Australia: Section 151D applications to extend the limitation period in work injury damages claims — more difficult with time

Last Updated: 12 December 2018
Article by James McEnaney

Key takeaways

  • Plaintiff lawyers should consider putting any potential defendant on notice of a possible claim in order to combat any later argument of presumptive prejudice.
  • The more details of the proposed claim that are provided the more likely the defendant will be able to preserve any necessary evidence.
  • In some cases it may be prudent to have the plaintiff assessed to determine whether their impairment is “fully ascertainable” in order to stop time from running.

Introduction

Applications to extend the limitation period in work injury damages matters are typically a risky proposition, particularly given the wide and unfettered discretion granted to the court. Plaintiff personal injury practitioners should consider the lessons from Gower v New South Wales1 (Gower), and in particular the reasoning of his Honour Basten JA. This article assumes some knowledge of the practice of work injury damages claims.

Key points:

  • If Basten JA’s reasoning in Gower is adopted, injured workers must bring a claim for permanent impairment irrespective of whether their condition is stable or their impairment is fully ascertainable within the 3-year limitation period, as this creates a path to a Ch 7 medical dispute that stops the limitation period from running pursuant to s 151DA(1)(a) of the Workers Compensation Act 1987 (NSW).
  • Adopting instead the (gentler) majority view in Gower, injured workers should continue to give conditional notice of a damages claim2 at the same time as making their claim for at least 15% whole person impairment in order to fend off prospective claims of prejudice by the defendant when the case is eventually heard.
  • Workers should be sufficiently precise in early particulars and draft pleadings to allow the defendant a reasonable understanding of what evidence should be obtained or preserved to make out a defence case later.
  • Any applicant seeking leave under s 151D should approach the court with a reasonable and detailed explanation for their delay and be able to demonstrate both a worthwhile claim and that the respondent will not suffer actual prejudice as a consequence of the delay.
  • A plaintiff is not required to file a motion for a grant of leave pursuant to s 151D in advance of the hearing of their claim, but should obviously do so in reply to a defendant’s motion for summary dismissal for want of that leave in advance of the trial.

Facts and overview

Mr Gower was injured on 12 September 2003 when, while teaching at West Wallsend High School, he was hit in the face by a soccer ball thrown by a student. Mr Gower developed a major depressive disorder, which would become sufficiently serious by 2014 as to result in an assessment of 15% whole person impairment (a necessary precondition for claiming work injury damages from his employer).

In (partial) explanation of the apparent delay in his case between 2003 and 2012, Mr Gower was assessed on two occasions by a psychiatrist for determination of his whole person impairment. Both concluded his condition had not stabilised, and declined to assess his impairment as it was not yet “fully ascertainable”. Mr Gower finally brought the claim in 2012, in excess of 15% impairment. The claim was disputed by the relevant insurer, and it was only in early 2014 that the dispute was resolved in the Workers Compensation Commission.

Mr Gower gave notice of his claim for work injury damages in September 2014. After extensive procedural skirmishes, the parties proceeded to the District Court, and lodged opposing motions relating to the extension of time required by the plaintiff to have commenced his action in court.

On 24 March 2017, her Honour Gibson DCJ gave reasons in the matter, finding for the State and refusing Mr Gower leave to continue his claim. Her Honour concluded that owing to a number of factors:

a fair trial [would not be] merely unlikely but impossible, and that it [would] not be fair and just, or in the interests of justice, to grant the extension of time …3

One of the grounds reasoned by her Honour was that Mr Gower had allowed the limitation period to expire through his conduct in failing to claim permanent impairment compensation until 2012.

The matter was appealed to the Court of Appeal by Mr Gower. Mr Gower’s primary contention was that he had not “failed” to bring any such claim, as his permanent impairment was not fully ascertainable until 2012 (following which he proceeded reasonably expeditiously).

Ultimately, his case was dismissed although the court split. The court held (Simpson AJA dissenting) that it would not be fair to permit a trial where a key piece of evidence to make out the plaintiff’s case could not be tested by the defendant owing to the passage of time.

The case is noteworthy for the decision by his Honour Basten JA on managing the limitation period in the jurisdiction.

Basten JA’s decision:

It is apparent from the legislative scheme that no claim for work injury damages need be brought outside the limitation period because there is doubt about whether the degree of permanent impairment suffered through the injury is yet fully ascertainable.4

This is the core conclusion of Basten JA’s decision in Gower. Its significance is apparent if one considers the frequency with which the court considers extension of limitation period applications in work injury damages matters. Such limitation period applications are commonplace in the jurisdiction.

As in the case of Gower, many (even most) workers do not satisfy the 15% permanent impairment threshold to claim damages within 3 years. These workers must effectively satisfy the court that a grant of leave to extend time is just and fair in the circumstances, as well as then succeeding in their primary case.

The bar to overcome for this leave is set at an appropriate level, given the beneficial nature of the scheme and the way in which the court has previously taken up arguments like Mr Gower’s with ease. Plaintiffs often obtain a grant of leave (see again Davis v Qantas Airways Ltd,5 particularly). From a case strategy perspective, it remains a significant “stress” point for plaintiff damages cases — a point at which fatal risk is introduced (since without leave to extend time, even a worthy case must be dismissed), and therefore a significant weapon for a defendant to employ against a plaintiff in negotiations to that point. No doubt the Gower case was also a timely and healthy reminder that the court’s discretion should not be assumed by an injured worker.

For the purposes of discussion, his Honour assumes a worker has suffered an injury in circumstances suggestive of actionable “negligence” on their employer’s behalf, and the worker’s degree of permanent impairment is not stable or fully ascertainable prior to the limitation period expiring on the third anniversary of the date of injury.

In those circumstances, he proposes that:

  • the worker lodge a claim for permanent impairment compensation without identifying the exact degree of impairment that has resulted
  • the insurer ought then to dispute the claim, as the degree of that impairment cannot be “fully ascertainable” at the time the claim is assessed
  • the worker would then apply to the Workers Compensation Commission for a referral to an approved medical specialist (AMS) to consider whether the impairment was fully ascertainable

In these circumstances, time would not run by virtue of s 151DA(1)(a), and would only begin to run again once the AMS had determined that the impairment had become fully ascertainable.

This is a prescriptive method for “stopping time”, but from a practical perspective it presents great difficulties given the workers compensation scheme currently.

In practice

With respect, it would seem quite unlikely that plaintiff practices will adopt Basten JA’s approach with any regularity, or perhaps at all.

There appear to be a number of attendant problems with this approach:

  1. It imposes significant work on practitioners to build and prosecute cases up to the stage of an AMS for the sole purpose of establishing that a worker’s impairment is not “fully ascertainable”.
  2. It does not appear to account for the chilling effect that s 66(1A) has undoubtedly had on when workers bring permanent impairment claims in the context of their midterm future health.
  3. It would likely place an additional cost and time burden on an already strained commission to arrange medical appointments in a significant number of cases (on multiple occasions) to assess whether a worker’s impairment had become “fully ascertainable”.
  4. It does not fully account for the complexity of a plaintiff lawyer’s obligations under the Workers Compensation Independent Review Office system to prosecute cases with forward-looking funding being needed at each step.
  5. It would be burdensome on practices given the unresponsive costs regulations in addition to point
  6. And perhaps most of all, the problem may already be simply resolved by plaintiff-workers giving employer-defendants notice of damages claims as early as possible and with sufficiently detailed pleadings of the case they intend to run.

Conclusion

It remains to be seen whether his Honour’s approach will be taken up wholeheartedly in the District Court — if Davis v Qantas Airways Ltd which followed Gower is any indication, the court did not grapple with Basten JA’s reasoning, and the court noted that on the facts it was distinguishable as Mr Davis’s lawyers had given notice of an intention to claim damages 4 years before Mr Davis’s permanent impairment was assessed at 15%,6 rather than only several months after it had been assessed in Mr Gower’s case.

For plaintiff lawyers, it remains best practice to give notice of an intention to claim damages as early as possible, and with as much clarity and detail as possible of the case that will be made. This will not keep the limitation period from expiring, but is a powerful argument against any suggestion that presumptive prejudice occasioned by the inevitable passing of time has been converted into an actual prejudice to the defendant.

Footnotes

1 Gower v New South Wales [2018] NSWCA132; BC201805281.

2 Workplace Injury Management and Workers Compensation Act 1998 (NSW), s 282.

3 Gower v New South Wales [2017] NSWDC 60; BC201740149 at [122].

4 Above n 1, at [23].

5 Davis v Qantas Airways Ltd [2018] NSWDC 260; BC201840499.

6 Above n 5, at [22]–[23].

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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