SUPREME COURT OF QUEENSLAND

1. THE COURT:  This is an appeal against judgment for the defendants in a District Court action for damages for personal injuries.  There were two plaints issued, the first of which was filed in 1997.  That claimed damages for personal injuries and property damage arising out of a motor collision which occurred on 1 June 1996.  The second was begun out of time, on 30 June 1999, and it claimed damages for personal injuries only (not property damage) relating to the same accident.  The judge gave judgment for the defendants on an application to determine questions in advance of trial.

2. The reason for institution of the second plaint was that the plaintiff, now appellant, had not complied with relevant requirements of the Motor Accident Insurance Act 1994, in relation to the first plaint;  it is common ground that the appellant can rely upon the second plaint only and it was the action begun by that plaint which was dismissed.  It is also accepted that the second action was brought out of time and the first question is whether events which occurred in August 1998, between the dates of the two plaints, estopped the respondents from reliance on the limitation point;  a second point argued was that there was a contract not to plead the limitation point.  It should be mentioned that the first plaint was at one stage amended so as to delete the claim for personal injuries, but that seems to have no present relevance. 

3. On 18 August 1998, long before the expiration of the limitation period, the solicitor for the second respondent (the insurer) orally admitted liability for the appellant's injuries and on 19 August 1998 the appellant's solicitors wrote confirming that conversation. On 24 August 1998 the respondents' solicitor wrote a letter, received by the appellant's solicitor on 26 August 1998, enclosing "a letter from our client insurer in relation to an admission of liability for the circumstances of the accident" and asking for documents to be sent relating to quantum. That letter from the insurer, dated 3 July 1998, included the following –

"... we hereby give notice that we admit liability in full for the circumstances of the accident only.

We do not admit that your client suffered any personal injury or other loss or damage as a consequence of the accident and therefore do not admit liability for your client's motor vehicle accident claim.

Notwithstanding the admission ... we reserve our right to rely on the Limitation of Actions Act, 1974 should your client not commence an action for damages in respect of personal injury which he alleges resulted from the accident within the applicable statutory limitation period".

(Another letter dated 3 July 1998 was also enclosed, but it requires no discussion).  From that date, 26 August 1998, to 28 May 1999, 15 letters passed between the solicitors with a view to arranging settlement of the matter and these included 10 letters emanating from the respondents' solicitor;  it is clear that the appellant's solicitor did not move the matter towards settlement as expeditiously as possible.  None of these letters made any reference to the reservation concerning the Limitation of Actions Act contained in the letter of 3 July 1998, part of which we have quoted, nor any reference to bringing a further suit, in time, referred to in that letter.  The last letter relevant to possible settlement was sent on 28 May 1999 by the appellant's solicitor and it was replied to by letter dated 7 June 1999 from the respondents' solicitor, which letter asked whether proceedings had been begun and said that if they had not the claim was statute-barred;  the time-limit had expired six days earlier.

4. The judge decided the estoppel point against the appellant on the basis of documentary evidence only; but his Honour was allowed to and did draw inferences from the documents and certain points were admitted.

5. There were two admissions of liability on the part of the second respondent, the first by letter dated 3 July 1998 and the second in a telephone call made on 18 August 1988;  the former was, however, not received by the solicitor for the appellant until the latter had occurred;  that is, the letter was not received until eight days after the phone conversation.  One aspect of the problem before the learned primary judge was the relationship between the two admissions.  That of 3 July 1998 was qualified by reference to the limitation statute and by the non-admission that any loss had been suffered;  as well, it may be that the reference to "liability ... for the circumstances of the accident only" implies some further reservation. The admission of 18 August 1998 was unqualified.  But the admissions were communicated in the reverse order.

6. It is common ground that as a result of the admission of 18 August 1998 the appellant's solicitor assumed that liability for the injuries had been admitted and that there was therefore no need to bring an action for damages within the limitation period. And the judge found that on receipt of the letter of 24 August 1998, enclosing that of 3 July 1998, the appellant's solicitor assumed that the limited admission of liability contained in the letter of 3 July 1998 –

"had been overtaken by the oral advice of [the respondents' solicitor] ... made in the telephone conversation on 18 August 1998 to the effect that liability for the plaintiff's injuries had been admitted and that the limited liability admitted by the second [respondent] in its letter of 3 July, 1998 no longer applied".

7. The judge also found that the assumption made, as a result of the admission of 18 August 1998, by the appellant's solicitor continued until receipt of the letter dated 7 June 1999 and that but for that assumption the appellant's solicitors would have begun an action for damages before 1 June 1999.  The appellant says that he derives assistance from the failure of the respondents, after 26 August 1998, to dispel the assumption on which, as they must have known, the appellant's solicitor was acting;  see Newton, Bellamy and Wolfe v SGIO (Qld) [1986] 1 Qd R 431 at 437/30. 

8. The essence of the respondents' case is that, their counsel submits, the appellant had no right to ignore the content of the letter of 3 July 1998, received after the admission of 18 August 1998. It must be said in favour of the respondents' position that the letter of 3 July 1998 can be regarded as a formal and detailed statement of the respondents' position and it is argued, in effect, that a prudent solicitor would have regarded it as supplanting the unqualified admission earlier made. But the last communication between the parties, before the letter of 24 August 1998 which enclosed letters of 3 July 1998, was one which confirmed the respondents' solicitor's advice that liability was admitted. If it was intended substantially to qualify that admission, one would have expected that to be stated either in the letter of the respondents' solicitors of 24 August 1998 or in some subsequent letter.

9. The judge held in substance that, having received the letter of 24 August 1998 with its enclosures, the appellant's solicitor could no longer reasonably rely on the unqualified admission of 18 August 1998. It is not clear that his Honour was of the view that the solicitor should have thought the earlier unqualified admission had been entirely replaced by an admission qualified in at least two important respects. The judge found:

"that the assumption in relation to the limited admission of liability contained in the second defendant's letter of 3 July 1998 had been overtaken by the more extensive admission of liability conveyed in Mr Pinder's telephone conversation of 8 (sic) August.".

If the two admissions are to be considered in that order – i.e. in the order of the date that they were made, rather than the date they were received – it is hard to see how the judge's conclusion that the appellant's solicitor misinterpreted the situation can be upheld.  This is so because the admission of 18 August was made without any reservation.  Perhaps inconsistently with the view set out in the passage just quoted, the judge decided the case on the basis that one of the qualifications (as to the limitation statute) in the admission which the judge treated as earlier – that of 3 July – survived the impact of the later, unqualified, admission.  As counsel for the appellant (Mr Thompson SC) pointed out, there is a difficulty in fastening on one only of the qualifications in the letter of 3 July, without going so far as to hold that on receipt of such letter the appellant's solicitor was obliged to treat the oral admission of 18 August as no longer relevant. 

10. In our opinion, caution should have induced the appellant's solicitor to have written, on receipt of the letter of 24 August, again confirming the unqualified admission of 18 August and inviting the respondents' solicitor to explain whether that was to be treated as replaced by the qualified admission in the letter of 3 July. What the solicitor did, on the judge's finding, was to continue making the assumption which had been induced by the admission of 18 August.

11. In Newton, Bellamy and Wolfe (above), solicitors wrote to a motor vehicle insurer saying that they had been instructed to sue for damages for personal injuries.  Later the insurer wrote a letter including the statement that "it is confirmed that liability is not in issue" and negotiations for settlement took place.  Ultimately, an action was begun, but out of time.  The Full Court held that it had been implicitly agreed that a time limitation would not be pleaded.  That was a contract case, but the view taken by the Court assists the appellant here, in resisting the conclusion that his solicitor's understanding of the position was an unreasonable one.

12. In Morris v FAI General Insurance Company Limited [1996] 1 Qd R 495, the facts were somewhat similar to those in Newton, Bellamy and Wolfe, but the plaintiff proceeded on the basis of estoppel, not contract.  The judgment supports the view that an admission of liability may imply that the time limitation will not, if it becomes necessary to resolve a difference about quantum by litigation, be pleaded.  Presumably the estoppel would not avail the representee forever;  if no action were begun by the limitation date the representor could perhaps, on reasonable notice, withdraw the representation.  The argument for the respondents relied on the fact that in Morris the admission of liability was closer to the last date for suit than it was in the present case, and it is true that that factual difference exists.

13. Till v The Nominal Defendant and Mulcair v Puckering [1999] QCA 490;  Appeal Nos 2676 and 2558 of 1999, 26 November 1999, were appeals dealt with together, in which an admission of liability was made and allowed to be resiled from.  The only issues raised were whether an admission made under s 41(1)(b) of the Motor Accident Insurance Act 1994 could under that statute be withdrawn, and estoppel.  The latter argument failed because there was no detriment proved.  No question of the limitation statute arose.  As to contract not being argued, it may be assumed that the difficulty was lack of consideration.  In any event, nothing said in Till affects the legal proposition established by Morris:  that an unqualified admission of liability, at least when coupled with an indication of intention to try to reach agreement about quantum, may give rise to an estoppel preventing a plea of the limitation statute.

14. In argument before us, there was much discussion about the effect of the obligation cast upon insurers by s 41(1)(b) of the Motor Accident Insurance Act 1994, of either admitting liability in full or in part, or denying it.  Neither of the admissions discussed was such a notice as is contemplated by s 41(1)(b).  The admission of 18 August 1998 was not in writing.  The other admission was neither a full admission of liability nor an admission in part "expressed as a percentage" as s 41(1)(b) requires.  It was not a full admission of liability because of the use of the expression "for the circumstances of the accident only" (the meaning of which is obscure) and of the statement "We ... do not admit liability for your client's motor vehicle accident claim".  Had there been an admission of liability within the terms of s 41 of the Act, as there was not, it would have been relevant to discuss whether such an admission made, so to speak, under statutory compulsion, would ever give rise to an estoppel;  that problem does not arise here.

15. It is necessary to consider whether the assumption which was adhered to from the date of admission of liability until the 3 year time limit had expired was one which affected the respondents' rights, because (to adapt the language of Deane J) the respondents played such a part in the adoption of and persistence in the assumption that it would be unjust and oppressive if the respondents were to depart from it:  Commonwealth v Verwayen (1990) 170 CLR 394 at 444.  We have referred above to the fact that, during the desultory efforts to reach a settlement which followed receipt of the letter of 24 August 1998, nothing was done or said to dispel the assumption which was, as found by the primary judge, made by the appellant's solicitor.  In Morris the principal judgment includes the following:

"... the question becomes whether it would be unjust and oppressive on the part of the appellant to depart from [the assumption].  It was not necessary for the respondent to show that every recipient of such a letter would treat it as making the institution of proceedings unnecessary;  it is enough that the respondent did so.  Then the appellant's difficulty is that its letter of 11 September 1987 is well capable of conveying to a prospective plaintiff that liability will not be disputed and that it is unnecessary to institute the proceedings threatened by the letter to which the appellant's letter was an answer.  Further, it must have been evident to the appellant that its letter could give rise to the very assumption which the respondent adopted ...". (501)

16. As we have pointed out, the judge himself found that "the assumption in relation to the limited liability" in the 3 July letter "had been overtaken by the more extensive admission of liability conveyed in Mr Pinder's telephone conversation of 8 (sic) August". Any obscurity created arose from the inconsistent statements emanating from the respondents' side. Regarding the qualifications in the letter of 3 July as having been abandoned by the unqualified statement on 18 August, as the appellant's solicitor did, was not necessarily in itself an unreasonable course; the unreasonableness lay in the appellant's solicitor's failure to attempt to clear up the potential muddle created by the other side. In our opinion that failure was not such a fault as to destroy what would otherwise have been the appellant's right, i.e. to rely on the implication that negotiations for settlement could be carried on without concern about the limitation statute. We are of the view that in the rather unusual circumstances, the judge's primary findings should have led to a conclusion in favour of the appellant.

17. Mr Thompson SC was allowed to rely upon an alternative argument, in addition to estoppel, that there was a contract, based principally upon the decision in Newton, Bellamy and Wolfe.  It is in our opinion unnecessary to discuss that aspect of the matter.

18. We would allow the appeal with costs, set aside the orders made by the learned primary judge and order in lieu (a) that it be declared that the defendants are estopped from denying liability and estopped from relying on the provisions of the Limitation of Actions Act 1974 and (b) that the defendants pay the plaintiff's costs of and incidental to the application of 20 September 1999.