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LIMITATION BILL
Introduction and First Reading

Bill introduced, on motion by Mr J.A. McGinty (Attorney General), and read a first time.
Explanatory memorandum presented by the Attorney General.

Second Reading

MR J.A. McGINTY (Fremantle - Attorney General) [3.30 pm]: I move -

That the bill be now read a second time.

The purpose of the Limitation Bill 2005 is to update and modernise Western Australia’s law in relation to time limits for commencing civil legal proceedings and arbitrations. Currently, the most significant statute in this state related to limitation periods is the Limitation Act 1935, a statute that largely reflects, in language and substance, English limitation statutes dating back to the sixteenth century. The act is antiquated. Some of its language is archaic, a number of its provisions are obsolete or anomalous, and some aspects of the act are unnecessarily complex. Most importantly, its provisions are unfair and represent the harshest provisions in Australia. It is therefore proposed to overhaul the act and associated legislation that contain limitation or notice of action provisions. The objective is to achieve a modern limitations regime that is fairer and more flexible than our current law and that delivers a large measure of certainty.
The basis for these reforms stems from May 2002 when a discussion paper entitled “Limitations Law Reform” was released for public comment. The discussion paper took into account the recommendations of the Western Australian Law Reform Commission’s 1997 report titled “Limitation and Notice of Actions”. A number of comments and submissions were received in response to the discussion paper.

Since the release of that paper, the issue of limitations law has been the subject of further consideration in the context of reform of the law governing civil liability generally, both in the “Review of the Law of Negligence” report - commonly referred to as the Ipp report, which was released in September 2002 - and in the report of the Australian Health Ministers Advisory Council chaired by Professor Marcia Neave, which was also released in that month. The issue has also been canvassed in detail at a national level and a number of states and territories have introduced legislation to amend their limitation laws. Generally, the concern in those other states and territories has been to narrow, from a limitations perspective, the typically very broad circumstances in which proceedings in respect of personal injury may be brought. These reforms go hand in hand with the reforms contained in the Civil Liability Act 2002, particularly insofar as the introduction of a Bolam-type test for medical negligence is concerned.

The Limitation Bill largely mirrors the Limitation Bill 2004 introduced last year. There was considerable discussion and liaison with stakeholders in the finalisation of that bill.

The current limitations regime in Western Australia is a scheme of fixed limitation periods for identified causes of action, and the relevant period runs in each case from the time of the action’s accrual; that is, from when all the elements of the cause of action have come into existence. For matters involving personal injury, there is presently a limitation period of six years, which runs from the date of the injury or damage. The only exceptions are in respect of asbestos-related diseases, for which the limitation period of six years accrues not on the date the disease was suffered but on the date when knowledge of the key facts was acquired -

Ms S.E. Walker: Is that speech any different from the one you gave before?

Mr J.A. McGINTY: Yes, there have been some changes to the bill over the period.

Ms S.E. Walker interjected.

Mr J.A. McGINTY: No.

Ms S.E. Walker: I understood that it was referred to a committee.

Mr J.A. McGINTY: Yes, and it lapsed with the prorogation of Parliament

Ms S.E. Walker: Hon Peter Foss raised some issues that were not in that bill and I am not sure whether the Attorney General has considered them.

Mr J.A. McGINTY: I have not personally, but I am sure relevant state solicitors’ officers have done so.

Ms S.E. Walker: If they have, can I have a briefing on their consideration so that I know what the issues are?

Mr J.A. McGINTY: Absolutely. I will undertake to organise that.

Ms S.E. Walker: When you have finished the second reading will you tell us how it is different from the one before?

Mr J.A. McGINTY: Yes, I can do that. The second reading continues -

and in respect of children, persons with mental illness and defendants outside Australia at the time of accrual. There is no provision for extensions.

Other jurisdictions around the country, except for the Northern Territory, which has a general three-year period, have a six-year limitation period for civil claims generally but, only a three-year period for personal injury claims though the date varies from when the three-year period runs. All other jurisdictions provide their courts with a discretion to extend the limitation period in defined circumstances; for example, when such an extension is just and reasonable.

This bill proposes to amend our legislation to fall more into line with our counterparts. A scheme of fixed time periods running from the date of accrual of causes of action is to be retained, although with provision - most significantly in the context of claims for personal injury - for extension by a court of that period. The limitation period for the commencement of proceedings is to be six years unless otherwise specified.

The initial limitation period for the commencement of proceedings for personal injury will be three years, not the current six years. The court will be empowered to extend time for the commencement of proceedings for three years from when the victim knew, or ought to have known, that the physical cause of his or her injury was attributable to the conduct of a person, whether a defendant or not, and the identity of that person. In the case of latent injury or disease, the cause of action is to accrue not when the injury or disease occurred, which is the present position, but when it first manifests itself in a not insignificant form.

Clause 54 of the bill provides that a cause of action for damages relating to a personal injury to a person accrues when the only or earlier of such of the following events as are applicable occurs: either when the person becomes aware that he or she has sustained a not insignificant personal injury or the first symptom, clinical sign or other manifestation of personal injury consistent with the person having sustained a not insignificant personal injury. This will be of particular comfort to a range of vulnerable persons, from the victims of child sexual abuse to the victims of chemical accidents. The specific limitation provisions governing asbestos-related claims introduced by the Acts Amendment (Asbestos Related Diseases) Act 1983 have been retained. In relation to children, the law currently provides that the six-year period is suspended while they are minors and runs from the time they turn 18 years of age or from the date of accrual of the cause of action, whichever is later, except in the case of actions against the state or public authorities falling within section 47A of the Limitation Act 1935, when the six years runs from the date of accrual only. Again, the situation in other jurisdictions is largely comparable. In both Victoria and New South Wales, for example, the limitation period is suspended while the person is under age 18 unless that person is in the custody of a capable parent or guardian. However, the limitation period for a potential defendant in a close relationship with a victim runs from when the victim turns 25 years old. There is also provision for an extension when the parent’s or guardian’s failure to bring an action is irrational.

Under the bill, the limitation period will similarly be suspended for a child who is not in the custody of a parent or guardian. For a child who is in the custody of a parent or guardian, time is to run in the ordinary way, but the courts will again have a discretion to extend time until age 21 if the parent’s or guardian’s failure to commence proceedings was in the circumstances unreasonable. A six-year limitation period will apply to a child under 15 years, and a child aged 15 to 17 will have until age 21 to sue. When a potential defendant was the parent or guardian of a child, or otherwise in a close relationship with the child in the sense that the relationship reduced the prospect of tortious conduct being disclosed or of a dispassionate consideration by the parent or guardian of the appropriateness of proceedings, the child has until age 25 to bring proceedings.

The situation in relation to obstetrics is of particular significance. Under our current law an obstetrician can be sued by a person up to 24 years after his or her birth. This has resulted in increased insurance premiums for obstetricians and led to a shortage of obstetricians in the private sector. I met last year, prior to the introduction of this bill’s 2004 predecessor, with Dr Louise Farrell, Chairman of the Royal Australian and New Zealand College of Obstetricians and Gynaecologists. Dr Farrell subsequently wrote to me, and I quote from her letter dated 15 October 2004 -

This Bill will make a substantial difference to my colleagues in The Royal Australian and New Zealand College of Obstetricians and Gynaecologists. It will remove one of the major obstacles to retaining and recruiting Obstetricians. Medico-legal concerns were cited as one of the principal reasons for current Obstetricians leaving private Obstetric practice. The reforms will therefore help in addressing current difficulties and facilitate improving access to high quality care. This will assist in maintaining and improving outcomes for mothers and babies.

It is the very long “tail” for obstetrics that concerns many obstetricians. It pushes up already high indemnity costs, as insurance organisations find it difficult to estimate future liability and cannot remove potential liabilities from their books for up to 24 years. The long period of time available for obstetric claims makes it extremely difficult for the doctor to have any personal memory of the event when defending the claim. It also makes it very difficult to ensure that the case is judged by contemporaneous standards.
The situation will now be that if a person has suffered a personal injury in the course of being born or immediately after and arising from the birth, and has not begun an action before the commencement day of the new act, provided the limitation period has not already expired, the action must be commenced within six years of the commencement day or before the date on which the person turns 24, whichever is the earlier. The limitation period may be extended in certain circumstances under part 3 of the bill. This is an important safety net to ensure that children with legitimate claims are not disadvantaged. However, in general terms, the effect will be that the limitation clock, so to speak, of babies who are injured during birth before the bill comes into effect will start ticking from the date the bill becomes law.

According to the President of the Western Australian Branch of the Australian Medical Association, Dr Paul Skerritt, these changes will help to overcome the present obstacle of retaining and recruiting obstetricians, improve the quality of care for mothers and their babies, and generally create a fairer system for both patients and doctors.

The law currently provides that the six-year limitation period for a person with a disability is also suspended, but only when the person was insane at the time the cause of action accrued. In those circumstances, the six years runs from the date the person becomes sane or from the date of accrual of the cause of action, whichever is the later. The same exception applies in relation to the state or defined public authorities as outlined above in relation to children.

Other jurisdictions generally provide that the limitation period is suspended while a person is deemed to be under a disability, and some provide an exception when a person is represented by or is in the custody of a parent or the like. Under the proposed reforms, a person with a mental disability in this state may sue within 12 years of the accrual of the cause of action if he or she is not in the care of a guardian or an administrator. If the person is in the care of a guardian or an administrator, the limitation time is to run in the ordinary way subject to a discretion in the courts to extend time to 12 years from the action’s accrual if the guardian’s or administrator’s failure to commence proceedings was in the circumstances unreasonable. Again, where the potential defendant is in a close relationship with the victim, the person has three years from when that relationship ceases to bring proceedings, provided that 30 years have not elapsed since the cause of action accrued. Significantly, aside from the legislative provisions applicable to government entities, there is no facility in the Limitation Act for the extension of a limitation period by a court or otherwise.

Perhaps the final key aspect of these reforms is that the bill will bind the state. Under the law as it currently stands, the state is not bound by limitation periods. This will change so that actions by government and government entities will be barred if outside the prescribed limitation periods in the same way as any member of the community would be barred from bringing an action. The three exceptions to this reform are matters involving the recovery of tax, recovery of land and seeking to forfeit a ship.

I now briefly outline some of the other fundamental changes being made by the bill. First, the specific notice of action and limitation provisions of section 6 of the Crown Suits Act 1947 and section 47A of the Limitation Act, as well as the related provisions in the Fatal Accidents Act 1959, are to be dispensed with.

Second, limitation periods in contract other than personal injury claims are to continue to run from the date of the contractual breach.

Third, the courts are to be empowered, upon being satisfied that a victim’s failure to commence proceedings was attributable to fraudulent or other improper conduct of the proposed defendant, to extend time for the commencement of proceedings for three years from when the proceedings should reasonably have been brought.

Fourth, while on extension applications, the courts have a broad discretion as to whether to grant or refuse leave once the necessary criteria are met. The bill specifically requires the courts to have regard to the prospects of a fair trail and to whether the grant of leave would significantly prejudice the defendant.

Fifth, actions for contribution or indemnity are to be brought within two years of the date of the judgment or settlement.

Sixth, limitation periods are to be applied to all equitable actions relating to land, whether the interest is legal or equitable; to all actions on a mortgage; to all breaches of trust; to all actions against personal representatives; to all actions of account; and to all claims based on fraud or mistake. Claims for specific performance, injunction and other such equitable remedies are to be subject to limitation periods.

Seventh, the Limitation Bill incorporates recommendation 7 of the September 2003 report of the Western Australian Defamation Law Committee chaired by Wayne Martin, QC. Recommendation 7 provided that proceedings for defamation should be commenced within six months of awareness of the defamatory publication, although a court may extend time, if it thinks it just to do so, up to 12 months from when the defamed person became aware or should have become aware of the defamation and the identity of the person who published the defamation. The current Limitation Act allows actions for slander to be brought within two years of the utterance, and actions for libel to be brought within six years. Although the committee report did not address the position of children and the mentally disabled, the bill applies the general children and disability extension provisions to defamation claims, although subject in the absence of fraud or improper conduct to an ultimate six-year limitation period from publication.

Eighth, the bill’s provisions are to extend to arbitrations.

Ninth, the proposed limitation regime is not to be retrospective, with the exceptions outlined earlier in relation to causes of action accruing from when a latent disease or injury first manifested itself and in respect of obstetrics.

These reforms are the result of more than two years of consultation with the medical and legal fraternities. I have nothing further to add with respect to the key medical stakeholders to whom I have already referred, except to say that the Australian Medical Association, save for a preference that the childbirth provisions take effect from January this year, has given its unqualified support for these reforms. In terms of the legal fraternity, the Law Society of Western Australia has been integrally involved in the development of the reforms; although it has expressed some concerns, it is generally supportive. The Australian Plaintiff Lawyers Association, now known as the Australian Lawyers Alliance, has also been consulted. This bill will give Western Australia a fairer and more flexible limitations regime and will deliver a greater degree of certainty for both defendants and victims. I am therefore pleased to commend the Limitation Bill to the house.

Debate adjourned, on motion by Dr G.G. Jacobs.