Simpson v Lenton[2000] QDC 372

CIVIL JURISDICTION

JUDGE McGILL SC

and

and

BRISBANE

DATE 08/12/2000

JUDGMENT

HIS HONOUR: This is an application to set aside their default judgment. The claim was filed in the Court on 20 September this year and served on the second defendant on 29 September.

On 31 October a default judgment for damages to be assessed was signed in the Registry. This occurred, according to the file, at 10.20 a.m. At 10.52 a.m., 22 minutes later, the Notice of Intention to Defend and Defence of the first and second defendants was filed.

The plaintiff's claim is for damages for personal injuries which he alleges he suffered in a motor vehicle accident on 15 December 1994. The plaintiff gave a notice under section 37 of the Motor Vehicle Accident Insurance Act 1994 to the second defendant under cover of a letter of 18 January 1995.

In response, the second defendant wrote on 1 March 1995,

Nothing further was said. The plaintiff's solicitor has deposed to the belief that this was a general admission of liability and that accordingly proceedings would not need to be commenced. Presumably for this reason, the matter thereafter has taken an extraordinarily leisurely progress, possibly also due in part to the fact that the plaintiff has been living in rural areas during this time.

Medical reports have been accumulated in much the same way and at much the same speed as a tree accumulates rings, but in spite of the many years that have passed, and one actual invitation from the second defendant for an offer of settlement, there have actually been no settlement negotiations between the parties in all this time.

In 1998 the second defendant, perhaps out of desperation, closed its file and told the plaintiff's solicitors that it was doing so. Even that did not prompt anything much in the way of action until the claim was commenced and served without prior warning. The only thing that was done with alacrity in this whole matter was the signing of the default judgment which occurred only four days after the 28 day period expired. The default judgment was possible because the defendants were four days late in filing a Notice of Intention to Defend.

The first point is the question of whether the judgment was regularly entered. The claim endorsed on the claim is “The plaintiff claims $X damages for negligence, together with interest thereon and costs.” It was submitted that this was irregular because the claim against the second defendant was for money payable under a statute rather than damages for negligence. This follows from the analysis by Chesterman J with whom the other members of the Court agreed and De Innocentis v. Brisbane City Council [1999] 30 MVR 47 at 51.

The effect of the Motor Accident Insurance Act 1994 is that both the person alleged to be negligent and the licensed insurer are to be sued but only the licensed insurer is served and judgment goes against the licensed insurer only. I think, strictly speaking, the claim should be endorsed.

“The plaintiff claims damages in an amount not in excess of the jurisdiction of the District Court [as this one is] against the second defendant because of the negligence of the first defendant.” But what has been endorsed is, I think, in substance, an elliptical statement of that claim when read in the light of the relevant provisions of the Act. In any case, on its face, the claim is not defective. On its face the rule has been complied with and I think that is sufficient to make the judgment regularly entered. Even if the claim is bad in law that is not a matter which renders the judgment irregular for the purposes of this test.

The judgment being regularly entered then it is a question of whether the defendant can explain how it came about that the Notice of Intention to Defend was not filed in time and whether the application was made promptly, as it is, and whether the defendant can show enough of a defence to justify there being a trial.

As to the former point there was some criticism of the explanation for the delay. Some of the delay occurred because of the necessity to retrieve the file from archives - something which I would expect with any archiving system would take a few days - and there were then some days spent in transferring the file to the second defendant's internal defence unit, which is explained in the affidavit, rather briefly, as being due to internal processes in respect of litigation matters. No doubt the second defendant has a lot of these matters to deal with.

The delay is not very long and I think that the question that how much explanation for the delay is required to be given has to be measured against the sort of delay that is involved. Where the delay is only a matter of four days, frankly, I do not think much explanation needs to be given at all and I think what is given in this case is more than adequate.

With regard to the question of whether there is a defence on the merits, the matter sought to be raised is expiration of the limitation period. Here, on the face of it, the action is well outside the limitation period but it is to be argued on behalf of the plaintiff that the effect of the letter sent on 1 March is that the limitation period did not apply.

There are authorities - I need not go into detail - that would suggest that it is possible for a letter accepting liability to remove the necessity to commence proceedings within the limitation period, either on the basis of estoppel or on the basis that there is an enforceable contract between the parties to pay damages to be assessed.

I think it is sufficient for present purposes to say that it is important that those authorities precede the Motor Accident Insurance Act 1994.

Under that Act, by section 41, “Within six months after an insurer receives Notice of a Motor Vehicle Accident Claim, the insurer must, among other things, give the claimant written notice stating whether liability is admissible or denied and if it is admitted whether in full or in part to the extent expressed as a percentage for which it is admitted.”

It seems to me that it is at least arguable that this letter was an admission by way of the response required by section 41. That follows from the reference to previous correspondence which can only be a reference to the notice of the claim, and perhaps from the use of the percentage figure.

There is also the consideration that the existence of the statutory regime, I think, changes the position generally. This seems to have been recognised by the recent decision of the Court of Appeal in Hewson v. Burke [2000] QCA 434 where the point was made that had there been an admission of liability within the terms of section 41 of the Act, as there was not in that case, it would have been relevant to discuss whether such admission made so to speak under statutory compulsion would ever give rise to an estoppel. However, the Court held that that was not the situation in that case and that there was an estoppel.

The significance of the admission being under the statute is that there is other authority from the Court of Appeal - Till v. The Nominal Defendant [1999] QCA 490 - that an admission of liability under section 41 is not irrevocable even for the purposes of the statute. So, in those circumstances it can hardly amount to a representation that no action need be commenced within the limitation period.

It seems to me that it is plainly arguable that the letter of 1 March did not amount to a representation that no action need be commenced within the limitation period and that there is a good defence under the Limitation Act.

In those circumstances it would not be appropriate to shut out the defendants from pursuing that defence and, in all the circumstances, the appropriate course is to order that the judgment signed on 31 October 2000 be set aside.

...

HIS HONOUR: In relation to the question of costs it is true that the judgment was regularly entered and ordinarily, therefore, it should be the responsibility for the defendant to apply to set it aside. However, the judgment was regularly entered without any prior warning to the defendants, or without even an inquiry of the defendant as to whether it was proposing to file a Notice of Intention to Defend. That is not a requirement under the Rules, but it is a good practical way for solicitors to proceed.

One of the things which the Rules do require in Rule 5 is that the purpose of the Rules is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense.

This application has been productive of a great deal of entirely unnecessary expense. Indeed I regard it as a waste of the Court's time. It could easily have been avoided by a phone call to the defendant prior to signing the default judgment. The defendants' Notice of Intention to Defend was not particularly delayed and, once there was a default judgment, it must have been obvious that an application to set it aside would succeed.

I think that it was ridiculous for the time of the Court to be taken up dealing with this application. I think the plaintiff should pay the costs. The costs should follow the event. So I will order the plaintiff to pay the defendants' costs of the application to be assessed.