Hertess v Adams [2011] QCA 73

The appeal centred on the extension of the limitation period by the primary judge and in doing so, not weighing sufficiently the prejudice to be suffered by the defendant. The seminal High Court decision of Brisbane South Regional Health Authority v Taylor was extensively reviewed throughout. Muir JA delivered the leading judgment, Margaret Wilson AJA and Martin J concurred.

 The appealed was allowed on the basis the prejudice would prevent a fair a trial:

 [7]

McHugh J proceeded to explain the significance of the expiration of the limitation period and the likely consequence of a finding of actual significant prejudice:6

“If the action had been brought within time, it would have been irrelevant that, by reason of the delay in commencing the action, Dr Chang might have had little independent recollection of his conversation with the applicant and that the defendant might have had difficulty in fairly defending itself. But once the potential liability of the defendant had ended, its capacity to obtain a fair trial, if an extension of time were granted, was relevant and important. To subject a defendant once again to a potential liability that has expired may often be a lesser evil than to deprive the plaintiff of the right to reinstate the lost action. This will often be the case where the plaintiff is without fault and no actual prejudice to the defendant is readily apparent. But the justice of a plaintiff’s claim is seldom likely to be strong enough to warrant a court reinstating a right of action against a defendant who, by reason of delay in commencing the action, is unable to fairly defend itself or is otherwise prejudiced in fact and who is not guilty of fraud, deception or concealment in respect of the existence of the action.

Legislatures enact limitation periods because they make a judgment, inter alia, that the chance of an unfair trial occurring after the limitation period has expired is sufficiently great to require the termination of the plaintiff’s right of action at the end of that period. When a defendant is able to prove that he or she will not now be able to fairly defend him or herself or that there is a significant chance that this is so, the case is no longer one of presumptive prejudice. The defendant has then proved what the legislature merely presumed would be the case. Even on the hypothesis of presumptive prejudice, the legislature perceives that society is best served by barring the plaintiff’s action. When actual prejudice of a significant kind is shown, it is hard to conclude that the legislature intended that the extension provision should trump the limitation period. The general rule that actions must be commenced within the limitation period should therefore prevail once the defendant has proved the fact or the real possibility of significant prejudice. In such a situation, actual injustice to one party must occur. It seems more in accord with the legislative policy underlying limitation periods that the plaintiff’s lost right should not be revived than that the defendant should have a spent liability reimposed upon it. This is so irrespective of whether the limitation period extinguishes or merely bars the cause of action.” (emphasis added)

[25]

As appears from the foregoing discussion, the exercise of the primary judge’s discretion miscarried and it falls for this Court to exercise the discretion afresh.

[26]

There are differences between the approaches in Brisbane South of Toohey and Gummow JJ on the one hand and those of McHugh J, with whom Dawson J concurred, on the other. The latter would appear to place much more weight than the former on prejudice, both actual and presumptive, and on a prima facie prejudice to the respondent to an application for extension of time flowing from the enlivening of an expired limitation period. These and other differences have been analysed elsewhere11 and there is no need to further expand these reasons by considering them once again. Any differences of principle in the reasons in Brisbane South do not affect the resolution of this appeal.

[27]

I would not order that an extension of time be granted. It is apparent from the above discussion that the lengthy delay in commencing proceedings has given rise to presumptive prejudice of the type discussed in paragraph [7] above. There was also significant actual prejudice to the applicant existing at the date of the application to extend time, as I have already explained, and the respondent has failed to show that delay has not made the chances of a fair trial unlikely.12

 6 At 555.  

11 See for example, Holt v Wynter (2000) 49 NSWLR 128; Smith v Morton [2004] NSWCA 84; Parsons v Doukas (2001) 52 NSWLR 162 and Sauer v Allianz Australia Insurance Ltd [2006] NSWCA 364.

12 Brisbane South Regional Health Authority v Taylor (supra) at 550.  

 Brisbane Barrister – David Cormack

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