Ivanisevic v N & T Building Pty Limited

1. [1]

   HIS HONOUR: By notice of motion filed on 27 June 2023, Steve and Jennifer Jancetic (the third defendants), sought an order that certain paragraphs of an amended statement of claim (ASoC) of Alojz (Alex) Ivanisevic (the plaintiff), that make a claim against the third defendants, be struck out; alternatively, that summary judgment be given for the third defendants against the plaintiff, as well as an order for costs. In supplementary written submissions, the third defendants clarified that the first order was sought on the basis of r 14.28(1)(a) of the Uniform Civil Procedure Rules (UCPR) and the alternative order pursuant to r 13.4(1)(b) of the UCPR.

2. [2]

   The basis of the orders sought is that the ASoC, which was filed and served on the third defendants on 6 February 2023, was statute barred by operation of ss 50C and 50D of the Limitation Act 1969 (NSW) (the Act). Sections 50C and 50D are in Div 6 of the Act, which is titled “Personal Injury Actions”. Those sections, and s 50A, relevantly provide as follows:

3. [3]

   Section 63 of the Act is also relevant to the determination of the motion, the relevant sub-sections of which are as follows:

4. [4]

   Rules 13.4 and 14.28 of the UCPR relevantly provide:

The background to the motion

1. [5]

   The background circumstances to the motion, as set out in affidavits by the plaintiff (dated 31 August 2023) and Mr Jancetic (parts of one dated 28 July 2023 and 7 November 2023) which were read at the hearing, are as follows.

2. [6]

   The third defendants were the occupiers and registered owners of a residential property in Mangerton (the site). In November 2012, the third defendants entered into a building contract with N & T Buildings Pty Ltd, the first defendant, for the construction of a domestic dwelling on the site. In July 2013, during the course of construction, the first defendant requested the second defendant, Clymax Glass & Showers Pty Ltd, to take measurements and provide a quote to install shower screens on a ground level bathroom and two bathrooms on level one. The plaintiff, who was employed as a glazier by the second defendant, attended the site to produce the quote. The second defendant is described by the plaintiff as “my own business”, which employed “five to six people”.

3. [7]

   On 24 July 2013, Mr Jancetic admitted the plaintiff to the site for that purpose. The stage of construction was such that there was no internal stairwell between the ground floor and the first floor. While the plaintiff was ascending a ladder to access the first floor, it collapsed and he fell approximately 2.5m onto a concrete slab (the incident), causing him injuries. The plaintiff claims in the ASoC that the incident was caused by the defendants’ negligence and breaches of their duty of care to the plaintiff.

4. [8]

   Consequent to the injuries, the plaintiff underwent 18 surgeries, including the amputation of his left leg below the knee on 10 March 2021. He has ongoing health issues relating to his left leg and suffers from anxiety and depression. He claims relief in the form of damages, interest and costs in respect of the incident.

5. [9]

   Evidence of the background to the legal proceedings was the subject of the plaintiff’s affidavit, two affidavits of his solicitor, Anna Gordon (dated 1 September 2023 and 27 November 2023) and parts of an affidavit by the third defendants’ solicitor, Meaghan Williamson (dated 27 June 2023). In a supplementary evidentiary statement signed on 29 April 2022, which is annexed to the plaintiff’s affidavit, he provided an account of his awareness of legal proceedings arising from the incident. The effect of these affidavits, along with the supplementary evidentiary statement, is as follows. On the same day as the incident, the plaintiff’s wife, who was the manager of the second defendant, notified their workers compensation insurer of the incident. The plaintiff stated that “by 2017”, he realised that his leg injury was not going to recover:

6. [10]

   In January 2017, that is, approximately three and a half years after the incident, the plaintiff sought legal assistance from a law firm. On his account, the advice that he received was to the effect that “there was nothing that could be done in relation to any claims until [his] surgery was over”, and he “accepted that that was the position”.

7. [11]

   Later in 2017, the plaintiff was receiving treatment from a psychiatrist for anxiety and depression from the incident:

8. [12]

   The plaintiff changed lawyers and in August 2017, he had his first conference with his current lawyers, Gorman Jones Lawyers, who filed proceedings in the Workers Compensation Commission on his behalf seeking a lump sum payment for his disability. He had a conference with junior counsel on 1 April 2019 in relation to that claim:

9. [13]

   On 9 November 2019, the plaintiff filed a statement of claim against the first defendant.

10. [14]

    Ms Gordon stated that in June 2022, she received a witness statement dated 14 May 2022 by Mr Neil Ballinger, who was the managing director of the first defendant. He alleged that the ladder used by the plaintiff during the incident was not owned by the first defendant.

11. [15]

    In his affidavit, the plaintiff recalled reading Mr Ballinger’s statement in May 2022, and stated:

12. [16]

    Ms Gordon stated that in June 2022, she wrote to the third defendants inviting them to refute Mr Ballinger’s account. On 21 July 2022, she again wrote to Mr Jancetic requesting his response to the content of by Mr Ballinger’s witness statement, but received no reply. She said:

13. [17]

    On 24 November 2022, the Court ordered the plaintiff to file and serve an amended statement of claim to join the second and third defendants by 12 December 2022. On 6 February 2023, the plaintiff filed and served an amended statement of claim, joining the second and third defendants as parties to the dispute. It was nine years and seven months after the incident; five years and six months after the plaintiff sought legal advice from his present solicitors; and three years and two months after he filed the statement of claim against the first defendant.

14. [18]

    On 9 June 2023, the third defendants filed a defence to the ASoC in which they pleaded, inter alia, that the claim was not maintainable because of s 18 of the Act, which provides, in respect of certain causes of action founded on negligence or a breach of duty for which damages are sought for personal injury:

15. [19]

    On 27 June 2023, as mentioned above, the third defendants filed the notice of motion that is the subject of the current proceedings.

The parties’ submissions

1. [20]

   Counsel for the third defendants submitted that the plaintiff knew, or ought to have known, that its case was that the injury was caused by the fault of the third defendants, at the time of the incident or, at the latest, by August 2017, when the plaintiff first consulted his current lawyers for legal advice, so that the three-year post-discoverability limitation period contemplated by ss 50C and 50D of the Act had expired by the time that the ASoC was filed.

2. [21]

   In oral submissions, it was argued that the plaintiff knew nine facts at the time of the incident that were sufficient to prove or impute knowledge of the third defendants’ fault in causing the injury:

3. [22]

   The facts suggest a duty owed to the plaintiff by the third defendants on the basis that, firstly, it was the occupier of the site; secondly, it was managing the system of work on the site; and thirdly, it directed the plaintiff as to how to get to the first floor. The breaches of those duties were that the ladder fell due to the absence of chocks and an upper brace on the ladder and that Mr Jancetic did not hold the ladder for the plaintiff. Knowledge of the ownership of the ladder was irrelevant to the plaintiff’s case as it was pleaded in the ASoC.

4. [23]

   The third defendants submitted that its primary position was that for the purposes of s 50D(1), the plaintiff “knew” the relevant facts as of the date of the incident, but conceded that he may not have appreciated their legal significance, such that there was an arguable cause of action against the third defendants, until he obtained legal advice in August 2017. In that regard, the third defendants relied upon Baker-Morrison v State of New South Wales (2009) 74 NSWLR 454; [2009] NSWCA 35 per Basten JA (Ipp and Macfarlan JJA agreeing) at [58]:

5. [24]

   The third defendants submitted that it follows that the plaintiff took “all reasonable steps” from the time he instructed his current solicitors, in August 2017 and so the three-year limitation period ran from that time. Accordingly, the cause of action was “extinguished” pursuant to s 63 of the Act either by July 2016, being three years from the date of the incident, or by August 2020, being three years from the date the plaintiff sought legal advice, or by May 2022 at the latest, being three years from the date the plaintiff’s solicitors spoke with Mr Jancetic.

6. [25]

   The third defendants acknowledged that courts are reluctant to determine a limitation defence at an interlocutory stage, but submitted that the plaintiff’s claim against it should be struck out pursuant to r 14.28(1)(a) of UCPR because there is no reasonable cause of action disclosed against it. Further, it is the “clearest of cases” with respect to the existence of a limitation defence, such that the issue can be determined on an interlocutory basis: Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514; [1992] HCA 55 at 525 (Wardley v WA).

7. [26]

   The plaintiff submitted that the cause of action against the third defendants was not discoverable until May 2022, because the plaintiff did not “know”, for the purposes of s 50D of the Act, that the faulty ladder could have been owned by the third defendants until he drew that inference from Mr Ballinger’s witness statement. The plaintiff submitted that the significance of knowledge of the ownership of the ladder was that there is nothing in s 50D to the effect that a plaintiff is confined to run one particular case if he becomes aware of a fact which gives rise to a liability in relation to fault on a different basis.

8. [27]

   The plaintiff submitted that if the matter against the third defendants proceeded to trial:

9. [28]

   As foreshadowed by the third defendants, the plaintiff submitted that it was undesirable to determine a limitation issue in interlocutory proceedings, citing a passage from Wardley v WA at 533, in which the plurality (Mason CJ, Dawson, Gaudron and McHugh JJ) said:

10. [29]

    At the eleventh hour of the hearing, the plaintiff raised a fresh issue, submitting that the Court does not have power under rr 14.28(1)(a) and 13.4(1)(b) of the UCPR to make an order for summary judgment on a statutory defence under the Act. The parties were granted leave to file further written submissions on this issue.

11. [30]

    The plaintiff noted that the aspect of both rules relied upon by the third defendants is that there was “no reasonable cause of action” and submitted that those words imply that the two rules are concerned with whether the plaintiff has a good cause of action and not whether the defendant has a good defence to it. Accordingly, it was submitted, the third defendants could not satisfy the test as established by General Steel Industries v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69.

12. [31]

    The third defendants submitted that the effect of s 63(1) of the Act is to extinguish the plaintiff’s cause of action and therefore, if the statute bar is established, the cause of action ceased to exist after the limitation period expired.

13. [32]

    As to the plaintiff’s reliance upon the term “no reasonable cause of action”, the third defendants submitted that reasonableness is otiose if the cause of action has been extinguished. The third defendants cited multiple instances of interlocutory proceedings in which pleadings were struck out or dismissed for the reason that they were brought out of time or otherwise statute barred.

Consideration

1. [33]

   In Sampson v Zucker (unreported, Court of Appeal of New South Wales, 11 December 1996) Gleeson CJ (Cole JA and Simos AJA agreeing) dismissed an appeal against a decision of the primary judge to strike out the appellant’s statement of claim on the basis that it was statute barred pursuant to s 14 of the Act, which provided that an action on a cause of action of a certain type “is not maintainable” if brought after the expiration of the limitation period. The primary judge applied Pt 9, r 17 of the District Court Rules 1973 (NSW), which was in relevantly similar terms to r 14.28 of the UCPR. However, there was no challenge by the appellant to the primary judge’s power to strike out a statement of claim on the basis that it was outside the limitation period, so that issue was not considered.

2. [34]

   In Hillebrand v Penrith Council [2000] NSWSC 1058, Austin J considered whether the plaintiff’s cause of action could be struck out by reason of it being outside the limitation period, pursuant to the precursor to Pt 13, r 5(1)(b) or Pt 15, r 26(1)(a) of the Supreme Court Rules 1970 (NSW), which were the predecessors to rr 13.4(1)(b) and 14.28(1)(a) respectively. The defendant submitted that the cause of action was statute barred by virtue of s 14 of the Act. His Honour found in favour of the defendant’s strike-out application, on the basis that, provided that the limitation period clearly applies and has expired, it is not a reasonable cause of action. His Honour said, at [27]:

3. [35]

   Hillebrand v Penrith Council has not been considered at an appellate level, but has been followed in successive first instance cases: Rogers v Rogers [2005] NSWSC 807 per Bell J at [21], referring to Pt 15, r 26 of the Supreme Court Rules; D Tannous No 2 Pty Ltd v Bevillesta Pty Ltd [2009] NSWSC 782 per Hall J at [19]; Kovarfi v BMT & Associates Pty Ltd [2012] NSWSC 1101 per McCallum J at [22]; Spiliotopoulos v National Australia Bank Ltd [2017] NSWSC 971 per Harrison J at [41]; Walsh v State of New South Wales [2018] NSWSC 1480 per Harrison AsJ at [125]; and Gillies v New South Wales [2022] NSWSC 640 per Bellew J at [29].

4. [36]

   For the reasons expressed by Austin J in Hillebrand v Penrith Council at [27], I am satisfied that the Court has the power to strike out or dismiss the plaintiff’s amended statement of claim, insofar as it pleads that the third defendants are legally liable, pursuant to rr 14.28(1)(a) or 13.4(1)(b) of the UCPR, on the basis that a cause of action that is plainly outside the limitation period is not a reasonable claim of action.

5. [37]

   The parties otherwise agreed that the determination of the notice of motion turns upon the application of s 50D(1)(b) of the Act; that is, whether the plaintiff knew, or ought to have known, “the injury … was caused by the fault of the (third) defendant” before 6 February 2020, which was three years before a sealed copy of the ASoC was served on the third defendants.

6. [38]

   The onus in that exercise lies with the moving party on the motion, namely, the third defendants: Baker-Morrison v State of New South Wales at [14]. I note that, although the amputation of the plaintiff’s left leg beneath his knee did not occur until 10 March 2021, the plaintiff does not suggest that s 50D(1)(c) was not satisfied in relation to the third defendants until then.

7. [39]

   The plaintiff’s submission that the question of ownership of the ladder was central to his case is not apparent from the terms of the ASoC, which does not have an assertion as to who owned the ladder, or mention the issue of its ownership at all. Rather, it pleads negligence and breaches of duties of care owed by the third defendants that derive from, among other heads of responsibility, that the third defendants were the owners and occupiers of the site (cl 4), thus pleading the basis of an occupiers’ liability, and that they were “conducting [a] business or undertaking at the site within the meaning of s 5 of the Work Health and Safety Act” (cl 5), thus pleading a duty as the manager of a system of work. At cl 15BA of the ASoC, the plaintiff pleaded that the third defendants had a duty “to provide reasonably safe means of access for subcontractors to the first floor of the premises while under construction”; and at cl 15C, that the first and third defendants:

8. [40]

   The explanation offered by the plaintiff that it was not apparent to him until the builder denied ownership of the ladder that it may have belonged to the third defendants, and therefore they should be joined, only makes sense if his case against the third defendants, as drafted in the ASoC, incorporates or indirectly relies upon that assertion, which it does not. The plaintiff chose not to respond, in either his written or oral submissions, to the third defendants’ submission that the ASoC did not assert, or rely upon, the third defendants owning the ladder.

9. [41]

   As to the timing of the plaintiff’s knowledge of these aspects of the third defendants’ responsibilities that were in fact pleaded, it would appear from his evidentiary statement filed on 4 March 2020, that on the day of the incident, the plaintiff was aware of Mr Jancetic’s status and physical acts as alleged in the ASoC:

10. [42]

    In other words, the attribution in the ASoC of the third defendants’ legal liability is based upon what was known by the plaintiff as to the status and actions of Mr Jancetic at the date of the incident. In this sense, the realisation by the plaintiff and his legal representatives that the first defendant denied owning the ladder does not explain why the ASoC, as it is drafted, was not filed within the limitation period.

11. [43]

    The plaintiff’s case against the third defendants rests on facts, propositions and heads of legal liability that were knowable from the date of the incident, and certainly after a reasonable allowance of time for the plaintiff’s legal representatives to make inquiries and, if necessary, obtain and provide counsel’s advice. Clearly, that date had passed by 6 February 2023, which was about five years and six months after he first consulted his current solicitors.

12. [44]

    In the passage quoted from Baker-Morrison v State of New South Wales at [23] above, Basten JA referred to the act of instructing a solicitor being, in most circumstances, sufficient for a prospective plaintiff to satisfy the element in s 50D(1)(b) of taking “all reasonable steps”, although in that case there was no question of “whether other limitations prevented the solicitor from taking proper steps in a timely fashion”. In Pomare v Whyte (2019) 377 ALR 352; [2019] NSWCA 317, Basten JA (Macfarlan JA agreeing) considered the situation of a plaintiff who contacts a solicitor in a timely fashion but does not receive appropriate advice:

13. [45]

    Applying the appropriate onus of proof and the test as to legal advice as stated in Pomare v Whyte, the question for determination is whether, in accordance with s 50D(1)(b) of the Act, the third defendants have established that the plaintiff knew or ought to have known of the “fact that the injury … was caused by the fault of the defendant” prior to 6 February 2020. In Pomare v Whyte, Basten JA referred to the meaning of “fault” in that context:

14. [46]

    I accept that the circumstances of the incident are not such that one could reasonably expect that the plaintiff, as a matter of everyday knowledge, would have appreciated that the third defendants were at fault at all for his injuries, let alone in a sense that created a legal liability. Thus, the cause of action was not discoverable until he had the benefit of legal advice as to the potential liability of the third defendants.

15. [47]

    There was no oral evidence at the hearing. Both parties relied upon affidavit evidence from the plaintiff as to his state of knowledge and reasons for his actions at various times. The only evidence as to why the plaintiff joined the third defendants when he did is summarised and extracted in [15] and [16] above. It is apparent from those passages that the plaintiff did not state when he first received legal advice to join the third defendants and in neither of Ms Gordon’s two affidavits did she state when she first gave legal advice to the plaintiff to that effect, although there is an available inference from those same passages that it was around July 2022, when Ms Gordon believed that Mr Jancetic had failed to respond to her questions concerning Mr Ballinger’s witness statement. There is no evidence that the plaintiff was given such legal advice prior to that time, from which one might infer actual or constructive knowledge by the plaintiff prior to 6 February 2020.

16. [48]

    To the extent that such advice being provided more than five years after initial instructions might be thought to be a matter for some criticism, the observations by Basten JA in Pomare v Whyte, extracted at [44] above, as to whether the plaintiff is statute-barred as a result, are apposite. It follows that this is not as clear a case for strike out or dismissal as the third defendant has submitted.

17. [49]

    As to the undesirability of determining a limitation issue in an interlocutory motion, I note the following statement of principle and consideration of Wardley v WA by Basten JA (MacFarlan and Leeming JJA agreeing) in Murgolo v AAI Ltd t/as AAMI (2019) 101 NSWLR 376; [2019] NSWCA 295:

18. [50]

    I find that, in the absence of evidence that establishes that the plaintiff first received legal advice to join the third defendants before 6 February 2020, this is not a case that comes within the narrow scope of being one “clearly out of time”. It follows that the third defendants’ application must fail.

Orders

1. [51]

   I make the following orders: