DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application under s. 31 of the Limitation of Actions Act 1964 (“the Act”) for an order that the period of limitation for the applicant’s action against the first and second respondents for damages for negligence caused in a motor vehicle accident which occurred on 7 May 1999 be extended.  It is not disputed that the applicant was involved in that accident, and that there is evidence to establish the right of action on the part of the applicant against the respondents in respect of whatever injury the plaintiff then suffered, apart from a defence founded on the expiration of the period of limitation.  Essentially the applicant was driving a motor vehicle which was struck from behind. 

2. [2]
   It is also not disputed that after the commencement of the year last preceding the expiration of the period of limitation additional material facts relating to the right of action in fact first came to the knowledge of the applicant. However the respondents submit that the applicant had knowledge of material facts of a decisive character prior to the expiration of the two year period, and that any material facts ascertained subsequently were not of a decisive character. The respondent submitted that, although additional facts which tended to show that her claim would produce a greater amount of damages may have been ascertained later, prior to the expiration of the two year period she was aware of, or had the means of knowledge of, facts showing that she had reasonable prospects of success and of achieving an award of damages sufficient to justify bringing an action: s. 30(1)(b)(i).

3. [3]
   When determining whether a fact is within the means of knowledge of a person at a particular time it is necessary to consider not only whether the person in fact knew that fact, but also whether, so far as the fact is able to be found out by that person, that person has taken all reasonable steps to find out the fact before that time: s. 30(1)(c). In order to assess what are reasonable steps in these circumstances, it is necessary to consider the position from the point of view of the applicant. In Healy v Femdale Pty Ltd (Appeal 37/93, Court of Appeal, 9.6.93, unreported) McPherson JA said:

“The question whether an injured person has taken all reasonable steps to ascertain the seriousness of the injury depends very much on the warning signs of the injury itself and the extent to which it or any other facts might be thought to call for prudent enquiry to protect one’s health and legal rights.  It is difficult to say that a person who finds herself able to get on with her life, and returns to employment without significant pain or disability fails the test merely because she fails to ask for opinions from her doctor about the prospect of future disability or effect upon her working capacity.  There is no requirement to take ‘appropriate advice’ or to ask appropriate questions if in all the circumstances it would not be reasonable to expect the plaintiff to have done so.”

4. [4]
   That case was one where after an injury was suffered at work the plaintiff had taken medical advice and, after physiotherapy and various forms of conservative treatment did not produce any improvement, had undergone surgery which had apparently fixed the problem. The orthopaedic surgeon who conducted the operation however said that if asked he would have advised that following the operation she should avoid repetitive work with the arm held above shoulder height, and that there was some permanent disability in the arm. In fact he had not given that opinion at the time, and the question was whether a reasonable person in the plaintiff’s position would have sought an opinion as to any permanent disability, or any permanent restriction on the work she should undertake, in circumstances where the operation had apparently fixed the problem. The court upheld a finding by a chamber judge that the nature and extent of the injury was not within her means of knowledge at the material time, on the basis that it was not reasonable for her to have taken further advice in the circumstances.

Sequence of events

5. [5]
   It is necessary therefore to examine the factual situation of the applicant following the accident, which was on 7 May 1999. At the time of the accident her whole body was jarred and she had a sore neck for a couple of days, and soreness on the right side and in the right leg. She was off work for a short time but returned to work on 10 May 1999, three days after the accident. She also became very nervous about motor vehicles and was unable to ride as a passenger in the car for about three or four months after the accident, although presumably she was able to thereafter. It does not appear that she received any significant medical advice or treatment at about the time of the accident^[1], although she did ultimately seek treatment from an osteopath, and she later received various forms of treatment such as physiotherapy and massage therapy.  At the relevant time she was working as a legal secretary, and she was able to continue in that work full time until the end of 2001, when she took holidays.  At the end of the holidays she felt she was unable to return to full time work, and her hours were reduced somewhat: p. 26.

6. [6]
   During most of 1999 and 2000 the plaintiff was just putting up with the symptoms until she went to see an osteopath, Mr Day, on 3 July 2000. After treatment from him she felt fine for a time, but in time the symptoms recurred and she had to seek further treatment: p. 26. The pattern therefore seems to have been that after each treatment the plaintiff obtained relief from symptoms, and that continued for some time, but ultimately the symptoms recurred, and in due course the plaintiff felt in sufficient difficulty to go back to see the osteopath again. Apart from that cycle of symptoms and relief however, broadly speaking the applicant’s condition was deteriorating during 1999 and 2000. However she continued to hope that the condition would get better: p. 28.

7. [7]
   Notwithstanding this progressive worsening, the plaintiff was still able to work full time to the end of 2001. In addition she did not seek medical treatment, continuing to rely on the osteopath until 2001. Indeed, she did not initially connect her symptoms in 2000 with the accident, and it was not until January 2001 that she was advised by Mr Day that it was his opinion that those symptoms had been caused by the accident.^[2]  As a result she took legal advice, and gave notice under s 34 of the Motor Accident Insurance Act on 24 January 2001.^[3]  The second respondent accepted that there had been compliance with that section on 1 February 2001, and on 16 February 2001 a Notice of Claim under s 37 of that Act was sent to the second respondent.^[4]  It required a sworn statement as to the reasons for the delay, which was provided on 30 March 2001.^[5]  This described the various symptoms from which she had been suffering as a sore right side from the ankle up to the lower back, a  sore right knee, and a sore and stiff neck and shoulder, mainly on the right side.  She said that it was difficult to work with the computer sometimes because of the neck and that her right leg ached if she was in the one position for too long, including if she lay on her right side in bed for too long.  These were said to have been experienced for a number of months.  They were suffered by her to various degrees: p. 4.  The position seems to have been that the plaintiff had been experiencing these symptoms to some extent off and on since the date of the accident,^[6] and that the position had developed to the point where they amounted to difficulties for her by the beginning of 2001.

Pre-litigation procedure

8. [8]
   The applicant said that after speaking to the solicitor in January 2001: “We decided to put in a claim.”^[7] It seemed to me from the applicant’s evidence generally that this is not a reference to a claim in the sense of a document by which a civil proceeding is started under the Uniform Civil Procedure Rules.  The Motor Accident Insurance Act contains a mechanism for a pre-litigation Notice of Claim, and for a procedure then to be followed which is intended to achieve, if possible, a compromise of the injured person’s entitlement without resort to litigation.  The document by which this is done is described in the Act as a “Notice of Claim”, and the person giving such a notice can be seen as making or putting in a claim on the insurer for compensation in respect of the accident.  That might or might not result in an agreed payment in settlement of the claim.  If it did not, court proceedings can then be taken, subject to any legislative restrictions imposed by that or another Act.  Injured persons who proceed to litigation therefore have to follow a two stage process: the pre-litigation procedure, and then pursuit of the claim in a court.  For others however there is a one stage procedure which does not lead to court:  a Notice of Claim is given and the “claim” is settled, or the matter is not settled but the injured person decides not to proceed to litigation.

9. [9]
   From the injured person’s point of view there are substantial practical differences between the two stages. The first stage is relatively straightforward, the legal costs involved can usually be easily quantified, and there is no exposure to anyone else’s legal costs. It is therefore a much cheaper and easier step for the injured person to take, and one where there is much less risk of anything going seriously wrong.

10. [10]
    It follows that there is a distinction between a willingness to pursue a claim through the statutory, pre-litigation procedure under the Motor Accident Insurance Act and a willingness to commence a proceeding in a court.  But the Act operates by reference to the commencement of a proceeding in a court, and when s. 30(1) speaks of “the bringing of an action on the right of action” it is concerned with the commencement of a proceeding in a court, not taking the pre-litigation steps required under the Motor Accidents Insurance Act.  Further, the reasonableness of a person, both in relation to what advice it is appropriate to take and in relation to whether or not the person ought to bring an action on the right of action, is to be assessed in relation to litigation, not the pre-litigation procedure.  One of the consequences of the Motor Accident Insurance Act procedure is that, by providing a relatively cheap, reasonably simple and essentially risk free procedure for advancing a claim in respect of an injury suffered in a motor vehicle accident, people who have suffered less serious injuries in respect of which no great sum might be recoverable are encouraged to make a formal claim even if it is not pursued to litigation.

11. [11]
    In the present case the applicant by January 2001 had reached a stage where she believed it was worth making a claim in the sense of pursuing the pre-litigation procedure, and that is what she did. But at that stage she had not received any significant medical treatment, and had not received any advice from any medical practitioner, let alone a specialist. When the Notice of Claim was submitted the applicant said she was unable to make an offer of settlement as she had not had the opportunity to undertake the necessary medical assessments or obtain legal advice.^[8]  The applicant said that at that stage she had no intention of and did not envisage having to go to court; her understanding was that after the claim was made, information was gathered and there was a settlement conference.   She had no idea that it would have to go to court: p. 6.  That was not something she wanted to do.   She had at that stage a fairly modest objective, to recover her treatment expenses.

12. [12]
    In early 2001 she stopped attending one of the therapists she had been seeing, a Mr Eickenloff (a ‘remedial therapist”) because of the cost: p. 7. On 16 February 2001 her solicitors wrote to the second respondent seeking reimbursement for continuing treatment expenses and asking it to forward a treatment plan. After the sworn statement was provided the second respondent acknowledged that the applicant had complied with s. 37 and admitted liability for the purposes of the Act.^[9] 

13. [13]
    Nothing much then happened with the claim until 4 July 2001, when a new solicitor for the applicant wrote to the second respondent advising of practitioners who had seen the applicant, including Mr. Day.^[10]  It may be that this delay is explained by the fact that the firm of solicitors for whom the applicant worked split on 1 April 2001: p. 13.  The partner with whom the plaintiff had been working moved to a different office, and the partner who had been handling the applicant’s claim stayed where she was: p. 14.  The former took over the conduct of the matter from the latter.   The next step appears to have been a letter from the second respondent on 7 August asking the applicant to make an offer of settlement, and the response was an offer on 23 August to accept $36,000 all up.^[11] 

Were the offers “without prejudice”?

14. [14]
    Objection was taken to the admissibility of this and the other letters of offer, on the ground that they were privileged from disclosure as bone fide attempts to comprise the applicant’s claim. The letters are not headed “without prejudice”, but this is not necessarily a bar to the admissibility of such communications: Harrington v Lowe (1996) 190 CLR 311.  As that case and Rogers v Rogers (1964) 114 CLR 608 at 614 show a court is particularly willing to treat communications seeking to settle a matrimonial dispute as being within the scope of this privilege.  It is however possible to make an open offer, and the fact that an offer of settlement is made does not necessarily mean that the communication of that offer is to be treated as impliedly made “without prejudice” and therefore within the scope of the privilege. 

15. [15]
    The function of the privilege is to prevent either party from using the other party’s readiness to negotiate as an implied admission: Field v Commissioner for Railways NSW (1957) 99 CLR 285 at 291.  But in circumstances where there has been an acceptance of liability for the purposes of the Motor Accident Insurance Act and where that legislation makes some attempt to compromise the claim almost mandatory prior to litigation, the fact that the party was willing to attempt to compromise the claim could hardly be said to be of significance as an admission.  That is not to say that an offer which is expressly made “without prejudice” would nevertheless be admissible as outside the privilege, but in circumstances where an offer is not made expressly “without prejudice” in my opinion it does not necessarily follow that the privilege applies.  There is no reason in such circumstances why parties might not be willing to make open offers, and therefore no reason to extend the privilege to what is on its face an open offer.

16. [16]
    In my opinion that was the case with this and the other offers. None of them were expressed to be made “without prejudice”, and the context of the negotiations to which I have referred suggests that both parties accepted that these were in truth open negotiations. In those circumstances there can be no valid objection the admissibility of such correspondence for the purposes of this application. Indeed, even if the offers were really “without prejudice” and therefore within the scope of the privilege, it may well be that in the present circumstances what is significant is the fact that the offer was made rather than any implied admission which the offer may contain or include, and in those circumstances they may well not be within the scope of the privilege: Field (supra) at page 291.  It has been said that exceptions to the privilege abound:  Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants and Bars Pty Ltd [2001] 1 QdR 276 at 289 per Byrne J.

Further events

17. [17]
    The second respondent then forwarded a copy of a doctor’s report obtained by it, and requested additional medical information,^[12] and the applicant’s solicitor advised the name of the osteopath, from whom the second respondent obtained a report.^[13]  A copy of this was provided to the applicant’s solicitors on 17 October 2001, when an offer was made to settle for $7,300 “all inclusive”.^[14]  It appears that this was the first formal advice from Mr Day. 

18. [18]
    In the report^[15] dated 22 September 2001 Mr Day advised that he saw the applicant first on 3 July 2000 when she complained of low back pain radiating into her right hip and leg, and upper thoracic and cervical stiffness and pain.  He noted a variety of abnormalities which were said to be consistent with the consequences of a motor vehicle accident, and showing evidence of whiplash strain patterns.  He had seen her on a total of 19 occasions during which time he had been successful in alleviating most of the presenting symptoms but had been unable to stabilise the right sided pain, which he attributed to the L5/S1 joint and associated sciatic nerve.  He said there had been symptomatic relief after treatment for up to three weeks and that he believed her condition should improve with further non-invasive therapy.  There was nothing in the report to suggest the plaintiff was suffering from any significant permanent disability.  Presumably the report is consistent with any advice he had given, or would have given if asked, to the applicant previously.   The applicant said that she would not have taken court action just on the basis of this report. p. 34.   I accept that, and regard such an attitude as reasonable.

19. [19]
    On 8 November 2001 counsel was briefed to advise on quantum. Shortly after the offer of 23 August 2001 was withdrawn, presumably on the advice of counsel. On 21 November the applicant conferred with counsel who advised that further medical reports should be obtained.^[16]  Arrangements were then made for the applicant to see Dr Pentis, an orthopaedic surgeon. 

20. [20]
    Dr Pentis examined the plaintiff on 18 December 2001, and reported on 7 January 2002.^[17]  The history taken included that she had at the time of the accident soreness to the neck and subsequently slowly developed pain in her back and leg with time.  She had not lost time off work and was still working as a legal secretary, recreational activities of walking and gardening had been reduced but apparently not eliminated.  X-rays taken for Dr Pentis that day showed degenerative changes in the spine.  Dr Pentis expressed the opinion that the applicant had sustained a musculo ligamentous injury in the spine having been left with some residual problems, and having aggravated the degeneration to cause a residual incapacity which was a combination of degeneration and soft tissue injury.  He recommended limiting strenuous activity, and changing her position at reasonably frequent intervals when sitting or driving.  He thought she had a permanent incapacity which he assessed at 10-12½ per cent loss of efficient function of the spine as a whole.  It was not susceptible of surgery.

21. [21]
    In addition, arrangements were made for the applicant to see an occupational therapist, whose report^[18] was not provided until 3 April 2002.  It referred to a wide range of difficulties and reduced capacities and restrictions, and expressed the opinion that the plaintiff needed substantial assistance from others, although less during the first seven months after the accident than in the following 1½ years, but with a continuing need of assistance of 15 hours per week.  I find some of the contents of this report surprising, in the light of the other material I have seen.

22. [22]
    That report referred to anxiety symptoms and suggested a psychological assessment. As a result, and after further advice from counsel, arrangements were made for the applicant to see a psychologist Dr Hazell, who was seen on 2 May 2002. He reported^[19] that she appeared to have a chronic pain disorder associated with a general medical condition, which is not usually considered a psychiatric condition although it did have psychological consequences.  Because of her personality she was likely to feel pain more intensely, and be more disabled, although she would tend to deny psychological conditions and understate psychological symptoms.  He also thought there was a specific or simple phobia associated with riding as a front seat passenger in a vehicle. He assessed the applicant as suffering a moderate permanent partial psychological impairment of 35 per cent.

23. [23]
    Meanwhile, before these reports were available, and following prompting from the second respondent, a further offer of settlement was made on behalf of the applicant on 7 December 2001, though for a much higher figure, $80,000 plus costs.^[20]  That was rejected by the second respondent, on 20 December 2001.

Analysis

24. [24]
    The applicant has sworn that after the accident she believed her injuries would resolve completely and that this view persisted until she saw Dr Pentis’ report when she realised for the first time that she would have a permanent impairment.^[21]  I accept this evidence.   Indeed, the significance of Dr Pentis’ report seems to me to be that it revealed that the accident had aggravated a pre-existing degenerative condition of the spine.  But for that degenerative condition, she may well have recovered completely in due course, but because of that pre-existing degenerative condition it is likely that her condition will continue to become worse, as indeed it has since the accident.

25. [25]
    My impression overall from the material is that, once the immediate effects of the accident had subsided, the applicant had relatively mild symptoms at least until the period before she began seeing Mr Day. Thereafter her symptoms were largely controlled by Mr Day’s treatment until 2001, in the sense that he gave symptomatic relief for up to three weeks, and the pattern of recurrence of symptoms was not sufficiently severe to induce the applicant to seek further medical advice. The report from Mr Day, when it was finally obtained, suggested that her condition would clear up in due course, and presumably that was consistent with anything he said to her or would have said to her had he been asked.

26. [26]
    I think it is also of some significance that the initial offer of settlement was relatively modest. In assessing whether it is reasonable for a person in the position of the applicant to bring an action in respect of such a claim, it is necessary to bear in mind the cost and the uncertainty of litigation, and that by commencing litigation a plaintiff exposes herself to the risk of an adverse costs order. Furthermore, an offer of settlement is not necessarily to be equated with a belief, or indeed a reasonable basis for a belief, that an action if successful will produce an award in that sum. I do not consider that the making of that settlement offer shows that she was then aware of facts which would make an action if successful result in an award of damages sufficient to justify the bringing of the action.

27. [27]
    If one looks therefore at the position at the expiration of two years from the date of the accident, the applicant had not received any medical advice of the existence of a permanent disability, and had received treatment essentially only from Mr Day who believed that good results had been obtained and that in due course everything would resolve. She had been able to continue to work, and there was nothing to indicate that she would be unable to continue to work full time in the future. She was hoping to get better: p. 28. She had not received any advice that she would have a permanent and significant incapacity, and there was nothing to indicate that anything had happened which would have induced a reasonable person in her position to think there was anything of any great significance wrong with her, or to seek further medical advice about that matter.

28. [28]
    In these circumstances, bearing in mind the costs and risks of uncertainty of litigation and that from her point of view the amount which might have been recovered could reasonably have been foreseen as modest, she was not necessarily in a position where it was reasonable in the light of appropriate advice (that is such advice as it would seem reasonable for such a person to have taken at that stage) to regard what she then knew as showing both that an action would have a reasonable prospect of resulting in an award of damages sufficient to justify bringing it, and that she ought in her own interests and taking her circumstances into account, to bring an action in respect of the injury. Matters which are relevant in assessing this include her relatively modest financial position (p. 17), and her clear reluctance to go to court. In my opinion these matters are properly taken into account as part of the circumstances of the applicant.

29. [29]
    At that stage she had been assisted by massage that she had been receiving, there was apparently a prospect of further recovery in that way, and she had not been prevented by this condition from continuing to work, and in my opinion it was not unreasonable for a person in her circumstances not to think that she ought to commence proceedings for damages. That is so even if it was reasonable to make a claim and to proceed to the first stage contemplated by the Motor Accident Insurance Act, the pre-litigation stage.   Adopting the approach in Healy v Femdale (supra), I am satisfied that she has taken all the steps which it was reasonable for her, in her circumstances, to take, both as at 7 May 2001 and up to the time when the report of Dr. Pentis was received.  

30. [30]
    Once the matter was placed in the hands of her solicitor, it was reasonable for her to act on the advice that she received. The solicitor took the matter forward, although not as expeditiously as he might have, and, having obtained advice from counsel, did obtain a medical specialist’s report in a timely way.

31. [31]
    There were I think two significant things that happened in January 2002. The first was that the plaintiff found out through Dr Pentis’s report that the injury had aggravated a pre-existing degenerative condition, so that she faced the prospect of further deterioration rather than further recovery. The other was that she realised that she would not be able to continue working full time as a legal secretary. Both of these were matters of some significance in relation to the extent of the damages suffered by the plaintiff. In my opinion they changed the situation from one where it was reasonable for the plaintiff, in view of the risks and expense of litigation and her understandable reluctance to engage in such a thing, not to pursue an action in her own interests to one where a reasonable assessment of her own interests did require her to take action.^[22]  It is not clear exactly when she found out that she would not be able to continue working full time, but it does not appear that it was prior to the receipt of the report of Dr Pentis.  That report is dated 7 January 2002.  It is not clear just when it was received by the solicitor, but in the circumstances I think it reasonable to proceed on the basis that the report was within the means of knowledge of the applicant on 9 January 2002.

32. [32]
    Once Dr Pentis’s report was received, in my opinion it was then reasonable for a person in the position of the applicant to regard what she knew as indicating that she ought in her own interests to bring an action to recover damages in respect of the injury she suffered in the accident.

33. [33]
    I accept that it is insufficient to show merely some additional fact which bears upon the nature and extent of the injury, and for that reason it does not necessarily follow that there is any particular significance in ascertaining that a symptom or any disability associated with the injury is going to be permanent: Moriarty v Sunbeam Corporation Ltd [1988] 2 QdR 325 at 332-3 per Macrossan J.  The point is whether the newly learned fact, or the fact which becomes within the means of knowledge of the applicant, makes the difference between a situation where a reasonable person in the position of the applicant would not think that an action on a claim for damages was worth pursuing, or that such action ought to be pursued, and a situation where a reasonable person in that position would think both of those things.  In practice however it may well be the case that finding out that something, which had been thought to be temporary and would in due course resolve without any significant treatment, is in fact a condition which is not going to resolve and will if anything get worse as time passes, is the sort of additional fact which could well make such a difference, particularly where a person has been continuing to work, although perhaps with some difficulty, but faces for the first time the prospect that the ability to continue to work as before the accident will not continue in the future. 

34. [34]
    The admission of liability was expressly made only for the purposes of the Motor Accident Insurance Act, and expressly reserved the requirement that any litigation be commenced within the limitation period.^[23]  Further, it expressly did not admit that the plaintiff had suffered any injury in the accident, so that the question of whether the applicant’s current problems were caused by the accident, and hence compensable in any action for damages, remained, and apparently remains, in issue.  It is therefore not really appropriate to approach the matter on the basis that the plaintiff was assured of receiving compensation for whatever symptoms she was currently suffering, since the question of whether those symptoms were caused by the accident is in issue.  In those circumstances I certainly do not think that a reasonable person in the position of the plaintiff, with the benefit of appropriate advice, would have regarded litigation as being risk free on the basis of that letter.

35. [35]
    When assessing the reasonableness of the applicant’s position, I think it is permissible to note the very modest offer of settlement made by the second respondent. At that stage the second respondent had all of the (very limited) medical material available to the applicant, and such a modest assessment of the applicant’s prospects could well have reasonably discouraged her from commencing litigation.

36. [36]
    I do not think the settlement offer made to the second respondent on 7 December 2001 is of any real significance. At that stage the applicant had been advised to obtain the opinion of a medical expert, and arrangements had been made for that to happen, but it was not then available. In those circumstances it would have been quite unrealistic for the applicant to make a settlement offer on the basis of anything other than an assumption that her condition was as bad as it could possibly be. The fact that when pressed she made an offer in that amount does not in my opinion in any way mean that the plaintiff had the belief that she would recover that amount or anything like it if she commenced court proceedings, or had reasonable grounds for such a belief.

37. [37]
    The discretion provided in s. 31(2) of the Limitation of Actions Act is therefore available.  Given the admission of liability, and given the relatively short period which has elapsed since the three year limitation period expired, and in the absence of any evidence of prejudice to the respondents, in my opinion it is appropriate to exercise that discretion.  I therefore order that the period of limitation for the action proposed to be commenced by the applicant against the respondent in the District Court be extended so that it expires on 9 January 2003.