Carey v Gough and Gilmour Holdings

[2001] NSWSC 789

CITATION:	Carey v Gough & Gilmour Holdings & Anor [2001] NSWSC 789
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 20439/00
HEARING DATE(S):	29 August 2001
JUDGMENT DATE:	18 September 2001
PARTIES :	Plaintiff - Ian Norman Carey 1st Defendant - Gough & Gilmour Holdings 2nd Defendant - Rix's Creek Pty Ltd
JUDGMENT OF:	Master Harrison

COUNSEL :	Plaintiff - N/A 1st Defendant - Ms E Kennedy Proposed Cross Defendant - Mr S Kettle
SOLICITORS:	1st Defendant - Lander & Rogers
CATCHWORDS:	file cross claim against previous employer
LEGISLATION CITED:	Workers Compensation Act 1987 (NSW) Law Reform (Miscellaneous Provisions) Act 1946 (NSW) Limitation Act 1988 (NSW) Supreme Court Act 1970 (NSW) Supreme Court Rules Corporations Law
CASES CITED:	Mahoney v Kruschich (Demolitions) Proprietary Limited & Anor (1985) 156 CLR 522 Dillingham Constructions Pty Lijmited v Steel Mains Pty Limited & anor (1974-1975) 6 ALR 171 State Government Insurance v Oakley (1990) AustTortsR 81-003 Jefferies v Roads & Traffic Authority of NSW (unreported, NSWCA 28 November 1997) Caltex Tanker Co (Aust) Pty Limited v Robert Kerr (1999) NSWCA 115 Government Insurance Office of New South Wales v Aboushadi (1999) AustTortsR 81-531 Knight & Anor v F.P. Special Assets Limited & Ors (1992) 174 CLR 178
DECISION:	(1) Leave is granted to the first defendant to file a cross claim against the second defendant seeking contribution within 14 days; (2) Leave to file a cross claim against Hayedi Pty Ltd is refused; (3) The first defendant is to pay Hayedi Pty Ltd’s costs of the motion.

3

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MASTER HARRISON

18 SEPTEMBER 2001

20439/00 - IAN NORMAN CAREY v GOUGH & GILMORE
HOLDINGS PTY LTD & RIX’S CREEK PTY LTD

JUDGMENT (File cross claim against previous employer)

1 MASTER: By a notice of motion filed 25 June 2001, the first defendant seeks leave to file a cross claim in these proceedings against Hayedi Pty Ltd trading as Warners Bay Car Repairs (Hayedi) and Rix’s Creek Pty Ltd, the second defendant, outside the usual time permitted by the Supreme Court Rules. The defence was filed on 13 September 2000. The cross claim should have been filed on 27 September 2000. The cross claim was filed on 22 May 2001. Hayedi was the plaintiff’s employer in 1993, Gough & Gilmore Holdings Pty Ltd was the plaintiff’s employer in 1998. The first defendant relied upon an affidavit of Sharon Armstrong sworn 18 June 2001. Hayedi has not filed any affidavit evidence. The second defendant does not oppose the filing of the cross claim.

2   The plaintiff was born on 8 July 1966. He is 34 years of age. On 13 April 1997, the plaintiff, in the course of his employment with the first defendant was engaged in carrying out repairs to a front-end loader at a mine site owned and operate by the second defendant. The repairs involved changing a heavy steel pin which was part of the bucket assembly on the front-end loader. It is alleged that the crane supplied by the second defendant to assist in the procedure was not in proper working order and as a result the plaintiff was required to manually lift and support parts of the front-end loader while the work was carried out by an assistant. The plaintiff alleges that as a result he suffered injury to his back, specifically his L5/S1 disc and L4/5 bulge.

3   The plaintiff previously injured his back on 15 July 1993 in a work-related accident, when he was employed by a previous employer, Hayedi. The plaintiff and the first defendant allege that this earlier accident occurred as a result of the negligence of Hayedi. The cross claim pleads that if the plaintiff was injured on 13 April 1997, the first and second defendants were joint and/or concurrent tortfeasors who are liable for same damage.

4   Dr Pillemer in his report dated 13 May 1998, stated that the plaintiff originally injured his back in July 1993 while doing heavy lifting and had severe pain at the time. Although his severe symptoms settled down he has continued to have fairly persistent problems since then. Dr Pillemer’s view is that the majority of his present disability is due to his original injury in 1993 with the aggravation in 1997 of this underlying problem.

5 The plaintiff has previously sought leave to proceed out of time against Hayedi Pty Ltd in relation to the 1993 injury. On 24 November 2000, Master Malpass refused leave on the basis that Hayedi Pty Ltd had been deregistered and no proceedings could be commenced again until it was re-registered. On 13 March 2001, Registrar Berecry ordered that ASIC reinstate the registration of Hayedi Pty Ltd pursuant to s601AH(2) of the Corporations Law.

6 The plaintiff also sought leave to proceed against Hayedi as a defendant in fresh proceedings for the 1993 accident pursuant to s151D of the Workers Compensation Act 1987 (NSW). On 16 July 2001, Master Malpass delivered judgment and refused leave. I shall return to this judgment later.

The Statutory Provisions

7 Section 5(1) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) provides:

“Proceedings against and contribution between joint and several tort-feasors
5. (1) Where damage is suffered by any person as a result of a tort (whether a crime or not):
(a) judgment recovered against any tort-feasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tort-feasor in respect of the same damage;

(b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, brother, sister, half-brother, half-sister, parent or child, of that person, against tort-feasors liable in respect of the damage (whether as joint tort-feasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action;

(c) any tort-feasor liable in respect of that damage may recover contribution from any other tort-feasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tort-feasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by that person in respect of the liability in respect of which the contribution is sought.”

8   The relevant provision is s26 of the Limitation Act 1988 (NSW) which provides:

“Contribution between tort-feasors
(1) An action on a cause of action for contribution under subsection (1) of section 5 of the Law Reform (Miscellaneous Provisions) Act 1946 is not maintainable if brought after the first to expire of:


(a) a limitation period of two years running from the date on which the cause of action for contribution first accrues to the plaintiff or to a person through whom the plaintiff claims, and

(b) a limitation period of four years running from the date of the expiration of the limitation period for the principal cause of action.

(2) For the purposes of paragraph (a) of subsection (1), the date on which a cause of action for contribution first accrues is:

(a) if the plaintiff in the action for contribution or a person through whom the plaintiff claims is liable in respect of the damage for which contribution is claimed by judgment in a civil action or by arbitral award—the date on which the judgment is given or the award is made, whether or not, in the case of a judgment, the judgment is afterwards varied as to quantum of damages, or
(b) if, in a case to which paragraph (a) does not apply, the plaintiff in the action for contribution or a person through whom the plaintiff claims makes an agreement with a person having a cause of action for the damage for which the cause of action for contribution arises, which agreement fixes, as between the parties to the agreement, the amount of the liability in respect of that damage of the plaintiff in the action for contribution or a person through whom the plaintiff claims—the date on which the agreement is made.


(3) In paragraph (b) of subsection (1), the expression the limitation period for the principal cause of action means the limitation period fixed by or under this Act or by or under any other enactment (including an enactment repealed or omitted by this Act) for the cause of action for the liability in respect of which contribution is sought.

(4) Nothing in this section affects the construction of section 5 of the Law Reform (Miscellaneous Provisions) Act 1946.”

9   The first defendant submitted that the principal cause of action, pursuant to s26(1)(b), in these proceedings dates from the second accident which occurred on 13 April 1997. If this proposition is correct, the limitation period for the principal cause of action is 13 April 2000. The first defendant has until 13 April 2004 to bring an action against the cross defendant. It could also be argued that once judgment is given in this matter, the first defendant has two years after that date to seek contribution. The proposed second cross defendant submitted that time runs from the 1993 cause of action and the cross claim is statute barred. The statute refers only to a cause of action. The accident which occurred on 13 April 1997 in which the plaintiff injured his back is a cause of action. It is my view that the first defendant’s submissions are correct and that the cross claim is not statute barred. If I am wrong, this proposition is arguable and granting leave on this basis is not futile.

10   The Court of Appeal in Mahoney v Kruschich (Demolitions) Proprietary Limited & Anor (1985) 156 CLR 522 considered the High Court decision of Dillingham Constructions Pty Limited v Steel Mains Pty Limited & Anor (1974-1975) 6 ALR 171; (1974-75) 132 CLR 323. In Dillingham the plaintiff sued his employer in negligence for damages for personal injury sustained in an accident occurring in the course of his employment. The plaintiff had in fact been injured in two accidents, the earlier having occurred in the course of his employment by a previous employer. The plaintiff had already recovered a judgment against his previous employer, which had been satisfied. The second employer cross claimed against the previous employer, claiming contribution under s5(1)(c) and alleging that the injuries sustained in the first accident had caused physical deterioration which carried the potential of further deterioration of the kind evident in the result of the second accident. The cross claim against the previous employer was struck out by the High Court as untenable.

11   In Dillingham the High Court stated (per Barwick CJ, Gibbs, Stephen & Mason JJ):

“It is, to my mind, beyond question that the cross-defendant [the first employer] could not have been sued by the plaintiff for the injury which he had received by the negligence of the cross-claimant [the second employer] whilst in his employ. The cross-defendant quite clearly was not, in my opinion, a tortfeasor in relation to the plaintiff and his injury thus received at the hands of the cross-claimant.
But it was said in argument and strongly asserted that the injury of the workman by the cross-claimant was an event foreseeable as at the time of the receipt of the workman’s injury sustained whilst in the employ of the cross-defendant: and that therefore the damage suffered by him whilst in the employment of the cross-defendant. To my mind, this has only to be stated to be rejected. Even if the results of the subsequent injury, can recover any contribution from the cross-defendant to the damages which he may be called upon to pay for the injury caused. By no stretch of language can the earlier injury be said to be the same injury as the later injury. There are two injuries, two unrelated acts of negligence, two separate and distinct torts though occurring to the same man at different times.”

12   In Mahoney the Court of Appeal, after stating that it is clear that damage pursuant to s5(1)(c) is not to be equated to damages awarded by a court, quoted the above passage from Dillingham and then referred to foreseeability:

“In negligence, ‘damage’ is what the plaintiff suffers as the foreseeable consequence of the tortfeasor’s act or omission. Where a tortfeasor’s negligent act or omission causes personal injury causes personal injury, ‘damage’ includes both the injury itself and other foreseeable consequences suffered by the plaintiff. The distinction between damage and damages is significant damages are awarded as compensation for each item or aspect of the damage suffered by a plaintiff, so that a single sum is awarded in respect of all the foreseeable consequences of the defendant’s tortious act or omission. But concurrent tortfeasors whose negligent acts or omissions occur successively rather than simultaneously may both be liable for the same damage, being a foreseeable consequence of both torts, although one is liable for some only of the damage for which the other is liable and an award of damages against the one would necessarily be less than an award of damages against the other.”

13   Since Dillingham and Mahoney the Court of Appeal has quoted with approval a passage from the decision of Malcom CJ in State Government Insurance v Oakley (1990) AustTortsR 81-003 which refers to the damages that flow from a subsequent injury. In Oakley, His honour stated:

“In my opinion, where the negligence of a defendant causes an injury, and the plaintiff subsequently suffers a further injury the position is as follows:

(1) where the further injury results from a subsequent accident which would not have occurred had the plaintiff not been in the physical condition caused by the defendant’s negligence, the added damage should be treated as caused by that negligence;

(2) where the further injury results from a subsequent accident, which would have occurred had the plaintiff been in normal health, but the damage sustained is greater because of aggravation of the earlier injury, the additional damage resulting from the aggravated injury should be treated as caused by the defendant’s negligence; …”

14   See Jefferies v Roads & Traffic Authority of NSW (unreported, NSWCA 28 November 1997); Caltex Tanker Co (Aust) Pty Limited v Robert Kerr (1999) NSWCA 115 and Government Insurance Office of New South Wales v Aboushadi (1999) AustTortsR 81-531. This suggests that Hayedi, the first employer, could be held liable for at least some portion of the damages.

15   Even though Dillingham involved a cross claim seeking contribution in similar circumstances, it is my view that it is arguable in the light of more recent decisions that the subsequent injury is an exacerbation of the previous injury and that it is not possible to draw a clear line in relation to foreseeability. This is a matter that should be left for trial. Leave to file the cross claim should not be refused on this basis.

Prejudice

16   Hayedi submitted that it was actually prejudiced for the reasons outlined by Master Malpass in his judgment dated 16 July 2001. These factors are that: The plaintiff’s recollection of the 1993 accident and related matters has limitations and he lacks recollection about other injuries. However, there are written reports of injury forms available, which provide brief statements as to how the injury was suffered. At the time, the accident gave rise only to short term worker’s compensation and the accident may not have been the subject of a full investigation. The work premises still exist but they are not used for the same purpose.

17   There are conflicting medical opinions. Some of the reports largely attribute the plaintiff’s problems to the 1997 accident, while others support the view that the 1993 accident was the cause of the disc protrusion and the 1997 accident merely brought about aggravation of it. The plaintiff did not have a CT Scan until after the 1997 accident. Dr Smith was of the view that the plaintiff was suffering from an annular tear which probably occurred in 1993 and that this accident probably did contribute to the likelihood of his developing a protrusion. However, he considered the attribution of a lower lumbar prolapse in 1993 was not a justifiable diagnosis without CT Scan evidence. He considered that the plaintiff was symptom free in 1996 and any attempt to quantify the contribution made by the 1993 accident would be arbitrary. This view finds support in the contemporary investigations and the plaintiff’s subsequent medical history. On the other hand Professor Ghabrial held the view that the calcification shown in the subsequent CT Scan gave support to the approach he had taken, that is, that the 1993 accident caused the disc protrusion and the 1997 accident merely brought about aggravation of it. This is in line with Dr Pillemer’s view. This matter is more a matter to be determined at the trial.

18   There were two witnesses to the accident in 1993, Mr Hirst, a director of Hayedi, and his son. Mr Hirst is of advance age and in ill health. He lacks recollection of both the accident and the circumstances relevant to the workplace. Mr Hirst’s son has suffered from a mental disability at all material times and also has a lack of recollection.

19   Following action from the bank, Hayedi’s assets were sold and the company records destroyed. Although no particular records have been identified as a source of prejudice, the potential for prejudice still remains. It is nine years since the accident occurred. There is the presumptive prejudice caused by delay.

20   Even though the cross claim is not statute bared and there is a weak arguable case on foreseeability, it is my view that justice is best served if the application to file a cross claim against the proposed second defendant, Hayedi is refused. This is because the prejudice to the proposed second cross defendant is too great. Leave to file a cross claim against the second defendant (and proposed first cross defendant) is granted. Leave to file a cross claim against the proposed second cross defendant is refused.

21 Costs are discretionary. Costs should follow the event. The first defendant is to pay the proposed second cross defendant’s costs - see s76 Supreme Court Act and Knight & Anor v F.P. Special Assets Limited & Ors (1992) 174 CLR 178.

22   I make the following orders:

(1) Leave is granted to the first defendant to file a cross claim against the second defendant seeking contribution within 14 days.

(2) Leave to file a cross claim against Hayedi Pty Ltd is refused

(3) The first defendant is to pay Hayedi Pty Ltd’s costs of the motion.

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Last Modified: 09/19/2001