Leonard v Gaincrew Pty Ltd

[2007] NSWSC 1408

CITATION:	Leonard v Gaincrew Pty Ltd [2007] NSWSC 1408
HEARING DATE(S):	19, 22 February 2007 23 July 2007 29 August 2007
JUDGMENT DATE :	7 December 2007
JURISDICTION:	Common Law
JUDGMENT OF:	Associate Justice Harrison
DECISION:	(1) I grant the plaintiff an extension of the limitation period to commence proceedings against Windsurf Holdings Pty Limited trading as Mark Ellis Marine Design & Management, Robert Kerry Wyvill and John Douglas Carlson up to an including 21 December 2007; (2) I grant leave to join Windsurf Holdings Pty Limited trading as Mark Ellis Marine Design & Management, Robert Kerry Wyvill and John Douglas Carlson as defendants in these proceedings; (3) An amended statement of claim is to be filed on or before 21 December 2007; (4) Costs are reserved.
CATCHWORDS:	Extension of limitation period - Qld - personal injury
LEGISLATION CITED:	Contracts Review Act 1980 Limitation Act 1969 Limitation of Actions Act 1974 (Qld) Transport Operations (Marine Safety) Act 1994 (Qld) Transport Operations (Marine Safety) Regulation 1995 (Qld)
CASES CITED:	Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Castlemaine Perkins Limited v McPhee (1979) Qd R 469 Creevey v Barrois [2005] NSWSC 264 Marshall v Minister for Education of Queensland [2004] QSC 135 Neilson v Peters Ship Repairs Pty Limited [1983] 2 Qd R 419 Queensland v Stephenson [2006] 226 CLR 197 Randel v Brisbane City Council (1984) 2 Qd R 276 Williams v The Minister for Aboriginal Land Rights Act 1983 (1993) 35 NSWLR 497
PARTIES:	Julie Leonard (Plaintiff) Gaincrew Pty Limited (First Defendant) Kerry Eckersley (Second Defendant) Windsurf Holdings Pty Limited trading as Mark Ellis Marine Design & Management (Third Defendant) Robert Kerry Wyvill (Fourth Defendant) John Douglas Carlson (Sixth Defendant)
FILE NUMBER(S):	SC 21003/01
COUNSEL:	Mr I Butcher (Plaintiff) Mr G Parker (Third Defendant) Mr B DeBuse (Fourth Defendant) Mr G Bateman (Sixth Defendant)
SOLICITORS:	Bale Boshev Lawyers (Plaintiff) Ebsworth & Ebsworth ( Third Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE HARRISON

FRIDAY, 7 DECEMBER 2007

21003/01 - JULIE LEONARD v GAINCREW PTY LTD &
KERRY ECKERSLEY
JUDGMENT (Extension of limitation period – Qld
– personal injury)

1 HER HONOUR: By further amended notice of motion filed 27 October 2006 the plaintiff seeks orders that Windsurf Holdings Pty Limited, Robert K Wyvill, Pettit & Carlson Pty Limited and John Carlson be joined as third, fourth, fifth, and sixth defendants in these proceedings and that she be granted leave to proceed against the proposed third, fourth, fifth and sixth defendants in accordance with Limitation of Actions Act 1974 (Qld). The hearing of this motion took place over a number of days, namely 19 February 2007, 22 February 2007, 23 July 2007 and 29 August 2007.

2 The plaintiff in these proceedings is Julie Leonard (Ms Leonard). The first defendant in these proceedings is Gaincrew Pty Limited (Gaincrew). The first defendant is the owner of the vessel “Diversity”. The second defendant is Kerry Eckersley. Mr Kerry Eckersley is the director of the first defendant. He is the brother of the plaintiff. The proposed third defendant is Windsurf Holdings Pty Limited t/as Mark Ellis Marine Design & Management. The vessel was designed by Windsurf Holdings Pty Limited t/as Mark Ellis Marine Design & Management. The proposed fourth defendant is Robert Kerry Wyvill (Wyvill). He is an accredited marine surveyor. The proposed fifth defendant is Beach Craft Pty Limited (Beach Craft). Beach Craft, the boatbuilder, has since been deregistered. The proposed sixth defendant is John Douglas Carlson (Carlson). He is a marine surveyor. For convenience, in this judgment, I shall refer to the parties by name.

3 Ms Leonard relied on her two affidavits, one sworn 27 February 2006, the other dated 19 June 2006 and the affidavits of her solicitor Greg Schipp sworn 28 October 2005, 24 February 2006, 3 July 2006 and 13 July 2007 and that of Mr Mellick sworn 12 April 2005. John Douglas Carlson relied on his affidavit sworn 25 August 2006. Robert Wyvill relied on his affidavit sworn 15 February 2007.

The plaintiff’s claim

4 For the purposes of this application I have largely accepted the plaintiff’s evidence. It is convenient that I now record my observations of the plaintiff’s demeanour. I observed the plaintiff carefully while she was being cross examined. After a short time in the witness box, the plaintiff’s answers became vague and unresponsive, so much so that I asked her when she had last read her affidavits. She answered that she had read them that morning. After that exchange, Ms Leonard told the Court that she was in a lot of pain. The Court granted an early luncheon adjournment. On resumption the plaintiff was clearheaded and responsive. There was a marked difference in her ability to comprehend and answer questions after the adjournment. It is my view that the plaintiff appeared affected by pain for some time prior to the luncheon adjournment and this affected her ability to answer questions such that I would attach little weight to her responses during that period.

5 On 31 December 1998, Ms Leonard had an accident on a vessel known as “Diversity” when it was moored near Lizard Island, Queensland. Some time prior to Monday, 28 December 1998 her brother Kerry Eckersley invited Ms Leonard and other members of the family onto Diversity for a holiday, which was planned to last about 10 days. Ms Leonard had been told by her brother previously words to the effect “I own Diversity” or “Gaincrew own the vessel”. Mr Eckersley had at some stage told Ms Leonard that he wanted to use the boat in his charter business and had it purposely built in Brisbane. He had only recently taken delivery of it.

6 On 28 December 1998, Ms Leonard boarded Diversity at Port Douglas. Also on board were 18 members of Ms Leonard’s family. On 29 December 1998, after some delays the vessel left Port Douglas. They moored overnight and the following day they went to Lizard Island, arriving in the morning. Prior to these holidays Mr Eckersley had told Ms Leonard to bring her own drinks to last the duration the trip. She took two casks of Moselle.

7 On 30 December 1998, the family had dinner together. The plaintiff consumed four or five small glasses of Moselle and then ceased drinking. They all retired at about 10.00pm. She had been sleeping on a mattress on the floor of the galley with her daughter Rebecca as all the bedrooms on the boat were full except for one which had only three people in it. As the air conditioner was not working properly in that room it was hot, stuffy and uncomfortable.

8 At about 4.00am on 31 December 1998, Ms Leonard wanted to go to the bathroom. At that time the lights had been turned off. As Ms Leonard turned left in the dark she immediately fell down stairs. She tried to grab a handrail but there was not one present. At the bottom of the stairs she hit her head on steel and felt pain in her neck. She did not realise that she had hurt her knee. She was more concerned about her neck. Her head was bleeding. She called out for help and the next thing she remembered was her brother Tim yelling out “don’t anyone move until I find the lights” then the lights were turned on. Tim came down the stairs to help her. She was taken to Lizard Island. Ultimately a call was made to the Flying Doctor Service. She was transported to Cairns and then on to Kurri Kurri hospital where she stayed for about five days.

9 Shortly after the accident occurred the plaintiff had formed an opinion that her accident was caused by the lack of a handrail and lack of lighting. Between the time of the accident and until she had access to the report of Dr Burge, Ms Leonard did not turn her mind to consider why there was no handrail. While the light was functional, the plaintiff says that on the night of the accident her brother had turned it off to save power.

10 Since the accident the plaintiff has undergone six operations on her left knee. She walks with a walking stick and brace. She does not work. Her and left knee is painful all of the time. Occasionally it gives way causing her to fall. She takes painkillers. Her back also hurts. There is medical evidence to support the plaintiff’s claim that the injury to her left knee was caused by the fall.

11 As a result of the medical treatment to her knee she commenced District Court proceedings against Dr Hammond. These proceedings were resolved in 2002.

12 On 14 October 1999, Kerry Eckersley wrote to his sister Ms Leonard (Ex PD4/5) stating:

“Dear Julie
I refer to the various telephone discussions that we have had recently and I am prepared to give you some financial help with your knee operation.
You must clearly understand that I do not believe that my company, Gaincrew Pty Ltd, or myself have any responsibility, legally or morally, for the fall that you had on the boat.
I am prepared to help you financially on the clear understanding that if you accept my financial help you give up all rights to take legal action against me or my company for the accident on Diversity.
I have sent the money down to Dad and you should speak to him and he will organise to pay [your necessary bills]. I would do this myself but as you know I am currently laid up in hospital with a bad back and Dad has kindly offered to do this on my behalf.
I have told Dad that you will sign the attached copy of this letter as an indication that you agree to its terms and conditions and Dad will not release any fund to you, or on your behalf, until you give him the signed acknowledgement.
I am glad things are looking a little brighter and I hope that everything gets fixed up next week in hospital for you. I will phone you shortly.”

13 On 16 October 1999, Ms Leonard signed the letter agreeing to the terms and conditions detailed in it (Ex PD4/5). At trial, the plaintiff will rely on the Contracts Review Act 1980 and seek to set aside this acknowledgement.

14 In December 2001 Ms Leonard commenced proceedings against both Kerry Eckersley and Gaincrew. After commencing legal proceedings against her brother, I accept that any attempt to obtain information from her brother would not have been fruitful. In any event, she has had no contact with her brother since January 2000 (t 7.30).

The Law

15 It is common ground that the applicable legislation is the Limitation of Actions Act 1974 (Qld).

16 Pursuant to s 11 of the Limitation of Actions Act, the limitation period in respect of the plaintiff’s cause of action expired on about 31 December 2001.

17 Sections 30 and 31 of the Limitation of Actions Act provide:

“30 Interpretation

(1) For the purposes of this section and sections 31, 32, 33 and 34—

(a) the material facts relating to a right of action include the following—

(i) the fact of the occurrence of negligence, trespass, nuisance or breach of duty on which the right of action is founded;
(ii) the identity of the person against whom the right of action lies;
(iii) the fact that the negligence, trespass, nuisance or breach of duty causes personal injury;
(iv) the nature and extent of the personal injury so caused;
(v) the extent to which the personal injury is caused by the negligence, trespass, nuisance or breach of duty;
(b) material facts relating to a right of action are of a decisive character if but only if a reasonable person knowing those facts and having taken the appropriate advice on those facts, would regard those facts as showing—

(i) that an action on the right of action would (apart from the effect of the expiration of a period of limitation) have a reasonable prospect of success and of resulting in an award of damages sufficient to justify the bringing of an action on the right of action; and
(ii) that the person whose means of knowledge is in question ought in the person’s own interests and taking the person’s circumstances into account to bring an action on the right of action;

(c) a fact is not within the means of knowledge of a person at a particular time if, but only if—

(i) the person does not know the fact at that time; and
(ii) as far as the fact is able to be found out by the person—the person has taken all reasonable steps to find out the fact before that time.
(2) In this section—

appropriate advice , in relation to facts, means the advice of competent persons qualified in their respective fields to advise on the medical, legal and other aspects of the facts.


…

31 Ordinary actions

(1) This section applies to actions for damages for negligence, trespass, nuisance or breach of duty (whether the duty exists by virtue of a contract or a provision made by or under a statute or independently of a contract or such provision) where the damages claimed by the plaintiff for the negligence, trespass, nuisance or breach of duty consist of or include damages in respect of personal injury to any person or damages in respect of injury resulting from the death of any person.

(2) Where on application to a court by a person claiming to have a right of action to which this section applies, it appears to the court—


(a) that a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation for the action; and

(b) that there is evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation; the court may order that the period of limitation for the action be extended so that it expires at the end of 1 year after that date and thereupon, for the purposes of the action brought by the applicant in that court, the period of limitation is extended accordingly.

(3) This section applies to an action whether or not the period of limitation for the action has expired—


(a) before the commencement of this Act; or

(b) before an application is made under this section in respect of the right of action.”

Notices of motion filed by the plaintiff

18 There have been a number of relevant motions filed by the plaintiff relating to the proposed defendants. The notices of motion fall within the definition of “action”. The motions are as follows:

(1) 4 October 2005, seeking to join Windsurf and Wyvill as defendants in these proceedings.

(2) 9 November 2005, an amended notice of motion that sought the same order as above plus an additional order that leave be given to commence proceedings against Windsurf and Wyvill in accordance with s 60C and/or s 60G of the Limitation Act 1969.

(3) 22 June 2006, seeking orders firstly, that Windsurf, Wyvill, Pettit & Carlson Pty Limited and Beach Craft Boats Pty Limited be joined as third, fourth, fifth and sixth defendant; and secondly, that the plaintiff be given leave to proceed against the proposed third, fourth, fifth and sixth defendants in accordance with s 60C and/or s 60G of the Limitation Act 1969 or other relevant Queensland Statute.

(4) 24 July 2006, seeking orders that Windsurf, Wyvill, Pettit & Carlson Pty Limited, Peter Carlson and Beach Craft Boats be joined as third, fourth, fifth and sixth defendants and that the plaintiff be given leave to proceed against the proposed third, fourth, fifth and sixth defendants in accordance with s 60C and/or s 60G of the Limitation Act 1969 or other relevant Queensland Statute.

(5) 27 October 2006, a further amended notice of motion seeking orders that Windsurf, Wyvill, Pettit & Carlson Pty Limited and John Carlson be joined as third, fourth, fifth and sixth defendants and that the plaintiff be given leave to proceed against the proposed third, fourth, fifth and sixth defendants in accordance with s 60C and/or s 60G of the Limitation Act 1969 or other relevant Queensland Statute.

(for all motions – see Ex D).

19 The exercise of the jurisdiction created by s 31(2) of the Limitation of Actions Act operates upon the period of limitation otherwise applicable, here the three year period prescribed by s 11. The court may make an order which has the effect of altering the prescribed period so that it expires at the end of one year after a date which is ascertained in accordance with paragraph (a) of s 31(2). On its face, s 31 authorises the obtaining of an extension before the institution of the action within the period so extended. However, s 31 may also be utilised where an action already has been instituted (s 31(3)) – see Queensland v Stephenson [2006] 226 CLR 197.

20 In my view “on application to a Court” is the relevant notice of motion that seeks to extend the limitation period in relation to the specific proposed defendant. On 9 November 2005, or shortly after, Windsurf and Wyvill were put on notice of the orders sought against them. Similarly the date of the application so far as the Pettit and Carlson Pty Limited and Beach Craft Boats Pty Limited is 22 June 2006. The date of the application so far as John Carlson is concerned is 27 October 2006.

The plaintiff’s knowledge and her claim against Wyvill and Windsurf

21 Before the limitation period expired and at the time the plaintiff commenced these proceedings she did not know that there was or could be a case against other parties. The plaintiff had no knowledge as to who designed or built Diversity. She did not know that her brother Kerry Eckersley and Gaincrew would come to say that the surveyor or boat builder was to blame.

22 I shall deal firstly, with whether the limitation period should be extended in relation to Windsurf and Wyvill; and secondly, whether the limitation period should be extended in relation to John Carlson. Beach Craft is in liquidation.

23 As provided by s 30(1)(b), a material fact is a material fact of a decisive character, only if a reasonable person having knowledge of the fact would, having taken advice, regard the fact as showing that he or she would have a reasonable prospect of success and that he or she ought to bring an action.

Imputation of knowledge

24 Ms Leonard’s Counsel submitted that the test of the reasonableness of the steps taken by an applicant to ascertain a material fact is objective, with regard to the background and situation of the applicant (Castlemaine Perkins Limited v McPhee (1979) Qd R 469) and that Ms Leonard was not a highly educated person and as such left the matter in the hands of her solicitors. Ms Leonard also submitted that the knowledge of Mr Schipp, who was aware of the statement of Wyvill on 15 April 2005 and the survey report of Carlson on 18 October 2005 is not knowledge that is imputed to the plaintiff in light of Randel v Brisbane City Council (1984) 2 Qd R 276; Neilson v Peters Ship Repairs Pty Limited [1983] 2 Qd R 419.

25 On the other hand, Counsel for Mr Wyvill submitted that all the necessary information was known to the plaintiff’s solicitor, and the plaintiff was clear and unequivocal in her position that she relied on her solicitor in taking any action necessary on her behalf. I accept that the plaintiff did not have any legal knowledge and was reliant on her solicitor. Mr Wyvill submitted that asking your solicitor as to who was responsible for the vessel being in the water without complying with the relevant code is something clearly any person acting reasonably would be able to do. The solicitor is not an expert in boat building and the requirements and obligations involved in certification process. The solicitor is reliant on expert advice in relation to these aspects of the case and he sought advice.

26 In Marshall v Minister for Education of Queensland [2004] QSC 135 Jones J stated that the question of whether the material fact of a decisive character must be known to the plaintiff personally or whether the solicitor’s knowledge of the material fact can be imputed to the plaintiff was authoritatively determined in Neilson v Peters Ship Repair Pty Ltd [1983] 2Qd R 419 where it was held that the knowledge of the solicitor is not to be automatically imputed to a client seeking an extension of time under s 31.

27 In cross examination the plaintiff said that she supplied her solicitor with a video showing where the stairs were and what they looked like to her solicitor right at the beginning (t 20.14-22).

28 Ms Leonard’s evidence given in Court was at odds with that contained in her affidavit and with her solicitor’s evidence as to the critical date upon which she acquired the knowledge, firstly, of the identity of the surveyor and boat builder; and secondly, that they bore blame and responsibility for the accident. She deposed that she did not know, until shortly before swearing her affidavit, that her brother Kerry and Gaincrew relied on the skills of Windsurf for firstly, the preparation of the plans of the construction of the vessel; and secondly, upon the advice of Robert K Wyvill, to ensure that the vessel complied in all respects with surveying requirements.

29 During cross examination of the plaintiff (which occurred after the luncheon adjournment) the following exchange took place:

“Q. Do you recall that you were shown a cross-claim? Was that something that was explained to you?
A. I wasn’t shown it, but I had notification of it, yes.

Q. You were told that your brother and his company were suing my client, Mr Wyvill?
A. Yes.

Q. And I think Windsurf?
A. Yes.

Q. That was at about the time that the cross-claim was made?
A. Yes, around about then, yes. I was told in May.

Q. Early in May, late in May, not sure?
A. Sorry?

Q. That is May 2005?
A. Or was it April - one of those. I think it was April, sorry.

Q. April 2005?
A. Yes.”
(t 21.22-45)

30 I accept that the plaintiff knew of the existence of a cross claim which named Wyvill and Windsurf in May 2005. That much is clear. (The cross claim was not filed until May 2005) together with the affidavit of Habib Mellick.

31 On 17 May 2005, Kerry Eckersley and Gaincrew filed a cross claim against Windsurf Holdings Pty Limited t/as Mark Ellis Marine Design (first cross defendant to first cross claim), Robert K Wyvill (second cross defendant to first cross claim) and Associate Marine Insurers Agencies Pty Limited (third cross defendant to first cross claim) (Ex PD6/1).

32 It is the affidavit of Habib Mellick Jnr (sworn 12 April 2005), solicitor for Gaincrew and Eckersley which provided the information which has led the plaintiff to seek to join Wyvill and Windsurf. Mr Mellick Jnr deposed that during the course of 2004, documentation was provided to the plaintiff’s solicitor that included various photographs of the vessel during stages of construction, a stability report and marine architect plans. Mr Mellick Jnr says that construction of the vessel was completed in Brisbane in or about late 1998, only some weeks prior to the incident on 31 December 1998. At or about the time possession of the vessel was taken by Gaincrew, a certificate was provided by Mr Robert K Wyvill, an accredited marine surveyor confirming that the vessel complied in all respects with the USL Code for a Class 1B ship.

33 Further, Mr Mellick Jnr deposed that he has been instructed by Mr Eckersley that he [Mr Eckersley] and Gaincrew relied upon the skill and expertise of Windsurf with respect to the preparation of the plans for the construction of the vessel, and also Robert K Wyvill, to ensure that the vessel complied in every respect with survey requirements.

34 Since the filing of this affidavit, Mr Mellick, despite three requests, has not provided any further information to the plaintiff’s solicitor. The plaintiff is unable to provide any evidence as to whether the reliance occurred because of the survey, a conversation or some other correspondence between Eckersley, Gaincrew and Wyvill.

35 In February 2006, most likely on 24 February 2006, Mr Gregory Schipp the plaintiff’s solicitor says that he informed the plaintiff that a cross claim had been filed against Windsurf Holdings Pty Limited t/as Mark Ellis Marine Design, as first cross defendant and against R K Wyvill, as second cross defendant.

36 Ms Leonard says that she did not know that there were design faults in Diversity until she was made aware of the reports of Mr. Burge. She says that she did not know that there was any link between her injuries and faults and acts or omissions of Windsurf or Mr. Wyvill, until becoming aware of the allegations made by Mr. Mellick Jnr.

37 In cross examination, the plaintiff clarified that she was referring to Mr Burge’s report dated 28 September 2003. However, it was the report dated 12 November 2004 where Mr Burge expressed the opinion that the absence of handrails on the stairway meant that the vessel did not comply with a designation 1B Survey at the time of the accident and consequently it did not comply with the USL Code. Likewise it is in Mr Burge’s report dated 12 November 2004 wherein Mr Burge opines to s 5 of the USL Code subs E63 Stairways and Ladders states that stairways shall be well lighted by day and night and emergency lighting is stipulated for the service and accommodation of stairways. Mr Burge says that under normal operating conditions it is not possible to switch off the emergency lighting and that it is difficult to understand why it was thought to be necessary as the emergency batteries ought to have been able to supply power to the emergency lighting system and the other emergency battery supplied systems for much longer than the hours of darkness. I find that the plaintiff was not seized with the knowledge of non-compliance with the Code in relation to lighting and handrails until 12 November 2004.

38 I accept that the plaintiff, shortly after the accident occurred, was aware that there was no handrail on the stairway and this together with the lack of lighting caused her to fall. In November 2004, the plaintiff knew that the absence of the handrail and lack of lighting in the stairwell meant that the vessel did not comply with the USL Code.

39 However, knowledge as to the name of a potential defendant and their expertise per se do not constitute a material fact of a decisive nature. The question is as to the date the plaintiff was appraised of the contents of the Mellick affidavit. The plaintiff’s solicitor does not have a specific file note as to when this information was imparted to the plaintiff. His recollection is that it did not occur until 24 February 2006. It is my view that the most likely time that the plaintiff obtained this knowledge was when she says that she knew of the cross claim, that is in May 2005. It would have been more likely that the plaintiff’s solicitor explained the existence of that claim and what was being asserted in the Mellick affidavit, at that time.

40 In May 2005 at the earliest, I find that the plaintiff became aware that Wyvill performed a survey of the vessel. Mr Wyvill in his survey stated that the vessel complied with the USL Code 1B and I accept that Eckersley and Gaincrew relied upon that expertise. If I am wrong, it is my view that in May 2005 the plaintiff ought to have known that a requirement of the USL Code was that there should have been a handrail and lighting on the stairway. I accept that there is evidence to the effect that Mr Eckersley turned off the emergency lighting to save power but this leaves in issue the question of whether there was sufficient lighting.

41 Mr Wyvill is an accredited marine surveyor in the State of Queensland and has been so since 1996. He is familiar with the requirements of the Transport Operations (Marine Safety) Act 1994 (Qld) and the Regulations relating to the building and registration of ships (such as the ship Diversity) for commercial use in Queensland; the accreditation in Queensland of ship designers, ship builders, marine surveyors inter alia and their responsibilities under the Regulations.

42 Mr Wyvill provided a survey and valuation dated 14 December 1998. Mr Wyvill, in a letter to the Manager, Textron Finance Corporation (Australia Pty Limited) stated that he carried out a final inspection of the ship. Mr Wyvill stated that he carried out a final inspection of the ship and equipment fitted and he considered the ship to be complete and provided with safety equipment as required. A valuation of Diversity was attached - Ex PD4/2.

43 A fax dated 11 July 2005, from the Captain John Watkinson, general manager of Marine Safety, Queensland puts into doubt that Mr Wyvill’s inspection and the initial certification of compliance led to the registration of the vessel. Relevantly that letter reads:

“I refer to your request at the meeting this morning for written advice concerning your role in the initial certification of the above-mentioned ship.
Maritime Safety Queensland’s files indicate that the initial registration, including a Restricted Use Flag, issued for the ship ‘Mahalo II’ 20584QB (at the time called ‘Diversity’) was not based on any report or Certificate of Compliance issued or authorised by you.”

44 However, I accept for the purposes of this application, that Mr Wyvill did not provide the final certification in relation to the vessel. He did however provide a certification about three weeks prior to the occurrence of the accident. Eckersley and Gaincrew are asserting that they relied on Mr Wyvill’s certificate. More importantly in Mr Wyvill’s defence to the cross claim, he admits that he provided Eckersley and Gaincrew with an insurance report of the condition of the vessel and its value for the purposes of valuing the vessel to obtain insurance for its replacement in the event of damage to the vessel.

45 Ms Leonard’s Counsel submitted that she has shown an arguable case. Mr Wyvill’s Counsel submitted that the case against him was misconceived and hopeless, because the only allegation asserted against Mr Wyvill, he maintains, was that his statements were relied upon by Eckersley and Gaincrew, without establishing how this led to any duty or obligation being owed. Nevertheless, the plaintiff may argue that he certified the vessel as complying with the USL Code when it did not and that his omissions led to the defects not being rectified such that the plaintiff fell and was injured. It is my view that the plaintiff’s case has reasonable prospects of success. The plaintiff has had numerous operations to her left knee. She takes painkillers. She is unable to work and ambulates with the aid of a walking stick and brace. Some of the damage to her knee has been caused by medical treatment. However, it is my view that the plaintiff has serious injuries to her knee which might result in an award of damages sufficient to justify the bringing of an action on the right of an action – s 30(1)(b)(i).

46 To summarise, the plaintiff already knew there was no handrail on the stairwell and there was no lighting. She knew that the vessel did not comply with the USL Code, as it should have had a handrail on the stairwell. The identity and involvement of Mr Wyvill was the last piece of information she needed. As previously stated, it is my view that the plaintiff knew the identity of Mr Wyvill and his involvement as an accredited marine surveyor with Diversity by May 2005 at the earliest. The relevant application was filed on 9 November 2005, which is within the one year period allowed for acquisition of the knowledge of material fact of a decisive factor. Therefore the plaintiff has passed through the s 30(1)(a)(ii) and (iii) threshold.

47 I now turn to consider whether it is just and reasonable to extend the limitation period in respect of Mr Wyvill. Mr Wyvill submitted that he would not be afforded a fair trial for two main reasons, namely the lack of documentation and the expiration of his insurance cover.

48 Mr Wyvill held Professional Indemnity Policies from 1996. They are “claims made” policies with the following conditions:

“You are only insured if the risk arises directly from a claim or intimated to you and notified to the Managers during the period of the policy.
…
A claim made against or intimated to you after the period of insurance, arising out of circumstances notified to the managers during the period of insurance as circumstances which might give rise to a claim.” (Aff, 19/02/2007)

49 Mr Wyvill deposed that had the plaintiff or the defendants made a claim against him before 1 January 2003, he would have been covered for professional indemnity by QBE.

50 Mr Wyvill deposes that the documents and recollections of the boat builder, designer and compliance marine surveyor would have assisted in exculpating him from any responsibility but are now unavailable, through no fault of his own, and the entity most likely to have the most significant information, the boat builder, is in liquidation.

51 Windsurf is resident in Western Australia. The contract between Windsurf and Gaincrew was made in January 1998. The vessel was constructed during 1998. The builder, Beach Craft, contracted with Gaincrew. The builder is in liquidation. The “Vessel Building Agreement and Technical Specifications” document is available. It indicates that the vessel was to comply with USL Code B. There are plans, various photographs of the vessel during construction, stability report and marine architect plans in existence.

52 I accept that with the passing of nine years there will be presumptive prejudice. There are some documents in existence. There are witnesses available to give evidence. Documents have been produced on subpoena by Mr Wyvill, Mr Carlson and Maritime Safety Queensland. Mr Green who was a director of Beach Craft was involved in the construction of Diversity. There is no evidence as to his whereabouts. Mr Whitewood, a former director of Beach Craft, is available to give evidence although his state of knowledge of the important matters is unknown.

53 Other documentation is available including a letter dated 23 December 1998 from Mr Wyvill addressed to the manager, Textron Finance Corporation (Australia) Pty Ltd headed “Re: 18 Metre Commercial Ship Under Constructions by Beach Craft Pty Ltd for Gaincrew Pty Ltd t/as Quicksilver Diving Services’: a report No 743 identified as “Condition and Valuation Report for Class 1B Commercial Ship ‘Diversity” being a “Survey and Valuation Report” of the ship for insurance purposes; and a “Compliance Survey Report” by Pettit & Carlson dated 18 December 1998 signed by J D Carlson, Marine Surveyor, Accreditation No 2-23-171. There are also various photographs of the vessel during stages of construction, a stability report and marine architect plans, technical specification 12 February 1998, stability report 8 May 1998, half text plans January 1998 and six sketch plans.

54 Mr Wyvill and Mr Carlson also submitted that the claim should not be allowed to proceed as they cannot seek indemnity from their insurers. They referred to Creevey v Barrois [2005] NSWCA 264. In Creevey v Barrois the New South Wales Court of Appeal considered the question of whether delay resulting in a lost opportunity for the defendant to cross claim against a third party could prejudice a fair trial. The Court of Appeal in Creevey v Barrois held that the combination of a flexible rule with respect to the commencement of primary proceedings by an injured party, together with an inflexible limitation period on claims for contribution by a putative defendant, clearly has potential to cause results which may be arbitrary and unjust.

55 In Creevey v Barrois it was held that where the possible claim for contribution was shown to be viable and realistic, rather than a fanciful or theoretical possibility, an assumed loss of a right to cross-claim against a joint tortfeasor will give rise to significant prejudice sufficient to render it unjust to allow a claimant to proceed out of time.

56 Counsel for Mr Carlson acknowledged that the professional indemnity insurer is not a joint tortfeasor but he submitted that the same principle is applicable to Mr Carlson’s ability to seek indemnity from his insurer so that it would be unjust to allow the plaintiff to proceed against him. The same argument is applicable to Mr Wyvill’s situation except that Mr Wyvill has already been joined as a party to the proceedings.

57 I accept that both Mr Wyvill and Mr Carlson no longer have insurance cover. The case against them as cross defendants only comes into play if there is a finding of liability against one of the defendants. I shall refer more to Mr Carlson’s position later in this judgment.

58 However, Mr Wyvill is already a party to the proceedings and will have to prepare for trial in any event. Mr Wyvill has a good recollection of relevant events. The relevant documentation is available. It is my view that over all Mr Wyvill will be afforded a fair trial. The plaintiff has discharged her onus and I am satisfied that it is just and reasonable to extend the limitation period in respect of the plaintiff’s claim against Mr Wyvill.

Windsurf

59 In relation to the case against Windsurf, Ms Leonard relied on the material fact that she did not know the identity of the surveyors involved, namely Windsurf, until 24 February 2006. Windsurf submitted that Ms Leonard’s application must fail because Ms Leonard knew, or had she taken reasonable steps would have found out, the identity of Windsurf on any of three alternative dates: either shortly after the accident; shortly after the receipt by her solicitors of the report of Mr Burge dated 26 September 2003; or shortly after 17 May 2005 when the cross-claim and affidavit were filed against Windsurf.

60 To satisfy s 30(1)(c), Ms Leonard must not only not know of the material fact, but take all reasonable steps to find out the fact. Windsurf submitted that this could have occurred by a simple enquiry of her brother as to the identity of the builder or designer. I do not think so. The plaintiff had had no contact with her brother since January 2000. The relationship between the plaintiff and her brother would have irretrievably broken down in about December 2001 when the plaintiff commenced proceedings against Him. She could not seek information concerning the accident from him.

61 In May 2005 as previously stated the plaintiff became aware that Windsurf was the designer of the vessel and Eckersley and Gaincrew relied upon its expertise. By May 2005 the plaintiff either knew or ought to have known that Windsurf should have designed the Diversity so that it complied in all respects with the survey requirements and that one such requirement was that there should have been a handrail and proper lighting on the stairway and that there was not.

62 Windsurf further submitted that Ms Leonard had no reasonable prospect of success, in light of the “Technical Opinion in response to specific questions” of Mr Burge of 30 June 2006 which comments:

“It is common practice of vessel designers, when they are preparing ship’s construction drawings, not to include minute details such as detailed drawings of or specifications of handrails for stairways.”

63 Whether Windsurf did not include the detailed drawing or specifications on the drawing is knowledge within Windsurf’s camp. It has not put on any affidavit evidence. What is known is that the stairway did not have a handrail and the lighting that was available may not have been adequate. Whether or not Windsurf included a handrail on the stairway in its design and whether it included enough lighting in the stairway are matters for trial. There is a director of Windsurf available and it is known that Mr Green was mainly involved in the design of Diversity but at this stage his whereabouts are not known. Windsurf has not put on any evidence as to actual prejudice. If Mr Green was not available to give evidence one would have expected Windsurf to put on evidence to this effect. In my view the plaintiff has discharged her onus to show that she has a reasonable prospect of success in her claim against Windsurf. It is my view that the plaintiff knew of the identity of Windsurf as the builder of Diversity in May 2005 at the earliest. The relevant application was filed on 9 November 2005 which is within the one year of the acquisition of the knowledge of a material fact of a decisive factor. The plaintiff has passed through the s 30(1)(a)(ii) and (iii) thresholds.

64 Once again I accept with the passage of nine years there is presumptive prejudice. There are design specification documents available. There are other documents of less relevance available which I have outlined earlier. Windsurf is already a party to the proceedings and will have to prepare for the trial in any event. It is my view that Windsurf will be afforded a fair trial. The plaintiff has discharged her onus and I am satisfied that it is just and reasonable to extend the limitation period in respect of the plaintiff’s claim against Windsurf.

Beach Craft

65 I accept that it was not until June 2006 that the plaintiff became aware that according to the agreement between Beach Craft and Gaincrew, Beach Craft had to build the boat according to the USL Code. Beach Craft has been deregistered. As I understand it, the Court cannot make an order against Beach Craft until such a time as it is restored to the company register.

The plaintiff’s knowledge and her claim against Carlson

66 From 1997 to 2000, Mr John Carlson was a director of Pettit & Carlson Pty Ltd, which traded as Consulting Marine Engineers & Surveyors. The other director was Brian Pettit. The business of Pettit & Carlson Pty Ltd was dissolved in 1999 and the company was deregistered on 4 May 2003. After a period trading as a Consulting Marine Engineer on his own account, under the company name John Carlson Pty Ltd, Mr Carlson retired from working as a marine surveyor in 2002.

67 In December 1998, whilst an accredited surveyor with Queensland Transport, Beach Craft Boats requested Mr Carlson to verify the safety equipment and to observe sea trials of the vessel “Diversity”, to certify that it complied with the USL (Uniform Shipping Laws) Code. He issued a Compliance Survey Report on behalf of Pettit & Carlson Pty Ltd on 18 December 1998, [Ex PD/4/1].

68 Mr Carlson accepted that the knowledge of the plaintiff’s solicitor, Mr Schipp, were not imputed to Ms Leonard, but submitted that this principle is of little assistance to Ms Leonard from February 2005 when the prospective liability of the surveyor in respect of the vessel was raised in the pleadings filed in court, namely the affidavit of Mr Habib Mellick. However, the affidavit of Mr Mellick does not mention Mr Carlson and was sworn later, in April 2005.

69 Mr Carlson further submitted that as Ms Leonard had already sued the first and second defendants and her medical practitioners in relation to the accident, and one of the defendants was her brother, it could not be said that she took all reasonable steps to find out the identity of the relevant surveyor. I have discussed the plaintiff’s inability to obtain information from her brother earlier in this judgment.

70 The material fact that the plaintiff relies upon in relation to Mr Carlson is that without his survey as marine surveyor which indicated compliance with the USL code, the boat would not have been used, and therefore, the accident would not have happened. It may also be pleaded that Mr Carlson owed a duty of care to users of the vessel when he certified that the vessel complied with the USL Code when it did not comply in relation to lighting and handrails and that the incorrect certification caused injury to the plaintiff.

71 Ms Leonard submitted that this material fact was not known until at least 30 June 2006, when the report of Mr Burge dealt with the roles of the marine surveyor. But it was already known the compliance certificate certified that the vessel complied with the USL Code. However, it is arguable that it did not comply in relation to the handrails and lighting. The 2004 Burge report said as much. Ms Leonard submitted that the material fact falls under s 30(1)(a)(iii), which deals with causation. She further submitted that s 30(1)(b)(i) and (ii) provides that a material fact is only a material fact of a decisive character if a reasonable person having knowledge of that fact would, having taken advice, regard the fact as showing that she would have a reasonable prospect of success and that she ought to bring in action on the right of action. Mr Carlson submitted that the plaintiff’s reliance upon s 30(1)(a)(iii) could not be relied upon, as the plaintiff’s assertion is not a fact, let alone a material fact, but merely an assumption, and further, that as an assumption it is erroneous and without foundation.

72 Mr Wyvill became aware of the claim against him in about May 2005. As a result, in October 2005, Mr Wyvill informed the solicitors acting for Eckersley and Gaincrew of Mr Carlson’s role in the final certification process. On 18 October 2005 the plaintiff’s solicitor received a copy of Mr Wyvill’s letter but, at that stage, did not have a copy of the final certificate issued by Mr Carlson. I accept there is some delay on the solicitor’s part between receipt of the Wyvill letter and the issue of the subpoena. In order to establish that Mr Carlson gave a final certificate which certified that the vessel complied with the USL Code, it is necessary that the certificate be obtained and inspected. Once this was done, it is my view that the plaintiff had knowledge of the material facts of a decisive nature. On 14 March 2006, the plaintiff’s solicitor issued a subpoena, which I infer was at a date shortly after 18 March 2006, to Mr Carlson.

73 Upon receipt of the subpoena Mr Carlson telephoned the plaintiff’s solicitor and forwarded him a copy of the compliance report. In June 2006, Ms Leonard was told by her solicitor Mr Gregory Schipp that according to documents produced on subpoena, Mr Carlson provided a survey, dated 18 December 1998 in which he said that the vessel complied with the USL Code. The plaintiff was already seized with the knowledge that the vessel did not comply with the USL Code in relation to lighting and handrails. In June 2006, she was informed that a conference was held between counsel and Mr Burge on 25 May 2006. The plaintiff says that it was in June 2006 that she became aware that she had a case against Mr. Carlson.

74 It was in March 2006 at the earliest, that the plaintiff’s solicitor obtained a copy of the compliance certificate issued by Mr Carlson. The plaintiff relied on her solicitor for legal advice and I accept that it was in June 2006 that the plaintiff became aware that she had a claim against Mr Carlson. It is also my view that had the plaintiff’s solicitor acted expeditiously and subpoenaed the Carlson certificate earlier, the earliest that the plaintiff could have or ought to have known that she had a case against Mr Carlson was in November 2006.

75 Mr Carlson submitted that to succeed in her action, Ms Leonard must show that the cause of action for which she requires an extension under the Act is viable so that the provision of an extension is not a futility (Williams v The Minister for Aboriginal Land Rights Act 1983 (1994) 35 NSWLR 497 per Kirby P at 515). Under s 30(b)(1) of the Limitation of Actions Act the plaintiff has to show that she has a reasonable prospect of success resulting in an award of damages sufficient to justify bringing the action.

76 Mr Carlson submitted that the Compliance Certificate in respect of the USL Code was irrelevant, given that the “family outing” at which the damage occurred was private recreation. Mr Carlson cited Clause 39 of the Transport Operations (Marine Safety) Regulation 1995 (Qld), which was in force at the relevant time, which provides that where a vessel is used for genuine private recreation by the owner, the provisions of the regulation applying to the ship, or its operation, as a commercial or fishing vessel do not apply. Mr Carlson further submitted that at the time of the accident the vessel had not been registered, and was not be operated as a commercial vessel. Accordingly, he submitted, the action based on the Certificate must fail.

77 However, a commercial vessel is defined in the USL Code as:

“A vessel which is not used solely for pleasure or recreation and the use of which is made, allowed or authorised in the course of any business or in connection with any commercial transaction and subject to any State legislation includes any Government vessel other than one under the control of the Minister for Defence”

78 Whether the vessel was used solely for pleasure or recreation is a fact to be ascertained at trial. At trial the interplay between the Code of Clause 39 can be properly considered. It is my view that the plaintiff has a case with reasonable prospects of success to advance against Mr Carlson. The notice of motion seeking to join Mr Carlson was filed on 27 October 2006 which was within the one year period. It is my view that the plaintiff has passed through the s 30(1)(a)(i), (ii) and (iii) gateways in so far as Mr John Carlson is concerned.

79 I turn to consider whether it is just and reasonable to extend the limitation period. As Mr Carlson submitted, if the plaintiff were to satisfy the conditions of s 31 of the Act to permit an extension of time, the section does not confer a presumptive right to an order extending time, but confers a discretion upon the Court which should only be exercised in favour of Ms Leonard where, in all the circumstances, “justice is best served by so doing”, in accordance with Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541.

80 Mr Carlson gave evidence that apart from the Compliance Survey Report which he has submitted to the court, he is no longer in possession of any documentation concerning his inspection of the “Diversity” on behalf of Pettit & Carlson Pty Ltd. Further, he said that neither Mr Pettit, the other director of the dissolved company Pettit & Carlson Pty Ltd, nor the dissolved company’s accountants, Ham Brothers of Cannon Hill, Queensland, are in possession of any relevant business records. I have already outlined the documents that are available.

81 The role of Mr Carlson was limited. He gave evidence that it was to issue the final compliance certificate survey on the vessel and “do the safety equipment”. He noted all the equipment on board and what tests were done. He also documented as to what trials were done on the vessel. Engine numbers and safety tests were recorded (t 28.24-32). In evidence, Mr Carlson stated that he had a recollection of what he did when he read through his report. The report and the two compliance documents he wrote are available. Mr Carlson has recall of the events for him to be afforded a fair trial.

82 That leaves the issue of whether it can be said that Mr Carlson will receive a fair trial when he has lost the benefit of insurance cover due to the delay in the plaintiff bringing her claim against him. Professional indemnity insurance for Pettit & Carlson Pty Ltd was arranged by AON Insurance Brokers and underwritten, on a 50% liability basis, by both Royal & Sun Alliance Insurance Australia Ltd and CGU Professional Risks Insurance. Pettit and Carlson Pty Limited was dissolved in 1999 and the company was deregistered on 4 May 2003. The Pettit & Carlson Pty Ltd policy lapsed in May 2001, although the company was covered on a “run-off” basis until 22 May 2002.

83 Mr Carlson retired in 2002. He continued his insurance cover on a run off basis until 22 May 2003. So far as insurance is concerned his position differs from that of Mr Wyvill because Mr Carlson is not already a party to these proceedings.

84 McHugh J referred to a situation similar to that Mr Carlson finds himself in, he illustrated one of the broad rationales for the enactment of the limitation period in Brisbane South Regional v Taylor as:

“…people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period. As the New South Wales Law Reform Commission has pointed out:

“The potential defendant is thus able to make the most productive use of his or her resources and the disruptive effect of unsettled claims on commercial intercourse is thereby avoided. To that extent the public interest is also served.”

85 I have found this to be a borderline case when exercising my discretion. It cannot be said to be automatic that a person will not receive a fair trial because insurance cover has elapsed. It is but one factor to be taken into account. Even when I also take into account that nine years have passed since the accident occurred, I am satisfied that Mr Carlson will receive a fair trial. It is my view that it is just and reasonable to extend the limitation period so far as the plaintiff’s claim against Mr Carlson is concerned.

86 Costs are reserved.

The orders I make are:

(1) I grant the plaintiff an extension of the limitation period to commence proceedings against Windsurf Holdings Pty Limited t/as Mark Ellis Marine Design & Management, Robert Kerry Wyvill and John Douglas Carlson up to and including 21 December 2007.

(2) I grant leave to join Windsurf Holdings Pty Limited t/as Mark Ellis Marine Design & Management, Robert Kerry Wyvill and John Douglas Carlson as defendants in these proceedings.

(3) An amended statement of claim is to be filed on or before 21 December 2007.

(4) Costs are reserved.
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