Mark Richard Betts and Mark Betts Nominees P/L v George Stewart John Justice No. 4225 Judgment No. SCGRG 92/502 Number of Pages 5 Limitation of Actions

[1993] SASC 4225

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA MULLIGHAN J

CWDS
Limitation of actions - general - Application for joinder of employer company in action by employee for damages for personal injuries - application made more than three years after the tort committed - company wishing to claim damages for loss of services of its servant - appeal against decision of Master allowing joinder of company and consequential amendment - argument that three year limitation period not applicable - plaintiff and company should be permitted to present argument at trial - grounds established capable of founding relief under s. 48 of Limitation of Actions Act - one ground necessarily futile, namely Company being informed that it had a cause of action - joinder and consequential amendments with one exception justified. Limitation of Actions Actss.34, 35, 36 and 48 considered.; Weldon v Neal
(1887) 19 QBD 394; Brook v The Flinders University of South Australia (1988) 47 SASR 119; Cliff and Anor v Quinn and Ors (1988) 54 SASR 151; Lovett v Le Gall (1975) 10 SASR 479 and Sola Optical Australia P/L v Mills (1987) 163 CLR
628 referred to.

HRNG ADELAIDE, 22, 30 July, 2 August 1993 #DATE 20:10:1993
Counsel for appellant:     Mr D A Trim
Solicitors for appellant:    Phillips Fox
Counsel for respondent:     Mr R A Cameron
Solicitors for respondent: Morcombe Townsend

ORDER
Appeal allowed.

JUDGE1 MULLIGHAN J This is an appeal against the decision of a Master granting leave to the plaintiff to join Mark Betts Nominees Pty Ltd ("the Company") as a plaintiff in this action and to further amend the statement of claim so as to incorporate a claim for damages by the Company. The plaintiff claims that he sustained severe personal injuries on 9th May 1989 in the course of assisting the defendant in the installation of a tank at the property of the defendant at One Tree Hill. He alleges that at the time he was injured he was employed by the Company both as a tank maker and general manager. The Company is the corporate trustee of the Mark Betts Family Trust which trades under the name of "Betta Tanks". 2. The plaintiff commenced proceedings against the defendant on 2nd March 1992 claiming that his injuries and consequential loss were caused by the defendant, its servants and agents. It is clear from the amended statement of claim and particulars provided by the plaintiff pursuant to R.46.15 of the Supreme Court Rules 1988 that he claims damages for economic loss and has included in that claim the cost of employing staff to replace him in the business conducted by the Company and a claim for loss of profits. In the amended defence, filed on 17th December 1992, the defendant pleads, inter alia, that if certain financial losses occurred as claimed, they were the losses of the Company and not the plaintiff. Consequently, the plaintiff, by Notice for Further Directions dated 9th February 1993, made the application which is the subject of this appeal. The learned Master accepted that the application was made pursuant to R.27 of the Supreme Court Rules 1988. The proposed joinder and the further amendment to the statement of claim, if allowed, would include in the statement of claim a cause of action by the Company against the defendant in negligence for damages for the losses sustained by it in consequence of the injuries to, and incapacity of, the plaintiff. The defendant opposed the application on the grounds that to grant the leave sought would be tantamount to the institution of a new cause of action offending the rule in Weldon v Neal (1887) 19 QBD 394 and further that the proposed claim of the Company is outside the limitation period of three years prescribed by s.36 of the Limitation of Actions Act 1936. The proposed amendment to the statement of claim does seek an extension of time within which the Company may bring its claim, pursuant to s.48 of the Act. It is asserted that there are certain facts material to the claim which were not ascertained by the Company until some point in time occurring after the expiration of the period of limitation prescribed by s.36. Those facts, as alleged before the learned Master, are that the Company was advised in February 1993 that it had a claim for the loss of the services of its servant and agent (the plaintiff) in the alternative to his claim for economic loss. 3. The learned Master took the view that the proposed joinder and amendment should be granted as the Company was seeking an extension of time in which to bring its action pursuant to s.48 and whether a basis could be established for the extension of time should be left to the trial of the action. The defendant appeals on the ground that the learned Master should have found that the proposed application for an extension of time was futile and consequently the application for leave to join the Company and leave to make the consequential amendments to the statement of claim should have been refused. Mr Trim cited Brook v The Flinders University of South Australia (1988) 47 SASR 119 where von Doussa J acknowledged that an application to amend will be refused if there are facts or reasons why "the s 48 relief must inevitably fail": pp.124-125. However, he went on to say that if the plaintiff establishes an arguable case for relief under s.48, leave to amend should be granted so that the merits of the claim can be resolved at trial. 4. After the appeal was instituted, but before it came on for hearing, the plaintiff filed an application seeking leave to further amend the statement of claim by pleading further facts justifying relief under s.48. The alleged facts are:-
    1. that in or about late August 1992 the Company ascertained from the report of a medical expert that the plaintiff may require further surgical treatment;
    2. that during the period of twelve months prior to February 1993, in particular in the period in or about September and October 1992, the Company ascertained that the financial viability of its business was seriously threatened because of the impairment to the working capacity of the plaintiff. 5. Mr Trim acknowledged, correctly in my view, that these facts, if established, are capable of founding relief pursuant to s.48. There was no objection to my hearing and determining this second application and I did so. Clearly, on this basis the Company should be joined as a party and the statement of claim amended accordingly. 6. However, the defendant requires the point raised by the appeal to be determined even though it may have no practical significance if at the trial the other factual bases for an extension of time are established. 7. Before turning to that matter, I mention that Mr Cameron contended that leave to join the Company and consequential amendment of the statement of claim should have been granted because the Company does not concede that its proposed claim is out of time. Mr Cameron argued that the period of limitation which applies to the Company is six years because it is s.35 which applies and not s.36. At all events the plaintiff and the Company wish to argue that such is the case. S.35 provides that actions founded on tort shall, save as otherwise provided in the Act, be commenced within six years next after the cause of action accrued and not after. S.36 provides as follows:-
    "36.(1) All actions in which the damages claimed consist of
    or include damages in respect of personal injuries to any
    person, shall be commenced within three years next after the
    cause of action accrued but not after.
    (2) In this section 'personal injuries' include any disease and
any impairment of a person's physical or mental condition." 8. These sections were considered in Cliff and Anor v Quinn and Ors (1988) 54 SASR 151 in the context of a claim by a partner spouse pursuant to s.34 of the Wrongs Act 1936. The Court held that in an action in tort for damages for personal injury time will start to run under s.35 and s.36 as soon as any damage is suffered. That principle must apply to the claim of the Company. All members of the Court held that s.36 applied to the claim of the partner spouse made pursuant to s.34 of the Wrongs Act. However, Mr Cameron drew attention to obervations of Cox J at pp.164-165:-
    "Of course, there will sometimes be a question whether the
    relationship between the damages claimed and some person's
    personal injuries is sufficiently direct to satisfy the nexus
    condition. Some of the cases show that the issue may be nicely
    balanced. See, for example, McGahie v Union of Shop
Distributive and Allied Workers (1966) SLT 74; Paterson v
Chadwick (1974) 1 WLR 890; (1974) 2 All ER 772; Ackbar v Green
(CF) and Co. Ltd (1975) QB 582; and Petricola v Metropolitan
Transit Authority (1988) Aust Torts Reports 67,461. I do not
    think that the difficulty, particularly in the case of a
    statutory right of action, is necessarily to be resolved by
    determining whether it is parasitical to another person's action
    or whether it stands, as it were, in its own right. Note the
    treatment of a loss of services claim in this respect in Curran
v Young (1965) 112 CLR 99; and State Government Insurance Office
(Qld) v Crittenden (1966) 117 CLR 412; cf Petricola v
    Metropolitan Transit Authority (supra). Much may depend upon
the policy discernible in the particular legislation." 9. In my view, the Company should not be deprived of the opportunity to present that argument at trial should the need arise. True it is that the opportunity would have been available in separate proceedings but the joinder of the Company as a plaintiff in these proceedings is sensible and desirable so that if there is merit in the Company's claim, there will not be overlapping in the assessment of its damages and those of the plaintiff for economic loss. It may be argued that relevant aspects of the decision in Cliff and Anor v Quinn and Ors (supra) were based upon the statutory right of action given to a partner spouse and because of the close relationship between the spouse and the immediate victim of the tort, a legislative intention to limit the time for proceedings by s.36 can be readily discerned but such intention is not so obvious in relation to claimants who are not married. I make no comment about any argument which may be advanced by the plaintiff and the Company but in the context of these proceedings they should be able to put the argument and the joinder is justified for that reason. 10. However, I accept the argument that the ground for the application of s.48 which was before the learned Master could not have justified an extension of time, if one was needed. S.48(1) empowers the Court to extend the time for instituting an action to such an extent and upon such terms (if any) as the justice of the case may require subject to s.48(3) which provides (inter alia) that the time cannot be extended unless the court is satisfied 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" and that in all the circumstances of the case, it is just to grant the extension of time. 11. The question is whether the Company being advised that it had a claim against the defendant for the loss of the services of its servant (the plaintiff) amounts to a fact material to its case. In Lovett v Le Gall (1975) 10 SASR 479 Bray CJ, with whom Walters J agreed, took the view that the phrase "takes in the whole complex of evidence and argument which will be advanced at the trial on (the plaintiff's) behalf", p.482. Wells J., at pp.485-486, said:-
    "Counsel concentrated most of their attention on the passage
    '... facts material to the plaintiff's case ...'. It seems to
    me that that passage must be read as a whole. When it is so
    read, the word 'material' denotes, in my opinion, facts that are
    not only relevant to the issues - which, I apprehend, may
    include the issue of damages - but are also of such a nature and
    of such weight that they may fairly be taken into account by a
    plaintiff who is in the course of considering whether he should
    or should not prosecute his claim to trial. Similarly, the word
    'case' has a much wider purview than the expression 'cause of
    action'; it comprehends, in my opinion, all evidence, law and
    argument to be relied on in court by the party concerned." 12. The High Court in Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR
628 considered the phrase and said, at pp.636-637:-
    "A fact is material to the plaintiff's case if it is both
    relevant to the issues to be proved if the plaintiff is to
    succeed in obtaining an award of damages sufficient to justify
    bringing the action and is of sufficient importance to be likely
    to have a bearing on the case. The Shorter Oxford English
    Dictionary defines the word 'material', inter alia, to mean 'Of
    such significance as to be likely to influence the determination
    of a cause'. Although a definition attributed to the sixteenth
    century, in our opinion it provides an apt guide to the
    intention of the legislature in choosing to refer, without any
    elaboration, to 'facts material to the plaintiff's case'." 13. Giving full effect to the observations in those cases, the receipt of advice by the Company, out of time, that it had a claim could not amount to a fact material to its case. It was not a matter which had any relevance to the Company's claim. In presenting its substantive case, it would not have been admissible. It is no more than an explanation, by inference, as to why it is out of time. To say that such a fact was material to the Company's case, without more, would be to acknowledge that whenever a person, who is out of time, learns that he or she would have had a case, but for the time limitation, there is a fact material to its case. 14. In my view, this ground, standing alone, is futile and should not have been the basis of granting the initial application. In that sense the appeal should be allowed. However, there are other grounds to grant the application. I think the first ground for relief under s.48 should be struck out but otherwise the joinder and the leave to amend the statement of claim should stand. 15. I shall hear the parties as to the orders which should be made.