District Court New South Wales Medium Neutral Citation: Afarin v Excelior Pty Ltd [2013] NSWDC 65 Hearing dates: 26 March 2013 Decision date: 20 May 2013 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: 1. Leave granted under s 151D of the Workers Compensation Act 1987 to commence proceedings outside the period prescribed. 2. Costs of the application be costs in the proceedings. Catchwords: WORKERS COMPENSATION - leave to commence proceedings outside limitation period - costs - ordinary rule Legislation Cited: Civil Procedure Act 2005, s 56 Uniform Civil Procedure Rules 2005, r 42.1 Workers Compensation Act 1987, s 66, s 151D Workplace Injury Management and Workers Compensation Act 1998, s 282 Cases Cited: ASB-Tech Services Pty Ltd (In Liquidation) v Doeland & Anor [2003] NSWCA 167 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Campbell v State of NSW [2002] NSWSC 230 Cavanagh v State of New South Wales [2008] NSWCA 350 Commonwealth of Australia v Lewis [2007] NSWCA 127 Commonwealth of Australia v Smith [2005] NSWCA 478 Fordham v Fordyce [2007] NSWCA 129 Holt v Wynter (2000) 49 NSWLR 128 Itek Graphix Pty Limited v Elliott [2002] NSWCA 104 Josef & Sons Contracting Pty Ltd v Mabbett [2007] NSWCA 237 Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 Parsons v Doukas (2001) 52 NSWLR 162 Saad v J Robins & Sons Pty Limited [2003] NSWCA 87 Salido v Nominal Defendant (1993) 32 NSWLR 524 The Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 Category: Interlocutory applications Parties: Katrina Afarin (plaintiff) Excelior Pty Ltd (defendant) Representation: Mr B McManamey (plaintiff) Mr H Halligan (defendant) Ron Kramer Associates (plaintiff) Edwards Michael Lawyers (defendant) File Number(s): 2011/396601 Publication restriction: No Judgment (a) Background 1Excelior Pty Ltd ("Excelior") employed Katrina Afarin as a store person. On 20 September 2005 Mrs Afarin was working in despatch, lifting boxes from a palette onto a conveyor line at the premises of Ceva Logistics (Australia) Pty Ltd ("TNT"). She would scan the box, affix a label and push the box along the line. That day she suffered a back injury when lifting a carton from the pallet. 2Mrs Afarin reported the injury, remained off work for about three weeks and filled out a workers compensation form, where the injury was described as "lower back annular tear and low grade disc bulge at L5/S1" arising from "lifting HEAVY boxes from the pallet on the floor and placed them on the conveyor". When Mrs Afarin returned to work her place of work was changed to a more remote location. The lengthy drive aggravated her back pain, so she stopped work for Excelior and was unable to find a suitable job elsewhere. She stopped looking for work on about 29 October 2008 when her treating doctor certified she was unfit for work. 3Since ceasing work Mrs Afarin has been receiving weekly payments of workers compensation, and has continued to provide medical certificates to the workers compensation insurer. At the time of the injury, she was unaware of claims for negligence. A certificate of determination had been issued in respect of the injury certifying a six per cent permanent impairment. On 4 January 2010 Mrs Afarin underwent surgery on her back. The pain that had been radiating down the back of her legs ceased, but otherwise there was little improvement from the surgery. 4Mrs Afarin's present solicitor first obtained instructions on 28 April 2010. In November 2010, she was assessed by her doctors as having a whole person impairment of greater than 15 per cent. Her solicitor told her that she could claim work injury damages. A notice of intention to make a work injury damages claim was forwarded by Mrs Afarin's solicitor to Excelior. 5Thereafter, the plaintiff's solicitor has requested an expert report on liability (December 2010), obtained past tax returns from the Australia Taxation Office (January 2011), received the expert report (April 2011) and briefed counsel (June 2011). 6The parties agreed that Mrs Afarin was entitled to workers compensation in respect of a 22 per cent whole person impairment, and a certificate of determination to this effect was issued on 7 July 2011. 7The plaintiff, her solicitor and counsel engaged in a conference on 19 July 2011. In October 2011 the draft pre-filing statement and other documents were received from counsel, were signed and on 13 October 2011 pre-filing statements were served. A pre-filing defence was received on 21 October 2011. An application for mediation was lodged and, when the defendant declined, in December the statement of claim was filed, suing Excelior in negligence. 8Excelior filed a defence on 6 February 2012 denying the claim and alleging as a defence that the proceedings were commenced in breach of s 151D of the Workers Compensation Act 1987 ("the Act"). Section 151D(2) of the Act provides: "(2) A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation more than 3 years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken." 9Excelior also filed a cross-claim against TNT. TNT filed a defence. Then Mrs Afarin, on 17 December 2012, applied for an extension of time for the filing of a statement of claim under s 151D. 10Excelior opposes the application. It filed an affidavit by an insurance claim assessor, Donald Gaskin, which detailed his inquiries into the matter. His inquiries failed to locate the Human Resources file although he received the payroll records pertaining to Mrs Afarin. He obtained draft statements from Mamta Kumar and Peter Cook. 11Ms Kumar gave information about the induction training and nature of work at the premises, including the presence of trolleys. Mr Cook gave information on the same subject matter. He did not believe that any box exceeded 15kgs in weight. Neither witness remembered the incident involving the plaintiff. (b) Legal principles 12In relation to the decision to grant leave there is authority for the importance of an adequate explanation for the delay: see Gleeson CJ in Salido v Nominal Defendant (1993) 32 NSWLR 524 at 530. In Holt v Wynter (2000) 49 NSWLR 128 a five member bench of the Court of Appeal applied the test espoused by Toohey and Gaudron JJ in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 550: "The real question is whether the delay has made the chances of a fair trial unlikely. If it has not there is no reason why the discretion should not be exercised in favour of the respondent." Although this quoted passage dealt with a different limitation provision it was adopted by the Court of Appeal in Holt v Wynter to have application to section 151D(2). The principal judgment in Holt v Wynter was delivered by Sheller J and in Parsons v Doukas (2001) 52 NSWLR 162 Sheller J reiterated that approach. 13However, in Itek Graphix Pty Limited v Elliott [2002] NSWCA 104 the Court of Appeal (per Ipp AJA, with whom Spigelman CJ and Sheller JA agreed) determined that those remarks were not intended to be applicable to a case involving a lack of diligence on the part of an application for leave (at [55]) nor, it seems, to "a deliberate decision to allow the limitation period to expire" (at [62]). 14In Itek Graphix the reasonableness of the explanation for the delay was held (at [82]) to be a relevant consideration for leave although it was recognised (at [88]) "that often a failure satisfactorily to explain the delay will not be decisive. Ordinarily the issue of prejudice will be of paramount importance". Further, (at [91]) "[a] deliberate decision to allow a statutory limitation period to expire would be a powerful factor against a grant of leave" and (at [98]): "In my opinion to grant leave to sue long after the expiration of a limitation period, when the applicant has made a deliberate decision to allow the statutory period to expire, in the absence of special circumstances explaining satisfactorily the conduct of the applicant, would set at naught the purpose of the legislation." 15In ASB-Tech Services Pty Ltd (In Liquidation) v Doeland & Anor [2003] NSWCA 167, Hodgson JA (at [30]-[33]) emphasised the need for the applicant to provide an explanation for the delay including, in an appropriate case, evidence whether by documents or otherwise from the plaintiff's solicitor. 16At [34] Hodgson JA stated: "The correct approach is to regard the provision of an explanation as a necessary step in the application, and the nature of the explanation as being a matter which has to be taken into account in the ultimate determination of whether it is fair and just to grant the extension. The weaker the explanation, the greater the need to show that there would be little prejudice to a respondent." 17In Saad v J Robins & Sons Pty Limited [2003] NSWCA 87, Santow JA, with whom Mason P and Hodgson JA agreed, stated (at [60]): " I consider that the decision not to bring common law proceedings is sufficiently explained by the diary notes, though the explanation leaves something to inference. One may properly infer that the Appellant did not want to bring common law proceedings against his employer whilst (a) his job continued; (b) he was receiving payments under the Act from his employer; (c) his condition had not stabilised but was getting worse; (d) while he had hope of a substantial payment under the Act by way of settlement and commutation; (e) there would be potential legal impediments; and (f) he had received no legal advice to commence proceedings at common law till very late. But the point was reached where his condition had worsened, where his job was terminated and no commutation payment was forthcoming. At that time, the inhibition against any proceedings would simply have been a potential legal impediment in revoking his election. Reasonably enough, with the benefit of legal advice, he then commenced proceedings in common law." 18His Honour distinguished the Itek Graphix decision where there had been a deliberate decision to allow the limitation period to expire. (c) Analysis 19Excelior's opposition to leave being granted relies on the following matters: (a)Mrs Afarin allowed the time limit to expire; (b)there was no, or no adequate, explanation of the delay; (c)there is prejudice to Excelior because of the passage of time; and (d)the case on liability is weak. 20As to the first matter, the evidence establishes that at the time of the expiration of the limitation period in 2008, the plaintiff did not know of the possibility of a negligence claim. Thus, the plaintiff did not choose to allow a limitation period to expire. 21Importantly, Mrs Afarin had no entitlement to commence proceedings for damages. She was assessed as having six per cent whole person impairment ("WPI") as a result of the injury, less than the 15 per cent threshold for an action for damages. By November 2010 her solicitors sought agreement from the defendant that she had a level of WPI of at least 15 per cent, and provided a medical report in support. By July 2011 the defendant had commenced inquiries into the circumstances of the injury and had agreed to 22 per cent WPI, and proceedings were commenced in December 2011. 22In those circumstances, there has been an explanation for the delay. The worsening of the condition since the injury was initially suffered is a factor in favour of granting leave, as is the relatively recent assessment of her WPI at 22 per cent. 23Further, no actual prejudice is alleged. Although any delay will impact on the reliability of evidence at a trial, there is nothing to indicate a fair trial is impossible. Nor does the evidence indicate that the prospects of a fair trial have decreased markedly by reason of the delay. Since 2005 the defendant has been aware of the injury and has been paying compensation. Thus, there would seem to be no issue about the incident occurring at work which resulted in an injury as recorded in the workers compensation claim filed in September 2005. The only real issues appear to be whether the defendant's system of work was negligent, and the quantum of damages. The latter is readily able to be assessed, more easily now that Mrs Afarin's impairment appears to have stabilised and be permanent. The former issue of negligence involves evidence of the system in the workplace, and the defendant has already identified two witnesses who have provided statements on that issue. 24As to the defendant's final point, I am not persuaded that Mrs Afarin's case on liability is weak. Questions about the strength of the case will be resolved at trial. They are of doubtful relevance and no significance in this application for leave. 25For these reasons, leave to commence proceedings out of the time provided in s 151D should be granted. 26The only other matter is the question of costs. The ordinary rule is to the effect that the successful applicant who has allowed a limitation period to expire should pay the costs of the application unless the opposition of the defendant to the application was unreasonable. Four members of a five-person bench of the Court of Appeal endorsed this principle in Holt v Wynter (2000) 49 NSWLR 128 at [121] (see also [109], [110] and [123]). It was adopted in Campbell v State of NSW [2002] NSWSC 230. 27This principle has been questioned in some more recent cases. In Fordham v Fordyce [2007] NSWCA 129 at [50], Young CJ in Eq doubted whether there was an "overarching principle" that "where a person seeks an indulgence of a court, that person should pay the opponent's reasonable costs unless the latter was based unreasonably". This issue was not referred to by the other members of the Court. No reference was made to Holt v Wynter, and the case itself involved costs orders after a settlement and thus was not readily analogous to the usual contested matter. Respectfully, I do not think this decision is of assistance in the present case. 28In Commonwealth of Australia v Smith [2005] NSWCA 478 the Court of Appeal considered an order for costs made against the Commonwealth in unsuccessfully opposing an extension of time by a plaintiff who sued for damages for psychological injuries arising from the collision between HMAS Melbourne and HMAS Voyager on 16 February 1964. Santow JA, at [157]-[161] stated: "[157] The Commonwealth submitted that the primary judge erred in not applying Pt 52A r 17 Supreme Court Rules, which provides. Where a party applies for an extension of time, unless the Court otherwise orders, he or she shall, after the conclusion of the proceedings, pay the costs of and occasioned by the application, or any order made on or in consequence of the application. [158] However, an application for extension of a limitation period is not an application for an extension of time within the meaning of the Rules. Part 52A r 17 applies to procedural matters arising under the Rules (for example, an extension of time to lodge a notice of appeal) and has no application to proceedings under a statute for the extension of a limitation period. [159] Sheller JA (with whom Meagher, Handley JJA and Brownie AJA agreed) said in Holt v Wynter (2000) 49 NSWLR 128 at 147, that: ... ordinarily a successful applicant, who allowed him or herself to get out of time, should pay the costs of the application unless the respondent's opposition was wholly unreasonable. [160] However, there is no rule that binds the judge to deny costs to an applicant for extension of the limitation period. A costs order for such an application is a matter of practice and procedure within the discretion of the primary judge. In view of the Commonwealth's failure in so many of these extension cases over six years [para 133] the judge would have been entitled to find that the Commonwealth acted unreasonably in opposing an extension in this case and should pay the applicant's costs. It has not been shown that the primary judge erred in the exercise of his discretion so as to warrant the interference of an appellate court (Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274; House v R (above); Lovell v Lovell (1950) 81 CLR 513 at 518-519 and 532-533). [161] Although not relied upon specifically, there is also the overriding purpose rule enjoining the parties to assist the Court in the just, quick and cheap resolution of the real issues in the proceedings; Pt 1 r 3(1), (2) now to be found in s 56(3) Civil Procedure Act 2005. By putting unsuccessful submissions as to prejudice based on the unavailability of documentation when this has so frequently been found insufficient to constitute significant prejudice, and was again so found here, that Rule would support the result that the primary judge's cost order should not be interfered with." 29The reference by Santow JA at [160] to "the judge would have been entitled to find that the Commonwealth acted unreasonably in opposing an extension in this case" is consistent with the rule in Holt v Wynter, and an application of it. The reference to s 56 of the Civil Procedure Act 2005 is not so easily reconciled, although this point does not appear to have been the subject of argument as it was "not relied upon specifically". The concluding comment - "putting unsuccessful submissions as to prejudice based on the unavailability of documentation when this has so frequently been found insufficient to constitute significant prejudice" also seems to raise the question of the reasonableness of the Commonwealth's opposition. 30Basten JA in Smith referred to Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116 and concluded that if the opposition was reasonable, the unsuccessful defendant should not be liable for the costs of the application (see [218] and [221]). 31In The Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 costs were awarded to a plaintiff in an application for extension of time for a claim alleging sexual abuse while in the defendant's care many years earlier. At [111] McColl JA (with whom Bell JA agreed) held that Holt v Wynter and Smith: "support the proposition that it was within the primary judge's discretion to consider the costs order in light of the manner the appellant resisted the extension application. In my view her findings as to its misleading conduct justified it being ordered to pay costs". 32Again, this decision endorses the ordinary rule stated in Holt v Wynter, and the finding is an application of the unreasonable conduct proviso in the ordinary rule. 33The other member of the Court in Rundle, Basten JA, at [147] distinguished the circumstances of the plaintiff from the ordinary rule stated in Holt v Wynter. The plaintiff in Rundle was not seeking an indulgence for he was unaware of the material facts. He had not, to use the words of Sheller JA in Holt v Wynter, "allowed him or herself to get out of time". Again, this is an application of the ordinary rule. 34However, at [148] Basten JA doubted whether an applicant should routinely pay the costs if not at fault, and rejected the application of the ordinary rule in that case. He raised the possibility that the preferable rule in those circumstances might be that the costs of the application be the applicant's costs of the proceedings. Ultimately, (at [153]) his Honour did not disturb the primary judge's order that the unsuccessful respondent pay the costs concluding that the costs order made was a matter for the primary judge, and commented (at [153]) on the failure of the respondent to deal appropriately with the issue below. 35Reference should also be made to Nowlan v Marson Transport Pty Ltd (2001) 53 NSWLR 116. In that case, Heydon J, with whom Mason P and Young CJ in Eq agreed, ordered in respect of a successful application for leave to commence proceedings out of time, that the costs of the application be the applicant's costs of the proceedings. No reference was made to the decision in Holt v Wynter although at [37] Heydon JA stated: "It may be that that type of order is not typical of those made in relation to s 52(4) applications which succeed. In argument before this Court expressions were used to the effect that the appellant had been seeking an "indulgence". In a limited sense that is true. There are some types of opposition which ought not to result in adverse costs orders even if the opposition fails. In other cases it can be seen, if opposition fails, that there ought not to have been opposition, and different types of costs orders may be appropriate. The failure of the respondent here is in the latter category." 36This decision does not identify those factors which might cause a matter to fall into one category or another, except perhaps if "there ought not to have been opposition". Whether the decision was an application of the proviso in Holt v Wynter or another principle is uncertain. 37In Commonwealth of Australia v Lewis [2007] NSWCA 127, the Court of Appeal unanimously endorsed the ordinary rule in Holt v Wynter, and many have even gone further, stating "in the ordinary course, a court would order a successful applicant for an extension of time to pay the costs" ([94], see also [98] and [99]). See also Cavanagh v State of New South Wales [2008] NSWCA 350 at [38], [41] and [42]. 38In these circumstances, it seems to me that the rule in Holt v Wynter has generally been endorsed rather than rejected. It remains a governing principle. If applicable, and absent special circumstances, it should govern the result. 39In this case, I do not find that the defendant's conduct was unreasonable. Unreasonable conduct must mean more than mere unsuccessful opposition to the application. No submission of unreasonableness was raised by the plaintiff. 40On the other hand, Mrs Afarin did not intentionally allow the limitation period to lapse. At that time she had no entitlement to claim. She is, as Basten JA stated in Rundle, not someone that allowed herself to get out of time. Accordingly, the ordinary rule in Holt v Wynter is not, in terms applicable, and does not require that she pay the costs. 41Basten JA in Rundle at [151] considered that an application for an extension of time is not an event in its own right raising the application of the general rule in Uniform Civil Procedure Rule 42.1. In the circumstances of this application, I agree. In Josef & Sons Contracting Pty Ltd v Mabbett [2007] NSWCA 237 at [6], the Court of Appeal unanimously rejected a challenge to an order by the trial judge that, although the defendant's opposition was not unreasonable, the costs were to be costs in the cause. I think that is the appropriate order in this case. 42Accordingly, the orders of the Court are: 1. Leave granted under s 151D of the Workers Compensation Act 1987 to commence proceedings outside the period prescribed. 2. Costs of the application be costs in the proceedings. ********** 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. Decision last updated: 21 May 2013