New South Wales Supreme Court CITATION : MacLean v The Bike Farm & Ors [2000] NSWSC 847 revised - 13/09/2000 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 20049 of 1995 HEARING DATE(S) : 14/08/00 25/08/00 JUDGMENT DATE : 25 August 2000 Duncan MacLean PARTIES : Mr B Hull Mr PW Taylor SC JUDGMENT OF : Dowd J at 1 LOWER COURT Supreme Court (Master) JURISDICTION : LOWER COURT 20049 of 1995 FILE NUMBER(S) : LOWER COURT Malpass M JUDICIAL OFFICER : Mr RV Letherbarrow COUNSEL : Mr B Hull Mr PW Taylor SOLICITORS : CATCHWORDS : Limitation period - Negligence - Quadraplegic - Damages - Delay in commencing proceedings - Discretionary powers Limitation Act 1969 (NSW) LEGISLATION CITED : Supreme Court Act 1970 (NSW) Supreme Court Rules Gronow v Gronow (1979) 144 CLR 513. House v The King (1936) 55 CLR 499. Evans v Bartlam (1937) AC 473. Storie v Storie (1949) 80 CLR 597. Lovell v Lovell (1950) 81 CLR 513 CASES CITED : Sharpe v Wakefield (1891) AC 173. Salido v Nominal Defendant (1993) 32 NSWLR 524. Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. Sydney City Council v Zegarac (1998) 43 NSWLR 195. Northern Sandblasting Pty Limited v Harris (1996-1997) 188 CLR 313. Dow Corning v Paton (1998) Aust Torts Rep 65,241. DECISION : 1. That the appeal be dismissed; 2. That the appellant pay the respondents' and the cross-defendant's costs of the appeal. THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION DOWD J Friday 25th August 2000 N20049/95 DUNCAN MACLEAN V THE BIKE FARM & ORS REASONS FOR JUDGMENT 1 This is an appeal from a judgment of Malpass M of 15 June 2000, refusing an application by the appellant for extension of time, pursuant to s60C of the Limitation Act 1969 ('the Act'), to commence an action for damages founded in negligence. The injury was sustained in a motor cycle accident which occurred on a commercial motorcycle track on 27 January 1992, which rendered the appellant a quadraplegic. 2�The appellant, who was, at the time of the accident, a horticultual apprentice, brought a claim for damages in negligence in respect of the subject premises, which were known and operated as 'The Bike Farm'. The Bike Farm comprised a series of motorcycle tracks that was constructed on the respondents' property. 3 Eric and Helen Sykes, the second defendants in the original proceedings, who are now the only defendants, were the owners of the land at the time of the accident. The respondents had purchased the property in 1982. The property was subject to a lease to a bike track operator, which lease had been renewed on a number of occasions. That lease, in its various forms, permitted the owners a right of entry to inspect and repair. 4 The allegation of negligence is that the appellant lost control, becoming airborne because of the condition of the approaches to a jump, which should have been graded more often. It is submitted on behalf of the appellant that this was a result of the respondents' breach of duty to inspect and repair. The three year limitation period from the accident expired on 28 January 1995. 5 A Statement of Claim joining 'The Bike Farm' as the sole defendant was filed on 25 January 1995, it being subsequently ascertained on 30 January 1995 that the business name 'The Bike Farm' had been deregistered in early 1994. 6 In February 1995, confirmation of the Bike Farm's deregistration was received by the appellant's solicitor. Three months later a title search of the subject property was undertaken. On 16 August 1995, a search of 'The Bike Farm' was conducted. One week later, the result of the search showed that the subject company was dissolved on 17 September 1993. 7 On 20 March 1996, the Statement of Claim was amended to join the respondents, who were served on 16 April 1996. On 3 April 1998, the respondents filed a defence, pleading the Act. On 19 January 1999, the respondents filed a cross-claim, joining Insurance Brokers and Zurich Australian Insurance Limited. On 18 October 1999, a second amended Statement of Claim was filed, seeking an extension of time against the respondents. On 9 December 1999, the respondents lodged the Motion to strike out the proceedings. On 28 January 2000, the five year absolute extension time under s60C of Act the expired. 8 On 27 March 2000, a Motion seeking an extension of time to bring proceedings against the respondents was filed. 9 The appellant relied on evidence contained in an affidavit, being the affidavit by the appellant and an affidavit by the two solicitors, Lesley Young and David Morris Stack, who acted for the appellant. The respondents relied on the evidence of mark Edward McGuinn, who was originally a third defendant in the proceedings, and an affidavit of Eric Sykes. 10 The appellant's case was that he was familiar with all of the cycling tracks at the Bike Farm, and that he had only once seen the main track being bulldozed. The other tracks often had corrugation marks running lengthways up the jumps. These marks were created by bike tyres after rain. 11 On 27 January 1992, the appellant was cycling with his friend, Matthew Carnes. The appellant recollected approaching a jump at approximately thirty kilometres per hour, which he identifies as depicted in a photograph taken in his presence in 1995. The appellant's evidence was that the construction of the jump had not been altered, save that it was about half a metre higher than that shown in the 1995 photographs, giving the jump an approach of approximately forty-five degrees at the time of the collision. The jump was heavily affected by rain, damage, and had lengthwise corrugations in the take-off zone. 12�After the accident, the appellant remained in Prince Henry Hospital for some treatment. He became a quadraplegic as a result of the accident. He has however regained some limited use of his upper body and upper limbs. 13 The appellant's mother went to see a solicitor soon after the accident occurred, and was told that the accident was eighty per cent his fault, and that it would not be worth pursuing compensation. 14 The appellant moved to Department of Housing accommodation at Daceyville, where he has remained ever since, largely looking after himself with some difficulty. He is very much in need of permanent care. His condition has now stabilised. 15 While at the Prince Henry Hospital, a board officer with an organisation known as Paraquad, suggested that the appellant see the solicitors Stacks. The appellant did so on 23 August 1994, instructing that a claim for damages be brought. 16 The appellant was aware that he had a period of three years within which to bring a claim. After the advice of counsel, these proceedings were commenced on 25 January 1995. 17 Although the appellant has undertaken some further education, he has not worked since the accident, and receives the Disability Support Pension. 18 In early 1996, the appellant's then solicitor Lesley Young, became aware of an appeal to the High Court from the Queensland Court of Appeal, which was a test case as to the liability of an absentee landlord for premises occupied by another. After consulting counsel, Miss Young made enquiries as to the ownership of the premises, in anticipation of the High Court result, which ultimately did not come down until 14 August 1997. 19 In March 1996, Miss Young ascertained the ownership of the subject premises, and had an Amended Statement of Claim drafted, which was filed on 29 March 1996, a period of fourteen months after the expiration of the limitation period. 20 The appellant's case was supported by the evidence of a rehabilitation specialist and an occupational therapist, setting out in some detail the house modifications that were necessary, and the very substantial needs of the appellant. 21 The respondents' case is that although they had purchased the land in 1982, the then business ceased to operate, and in 1983 the premises were leased to the third defendant in the original proceedings on the guarantee of rent of the fourth defendant. The lease was for three years from December 1983, with two three year options for extension. 22 The respondents played no part in the design or construction of the bike complex, nor did the respondents alter or modify the premises, nor were they informed as to whether any modifications had been carried out. 23 The lease provided for the maintenance of a public risk insurance not less than $500,000 for the benefit of the lessee. 24 The respondents did not become aware of the appellant's claim until April 1996, when they were served with the Statement of Claim. At that stage, the property had been sold some four years earlier. 25 The respondents' prejudice, on which they rely, was that they were not able to carry out any proper investigation of the claim or the circumstances surrounding it. 26 The respondents had a public liability policy of $1 million to Zurich Australian Insurance Limited, liability under which has been denied for non-disclosure as to the use of the property. 27 The prejudice which the respondents say they suffer are that they have no insurance cover. They also assert no liability to the appellant, and that the lessee is uninsured and that it has no assets to satisfy a judgment. 28 Mark McGuinn's evidence was that he and his brother were shareholder in The Bike Farm Pty Ltd, being the first defendant. He said that persons entering the land were required to purchase a ticket, the reverse of which contained a number of conditions of entry to the land. He does not now have a copy of that ticket, nor does he recall the terms of the conditions, except to say that it pointed out the dangerous nature of the activity and that the first defendant would accept no liability for injuries suffered. 29 There were signs placed around the premises, but Mr McGuinn does not have photographs of them. he does however remember that signs warned that motorcycles were dangerous, and that people should be familiar with the track. 30 Mr McGuinn worked as a Manager for the 'Red Baron Group', which purchased the premises for three-and-a-half years after June 1993, where tracks and configurations were the same as when the first defendant was operating the business. 31 On returning in January 2000, Mr McGuinn went back, and the tracks now appear to be in a different configuration. The particular jump has been completely altered. Mr McGuinn pointed out that it would not now be possible to obtain any engineering evidence as to the negligence or otherwise of the design or construction of the track. 32 Before the Learned Master, there were three issues. The first being that the respondents owed no duty to the appellant for what took place on the property; the second was that the delay was lengthy and that the explanations were inadequate; and the third was that they were prejudiced by the delay. 33 This appeal is brought under s75A of the Supreme Court Act 1970, and Pt 60 r10 of the SCR. The appeal is by way of re-hearing, the issue being the exercise of discretion by the Learned Master under s60C of the Act. For the applicant to succeed, it must be shown that there has been a wrongful exercise of such discretion, that the Master acted on an incorrect principle of law or failed to take into account relevant considerations, or made some relevant error of fact or reached a result that was plainly unreasonable or unjust. 34 Section 60C of the Act provides that: S60C Ordinary action (including surviving action) (1) This section applies to a cause of action, founded on negligence, nuisance or breach of duty, for damages for personal injury, but does not apply to a cause of action arising under the Compensation to Relatives Act 1897. (2) 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 seems fit, may, if it decides that 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. 35 In applying s60C, the court must have regard to the matters set out in s60E of the Act, which relevantly provides: s60E Matters to be considered by court (1) In exercising the powers conferred on it by section 60C…., a court is to have regard to all the circumstances of the case, and (without affecting the generality of the foregoing), the court is, to the extent that they are relevant to the circumstances of the case, to have regard to the following: (a) the length of and reasons for the delay; (b) the extent to which, having regard to the delay, there is or may be, prejudice to the defendant by reason that evidence that would have been available if the proceedings had been commenced within the limitation period is no longer available; (c) the time at which the injury became known to the plaintiff; (d) the time at which the nature and extent of the injury became known to the plaintiff; (e) the time at which the plaintiff became aware of a connection between the injury and the defendant's act or omission; (f) any conduct of the defendant which induced the plaintiff bringing the action; (g) the steps (if any) taken by the plaintiff to obtain medical, legal or other expert advice and the nature of any such advice the plaintiff may have received; (h) the extent of the plaintiff's injury or loss. 36 Both parties have referred me to Gronow v Gronow (1979) 144 CLR 513. I refer to the passage cited by the respondents per Stevens J at p519: "The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well-established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight. In the present case it should not have done so at all". 37 And per Aickin J at 534 (with whose judgement Wilson and Mason JJ concurred at 525): "Those principles have been stated in this Court on many occasions and are not in doubt. It is sufficient to refer to such cases as House v The King (1936) 55 CLR 499; Evans v Bartlam (1937) AC 473; Storie v Storie (1949) 80 CLR 597 and Lovell v Lovell (1950) 81 CLR 513. Two short passages make the position clear. In House , at pp504-505, Dixon, Evatt and McTiernan JJ said: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has material for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of discretion is reviewed on the ground that a substantial wrong has in fact occurred". In Lovell , at p519, Latham CJ said: "But when the appellate tribunal is considering questions of weight it should not regard itself as being in the same position as the learned trial judge. In the absence of exclusion of relevant considerations an appellate tribunal should not set aside an order made in the exercise of a judicial discretion (as to which see Sharpe v Wakefield (1891) AC 173, at p179), unless the failure to give adequate weight to relevant considerations really amounts to a failure to exercise the discretion actually entrusted to the court. The words used by their Lordships in the House of Lords in this connection are not always easy to apply, but they ought not to be read as denying the long-established principle (which, indeed, is expressly recognised in the cases of the House of Lords) that on an appeal from an order founded upon the exercise of a discretion the appellate tribunal has no right to substitute it discretion for the discretion entrusted to the primary tribunal"". 38 The appellant's contention is that the Master misdirected himself as to the appropriate test, and thus his discretion carried, insofar as the appellant contends that the Master did accept the appellant's argument concerning the unsatisfactory explanation for the lengthy delay. I note that at paragraph eighteen of the Master's reasons for judgement, that the Master said that there has been "significant delay and the explanation that has been offered falls well short of being satisfactory". 39 The appellant further submitted that the Master failed to take into account the relevant considerations under s60E, and further, that he made a factual error on the question of delay. Finally, the appellant submits that the Master's decision on prejudice reveals several factual and legal errors, and that the decision is unreasonable or unjust. The Appropriate Test 40 The appellant submits that the Master only referred to the "just and reasonable" test in paragraph fifteen, but that he did not mention that test in paragraph twenty-three, in stating that a fair trial would now be difficult, that he applied a more stringent test than that espoused by the High Court. The appellant asserts that he failed to direct his mind to the appropriate question as to whether a fair trial was now "unlikely". 41 The appellant also asserted that the depriving of the respondents of their limitation defence and committing them to a lengthy and expensive trial, were afforded too much weight. The appellant relied on Salido v Nominal Defendant (1993) 32 NSWLR 524 at 538D. 42 The respondents contend, and in my view, quite correctly, that the Master did in fact specifically direct his mind to the "just and reasonable" criterion, and then exercised his discretion as considering all the relevant circumstances which he substantially enumerated in his judgment. It is submitted by the respondents that the decision of Kirby J in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541at 571, which was approved in Sydney City Council v Zegarac (1998) 43 NSWLR 195: "In performing the appellate task, a court will address itself to the substance of the reasons under consideration, avoiding an over-nice attention to infelicitous expressions. Whilst the reasons under challenge are usually the only means by which the parties and the appellate court have to decide whether incorrect or irrelevant considerations have intruded into the exercise of a statutory discretion, the ultimate concern of an appellate court is with the correctness or otherwise of the order under appeal. If that order appears to be correct, although come of the reasoning which supports it is imperfect, the appellate court will withhold interference, for its function is to correct orders, not to rewrite judicial reasons". 43 The respondents submit that the appellant, in posing that the real question is whether the delay "had made the chances of a fair trial unlikely", is not the expression contained in s60C of the Act. The decision from which it is taken did not involve the Limitation Act, and does not use the terminology of s60C. 44 Zegarac reaffirms that under s60C of the Act, the test is as to whether the appellant can discharge the onus of showing whether a fair trial can be had in all circumstances. I accept that this was the clear intention of the Master's finding. Slender Basis of the Claim 45 The appellant contends that consequent upon the decision in Northern Sandblasting Pty Limited v Harris (1996-1997) 188 CLR 313, and Wilkinson v Joyceman (1985) 1 Qd R 567, the circumstance of this matter was such that the appellant had a viable cause of action. The appellant asserts that if the respondents had utilised their right to inspect, then the danger would have been detected within the principles in Northern Sandblasting. 46 The appellant submits that the fact that it is a difficult cause of action is not relevant unless it is so difficult as to be hopeless. 47 Clearly, the width of the discretion in s60E of the Act is not reduced by the setting out of the criteria listed in that section. The strength or weakness of the claim is relevant and is a matter which the Court of Appeal in Dow Corning v Paton (1998) Aust Torts Rep 65,241, stated may be taken into account. 48 The decision in Northern Sandblasting is not of general application, and it is submitted by the respondents that the case can be distinguished on its facts. 49 There must be some clear distinction between a bike track which is damaged in part almost every time that someone rides upon it, particularly in wet weather, from the facts in Northern Sandblasting. The right to inspect and review would cast an unbelievable onus or obligation on an absentee landlord, where every part of each track, particularly after rain, would have to be inspected almost every day. Factually, this is a case going some considerable distance beyond that in Northern Sandblasting. In my view, it was open to the Master to make this finding which he took into account. Considerations under s60E 50 The appellant asserts that the Master did not relate his comments on just and reasonableness, and delay and prejudice to s60E, and that he failed to discuss ss60E(1)(c) and (g). 51 The criteria set out in s60E of the Act are part of a general discretion. The Master is not obliged to slavishly follow each placitum of the criteria. The Master clearly regarded the delay as significant, and the explanation deficient. Explanation for Delay 52 The appellant submit that there is a five year delay in which an extension for delay can be sought under s60C of the Act, which expired on 26 January 2000, some two months prior to the subject Motion having been filed. It is submitted that the Second Amended Statement of Claim was filed on 18 October 1999, seeking an extension of time which is within the five years, but more importantly, the Amended Statement of Claim joining the respondents was filed only fourteen months after the expiration of the normal limitation period. 53 The appellant asserts that the Master believed that the delay was in excess of five years, since it was in fact only fourteen months. 54 It is also submitted on behalf of the appellant that the Master did not believe why it fell short of being satisfactory. In my view, the Master was entitled to regard the delay as significant. 55 The evidence of the change in the configuration of the track and the loss of any evidence as to the specific signs and conditions of persons using the track, are highly relevant to the factual status. The fourteen month delay on top of the three years to bring the matter to the respondent's notice is considerable and damaging to the respondents' capacity to defend. Prejudice 56 As to the question of prejudice, the appellant submits that it is not necessary to set out all of the evidence, and many witnesses may still be available as to the circumstances of the track, and that the respondents could not point to any witnesses who may not now be available. 57 It is further pointed out that Mr Sikes made no enquiries about Mr McGuinn in April 1996, when it came to his attention. 58 It is asserted by the appellant that the Master's approach to the question of prejudice is flawed, as that there is ample evidence still available as to the circumstances. 59 In my view, the issue is whether the respondents have been prejudiced by the delay in bringing proceedings. The change in the track and the loss of signs and conditions and the actual circumstances of what happened on the day are part of the prejudice from which the respondents suffer. It must be remembered that until the application for an extension of time was made, the respondents had a complete defence to the claim. 60 There has been a significant delay from the time of obtaining instructions until the service of the Second Amended Statement of Claim. 61 As Mr Hull for the second cross-defendant, a party to these proceedings, said, that the law as to the liability of absentee landlords was not entirely settled until Northern Sandblasting, and that that determination was not sufficiently significant to justify only commencing an action once that decision had been handed down. The Master's Decision 62 In my view, the Master's discretion did not miscarry, but in any event, even if it had, I consider that if this court were exercising its own discretion, it would find against the appellant notwithstanding the catastrophic injuries. Orders 63 Accordingly, I make the following orders: 1. That the appeal be dismissed. 2. That the appellant pay the respondents' and the cross-defendant's costs of the appeal. o0o Last Modified: 09/13/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.