Clarke v Harpier Acoustics Pty Ltd (in liq) & Ors [1991] QSCFC 110

(K IN THE SUPREME COURT OF QUEENSLAND FULL COURT Writ No. 2678 of 1988 BETWEEN : ALAN CHARLES CLARKE (Plaintiff) Respondent - and - HARPIER ACOUSTICS PTY LIMITED (IN LIQUIDATION) (First Defendant) Appellant - and - ERIBELL PTY LIMITED (IN LIQUIDATION) (Second Defendant) - and - JOHN HOLLAND PTY LTD (Third Defendant) Appellant DERRINGTON J AMBROSE J DOWSETT J Reasons for judgment delivered by Derrington J on 20th September 1991. Ambrose and Dowsett JJ concurring with the reasons and orders of Derrington J. ' "APPEAL ALLOWED WITH COSTS. THE ORDER APPEALED FROM SET ASIDE AND THE APPLICATION IS DISMISSED WITH COSTS." [1991] QSCFC 110 -- 1 of 13 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT No. 2678 of 1988 Before the Full Court Mr Justice Derrington Mr Justice Ambrose Mr Justice Dowsett BETWEEN: ALAN CHARLES CLARKE (Plaintiff) Respondent - and - HARPIER ACOUSTICS PTY LIMITED (IN LIQUIDATION) (First Defendant) Appellant - and - ERIBELL PTY LIMITED (IN LIQUIDATION) (Second Defendant) - and - JOHN HOLLAND PTY LTD (Third Defendant) Appellant JUDGMENT - DERRINGTON J. Delivered the 20th day of September, 1991 CATCHWORDS Limitation of actions - Personal injuries - Extension of time - respondent suffered respiratory condition after inhaling fumes at work - whether respondent's knowledge of his condition ought to have led him to the reasonable view that commencing an action would have been worthwhile - whether if all relevant knowledge is in solicitors' hands it is within appellant's means of knowledge Counsel: Mr Egan for appellant Mr Boulton for respondent Solicitors: W.H. Tutt & Quinlan for appellant Watkins Stokes t/a for Adamson Bemays Kyle & Jones for respondent Hearing date: 5 September, 1991 -- 2 of 13 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT No. 2678 of 1988 BETWEEN: ALAN CHARLES CLARKE (Plaintiff) Respondent - and - HARPIER ACOUSTICS PTY LIMITED (IN LIQUIDATION) (First Defendant) Appellant - and - ERIBELL PTY LIMITED (IN LIQUIDATION) (Second Defendant) - and - JOHN HOLLAND PTY LTD (Third Defendant) Appellant JUDGMENT - DERRINGTON J. Delivered the 20th day of September, 1991 This is an appeal against an extension of time granted to the respondent under s. 31 of the Limitation of Actions Act 1974 extending to 15 July, 1988 the time for the bringing of the action in respect of a cause of action which is alleged to have arisen on 2 July, 1985. Accordingly, the extension was for a period of only two weeks, but that is not of great significance in the determination of the matter. The history of most of the relevant considerations is happily stated by the learned Judge at first instance in his reasons for judgment as follows:- -- 3 of 13 -- 2 " The plaintiff's case is that while working as a plasterer he inhaled fumes from spray painting which was being Carried on nearby and suffered as a result of such inhalation a respiratory condition which has now proved to be permanent with the result that, inter alia, he cannot work at his trade. After the incident in July 1985 he worked from time to time, the gaps being caused more by lack of work than by ill health, although he did suffer from respiratory problems during that period and in his verbal evidence before me he said he had basically become an asthmatic which interfered with his enjoyment of life. In December 1986 he was advised by his medical practitioner to have a period away from dusty environments in the workplace to see if his problem could be resolved. In January 1987 he applied for workers' compensation again. He was granted workers' compensation for six months at the end of which the case went before the General Medical Board which on the 2nd June, 1987 determined that the nature of the injury was bronchial hyperreactivity following exposure to fumes at work, that the extent of the incapacity for work was total but that the incapacity was temporary. The Board recommended that the claimant be given a trial of rehabilitation and that the claimant be reviewed in three months time. Then on the 22nd September, 1987 by another decision the General Medical Board determined that the incapacity was permanent and that the extent of the disability was 20 per cent of his working capacity prior to the date of the injury. In early 1987 the applicant had a consultation with Paul Richards & Associates, solicitors, at the suggestion of the appalicant's union secretary. At that time the applicant was involved in legal action arising from the financial difficulties that he was then in. In his affidavit he says:- 'Not long after I first engaged Paul Richards & Associates that firm raised with me the possibility of my bringing a common law action for damages .' He said that he had no money to pursue an action and an application for legal aid was subsequently made. On the 5th May, 1987 approval was given by the Legal Aid Office for the investigation of the claim and the obtaining of counsel ' s opinion . That opinion was eventually rendered on or after the 16th May, 1988. There is no evidence as to when the brief was delivered. The applicant says that he asked Mr. Richards from time to time throughout 1987 and early 1988 about -- 4 of 13 -- 3 the progress of the common law action and received assurances that everything was under control. However by the end of 1987 he said that he formed the opinion that these enquiries were irritating Mr. Richards. On the 11th May, 1988 he gave instructions to Mr. Kyle of Adamson, Bernays, Kyle & Jones, solicitors of the Gold Coast, to take over the personal injury action and the conduct of any other matters which were still current. The applicant says he told Mr. Kyle in general terms of his injury and its effects on him. However he said he was not a good historian and did not tell Mr. Kyle the precise date of his injury. He said that at no time had he been told by anyone of a three year limitation period. Attempts to get the file from Paul Richards & Associates began immediately. There was some reluctance on the part of Mr. Richards to hand his file over because of concern over his position so far as fees were concerned. After correspondence involving the two firms and the Legal Aid Office the file was eventually received by the new solicitors on the 1st July, 1988, the day before the limitation period expired. An appointment was made for the 6th July, 1988. Apparently it had not been noticed that the limitation period would expire the day after the file was received by the new solicitors. At the appointment on the 6th July, 1988 advice was given that an action should be commenced and at a further appointment on the 8th July, 1988 the applicant gave instructions for the action to be commenced." The determination of the General Medical Board on 2 June, 1987 that the respondent's incapacity for work was total but that the incapacity was temporary is used by him as the reason why he believed at that time that an action would not be worthwhile. But that was not the real import of that decision. As the learned Judge below observed, the determination also added "The Board recommends the Claimant be given a trial of Rehabilitation and would like to review the Claimant in three months ' time with an up-to-date report from Dr Charles Mitchell and Rehabilitation." The respondent's legal advisers must have read this as meaning that the prior determination was provisional only and designed to keep the matter unresolved until the later review. At least they must have known that the classification of the condition as -- 5 of 13 -- 4 temporary was not final; and if the respondent were properly advised he would have known that too. This is quite important because the report of Dr Mitchell, a specialist who was treating him was not put in evidence. Two reports from his general practitioner, Dr Richard Wilson, of 17 February and 22 May of that year were exhibited. In the former he observed that the respondent had been unable to complete a day's work since his original injury because of his respiratory difficulties. In the latter, after discussing some of the views of Dr Mitchell, to whom he had referred the respondent, he said:- "Mr Clarke became permanently unemployed on 19.12.1986 and has suffered severe financial hardships since. He is to be further reviewed by Dr Mitchell who feels only time will tell if he is to improve any further." The learned Judge at first instance was of the view that:- "The medical reports from his doctors were not optimistic. Had he specifically requested advice from them it seems probable that what is in the reports is what he would have been told. If the application rested solely on the basis of that material I would have thought that the application should fail." However, His Honour came to the conclusion "... that a reasonable man faced with the information from his own doctors, which did not give him cause for optimism that his condition would improve, but nevertheless also faced with the decision of the General Medical Board, which no doubt, he would assume had assessed and adjudicated on his condition on the basis of the information available to it, would not have concluded before the 2nd July, 1987 that his conditiqn was permanent." It was on this basis that, having regard to the principle that the respondent need only have concerned himself with the net amount which he would have received as against the risks of litigation and the time and expense involved, he decided that a reasonable man in the place of the respondent at the critical -- 6 of 13 -- 5 date, having taken appropriate advice, would not have thought that he ought, in his own interests and taking the circumstances into account, bring an action: Smith v. Central Asbestos Co. [1973] A.C. 518 at 541. There are two areas of difficulty about this. The first is that by the critical date the respondent had suffered some two years of illness and had lost much working time in his own business for which he had not received workers' compensation. Moreover his total disability had not abated by that date. Consequently he had quite a substantial claim well beyond any sum which he might have to repay for workers ' compensation payments received. It was far from trivial: cf. Re Moshnoqorskv - O.S. 137/1984 4 June 1985, unreported per Thomas J. It is true that an injured party who restrains himself from leaping into litigation because of a mistaken belief that his prospective damages will be moderate will not be penalised by the court, for it will not judge his restraint harshly: Royal Northshore Hospital v. Henderson (1986) 7 N.S.W.L.R. 283 at 287; Bvers v . Capricorn Coal Management Ptv Ltd [1990] 2 Qd. R. 306 at 308; Do Carmo v. Ford Excavations Ptv Ltd (1984) 154 C.L.R. 234 at 256 and 258; but there are limits to this. Even upon the respondent's own account, he should have been of the view, if properly advised, that his action deserved to be pursued. In those circumstances he was not entitled to an extension of time even if he were unaware of a fact which would have made his damages even larger: Taggart v . The Workers ' Compensation Board of Queensland [1983] 2 Qd. R. 19; Moriartv v. Sunbeam Corporation Limited [1988] 2 Qd. R. 306. -- 7 of 13 -- 6 The respondent's other major difficulty is that there has not been a full disclosure to the court of the material that was available to him at that time or of the advice which he was given on that material. This is necessary in order to support his assertion that he was justified in believing that his claim would have been so moderate as he says. His failure to supply Dr Mitchell's report makes it impossible to say what information was available to him and consequently what view he might reasonably have held as to the size of his claim. If for example Dr Mitchell's report had suggested a real prospect of prolonged or permanent disability flowing from the condition, then it would have been impossible for the respondent to have had any reasonable view that an action would not have been worthwhile. Even had there been any serious question in his mind, properly informed by his legal advisers, that the Medical Board's view was that his condition was only temporary, however if Dr Mitchell's report were to the contrary, then taking into account the very substantial damages at stake, it would have been worthwhile to have pursued his action: Taggart v. The Workers' Compensation Board of Queensland (supra); Moriartv v. Sunbeam Corporation Limited ( supra ). Reference has been made above to the availability to the respondent of, competent legal advice concerning the matter. The interpretation of the first decision of the General Medical Board by the respondent's legal advisers has already been discussed. If there were any difficulty as to that, there was still the problem of the advice which the respondent had or should have had from his advisers upon the evidence which was in their hands. -- 8 of 13 -- 7 It is difficult to believe that, if Dr Mitchell were of the view that the condition was permanent, any competent legal advice would have left the respondent with the impression that the Board had come to a conclusion that his condition was temporary only. In that context, and taking into account its request for a review after three months, the determination that the condition was temporary only would have been surely construed as meaning only that the Board was not making a determination at that stage that it was permanent. That would have been a final determination, but its classification of the condition as a temporary one only was provisional for the sake of expedience until the later review. Significantly there is no evidence of the respondent's lawyers' interpretation of these things nor of how they advised or would have advised the respondent concerning them. As these matters were within the active, if in some respects tardy, hands of the legal advisers, and if, as seems to have been the case, expert opinion supporting a very substantial cause of action by the respondent was available to them, then the respondent's evidence confined to his own subjective views on his prospects cannot alone support an order: Do Carmo v. Ford Excavations Ptv Ltd (supra). By s. 30(b) of the Act, a material fact is of a decisive character if, but only if, a reasonable man knowing those facts and having taken appropriate advice on those facts would regard them as showing that an action would have a reasonable prospect of success and of resulting in an award of damages sufficient to justify the bringing of the action and that he ought in his own interest and taking his circumstances on -- 9 of 13 -- 8 account to bring an action. The emphasis in this context is upon the reference to "having taken the appropriate advice on those facts": Berg v. Kruger Enterprises [1990] 2 Qd. R. 301 at 303; Roval Northshore Hospital v. Henderson (supra) at 287; Smith v. Central Asbestos Co. (supra). The latter discussion has been directed, not to the question as to whether the respondent should have felt that an action was worthwhile, but as to whether, if properly advised, he should have known the relevant fact and felt that way . The onus was upon him to satisfy the court that, properly advised, he was justified in the belief claimed. If he chose to withhold from the court the full details of communications from most material sources of knowledge, and if he also failed to show that in some way his legal advisers who had that information did not properly advise him as to the material fact, then he will have failed several times over to discharge his onus. That is the position here . The respondent was assisted by a solicitor who at all relevant times was attempting to obtain an opinion from counsel concerning the common law claim. Apart from what has been said above, there was nothing that should have led them into any misapprehension that the plaintiff's condition was determined to be temporary only . All ordinary precautions to ensure that the respondent was "properly advised" would have required that expert opinion upon this point be obtained, if that were not already done. There is little doubt that a report from Dr Mitchell had been obtained, and there is no reason to believe that it said anything other than that there was a likelihood that the -- 10 of 13 -- 9 condition would at least endure for a long time. This should have provoked advice to the respondent to proceed with his action even if the matter were arguable. Again it is highly probable that such advice was proffered, for preliminary steps in that direction were undertaken, such as by way of an application for legal aid; and again, this is probably the reason for the absence of any evidence of advice. If all the relevant knowledge sufficient to persuade a party to proceed is in the hands of his legal advisers who are engaged to advise him for that purpose a fact which is within that knowledge cannot found an extension of time. It is within his means of knowledge and s. 31 (2) (b) provides for an extension of time only if the decisive fact is not within the party's means of knowledge. Any other result would admit of an extension of time where a party puts the matter in the hands of his solicitors and then reasonably relies upon them to make the necessary enquiries, but where they fail to keep him informed. These provisions of the Act were never intended to provide a remedy in such a case . Nor do they provide a remedy in cases where the material facts were all known to the legal advisers who have simply failed to commence the action in time, as appears to be the position in the present case. For these several reasons, the respondent failed to establish the necessary foundation that would permit the court to exercise its discretion in his favour by granting an extension of time. It might be remarked that even had he done so, it is indisputable upon all the evidence that he and his advisers must have known at least ten months before the effluxion of the -- 11 of 13 -- 10 ordinary period of limitation that his condition would be permanent and that an action should be brought. In those circumstances, and particularly having regard to the period during which the prospective action had been under consideration, it is highly doubtful whether the discretion should have been exercised in his favour even if he could have otherwise invoked the remedy. Such a lengthy period with full knowledge of all of the decisive facts before the matter became statute-barred is a good reason for refusing an extension of time. The purpose of the legislation is to provide relief for parties who through no fault of their own or of their representatives are reasonably disabled or deterred from commencing an action within the statutory period by lack of knowledge of a decisive fact. The relief will be afforded in a suitable case even where the relevant knowledge or means of knowledge has existed prior to the effluxion of the I limitation period if there were circumstances reasonably justifying the failure to commence the action in time. However relief will be refused where the real cause of the default was the failure of the party or his legal advisers to take proper action after the decisive fact came within their knowledge: Roval Northshore Hospital v. Henderson (supra) at p. 300. The circumstances of this case strongly suggest that that is the position here and the respondent has not even addressed, much less shown, any reason for the exercise of the discretion in his favour . -- 12 of 13 -- The appeal should be upheld with costs and the order below set aside. In lieu thereof it is ordered that the application be dismissed with costs. 11 -- 13 of 13 --