Supreme Court New South Wales Medium Neutral Citation: Merton v Manildra Energy Australia Pty Ltd [2013] NSWSC 1482 Hearing dates: 3 October 2013 Decision date: 11 October 2013 Before: Hoeben CJ at CL Decision: (1) Grant the plaintiff an extension of time within which to commence proceedings against Park up to and including 12 February 2013. (2) The plaintiff's costs of this application are to be the plaintiff's costs in the cause. Catchwords: LIMITATION OF ACTIONS - extension of time - limitation period for work injury damages claim - Workers Compensation Act 1987, s151D - delay adequately explained by plaintiff's medical condition - no evidence of prejudice - discretion to extend time should be exercised. Legislation Cited: Workplace Injury Management and Workers Compensation Act 1998 Workers Compensation Act 1987 Cases Cited: Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541 Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; 54 NSWLR 207 Salido v Nominal Defendant (1993) 32 NSWLR 524 Strasburger Enterprises Pty Ltd trading as Quix Food Stores v Serna [2008] NSWCA 354 The Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 Category: Principal judgment Parties: Craig Merton - Plaintiff Manildra Energy Pty Ltd - First Defendant Kidde Australia Pty Ltd - Second Defendant Park Pty Ltd (formerly known as Manildra Park Pty Ltd) - Third Defendant Representation: Counsel: Mr L King SC/Mr J Wilson/Mr J Lee - Plaintiff Mr A Hourigan - Third Defendant Solicitors: AR Yates & Co, Solicitors - Plaintiff HWL Ebsworth - First Defendant Minter Ellison - Second Defendant DLA Piper - Third Defendant File Number(s): 2008/289240 Judgment 1HIS HONOUR: The plaintiff moves by way of notice of motion seeking leave pursuant to s151D of the Workers Compensation Act 1987 (the Act) to commence proceedings for damages against Park Pty Limited (formerly Manildra Park Pty Limited) (Park). 2The first and second defendants did not wish to participate in the application. Park advised the Court that it neither consented to nor opposed the plaintiff's motion and its joinder to the proceedings. Accordingly, the application proceeded on that basis. Factual Background 3The following matters are uncontroversial. At all material times, the plaintiff was an employee of Park. At all material times, Park was the owner and lessor of land situate at Lot 2, 5 Flinders Street, Port Kembla (the land). 4At all material times, the first defendant was the lessee of the land which it used for the storage and manufacture of petroleum and associated products including ethanol. 5At all material times, the second defendant was the supplier of a "Foam Box", which was installed on the ethanol storage tanks upon the land with the intention that it would enable foam to be distributed over the surface of the stored ethanol in the event of fire. The Foam Box was connected to a foam distribution unit by individual pipes. 6On 28 January 2004, the plaintiff while performing welding duties on one of the pipes at the ethanol storage tank, suffered injury as a result of ethanol leaking from the tank through the Foam Box into the pipe which he was welding. 7The plaintiff alleges that Park was negligent as his employer in that it did not adequately supervise him, did not provide him with a safe place of work, did not provide him with a safe system of work, failed to prevent ethanol leaking from the tank, failed to properly supervise the installation of the Foam Box and failed to properly assess the safety of the job to which the plaintiff had been allocated. It should be noted that this is a summary of the allegations made. In point of fact, 59 particulars of negligence have been pleaded against Park. 8The plaintiff consulted his present solicitors on 7 February 2005. Before those solicitors could take any steps in relation to the matter, they had to arrange for the plaintiff's file to be transferred from his then solicitors, Nikolovski Lawyers. This occurred on 4 July 2005. 9On 28 July 2005 the plaintiff advised his solicitors that he was not receiving counselling or psychological treatment because he did not want to have to talk about the incident and just wanted to forget about it. He was at the time receiving treatment for back pain and was seeing a rehabilitation specialist arranged by the workers compensation insurer. In the accident the plaintiff suffered an injury to his back and continued to complain of low back pain, right side neck pain, constant headaches and migraines, pins and needles in both hands, a burning sensation in the right foot and dizziness. 10The accident was the subject of a coronial inquiry. The results of the coronial inquiry were delivered on 28 February 2006. The coroner concluded that the source of ignition of the fire was the welding operation being carried out by the plaintiff. His other findings were: (1) The tank had been placed in service for storing ethanol before the fixed fire protection system was fully installed. (2) A frangible disc that was supposed to have been installed in Foam Distribution Box 1 was not fitted. (3) The quality of supervision of the plaintiff was not adequate. (4) The system for safely conducting hot work was deficient in that the hot work permit system was not always followed and that hot work was undertaken in situ in a hazardous space without a permit. 11Park was successfully prosecuted in the Industrial Relations Commission. The findings of the coroner are supported by reports of Mr Underwood, an occupational health and safety mechanical engineer, dated 25 May 2010 and 26 May 2011. Those reports provide prima facie evidence of liability in negligence on the part of Park to the plaintiff. 12The plaintiff has not been so fortunate in obtaining medical support for the injuries which he suffered. Pursuant to s151H of the Act the plaintiff was not entitled to bring proceedings for damages against Park unless he could establish a whole person impairment (WPI) of 15 percent. A report from Dr Deveridge of 13 February 2006 assessed his WPI at 10.3 percent. 13A further series of medical examinations were arranged by the plaintiff's solicitors for August 2006. One of those doctors was a psychiatrist, Dr Pickering. Four days before his appointment with that doctor, the plaintiff instructed his solicitors to cancel the appointment because he did not think he could participate in a psychological assessment. This was because he was having great difficulty in dealing with the accident in his mind and was suffering from considerable mental stress. In a report dated 4 October 2006 Dr Darveniza, a neurologist, assessed the plaintiff as suffering from a 13 percent WPI. On 7 February 2007 Dr Carrol, an ENT specialist, reported that the plaintiff had a 4 percent WPI in relation to his hearing loss. 14By letter dated 21 December 2006 the plaintiff's solicitors advised Park that as his employer the plaintiff held it responsible for his injuries and that common law proceedings would be commenced against it if his injuries were assessed at 15 percent WPI or more. A letter to similar effect, dated 19 January 2007, was sent by the plaintiff's solicitors to Park. No response was received to either letter. 15On 24 January 2007 proceedings were commenced against the first and second defendants and others in the District Court at Wollongong. No proceedings were commenced against Park because at that stage the medical evidence available to the plaintiff did not indicate a WPI of 15 percent or more. 16By a report dated 1 February 2008 Dr Deveridge assessed the plaintiff as having a WPI of 16 percent by taking into account the assessments of Dr Darveniza and Dr Carol. This was the first time that the plaintiff had evidence available demonstrating a WPI of 15 percent or more. 17In January 2008 a cross-claim was brought by the second defendant against Park in the District Court proceedings. 18On 25 February 2008 the plaintiff made a claim against Park under ss 66 and 67 of the Act for lump sum payments of workers compensation. This was based on the assessment of Dr Deveridge of WPI of 16 percent. That claim was rejected by Allianz Insurance (Allianz) the workers compensation insurer of Park. This rejection was based upon the reports of Drs Mellick, Christie and Hawison who had seen the plaintiff on behalf of Allianz. 19The plaintiff commenced proceedings in the Workers Compensation Commission (the Commission) seeking lump sum compensation on 16 January 2009. There were problems with the documents filed by the plaintiff's solicitors and they were rejected by the Commission. The plaintiff's solicitors tried on a number of occasions during 2009 to file an application seeking lump sum compensation but all were rejected for reasons which could only be described as a triumph of form over substance. In fact an application was not successfully filed until 4 December 2009. 20The assessment of permanent impairment was referred by the Commission to two doctors as approved medical specialists (AMS). These were doctors Rosenthall and Waldman. The total combined WPI assessed by these doctors was 11 percent. (Accordingly, the plaintiff was not able to bring proceedings for damages against Park as he did not meet the 15 percent WPI threshold.) 21In early 2010 the plaintiff provided instructions that he be assessed by a psychologist. On 24 March 2010 Dr Sanna provided a psychological report which gave an assessment of WPI of 13 percent. 22The plaintiff's application pursuant to ss 66 and 67 of the Act for compensation for permanent impairment in respect of his physical injuries was resolved on 28 May 2010 on the basis of an 11 percent WPI. 23On 18 August 2010 the plaintiff's solicitors made a claim on Allianz in respect of 19 percent WPI in respect of psychological injury. This was based on a report from Dr Pickering. That claim was rejected by Allianz. The plaintiff then lodged a further application with the Commission seeking lump sum compensation, pursuant to ss 66 and 67 of the Act in respect of psychological injury. Before that matter could be resolved by an arbitrator appointed by the Commission, on 26 July 2011 Allianz conceded that the plaintiff had suffered from a primary psychological injury. On 7 October 2011 Dr Parmegiani, psychiatrist, an AMS appointed by the Commission, assessed the plaintiff as having a 19 percent WPI in respect of psychological injury. 24Despite the plaintiff having now satisfied the s151H WPI requirement, Allianz declined liability at common law on behalf of Park. By this time the matter had been transferred from the District Court to the Supreme Court because another claim raising identical liability issues had already been commenced in the Supreme Court. 25In accordance with the procedural requirements of the Workplace Injury Management and Workers Compensation Act 1998 (the WIM Act) it was necessary for the plaintiff to file a pre-filing statement and for other steps to be taken before a statement of claim could be issued. The preparation of the pre-filing statement was a difficult task, given the substantial volume of documents involved as a result of the coronial inquiry. A pre-filing statement and attached list of documents comprised three boxes of documents and was served on Allianz on 15 June 2012. The pre-filing defence was served on 13 July 2012 and the matter was referred for mediation. 26The mediation proceeded on 8 and 28 November 2012 but was unsuccessful. A Certificate of Mediation Outcome was issued and proceedings were commenced against Park by way of amended statement of claim on 12 February 2013 in which Park was the third defendant. The plaintiff's motion seeking leave is dated 2 May 2013. At the hearing of the matter the Court was advised that Park was unlikely to suffer any forensic prejudice in that the other defendants would consent to Park issuing cross-claims against them should the plaintiff be successful in obtaining the extension of time which he sought. Consideration 27Section 151D relevantly provides: "Time Limit for Commencement of Court Proceedings against Employer for Damages ... (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. (3) The Limitation Act 1969 does not apply to or in respect of court proceedings to which this section applies." 28The relevant principles were succinctly summarised by Basten JA in Strasburger Enterprises Pty Ltd trading as Quix Food Stores v Serna [2008] NSWCA 354 (with whom Gyles AJA and Hoeben J agreed) at [52] where his Honour said: "52 With respect to this and similar provisions, which contain no express indication of the matters to be considered in relation to an application to extend time, "the limits of the discretion are to be found in the subject matter, and the scope and purpose, of the statute": Salido v Nominal Defendant (1993) 32 NSWLR 524 at 530F (Gleeson CJ); see also 535-539 (Kirby P) and 541 (Powell JA). Subsequently, the High Court provided guidance as to the correct approach in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; 186 CLR 541, although the majority judgments did not speak in identical language and were concerned with a limitation provision which provided some guidance as to factors to be taken into account. As explained in The Salvation Army (South Australia Property Trust) v Rundle [2008] NSWCA 347 at [96] by McColl JA: "Brisbane South is authority for the proposition that an application for an extension of time under limitation legislation should be refused if the effect of granting the extension would result in significant prejudice to the potential defendant ... 'Significant prejudice' means such prejudice as would make the chances of a fair trial unlikely ... . For a trial to be fair, it need not be perfect or ideal ... ." 53 In relation to s 151D(2), the relevant principles were discussed in Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; 54 NSWLR 207, by Ipp AJA with whom Spigelman CJ and Sheller JA agreed. Sheller JA, after referring to the fact that actual significant prejudice might compel a refusal by the court to extend time, added that "it is not correct to conclude that the absence of such prejudice compels an exercise of discretion in favour of the plaintiff": at [3]. Itek itself was concerned with a particular additional consideration, namely that the prospective plaintiff had quite deliberately decided, on an informed basis, not to proceed within the specified period." 29In the present case, the plaintiff has at all times made it clear that he wished to commence proceedings against Park. Park was notified of this as was its insurer at an early point in time. The plaintiff was prevented from implementing that intention by his inability to obtain an assessment of WPI of 15 percent or greater in respect of his injury. Even when he was successful in obtaining such an assessment, it was necessary for him to satisfy the procedural steps which are required by the Act and the WIM Act before proceedings for damages could be commenced. The plaintiff and his solicitors have found satisfying those procedural requirements to be difficult but they have stoically attempted to and ultimately succeeded in overcoming each obstacle as it has occurred. 30The only area where some potential for criticism exists is the delay in seeking a psychiatric assessment. This, in my opinion, is adequately explained by the nature of the plaintiff's psychiatric disability. 31In a report of 8 May 2013 Dr Phillips, psychiatrist, said: "He suffered an extreme psychological shock at the time of the explosion at his work site and he was placed at serious risk for high level physical injury. He suffered a significant second order psychological shock when he realised that two men, working near him, were missing. He assumed at the time that they were dead and he began immediately to blame himself for the tragedy. He continued to experience numerous symptoms of post traumatic stress disorder including flashbacks, heightened vigilance, specific fears, a sleep disturbance (with nightmares linked thematically to the explosion), avoidance behaviours, more generalised anxiety, and problems involving concentration and memory. He began also to drink in a chronically hazardous manner, and he was abusing cannabis intermittently. ... Comment Post traumatic stress disorder is perhaps the most disabling of the non-psychotic psychiatric disorders. The symptoms of the disorder often become chronic and pervasive, as has been the case with Mr Merton. The focus of life for a person suffering from post traumatic stress disorder is on day-to-day survival. Simply the person does whatever he can to control intrusive and destructive trains of thought, to maintain high level vigilance for further potentially dangerous events, to avoid as far as possible cues linked with the original trauma, and to maintain some degree of useful cognitive focus." 32Later in the report Dr Phillips said: "9 There is another matter relevant to your question. Mr Merton was doing his best to avoid any form of cue which caused him to think about the explosion. This was a powerful mental defence. To seek legal advice and to pursue litigation placed him at risk of becoming overwhelmed by a traumatic memory. 10 Taking all of the above into consideration, it becomes easy to understand why Mr Merton failed for so long to pursue his claim. Simply it was too risky in a psychological sense to take such a step." And: "18 Taking my clinical findings into consideration and material to be noted in the affidavit sworn by Mr Merton and his daughter, it should be obvious that from the time of the explosion and during the period of interest, and until approximately 2010, the plaintiff was so impaired by his symptoms of PTSD and co-existing physical symptoms that he was rendered incapable of pursuing his legal claim." 33As the report of Dr Phillips makes clear, the factual basis for his opinion is to be found in the affidavit of the plaintiff at (sworn 10 April 2013) and that of his daughter, Caroline (sworn 12 April 2013). Those affidavits show that the plaintiff did not want to talk about the explosion from an early point in time and that is why he avoided consultations with psychologists and psychiatrists. It was only with the passage of time that he felt sufficiently able to do so. 34In my opinion, the plaintiff has satisfactorily explained the delay in commencing proceedings against Park. A significant factor in the delay has been his psychiatric injury which he suffered as a direct consequence of the accident. Moreover, no evidence has been placed before the court of any prejudice likely to be suffered by Park should an extension of time be granted. On the contrary, Park has known from a relatively early point in time of the plaintiff's desire to bring proceedings for damages against it and has been joined to the proceedings for the last five and a half years. There were no submissions made as to any presumptive prejudice. 35For those reasons it is appropriate that I exercise my discretion to allow an extension of time. 36The orders which I make are as follows: (1) Grant the plaintiff an extension of time within which to commence proceedings against Park up to and including 12 February 2013. (2) The plaintiff's costs of this application are to be the plaintiff's costs in the cause. ********** 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: 11 October 2013