Mulpha Hotel Pty Ltd v Goff [2011] QCA 204

Issues: appeal on the issue of prejudice to be suffered on the adding of the applicant as a party and leave to commence proceedings pursuant to s.59(2)(b) of the Personal Injuries Proceedings Act 2002 (Qld)(PIPA), in circumstance where the applicant alleged it could not now claim contribution pursuant to s.40 of the Limitation Act 1974 (Qld)

Peter Lyons J (with whom McMurdo P and Wilson AJA concurred) considered the lengthy and complicated history in relation to the correct respondent to the claim, together with the “cooperative attitude” between the parties, which was responsible for the delays. His Honour considered the respondent had demonstrated a good reason, namely that the respondent considered it had commenced against the correct entity. This was against a background of the then solicitor for the applicant’s insurer considering it was the appropriate entity. Furthermore, his Honour rejected the contention that the s.40 of the Limitations Act operated in such circumstances as to expire before the cause of action had accrued.

Peter Lyons J

[71] It may be observed that careful attention to the facsimile transmission from Murrell Stephenson would have revealed what now appears to be the correct position, namely, that the applicant was the operator, and PTAL the owner, of the Sun Paradise. However that facsimile transmission also asserted that PTAL was a proper respondent to the claim. It did not suggest that there was no relevant relationship between the applicant and PTAL. The BOI Report provided no more reliable information.

[72] At the time when proceedings were commenced against PTAL, those represented by TressCox were in a position to know the true relationship between the applicant and PTAL. The respondent had no direct knowledge of that relationship; and limited means of acquiring such knowledge. The conduct of the solicitors representing Suncorp and the applicant played a very significant role in the commencement of proceedings against PTAL, rather than the applicant. They represented that PTAL, as owner of the Sun Paradise, was an appropriate entity to sue; that they acted for the insurer of the vessel; and that their client was responsible as to fifty per cent for the collision. It is almost inconceivable that, had the solicitors, in October and November 2004, suggested that PTAL had no responsibility for the operation of the Sun Paradise, the proceedings would have been commenced against it, and not the applicant.

[74] It follows that the District Court Judge was correct to find that “a cooperative attitude” between parties, including the solicitors for the applicant, was responsible for delays which occurred until September 2010; and that the applicant’s solicitors accepted that, after the initial notice, the matter proceeded at a leisurely pace, in an appropriate way for the purposes of the PIPA and of the respondent’s action.

[75] It could fairly be said that the history of the matter reveals that the actions taken on behalf of the respondent, considered as a whole, fell well short of conduct which could be characterised as a “conscientious effort to comply” with the requirements of the PIPA. The reason for the failure to commence proceedings against the applicant within three years of the collision, however, appears to be that until September 2010, the respondent (or perhaps more accurately, her legal advisers) had reasonably concluded that she had commenced proceedings against the entity responsible for the operation of the Sun Paradise. As was recognised by Chesterman J (as his Honour then was) in Morrison-Gardiner v Car Choice Pty Ltd,[9] each case must be decided on its individual merits. In the present case, the respondent has demonstrated good reason for the favourable exercise of discretion conferred by s 59(2)(d) of the PIPA.

[81] The critical question is whether “the period of limitation for the principal action” referred to in s 40(1)(b) of the Limitation Act, as defined in s 40(3), includes the period within which the principal action might be commenced, by virtue of an order made under s 59(2)(b) of the PIPA. The definition in s 40(3) of the Limitation Act refers to “the period of limitation prescribed by this Act or by any other enactment” for the commencement of the principal action.

[82] In Seltsam, it was held that the use of the word “prescribe” in conjunction with a reference to legislation, found in s 40(3) of the Limitation Act, included the period within which an action might be brought as a result of an order of the Court made under s 31(2) of the Limitation Act.[12] Section 31(2) provides that the Court “may order that the period of limitation for the action be extended”. It can be seen therefore that the language of s 31(2) is consistent with the variation of a limitation period.

[84] The plain intention of s 40 of the Limitation Act, therefore, is to provide a defendant in an action with a substantial period after the action against that person has commenced, within which to claim contribution. The cause of action on which such a claim is based does not accrue, for the purpose of the limitation period found in s 40(1)(a) of the Limitation Act, until either there is a judgment against the person who then claims contribution, or that person makes an agreement with another person fixing the amount of the liability of the person seeking to claim contribution.[14] The position formulated in the Limitation Act is similar to the view otherwise reached in respect of the accrual of a cause of action for contribution.[15]

[85] If the applicant’s submissions were accepted, it would mean that in a case such as the present case, the limitation period for its claim against another tortfeasor would expire before its cause of action had accrued. That can hardly have been the intention of the legislature in adopting s 40 of the Limitation Act.

[86] The language found in s 59 of the PIPA does not require acceptance of the applicant’s submissions. The applicant’s submissions point to the use of the expression “the period of limitation” in s 59, in a way that clearly applies to a period specified in the Limitation Act, or an extension of that period under the provisions of that Act; and to the absence of the use of that expression in connection with a period resulting from the application of s 59(2). However, that does not mean that the latter period is not a “period of limitation for the principal action” for the purposes of s 40 of the Limitation Act. Such a period is plainly a period which limits when a person might bring an action against another who might then seek contribution from yet another person. The heading to s 59 supports this characterisation of the period resulting from the application of s 59(2).

[87] These considerations lead to the conclusion that, where under a statute the Court allows a person to commence an action after the expiry of the period of limitation determined by reference to the Limitation Act, the limitation period for a claim for contribution is determined by reference to the longer period allowed by the Court. Accordingly, the applicant has not demonstrated relevant prejudice by reference to a potential claim against those associated with the operation of the Pride of Airlie.

Prejudice and delay

[88] The District Court Judge held that there was no evidence of what was referred to by McHugh J in Taylor as actual prejudice. That finding has not been challenged. It reflected an express concession at first instance.

[89] In this case, there is good reason not to attribute significant weight to the general prejudice said inevitably to occur simply from the passage of time. The Master and a member of the crew of the Sun Paradise gave evidence before the BOI. In the nature of things, it is likely that those associated with the operation of the Sun Paradise investigated in detail, the circumstances of the collision, in preparation for the BOI’s hearing. Senior Counsel for the applicant appeared to accept that this was likely; and there is no evidence to suggest otherwise.

[90] Beyond that, the applicant has been on notice since late in 2002 of the respondent’s intention to make a claim against it. Solicitors representing it, and its insurer, have over the subsequent years had the conduct of the investigation and consideration of the respondent’s claim. Those solicitors have, at the very least, acquiesced in the delays which have occurred, and have contributed materially to the fact that the respondent did not earlier commence proceedings against the applicant. In those circumstances, considerations of prejudice of this kind would not have warranted the refusal of the respondent’s application under s 59(2) of the PIPA. Moreover the applicant’s solicitors appear to have been by November 2004 in a position to assess the degree of the applicant’s responsibility for the collision.

Brisbane Barrister – David Cormack

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