Extension of time for bringing personal injury proceedings in South Australia
Meaning of “major significance on assessment of loss“
Ireland v Wightman  SASCFC 52
On 28 May 2014, the South Australian Full Supreme Court handed down its decision in Ireland v Wightman  SASCFC 52, overturning the decision of the South Australian Supreme Court in the matter of Ireland v Wightman  SASC139.
The Supreme Court judgment itself was in respect of an appeal from a Magistrate’s decision that had granted an extension of time to a plaintiff injured in a motor vehicle collision. In dismissing that appeal brought on behalf of the Compulsory Third Party (CTP) insurer, his Honour Justice Blue reviewed the qualifying requirements contained in section 48 of the Limitation of Actions Act 1936 (SA) (the Act) as to when a Court would favourably exercise its discretion to extend the time for the commencement of proceedings in personal injury cases.
The CTP insurer successfully appealed the Supreme Court judgment. We now consider the Full Court’s reasoning.
Discretion to extend the limitation period
In South Australia, legal proceedings seeking damages for personal injury must be commenced within 3 years of the cause of action accruing. However, Courts have the discretion to extend that limitation period when:
- The action is commenced within 12 months of the plaintiff ascertaining previously unknown “facts material” to his or her case; or
- The failure to commence the action within time was due to the defendant’s representations or conduct; and
- The court is satisfied that all the circumstances of the case it is “just” to grant the extension of time.
Section 48(3) of the Act stipulates that facts are material if they:
- Form an essential element of the plaintiff’s cause of action; or
- Would have major significance on the assessment of the plaintiff’s loss.
Wightman suffered personal injury in a motor vehicle collision on 13 February 2005. His physical injuries included a dislocated right shoulder and a fractured left wrist. He also claimed to have suffered an adjustment disorder with anxiety.
Magistrates Court proceedings
Wightman commenced proceedings in the Magistrates Court on 11 August 2011, some 3 years and 6 months after the limitation period under section 36 of the Act had expired. In seeking an extension of time pursuant to section 48 of the Act, Wightman claimed that he did not commence proceedings within time because he feared reprisals from Ireland’s family whom he believed had connections with a well known “bikie” club. He claimed it was not until November 2010 that he learned from his solicitor that the CTP insurer and not Ireland personally, would respond to the claim.
In support of his application for an extension of time, Wightman relied on opinions contained in the report of a psychologist to the effect that he was suffering a recognised psychiatric illness as a result of the collision and he was still suffering emotional and psychiatric effects. Wightman read the report in April 2011 and commenced proceedings four months later.
In granting an extension of time, the Magistrate found that the facts learned by Wightman from reading the psychologist’s report formed an essential element of his cause of action and would have major significance on an assessment of his loss. The CTP insurer challenged both findings.
Appeal to Supreme Court
His Honour Justice Blue rejected Wightman’s argument that suffering an adjustment disorder formed an essential element of his cause of action. His Honour reiterated the common law principle (preserved by the codification of the law of negligence in the Act) that there is a single indivisible cause of action for all personal injury and loss caused by negligence and the fact that Wightman had learned that he suffered additional loss over and above his physical injuries could not be characterised as relating to an essential element of his cause of action.
His Honour did, however, find that suffering an adjustment disorder would have a major significance on an assessment of Wightman’s loss and was therefore a fact material to this case. His Honour determined that an “evaluative judgment” was required having regard to the plaintiff’s knowledge at the time of learning the new fact and involved weighing the strength and importance of the new fact against the existing facts of which the plaintiff was already aware, stating:
It is simply a matter of weighing holistically the significance of the fact on the assessment considering its relative and absolute impact on the assessment of loss.
Although not undertaking an assessment of the various heads of damage, his Honour considered that the overall award of damages for Wightman’s combined physical and psychiatric injuries would be at least 50% and possibly as much as 100% higher than an award of damages for his physical injuries alone.
The CTP insurer appealed.
Appeal to Full Supreme Court
The Full Court noted that this was the first occasion it had been called upon to determine the meaning and application of section 48(3a) of the Act.
The issue for consideration by the Full Court was whether the facts disclosed in the psychological report would have a major significance on the assessment of Wightman’s loss within the meaning of section 48(3a)(b) of the Act and therefore be a “fact material to the plaintiff’s case” for the purpose of section 43(3)(b)(i) of the Act.
The Full Court’s substantive reasoning began with a review of the Second Reading speech delivered in the Legislative Council of the South Australian Parliament at the time amendments to section 48 of the Act were introduced in 2003. The Full Court noted the then Government’s view that extensions of time were readily available and that material facts often emerged in the form of a new medical report. The Government contended that extensions should only be available if a plaintiff could show that a newly discovered fact formed an essential part of the plaintiff’s claim or would have a major significance on the assessment of the plaintiff’s loss.
The Full Court emphasised the requirement that the material facts must have a “major” significance on the assessment of a plaintiff’s loss. In considering the meaning of “major significance”, the Court rejected the CTP insurer’s ambitious argument that the newly discovered fact must have a greater significance on an assessment of the plaintiff’s loss than the facts previously known and that the new fact should at least double the plaintiff’s entitlement to compensation. The Court considered that in the context of Section 48(3a)(b) the word major should be interpreted to mean “very important” and that a newly discovered fact may be regarded as material to the plaintiff’s case if it would be very important in the assessment of the loss.
The Full Court found that the importance of the new fact is to be determined by comparing the assessment of the plaintiff’s loss without the newly discovered fact being known and the assessment after the fact is ascertained. The Court said:
The statutory test will be satisfied if there would be a major (i.e. very important) difference between the two assessments.
The Court considered that this interpretation was consistent with the example set out in the legislation under the text of section 48 (3a).
The Full Court confirmed Blue J’s preference to measure the impact of the new fact on the assessment of the loss in relative rather than absolute terms and considered that a precise mathematical or numerical exercise was not required. The Court said:
Accordingly S48(3a) requires an overall judgement to be made in light of the evidence then available as to whether the newly found fact would be of major (i.e. very important) significance on the assessment of loss. However, where the available evidence permits a numerical exercise may sometimes be helpful.
The Full Court had regard to the opinions expressed in the psychologists report that the adjustment disorder with anxiety suffered by Wightman had not caused him to lose time from work nor was further treatment contemplated. The Court noted the reported resolution of some of Wightman’s psychological symptoms and that his condition had stabilised.
The Full Court concluded that both the Magistrate at first instance and Blue J on appeal had fallen into error by concluding that the psychologists report would have a major effect on the assessment of Wightman’s loss. The opinion of Blue J that the psychological injuries suffered by Wightman would lead to compensation for future treatment and loss of earning capacity was contrary to the psychological evidence presented in support of the application for an extension of time.
The Full Court’s clarification of section 48(3a)(b) of the Act consequent upon the 2004 amendments is important. Sola Optical Australia Pty Ltd v Mills is often cited as the authority for the proposition that findings consequent on a medical assessment in relation to the effect of physical disability upon the capacity of a person to function is generally speaking a fact material to the issue of damages even where the plaintiff is aware of the disability. A practice emerged whereby plaintiffs’ legal advisors obtained medical and/or psychiatric reports that identified a previous unknown medical or psychiatric condition or opined that a previously known condition now assumed more significance for the primary if not the sole purpose of satisfying the requirements to obtain an extension of time. The mere expression of such opinions was often considered to be a sufficient material fact.
It is now clear that it is not enough to obtain a report identifying a previously unknown injury or that a previously known injury now causes some level of previously unknown disability. To satisfy the requirement that the new fact be material for the purpose of section 48(3a)(b) of the Act a plaintiff will need to demonstrate by way of comparative assessment that the new fact is of major significance as that term has now been interpreted by the Full Court.
Date: 10 July 2014