Aydar v Pashen[2001] QDC 292

DISTRICT COURT OF QUEENSLAND

1. [1]
   These applications turn on the interpretation of the Motor Accident Insurance Act 1994 (“the Act”) and the effect of the decision of the Court of Appeal in Horinack v. Suncorp Metway Insurance Ltd [2001] 2 Qd.R. 266.  I am asked to distinguish that decision because, if it applies, the plaintiff’s action must be struck out. 

The limitation period

2. [2]
   According to the pleading, the plaintiff was injured in a motor vehicle accident which occurred on 5 February 1998^[1].  The accident and the plaintiff’s claim for damages for personal injury arising out of it come within the application of the Act: s. 5.  A notice pursuant to s. 37 of the Act was given by the plaintiff on 1 February 2001.  The limitation period prescribed by the Limitation of Actions Act 1974 s.11 was “three years from the date on which the cause of action arose”.  There is no suggestion that any of the provisions of that Act which would operate to extend that period apply in the present case, and accordingly (subject to the operation of the Act) the last day upon which proceedings could be commenced without the remedy being barred by that Act was 5 February 2001. 

3. [3]
   However, under s. 57 of the Act, the period of limitation was extended. Section 57 of the Act relevantly provided as follows:

“(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.

3. (2)
   However, the proceeding may only be brought after the end of the period of limitation if it is brought within six months after the day on which the notice is given or leave to bring the proceeding is granted.

3. (3)
   If during the last 14 days of the period of limitation, the claimant wants to give a notice of claim under division 3 but is unsure to which insurer the notice should be given, the notice is validly given if it is given to the commission.”

4. [4]
   Accordingly the proceeding can only be validly brought after the end of the period of limitation if brought “within six months after the notice is given”, that is, within the period of six months commencing on the day after the date on which the notice is given (because of the use of the word “after”) and concluding on the last day of that period of six months (because of s. 38(1)(b) of the Acts Interpretation Act 1954).  The last day upon which the proceeding could have been brought was 1 August 2001.  The proceeding was commenced prior to this, being filed in the court (at Maroochydore) on 13 July 2001. 

Requirement of s. 39

5. [5]
   However, s. 39 of the Act provided in subsection (5):

“A claimant may bring a proceeding in the 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. (i)
   at least six months have elapsed since the notice or the waiver was given;  or

2. (ii)
   the insurer has denied liability on the claim;  or

3. (iii)
   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. (b)
   the court, on application by a claimant dissatisfied with the insurer’s response to a notice of a claim under this division, declares that –

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

2. (ii)
   the claimant is taken to have remedied noncompliance with this division;  or

3. (c)
   the court gives leave to bring the proceeding despite noncompliance with requirements of this division.”

6. [6]
   In the present case there was no denial of liability, or admission of liability but only in part, from the insurer. Since the plaintiff had given notice as required, in the absence of an order under para. (b) or (c) the proceedings in the court might only be brought after “at least six months have expired since the notice was given”. It seems to me that the application of the ordinary principles of construction of statutory provisions dealing with the measurement of time produce the result that the first day upon which proceeding could be commenced in the court to enforce the claim consistent with s. 39(5)(a)(i) was 2 August 2001^[2].  The plaintiff has therefore failed to comply with the requirements of s. 39, and therefore with division 3 of Part 4 of the Act. 

Submissions of the parties

7. [7]
   The plaintiff seeks to overcome this difficulty by applying under s. 39(5)(c) for leave to bring the proceeding despite noncompliance. The relevant noncompliance was bringing the proceeding before the six months had elapsed. The defendant’s answer to this however is that the decision in Horinack (supra) prevents me from giving leave nunc pro tunc (see p. 272) so I cannot now make an order which would approve (retrospectively) the bringing of the proceeding on 13 July 2001. The defendant submitted that the claim which had been filed ought to be struck out for failure to comply with the requirements of s. 39:  Young v. Keong [2000] 2 Qd.R. 335.

8. [8]
   The plaintiff submits in response that Horinack can be distinguished because in the present case there was a complying notice of claim given, which was not the case in Horinack.  There at the time when the limitation period expired there had been neither a complying notice of claim nor an application for leave to proceed.  In those circumstances the ordinary period of limitation had not been extended, so that the writ, issued after the expiration of the ordinary period of limitation (and without compliance with the requirements of the Act), was a nullity, and leave could not be given nunc pro tunc.

9. [9]
   It was submitted that the reasoning in Horinack turned on the terms of s. 57 of the Act, which required that either there be a complying notice of claim or there be an application for leave to bring proceedings before the expiration of the limitation period.  Section 39(5)(c) referred to noncompliance with “the requirements of this division”, not just the requirements of s.37.  It therefore extended to noncompliance with the requirements of s. 39, and therefore assumed that there was jurisdiction in the court to excuse noncompliance by issuing proceedings at a time when none of the paragraphs of s. 39(5) had been satisfied.  That necessarily means giving leave to commence the proceedings after the relevant proceedings have already been commenced (in breach of the section) which is what the plaintiff is seeking. 

10. [10]
    Although an application for leave must be made within the ordinary limitation period in order to satisfy s. 57 when there has not been a complying notice of claim, that is not the situation here where there has been a complying notice of claim. Indeed, it was submitted that on the defendant’s construction a claimant would be better off not submitting a notice of claim, even a complying one, during the last six months of the limitation period, but should simply make an application (before the limitation period expired) under s. 39(5)(c). Then the limitation period would be automatically extended, and the court could give leave to start the proceeding, with the imposition of appropriate conditions, such as the requirement that the appropriate notice be given and the proceedings then be stayed for a suitable period of time.

11. [11]
    It was further submitted that the construction for which the defendant contends would encourage the insurer to breach s.41. That section required an insurer within six months after receiving notice under s. 37 to take reasonable steps to inform itself of the circumstances of the accident under which the claim arose, and give the claimant written notice stating whether the liability was admitted or denied, and if admitted, whether admitted in full or in part^[3].  If the insurer gave a notice denying liability or admitting liability only in part within the six months period, then the balance of the six month period would be available to the claimant for the purpose of issuing proceedings: s. 39(5)(a)(ii) and (iii).  However, the insurer has the full six months to respond, and there is no guarantee that an insurer would respond in a sufficiently prompt way to enable the claimant to issue proceedings in time.  It also seems ironic that it is possible to commence proceedings if there is a timely denial of liability, but not if there is a timely admission of liability in full.  It was also submitted that this led to the conclusion that the claimant will always have to bring an application for leave, even if a complying notice were given, as long as the notice was given after the commencement of the last six months of the original limitation period, notwithstanding that s. 57 provided for an extension in either of two circumstances, either when a complying notice was given or when an application was made within time. 

Horinack

12. [12]
    The relevant passage of the judgment of White J in Horinack, with whom the other members of the Court agreed, commences at p. 271:

“Contrary to the submissions advanced on behalf of Ms. Horinack, an application for leave to bring proceedings must be brought within the ordinary limitation period.  That this is so is clear from s. 57 of the Act.  …  This means that a claimant may bring a legal proceeding based on a motor vehicle accident of the kind covered by the Act in one of two circumstances:

• if a notice of claim has been given under the claims procedure in division 3 (and this must be a reference to a complying claim), or
• an application for leave to bring the legal proceeding based on such a claim is made (which must be a reference to an application made pursuant to s. 39(5)(c)). 

There is a third process whereby a legal proceeding may be commenced which is, strictly, encompassed in the first.  That occurs when a court declares that a complying notice of claim has been given, s. 39(5)(b)(i), or that a claimant is taken to have remedied noncompliance, s. 39(5)(b)(ii).  The notice then becomes a notice of claim for the purpose of division 3 and the insurer is deemed to have received notice when the declaration is made, s. 41(3)(b).  The scheme of division 3 envisages that an insurer is to have six months from the receipt of the notice of claim to make necessary investigations, decide if liability will be admitted and to make an offer (or counter offer) of settlement, s.41.  This six months provision is reflected in s. 39(5)(a)(i) which permits a claimant to bring proceedings in a court only when six months have elapsed after the claimant has given notice of the claim or the insurer has waived compliance with the notice requirements.  That six month period is further reflected in s. 57(2) which extends the limitation period by six months when an application for leave to bring a proceeding is made within the period of limitation.

It follows that s. 39(5)(c) does not confer a general discretion on a court to give leave to bring a proceeding in a court despite noncompliance, if the application to do so is brought outside the period of limitation.  There is, therefore, no basis as a matter of construction for making such an order nunc pro tunc and it follows that the statement in McKelvie v. Page [1999] 2 Qd.R. 259 that leave can be granted nunc pro tunc cannot stand.”

13. [13]
    It was submitted on behalf of the defendant that this decision was authority for two propositions:

1. (a)
   an application for leave to bring a proceeding under s.39(5)(c) could not succeed unless brought within the limitation period applying to the applicant’s claim; 

2. (b)
   leave could not be given nunc pro tunc. 

The plaintiff however submitted that the former limitation only applied where there had not been a complying notice of claim, because, if there had been a complying notice of claim, the other limb of s. 57 was satisfied and the period of limitation was extended anyway.  Not making an order nunc pro tunc only applied in situations where s. 57 had not been satisfied, because there had been neither the complying notice of claim nor an application filed prior to the expiration of the period of limitation. 

Analysis

14. [14]
    The first question then is as to the scope of the decision in Horinack.  The difficulty is that there appears to have been no specific consideration given by the court in that case to the situation applicable where a complying notice was given during the last six months of the ordinary period of limitation.  The legislature must have contemplated that such a thing could occur: s. 57(3) expressly provides what is to happen if a  notice is given during the last 14 days of the period of limitation in certain circumstances, and provides that it will if given to the commission in those circumstances be “validly given”.  There would be little point in providing that if nothing could usefully be done as a result of giving that notice. 

15. [15]
    Of course the difficulty is that the obstacle appears to arise from defective drafting of the legislation, the legislature apparently not having noticed that one section said that a proceeding could not be commenced within six months while another section said that it had to be^[4].  That sort of situation is bound to give rise to difficulties of construction, and to produce anomalous results.  Her Honour said in Horinack that the Act did not fall to be interpreted by reference to difficult cases, particularly where they could be accommodated (by making an order under s. 39(5)(c)): p. 271. 

16. [16]
    Nevertheless if an order for leave nunc pro tunc can never be made under s. 39(5)(c), it does pose a serious difficulty for a claimant within the last six months of the ordinary period of limitation.  If a complying notice of claim is given, and the insurer does not oblige by denying liability or denying liability in part, it seems that proceedings cannot be commenced at all:  if they are commenced in the first six months after the notice then they will be struck out for breach of s. 39(1)(a)(i), and if they are commenced subsequently they will be statute barred.  If an application is made under s. 39(1)(c) prior to commencing proceedings, there has been at that stage no noncompliance with the requirements of the division, so there is no basis for giving leave to commence proceedings notwithstanding noncompliance.  There will be noncompliance which can found the jurisdiction under s. 39(5)(c) if the proceedings are commenced first, but if that occurs, an application for leave will be futile, even if made within the limitation period, if leave cannot be given nunc pro tunc.  Hence the plaintiff’s submission that, if this approach is correct, a claimant should refrain from giving a s. 37 notice, so as to enliven the jurisdiction under s. 39(5)(c), and then make an application for leave before the limitation period expires.  That would seem an odd result.  It would also seem an odd result if the answer is that an application could be made under s. 39(5)(c) at a time when there had been as yet no failure to comply with the division, simply to obtain permission to fail to comply in the future by commencing proceedings in the future in breach of s. 39(5)(a)(i). Once leave had been given, there would be no breach of s. 39(5) in commencing proceedings with the six months.

17. [17]
    I have some difficulty in seeing how the reasoning from Horinack in the passage that I have cited leads to the conclusion that s. 57 operates as a restriction on the circumstances under which the court can accede to an application under s. 39(5)(c), in effect by restricting the application to one which is made prior to the expiration of the ordinary period of limitation.  Section 57 provides that, if one of two things occurs, the limitation period is extended;  if neither of those things occurs, the consequence is that the limitation period is not extended.  If a proceeding has not been commenced within the limitation period, the fact that any proceeding subsequently commenced would be statute barred would be a good reason for not giving leave to bring the proceeding under s. 39(5)(c), but that would not apply in the present case because the proceeding was commenced during the period of limitation which was validly extended by the first limb of s. 57. 

18. [18]
    It also does not seem to me necessarily to follow from the reasoning in Horinack that leave cannot be given nunc pro tunc in any case;  the significance of s. 57 is that in circumstances where neither limb is satisfied and the proceeding has been commenced outside the limitation period there is no point in granting leave nunc pro tunc.  There is also the consideration that it seems from para. 21 on p. 272 that the court had not averted to the difficulty caused by the incongruence between s. 39(5)(a)(i) and s. 57(2).

Conclusion

19. [19]
    However, there is no useful purpose in my considering whether the decision in Horinack is right or wrong.  It contains a clear statement by the Court of Appeal that there is no power to give leave under s. 39(5)(c) if the application is brought outside the period of limitation, and a clear statement that there is no power to make an order nunc pro tunc.  The latter follows in particular from the circumstance that the passage in McKelvie v. Page [1999] 2 Qd.R. 259 was expressly overruled.  In McKelvie v. Page, a notice under s. 37 was given prior to the expiration of the ordinary period of limitation, although at the same time as the writ was issued.  The notice was initially non-complying, but the deficiency was subsequently remedied. 

20. [20]
    Her Honour held there that the effect of remedying the deficiency was that the notice was to be treated as having been compliant as from the date it was first given: para. 29 p. 265. This, with respect, does not appear to be consistent with the provisions of s. 41(3) of the Act, referred to in Horinack at para. 19, but it does mean that McKelvie was treated as a case where there had been in effect a complying notice within the ordinary period of limitation, so that the first limb of  s. 57 did apply, the same situation as in the present case.  But the Court of Appeal did not say that McKelvie was wrong because neither limb of s. 57 had in fact been satisfied in that case, which would have affected the reasoning but not the outcome in McKelvie.  It rejected the statement in McKelvie that leave could be granted nunc pro tunc.

21. [21]
    In my opinion, I am bound by the clear statements in Horinack, and they are not susceptible of being distinguished in the present case because there was a complying notice under s. 37 given prior to the expiration of the ordinary period of limitation, so that s. 57(1) was activated.  I cannot give the plaintiff leave to bring proceedings under s. 39(5)(c) in the present case, because the application for leave was not made (ie filed) before the end of the limitation period for the claim, and because what is sought is leave nunc pro tunc and leave cannot be given under s. 39(5)(c) nunc pro tunc.  Accordingly, the plaintiff’s amended^[5] application, which sought leave nunc pro tunc, and to strike out para. 3 of the defence, must be dismissed. It follows also that the defendant’s application to strike out the proceedings because of a failure to comply with the requirements of s. 39 must succeed:  Young v. Keong [1999] 2 Qd.R. 335.

22. [22]
    I should like to add that I arrive at this conclusion with considerable regret. The plaintiff’s efforts to obtain justice have been frustrated by the defective drafting of this Act. The amending Act last year has removed this particular difficulty, although it may have replaced it with new, improved difficulties: only time will tell. But it is lamentable that the inconsistency between s. 39(5)(a)(i) and s. 57(2) was not removed retrospectively.

23. [23]
    The orders therefore are:

1. On the plaintiff’s application, application dismissed.  I order the plaintiff to pay the defendants’ costs of the application to be assessed.

2. On the defendant’s application, I order that the proceeding be struck out, and order the plaintiff to pay the defendants’ costs of the proceeding, including the defendants’ application, to be assessed.