New South Wales Court of Appeal CITATION : State of New South Wales v Connor [1999] NSWCA 251 FILE NUMBER(S) : CA 40012/99 HEARING DATE(S) : 6 July 1999 JUDGMENT DATE : 21 July 1999 PARTIES : State of New South Wales v Barry Connor JUDGMENT OF : Sheller JA at 1; Cole AJA at 2; Foster AJA at 17 LOWER COURT JURISDICTION : Supreme Court LOWER COURT FILE NUMBER(S) : CL 13920/96 LOWER COURT JUDICIAL OFFICER : Hidden J COUNSEL : Appellant: Hunt & Hunt Respondent: Peter Long & Co Appellant: Mr R Bartlett SC & SOLICITORS : Mr W Austron Respondent : Mr J Rowe CATCHWORDS : Workers Compensation Act 1987, s151D; Judge reversing decision of Master to refuse extension of time; no erroneous exercise of discretionary decision by Master shown; appeal upheld and Master's decision reinstated ACTS CITED : Workers Compensation Act 1987 CASES CITED: House v The King (1936) 55 CLR 505 Brisbane South Regional Authority v Taylor (1996) 186 CLR 541 DECISION : (1) Appeal upheld; (2) Orders of Hidden J made 2 December 1998 should be set aside; (3) Orders of Master Greenwood made 21 October 1996 reinstated; (4) Respondent should pay the appellant's costs of the proceedings before Hidden J and on appeal should have in respect of the appeal, if qualified, a certificate under the Suitors Fund Act 1951 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40012/99 CLD 13920/96 SHELLER JA COLE AJA FOSTER AJA Wednesday, 21 July 1999 STATE OF NEW SOUTH WALES v BARRY CONNOR JUDGMENT 1 SHELLER JA: I agree with the reasons of Cole AJA. 2 COLE AJA: Application has been made for leave to appeal from a decision of Hidden J delivered on 2 December 1998. The parties agreed that, in the event of leave being granted the appeal be dealt with by this Court immediately. In his judgment Hidden J reversed a decision of Master Greenwood dated 28 October 1996. Master Greenwood had refused an application to extend the time for bringing common law proceedings pursuant to a power conferred by s151D of the Workers Compensation Act 1987. Hidden J granted that extension. 3 The plaintiff was injured on 4 July 1992, slipping on a step whilst descending from a watchtower. He suffered injury. In July 1994 he further injured his back whilst changing a fanbelt at his home. He claimed that that second incident aggravated the injury suffered on 4 July 1992. Subsequent to surgery in September 1994 he obtained legal advice, being advised that he had rights under the Workers' Compensation Act, and had entitlements to modified common law damages. That latter claim was at that time statute barred However, with amendments made to s151W the time for bringing common law proceedings was effectively extended to 4 July 1995. 4 On advice, he commenced workers' compensation proceedings in respect of each of the two incidents. He decided in October 1994 to defer bringing common law proceedings, first because his medical condition was uncertain and second because it was not apparent that the second incident at his home was necessarily an aggravation of a pre-existing work-related injury. 5 The Compensation Court proceedings were heard on 25 May 1995 and stood over until 30 August 1995. He underwent a disc fusion on 7 August 1995 resulting in the Compensation Court proceedings being adjourned to 5 December 1995. Effectively those proceedings resulted in a finding that the second incident was an aggravation of the first work-related injury. On 11 December 1995 he instructed his solicitor to proceed with the common law claim. However his back condition had not settled. His contention was that the application for an extension of time, commenced in September 1996, was deferred because of uncertainty regarding that condition. 6 In dismissing the application for an extension of time Master Greenwood found that for eight months prior to expiration of the period available to the plaintiff to bring an action for damages, he was aware he had suffered a work-related injury, but that he had accepted advice from his legal adviser that common law proceedings should not be commenced until such time as the Workers' Compensation Court determination had been made. That advice was given for two reasons. The first was that the finding, if made in the worker's favour, would establish that the second incident was an aggravation of a work-related injury, it being thought that the combination of the injuries suffered in the two incidents would permit the worker to overcome barriers created by s151G and 151H of the Act which limited the circumstances in which damages for both economic and non-economic loss could be recovered. Further, the worker and his solicitor were alive to s151A of the Act which required there to be an election whether to seek workers' compensation or common law damages. The worker, on legal advice, did not wish to make that election until he was aware whether the Compensation Court had established that the second incident was an aggravation of the first work-related incident, thus increasing the likelihood of recovering damages for both economic and non-economic loss. This issue was referred to by the parties in the proceedings as "the forensic issue". 7 In exercising his judicial discretion, Master Greenwood weighed the consequence of refusal of an extension of time to the worker, the fact of his entitlement to workers' compensation payments, the delayed knowledge of the appellant regarding the second incident, the loss to the appellant of a possible statutory bar to the action, the diminution in accuracy in witnesses recollection, the absence of availability of an early medical examination, the absence of diligence in prosecuting the claim, the consciousness of the decision to defer bringing common law proceedings whilst aware of the time bars, and whether, in all the circumstances, it was just and equitable that he should be granted an extension of time. In exercising his discretion he determined that extension should not be granted. 8 Being an exercise of a judicial discretion, it may be interfered with on appeal only if it is shown that there had been some error of law in the exercise of discretion. As was said in House v The King (1936) 55 CLR 505 : "If the judge acts upon a wrong principle, if he allows extraneous matters to guide or affect him, if he mistakes the fact, 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 the 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 the discretion is reviewed on the ground that a substantial wrong had in fact occurred." 9 It follows that, on appeal, Hidden J could interfere only if such an error could be identified. 10 Hidden J noted that the appellant employer suggested error only in two respects. The first was that there was no real prejudice to the respondent by the delay in commencing proceedings. The second was: "That the appellant's decision to abide the decision in the proceedings in the Compensation Court, far from amounting to a lack of forensic diligence, was a reasonable response to what counsel described as 'the forensic dilemma' in which he was placed by the Act: particularly in the light of the election to which he was put by s151A." 11 However, having noted those two asserted errors in the Master's judgment, Hidden J did not address the second. 12 Regarding the first his Honour did not find the Master's reasoning on the question of prejudice "entirely satisfactory". He said: "Earlier notice of the common law proceedings may have been to the respondent's advantage on the issue of liability: in particular, breach of duty. However, the Master's reasons appeared to centre upon the question of resultant damage, and it was on this basis that counsel for the respondent sought to support the decision. It is not apparent to me that the appellant's delay would have caused the respondent any significant prejudice in that respect. That was the central issue in the proceedings before the Compensation Court, and the respondent had the opportunity to investigate it within the time limited by s151D(2) of the Act." 13 That was the only reason advanced by Hidden J for holding that the Master's discretion miscarried. 14 The question of whether the appellant suffered prejudice was a question of fact for the judicial officer hearing the application for an extension of time. That question was to be resolved in accordance with the approach of the High Court in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 . The Master weighed aspects of prejudice or disadvantage to the appellant in reaching his conclusions. Having determined, as a factual matter, that the appellant had suffered prejudice from the delay, it was not open to Hidden J to reverse that finding of fact in the absence of breach of the tests enunciated in House v The King . There was no basis for a successful challenge to that factual finding. 15 It follows that Hidden J ought not to have set aside the decision of Master Greenwood, and exercised the judicial discretion himself. 16 The result is that: (1) The appeal should be upheld, the orders of Hidden J made 2 December 1998 should be set aside. (2) The orders of Master Greenwood made 28 October 1996 reinstated. (3) The respondent should pay the appellant's costs of the proceedings before Hidden J and on appeal but should have in respect of the appeal, if qualified, a certificate under the Suitors Fund Act 1951. 17 FOSTER AJA: I have had the opportunity of reading in draft form the reasons for judgment prepared by Cole AJA. I am in agreement with the orders proposed by his Honour and with the reasons he advances in support of them. I do not wish to add anything. ___________________________ . 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.