Franco v Workers Compensation Nominal Insurer

1. [1]

   HIS HONOUR: The plaintiff, Marina Franco, seeks leave of the Court to commence proceedings later than three years after the date on which the injury relevant to the proceedings occurred. The time limit for the commencement of court proceedings against an employer, said to be liable in negligence for a workplace injury, is three years after the date on which the injury was inflicted, pursuant to the terms of s 151D of the Workers Compensation Act 1987 (NSW) (hereinafter “the Act”). The application for leave was the subject of a Motion on notice filed 21 April 2020, which Motion also seeks costs and any other order that the Court deems fit.

2. [2]

   The defendant, the Workers Compensation Nominal Insurer, is, quite properly, charged with the duty to ensure that all defences that are properly able to be mounted are adequately agitated and is opposed to the extension of time. The plaintiff relies upon two evidentiary statements and has filed a Chronology.

3. [3]

   The Chronology is in the following terms:

4. [4]

   Essentially, the injury suffered by the plaintiff occurred on 28 December 2003. In 2004/2005, the plaintiff instructed solicitors in respect of her claim under workers compensation and a permanent impairment claim, then made, was rejected and finalised unsuccessfully in early 2006.

5. [5]

   In mid-2007, the plaintiff instructed different legal representatives and claimed weekly benefits and lump-sum compensation for permanent impairment. She was, at the time, advised that she would not be able to bring a claim for work injury damages, unless and until her whole person impairment (hereinafter “WPI”) was 15% or greater. [1] That advice was correct.

6. [6]

   In early 2017, her file was transferred to another firm of solicitors, but its day-to-day carriage continued to be undertaken by the solicitor who had carriage of the matter from mid-2007. Medical assessments were arranged.

7. [7]

   On 2 May 2018, a Certificate of Determination was issued by the Workers Compensation Commission (hereinafter “the Commission”) finding, for the first time, that she had 15% WPI and the plaintiff instructed her solicitor to bring a workplace injury damages claim. Previous WPI assessments and determinations by the Commission had not reached a 15% WPI.

8. [8]

   It is necessary to set out the substance of the cause of action, or conduct which is said to give rise to the cause of action, because the defendant raises the prejudice associated with the defence in the proceedings. The plaintiff says that on or about 28 December 2003, she was directed by her manager, Tony, to move drums of olives. When trying to lift the drum, she felt sharp pain in her lower back. The next day the plaintiff awoke in pain and, essentially, has not been able to return to work since that time. It is not suggested that any other person saw the incident.

9. [9]

   By 2009, the plaintiff’s symptoms relating to her left leg had deteriorated and, in April 2009, the plaintiff experienced sudden lower back and left leg pain and weakness and suffered two falls. The plaintiff had suffered from falls earlier, but not for some time. Later falls occurred in around July to September 2009. After the falls, the pain and injury in her neck deteriorated and she developed pain and restriction in her right shoulder.

10. [10]

    Between late-2009 and late-2011, the plaintiff attended on a pain specialist; and a neurosurgeon. In 2011, the plaintiff experienced another fall and completed a low intensity pain management program at Royal Prince Alfred Hospital.

11. [11]

    In late-2011, the plaintiff was referred to an orthopaedic specialist in respect of her right ankle and foot injury and, by this time, had begun experiencing severe back pain.

12. [12]

    On 18 July 2013, the plaintiff fell again and aggravated injuries. The plaintiff continued to consult her general practitioner, pain specialists and a psychiatrist.

13. [13]

    On 2 May 2018, the plaintiff was determined as having 15% WPI, as earlier mentioned, in the Commission.

14. [14]

    A further evidentiary statement, dated 26 February 2020, attests to the fact that the plaintiff located an old workbook diary, which, she says, notes the rosters; records starting and finishing hours; and the plaintiff found other payroll documents. Further, the payroll activity documents, the plaintiff says, do not accurately record her hours worked or paid.

15. [15]

    There is also an Affidavit of the plaintiff’s solicitor, who has had carriage of the matter since mid-2007. It is unnecessary to summarise the solicitor’s evidence beyond that which is in the Chronology recited above.

16. [16]

    The defendant relies upon the Affidavit of Mark Robinson, sworn 28 May 2020. It repeats a number of the formal matters which have otherwise been described in the evidence upon which the plaintiff relies. Some of the material in the Affidavit is argumentative and not strictly factual, but these are interlocutory proceedings and no objection was taken to the Affidavit.

17. [17]

    Of importance is that the employer of the plaintiff at the time of the injury, namely in December 2003, was a company called BMG on Norton Pty Ltd, trading as Norton Street Grocer (hereinafter “BMG”). The “Tony”, who the plaintiff believes was her manager at the time, was, it seems, on the investigations of the defendant, Tony Napoli, a person referred to in some payroll documents.

18. [18]

    BMG was deregistered as a company on 4 September 2017 and, thus far, except as detailed later in these reasons, the defendant’s attempts to contact and interview employees, co-workers and directors of BMG have been unsuccessful. The defendant has, also, been unable to obtain contemporaneous wage, roster and payment records or details of co-workers.

19. [19]

    As has been made clear already, until 2017, the plaintiff received weekly workers’ compensation payments, which ceased when the plaintiff made a further and final claim for impairment, assessed in 2018 at 15% WPI. Further, the defendant says that it was only on 12 October 2018 that particulars relevant to a claim for work injury damages were served and it was only on 2 May 2018 that the plaintiff’s solicitors began assembling the evidence necessary to particularise such a claim. The defendant claims substantial forensic disadvantage on account of the delay and the events that have occurred in the meantime, together with the absence of contemporaneous evidence or its availability.

Principles

1. [20]

   The parties are agreed on the relevant legal principles that define the basis upon which the Court should exercise its discretion.

2. [21]

   The starting point must be the legislative framework. By operation of s 151E, the provisions of Part 5 Div 3 of the Workers Compensation Act apply to an award of damages in respect of an injury to a worker caused by the negligence, or other tort, of the worker’s employer. Section 151H is within Part 5 Div 3 of the Act and is in the following terms:

3. [22]

   Further, s 151 of the Act preserves common law causes of action, notwithstanding the provisions for compensation under the Act. However, those common law actions are qualified by a number of provisions, contained in Part 5 Div 2 of the Act.

4. [23]

   One of those qualifying provisions is that, once common law damages are obtained, no further compensation payable under the Act is able to be received, on account of the injury for which the common law damages was paid. Further, the weekly payments of compensation that have already been received must be deducted from the damages and repaid to the person who paid the compensation. [2]

5. [24]

   An injured worker is not entitled to commence court proceedings for common law damages until six months after the injury has occurred. [3]

6. [25]

   Most importantly, from the perspective of the current reasons for judgment, is that the provisions of s 151D of the Act provide that the entitlement to commence proceedings for common law damages ceases after three years from the date of the injury and, leaving aside issues related to motor accidents, is, relevantly, in the following terms:

7. [26]

   The provisions of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (hereinafter the “WIM Act”) deal with the process by which WPI is assessed and allows for the promulgation of Guidelines and the manner in which the WPI is determined, relevantly, by an Approved Medical Specialist. While there is a pending dispute about the WPI before an Approved Medical Specialist, a claimant is unable to serve a pre-filing statement, nor commence Court proceedings for common law damages. [4]

8. [27]

   It is unnecessary for the Court in these proceedings to rehearse the operation of Pt 7 of the WIM Act, which has been the subject of significant litigation and deals with the resolution of medical disputes, as defined, which include a dispute between an injured worker and, relevantly, the employer about the degree of permanent impairment to the worker as a result of injury. [5] However, if there is a dispute as to the degree of permanent impairment of the injured worker, then the provisions of s 313 of the WIM Act apply. That provision is in the following terms:

9. [28]

   Understandably, in the circumstances of the requirements under Pt 7 of the WIM Act and the provisions of s 313 of the WIM Act, there are provisions in the Workers Compensation Act that provide for the time not to run in circumstances governed by such provisions. The terms of s 151DA of the Act are in the following terms:

10. [29]

    It is unnecessary to deal with the limitations on common law damages prescribed by Part 5 Div 3 of the Act, as such limitations are irrelevant for the purposes of the leave with which the Court is now dealing. It is clear from the foregoing that the provisions of s 151DA of the Act suspends the running of the three-year time limit imposed by s 151D of the Act.

11. [30]

    That suspension occurs during the period that the insurer is considering a claim and for two months after they failed to make such a decision; while a medical dispute, of the kind already described, is the subject of referral for determination (including a period during which an Approved Medical Specialist has declined to ascertain the WPI); while the matter is otherwise pending before an Approved Medical Specialist or pending an appeal from an Approved Medical Specialist to a Panel; for a period of one month after an offer of settlement by the insurer, following the making of a claim; and while a pre-filing statement is current.

12. [31]

    The discretion granted to the Court to extend time or grant leave for the filing of proceedings is a broad discretion for which no express criteria are prescribed. In those circumstances, where there are no positive indications of considerations by reference to which a decision is to be made, the exercise of discretion must be determined by what is “just”, bearing in mind the purposes of the Act and disregarding the matters extraneous to its operation. [6] Thus, the term “just” as used in the authorities must be that which is just, derived from the subject matter, scope and purpose of the Workers Compensation Act.

13. [32]

    The approach to be adopted has been dealt with on a number of occasions by the High Court and Court of Appeal. [7]

14. [33]

    The provisions of s 151D(2) of the Act were expressly dealt with by the Court of Appeal in Itek Graphix Pty Limited v Elliott (2001) 54 NSWLR 207; [2001] NSWCA 442. The onus rests with the applicant to satisfy the court that leave should be granted and the broad discretion conferred by the provisions of s 151D of the Act should be applied by asking the question “what is fair and just”. [8] Otherwise expressed, the Court is required to ask itself what the justice of the case requires. [9]

15. [34]

    As was made clear by the High Court, [10] there is no presumptive right to an order granting leave to commence proceedings. The applicant still bears the legal onus of showing that the justice of the case requires the discretion to be exercised in the plaintiff’s favour. In meeting that onus, the plaintiff is required to show that the extension of the limitation period would not result in significant prejudice to the prospective defendant and the Court is not required to undertake a weighing process between the potential prejudice to the plaintiff and the potential prejudice to the prospective defendant.

16. [35]

    Notwithstanding the foregoing, the notion of fairness, and the determination of what is a just result, is a matter of degree and the concept of a fair trial is a relative one, which does not require the attainment of perfection. [11]

17. [36]

    This approach was confirmed by the Court of Appeal and applied in Holt v Wynter. [12] According to the Court of Appeal in Holt v Wynter, significant prejudice to the potential defendant is decisive. [13]

18. [37]

    It is important then to consider the comments of the Court of Appeal in Itek Graphix Pty Limited v Elliott. Fundamentally, the Court of Appeal took the view that in exercising the broad discretion conferred by s 151D(2) of the Act, the Court should exercise its discretion in a manner that is “fair and just … or what … the justice of the case require[s]”. [14] The Court there stated:

19. [38]

    The four rationales, which McHugh J described, is a reference to the reasons of McHugh J in Brisbane South Regional Health Authority v Taylor, during which [15] McHugh J identified four broad rationales for the enactment of limitation periods, which were:

20. [39]

    As McHugh J pointed out, [19] in promulgating the limitation period, the legislature has regard to all of the rationales, summarised above. As a consequence, when the legislature provides a capacity to extend the limitation period that has been fixed, the limitation period should not be seen as an arbitrary cut-off point, unrelated to the demands of justice or the general welfare of society.

21. [40]

    At the same time, there is no warrant for treating the grant of a discretion to extend time for commencing proceedings as having a standing equal to or greater than those provisions that enact the limitation period itself. The limitation period is the general law and the extension is the exception to it. As McHugh J said:

22. [41]

    While the defendant does not take issue with the submissions of the plaintiff on the principles to be applied by the Court in determining the extension of time, on an analysis of the authorities, it seems to the Court, as presently constituted, that the principles adumbrated by the plaintiff state the balancing exercise in a manner that is slightly more favourable to the applicant for an extension of time, than the authorities permit. Ultimately, the Court is required to exercise its discretion judicially and determine what is fair and just, bearing in mind that the statute imposes a limitation period and it is for the plaintiff to satisfy the Court that an exception should be made, having regard to the rationales to which the High Court has referred and which have been summarised above, in these reasons.

Defendant’s Submissions

1. [42]

   As is clear from the foregoing chronology and brief summary of facts, the plaintiff was injured in a manual handling incident on 28 December 2003. The statute required her to commence proceedings before 28 December 2006.

2. [43]

   From shortly after the date of the injury, the plaintiff was on workers’ compensation payments and the employer’s then insurance company had access to her statements as to the cause of the accident and any and all medical assessments and treatment from that time forward. So too does the defendant in these proceedings.

3. [44]

   According to the plaintiff, she has been totally incapacitated as a result of the injury since the time of injury and has not worked since that date.

4. [45]

   The allegation of the plaintiff is that she was required and/or attempted to lift a drum of olives, during which process the injury occurred. According to the plaintiff, she had sought assistance from her then manager, Tony Napoli.

5. [46]

   The defendant points to the delay between 2003 and the date upon which proceedings were thought to be commenced and, in particular, the deregistration of the then employer, which renders it more difficult to identify potential witnesses and obtain statements from them. The defendant has identified and contacted George Angelidis who is available to give evidence and was a director of BMG at the time of the injury. Mr Angelidis was the subject of a subpoena to give evidence. Since the hearing of the matter on 10 June 2020, the defendant has served an evidentiary statement of the aforementioned George Angelidis, which states that there are no records of the deregistered company held by him and comments on the plaintiff’s evidentiary statements.

6. [47]

   Mr Angelidis was not responsible for accounts or payroll, the accuracy of which is put in issue by the plaintiff, but is aware that, from his experience, the accounts and payroll accurately reflected the amounts paid to him.

7. [48]

   He denies certain detailed statements such as the plaintiff being singled out for praise and distinguishes the Leichardt business premises of Norton Street Deli from those at Bondi. He states that he did not single the plaintiff out as a potential manager for any store and that her role in Norton Street Deli was as a casual shop assistant.

8. [49]

   While he is not in a position to dispute the claim that the plaintiff attempted to lift a drum of olives, he states that such an attempt would have been, and was, contrary to instructions, given to all female shop assistants, not to seek to lift the drums of olives and he attests to the proposition that such shop assistants were given specific instruction and training. He disputes that the plaintiff would have been paid or was paid the amount that she states she was paid.

9. [50]

   It is not clear from the evidentiary statement, later filed and to which the Court has just referred, whether Mr Angelidis has knowledge of other former employees and/or directors of Norton Street Deli and their present contact details. The business that existed in 2003 now operates as Harris Farm and one of the directors seems to have established another like business that is separate from the Norton Street Deli business and Harris Farm.

10. [51]

    The submission of the defendant that it has been unable to contact any person with knowledge or any co-worker, as at 10 June 2020, is significantly qualified by the serving of the evidentiary statement of Mr Angelidis. Further, while any defendant would be prejudiced by a delay of the kind here in question, there are a number of other factors that require attention.

11. [52]

    It is true that the common law damages claim, arising from negligence, was not commenced until the filing of the pre-filing statement and particulars relevant to the workplace injury damages in October and later in 2018. However, until the assessment by the Commission of WPI at 15%, which occurred on 2 May 2018, the plaintiff would have been unable to commence, and was precluded from commencing, proceedings for workplace injury damages.

12. [53]

    The defendant submits that the plaintiff has provided no explanation for delay between the period from 1 May 2012 to 2017, even though the plaintiff had access to a lawyer throughout that period. Yet, during that period, the plaintiff was precluded from commencing common law proceedings by the operation of the provisions of s 151H of the Act. It would be difficult for there to be a more obvious and better explanation for not commencing the proceedings.

13. [54]

    If the issue is the delay in obtaining a revised certificate giving 15% WPI, apart from some minor periods during which the solicitor did not make appropriate applications, there is no significant delay. It is a difficulty caused by the combination of a deteriorating injury and the ability, now precluded, to make more than one application for WPI Assessment.

14. [55]

    While, in the absence of the evidentiary statement from Mr Angelidis, the defendant’s submission that it suffered a significant forensic disadvantage was compelling, since 15 June 2020, admittedly after the date on which the hearing occurred, that forensic disadvantage has been qualified significantly. In light of the cooperation from Mr Angelidis, which his statement evidences, some of the claims in relation to forensic disadvantage may, as well, dissipate.

15. [56]

    The statement, in and of itself, from a director of the employer, dealing with the accuracy of the accounts, the training and instruction to shop assistants and the method of work at Norton Street Deli, renders the forensic disadvantage less than significant. Of course, the defendant does not have an eyewitness to the incident in question. But, the defendant would not have had such an eyewitness, if the proceedings had commenced the day after the injury was inflicted. Nor, as yet, has the defendant been able to contact Tony Napoli, the relevant manager. Even if the defendant were, prior to trial, able to contact Mr Napoli, given the delay, he may not have any memory of the events. Delay is still a forensic disadvantage.

16. [57]

    As to the evidence relating to the plaintiff’s request to the manager Tony Napoli, as just mentioned, the absence of Mr Napoli is a forensic disadvantage, but is yet to be determined whether Mr Napoli will be available, now that Mr Angelidis is cooperating with the defendant. The disadvantage, associated with the absence of Mr Napoli or his inability to remember, is outweighed by the relatively recent entitlement of the plaintiff which makes her situation exceptional.

Conclusion

1. [58]

   For the foregoing reasons, and bearing in mind the four rationales for limitation periods, the Court is of a view that the circumstances of the plaintiff are a justifiable exception to the proposition that the limitation period should, prima facie, be given effect. The most important aspects of those circumstances are: the fact that the legislation precluded any claim for common law damages in workplace injury proceedings prior to 2 May 2018; the availability of a director of the then employer who is able to give evidence as to the role of the plaintiff, and the instruction and training given to shop assistants performing the function of the plaintiff; and the possible availability of other witnesses. Further, the medical issues from 2003 until the present are available to the defendant as a consequence of the workers’ compensation claims and payments.

2. [59]

   In light of the foregoing conclusion, it is unnecessary for the Court to calculate each of the periods during which the 3 year period was suspended because of the operation of s 151DA of the Act.

3. [60]

   In all, the Court has formed the view that it is fair and just to extend the time to allow the filing of the Statement of Claim.

4. [61]

   The Court makes the following orders:

   1. (1)

      Pursuant to s 151D(2) of the Workers Compensation Act 1987 (NSW), leave is granted to the plaintiff to commence her claim for work injury damages;

   2. (2)

      A declaration that Subdiv 2, Div 3, Pt 17 of the Workers Compensation Regulation 2016 (NSW) does not apply to the costs of the motion pursuant to the effect of cl 98 of the Regulation;

   3. (3)

      The defendant is to pay the plaintiff’s costs of and incidental to the motion;

   4. (4)

      The substantive hearing remains listed for hearing on 3 August 2020 with an estimate of three days.