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- Croft v Francis[2000] QDC 109
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Croft v Francis[2000] QDC 109
Croft v Francis[2000] QDC 109
DISTRICT COURT OF QUEENSLAND
CITATION: | Croft v. Francis & Anor [2000] QDC 109 |
PARTIES: | SANDRA CLAIRE CROFT (Plaintiff) v. MICHAEL NICHOLAS FRANCIS (First defendant) And FAI GENERAL INSURANCE COMPANY LIMITED (Second defendant) |
FILE NO/S: | Plaint 2393 of 1999 |
DIVISION: |
|
PROCEEDING: | Determination of questions before trial |
ORIGINATING COURT: | District Court Brisbane |
DELIVERED ON: | 6 June 2000 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 22 May 2000 |
JUDGE: | McGill D.C.J. |
ORDER: | Questions answered as follows: Whether the plaintiff’s action is statute barred by operation of s.11 of the Limitation of Actions Act 1974: Yes. Whether the defendants are estopped from relying on s.11 of the Limitation of Actions Act 1974: No. Order that the plaintiff’s action be dismissed. Order the plaintiff to pay the defendants’ costs of and incidental to the action, including the costs of the trial of the separate questions and the costs of the applications filed 25 January and 8 March 2000, to be assessed. Leave reserved to the defendants to seek an order that some or all of those costs be paid by the solicitors for the plaintiff. Leave reserved to the plaintiff to seek an order that her costs, including costs ordered to be paid to the defendants, be paid by the solicitors for the plaintiff. |
CATCHWORDS: | LIMITATION OF ACTIONS – personal injury – whether admission of liability allows action out of time by estoppel or contract Motor Accident Insurance Act 1994 ss. 37, 39, 41, 57 Morris v. FAI General Insurance Co Ltd [1996] 1 Qd.R. 495 – distinguished The Commonwealth v. Verwayen (1990) 170 CLR 394 – applied Newton v. SGIO (Queensland) [1986] 1 Qd.R. 431 – distinguished Till v. The Nominal Defendant [1999] QCA 490 – followed |
COUNSEL: | K.B. Varley for the plaintiff K F Holyoak for the defendant |
SOLICITORS: | Colwell Wright Solicitors for the plaintiff McInnes Wilson Lawyers for the defendants |
- [1]The plaintiff was injured in a motor vehicle accident which occurred on 24 December 1995. On 15 June 1999 a plaint was filed in the District Court at Brisbane seeking damages for injuries suffered by her in that accident. By a defence filed on 21 October 1999, the defendants alleged that the claim is statute barred by s. 11 of the Limitation of Actions Act 1974. The issue I have to decide is whether that is correct.
- [2]The plaintiff pleaded by way of reply that the defendants were estopped from relying on the Limitation Act, or that the effect of s. 57 of the Motor Accident Insurance Act 1994 was that the action had not been commenced outside the limitation period as extended by that section. On 13 March 2000, I ordered pursuant to r. 483 that the following questions be decided separately before the trial:
- (a)whether the plaintiff’s action is statute barred by operation of s. 11 of the Limitation of Actions Act 1974;
- (b)whether the defendants are estopped from relying on s. 11 of the Limitation of Actions Act 1974.
- [3]I also gave directions for the decision of those questions. When that hearing came on before me the plaintiff did not seek to advance any argument in support of the pleading that the effect of s. 57 of the Motor Accident Insurance Act 1974 was to extend the limitation period in a way which would be of assistance to the plaintiff, and it is clear that there is nothing in that section which has that effect in a way which is relevant to the present action. It was, however, submitted that the defendants were estopped from relying on the Limitation Act. In addition, the plaintiff sought leave if necessary to amend the reply to add a plea that there was a contract between the plaintiff and the second defendant which prevented the defendants from relying on the Limitation Act defence, and if necessary the variation of the questions to enable that issue also to be determined. The defendants opposed that amendment but only on the ground that the amendment was futile; the argument advanced on behalf of the plaintiff in relation to this issue was met on its merits.
Sequence of Events
- [4]A Notice of Claim as required by s. 37 of the Motor Accident Insurance Act 1994 was given on behalf of the plaintiff on 26 February 1996: affidavit of M. Howarth filed 25.1.00, para. 3, Exhibit MH1. It is unnecessary to determine whether that notice complied fully with the requirements of s. 37, since any non-compliance was waived by the second defendant by a letter dated 10 April 1996: Exhibit MH3. The material terms of that letter were as follows:
“We have your clients’ Notice of Claim dated 26 February 1996 forwarded under cover of your letter. We are satisfied the notices have been given as required.
Liability in this matter is admitted, however, whilst the forms have been completed, we note that neither an offer to settle nor medical reports were enclosed.
We therefore would thank you to forward any reports that are to hand together with your advices regarding when we can expect final reports and an offer to settle in due course.”
- [5]After a follow up letter on 21 September (Exhibit MH 4), the solicitors for the plaintiff forwarded a number of medical reports on 7 October 1996 and advised that the plaintiff was to see a specialist: Exhibit MH5. The second defendant wrote chasing up medical reports on 15 January 1997 (Exhibit MH6), but it was not until 27 August 1997 that copies of three reports were forwarded, with advice that further medical reports were being obtained: Exhibit MH 7. In February 1998 the second defendant wrote inquiring when they might expect to begin settlement negotiations in the matter (Exhibit MH8) and were advised on 24 February that the plaintiff was still undergoing treatment for her injuries, and they had not yet stabilised, and that the solicitors would communicate in due course: Exhibit MH9. The defendant forwarded a copy of the Commonwealth Rehabilitation Service Case Closure Summary on 18 May 1998: Exhibit 1, doc. 9. On 26 August 1998, the second defendant, having been told that the plaintiff was not in a position to make an offer of settlement, decided to have her assessed by a neurosurgeon: Affidavit of Donaghey, para. 7. About this time there was a telephone conversation between the solicitor handling the matter on behalf of the plaintiff and an officer of the second defendant; I will need to return to that conversation as there is some contest about it on the evidence.
- [6]On 31 August the second defendant wrote advising that it was unable to make an offer as the plaintiff’s condition had not stabilised and she had not been fully assessed: Exhibit MH 10. By a letter dated 2 September 1998, the plaintiff’s solicitors suggested that her injuries be assessed, and copies of medical reports provided by doctors to which the plaintiff was referred by the Commonwealth Rehabilitation Service were sought: Exhibit MH11. These were provided on 10 September 1998. The plaintiff’s solicitors then inquired what the second defendant was proposing to do next (Exhibit MH 12), and the second defendant sent a list of neurosurgeons and requested that one be nominated for the purposes of an examination: Exhibit MH 13. On 14 October 1998, the plaintiff’s solicitors agreed to a particular neurosurgeon, and forwarded copies of a further three medical reports: Exhibit MH 15. An appointment was made to see that neurosurgeon on 26 November 1998, but that was changed to 4 December 1998: Exhibit MH 17.
- [7]A copy of the report of that examination was obtained that month and was forwarded to the plaintiff’s solicitors in early January 1999, together with a request that the plaintiff be examined by an orthopaedic surgeon, forwarding a panel: Exhibit MH 18. The second defendant chased up a response to that in March 1999 (Exhibit MH 19) as a result of which a particular doctor was nominated and arrangements were made for him to see the plaintiff on 27 April 1999: Exhibit MH 20. That report was evidently forthcoming and a copy forwarded on 4 June 1999 to the solicitors for the plaintiff: Exhibit MH 21. On 21 June the plaintiff’s solicitors sought copies of reports provided to that doctor which they had not yet seen: Exhibit MH 22. On 1 September the second defendant sought some further material to be relied on in the matter (Exhibit MH 23) and added:
“Please also provide a copy of the legal proceedings in this matter. We point out to you that we do not require service, just a copy at this point in time.”
- [8]On 7 September material as requested was forwarded, including a copy of the plaint, and the second defendant was asked to open negotiations: Exhibit MH 24. Upon seeing the plaint however, it was apparent that the action had been commenced beyond the period allowed in the Limitation Act and the second defendant advised the claim was statute barred by a letter dated 10 September 1999: Exhibit MH 25
- [9]There was one factual dispute in the material, which led to some cross-examination; the plaintiff’s solicitor in para. 12 of his affidavit stated that on 28 August 1998 the plaintiff attended the office and provided him with certain instructions, which included that she had seen a number of doctors and she wanted the matter settled without going to court. He added that on the same day “I spoke with [an officer of the second defendant] and informed her of these instructions”. He exhibited a diary note which referred to the attendance on the plaintiff and the telephone call (Exhibit OFC3); the diary note records in relation to the attendance on the plaintiff, among other things, “She does not want to commence proceedings”. The note as to the telephone call is simply “t/c with FAI re $$ settlement”.
- [10]There was an issue about whether I should conclude that the statement that the plaintiff did not want to commence proceedings had been passed on to the second defendant. The note made of the conversation by the officer of the second defendant (Exhibit 1 doc. 11) was rather more extensive than that made by the solicitor. It does not record that there was communicated anything about the plaintiff’s not wanting to commence proceedings. The solicitor, when cross-examined about whether that particular aspect of his instructions had been communicated, was very vague (p.22), and I think ultimately was unable to assert any positive recollection it had been (p. 23), and I am not persuaded that it was. Given the terms of the note in fact taken by the officer of the second defendant, I think it likely that if it had been mentioned it would have been recorded in that note. The solicitor’s diary note was in other respects inaccurate; he attributed this conversation to 28 August, whereas the officer of the second defendant attributed it to 21 August and there was on the same page a note by a different officer of the second defendant dated 26 August (Exhibit 1, doc 11) which, I think, confirms that the date 21 August is more likely to be accurate.
- [11]The matter was considered further by the other officer of the second defendant on 26 August and as a result a letter was sent on 31 August to the solicitors for the plaintiff: Exhibit 1 doc. 10, 13. That letter advised that the second defendant was not able to make an offer because the plaintiff’s injuries were not stabilised. Far from suggesting that it was appropriate to delay commencing proceedings to enable settlement negotiations to be carried forward, that letter ought to have indicated clearly enough that the matter was not going to be settled, or at least was not going to be settled in the near future, so that proceedings needed to be commenced, unless the plaintiff was so reluctant to commence proceedings that she was content to abandon her claim. Nothing else was done by the second defendant prior to the expiration of the limitation period which amounted to the commencement of negotiations to settle quantum.
- [12]There was no argument advanced on behalf of the plaintiff that the effect of s. 39(5) of the Motor Accident Insurance Act 1994, or any other relevant provisions of that Act, was that the limitation period did not begin to run until some date after the accident, for example, when the claimant had given notice of the claim to the insurer as required by s. 37. Such a proposition would be inconsistent with the purpose of s. 57 of the Act, and I assume that that was not its effect. In any case, the action was commenced more than three years after the notice under s. 37 was given.
Estoppel
- [13]The argument in relation to estoppel was based on the decision of the Court of Appeal in Morris v. FAI General Insurance Co Ltd [1996] 1 Qd.R. 495. In that case the plaintiff was injured in a motor cycle accident on 20 January 1985. She consulted a solicitor who, in August that year, wrote to the registered owner of the vehicle. Over two years later the solicitor wrote to the compulsory third party insurer of the vehicle enclosing copies of two reports from medical specialists, and advising that they had instructions to commence proceedings, seeking advice within 28 days as to whether there was an intention to offer a settlement in the matter, and if so what amount, and advising that failing such a response proceedings would be issued. The members of the court regarded the fact that less than five months remained before the limitation period expired as adding some significance to the latter part of this letter. The solicitor received a response which included the statement:
“We wish to advise we are prepared to accept your client’s claim for personal injuries.”
There was also a request for medical reports. There was evidence that when the solicitor received this letter he regarded it as having the consequence that it was not necessary to commence proceedings within the three year time limit.
- [14]In that case the primary judge rejected an argument that there was a contract between the parties, but found that there was an estoppel binding on the insurer. On appeal the judgment was upheld on the basis of estoppel. The appellant did not apparently seek to interfere with the finding that there was an assumption by the solicitor adopted by the respondent and induced by the letter from the appellant that (relevantly) the appellant would not rely on the limitation period. The majority at p. 501 concluded that the letter was “well capable of conveying to a prospective plaintiff” not only that liability would not be disputed, but that it was unnecessary to institute the proceedings threatened in the letter to which that letter was an answer. This is no doubt a consequence of the circumstances emphasised earlier that the letter was written relatively close before the end of the three year limitation period and threatened to commence proceedings unless there was a favourable response. In such circumstances, the making of a favourable response was interpreted by the court as an implied invitation not to commence proceedings. The next issue was whether the letter was in fact relied on as indicating that it was unnecessary to commence proceedings, and the majority noted that there was a finding that it had been. The majority also held that the failure to institute proceedings during the period between the receipt of the letter and the expiration of the limitation period just over four months later was properly treated as a consequence of the conduct in sending the letter. In those circumstances all of the elements of an estoppel as identified in the judgment of Deane J in The Commonwealth v. Verwayen (1990) 170 CLR 394 at 444 were present.
- [15]If liability is admitted but quantum has not been agreed, there is the prospect of litigation being necessary in order to resolve the question of quantum. In these circumstances where an insurer (or indeed, any defendant) writes admitting liability there is no need for proceedings to commence to resolve liability, but where there is the prospect that, if quantum is not resolved, litigation will have to be commenced in order to finalise the plaintiff’s claim, a bare admission of liability may be interpreted in two ways:
“Liability is admitted (but if quantum is not also agreed any action to enforce the claim will have to be brought within the limitation period prescribed by the statute)” or
“Liability is admitted (and if quantum is not also agreed it is not necessary for any action to enforce the claim to be brought within the limitation period prescribed by the statute)”.
Obviously, the correct interpretation in a particular case will depend on the context; the cases do not say that in all such situations a bare statement admitting liability has the latter interpretation.
- [16]The starting point is that the statute prescribes a three year limitation period for commencing an action in such circumstances. In my opinion, the prima facie position is that the former interpretation is the correct one in the absence of some context indicating to the contrary, that is some circumstances which go beyond the mere existence of an admission of liability which support the implication, not necessarily to be made in every case, that there is an implied intimation that the Limitation Act will not be relied on. The terms of the letter from the plaintiff’s solicitors and the timing with reference to the expiration of the limitation period provided a context for the letter from the insurer in Morris (supra); perhaps the only other thing to be drawn from that case is that not very much of a context may be required before such an implication is to be found in such a statement. But obviously there must be something.
- [17]There are, I think, two factual distinctions between the situation in Morris (supra) and the situation in the present case. The first is that the factual matters which I have identified as providing a context leading to an implication that it was unnecessary to institute proceedings within the limitation period were not present in this case. The letter of 10 April was not sent towards the end of the limitation period in response to a threat to commence proceedings immediately unless liability was admitted; it was sent less than four months after the accident, at a time when everyone might reasonably have thought that there was plenty of opportunity to exhaust reasonable efforts to compromise the claim before litigation was commenced within the three year time limit. As it turned out, the plaintiff’s injuries apparently did not stabilise for some time, but there was no reason for anyone to assume in April 1996 that that was going to be the case.
- [18]The other distinguishing feature is that since the events in Morris there has come into operation in Queensland on 1 September 1994 the Motor Accident Insurance Act 1994. The scheme of that Act has been analysed elsewhere; see e.g. Re: Tonks [1999] 2 Qd.R, 671. Briefly it provides for a mechanism under which a claim is made by notice prior to the commencement of litigation, ordinarily relatively quickly after a motor vehicle accident occurs, i.e, within nine months after the motor vehicle accident or the first appearance of symptoms of the injury: s. 37(2). When such a notice is given, the insurer must within one month after receiving it give the claimant written notice stating whether the insurer accepts that the notice has been given as required, or as the case may be: s. 39(1). In addition, within six months after an insurer receives notice, it must take reasonable steps to inform itself of the circumstances of the accident, and give the claimant written notice stating whether liability is admitted or denied, or partly admitted and if so to what extent: s. 41(1). The notice required to be given by the claimant must include an offer of settlement or a statement of reasons why an offer cannot be made (s. 37(i)(b)), and the insurer must, within the six month period, either accept or reject the offer of settlement made, or invite one if one was not made: s. 41(i)(c).
- [19]In this case the notice was given and the insurer, by the letter of 10 April, indicated satisfaction that the notice had been given as required, and satisfied its statutory obligation under s. 41(1)(b), by stating that liability was admitted. The Act did not of course require the insurer to admit liability, but the insurer was required to say whether or not liability was admitted, so that in cases where liability is admitted, the insurer is required to say so at that stage. By s. 39(5) a claimant may bring a proceeding in a court for damages based on a motor vehicle accident claim only if the claimant has given notice to the insurer as required and at least six months have elapsed since the notice was given unless the insurer has denied liability in whole or in part so that there is a dispute as to liability. In the circumstances of the present case, the insurer having admitted liability, the plaintiff was not able to commence proceedings until six months after the notice was given. The letter of 10 April 1996 made it impossible for the plaintiff to commence proceedings until 4 September l996. The purpose of this delay is to enable the parties to make a genuine attempt to resolve quantum without resort to litigation: Grigg v. Rolfe Investments Pty Ltd (Appeal 3415 of 1999, 12.10.99, unreported).
- [20]It is one thing to insist that there be a reasonable opportunity to settle the claim without resort to litigation before proceedings commence. It is another to say that the effect of complying with the statute was intended to be that any proceedings commenced after admission of liability had been made do not have to be commenced within the ordinary limitation period. One of the objects of the Act was “to encourage the speedy resolution of personal injury claims resulting from motor vehicle accidents”: s. 3(c). It would be scarcely consistent with that object if every time an insurer admitted liability when complying with its statutory obligation under s. 41(1)(b) the effect was to exempt that claim from s. 11 of the Limitation Act. The terms of s. 57 suggest that the legislature contemplated that the ordinary limitation period would apply even in a case where the insurer had admitted liability, because it apparently intended to provide an extension of the limitation period in order to prevent a plaintiff from being prejudiced by the six month period during which there is to be an attempt to settle the action if liability were admitted. There are difficulties with the drafting of s. 57, because the extension is only to a date “within six months after the day on which the notice is given”, so the last day on which the proceeding could be commenced is the day before the first day on which it can be brought in compliance with s. 39(5), vis. when “at least six months have elapsed since the notice was given”. It is therefore unhelpful to analyse its operation closely in this context. The point is simply that its presence demonstrates a legislative intention that the limitation periods prescribed by the Limitation of Actions Act will ordinarily continue to apply to claims dealt with under the Motor Accident Insurance Act: and see Bryant v. Queensland Rail [2000] QSC 081.
- [21]There is nothing in the context in which the admission of liability was made in the letter of 10 April which would serve to distinguish it from any other case where an insurer admitted liability when complying with its obligation under s. 41(1)(b). That the insurer was obliged by statute to say something about liability at this stage is a feature which was not present in Morris (supra), and serves as a distinguishing feature. In addition, the Motor Accident Insurance Act provides a statutory context which in my opinion serves to reinforce a conclusion that a mere admission of liability should be interpreted in the former sense referred to earlier, that is as not providing an intimation that proceedings may be commenced after the expiration of the limitation period. In my opinion, when an insurer does no more than state in writing that liability is admitted, in compliance or apparent compliance with the obligation under s. 41(1)(d) of the Motor Accident Insurance Act 1994, there is no implied intimation that proceedings on the claim may be commenced after the expiration of the limitation period.
- [22]It follows that in this case there was no representation or intimation on the part of the second defendant which could be the foundation for any estoppel. That, I think, is sufficient to deal with the estoppel argument, but I should perhaps add that it is clear that, even if that letter could have been treated as such a representation, it was not treated by the plaintiff (or relevantly the plaintiff’s solicitor) as something that made the instituting of proceedings within the limitation period unnecessary. The solicitor concerned was cross-examined, and frankly admitted that he had relatively little experience in personal injury claims, that he had had some experience with such claims in New South Wales before beginning to practice as a solicitor in Queensland, and that he was unaware that the limitation period for personal injury actions in Queensland was different from the six years allowed for such actions in New South Wales: pp. 12-13. This is therefore not a case where the plaintiff was induced to refrain from commencing proceedings within the three year limitation period by anything said expressly or by implication by the insurer; the proceedings were not commenced within the three year limitation period in the present case because the solicitor handling the matter for the plaintiff did not realise that it was necessary to do so.
- [23]When told that liability was admitted, he expected that the claim would be settled, and did not give any thought to the question of commencing proceedings if that outcome did not occur: p. 31. At one point he said that he thought that the effect of the admission was that proceedings in court would not be necessary at all: pp. 9-10. On any view of the limitation period, any such proceedings would be some way down the track, but if one assumes a six year limitation period, there was really no need to think about commencing proceedings for a long time. It was only in June 1999 when the solicitor happened to be speaking with the barrister who was retained to advise on quantum that he discovered that the limitation period in Queensland was three years, and that he ought to have commenced proceedings by 24 December 1998: p. 13. This is therefore not a case where anything said or done by the second defendant, and in particular the admission of liability in the letter of 10 April 1996, was a cause of the failure to commence proceedings within the three year limitation period.
Contract
- [24]It is therefore necessary to consider whether there was a contract between the parties which had the effect of preventing the defendants from relying on the Limitations of Actions Act. Here, the plaintiff relies on the decision in Newton v. SGIO (Queensland) [1986] 1 Qd.R. 431. In that case the respondents were the executors of a married couple who were killed in a motor vehicle accident on 22 July 1979, together with the son of the couple. On 20 November 1979, their solicitors wrote to the appellant insurer advising of an intention to commence an action for damages on their behalf as a result of which the appellant investigated the matter. After some further correspondence, on 9 February 1981 the appellant wrote asking for details of the plaintiff’s claim, adding “It is confirmed that liability is not in issue”. Further correspondence followed, but the matter was not resolved before a writ was issued over two months after the expiration of the limitation period.
- [25]In Newton v. SGIO the majority analysed a number of authorities on the question of whether there was an implication that there would be no plea of the statute of limitations, which are not all consistent, then identified the argument for the appellant as that a binding promise to accept liability made within the limitation period does not imply a promise not to plead the Limitation Act defence if the other party does not commence proceedings within time, and continued (p. 437):
“Acceptance of liability is more than a bare admission of liability. In any event the arrangement here is supported by consideration. The insurer by accepting liability offers the other party an inducement and impliedly requests him to forebear from taking action with avoidance of costs of formal proceedings at the expense of the insured. Once the negotiations are thus commenced, the potential for saving is created and the insurer is bound to pay something, however ultimately it is to be assessed, to that other party. Here negotiations continued for some time to determine whether the appellant would pay the respondent his damages without the need for the latter to commence an action. In our view an agreement is implicit in the facts constituting the history of the matter, following upon the confirmation that liability was not an issue.”
- [26]They then noted that the right to sue was not extended indefinitely, because the right on a contractual cause of action was itself subject to a period of limitation, namely six years. Of course, the six year period does not run from the date when the contract was entered into, but rather from the date where the cause of action arose, which in the case of an action on a contract would be the date on which the contract was breached. It will be immediately apparent that there are two points of distinction between that case analysed in that way and the present; in the present case there was no more than what was characterised by the majority as “a bare admission of liability”. Further, there were no subsequent negotiations as to the question of quantum. There was some exchange of medical reports, something which was required anyway by s. 45 and s. 47 of the Motor Accident Insurance Act, and some arrangements were made for further medical examinations, but actual negotiations as to quantum never began. The offer of settlement invited by the letter of 10 April was never forthcoming.
- [27]Insofar as the analysis involves the proposition that a statement “It is confirmed that liability is not in issue” implies an offer not to plead the statute of limitations when the action is commenced, that in my opinion was a decision which must be referable to the particular facts of that case, and cannot be a decision that any form of admission of liability has that characteristic; for the reasons given earlier, in my opinion in this case what was stated in the letter of 10 April did not amount to an implied representation that the proceedings need not be commenced within the limitation period, and for the same reasons, did not amount to an offer not to plead the statute if negotiations as to quantum were commenced. It is not difficult to see that, apart from any considerations arising from the Act, an insurer could make an offer to a claimant to enter into negotiations to settle quantum without proceedings having to be commenced in circumstances where it would be a part of that offer, express or applied, that if it were accepted (expressly or by entering into the negotiations) the action did not have to be commenced within the limitation period. Such may arise from the express terms of the offer, or by implication from its context, but again there needs to be, in my opinion, a context which does justify such an implication.
- [28]The third member of the court, McPherson J, as His Honour then was, arrived at essentially the same conclusion but differentiated the steps in his reasoning more clearly. He referred to the decision of the Full Court in 1981 in Giblin v. Duggan noted as a practice decision in Ryan Weld and Lee “Queensland Supreme Court Practice”, 7522. In that case a similar expression was treated by the court as not constituting a contract between the parties. His Honour concluded that the court there was not laying down a general rule that an agreement made in the course of correspondence was not an enforceable contract, and stated (p. 440) that:
“Whether the intention is that such agreements are to be legally enforceable as contracts is something that must be gathered from the correspondence and surrounding circumstances, among which is the fact that solicitors ordinarily do not waste words in expressing the obvious in what is such a common subject of correspondence”.
His Honour’s experience of taciturn solicitors may be more extensive than my own, but the essence of His Honour’s reasoning there is that whether there is a contract depends on the facts of the particular case; His Honour rejected the argument that Giblin laid down a general rule that there was no contract, and was therefore obviously not attempting to lay down a general rule that there was a contract. Hence the significance of the context. The Full Court in that case took the view that the context in that case indicated that there was a contract. The judge at first instance in Morris took the view that what occurred in that case did not amount to a contract, and there is nothing in the judgment of any of the members of the Court of Appeal to suggest that that view was erroneous.
- [29]As I have noted earlier, there was one important difference between the context in Newton and the context of the present case; in this case the parties were acting in accordance with the Motor Accident Insurance Act. The fact that the statute required the second defendant to say whether or not it admitted liability is, I think, an important consideration in determining whether the statement that liability was admitted was intended to be of contractual effect. The fact that the statute required the parties to attempt to resolve the matter by negotiation, and indeed prevented the plaintiff from commencing an action for six months after the notice had been given to give time for such negotiation, is relevant to the question of whether there was to be some contract providing for negotiations as to settlement.
- [30]The proposition that an admission under s. 41 amounts to an offer to enter into a contract to accept liability is inconsistent with the terms of s. 41(6), and the Court of Appeal has recently held an admission made in compliance with the statutory obligation in s. 41(1)(e) is capable of being withdrawn: Till v. The Nominal Defendant [1999] QCA 490. The court regarded subsection (6) as making it abundantly clear that such admissions were not binding even for the purpose of the pre-litigation regime for the speedy resolution of personal injury claims. Indeed, the court held that an admission of liability could be withdrawn in circumstances which were wider than those identified in subsection (6). Such a proposition I think is incompatible with the existence of a binding contract to admit liability. In Newton both the majority and McPherson J referred to authority dealing with the situation where liability was definitely admitted, and appear to have analysed the matter on the basis of what was said by the insurer in that case was not just an admission of liability but was a binding and irrevocable acceptance of liability. This is different from the consequence attributed to an admission of liability under s. 41(1) in Till. It would be an odd result if a statement that liability was admitted did not mean that the insurer was irrevocably bound to admit liability, but did mean that the insurer was irrevocably bound not to plead the statute of limitations.
- [31]I think as well that when the statute prescribes particular steps, it would be an odd result that the mere following of those steps produced an outcome in terms of the contractual obligations of the parties which was different from and more extensive than the outcome specified by the statute for compliance with those steps. I therefore think that the fact that the admission was made within the framework of the statutory regime is a relevant and important factor in determining whether it had contractual effect. It is also an important factor serving to distinguish this case from Newton. A similar view appears to have been taken of the statutory context by Helman J in Ryan v. Pont (Maryborough Writ 24/96, 12.6.97, unreported) at p. 7 and by Forde DCJ in Coyne v. Coyne (1997) 18 Qld Lawyer Rep 44, at p. 50.
- [32]McPherson J discussed the actual words used in the statement and attributed some significance to the use of the word “confirmed”, which was not used in this case. He concluded that the letter was an offer which was accepted by the forwarding of particulars of the claims sought in that letter. In the present case the letter sought reports that were to hand, together with advice as to when there would be final reports and an offer to settle. There was no immediate response to the letter, and after a follow up letter on 21 September 1996, some copies of medical reports were provided on 7 October 1996 with an indication that a further report was to be obtained. If the letter of 10 April was to be accepted by doing the things sought to be done in the letter, they were not done. I think this really just underlines the fact that the parties were not entering into a contractual arrangement.
- [33]With regard to the question of consideration, McPherson J identified the consideration as the forbearance to sue: p. 444. But in the present case the effect of the Act was that the plaintiff was prevented from suing (without the leave of the court) until six months after the notice under s. 37 had been given: s. 39(5). I think in these circumstances it is artificial to identify the forbearance to sue as consideration for the promise. A point arose however when it would have been open to the plaintiff to commence proceedings, but even after that there was no deliberate forbearance to sue in response to the statement by the second defendant; as explained earlier, the matter was not taken forward either by negotiation or by commencing proceedings because the solicitor assumed that he had six years to begin any litigation, and regarded the plaintiff’s condition as not having settled sufficiently to make it appropriate to commence negotiations.
- [34]McPherson J also considered the meaning and effect of the statement that “liability is not in issue”. That analysis emphasised that the effect of such a statement was that liability was once and for all definitely accepted, a proposition which is not the consequence of a mere admission of liability, as demonstrated by the decision in Till. I do not think it is necessary for me to say anything about the balance of His Honour’s judgment which is really concerned with the consequences of a conclusion that there was a binding contract.
- [35]In Till the point was made that a situation could arise where an insurer would be prevented by an estoppel from withdrawing an admission of liability made in accordance with s. 41(1). No doubt that could occur in an appropriate case; but that was whether an estoppel would prevent the defendants from disputing liability in an action which was subsequently commenced. That, I think, is a distinct question from whether the defendants would be estopped from pleading the statute of limitations in an action which was subsequently commenced. It is unnecessary for me to consider whether there is in the present case any estoppel as to the question of liability in the action. For reasons I have already explained, in my opinion, there is no estoppel preventing the defendants from pleading the statute of limitations.
- [36]It is therefore not appropriate to give leave to the plaintiff to amend the reply to raise the existence of a contract as an answer to the defence under the Limitation of Actions Act, because such an amendment would be futile as that answer would fail. It follows that there is no need to consider whether the questions to be answered as preliminary questions should be revised.
- [37]For those reasons the preliminary question should be answered as follows:
A: Whether the plaintiff’s action is statute barred by operation of s. 11 of the Limitation of Actions Act 1974: Yes.
B: Whether the defendants are estopped from relying on s. 11 of the Limitation of Actions Act 1974: No.
- [38]The plaintiff’s action being statute barred, it must fail. It is appropriate therefore, pursuant to r. 485 to give judgment dismissing the plaintiff’s action. I therefore order that the plaintiff’s action be dismissed. I order the plaintiff to pay the defendants’ costs of and incidental to the action, including the costs of the trial of the separate questions and the costs of the applications filed 25 January and 8 March 2000, to be assessed. I reserve leave to the defendants to seek an order that some or all of those costs be paid by the solicitors for the plaintiff. I reserve leave to the plaintiff to seek an order that her costs, including costs ordered to be paid to the defendants, be paid by the solicitors for the plaintiff.