Bermingham v Priest[2002] QCA 327

SUPREME COURT OF QUEENSLAND

[1]WILLIAMS JA:  The respondent received personal injuries when the motor vehicle in which she was a passenger collided with another vehicle on 12 August 1998.  Ultimately on 6 August 2001 she commenced proceedings against the appellants seeking damages arising out of that incident.  It was accepted that the Motor Accident Insurance Act 1994 (the Act) applied to the claim: Reprint No 2 reprinted as in force on 28 July 1997,

2. The appellants contended that the proceedings as commenced breached provisions of the Act and by application filed 22 November 2001 sought an order that the claim and Statement of Claim be struck out and that there be judgment for the defendants in the action. The respondent countered by filing an application on 28 November 2001 seeking an order granting leave to commence the proceedings in fact commenced by claim filed on 6 August 2001; that order was sought nunc pro tunc.

3. The learned judge at first instance concluded that he had power to grant leave and he did so. It followed that the application of the appellants was dismissed. This appeal is brought from those orders; the appellants seek an order from this court that the respondent’s claim be dismissed.

4. Section 37 of the Act obliged the respondent to give written notice to the insurer of the relevant motor vehicle within nine months after the accident or the onset of symptoms. The section makes it clear that the notice may be given outside of the nine month period provided an explanation for the delay is given.

5. In this case no notice was given within the nine month period. The section 37 notice was in fact given on 6 April 2001 and contained an explanation for the delay.

6. Section 39(1) of the Act then deals with the response of the insurer. It must, within one month of receiving the notice, give written notice accepting that the section 37 notice is wholly compliant or alternatively identify non-compliance and either waive non-compliance or allow a further period for reasonable action to be taken to make the notice compliant. Subsection (3) provides that if there is no response within one month then it is conclusively presumed that the insurer is satisfied that the notice was compliant.

7. In this case it was accepted before the learned judge at first instance, and again before this court, that the notice given on 6 April 2001 was compliant.

8. Section 41 of the Act then provides that within six months after an insurer receives a section 37 notice it must take reasonable steps to inform itself of the circumstances of the accident, give the claimant written notice stating whether liability is admitted or denied and (if the claimant made an offer of settlement in the Notice of Claim) inform the claimant whether that offer is accepted or rejected. The insurer must also “as soon as practicable” after receiving a section 37 notice make a written offer of settlement. By so providing the Act is encouraging early resolution of a claim without the necessity of resorting to legal proceedings. The six month period in s 41 is then reflected in s 39(5)(a)(i).

9. The most critical provisions of the Act for present purposes are those dealing with the bringing of proceedings claiming damages arising out of the motor vehicle accident; in particular the present matter requires a detailed consideration of section 39(5) and section 51(1) and (2). Those provisions are in the following terms:

“39(5)A claimant may bring a proceeding in a court for damages based on a motor vehicle accident claim only if –

1. (a)
   the claimant has given notice to an insurer who may be liable on the claim under the statutory insurance scheme as required under this Division or the insurer has waived compliance with the requirement and –

1. at least 6 months have elapsed since the notice or the waiver was given; or

2. the insurer has denied liability on the claim; or

3. the insurer has admitted liability but only in part and the claimant has given the insurer written notice that the extent of liability is disputed; or

2. the court, on application by a claimant dissatisfied with the insurer’s response to a notice of claim under this Division, declares that –

1. notice of claim has been given as required under this division; or

2. the claimant has taken to have remedied non-compliance with this Division; or

3. the court gives leave to bring the proceeding despite non-compliance with requirements of this Division.

…….

57(1)If notice of a motor vehicle accident claim is given under Division 3 (Claims procedures), or an application for leave to bring a proceeding based on a motor vehicle accident claim is made under Division 3, before the end of the period of limitation applying to the claim, the claimant may bring a proceeding in court based on the claim even though the period of limitation has ended.

(2)However, the proceeding may only be brought after the end of the period of limitation if it is brought within 6 months after the day on which the notice is given or leave to bring the proceeding is granted”

10. The ordinary period of limitation applying to the respondent’s claim was three years; that would have expired here on 12 August 2001. By operation of section 57 that limitation period was extended so that it expired on 6 October 2001, that is six months after the day on which the section 37 notice was given. But by operation of section 39(5)(a)(i) the respondent only had a right to commence proceedings after 6 October 2001. As already noted the present proceedings were commenced on 6 August 2001. Liability had not been denied prior to commencement of the proceedings.

11. The respondent’s submission before the learned judge at first instance, and repeated again in this court, was as follows:

1. On the proper construction of the Act, and in the circumstances which occurred, the respondent was entitled to commence proceedings prior to 6 October 2001 without the necessity of getting leave;

2. If leave was required then the court had jurisdiction pursuant to s 39(5)(c) or s 57(2) to give leave to commence the proceedings, there being no temporal limit on the court’s jurisdiction to grant leave pursuant thereto.

12. The appellants’ submission at first instance, and repeated in this court, was that leave was necessary and could only be granted prior to the expiration of the limitation period, here 6 October 2001.

13. The learned judge at first instance referred to the “tension” between s 39(5) and s 57 and concluded that “the effect of s 39(5)(i)(a) must be read subject to the terms of s 57 which allow proceedings to be brought within six months of a complying notice.  If leave to bring the proceeding is necessary, that leave is granted pursuant to s 57(2).”  He then considered whether leave to commence could be granted nunc pro  tunc.  He rejected the submission of counsel for the appellant that s 39(5) was the only source of power to grant leave and concluded that “s 57(2) is the source of the right to seek leave”.  Finally he stated:

“Although s 39(5) of the Act is couched in emphatic language, which prompted counsel for the defendant to speak in terms of its provisions being mandatory, that language probably reflects the different style of drafting which modern legislation appears to have adopted.  I do not regard the terms of the subsection as indicating a reduced scope for the right conferred by s 57 of the Act.  More significantly, it would have been open to the legislators to provide explicitly for the time at which the leave referred to in s 57(2) had to be sought.  This was not done and so there was no reason for the Court to take the view that its ordinary power has in any way been constrained.”

14. There is no basis for concluding that in some way s 57 amends or restricts the operation or effect of s 39(5)(a) other than in calculating the end of the limitation period. Proceedings can be brought “only if” the requirements of s 39(5) are met and those requirements are not affected by s 57 otherwise than as indicated. A claimant has no right to bring proceedings, even within the extended limitation period, unless s 39(5)(a)(i) is complied with or leave is obtained. It follows that leave was necessary in this case.

15. The next question which must be answered is whether or not s 57(2) is the source of an independent power to grant leave to commence an action. In my view it does not do so; the construction placed on s 57(2) by the learned judge at first instance is one which cannot be supported.

16. Section 57(1) and (2) deal with two separate factual situations. The first situation is that where notice is given under Division 3. Once such notice is given before the end of the period of limitation (which must mean the ordinary period) s 57(1) provides that there is an extension of that limitation period. The duration of that extension is then fixed by s 57(2) which provides that in those circumstances the proceeding may be “brought within six months after the day on which the notice is given”.

17. The second situation dealt with by the section is that where an application for leave to bring a proceeding is made under s 39(5) before the end of the ordinary period of limitation. In that circumstance the period of limitation is extended, but again the duration of that extension is fixed by s 57(2). In those circumstances the proceeding may only be brought “if it is brought within six months after … leave to bring the proceeding is granted”.

18. Section 57 must in my view be construed in that way. It follows that the reference at the end of s 57(2) to “leave to bring the proceeding” has no application where the matter comes within what I have called the first situation. The facts of this case are within what I have called the first situation. It follows that so far as s 57 is concerned the respondent had until 6 October 2001 to commence proceedings but, if leave was required because of any non-compliance with a requirement of Division 3, that leave could not be granted pursuant to s 57. The only provision conferring jurisdiction on the court to grant leave to bring a proceeding despite non-compliance with a requirement of Division 3 is s 39(5)(c). That particular provision is not limited by the words in s 57(1) “before the end of the period of limitation”.

19. Here the respondent was in the position that she could not comply with s 39(5)(a)(i) and yet commenced proceedings within the period of limitation. It follows that leave was required, and that leave could have been obtained by application bought pursuant to s 39(5)(c).

20. Counsel for the respondent argued that s 39(5)(c) only applied to some past non-compliance; it could not operate prospectively. There is no substance in that submission. It was obvious at all material times that the respondent could not comply with the requirements of Division 3, and in consequence leave was necessary. There was no obstacle to her seeking that leave. There is no reason why s 39(5)(c) cannot operate prospectively in such circumstances.

21. In Horinack v Suncorp Metway Insurance Ltd [2001] 2 Qd R 266 this court (McPherson JA, White and Jones JJ) held that the court had no jurisdiction under s 39(5)(c) to grant leave to bring a proceeding unless the relevant application was brought within the limitation period applying to the claim.  That conclusion follows from the proper construction of s 39(5).  In Thomas v Trans-Pacific Industries Pty Ltd & Anor [2002] QCA 160 Davies JA (with whom McMurdo P and Helman J agreed) said:

“In Horinack no notice of claim had been given or application for leave made before the limitation period had expired.  The court held that in such a case there was no basis as a matter of construction for making an order giving leave to bring the proceedings.  That is undoubtedly correct.”

22. The issue was also raised in Sweeney v Volunteer Marine Rescue Currumbin Inc & Suncorp General Insurance Limited [2000] QCA 455.  There the McMurdo P (with whom Cullinane and Wilson JJ agreed) said:

“His Honour’s decision was consistent with a subsequent recent decision of this court, Horinack v Suncorp Metway Insurance Limited … .  That case turned on a different factual basis to this but nevertheless affirmed that s 39(5)(c) of the Act does not confer a general discretion on a Court to give leave to bring a proceeding in a Court despite non-compliance if the application to do so is brought outside the period of limitation.

The appellant submits that Horinack was wrongly decided and that s 39(5)(c) does confer a broad discretion to grant leave to commence proceedings regardless of s 57. 

…

The appellant here has not demonstrated an obvious error by this Court and the construction of the Act adopted in Horinack nor that there has been any resulting unintended consequences”.

23. An attempt was made by counsel for the respondent to distinguish Horinack on the basis that there a complying s 37 notice had not been given within the ordinary period of limitation.  In my view that is not a proper basis for distinguishing Horinack, particularly given the construction of s 57 which I have outlined above.

24. In Horinack it was said at 272 that the court had no jurisdiction to grant leave where the application seeking such an order was “brought outside the period of limitation”.  Counsel for the appellants here has contended that that must mean the period of limitation extended by s 57.  In the circumstances that must be so.  There is nothing in the decision in Horinack which indicates a contrary view.

25. Particularly given that the decision in Horinack has been confirmed by two subsequent decisions of this court there is no basis for again reviewing the position.  The decision in Horinack does not create any injustice.  A claimant caught by the apparent tension between s 39(5) and s 57(2) need only make an application for leave to bring the proceedings prior to the expiration of the extended period of limitation.  There is nothing onerous about that.

26. Given the decision of this court in Young v Keong  [1999] 2 Qd R 335, and the subsequent cases in which that decision has been applied, the non-compliance with s 39(5)(a)(i) means that the proceedings were not validly commenced.  It follows that the claim should be struck out and there be judgment for the defendant in the action.

27. The orders of the court should therefore be:

1. Allow the appeal and set aside the orders at first instance.

2. Order that the application of the plaintiff be dismissed.

3. Order that the proceedings of the plaintiff be struck out and there be judgment for the defendants.

4. Order that the respondent pay the appellants’ costs of and incidental to the appeal and the two applications below to be assessed.

28. JERRARD JA:  This appeal raises the same issue as is considered in the appeal in Aydar v Pashen & Anor, Appeal No 11200 of 2001.  I will not repeat in these reasons the provisions of the Motor Accident Insurance Act 1994 which are applicable, nor will I repeat the relevant facts, which are described already in my reasons for judgment in Aydar v Pashen. 

29. I adhere to the reasons for judgment expressed in Aydar v Pashen and therefore am of the opinion that the appeal in this matter should be dismissed.  I would order accordingly.

30. WILSON J: The respondent was injured in a motor vehicle accident on 12 August 1998.  On 6 April 2001 she gave the second appellant notice of her claim pursuant to s 37 of the Motor Accident Insurance Act 1994, and on 6 August 2001 she commenced this proceeding in which she claims damages for personal injuries.

31. The second appellant applied to have the proceeding struck out because it had been commenced before the elapse of six months from the giving of the s 37 notice^[1], and the respondent cross-applied for leave nunc pro tunc to commence the proceeding.  The primary judge dismissed the appellants' application, and granted leave.

32. For the reasons I expressed in Aydar v Pashen & Anor^[2], I consider that the primary judge erred in so doing.  I agree with Williams JA, whose reasons for judgment I have had the advantage of reading, that s 39(5)(c) is the only source of power to grant leave to commence a proceeding notwithstanding non-compliance with requirements of Division 3 of Part 4 of the Act. The course which the respondent should have adopted was to make an application (within six months of 6 April 2001) for leave to commence a proceeding notwithstanding that six months had not elapsed from the giving of the s 37 notice.

33. I agree with the orders proposed by Williams JA.