Extensions of time
Time limits
The Limitation of Actions Act 1936 (SA) (the Act) provides time limits for bringing an action in South Australia. Generally an action is barred if it is not commenced within the relevant time limit.
Pursuant to section 35 of the Act, actions founded on simple contract and in tort must be commenced within six years after the cause of action arose. However, under section 36 of the Act, personal injury claims must be brought within 3 years after the cause of action, or 3 years after the injury first comes to the person’s knowledge.
General power to extend periods of limitation
Under section 48 of the Act, courts have a general power to extend the time limits of actions. This means that if an action is not otherwise issued within the time specified by the Act, the court has a power to allow the proceedings to be issued late.
There is no power to grant an extension of time unless the plaintiff ascertains a material fact. Even the court has to decide whether it is prepared to exercise its discretion in the plaintiff’s favour. In this regard, section 48(3)(b)(i) does not:
“(b) empower a court to extend a limitation of time prescribed by this Act unless it is satisfied-
that facts material to the plaintiff’s case were not ascertained by him until some point of time occurring within twelve months before the expiration of the period of limitation or occurring after the expiration of that period and that the action was instituted within twelve months after the ascertainment of those facts by the plaintiff (Our emphasis)
In other words, a plaintiff might be given leave to issue an action “out of time” if the plaintiff either:
- ascertained some new material fact within 12 months before the expiry of the limitation period (but did not actually issue proceedings until after the limitation period had expired), or
- ascertained the new material fact after the limitation period expired and then issued proceedings within 12 months of ascertaining that fact.
This naturally leads to the first question:
What is a material fact?
The principle of what constitutes a material fact was revisited by the Full Court of the Supreme Court in Pomeroy v Thwaites Witham & Anor [2000] SASC 44.
In Pomeroy, the appellant appealed against a decision of a District Court Judge refusing an order for an extension of time under section 48 of the Act.
In 1991 the appellant was a tenant in premises owned by the second respondent and managed by the first respondent. She was in arrears in rent and the Residential Tenancies Tribunal ordered that she vacate the premises. She sought an extension of time, but the Tribunal advised her it was unable to grant this. In June 1991, the locks were changed and the appellant was unable to retrieve her goods. In October 1991, her goods were sold at auction.
In August 1992, the appellant applied to the Tribunal for compensation of $45,000 for the losses she alleged that she sustained from the sale of her goods, based on replacement costs and other quotes or valuations. The Tribunal’s jurisdictional limit was $25,000, but the Tribunal gave leave for the application to be reinstated upon receipt of written consent by both parties to the application proceedings before the Tribunal, notwithstanding this limit. In November 1997, the respondent advised the Tribunal it did not consent to an increase in the Tribunal’s jurisdiction and the application was struck out.
In July 1997, the appellant was referred to Mr Kearns for a valuation of her goods. The market value was valued at $9,735. This did not include a valuation for jewellery, which was valued at $20,655 by quotes from jewellers.
In May 1998 (about 8 months after the limitation period for the appellant to issue proceedings had expired), the appellant brought proceedings claiming damages of $33,744. She sought an extension of time pursuant to section 48 on the basis of, among other things, the valuation she received from Mr Kearns in October 1997.
The appeal was allowed. The Full Court held that the appellant had satisfied the requirements of section 48(3)(b)(i). The Court could only grant the appellant an extension of time if it was satisfied that facts material to the appellant’s case were ascertained by her within 12 months prior to the expiration of the limitation period or occurred after the expiration of that period.
In the earlier Supreme Court decision of Wright v Donatelli (1995) 65 SASR 307, the Full Court commented that the test for the ascertainment of a material fact under section 48 of the Act is extremely modest. Their Honours commented that:
‘the solicitor must be bereft of all ingenuity and imagination who cannot in practically every case discover, or even create, some material fact that his out-of-time client can then ascertain within the limitation period in order to meet the first requirement of the statutory provision’.
The Court referred to the High Court decision of Sola Optical v Mills (1987) 163 CLR 628, where it was held that the requirement to demonstrate materiality to the case was a “broad general requirement that is capable of satisfaction by objective inquiry”. The High Court said, at page 636, that:
“A fact is material to the plaintiff’s case if it is both relevant to the issues to be proved if the plaintiff is to succeed in obtaining an award of damages sufficient to justify bringing the action and is of sufficient importance to be likely to have a bearing on the case.”
The High Court also held that for the purposes of section 48(3)(b)(i), it is not necessary that there be some interaction between the material fact and the plaintiff’s decision to sue.
Although the appellant in Pomeroy already knew that the goods possessed a market value, she did not have any information as to the amount of that market value before the valuation by Mr Kearns. The market value of the goods, as provided to her by Mr Kearns’ valuation, was a fact material to the issue of damages. Even if the valuation was speculative, this did not mean that it was not a fact material to the appellant’s case.
The Full Court held that where a plaintiff has ascertained the market value of goods and the amount is so insignificant in the context of the entire claim, it ceases to be a fact material to the plaintiff’s case because it is not likely to have a bearing on the case.
Once the court has decided that a material fact exists it then considers whether it is appropriate to exercise its discretion in the plaintiff’s favour and allow the extension of time.
Exercise of discretion
Even where the requirements of section 48(3)(b)(i) are satisfied, the Court is not empowered to extend the time within which to bring the proceedings unless it is also satisfied in all the circumstances of the case that it is just to grant the extension. In this case, the Full Court decided that the appellant’s knowledge of the time limitation and her attitude to it were significant in exercising this discretion. However, rather than exercise the discretion itself, the Full Court decided that this discretion is best exercised by a trial judge, not by the appeal court.
Fairness
The Court must also consider whether, in exercising their descretion to grant and extension of time, it is just to do so in all the circumstances of the case. The ultimate question to ask when dealing with an application to extend time is: “Can there be a fair trial?”
In respect to the general discretion of the court, section 48 (3b) sets out the following guidelines that the Court should have regard to:
(1) the period of extension sought and, in particular, whether the passage of time has prejudiced a fair trial; and
(2) the desirability of bringing litigation to an end within a reasonable period and thus promoting a more certain basis for the calculation of insurance premiums; and
(3) the nature and extent of the plaintiff’s loss and the conduct of the parties generally; and
(4) any other relevant factor.
In Ardoch Pty Ltd v Valuer-General
“In my opinion no party is entitled to an extension of time within which to appeal unless that party explains, with appropriate frankness and candour, the reasons why the party did not observe the Rules of Court and in particular the time limits imposed by those rules…The longer the delay the better the reasons need to be to explain that delay.”
Although His Honour found that the appellant and its solicitors could not adequately explain the delay in bringing the action, he found that much of the delay was caused by the appellant’s solicitors. Justice Debelle found that no prejudice would be suffered by the respondent and on the basis that the appellant should not be penalised for the delay of its solicitors exercised the Courts discretion and granted an extension of time.
More recently, in Jones v Griggs
Comment
In light of the decision in Pomeroy v Thwaites Witham & Anor it is difficult not to draw the conclusion that almost any fact will be regarded as material for the purposes of section 48. It seems that the only rider to this will be that it will not be regarded as material if it is so insignificant in the context of the entire claim that it could not be so regarded. As such “materiality” appears to have been interpreted as meaning something a bit more than “trifling significance.”
This is consistent with the comments of the Full Court in the earlier decision of Wright v Donatelli in which contained the comment that a material fact should be able to be discovered in practically every case unless the solicitor (for the plaintiff) is “bereft of all ingenuity and imagination.”
Once it has been established that a material fact has been ascertained, the Court will consider whether it is just to exercise their discretion and extend the time. It seems that unless exercising their discretion will cause undue hardship on the defendant, if the loss claimed is “not insignificant”, extending the time to bring the action will be justified in the circumstances of the case.
Revised October 2008
[1] [2006] SASR 26
[2] [2007] SASC 394
