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Psychiatric injury – limitation of actions

compensation law casenotes

On 10 March 2018, the applicant was a commercial airline pilot working on a Qantas linked flight operated by her employer, National Jet Systems Pty Ltd (NJS). 

The aircraft had two engines manufactured by Rolls Royce Deutschland Limited & Co (Rolls Royce), with one of the engines failing mid-flight with what was later found to be a crack in the turbine blade which caused it to fail, leading to other blades also failing. The applicant suffered psychiatric injuries including post-traumatic stress disorder. 

In May 2018, the applicant lodged an application for WorkCover before also liaising with the human resources officer, enquiring with respect to issues concerning the engine. The applicant was subsequently provided with a report in late August or early September 2018 from the employer, as to the circumstances of the engine failure (Cobham report). The applicant gave evidence that while she had read parts of the report at the time, she found it “highly triggering” so she “shelved it”.

Medical evidence identified that, subsequent to the incident, the applicant was experiencing frequent flash backs, reminders of the incident, was hypervigilant, had disrupted sleep and was waking in a panic-like state, with a diagnosis of post-traumatic stress disorder being made. The applicant had first seen a psychologist in May 2018. Subsequent medical evidence in 2020 again diagnosed post-traumatic stress disorder (the main cause being the engine failure), and that significant improvement in the foreseeable future was unlikely. 

On 9 March 2021, the applicant was granted leave to commence a proceeding against, in part, Eastern Australian Airlines Pty Ltd (EAA), and commenced proceedings against that party on the basis that it was responsible for the inspection, maintenance and service of the aircraft including the engines, and was negligent in the performance of those responsibilities, causing personal injury and loss.

Subsequent to the expiration of the applicant’s limitation date:

  • correspondence was forwarded by the solicitors for NJS to Rolls Royce, asserting that the failure of the cracked turbine blade was as a result of defects in the manufacture, installation or service and maintenance of the engines by Rolls Royce, and was in an area which was only capable of inspection by Rolls Royce
  • correspondence from EAA’s solicitors to the applicant’s solicitors identified that Cobham Aviation Services Engineering Pty Ltd (CASE) and EAA conducted routine aircraft maintenance, but neither was responsible for, nor had any involvement in inspecting, maintaining and servicing the engines, which were the responsibilities of Rolls Royce
  • correspondence was sent from EAA’s solicitors to Cobham Aviation Services Australia Pty Ltd (CASA) and CASE, claiming indemnity with respect to the applicant’s claim
    • this asserted CASA provided continuous airworthiness management organisation services, provided aircraft maintenance activities in respect of the aircraft and the engines, and both had failed to perform those services or to take reasonable care in the inspection, maintenance, repair, overhaul and modification of the aircraft and the relevant engine.

The applicant therefore brought an application against CASE, CASA and Rolls Royce (EAA did not appear at the application given leave to proceed had been granted) to extend her limitation date against those parties on the basis that, prior to the expiration of her limitation date, material facts not known to her were those which companies were responsible for maintaining; the aircraft and particularly the aircraft engines.

The applicant brought the application to extend the limitation period for the claim against Rolls Royce, CASE and CASA, on the basis that the facts asserted in that correspondence were material facts of a decisive nature relating to her rights of action. Until she knew the role of each party, particularly who was responsible for or involved in the maintenance of the engines and the aircraft, she could not determine the identity of the parties against which a cause of action lay.

The applicant additionally contended the relevant information became known to her or within her means of knowledge only on, or perhaps shortly after, the dates of the correspondence, all of which fell after one year before the limitation period expired. 

The respondents to the application relied on the applicant’s enquiries of May 2018, and the content of the Cobham report in August or September 2018, that material facts of a decisive nature (namely, the identity of the entities responsible for the various aspects of services of the engines and the aircraft) were known by the applicant, or within her means of knowledge, well before one year before the expiration of the limitation period.

Decision

  1. Pursuant to s31(2) of the Limitations of Actions Act 1974 (Qld), the period of limitation for the commencement of a proceeding by the applicant:
    (a) against the second respondent, be extended to 23 September 2022
    (b) against the third respondent, be extended to 26 April 2022
    (c) against the fourth respondent, be extended to 23 April 2022.

Ratio

The court identified that the discretion to extend the limitation period only arises under s31 if the applicant demonstrated, on evidence, that a material fact of a decisive nature is not within her means of knowledge until after one year before the limitation period expired, and that she has a right of action. 

In determining whether a fact was ‘within the means of knowledge’ of the applicant, not only must the applicant not have known that fact, but she must have ‘taken all reasonable steps to find out the fact’ by the relevant date. 

The reasonableness of the steps taken by an applicant to ascertain a material fact must be assessed on an objective basis, but with regard to the background and situation of the applicant, including (in appropriate cases) her psychiatric condition and its effects on her ability to find out the material fact.

The applicant must also satisfy that she, on the evidence, has a right of action against the respondents, but does not have to prove her case as such. The applicant can meet that requirement by pointing to the existence of evidence (which can reasonably be expected would be available) at the end of the trial, and which will, if unopposed by other evidence, be sufficient to prove her case.

Lastly, the applicant retains the onus of satisfying the court that there is a good reason to exercise the discretion by extending the limitation period, with the principal consideration being whether the claim may still be fairly litigated, so that a trial would not be unfair to the defendants. If a fair trial is unlikely, the discretion should not be exercised in the applicant’s favour.

The court accepted that the identify of a person responsible for the engine’s maintenance, the extent of that responsibility, and whether that person may have undertaken those negligently, are facts that are material to any cause of action. 

They also considered material facts of a decisive nature, as it is essential (in order to determine whether a proceeding might have a reasonable prospect of success) to identify the apparent cause of the relevant injury, the person who may have been negligent and that person’s relevant responsibilities. 

A reasonable person knowing those facts and having taken appropriate advice (in this case, legal and quite possibly engineering) on those facts, would regard them as necessary to know in order to justify the person taking legal action against the relevant person or persons. Conversely, without knowing those facts, such a person would not appreciate that she had a worthwhile action to pursue against particular persons, and that she should do so in her interests.

The court then considered whether the applicant did not know those facts and, if not, whether she took all reasonable steps to find out the facts in respect of each of the respondents within the limitation period. The court determined it was necessary that reference be made to what could reasonably be expected from the actual person in the circumstances of the applicant. 

By extension, it was necessary to consider the question in light of the applicant’s personal circumstances, including her psychiatric condition during the relevant period. In that regard, the court identified the applicant was already suffering post-traumatic stress disorder when given the Cobham report; accepting her evidence that she only read parts of the report and found it “triggering” so set it aside, inferring also that she continued to suffer from the condition throughout the remainder of the limitation period.

In considering knowledge on the part of the applicant, the court did not consider that the responses to the applicant’s questions in May 2018 made it clear “there was or may have been any negligence by any person that led to the engine failure”, nor was any person identified who may be negligent. At that stage, therefore, not only the identities of potential defendants but the existence of a cause of action were not known, or within the knowledge of the applicant.

The court did not accept the Cobham report would have alerted the applicant to the possibility that one or other (or both) of the Cobham respondents had any role in servicing the aircraft, or the vehicles, as it did not mention either company involved.

The applicant had no knowledge of the exact relationship between the parties until after her solicitors received the letter from EAA solicitors, dated 19 April 2021. Until then, she did not know, nor had the means of knowing, that CASE was involved in the maintenance and inspection of the engine.

The Cobham report however, in the court’s view, would have alerted an ordinary person reading it to the possible liability of Rolls Royce for either negligent manufacture of the turbine, negligent service of the engine, or negligent failure to recall this type of engine in light of four earlier, very similar turbine blade failures. 

The court considered that a person, or solicitor, might be expected to make enquiries of the applicant’s employer to ascertain who had responsibility for maintaining the aircraft (and its engines) at the relevant times.

This was on the basis that a person properly advised (or a solicitor experienced in personal injury litigation), upon reading the Cobham report, may seek advice from an aircraft maintenance engineer or another appropriately qualified expert. That is, with respect to who might have responsibility for maintenance of the blades in the engine, particularly given the Rolls Royce report stated it was “below platform”.

The correspondence from EAA and NJS solicitors, outside the limitation date, identified that it was impossible to inspect any ‘below platform’ components whilst an engine is on the wing of an aircraft, and a full engine strip by the engine manufacturer is required. Once such assertions had been made, they could be seen to direct the applicant’s lawyers to Rolls Royce as at least having some responsibility for relevant inspection and maintenance.

The legislation, however, speaks of a state of knowledge attainable by an actual person who has taken all reasonable steps, that person being the person who suffered particular injury. Having regard to the applicant’s psychiatric condition and her other priorities at the time she received the Cobham report, it was considered not unreasonable that the applicant paid little attention to the report, did not read it fully, and did not consider whether she may have a right of action against someone for damages for her illness.

Whilst the court formed the view with respect to the applicant, when her solicitors received the Cobham report they were not so affected, with the court finding they knew (or had means of knowing) Rolls Royce was a company that had some responsibilities for the engine, and there was an arguable case against it, by 9 February 2021. 

Specifically, the court identified that, by that date, the solicitors had a means of knowing sufficient information about Rolls Royce to determine, when properly advised, that an action against Rolls Royce would have a reasonable prospect of success, with an award of damages sufficient to justify bringing an action against the company. The applicant’s solicitors did not appear to reach that conclusion.

Whilst the court determined the applicant’s solicitors had the means of knowledge that Rolls Royce was probably an appropriate defendant, and did not commence a proceeding against that company within the limitation period (or take all reasonable steps to find out who was responsible for the engine’s maintenance before the limitation period expired), their delay in making those enquiries was not such as to mean they did not eventually take all reasonable steps to ascertain the necessary, relevant facts.

The court identified that if their conclusion was incorrect, it may raise the question of whether the facts were in the applicant’s means of knowledge because her solicitors were within the means of knowledge. However, the court’s view was that, although the solicitors acquired the means of knowledge after they received the Cobham report on 9 February 2021, they did not inform the applicant of Rolls Royce’s involvement until sometime after 16 April 2021, as they did not form the conclusion themselves. 

In any event, the court determined that the applicant’s solicitors did not receive the Cobham report and therefore did not know the information it contained, until within the last year of the limitation period.

The court concluded the applicant did not know or have the means of knowing the decisive material facts about Rolls Royce, until sometime after she provided the Cobham report to her solicitors, with the most likely date being sometime after 16 April 2021.

Similarly, the court concluded the applicant did not know or have the means of knowing the role of CASE (and possibly CASA) until, at the earliest, a short time after her solicitors received the letter of 19 April 2021. Further, that she did not learn more information about the involvement of CASA until correspondence dated 16 September 2021.

Accordingly, the applicant was found to satisfy the relevant criteria of s31(2)(a).

In considering the second limb as to whether there was evidence to establish a right of action, the court determined the applicant had met the test in demonstrating rights of action against CASE, CASA and Rolls Royce.  

Lastly, in determining whether the discretion should be exercised in the applicant’s favour, the court identified the usual consideration is whether the action can be fairly litigated as at the date of the application. More particularly, that the extension of time must not result in significant prejudice to the proposed defendant. None of the respondents put on evidence or asserted that any of them would be materially prejudiced if the discretion were exercised.

The court ordered the extension of the limitation date against each respondent, with the dates being extended for a year from the respective material facts against each of those respondents.

This compensation law casenote appears courtesy of Travis Schultz & Partners (TSP), where the author, Michael Callow, is a Special Counsel. As part of the firm’s commitment to providing ongoing legal education, TSP practitioners review relevant judgments and prepare case summaries for the legal profession. A free searchable catalogue of compensation law casenotes is available at schultzlaw.com.au/case-summaries (registration required). The full version of the judgments can be found at austlii.edu.au.

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