WorkCover Corp v John Holland Group P/L (No 2) - [2015] SADC 56

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
WORKCOVER CORP v JOHN HOLLAND GROUP P/L (NO 2)
[2015] SADC 56
Judgment of His Honour Judge Gilchrist
21 April 2015
PROCEDURE
Leave sought to amend the statement of claim to substitute the defendant with another after the time limit for the prosecution of the claim has expired - Leave granted.
WorkCover Corporation of SA v Amcor Packaging (Aust) P/L (ACN: 004275165) t/a Amcor Glass (Australasia) [2006] SAWCT 81; Bridge Shipping P/L v Grand Shipping SA (1991) 173 CLR 231; Aon Risk Services Aust Ltd v Australian National University (2009) 239 CLR 175, considered.

WORKCOVER CORP v JOHN HOLLAND GROUP P/L (NO 2)
[2015] SADC 56

The plaintiff sought leave pursuant to DCR 6R 54 to substitute where pleaded, John Holland Group Pty Ltd with John Holland Pty Ltd.
For reasons published on 21 November 2014[1] I found for the purposes of DCR 6R 54 that there has been a relevant mistake and that the basic threshold for the making of an order under that rule had been met. I was not, however, prepared to make an order granting leave at that time, because I was not, on the affidavit material that had been filed, satisfied that WorkCover had provided a candid explanation as to how the “mistake” had occurred. I formed the view, that without such an explanation the Court should not exercise its discretion in favour of the party seeking the Court’s indulgence, ie WorkCover.
[1] [2014] SADC 202
I could have dismissed the application there and then. I did not do so because I was concerned that WorkCover may have failed to appreciate that the Court would conduct a rigorous inquiry as to the circumstances giving rise to its need to seek an order to cure its failure to identify the correct party and that it may be able to provide a more fulsome explanation.
As a matter of fairness, I thought it appropriate to extend to it the indulgence to enable it to do so.
On the face of it, the evidentiary material that WorkCover had previously put before the Court was consistent with it conducting belated and superficial enquiries that identified the wrong entity in circumstances where a moderately more robust approach would have in all likelihood identified the right entity.
It seemed to me that looked at in context, that as the party seeking that indulgence was WorkCover, a regular and sophisticated litigant clothed with wide ranging powers of enquiry and substantial physical and financial resources, it could have and should have done better and that in all the circumstances it might not have been in the interests of justice to excuse its mistake.
The further affidavit material that has now been produced to the Court makes it clear that WorkCover’s investigations were not belated or superficial. It instructed investigators in a timely manner. The investigations were extensive. It must be accepted that a more astute person might have twigged to the fact that there were at least two entities, John Holland Group Pty Ltd and John Holland Pty Ltd and that some care might be required to make sure that the right “John Holland” entity was being sued. The fulsome explanation reveals that what was involved here was a mistake that in hindsight might be said to have been careless, but nevertheless understandable. But the rule that WorkCover seeks to rely upon is predicated upon a “mistake” having been made. It therefore has no answer to say that because what happened here was a careless mistake the discretion ought not to be exercised in WorkCover’s favour.
The defendant sought to rely upon the decision of Judge Hannon in WorkCover Corporation of South Australia v Amcor Packaging (Australia) Pty Ltd (ACN: 004275165) t/as Amcor Glass (Australasia).[2] That case concerned an application for an extension of time. His Honour refused the application. In the course of his reasons he said;
The need for compliance with the three year time limitation was well known to the Corporation, and was known to Ms D’Souza. Allianz was an experienced insurance agent with the responsibility of monitoring potential recovery files on behalf of the Corporation. No explanation was given as to whether a system for ensuring compliance with time limits was in place, and if it failed, why it failed, apart from the inadequate explanation that it was due to “administrative error”. No explanation is given as to why that failure was not detected until 11 November 2005. Further, no explanation was given as to why Ms D’Souza had not been trained as to the action she should have taken upon ascertaining that a recovery action was out of time. Whilst I do not criticise Ms D’Souza personally, given her apparent lack of training, the Corporation through its agent is at fault for allowing this situation to arise. It was only as a result of the fortuitous telephone call from the employer to Ms D’Souza some three months later that any action was taken at all, and even then it appears that the Corporation did not act with the expedition that one might have expected in the circumstances.
These are important considerations with respect to a corporate litigant with a sector of its operations dedicated to recovery of compensation from negligent wrongdoers. As the Annual Report for the year ending June 2005 shows, some $19.5 million was recovered in that year.
[2][2006] SAWCT 81
He noted that the amount being claimed, $58,147.78 was but 0.3 per cent of the amount of compensation recovered by WorkCover for the year ending June 2005.
These factors led him to conclude that WorkCover had not discharged its onus to show that the justice of the case required that an extension be granted.
The defendant submitted that the recovery in this case when compared to the overall recovery that WorkCover might make in a financial year was similarly small and that I should take this into account in determining whether I should exercise discretion in WorkCover’s favour.
The amount at stake is an important consideration. In this case the amount sought is about $50,000. WorkCover’s potential inability to prosecute this claim if permission is refused will have little financial impact on it. That said the facts in Amcor Packaging are different to those under consideration here. Importantly, in that case there was a finding that WorkCover did not act with the expedition that might have been expected.
In all the circumstances I am satisfied that I should exercise the discretion in WorkCover’s favour. I grant it permission to substitute where pleaded, John Holland Group Pty Ltd with John Holland Pty Ltd.
I now turn to the question of costs.
WorkCover contends that the defendant should pay its costs. It says that having succeeded in securing permission, its application had succeeded, the defendant’s resistance to that application had failed and that as the victor it should get its costs.
It says that it was always open to the defendant to have written to WorkCover when it was served, and to have pointed out the error in which case in correcting the error, minimum costs would have been incurred.
The difficulty I have with these submissions is that they fail to reflect the fact that it was WorkCover’s error that has led to this application. It is the one seeking the indulgence of the Court. It cannot be said that the defendant or its advisors were guilty of sharp practice. They were under no duty to point out to WorkCover its mistake. They did not act improperly in demanding that WorkCover establish to the satisfaction of the Court that there was a “mistake” for the purposes of the relevant rule. They did not act improperly in demanding that WorkCover establish that the Court should exercise its discretion in WorkCover’s favour. In light of the paucity of evidentiary material that initially accompanied the application, with some justification it was entitled to think that WorkCover’s application would fail.
WorkCover is to pay the defendant’s costs of and incidental to this application. Such costs are to be agreed or taxed. There were important points of principle involved in this case. It concerned a consideration of the application of Bridge Shipping Pty Ltd v Grand Shipping SA[3] and the implications of the decision of Aon Risk Services Australia Ltd v Australian National University[4] in connection with applications to amend in this Court. I certify this case as fit for senior counsel.
[3] (1991) 173 CLR 231
[4] (2009) 239 CLR 175