Richard Crookes Constructions Pty Ltd v Kozul (Revised 6 9 05) - [2005] NSWCA 312

NEW SOUTH WALES COURT OF APPEAL

CITATION: Richard Crookes Constructions Pty Ltd v Kozul (revised 6.9.05) [2005] NSWCA 312

FILE NUMBER(S):
40233/05

HEARING DATE(S): 5 September 2005

JUDGMENT DATE: 05/09/2005

PARTIES:
Richard Crookes Constructions Pty Limited
Richard Crookes Constructions Group Pty Limited
Bosko Kozul

JUDGMENT OF: Tobias JA Young CJ in Eq Hunt AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 2688/03

LOWER COURT JUDICIAL OFFICER: Twigg ADCJ

COUNSEL:
A: M Elkaim SC / J Ryan
R: B Slowgrove

SOLICITORS:
A: Colin Biggers & Paisley, Sydney
R: Albert A Macri Partners, Liverpool

CATCHWORDS:
LIMITATION OF ACTIONS - Extension of limitation period for claim for personal injury - Length and reasons for delay - Prejudice to defendant - Likelihood of a fair trial - Application for extension supported by affidavit of solicitor only - No affidavit from applicant - Whether evidence supporting application sufficient to give Court satisfactory understanding of why proceedings not commenced in time - Whether prejudice to defendant such that would not be just and reasonable to extend time - Limitation Act 1969 s 60C(2)

LEGISLATION CITED:
Evidence Act 1995
Limitation Act 1969
Motor Accidents Act 1988
Workers' Compensation Act 1987

DECISION:
Summons for leave to appeal dismissed with costs

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40233/05
TOBIAS JA
YOUNG CJ in EQ
HUNT AJA
Monday 5 September 2005 (revised 6.9.05)

RICHARD CROOKES CONSTRUCTIONS PTY LIMITED & ANOR v BOSKO KOZUL

Judgment

TOBIAS JA: On 18 June 2003 the opponent commenced proceedings by way of a statement of claim against the claimants in the District Court seeking damages with respect to injuries sustained by him when working at a building site at Auburn on 18 June 2001. He also claims to have received an injury at the same site on 2 June 2001 which was not included in the statement of claim or in an amended statement of claim which was filed on 30 August 2004.
Ultimately on 28 September 2004 a notice of motion was issued on behalf of the opponent seeking an order that the limitation period under the Limitation Act 1969 (the Act) of three years, and which with respect to the accident of 2 June 2001 had expired on 2 June 2004, be extended pursuant to s 60C(2) of the Act. That subsection provides as follows:
"If an application is made to a court by a person claiming to have a cause of action to which this section applies, the court after hearing such of the persons likely to be affected by the application as it sees fit may, if it decides it is just and reasonable to do so, order that the limitation period for the cause of action be extended for such period not exceeding five years as it determines."
Pursuant to s 60E(1) of the Act, a number of matters are required to be taken into consideration when the court is considering whether to exercise the power conferred on it by s 60C(2). Relevantly, the Court is required to have regard to all the circumstances of the case and, without limiting the generality thereof and to the extent that they are relevant to the circumstances of the case, to have regard to the following matters, being those of particular relevance to the issues raised by the claimants in its written and oral submissions, namely, (a) the length of and reasons for the delay, and (b) the extent to which, having regard to the delay, there is or may be prejudice to the claimants by reason that evidence that would have been available if the proceedings had been commenced within the limitation period is no longer available.
According to the affidavit of his solicitor, Mr George Draca, at the time of his alleged injury on 2 June 2001 the opponent, whilst working at the building site at Auburn, was carrying on his shoulder two pieces of timber, each 3.6 metres in length, which obscured his vision of a lump of residue concrete which had been allowed to set on the floor in an access area. He fell, injuring his left knee, left elbow and neck. However, he remained at work, although in [8] and [9] of his affidavit, Mr Draca asserts that the accident was witnessed by another worker employed by the opponent’s then employer, and that there was a leading hand who was standing some 10-15 metres away who directed the opponent to the on-site first aid officer of the claimants, who took the opponent’s details and noted them down. In [10] he asserts that, having an optimistic view of his injuries and in any event not wishing to take any risk of losing his job, the opponent remained at work. However, Mr Draca asserts in [11] that the opponent suffered a great deal of pain in his left knee and neck. He then sought medical assistance some days later. However, he took no time off work.
He sustained further injuries to his right side, right elbow, lower back and left ankle in the second accident on 18 June 2001 in circumstances which are not presently relevant. He nevertheless continued to attend work after that incident, although his condition started to deteriorate rapidly when he attended Liverpool Hospital. However, his condition had so worsened by 30 June 2001 that it prevented him further working and he has not worked since.
The opponent sought legal advice from a solicitor, Mr Luis Porto of Norton Street, Leichhardt, in relation to his legal rights arising from his then incapacity. Mr Porto commenced proceedings on the opponent's behalf against his then employer in District Court proceedings No. 12339 of 2001. Those proceedings related to both accidents. However, it was subsequently realised by Mr Porto that those proceedings could not succeed, as a consequence whereof by consent they were ultimately dismissed on 31 July 2003 upon the basis that each party was to pay his or its own costs.
In the meantime, in October 2002 Mr Porto had obtained a report from a Dr Brian Emerson for the purpose of the proceedings instituted against the opponent’s employer, which dealt in some detail with both accidents and included on p 27 thereof a photograph taken shortly after the first accident of the location where the plaintiff fell on 2 June 2001, and which identified the mounds of concrete and the irregular surface of the floor upon which the opponent said he had tripped. It also contained details and photographs relating to the circumstances of the second accident.
Mr Porto in due course ceased to act for the opponent. The latter then retained Mr Draca as his solicitor who has had the conduct of the matter for the opponent since 25 June 2003. He took the matter over approximately 11 months prior to the expiration of the limitation period in respect of the first accident.
On 30 July 2003, Mr Porto wrote to Mr Draca enclosing his entire file and noting the claim by the opponent against his employer. In that letter he referred to the fact that that matter had been settled upon the basis of a verdict for the defendant with each party to pay his or its own costs. The reason given by Mr Porto for the settlement was that the proceedings had been commenced in breach of s 151C of the Workers’ Compensation Act 1987 in order to avoid the draconian changes which were then to take effect on 27 November 2001. Although an appeal to the High Court in relation to the effect of those changes was then current, the opponent did not wish to wait another two years for the Hid Court's decision and instructed Mr Porto to sue the claimants in respect of his injuries. This Mr Porto did but, as I have said, only in respect of the second accident which occurred on 18 June 2001.
It was not until Mr Gormley SC was briefed to appear for the opponent on 27 August 2004 that a question arose as to whether or not the opponent could also sue in respect of the injuries that he sustained on 2 June 2001. In Mr Draca’s affidavit sworn 21 September 2004 he refers to an advice given by Mr Gormley dated 31 August 2004 from which he concluded that it appeared that Mr Gormley believed that the reason the first accident was not included in the action commenced by Mr Porto against the claimants was because it had not resulted in any incapacity, it being remembered that the opponent had not taken any time off work as a consequence thereof. The affidavit goes on to depose that Mr Gormley was unaware at that stage of the fact that s 151C had operated to exclude the first injury from action against the employer. Both accidents had been included in the first statement of claim brought by Mr Porto against the opponent’s employer, but it was apparent from Mr Porto’s file, now in Mr Draca’s possession, that s 151C was considered to operate to deny recovery in respect of the first accident.
The letter of Mr Gormley to Mr Draca dated 13 September 2004 summarises his views generally in the following terms. He inferred from the bulky brief that the previous solicitor for the opponent, Mr Porto, had commenced action against the claimants only with respect to the second accident because the first accident appeared to be relatively insignificant. Thus, the first accident was thought not to have resulted in any incapacity during the period between 2 June 2001 and 18 June 2001 when the second accident occurred and the opponent sustained more serious injuries.
Mr Gormley went on to say that he had now had the opportunity of conferring with both the opponent and Dr Emerson, and that the decision not to include the first accident in the proceedings instituted against the claimants was a mistake. This was because that accident had resulted in significant damage to the knee and neck of the opponent and lesser damage to other areas of his body. The second accident resulted in a significant low back injury with only very minor aggravation of the knee and neck. Subsequent medical evidence demonstrated that there were disc lesions at both the cervical and lumbar levels.
Mr Gormley then referred to the obvious reluctance of the opponent to cease what was a heavy but lucrative job but, despite that, he would inevitably have come to a high level of incapacity as a result of the first accident. His neck condition had deteriorated and that was explained by radiological evidence. Importantly, Mr Gormley made the point that if the opponent’s rights were allowed to continue based only on the second accident, the claimants would be entitled with some justification to point to the unpleaded neck injury sustained on 2 June 2001 as a substantial contributor to the opponent’s incapacity. The claimants would no doubt assert that the opponent would have come to a high degree of incapacity in any event because of the injury sustained in that accident, thereby producing a reduction in the damages payable with respect to the injuries sustained by the opponent in the second accident.
The opponent's notice of motion for extension of the limitation period was only supported by the affidavit of Mr Draca. In that affidavit he deposed to the fact that the opponent had only arrived in Australia in December 1999 and spoke very poor English, and required an interpreter even for conferences. He set out the circumstances relating to the first accident, including the nature of the injuries sustained as well as [8] and [9] to which I have already referred, in which it was asserted that the injury was witnessed by another worker, that a leading hand was nearby, and that the on-site first aid officer was given details thereof.
The claimants filed in response to the notice of motion affidavits by the on-site first aid officer as well as the site foreman, which acknowledged the reporting and the existence of the second accident but denied any notification of the first accident of 2 June 2001.
The matter came on for hearing before Acting Judge Twigg who on 4 November 2004 granted the opponent’s application. In his judgment he acknowledged that he was obliged to consider the whole period of three years and four months between the date of the accident of 2 June 2004 and the filing of the notice of motion for extension of time. He noted that Mr Draca was not required for cross-examination, although he rejected [21] and [22] of his affidavit which related to conversations between himself and Mr Porto. His Honour then said that the essential matter put forward by the opponent was that there had been a mistake in the understanding of his legal situation in determining what actions he had against the claimants. He proceeded to find (no doubt based on [9] of Mr Draca's affidavit) that there was evidence before him of the reporting of the accident and that the opponent had continued to work until 30 June.
After referring to the Workers’ Compensation Act, the Limitation Act and the Motor Accidents Act 1988 in relation to extensions of time, his Honour then said that the onus was on the opponent in this type of application to provide an explanation and to put the Court in a position of understanding just why the proceedings were not commenced in time. The basis of that assertion by his Honour was the decision of this Court in ASB-Tech Services Pty Limited v Doeland [2003] NSWCA 167 and in particular [30]-[35] of the judgment of Hodgson JA in that case, with whom Handley JA and Cripps AJA agreed. That case however concerned an application to commence proceedings pursuant to s 151D of the Workers’ Compensation Act. Nevertheless the claimant submitted that the principles adverted to by Hodgson JA were applicable to the present case. In particular it was submitted that there should have been an affidavit from the opponent himself explaining the delay and that an affidavit from his solicitor was an inadequate substitute.
In [30] of Doeland, Hodgson JA observed that a first step for an applicant in relation to an application “such as this” is to lead evidence appropriate to give the court a satisfactory understanding of why it was that the proceedings were not commenced in time. In that case, his Honour said that the absence of any material from the applicant’s previous solicitor meant that the court could only guess at the true explanation of why proceedings were not so commenced.
In [31] Hodgson JA said,
"In such a case one might expect that the applicant would not rely on sworn evidence from the solicitor in support of the applicant’s case. However, at least there should be before the court the sworn evidence of the applicant as to what the applicant says about the matter, and evidence of inquiries of the solicitor and the response, if any, of the solicitors of those enquiries; so that the court is at least given some understanding of the position and the respondent is given material to enable it to decide whether it wishes to call the solicitor to give evidence on its behalf."
However, that passage was preceded by a reference to a situation as had occurred in that case where there was a clear conflict between the applicant and his former solicitor. It was "[i]n such a case" that his Honour made the comments referred to in the preceding paragraph.
Insofar as the claimants submitted that the decision in Doeland was authority for the proposition that an application such as the present could not be granted unless there was an affidavit from the applicant for the extension of time, then in my respectful opinion Hodgson JA was saying no such thing. Provided the relevant requirements of the legislation have been satisfied by the evidence, the source of that evidence is irrelevant so long as it is otherwise admissible on an interlocutory application of the kind in question.
Returning to the primary judge’s decision, his Honour went on to observe that there should be no ambiguity left in the court’s mind from the plaintiff’s evidence (meaning thereby the evidence elicited by the plaintiff in his case) as to the circumstances of the incident and the explanation for the delay. Having noted that the opponent had a limitation of language, and that he was of Serbian origin, but that notwithstanding an interpreter could be used, his Honour said,
"That is a factor which I take into account in considering whether there would not be a fair trial to the parties because of the manner in which the matters are placed before the Court."
It was suggested by the claimants that this statement related, relevantly, to whether there could be a fair trial of the action itself. But when placed in its context it is clear that what the primary judge was saying was that the opponent had a limitation of language, and although it could be the case that he could have given evidence by affidavit through an interpreter, nonetheless that did not result in there being a fair trial of the application for an extension. In other words, because of the matters which were placed before the court in the affidavit of Mr Draca, there was no question of the opponent not receiving a fair hearing or the claimants not receiving a fair hearing on the application that was then before the Court.
The primary judge then considered the issue of prejudice and considered that as the acts had occurred more than three years ago, and as the building works had long since concluded, the claimants did not have the ability to investigate the circumstances of the accident. His Honour said that that caused direct prejudice. It was submitted on behalf of the claimants before him that although there was no medical prejudice, there was prejudice in preparation which was incurable and that that must be taken into account. However, his Honour concluded that although there was prejudice caused to the claimants, in all the circumstances that prejudice did not weigh as heavily upon him as preventing the opponent with a proper cause of action from pursuing that action.
So far as the explanation for the delay was concerned, his Honour was of the view that the opponent had given a satisfactory explanation. The fact that its form was through a solicitor, putting matters that he had garnered from a number of sources, did not leave it any less likely for the Court to be able to understand fully the circumstances that prevented the proceedings being instituted in respect of the first action prior to the expiration of the limitation period on 2 June 2004.
His Honour then concluded in the following terms,
"In this instance the absence of an affidavit of the plaintiff does not prevent me from seeing that there is an explanation given to the court and clearly given. That is in my finding that the initial solicitor, Mr Porto, misunderstood the matters that were required to be looked at and, to my mind, that is satisfactorily explained by the affidavit of Mr Draca, and I find no fault on the plaintiff."
His Honour then referred to there being ample notice given to the defendants through the report of Dr Emerson made in 2002, albeit supplied subsequently on 29 June 2004, a few weeks after the limitation period expired. Nonetheless, senior counsel for the claimants properly conceded within the meaning of s 60E(1)(b) that the claimants had not suffered any additional prejudice in terms of evidence being no longer available as a consequence of the delay between the time the limitation period expired on 2 June 2004 and the time the notice of motion was filed in early September 2004. In fact it is clear from the material in Dr Emerson’s report as well as the affidavit evidence filed in support of the claimants' case before the primary judge that they had available to them the relevant witnesses in respect of which no doubt much will be made in the course of the trial on the issue as to whether or not the accident of 2 June occurred at all. His Honour found that the prejudice, if any, to the claimants was not such as to require the refusal of the application.
The claimants' primary arguments to this Court were really directed at what was said to be a failure to give a satisfactory explanation for the delay, it being acknowledged by the primary judge that the delay in question was to be looked at over the whole period from the time of the accident to the time the notice of motion for extension of time was filed. This was said to be so notwithstanding that the critical delay, certainly in terms of prejudice, was between the time the limitation period expired and the time the notice of motion was filed, a period within which the claimants accepted that they did not suffer any relevant prejudice.

I mention that matter because in McLean v Sydney Water Corporation [2001] NSWCA 122, Giles JA, with whom Stein JA and Hodgson CJ in Eq agreed, when dealing with the question of delay in relation to the Limitation Act as distinct from the Workers’ Compensation Act, made reference to the judgments of the High Court in Brisbane South Regional Health Service v Taylor (1996) 186 CLR 541, and of this Court in Holt v Wynter (2000) 49 NSWLR 128. In the latter Sheller JA, with whose reasons Meagher JA, Handley JA and Brownie AJA agreed, said that the effect of the decision of the High Court in Taylor was that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant.
Further in that judgment, Sheller JA said this at [22]:
"Prejudice engendered by delay and unlikelihood of a fair trial will be highly material and if there is prejudice and unlikelihood of a fair trial, that will tell strongly, often conclusively, against the grant of an extension of time. It does not follow that in the absence of prejudice (other than general prejudice) and unlikelihood of a fair trial, it will be just and reasonable to grant an extension of time."
His Honour said that other considerations may be material to that ultimate determination.
In [25] of McLean, Giles JA referred to what the President had said, with the agreement of Handley and Beazley JJA, in Jones v Royal Hospital for Women (Court of Appeal, 24 July 1998, unreported) namely, that in exceptional cases considerations other than prejudice may prove decisive "such as inordinate delay on the part of the applicant considering the extent of awareness of relevant issues under s 60I as explained by Gleeson CJ in Drayton Coal Pty Limited v Drain".
In the present case, as I have indicated, the primary judge found, and in my opinion it was clearly open to him to do so, that the relevant delay, including that prior to the expiration of the limitation period, was not such as to result in such prejudice to the claimants as would result in them not being able to obtain a fair trial in the action.
The question then arises as to whether there were other considerations to make this an exceptional case to justify the refusal of the application upon the basis that it would not be just and reasonable to extend time. The only matters pointed to by the claimants are really twofold. The first is the failure in Mr Draca’s affidavit and in the letter of Mr Porto of 30 July 2003, and in particular the latter, to explain why, when Mr Porto instituted proceedings against the claimants in relation to the second accident on 18 June 2003, some 12 months before the expiration of the limitation period in relation to both accidents, he failed to include the first accident.
The explanation for that in my opinion is to be found in the letter of Mr Gormley of 13 September 2004, which makes it plain that neither Mr Porto nor Mr Draca, and initially Mr Gormley, realised that the first accident had caused the opponent any relevant incapacity. It was only when that was realised by Mr Gormley after conferring with the opponent and Dr Emerson in August 2004 that it was appreciated that there had been an error in failing to include the first accident in the statement of claim that was filed on 18 June 2003. If this was not plain on the face of the material referred to, then it was only inference that could be drawn therefrom.
The second matter relied upon by the claimants was that there was a failure by Mr Draca, who took over the proceedings from Mr Porto in June 2003, to explain the delay between that date and August 2004 when Mr Gormley advised that the first accident should also be included in the proceedings. However, it seems to me that the clear inference is, and this is confirmed by what Mr Gormley said in his letter of advice to Mr Draca of 13 September 2004, that Mr Draca did not realise that there was any relevant incapacity as a consequence of the first accident in respect of which the opponent could legitimately or justifiably sue. Furthermore, neither Mr Porto nor Mr Draca realised, as ultimately did Mr Gormley, the necessity to sue in respect of the first accident, which in fact the medical evidence indicated caused the opponent injuries particularly to his neck and knee, because the claimants would be able to utilise the unpleaded first accident in reducing the damages payable in respect of the second accident.
Finally, the claimants submitted, somewhat without conviction, that the primary judge erred in admitting as hearsay [8] and [9] of Mr Draca's affidavit. Although it was acknowledged that s 75 of the Evidence Act 1995 provides that in an interlocutory proceeding the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source, it was submitted, firstly, that no evidence of the source of Mr Draca's evidence in [8] and [9] had been adduced and, secondly, that the primary judge should have refused to admit the evidence as a matter of discretion because of the contrary evidence adduced by the claimants.
There is, in my opinion, no substance in these submissions. The clear and only inference from Mr Draca's affidavit is that the matters deposed to by him generally, and in [8] and [9] in particular, had their source in instructions received by him from the opponent. The fact that there may be a conflict in the evidence as to the reporting or witnessing of the accident on 2 June 2001 provided no reason for excluding that of Mr Draca in an application such as the present.
In the foregoing circumstances it seems to me that no error requiring appellate intervention has been demonstrated on the part of the primary judge in accepting as he did, firstly, that the opponent had put before him evidence that did explain and did provide reasons as to why the proceedings in relation to the first accident were not commenced within the limitation period, and, secondly, that there was no relevant prejudice that would justify a finding that it would not be just and reasonable to extend the time for the inclusion of the first accident in the proceedings that have been instituted.
Even if there were any such error in the exercise of the discretion reposed in the primary judge within the House v The King principles, which in my opinion there was not, and this Court were required to exercise the discretion itself, then from my point of view I would have come to the same conclusion as did the primary judge and would have considered that it was just and reasonable to extend the time in the circumstances to enable the opponent to sue in respect of the first accident.
For the foregoing reasons, in my opinion the case for the claimants is not of sufficient strength as to justify a grant of leave to appeal. I would therefore propose that the summons for leave to appeal be dismissed with costs.
YOUNG CJ IN EQ: I agree, but really for emphasis would just add one thing. That is because for some reason or other the core matter that appeared to have troubled the Court below was the submission that, having regard to the decision of this Court in ASB-Tech Services Pty Limited v Doeland [2003] NSWCA 167, the absence of an explanation from the opponent personally is fatal to the application for an extension of time to sue because of the limitation period’s expiry. That is not what a fair reading of that case establishes. The passage relied on does not form part of the ratio decidendi of the case. In any event, the present is a different case altogether and on different legislation. I agree with what has fallen from the presiding judge.

HUNT AJA: I agree with both the presiding judge and the Chief Judge in Equity.
TOBIAS JA: The orders of the Court will be as I have proposed.

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LAST UPDATED: 12/09/2005