Pomeroy v Thwaites Witham Pty Ltd

POMEROY v THWAITES WITHAM PTY LTD & KRANTZ
[2001] SASC 125
Full Court: Doyle, Nyland and Gray JJ

DOYLE CJ The issue in this appeal is whether a Judge of the District Court has erred in exercising his discretion to refuse to extend the time within which the Plaintiff may bring a damages action in that Court.
The Plaintiff’s claim
The Plaintiff has issued proceedings in the District Court claiming from the Defendant damages for the conversion of her goods by their sale. In the alternative she claims damages for breach of statutory duty, for detinue, and for negligence.
The Plaintiff was a tenant who was evicted from premises by the Defendants. The claim is that the Defendants took possession of property of the Plaintiff on the premises, and later wrongfully sold that property. The Plaintiff claims that the Defendant was not entitled to sell the property, acted negligently in selling it, and breached certain provisions of the then applicable Residential Tenancies Act, 1978 (SA).
The goods were sold on 18 September 1991. The Plaintiff issued her proceeding on 21 May 1998, more than six years after the event.
It is common ground that the time within which proceedings had to be brought for conversion or negligence expired on 17 September 1997. No suggestion appears to have been made at any stage that the claim for breach of statutory duty attracts a different time limit.
The Plaintiff sought an extension of the time within which the action might be brought. The extension was sought under s 48 of the Limitation of Actions Act 1936 (SA), which provides as follows:
“48. (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)    ...
(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)that the plaintiff’s failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances,
and that in all the circumstances of the case it is just to grant the extension of time.”
The Judge heard evidence led by the Plaintiff and by the Defendants. He declined to grant an extension of time. He found that none of the matters relied on by the Plaintiff as facts material to her case, which would enliven the discretion conferred by s 48(3)(b), constituted facts material to her case. The Plaintiff appealed. The appeal was upheld by the Full Court: Pomeroy v Thwaites Witham Pty Ltd & Anor [2000] SASC 44. The Court found that one of the matters relied on by the Plaintiff was a material fact for the purposes of s 48(3)(b)(i). The matter was remitted for further hearing before the Judge.
The parties put further submissions to the Judge. No further evidence was called. The Judge held that although the discretion was enlivened, it was not just to grant an extension of time. Accordingly, he refused to grant the extension of time.
To identify the point that arises on appeal, I now need to say a little more about the facts of the case.
The Plaintiff had consulted a number of solicitors about her claim between 1992 and 1998. She had also sought compensation through the Residential Tenancies Tribunal, but the amount of the claim she made exceeded the jurisdiction of that Tribunal. For some time the Plaintiff had been wanting to recover the estimated replacement cost of the property which she claimed was wrongfully sold. Solicitors advising her had been advising her that she could recover only the market value of the property. She appears to have been reluctant to accept that advice. There were periods of time during which the Plaintiff appears to have done little to progress her claim.
In July 1997 a valuer, Mr Kearns, provided to the Plaintiff’s then solicitor a valuation of some of the property for the sale of which the Plaintiff was claiming damages. The valuation was on the basis of market value. Martin J, with whose reasons the other members of the Full Court agreed, said at [11]:
“[I]t appears that Mr Kearns has given a market value as at about June 1991. Importantly, the valuation by Mr Kearns was the first occasion on which the appellant was given information as to the market value of any of the goods sold by the first respondent.”
The Plaintiff relied on this valuation as a fact material to her case which enlivened the discretion to grant an extension of time. There were other matters upon which she relied as well. In relation to the valuation, when the matter was first before him, the Judge said:
“I have some difficulty in finding that the Kearns’ valuation amounted to a “material fact” within the meaning of the section. The plaintiff at that time was aware of the variance in figures and the ongoing debate of the true measure of her loss. It is simply a regurgitation of her loss. It can be seen as a more accurate assessment of the loss.
The assessment of loss in this type of case is conjectural. A valuation may be right or wrong. A valuation by description is clearly open to much debate. The goods in question had a significant value. However, the Kearns’ valuation is based on the plaintiff’s description of her goods and is no doubt speculative and can hardly be called decisive.
I do not consider that the Kearns’ valuation can be sighted [sic] as a “material fact” within the meaning of the Act.
On appeal, the Full Court held that the Judge erred. Martin J said at [21]:
“In my opinion, if his Honour regarded the appellant’s knowledge of the distinction between replacement cost and market value as knowledge which prevented the valuation by Mr Kearns from being a fact material to the appellant’s case, his Honour was in error. The knowledge of the distinction was knowledge of the legal position. It was not knowledge of the market value of the goods. Although the appellant had a knowledge that the goods possessed a market value, prior to the valuation by Mr Kearns she had not gained any information as to the amount of that market value. The market value of the goods was a fact material to the issue of damages. In addition, the existence and contents of the valuation was material to the appellant’s case “in the sense that the [valuation] represented available evidence that could be called in support of her case”.
It was on the basis that the provision of the valuation gave rise to a fact material to the Plaintiff’s case for the purposes of the legislation, that the case was remitted to the Judge for further consideration.
The Refusal to Exercise the Discretion
When the matter came back to the Judge, the sole issue was the exercise of the discretion to grant an extension of time on the basis that “in all the circumstances of the case it is just to grant the extension of time”.
The Judge delivered written reasons for refusing to exercise his discretion in the Plaintiff’s favour. He summarised the history of the matter. He correctly identified the issue before him as being whether he should exercise the statutory discretion. He referred to the evidence given before him on the previous occasion.
The Judge put particular emphasis on a letter written on 2 July 1997 by Mr Baldock, the Plaintiff’s then solicitor. This was a letter addressed to the Plaintiff, providing advice to the Plaintiff and recording matters that were discussed with the Plaintiff on 30 June 1997. The letter noted that the Plaintiff was going to make a further application to the Residential Tenancies Tribunal. The letter pointed out that unless the respondents to that application consented, the Tribunal would not be able to entertain a claim for the full amount claimed by the Plaintiff. The letter pointed out that if the Tribunal declined to entertain the claim the Plaintiff would have to issue proceedings in the Magistrates Court or the District Court. In a passage in bold and underlined in the letter, the writer stated that “Any such action must be instituted by September 1997 - six years from the date of the negligence ... ”. The writer pointed out in terms that if the Plaintiff did not proceed within that time, she would not be able to issue a claim as the time limit of six years would have expired.
In his reasons the Judge finds that the Plaintiff was informed that the time within which proceedings could be brought would expire in September 1997. In particular, the Judge found at [21]:
“She was specifically advised that the expiry date for her claim to be instituted was September 1997. This advice was certainly confirmed in writing to her on 2 July 1997.”
On my reading of the Judge’s reasons, this finding is based on the letter written by Mr Baldock, and accordingly must be based on a finding that the letter was received by the Plaintiff. It is clear from the Judge’s reasons that this finding was influential in his decision not to grant an extension of time. The point is an obvious one. The Plaintiff was well aware that the time was about to expire, and ignored that advice. Indeed, in returning to the Tribunal for relief, she followed a course that was clearly unlikely to succeed.
There is a further passage of the Judge’s reasons that is relevant. He referred to the fact that the Plaintiff was reluctant to accept advice that her claim should be based on market value, as distinct from replacement value. The Judge then said:
“... A significant proportion of the Kearns valuation was based on quotations obtained by the plaintiff early in 1992. I accept that the valuation may amount to a material fact for the purposes of section 48 and in my view has been prepared or manufactured for the purpose of the issue of the proceedings but in reality adds nothing new to the plaintiff’s actual knowledge of her loss. This is a matter which must be borne in mind in exercise of discretion.”
There are two things about this passage of the Judge’s reasons that require comment. First, the statement that the valuation “has been prepared or manufactured”. Secondly, the statement that the valuation “adds nothing new” to the Plaintiff’s knowledge of her loss. The Judge then referred to the fact that having regard to the lapse of time, the events having occurred some nine years ago, there was likely to be prejudice to the Defendants in the form of failing memories in particular. The Judge repeated that the Plaintiff had ignored advice about the applicable time limit.
Submissions on Appeal
Three submission are advanced in support of the appeal. First, that the Judge erred in finding that Mr Baldock informed the Plaintiff of the applicable time limit. Secondly, that the Judge wrongly treated the valuation as “prepared or manufactured” and erred in relying on that finding. Thirdly, that the Judge wrongly deprecated the significance of the valuation, by saying it added “nothing new” to the Plaintiff’s knowledge.
When the matter was first before the Judge, it was the Defendant who called Mr Baldock to give evidence. He gave evidence under subpoena. He was then the Plaintiff’s former solicitor. When he gave evidence privilege was waived. But as I understand it privilege was waived only at that stage. Accordingly, counsel for the Defendant was not aware what documents passing between Mr Baldock and the Plaintiff were in his possession. The letter with the advice about the time limit was produced for the first time in the course of Mr Baldock’s examination-in-chief. By then the Plaintiff had given evidence and had been cross-examined. Later in the proceedings the Plaintiff was recalled for further examination. She was recalled by her own counsel. The evidence was as follows (D4 is the letter):
“Q.Looking at Exhibit D4 do you remember receiving that letter.
A.No I have no recollection of it.
HIS HONOUR
Q.Where’s the letter addressed to.
A.Unit 7, 26 Park Street, Hyde Park, South Australia.
Q.Is that where you were living then.
A.Yes.
Q.But you have no memory of getting that letter.
A.I got a couple of accounts from Mr Baldock. I have been sitting there trying to think, I really cannot remember the letter.’
NO FURTHER QUESTIONS
WITNESS RELEASED”
It is to be noted that the Plaintiff was not cross-examined by the Defendants on her assertion that she had no recollection of receiving the letter.
In finding that Mr Baldock advised the Plaintiff of the time limit, the Judge must have intended to find that she received the letter. There is no suggestion in the evidence that the Plaintiff was informed of the expiry of the time limit on any other occasion. There are passages in the evidence where the Plaintiff acknowledges that Mr Baldock mentioned that a summons had to be issued “by a certain period of time”, but the Plaintiff said she could not say what period of time he said. At another stage the Plaintiff said that Mr Baldock “said something about things having to be done ... he didn’t particularly mention years, he just said something like we’ve got to do this by - I don’t even know what dates he said, if he particularly referred to a date.” In cross-examination when asked if she was advised as to the time limit, the Plaintiff said:
“A.He didn’t particularly state years. He just said that we had to get this done and I particularly asked him to service his summons and he made the comments that they would be very upset when they get it.”
A little later occurred the following question and answer:
“Q.Are you suggesting that he never told you that there was a time limit within which to issue proceedings.
A.I’m not suggesting that. I’m saying that he mentioned something about having it done by a certain period of time. I can’t tell you just what he particularly said about that. He didn’t mention statutory years and he didn’t say years. I asked him to serve his summons. He said, they’ll be very upset when they get that. They’ll be petrified about going to court.”
The difficulty with the Judge’s finding that the Plaintiff was aware of the time limit is that he makes no reference to the evidence by the Plaintiff that she had no recollection of receiving the letter. Nor does he refer to the fact that the Plaintiff was not cross-examined on this assertion. The fact that she was not cross-examined does not mean that the Judge had to accept the assertion. On the evidence the letter had been posted to the Plaintiff’s then address. The lack of cross-examination might have been attributable to the manner in which the Plaintiff gave her answer. It might have been completely unconvincing. It might have implied that she was not denying receipt, and asserting no more than that she no longer remembered getting the letter. But, as counsel for the Plaintiff submits, the difficulty is that there is no way of telling whether the Judge has overlooked the evidence in question, and the absence of cross-examination.
The submission is not necessarily disposed of by the Judge’s finding that where there is any disparity between Mr Baldock’s evidence and the Plaintiff, “I prefer his evidence particularly as the same is supported by the evidence in his file.” The receipt of the letter is not something of which Mr Baldock could give evidence, beyond saying that the letter had been posted. The same comment applies to the Judge’s finding “I would have to reject the Plaintiff’s evidence that Mr Baldock did not give any specific advice about time limits.” That finding again appears to be based on the receipt of the letter.
On the other hand, it may be that the Judge intended to find and was finding that the letter had been received by the Plaintiff. Such a finding was open to him.
If this matter stood alone, it may be that I would not be satisfied that the appeal should be allowed. But there are three other matters.
I can find no basis for the Judge’s finding that the valuation was “prepared or manufactured” for the purpose of the proceedings. The Judge implies that the Plaintiff set out deliberately to create a material fact, to enliven the discretion to grant an extension of time. But this does not appear to have been suggested at any stage to the Plaintiff, or to her advisers. On my understanding of the facts, Mr Kearns’ valuation was something appropriately obtained for the purpose of making a claim. In my opinion the Judge has erred in this respect. There is no doubt that he placed reliance upon this finding.
The Judge erred again when placing weight, as he evidently did, on the fact that the valuation added “nothing new” to the Plaintiff’s knowledge of her loss. First of all, it did add to that knowledge, although perhaps not much. But, more significantly, the Judge’s comment overlooks the fact that the Plaintiff now knew that she had expert evidence as to the amount of her loss. The Judge’s comment overlooks this point.
Finally, when considering the question of prejudice to the Defendants, the Judge makes no reference to the fact that the Defendants did not lead evidence identifying any specific prejudice that would flow if an extension of time were granted. The Defendants relied only on the proposition that prejudice might well arise having regard to the significant lapse of time. That also is a matter to be taken into account, and not referred to by the Judge.
Decision on Appeal
In my opinion the Judge has erred in the exercise of the discretion. He has made findings which inappropriately deprecate the significance of the matters relied upon by the Plaintiff as facts material to her case. He does not appear to have assessed adequately the issue of prejudice to the Defendants.
Disposition of the Appeal
The usual course would be to remit the matter to the District Court for the Judge to further consider the exercise of the discretion. In this case I am reluctant to do that. The application for an extension of time has resulted in two hearings in the District Court and two appeals to this Court. In these circumstances it is preferable that this Court, if it is able to do so, should deal with the application for an extension of time. The Court has power to exercise the discretion that was conferred on the District Court Judge: see R 19.15(e) of the Supreme Court Rules.
My initial view was that the matter would have to be remitted to the Judge, for him to decide whether or not the Plaintiff had received the letter from her solicitor of 2 July 1997. On reflection, I agree with Gray J that this Court can safely conclude that the Plaintiff received the letter, even though, when she gave evidence before the Judge in April 1999, she no longer recalled doing so. That issue having been resolved, this Court is in as good a position as the District Court Judge to exercise the discretion.
Exercise of the Discretion
The discretion conferred by s 48(2)(b) of the Limitation of Actions Act 1936 (SA) is virtually unrestricted. The only requirement, once the discretion is enlivened, is that it be “just to grant the extension of time”.
The general approach to the exercise or a discretion such as this was considered by the High Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. Gray J has set out in his reasons the observations made by members of the High Court in that case.

As this Court has heard no submissions on the matter, this is not the case in which to decide which of the approaches canvassed in that case is the appropriate one. As Gray J notes, the matter has been considered by a number of other Courts. The correct approach remains unsettled. I propose to consider the case in light of the observations made by each of the members of the High Court. However, it is at least clear that the Plaintiff must demonstrate that the circumstances of the case establish that it is just to grant the extension of time.
The Defendants did not identify any particular prejudice from which they might suffer if time were extended. The Defendants can rely only on the common sense presumption that, if the matter goes to trial, it is likely that memories of relevant events will have become less reliable, and there is a risk that some relevant evidentiary material will have been lost. On the other hand, as Gray J points out, the Defendants have had notice of the Plaintiff’s wish to pursue a claim from a very early stage. It is reasonable to assume that the Defendants will have taken steps to secure relevant material, and that the key participants will have had reason to reflect on the relevant events. I should add that I do not overlook the fact that proving just what property of the Plaintiff was in the house at the relevant time, and presumably removed by the Defendants, and then describing those goods sufficiently for the purpose of them being valued, may be difficult. But any such difficulty is likely to be resolved, by and large, against the Plaintiff.
In the circumstances I am satisfied that the Plaintiff has shown that the delay has not made the chance of a fair trial unlikely. It is simply a case in which there is an unquantifiable but slight risk of an unfair trial. If that were the only matter requiring consideration, it would be appropriate to grant an extension of time.
I take into account that the Plaintiff has had advice from time to time about her claim. I also take into account that, before the time limit expired, she had advice about the need to make a timely decision to institute proceedings in the District Court. The Plaintiff is responsible for the substantial delay which has occurred since her cause of action arose. However, I also bear in mind that the Plaintiff has evidently had difficulty comprehending the significance of the difference between market value and replacement cost, and has probably been somewhat confused about the body before which her claim should be made. But in the end there is no satisfactory explanation for the failure to proceed sooner than she did, and this must count against the Plaintiff.
I turn to the matters of the kind identified by McHugh J in Brisbane South Regional Health Authority. I regard them as significant. But, once again, the Defendants have not identified any particular prejudice of the kind referred to by McHugh J. In saying that, I do not suggest that such matters are to be disregarded unless evidence is given. To some extent the rationales that McHugh J identified for a limitation period are general principles or rules, which apply in every case. The point I make is that in this case the Defendants have been on notice of the Plaintiff’s wish and intention to make a claim, and have not attempted to show that the general considerations identified by McHugh J have had any particular impact on them.
I take into account the fact that the delay is considerable. When the Plaintiff instituted her proceedings, between six and seven years had elapsed since the cause of action arose.
I return to the fundamental issue. Has the Plaintiff shown that in all the circumstances of the case it is just to grant the extension of time?
I am satisfied that she has, although I regard the case as very close to the borderline. I am particularly influenced by the conclusion that there can be a fair trial, and by the fact that the Defendants can be taken to have known, throughout the relevant period, that the Plaintiff wished and intended to make a claim.
Conclusions
For those reasons I would allow the appeal, I would set aside the judgment of the District Court dismissing the Plaintiff’s claim, I would order that in substitution for that judgment there be an order that the time within which the action in the District Court may be instituted be extended to 21 May 1998, and I would further order that the matter be remitted to the District Court for the hearing of the action.
NYLAND J.          I agree that the appeal should be allowed for the reasons expressed by Gray J. I agree that the application for extension of time should be allowed.
GRAY J
Introduction
On 14 July 2000 a District Court judge declined to make an order to extend the time in which Ms Pomeroy, the plaintiff[1] could bring a damages action. This is an appeal against that decision.
[1] In these reasons the appellant is referred to as the plaintiff and the respondents as the defendants
Background
The plaintiff’s claim arises out of events that occurred in 1991. She was a tenant of the first defendant, Thwaites Witham Pty Ltd. Ms Krantz, the second defendant, owned the premises let to the plaintiff. She engaged the first defendant as her agent. Apart from adopting the submissions of the first defendant, Ms Krantz took no part in this appeal.
The plaintiff defaulted in payment of rent. Eviction proceedings were issued. As a consequence, she was evicted from the premises. It is common ground that the defendants took possession of the plaintiff’s personal property. She claims that some of that property disappeared and that the balance was wrongfully sold. The property was sold on 18 September 1991. The plaintiff claims that the defendants lacked authority to sell the property, were negligent and breached provisions of the Residential Tenancies Act 1978 (SA).
The plaintiff first consulted Mr Harley, a solicitor, in 1992. She received advice as to the measure of her loss. A letter of demand was written on her behalf claiming that the replacement value of the goods was $45,000.00.
On 4 August 1992 the plaintiff made application for compensation at the Residential Tenancies Tribunal (“the tribunal”). She claimed $45,000.00. The matter came on for hearing on 15 September 1992. The tribunal explained to the plaintiff that its jurisdiction was limited to $25,000.00. The tribunal made the following order:
“The Tribunal gives leave to the tenant to withdraw her application to the Tribunal, but also gives leave for the application to be reinstated upon receipt by the Tribunal of written consent by both the tenant and the landlord to the application proceeding before the Tribunal to seek an order to the limit of $45,000 (or such other amount as the parties’ consents may refer to).”
The plaintiff did not withdraw her application.
Following the tribunal’s order in September 1992 the plaintiff, consulted a different solicitor, Mr Bowler of Hume Taylor & Co. A further letter of demand was written to the defendants. It was again claimed that the replacement cost of the goods taken was $45,000.00.
In November 1994 the plaintiff consulted another solicitor. On this occasion, she saw Mr Baldock of Grope Hamilton. A further letter of demand was written in February 1995.
In early 1997 the plaintiff sought further advice from Mr Harley the solicitor she had initially engaged. He advised that she seek independent valuation advice from Mr Kearns, a licensed valuer.
In July 1997 Mr Kearns provided an opinion about the market value of some of the property (“the valuation”). This was the first occasion on which the plaintiff was given information as to the market value of her property.
On 27 October 1997 the case came on again before the tribunal. The tribunal ordered the plaintiff to formulate her claim. It also ordered her to enquire whether the defendants would consent to an increase in the tribunal’s jurisdiction to allow it to rule on her application. In late October 1997 the plaintiff formulated her claim at $48,000.00.
On 6 November 1997 the tribunal, having been advised that the defendants would not consent to an increase in its jurisdiction, struck out the plaintiff’s application for want of jurisdiction.
On 10 November 1997 the plaintiff instructed Mr Harley to commence court proceedings. On 21 May 1998 District Court proceedings were issued out of time. The statutory limitation period expired in September 1997.[2]
[2] Limitation of Actions Act 1936 (SA) s 35
Although incomplete, this history demonstrates that the defendants had been on notice that the plaintiff wished to pursue her claim since 1992. Notice is important, given that issues of possible prejudice to the defendants and the holding of a fair trial must be considered. The defendants knew that there had been a number of formulations of claim, a number of attendances before the tribunal and proceedings issued in the District Court.
The Relevant Legislative Framework
Section 48 of the Limitation of Actions Act 1936 (SA) provides:
(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 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)    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) that the plaintiff’s failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances,
and that in all the circumstances of the case it is just to grant the extension of time.
(4) Where an extension of time is sought pursuant to this section in respect of the commencement of an action, the action may be instituted in the normal manner, but the process by which it is instituted must be endorsed with a statement to the effect that the plaintiff seeks an extension of time pursuant to this section.
(5) Proceedings under this section may be determined by the court at any time before or after the close of pleadings.
(6) This section does not derogate from any other provision under which a court may extend or abridge time prescribed or limited by an Act, regulation, rule or by-law.”
In Sola Optical Australia Pty Ltd v Mills.[3]The High Court said at (635):
“It is quite clear that the South Australian legislature preferred a simpler model to that contained in the 1963 Act. No doubt the broad purpose of the Act was substantially the same, namely, to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced. Section 48(1) confers, subject to the section, a general and unfettered power upon a court to extend the time prescribed by any Act (including the Limitation of Actions Act 1936 itself) or piece of subordinate legislation for instituting an action, or for doing any act in an action or with a view to instituting an action. The wide general power so conferred is limited by sub-s. (3). That sub-section denies to a court the power to extend the time within which an action may be instituted unless it is satisfied of the existence of the circumstances set out in either par. (i) or (ii). The contrast between the matters described in par. (i) and the 1963 Act is significant. The former is not limited to material facts which relate to a cause of action and satisfy the exhaustive enumeration in s. 7 of the 1963 Act. The subject-matter of par. (i) is facts which are material to the plaintiff’s case, with no attempt to provide any definition of the categories to which such facts must conform. The reference to the plaintiff’s case supplies a broader canvas than the reference in the 1963 Act to the cause of action. Unlike the 1963 Act, 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 C.J. in Napolitano in words which we are glad 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 is some cases may not be of great significance, has left all the rest to the discretion of the court.’ ”
[3] (1987) 163 CLR 628
The District Court Proceedings
The District Court proceedings included an application for an extension of time pursuant to s 48 of the Limitations of Actions Act.
The application for an extension of time was tried as a preliminary matter on 10 June 1999. The trial judge refused the application. He took the view that no new facts material to the plaintiff’s case had been ascertained in the relevant period and that his discretion to extend time had not been enlivened[4]. The plaintiff successfully appealed from this decision. In Pomeroy v Thwaites Witham Pty Ltd & Anor[5] the Full Court considered that the valuation was a fact material to the plaintiff’s case for the purposes of section 48(3)(b)(i). Martin J speaking for the court said at [21-22]:
“In my opinion, if his Honour regarded the appellant’s knowledge of the distinction between replacement cost and market value as knowledge which prevented the valuation by Mr Kearns from being a fact material to the appellant’s case, his Honour was in error. The knowledge of the distinction was knowledge of the legal position. It was not knowledge of the market value of the goods. Although the appellant had a knowledge that the goods possessed a market value, prior to the valuation by Mr Kearns she had not gained any information as to the amount of that market value. The market value of the goods was a fact material to the issue of damages. In addition, the existence and contents of the valuation was material to the appellant’s case ‘in the sense that the [valuation] represented available evidence that could be called in support of her case’.
It appears that his Honour may have concluded that the valuation was not a fact material to the appellant’s case because the valuation was ‘speculative’ and ‘could hardly be called decisive’ because it was based upon the appellant’s description of her goods. While the respondents might use that circumstance to mount a challenge to the reliability of the valuation, in my opinion it was inappropriate to dismiss the materiality of the valuation on that basis. A list of the goods sold at auction had been provided by the auctioneers. The description given by the appellant to Mr Kearns might be accepted by a trial judge as accurate and as a reasonable basis for the valuation by Mr Kearns.”
[4] Pomeroy v Thwaites Witham Pty Ltd & Anor [1999] SADC 80
[5] [2000] SASC 44
On 3 March 2000 the Full Court remitted the plaintiff’s application to the trial judge. He had to determine whether she had satisfied the court that in all the circumstances of her case, the grant of an extension of time was just.
The trial judge conducted a hearing of the remitted application. Further submissions were made. No further evidence was called. The trial judge refused to exercise his discretion to grant an extension of time.[6] It is from that decision the that plaintiff now appeals.
[6] Pomeroy v Thwaites Witham Pty Ltd & Anor (No 2) [2000] SADC 78
In his reasons for declining to grant an extension of time, the trial judge said:
“I think it is apparent from the nature of the proceedings that the plaintiff has never accepted that advice, which advice I believe is accurate. A significant proportion of the Kearns valuation was based on quotations obtained by the plaintiff early in 1992. I accept that the valuation may amount to a material fact for the purposes of section 48 and in my view has been prepared or manufactured for the purpose of the issue of the proceedings but in reality adds nothing new to the plaintiff’s actual knowledge of her loss. This is a matter which must be born in mind in exercise of discretion.”
I consider that clear error has been demonstrated. The trial judge either misunderstood or misapplied the Full Court ruling.
The Full Court found that the valuation provided two new facts material to the issue of damages. It provided information in regard to the amount of market value. Further, the existence and contents of the valuation itself were material to the plaintiff’s case “in the sense that the valuation represented available evidence that could be called in support of her case.”
In concluding that the valuation “in reality adds nothing new to the plaintiff’s actual knowledge”, the trial judge erred. He failed to recognise that the plaintiff had learned for the first time of the market value of her goods through the valuation.
The trial judge erred in failing to consider or give any weight to the fact of the existence and contents of the valuation as available evidence to be called in support of the plaintiff’s case.
The trial judge had no basis for concluding that the valuation was “prepared or manufactured for the purpose of the issue of the proceedings.” The reference to manufacture carries the pejorative meaning “to invent fictitiously; concoct; devise”[7] and “the fabrication of false statements.”[8] This conclusion was not substantiated by the evidence available.
[7] The Macquarie Dictionary 1997 3rd edition at (1313)
[8] The Shorter Oxford English Dictionary 1973 3rd edition at (1275)
The trial judge failed to give any weight to the fact that the defendants were facing tribunal proceedings until late 1997. Their awareness of that ongoing claim is a material matter in the exercise of discretion to extend time.[9] The trial judge’s failure to have regard to this matter was an error vitiating the exercise of his discretion.
[9] Napolitano v Coyle (1977) 15 SASR 559 at (569)
For these reasons the decision of the trial judge must be set aside. The plaintiff’s application must be reconsidered.
Should there be a Further Remittal
Counsel for the plaintiff submitted that the trial judge erred in concluding that the plaintiff had received a letter in July 1997 from Mr Baldock which put her on notice of the limitation period applicable to her case. The trial judge found that the letter had been sent but he did not make any express finding as to whether it had been received by the plaintiff. The evidence supported the trial judge’s finding that the letter had been sent. There was a specific note on the solicitor’s copy that it had been “posted”.

The plaintiff gave evidence that she had no memory of receiving the letter. However she did not deny that it was received. The appropriate conclusion is that the letter was received by the plaintiff. However her evidence that she could no longer recall receiving the document and her lack of awareness of its contents can be accepted. The judge found the plaintiff to be generally reliable. The evidence does not justify a finding to the contrary.
The letter was sent. It was received, but for reasons that are unexplained, the plaintiff has no memory of its receipt or its contents. The issue of fact has been resolved. Given the history of this matter it is desirable and appropriate that this court determine the application for an extension of time.
More Recent Authority
The High Court considered the interpretation of the Limitation of Actions Act 1974 (Qld) in Brisbane South Regional Health Authority v Taylor.[10] The terms of the Queensland legislation were as follows:
“s 31(2) Where on application to a court by a person claiming to have a right of action to which this section applies, it appears to the court –
(a) that a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation for the action; and
(b) that there is evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation;
the court may order that the period of limitation for the action be extended so that it expires at the end of 1 year after that date and thereupon, for the purposes of the action brought by the applicant in that court, the period of limitation is extended accordingly.”
[10] (1996) 186 CLR 541 at (544)
It is to be observed that the Queensland legislation requires an applicant to establish specific criteria. Once established, the court’s discretion is enlivened. This is to be contrasted to the scheme of the South Australian legislation. Section 48 of the Limitation of Actions Act provides the court with an unfettered discretion to extend time. However this power is then limited to circumstances where the court is satisfied that specific criteria have been established. The discretion is subjected to the overriding requirement that:
“in all the circumstances of the case it is just to grant an extension of time.”
In Brisbane South Regional Health Authority different views were expressed as to the proper approach that should be taken when dealing with applications to extend time.
Toohey and Gummow JJ enunciated the following test at (547-550):
“The discretion conferred by the sub-section is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant. 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 (Vict) in a passage which was endorsed by Gibbs J in Campbell v United Pacific Transport Pty Ltd:
‘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.’
...
Once an applicant satisfies pars (a) and (b), the Court has a discretion to extend the time for the bringing of an action. A material consideration (the most important consideration in many cases) is whether, by reason of the time that has elapsed, a fair trial is possible. Whether prejudice to the prospective defendant is likely to thwart a fair trial is to be answered by reference to the situation at the time of the application. It is no sufficient answer to a claim of prejudice to say that, in any event, the defendant might have suffered some prejudice if the applicant had not begun proceedings until just before the limitation period had expired.
...
In this regard we have difficulty with the notion of weighing prejudice to an applicant against prejudice to the respondent. In one obvious sense the prejudice to the present respondent is absolute if her application is refused. She can never litigate her claim. But that cannot be enough of itself to warrant an extension of time; in truth there would be no discretion to be exercised. For that reason we do not accept the respondent’s argument that the District Court fell into error in failing to balance the prejudice to the appellant against the prejudice against the respondent. It may be appropriate to temper that approach and to say that because the respondent has satisfied par (b) of sub-s (2), there is therefore evidence to establish her right of action. Even then, a weighing process is not called for. The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent.”
McHugh J adopted a different test at (552-554):
“Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even ‘cruel’, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them. Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period. As the New South Wales Law Reform Commission has pointed out:
‘The potential defendant is thus able to make the most productive use of his or her resources and the disruptive effect of unsettled claims on commercial intercourse is thereby avoided. To that extent the public interest is also served.’
Even where the cause of action relates to personal injuries, it will be often just as unfair to make the shareholders, ratepayers or taxpayers of today ultimately liable for a wrong of the distant past, as it is to refuse a plaintiff the right to reinstate a spent action arising from that wrong. The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.
In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. 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 purpose of a provision such as s 31 is ‘to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced.’ But whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. 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.”
Dawson J agreed with McHugh J but added at (544):
“The section confers a discretion upon a court to extend time and that discretion should only be exercised in favour of an applicant where, in all the circumstances, justice is best served by so doing. 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. I agree with McHugh J that, once the legislature has selected a limitation period, to allow the commencement of an action outside that period is prima facie prejudicial to the defendant who would otherwise have the benefit of the limitation.”
Kirby J approached the matter differently saying at (565-566):
“The purposes of the particular legislation here in question are neatly encapsulated in two passages from decisions of this Court and of the House of Lords. The two passages state the competing policies which lie behind, respectively, the general rule of the limitation bar (s 11 of the Act) and the exceptions affording power to provide an extension (s 31 of the Act). In Donovan v Gwentoys Ltd, Lord Griffiths explained the general rule behind the limitation bar:
‘The primary purpose of the limitation period is to protect a defendant from the injustice of having to face a stale claim, that is, a claim with which he never expected to have to deal.’
On the other hand, this Court explained the purposes of provisions such as s 31 in Sola Optical Australia Pty Ltd v Mills thus:
‘[T]he broad purpose of the Act was ... to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced.’
The residual discretion invoked in this case was therefore to be exercised in a way that gave effect to the exception but in the context of a statute designed also to uphold the general rule.
In some Australian limitation statutes, the provision for an extension has referred explicitly to criteria which must be taken into account, for example whether it is ‘just’ or ‘just and reasonable’ or ‘fair and equitable’ to provide the extension. In the Queensland Act no such formulae are used. Instead, the word ‘may’ is used as a word of perfect generality. But it cannot be doubted that similar broad notions of justice to the parties are introduced by the use of that word.
...
It will be rare that the passage of time does not cause at least some disadvantages to a prospective defendant (eg, the erosion of memory; the loss of documents; and the death, departure or disappearance of witnesses). But precisely what that disadvantage is in a particular case is better determined on evidence than on the basis of judicial generalities about time, the importance of finality and the usual desirability of prompt action for the fair trial of contested issues.”
His Honour continued at (568-570):
“... once the preconditions are made out, the positive burden on the applicant would not be one of any great severity. But if, weighing the countervailing evidence, the judge is uncertain or unconvinced that the provision of an extension would be just, it should be refused.
...
“Although attempts have been made to spell out the criteria to be taken into account in judging whether or not an order extending time should be made, care must be taken in the use of such criteria because of the different expression of the relevant provisions of limitation statutes. Furthermore, the factual circumstances of cases are infinitely various. The discretion conferred by s 31(2) of the Act is controlled only by the terms of the Act and the achievement of its purposes, as elaborated above.”
The decision in Brisbane South Regional Health Authority has been the subject of considerable judicial discussion. Attention has been drawn repeatedly to the different tests formulated by the court.[11] At times, a preference for one or other test has been expressed. However the correct approach has not been settled. Most decisions since Brisbane South Regional Health Authority have reached the same conclusion on the application of either test. The remarks in Brisbane South Regional Health Authority were directed towards the Queensland legislation. It is important to address the legislation in question in any subsequent case.
[11]Henrick v Agnew (1998) 26 MVR 277; (1996-1997) 9 ANZ Insurance Cases [61-382]; Sydney City
Council v Zegarac (1997-98) 43 NSWLR 195; Mason v Murray’s Charter Coaches and Travel
Services Pty Ltd (1998) 159 ALR 45; Paramasivam v Flynn (1999) 160 ALR 203; Kinnas v Petricca
(1999) 28 MVR 539; Holt v Wynter (1999-2000) 49 NSWLR 128
On the hearing of this appeal, the Brisbane South Regional Health Authority matter was not raised and this issue was not the subject of submissions by counsel.
The application of either test leads to the same conclusion in this matter. Although this is not the occasion to express a concluded view about the correct approach, I consider that when dealing with an application to extend time the overriding enquiry should be – can there be a fair trial? The South Australian legislative scheme supports such an approach as it leaves the court with an unfettered discretion once an applicant has met the qualifying condition.[12]
[12] Napolitano v Coyle (1977) 15 SASR 559 at (569)
Reconsideration of the Application
The South Australian Parliament enacted a scheme that provided a qualifying condition for an applicant seeking a discretionary grant of an extension of time. Once that condition was satisfied it “left all the rest to the discretion of the court”.[13]
[13] Napolitano v Coyle (1977) 15 SASR 559 at (569); Lovett v Le Gall (1975) 10 SASR 479 at (486), (491-2.)
Has the appellant in the circumstances of this case satisfied the court that it is fair and just to grant an extension ?
It would be unfair and inequitable to grant an extension if the defendants had suffered any real prejudice by the delay but as in Napolitano, the defendants have had ongoing notice of the claim.
The defendants were on notice that the plaintiff intended to pursue her claim and that she had done so since late 1991. They had constant reminders of that intention. The only period when a claim was not before the tribunal or the District Court was between October 1997 and May 1998.
The defendants were aware that the facts in issue in the proceedings may have had to be canvassed in the event that the tribunal proceeded to a hearing. They had to be prepared to meet that claim. The defendants did not identify by affidavit or evidence any specific prejudice they would suffer if an extension of time were granted. Since 1972, every defendant knows or ought to know that the lapse of the statutory period does not lead to absolute immunity from suit.
It was not suggested that the defendants had failed to take steps to obtain and preserve the evidence necessary for their defence. Apart from the presumptive prejudice that arises from delay and its insidious effect on the memory of witnesses, no other prejudice has been identified by the defendants.
The history of these proceedings demonstrates that this is not a case of anything other than presumptive prejudice. Significant prejudice or the real possibility of significant prejudice has not been established. In these circumstances, the plaintiff has discharged the onus of establishing that the commencement of the action beyond limitation period would not result in significant prejudice to the defendants.
The circumstances outlined support a finding that a fair trial can occur despite the delay. Approaching the matter in the manner outlined by Toohey and Gummow JJ in Brisbane South Regional Health Authority, the issue is primarily one of a fair trial, rather than prejudice whether presumptive or otherwise. As their Honours said at (550):
“The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent.”
Applying this test, I am of the view that the delay has not made the chances of a fair trial unlikely.
I consider the application for an extension of time should be allowed.
LIST OF JUDGMENT CITATIONS AS THEY APPEAR IN THE JUDGMENT
1In these reasons the appellant is referred to as the plaintiff and the respondents as the defendants
2      Limitation of Actions Act 1936 (SA) s 35
3 (1987) 163 CLR 628
4       Pomeroy v Thwaites Witham Pty Ltd & Anor [1999] SADC 80
5       2000 SASC 44
6     Pomeroy v Thwaites Witham Pty Ltd & Anor (No 2) [2000] SADC 78
7     The Macquarie 1997 3rd edition at (1313)
8       (The) Shorter Oxford English Dictionary 3rd edition 1973 at (1275)
9        Napolitano v Coyle (1977) 15 SASR 559 at (569)
10 1996) 186 CLR 541 at (544)
11Henrick v Agnew (1998) 26 MVR 277; (1996-1997) 9 ANZ Insurance Cases [61-382]; Sydney City Council v Zegarac (1997-98) 43 NSWLR 195; Mason v Murray’s Charter Coaches and Travel Services Pty Ltd (1998) 159 ALR 45; Paramasivam v Flynn (1999) 160 ALR 203; Kinnas v Petricca (1999) 28 MVR 539; Holt v Wynter (1999-2000) 49 NSWLR 128
12     Napolitano v Coyle (1977) 15 SASR 559 at (569)
13 Napolitano v Coyle (1977) 15 SASR 559 at 569; Lovett v Le Gall (1975) 10 SASR 479 at (486), (491-2.)

[2001] SASC 125

18 May 2001