McGowan v Hills Industries

Case •

[2017] VSC 122

•

21 March 2017
IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2014 05411

STEPHEN McGOWAN Plaintiff
v  
HILLS INDUSTRIES & ORS Defendants

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JUDGE:

KEOGH J

WHERE HELD:

Melbourne

DATE OF HEARING:

20 September 2016

DATE OF JUDGMENT:

21 March 2017

CASE MAY BE CITED AS:

McGowan v Hills Industries & Ors

MEDIUM NEUTRAL CITATION:

[2017] VSC 122

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PRACTICE AND PROCEDURE – Appeal from an Associate Justice – Appeal under r 77.06 of the Supreme Court (General Civil Procedure) Rules 2015 – Applebee v Monash City Council [2013] VSC 481 applied – Error demonstrated.

PRACTICE AND PROCEDURE – Application for extension of time to bring an action in negligence – Limitation of Actions Act 1974 (Qld) ss 11, 30 and 31 – Whether material fact of a decisive character relating to the right of action not within the means of knowledge of the plaintiff until after the relevant date – Injury caused by fall - Allegedly defective ladder – Plaintiff’s knowledge of manufacture of ladder in Queensland – Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 – Queensland v Stephenson (2006) 226 CLR 197 – Whether significant prejudice to first defendant – Whether fair trial likely – Brisbane Regional Authority v Taylor (1996) 186 CLR 541.

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APPEARANCES:

 Counsel Solicitors
For the Plaintiff Mr M Seelig Slater and Gordon Lawyers
For the First Defendant Mr J Ruskin QC with Mr J Simpson Clayton Utz
For the Second Defendant Mr M Hooper Lander & Rogers Lawyers

HIS HONOUR:

Introduction and summary

  1. In this proceeding the plaintiff, Mr McGowan, alleges that he suffered personal injury when he fell from a ladder on 17 January 2008, that the ladder was manufactured by the first defendant, Hills Industries Ltd (Hills), and that there was negligence in the manufacture of the ladder which was a cause of his fall and the injuries.  It is now common ground that the ladder was manufactured by Hills in Queensland.  On an earlier application by summons issued by Hills, T Forrest J ruled that the law of Queensland is the substantive law which governs Mr McGowan’s cause of action against Hills.[1]

    [1]           McGowan v Hills Limited (Ruling No 1) [2015] VSC 674 (27 November 2015).

  1. Pursuant to s 5 of the Choice of Law (Limitation Periods) Act 1996 (Qld), the limitation law of Queensland is to be regarded as part of the substantive law of that State. The Limitation of Actions Act 1974 (Qld) (the QLAA) is the statute which governs limitation law in Queensland. Section 11 of the QLAA provides that the limitation period applicable to Mr McGowan’s cause of action against Hills is three years. That period expired on 17 January 2011. By summons filed 18 December 2015 Mr McGowan made application pursuant to s 31 of the QLAA to extend the limitation period to 7 October 2014, which is the date on which the proceeding was issued. That application was dismissed by an Associate Justice on 23 June 2016. By amended notice of appeal dated 2 August 2016 Mr McGowan brings an appeal pursuant to r 77.06 of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules) from the Order of the Associate Justice made 23 June 2016 dismissing his application for extension of the limitation period applicable to his cause of action against Hills.

  1. There is no dispute that this appeal is by way of re-hearing, and that in order to succeed on the appeal Mr McGowan must demonstrate that the Order from which he appeals was the result of legal, factual or discretionary error by the Associate Justice.[2]

    [2]Applebee v Monash City Council [2013] VSC 481 [9]–[20] (6 September 2013); David Glass (a pseudonym) v Chief Examiner & Ors [2015] VSC 29 (30 January 2015) [2].

  1. At issue on this appeal is the construction and application to the facts of this case of ss 30 and 31 of the QLAA. Section 30 provides:

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.

Section 31 provides:

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.

  1. Hills accepts that Mr McGowan’s action against it fell within s 31(1) of the QLAA and that s 31(2)(b) was satisfied. The parties agree that Mr McGowan’s cause of action expired on 17 January 2011. The proceeding was issued on 7 October 2014 and Mr McGowan seeks extension of the limitation period to that date. The parties agree that in order to succeed on the s 31(2) provision it is necessary for Mr McGowan to establish that a material fact of a decisive character relating to his right of action against Hills was not within his means of knowledge until after 7 October 2013 (the relevant date).

  1. Grounds 1, 2 and 3 in the amended notice of appeal are simply complaint in relation to the Associate Justice’s conclusion that the plaintiff’s application to extend the limitation period should not be granted, and was dismissed.  The remaining grounds relied upon by the plaintiff are:

4.The Learned Associate Justice erred in finding that the fact that the ladder was manufactured in Queensland was not a material fact of decisive character;

5.The Learned Associate Justice erred in finding that the plaintiff had failed to establish that the material fact of a decisive character did not come to his knowledge until after 7 October 2013;

6.The Learned Associate Justice erred in finding that the plaintiff commenced proceedings because he appreciated that he had a worthwhile action to pursue;

7.The Learned Associate Justice erred in her application of the term “appropriately advised” as used by the Limitation of Actions Act 1974 (Qld);

8.The Learned Associate Justice erred in the exercise of her discretion not to extend the limitation period because:

a.Her Honour did not take into account the fact that the ladder was still in existence;

b.Her Honour did not take into account the fact that the ladder was available, still, for testing;

c.Her Honour did not take into account the case for the Plaintiff would be limited to the defective manufacturer [sic] of the ladder; and

d.Her Honour did not take into account the fact that there had been no attempt on the part of the First Defendant to seek the appropriate records or witnesses, even though the defective manufacture of the ladder would have been brought to its attention.

By amended notice of contention dated 16 September 2016, Hills contends that the place of manufacture of the ladder was not a ‘material fact’ for the purposes of ss 30(1)(a) and 31(2) of the QLAA.

  1. The following evidence was before the court in relation to this appeal:

(a)        affidavits of Mr McGowan sworn 9 November 2015, 9 March 2016 and 25 May 2016;

(b)        affidavits of David Fox, general counsel of Hills, affirmed 12 November 2015, 7 March 2016 and 20 April 2016; and

(c)        affidavits of Ashley Tsacalos, solicitor for Hills, sworn 8 October 2015 and 8 March 2016.

  1. For the reasons that follow, the plaintiff’s grounds of appeal [4] – [8] have been made out.  The plaintiff’s appeal will be allowed. 

Factual background

  1. The Associate Justice appeared to receive only limited assistance in relation to the broader factual background which was relevant to the determination of this application.  Mr McGowan was born on 10 October 1958.  He resides in Tongala in the State of Victoria. On 21 February 2007 he completed a document titled ATS Subcontractor Application Form. Mr McGowan was engaged by Access Television Services Pty Ltd (ATS), the second defendant, as a subcontractor in relation to the installation of pay TV and satellite dishes.  The written subcontractor agreement between Mr McGowan and ATS is dated 22 October 2007.  In that agreement ATS is referred to as a Hills company. 

  1. In early 2007, pursuant to ATS requirements, Mr McGowan purchased the ladder manufactured by Hills. On 17 January 2008, while installing a satellite dish at a property located at 344 Hay Road, Deniliquin in New South Wales, Mr McGowan fell from the ladder and suffered injury.

  1. On 20 February 2008 Mr McGowan made a workers’ compensation claim for the injuries pursuant to the Accident Compensation Act 1985 (Vic) (ACA). In the claim form ATS is named as Mr McGowan’s employer. It appears the claim was accepted, and benefits were paid. On 19 November 2009 Mr McGowan made a claim for impairment benefits pursuant to s 98C of the ACA. By letter dated 11 February 2010 the authorised insurer for the purposes of the ACA claim accepted liability for Mr McGowan’s impairment claim. The employer for the purposes of the ACA claim was recorded by the authorised insurer as Hills Industries Ltd.

  1. On 22 January 2014 Mr McGowan signed a form A application for serious injury under s 134AB(5)(a) of the ACA.  The purpose of the application was to satisfy a precondition to Mr McGowan commencing proceedings to recover damages for the injuries suffered by him in the fall.  Hills Industries Ltd was named in that application as employer.  Documents forming part of the application included tax records, medical reports, an affidavit sworn by Mr McGowan on 22 January 2014 and a draft statement of claim.  A number of the medical reports which had been commissioned by the authorised insurer named Hills as the employer for the purposes of Mr McGowan’s ACA claim.  The court heading of Mr McGowan’s affidavit and the draft statement of claim names Hills as the sole defendant in the contemplated proceedings.  In the serious injury affidavit sworn by Mr McGowan he deposed:

In terms of obtaining work with the Defendant, I came across the name ‘Access Television Services’, which is the trading name of the Defendant, Hills Industries Limited, when a fellow was installing a satellite dish at my home in Tongala.

In a draft statement of claim attached to the application it is pleaded that Mr McGowan was employed by Hills, and that Hills manufactured the ladder.  ATS is not named as a respondent to the serious injury application, or as a defendant in the draft statement of claim.

  1. On 3 June 2014 Mr McGowan was given a certificate, pursuant to s 134AB(16) of the ACA, allowing him to bring proceedings for the recovery of damages for the injury sustained by him in the fall.  Mr McGowan was then required to engage in certain pre-litigation processes.  Pursuant to sub-s 134AB(12)(e) there was a window of opportunity of 31 days, commencing some three weeks after conclusion of the pre-litigation process, for Mr McGowan to commence a common law proceeding to recover damages for the injuries sustained in the fall.

  1. By the time this proceeding was issued on 7 October 2014, the identity of the defendants had been clarified.  Hills was sued as a manufacturer of the ladder, not as employer of Mr McGowan and manufacturer; and the second defendant ATS was added and sued as employer/contractor of Mr McGowan.  The parties now agree that ATS is a wholly owned subsidiary of Hills, but a separate legal entity, and that at no stage was Mr McGowan engaged by Hills as a subcontractor or employee.  The clarification of the defendants’ identities was critical to the proceeding in a number of respects: 

(a)        It raised the possibility that the substantive law of a jurisdiction other than Victoria may apply to Mr McGowan’s cause of action against Hills.  If Hills’ identity was employer and manufacturer, then pursuant to the Choice of law division of the ACA; the Choice of law for damages Chapter of the Workers’ Compensation and Rehabilitation Act 2003 (Qld); and the Choice of law division of the Workers Compensation Act 1987 (NSW), the substantive law applicable to Mr McGowan’s cause of action against Hills was the law of Victoria, despite the place of the fall being New South Wales and the place of manufacture of the ladder being Queensland;

(b)        Crucially, the issue of jurisdiction bears upon the viability and potential quantum of Mr McGowan’s cause of action.  In Victoria, Mr McGowan’s right of action against an employer in respect of injuries sustained in the fall was ‘contingently extinguished’ subject to him satisfying one of the preconditions prescribed by s 134AB of the ACA.[3]  It was possible that Mr McGowan might satisfy a precondition which would restrict him to claiming only pain and suffering damages, or he might satisfy a different precondition allowing him to claim both pecuniary damages and pain and suffering damages.  Once a precondition was satisfied, the section makes the following prescriptions: minimum thresholds below which damages would not be awarded; maximum amounts claimable for damages; the applicable discount rate; and provisions governing circumstances in which costs would be awarded and restricting the amount of those costs. Once the identity of Hills as manufacturer (and not employer) was known, the distinct possibility arose that the statutory regime of another State may apply to impose different thresholds or restrictions on the right to recover damages, different discount rates, and possibly formula for the calculation of damages; and  

(c)        A different limitation period may apply to the cause of action against Hills.

[3]Wilson v Nattrass (1995) 21 MVR 41, 54–55 (Ashley J); Hurwood v State of Victoria [2005] VSCA 176 (27 July 2005) [13] - [14] (Osborne AJA).

  1. From the court file it appears that the writ and statement of claim were served on Hills by registered post on 9 December 2014, interlocutory judgment in default of appearance was entered by the solicitors for the plaintiff on 13 February 2015, and that judgment was set aside by consent on 13 April 2015.  By letter dated 16 April 2015 the solicitors for Hills wrote to the solicitors for Mr McGowan requesting further and better particulars of the statement of claim with a list of 18 questions, many with numerous sub-parts.  Correspondence followed in relation to a number of topics including identification of the ladder, availability of the ladder for inspection and delivery of a defence by Hills.  A defence was filed on behalf of Hills on 24 July 2015 in which it was pleaded that the substantive law applicable to the plaintiff’s cause of action against Hills was the law of the State of New South Wales where the fall occurred or alternatively the law of the State of Queensland where the ladder was manufactured.  The defence of 24 July 2015 contains the first mention, in any document of which I am aware, of the fact of manufacture of the ladder in the State of Queensland.

  1. On 7 October 2015 the solicitors for Hills wrote to the solicitors for Mr McGowan confirming that the ladder was manufactured by Hills in Queensland, and arguing that the substantive law applicable to Mr McGowan’s cause of action against Hills was either the law of New South Wales or the law of Queensland.  Hills’ solicitors cited in support the trial and appeal judgments in Di Paolo v Salta Constructions Pty Ltd & Ors,[4] in which it was determined that the substantive law of Western Australia applied, unmodified by the choice of law provisions in the Workers Compensation and Injury Management Act 1981 (WA), to claims for damages by the plaintiff against two non-employer defendants in respect of a workplace injury which occurred in Western Australia but which had resulted in payments of compensation under the ACA.

    [4][2015] VSC 31 (12 February 2015); Di Paolo v Salta Constructions Pty Ltd [2015] VSCA 230 (4 September 2015) (‘Di Paolo’).

  1. As stated above, the question of the substantive law applicable to the plaintiff’s cause of action against Hills raised by the defence was dealt with by T Forrest J as a preliminary issue.  On 27 November 2015 his Honour ruled that the common law of Australia referrable to Queensland was the substantive law which governed Mr McGowan’s claim against Hills.[5]  His Honour noted the significance of the ruling was that if the substantive law of Queensland applied, Mr McGowan’s claim against Hills is prima facie statute barred.  However, if it had been determined that the substantive law of Victoria applied then the parties agreed that the plaintiff’s proceeding had been issued within time and no limitations issue arises.

    [5]McGowan v Hills Limited (Ruling No 1) [2015] VSC 674 (27 November 2015).

Hills’ notice of contention — was the place of manufacture of the ladder a ‘material fact’?

  1. In relation to this issue, the Associate Justice concluded:

The place in which the ladder was manufactured is a ‘material fact’ relating to the right of action.  It is the place where the alleged wrongful act of defective manufacture occurred.[6]

[6]McGowan v Hills Limited [2016] VSC 331 (16 June 2016) [23].

Submissions

  1. Counsel for Hills submit first that although the definition in s 30(1)(a) is inclusive, none of the non-exhaustive factors listed in paragraphs (i) to (v) are referrable to the jurisdiction in which the ‘right of action’ arises. Second, the place of manufacture of the ladder was not pleaded by the plaintiff in the statement of claim, and is not a material fact in the pleading sense. Third, the place of manufacture of the ladder has nothing to do with the circumstances of the accident, and is relevant only because it determined the requisite limitation period and the legal right to damages. Counsel for Hills, relying on the decisions of the Full Court of the Supreme Court of Victoria in Harris v Gas and Fuel Corporation of Victoria,[7] Campbell J in the Supreme Court of Queensland in Ex Parte Bolewski,[8] and the New South Wales Court of Appeal in Ford Excavations Pty Ltd v Do Carmo,[9] submit that legal consequences are not material facts for the purposes of s 30(1)(a) of the QLAA.

    [7][1975] VR 619 (‘Harris’).

    [8][1981] Qd R 54 (‘Bolewski’).

    [9][1981] 2 NSWLR 253 (‘Do Carmo’).

  1. I understand the submissions of counsel for the plaintiff on this point to be, first, that the definition of material fact in s 30 of the QLAA is inclusive. Second, ‘… if, by choice of law rules being applicable, the place of the tort was the only place in which an action could be taken, such a fact would become a material fact …’. In advancing this argument counsel relied on the decision in Amaca Pty Ltd v Frost.[10]  Third, the ‘choice of law’ determination created a ‘threshold’ question, because in this case it must be shown that liability for the alleged tort against Hills existed by applying the common law of Australia applicable in Queensland.  It was submitted on this basis that the place of the tort was a material fact, because it determined whether or not the action by Mr McGowan against Hills was maintainable.

    [10](2006) 67 NSWLR 635.

Analysis

  1. In Harris, the Full Court was concerned with the construction of s 23A(3) of the Limitations of Actions Act 1958 (Vic), as it then was, which provided an inclusive definition of ‘material facts relating to a cause of action’ similar to the definition in the QLAA with which we are currently concerned.  Of the Victorian legislation, Gillard, Menhennitt and Norris JJ said:

The other preliminary comment we make is that, in interpreting the provisions of s 23A, it should be emphasized that the Court is concerned to deal only with those actions where personal injury has been caused to the applicant. It is patent that personal injury could only be caused to the applicant by her suffering some harmful or hurtful action at the hands of the proposed defendant. This experience is essentially of a factual character. This feature of the legislation strongly suggests that the apparent purpose of the section was to enlarge the period of limitation only in those cases where the applicant would be ignorant of any of the facts necessary to establish her cause of action and could not have obtained knowledge of them by taking reasonable steps to do so. Unless there were clear indications that the legislation was intending to equate ignorance of legal rules or principles to ignorance of fact, the Court should be slow to adopt an interpretation of the section which might lead to this result.[11]

[11][1975] VR 619, 624.

  1. In Bolewski, Campbell J, when dealing with an application for extension of time pursuant to s 31 of the QLAA, referred with approval to the decision of the Full Court in Harris, and said:

In my opinion, the fact that the solicitors, with full knowledge of the applicant’s injuries and of the circumstances in which they were suffered, may have failed to advise him that he has a right of action is not a material fact of a decisive character relating to the right of action within the meaning of s 31(2)(a).[12]

[12][1981] Qd R 54, 59.

  1. The decision of the New South Wales Court of Appeal in Ford Excavations Pty Ltd v Do Carmo, to which I was referred, was subject to appeal to the High Court in Do Carmo v Ford Excavations Pty Ltd.[13]In that case the High Court was concerned with the construction of ss 57 and 58 of the Limitation Act 1969 (NSW), which were expressed in similar terms to ss 30 and 31 of the QLAA. The appeal in Do Carmo required the court to consider whether ignorance of a cause of action was ignorance of a material fact for the purposes of the New South Wales limitation provisions.  By majority that question was answered no.  Deane J observed:

    [13](1984) 154 CLR 234.

The ignorance of a material fact to which those sections refer is, in my view, ignorance of factual matter in the ordinary sense and not ignorance either of the law itself or of the legal consequences of the material facts.[14]

Wilson J noted:

Knowledge of the legal implications of the known facts is not an additional fact which forms part of the cause of action.[15] 

On this point Brennan and Dawson JJ agreed.[16] Only Murphy CJ accepted that existence of a right of action is a ‘material fact’.[17]

[14]Ibid 249.

[15]Ibid 245.

[16]Ibid 249.

[17]Ibid 239; see also Dick v University of Queensland [2000] 2 Qd R 476 (‘Dick’) and Tromp v Nambour Yandina United Soccer Club Inc [2001] VSC 494 (‘Tromp’) which confirm that the same approach is to be taken in relation to QLAA ss 30 and 31.

  1. Two propositions emerge from the above cases. First, the s 30(a) enquiry is a factual one. In other words, has the applicant identified a fact which is a material fact relating to a right of action? Second, there is a distinction between the facts which are material to the right of action, and knowledge of the legal consequences of those facts. The legal consequence of a material fact is not itself a material fact as defined by s 30(a) of the QLAA.

  1. The material fact identified by Mr McGowan is the manufacture of the ladder by Hills in Queensland. I agree with the submission of the first defendant that that fact does not fit within subparagraphs (i)–(v) of the definition of material facts in s 30(1)(a) of the QLAA. However, the definition is inclusive. There was no examination in Do Carmo,[18] or the other cases to which I was referred, of when a fact which does not fit within subparagraphs (i)–(v) of the inclusive definition in s 30(1)(a) is nonetheless a material fact relating to a plaintiff’s right of action.

    [18](1984) 154 CLR 234.

  1. The words ‘material facts’ should be given their natural meaning, having regard to the context in which they appear.  A fact will be material if it has significant consequences for the matter in issue, that is, Mr McGowan’s right of action against Hills.

  1. For the following reasons, I conclude that the fact of manufacture of the ladder by Hills in Queensland is a material fact relating to Mr McGowan’s right of action against Hills.  First, Mr McGowan has clearly identified a fact, as distinct from a legal consequence of that fact.  Second, the identified fact is a relevant circumstance to Mr McGowan’s right of action.  It is part of the factual matrix of Mr McGowan’s right of action that Hills, as manufacturer, manufactured the ladder in Queensland.   

  1. Third, the identified fact will have consequences for Mr McGowan’s right of action.  The manufacture of the ladder by Hills in Queensland determined, in combination with other relevant facts, that the common law of Queensland was the substantive law which governs the plaintiff’s cause of action against Hills.  At the time that preliminary point was determined there were three possibilities, namely that the applicable substantive law could be that of Victoria, New South Wales or Queensland.  The differences between the substantive law of those three states are of great significance in their application to the plaintiff’s right of action, and go well beyond the issue of the relevant limitation period. 

  1. For example, if Victorian law applied, the plaintiff would be restricted by the thresholds and limitations on damages contained in s 134AB of the ACA.  Queensland’s substantive law includes the Civil Liability Act 2003 (Qld), which governs assessment of damages, including assessment of general damages pursuant to a scale provided in related regulations. Similarly, New South Wales’ substantive law includes the Civil Liability Act 2002 (NSW), which provides, amongst other things, different thresholds for access to damages and different means for the calculation of damages. It is clear that a relevant fact that determined the question of what substantive law applied to Mr McGowan’s right of action against Hills was of great significance to him when he came to consider the viability and quantum of that right of action.

  1. I find against Hills on the amended notice of contention.

Grounds 4, 6 and 7 — is the place of manufacture a material fact of a decisive character?

  1. Mr McGowan’s cause of action against Hills accrued in January 2008.  On this application it was necessary for Mr McGowan to establish that a material fact of a decisive character relating to his right of action against Hills was not within his means of knowledge until after 7 October 2013.  On that question the Associate Justice concluded:

The fact that the ladder was manufactured in Queensland was not of a decisive character in terms of whether or not to sue for damages.  Ignorance of that fact did not preclude the plaintiff from bringing proceedings.  Indeed the amended statement of claim does not refer to the place of manufacture. … There is no explanation as to why the proceedings were commenced without knowledge of the place of manufacture of the ladder.  It is reasonable to infer that the plaintiff commenced the proceedings because he appreciated that he had a worthwhile action to pursue.  He believed the ladder was manufactured defectively, and believed that his injury was caused or caused in part by it, and believed his injury to be serious.  These facts are enough to lead a reasonable man, appropriately advised to bring an action in negligence. …

By mid 2010 to mid 2011 the plaintiff had been advised by his solicitor that the ladder was faulty and that he could sue for damages.  That constituted appropriate advice.  The fact that the ladder was manufactured in Queensland is a material fact, but it is not a material fact of a decisive character. …[19]

[19]McGowan v Hills Limited & Anor (Ruling No 2) [2016] VSC 331 (16 June 2016) [29]–[30].

Submissions

  1. Counsel for Mr McGowan submitted that ‘… the material fact of the decisive character relating to the right of action in this proceeding, is that he knew that the ladder was designed, made and or [sic] constructed in Queensland such that he had a cause of action in the State of Queensland.’  That information was said to be decisive as to whether or not the plaintiff’s cause of action would succeed.

  1. Counsel for Hills submitted, first, that the plaintiff was aware of all the material facts relating to his right of action against Hills well before 7 October 2013. It was submitted the plaintiff knew the circumstances of the fall, that he suffered injury as a consequence, that the injury was serious, that the cause of his fall was a fault in the ladder and that the ladder was manufactured by Hills. Second, a reasonable person in the plaintiff’s position, knowing those facts, would have brought the action within the limitation period. Third, it was irrelevant that the plaintiff was unaware of the limitation period which in fact applied. Fourth, there was nothing in the law of Queensland which would have prevented the plaintiff from bringing the action within time. Fifth, it is significant that the proceeding was issued and pleaded with detailed particulars justifying the cause of action against Hills prior to the time when the plaintiff obtained knowledge that the ladder was manufactured in Queensland, and that the law of Queensland applied. Sixth, the question is whether the identified fact is one which would make the difference between a reasonable person concluding that a proceeding on the cause of action was worth bringing. Because Mr McGowan issued the writ against Hills before he acquired knowledge that the ladder was manufactured in Queensland, it is self-evident that that knowledge did not make the difference as to whether an action was worth bringing. Seventh, the relevance of the place of manufacture only went to determination of the expiration of the period of limitation, and was therefore definitionally excluded by s 30(1)(b)(i) of the QLAA.

  1. Counsel for ATS submitted, first, ‘… that a material fact is of decisive character when it would show a reasonable person that they have a cause of action which has reasonable prospects and is of sufficient value, and which they ought to bring’.  Second, that a fact previously known may take on a decisive character as circumstances develop.  Third, the fundamental issue in this case was that a reasonable person in the position of the plaintiff could not know whether to bring an action until he knew whether that action had reasonable prospects of success and was of sufficient value.  Fourth, it was irrelevant that proceedings were brought before the point in time when a reasonable person would regard the facts relating to the right of action as showing that he ought to do so.

Analysis

  1. Material facts are regarded as having a decisive character if a reasonable person with knowledge of those facts would, having taken appropriate advice, ‘regard the facts as justifying and mandating that an action be brought in [his or her] own interests.’[20]

    [20]Queensland vStephenson (2006) 227 CLR 197 [30] (Gummow, Hayne and Crennan JJ) (‘Stephenson’).

  1. The relevant date is 7 October 2013.  Prior to that date Mr McGowan knew that Hills manufactured the ladder, that the ladder as manufactured was faulty or defective, that the fault or defect caused the ladder to collapse, that as a result he fell and suffered injury, and the extent of the injuries suffered by him as a consequence. 

  1. In the period mid 2010 to May 2011 discussions occurred between Mr McGowan and his solicitors in relation to the possibility of pursuing a claim for damages against Hills because the faulty manufacture of the ladder caused the fall which resulted in his injuries.  At that stage Hills was recorded as employer in respect of Mr McGowan’s claim for statutory benefits under the ACA.  Mr McGowan believed Hills to be his employer.  Mr McGowan’s solicitors were under the same misapprehension.  If Hills was Mr McGowan’s employer for the purposes of the ACA statutory benefits claim, then as a precondition to commencing an action against Hills Mr McGowan was required to access one of the gateways provided by s 134AB of the ACA.  Mr McGowan’s solicitors proceeded on that basis.  The form A application for serious injury was made.  The application was granted, and a s 134AB precondition was satisfied on 3 June 2014 when Mr McGowan was given a certificate pursuant to s 134AB(16) of the ACA.  Prior to satisfying the precondition, Mr McGowan could not commence proceedings against his employer claiming damages for the injury sustained in the fall.

  1. In early 2014 Mr McGowan’s state of knowledge was that Hills was his employer.  A reasonable person knowing what Mr McGowan knew at that time, having taken appropriate advice on those facts, would have concluded that it was necessary to satisfy one of the s 134AB preconditions before an action for recovery of damages against Hills could be issued.  The viability and potential quantum of an action against Hills depended on a number of matters which followed the form A s 134AB application:  whether a precondition to commencing the action against Hills was satisfied at all; whether the precondition was satisfied so as to allow an action to be commenced for both pain and suffering and loss of earning capacity damages, or whether the action was restricted to pain and suffering damages only; assessment of medical and liability evidence served by the respondent to the 4 May application; and assessment of settlement offers made pursuant to s 134AB(12) of the ACA as part of the pre-litigation process.

  1. After Mr McGowan, through his solicitors, made the form A s 134AB application, circumstances further developed.  On 3 June 2014 Mr McGowan was given a certificate confirming that he had satisfied the s 134AB precondition to commence the action for recovery of damages.  By late 2014 it was known that Mr McGowan’s employer was ATS, and that the identity of Hills was manufacturer only, not manufacturer and employer.  By July 2015 it was known that Hills manufactured the ladder in Queensland, and that Hills alleged that the substantive law which governed Mr McGowan’s action against it was the law of New South Wales or alternatively the law of Queensland.  Appropriate advice on that combination of facts was that Mr McGowan could bring an action against Hills without satisfying a precondition, and that the action was viable in the sense of having reasonable prospects of success and of resulting in an award of damages sufficient to justify bringing the proceeding.  A reasonable person having received that advice would at that stage, in mid to late 2015, have regarded the facts as mandating that a proceeding should be issued.

  1. Unfortunately, the Associate Justice appears to have received limited assistance in relation to the relevant factual background.  I consider that there was error in the decision at first instance.  The background that I have set out above does explain why Mr McGowan did not issue proceedings until October 2014; the proceedings were then issued by him within the timeframe provided by s 134AB of the ACA.  The test is not whether ignorance precluded the plaintiff from bringing proceedings.  Nor is it determinative that proceedings were issued before the plaintiff became aware of the material fact of a decisive character.[21] 

    [21]Opacic v Patane [1996] QCA 95 (27 March 1996); Dick [2000] 2 Qd R 476 [65] (Cullinane J).

  1. Until mid to late 2014, Mr McGowan and his solicitors’ state of knowledge was that Hills was his employer.  Up to that time the advice received by Mr McGowan was that he was required to satisfy a s 134AB precondition prior to commencing proceedings against Hills.  With that state of knowledge, having received that advice, a reasonable person in the position of Mr McGowan would not have regarded the facts as justifying and mandating that an action be brought against Hills.

  1. The above analysis proceeds on the foundation of the conclusion that the manufacture of the ladder by Hills in Queensland is a ‘material fact’.  As was submitted by counsel for ATS, if that conclusion is wrong, and all material facts relating to Mr McGowan’s right of action against Hills were known by him prior to 7 October 2013, it remains to consider whether those facts acquired a decisive character after that date.  The majority in Stephenson accepted as correct the following construction of s 31 of the QLAA by Davies JA sitting in the Queensland Court of Appeal in that case:

The subject of the verb ‘was’ in that paragraph of s 31, in my opinion, is the compound phrase ‘material fact of a decisive character relating to the right of action’. Thus the question is not when all material facts came within the means of knowledge of the applicant. It is when all material facts of a decisive character relating to the right of action came within his means of knowledge. …

One cannot have the means of knowledge of material facts of a decisive character at a time when those material facts do not have that character. If the correct question is as I have stated it then the answer is that it was after the critical date because the material facts did not acquire a decisive character until after that date.[22]

In the High Court, Gummow, Hayne and Crennan JJ added:

The ascription to material facts of the character of “decisive” looks to the response of an actor. It is here that the exegesis supplied by par (b) of s 30(1) comes into play. The court is to consider the response of “a reasonable person” in the manner explained in that paragraph. …

The better view is that the means of knowledge (in the sense given by par (c) of s 30(1)) of a material fact is insufficient of itself to propel the applicant outside s 31(2)(a). For circumstances to run against the making of a successful extension application, the material fact must have “a decisive character”. Whether the decisive character is achieved by the applicant becoming aware of some new material fact, or whether the circumstances develop such that facts already known acquire a decisive character, is immaterial.[23]

[22](2006) 226 CLR 197 [19].

[23]Ibid [25]–[29].

  1. Hills submits that the manufacture of the ladder by it in Queensland is not a material fact, and that Mr McGowan knew all the material facts relating to his right of action against it by 2011, well prior to the relevant date of 7 October 2013.  If this submission were accepted, I would conclude that it was the circumstances detailed above that developed after 7 October 2013 which resulted in material facts known prior to that date acquiring a decisive character.  For the reasons expressed in paragraphs [36] to [38], it was only after those circumstances developed that a reasonable person in Mr McGowan’s position, having received appropriate advice, would regard the facts as requiring that he ought, in his own interests, bring the action.  Whether or not the manufacture of the ladder by Hills in Queensland is a material fact, I conclude Mr McGowan has established that the facts known to him only acquired that decisive character after 7 October 2013.

The ‘relevant date’ and the ‘expiry date’

  1. Relying on the High Court decision in Stephenson, counsel for Hills submit that, in order for Mr McGowan to be entitled to the benefit of s 31(2) of the QLAA, the material fact of a decisive character must become known to him in the period of 12 months between the relevant date, that is 7 October 2013, and the expiry date being 7 October 2014. If knowledge of the material fact of a decisive character was acquired by Mr McGowan in July 2015 that was outside the temporal window for extension provided by s 31(2). It was submitted on that basis there was no discretion to extend time. This issue was not determined at first instance.

  1. Counsel for Hills relied upon the following discussion of the majority in Stephenson:

But, in the events that had happened, the expiry date could be no later than 20 December 2001. This was when the action had been instituted, and it was that action which Mr Stephenson sought to keep on foot, so that, in turn, “the relevant date” could be no later than 20 December 2000. Mr Stephenson thus had to show that until after 20 December 2000 a material fact of a decisive character relating to the right of action was not within his means of knowledge.

This conjunction of circumstances attracted the description by the primary judge (McMurdo J) of 20 December 2000 as the “critical date”. However, it is to be observed that what made 20 December 2000 of critical importance, rather than any other date after mid-1999, was the date of the institution of the action, out of time, on 20 December 2001. That narrowed the selection of the relevant date, in a fashion that would not necessarily have obtained, for example, if the extension application had been made in advance of the institution of an action, so that the action was to be commenced within the extended period[8].

Hence, in construing the legislation, reference will be made to the two temporal points fixed in s 31(2) as “the expiry date” and “the relevant date”...[24]

[24](2006) 226 CLR 197 [15] – [17].

  1. Counsel for Mr McGowan and counsel for ATS both argued that the critical issue was whether the plaintiff had established that the material fact of a decisive character was not within his means of knowledge until a date after 7 October 2013.  Once that was established it did not matter if the date by which the material fact of a decisive character was first within the plaintiff’s means of knowledge was before or after 7 October 2014.

  1. An earlier decision of the Queensland Court of Appeal in Opacic v Patane,[25] confirms the position contended for by Mr McGowan and ATS to be correct.  In Opacic the relevant proceedings were issued on 5 October 1993, but the material fact of a decisive character was not within the respondent’s knowledge until the advent of a medical report of 28 March 1995.  In respect of those circumstances Davies JA said:

    [25][1997] 1 Qd R 84 (‘Opacic’); see also Dick [2000] 2 Qd R 476 [65] and HWC v The Corporation of the Synod of the Diocese of Brisbane [2009] QCA 168 (16 June 2009) [48].

It is also true that section 31(2), by permitting an order for extension of time to one year after the date on which the material fact came within the knowledge of the applicant, contemplates that proceedings will ordinarily be commenced and an application for extension of time made after an applicant has [acquired] the relevant means of knowledge. But there is no reason of principle or policy why the section would be read down to apply only to that case. That would have the effect of excluding from the operation of the section an applicant for no other reason than that he has commenced proceedings outside the limitation period but before he has acquired the relevant means of knowledge.[26]

Pincus JA, agreeing, added:

The statute is not expressed in such a way as to exclude such a case from being a ground of relief, nor does it appear to me that an implication may be made in favour of the appellant of such kind as to prevent the respondent from obtaining relief.[27]

Ambrose J also agreed, adding that the position contended for by the appellant in that case, which is the position adopted by counsel for Hills in the present case, was inconsistent with s 31(2)(a) of the QLAA.[28]

[26]Ibid 87.

[27]Ibid.

[28]Ibid 88.

  1. The natural meaning of the words used in s 31(2) supports the conclusion reached by the Queensland Court of Appeal in Opacic.[29]  The provision extends the limitation period so that it expires one year after the date on which the applicant acquires the knowledge of a material fact of a decisive character.  If it had been intended instead to provide a one year window of opportunity within which an applicant might issue proceedings, different phraseology would have been used.

    [29][1997] 1 Qd R 84.

  1. The decision in Stephenson does not support the argument advanced by counsel for Hills.  The majority in Stephenson confirm that a plaintiff always has at least one year to commence proceedings from the conjunction of two circumstances — first, his or her knowledge of material facts, and second, that in the circumstances a reasonable person with that knowledge would consider that those facts required an action be brought.[30]  I have determined that in Mr McGowan’s case the conjunction of circumstances occurred after 7 October 2013 and in the second half of 2015.  Consistent with the majority judgment in Stephenson, Mr McGowan had 12 months from that conjunction of circumstances within which to commence proceedings. 

    [30](2006) 226 CLR 197 [30].

  1. I find for Mr McGowan on Grounds 4, 6 and 7.

Ground 5 — did the plaintiff establish that a material fact of a decisive character was not within his means of knowledge until after 7 October 2013?

  1. In order to succeed, Mr McGowan must satisfy the requirements of s 30(1)(c) of the QLAA that, (a) he did not know the material fact of a decisive character before 7 October 2013; and (b) he had taken all reasonable steps to find out that fact before that time.

  1. In his affidavit sworn 9 November 2015, Mr McGowan refers to a dispute in relation to his weekly payments of compensation under the ACA which occurred in the period mid 2010 to May 2011, and deposes:

Over the course of my dispute regarding weekly payments I advised the solicitor regarding the fault which had been detected in the ladder.  I was advised by the solicitor that he would look in to where the ladder was manufactured as the maker of the ladder may be able to be sued for damages.  Some time after that I was informed by the solicitor that the ladder had been made in Dandenong, Victoria.  Eventually the solicitor wrote to me and advised the ladder had been manufactured in Queensland and that I may be able to sue for damages in that State.

Mr McGowan sought to clarify this evidence in an affidavit sworn 8 March 2016, in which he deposed:

I don’t recall precisely when I found out that the ladder was actually made in Queensland and not in Victoria but I believe it to have been around July 2015 by way of my solicitors telling me about what was contained in the first defendant’s defence dated 22 July 2015.  I now know that on or about 4 June 2015, my solicitors’ answer to question (asked of them by Hills’ solicitors in May 2015) with regard to the precise model of the ladder.

  1. In the reasons for judgment, the Associate Justice criticised the lack of temporal specificity in this evidence.  Although a final conclusion was not expressed, it seems the Associate Justice was inclined to the view that the plaintiff had not established that it was not until after 7 October 2013 that he became aware that the ladder was manufactured in Queensland.  Relying on the evidence of Hills’ general counsel that all ladders manufactured by Hills in Australia were made in Queensland, the Associate Justice concluded that ‘… a simple enquiry would have determined that the ladder was manufactured in Queensland.’[31]

    [31][2016] VSC 331 [29].

Submissions

  1. I understand the submissions of counsel for Mr McGowan on this point to be first, that there was inadequacy in the Associate Justice’s reasoning in concluding that the plaintiff had not established lack of knowledge of the place of manufacture prior to 7 October 2013. Second, there were errors in relevant factual findings made by the Associate Justice. Third, the evidence compelled the conclusion that Mr McGowan was not aware of the fact of the place of manufacture of the ladder prior to 7 October 2013. Fourth, Mr McGowan had acted reasonably by placing the matter of his claim for compensation and damages for the injuries sustained in the fall in the hands of apparently competent solicitors. I take that to be a submission that the plaintiff had satisfied the requirements of s 30(c)(ii) of the QLAA.

  1. Counsel for Hills submit first that Mr McGowan had the burden of proof on the application.  Second, that the evidence of Mr McGowan in relation to the nature and extent of legal advice obtained by him during the period mid 2010 to mid 2011 was vague and unclear.  Third, this lack of clarity was compounded by the failure of the plaintiff to give particular evidence as to the letter he said he received from his solicitor as to the place of manufacture of the ladder.  Fourth, these inadequacies were further compounded by evidence of Mr McGowan in his affidavit of 8 March 2016 that he believed he was told by his solicitors the place of manufacture in ‘… around July 2015’.  And finally, that it was open to the Associate Justice to conclude that Mr McGowan had not proved that the identified fact was not within his means of knowledge by 7 October 2013.

Analysis

  1. For the following reasons I find that there was error in the conclusion at first instance that Mr McGowan failed to satisfy the requirements of s 30(1)(c) of the QLAA. First, whilst the affidavits prepared for him, sworn on 9 November 2015 and 8 March 2016, were poorly and imprecisely worded, Mr McGowan did depose to the fact that he first became aware that the ladder was manufactured in Queensland when he was informed of that fact by his solicitors in around July 2015. There is nothing in Mr McGowan’s affidavits which is inconsistent with that evidence. Hills chose not to cross-examine Mr McGowan on this evidence. Second, there is no documentary or other evidence which establishes the place of manufacture of the ladder being Queensland prior to Hills’ defence dated 24 July 2015. In other words, there is no evidence which contradicts or undermines the evidence of Mr McGowan that he first became aware in July 2015 that the ladder was manufactured in Queensland. Third, the place of manufacture of the ladder only became a significant fact after it was discovered by Mr McGowan’s solicitors that the identity of Hills was not employer and manufacturer of the ladder, but simply manufacturer of the ladder. Up to that point the solicitors for Mr McGowan were proceeding on the basis that Mr McGowan’s cause of action against Hills was governed by the substantive law of Victoria, relevantly s 134AB of the ACA. Fourth, there is no evidence to support the conclusion that ‘a simple enquiry would have determined that the ladder was manufactured in Queensland’. In any event, at a time when Mr McGowan and his solicitors’ state of knowledge was that Hills was Mr McGowan’s employer, such an enquiry was not significant. I conclude that Mr McGowan’s uncontradicted evidence that he first became aware, in July 2015, that the ladder was manufactured by Hills in Queensland should have been accepted.

  1. Finally, I conclude that Mr McGowan took all reasonable steps to find out the facts of the decisive character before 7 October 2013.  Mr McGowan had placed the matter of his claim against Hills in the hands of apparently competent solicitors.  In Dick, Thomas JA concluded, relying on the judgment of Dawson J in Do Carmo, that the s 30(1)(c) test is subjective, that there is no assumption within the section that appropriate advice was received when it was sought, and ‘… that not many “steps to ascertain the fact” can reasonably be expected of a client when he is in ignorance of the need to ascertain it’.[32]  Until around mid to late 2014, when it became apparent that Hills was not Mr McGowan’s employer, there was no particular reason why Mr McGowan’s attention should be directed to the place of manufacture of the ladder by Hills.  From mid 2014, Mr McGowan’s awareness developed in stages.  It was only as it did so that the place of manufacture of the ladder by Hills became important.  In the circumstances there was no failure by Mr McGowan to take all reasonable steps to find out prior to 7 October 2013 where the ladder was manufactured.

    [32]Dick [2000] 2 Qd R 476, 488 [34] (citations omitted).

  1. I find for Mr McGowan on Ground 5.

Ground 8 — was there error in the exercise of the discretion not to extend the limitation period?

  1. The parties agree that the principles governing review of any discretion exercised by the Associate Justice in relation to the application to extend time are governed by the principles enunciated by the High Court in House v R, where Dixon, Evatt and McTiernan JJ said:

If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.[33]

[33](1936) 55 CLR 499, 504–505.

  1. The discretion available for exercise by the court, pursuant to s 31(2) of the QLAA, was described by Toohey and Gummow JJ in Brisbane South Regional Health Authority v Taylor in the following terms:

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.[34]

[34]Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 (‘Brisbane South’) (citations omitted).

On this point their Honours referred with approval to the following statement of Gowans J in Cowie v State Electricity Commission of Victoria:

It is for the respondent to place in evidence sufficient facts to lead the court to the view that prejudice would be occasioned and it is then for the applicant to show that these facts do not amount to material prejudice.[35]

[35][1964] VR 788, 793.

In Brisbane South, Toohey and Gummow JJ concluded that the task was not to balance prejudice to the defendant by reason of the delay against prejudice to the plaintiff if the application were not allowed, and said:

The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent.[36]

McHugh J, with whom Dawson J agreed said:

The general rule that actions must be commenced within the limitation period should therefore prevail once the defendant has proved the fact or the real possibility of significant prejudice.[37]

[36]Brisbane South (1996) 186 CLR 541, 550.

[37]Ibid 555.

  1. Counsel for Hills placed reliance on the decision of J Forrest J in Sparkes v Hylemit Pty Ltd,[38] in which his Honour referred to his earlier decision in Gordon v Norwegian Capricorn Line (Australia) Pty Ltd in which he said: [39]

[I]n determining whether there is significant prejudice, what is to be considered is whether there can be a fair trial.  A fair trial does not mean an ideal trial, but one that is “acceptably fair”.  A Court has to make an assessment of what might occur at the trial in terms of determining whether an acceptably fair trial can be had.  The applicant must satisfy the Court that there would not be such prejudice as would make the chances of an acceptably fair trial unlikely.  In South Western Sydney Area Health Service v Gabriel, Hodgson JA said:

“… The true issue on this matter is whether or not the applicant for the extension discharged the onus of satisfying the Court that there would not be such prejudice as would make the chances of an acceptably fair trial unlikely.”[40]

Where significant prejudice to the defendant is not established it remains for the court to consider whether, in the context of the action which the plaintiff seeks to pursue, presumptive prejudice to the defendant caused by the passing of time is such that the plaintiff has not discharged the onus of satisfying a court that time should be extended.[41]

[38][2016] VSC 453 (12 August 2016) [90].

[39][2007] VSC 517 (14 December 2007) [79] (‘Gordon’) (citations omitted).

[40]This statement, in principle, has been adopted subsequently by the New South Wales Court of Appeal in Commonwealth of Australia v Smith [2005] NSWCA 478 (23 December 2005) [128]; Commonwealth of Australia v Lewis [2007] (6 June 2007) NSWCA 127 [28] – [30]; Commonwealth of Australia v Smith [2007] NSWCA 168 (13 July 2007) [50] – [52].

[41]Brisbane South (1996) 186 CLR 541, 551-555 (McHugh J); Sydney City Council v Zegarac (1998) 43 NSWLR 195, 197 (Mason P); Gordon [2007] VSC 517 (14 December 2007) [97].

Analysis

  1. In the proceeding Mr McGowan claims that there was negligence on the part of Hills in the design and/or construction and/or manufacture of the ladder.  The ladder is in existence and remains in the possession of the plaintiff.  The ladder model number is confirmed as TDP7.  A stamp said by Hills to indicate the date of manufacture is ‘030307’.  In an affidavit sworn 8 March 2016, Ashley Tsacalos, solicitor for the defendant, deposes as follows:

As detailed at paragraphs 7 to 15 above, despite multiple requests and offers to pay for transportation, the plaintiff’s solicitors have been unwilling to provide the Ladder for inspection by Hills.

As a consequence, Hills does not know the current condition of the Ladder, whether it has been kept in the same condition as when the accident occurred or if any other damage has been inflicted on the Ladder.

As such, Hills would suffer significant prejudice if the limitation period were to be extended.

The exhibits to the Tsacalos affidavit show that attempts to arrange inspection of the ladder by Hills have not been successful, but do not indicate this was caused by any unwillingness on the part of the plaintiff or his solicitors to provide the ladder for inspection.  There was no cross-examination of Mr McGowan on this application in relation to the ladder, or whether there had been any change in the condition of the ladder since his fall.  Hills are entitled to make application pursuant to r 37 of the Rules to inspect the ladder.  As yet no application has been made.  If the proceeding against it continues, Hills will no doubt apply to inspect the ladder.  There is no evidence of any change in the actual condition of the ladder in the period since the fall which will now cause some difficulty or restriction in the ability of Hills to have the ladder examined and to call evidence in relation to the physical condition of the ladder relevant to the case against it.  The ladder was inspected at the request of the WorkCover claims agent in the weeks following Mr McGowan’s fall.  There is no suggestion that evidence of what was found at that inspection is no longer available.  The evidence does not establish significant prejudice to Hills in relation to the ladder itself.

  1. Hills submit that significant prejudice is established by the evidence of general counsel, David Fox, in his affidavit affirmed 7 March 2016.  The evidence of Mr Fox primarily relates to the sale by Hills in June 2013 of its ladder business to an unrelated company.  Mr Fox deposes that employees of Hills who worked in the ladder business ceased to be employed by it on the date of sale.  However, there was no evidence from Mr Fox of any attempt to identify or contact relevant employees having regard to the manufacture of the ladder in March 2007.  There is no evidence to support a conclusion that the witnesses who could give relevant evidence in respect of the action against Hills will not be available.  Mr Fox deposes that the majority of business records relating to the ladder business were transferred to the purchaser of that business and that the defendant retains few documents relating to the ladder business.  However, there is no evidence from Mr Fox as to whether the documents retained by Hills are relevant to Mr McGowan’s cause of action, or as to whether any request was made of the purchaser of the business to make available relevant documents.  Mr Fox does not explain why it would be difficult and expensive to obtain relevant documents from the purchaser of the ladder business.  Mr Fox’s evidence does not establish that Hills will suffer prejudice at trial because of unavailability of relevant documents.

  1. In his ACA injury claim form Mr McGowan records the cause of the ladder collapsing as ‘ladder clips failed’.  In his affidavit in support of this application sworn 9 November 2015 he deposes:

The ladder had aluminium strips which were designed to lock in place when extended.  However the ladder had a defect in that certain holes which held rivets were oversized.

…

On the 17th of January 2008 I was installing a satellite dish in a house in Deniliquin, New South Wales.  I tied the ladder down at the top to the gutter.  I was stepping from the ladder onto the roof when the rivets caved in through the drilled holes as a result of which the ladder moved.

Exhibited to the affidavit of Mr Fox affirmed 12 November 2015 is a drawing of the model TDP7 ladder.  The drawing depicts the ladder in extended form.  Just above the centre hinge connecting the top and bottom halves of the ladder is a small item which appears to be a clip intended to secure the ladder in place.

  1. Mr McGowan’s case of negligent manufacture against Hills is that:

(a)        The rivets attaching the holding clips to the ladder were in holes which were too large, allowing the rivets to come through resulting in the ladder moving/collapsing; and/or

(b)        There should have been a secondary failsafe device on the ladder preventing it collapsing.

This seems, in evidentiary terms, a relatively straight-forward case.  Either the holding clips on the ladder were adequate to allow safe use of the extended ladder or they were not.  The relevant evidence will include Mr McGowan’s description of what occurred, design drawings including the drawing exhibited to Mr Fox’s affidavit, the ladder itself, and most likely, evidence of experts who have examined the ladder.

  1. Hills will not suffer significant prejudice in its defence of the proceeding if Mr McGowan’s application is granted.  Having regard to the nature of Mr McGowan’s case against Hills and to the evidence likely to be central to that case, the presumptive prejudice arising from the passage of time since the cause of action arose will not be such ‘as would make the chances of an acceptably fair trial unlikely’.[42]

    [42]Brisbane South (1996) 186 CLR 541, 544 (Dawson J), 547 (Toohey and Gummow JJ).

  1. At first instance it was determined, based on the evidence of Mr Fox to which I have referred, that there was a significant risk of actual prejudice to Hills’ defence of the claim against it.  In my view the evidence does not support that conclusion.  The circumstances therefore exist for me to exercise the discretion on this application.  I have determined that Mr McGowan’s application to extend time within which to bring the proceeding against Hills should be granted.

  1. I find for Mr McGowan on Ground 8.

Conclusion

  1. I find for Mr McGowan on the appeal and on his application by summons filed 18 December 2015 to extend the limitation period in respect of his action against Hills to 7 October 2014.  I will hear from the parties as to the form of the order and in relation to costs.


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