New South Wales Supreme Court CITATION : Lee v Kean [1999] NSWSC 109 CURRENT JURISDICTION : Common Law FILE NUMBER(S) : N300167/94 HEARING DATE(S) : 19 February 1999 JUDGMENT DATE : 25 February 1999 ROBERT VINCENT LEE (Plaintiff) PARTIES : MARK ALEXANDER KEAN (Defendant) JUDGMENT OF : Master Harrison Mr Mark Cahill (Plaintiff) COUNSEL : Mr P A Regattieri (Defendant) Mr M A Whelan Geoffrey Edward & Co, Solicitors SOLICITORS : Sydney Mr J C Palmieri, Solicitor Hamilton CATCHWORDS : Extension of time ACTS CITED : Motor Accidents Act - s 52(4) Transport Accident Act 1987 DECISION : See paragraph 26 15 THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON THURSDAY, 25 FEBRUARY 1999 N300167/94 - ROBERT VINCENT LEE v MARK ALEXANDER KEAN JUDGMENT (Extension of time - s 52(4) MAA) 1 MASTER: By notice of motion filed 9 October 1998 the plaintiff seeks that leave be granted to commence proceedings pursuant to s 52(4) of the Motor Accidents Act. The plaintiff relies on his affidavit sworn 29 October 1998 and the affidavits of Ross Pfennigwerth sworn 28 September 1998 and Mark Ambrose Whelan sworn 12 October 1998. The defendant opposes the application. 2 For the purposes of this application I find the following facts. (1) On 8 July 1987, a bus in which the plaintiff was travelling as a passenger was involved in a motor accident. The plaintiff suffered injuries as a result of the accident. (2) On 14 July 1987, the plaintiff completed a workers compensation form. (3) Shortly after the motor vehicle accident the plaintiff sought legal advice and as a consequence believed that he did not have any entitlement to make a claim for workers compensation or under the Transport Accident Act 1987. After receiving that advice he took no further steps to pursue the claim which he had filed with his employer Coal and Allied Industries Pty Limited. (4) In November 1989, the plaintiff was contacted by Mr Ross Pfennigwerth a solicitor then in the employ of Geoffrey Edwards and Company Newcastle. Mr Pfennigwerth had contacted the plaintiff as a potential witness in proceedings where another passenger was injured in the accident. (5) On 29 June 1990, the plaintiff sought further advice from Mr Pfennigwerth regarding injuries which he sustained in the bus accident. The plaintiff understood that Mr Pfennigwerth was acting as his solicitor in respect of any rights which he might have in relation to compensation or damages in relation to the bus accident. (6) On 29 June 1990, the plaintiff's solicitor commenced proceedings by filing a statement of claim in the Newcastle Supreme Court. The 30 June 1990 was the cut off date to commence proceedings in Transcover matters. A defence was filed raising non-compliance with s 43 of the Motor Accidents Act The plaintiff filed a motion seeking orders to satisfy s 43 of the Motor Accidents Act. On 5 March 1993, the plaintiff consented to the notice of motion being dismissed and the statement of claim being struck out (Ex 1). (7) The plaintiff says that he has intended to pursue any rights which he has. He relied on the advice he had received from his solicitors and barristers and he had attempted to comply with all the requests communicated by the solicitors including requests that he attend for medical examinations and provide further instructions. (8) On 25 October 1990, a Motor Accidents Act claim form was forwarded to the GIO it did not attach a certificate of the statement of earnings. The plaintiff was requested by his solicitor to take the form to his employer Coal and Allied Industries Pty Limited. He did so but despite his request, the employer did not return the form to him prior to his resignation. It appears that the plaintiff made no further attempts to obtain the completed form. (9) On 11 January 1991, the GIO requested a full and satisfactory explanation. (10) On 25 May 1992, the plaintiff completed a statutory declaration for the purpose of providing a satisfactory explanation. In this documents the plaintiff says that it was not until November 1990 that he consulted his present solicitors yet in his affidavit he referred to seeking advice from that solicitor on 29 June 1990. In both the statutory declaration and the affidavit he says that he came into contract with his current firm of solicitors when he was approached as a witness to the accident. The 29 June 1990 most likely relates to the plaintiff being approached to be a witness. I find that the plaintiff first sought legal advice from Geoffrey Edwards and Company in November 1990. The explanation was rejected. (11) On 31 October 1994, the plaintiff filed a statement of claim in these proceedings (the second statement of claim). (12) In 1995 Mr Pfennigwerth left the employ of Geoffrey Edwards and Company. Mr Pfennigwerth has no independent recollection of the plaintiff nor of the contents of the solicitor's file. (13) On 1 February 1996, the GIO arranged for the plaintiff to be medically examined by Dr Donaldson on 10 May 1996. (14) On 16 May 1996, the defendant's solicitor advised the plaintiff's solicitor that the plaintiff did not attend the medical examination. On 2 September 1996 and 18 November 1996 the defendant's solicitor wrote to the plaintiff's solicitor seeking explanation for the plaintiff's non-attendance at this medical examination. There was no reply. (15) In 1994 the plaintiff gave evidence in workers compensation proceedings taken on his behalf. Shortly after giving evidence in those proceedings he recalled that he was advised by Mr Pfennigwerth that he was unlikely to succeed in those proceedings because the motor vehicle accident that occurred on the 8 July 1987 did not appear to fall within the bounds of the workers compensation legislation. Judgment apparently has not been delivered in this matter. After receiving that advice, and as he did not receive any further messages for some time, he assumed that he was not entitled to any compensation for damages and the litigation in relation to the bus accident was at an end. Because of that assumption, when he changed his address he did not inform the solicitor of his whereabouts. (16) In 1995 the plaintiff instructed other solicitors to take Compensation Court proceedings in relation to another accident. This accident occurred in his employment with the Department of Corrective Services and related to an injury to his right hand. (17) The plaintiff's current solicitor, Mr Mark Whelan of Geoffrey Edwards and Company assumed conduct of this matter and retained the services of a private investigator to locate the plaintiff. The private investigator located the plaintiff on 27 May 1998. (18) On 28 August 1997, the plaintiff's solicitors wrote to the defendant's solicitors informing them that they had been instructed to proceed with this matter. (19) In late May 1998 he was contacted by an investigator on behalf of Geoffrey Edwards and Company. On 9 June 1998, the plaintiff attended a conference with Mr Whelan solicitor and Mr Cahill of counsel. As a consequence of that advice received from the barrister he renewed his instructions to Geoffrey Edwards and Company to pursue his entitlement to damages under the Motor Accidents Act. (20) On 9 October 1998, this notice of motion was filed. 3 The parties agree that the plaintiff was required to file a notice of claim by 31 December 1989 and file a statement of claim by 30 June 1990. 4 I turn now to the plaintiff's explanation of delay in commencing proceedings pursuant to s 43(1) and s 52(4) of the Motor Accidents Act. Section 43(1) provided: "43(1) A claim must be made within 6 months after - (a) except as provided by paragraph (b), the date of the motor accident to which the claim relates; or (b) if the claim is made in respect of the death of a person, the date of death. 5 The defendant has raised the plaintiff's non-compliance with s 43(1) of the Motor Accidents Act in his defence. The plaintiff referred me to Flower v Fitzgerald (unreported, 6 December 1990) where Master Malpass) stated at p 12: "No jurisdiction is conferred upon the Court, enabling it to deal with, a failure to provide the requisite explanation. There is no prescribed consequence upon failure to comply with s 43(2). There appears to be no sanction consequent upon breach. In a practical sense, in the event of breach by a claimant, the Insurer may not be placed in a position where it is able to resolve the claim…" 6 According to Master Malpass a failure to provide the explanation (required by s 43(2)) does not give rise to any bar to the bringing of the an action 7 In Nicholas v Webb (No 1) (unreported, Master Greenwood, 8 April 1991) Master Greenwood held that an explanation for delay must be made to the insurer in the first instance. If the insurer is not satisfied with the explanation it can seek a stay of proceedings or seek to have the statement of claim struck out. The defendant has not adopted either of these courses of action. 8 Section 52(4) of the Motor Accidents Act provided: "A claimant is not entitled to commence proceedings in respect of a claim more than 3 years after the date on which the claim must be made in accordance with section 43 except with the leave of the court in which the proceedings are to be taken." 9 The authorities clearly establish that the onus is on an applicant for extension of time to satisfy the court that it is just and reasonable to extend the time, or as it has often been expressed, that justice is best served if the applicant be given leave to proceed. The starting point for examination of the way in which this discretion should be exercised is Salido v Nominal Defendant (1993) 32 NSWLR 524. At 532 Gleeson CJ set out some principles to be considered in the exercise of the discretion. 10 The following guidelines are posited by the Chief Justice: "1. Section 52(4) confers a discretion which is to be exercised judicially, in a manner that furthers the purposes of the statutory context in which it appears. The immediate purpose, as with any limitation period, is to protect defendants against injustice of stale claims; the statute is also aimed at promoting forensic diligence. 2. Bearing in mind those statutory purposes, the question is whether, in the circumstances of each individual case, the applicant for leave has demonstrated that it is fair and just that leave should be granted. 3. The diligence, or lack of diligence, shown by a plaintiff or a plaintiff's legal representatives, in ascertaining and asserting his or her rights will ordinarily be a material factor, as will the extent of the relevant delay, and the reason for it. 4. The nature and extent of any forensic disadvantage to a defendant resulting from the plaintiff's delay will also be material. The effect, if any, of the delay upon the defendant's ability to defend an action is a matter to be taken into account, and may in some cases be of decisive importance. 5. Leave under s 52(4) may be refused if it would be plainly futile to grant it, and in that connection an applicant's willingness and ability to give a full and satisfactory explanation of any delays in reporting to police, notifying claims and commencing proceedings will be material." 11 The plaintiff says that he discharged the onus and established that it is fair and reasonable to extend time in which the action should be brought. Or to put it another way, the plaintiff has established that in all the circumstances, justice is best served by exercising discretion in favour of him. 12 In relation to the third guideline in Salido, the lack of diligence shown by the plaintiff's representative is considered a material factor. Studdert J considered this issue in Guest v Southern & Anor (unreported 22 September 1995). Guest is an appeal against the decision of Master Malpass that a full and satisfactory explanation had been given for the purposes of s 52(3). (This section is now s52(4)). In Guest, Studdert J held that the plaintiff was not personally responsible for the delay and considered it to be reasonable for the plaintiff to have relied upon his solicitors to the extent he did. The plaintiff's solicitors were essentially to blame for the delay. Studdert J held that this was a very material consideration and referred to Sophron v The Nominal Defendant (1957) 96 CLR 469 and Stollznow v Calvert (1980) 2 NSWLR 749. 13 In Stollznow the Court of Appeal entertained an appeal against the decision of a trial judge who declined to order dismissal of proceedings for want of prosecution. It would seem that the inactivity complained of was not inactivity for which the plaintiff was personally to blame. On the hearing of the appeal Moffitt P, with whom the other members of the court agreed, said at 753: "As a matter of principle the blamelessness of a plaintiff personally for the delay is a fact relevant to be considered, along with other relevant facts. The submission of the appellant to the contrary, namely, that the fault of the respondent's solicitor should be attributed vicariously to the respondent was that, despite the absence of any personal fault she should be held to be to blame and the proceedings necessarily dismissed, should be rejected." 14 It was in this context, that Studdert J said that the function of the provision s 52(3) is to require the claimant to explain that conduct in the course of providing a full and satisfactory explanation for the delay. It is not to provide a weapon which may enable an insurer to defeat the claim because of such conduct. It may be defeated if the court decides that the claimant has failed to provide a full and satisfactory explanation for the delay in relation to blame attributable to solicitors. 15 The plaintiff's current solicitor has no personal knowledge of the actions that the previous solicitor took in relation to the plaintiff's file. He has annexed correspondence and detailed his recent efforts in preparing the plaintiff's case. The former solicitor who acted until 1995 is no longer with the firm and has no independent recollection of the plaintiff or the steps he took in relation to the plaintiff's instructions. 16 The plaintiff was not cross examined. The plaintiff received advice from his previous solicitor that he did not have a claim in relation to the bus accident at either Workers Compensation or Transcover. He accepted that advice. In 1990 he instructed his solicitor Mr Pfennigwerth to act for him in respect of any rights he may have in relation to compensation or damages arising out of the bus accident. He did not pursue his certificate of earnings from his then employer but his solicitor did not take any action to case it up or request that the plaintiff make further attempts to do so. 17 In 1994 he was advised that his accident did not fall within the Workers Compensation Act. From that the plaintiff assumed that he was not entitled to damages arising from the accident. He thought that no further action was to be taken and his claim was at an end. That being so when he changed his address, he did not inform his solicitor of his new address. 18 It cannot be said that the previous solicitor conducted the plaintiff's Motor Accidents Act claim with diligence. It is true that difficulties were occasioned when the plaintiff's solicitor was obliged to submit a claim form in accordance with s 44 and the employer did not supply a certificate of earnings. Studdert J refers to this problem in Bridge v Kimmorley (1991) 14 MVR 245 at 251. In 1993 the defendant's solicitor advised that he would accept copies of tax returns for the years 1987 to date in lieu of the certificate of earnings. These were finally supplied by the plaintiff's current solicitor on 11 June 1998. I cannot attribute this delay to the plaintiff nor can I attribute the delay in properly bringing these proceedings to the plaintiff. The plaintiff was reliant on the advice of his solicitor and aside from not chasing up his certificate of earnings, he has accepted and followed his solicitor's advice. 19 In relation to guideline (5) liability although in dispute would not appear to be complex as the plaintiff was a passenger travelling on a bus when the accident occurred. A report of the accident was made to the police shortly after the accident occurred. The witnesses' names have been recorded on the P4. The claim does not seem to be a large one however, I am satisfied that the plaintiff's claim is not futile. 20 In relation to guideline (4) in Salido the forensic disadvantage is considered a material factor. The defendant submitted that as the plaintiff did not attend the medical examination arranged in 1996 and has now lost that opportunity to do so I take this into account. Salido was decided before Brisbane South Regional Health Authority v Taylor (1996) 70 ALJR 866. In Taylor, the High Court was dealing with an application to extend time pursuant to s 31(2) of the Limitations of Actions Act Queensland 1974 which is almost identical with s 58(2) of the Limitation Act 1969 in New South Wales. Taylor deals with prejudice that occurs with delay. These principles enunciated in Taylor expand on what was said by the Chief Justice in Salido and are applicable to s 52(4) applications - see Hendricks v Agnew (Court of Appeal, unreported, 23 October 1997). 21 In Taylor's McHugh J case refers to the effect of delay on a trial. His Honour says: "The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. 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." and; "Legislatures enact limitation periods because they make a judgment, inter alia, that the chance of an unfair trial occurring after the limitation period has expired is sufficiently great to require the termination of the plaintiff's right of action at the end of that period. When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case. Even on the hypothesis of presumptive prejudice, the legislature perceives that society is best served by barring the plaintiff's action. When actual prejudice of a significant kind is shown, it is hard to conclude that the legislature intended that the extension provision should trump the limitation period." 22 Dawson J, in Taylor said at page 2: "The applicant must establish that the commencement of an action beyond the limitation period would not result in significant prejudice to the prospective defendant." 23 I accept that the defendants would suffer the prejudice of the loss of the statutory bar which they are now entitled. The defendants would also suffer from the tyranny of time as witnesses memories fade. As previously stated, a report was made to the police shortly after the accident and the plaintiff attended Dr Aoeney's surgery 3 days after the accident. A copy of the police report and doctor's report are now available. The defendants have been served with a statement of claim and an incomplete notice of claim form in 1990. Medical reports have been served by the plaintiff. In 1993 this statement of claim was struck out and a second statement of claim was filed in 1994. While there has been a gross delay in bringing this matter to a head and indifference shown on behalf of the plaintiff's prior solicitors, there is nothing before me to suggest that the defendant would not have been aware that the claim was still alive and being agitated. 24 Taking all of these circumstances into account, I have come to the conclusion that in the exercise of my discretion in difficult circumstances it is appropriate to grant leave to the plaintiff to continue these proceedings. If leave was granted, the defendant consented to the plaintiff being allowed to continue these proceedings. 25 The plaintiff consented to this matter being transferred to the District Court, Sydney Registry. As the plaintiff's solicitors have largely been responsible for the delay in these proceedings which brought about the necessity of this motion, the plaintiff's solicitors are to pay the defendant's costs. 26 The orders I make are: (1) Leave is granted to the plaintiff to continue these proceedings. (2) This matter is transferred to the District Court, Sydney Registry. (3) The plaintiff's solicitors are to pay the defendant's costs. Last Modified: 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.