Milperra Marketing Pty Ltd v Bayliss

[2001] NSWCA 315

CITATION:	MILPERRA MARKETING PTY LTD & ORS v BAYLISS [2001] NSWCA 315 revised - 19/09/2001
FILE NUMBER(S):	CA 40222/00
HEARING DATE(S):	23 August 2001
JUDGMENT DATE:	17 September 2001
PARTIES :	Milperra Marketing Pty Ltd, Kellyco (NSW) Pty Ltd and Coley Pty Ltd - Appellants Noel John Bayliss - Respondent
JUDGMENT OF:	Meagher JA at 1; Sheller JA at 2; Brownie AJA at 44

LOWER COURT JURISDICTION :	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S) :	21445/96
LOWER COURT JUDICIAL OFFICER :	O'Keefe J

COUNSEL:	J D Hislop QC/D R Russell - Appellants B Gross QC/T Boyd - Respondent
SOLICITORS:	Johnstone Robinson - Appellants Carroll & O'Dea - Respondent
CATCHWORDS:	PRACTICE AND PROCEDURE - Limitation Act 1969 - ss60I, 60G - whether plaintiff made application for extension of limitation period within three years of becoming aware of his condition and its connection to the defendant's acts or omissions - whether just and reasonable to order extension of limitation period
LEGISLATION CITED:	Limitation Act 1969
CASES CITED:	Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 BHP Steel (AIS) Pty Ltd v Guidice (unreported) NSWCA 7 March 1997 Council of the City of Sydney v Zegarac (1998) 43 NSWLR 195 Commonwealth of Australia v McLean (1997) 14 NSWLR 389 Astill v Newman [1999] NSWCA 43 House v The King (1936) 55 CLR 499 Taylor v State of New South Wales (1999) 46 NSWLR 322 Dedousis v Water Board (1994) 181 CLR 171 Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 Drayton Coal Pty Ltd v Drain (unreported) NSWCA 22 August 1995 Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 Harris v Commercial Minerals Ltd (1996) 186 CLR 1 Cowie v State Electricity Commission (Vic) (1960) VR 788 Holt v Wynter (2000) 49 NSWLR 128
DECISION:	Appeal dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40222/00
CL 21445/96

MEAGHER JA

SHELLER JA

BROWNIE AJA

Monday, 17 September 2001

Milperra Marketing Pty Limited & Ors v Bayliss


The respondent was a plumber who, between 1978 and 1994, purchased PVC solvent cement for use in his business from each of the appellants. In December 1996, the respondent commenced proceedings in tort and contract against the appellants. In February 1998, the respondent made an application for an extension of time for commencement of proceedings pursuant to the Limitation Act 1969 (the Act). It was necessary for the respondent to demonstrate, in accordance with s60I, that his application was made within three years of his becoming fully aware of his condition and its connection to the appellant’s acts or omissions. Section 60G(2) further provided that the court was only to order the extension of the limitation period if it considered it is “just and reasonable” to do so.

The Master accepted that the respondent was unaware of the connection between his illness and the appellant’s acts or omissions until 1996, which was less than three years before the application was made. However, the Master refused the application on discretionary grounds. Although the appellants did not produce evidence of actual prejudice, the Master considered that they would suffer significant prejudice because of the need to locate records from as long ago as twenty years. The Master also emphasised various unexplained delays between the respondent’s first contact with a solicitor in 1995 and the filing of the application in 1998.

The respondent successfully appealed from this decision to a single judge of the court. The Judge held that the Master did not apply a test of significant or material prejudice as required by Brisbane South Regional Health Authority vTaylor (1996) 186 CLR 541. In addition, the conclusion that the plaintiff had unduly delayed was flawed by errors of fact. A cross appeal by the appellant in relation to the s60I element was dismissed.

The appellant challenged the decision of the Judge.

Held : (per Sheller JA, Meagher JA and Brownie AJA agreeing):
(1) In relation to the s60I point, the Master did not decide in favour of the respondent on the basis that although aware of the existence of acts or omissions he was unaware of legal conclusions. The Master’s finding was that the respondent did not become aware that, in accordance with good practice, the appellants should have included warnings on their labels. Such non-awareness relates to facts rather than to law. Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129, applied.
(2) The Judge was correct to overturn the Master’s ruling in relation to the exercise of the discretion to extend the limitation period. There was considerable evidence put forward by the respondent to show that there could be no prejudice to the appellant. This could not be put aside on the basis of general considerations of presumptive prejudice based on speculation.

Legislation
Limitation Act 1969

Cases cited
Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541
BHP Steel (AIS) Pty Ltd v Guidice (unreported) NSWCA 7 March 1997
Council of the City of Sydney v Zegarac (1998) 43 NSWLR 195
Commonwealth of Australia v McLean (1997) 14 NSWLR 389
Astill v Newman [1999] NSWCA 43
House v The King (1936) 55 CLR 499
Taylor v State of New South Wales (1999) 46 NSWLR 322
Dedousis v Water Board (1994) 181 CLR 171
Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234
Drayton Coal Pty Ltd v Drain (unreported) NSWCA 22 August 1995
Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129
Harris v Commercial Minerals Ltd (1996) 186 CLR 1
Cowie v State Electricity Commission (Vic) (1960) VR 788
Holt v Wynter (2000) 49 NSWLR 128

ORDERS

Appeal dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40222/00
CL 21445/96

MEAGHER JA

SHELLER JA

BROWNIE AJA

Monday, 17 September 2001

Milperra Marketing Pty Limited & Ors v Bayliss
Judgment

I agree with Sheller JA.

:

Introduction
At all times material to this appeal Noel John Bayliss, the respondent, worked as a self-employed plumber. Between 1978 and 1994 he bought PVC solvent cement for use in his business from each of the appellants, Milperra Marketing Pty Limited, Kellyco (NSW) Pty Limited and Coley Pty Limited.

3 On 20 December 1996 Mr Bayliss began proceedings by statement of claim in the Common Law Division of the Court to recover damages from the appellants for injuries said to have been caused by their negligence, breach of duty and breach of contract. Mr Bayliss alleged that the appellants engaged in the business of, inter alia, “manufacturing and/or selling plumbing materials including PVC solvent cement”; that when selling the PVC solvent cement to him each of the appellants knew or ought to have known that a failure to take reasonable care on its part as to the giving of warnings about the chemical qualities of the PVC solvent cement might cause injury to him; and that as a result of his exposure to the fumes from the cement bought from each of the appellants he was injured and suffered loss and damage. Mr Bayliss’s particulars of negligence were:

“(a) Failing to give the plaintiff any or any adequate warning that fumes from the industrial glues were dangerous to humans;
(b) Failing to give the plaintiff any or any adequate warning that he should avoid exposure to fumes from the industrial glues and could do so by the use of masks.”

4 On 2 February 1998 Mr Bayliss filed a notice of motion for an order that the time for commencement of proceedings in the matter be extended pursuant to the provisions of the Limitation Act 1969 (the Act). This application came before Master Harrison. On 31 August 1999 she dismissed it.

5 The application for extension was made pursuant to ss60G and 60I in Subdivision 3 of Division 3 of Pt 3 of the Act. The sections of Subdivision 3 material to this appeal were:

“ 60F Purpose of this Subdivision

The purpose of this Subdivision is to provide a procedure for a further discretionary extension of limitation periods where the plaintiff was unaware of the fact, nature, extent or cause of the injury, disease or impairment at the relevant time. This procedure is available for causes of action accruing on or after 1 September 1990, and also (by the operation of Schedule 5) for causes of action that accrued before that date.

“ 60G Ordinary action (including surviving action)

(1) This section applies to a cause of action that accrues on or after 1 September 1990, founded on negligence, nuisance or breach of duty, for damages for personal injury, but does not apply to a cause of action arising under the Compensation to Relatives Act 1897.
(2) If an application for an order under this section is made to a court by a person claiming to have a cause of action to which this section applies, the court, after hearing such of the persons likely to be affected by the application as it sees fit, may, if it decides that it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period as it determines.

60I Matters to be considered by court

(1) A court may not make an order under section 60G or 60H unless it is satisfied that:
(a) the plaintiff:
(i) did not know that personal injury had been suffered, or
(ii) was unaware of the nature or extent of personal injury suffered, or
(iii) was unaware of the connection between the personal injury and the defendant’s act or omission,
at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted, and
(b) the application is made within 3 years after the plaintiff became aware (or ought to have become aware) of all 3 matters listed in paragraph (a) (i)-(iii).”

6 Relevantly clause 4(1) of Schedule 5 of the Act provided that:

‘Section 60G also applies to a cause of action, founded on negligence, nuisance or breach of duty, being a cause of action that accrued or would have accrued before 1 September 1990…’;

7 Clause 4(4) empowered the court to make an order under s60G in respect of such a cause of action:

“if an application for such order is made within:

(a) the period of three years referred to in s60I; or
(b) the period of three years commencing 1 September 1990.”


The application to extend time was made on 2 February 1998, outside the time stipulated in clause 4(4)(b). Accordingly the application could only succeed if that date was shown to be “within the period of three years referred to in s60I.”

Master Harrison’s Decision

8 After referring to the terms of the statement of claim and carefully reviewing the evidence, the Master said:

“The plaintiff relies on s60G and s60I(1)(a)(i), (ii) and (iii) of the Limitation Act 1969 (NSW) (as amended). The approach to be adopted in dealing with applications for extension of limitation periods is that which has been expounded in recent times in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; BHP Steel (AIS) Pty Limited v Guidice (& Ors) (NSWCA unreported, 7 March 1997) and Council of the City of Sydney v Zegarac (1997-1998) 43 NSWLR 195. The onus rests with the applicant. In addition to the satisfying of the relevant threshold requirements, it must be shown that it is just and reasonable to make an order.”

9 After setting out s60I(1) the Master said:

“12 Where it is alleged that as a result of continuing negligence by a manufacturer the health and well being of the plaintiff progressively deteriorates, a new cause of action may arise when the plaintiff suffers further not insignificant damage to his health and well being. Leave is required for those causes of action that arose up to December 1993.
13 Thus to gain access to the beneficial provisions of s60G, the plaintiff must show that:
(1) As at December 1993 [sic ] the expiration of the relevant limitation period) he was unaware of one or more of the matters identified in s60I(1)(a)(i), (ii) or (iii).
(2) That he did not become aware of that or those or he ought to have become aware in s60I(1)(a)) (or the last of those matters to become known to him) earlier than 2 February 1995 [that is, the date 3 years before the application for extension of the limitation period was made].
14 The practical effect is to require the plaintiff to identify specifically what fact or facts he claims not to have known in December 1993, which lack of knowledge meets the description in one or more of paragraphs (i), (ii) and (iii) of s60I(1)(a); and to show (by evidence) the date on which he acquired knowledge thereof (being a date later than 2 February 1995); or to show that that fact was or those facts were still unknown to him on that date. The defendant did not submit that the plaintiff ought to have become aware of the matters listed in paragraphs (i)-(iii) at an earlier date – see s60I(1)(b).
15 Counsel indicated that the plaintiff relied on s60I(1)(a)(i), (ii) and (iii) but conceded that evidence given by the plaintiff during cross examination severely qualifies and undermines his case under s60I(a) (i) and (ii).”

10 The Master held that the respondent’s claim under both s60I(1)(a)(i) and (ii) failed. Mr Bayliss has not challenged these conclusions. On the other hand, the Master concluded that he had passed through the s60I(1)(a)(iii) gateway. She said:

“21 Section 60I(1)(a)(iii) is concerned with ignorance of the existence of acts and omissions rather than legal conclusions. The acts or omissions referred to in s60I(1)(a)(iii) are the acts or omissions on which the plaintiff relies to found the cause of action referred to in s60G. Those acts or omissions, will be found in the plaintiff’s particulars of negligence – Drayton Coal Board Pty Limited v Drain (NSWCA, Gleeson CJ, unreported 22 August 1995).
22 The plaintiff submitted that he was unaware of the connection between the personal injury and the defendant’s acts or omissions until August 1996 when he was told that the manufacturers should have included a warning label on their PBC solvent containers. The defendants submitted that the plaintiff knew of the warnings on the containers in 1992 and had worn a mask in 1991.
23 In 1992 due to the poor state of his health the plaintiff had to employ a plumber and told him to be careful using the solvent but it ‘can’t hurt you that much’. At that time the plaintiff became aware for the first time that labels on the tins of glue had been changed to add a direction to ‘avoid breathing vapour’ and to include details of the chemical, methyl-ethyl ketone. After becoming aware of these directions the plaintiff began wearing a mask at all times. The warning did not strengthen the plaintiff’s belief that there was a connection between exposure and the symptoms. He was careful using the solvent in confined spaces but never thought that it would harm anyone ‘out in the trenches’.
24 In August 1996 the plaintiff first became aware that chemical companies which manufacture the solvents supply the details of the chemicals used in the manufacture. Details of the chemical compounds were provided in safety data sheets. In August 1996 the plaintiff became aware that they should have included on their labels warnings of the chemicals in the solvents and that the manufacturers did not pass on to the consumer the details that were provided to them by the chemical companies. He was told this by Mr Johnny Walker who holds an Associate Diploma of Applied Chemistry from Royal Melbourne Institute of Technology. It was confirmed by Mr Walker in writing to the plaintiff on 26 September 1996 (Ex A).
25 In October 1996 the statement of claim pleaded as one of the particulars of negligence, the lack of warning. Particulars of negligence in the statement of claim pleaded that the defendants failed to give the plaintiff any adequate warning that fumes from the industrial glues were dangerous to humans and any or any adequate warning that the plaintiff should avoid exposure to fumes from the industrial glues and could do so by the use of masks. Although the plaintiff knew that a warning appeared on the containers of solvent it was not until after August 1996 that the plaintiff became aware that the manufacturers should have included on their labels warnings of the chemicals in the solvents and that this constituted an omission which would found a cause of action.”

11 The Master next turned to consider s60G(2) and whether it was just and reasonable to extend the limitation period. In addition to Brisbane South Regional Health Authority v Taylor and BHP Steel (AIS) Pty Ltd v Guidice the Master referred to Commonwealth of Australia v McLean (1997) 14 NSWLR 389. She observed that the appellants conceded that Mr Bayliss had a real case to advance and said that there was medical evidence to support the claim that his injuries were linked to the exposure to solvents. There was also medical evidence to the contrary.

12 After citing Astill v Newman [1999] NSWCA 43 and Council of the City of Sydneyv Zegarac the Master said:

“35 The plaintiff submitted that the defendants would not suffer from presumptive prejudice because the case involves only a failure to warn of the dangers of the solvent and there is evidence to show that there were no warnings on the solvent cans until 1992. However this submission is based on the plaintiff’s knowledge that a warning was affixed on containers produced by one manufacturer in relation to one brand of solvent. I do not think that it is that simple. The defendants will be obliged to investigate when they actually put warnings on their containers. They will also have to investigate what was known about those particular solvents since 1978 to 1994 and locate the safety data sheets during that period. The defendants did not put on any evidence to show that they suffered actual prejudice.
36 According to the plaintiff witnesses’ memories would not need to be relied upon. For the defendants to locate records and investigate what was known about solvents at particular times may in part rely on witnesses’ memories. The doctors’ records of treatment and diagnosis of the plaintiff have been subpoenaed, produced and are available. The plaintiff purchased his supplies for 30 years from Raynor Plumbing Supplies at Girraween and later Port Macquarie. Additionally he purchased material from Coleman Plumbing Supplies at either Taree or Forster. The entities from which he purchased the solvent are relatively few and have been identified by the plaintiff. Once again the location of old records and witnesses’ memories come into play when the defendants prepare their cases for trial.
37 The defendants submitted that in considering whether it is just and reasonable, regard should be had to the plaintiff’s firm state of knowledge in 1993 and 1994 of the connection between his symptoms and the chemical exposure of solvents and the delay in prosecuting these proceedings. In October 1994 the plaintiff was told by Dr Fluhrer to consult a solicitor. This did not occur until April 1995 but I accept the plaintiff’s explanation that even though he had been told he had some permanent damage he was receiving treatment which may have made him well. However there has been a delay from April 1995 when he first consulted a solicitor to 20 December 1996 when the statement of claim was filed. The plaintiff’s legal representative received the report of Dr Donohoe about one month after he was instructed. This delay of 18 months had not adequately been explained. Nor had the period of 10 months between 20 December 1996 to October 1997 when service of the statement of claim was effected.

38 The notice of motion was not filed until 2 February 1998, nearly over three years after the statement of claim was filed. The plaintiff submitted that it did not need to trouble the court unnecessarily with this application until the defendants raised the limitation period in their defences. However no defences have been filed to date. It is most unlikely that the defendants would have waived this defence as the cause of action dates back up to 20 years. It is appreciated that the blame for the delay in prosecuting the proceedings once they were commenced may rest at the feet of the plaintiff’s solicitors and the plaintiff may not be personally to blame.
39 The defendants will suffer significant prejudice as it is up to 20 year since the causes of action arose. The plaintiff had firm knowledge in 1993 and 1994 that his symptoms were connected to the exposure to solvents and there have been periods of unexplained delay in prosecuting these proceedings. It is my view that the chances of a fair trial are unlikely. The plaintiff has not discharged the onus as I am not satisfied that it is just and reasonable to extend the limitation period. Costs should follow the event. The plaintiff should pay the defendants’ costs.”

13 The Master noted that the defendants did not put on any evidence to show that they suffered actual prejudice. She found that the defendants would suffer significant prejudice because up to twenty years had passed since the causes of action arose. She seems to have based this upon findings that the defendants would be obliged to investigate when it was they actually put warnings on their containers and what was known about the particular solvents from 1978 to 1994 and would have to locate the safety data sheets during that period. Although apparently Mr Bayliss submitted that witnesses’ memories would not need to be relied upon, the Master found that in order to locate records and investigate what was known about solvents at particular times the defendants “may [need] in part [to] rely on witnesses’ memories”. The Master found that the entities from which Mr Bayliss purchased the solvent were relevantly few and had been identified by him but observed that once again the location of old records and witnesses’ memories come into play when the defendants prepare their cases for trial.

14 The Master also emphasised the unexplained delay between April 1995, when Mr Bayliss first consulted solicitors, to December 1996, when the statement of claim was filed, and that date and October 1997 when service of the statement of claim was effected. She referred also to the delay between the filing of the statement of claim and the application for extension on 2 February 1998 which she said was nearly over three years. In fact it was just over one year. The Master may have been referring to the delay between the time when the plaintiff first consulted solicitors (April 1995) and the filing of the notice of motion. What seems to have been regarded as significant prejudice was based not upon any evidence from the defendants but rather on supposition which was contrary to material put in evidence on behalf of Mr Bayliss.

Appeal to Single Judge

15 From this decision Mr Bayliss appealed to the Court constituted by a single judge. The appellants cross-appealed. The appeal and cross-appeals were heard by O’Keefe J, who on 21 March 2000 allowed the appeal, dismissed the cross-appeals, set aside the decision of the Master and extended the limitation period for the action by Mr Bayliss against the appellants to 31 March 2000.

16 O’Keefe J held that in reaching her conclusion in relation to the satisfaction of s60I the Master applied the correct legal principles. His Honour said:

“The detailed findings of fact made in relation to the state of the plaintiff’s knowledge and awareness are well justified by the evidence, indeed, in my opinion, they are correct and I adopt them.”

17 His Honour added:

“Her conclusion in relation to this aspect of the case is not one which bespeaks error of the kind referred to in House v The King (1936) 55 CLR 499 at 504-5 so as to invoke intervention by this court on appeal. Accordingly the cross appeal must fail.”

18 However, O’Keefe J concluded, contrary to the Master, that it was just and reasonable that the time within which Mr Bayliss might institute an action should be extended. In reaching this conclusion, O’Keefe J first summarised what he said was the basis upon which the Master refused to exercise the discretion conferred by s60G in favour of Mr Bayliss. His Honour said:

“1. The applicant must demonstrate that despite the delay and other circumstances of prejudice, the defendants will have a fair trial. Absent such a demonstration, leave should be refused (para 33).
2. The defendants in the action will suffer prejudice because they:
(a) ‘Will be obliged to investigate when they actually put warnings on their containers;’ (para 35).
(b) ‘Will also have to investigate what was known about (the) particular solvents since 1978 to 1994 and locate safety data sheets during that period.’ (para 35). This ‘may in part rely on witnesses memories’ (para 36).
(c) ‘There (was) a delay from 1995 when (the plaintiff) consulted a solicitor to December 1996 when the Statement of Claim was filed… This delay of 18 months has not been adequately explained’ (para 37).
(d) ‘The Notice of Motion was not filed until …. nearly over three years after the Statement of claim was filed’ (para 38).
(e) ‘The defendants will suffer significant prejudice as it is up to 20 years since the causes of action arose’ (para 39).”

19 O’Keefe J set out under six heads the error which his Honour said was “of a kind that is within the principles stated in House v The King”. The errors were described in the reasons for judgment as follows:

“First, she appears not to have adverted to the differences in the two sets of judgments to which I have referred above. [Brisbane South Regional Health Authority v Taylor and Sydney City Council v Zegarac] In the joint judgment of Toohey and Gummow JJ it was said that where prejudice is alleged by reason of the effluxion of time, the position is (as stated by Gowans J in Cowie v State Electricity Commission (Vic) (supra) and approved by Gibbs J in Campbell v United Pacific Transport Pty Ltd (supra) that 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’. The defendant did not put on any evidence as to prejudice that it might suffer. Dawson J was of the view that the test in relation to the prejudice to a prospective defendant was that it had to be ‘significant’ . McHugh J distinguished between a case in which a defendant is able to prove that he or she will be prejudiced in properly defending him or herself and a case in which mere effluxion of time gives rise to presumptive prejudice (at 555). In this context the failure of the defendant to put on any evidence of actual prejudice is the more significant, but such significance is not referred to by the Master. The reference to the defendant’s failure to put on evidence of prejudice is noted, but not apparently given weight. McHugh J also said that the general rule provided for in the limitation period should prevail ‘once the defendant has proved the fact or the real possibility of significant prejudice.’
The Master did not clearly apply a test of significant or material prejudice. At one point in the judgment reference is made to ‘prima facie prejudice’ (para 33); at another ‘significant prejudice’ (para 39).
Second, one of the grounds for the refusal to exercise the discretion in favour of the plaintiff was delay between the date the plaintiff first consulted a solicitor and the filing of the Statement of Claim. This was at a time after the labels had been changed and was within the period of three years which the Act itself allows for the making of an application (s60I(1)(b); Schedule 5 Cl4(4)). No reason was stated as to why this particular period should be singled out and made a separate basis for refusing the exercise of discretion in favour of the plaintiff, or what prejudice was or might be occasioned to the fair trial of the action in or as a result of this period. Furthermore, what is unjust or unreasonable about commencing action within the time provided for in the statute is not stated in the judgment appealed from. I do not think that the exercise of a right conferred by the statute within the time provided for by that same statute for such exercise can be said to be unjust and unreasonable, in the absence of some fact or facts that show why this is so in the particular case. In the present case there was nothing to show that it was so. The defendant chose not to put on any evidence of prejudice or at all.
Third, the Master expressly relied on the delay of ‘nearly over three years’ between the filing of the Statement of Claim and the filing of the Notice of Motion for extension of time. This is a clear error. It is not ‘nearly over three years’, it is just over one year, 13½ months to be precise. Such an error of fact, material to the ultimate conclusion is within the principles of House v The King (supra).
Fourth, the Master appears not merely to have taken the period referred to in the second reason set out above as one of the bases for refusing to exercise the discretion in favour of the plaintiff, but in addition appears to have included the same period in the period of ‘up to twenty years since the causes of action arose’ which was another of the bases for the conclusion that the plaintiff will suffer significant prejudice. On the face of it this appears to be a double counting.
Fifth, in declining to exercise the discretion in favour of the plaintiff the Master’s concern that the defendants would be obliged ‘to investigate’ when they actually put warnings on their containers and what was known about particular solvents is not of itself a matter of prejudice. It is not the fact that a defendant has to investigate a claim that constitutes relevant prejudice, but rather that it will not be able to investigate the claim properly because of the effluxion of time. Every defendant must investigate the claim made against it by a plaintiff. Furthermore, in the present case the fact that warnings were not put on the products until 1992 should still be readily known by those within the defendants’ organisations. After all the application was made within six years of this occurring. The ordinary provisions of the Act in relation to time bars in actions in tort (s14) does not regard such a period as unreasonable or as imposing any injustice on or causing prejudice to a defendant. In addition, the safety data sheets which concerned the Master are available from the major manufacturers of the constituent chemicals that were the basic components in the relevant products. The major manufacturers are the large multi-national corporations Monsanto and Dow and the evidence indicates that they had extensive records on the very topic that will arise in the action.
Sixth, in refusing the plaintiff an order extending the time within which he could commence proceedings, the Master did not advert to the basis of claim inherent in the plaintiff’s Statement of Claim, viz that the defendants ought to have known of the noxious character and seriously deleterious effects of the fumes given off by the products that they respectively manufactured and marketed. These matters were known to the major suppliers of the basic components of the kind that went into the products manufactured and distributed by the defendants. As entities that were mixing and putting into the community chemical substances, the defendants ought, on the evidence, to have known that they could have seriously deleterious effects. Evidence that they were capable of causing serious and permanent physical injury was known to the major manufacturers and this was, according to the evidence before the Master, information that had been readily available for many years. Furthermore, the affidavit of Professor Phoon which was before the Master showed that six of the active ingredients in the relevant PVC solvent weld cement and the ingredient methyl-ethyl ketone in the bond priming fluid were organic solvents whose toxic effects had ‘been known for a very long time’. He said that such knowledge ‘was widespread well before the 1970’s in North America, Europe and Australia.’
The refusal by the Master to exercise the relevant discretion in favour of the plaintiff was, in my opinion, flawed and involved errors of the kind referred to in House v The King (supra). As a consequence it is open to the court on this appeal to review the exercise of the discretion under s60G of the Act.”

20 Having identified these elements of error, O’Keefe J stated his reasons for the conclusion that it was just and reasonable that the time be extended as follows:

“1. I do not think that the defendants would suffer material or significant prejudice in responding to the case which will be made by the plaintiff. According to the evidence, labels first included a warning in 1992. The defendants were aware, at latest, of the plaintiff’s claim against them by the date on which the Statement of Claim was served, namely October 1997 – a period of five years. Service of the Statement of Claim should have put the defendants on notice about
(a) inquiring as to their records and preserving them;
(b) ascertaining the recollection of executives and other employees concerning the first date on which warnings were included in the label;
(c) checking the chemical constituents of the products they manufactured and distributed;
(d) what material was available prior to 1992 in scientific journals, from the manufacturers and otherwise as to the known effects of such chemical constituents;
(e) taking advice as to any other matters that may be relevant to the claim.

Recollections back to 1992 and even some years before should not be dimmed.

2. It is clear from the evidence of Professor Phoon that the toxic effects of the chemical constituents of the relevant products had been known for many years in Australia, as well as elsewhere. If the defendants or any of them claimed not to have such knowledge, absence of such knowledge would not of itself be a defence to the action. The plaintiff’s case is that they clearly should have; the gist of the plaintiff’s claim is that the defendants ought to have known.
3. It is clear from the evidence of Mr Walker that the chemical substances which were the basic constituents of the relevant products manufactured or distributed by the defendants were not only well known in the field of manufacture and distribution of the relevant and like products for their deleterious effects, but also records to substantiate that knowledge, and to verify that the harmful qualities of such constituents was a widely disseminated fact in the industry, exist in at least the records of Dow and Monsanto. Furthermore, it defies belief that the National Occupational Health and Safety Commission (Commonwealth) and the equivalent Department of State in New South Wales would not have records relating to the noxious substances and their deleterious effects well prior to early 1992, given evidence of Mr Walker and Professor Phoon. The existence of such records should ensure that the state of knowledge in the industry can be chronicled clearly, without need to rely just or essentially on memories.
4. The fact that the prejudice relied upon by the defendants is presumptive rather than actual, that no evidence was called to show that there was any actual or particular prejudice on the part of the defendants or any of them ( Brisbane South Regional Health Authority v Taylor (supra) at 57; Cowie v State Electricity Commission (Vic) (supra) ; Campbell v United Pacific Transport Pty Limited (supra).
5. That there is or may be some prejudice (presumptive), which may arise merely as a result of the passage of time does not dictate the rejection of an application for an extension of time. In these circumstances the absence of evidence of actual prejudice or prejudice that is material or significant, is in favour of the discretion being exercised favourably to the plaintiff in a case of the present kind ( Sydney City Council v Zegarac supra at 199).
6. Viewed over all in the light of the case made by the plaintiff, the evidence produced by the plaintiff before the Master and the absence of evidence of specific prejudice from the defendants I am satisfied that the defendants are unlikely to be prejudiced, either materially or significantly in the mounting and presentation of their defence. In my opinion the prospect of a fair trial is high.
7. Having regard to the issues in the case, I am of opinion that the prospect of a fair trial is high.”

Appeal to Court of Appeal

21 The appellants appealed from O’Keefe J’s decision by leave of the Court. There were seven grounds of appeal which in their written submissions the appellants refined as raising the following questions:

“(a) Did O’Keefe J err in applying the House v The King test to the Master’s finding in relation to s60I(1)(a)(iii)?
(b) Did the Master apply correct legal principles in considering whether the requirements of s60I(1)(a)(iii) were met?
(c) Did O’Keefe J err in upholding the Master’s finding that the requirements of s60I(1)(a)(iii) were met?
(d) Did O’Keefe J err in concluding that the exercise by the Master of the discretion under s60G had miscarried?
(e) Did O’Keefe J err in his exercise of the discretion under s60G of the Act?”

22 I have quoted that part of O’Keefe J’s reasons for judgment in which, after holding that the Master had applied the correct legal principle in reaching the conclusion she did about whether the requirements of s60I were satisfied and concluding the findings of fact were justified by the evidence, his Honour said that the case was not one which bespoke error of the kind referred to in House v The King. As was pointed out by Giles JA in Taylor v The State of New South Wales (1999) 46 NSWLR 322 at 330-331, where a court’s power to exercise a discretion depends upon the satisfaction of conditions set out in a statute appellate intervention in a court’s finding about the satisfaction of those conditions flows from principles involving the credibility of witnesses and the due weight and respect to be given to findings at first instance. The limitations on appellate intervention in the exercise of a discretion spelled out in House v The King do not apply at that stage in the process. O’Keefe J addressed the conventional matters to be considered when the Master’s conclusion about s60I(1)(a)(iii) was challenged and adopted her conclusions both of law and fact as correct. The reference to House v The King was an unnecessary addition and can be ignored.

23 That brings me to the question of whether the Master applied correct legal principles in considering the requirements of s60I(1)(a)(iii) and whether O’Keefe J erred in upholding the Master’s finding that the requirement of the subsection were met.

24 The Court may make an order under s60G if it is satisfied that the plaintiff was unaware of the connection between the personal injury which founds his claim for damages and the defendant’s act or omission; s60I(1)(a)(iii). In the present case the appellants’ acts or omission were those particularised in the statement of claim as failures to give Mr Bayliss any or any adequate warning that fumes from the industrial glues were dangerous to humans and that he should avoid exposure to fumes from the industrial glues and could do so by the use of masks; compare Dedousis v Water Board (1994) 181 CLR 171 at 181-2. The appellants submitted that sub para (iii) postulates unawareness of the existence of acts and omissions and not unawareness of legal conclusions; see Do Carmo v Ford Excavations Pty Limited (1984) 154 CLR 234 at 246, 250-252 and 254 and Dedousis v Water Board at 181.

(unreported) Court of Appeal, 22 August 1995 was an appeal against a decision in the District Court to extend the limitation period applicable to a cause of action propounded by a plaintiff against his employer. The plaintiff claimed to have suffered from industrial deafness contracted during his employment. During the 1980s he was employed as a storeman and required to work near noisy machinery. The excessive noise caused considerable discomfort for him and other workers. They requested the installation of sound dampening equipment in the workplace. Those requests were not complied with. Gleeson CJ gave the principal judgment with which Priestley and Meagher JJA agreed. His Honour said:

“By 1988 the respondent knew that he was suffering from a degree of deafness associated with his working conditions. He knew that he was working in an area where he was exposed to excessive noise, and that his employer had taken no steps to protect him by installing sound proofing or other noise dampening equipment. That was the extent of his relevant knowledge before he consulted a solicitor in 1992.
When the respondent consulted a solicitor he was informed, for the first time, that there was an Australian Standard, which established a Hearing Conservation Code, and which, in its application to his case, set out a number of requirements which, if complied with, would have protected his hearing. According to the case the respondent will seek to make out at trial, those requirements included regular hearing testing, the provision to employees of advice and information as to steps that could be taken to protect hearing, and the supply of hearing protection devices. O’Reilly DCJ, of course, did not make any final determination of the merit of the respondent’s complaints, but it was apparent from the particulars of negligence, the evidence, and the arguments of counsel, that the respondent was setting out to establish a case in negligence going substantially beyond any complaint, of the kind made in the late 1980’s, about the failure to install, in the workplace, sound dampening materials.
It was argued on behalf of the appellant, both at first instance and in this court, that by 1988 the respondent was aware that he was suffering from industrial deafness, that it was caused by his noisy working environment, and that his employer had taken no steps (whether of the kind being urged by the employees or of any other kind) to deal with the problem. However, his Honour held that, before consultation with a solicitor in 1992, the respondent ‘had only a primitive appreciation of the connection between any failure of the defendant and his hearing loss’.
In a later passage in his reasons for judgment O’Reilly DCJ said that, on the authority of Dedousis, the critical question was whether, until he consulted his solicitor in 1992, the respondent was not aware that his hearing could have been protected by the provision of a thorough hearing conservation programme. Although there is no explicit finding on the answer to that question, the way in which O’Reilly DCJ decided the case makes it reasonably clear that he resolved that issue in favour of the respondent.
In summary, there was evidence on the basis of which O’Reilly DCJ was entitled to find, and he found, that it was not until 1992 that the respondent became aware of the alleged shortcomings in the conduct and workplace practices of his employer upon which he intended substantially to rely in making out his cause of action. Some years before that he was aware of his injury, and the fact that it resulted from his working conditions, and he was also aware that, despite complaints, his employer had done nothing to alleviate those conditions. On the other hand, he was not aware of the requirements of the Australian Standard, or of the steps that could and should have been taken pursuant to that Standard, or that the taking of those steps as prescribed would have prevented his deafness, and in that respect he was not aware of the acts or omissions upon which he intended to rely at trial if granted an extension of the limitation period to sue his employer.”

26 Later in his judgment Gleeson CJ said that for the purposes of the case the decision of the High Court in Dedousis established, inter alia, the following propositions:

“3 S60I(1)(a)(iii) is concerned with ignorance of the existence of acts or omissions rather than legal conclusions. The legal complexion which may be put upon a set of facts or circumstances (eg actionable negligence), and the plaintiff’s awareness of that legal complexion, is not what matters for the purpose of s60I(1).
4 The acts or omissions referred to in s60I(1)(a)(iii) are the acts or omissions on which the plaintiff relies to found the cause of action referred to in s60G. Those acts or omissions, in a case such as the present (as in Dedousis) will be found in the plaintiff’s particulars of negligence. (In this connection I refer, not to the product of some word processor, which, as some of the particulars in the present case illustrate, might include allegations that are either inapplicable or of marginal relevance, but to the material particulars as they emerge from a consideration of the statement of claim and the evidence in support of the application for an extension of time).
5 If a plaintiff alleges that his or her employer has failed to provide him or her with a safe system of work and is able to establish that he or she was not aware that there was a safer alternative system then s60I(1)(a)(iii) will be satisfied.
6 Even so, it will still be necessary for the court dealing with the application for an extension of time to decide whether, under s60G(2), it is just and reasonable to extend the limitation period.”

27 The Chief Justice said that the case was principally concerned with propositions in 4 and 5. His Honour said:

“Senior Counsel for the appellant contended that O’Reilly DCJ took an inappropriately particular view of the meaning of the expression ‘the defendant’s act or omission’ in s60I. Here, it was argued, the relevant act or omission was the failure to provide a safe system of work, or the failure to provide adequate protection for the hearing of employees such as the respondent, and this was something of which the respondent was aware in 1998. The information obtained by the respondent in 1992 may have added some further detail to the knowledge and information already possessed by the respondent, but this was immaterial. The respondent knew, in 1988, the essential facts which were to form the basis of his claim against the appellant, and he could not establish that he was unaware of the connection between his deafness and his employer’s failure to protect him against excessive noise, which was, in essence, the relevant act or omission relied upon.
The first thing to be observed about this argument is that it is difficult to reconcile with the actual decision in Dedousis.
In Dedousis the High Court accepted an argument based upon the difference between the particulars of negligence being relied upon by the plaintiff, and the somewhat narrower complaint which had been known to, and made by, the plaintiff some years before instituting his action. (see 181 CLR at 181).
In the resolution of a problem of the kind that arose in Dedousis, and that arises in the present case, it may be necessary for a court to consider questions of degree. In the evaluation of a contention that a plaintiff was unaware of the connection between the plaintiff’s injury and the defendant’s act or omission, a court may well be confronted with a situation where, before and at the relevant time, the plaintiff was aware of some acts or omissions on the part of the defendant, and the connection between those acts or omissions and the plaintiff’s injury, but not of other acts or omissions upon which reliance will be placed at a trial. The mere fact that a plaintiff’s lawyers can think up some act or omission, upon which they will wish to place some reliance at a trial, which was not known to the plaintiff at the relevant time, does not automatically mean that the requirements of s60I(1)(a)(iii) are satisfied. On the other hand, the decision in Dedousis establishes that unawareness of a material act or omission which constitutes a substantial ground upon which reliance will be placed is sufficient to satisfy s60I(1)(a)(iii).
It is important to bear in mind, however, that satisfaction of the requirements of s60I(1)(a)(iii) is not an end to the matter. One of the considerations which, in a given case, it may be proper to take into account under s60G(2) is the extent of a plaintiff’s awareness at the critical time of acts or omissions which, by reason of their connection with the plaintiff’s injury, are to be relied upon as constituting actionable negligence. It may well be that such questions of degree will also have a bearing upon the justice and reasonableness of extending a limitation period. The same applies to the other aspects of s60I(1)(a). For example, a plaintiff might be able to establish that he or she was unaware of the full extent of personal injury suffered, but a court might take the view that, at the relevant time, the plaintiff’s awareness, although not complete, was so extensive that it would not be just or reasonable to extend the limitation period. Similarly, the state of a plaintiff’s awareness of certain acts or omissions connected with the plaintiff’s injury may, in a given case, lead a court to conclude that it would not be just or reasonable to permit the plaintiff to have an extension of the limitation period, even though the plaintiff is able to establish that some other act or omission only came to notice at a later time. In other words s60G(2) may, depending upon the facts and circumstances of a case, operate as an important qualification upon the practical effect of s60I.
In the present case O’Reilly DCJ was correct to conclude that the requirements of s60I had been satisfied by the respondent, and there was no error in his discretionary decision under s60G(2).”

28 In the present case the appellants fastened upon a passage in the Master’s judgment that I have quoted and now quote again. The Master said:

“Although the plaintiff knew that a warning appeared on the containers of solvent it was not until after August 1996 that the plaintiff became aware that the manufacturers should have included on their labels warnings of the chemicals in the solvents and that this constituted an omission which would found a cause of action.”

29 The appellants submitted that this passage disclosed an error of law in that, contrary to the decisions to which I have just referred, the Master decided in favour of Mr Bayliss on the basis that although aware of the existence of acts or omissions he was unaware of legal conclusions, that is to say the legal complexion which might be put upon the particular facts or circumstances. Some support can be found for this in the words “that this constituted an omission which would found a cause of action.” The Master had earlier referred to the critical date in August 1996. She said:

“In August 1996 the plaintiff became aware that the manufacturers should have included on their labels warnings of the chemicals in the solvents and that the manufacturers did not pass on to the consumer the details that were provided to them by the chemical companies. He was told this by Mr Johnny Walker ….. It was confirmed by Mr Walker in writing to the plaintiff on 26 September 1996.”

As they pointed out, at least two of the appellants were not manufacturers. However, I do not think anything turns on the Master’s description of the appellants as manufacturers. They were sued as engaging in the business of “manufacturing and/or selling”. The claim was that in either capacity, each appellant failed to give adequate warning.

30 Section 60I(1)(a)(iii) poses the question of whether the plaintiff “was unaware of the connection between the personal injury and the defendant’s act or omission. In Deming No 456 Pty Limited v Brisbane Unit Development Corporation Pty Limited (1983) 155 CLR 129 at 151, Mason, Deane and Dawson JJ said:

“We would be inventing a new doctrine of constructive notice if we were to hold that a purchaser is ‘aware’ of a failure to comply with particular statutory provisions when he knows the facts, even though he is ignorant of those provisions and of the obligations which they impose. Indeed, the very words ‘becomes aware’ strongly indicate that the statute is looking to the purchaser’s actual knowledge of the failure which, by description, is a failure to comply with the statutory provisions. We conclude that the words ‘become aware of the failure’ in s49(5) [of a Queensland statute] involve not only knowledge that a statement containing the specified material has not been given but an awareness that the fact that such a statement was not given constitutes a ‘failure’ to do something which the Act says should be done.”

31 In Harris v Commercial Minerals Limited (1996) 186 CLR 1 at 10 the High Court said that what it had said in Deming No 456 Pty Limited about the meaning of the words “first becomes aware of” was equally applicable to the term “unaware” in s60I(1)(a). This means that unawareness of, for example statutory provisions or standards or codes of good practice, is not to be equated with unawareness of legal consequences.

32 To me it is quite clear that in the passage complained of the Master was referring to what the Chief Justice described in Drayton Coal Pty Limited v Drain as the requirements of a standard or in this case a good practice or of the steps that could and should have been taken pursuant to that standard or practice to warn Mr Bayliss. According to the Master, not until after August 1996 was Mr Bayliss aware that in accordance with such standards or practices the appellants should have included, that is to say should have taken steps to have included, warnings on their labels. That is the critical part of the Master’s conclusion and contains no error.

33 The appellants next submitted that Mr Bayliss did know of the relevant connection between the injury and lack of warning before 2 February 1995. The appellants submitted that during 1992 Mr Bayliss became aware for the first time that labels on the tins of glue had been changed to add a warning, that he knew by August 1994 of his condition, that he knew by August 1994 that the condition was caused by exposure to the glues supplied by the appellants, that he knew if there had been warnings on containers he could have followed them and avoided injury, that he knew that appropriate warnings could be printed on labels on containers by 1992, that he knew there were no warning labels on the containers before 1992 and had not taken precautions before 1991 and that in August 1994 he was told by Dr Teo and in October 1994 by Dr Donohoe to sue. On the basis of these matters, the appellants submitted that there was only one conclusion reasonably open on the evidence, namely that Mr Bayliss had not brought himself within the terms of s60I(1)(a)(iii). On that basis, it was submitted that O’Keefe J should have upheld the cross-appeal and confirmed the refusal of the application for an extension of time.

34 If an argument in this form was put to O’Keefe J it was not addressed in the reasons for judgment. But the facts asserted do not undermine the conclusion that the Master reached. To take but one example the fact that Mr Bayliss knew that “appropriate” warnings could be printed on labels on containers by 1992 did not mean that he knew that as a matter of appropriate industry standard or practice he should have been given the warnings that he claims he was not. The fact that he was told by two doctors on two different occasions to sue does not fill the gap. In my opinion, O’Keefe J correctly concluded that the Master’s decision that Mr Bayliss passed through the s60I(1)(a)(iii) gateway was justified by the evidence and correct. Accordingly the grounds of appeal summarised in the appellants’ questions (a), (b) and (c) fail.

O’Keefe J’s decision that it was just and reasonable to extend the limitation period

35 The appellants submitted that O’Keefe J’s reasons for holding that it was just and reasonable to grant an extension were erroneous and should be set aside. The starting point to this conclusion was his Honour’s finding of six errors in the Master’s reasons for holding that within the meaning of s60G(2) it was not just and reasonable to order that the limitation period be extended. O’Keefe J overruled the Master’s decision on this part of the case citing the well-known passage in the judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 505. Part of the matter that concerned O’Keefe J was the Master’s understanding of what had been said by the High Court in Brisbane South Regional Health Authority v Taylor. In that case at 544 Dawson J said:

“The onus of satisfying the court that the discretion should be exercised in favour of an applicant lies on the applicant. To discharge that onus the applicant must establish that the commencement of an action beyond the limitation period would not result in significant prejudice to the prospective defendant.”

36 At 553 McHugh J observed:

“A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. ….. The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension.”

37 On the other hand, in a joint judgment Toohey and Gummow JJ at 547 adopted what had been said by Gowans J said in Cowie v State Electricity Commission (Vic) (1960) VR 788 at 793:

“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.”

38 As I observed in Holt v Wynter (2000) 49 NSWLR 128 at 145, Toohey and Gummow JJ did not treat an extension as prima facie prejudicial to the defendant. The prospective defendant must show some evidence of prejudice. In Holt v Wynter, this Court by a majority came to the conclusion that the majority of the High Court in Brisbane South Regional Health Authority v Taylor were of the opinion that an application for extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant; 49 NSWLR at 147. Holt v Wynter was decided after O’Keefe J gave judgment.

39 However, even accepting an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion the ultimate onus of satisfying the Court that time should be extended remains on the applicant; see per Toohey and Gummow JJ in Brisbane South Regional Health Authority v Taylor at 547.

40 I do not think it is necessary to deal in detail with the six heads of error which O’Keefe J identified. I agree with his Honour that the appellants’ failure to call any evidence to suggest that they were prejudiced in any way by an order for extension of time is significant. In Brisbane South Regional Health Authority v Taylor McHugh J remarked, at 555:

“To subject a defendant once again to a potential liability that has expired may often be a lesser evil than to deprive the plaintiff of the right to reinstate the lost action. This will often be the case where the plaintiff is without fault and no actual prejudice to the defendant is readily apparent. …. When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case.”

41 The Master referred to part of a considerable body of evidence that Mr Bayliss led to demonstrate that there could be no prejudice to the appellants. Unanswered that remained compelling and could not I think be put aside on the basis of general considerations of presumptive prejudice based on speculation. In my opinion, this was an error which entitled O’Keefe J to conclude that the Master’s exercise of discretion had miscarried and permitted his Honour to re-exercise it.

42 His Honour summarised his reasons for doing so by saying that viewed overall in the light of the case made by Mr Bayliss, the evidence produced by him before the Master and the absence of evidence of specific prejudice from the appellants, he was satisfied that the appellants were unlikely to be prejudiced, either materially or significantly in the mounting and presentation of their defence. In O’Keefe J’s opinion the prospect of a fair trial was high. Having reached the conclusion that the Master had erred, a conclusion with which I agree, I am not persuaded that O’Keefe J in any way erred in ordering that the limitation period be extended. His Honour formed the view that it was just and reasonable to do. I agree. Accordingly, the grounds of appeal summarised in the appellants’ questions (d) and (e) fail.

Conclusion

43 The appeal should be dismissed with costs.

I agree with Sheller JA

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