Supreme Court New South Wales

• Medium Neutral Citation: Pearce v Integra Coal Operations Pty Ltd [2014] NSWSC 561
• Hearing dates: 2 April 2014
• Decision date: 13 May 2014
• Before: Rothman J

Decision

1. Pursuant to s 151D of the Workers Compensation Act 1987 leave granted to the plaintiff, Michael Jason Pearce, to commence court proceedings for damages, in respect of the injury said to have been suffered by Mr Pearce on or about 11 October 2006, by relying on the Statement of Claim (or any subsequently allowed pleading) filed 24 April 2013;The aforesaid extension of time operates nunc pro tunc;

2. The plaintiff shall pay the defendants costs of and incidental to the motion for extension of time;

3. The parties have liberty to apply on two days' notice for any different or special order for costs.

• Catchwords: LIMITATION OF ACTIONS - Workers Compensation Act 1987, s 151D - Extension of period by leave of court - Exercise of discretion - justice of the case - lack of prejudice to defendant or effect on fair trial - plaintiff's solicitor's professional and personal circumstances causes delay, together with necessity to brief alternate counsel - stabilisation of injury or symptoms
• Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW); Workers Compensation Act 1987 (NSW)
• Cases Cited: Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541; Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207
• Category: Interlocutory applications
• Parties: Michael Jason Pearce (Plaintiff); Integra Coal Operations Pty Ltd (Defendant)
• Representation: Counsel: L. T. Grey (Plaintiff); J. Gleeson SC/ with P. Menary (Defendant); Solicitors: Ross Pfenningwerth (Plaintiff); Norton Rose Fullbright (Defendant)
• File Number(s): 2013/126419
• Publication restriction: None

Judgment

1 HIS HONOUR: The interlocutory issue with which the Court must deal is the question of an extension of time. The substantive proceedings concern an allegation that the plaintiff, Mr Pearce, suffered a work injury whilst employed at an underground colliery for the defendant, Integra Coal Operations Pty Ltd (Integra). The incident occurred on 11 October 2006. A Statement of Claim was filed on 24 April 2013. It is necessary to deal with the circumstances leading up to the filing of the Statement of Claim.

Facts

2 The incident which it is said gave rise to the injury is that the plaintiff injured his back, which was caused by a requirement to lift heavy steel bars attached to chains, forming part of the coalface cutting machinery. The circumstances of that lifting are irrelevant for the interlocutory purposes. The weight of the bars and chains are, it is alleged, greater than any one person could be expected to lift in safety.

3 Particulars have been filed in accordance with the Uniform Civil Procedure Rules 2005, as has an expert report. The damages claimed are significant, if there were liability.

4 Prior to the date of the injury, Mr Pearce suffered some problems with his back, seemingly as a result of the requirement to wear an equipment belt weighing approximately 15 kilograms. Notwithstanding that requirement and those problems, Mr Pearce carried out his functions as a fitter in the mine until the incident on 11 October 2006.

5 The incident involved a twisting of the lower back while Mr Pearce was lifting very heavy metal bars. As a result of the incident, he was taken to Cessnock District Hospital, the triage notes record pain running from Mr Pearce's groin to the right knee. He was taken off normal duties and given light duties until at least January 2007.

6 Mr Pearce first contacted his solicitor as to the event on the day he was injured and a claim for Workers' Compensation was lodged and liability denied. On 10 July 2007, Mr Pearce commenced proceedings in the District Court, claiming weekly payments and treatment expenses under the provisions of the Workers Compensation Act 1987 (the Act).

7 The plaintiff filed an Amended Statement of Claim in May 2008 and counsel (first counsel) was briefed to advise at that time. By November 2008, Mr Pearce's condition had deteriorated and further medical advice was sought relating to the possibility of surgery to correct the injury. As a consequence of that deterioration and the possibility of further medical treatment of a significant kind, the District Court proceedings were discontinued (Affidavit of Ross Pfennigwerth, 12 November 2013 at [12]).

8 On 17 February 2009, the plaintiff underwent an L4-L5 laminectomy and an L4-S1 fusion. Mr Pearce required a lengthy period of recuperation and rehabilitation.

9 On 27 February 2009, Mr Pearce consulted Dr Doyle (a urologist) for complications associated with a colovesical fistula, which, were it not for the recuperation associated with his recent back operation, would ordinarily have immediate surgical review. On 7 April 2009, the first counsel wrote to Mr Pfenningwerth advising that potential damages would exceed the threshold under the Act and consideration ought to be given to common law action. The plaintiff was advised to obtain additional medical reports.

10 The uncontradicted and uncontested evidence (Affidavit of Pfenningwerth, 12 November 2013 at [17]) is that a considerable amount of time was spent waiting for the injury, including the outcome of the surgery, to stabilise, in order to assess properly the level of Mr Pearce's incapacity.

11 On 15 October 2009, Mr Pearce was examined by Professor Ghabrial, one of the orthopaedic surgeons who performed the original operation on 17 February 2009. Professor Ghabrial reported that the injury (or symptoms) had improved; but that Mr Pearce would never be able to return to his previous employment, nor be employed in work involving heavy lifting, excessive bending or excessive twisting.

12 On 3 August 2011, the first counsel withdrew from the case, on the basis that he had been offered and had accepted a general retainer to appear and advise Integra. The brief was returned after a conversation with Mr Pfenningwerth.

13 It is appropriate to remark, at this stage, that Mr Pfenningwerth is a sole practitioner, albeit with significant experience, with secretarial assistance on a less than full-time basis. As a consequence, there was a delay in briefing second counsel and, on 25 October 2011, Mr Pfenningwerth briefed a second counsel (the second counsel). Mr Pfenningwerth had spoken to the second counsel before sending a written brief and discussed the organisation of the brief, which, by that time, comprised a number of folders and, according to Mr Pfenningwerth, required a number of days to organise (Affidavit of Ross Pfenningwerth, 12 November 2013 at [34]).

14 Eventually, the documents were sent to the second counsel, but that did not occur until late July 2012.

15 In the meantime, the workload of the instructing solicitor continued, with the absence of available time being exacerbated by the illness to Mr Pfenningwerth's father, who was admitted to a high care unit suffering dementia and required 24-hour care and for whom Mr Pfenningwerth had the main responsibility until his father's death on 3 July 2012.

16 On 9 July 2012, the preparation of the brief was commenced and was ultimately sent to the second counsel in August 2012.

17 Second counsel conferred with Mr Pfenningwerth on 18 September 2012, following receipt and perusal of the brief and documents. A slightly different approach was taken to the issue of liability, compared to that of the first counsel.

18 A conference was organised with Mr Pearce, which occurred on 27 September 2012 and further opinions from certain medical practitioners, being treating physicians, were requested and ultimately obtained and sent to the second counsel on 21 December 2012 (Affidavit of Ross Pfenningwerth, 12 November 2013, at [45] and reports at Annexure H and J thereof).

19 Following the conference, a draft Statement of Claim was prepared by Mr Pfenningwerth, which was sent to the second counsel to settle on 28 February 2013. The settled Statement of Claim was returned on 18 April 2013 and filed on 24 April 2013.

Principles

20 The time limit for commencement of court proceedings against an employer in common law is governed by the provisions of s 151D of the Act, which provides that court proceedings for damages may not be commenced more than three years after the date on which the injury was received, except by leave of the court in which the proceedings are to be taken: s 151D(2) of the Act.

21 It is accepted that the discretion conferred by s 151D of the Act is a broad one, but not unconfined. Ultimately, the task that falls on the court is determining what is the "justice of the case": Itek Graphix Pty Ltd v Elliott [2002] NSWCA 104; (2002) 54 NSWLR 207 at [72] per Ipp AJA, with whom Spigelman CJ and Sheller JA agreed.

22 In the course of the judgment in Itek, Ipp AJA discussed the judgment of the High Court in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 and concluded that the broad discretion involved a number of factors, including a failure satisfactorily to explain the delay (although a failure so to do will not be decisive); the issue of prejudice will be of paramount importance; but in all circumstances the issue must be determined by its own individual circumstances, evaluating it with regard to the rationale for limitation periods in the statute; and the necessity for the applicant, who necessarily is seeking an indulgence, to satisfy the court that, first, a fair trial can occur and secondly, extending the time is the result of the determination of what is fair and just in the circumstances.

23 In the particular circumstances of this case, Integra cannot show real or substantial prejudice. Subpoenas were served at a very early time, as were requests for and answers to particulars. All of the witnesses to the incident and any issue associated with prior injuries and/or the effect of the operation were well known prior to the expiration of the limitation period and the defendant, Integra, was on notice as to that which was required to be prepared.

24 I do not underestimate the proposition that a different level of preparation may be involved in a claim for weekly payments and treatment expenses (even a lump sum permanent impairment compensation) as against common law damages. Nevertheless, the circumstances of the incident and the conduct of the employer and plaintiff in the events leading up to the incident are such that Integra should have been well prepared prior to the receipt of the Statement of Claim in 2014.

25 I take the view that there is no prejudice or substantial prejudice suffered by Integra. Most appropriately, Integra has accepted that the long delay has not resulted in significant prejudice to it.

26 Nevertheless, the absence of significant prejudice does not compel the exercise of the Court's discretion in the plaintiff's favour. It is for the plaintiff seeking this indulgence to satisfy the Court that it is just so to do.

27 When determining that question, the Court must bear in mind that the legislature has deliberately fixed a period for what, to it, is good reason, and the Court is bound by that period, subject to the exercise, judicially, of the discretion afforded it.

28 Essentially, the delay comes down to a number of obvious factors. First, it was a while before the injuries and result of the operation stabilised.

29 Secondly, the lack of resources available to Mr Pearce's solicitor was a significant factor, together with the personal issues suffered by him during the course of the time over the last six and a half years.

30 Thirdly, the unavailability, part way through the process, of counsel first chosen to deal with the matter, because counsel became retained by Integra, was another significant factor in the delay. I do not, with this issue, suggest any inappropriate conduct on behalf of Integra or indeed first counsel. It is simply a coincidence of events, which led to delay that was not insignificant in the ultimate preparation to a point where a Statement of Claim could be filed.

31 Lastly, there are two particular aspects that need consideration. It is uncontradicted that Mr Pearce had always indicated that he was keen to advance his matter, including the commencement of common law proceedings, if that were an appropriate course advised by counsel and his solicitor (Affidavit of Ross Pfennigwerth, 12 March 2014 at [9]). The issue of the time limit was not discussed with Mr Pearce in October 2009 (when it would otherwise have expired) as Mr Pfennigwerth was of the view that it was inappropriate, due to the issue associated with the injury not yet stabilising, for Mr Pearce to then commence proceedings.

32 The lack of stabilisation affected not only the question of the injuries that were suffered, but also whether the level of damage was such as to warrant a far greater expenditure on common law proceedings and to determine whether those proceedings should be commenced in this Court or elsewhere.

33 The lack of prejudice to an employer associated with the factors referred to above cannot be decisive in a manner such as this. It is more often than not that an employer will be aware of a Workers Compensation claim at an early stage, but unaware that common law damages would be sought.

34 As earlier stated, very different approaches may be taken to the different kinds of litigation. Nevertheless, in this case Integra must have been aware of the seriousness of the injuries, the nature of the events that led up to the injury, and the fact that the plaintiff would not be able to continue in his previous employment or employment of like kind. The possibility of common law damages must have been obvious.

35 The delay of six and a half years is not the result of any deliberate conduct on the part of Mr Pearce, although the judgment of Mr Pearce's solicitor that the proceedings were unable to be commenced in time may be treated similarly to a deliberate act of not commencing proceedings. That deliberate act is not a deliberate act involving lack of diligence on the part of the plaintiff.

36 It is unfortunate that the personal circumstances and lack of resources of the plaintiff's solicitor led to a significant part of the delay occasioned.

37 Nevertheless, I am satisfied, as I must be, that the plaintiff, Mr Pearce, was keen, subject to appropriate advice, to pursue his claim. Further, the preparation for the claim was progressed, albeit with some unfortunate delays due to the time taken to obtain certain material and/or to send the second brief.

38 The foregoing does not alter the proposition that the delay was caused by Mr Pearce and Mr Pearce's agent, namely his solicitor. For some of that delay Mr Pearce is, through his agent, plainly at fault. Mr Pearce is not at fault for the time that passed during which it was necessary to await the stabilisation of the injuries. Nevertheless, Mr Pearce was advised as early as 7 April 2009 that common law damages action was warranted.

39 It is the whole of the delay that must be examined in dealing with whether the discretion should be exercised. As earlier stated, Integra does not claim significant prejudice. It is plain that a fair trial can occur.

40 Because of the scheme under which Workers' Compensation is now resolved, invariably employers are put on notice as to the nature of the injury, its occurrence and its seriousness. Nevertheless, the legislature has fixed a period of 3 years beyond which common law damages cannot proceed, without the intervention or grant of leave by the Court.

41 The time between the injury and the filing of the Statement of Claim has been fully explained. I do not mean by that that I find the explanation wholly satisfactory; only that all of the time has been accounted for by various factors.

42 Essentially, the discretion of the Court comes down to one fundamental proposition. Given the uncontroverted evidence that Mr Pearce, at all times, sought to advance his matter, the question that faces the Court is whether the solicitor's judgment that there was insufficient supporting material to justify the commencement of those proceedings (and the delay caused by the solicitor's personal and practice circumstances) is sufficient to warrant the grant of leave, in circumstances where there is no significant prejudice and there can be a fair trial.

43 The extension of time is sought for a proper purpose. The plaintiff will not be able to agitate his issues in the absence of an extension of time. The plaintiff will suffer substantial prejudice. That prejudice is, at least partly, brought about by his or his solicitor's delay. No amount of the delay has been caused by Integra.

44 Against that proposition is that Integra, if the application were granted, would lose the benefit of an expired limitation period.

45 In my view, the exercise of discretion is finely balanced. On the one hand, the Court must accept that the legislature's intention was that all common law cases (subject to the grant of leave) arising from industrial accidents would be taken within three years of the accident. That must be a paramount consideration.

46 Further, ordinarily, the delay occasioned by a solicitor will be sheeted home to the plaintiff. In this case, given the explanation for the delay by the solicitor; the necessity to change counsel and alter forensic tactics as a consequence; and the uncontroverted keenness of Mr Pearce to pursue his claim at all times, together with the lack of prejudice and the lack of any prejudicial effect on the fairness of any trial, I would grant the extension of time.

47 The Court makes the following orders:

(i) Pursuant to s 151D of the Workers Compensation Act 1987 leave granted to the plaintiff, Michael Jason Pearce, to commence court proceedings for damages, in respect of the injury said to have been suffered by Mr Pearce on or about 11 October 2006, by relying on the Statement of Claim (or any subsequently allowed pleading) filed 24 April 2013;

(ii) The aforesaid extension of time operates nunc pro tunc;

(iii) The plaintiff shall pay the defendants costs of and incidental to the motion for extension of time;

(iv) The parties have liberty to apply on two days' notice for any different or special order for costs.

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Decision last updated: 13 May 2014