Limitation extension: OPT back injury – means of knowledge & value of the claim

Milling v Fraser Coast Regional Council [2015] QDC 291

The applicant was close to turning 62 when the decision was delivered. Over the period from 2009 – 2011 the applicant injured his back at work, but on each occasion returned to work on full duties, albeit with occasional pain. In 2013 the applicant woke at night with numbness in his left leg and ‘drop foot’, which culminated in surgery, which improved his situation considerably. In September 2013 the applicant returned to work, but it was not until July 2014 when the applicant consulted a lawyer. Around that time the applicant’s supervisor started to provide assistance, which together with the applicant having used up his sick leave, made him query whether his job was at risk. The notices of claim for damages were served in December 2014. In February 2015 the applicant attended upon a doctor to assess his fitness for work. In March 2015 the applicant was placed on leave in response to the doctor’s report and by October 2015 the applicant’s employment had been terminated.

The relevant date for the purposes of the ‘material fact’ of a decisive nature was 22 December 2013, by reference to the notices served the following December 2014. The applicant had returned to work in September 2013 and hence much turned on whether it was within the applicant’s means of knowledge and when the applicant first consulted his lawyer, if he had a claim worth pursuing.

His Honour McGill SC considered that in answering whether the applicant had a claim worth pursuing, it was necessary to consider the legislative scheme under the Workers’ Compensation and Rehabilitation Act 2003 and the restriction on costs in s 316. His Honour considered at length the operative provisions and noted:

[13] A plaintiff who is successful but does not obtain an order for costs will have to recover significant damages in order to make the whole exercise worthwhile. The practical effect of these considerations is that what is required in order to show that a right of action would result in an award of damages sufficient to justify the bringing of an action on the right of action is a much larger award of damages than would have been considered sufficient to satisfy that test prior to the introduction of the statutory restrictions on damages and costs. I note that in Thompson v WorkCover Queensland [2011] QSC 197 McMurdo J said at [19] that awards in the range of $40,000 to $60,000 would not have been sufficient to justify the bringing of an action, because of a costs limitation which was to the same effect as the current limitation, but was then in s 316 of the Act, but in that case this conclusion was based on evidence.

[14] There was in this case no evidence as to what sort of an award of damages a plaintiff would need to recover in order to make an action economically viable in this sense, though counsel for the respondent readily conceded that the quantum would have to be more than $50,000. When assessing the economic value of the claim one must take into account and make allowance for the risk of failure on liability. If liability is not clear, in practical terms it means that the quantum, if the claim is successful, has to be that much more to justify taking the risk of failing.[11] In the present case it was certainly not conceded that the applicant had a good case on liability; indeed it was submitted that the applicant had also failed to show that there was evidence to establish the right of action apart from a defence founded on the expiration of the period of limitation. For reasons given below, I am not persuaded that that is made out, but for present purposes what matters is that the question of liability is contentious, and must be described as involving at least some real risk of failure. That is a matter relevant to the application of the test.

His Honour considered the authorities (Healy v Femdale Pty Ltd [1993] QCA 210; Greenhalgh v Bacas Training Ltd [2007] QCA 327; & HWC v Corporation of the Synod of the Diocese of Brisbane [2009] QCA 168 ) as to the means of knowledge under s 31 of the Limitation of Actions Act 1974 , but noted the decisions of Capricorn Coal Management Pty Ltd [1990] 2 Qd R 306 and Watters v Queensland Rail [2000] QCA 51[2001] 1 Qd R 448. These decisions were relevant in treating the material fact of a decisive nature by reference to when the applicant would not be able to work or that if the applicant kept working, it would make their condition worse.

His Honour found:

[22] On the basis of what he knew it was reasonable for him to expect that he would probably be able to continue in his job until he was of retirement age anyway even if he was aware of some risk to his employment. In these circumstances, it was reasonable for him not to have sought advice in relation to his legal position. In addition, if he had sought that advice it is not at all clear that he had a claim which was worth pursuing. It may be that, if there was no issue about liability, the applicant may have had a claim worth pursuing even at that stage, simply because of the risk to his employment, but in circumstances where liability was likely to be contentious, as it has proved to be, that factor should also be taken into account, and as a result it is not clear that at that stage the applicant ought to bring an action on the right of action in his own interest. It was really only in March 2015, when it became clear that the respondent no longer regarded him as fit to do the carpenter’s job, that the risk of losing his job became a probability, and shortly after that the certainty, of losing his job, so that the claim if successful would obtain a significant award of economic loss.

[23] It is apparent from the information that is in the notice of claim that the plaintiff’s net income in the 2011, 2012 and 2013 financial years was between $42,500 and $45,000. At the time when he returned to work the present value of his future earning capacity was probably not much more than $200,000 anyway, once it was discounted for contingencies, and bearing in mind the uncertainty as to liability, the fact that there was virtually no past economic loss, and the limited amount of general damages available for an injury of this nature, he would have to be confident of succeeding in his claim and of obtaining at least a significant fraction of this amount to make pursuit of the claim economically worthwhile.[15] I conclude on all the material I have seen that as at the end of 2013, if the applicant had taken proper advice, on the information then available the situation had not yet become one where the economic value of his right of action was sufficiently great to make it economically worthwhile bringing an action on it, let alone that it was in his interest, taking his circumstances into account, to bring such an action on the right of action. It would be reasonable to expect that a person in modest circumstances would be wary about litigating, particular if a significant amount had to come out from anything recovered to cover costs, and where there was a real risk of not recovering costs or of having to pay costs if his claim failed or if he was awarded less than the amount of the insurer’s final offer. If there is some real risk associated with liability, such person is likely to be particularly cautious about litigating.

His Honour was not persuaded that the claim of $280,000.00 in the notice of claim for damages was reflective of the worth of the claim and noted, “…There is no reason to be modest in nominating the particulars of damages in the context of a notice of claim.”[26]

His Honour distinguished the decision of Castillon v P&O Ports Ltd [2007] QCA 364 based on the available medical evidence.

In determining whether there was evidence to establish the right of action apart from a defence founded on the expiration of a period of limitation (Macrossan CJ in Wood v Glaxo Australia Pty Ltd [1994] 2 Qd R 431[18] at 434-5), His Honour found that it was very much a matter of impression from the material as to whether such evidence would be available at trial:

[38]… This issue is to be decided essentially on the impression on my mind from the material available, and it seems to me, on the material available, that it can reasonably be expected that there will be evidence at the trial which, if unopposed by other evidence, would be sufficient to prove the plaintiff’s case on liability. There is no dispute about proof of the plaintiff’s case on quantum. This is not to say that the issue of liability is free from risk for the plaintiff; I am not seeking to predict the outcome of a future trial, much less to indicate a probability of success on liability at such trial. That will depend on all the evidence available and before the Court at that time. But I consider that, approaching the matter in the way indicated in Wood, the applicant has shown that he has evidence to establish the right of action apart from a defence founded on the expiration of the limitation period. Both requirements for the discretion to extend the limitation period have therefore been satisfied.

His Honour distinguished Barnes v Smith [2011] QSC 259 where the applicant had failed on this point in a manual lifting type case. The point in difference being the lengthy period of work as opposed to a Barnes where it was isolated. Whilst, His Honour found it was not necessary to have expert evidence on the point, comfort and reliance was taken from the report of Dr Campbell to establish causation.

In the absence of prejudice the application was granted.

David Cormack – Brisbane Barrister & Mediator.

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