louise Baker-Morrison bhnf Alicia Louise Baker (Plaintiff) State of New South Wales (Defendant)
FILE NUMBER(S):	34/07 Gosford
COUNSEL:	Mr R Quickenden (Plaintiff) Mr G Bateman (Defendant)
SOLICITORS:	John Ryan (Plaintiff) Crown Solicitor (Ms M Wasilewicz) (Defendant)

JUDGMENT

1. On 26 May 2004 at about 3.30pm Shakyra Baker-Morrison who was then a 22 month old baby received serious injuries to two fingers of her right hand when they were caught between the floor and a sliding glass door at the Gosford Police Station.

2. Three years and some 26 days later, solicitors acting for her mother, Alicia Baker, Shakyra’s next friend, filed a Statement of Claim on 21 June 2007 alleging negligence on the part of the occupier of the police station, the State of New South Wales, and claiming damages on behalf of Shakyra.

3. Section 50C(1)(a) of the Limitation Act 1969, which applies to causes of action accruing after 6 December 2002, provides:

“1. An action on a cause of action to which this Division applies is not maintainable if brought after the expiration of a limitation period of whichever of the following periods is the first to expire:

(a) the “3 year post discoverability limitation period”, which is the period of 3 years running from and including the date on which the cause of action is discoverable by the plaintiff,

(b) the “12 year long-stop limitation period’, which is the period of 12 years running from the time of the act or omission alleged to have resulted in the injury or death with which the claim is concerned.”

These proceedings concern only the first limb of the section, namely the 3 year post discoverability limitation period.

Section 50D of the Act provides as follows:

“(1) For the purposes of this Division, a cause of action is ‘discoverable’ by a person on the first date that the person knows or ought to know of each of the following facts:

(a) the fact that the injury or death concerned has occurred,

(b) the fact that the injury or death was caused by the fault of the defendant,

(c) in the case of injury, the fact that the injury was sufficiently serious to justify the bringing of an action on the cause of action.

(2) A person “ought to know” of a fact at a particular time if the fact would have been ascertained by the person had the person taken all reasonable steps before that time to ascertain the fact.

(3) In determining what a person knows or ought to have known, a court may have regard to the conduct and statements, oral or in writing, of the person.

(4) To remove doubt, a compensation to relatives action is not discoverable before the date of death of the deceased.”

4. It was common ground that for the purposes of these sections the relevant person was the next friend, namely the mother: s 62. It was also common ground that she consulted the solicitor, John Ryan, within days of the accident and that he wrote a letter of demand to the Gosford Police on 1 June 2004 foreshadowing a claim for damages (see annexure A to his affidavit). He subsequently attended the Gosford Police Station on 4 June 2004 to view the accident scene and took photographs. He noticed an angle iron had been installed at the base of the front sliding door.

Mr Ryan also conceded in evidence that he believed (mistakenly) that he had until Shakyra turned eighteen before proceedings needed to be filed and he unaware of the new provisions in s 50C and 50D of the Limitation Act 1969.

5. The defendant filed a Notice of Motion on 27 November 2007 seeking dismissal of the proceedings on the ground that the cause of action is statute barred by reason of s 50C. The plaintiff opposed such an order and contended that the mother did not know nor could it be held that she ought to have known before the relevant date, namely 21 June 2004 that:

(i) Shakyra’s injury was caused by the fault of the defendant, or

(ii) the injury was sufficiently serious to justify bringing an action.

As such, argues the plaintiff, the three year post discoverability limitation period did not commence to run until the cause of action was in fact discoverable, which it contended was not until around 30 November 2004 when solicitors acting for the defendant invited an offer of settlement.

6. The plaintiff’s submission was, in summary, that the next friend (Mrs Baker, the mother) was entirely reliant upon her being advised by her solicitor, Mr Ryan, that her daughter’s injury was:

(i) caused by the fault of the defendant), and

(ii) and sufficiently serious to justify bringing an action against the occupier

(see Mr Ryan’s affidavit at paragraphs 4, 7, 9, 10, 11 and 12).

For his part Mr Ryan contended that he did not form a belief that Shakyra had reasonable prospects of success in a claim prior to 21 June 2004, either in regard to the seriousness of her injury or in respect of the question of the defendant’s fault causing that injury. It was his position that he knew there was a potential case but it was by no means “open and shut” and that it was “underdone” in the sense that he did not know whether expert evidence might be required or what counsel’s advice was. Nor did he know the extent of Shakyra’s injury or whether it might result in a continuing disability.

7. The determination of this dispute turns on the question of the proper construction of s 50C and s 50D of the Limitation Act 1969. As far as I have been able to ascertain there has been no consideration of these sections by any of the superior courts, and it has only been considered in a handful of decisions in the District Court.

There is no doubt that in amending the legislation the Parliament intended to introduce more stringent criteria than previously, and to require the application of a test involving objective reasonableness rather than one of subjective knowledge.

As to the requirement of knowledge that the injury was sufficiently serious to justify the bringing of an action, it is clear that provision was inserted to deal with cases of progressive latent damage such as mesothelioma: (see the Ipp Report at para 6.20 and following).

8. What is not clear, however, is just what a reasonable person needs to know, or find out, to know or to be taken to know that the injury was caused by the ‘fault’ of the defendant. Is it sufficient for example for Mrs Baker to have known enough to go and see a solicitor, or for Mr Ryan to know that there was ‘a potential case’ even though he did not have sufficient facts to conclude that there were reasonable prospects of success.

9. I referred earlier to some District Court decisions in which respective judges have grappled with these issues. I need to look briefly at each of these decisions, which I will do in chronological order.

10. The sections were first considered by Judge Sidis in November 2006 in Antonini v SRA (No 2) [2006] NSWDC133. She said this at [13] to [17]:

“13. In determining whether Mrs Antonini ought to have known any of those facts, I take into account the facts that would have been ascertained by her had she taken more reasonable steps to ascertain those facts.

14. As to the first of those facts there is no doubt that Mrs Antonini was aware on the date of the accident of her injury.

15. The second of those facts causes some difficulty. She conceded as I have already noted that she believed at the outset that her injury was caused by the fault of the State Rail Authority. There is correspondence among the papers from the State Rail Authority which raises the suggestion that Mrs Antonini in fact tripped when she was leaving the train in question. I am not prepared to accept that the belief of an elderly passenger as to fault establishes that she knew as a fact that the State Rail Authority was at fault by 11 August 2003.

16. As to the third of those facts the date upon Mrs Antonini knew or ought to have known that the injury was sufficiently serious to justify the bringing of the action …it is apparent that as at May 2004, the solicitor advising Mrs Antonini himself was not persuaded that there was a sufficiently serious injury to justify the bringing of an action.

17. In the circumstances, it is not reasonable, in my view, to suggest that Mrs Antonini ought to have known by 11 August 2003 of each of the facts referred to paragraphs (b) and (c).”

11. The next decision was that of Judge Neilson in Country Waste Systems Pty Limited v Wright [2007] NSWDC 287. His Honour applied a test of “legal culpability”, which he equated with the remarks of Judge Sidis. He said this at [48]:

“In my view s 50D(1)(b) requires two things of a plaintiff. Firstly, a knowledge of the causal nexus between injury or death and the defendant's conduct and, secondly, knowledge by the plaintiff of the culpability of the defendant for the injury or death. In using the word “culpability”, I do not mean, for example, that the plaintiff must know whether his or her cause of action is in negligence, nuisance, trespass, breach of statutory duty or however otherwise it might arise, but I mean that there is some form of culpability which the law recognises. Clearly her Honour Judge Sidis in Antonini seemed to adopt that view.”

See also his comments at [51].

Then at [58] he said this:

“The question is when ought the plaintiff have been aware of legal culpability. In my view, that can only occur either if a plaintiff is aware of legal culpability through some expertise or training or has been advised of that by somebody with expertise or training. For example, if the fault, in question, was fault for the cause of a motor vehicle accident most experienced motorists could form a view about that. One would not need to call upon a lawyer. Equally, one can accept that there are many sorts of occupations where one has developed expertise which might help to ascertain “fault”, for example, an insurance loss adjuster, a policeman. There are many such experts or quasi-experts”

12. Then in September 2007 Judge Gibson considered the provisions in her reasons in Perez v Instant Access Australia Pty Limited [2007[ NSWDC 182, in which she adopts the reasoning of Judge Sidis in Antonini: see [17] - [23]. Judge Gibson it seems, was not taken to Judge Nielson’s decision but she nevertheless took a similar approach. At [26] and [29] she said:

“26....it is not sufficient for the defendants to point to a party’s solicitor as someone who ought to have known as sufficient for the information to be discoverable. This is because the section sets out, as Mr Andrews points out, and I accept, that the section provides that a person ought to know if that person had taken all reasonable steps. What did the plaintiff do? What the plaintiff did was precisely what the Court of Appeal referred to in [120] of Telstra Corporation Ltd v Albert John Rea , in (that) he took such reasonable steps as was necessary for him to find out. He consulted the solicitor and he gave that solicitor specific instructions. That is sufficient to comply with s 50D.

29…Where accidents occur on building sites where there are multiple potential defendants it is often the case that there is uncertainty as to who is responsible. This is one such case. It is a disputed issue of fact for the trial whether this scaffolding was in fact negligently constructed or whether, as is at least equally likely, the scaffolding was perfectly ably constructed and somebody, perhaps an employee of the second defendant or perhaps a fellow employee of the plaintiff or some third party, was doing work and loosened the clamp. I do not know. But to say of a plaintiff or his solicitor that they ought to have known in the circumstances of the facts of this case in my view is to overstate the burden that is placed on plaintiffs by this section of the Limitation Act. This section is designed to ensure that proceedings are commenced in circumstances where a person knew or ought to have known by taking all reasonable steps. It is designed to ensure that plaintiffs consult solicitors and place all relevant information in their possession so that solicitors can commence proceedings expeditiously and the matter be heard promptly. That is what the plaintiff did.”

13. There are two unreported decisions by Judge McGrowdie. His first decision, Ozturk v NSW Department of Housing, was delivered on 24 August 2007. The Judge was told by counsel that there was no known decision in New South Wales on the provisions to give guidance. Counsel failed therefore to provide him with any of the reported decisions to which I have already referred, particularly that of Judge Nielson.

His Honour did, however, refer to the Victorian decisions on similar provisions in that state, that Judge Nielson discussed in his judgment, including Caven v Women’s and Children’s Health [2007] VSC 7. Judge McGrowdie’s approach was not one of strict legal culpability in the sense enunciated by Judge Nielson. He said for example (at p 16):

“Obviously the plaintiff would not have the obligation of ascertaining the fact conclusively. It would not be necessary in my view that the plaintiff have an expert’s report before he could conclude that there was fault on the part of the defendant. It may well be that the plaintiff would wish to test the fact by obtaining expert reports before commencing proceedings. However the plaintiff would have up to three years to do that.”

In respect of the issue relating to the seriousness of the injury, his Honour said this (at p 18):

“Legislative changes introduced this decade have commonly been known to have had a severely limiting effect on claims being brought before the courts. The Civil Liability Act 2002 operates to preclude damages for non-economic loss in a case such as the plaintiff's were the plaintiff only to be complaining of headaches and dizziness, which he did not think much of.

As the amendment to the Limitation Act introducing ss 50C and 50D was made under the Civil Liability Amendment (Personal Responsibly) Act 2002 , it is unlikely to have been the intention of Parliament to have sought to promote the bringing of minor claims. Until such time as the plaintiff gained the knowledge that his injury was serious, it can be concluded that the plaintiff did not know the fact that it would justify the bringing of a claim.”

14. In the meantime Judge Sidis delivered a second judgment involving the provisions on 6 November 2007, in Toppin v Coles Myer Ltd [2007] NSWDC 256. The question of the injury being caused by the defendant's fault turned there on questions of fact. However, in relation to the seriousness of the injury Judge Sidis said (at [14] and [15]):

“ 14. I do not accept that s 50D(1)(c) applies to circumstances which would entitle a person to bring an action. The word used is justify and in my view this requires the consideration of circumstances which suggest that having regard to the time and cost involved in bringing a claim for personal injuries the level at which compensation might be expected to be awarded was sufficient to justify bringing the claim.

15. The plaintiff’s evidence was that he realised towards the end of 2004 that his injury was sufficiently serious in that he would not fully recover from it and at that stage he sought legal advice.”

15. On 27 November 2007, Judge McGrowdie delivered his second decision, Frizelle v Bauer. It seems that his Honour was again left unassisted by any of the decisions to which I have referred.

The decision in that matter related to the seriousness of the injury, but his Honour again adopted a less stringent approach than Judge Nielson and Judge Sidis. He said (at p 14):

“The mere fact that one might at a particular point of time appreciate that the circumstances existed to justify the commencement of proceedings does not mean that the proceedings have to be commenced at that point of time. Under the legislation one has three years from the date to commence proceedings. It is not necessary at that time to have all the evidence available which would be required for a trial. It would not be necessary of course to have an expert’s report in every case. On the question of liability one has three years from that date to gather necessary evidence even before proceedings are commenced...

I do not think that the plaintiff’s submission that the time would not run until after the plaintiff had had the surgery in 2006 can succeed. As I have said before the surgery was to improve the plaintiff's condition. It would have been open to the plaintiff through her advisers to have obtained medical evidence as to prognosis well before that time.”

16. Finally, in Bet v UTS Haberfield Club Limited, Judge Elkaim delivered a judgment in Sydney on the morning of 18 June 2008 at the same time as I was finalising this current matter in Gosford.

I therefore provided counsel with copies of this decision and the unreported decisions of Judge McGrowdie, and gave them an opportunity to provide me with additional written submissions if they wished. Both did. Not unexpectedly each counsel went to passages in these cases that assisted their respective cases. Unfortunately neither set of written submissions is particularly helpful in ascertaining the proper construction of s 50C and s 50D.

17. I subsequently discovered another unreported decision of Judge Goldring in Rawle v South State Industrial Supplies Pty Limited, delivered on 17 April 2008. Judge Goldring also considered the provisions in 50C and s 50D. His Honour referred to and adopted what was said by Judge Gibson in Perez at [22] - [28], some of which I have referred to above. But his Honour does not seem to have been aware of the other decisions. He said (at pp 5 - 6):

“The respondent’s evidence is that he was not properly informed until his present solicitors and counsel were retained when he received proper advice. That is important because knowledge of whether an injury is or is not sufficiently serious to justify the bringing of the action requires a degree of understanding of the law...

…it does seem clear to me that what the section requires is the knowledge of the person himself, not the knowledge of the hypothetically reasonable person and not the knowledge of a person employed by that person That is particularly the case in a situation such as this, where in order to know whether the claim is or is not justified, some expert advice may be required.”

He went on to make further observations as to the question of whether the plaintiff knew at the relevant time that his injury was sufficiently serious to justify bringing an action. He said this (at p 70):

“If a person - or his or her legal representative - commences proceedings and does not meet the threshold, not only will the right to compensation be nullified or reduced, but the person will also be exposed to liability for costs, and because of the requirements of certification, the legal practitioner may also be subject to sanctions. The question of whether or not the bringing of action is justified is not simply a matter of looking at the seriousness of the injury, but also of looking at that injury in the light of the statutory requirements for claiming compensation, and that requires some understanding of the law. In order to know whether the injury is sufficiently serious to justify the bringing of action, a person must know not only that the injury is serious, but also, in approximate terms, whether that injury is sufficient to bring the person over any of the statutory thresholds that now exist.”

He then set out the various threshold requirements for personal injury claims under the Workers’ Compensation legislation (whole person impairment of at least 15%); the Motor Accidents legislation (whole person impairment of at least 10%); and the Civil Liability Act 2002 (under which an award of damages for non-economic loss is excluded where the severity as a proportion of a most extreme case is less than 15%, and is limited where the proportion is between 15% and 33%).

This was similar to the approach of Judge McGrowdie in Ozturk, to which I have referred above.

18. I digress here for the moment because of something said by Judge Goldring at p 4, where he suggests that it was for the plaintiff to satisfy the court that the date of the cause of action fell after the day three years prior to the filing of the Statement of Claim.

It is not necessary for me to determine where the onus of proof lies under s 150C and s 150D for the purpose of my decision, but it does seem to me that the legal onus remains upon the defendant, because the legislature has not chosen to alter the usual position. However, I venture to suggest that there might be a shifting evidential onus in the light of particular circumstances in individual cases: See, for example, the discussion in Russo v Aiello [2003] HCA 53 at [121].

19 Judge Elkaim in his judgment in Bet v UTS Haberfield Club Ltd took a somewhat different approach from the other judges in the judgments I have mentioned. He expressed his view thus:

“34. Applying the reasoning of Nielson J in Wright, as stated in paragraph 58 of his judgment, the plaintiff asserts that despite her own thoughts she would not have known that the plaintiff was at fault in the sense required by the section until Mr Margiotta told her so. If what his Honour says in paragraph 58 is that a person, absent any legal or other relevant expertise, cannot of his or her own accord form a conclusion about fault then I respectfully disagree with his Honour. I do not however thing his Honour goes that far. It seems to me that if the test required the intervention of expert advice it would have said so and further that such an interpretation is contrary to the intention of the section which is to impose upon a potential plaintiff the obligation to commence proceedings within three years of knowing that there was a defendant who had been at fault.”

20. The proper application of s 50C and s 50D has to be viewed in the light of the legislative intent. As was so aptly said by McHugh J in Brisbane South Regional Health Authority v Taylor [1996] HCA 25 at [ 7]:

“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.”

21. The approach taken by Judge Elkaim, it seems to me, was consistent with that approved by Kaye J in Caven v The Women’s and Children’s Health 2007 VSC 7, when he said of similar legislation in Victoria (at [56]):

The Act does not define the term “fault”. In some other contexts such as s 5(1A) it uses a different phrase, namely act or omission. It is arguable that the use of a different term “fault” evinces a legislative intention that the plaintiff must know or ought to know not simply of the existence of the act or omission which caused the injury but also that the injury was caused by a legal wrong. However it would be curious if the legislation is intended to work in such a way so as to postpone the application of the period of limitation until the plaintiff knew of his or her legal rights.”

22. That approach is also consistent with the approach of Lord Donaldson of Lymington MR in Halford v Brookes (1991) 1 WLR 428. As to the question of “knowledge” the Master of the Rolls said this in the context of a similar provision in the United Kingdom (at page 433):

“The word has to be construed in the context of the purpose of the section which is to determine a period of time within which a plaintiff can be required to start any proceedings. In this context “knowledge” clearly does not mean “know for certain and beyond a possibility of contradiction”. It does however mean “know with sufficient confidence to justify embarking on the preliminaries to the issue of a writ such as submitting a claim to the proposed defendant, taking legal or other advice and collecting evidence.”

24. The approach is also consistent with the Ipp Report. It is clear that the legislature shunned the use of the accrual of the cause of action as the commencement date for the limitation period to run: paras 6.14-6.17). Instead, it adopted a discoverability test which was said to justify a lesser, three year period, and the removal of any discretion to extend time: paras 6.26-6.28.

25. In my view, the purpose of s 50C and s 50D is not to set a date beyond which a plaintiff cannot sue. Rather, its purpose is to set a date from which time begins to run. A prospective plaintiff thus has three years to make all appropriate inquiries to determine whether proceedings should be instituted. In that context the requirements of s 50D are not to be so strictly construed as to require legal certainty. If a prospective plaintiff has knowledge, or should have made inquiries by which that knowledge would have been acquired, of facts sufficient to alert him or her to the prospect of a cause of action, albeit one requiring further investigation, that is sufficient.

26. Similarly, in my view, in respect of the seriousness of an injury it is not necessary that the prospective plaintiff know that it is sufficient to satisfy the threshold tests discussed by Judge McGrowdie and Judge Goldring in their judgments, nor that there be a determination of the cost benefit of bringing the proceedings, before time begins to run. All that is required is an injury of sufficient seriousness to raise the prospect of a cause of action. The prospective plaintiff still has 3 years to investigate the injury and determine whether it is sufficient to justify the commencement of proceedings.

27. The approach which I take might be tested in the present case as follows: At one level this plaintiff or her mother will not have knowledge certain that the injury was caused by this defendant’s fault, in a legal sense, until there is a verdict or even perhaps until the appeal process has been exhausted.

For all we know sitting here today this defendant may ultimately be held to be not guilty of negligence. Indeed it may even be that the proceedings have been commenced against the wrong defendant and that they should in fact have been brought against the designer or the manufacturer of the door, or even the builder of the building. I did ponder the question as to what the situation might be if, later, the plaintiff decides to join another defendant, but that should be left for another day, if required.

28. This mother may not have known, when she consulted Mr Ryan, that the Police Department was at fault in the legal sense that it was negligent. What she did know, however, was that the Police Department occupied the premises and that it was responsible for them. She knew that Shakyra was injured on those premises and that the injury was caused by the door rather than some other cause or by some other person. She knew the injury was serious, so serious in fact that the child required to go to hospital.

These were facts sufficient to put her on notice of the prospect of an action. So much was self-evident, because she consulted Mr Ryan within a matter of days.

29. That being so, I find that the mother knew or ought to have know of each of the facts specified in s 50D(1), such that the cause of action was discoverable on or about 1 June 2004. The 3 year post discoverability period therefore expired on 1 June 2007. As a consequence, the Statement of Claim was filed out of time and the cause of action is statute barred.

30. The statement of claim should therefore be struck out and the proceedings should be dismissed: see Hillebrand v Penrith Council [2000] NSWSC 1058 at [27].

31. Unless there is some application for a different order, costs should follow the event.

I make the following orders:

1. The Statement of Claim is struck out and the proceedings are dismissed.

2. The plaintiff is to pay the defendant’s costs of the proceedings including the motions that were filed, on

the ordinary basis.