New South Wales Supreme Court CITATION : Paterson v Comalco Aluminium [2002] NSWSC 994 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 20955 of 2001 HEARING DATE(S) : 14 October 2002 JUDGMENT DATE : 25 October 2002 Douglas Malcolm Paterson (Plaintiff) PARTIES : v Comalco Aluminium Ltd (Defendant) JUDGMENT OF : Master Malpass COUNSEL : Mr G M Watson SC/S Fendekian (Plaintiff) Mr A Stone (Defendant) SOLICITORS : Carroll & O'Dea (Plaintiff) Vandervords (Defendant) CATCHWORDS : Leave to commence proceedings - application should precede the commencement of the proceedings - forensic diligence - deliberate decision not to pursue claim - prima facie case - prejudice. LEGISLATION CITED : Workers Compensation Act 1987, s 15, s 151D, s 151D (1) and (2). CASES CITED : Haidar Dandashli v Osama Dandashli (16/12/1996 NSWCA Unreported). Itek Graphix Pty Ltd v Elliott [2001] NSWCA 442. DECISION : See Paragraph 31. IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Master Malpass Friday 25 October 2002 20955 of 2001 Douglas Malcolm Paterson v Comalco Aluminium Ltd JUDGMENT 1 Master: These proceedings were commenced by Statement of Claim filed on 26 November 2001. The plaintiff brings a claim for damages arising out of personal injury. 2 The injury relates to allergies. One allergy is to aromatic hydrocarbons (the aromatic hydrocarbon allergy). The other is to kerosene (the kerosene allergy). Kerosene contains aromatic hydrocarbons. 3 The allergies are said to arise out of his employment with the defendant at its Yennora Plant. He commenced a period of about 15 year's employment as a cadet engineer in January 1981. The exposure to aromatic hydrocarbons continued until either the late 1980's or the early 1990's. The exposure to kerosenes lasted for over 15 years from January 1981 through to February 1996. In February 1996, he ceased working at the plant and KAAL Australia Pty Ltd (KAAL) became its owner. The detail of the exposure and the conduct of the defendant in relation to it may be found in the affidavit sworn by the plaintiff on 20 March 2002. 4 On 21 March 2002, the defendant filed a Defence. It contains inter alia the following: "2. The Defendant alleges a failure by the Plaintiff to comply with the provisions of Section 151D (1) of the Workers Compensation Act, 1987 and denies liability." 5 On 26 November 2001 the plaintiff filed a Notice of Motion. It sought inter alia leave pursuant to s 151D. There was also an application to strike out paragraph 2 of the Defence. The contested application was heard on 14 October 2002. 6 In support of the application, the plaintiff relied on his affidavit. He was extensively cross-examined. He tendered an expert's report (Exhibit A). The defendant did not adduce any affidavit or other documentary evidence. 7 The defendant has raised a number of issues. One of them may be described as a formal submission. It was submitted that leave should have been obtained prior to the commencement of proceedings. The submission referred to what has been said in Haidar Dandashli v Osama Dandashli (16/12/1996 NSWCA Unreported) and other cases. It is said that Dandashli was wrongly decided. The submission was not argued and the court proceeded on the basis that it was bound by those decisions. The remaining issues went to discretionary considerations. The defendant argued that the application should be refused because of lack of forensic diligence (including the making of a deliberate decision not to pursue a claim), lack of a prima facie case and prejudice. The court was referred to a number of decided cases (including Itek Graphix Pty Ltd v Elliott [2001] NSWCA 442). 8 I do not propose to repeat the detail of the material deposed to by the plaintiff in his affidavit. I will simply refer to certain of the relevant matters. 9 In about 1990 – 1991, the plaintiff started getting blisters on his fingers, hands and one wrist. It was later diagnosed as an allergy to Butyl Phenol Formaldehyde (an aromatic hydrocarbon). During his employment as Maintenance Superintendent Central Services, the problem with blisters on his hands and fingers increased in severity and he commenced having a growing problem with blisters appearing on his feet. He held that role from June 1992 to 2 October 1993. 10 He reported his rash to his employer in late 1995 and completed an incident form. This was the first formal report (as opposed to verbal communications) of the aromatic hydrocarbon allergy. He made a claim on his employer's insurer for cortisone cream. He consulted with an IRS rehabilitation provider. He made some investigations in the defendant's library. He decided that he had no choice but to leave his employment and look for a job where he was no longer exposed to chemicals to which he was allergic. 11 He chose to apply for retrenchment on medical grounds rather than pursue a WorkCover case. He did this because he feared that if he pursued the WorkCover case it might be harder for him to get another job. He volunteered for redundancy (see Annexure F to the affidavit). An agreement was reached with KAAL whereby he would be retrenched only on the basis that he did not pursue the WorkCover case. He regarded this as a "deal" and his "best option". He was retrenched in mid-February 1996. 12 He obtained other employment, firstly with Mannesmann Demag Heavy Engineering (Demag). This lasted for about 16 months. Secondly, with Dexion. He remains in that employment. There were many flare-ups of his condition. The most serious took place during a business trip to Malaysia in June 2001. He made a compensation claim on his employer's insurers. The claim was rejected in September 2001. He sought legal advice from his then solicitor (Mr Williams). He was not a litigation lawyer and recommended the plaintiff's present solicitors. The plaintiff first saw them on 31 October 2001. 13 Section 151D (2) confers a discretionary power to commence court proceedings. The plaintiff bears the onus of satisfying the court that such leave should be granted. The exercise of the discretion has been the subject of comment in numerous decided cases (more recently Itek). There has been inconsistency in the judicial observations made on this matter. It may be described as a discretion to be exercised having regard to the relevant circumstances of the particular case before the court and so that the interests of justice are best served. 14 As has been said, the submission that Dandashli was wrongly decided is only put formally. It is made to protect the position of the defendant. The submission is founded on a question of the construction of the section. There is the possibility of a High Court challenge. However, for present purposes, the matter needs no further consideration. 15 It is common ground that the relevant limitation period had expired prior to the commencement of these proceedings. For the purposes of this application, the parties appeared to regard the plaintiff's problems as diseases of gradual process (see section 15). There is a lack of consensus as to when the limitation period did expire. In this case, it is unnecessary to further pursue the matter. It suffices to proceed on the basis that the proceedings were commenced well out of time. 16 The court has been informed that the plaintiff is about forty years of age. It is not in dispute that he is a well-educated and intelligent man. He is an engineer by occupation. He has sworn an extraordinarily lengthy affidavit (26 pages plus annexures). The affidavit is remarkable for its detail. It names various fellow workers. It provides a frank narrative of inter alia the relevant past. His credibility has not been attacked. 17 In relation to the question of lack of forensic diligence, the defendant concedes that the plaintiff was not aware of the full extent of his rights until shortly before these proceedings were commenced. 18 A lengthy history of exposure is involved (from 1981). During that long period he worked with a widespread number of products which had the potential to cause his problems. He was aware of problems in about 1991. By about 1995, he was aware that he had problems which may be work related. 19 It was in 1996, that he made what has been described as a deal with Chris Lynch (of KAAL) concerning the retrenchment package. He agreed not to pursue his WorkCover case. The agreement saw him receiving a redundancy component in the order of about $60,000. This was done at the time he could not realistically continue in his then employment. It is conceded that at the time of the making of such deliberate and conscious decision (see Itek) that he was ill informed as to his legal rights. 20 Subsequently, his condition deteriorated and he had his most serious flare-up in June 2001. Following that flare-up and the rejection of his worker's compensation claim, he sought legal advice. 21 The content of his affidavit would suggest that he had had a solicitor prior to that time and could have earlier sought legal advice. Proceedings were commenced within a reasonable time after obtaining advice from his present legal advisers. He was unaware of any limitation period prior to the receiving of that advice. 22 There is dispute between the parties as to whether or not there is evidence before the court of a prima facie case. There is detailed evidence from the plaintiff as to his working conditions. The plaintiff also relies on various medical reports together with a report from Dr George Crank (consultant chemist and toxicologist). 23 It seems to me that there is sufficient material before the court to indicate that the plaintiff's claim has prospects of success. I do not consider that it would be futile to grant leave. Whether or not his claim will be successful seems to me to be a question which can only be explored at trial when all of the relevant evidence is placed before the court. The plaintiff has serious problems which impact both on his earning capacity and his life generally. If successful, his claim may be productive of substantial damages. 24 The defendant contends that the delay has brought about both actual and presumptive prejudice. A long period of time is involved and it is not disputed that there will be presumptive prejudice. The real dispute between the parties concerns the contention of actual prejudice. 25 The defendant has not adduced any evidence of actual prejudice. It relies on what has been adduced by the plaintiff and what it says is common sense. 26 An investigation of the plaintiff's claim may well be a difficult task of considerable magnitude. The defendant also says that it may have difficulties in mounting a cross-claim against its suppliers (no such cross-claim has yet been filed). Further, it may well be that what happened during his employment with Demag will have relevance to the determination of his claim. The defendant did not have the opportunity of having medical examinations of the plaintiff during the period between 1996 and 2001. These matters do have the potential to throw up actual prejudice. However, it can be observed that the defendant did have the opportunity to put on evidence of actual prejudice and has chosen not to do so. In the circumstances of this case, it seems to me that a fair trial is still likely. 27 I regard this application as being a difficult one to decide. It has caused me considerable deliberation. 28 Ultimately, I have come to the view that in the relevant circumstances of this case justice is best served if the power is exercised in favour of the plaintiff. I consider that the onus has just been discharged. 29 The application to strike out paragraph 2 of the Defence was not really argued. I was under the impression that at the end of the hearing the plaintiff was not pressing for this relief. In any event, I am of the view that justice may be best served if no such order is made. This approach may take into account the possibility of a successful challenge to Dandashli. 30 There was some debate as to the terms of the order that should be made if the plaintiff be successful. The plaintiff merely seeks an order that leave be granted to commence court proceedings. 31 Accordingly, I order that the plaintiff have leave to commence court proceedings for damages in respect of the injury pleaded in the Statement of Claim. The plaintiff is to pay the costs of the Notice of Motion. The exhibit may be returned. ********** Last Modified: 10/31/2002 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. 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