Fitzgerald v Balanda[2003] QDC 36

[2003] QDC 036

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No 397 of 2002

SOUTHPORT

DATE 03/02/2003

ORDER

HIS HONOUR: This application by the plaintiff has been made more complicated by the absence of the first defendants and of the second defendant, at whose urging the application is brought. As filed, presumably under rule 69, it seeks the addition of Suncorp Metway Insurance Limited ("Suncorp") as an additional defendant in the action.

The existing defendants who are solicitors have been anxious to procure such a joinder to protect their own positions as defendants in professional negligence proceedings. In them, the plaintiff complains that they let the statute of limitations expire without instituting proceedings to protect her interests, in respect of the motor vehicle accident in which she apparently suffered personal injuries on the 2nd of December 1994. The proposed new defendant's insured was a Mr Bagot.

The statutory hoops established by the Motor Accident Insurance Act 1994 ("the Act") had to be gone through by the plaintiff. On the 7th of September 1995, the proposed new defendant insurer, which opposes the application for relief, wrote, and I quote:

"Thank you for your notice of claim dated 29th of August 1995.

We note you have complied with section 37 of the Motor Accident Insurance Act except for the provision of an offer supported by medical reports. Please forward that information immediately it becomes available, bearing in mind the provisions of the above Act.

We are prepared to settle liability on the basis of 100 per cent apportionment in favour of your client."

There were further contacts between the plaintiff's solicitors who received that offer and Suncorp, which on the solicitor's part indicated the plaintiff's preparedness to settle for $50,000 general damages; special damages as listed, and party and party costs. That offer appears in a letter of the 12th of December 1996.

The plaintiff was apparently examined by Dr A Walker at the behest of Suncorp. Dr Walker's report was some time in coming. Suncorp wrote to the plaintiff's solicitors on 29th April 1997 indicating they were presently awaiting the report, and on receipt of it, would hopefully be in a position to make an offer to settle. Unsurprisingly, the plaintiff's solicitors evinced  an interest in getting hold of that report - see the letter of 28th October 1997 - which offers on behalf of the plaintiff to undergo further medial assessment should Suncorp require that.

Suncorp's letter of the 11th of November 1997 advised Dr Walker's report was still being awaited. On 2nd December 1997, the very date when the limitation period under section 11 of the Limitation of Actions Act 1974 expired, Suncorp wrote to the plaintiff's solicitors forwarding copies of importuning communications to Dr Walker and suggesting that the plaintiff and her solicitors "put some pressure" on the doctor. The plaintiff's solicitors' for an offer from Suncorp continued.

By a letter of 16 March 1998, Suncorp asked the solicitors to "please confirm that proceedings have been issued in this matter" and that a copy of the plaint be forwarded.

Follow-up communications came from Suncorp. The only proceedings that have hitherto, been instituted, on 24th of May last year, are against the solicitors. Their response to being sued for overlooking the limitation period has been to provide the plaintiff's present solicitors, the original ones now being defendants of course, with ammunition which suggests that Suncorp and perhaps its insured, Mr Bagot, may yet be successfully pursued.

Suncorp sent the plaintiff's new solicitors a letter dated 24th September 2001 which includes the following:

"If your client is minded to proceed this matter further, we hereby put you on notice that the matter will be strenuously defended by Suncorp Metway and we will rely on the Limitation of Actions Act 1974."

The decisions of Appeal Courts in Queensland in circumstances like the present where there is a compulsory third party insurer's letter like the one of 7 September 1995, reveal an attitude of sympathy towards putative plaintiffs who are given an intimation that they have no particular problems to face in establishing liability for an accident, and, on the other side, a stern attitude towards the insurers.

It may not have been inevitable that the Courts would take such an approach, but by the time of this application it is clearly enough established for this State.

The first important case is Newton, Bellamy and Wolfe v. The State Government Insurance Office Queensland (1986) 1 Qd.R. 431 which was applied and confirmed to be still relevant, notwithstanding the new regime brought about by the Act, in Lindsay v Smith (2002) 1 Qd.R. 610.

The older case dealt with the contractual aspects of a letter of the kind in evidence here. Lindsay v. Smith dealt also with the related aspect of estoppel which the Court of Appeal had considered in Morris v. FAI General Insurance Company Limited (1996) 1 Qd.R. 495.

Judge McGill had to consider both aspects in Simpson v. Lenton (2002) QDC 214, Judgment 13 August 2002. There, his Honour was highly critical of the delay exhibited by the plaintiff and her legal representatives, and he concluded with what appears to be regret that although on the contractual aspect the Court was in a position to hold the plaintiff statute barred because "the limitation period of six years from the date of the letter accepting liability has also expired in March last year" (see paragraph 15 of the reasons), binding authority obliged him to acknowledge the potential availability to the dilatory plaintiff of assistance by way of estoppel.

Mr Holyoak, who has argued this application for Suncorp, relied on Woodhead v. Elbourne, (2001), 1 Qd.R. 220, which was not relied upon before Judge McGill, as an instance of the well-known principle that equity does not allow its doctrines to be resorted to, to subvert limitations periods which apply to a common law claim, which was available to the plaintiff to pursue.

I ought to indicate that the responsibility for delay in this matter cannot fairly be laid at the door of the plaintiff or her present solicitors. In part, it seems it can be laid at the door of her former solicitors, and perhaps elsewhere too. I have in mind the doctor I have referred to, and perhaps even Suncorp, but it is not necessary to embark on an inquiry into those aspects.

In Smith v. Lindsay, Chesterman J, with whom other members of the Court expressed agreement, said at the top of page 617, that the contract incorporated in a letter of the kind in question is, in essence,

"In consideration of the claimant forbearing to sue, and not incurring the expense of proving liability which the insurer will ultimately have to pay, the insurer admits liability and agrees to pay reasonable damages."

That is not the way in which the proposed pleading making allegations against Suncorp, presently before the Court, deals with the matter. It pleads the contract as in terms of being one "not to rely on the Limitation of Actions Act 1974". That is plainly too broad an allegation, as the judgment of McPherson J in Newton, Bellamy makes clear.

His Honour distinguished the limitation provision respecting the contract to pay reasonable damages which, under section 10 (1)(a) of the Limitations of Actions Act 1974, is six years, from limitations issues to do with the three-year period for actions in respect of personal injury, dealt within section 11.

It is most unlikely that anyone, least of all an experienced insurer, would, in such a broad way, abandon any limitations points. Of course there may be estoppels created in particular circumstances.

Judge McGill's view that the limitation period in respect of suing on what appellate decisions construe as a "contract" was six years from the date of the contract or agreement is supported by comments of McPherson J in Newton, Bellamy at 445 where his Honour, having noted "The limitation period in respect of an action on a simple contract is six years from the date on which the cause of action arose", said, lower on the page, that: "The limitation period applicable to the contract in this case was...the period of six years...running from the date of the contract made by the letter dated February 9th 1981 from the SGIO."

The correspondence from the existing defendants, calculated to encourage the plaintiff to bring this application, referred to what his Honour said at the foot of the same page regarding the "contract to accept liability" having "been repudiated by the SGIO" whereupon the plaintiffs acquire the option of suing for damages for breach of that contract or of affirming the contract and relying upon it in answer to the defence". His Honour regarded the plaintiff as having elected to adopt the second alternative in that case.

It thus emerges that there are, or may be, two views of the date when the limitation period in contract which affects the present plaintiff began to run the date of the contract or the date of breach. From some points of view, as yet, there is no breach, although the letter of 24th of September 2001 from Suncorp appears to evince an intention to use limitation points to defeat any claim by the plaintiff founded on the motor vehicle accident.

The elucidation in the cases of the limitation period under section 10(1)(a) has established, in my view, a basic approach that it is upon the breach of a contract that the cause of action arises, rather than on the making of a contract (see The Laws of Australia (LBC) volume 5 at 10.20). Obviously, there may be special cases, and Mr Holyoak's industry has unearthed some.

In particular, he relies on the decision of the Appeal Court in Western Australia in CIGNA Insurance Asia Pacific Limited v. Packer [2000] 23 WAR 159, a case in which an injured employee waited some 13 years, after being seriously injured at work, before claiming a fixed sum, apparently $93,500, which he was entitled to upon becoming permanently disabled, the test of which was bodily injury lasting for at least 12 months which entirely prevented the insured person from engaging in any occupation for the remainder of his life. The plaintiff asserted he had made a claim by the 30th of August 1988 but the insurance company denied that. The accident had occurred on the 20th of March 1986.

The claim was otherwise pursued and the insurance company finally made it clear by a letter of 30th of April, 1993, that it denied liability. No claim was instituted in Court until the 27th of August, 1998.

The judges, in particular, Malcolm C. J. and Pidgeon J., took the view that the cause of action accrued on the 20th of March, 1987, a year after the accident, and that liability of insurer was not dependent on the respondent making a claim, the "defined event" being bodily injury which resulted in permanent total disablement as defined.

The Court of Appeal has applied that decision in Sullivan v. Oil Company of Australia Limited, (2002), 2 Qd.R 94, in the context of claims for compensation for entering on private land.

It did not matter in the result in that case whether or not the amount of compensation that was appropriate had been worked out. The right to compensation was held to arise on the entry, and the limitation period, this time, pursuant to section 10(1)(d) of the Act, one referring to sums recoverable by virtue of an enactment, began to run from the date of the entry.

The judgments there and in CIGNA contain interesting discussions of the authorities. Pidgeon J in CIGNA distinguishes the judgment of Giles J in Council of the City of Penrith v. Government Insurance Office of New South Wales, (1991), 6 ANZ Insurance Cases, 77 210, which, although it is not available to me today, appears, from what is said about it, to represent the conventional approach that "a breach could not occur while there was a possibility of the defendant performing its promise", see CIGNA at 181.

I am inclined to regard such cases as CIGNA and Sullivan and those applied in them as special and dependent on their own particular contexts. I think the Court today must be aware of the particular context of this application, which is very much to do with the Court's regulating the conduct and consequences of conduct of parties who proceed towards and/or get involved in litigation together.

Since Newton Bellamy, which was decided on the 19th of June, 1985, it has been clear in this State that the consequences of a compulsory third-party insurer, perhaps any insurer, indicating in some way that liability is accepted, are serious and not easily avoided where the putative plaintiff, who does not become an actual plaintiff in time, assuming the Limitation of Actions Act can be invoked, can be shown to have been led into believing that it was not necessary to institute proceedings.

It has become clear that the Motor Accident Insurance Act, 1994, which not only establishes hurdles for a plaintiff to negotiate, but also imposes obligations on insurers to declare their attitudes, has not changed the approach of Newton Bellamy, or indeed, the availability of estoppels which goes back at least to Verwayen v. The Commonwealth.

Today is not the occasion on which to determine whether an estoppel exists.

It is not even the occasion on which to determine what the precise effective terms of the "contract" in the letter of 7th September, 1995 were.

It seems clear to me, however, that the plaintiff ought to have the opportunity to pursue in the Court her claims, which I note again, she is being encouraged to do by the absent existing defendants. They have not appeared today when called, although Mr Morgan has obtained leave to file and read an affidavit of the second defendant, an original copy of which has been served on his instructing solicitors.

The plaintiff, it seems to me, would be free to institute proceedings against Suncorp and indeed, against Mr Bagot as well. This is the course which Mr Morgan, who has no responsibility for the presently proposed new statement of claim, says he is inclined to think is the proper course from the point of view of demonstrating against the solicitor defendants that the plaintiff, if this is the case, has no rights against Suncorp or Mr Bagot.

If the plaintiff chose to file a new claim against them in the Court, nothing could be done to prevent that. It would remain to be seen what defences the plaintiff was met with and whether anything might be said by way of contract or estoppel to assist the plaintiff. It seems to me convenient to have everything dealt with in the existing proceeding against the solicitors.

I think Suncorp has a legitimate concern not to be confronted with the argument that any joinder of parties or amendment permitted by the Court deprives it of any limitations or indeed other defence which might be available.

It is possible for the Court to attach conditions to orders for joinder of parties or amendment, which provide such protection. In the present situation, the action was not commenced until more than six years had elapsed from the insurer's letter, so there is probably nothing particular to be gained by Suncorp in having a protective condition added to the Court's order. Nonetheless, I propose to add the condition.

...

HIS HONOUR: There will be leave granted to the plaintiff to join Guy Bagot and Suncorp Metway Insurance Limited as third and fourth defendants in the action, with a view to establishing their liability to the plaintiff in respect of personal injuries suffered in a motor vehicle accident on the 2nd of December, 1994, on the condition that such joinder be without prejudice to the ability of either to raise any existing limitation or other defence.

I grant leave to the plaintiff to file and serve an appropriate amended statement of claim within 14 days of today, on the same condition.

I grant liberty to apply.

...

HIS HONOUR: Costs are reserved, for the reason that it may be determined that the first and second defendants, who are not represented today, may turn out to be the parties who should pay them.