Lauro v Battista - [2011] SASC 173

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
LAURO & ORS v BATTISTA
[2011] SASC 173
Judgment of The Honourable Justice Gray
14 October 2011
LIMITATION OF ACTIONS - EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS - GENERALLY - POWER OF COURT TO EXTEND LIMITATION PERIOD
LIMITATION OF ACTIONS - EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS - EXTENSION OF TIME IN PERSONAL INJURIES MATTERS - GENERALLY
Three appeals against decision of Magistrate granting the defendant an extension of time in which to pursue his counterclaim in each action - on 11 July 2006, an incident occurred leading to the plaintiffs issuing separate proceedings in the Magistrates Court with respect to alleged assaults - where the defendant defended each action and counterclaimed, seeking damages for assault arising from the same incident - where those counterclaims were lodged outside of the three year limitation period prescribed by section 36 of the Limitation of Actions Act 1936 (SA), and did not seek an extension of time - plaintiffs subsequently made applications seeking orders that the counterclaims be struck out - the defendant then sought leave in the Magistrates Court to amend the counterclaims to seek an extension of time in each action, and relied on section 48(3)(b)(ii) of the Limitations of Actions Act, namely that the defendant's failure to institute the counterclaims within time resulted from representation or conduct on the part of the plaintiffs - where on appeal it was conceded that it was inappropriate for the Magistrate to have ordered that there be grants of extension of time where there was no evidence before the Court from the defendant to support such orders - whether the defendant should be allowed to amend his counterclaims to seek extensions of time.
Held: appeals allowed - the question of whether an extension should be granted required evidence to be put before the Court, and to this extent the appeals should be allowed - however, the material before the Magistrate established conduct on the part of the plaintiffs to allow the conclusion that the defendant has an arguable case for a grant of extension of time to pursue his counterclaims under section 48(3)(b)(ii) of the Limitation of Actions Act - accordingly, in each proceeding the defendant should be given leave to amend his counterclaim to seek an extension of time in the terms proposed.
Limitation of Actions Act 1936 (SA) s 36, s 48(3)(b), referred to.
Johnson v South Australia (1980) 26 SASR 1; Finlay v Silcon Industrial Pty Ltd (2003) 229 LSJS 14; State of South Australia v Lampard-Trevorrow (2010) 106 SASR 331; Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; Ulowski v Miller [1968] SASR 277, considered.

LAURO & ORS v BATTISTA
[2011] SASC 173
Magistrates Appeal
GRAY J:
Introduction

These three appeals from decisions of a Magistrate raise identical issues. The plaintiff and appellant in each proceeding are respectively Natale Lauro, Eric Lauro and Silvana Lauro. The defendant and respondent in each proceeding is Vincenzo Battista. On 2 March 2011, a Magistrate granted the defendant an extension of time in which to pursue his counterclaim in each action. These appeals challenge the orders granting extensions of time. They also challenge the defendant’s entitlement to amend his counterclaims to seek an extension of time.
Background Facts
On 11 July 2006, an incident occurred leading to the plaintiffs issuing separate proceedings in the Magistrates Court with respect to alleged assaults. The defendant defended each action and counterclaimed, seeking damages for assault arising from the same incident. The counterclaims were lodged outside of the three year limitation period prescribed by section 36 of the Limitation of Actions Act 1936 (SA). The counterclaims did not seek an extension of time.
On 26 November 2010, following the Magistrate drawing attention to the question of the Limitation of Actions Act, the plaintiffs made applications seeking orders that the counterclaims be struck out. The defendant then sought leave in the Magistrates Court to amend the counterclaims to seek an extension of time in each action.
Before the Magistrate, the defendant submitted that the application to amend the counterclaims should be granted and further submitted that it was appropriate to make an order extending time in each action pursuant to section 48 of the Limitation of Actions Act. The defendant did not seek to argue that he had discovered a material fact to justify his claim for extensions of time.[1] Rather, the defendant relied upon section 48(3)(b)(ii) – that the defendant’s failure to institute the counterclaims within time resulted from representations or conduct on the part of the plaintiffs.
[1] See Limitation of Actions Act 1936 (SA) section 48(3)(b)(i).
The Magistrate recorded the uncontested background circumstances in the following terms:
On 10 July 2009 solicitors for the plaintiffs issued proceedings in the Magistrates Court claiming damages on behalf of each plaintiff in the amount of $40,000.
Rule 28 requires that an action filed in the Magistrates Court must be served within one year of the date of filing the claim. In each case the claims were not served until the last day for service under Rule 28, namely 9 July 2010. A proof of service was not filed however and the Registrar acting under Rule 28 dismissed the claims.
On 6 September 2010 solicitors acting on behalf of the plaintiffs filed applications seeking orders that the actions be reinstated.
On 22 September I directed that the actions be reinstated and extended the time for the defendant to file a defence in each action.
On 27 September 2010 the defendant filed a defence and a counterclaim in each action.
The matter came on for an initial directions hearing on 3 November 2010. I noted that in filing the counterclaims the defendant had not sought any extension of time to issue such proceedings. I adjourned the directions hearing until 1 December 2010 to enable the solicitors for the parties to take further instructions on the issue.
On 26 November the plaintiffs’ solicitors filed an application seeking the counterclaim be struck out. Contemporaneously the defendant’s solicitors filed an affidavit annexing a proposed amended defence and counterclaim and foreshadowed an application seeking an extension of time to bring proceedings.
The application to strike out the counterclaim was adjourned to 1 December 2010 and subsequently to 24 January 2011 for further argument. …
The Magistrate then observed:
This is a case where there was a history of an ongoing commercial relationship between the parties that had gone bad and there was an earlier history of alleged threats, etc., made between parties. It is not in dispute that there were reports to SAPOL and action taken in respect to the matters. I accept Mr Adams’ submission that there were justifiable reasons why neither party may have wished to pursue a claim likely to be vigorously defended.
The fact that such a significant time lapse had occurred after the alleged incidents in my view would lead any reasonable person to the belief the matter might have been left to lie. In my view the plaintiffs’ actions in delaying issue to the last date and more particularly in then delaying service for some 12 months after issue does amount to conduct the section contemplates. Further, although specific submissions were not made on the issue, it is my view that the late service of process may have amounted to a material fact ascertained less than 12 months prior to the issue of the proceedings.
The second limb of the test required by s.48 (3) (b) of the Act.
The second limb requires the applicant for extension to establish that it is just in all the circumstances to grant the extension. I reject Mr King’s submission that his clients are unfairly prejudiced by the delay in prosecuting the counterclaims. In my view there is no injustice to the plaintiffs in making the application. The plaintiffs seek to prosecute their own rather old claims for personal injury. The considerations raised by Mr King of difficulties in defending a four year old claim, e.g. of locating and proofing witnesses, of potential difficulties in witnesses’ recall of events, of locating and producing medical records and in obtaining relevant evidence to support quantum of the claims, are equally true of the plaintiffs’ claims. The extent to which either party is prejudiced by the failure of the other to proceed in a timely manner is a matter that will no doubt be considered and addressed at a stage of assessing any damages that might arise from a finding of liability.
While there might have been some dilatoriness on the part of the defendant’s solicitors in the preparation of the counterclaims – in particular in initially overlooking the requirement to seek an extension of time – the delay in bringing the application for extension is not in my view so long as to prohibit the making of the application.
In all the circumstances it is my view that the application for extension of time on each file should be granted. I accordingly dismiss the applications made by the plaintiffs seeking that the counterclaims be struck out. …
[Emphasis added.]
The Appeal
Before this Court the plaintiffs contended that the Magistrate erred in two respects. It was said that it was inappropriate to have ordered that there be grants of extensions of time as there was no evidence before the Court from the defendant to support such orders. On the hearing of the appeals, counsel for the defendant did not challenge this contention. This was an appropriate concession. The question whether an extension should be granted required evidence to be put before the Court. Accordingly, to this extent the appeals should be allowed.
The plaintiffs further contended on the appeal that the defendant should not be allowed to amend his counterclaims to seek extensions of time. The defendant submitted that he should be allowed to amend his counterclaims and to pursue his applications for extensions of time at an appropriate time.
Section 48(3)(b) of the Limitation of Actions Act provides that a court cannot extend a prescribed limitation of time – in the case of personal injuries, within three years – unless it is satisfied:
(i)that facts material to the plaintiff's case were not ascertained by him until some point of time occurring within twelve months before the expiration of the period of limitation or occurring after the expiration of that period and that the action was instituted within twelve months after the ascertainment of those facts by the plaintiff; or
(ii)that the plaintiff's failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances,
and that in all the circumstances of the case it is just to grant the extension of time.
Before delving further into the arguments made in the within proceeding, it is appropriate to turn to judicial commentary regarding the approach to be taken to applications for an extension of time made pursuant to section 48(3)(b) and in particular sub-section (ii).
In Johnson v South Australia, Mitchell J made the following remarks regarding the nature of section 48(3)(b)(ii):[2]
… What s 48(3)(b)(ii) does do is to give a court power to extend time for instituting proceedings where an intending plaintiff has been lulled into a sense of false security by representations or conduct of the intended defendant. …
[2] Johnson v South Australia (1980) 26 SASR 1, 52.
In Finlay v Silcon Industrial Pty Ltd, Doyle CJ relevantly observed:[3]
… It is not necessary, in my opinion, for the conduct of the defendants to be the sole explanation for the failure to proceed within time. While it may well be that the plaintiffs could have brought proceedings sooner than they did, the difficulty of the plaintiffs' circumstances is obvious, and it is not surprising that the institution of proceedings was delayed. It was reasonable to wait while the police investigated the matter, in the hope that they would turn up relevant material, or bring a prosecution that would result in helpful evidence becoming available.
[Emphasis added.]
Further, the High Court decision in Brisbane South Regional Health Authority v Taylor made it clear, by reference to a comparable section, that satisfaction of either or both of the subsections in section 48(3)(b) does not give a plaintiff a presumptive right to an extension of time.[4] The plaintiff ultimately must convince the court that time ought to be extended.
[3] Finlay v Silcon Industrial Pty Ltd (2003) 229 LSJS 14, [88], cited with approval in State of South Australia v Lampard-Trevorrow (2010) 106 SASR 331, [439].
[4] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541, 547, where it was observed:
With respect to their Honours, that passage does not truly reflect the meaning and operation of s 31 (2). The discretion conferred by the subsection is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant.
In Trevorrow v State of South Australia (No 5),[5] I reviewed the following judicial observations in relation to the Court’s discretion to extend time. It is convenient to repeat my review:[6]
In Ulowski v Miller, Bray CJ observed that the discretion to extend time should not be fettered by any absolute or inflexible rules. However, Bray CJ went on to outline what he referred to as five paramount matters to be considered in the exercise of the discretion. Those factors are the length of the delay; the explanation for the delay; the hardship to the plaintiff if the action is dismissed and the cause of action left statute-barred; the prejudice to the defendant if the action is allowed to proceed notwithstanding the delay; and the conduct of the defendant in the litigation. Bray CJ then went on to say:
"I think the discretion [to extend time] should be exercised as seems best in the interests of justice after considering in relation to the particular case the five matters mentioned above."
In Lovett v Le Gall, Bray CJ held that the following two considerations could be added to the list in Ulowski: the conduct of the plaintiff; and the nature, importance and circumstances surrounding the ascertainment of the new material facts.
In Forbes v Davies, Kearney J agreed with Bray CJ as to the relevant factors to consider when contemplating an exercise of the discretion to extend time, and added a further factor to the list — the extent to which, having regard to the delay, the evidence is likely to be less cogent than if the action had been brought within the time allowed.
In McPhee v Blyth, Olsson J reaffirmed the view adopted by Legoe J in Luscombe v South Australia that the five factors outlined by Bray CJ in Ulowski were relevant to applications made pursuant to s 48 of the Limitation of Actions Act. These factors form the basis for any consideration of an application for an extension of time. An analysis of the circumstances of a matter relevant to these factors assists the court to ascertain whether, in the interests of justice, the application for extension of time should be granted.
[Footnotes omitted.]
[5] Trevorrow v State of South Australia (No 5) (2007) 98 SASR 136.
[6] Trevorrow v State of South Australia (No 5) (2007) 98 SASR 136, [924]-[927].
In the present proceeding, as earlier mentioned, the defendant by the proposed amendment to the counterclaims sought extensions of time. In support of the proposed pleas, the following assertions were made:
The defendant by counterclaim[’s] failure to serve proceedings upon the plaintiff by counterclaim and prosecute the proceedings until one year after the Limitation of Actions Act 1936 (SA) period for the issue of the proceedings prevented the plaintiff by counterclaim from being able to issue and plea a counterclaim in the action.
The plaintiff by counterclaim seeks exercise by the court of the discretion provided under Section 48 of the Limitation of Actions Act 1936 (SA) to extend the time for the commencement of the proceedings by counterclaim to the date of filing the amended defence and counterclaim.
On the hearing of the appeals, counsel for the plaintiffs submitted that leave to file amended counterclaims should have been refused by the Magistrate and should be refused by this Court. It was further contended that the counterclaims should be struck out as statute barred. It was said that any application to extend time was doomed to fail. It was contended that the defendant had not provided any sworn evidence to support grants of leave to amend and that he did not have an arguable case for extensions of time.
It was submitted by the plaintiffs that the Magistrate had overlooked or given inadequate weight to conduct on their part. That conduct was the service on the defendant by the plaintiff, Natale Lauro, of a notice of intention to sue on 22 January 2009 as follows:
NOTICE OF INTENTION TO SUE
You are being written to directly due to your legal representatives, Starke Lawyers, ceasing to communicate on your behalf in the past.
Aside from your illicit demands for moneys, in consequence of the unprovoked attempted assault of my brother and property damage caused by you to his motor vehicle on 11 October 2008 (for which you were arrested on 25 October 2008 and are currently being prosecuted before the Adelaide Magistrates Court), you are hereby put on NOTICE that:
1My family and I (“us”) will be seeking independent legal advice and will instruct lawyers to commence legal proceedings for, inter alia, the personal injuries arising from the serious assault perpetrated by you at our private residential address on the night of 11 July 2006;
2Any and all other appropriate action will also be taken by us against you or any of your family members, associates or acquaintances, in the event that, you or any of these parties, continue to make further threats and/or perpetrate further acts of violence against us and/or our property; and
3You will be held personally responsible for all legal and incidental costs associated with the above actions.
Due to your violent conduct over time, and your criminal history, you are not to approach or communicate with us in any way other than if required by, and exclusively in writing via, your legal representatives who have our postal address.
It was submitted on the appeal that this notice unequivocally informed the defendant that proceedings would be issued claiming damages in respect of personal injury and property damage sustained as a result of an assault on 11 July 2006. It was claimed that the defendant had ample warning of what would occur and should have, in these circumstances, issued proceedings pursuing his own claim for damages before the expiration of three years on 11 July 2006. It was argued that given the notice of intention to sue, the defendant’s case for an extension of time was doomed to fail. It was also said that it would be futile to allow the proposed amendments and that accordingly it was appropriate to dismiss the counterclaims.

The solicitor acting for the plaintiff, Natale Lauro, in an affidavit tendered before the Magistrate provided an explanation for the delay in the issue of proceedings and inferentially for the delay in the service of those proceedings. That explanation was as follows:
For reasons of his fears arising from those threats of violence, the Plaintiff avoided taking any action against the Defendant in the subsequent years following that assault. However, on 10 July 2009 the Plaintiff as well as his said wife and said son, Mr Eric Lauro simultaneously commenced actions seeking compensation under both the Victims of Crime Act 2001 and by actions in this Honourable Court. Since lodging both of those Claims, the Plaintiff and his said wife and his said son, Mr Eric Lauro have been negotiating with the Crown Solicitors Office regarding their Victims of Crime Claim, still afraid of direct contact with the Defendant. Very recently a resolution of that Victims of Crime Claim was reached with the Crown Solicitors and the Plaintiff, his said wife and his said son, Mr Eric Lauro elected to pursue their separate actions against the Defendant in this Honourable Court. Following preparation of the necessary Form 22 information along with the List of Documents and a Form 17, that material along with the Claim was provided to the process server, Mr Philip Atkinson, for service upon the Defendant. This service was effected on 9 July 2010. I refer to the separately filed Affidavit of Mr Philip Atkinson concerning service of those items.
This statement is of some significance. Apparently the plaintiffs commenced actions seeking compensation under the Victims of Crimes Act 2001 (SA) as well as the within proceedings seeking common law damages. These proceedings were issued on 10 July 2009, approximately six months after the notice of intention to sue. It appears that the plaintiffs had deferred making a decision to proceed with the common law damages proceedings. Natale Lauro explained that following the resolution of the victims of crime claim, an election was made by the plaintiffs to pursue the common law claims.
In my view, the material before the Magistrate established conduct on the part of the plaintiffs to allow the conclusion that the defendant has an arguable case for a grant of extension of time to pursue his counterclaims under section 48(3)(b)(ii) of the Limitation of Actions Act. What is relevant is the delay in taking action. The conduct was not mere inaction, rather the taking of action following delay. The defendant did not become aware of the proceedings brought against him until almost four years following on the alleged assaults. The plaintiffs’ conduct was such as to create a false sense of security.
Further, it was open to the Magistrate to observe that such a significant time lapse after the alleged incidents before the proceedings were served would lead any reasonable person to the belief that the matter would be left to lie. It is in my view plainly arguable that the plaintiffs’ actions in delaying issue of process to the last day and then delaying service for some 12 months after issue does amount to conduct within section 48(3)(b)(ii) of the Limitation of Actions Act. I consider that prima facie the defendant has good prospects of obtaining extensions of time to pursue his counterclaims in each action. The Magistrate was justified in concluding that there appeared to be justifiable reasons why none of the parties may have wished not to pursue a claim likely to be vigorously defended.
In considering whether the defendant should be granted leave to proceed, it is appropriate to consider several of the factors identified in Ulowski v Miller[7] and the other decisions earlier extracted.
[7] Ulowski v Miller [1968] SASR 277.
In the present proceeding, the defendant filed the counterclaims approximately 11 weeks after he had been served with the plaintiffs’ claims and approximately four years and 11 weeks after the alleged assaults.
As the Magistrate observed, the prejudice which is likely to be caused to the plaintiffs by the delay in filing the counterclaims includes the difficulty in locating and proofing witnesses and in producing medical records, the problems associated with the witnesses’ ability to recall events and the difficulty in obtaining relevant evidence to support the quantum of the claims. I agree however with the observations of the Magistrate that each of these difficulties are equally applicable to the defendant in respect of the plaintiffs’ claims.
I consider that it is arguable that the notice of intention to sue served on the defendant on 22 January 2009 was never intended to be an absolute or unequivocal notice that the plaintiffs would proceed with an action for common law damages. This is supported by the fact that following the service of the notice, the plaintiffs made an election to continue with the common law damages proceedings. The notice of intention did no more than express an intention. It was not a commitment. The later conduct of the plaintiffs in making an election to sue only after other relevant events makes this clear.
Conclusion
In the circumstances, the order of the Magistrate granting extensions of time should be set aside. However, in each proceeding the defendant should be given leave to amend his counterclaim to seek an extension of time in the terms proposed. The amendments should be made within seven days.