BlueScope Steel Limited v De Caires; ABB EPT Management Limited v De Caires

[2005] NSWCA 431

CITATION:	BLUESCOPE STEEL LIMITED v DE CAIRES; ABB EPT MANAGEMENT LIMITED v DE CAIRES & ANOR [2005] NSWCA 431 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	21 November 2005
JUDGMENT DATE:	21 November 2005
JUDGMENT OF:	Mason P at 1; Handley JA at 41; Hodgson JA at 42
DECISION:	Each Summons dismissed with costs.

CATCHWORDS:	Limitation of actions - work accident - initial unfavourable advice about proceeding against occupier - evidence coming to light later - primary judge refuses, then later grants extension - principle in Itek Graphix - whether prejudice stemming from unidentified witnesses (ND)
LEGISLATION CITED:	Workers Compensation Act 1987 Factories Shops and Industries Act 1962 Limitation Act 1969
CASES CITED:	Nominal Defendant v Manning (2000) 50 NSWLR 139 Itek Graphix Pty Ltd v Elliott (2002) 54 NSWLR 207 House v The King (1936) 55 CLR 499
PARTIES:	BLUESCOPE STEEL LIMITED v AURELIO DE CAIRES; ABB EPT MANAGEMENT LIMITED v AURELIO DE CAIRES
FILE NUMBER(S):	CA 41166/2004; 41179/2004
COUNSEL:	Claimants: D Ronzani Opponent: L Morris QC/ S Longhurst
SOLICITORS:	Claimants: Blake Dawson Waldron Opponent: Russell McLelland Brown

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 88/2002
LOWER COURT JUDICIAL OFFICER:	Phelan DCJ

CA 41166/2004
CA 41179/2004

MASON P
HANDLEY JA
HODGSON JA

21 November 2005

BLUESCOPE STEEL LIMITED v Aurelio De CAIRES

ABB EPT MANAGEMENT LIMITED v Aurelio De CAIRES & ANOR

JUDGMENT

1 MASON P: These proceedings arise from injuries allegedly sustained by the opponent in an industrial accident at the old Lysaght works at Port Kembla on 18 May 1995. The owner/occupier of the factory was BHP Steel JLA Pty Limited, now Bluescope Steel Ltd, one of the claimants in this Court. The contractor which had undertaken the work on the site was ABB Services Pty Ltd, the other claimant for leave to appeal in this Court. A leading hand supervisor of ABB was Mr Fogliada. The opponent, to whom I will hereafter refer as the plaintiff, was employed as a rigger by Rapid Fabrications Pty Ltd.

2 The plaintiff states that he was injured when he slipped while pushing a trolley onto which a large roller had been positioned. He said that he slipped on a wet, greasy floor, injuring his back. The plaintiff’s claim for workers compensation was accepted by his employer, Rapid.

3 In about November 1995 the plaintiff sought legal advice from Mr Holmes of Denley Garbutt and Baird, lawyers. By letter dated 6 March 1996 he was advised that there was insufficient evidence to commence common law proceedings against the occupier. He was advised to commence proceedings for workers compensation. The letter informed him that his common law rights would expire on 18 May 1998.

4 Workers compensation proceedings were launched, culminating in a settlement of the ss 66 and 67 rights that was effected in August 1997. The plaintiff has subsequently continued to receive weekly benefits and medical expenses.

5 The injury to his back has turned out to be a serious and permanent one, more so than it first presented itself. In 2001 Rapid sought commutation of the workers compensation benefits. On 30 July of that year the Compensation Court declined to agree to that proposal.

6 In May 2001 Rapid commenced proceedings under s151Z of the Workers Compensation Act 1987 against BHP and ABB, seeking indemnity from them with respect to Rapid’s workers compensation liability as the plaintiff’s employer.

7 The plaintiff was generally unhappy with the advice given in relation to his common law situation but he accepted it. May 1998 came and went. In 2001 the plaintiff sought a second opinion and he was referred to new solicitors, Russell McLelland Brown, and he also through those solicitors obtained the advice of counsel. In December 2001 his new solicitor notified BHP and ABB of the intention to proceed against them. In fact, their attention had already been engaged in May 2001 in consequence of the s151Z proceedings.

8 On 15 July 2002 the plaintiff filed the first application for extension of time to sue BHP and ABB. He relied on affidavits by his then solicitor, Ms Bartholomew, and himself. The only opposing evidence was an affidavit filed on behalf of ABB sworn by Mr Fogliada which stated ignorance of the accident and of the injury. It said that there was no record of the injury available.

9 The first application came before Judge J B Phelan. The affidavits were read without cross-examination. There was no information put before the judge about the Rapid proceedings. BHP and ABB invoked prejudice because of their inability to investigate the matter until about July 2002.

10 The first application for extension of time was dismissed on 5 August 2002. Judge Phelan referred in particular to the fact that there was no record of injury available such that the prospect of a fair trial appeared unlikely. No steps were taken at that time by the defendants for dismissal of the proceedings. ABB had apparently a pending motion to that effect but did not draw it to the attention of Judge Phelan or press it for resolution.

Further information comes to light.

11 The plaintiff, using the services of a more experienced solicitor at Russell McLelland Brown, started preparing a claim in negligence against his former solicitors.

12 On 17 December 2002 the plaintiff was subpoenaed to give evidence in Rapid’s proceedings at Sydney, then fixed for hearing on 29 January 2003. There had been a previous subpoena for the plaintiff to give evidence in those proceedings when previously fixed for hearing in April 2002. That had been brought to the attention of Ms Bartholomew. She was a very junior solicitor and did not appreciate the relevance or significance of those other proceedings. Accordingly, she did not inform counsel briefed for the plaintiff in the first extension proceedings about the pendency of the s151Z proceedings. Needless to say, the plaintiff knew nothing about the relevance to his rights of Rapid’s s151Z proceedings.

13 The plaintiff’s current solicitor at Russell McLelland Brown, Mr Culleton, did appreciate the potential significance of the Rapid proceedings. He decided to have the professional negligence proceedings commenced in the District Court in September 2002 against the earlier solicitors placed in the “not ready list” on the basis that he intended to make a further application for extension of time. Mr Culleton also got in touch with Rapid’s solicitors and sought access to the information Rapid would be relying upon to show that BHP and/or ABB were tortiously responsible for the plaintiff’s injury.

14 The proceedings in the District Court against the two claimants were filed on 25 March 2002. The plaintiff sued in negligence but also pleaded counts under ss34 and 40 of the Factories Shops and Industries Act 1962. It seems quite clear that BHP is liable if the relevant facts are made out. It is not so clear, although there have been no submissions put either way on this, as to ABB’s exposure on the statutory counts. What is clear, is that the statutory counts will be easier to establish than the negligence count, even though both proceed, in effect, on the basis of proof that there was oil and grease on the floor on which the plaintiff allegedly slipped.

15 The second application for extension of time was also heard and determined by Judge Phelan. The evidence of the earlier proceedings were treated as before his Honour. In addition there was a body of fresh material including an affidavit from the plaintiff and from a Mr Silevski, a fellow-worker, who corroborated the plaintiff’s account of an accident having occurred in consequence of the plaintiff slipping on a greasy floor. Judge Phelan granted the extension of time on 26 November 2005. This is the order under challenge in these proceedings.

16 His Honour was satisfied that there was an arguable case for negligence. This aspect of the decision under appeal was not really challenged before us. I do not think it could have been challenged, bearing in mind that arguability was all that had to be shown. There were contemporaneous records in the form of an accident report prepared by a nurse on the day of the accident, and medical reports dealing with treatment received by the plaintiff within days of the injury. There was also, as I will indicate shortly, material from the BHP camp which provided significant corroboration for the plaintiff’s allegation of negligence.

17 Judge Phelan acknowledged that there were various errors in the reasoning of his earlier judgment and he referred to the additional material that was before him. There is no complaint raised as to the fact that the plaintiff was having, in effect, a second bite of the cherry (see Nominal Defendant v Manning (2000) 50 NSWLR 139).

18 Judge Phelan referred to the fact that there had been no mention of the Rapid litigation at the earlier extension proceedings, despite the fact that counsel then briefed for BHP and ABB had also been briefed in the then pending Rapid proceedings. I am not implying any criticism on his Honour’s or my part by making that observation. His Honour found that the failure on the plaintiff’s side to have mentioned or adverted to the Rapid proceedings was due to the fact that the plaintiff was unaware of that litigation and that his then solicitor had not realised its potential significance.

19 His Honour referred to Mr Fogliada’s evidence at the first extension hearing and drew some comparison between the situation then presenting and the situation as it then appeared to him. He took into account, among other things, the cross-examination of Mr Fogliada. The views he expressed were relevant to the issue then presented to him. The mere fact that they could potentially impact on the ultimate issue does not seem to me to be a proper source of any criticism for those comments having been made.

20 His Honour then referred to the significant records pointing to investigation having taken place about the accident within the BHP camp, and otherwise corroborating the plaintiff’s account of the injury and the consistency of that account. These records included the BHP Record of Injury to Contractors or Visitors, a Workers Compensation claim form dated 25 May 1995, and a BHP Accident Minute of 7 March 1996, which contained a record of a “minor back injury” of 18 May 1995 relevant to ABB, obviously a reference to the plaintiff’s injury.

21 His Honour also referred to the information compiled in an accident investigator’s report prepared on behalf of BHP in 2001 in connection with the Rapid proceedings. This report had been obtained on subpoena issued by Mr Culleton. The report contained statements by Mr Gold, a BHP mechanical engineer, who had been the construction manager in charge of the Lysaght factory upgrade. The material that is set out at pp 10-12 of his Honour’s judgment shows that within the BHP camp there was a significant recall of the general situation in the factory. It refers to records corroborative of the plaintiff’s claim that an accident occurred and includes some material that is - I’ll put it fairly neutrally - inculpatory.

22 His Honour then addressed the relevant provisions of the Limitation Act, namely ss60C and 60E.

23 It is convenient at this stage to turn to the challenges to his Honour’s decision that have been pressed in these applications for leave.

24 Section 60E(1)(a) required the Court to have regard to the length of, and reasons for the delay. On this topic his Honour said the following:

The plaintiff sought advice from his first legal advisers, he was told he had to sue within the limitation period at common law but was advised in strong terms that he did not have a case. His injuries did not improve with time as he might have been led to believe with the major surgery he underwent and the intensive treatment he had over a long period of time. Increasingly it must have become obvious to him that he was permanently disabled. He did obtain awards pursuant to the Workers Compensation Act but in the end result his suspicions that he may not be getting good advice were, I think made clear when the Workers Compensation Court rejected an application to commutate on 30 July 2001. It was at that time that this humble man without much education sought advice from another solicitor, a friend of the first solicitor who could not act but referred him to his present solicitors and he was informed that he had what appeared to be a good cause of action. I accept Mr Kearns’, senior counsel’s, submissions on his acceptance of the advice over a period of time although to some degree suspicious of it.

25 I think it is somewhat of an overstatement to say that the plaintiff was advised in strong terms that he did not have a case, although, if anything, this is an error in the claimants’ favour. What the plaintiff swore to was that Mr Holmes told him that while he may have had an occupier’s liability claim, liability was in issue. Mr Holmes’ advice had been to the effect that he did not feel that there was at that stage sufficient evidence to justify the commencement of common law proceedings against Lysaght’s. He had said in his letter of 6 March 1996:

“It is not to say that such evidence may not become available later.”

26 Mr Holmes advised the client that he had three years to file a statement of claim, to bring a common law claim against Lysaght’s, and confirmed instructions to proceed down the compensation route “at this stage, and to review the possibility of common law proceedings at a later stage”.

27 In cross-examination the plaintiff admitted receiving this advice and with being unhappy with it. Taxed with why he did nothing between settling his compensation claim in August 1997 and notifying the claimant of his intention to sue them in July 2001, he said “I was waiting for my solicitor to move along” and “I was waiting for his decision”.

28 It was not until 2001 that the plaintiff sought a second opinion from a different firm of solicitors. The claimants submit that this explanation was not satisfactory, particularly in circumstances where the plaintiff was dissatisfied with, and perhaps suspicious of, the 1997 advice. They contend that the primary judge failed to adequately address the delay from 1996, when the plaintiff was first advised of the limitation period, and 2001 when he sought a second opinion.

29 The claimants in their written submissions state that “statements of principle” in Itek Graphix Pty Limited v Elliott (2002) 54 NSWLR 207 are “equally applicable to the circumstances of the present case”. I cannot accept the latter proposition in the categorical terms it is put in the claimants’ written submission. Itek involved s151D(2) of the Workers Compensation Act 1987, a provision that contains a broad discretion to grant leave. The significance of this is mentioned by Ipp JA at 224[87]. Itek correctly states that a deliberate decision to allow a statutory limitation period to expire would be a powerful fact against the grant of leave at 225[91]. I agree, adding the observation that Ipp JA did not state that it was a conclusive factor.

30 The facts of Itek also prevent its direct transportation into the present situation. The plaintiff in Itek made a fully informed decision to pursue a compensation claim against her employer instead of a common law claim, in circumstances where she was presented with an either/or choice (see Itek at 227-228). None of this is intended to suggest that a plaintiff who allows a limitation period to elapse when aware that time will be running will have an easy time satisfying the court that the ultimate discretion ought be exercised in his or her favour. But I do observe that the criticisms advanced by the claimants in this regard are directed at his Honour’s analysis of the length of, and reasons for delay, rather than the ultimate exercise of the statutory discretion under s 60C.

31 Section 60E required his Honour to have regard to the matter of the length and explanation for the delay. Obviously proper regard would entail taking account of all relevant facts and not mistaking those facts (see generally House v The King (1936) 55 CLR 499). In my opinion, the passage in the reasons at pp 12-13 that I have already set out betrays no error attracting appellate review.

32 The second attack focused on s 60E(1)(b) which required the Court to have regard to “the extent to which, having regard to the delay, there is or may be prejudice to the defendant by reason that evidence that would have been available if the proceedings had been commenced within the limitation period is no longer available.

33 The claimants submit that the evidence disclosed “unassailable prejudice” that of itself should have resulted in a refusal to extend time. They point to the inability to locate certain witnesses and the impact of time lapse upon the recollection of the witnesses that were located. I have indicated that this factor was determinative in the first application. The primary judge dealt with this matter in a passage at pp 13-15 as follows:

The plaintiff clearly had reported his injury to the first defendant’s ambulance station. It is clear that the nurse’s note indicates that she had tried to contact the supervisor himself but could not do so, presumably because he was away supervising the other part of his job. It is perhaps not to be wondered at that the supervisor with the responsibility of supervising two projects might have tended to put out of his mind what appeared to be a torn muscular injury not involving a missing leg or an arm; in other words, that the plaintiff’s injury at the time appeared relatively trivial. The plaintiff says that he handed him a note from the nurse and informed him of his mishap. I am satisfied that he did so. It was interesting to note that Mr Fogliada had no memory of his having done so and no memory of any accident at all but appeared to have a clear memory that there was no grease at the site and that it was dry. He did confirm that there was a system of reporting accidents, even trivial accidents. I did not find Mr Fogliada in these circumstances a persuasive witness. I accept the plaintiff’s general evidence as supported by Mr Silevski and this is relevant in my view because it seems to me that this defendant had in train procedures to record accidents but on this occasion put itself in a position of prejudice through its supervisor failing to do so. Again it seems in respect of the first defendant that there was a system of investigating accidents thus the heading of annexure A to the plaintiff’s affidavit.
It is clear that in time the plaintiff’s accident was the subject of a safety meeting and whilst the details were obviously sketchy they did not come from nowhere. Again it was probably connected with the fact that the plaintiff was employed by what one could describe as a foreign company, Rapid Fabrications, and it was seen to be a trivial accident. Whilst it is not the responsibility of the defendants to ensure that there is a case for the plaintiff it is clear that they would not be in a position of prejudice if their documents had been retained as normally would have been the case.
I accept that there is merit in the plaintiff’s submission that the failure of the defendants to record properly the plaintiff’s account at the outset was a contributing factor to any prejudice that might remain. However, it is significant that both Mr Gold and Mr Brain confirm that the area was exposed to grease and gave details of what was happening entirely consistent with what the plaintiff and Sulevski have said. Moreover Mr Silevski in evidence nominated a further witness, Mr Tony Garcia. Some months elapsed between the evidence being completed and submissions but no endeavour was made to inform the Court as to whether Mr Tony Garcia had been located. The mysterious Mr Gilligan has not been entirely excluded from the prospect of discovery and surely somebody must know something about him.

34 Fairly briefly in oral submissions, counsel for the claimants sought to argue that prejudice stemmed from loss of written records. In the end, I do not think there was anything in this point, simply because the claimants never established that there were any written records that once existed that were disposed of in consequence of the delay. Such written records as have come belatedly to light do not indicate any basis for thinking that there is any prejudice. The real focus of the attack was in relation to the impact of time on the recollection of witnesses.

35 There are three broad categories of witness. The first was Mr Silevski, a fellow-employee of the plaintiff, who swore an affidavit and was cross-examined in the second application. In his evidence, Mr Silevski adhered to the position that the work site had been greasy and that this had contributed to the plaintiff’s accident. He was understandably a little vague about some of the details but he did remember the name of one of the fellow employees, Tony Garcia, and he remembered Tony the superintendent from ABB, obviously a reference to Mr Fogliada. Some of Mr Silevski’s answers in cross-examination were in the form of “I think so” and “I’m not sure”, and the like. This is understandable, indeed arguably a badge of honesty in a witness. The application for leave to extend time was not the occasion for a final assessment of his credibility, but Mr Silevski was certainly not discredited and these records of some uncertainty fall far short of any case of prejudice to a right to a fair trial.

36 As well as the plaintiff and Mr Silevski, two apparent eyewitnesses to the accident were identified; one was Mr Brian Galiga or Gallagher - there were other spellings of the surname ventured as well - and Mr Tony Garcia. Mr Garcia was known to Mr Silevski as an old schoolmate and had been seen by him some four or five years previously. There was no evidence about the present whereabouts of either of these two witnesses. There was no evidence led to say they were available or unavailable. There was no evidence about the particular information that they might be able to cast upon the events in question, beyond the assertion by the plaintiff that they were eyewitnesses to his accident.

37 The claimants accept, properly so, that they would bear an evidentiary onus in establishing material pointing to particular areas of prejudice. They are also correct in pointing to the fact that the ultimate persuasive onus rests upon the party seeking to have the extension of time.

38 In my view, the passage which I have already set out betrays no error in the House v The King sense in his Honour’s analysis of the issue of prejudice. The matter for enquiry thrown up by s60E(1)(b) is a nuanced one which requires exploration of the particular evidence that is lost and its impact upon the trial of the substantive proceedings. As I have indicated, the question of proving some particular evidentiary material to show the nature and extent of the prejudice is a matter that rested upon the claimants. It is also the fact, although I do not think the claimants’ submissions squarely faced up to this, that the matter at issue is ultimately one of a fair trial and not a perfect trial. Section 60E(1)(b) makes prejudice a relevant factor to be taken into account but does not establish any proposition to the effect that some prejudice requires the dismissal of an application.

39 I would reject the submission that his Honour fell into the fallacy of performing some simple balancing exercise. The passing reference to the expression “on balance” was really a method of stating his Honour’s conclusion in the particular matter addressed in that particular sentence.

40 For those reasons I consider the application for leave should fail, and leave to appeal should be refused.

41 HANDLEY JA: I agree.

42 HODGSON JA: I agree.

43 MASON P: The order of the Court is that that leave to appeal is refused with costs. The summons is dismissed with costs.

**********

15/12/2005 - - Paragraph(s)