Extension of the limitation period: material fact – loss of earning capacity

Bolitho v Talbot & Anor [2010] QSC 415

Issue:

Whether the knowledge of the applicant’s loss of earning capacity was a material fact of a decisive nature warranting the extension of the limitation period.

Philippides J:

The facts arose out of tragic circumstances where the applicant/plaintiff was the Principal of Fairview Heights State School at Glenvale near Toowoomba, where he was required to assist in the aftermath of a horrific motor vehicle accident on 15 October 2004 at the school in which a father ran over his child, resulting in the death of the child. The applicant subsequently developed PTSD and major depression.

The applicant’s development of his psychiatric conditions were delayed and he struggled with its limitations endeavouring to continue to work and then exhausted his long service leave, sick leave, income protection insurance options, made an application for Workers’ Compensation.  The applicant returned to work on limited duties and as an unattached Principal. It was not however, until a disagreement with a colleague:

[33] I pause here to note that, in the circumstances of this case, it was on or after 31 August 2008 that a material fact of a decisive character must have come within the applicant’s knowledge. The following day, on 1 September 2008, an incident occurred at work which had a great impact on the applicant.

[34] On 1 September 2008, the applicant had a disagreement with Mr Cook. It seems to have revolved around the applicant’s perception as to work timeframes being imposed on him and his being placed in the complaints management section of the department. It took the applicant over a week to recover from the effects of the confrontation. This caused the applicant to realise that, if a confrontation over a comparatively minor issue had taken such a toll on his health, he would not be able to handle more difficult and serious confrontations. His evidence was that until this point, he had believed that he could return to work as a school Principal at some time in the future, but that after the confrontation he formed the view that he would not recover sufficiently to work as a Principal or teacher. Thereafter, his condition deteriorated markedly. The applicant stayed on the program for a further short period until 19 September 2008. On 9 October 2008, Dr Matthews provided a medical certificate stating that the applicant was totally incapacitated from work until 31 December 2008. The applicant did not resume the program.

[36] Dr Matthews provided a report on 3 November 2008, having seen the applicant on 18 occasions since his last report, on a weekly or fortnightly basis. Dr Matthews stated:

“Unfortunately, [the applicant] has struggled significantly with his return-to-work program.

while [the applicant] was being engaged in a return-to-work rehabilitatory program, he was instructed to attend an independent psychiatrist for a Section 85 review for possible forced medical retirement. This further led to [the applicant] feeling unsupported in the workplace during his rehabilitatory process, as he felt there was a drive to remove him from work via medical retirement.

The net result of this has been that [the applicant’s] rehabilitatory experiences have been suboptimal, and often countertherapeutic. This culminated in September, when his rehabilitation program involved him in complaints management, an area that would be likely to increase his subjective experience of work stress, rather than contain it. At this time I was grudgingly agreeable to him following this rehabilitation program, but it was clear that [the applicant’s] mental state was progressively deteriorating in the context of his workplace rehabilitation. He was experiencing a deterioration in mood with more pervasive depression, subjective feelings of being ‘desperate’ (without suicidality), impairments of sleep, energy, motivation and concentration, as well as PTSD phenomena of

re-experiencing trauma in the form of work-related nightmares, together with hyperarosal, irritability, decreased frustration tolerance and ongoing avoidance phenomena.

Thus, on 10 October 2008, after discussion with [the applicant], I provided him with a medical certificate for ongoing time away from work. This effectively ended his rehabilitation program, and it is pleasing to note that there has been some progressive improvement in mood and functionality away from the workplace.

I am thus of the opinion that he has experienced a failed trial of workplace rehabilitation, and he is best considered to be totally and permanently disabled from his work in Education Queensland as a school principal, the position for which he is qualified by virtue of his training and experience.”

[37] On 7 January 2009, the MAT reconvened to consider the applicant’s application for compensation. It noted its previous determination, in July 2008, that the applicant’s condition was not then stable or stationary and that the applicant was “managing reasonably well with his rehabilitation program, with project work and conference planning.” It stated that in September 2008 the applicant’s work included complaints management, which he found difficult to manage and that there were also some reported interpersonal difficulties with his supervisor. The Tribunal noted that the applicant ceased work in October 2008 and felt that it was unlikely that he would return to work with Education Queensland. The Tribunal stated that there had been little change in the applicant’s condition since his appearance before it in July 2008, and accepted that the applicant’s condition was now stable and stationary, with the applicant suffering a permanent and partial incapacity for work of 20 per cent.

[38] On 10 February 2009, Professor Whiteford reported that since late 2008 the applicant’s condition had deteriorated. He opined that the applicant was unfit to recommence a return to work program and was permanently unfit to return to work as a Principal or in any other position with Education Queensland. Moreover, Professor Whiteford considered that the applicant was unfit to undertake remunerated employment in the private or public sector and that it was unclear when he may be able to undertake alternative employment.

[39] The applicant was retired from Education Queensland on the grounds of ill health. Until then, he had received payments from Q-Super based on his position in the Department of Education as an unattached Principal.

[40] The applicant’s evidence was that it was not until his WorkCover claim was finalised that he was capable of addressing other issues or making other plans. He then made inquiries about the possibility of a civil claim. On 24 March 2009, the applicant was provided with advice from Macrossans Lawyers indicating that it was unlikely that he would be able to establish that his injury was negligently caused by his employer. The applicant was not advised of the possibility of a CTP claim. On 23 April 2009, the applicant consulted his present lawyers and was advised that he could bring a CTP claim. Even after receiving advice, the applicant stated that the idea of bringing a claim, especially against the father of the deceased child, was distressful and that he was not sure that he was prepared to deal with all that it entailed. He stated in his affidavit that he did not believe he was capable of making the best decisions regarding his health and employment from the beginning of about 2006 and onwards. He stated that until he was retired on medical grounds, he had not experienced a loss of income that was significant.

Relevant considerations

[45] It is apparent that s 31 of the Act, read with s 30, requires the applicant to establish the following matters:

(a) the fact relied on is material and is one which relates to the right of action;

(b) the fact is of a decisive character;

(c) the material fact and its decisive character were not within the means of knowledge of the applicant until a date after the commencement of the year last preceding the expiration of the period of limitation;

(d) there is evidence to establish the right of action apart from a defence founded on the expiration of the limitation period;

(e) the discretion to extend the limitation period should be exercised in favour of the applicant. (See Dick v University of Queensland [1999] QCA 474; [2000] 2 Qd R 476 at [26], Queensland v Stephenson [2006] HCA 20; (2006) 226 CLR 197 at [10] – [11], [15], [19], [21] – [22]).

[46] It was not in issue in the present application that there was evidence to establish the right of action, apart from a defence founded on the expiration of the limitation period. Furthermore, in relation to the question of the exercise of the discretion, the respondents conceded that they could not point to any prejudice resulting from the delay in bringing the action.

[47] It is clear that the economic effects of the injury can be material facts relating to the right of action. In Watters v Queensland Rail [2000] QCA 51; [2001] 1 Qd R 448, Thomas JA explained at 453:

“This court has consistently treated the consequences of injury including economic consequences, as a potentially material fact of a decisive character relating to the right of action. In Byers the material fact was that the plaintiff’s injury was such as to necessitate his changing to a different and lighter job. The court (Lee J, with whom McPherson and de Jersey JJ (as their Honours then were) agreed) observed that ‘this new fact transformed his case into one which would then probably result in a substantial award of damages’ and held that it was a sufficient basis for extending the limitation period. Such cases are almost invariably concerned with assessments of degree as to whether the plaintiff’s actual knowledge of physical injury and its warning signs and consequences had by a given date already afforded sufficient information to have justified the commencement of proceedings. The fact that a plaintiff’s injury was more serious than he or she had hitherto realised has long been recognised as capable of being a material fact. Such a fact of course needs to be weighed in context with facts already known and reasonably capable of being known.” (citations omitted)

[48] His Honour further stated at 456:

“The essential requirement for an extension of time is set out in s 31(2)(a) which requires proof that ‘a material fact of a decisive character relating to the right of action was not within the means of knowledge of the applicant … ’. That composite test is extrapolated by definitions of its three main components in s 30(1)(a), s 30(1)(b) and s 30(1)(c). The section contemplates analysis of the character of the material fact. One particular matter that s 30(1)(b) specifically requires the material fact to bear is an economic characteristic. It must produce the conclusion that the action would result in an award of damages sufficient to justify the bringing of an action. In this context it would seem inappropriate to limit the connotation of ‘the nature and extent of the personal injury so caused’ to medical concepts or to the mere consequences to the person of the plaintiff. The economic effects of the injury are encompassed, whether one adverts to s 30(1)(a)(iv) or to the residuum of s 30(1)(a).”

[49] In relation to the issue of the decisive character of a material fact, as was observed in Honour v Faminco Mining Services Pty Ltd [2009] QCA 352 at [73], s 30(1)(b) formulates two conditions for determining whether a material fact relating to a right of action is of a decisive character:

(a) that the fact (along with other facts known to the potential claimant) would be regarded 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;

(b) that the fact (along with other facts known to the potential claimant) would be regarded as showing that the potential claimant should, in that person’s own interest and taking that person’s circumstances into account, bring an action on the right of action.

[50] Each of these conditions is to be regarded from the point of view of a reasonable person; and that person is taken to be a person who has taken “the appropriate advice on those facts”. Both conditions must be satisfied if the material fact is said to have a decisive character (Honour v Faminco Mining Services Pty Ltd [2009] QCA 352 at [73]).

[51] A material fact is not of a decisive character if, before knowing that fact a reasonable person would know facts that that person would regard (having taken appropriate advice) 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 an action on the right of action; and that the potential claimant ought to, in the person’s own interest and taking the person’s circumstances into account, bring an action on the right of action (Honour v Faminco Mining Services Pty Ltd [2009] QCA 352 at [74]). If, without knowledge of that fact, a reasonable person, having taken the appropriate advice, would not regard the facts known to that person as showing that a right of action would (ignoring the effect of the limitation period) have a reasonable prospect of success, and resulting in an award of damages sufficient to justify the bringing of an action, then the fact is of a decisive character (Honour v Faminco Mining Services Pty Ltd [2009] QCA 352 at [74]).

[52] In other words, where the fact relied upon is the economic effect of the injury:

“By necessary implication a fact of this kind going to the enlargement of damages could be a material fact of a decisive character that converted such a person’s claim from one that was not worth bringing into one that was”. (Watters v Queensland Rail [2000] QCA 51; [2001] 1 Qd R 448 at 454).

59] I accept that it was only after 31 August 2008 that the applicant appreciated that his psychiatric condition was such that he was incapable of resuming employment as a Principal.

[60] The fact that the applicant’s psychiatric injury was so severe as to render him unable to continue to work as a Principal was clearly a material fact of a decisive nature, converting a claim that was previously not worth pursuing, into one that was. It was not until the aftermath of the incident of 1 September 2008, and the additional medical advice of Dr Matthews that the applicant discontinue the return to work program, that he appreciated that he was permanently incapable of resuming a position of Principal.

[61] Until 31 August 2008, on the information available to the applicant, a reasonable person, even with the benefit of appropriate advice, would not have appreciated that an action in relation to the motor vehicle incident would have reasonable prospects of resulting in damages sufficient to justify the bring of an action and that it was in his interests to pursue it. Before 31 August 2008, the applicant’s rehabilitation supervisor and his treating psychiatrist considered that it was too early to rule out the applicant being able to resume the role of Principal, as the applicant was still undertaking the return to work program. Moreover, the applicant’s expenses during this period had been covered and he was in receipt of payments from Q-Super, and from the Department in addition to payment for work done under the rehabilitation program.

[62] In submitting that the matters relied upon by the applicant did not qualify as material facts of a decisive character, the respondent relied upon Spain v Dipompo Jacs Constructions P/L & Anor [2009] QCA 323, and the following extract from the judgment of Keane JA (with whom Holmes JA agreed) at [61]:

“Whether or not the limitation on Mr Spain’s earning capacity was likely to be immediately productive of economic loss, a reasonable person in Mr Spain’s position would have appreciated that he was in a situation of vulnerability in the labour market. This limitation of his earning capacity, together with the pain and suffering and loss of amenities referred to in the President’s reasons, would have been regarded by a reasonable person who took appropriate advice as showing that an award of damages by way of compensation would be sufficient to justify the bringing of an action at that time. Reasonable advice in mid-2006 would have been that a successful action would result in an award of substantial damages sufficient to justify commencing proceedings at that time.”

[63] That extract must be read in the light of the account given by the applicant in that case, that the back injury sustained by him had forced him to cease working in the construction industry and to look for and commence a new career, which he pursued for some time until his employer became insolvent. As Keane JA observed (at [60]), the applicant’s account in that case was “undeniably an acknowledgment of a firm appreciation on his part that his back problems were such as to limit the range of work open to him and to place him in a situation of real risk in the labour market”

[64] In the present case, the applicant had continued in his position as a Principal, albeit unattached, and was, on the recommendation of Dr Matthews, proceeding with rehabilitation in the nature of a graduated return to work program with the aim of resuming the position of Principal of a school. Notwithstanding Dr McIntrye’s view, there was a body of medical opinion that supported the approach of pursuing such rehabilitation, as did the first MTA, which concluded that the situation of the applicant in terms of any permanent inability to resume his position was not yet ascertainable. Until the return to work program failed the applicant did not and could not reasonably have had any firm appreciation as to whether his psychiatric illness would ultimately prevent him from resuming his career.

[65] Of course s 31(1) of the Act only allows a period of limitation to be extended so that it expires at the end of one year after the date the material fact of a decisive character came within the means of knowledge of the applicant. Under s 30(1)(c), a fact is not within the means of knowledge of a person at a particular time if, but only if the person does not know the fact at the time, and as far as the fact is able to be found out by the person, the person has taken all reasonable steps to find out the fact before that time.

[66] It is apparent that, although the applicant was struggling with the return to work program, until 1 September 2008 he believed that he would be able to return to work as a school Principal in the future, having been encouraged in that belief by various experts. Moreover, the applicant actively participated in a graduated return to work plan that had the stated aim of returning him to a position as a Principal. In my view, the applicant had taken all reasonable steps to find out the material facts before 31 August 2008, as is evidenced by the various reports of psychiatrists and supported by the first decision of the MAT, which suggested that the applicant might be able to return to work as a school Principal or another equivalent position with Education Queensland.

[67] I note that the respondent sought to rely on the fact that the applicant had applied to enter into a programme for career change for primary teachers for which he was accepted on 5 June 2007 and was offered a retraining grant. However, the applicant changed his mind and did not accept the offer. Not only did the applicant change his mind, but he actively participated in the graduated return to work plan as advised by his doctor.

[68] Each of the material facts relied upon by the applicant came within the means of knowledge of the applicant after 31 August 2008, that is, the 12 month period before the proceedings were commenced. The material facts also came within the applicant’s means of knowledge on dates after the commencement of the year last preceding the expiration of the limitation period, which on the applicant’s case was May 2008 and on the respondent’s case was October 2007.

[69] I am satisfied that the applicant has demonstrated that the requirements of s 31 of the Act are met and that the limitation period for the proceeding should be extended to 31 August 2009.

Brisbane Barrister – David Cormack

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