New South Wales Supreme Court CITATION : Bayliss v Milperra [2000] NSWSC 296 FILE NUMBER(S) : SC 21445/96 HEARING DATE(S) : 9, 10, 13 March 2000 JUDGMENT DATE : 21 March 2000 PARTIES : Noel John Bayliss v Milperra Marketing Pty Limited and Ors. JUDGMENT OF : O'Keefe J LOWER COURT Supreme Court (Master) JURISDICTION : LOWER COURT 21445/96 FILE NUMBER(S) : LOWER COURT Master Harrison JUDICIAL OFFICER : COUNSEL : B Gross QC/T Boyd - For plaintiff J Hislop QC/D R Russell - For defendant Carroll & O'Dea Solicitors St James Centre 111 Elizabeth Street SYDNEY N S W 2000 SOLICITORS : Gibson Robinson The chambers, Level 10 370 Pitt Street SYDNEY N S W 2000 CATCHWORDS : Appeal from Master - Interference with Discretion - Extension of time for bringing action - gateway, bar - discretion - principles for exercise of discretion - just and reasonable - fair trial of action - prejudice - factors to consider - public interest LEGISLATION CITED : Limitation Act, 1969 s.60G, s60I Commonweatlh v McLean (1997) 41 NSWLR 389 Harris v Commercial Minerals (1996) 186 CLR 1 Drayton Coal Pty Limited v Drain (NSW Court of Appeal, 22 August 1995 unreported) Dedousis v The Water Board (1994) 181 CLR 171 Deming No.456 Pty Limited v Brisbane Unit Development Corporation Pty Limited (1983) 155 CLR 129 CASES CITED : House v The King (1936) 55 CLR 499 at 504-505 State of New South Wales v Connor (NSW Court of Appeal, 21 July 1999 unreported) Brisbane South Regional Authority v Taylor (1996) 186 CLR 541 Sydney City Council v Zegarac (1998) 43 NSWLR 195 Cowie v State Electricity Commission (Vict) (1964) VR 788 Campbell v United Pacific Transport Pty Limited (1966) QdR 465 Barker v Wingo (1972) 407 US 514 DECISION : Appeal allowed; Cross appeal dismissed; Decision of Master of 31 August 1999 set aside; Limitation period extended to 31 March 2000; Defendants to pay costs of appeal and cross-appeal and if otherwise entitled to have a Certificate under the Suitor's Fund Act 1951. IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION O'KEEFE J DATE: 21 March 2000 No: 21445 of 1996 - NOEL JOHN BAYLISS .v. MILPERRA MARKETING PTY LTD & 2 ORS JUDGMENT 1 HIS HONOUR: This is an appeal from a decision of a Master given on 31 August 1999 by which the plaintiff, Noel John Bayliss, was refused an order under s.60G of the Limitation Act 1969 (the Act) extending the limitation period for a cause of action in negligence, which the plaintiff claimed to have against the first defendant as manufacturer and the second and third defendants as suppliers of polyvinyl chloride cement (PVC) and solvents. A cross appeal has been filed in respect of the finding of the Master that the plaintiff had satisfied the requirements of s.60 I of the Act. 2 The plaintiff, who is now 65, was a self-employed plumber who claims to have suffered a serious condition known as chemical hypersensitive syndrome due to exposure to polyvinyl chloride cement and solvent fumes in the course of his work as a plumber. 3 The application for extension of the limitation period was filed on behalf of the plaintiff on 2 February, 1998, a Statement of Claim having already been filed on his behalf in October, 1997. APPLICABLE LAW 4 Sub-division 3 of Division 3 in Part 3 (ss60 F - 60 J) of the Limitation Act, 1969 deals with discretionary extension of the limitation period for latent injuries, diseases and impairments. The purpose of the sub-division is expressed to be to provide a procedure for an extension of the limitation period where the plaintiff was unaware of the fact, nature, extent or cause of the injury, disease or impairment at the relevant time. (S.60 F). 5 Section 60 I of the Act provides that: "(1) A court may not make an order under s.60 G … unless it is satisfied that : (a) the plaintiff : (i) did not know that personal injuries had been suffered; or (ii) was unaware of the nature or extent of personal injury suffered; or (iii) was unaware of the connection between the personal injury and the defendant's act or omission, at the expiration of the relevant limitation period or at a time before that expiration when proceedings might reasonably have been instituted; and (b) the application is made within three years after the plaintiff became aware (or ought to have become aware) of all 3 matters listed in paragraph (a)(i)-(iii)" 6 Section 60 I provides a bar to the making of an order under s.60G unless the Court is satisfied as to the existence of one of the matters specified in s.60I(1)(a)(i) - (iii) at the expiration of the relevant limitation period and the application for the order is made within three years after the plaintiff became aware or ought to have become aware of all of the matters specified in s.60 I(1)(a) (i) - (iii). In order to comply with the provisions of the section the plaintiff must prove as a fact that he did not know or was unaware of the particular matter referred to in one of the subsections of s.60 I(1)(a), but that matter itself need not be proved as a fact. As was said in Commonwealth v McLean (1997) 41 NSWLR 389: "Section 60 G and s.60 I are clearly intended to operate together. The requirement in s.60 I that the court be satisfied of various matters must be read as requiring no higher proof from an applicant on matters which form part of the cause of action than is required by s.60 G(2). When these provisions are read together, it becomes clear … that s.60 I requires the court to be satisfied that the applicant was not aware of the matters referred to but does not require proof of those matters as facts." (supra at 395) per Handley and Beazley JJA. 7 Section 60 I of the Limitation provides a bar must be crossed before the plaintiff can obtain an order under S.60 G or has been said by the highest authority it is a "gateway" through which the plaintiff must pass before coming to have his case considered under s.60 G. 8 Section 60 I(1)(a)(i) is concerned with the absence of knowledge on the part of the plaintiff. The words used in s. 60 I(1)(a)(i) are "did not know", whereas the words used in s. 60 I (I)(a)(ii) and (iii) are "was unaware of". A difference in meaning is normally indicated by a difference in words in such close proximity. However, the form of s. 60 I (I)(b) demonstrates that no difference in meaning is intended and that awareness and knowledge are equated, not only in s. 60 I(1)(b), but necessarily in s. 60 I (1)(a)(i), (ii) and (iii). 9 The test for lack of knowledge or awareness posed by s. 60 I(1)(a) is one of fact. The Court is required to look at an actual state of affairs, "the applicant's actual state of awareness" Harris v Commercial Minerals (1996) 186 CLR 1 at 9). Lack of knowledge or awareness on the part of the plaintiff need not be reasonable; it just has to be a fact. Constructive knowledge is not material to the application of s. 60 I (1) (a). This is in marked contrast to the situation to which s.60 I (1)(b) directs attention. What the plaintiff ought to have known, in addition to what he did know is material under that sub-section (Harris v Commercial Minerals supra at 10). In this regard, it is relevant to note that the Master records that the defendant did not submit that the plaintiff ought to have known any of the matters referred to in s. 60 I(1)(a) before the plaintiff actually knew of the relevant matters, as that time was argued for by the defendant. The situation before me was the same. 10 Knowledge on the part of the plaintiff that he has suffered personal injury and awareness of the nature or extent of that injury is not dependent upon an understanding by the plaintiff of the precise pathological condition, medical diagnosis or name of the injury, disease or impairment from which he is suffering, or of all its pathological and physiological incidents. However, the plaintiff must know or be aware of the significant aspects of the injury, disease or impairment from which he is suffering, including whether it is permanent or not (Harris v. Commercial Minerals (supra at 13-14). 11 Section 60 I(1)(a)(iii) refers to "the defendant's act or omission". In Drayton Coal Pty. Limited v. Drain (NSW Court of Appeal, 22 August, 1995, unreported), consideration of the decision of the High Court in Dedousis v The Water Board (1994) 181 CLR 171 led the Court to the conclusion that unawareness of an obligation to maintain a safe system of work constituted sufficient lack of awareness on the part of a plaintiff to satisfy the provisions of s. 60 I(1)(a)(iii). This conclusion is supported by the High Court in Harris v Commercial Minerals (supra): "What this Court said in Deming No 456 Pty Limited v Brisbane Unit Development Corporation Pty Limited (1983) 155 CLR 129 at 151 about the meaning of the words first becomes aware of in a Queensland statute is equally applicable to the term unaware in s.60 I(1)(a): '(T)he very words "becomes aware" strongly indicate that the statute is looking to the purchasers actual knowledge of the failure which, by description, is a failure to comply with the statutory provisions. We conclude that the words "becomes aware of the failure" … involve not only knowledge that a statement containing the specific material has not been given but an awareness that the fact that such a statement was not given constitutes "a failure" to do something which the Act says should be done' "(at 10). 12 A plaintiff cannot be aware that a defendant has omitted to do something unless the plaintiff is aware that the defendant should have done that something 13 The application of s. 60 I(1)(a) does not involve the exercise of any discretion. Its application depends upon findings of fact appropriate to absence of knowledge or awareness on the part of the plaintiff at a nominated time. The application of s. 60 I(1)(b) likewise does not involve any exercise of discretion. If the requirements of the section are met, the plaintiff is entitled to have his application considered under s. 60 G. 14 This is in marked contrast to s. 60 G pursuant to which the court "may" order that the limitation period be extended "if it decides that it is just and reasonable to do so". Interference with Discretion 15 The power of a judge to set aside a discretionary decision of a Master and to exercise his or her own discretion in substitution for that exercised by the Master depends on well established principles. These are conveniently set out in House v The King (1936) 55 CLR 499 at 504-505 per Dixon. Evatt and McTiernan JJ: "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 the materials 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 has in fact occurred." 16 These principles were applied to an appeal from the decision of a Master in State of New South Wales v. Connor (N.S.W. Court of Appeal, 21 July, 1999 unreported per Cole AJA, with whom Sheller JA and Foster AJA agreed). SECTION 60 G 17 Section 60 G(2) of the Limitation Act 1969 (the Act) gives power to extend the limitation period for a cause of action that a person claims to have, if the Court decides that "it is just and reasonable to do so". Although the section is expressed to apply to a cause of action that accrues on or after 1 September, 1990 and is founded on negligence, nuisance or breach of duty for damages for personal injury (s.60 G(1)), the power is extended so as to apply to existing causes of action for personal injury where the injury, disease or impairment is latent. This is effected by Clause 4(1) and (3) of Schedule 5 to the Act (S.60 F). In respect of a cause of action that arose before 1 September, 1990 the Court may extend the time within a period of three years from a date fixed by s.60 I of the Act or a period of three years commencing on 1 September, 1990 (Schedule 5 Clause 4(4)). 18 In Brisbane South Regional Authority v Taylor (1996) 186 CLR 541 the High Court consisting of Dawson, Toohey, McHugh, Gummow and Kirby JJ considered Queensland limitation legislation dealing with causes of action arising in circumstances cognate to those dealt with in Sub-division 3 of Division 3 of Part 3 of the Act. Kirby J. dissented. In the joint judgment of Toohey and Gummow JJ an approach to the application of the relevant section that involved a comparison of the prejudice that would have occurred had the action been commenced within time and that which would occur at the time at which the extension of the limitation period was sought was said to be wrong (supra at 548). McHugh J, with whom Dawson J agreed, also rejected such an approach (supra at 554 - 555). Toohey and Gummow JJ also rejected the notion of weighing the prejudice of an applicant against the prejudice of a respondent. One reason for this is that the prejudice to the applicant is absolute if the application is refused, but that of itself is not enough to warrant an extension of time (supra at 549). This matter was adverted to in Sydney City Council v Zegarac (1998) 43 NSWLR 195 at 199-200. 19 Toohey and Gummow JJ pointed out that whilst there was a discretion to grant an extension of time, the question was: "on what principles is the discretion to be exercised" (supra at 546 - 547). In answering this question they said: "The discretion conferred … is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the Court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the Court that time should be extended remains on the applicant. Where prejudice is alleged by reason of the effluxion of time, the position is as stated by Gowans J in Cowie v State Electricity Commission (Vict) ((1964) VR 788 at 793) in a passage which was endorsed by Gibbs J in Campbell v United Pacific Transport Pty Limited ((1966) QdR 465 at 474): 'It is for the respondent to place in evidence sufficient facts to lead the Court to the view that prejudice would be occasioned and it is then for the applicant to show that these facts do not amount to material prejudice.' " (supra at 547). 20 They also said that in considering the exercise of the discretion to extend the limitation period: "A material consideration (the most important consideration in many cases) is whether, by reason of the time that has elapsed, a fair trial is possible" (supra at 548); and "the real question is whether the delay has made the chances of a fair trial unlikely." (supra at 550). 21 McHugh and Dawson JJ also deal with the question of prejudice to a prospective defendant. The onus being on the applicant to satisfy the Court that the discretion should be exercised favourably, Dawson J said that: "(t)o discharge that onus the applicant must establish that the commencement of an action beyond the limitation period would not result in significant prejudice to the prospective defendant." (supra at 544). 22 McHugh J, with whose reasons Dawson J, agreed set out several considerations that are material to the determination of applications such as that presently before the Court: "The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible (supra at 553) 2. "A limitation period is the general rule; an extension provision is the exception to it" (supra at 555) 3. "the discretion to extend should … be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare to the State is best served by the limitation period in question." (supra at 553 - 554) 4. When an applicant brings him or herself within entitling provisions such as those of the Act: "those facts enliven the exercise of the discretion, but they do not compel its exercise in favour of the applicant. Without them the applicant has no right to call for the discretion to the exercised in his or her favour. Proof of them does not give the applicant a presumptive right to the exercise of the discretion." (supra at 554) 5. "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 himself 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. The general rule that actions must be commenced within the limitation period should therefore prevail once the defendant has proved the fact or the real possibility of significant prejudice. In such a situation injustice to one party must occur. It seems more in accord with the legislative policy underlying limitation periods that the plaintiff's lost right should not be revived than that the defendant should have a spent liability reimposed on him. (supra at 555) 23 From these references it can be seen that there are divergences between the two sets of judgments - Toohey and Gummow JJ on the one hand; Dawson and McHugh JJ on the other. However, both consider that whether or not a prospective defendant can properly defend him or herself, i.e. have a fair trial, is at least material, often most important, to the exercise of the discretion to extend the limitation period, since that consideration is at the heart of what is just and reasonable in the circumstances. One set, Dawson and McHugh JJ, goes further than this. The common ground was adverted to by Mason P in Sydney City Council v Zegarac (1998) 43 NSWLR 195 at 199. So too were the differences between the two sets of judgments, but Mason P took the view that it would be presumptuous for him to explain the differences (supra at 199). However he said that: 1. " … mere proof of actual prejudice will not dictate the rejection of an application to extend the time" (supra at 199; italics added) 2. "… even significant prejudice does not dictate the rejection of an application for the extension of time" (supra at 199; italics added) 3. "Evidence of actual or significant prejudice may lead to the refusal of the application depending on the particular circumstances of the case." (supra at 199) 4. "… its (prejudice's) impact on a fair trial is the primary focus." (supra at 199; parenthesis added) 24 Priestly JA dissented, but pointed out that the Queensland provisions under consideration in Brisbane South Regional Health Authority v Taylor (supra) "were … made in the context of the legislation for discovery cases that had originated in the United Kingdom in 1963" (supra at 222), thus treating the Queensland provisions as akin to those of Sub-division 3 of Division 3 of Part 3 of the Act rather than to those of Sub-division 2 of Division 3 of Part 3 of the Act. 25 Powell JA was of the view that difficulty in identifying and locating relevant witnesses, the loss of relevant records, the loss of the opportunity of having earlier medical examinations, the fading of witnesses' memories were sources of significant prejudice. These considerations are an echo what was said by McHugh J in Brisbane South Regional Health Authority v Taylor (supra at 551). Powell JA also stressed the importance of the unlikelihood of a fair trial taking place when deciding not to grant an extension of the limitation period. (supra at 238; 242). 26 In order to determine that this application be determined in favour of the plaintiff he must establish on the balance of probabilities that : 1. as at the expiration of the limitation period he did not know that he had suffered personal injury or that he was unaware of the nature or extent of the personal injury he had suffered or was unaware of the connection between the personal injury he had suffered and the defendant's acts or omissions; (S.60 I(1)(a)); 2. his application for extension of the limitation period was made within three years after he became aware or ought to have become aware of all of the matters set out in 1 above; (S.60 I(1)(b)); 3. it is just and reasonable to extend the limitation period. (S. 60 G(2)) 27 In order for it to be just and reasonable to extend the limitation period the plaintiff must establish that the commencement of an action beyond that period would not result in material or significant prejudice to the prospective defendant. The impact of prejudicial factors on the fair trial of an action is the primary focus for determining the justice and reasonableness of the granting of the extension. If a fair trial of the action cannot be had then the application should usually be refused. In arriving at a conclusion in relation to the question of whether it is just and reasonable to extend the limitation period, it is not appropriate to balance prejudice to the plaintiff on the one hand with the prejudice to the defendant on the other, nor to compare the prejudice that would have occurred had the action been commenced within time with that which would occur at the time at which the extension of the limitation period is sought. 28 Prejudice may take many forms. Those forms include unavailability of relevant witnesses, whether through death or inability to locate them; destruction or loss of material documents; lack of recollection on the part of relevant witnesses and the deterioration of recollection due to effluxion of time even in those witnesses who are available and have some recollection of some events that are or may be an issue. Furthermore, effluxion of time is likely to make at least some witnesses who claim to have a recollection of particular events or statements vulnerable in cross-examination to suggestions that their recollections must inevitably be faulty. In addition, a plaintiff may be able to benefit, to the detriment of a defendant, from responses in cross-examination of inability to recall details that may be adverse to the plaintiff's case, on the ground that the events occurred so long ago. In relation to a consideration of prejudice it is also relevant that individuals should be able to arrange their affairs on the basis that claims can no longer be made against them, a consideration that is true for public institutions as well as for private individuals and enterprises. There is also a more subtle prejudice that can occur, namely a deterioration in quality of evidence that is not even recognised by the parties. In this regard McHugh J drew attention to the dictum of the United States Supreme Court in Barker v Wingo (1972) 407 US 514 at 532, namely that "what has been forgotten can rarely be shown". He pointed out: "It must often happen that important, perhaps decisive, evidence has disappeared without anyone 'knowing' that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. … The longer the delay in commencing proceedings the more likely is it that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose." ( Brisbane South Regional Health Authority v Taylor (supra at 551)). 29 It is on the basis of the principles and considerations set out above that a consideration of the decision of the Master and of the matter will proceed. ANALYSIS 30 The Master made detailed findings of fact and then considered whether the plaintiff had crossed the bar or passed through the gateway provided by s.60 I of the Act. Consideration was given to each of the provisions in s.60 I(a). First, the Master found that by August, 1994 the plaintiff had no doubt in his mind that it was the exposure to the relevant products that had caused his injury. He therefore failed to satisfy the requirements of s.60 I (1)(a)(i). Second, the Master proceeded to consider whether the plaintiff had proved that he was unaware of the nature or extent of the personal injury he had suffered. She found that by August, 1994 the plaintiff knew that he was suffering from chemical sensitivity, the symptoms of which included sore muscles, severe shooting paints in both arms, sore feet and hands, respiratory problems, blurred vision, increased heart rate, sweating and dizziness and that he was aware that his condition was permanent. As a consequence the Master held that the plaintiff was aware of the nature and extent of the personal injury he had suffered by August, 1994. He thus failed to satisfy the requirements of s.60 I(1)(a)(ii). 31 The Master then gave consideration to the facts concerning the state of awareness of the plaintiff as to the connection between the personal injury that he had suffered and the acts or omissions of the defendant (S.60 I(1)(a)(iii)). It is this portion of the judgment that the cross-appeal challenges. The Master correctly stated that the relevant acts or omissions in the context of s.60 I(1)(a)(iii) were those on which the plaintiff relied to found his cause of action, as set out in the plaintiff's Statement of Claim and particulars of negligence. 32 The Master determined the issues under s.60 I (1)(a)(iii) on the basis that the sub-section is concerned with ignorance of the existence of acts or omissions rather than of legal conclusions and decided that, as the plaintiff first became aware in August 1996 that the manufacturers and suppliers of the relevant products "should have included on their labels warnings of the chemicals in the solvents" but had not done so, that was the date at which the unawareness required by s.60 I (1)(a)(iii) ceased. This was a correct application of the passage in Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 at 151 that was quoted with approval in Harris v Commercial Minerals (supra at 10). This meant that as the application for extension of the limitation period had been made on 2 February, 1998, the plaintiff had satisfied the time requirements of s. 60 I and clause 4(4) of Schedule 5 to the Act. 33 In reaching her conclusion in relation to the satisfaction of s. 60 I the Master applied the correct legal principles. The detailed findings of fact made in relation to the state of the plaintiff's knowledge and awareness are well justified by the evidence, indeed, in my opinion, they are correct and I adopt them. Her conclusion in relation to this aspect of the case is not one which bespeaks error of the kind referred to in House v The King (supra) so as to invoke intervention by this court on appeal. Accordingly the cross appeal must fail. Section 60 G 34 The basis on which the Master refused to exercise the discretion conferred by s.60 G in favour of the plaintiff can be summarised as follows: 1. The applicant must demonstrate that despite the delay and other circumstances of prejudice, the defendants will have a fair trial. Absent such a demonstration, leave should be refused (para 33). 2. The defendants in the action will suffer prejudice because they : (a) "Will be obliged to investigate when they actually put warnings on their containers;" (para 35). (b) "Will also have to investigate what was known about (the) particular solvents since 1978 to 1994 and locate safety data sheets during that period." (para 35). This "may in part rely on witnesses memories" (para 36). (c) "There (was) a delay from 1995 when (the plaintiff) consulted a solicitor to December 1996 when the Statement of Claim was filed … This delay of 18 months has not been adequately explained." (para 37) (d) "The Notice of Motion was not filed until … nearly over three years after the Statement of claim was filed." (para 38) (e) "The defendants will suffer significant prejudice as it is up to 20 years since the causes of action arose." (para 39) 35 In reaching her conclusion the Master, in my opinion, fell into error of a kind that is within the principles stated in House v The King (supra). First, she appears not to have adverted to the differences in the two sets of judgments to which I have referred above. In the joint judgement of Toohey and Gummow JJ it was said that where prejudice is alleged by reason of the effluxion of time, the position is (as stated by Gowans J in Cowie v State Electricity Commission (Vict) (supra) and approved by Gibbs J in Campbell v United Pacific Transport Pty Ltd (supra)) that it is for the respondent to place in evidence sufficient facts to lead the Court to the view that prejudice would be occasioned and it is then for the applicant to show that these facts do not amount to "material prejudice". The defendant did not put on any evidence as to prejudice that it might suffer. Dawson J was of the view that the test in relation to the prejudice to a prospective defendant was that it had to be "significant". McHugh J distinguished between a case in which a defendant is able to prove that he or she will be prejudiced in properly defending him or herself and a case in which mere effluxion of time gives rise to presumptive prejudice (at 555). In this context the failure of the defendant to put on any evidence of actual prejudice is the more significant., but such significance is not referred to by the Master. The reference to the defendant's failure to put on evidence of prejudice is noted, but not apparently given weight. McHugh J also said that the general rule provided for in the limitation period should prevail "once the defendant has proved the fact or the real possibility of significant prejudice." 36 The Master did not clearly apply a test of significant or material prejudice. At one point in the judgment reference is made to "prima facie prejudice" (para 33); at another "significant prejudice" (para 39). 37 Second, one of the grounds for the refusal to exercise the discretion in favour of the plaintiff was delay between the date the plaintiff first consulted a solicitor and the filing of the Statement of Claim. This was at a time after the labels had been changed and was within the period of three years which the Act itself allows for the making of an application (s.60 I (1)(b); Schedule 5 Cl.4(4)). No reason was stated as to why this particular period should be singled out and made a separate basis for refusing the exercise of discretion in favour of the plaintiff, or what prejudice was or might be occasioned to the fair trial of the action in or as a result of this period. Furthermore, what is unjust or unreasonable about commencing action within the time provided for in the statute is not stated in the judgement appealed from. I do not think that the exercise of a right conferred by the statute within the time provided for by that same statute for such exercise can be said to be unjust and unreasonable, in the absence of some fact or facts that show why this is so in the particular case. In the present case there was nothing to show that it was so. The defendant chose not to put on any evidence of prejudice or at all. 38 Third, the Master expressly relied on the delay of "nearly over three years" between the filing of the Statement of Claim and the filing of the Notice of Motion for extension of time. This is a clear error. It is not "nearly over three years", it is just over one year, 13 months to be precise. Such an error of fact, material to the ultimate conclusion is within the principles of House v The King (supra). 39 Fourth, the Master appears not merely to have taken the period referred to in the second reason set out above as one of the bases for refusing to exercise the discretion in favour of the plaintiff, but in addition appears to have included the same period in the period of "up to twenty years since the causes of action arose" which was another of the bases for the conclusion that the plaintiff will suffer significant prejudice. On the face of it this appears to be a double counting. 40 Fifth, in declining to exercise the discretion in favour of the plaintiff the Master's concern that the defendants would be obliged "to investigate" when they actually put warnings on their containers and what was known about particular solvents is not of itself a matter of prejudice. It is not the fact that a defendant has to investigate a claim that constitutes relevant prejudice, but rather that it will not be able to investigate the claim properly because of the effluxion of time. Every defendant must investigate the claim made against it by a plaintiff. Furthermore, in the present case the fact that warnings were not put on the products until 1992 should still be readily known by those within the defendants' organisations. After all the application was made within six years of this occurring. The ordinary provisions of the Act in relation to time bars in actions in tort (s.14) does not regard such a period as unreasonable or as imposing any injustice on or causing prejudice to a defendant. In addition, the safety data sheets which concerned the Master are available from the major manufacturers of the constituent chemicals that were the basic components in the relevant products. The major manufacturers are the large multi-national corporations Monsanto and Dow and the evidence indicates that they had extensive records on the very topic that will arise in the action. 41 Sixth, in refusing the plaintiff an order extending the time within which he could commence proceedings, the Master did not advert to the basis of claim inherent in the plaintiff's Statement of Claim, viz. that the defendants ought to have known of the noxious character and seriously deleterious effects of the fumes given off by the products that they respectively manufactured and marketed. These matters were known to the major suppliers of the basic components of the kind that went into the products manufactured and distributed by the defendants. As entities that were mixing and putting into the community chemical substances, the defendants ought, on the evidence, to have known that they could have seriously deleterious effects. Evidence that they were capable of causing serious and permanent physical injury was known to the major manufacturers and this was, according to the evidence before the Master, information that had been readily available for many years. Furthermore, the affidavit of Professor Phoon which was before the Master showed that six of the active ingredients in the relevant PVC solvent weld cement and the ingredient methyl-ethyl ketone in the bond priming fluid were organic solvents whose toxic effects had "been known for a very long time". He said that such knowledge "was widespread well before the 1970's in North America, Europe and Australia." 42 The refusal by the Master to exercise the relevant discretion in favour of the plaintiff was, in my opinion, flawed and involved errors of the kind referred to in House v The King (supra). As a consequence it is open to the court on this appeal to review the exercise of the discretion under s.60 G of the Act. 43 In my opinion, it is just and reasonable that the time within which the plaintiff may institute an action should be extended. My reasons for this conclusion are: 1. I do not think that the defendants would suffer material or significant prejudice in responding to the case which will be made by the plaintiff. According to the evidence, labels first included a warning in 1992. The defendants were aware, at latest, of the plaintiff's claim against them by the date on which the Statement of Claim was served, namely October, 1997 - a period of five years. Service of the Statement of Claim should have put the defendants on notice about: (a) inquiring as to their records and preserving them; (b) ascertaining the recollection of executives and other employees concerning the first date on which warnings were included in the label; (c) checking the chemical constituents of the products they manufactured and distributed; (d) what material was available prior to 1992 in scientific journals, from the manufacturers and otherwise as to the known effects of such chemical constituents; (e) taking advice as to any other matters that may be relevant to the claim. Recollections back to 1992 and even some years before should not be dimmed. 2. It is clear from the evidence of Professor Phoon that the toxic effects of the chemical constituents of the relevant products had been known for many years in Australia, as well as elsewhere. If the defendants or any of them claimed not to have such knowledge, absence of such knowledge would not of itself be a defence to the action. The plaintiff's case is that they clearly should have; the gist of the plaintiff's claim is that the defendants ought to have known. 3. It is clear from the evidence of Mr Walker that the chemical substances which were the basic constituents of the relevant products manufactured or distributed by the defendants were not only well known in the field of manufacture and distribution of the relevant and like products for their deleterious effects, but also records to substantiate that knowledge, and to verify that the harmful qualities of such constituents was a widely disseminated fact in the industry, exist in at least the records of Dow and Monsanto. Furthermore, it defies belief that the National Occupational Health and Safety Commission (Commonwealth) and the equivalent Department of State in New South Wales would not have records relating to the noxious substances and their deleterious effects well prior to early 1992, given evidence of Mr Walker and Professor Phoon. The existence of such records should ensure that the state of knowledge in the industry can be chronicled clearly, without need to rely just or essentially on memories. 4. The fact that the prejudice relied upon by the defendants is presumptive rather than actual, that no evidence was called to show that there was any actual or particular prejudice on the part of the defendants or any of them ( Brisbane South Regional Authority v Taylor (supra at 547; Cowie v State Electricity Commission (Vict) (supra); Campbell v United Pacific Transport Pty Limited (supra). 5. That there is or may be some prejudice (presumptive), which may arise merely as a result of the passage of time does not dictate the rejection of an application for an extension of time. In these circumstances the absence of evidence of actual prejudice or prejudice that is material or significant, is in favour of the discretion being exercised favourably to the plaintiff in a case of the present kind ( Sydney City Council v Zegaric supra at 199). 6. Viewed over all in the light of the case made by the plaintiff, the evidence produced by the plaintiff before the Master and the absence of evidence of specific prejudice from the defendants I am satisfied that the defendants are unlikely to be prejudiced, either materially or significantly in the mounting and presentation of their defence. In my opinion the prospect of a fair trial is high. 7. Having regard to the issues in the case, I am of opinion that the prospect of a fair trial is high. 44 For the foregoing reasons I am satisfied that it is just and reasonable to extend the time within which the plaintiff may institute action against the defendants. The extension should be until 31 March, 2000. 45 The formal order of the Court is: 1. Appeal allowed . 2. Cross appeal dismissed. 3. Decision of the Master of 31 August 1999 set aside. 4. The limitation period for the action by the plaintiff against the defendants is extended to 31 March, 2000. 5. The defendants must pay the costs of the plaintiff of this appeal and cross appeal and of the proceedings before the Master and, if otherwise entitled, should have a certificate under the Suitors Fund Act, 1951. ********** Last Modified: 09/26/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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