Peter David Dean Mitchell v Guiseppe Barbaro No. SCGRG 94/191 Judgment No. 4604 Number of Pages 9 Limitation of Actions

[1994] SASC 4604

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Limitation of actions - postponement of the bar extension of period - Appeal against order of magistrate granting an extension of time to the respondent within which to issue proceedings for damages - seven years previously respondent run down by a vehicle driven by appellant - police report annexing statement of eye witness not obtained until 6 years after accident - nigh on two years later eye witness was located and a witness proof obtained disclosing previously unknown evidence - appellant claimed hardship would result from an extension as the claim referred to injuries of which the appellant hitherto ignorant such that the long passage of time would prejudice its ability to assess the respondent's claim - magistrate refused to permit cross examination by appellant's counsel of the respondent as to his injuries - observations as to what constitutes a material fact necessary to sustain an application for an extension of time - the new evidence obtained from eye witness constituting a material fact ascertained within 12 months of application for extension of time - delay in commencing proceedings primarily due to successive respondent's solicitors' inactivity - appellant required to establish real prejudice to successfully challenge application for extension of time - assessment of prejudice to appellant impossible due to failure of magistrate to allow cross examination as to injuries - that refusal amounting to error of law - appeal allowed, matter remitted for further consideration in light of appropriate cross examination of respondent. Limitation of ActionsAct, 1936s 48. Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628; Napolitano v Coyle (1977) 15 SASR 559 and Ulowski v Miller (1968) SASR 277, applied.

HRNG ADELAIDE, 19 May 1994 #DATE 10:6:1994

Counsel for appellant:     Mr M G Steele

Solicitors for appellant:    Ward and Partners

Counsel for respondent:     M G L Muecke

Solicitors for respondent: Andersons Barker Gosling

ORDER
Appeal allowed.

JUDGE1 OLSSON J This is an appeal against an interlocutory order of a stipendiary magistrate granting an extension of time, pursuant to section 48 of the Limitation of Actions Act, 1936 ("the Act"), within which the respondent may issue proceedings for damages against the appellant.

2. The facts giving rise to the order may be summarised as under -
    (1) Just prior to 8.00 pm on 17 October 1985 the
    respondent was, it is alleged, standing by his parked
    vehicle on Magill Road, Kensington Park. He was struck
    and injured by a vehicle driven by the appellant in an
    easterly direction along that road.
    (2) As at 9.05 pm on that date a breath analysis
    revealed that the appellant had a blood alcohol
    concentration of 0.13%.
    (3) In September 1986 the respondent instructed Ms S.
    Caruso, a solicitor, to prosecute a claim for damages
    against the appellant on his behalf. Although some
    correspondence passed between her and SGIC in relation
    to it, she failed to initiate proceedings within three
    years from the date of the accident. At that stage the
    respondent was ignorant of the provisions of the Act.
    (4) It is clear that, although he enquired of her from
    time to time, the respondent obtained little
    satisfaction from Ms Caruso over a very significant
    period of time, as to what was happening with his claim.
    Eventually her file related to it was passed on to
    Daenke O'Donovan, although it is far from clear as to
    how that came about.
    (5) Eventually, on 6 June 1990, the respondent resorted
    to Mr Hackett of Andersons Barker Gosling ("Andersons"),
    who had acted for a friend of his, in an attempt to have
    the matter resolved. He procured the relevant file from
    Daenke O'Donovan shortly thereafter. It immediately
    became apparent to Mr Hackett that the claim was already
statute barred and that a section 48 application would
    need to be made. A statement was obtained from the
    respondent, arrangements were made for an updated
    medical examination and enquiries were put in train to
    ascertain the identity of the driver of the vehicle
    which had struck him - a fact not then known.
    Negotiations were also conducted with Law Claims as to
    whether a claim should be pursued against former
    solicitors for the respondent.
    (6) To say the least of it matters were also not
    expeditiously handled by Andersons. They did not
    procure details of the driver concerned (the appellant)
    until mid 1991. The relevant police report had been
    archived and a copy of it was not obtained until late
    January 1992. Counsel's advice had been obtained in mid
    June 1991 and this was discussed with the respondent at
    that time.
    (7) The police report had annexed to it a statement
    procured from an eye witness named Stewart. The
    respondent was spoken to by Stewart immediately after
    the accident. The former understood that Stewart had
    been a witness of relevant events. However, the
    respondent claimed that he had not discussed the full
    detail of the potential evidence of the latter both
    because of the respondent's own injuries, and also by
    reason of the fact that the police had attended and
    were getting full details from Stewart. It is true
    that, in cross examination, it seemed that Stewart had
    spoken to the respondent of at least some aspects of his
    potential evidence, but it appears clear that the
    respondent was by no means made aware of the full,
    detailed testimony which could have been given by this
    witness.
    (8) Initial attempts by Andersons to contact Stewart
    proved unsuccessful and, in March 1992, an investigator
    was instructed to attempt to locate him and obtain a
    full proof of evidence. In mid June the investigator
    forwarded his report with a plan and photographs of the
    locus, as well as a proof from Stewart. An up-to-date
    proof was also obtained by Andersons from the
    respondent. Stewart's proof was not before the learned
    magistrate, but what are said to be the highlights of it
    were set out in an affidavit of the respondent tendered
    as exhibit P1.
    (9) It was not until 16 November 1992 that further
    advice was sought from counsel. On 4 December Andersons
    interviewed the respondent and went through Stewart's
    proof with him. Proceedings were issued on 20 July
    1993. It is thus clear that Andersons were extremely
    dilatory in processing all aspects of the matter. SGIC
    was at all times well aware of the potential for a
    claim. It received an accident report signed by the
    respondent on or about 18 October 1985. Indeed it was
    the Commission which, by letter dated 26 April 1989,
    first pointed out to Ms Caruso that the limitation
    period had expired. It was advised by Andersons on 18
    June 1991 that they were then acting. On 11 February
    1992 Ward and Partners advised Andersons that it had
    been instructed by SGIC to act for it. That firm
    actually provided Andersons with a copy of the police
    report to which I have referred, at that time.

3. As I understand the material before me, the copy of Stewart's statement to the police was first forwarded to the respondent personally on 8 April 1992. I infer that it was at that time that he first became fully aware of the detailed evidence which Stewart was likely to give. The later proof procured by the investigator was not seen by the respondent until 4 December 1992.

4. In dealing with the application for extension of time and after reciting the written sequence of events, the learned magistrate had this to say:-
    "With some trepidation I find that the statement
    obtained by the private investigator Haynes, from the
    witness Stewart which was first brought to the attention
    of the plaintiff on 4 December 1992 contained material
    facts. I criticise Andersons for having been in the
    possession of the statement for nearly six months, at
    that time. In any event that's the trigger. Within
    that statement are material facts that entitle me to
    consider whether I should exercise my discretion. That
    came to the plaintiff's attention within 12 months of
    the issue of the claim. I need to consider, in
    particular, the matters set out in Ulowski v Millar
    (1968) SASR p.277. The length of delay, well that's
    appalling, October 1985 until 1993, 20 July 1993. The
    explanation is fairly and squarely incompetence by his
    legal advisors. I accept that Mr Barbaro always thought
    he had a good claim and on the face of it he has. He
    did the right thing, he first of all told SGIC, then he
    went and saw a lawyer. He was distracted but was not
    under notice of the limitation period. The file changed
    to another lawyer and he then went and saw Andersons. I
    find nothing Barbaro did or did not do contributed to
    the delay.

Hardship - he may well have, in fact I would be amazed
    if he didn't have good cause of action against both
    Caruso and Andersons as well. However it has been
    pointed out to me, 'there is many a slip twixt the cup
    and a lip' and also of course, to assess damages on any
    claim in negligence, we would have to, in effect,
    re-litigate the assessment of damages on this accident,
    and that is the only real issue. In this case there
    can't be much argument over liability when he is hit by
    a driver who has a blood alcohol reading of .13, and
    there is no suggestion he ran in the path of a car or
    anything like that. There is some risk of hardship to
    the plaintiff in the fact that to obtain the damages to
    which he was clearly entitled, he has to do so by the
    second hand method of a negligence suit or suits. He
    would then be in the unfortunate position of starting
    from scratch with a new lawyer. He would probably be
    nervous to commence a new action with yet another lawyer
    though he might console himself with the old expression
    of 'third time lucky.' As for the prejudice to the
    defendant, I accept there is some prejudice in that they
    have been deprived of the opportunity of conducting
    their own medical examinations in closer proximity to
    the time of the injury. I do not think that prejudice
    is all that severe. Certainly the injuries have had
    ample time to stabilise. Now the only issue is to what
    extent they are attributable to this accident. I am not
    convinced there is substantial prejudice in that latter
    respect. Finally there has been nothing improper at all
    in the conduct of the defendant. I have made clear in
    these reasons, that there has been an inexcusable delay
    by the plaintiff's lawyers. That has weighed heavily
    with me in exercising my discretion in this matter. But
    even despite that, in my view, the proper exercise of
    discretion here is to grant leave for the plaintiff to
    proceed. I extend the time to lodge the claim to 20
    July 1993."

5. By his notice of appeal, the appellant asserts that the learned magistrate -
    - erred in finding that the plaintiff had ascertained a
    fact material to his case within the meaning of Section
    48(3) of the said Act.
    - erred in finding that the alleged fact material to the
    plaintiff's case was ascertained by him after the
    expiration of time within which to issue proceedings.
    - erred in finding that the plaintiff issued proceedings
    within twelve months of ascertaining the alleged fact
    material to his case.
    - erred in ruling that the defendant's counsel could not
    cross-examine the plaintiff as to his injuries.
    - erred in exercising his discretion to grant an
    extension of time to issue proceedings in favour of the
    plaintiff - that it was unjust in all the circumstances
    to grant the plaintiff an extension of time to issue
    proceedings.

6. This appeal falls to be disposed of in the context of the detailed provisions of section 48 of the Act which, relevantly, stipulate that:-
    "48. (1) Subject to this section, where an Act,
    regulation, rule or by-law prescribes or limits the time
    for -
    (a) instituting an action;
    (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) ...
    (3) This section does not -
    (a) apply to criminal proceedings; or
    (b) empower a court to extend a limitation of time
    prescribed by this Act unless it is satisfied -
     (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 the period of limitation or occurring after the
     expiration of that period and that the action was
     instituted within twelve months after the
     ascertainment of those facts by the plaintiff;
    or
     (ii) ...
    and that in all the circumstances of the case it is just
    to grant the extension of time."

7. At the outset it is important to revisit what was said by the High Court in Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628 at 636, 638. In the course of the joint judgment in that case the members of the High Court made these points:-
    . Unlike the situation under the pre-existing legislation,
    there is no requirement that the material facts be of a decisive
    character, no reference to constructive knowledge, no obligation
    to have used due diligence in seeking to discover at an earlier
    time the facts in question and no mention of seeking appropriate
    advice. The effect of the paragraph was described by Bray CJ in
Napolitano v Coyle (1977) 15 SASR 559 at 569 in words which the
    High Court was content to adopt:
     "A plaintiff may still be entitled to ask the Court to
     extend the time under the section, notwithstanding that
     he has been supinely inactive and notwithstanding that
     the material facts might easily have been ascertained
     earlier and notwithstanding that their nature is not
     such as to be decisive of the success of the action or
     even such as to have in his mind weighed down the
     balance in favour of litigation. All these matters, of
     course, are relevant to the discretion, and it seems to
     me that the South Australian Parliament, having made one
     qualifying condition, which in some cases may not be of
     great significance, has left all the rest to the
     discretion of the court."

. A fact is material to the plaintiff's case if it is both
    relevant to the issues to be proved if the plaintiff is to succeed
    in obtaining an award of damages sufficient to justify bringing
    the action and is of sufficient importance to be likely to have a
    bearing on the case. The Shorter Oxford English Dictionary
    defines the word "material", inter alia, to mean "Of such
    significance as to be likely to influence the determination of a
    cause".

8. Although a definition attributed to the sixteenth century it provides an apt guide to the intention of the legislature in choosing to refer, without any elaboration, to 'facts material to the plaintiff's case'.

9. The very fact of the existence and contents of a witness statement is itself capable of being material to the case of the relevant party, in the sense that it represents available evidence that could be called in support of such case. It is, of course, trite to say that, as was recognised by the learned magistrate, the primary matters to be considered as to the merits of a section 48 application - once the pre condition of subsection (4) is satisfied - are those which were identified in Ulowski v Miller (1968) SASR 277.

10. The primary argument advanced on behalf of the appellant was that the learned magistrate fell into error, in that he incorrectly held that the material before him disclosed that the respondent had ascertained a fact material to his case within a period of 12 months prior to the initiation of the proceedings in the Magistrates Court.

11. One of the difficulties in that regard is that the learned magistrate simply made the bald finding that relevant material facts were contained in the proof obtained by the investigator and were thus ascertained by the respondent for the first time on 4 December 1992. Unfortunately he did not identify what material facts he had in mind, in so holding.

12. It was contended by the appellant that a comparison of Stewart's statement annexed to the police report and the summary of points emerging from the investigator's proof reveals no significant differences - that the latter contained nothing which could fairly be characterised as a significant new fact material to the respondent's case.

13. In my view that assertion cannot be sustained. The later proof contained a good deal of information which is not to be found in the original brief statement to the police at the scene. For present purposes the critical feature was the revelation by Stewart in his proof that, on his observation at the time, the appellant was not only travelling at considerable speed, but was attempting to squeeze his vehicle through an available space on the carriageway which, due to the configuration of vehicles and the respondent on it, was 10 patently not wide enough to enable him to do so without necessarily striking the respondent.

14. On any view this added a completely new dimension both to what the respondent previously knew or realised; and also to the inherent strength of his case against the appellant.

15. In my opinion the learned magistrate was clearly correct in concluding that the pre condition established by subsection (3) had been satisfied.

16. Whilst the learned magistrate expressed himself somewhat unfortunately as to the nature of the test to be applied (as to which I infer that he was really speaking in a somewhat jocular - if not cynical - vein) there is no doubt in my mind that he correctly addressed the various heads of consideration outlined in Ulowski v Miller in deciding whether or not to exercise his discretion in favour of the respondent.

17. He recognised that, as was obviously the case, the critical area of consideration for present purposes was that of possible hardship flowing to the appellant as a consequence of what had transpired.

18. In so saying I by no means ignore what was put by Mr Steele, of counsel for the appellant, as to the issues of length of delay and the explanation for it - in particular, what he argued was the supine inactivity of the respondent. However, I have no hesitation in rejecting that criticism. The respondent, who is obviously of ethnic background, can fairly be pardoned for accepting that the way of the Australian legal process is, to express it mildly, long, tortuous and frustrating. He had the extreme misfortune to fall into the hands of two lawyers in succession who grossly mismanaged his claim, in a manner which was as unforgivable as it was to the discredit of the profession. His initial enquiries of Ms Caruso had borne little fruit and I infer that he had, perhaps understandably, concluded that he simply had to wait an inordinate time for the appropriate steps to be taken. In the case of Andersons at least, the matter was progressed over time, even if at a snail's pace. In my opinion, in all of the unfortunate circumstances, the respondent is entitled to sympathy, rather than condemnation, for the inexcusable delays which occurred.

19. As the learned magistrate correctly identified, some degree of prejudice to the appellant is apparent. Although his insurer knew of the potential for a claim immediately after the accident, it was initially notified of injuries to the respondent's finger, left heel, both legs, pelvis and right elbow. A medical report arising from a medical consultation had by the respondent with Dr Pers on 18 October 1985 referred to the respondent's injuries in these terms:-

    "MEDICAL REPORT OF GUIESEPPE BARBARO
    History: I first examined Mr. Barbaro on the 18th
    October, 1985. He stated he was struck by a vehicle
    while standing beside his own vehicle in Magill Road at
    8.00 p.m. the previous night. He stated that the other
    vehicle had struck him in the left loin area. He was
    suffering from some pain and discomfort in the right
    elbow, the little finger of the right hand, the back of
    the left thigh and also some pain in the left heel. He
    stated that the other vehicle had left the accident site
    without stopping.

Examination: Examination revealed -
    a. mild tenderness, medial aspect of right elbow
    b. mild tenderness of the right 5th metacarpal joint
    c. mild tenderness, posterior aspect of the left thigh
    d. small abrasion, upper right calf
    e. small hematoma, medial aspect of the left heel
    covering 1.1 x .5 cm
    f. two abrasions above the left lateral ankle
    g. small hematoma, left buttock

Investigations: An X-ray of the left heel showed no
    abnormality Management: I treated him with 'Movelat'
    ointment, local heat to the affected area and analgesics
    for pain.

Progress: He continued to suffer from pain in the right
    calf and left heel for about two months after the
    accident. On last examination on the 10th February,
    1986, all his injuries had resolved.

Summary: Mr. Barbaro had suffered multiple soft tissue
    injuries as described. All injuries have healed and
    there is no residual disability."

20. It would seem that the first intimation which SGIC had of any other situation was when, in 1993, it received copy medical reports obtained in October 1986, November 1990 and May 1991, which, inter alia, made reference to a back injury. In the statement of claim some emphasis is given to an alleged multi-ligamentous or soft tissue injury to the respondent's back and para vertebral muscle spasm. The appellant claims that, due to the long passage of time, it has been denied the possibility of arranging independent medical examinations as to the nature and extent of any back injury and whether or not it was referable to the accident, and that this necessarily prejudices its ability to meet the plaintiff's claim and test the propriety of the claim for damages, to the extent that it reflects any back injury.

21. I digress to note that a further complaint of the appellant is that the learned magistrate inappropriately denied the respondent the right to cross examine the respondent as to this back injury on the section 48 application. This was, I think, unfortunate, because the appellant was surely entitled, within reason, to probe at least the broad nature and extent of the respondent's assertions concerning any back injury so as to be able to demonstrate the nature and significance of the back injury relied upon, for the purpose of demonstrating the likely nature and extent of any prejudice likely to be suffered. There is, I think, force in that criticism.

22. As I understand him, counsel for the appellant contended, on the authority of Napolitano v Coyle (1977) 15 SASR 559, that any degree of prejudice to him was sufficient to warrant a refusal to exercise discretion in favour of the respondent. It did not, he submitted, have to be demonstrated that the prejudice was of any particular degree of significance or substance. To the extent that such an argument was based on what fell from Bray CJ in Napolitano v Coyle it is, undoubtedly, ill-founded. The learned Chief Justice was very careful, in his judgment in that case, not merely to speak of 'prejudice'. Rather, he expressed a concept of what he described as 'real prejudice'. Quite clearly he was directing his mind to the impropriety of exercising discretion in favour of a plaintiff in situations in which it appeared that the lapse of time and conduct of a party had necessarily brought about a situation in which prejudice necessarily flowed to a defendant which was of such 14 a substantial nature that such party would, or might well, in some significant fashion, be prevented from developing an adequate potential defence to a claim made.

23. That concept requires the court, in the individual case, to examine the particular circumstances and arrive at a value judgment as to whether the nature and extent of prejudice is of such substance that it would not be fair to expose a defendant to that disability in conducting its case. In short there is an issue of fact and degree to be assessed, in light of the situation revealed by the evidence.

24. In the case at bar the learned magistrate was, seemingly, not persuaded that the issue was of sufficient potential significance in the overall case to warrant a refusal of the relief sought. However, due to his refusal of cross examination, as already adverted to, he was necessarily operating in something of an information vacuum. The true extent and significance of any prejudice was inextricably linked with the extent to which any doubt was fairly likely to arise as to the genesis of the back condition relied upon, the nature and extent of it and its likely relative impact on the damages ultimately to be assessed. Those are matters which I remain unable to determine with confidence on the information before me on this appeal.

25. In my view the refusal to permit proper cross examination, in the circumstances, was an error of law.

26. The proper course is to allow this appeal, set aside the order made and to remit the matter to the learned magistrate for further hearing according to law. He will then need to re-exercise his discretion in light of the situation emerging from any appropriate cross examination of the respondent and any other material put before him, as to the aspect of potential prejudice to which I have referred. There will be an order accordingly.