Elliott v Itek Graphix Pty Ltd

[2002] HCATrans 485

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S36 of 2002

B e t w e e n -

ANN ELLIOTT

Applicant

and

ITEK GRAPHIX PTY LIMITED

Respondent

Application for special leave to appeal

GLEESON CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 NOVEMBER 2002, AT 10.31 AM

Copyright in the High Court of Australia

MS S. NORTON, SC:   If the Court pleases, I appear with my learned friend, MS A.P. HEALEY, for the applicant.  (instructed by Bryden’s Law Office)

MR L. KING, SC:   I appear with MR R.S. SHELDON for the respondent, may it please the Court.  (instructed by Leigh Virtue & Associates)

GLEESON CJ:   Yes, Ms Norton.

MS NORTON:   Your Honour, the application relates to a decision by the New South Wales Court of Appeal to overturn a discretionary extension of time granted by a District Court judge, Judge Patten, under the provisions of section 151D of the Workers’ Compensation Act.  The provisions are similar to a number of other limitation periods in that a discretion is granted in the court to extend time.  The Court of Appeal acknowledged when it overturned that decision that a fair trial had taken place and as part of the same appeal there was a challenge to the damages awarded by the trial judge, a different judge, who eventually heard the case.  That challenge was not upheld on the appeal and so a verdict of in excess of $400,000 was overturned.

The factual situation was always a little difficult in that the applicant had been injured in two separate accidents which occurred reasonably closely in time.  The first one was a motor vehicle accident which occurred during the course of her work, so that gave her a cause of action potentially under workers’ compensation legislation and under motor accidents legislation.  Factually what happened is while she was off injured as a result of that she had an injury to her knee, being the major problem among a number of other ones.  She was required by her employer to come in to work and fill out a workers’ compensation claim form.  In the course of doing that she had to go up a flight of steps.  On her descent of those steps the knee she had injured in the motor vehicle accident gave way and she fell and sustained further injuries to that knee and some injuries to other parts of her body as well.

When she first brought proceedings for the motor vehicle accident she brought proceedings claiming that the fall on the stairs was all part of the chain of damages and was included in the motor vehicle accident.

GLEESON CJ:   She was confronted with a series of tactical decisions that she had to make.

MS NORTON:   That is right.

GLEESON CJ:   And on which she took carefully considered legal advice.

MS NORTON:   That is right.

GLEESON CJ:   And one of the decisions that she made after carefully considered legal advice was a decision not to commence these proceedings within time and to pursue alternative remedies.

MS NORTON:   Yes, your Honour, that is true.  The matter I wish to refer to first is that in the respondent’s submissions it is referred to a number of times that the settlement of the motor vehicle case in circumstances where the particulars were altered to take out reference to the injuries which occurred after the fall on the stairs at work was referred to by my friend in his written submissions on a number of occasions as a “device”.  That is somewhat colourful language and, in my submission, it was a matter that had not been raised when the matter came on for hearing before the trial judge, Judge Graham.  At 44 of the application book is the paragraph at about line 20 where his Honour stated:

Although no submission was directed to the Court on behalf of the Defendant suggesting that the settlement should be regarded as a sham or in some way should be regarded in some sinister light, it seems to me that where there are rational explanations for the parties arriving at a particular form of resolution of a dispute and, where there is some apparent advantage to both of them in reaching that resolution, the negotiations, the particulars and the ultimate settlement should be treated as being bona fide and given their face value.

HAYNE J:   Assume you get over that hurdle, assume that is all put to one side, what do you say to the point that it was a deliberate decision after advice not to start within time?

MS NORTON:   It was a deliberate decision made on the facts and circumstances at the time the limitation period expired and that is what the trial judge looked at.  He was aware that she made a deliberate decision.  At page 8 of the application book he specifically refers to her deliberate decision, at about line 15:

The applicant’s explanation is, I think, a reasonable one.  She has received a lot of advice, and as Mr Nock points out, has, on occasions, made deliberate decisions not to pursue the rights which she presently seeks to agitate.

So, the trial judge was well aware ‑ ‑ ‑

GLEESON CJ:   It is the next sentence, is it not?  He says:

it is understandable that a person in the position of this applicant could vacillate –

As a proposition of fact that may be accepted, but if you go to page 93, line 40, when you come to attach legal significance to that fact, Justice Ipp says this is the context in which that happened.

MS NORTON:   There is no suggestion in the trial judge’s judgment that he was not aware of the policy behind limitation periods.  He accepted that there was an onus on the applicant that she had to convince him that the extension of time should be granted.  What he did that differed from the Court of Appeal approach was that he looked at the culmination of things that happened after the expiry of the limitation period.  First, at the expiry of the limitation period she was having difficulty with her work with the respondent, but she was still there.  She had been working at this firm for a very long time and for a an unskilled person – no tertiary education – she was earning about $1,000 a week from having progressed through her trade as a printer.  So she had a good job, earning good money, with someone she had worked with for a long time.  She was nervous she might lose her job but she still had it.

GLEESON CJ:   There is a very large difference of principle, is there not, between the approach of the trial judge and the approach of the Court of Appeal concerning the weight to be attached to the kind of consideration referred to by Justice Ipp at the bottom of page 93 and on the other hand the consideration that seems to have been dominant in the mind of the primary judge, that is to say that there is no reason the defendant could not get a fair trial?

MS NORTON:   First of all Justice Ipp actually set out in his judgment that he accepted the test as it was proposed by Judge Patten.  Judge Patten said the test that he was applying, which was not the Taylor v Brisbane test but the Salido test, and he says that at page 8 of the book and he sets out the four things.  Justice Ipp, in his judgment at page 111 at line 30 sets out what Judge Patten said the test he was applying at paragraph 131, and then he goes on to say:

In my view this statement could not be criticised.

So, there is no suggestion that the trial judge was applying an incorrect test which I think was the first part of the question you asked me.

GLEESON CJ:   No, but the weight they gave to different considerations was quite different.

MS NORTON:   Very different.

GLEESON CJ:   And Judge Patten seemed to have given almost overriding weight to the consideration that there was nothing that would prevent the defendant from getting a fair trial.

MS NORTON:   No, he considered a number of other matters in arriving at that, your Honour.  This judgment was an ex tempore judgment.  The motion was heard on one day, part heard to the next and a judgment given, so it is not set out in as neat paragraphs perhaps as the Court of Appeal, which is a reserved judgment, but, in fact, if you read through his judgment he sets out accurately the chronology, he is aware of all the relevant time periods and then he says that he is aware of when the time limit expires.  What he does then is look at the conduct of the parties after the expiry of that period, accept that there is no prejudice to the respondent and then say, “In those circumstances there is a reasonable explanation for the delay, a fair trial can take place and I think it is just and reasonable having looked at the chronology of the matter.”

HAYNE J:   In the end does the explanation come down to anything more than, “The decision was very hard, I have changed my mind”?

MS NORTON:   It does come down to more than that.  It comes down to the decision was very hard – and it is a difficult test.

HAYNE J:   Yes.

MS NORTON:   Anyone who has had to read section 151 of the Workers’ Compensation Act, even with a lawyer’s knowledge, for a lay person to understand it when you have your barrister telling you one thing and your solicitor suggesting another is difficult, so it is a difficult thing.  Not only that, to put into that factual matrix is the fact that things ‑ and this, in my submission, when you read the trial judge’s ex tempore judgment, is what influenced him – the things that happened after the expiry of the limitation period.  Nothing sinister perhaps, that she is working there for the three years and a number of months after the expiry of the limitation period she is asked to resign.  But she was, she went from having a job of $1,000 a week to being asked to resign, and she resigned.

The Court of Appeal said that happened 17 months or something – a year before she started the application in the District Court for an extension of time, so that cannot be a cause.  But the trial judge looked at it cumulative.  He says, “Okay, what has happened?”  First of all she has lost a very good paying job.  Second of all 17 months have gone past and she has not been able to get any further employment.  She was assured at the time that she left that employment that she would receive workers’ compensation benefits.  She waited a while, obviously it would seem in the hope that those would be paid.  They never were and she commenced proceedings.  Then the final straw, which goes back and links up with the complication of having the two accidents, is that she was served with a statement of claim seeking the repayment of $47,000 as part of the verdict in that motor vehicle case.

The trial judge said all of these things have changed and they are all things, except for her not being able to find employment elsewhere, that relate to the conduct of the respondent or its insurer.  They are not things that were outside their control, that they were unaware of, and the trial judge has said, “I explain her delay by the fact that it is a difficult decision.  I explain the fact that she has changed her mind” – although he does not actually say this – “by the fact that the circumstances have changed so much from when the limitation period expired.”  When that period expired she was still in that job, earning that money, and her suggestion in her affidavit was that she did not want to commence proceedings against her employer or do anything that would make it more likely that she would lose that job.  That was basically one of her reasons.  So he did not just look at whether a fair trial could take place but that, in our submission, is, in any event, a very relevant consideration, that a fair trial could take place.  It has been held by the courts to be a relevant consideration.

Also, the Court of Appeal goes through each of those grounds and says of its own, it is not enough that she lost her job because that happened some time before she decided to sue, it is not enough that the claim was made for the repayment of the workers’ compensation payments because she knew that that might happen, and that seems to fail to understand that there is a big difference between being aware that someone might bring some proceedings to recover some amount of money and being actually served with a statement of claim for $47,000.  It is of interest that when that claim was actually heard at the same time as the present claim, the verdict entered in their favour was $4,000.  Nevertheless, when the statement of claim arrived, it was claiming $47,000.

The picture could arise of someone who is just so reluctant to engage in litigation that it is not until that statement of claim arrives that she realises and changes her mind.  The trial judge looked at them all cumulative, the Court of Appeal looked at each one and said, by themselves they are not a good enough explanation because she had – it seems that the pivotal point in there – because she had knowledge of the expiration of the period.  A lot of people have knowledge of expiration of limitation periods and if you make a decision on legal advice before the expiration of the period not to sue and then there is no change in circumstances afterwards, then, of course, an extension of time will not be granted.

In this case there was a change of circumstances.  Not only that, the trial judge accepted her explanation for the delay and that, in our submission, is very definitely his discretion.  The Court of Appeal has acted almost as if they were considering the matter for the first time and saying, “We would not have reached the same decision”, and the only error pointed to in the major decision of Justice Ipp, which is at paragraph 152 at page 116 of the application book, seems to be where the Court of Appeal says, “This is the error, therefore, we can exercise the discretion ourself.”  It starts off with the words:

In my view, the learned judge erred in that he failed to evaluate the respondent’s conduct against the rationales for the limitation period contained in s 151D(2), and in particular, failed to have regard to the public interest in requiring claims to be brought within the statutory period and then to be proceeded with as quickly as possible.

The trial judge does not say in his decision that he is bearing that in mind, but he is applying the test out of Salido and the test out of Salido was formulated because of that public policy or, more accurately, limitation periods themselves are enacted because of that policy.

The mistake that was criticised by this Court in Taylor of the Court of Appeal of Queensland was they assumed that if two preconditions were met, that is, a latent injury and I forget the second one to be honest, there was a presumption that you could get an extension of time.  The trial judge never operated under any assumption there was a presumption in this case.  He reviewed the evidence, he listened, he had the advantage of reading the affidavit of the applicant and hearing her cross‑examined and, unusually, having heard her solicitor give evidence and be cross‑examined and having tendered various advices from counsel and files notes passing within the solicitors firms that the solicitor was also cross‑examined about.

So he has applied, in our submission, the correct test.  He has accepted the applicant’s explanation of the delay, whereas the Court of Appeal has not accepted her explanation of the delay and we say that that is an inappropriate approach in the circumstances where no error of principle has been pointed to on the part of the trial judge.  This is a pure discretion in this section, whether a grant of additional time is made or not.  I was reading this, was I not:

He did not attach adequate weight to her deliberate decision to allow the limitation period to expire.

And I have already taken your Honours to the fact that he did, at page 8 of the application book, say, yes, it was a deliberate decision, he was well aware of that.

He appears not to have applied his mind to the long delay between the expiry of the three year period and the date on which the respondent applied for an extension of time.

And, again, if you read his judgment as a whole, all of the dates are set out there and the delay is something of around 17 months.  The limitation period is three years, the delay was 17 months.  It was not a matter of 17 years or five years or six years, those types of cases do come up before the Court where there is, as Justice McHugh said in Taylor’s Case, an extraordinary delay.

In this case there is 17 months in circumstances where the defendant is well aware of the facts of the accident.  It happened in their premises.  The respondent is well aware that she has at least a workers’ compensation claim because she filed the necessary claim form for workers’ compensation.  So it is not that long a period of time and, as pointed out by the trial judge, it was made a bit longer by the fact that when she was sued for the recovery of the 47,000 they attempted to put a cross‑claim on in that cause of action and that was ruled to be inappropriate.  Then it is simply said:

He erred in holding that the respondent’s explanation for her conduct was reasonable.

If there is ever a question of credit or fact it would be summed up in that, that the trial judge is the one who decided that her conduct was reasonable and her explanation of the delay was reasonable.  Unless there is some error on the part of the Court of Appeal – they should not have intervened.

The other question which will arise in the context of an application for special leave is what is special about this case.  We say it has resulted in a substantial injustice to this particular applicant and also that the decision has now been widely circulated and it is in the workers’ compensation practice.  It is referred to as being authority for the proposition that even if a fair trial can take place something more is required and the test until then was generally thought to be if a fair trial could take place and the delay had been explained, you did not have to look into whether you accepted that the conduct of the applicant was reasonable.

The other matter that the appellate judge at paragraph 140 – there is a whole group of paragraphs starting from about paragraph 137 where the appellate judge is going through and saying this is the explanation that she

says but that “carries little weight”, at paragraph 137.  The fact that she is ceasing to work and “has affection for her employer carries little weight”.  Again, we would say that the question of the weight of that was a question for the trial judge, not the Court of Appeal.  And at paragraph 138:

she must have realised that she might have to cease working soon.

That was never put to the applicant when she was cross‑examined.  There was a fear that she would lose her job but it was never suggested that she was aware that she would have to cease working soon, nor the next step, that she would be aware that she would not be able to obtain alternate employment.

GLEESON CJ:   Yes, thank you, Ms Norton.  We do not need to hear you, Mr King.

We are of the view that there are insufficient prospects of success of an appeal to warrant a grant of special leave in this matter and the application is refused with costs.

AT 10.53 AM THE MATTER WAS CONCLUDED