Commonwealth of Australia v Smith

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NEW SOUTH WALES COURT OF APPEAL

CITATION:      COMMONWEALTH OF AUSTRALIA v SMITH [2005]  NSWCA 478

FILE NUMBER(S):
40914/04

HEARING DATE(S):               23 June 2005

JUDGMENT DATE: 23/12/2005

PARTIES:
Commonwealth of Australia (Appellant)
Neil Patrick Smith (Respondent)

JUDGMENT OF:       Handley JA Santow JA Basten JA   

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S):          SC 20766/01

LOWER COURT JUDICIAL OFFICER:     Barr J

COUNSEL:
B. Toomey QC/D. Brogan (Appellant)
G. Little SC/J.L. Sharpe (Respondent)

SOLICITORS:
Australian Government Solicitor (Appellant)
Hollows by their agents, Brian Muir & Co (Respondent)

CATCHWORDS:
LIMITATION OF ACTION – extension of time – mental injury  LIMITATION ACT 1969 (NSW) - ss60G and 60I - awareness of mental injury

LEGISLATION CITED:
Civil Procedure Act 2005 (NSW)
Interpretation Act of 1897 (NSW)
Interpretation Act 1987 (NSW)
Judiciary Act 1903 (Cth)
Limitation Act 1969 (NSW)
Limitation Act 1980 (UK)
Limitation of Actions Act 1623 (Imp)
Limitation of Actions 1974 (Qld)
Motor Accidents Act 1988 (NSW)
Supreme Court Rules (NSW)
Supreme Court Rules 1965 (UK)
Uniform Civil Procedure Rules 2005 (NSW)

DECISION:
(1)  Appeal dismissed
(2)  Appellant to pay the costs of the respondent on appeal.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40914/04
SC 20766/01

HANDLEY JA
SANTOW JA
BASTEN JA

23 December 2005

COMMONWEALTH OF AUSTRALIA v NEIL PATRICK SMITH

The respondent sued the appellant for damages for psychological injuries arising from a collision between the HMAS Melbourne and HMAS Voyager on 16 February 1964. Section 60I of the Limitation Act 1969 sets out matters to be considered by the Court before granting an extension of a limitation period. Section 60G required that the Court consider whether it was just and reasonable to extend a limitation period. The trial judge found that although the plaintiff was aware of his symptoms long before he applied for an extension of the limitation period he was not aware that he had suffered a mental injury until December 2000.
The appellants argued that the trial judge erred in holding that the power to extend time was engaged and in exercising his discretion, in considering the issues under s 60I, to extend the limitation period.
Held:

  1. Knowledge of a mental injury required knowledge that it constituted a recognisable psychiatric illness.

  2. The pre-conditions of an extension of time in s 60I(1)(a) were satisfied.

  3. By Santow JA, (Handley JA agreeing, Basten JA dissenting) the application was made within the time limits in s 60I(1)(b) because this was not a case where the plaintiff ought to have become aware of the matters in s 60I(1)(a) earlier than he did.

  4. By Santow JA, (Handley JA agreeing, Basten JA dissenting) that the judge’s exercise of discretion should not be disturbed.

  5. Observations by Handley JA on the consequences of the principle that damages are recoverable for mental conditions which constitute a recognised psychiatric illness and the effect of DSM-IV in widening the boundaries of legal liability.

    IN THE SUPREME COURT
    OF NEW SOUTH WALES
    COURT OF APPEAL

    CA 40914/04
    SC 20766/01

    HANDLEY…

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Details
Case
[2005] NSWCA 478
Decision Date

CaseChat Overview and Summary

The Commonwealth of Australia appealed a decision of the primary judge who had granted an extension of time for Mr. Smith to bring an action for damages arising from psychological injuries sustained during the collision between HMAS Melbourne and HMAS Voyager in 1964. Mr. Smith, a radio operator on the HMAS Melbourne, witnessed the collision and its aftermath, including the sinking of the HMAS Voyager and the rescue of survivors. He was subsequently instructed, along with other crew members, not to discuss the incident and to forget about it.

The central legal issues before the court were whether Mr. Smith had satisfied the requirements of sections 60G and 60I of the *Limitation Act 1969* (NSW) for an extension of the limitation period, specifically concerning his awareness of the nature of his mental injury, and whether the primary judge had erred in exercising their discretion to grant such an extension. The Commonwealth argued that Mr. Smith ought to have been aware of his injuries much earlier than he claimed, and that the passage of time had prejudiced its ability to defend the claim due to the loss of records and the difficulty in disentangling potential causes for Mr. Smith's alleged conditions.

The court considered the evidence regarding Mr. Smith's psychological state, including the opinion of a psychologist who diagnosed him with Post Traumatic Stress Disorder with delayed onset, attributed to the collision and the subsequent instructions to remain silent. The primary judge had found Mr. Smith to be an honest witness and accepted the psychologist's opinion. However, the appellate court found that Mr. Smith had not established that he had made his application within three years of the time he ought to have become aware of his personal injury, as required by section 60I(1)(b). Consequently, the court did not need to definitively rule on the discretionary considerations under section 60G(2), as the threshold requirement of section 60I(1)(b) had not been met.

The appeal was dismissed, and the Commonwealth was ordered to pay the costs of the respondent on appeal.

Orders

Orders of the court

(1) Appeal dismissed

(2) Appellant to pay the costs of the respondent on appeal.

Background

Background to the litigation

There is however an anterior question. It is whether that cost rule applies at all in the circumstances where there is not an extension of time but an extension of the limitation period. SALIENT FACTS The salient facts are essentially undisputed save where indicated. I set these out below. Insofar as particular facts are disputed or need elaboration for the purposes of disposition of this appeal, I deal with those under “Disposition”. The respondent, Mr Smith, was a member of the crew of the HMAS Melbourne on the night of 10 February 1964 when it collided with the HMAS Voyager on the high seas. He worked as a radio operator. At the time of the collision (8.56pm), he was relaxing in the mess on level 5 which was down at the waterline. He was with about 50 other sailors. The mess shuddered; the lights went out; the main access door was shut tight from the outside and the occupants could not use it. The sailors managed to climb out of a small hatch, one at a time. This took 10 to 15 minutes. During this time, there was pandemonium in the mess. Mr Smith was very afraid; smoke and fumes were entering the mess adding the fear of fire to the terror of those present. He thought that the ship was going to sink, taking with it him and his shipmates. Mr Smith’s services were not required in the radio room, so he spent the evening watching the rescue operation from the flight deck. The Melbourne had cut the Voyager in two. Mr Smith watched the two halves of the Voyager sink. Later, Mr Smith went below decks and spoke to sailors who had been rescued from the Voyager or from the sea. They were covered in oil and in a bad way. A good friend of Mr Smith from recruit school died in the collision. Mr Smith found it difficult to believe what had happened, and the extent of the loss of life. He did not sleep well that night. The primary judge described the aftermath and what was said to Mr Smith in these terms: “He remembers little of the journey back to Sydney. It was impressed upon him and his shipmates that they should not talk to anybody about the collision once they were ashore. They were told, “You know nothing. Say nothing about what happened. Forget about it and get on with your lives.” No professional support was offered and no particular enquiry was made about any effect the collision and its aftermath might have had on Mr Smith. The subject was simply not mentioned. Those involved were told to “go and get drunk”.” (at [11]) Mr Smith did not speak to anyone about the collision, keeping things to himself as instructed. He never discussed the collision with his wife (whom he married the year after the collision) and his children, until two years before he swore his affidavit on 7 February 2002. Mr Smith returned to sea with the Melbourne but had lost his delight in being in the Navy. He was distressed by not being able to talk to anyone about the collision and the apparent indifference towards his and other crew members’ welfare.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Mr Smith finds it difficult to be close to people. He sleeps poorly, suffers from claustrophobia and other complaints. He says he has beaten his drink habit. The Primary Judgment What follows is a description of the basis upon which the primary judge concluded that it was open to him to extend the limitation period, and proper to do so in the circumstances. That required a degree of elaboration, as this appeal centres on whether his discretion miscarried. I refer also to the basis for the cost order. I have noted the relevant paragraphs of the judgment in square brackets. The Commonwealth admitted that the collision was caused by its negligence. Accordingly, if Mr Smith obtained the leave sought, the enquiry would be about whether he suffered damage and if so what damage and how he ought to be compensated; Judgment [4]. The injuries claimed by Mr Smith in his Statement of Claim were pleaded as follows, being primarily psychological injuries/conditions. “As a result of the collision the plaintiff was injured and he has suffered loss and damage aggravating, accelerating, exacerbating and/or resulting in the future deterioration of the following-PARTICULARS OF INJURY a)Severe shock;b)Severe anxiety and depression;c)Claustrophobia;d)Fear of flying;e)Difficulties with sleeping, nightmares and night sweats;f)Irritability, fatigue and headaches;g)Sexual impotence;h)Difficulty in concentrating, making decisions and solving problems;i)Mood swings, frustration and isolation;j)Obsessive compulsive behaviour;k)Chronic post-traumatic stress disorder with numerous re-experiencing symptoms, avoidance symptoms and arousal symptoms;l)Emotional detachment, insecurity and lack of confidence;m)Attempts to medicate himself by heavy use of alcohol (to 1997 approximately) with consequential impairment of body function;n)Hypertension;o)Acid reflux;p)Chest pain;q)Stomach discomfort;r)Dysphoria;s)Cold sweats;t)Ulcer;u)Heart Condition.But for the collision and the injuries sustained the plaintiff would have continued to progress through naval ranks with promotion.” Mr Smith finally sought advice from a solicitor in mid-1999. As a result he consulted a psychologist, Dr Morris, in December 2000. Tests showed that Mr Smith was suffering from, inter alia, serious depression and serious anxiety; Judgment [19]-[20]. Dr Morris concluded that, as a result of his involvement in the collision and the lack of appropriate support, Mr Smith was suffering from Post Traumatic Stress Disorder (“PTSD”), with delayed onset. Dr Morris found that the PTSD continued to be a major source of psychological distress for him and that it had led to a Major Depressive Episode disorder; Judgment [22]. Dr Morris attributed the delayed onset to the instruction given to Mr Smith not to discuss the incident and to get on with his life. Dr Morris also found that Mr Smith’s personality style made it likely that he would use avoidance and aggression to cope with his distress; Judgment [22]. On credibility Dr Morris concluded that Mr Smith responded to all the psychological tests in a reasonably forthright manner; Judgment [21]. The primary judge also found Mr Smith was an honest witness; Judgment [21].

Ratio Decidendi

Legal Principle Established

In my view the Applicant has not established that the application was made within three years after the time at which he ought to have become aware of the fact that he had suffered a personal injury of the kind identified in the statement of claim. Accordingly he has not satisfied the Court as to the matters identified in s 60I(1)(b).Discretionary considerations As others take a different view in relation to the last conclusion set out above, it is necessary to address the further question of whether it was “just and reasonable” to order that the limitation period be extended, in the terms provided by s 60G(2). I address that question on the assumption that the Applicant was neither aware of, nor ought to have become aware of, the matters set out in s 60I(1)(a) before 12 September 1998. The principles relevant to the exercise of this power are discussed by Santow JA at [122]-[129] above. However, I differ from his Honour in relation to the application of these principles. The first complaint of the Commonwealth dealt with by the primary judge was in relation to records and independent recollections of the Applicant prior to and around the time that he joined the Navy. His Honour did not suggest that such material had not been lost, but that the Commonwealth had lost nothing by its absence: at [41]. He also dismissed the concern that the Applicant had, in his application to join the Navy, affirmed that a member of his family had attempted to commit suicide and that records in relation to that matter were not available, as irrelevant on the basis that it “gave the Navy no cause for concern about Mr Smith’s suitability for service”. However, that is not the relevant issue for present purposes. The two broad issues which would no doubt arise if the matter were to go to trial would be the Applicant’s general character, behaviour and state of mental health prior to the collision and his equivalent position immediately afterwards and in later years. Assuming that Mr Smith suffers from some recognisable mental illness (albeit one in relation to which, despite his claim, he gave evidence that he had never received any counselling or treatment) the question will be whether the collision caused or contributed to that condition. Other factors in his life and family history may suggest a different cause or causes. It is clearly tenable that, 37 years after the event, it will not be possible to disentangle those circumstances with any sufficient level of confidence in the outcome. The next category of material dealt with by the primary judge (at [45]) concerned Naval records, including records of his consumption of alcohol, which had been destroyed in the ordinary course of business. His Honour concluded (at [46]):“If this case had been brought within a few years after the date of the collision I think it highly unlikely that material of the kind adverted to would have played any part in the trial. The passage of time does not change that. The Commonwealth has lost nothing of significance.”With respect, this is more akin to speculation than a finding of fact. In an “alcohol questionnaire” completed for the Department of Veterans Affairs on 26 March 2001, the Applicant gave an affirmative answer to the question “do you consider that your alcohol consumption was due to, or contributed to, by your service?” and added by way of explanation:“Stress of service life. Particularly after FESR service – and Vietnam service when I started to consume larger amounts of alchol (sic) such as drinking to excess.”(“FESR” is presumably a reference to a more recent version of the “Far East Strategic Reserve”, a British Commonwealth force used in Malaya in 1959-1961.) It is likely to be part of the Commonwealth’s case on a disputed trial, as foreshadowed in the cross-examination on the present application, that the Applicant’s excessive consumption of alcohol was related to factors other than the night of the collision.