Material fact of a decisive character : Q-Comp appeal and Industrial Magistrate decision

Leigh v. State of Queensland [2010] QSC 227

Should the limitation period be extended?

[42] It was held in State of Queensland v Stephenson [2006] HCA 20; (2006) 226 CLR 197 at [19] (Stephenson) that the phrase “material fact of a decisive character relating to a right of action” was a composite expression, each element of which must be within the means of knowledge of an applicant at any particular time. In their joint judgment, Gummow, Hayne and Crennan JJ stated at [29]:

“The better view is that the means of knowledge (in the sense given by para (c) of s 30(1)) of a material fact is insufficient of itself to propel the applicant outside s 31(2)(a). For circumstances to run against the making of a successful extension application, the material fact must have ‘a decisive character’. Whether the decisive character is achieved by the applicant becoming aware of some new material fact, or whether the circumstances develop such that facts already known acquire a decisive character, is immaterial. It is true to say, as the plaintiffs submit in their written submissions, that in a sense none of the material facts relating to the applicant’s right of action is of a decisive character until a reasonable person ‘knowing those facts and having taken the appropriate advice on those facts, would regard those facts as showing’ the features described in sub-paras (i) and (ii) of s 30(1)(b). Whether that test has been satisfied at a particular point in time is a question for the court.”  

[43] The facts of Stephenson illustrate how known material facts may take on a decisive character in the light of subsequent events. Mr Stephenson was an undercover police officer who developed a psychiatric condition in mid-1997. He retired from the police force on medical grounds on 23 February 2001. He instituted an action for damages for personal injuries against his employer on 20 December 2001. Before the expiry of the limitation period in mid-2000, he was in possession of all the material facts for bringing a common law action, however, the commencement of an action might have put at risk his attempt to retire on medical grounds with consequent loss of significant retirement benefits and an earlier commencement of his action would have exacerbated his psychiatric disability. It was held that the material facts for bringing his common law action did not become of a decisive character until after his retirement.

[44] The joint judgment of Gummow, Hayne and Crennan JJ in Stephenson summarised at [30] the effect of the construction they had given to the expression “material fact of a decisive character”:

“The practical result of this construction is that an applicant always has at least one year to commence proceedings from the time when his or her knowledge of material facts (as defined in s 30(1)(a)) coincides with the circumstance that a reasonable person with the applicant’s knowledge would regard the facts as justifying and mandating that an action be brought in the applicant’s own interests (as in s 30(1)(b)).”

[45] Another helpful summary of the conditions for determining whether a material fact relating to a right of action is of a decisive character is found in Honour v Faminco Mining Services Pty Ltd as Trustee for the Faminco Trust (in liq) [2009] QCA 352 at [73][74].

[46] The decision in Charlton was given in respect of a legislative scheme where there was no entitlement of a worker to pursue a claim for damages for personal injuries against the employer where the worker had lodged an application for workers’ compensation for the injury that had been rejected and was the subject of review or appeal. The limitation period was therefore extended in that case to expire 12 months after the date of the decision of the Industrial Magistrate at validating the worker’s application for compensation. Williams JA (with whom the other members of the court agreed on this point) stated [45]:

Sections 30 and 31 of the Limitation of Actions Act were not drafted with the intricacies of the Act (particularly s 253) in mind. There were not in 1974 many, if any, statutory provisions such as s 253 of the Act. In my view when one considers the provisions of s 253 in the context of s 30 and s 31 of the Limitation of Actions Act it must be a decisive consideration that for the first time a person has become entitled to seek damages for an injury sustained in the course of employment. As already noted, until the decision of the Industrial Magistrate the appellant had no entitlement to commence proceedings seeking damages for an injury allegedly sustained in the course of his employment. The decision of the Industrial Magistrate had the effect of clothing facts already known with a decisive character, namely the consequence that a reasonable person taking appropriate advice on those facts would conclude that it was only then appropriate to commence proceedings.”

[47] Although the legislative scheme applying to the plaintiff can be used to distinguish the plaintiff’s position from that which allowed the worker to succeed in Charlton, the fact that the plaintiff did not seek to rely on s 237(1)(c) of the WCRA to give her notice of claim for damages prior to the expiry of the limitation period which may have commenced as early as February 2007 (on the basis the injury was first sustained in February 2004) does not preclude her from seeking an extension of the limitation period. This point was not addressed in Nooteboom where the finding was made at [46] that the applicant had all the knowledge relating to his right of action at the time that he applied for review of the rejection of his compensation application. The fact that s 237(1)(c) is incorporated as one of the circumstances that gives a worker an entitlement to seek damages for an injury sustained as a worker does not deprive an unresolved appeal to the Industrial Magistrate in respect of a rejection of an application for workers’ compensation of relevance to the consideration of whether the limitation period should be extended. The entitlement given by s 237(1)(c) must be, however, a relevant matter in determining what steps a reasonable person in the position of the plaintiff would have taken in her own interests before the expiry of the limitation period.

[48] In considering whether a material fact of a decisive character relating to the plaintiff’s right of action was not within her means of knowledge until after 10 March 2007, it is relevant to take into account that the plaintiff’s claim is for damages for a psychiatric injury and the difficulties associated in establishing the liability of an employer for such an injury. This is illustrated by the history of the litigation in Hegarty and the outcome in Koehler v Cerebos (Australia) Ltd [2005] HCA 15; (2005) 222 CLR 44.

[49] The plaintiff’s right to seek damages for personal injuries arising from her employment depends on her being able to show that she had suffered an “injury”, as defined in s 32 of the WCRA: s 237(1) of the WCRA. The plaintiff has to prove that her injury was not excluded under s 32 of the WCRA which was the same issue that was litigated before the Industrial Magistrate that was seriously contested against the plaintiff. The uncertainty for the plaintiff about her prospects in pursuing a claim for damages for the injury until that proceeding was resolved was no doubt compounded by the length of time that the plaintiff waited before the Industrial Magistrate’s decision was given.

[50] The course which the proceeding before the Industrial Magistrate took must have vindicated for the plaintiff her solicitors’ early advice that they would consider whether or not she should make a claim for common law damages after the appeal to the Industrial Magistrate was decided.

[51] It is also relevant to take into account that throughout the entire period between the time that the plaintiff consulted her solicitors and when she gave the notice of claim for damages she was receiving intensive treatment for her severe depression and anxiety.

[52] In bringing her appeal before the Industrial Magistrate, the plaintiff’s position was that her injury was of the nature that entitled her to compensation (and therefore would also entitle her to bring a personal injuries action). Although she did not have the evidence at that stage in the nature of Professor Lonne’s report, the plaintiff blamed her employer for lack of support and counselling that caused, or contributed to, the onset of her psychiatric injury and was in possession of a number of medical reports that linked her psychiatric injury with her work stresses. When the plaintiff ultimately succeeded before the Industrial Magistrate, the significant question mark over the plaintiff’s claim that she had suffered an injury within the meaning of the WCRA was removed.

[53] The plaintiff’s position whilst the Industrial Magistrate’s decision was reserved was similar to that of Mr Stephenson in Stephenson before his retirement on medical grounds was approved. The material facts for the plaintiff’s right of action were, arguably, known in broad terms to the plaintiff by the time that the hearing took place before the Industrial Magistrate, but they lacked the decisive character that would attract advice in relation to those facts that the plaintiff would have reasonable prospects of success in obtaining an award for damages, because of the uncertainty created by the contested hearing before the Industrial Magistrate and the pending decision. Would it have been reasonable for a person in the vulnerable state that the plaintiff was at that stage to speculate on the outcome of the Industrial Magistrate’s decision and rely on the entitlement given by s 237(1)(c) to preserve an action for common law damages with the risk that those further steps would be wasted? In applying the tests for determining whether material facts are of a decisive character that are set out in s 30(1)(b) of the Act, the position has to be considered from the viewpoint of a reasonable person, but taking into account the circumstances of the plaintiff. I am not satisfied that, in the circumstances of this matter, it was in the plaintiff’s own interests to pursue her claim while the Industrial Magistrate’s decision was reserved.

[54] It was not until at least the giving of the Industrial Magistrate’s decision in June 2007 that the material facts that had been known by the plaintiff at the time she pursued the appeal to the Industrial Magistrate then took on the decisive character that is required for the purpose of s 31(2) of the Act. To the extent that the plaintiff’s case for an extension of the limitation period was also argued on the basis that Professor Lonne’s report was the critical event for giving the facts known to the plaintiff the decisive character required to justify a common law action, it is not necessary to consider that argument, because of the conclusion that I have reached about the effect of the Industrial Magistrate’s decision.

[55] As contended for by the plaintiff, there is no real prejudice caused to the defendant by the extension of the limitation period to a date which is calculated by reference to the date of the giving of the notice of claim for damages. Because of the delays caused by the rejection of the application for workers’ compensation, the review and the appeal, the taking of steps to pursue the claim for damages prior to 10 March 2008 would not have resulted in any significantly different progression of the common law claim than occurred. The fact that the plaintiff’s solicitors were in error about the time limit for commencing her personal injuries action is not a reason to exercise the discretion to extend the limitation period against the plaintiff.

Brisbane Barrister – David Cormack

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