Mountford v State of S.A. & Scotsbuild Pty Ltd No. DCCIV-96-263

MOUNTFORD v THE STATE OF SOUTH AUSTRALIA & SCOTSBUILD PTY LTD
[2000] SADC 23

Chief Judge Worthington
Civil

The plaintiff, David John Mountford, seeks an extension of time in which to institute this action and, by order of a Master, the application has been heard as a preliminary issue together with a cross-contention by the defendant, the State of South Australia, that the action should be struck out or stayed.
The plaintiff claims damages from the defendant for injuries he suffered at Ernabella in the far north of the State on 5 April 1990. At that time he was employed as a plumber by the third party, Scotsbuild Pty Ltd. Pursuant to a contract, Scotsbuild was providing various plumbing services for Services SA, an instrumentality of the defendant, including maintenance work at Ernabella and other areas in the far north. The plaintiff’s immediate supervisor was Mr Michael Goodchild, a foreman then employed by Scotsbuild. Services SA was then known as SACON and its representative at Ernabella for the purposes of the contract, was one of its employees, Mr Des Alexander, an inspector.
On the day of the accident, the plaintiff was helping to repair piping in an effluent lagoon. To get access to the pipe’s inspection point, it was necessary to remove some bushes. Mr Goodchild and Mr Alexander were the only other persons present. There is some dispute about who suggested what should be done, but for present purposes it is enough to say that it was decided that the best way to clear the bushes was to burn them. There was some solvent in the back of a nearby utility and Mr Goodchild poured some of it into a tin. The plaintiff dipped a stick into the tin and Mr Goodchild then emptied the tin into the scrub. The plaintiff walked over to that area and lit his cigarette lighter, intending to ignite the stick and throw it into the bushes. However, the solvent was extremely volatile and as soon as the plaintiff flicked the lighter, vapour exploded and he was enveloped in a fireball. He suffered extremely serious burns. No one else was injured. After initial emergency treatment at the Ernabella clinic, he was evacuated by Landcruiser to an airfield at Fregon and from there he was taken by Royal Flying Doctor to Alice Springs Hospital. It is not necessary for the purposes of this application to detail his suffering, treatment and the effect of these injuries on his lifestyle and working capacity.
In April 1991 he consulted a solicitor who was also a friend, Mr G D McGee, with a view to finding out what remedies he might pursue for his injuries. Mr McGee took advice from counsel and as a result, a summons was issued in this Court against Scotsbuild claiming damages (Action No 665/1993). Because Scotsbuild was the plaintiff’s employer, the provisions of the Workers Rehabilitation and Compensation Act 1986 (WRCA) applied. By virtue of s54 WRCA, the only claim the plaintiff could make against Scotsbuild at common law was for non-economic loss, and this is defined in s3 WRCA as follows:
“Non-economic loss” means-
(a)     pain and suffering;
(b)     loss of amenities of life;
(c)     loss of expectation of life;
(d)     and other loss or detriment of a non-economic nature.
Scotsbuild defended the action and it came on for hearing before Judge Lunn on 1 and 2 September 1994.
Judgment was delivered on 16 September 1994. His Honour assessed damages at $22,000 and added interest of $2,670 making a total of $24,670. Because of s54(3) WRCA, it was necessary to deduct any lump sum compensation payable to the plaintiff under s43 WRCA. In the result, on 28 October 1994, judgment was entered for the plaintiff for $20,500 with an order for costs against Scotsbuild. The evidence before his Honour in that matter was confined to physical disabilities arising from the burns themselves, skin discolouration and sensitivity, and problems with dermatitis. No expert psychological or psychiatric evidence was called.
Counsel for the plaintiff before Judge Lunn, Mr Algie, was not the same counsel that Mr McGee had consulted before instituting the action. As a result of certain observations made by Mr Algie about the plaintiff’s complaints of disability, Mr McGee suggested to the plaintiff that he should be examined by a psychiatrist. Although the exact date of that recommendation is not recorded, it was between the close of the hearing and the giving of judgment, ie, early September. The plaintiff accepted Mr McGee’s advice and was seen by Professor R D Goldney on 16 December 1994.
On 21 December 1994 Professor Goldney signed a report containing his findings on that examination and sent it to Mr McGee. I shall make more detailed reference to the contents of that report in due course, but for present purposes it is enough to say that Professor Goldney diagnosed the plaintiff as having a post traumatic stress disorder. There had been no suggestion of such a diagnosis before then.
At that time, the plaintiff was living in Queensland and he returned there after seeing Professor Goldney. Mr McGee received the report in early January 1995. Although the date is not certain, I am satisfied that in February 1995, probably late February, there was telephone contact between the plaintiff and Mr McGee. The plaintiff told him that he was coming down to South Australia in a week or so. On a date which Mr McGee fixes as 3 March 1995, he met the plaintiff at the Kings Head Hotel. Mr McGee fixes that date by reference to a file note he dictated at the time and on which he relied to prepare other documents but which he can no longer find. Having heard his evidence, I am satisfied that there was such a file note and that it was at the Kings Head Hotel on 3 March 1995 that he gave the plaintiff a copy of Professor Goldney’s report and asked him to read it. I accept the plaintiff’s evidence that this was the first time he was aware of any diagnosis of his having a post traumatic stress disorder, let alone that it was caused by his accident.
As the result of legal advice, the plaintiff instructed Mr McGee to bring the present action against the defendant for common law damages based in negligence and breach of the contract between the defendant and the third party. It was instituted on 28 February 1996. In short, the plaintiff claims that the defendant was in breach of a duty of care to the plaintiff and in particular, that there was negligence on the part of Mr Alexander. The Statement of Claim refers to certain matters ascertained by the plaintiff on reading the report of Professor Goldney and it is endorsed with an application to extend time pursuant to s48 of the Limitation of Actions Act 1936. A defence was filed on 21 June 1996. At some later time, the defendant took out third party proceedings against Scotsbuild. No issue arises with regard to the third party on this preliminary hearing; the third party electing not to take any part.
Apart from resisting the plaintiff’s application to extend time, the defendant says that having regard to the action heard by Judge Lunn, this action should be stayed on the basis of an estoppel founded on Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, and further that it should be stayed or struck out as an abuse of process by reason of s25(1)(b) of the Wrongs Act 1936.
I shall deal with the issues raised by the defendant before considering the application to extend time.

Estoppel - Anshun

Relying on the principles enunciated by the High Court in Anshun, the defendant submits that having regard to the action brought by the plaintiff against Scotsbuild (665/1993) and the judgment given in that matter, he is estopped from now bringing an action for damages against the defendant. This argument can be disposed of shortly.
The foundation of the Anshun principle is in Henderson v Henderson (1843) 67 ER 313 where Sir Charles Wigram VC said that the Court requires parties to “bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.”
In Anshun, a worker who was injured when girders fell from a crane, recovered damages in negligence against two defendants, the owner of the crane and the hirer, who was his employer. These two defendants had claimed contribution from each other and liability was apportioned between them at 90% against the owner and 10% against the hirer. The owner then brought a subsequent action asserting for the first time, a right to be indemnified by the hirer under an agreement relating to hire of the crane. The Court said that the owner could not do so and permanently stayed the action. In holding that there was an estoppel, Gibbs CJ, Mason and Aickin JJ, having referred to the previous judgment apportioning liability at 90/10 and the action now seeking to recover 100%, said at p 596:
“The judgment which [the owner] seeks to obtain in the present action is one which would contradict the judgment which has been entered in [the earlier] action. The judgment in that action was that [the hirer] should recover contribution from [the owner] to the extent of ninety percent of [the worker’s] damages and costs and that [the owner] should recover from [the hirer] contribution to the extent of ten percent of the damages and costs. The judgment which [the owner] now seeks is one whereby the [the owner] recovers from [the hirer] the whole of [the worker’s] damages and costs. It is this inconsistency between the judgment obtained in the first action and the judgment sought to be obtained now that is of importance.”

Their Honours continued at p 604:

“The matter now sought to be raised by [the owner] was a defence to [the hirer’s] claim in the first action. It was so closely connected to the subject matter of that action that it was to be expected that it would be relied upon as a defence to that claim and as a basis for recovery by [the owner] from [the hirer].”

In short, two issues arose in Anshun; (i) fairness and efficiency in requiring a party to put its whole case before the Court and (ii) avoiding the danger of a judgment in the first proceedings conflicting with a judgment in the second. Neither of those matters arise here.
The first action (665/1993) was for breach of contract of employment and breach of an employer’s duty of care and was between the plaintiff and Scotsbuild. At no stage during the course of that action was any issue joined with the present defendant or any of its instrumentalities. In the first action, the plaintiff was exercising a severely curtailed right to claim damages for non-economic loss. At that time, s54 WRCA (as relevant) provided as follows:
54(1) ...... no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except -
(a)     a liability under this Act;
or
(b)     a liability at common law for non-economic loss or solatium.
(2) ...........
(3) A court before which an action is brought against an employer for non-economic loss arising from a compensable disability shall make due allowance for any lump sum paid or payable under Division V or VI to the person by or on whose behalf the action is brought.
(4) Where an action is brought at common law against an employer for damages for non-economic loss arising from a compensable disability ...... the damages awarded in respect of that loss must not exceed 1.4 times the prescribed sum.
(4a) ...........
(4b) Where -
(a)     a worker suffers a compensable disability .......
and
(b).... action is taken against a person other than the employer for damages in respect of the disability,
the other person has no right to recover contribution from the employer.
I have already referred to the definition of “non-economic loss”. It is apparent therefore that the remedy pursued by the plaintiff in that action is very different from the damages at large sought here from the defendant. The plaintiff’s cause of action is not the same as it was in the first action and it is against a different party. It cannot be said that the plaintiff should have raised his present claim in the earlier proceedings.
In my opinion, there is nothing that triggers consideration of an Anshun stay.

Wrongs Act: s25(1)(b)

Section 25(1)(b) of the Wrongs Act, as relevant, is as follows:
25(1) Where damage is suffered by any person as a result of a tort (whether a crime or not) -
(a) ..........
(b).... if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, ........... against tort-feasors liable in respect of the damage (whether as joint tort-feasors or otherwise) the sums recoverable under the judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is of opinion that there was reasonable ground for bringing the action.
The defendant argues that the plaintiff chose to bring his earlier action (665/1993) for the injuries suffered in the accident against his employer, Scotsbuild, and having obtained a judgment, he should not be permitted to bring this action because by virtue of s25(1)(b), he cannot receive any more than the amount awarded by Judge Lunn in the first action and that to continue would therefore be an abuse of process.
Subject to his proving it, the “damage” or loss suffered by the plaintiff in the accident for which he could be compensated by damages at large, encompasses physical and psychological injuries together with their consequences, both economic and non-economic. Potential heads of economic loss include out of pocket expenses, lost wages, the cost of care, reduced earning capacity, lost benefits (superannuation and otherwise) and other lost opportunities. The only damage for which the first action could have been brought, and was brought, was for non-economic loss as defined in s4 WRCA. The damages payable in that action were not common law damages at large but quantum limited to 1.4 times a prescribed amount. That was further circumscribed because before judgment was entered, there had to be a deduction of any lump sum already paid under s43 WRCA by WorkCover on behalf of the employer.
In my opinion, with one possible exception, s25(1)(b) does not apply. Subject to liability being established, the “damage” first mentioned in s25(1) is the whole of the loss or damage suffered by the injured person. The restriction imposed by subsection (1)(b) concerns any action brought “in respect of that damage”. It cannot be said that in his first action the plaintiff brought an action for the “damage” he suffered in the accident. Perforce, his claim was for damages limited to that portion of damage or loss for which he was permitted to bring an action against an employer, and even then, not for damages at common law at large, but for damages as limited and circumscribed by the WRCA.
The possible exception is as follows. The Statement of Claim includes a claim for damages for “pain and suffering and loss of the amenities and enjoyment of life consequent upon the development of a post traumatic disorder and alcohol dependence.” In the course of argument, the question arose as to whether because of s25(1)(b), there may be a restriction on the plaintiff’s right to claim for that head. However, that is not for me to determine on this application. If it arises, it would be a matter for a trial judge to decide after consideration of the relevant evidence.
However, leaving aside possible argument at trial about non-economic loss, when regard is had to the spread of loss or damage that might be recoverable, this action is not one in respect of the same damage that was the subject of Action 665/1993. If the plaintiff succeeds in this action against the defendant, his award will reflect the following principle outlined in Andrews v Ziersch (1994) 61 SASR 521 by Perry J, with whom Mullighan J agreed. He said at p 539:
“It follows that if the employer is sued for common law damages, and if liability at common law is established, he or she will be liable to pay damages not exceeding 1.4 times ‘the prescribed sum’ under s54(4). If a person other than the employer is sued as a co-defendant, or if such a person is sued alone, and liability against that person is established, he or she will be liable for the whole of the damages at common law, subject, no doubt, to reduction by any amount recovered by the worker from the employer by way of common law damages, having regard to the principle against double recovery.”
The defendant has not made good its submission that the action should be stayed or struck out as an abuse of process.

Extension of time

As relevant, s48 of the Limitation of Actions Act reads:
(1) Subject to this section, where an Act, regulation, rule or by-law prescribes or limits the time for -
(a)     instituting an action; or
(b)     doing any act, or taking any step in an action; or
(c).... doing any act or taking any step with a view to instituting an action,
a court may extend the time so prescribed or limited to such an extent, and upon such terms (if any) as the justice of the case may require.
(2) A court may exercise the powers conferred by this section in respect of any action that -
(a)     the court has jurisdiction to entertain; or
(b).... the court would, if the action were not out of time, have jurisdiction to entertain.
(3) This section does not -
(a)     .............
(b).... empower a court to extend a limitation of time prescribed by this Act unless it is satisfied that -
(i)..... that facts material to the plaintiff’s case were not ascertained by him until some point of time occurring within twelve months before the expiration of that period of limitation or occurring after the expiration of that period and that the action was instituted within twelve months after the ascertainment of those facts by the plaintiff; or
(ii)..............
and that in all the circumstances of the case it is just to grant the extension of time.
If the plaintiff qualifies under subsection (3)(b)(i) the court must consider whether in all the circumstances, it is just to grant the extension of time.
The accident occurred on 5 April 1990 and the three year time limit in which to bring the action against the defendant expired in April 1993. The summons was issued on 28 February 1996, about six weeks short of being three years outside the limitation period and almost six years after the accident. To satisfy the requirement of subsection (3)(b)(i) the plaintiff relies on ascertainment of the facts contained in Professor Goldney’s report. In short, Professor Goldney offered the following items of information:

1...... The plaintiff suffers from a post traumatic stress disorder and is alcohol dependent.

The post traumatic stress disorder is definitely attributable to the accident but he cannot be as confident that the plaintiff’s alcohol dependence was caused by the accident. However, in his opinion the plaintiff’s burns and his subsequent post traumatic stress disorder have contributed significantly to the severity of his alcohol dependence.
The post traumatic stress disorder and his alcohol dependence do not prevent him from working but contribute some 20% in terms of overall loss of enjoyment of life and capacity to work.
It is probable that with treatment, the symptoms associated with post traumatic stress disorder can be reduced, but it is unlikely that they can be cured. The symptoms to which he refers include a disturbed sleep pattern, nightmares, variable levels of concentration, anxiety, and emotional arousal associated with daily intrusive thoughts about burns.

Having heard the plaintiff’s evidence, it is not clear to me what he learned from that report about his alcohol dependence, but I am satisfied that he had no knowledge of his having a post traumatic stress disorder, let alone its cause or prognosis, until he read the report of Professor Goldney on 3 March 1995. I am satisfied that on that day he learned for the first time of that diagnosis, that the disorder was due to the accident, that it had an effect on his lifestyle and working capacity, and that he could only expect limited improvement from treatment. In my opinion, therefore, he has qualified under subsection (3)(b)(i) for consideration of whether the general discretion should be exercised.
Although the majority in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 did not deliver a single judgment and there are differences of emphasis, in my opinion it stands for the proposition that although it is incumbent on a defendant to point to areas of prejudice that it says it will suffer if the extension is granted, the onus of satisfying the court that the discretion should be exercised to extend time lies on the applicant, with the ultimate question for the court being whether, in all the circumstances, there can be a fair trial. In deciding that issue, relevant matters include “the length of the delay, the explanation for the delay, the hardship to the [plaintiff] if the action is dismissed, the prejudice to the [defendant] if it is not, and the conduct of the defendant in the litigation.” (Ulowski v Miller (1968) SASR 277 per Bray CJ at p 283.)
On the evidence, I am satisfied about the following matters. When the plaintiff brought the first action, he relied on his legal advisers as to how and against whom it should be brought. Because of matters observed by his counsel during the trial of that action, it was suggested in September 1994 that he should have a psychiatric examination. Within a comparatively short time, on 16 December, he was examined and the report dated 21 December was received by his solicitor, Mr McGee, in early January 1995. At that time the plaintiff was in Queensland but within a matter of weeks, 3 March, he met with Mr McGee in Adelaide and read Professor Goldney’s report. On that occasion, Mr McGee advised him that he would probably succeed in a claim against SACON, so he instructed Mr McGee to go ahead. I accept that he then left it to Mr McGee to commence the action and to look after his interests, and he went back to Queensland.
The present proceedings were issued on 28 February 1996, some eleven months later. No evidence was led about the period between March 1995 and February 1996 but equally, no questions were asked in cross examination of the plaintiff or Mr McGee about it. It was not submitted that any additional prejudice arises from it and certainly, none is apparent.
The length of the delay is considerable. However, the plaintiff did not just sit on his rights. At all material times he has left the matter to his legal advisers and, so far as the evidence discloses, whenever anything was asked of him he attended to it within a reasonable time. The accident itself was fully investigated at the time it happened. There were only three witnesses to it and the evidence seems to be readily available. It appears that the relationship between the defendant and the third party is set out in a written contract. The defendant’s employee at that time, Mr Alexander, is still employed by the defendant. Mr Goodchild, who was then a foreman employed by the third party, is now also employed by the defendant. Clearly both these witnesses are still accessible to the defendant. The plaintiff’s treatment in the period immediately after the accident is documented and there is no suggestion that relevant medical or related evidence is no longer available.
The evidence does not make it clear when the defendant first became aware of Professor Goldney’s report, but it must have been by the first half of 1996. The defendant was served with the Summons and Statement of Claim in early 1996 and in its defence which was filed on 21 June 1996, there is a reference to that report. It has been open to the defendant, if so advised, to have the plaintiff examined by a psychiatrist since then, and of course, he is still available. Importantly however, no basis has been laid to suggest that the defendant has been prejudiced by an inability to have the plaintiff examined by a psychiatrist of its choice.
While I acknowledge that a significant lapse of time can cause prejudice by interfering with the memory of witnesses, that must be put in the balance with all other factors in deciding whether there can be a fair trial. For the reasons given, I am satisfied that the balance favours the plaintiff and that he has discharged the onus of enlivening the discretion of the court to extend time.

Orders

The defendant’s cross-contention that the action be struck out or stayed is dismissed.
Time to bring this action will be extended until, and to include, 28 February 1996.

[2000] SADC 23

22 May 2000