DISTRICT COURT OF QUEENSLAND

1. [1]
   On 8 April 2004 a claim and statement of claim were filed on behalf of the plaintiff seeking damages for personal injuries suffered as a result of the negligence of the first defendant in a motor vehicle accident on 16 April 2001.  On 10 May 2004 the plaintiff applied for an order that the court dispense with the obligation to make mandatory final offers, under s 51C(11) of the Motor Accident Insurance Act 1994 (“the Act”).  On 13 May 2004 the defendants filed a conditional notice of intention to defend, and applied to have the action struck out, on the ground that there had been a failure to comply with Division 5A of Part 4 of the Act.  Both applications came before me on 14 May 2004.

2. [2]
   The relevant chronology appears to be as follows:

3. [3]
   On the face of it the action which was commenced was premature, since no consent order had been made dispensing with the requirements to hold a compulsory conference, and to exchange mandatory final offers. Nevertheless, Senior Counsel for the plaintiff submitted that what had occurred amounted to an agreement to dispense with the compulsory conference, and that an order could now be made dispensing with the requirement to exchange mandatory final offers. Senior Counsel for the second defendant however submitted that neither of these courses were open; the parties had not in fact agreed to dispense with the compulsory conference, but agreed to do something else which was in the event never done, and an order to dispense with mandatory final offers could not be made after the proceeding had commenced, and the proceeding could not be validly commenced until they had been exchanged or the obligation to do so had been dispensed with. He submitted that the proceeding had been commenced in breach of the Act, and could not now be saved, and so must be struck out.

The agreement

4. [4]
   I should look in a little more detail at what passed between the parties’ solicitors in relation to the proposed consent order. On 25 March 2004 the solicitor for the second defendant realised that such an order was going to be necessary, and arranged for one to be prepared in a form which is commonly made in such circumstances.^[2]  He sent to the plaintiff’s solicitor a facsimile on that day which relevantly said:  “As neither party is ready or will be ready for a compulsory conference before 2 April 2004 we have prepared the enclosed:  1. Consent order;  and 2. Draft order.  We are currently seeking our client’s instructions that they are agreeable to consenting to the enclosed orders being made and will revert to you shortly in this respect.”  What was enclosed was a draft order and a form of consent to the registrar making an order in terms of the draft, pursuant to r 666.^[3] 

5. [5]
   On 6 April 2004 the plaintiff’s solicitor returned the signed form of consent to the solicitor for the defendant under cover of a facsimile, which referred to the facsimile of 25 March, and continued:  “Please find to follow the consent to order of registrar executed on behalf of our client.”:  Exhibit AMRM-28.  On 7 April 2004 the plaintiff’s solicitor spoke to the defendant’s solicitors about the name of the second defendant, and was told the name, and that the defendant’s solicitor would amend the consent order.  The defendant’s solicitor also informed the plaintiff’s solicitor that she now had her client’s instructions “as per the consent order.”^[4] 

6. [6]
   It appears that unfortunately the plaintiff’s solicitor thought that the second defendant’s solicitor would file the application for the consent order, possibly because the idea of the consent order appears to have originated with the solicitor for the second defendant, who had taken the initiative in drafting it. The solicitors for the second defendant on the other hand were expecting the plaintiff’s solicitors to take the initiative and were waiting to receive the originating application so that they could respond to it. For present purposes, I am not concerned with the question of fault.

Analysis

7. [7]
   In these circumstances, it was submitted that in substance what had occurred between the parties was an agreement that the compulsory conference would be dispensed with. In circumstances where the solicitors for the defendant communicated their client’s consent to the form of order, without reference to any particular material in support of the proposition that there was a good reason for it, the defendant must have agreed that there was a good reason for it, as indeed was obvious to the defendant’s solicitors since they had initiated the process. It was submitted that since the second defendant was consenting and regardless of the contents of the material to be filed, it was a reasonable and the correct inference that the “consent” notified to the plaintiff’s solicitors on 7 April was sufficient to satisfy the requirements of s 51A(4).

8. [8]
   With some hesitation, as I am concerned that this will be interpreted as a triumph of form over substance, I am not prepared to accept this interpretation of what occurred. Section 51A contains two separate and necessarily alternative means by which the compulsory conference may be dispensed with.  It may be dispensed with by the parties for good reason by agreement under subsection (4), or it may be dispensed with by the court for good reason, and after taking into account the extent of compliance by the parties with their respective obligations relating to the claim:  subsections (5), (6).  Plainly both solicitors were contemplating that the second path be followed rather than the first. 

9. [9]
   No doubt for practical purposes there was no consideration given to the first, because, by the time this exchange occurred, it was not only too late to hold a compulsory conference, it was also too late to exchange mandatory final offers before the limitation period expired. This was because s 51C(6) requires that a mandatory final offer must remain open for 14 days and proceedings must not be started while the offer remains open, and there were not then 14 days left before the limitation period expired.  There is no power in the parties by agreement to dispense with the requirement to exchange mandatory final offers, and if that had to go it could only be removed by the court under s 51C(11).  Accordingly there was no point in dealing with the compulsory conference under s 51A(4), and in these circumstances it is objectively apparent that the parties never actually intended to take that step. 

10. [10]
    There is also the consideration that the second defendant was plainly consenting to the order only on the basis that it contained conditions requiring something like a compulsory conference to occur after the proceeding had been started. One of the defects of this legislation is that there is no mechanism for postponing the compulsory conference and exchange of mandatory final offers; either they take place before the proceeding starts, or they are dispensed with altogether. Clearly what the second defendant was proposing here was to retain by a condition on the order under s 51A(5)(b) as much benefit of this procedure as could be retained in the circumstances.  That was intended to operate as a condition on the order under s 51A(5)(b), not as a condition of any agreement under s 51A(4).

11. [11]
    It also seems to me that in principle there is a difference between a party agreeing to do something by agreement, and a party agreeing to consent to that thing being done by the court. I do not think that the latter agreement amounts in substance to the former; indeed, but for the consideration that an order was also necessary under s 51C(11), if agreeing to consent to the order under s 51A(5)(b) had the effect that the parties were making an agreement for the purposes of s 51A(4), it could never be appropriate to make an order by consent under s 51A(5)(b), because the court could not dispense with the compulsory conference in circumstances where the parties had already dispensed with it by agreement under subsection (4).

12. [12]
    In these circumstances I am not persuaded to find that in the events that have happened there was an agreement between the parties for the purposes of s 51A(4).  Since there was also not an order of the court under subsection (5)(b) prior to the commencement of the proceeding, it follows that the proceeding was commenced in breach of s 51A(1), and therefore must be struck out.^[5] 

Mandatory final offers

13. [13]
    In these circumstances it is unnecessary for me to consider whether an order may now be made under s 51C(11) in respect of the proceeding that has already been commenced.  Nevertheless, in case a different view may be taken elsewhere, I should deal with the question of whether, if I had power to dispense with the requirement to exchange mandatory final offers, I would exercise that power.  In the present case the defendant was prepared to consent to an order that the exchange of mandatory final offers be dispensed with, and, but for the failure of the solicitors for the plaintiff to file the necessary application and process it prior to the time when the claim and statement of claim were filed, such an order would undoubtedly have been made.  Plainly it was an appropriate case to make such an order in those circumstances, and if the power still exists to make the order in respect of this proceeding, I would exercise it.

Extension of the period under s 57(2)(b)

14. [14]
    Since the limitation period has now expired, it appeared therefore that the plaintiff is without a remedy, at least a remedy against the defendants. However, it occurred to me that it may now be possible for the court to make an order under s 57(2)(b) of the Act allowing a longer period after the end of the period of limitation within which an action may be brought by the plaintiff against the defendants in respect of this claim, so as to enable a fresh action to be commenced.^[6]  Although Senior Counsel for the plaintiff was understandably reluctant to disavow any course which offered some prospect of preserving the plaintiff’s claim, Senior Counsel for the defendant submitted that this was not open, on the ground that it was established that s 57(2) was not an independent source of power for a court to grant leave to commence an action outside the limitation period. 

15. [15]
    The Court of Appeal said as much in Bermingham v Priest [2003] 1 Qd R 623, albeit in respect of the subsection in its unamended form.  The section, at the time which was relevant for the purposes of the decision in that matter, provided as follows: 

“(1) If notice of a motor vehicle accident claim is given under Division 3 (claims procedure), 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.”

16. [16]
    Williams JA, with whom Wilson J agreed, said at [16] – [18]: “Section 57(1) and (2) deal with two separate factual situations.  The first situation is that where notice is given under Division 3.  Once such notice is given before the end of the period of limitation (which must mean the ordinary period) s 57(1) provides that there is an extension of that limitation period.  The duration of that extension is then fixed by s 57(2) which provides that in those circumstances the proceeding may be ‘brought within six months after the day on which the notice is given’.  The second situation dealt with by the section is that where an application for leave to bring a proceeding is made under s 39(5) before the end of the ordinary period of limitation.  In that circumstance the period of limitation is extended, but again the duration of that extension is fixed by s 57(2).  In those circumstances the proceeding may only be brought ‘if it is brought within six months after … leave to bring the proceeding is granted’.  Section 57 must in my view be construed in that way.  It follows that the reference at the end of s 57(2) to ‘leave to bring the proceeding’ has no application where the matter comes within what I have called the first situation.  The facts of this case are within what I have called the first situation.  It follows that so far as s 57 is concerned the respondent had until 6 October 2001 to commence proceedings but, if leave was required because of any non-compliance with a requirement of Division 3, that leave could not be granted pursuant to s 57.  The only provision conferring jurisdiction on the court to grant leave to bring a proceeding despite non-compliance with the requirement of Division 3 is s 39(5)(c).  That particular provision is not limited by the words in s 57(1) ‘before the end of the period of limitation’.”

17. [17]
    I would not disagree with that interpretation of the section as it then stood, even if I were at liberty to do so. The fact that in the former situation the extension was of no practical use, because under s 39(5)(a)(i) of the Act at that time, a proceeding could not be commenced until “at least six months have elapsed since the notice … was given”, so that the extension of the limitation period provided in the first of the two situations identified by his Honour stopped one day short of the first day on which such a proceeding was permitted by that section, was simply an indication of bad drafting of the statute rather than an indication that the true construction of the provision was different.^[7] 

18. [18]
    The section however has subsequently been amended, by the Motor Accident Insurance Amendment Act 2000, which substituted for the former subsection (2) the following: 

“(2) However, the proceeding may only be brought after the end of the period of limitation if it is brought within –

1. (a)
   six months after the notice is given or leave to bring the proceeding is granted;  or

2. (b)
   a longer period allowed by the court.” 

The explanatory note to the Bill for that amending Act was not very frank about the need for this amendment;  all that was said in relation to the relevant clause was:  “This clause is amended to allow for the six month period to be extended by the court.  This alleviates an anxiety that some of the legal profession have concerning the effect of the current provision.”^[8]  This overcame the difficulty caused by the inconsistency between s 39(5)(a)(i) and s 57(2) of the Act as it previously stood.

19. [19]
    Unfortunately the legislature when considering the need to amend s 57 appears to have overlooked that it was also amending s 39 at the same time, to replace the former subsection (5) with a new subsection (5) which contained no reference to a period of six months, and also removed the provision formerly in s 39(5)(c) under which a court might give leave to bring a proceeding despite non-compliance with the requirements of that division.  That was the provision referred to by Williams JA as being applicable in the second situation contemplated by s 57.  On the face of it therefore s 57 was amended giving a power to extend the six month period, but preserving its operation in two situations notwithstanding that one of them can now no longer apply.  In these circumstances, the power to extend the six month period in the second situation identified by Williams JA is of no practical use. 

20. [20]
    On the other hand, the power to extend the six month period in the first situation remains of considerable significance. Although there is no longer a six month prohibition on proceedings being commenced, there is a good deal to be done after the point has been reached where a claimant has given a complying notice of claim under Division 3, or the insurer has waived compliance, or the court has authorised further proceedings based on the claim despite the non-compliance.  The parties are then to cooperate with each other under Division 4, and there are to be a compulsory conference under s 51A, and (possibly)^[9] an exchange of mandatory final offers under s 51C.  It may be that all of these things could occur within the six month period, but a situation could easily arise where they do not occur within that period.

21. [21]
    If that situation does arise, one way of dealing with the problem is in the manner suggested initially by the solicitors for the defendant; dispensing with the requirement for a compulsory conference and the exchange of mandatory final offers. That has the disadvantage referred to earlier, that there is no power under the legislation to postpone those requirements. Although there can be something like a compulsory conference held after the proceeding is commenced, by agreement between the parties or subject to a condition imposed by order of the court, there is no power in the court or the parties by agreement to impose something like the provisions dealing with mandatory final offers once they have been dispensed with: Lindsay v Aumaalii [2004] QDC 28.

22. [22]
    But on the face of it an alternative way exists of overcoming the problem, by making an order under s 57(2)(b) extending the six month period, to give time to enable the parties to complete the pre-litigation procedures in accordance with the requirements of the legislation before a proceeding has to be commenced.  That would have the practical advantage of giving the parties all the time that is necessary in order to enable all the relevant information to be gathered and exchanged, so that the parties can then conduct a compulsory conference on a fully informed basis, thereby maximising the opportunity for the parties to settle the matter prior to commencement of litigation.  It would also mean that there would be time to exchange mandatory final offers, which are of some significance because of the operation of s 55F, as explained in Gitsham v Suncorp Metway Insurance Ltd [2003] 2 Qd R 251 at 256. 

23. [23]
    In these circumstances it can be seen to be consistent with the purpose of the Act for the parties to be allowed time to complete all of the pre-litigation procedures before they have to commence a proceeding in a court, and only commence a proceeding if all of those procedures fail to resolve the matter. It can be seen to be consistent with the objectives of the legislation for the completion of the pre-litigation procedures to take priority over the need to commence a proceeding prior to the expiration of the limitation period specified in the Limitation of Actions Act 1974.

24. [24]
    Whatever the problems associated with the drafting of s 57, it has always been an attempt to deal with the fact that difficulties can arise where there is a conflict between the statutory imposition of pre-litigation procedures and the expiration of the limitation period, and to ensure that claimants were not prejudiced, in terms of the requirements of the Limitation of Actions Act, by the imposition of the obligation to comply with the pre-litigation procedures.  It did this by extending the limitation period.  Initially the extension was for a fixed period of six months, which no doubt the legislature expected would be an effective and appropriate concession.  Once it emerged that it was not, the legislature conferred on the court a power to extend that period of six months.  That can only be seen as a power to extend the limitation period, or rather a power to grant an additional extension of the limitation period over and above that already granted by the statute.  Plainly the purpose of that grant of power is to enable the pre-litigation procedures to be completed before a claimant has to commence a proceeding.

25. [25]
    I am not aware of any authority on s 57(2) since its amendment, but there is a similar provision in s 59 of the Personal Injuries Proceedings Act 2002.  That section provides as follows: 

“(1) If a complying notice of claim is given before the end of the period of limitation applying to the claim, the claimant may start a proceeding in a court based on the claim even though the period of limitation has ended.

3. (2)
   However, the proceeding may be started after the end of the period of limitation only if it is started within –

1. (a)
   six months after the notice is given or leave to start the proceeding is granted;  or

2. (b)
   a longer period allowed by the court.” 

Subsection (3) contains a provision that the proceeding is then stayed until the claimant complies with Part 1 of the Act, and subsection (4) contains a provision analogous to s 57(5) of the Act.

26. [26]
    In Kash v S M & T J Cedergren Builders [2003] QSC 426, McMurdo J said of s 59 at [15]:  “The evident intent of s 59 is to permit, in some cases, an extension of the period of limitation because the defendant has had the benefit of a complying notice of claim within the limitation period.  It would appear from s 59(2) that the court in an appropriate case could extend the period of limitation to a date more than six months after the complying notice was given.”  His Honour went on to reject the argument that the s 59 power was confined to cases where the application was made prior to the expiration of the period of limitation, concluding at [22]:  “The power under s 59 can be exercised before or after the date within s 59(2)(a).” 

27. [27]
    His Honour then went on to exercise the discretion in that case, noting that the exercise of the power was affected by factors such as the extent of the delay, the prospect of any prejudice to a respondent, and the prejudice to the applicant by being permanently shut out of the proceeding. His Honour did not specifically refer to the fact that, in circumstances where a complying notice of claim was given prior to the expiration of the limitation period, it is likely that, but for the imposition by the statute of pre-litigation procedures, a proceeding would have commenced prior to the expiration of the limitation period, so that but for the enactment of the statute, the defendant would not have obtained the benefit of a defence under the Limitation of Actions Act 1974.  The practical effect of the exercise of the power under s 59(2) of the Personal Injuries Proceedings Act, and indeed s 57(2)(b) of the Act, is likely to be simply preventing the defendant from obtaining the benefit of a defence under the Limitation of Actions Act which but for the enactment of the other statute would not have been available. 

28. [28]
    In the present case of course it is certain that proceedings would have been commenced in time, because they were commenced in time. They are subject to being struck out, but only because of a failure to complete the pre-litigation requirements of the Act before they were commenced. The objects of the Act do not extend to enabling defendants to obtain the benefit of defences under the Limitation of Actions Act which would otherwise not have been available.

29. [29]
    There are other decisions of the same effect, or following the approach in Kash, by other judges of the Supreme Court.^[10]  I have followed that interpretation of s 59, and generally respondents have taken the attitude that if the period is to be extended they prefer an extension which is long enough to enable the pre-litigation procedures to be concluded before the proceeding is started.

30. [30]
    It was submitted that an application for an extension of time under s 57(2)(b) could not be brought after the limitation period expired, because of the decisions in Bermingham and Aydar.  But those cases were not concerned with the timing of an application for the exercise of the new power to extend the period of six months allowed by s 57(2) which was inserted by the amendment.  The particular application for leave to commence a proceeding discussed by the court was an application for leave under the former s 39(5)(c), specifically identified by Williams JA at [18] in Bermingham, which power has now been abolished.  An application for the exercise of that power had to be filed prior to the expiration of the limitation period for s 57 to apply, because s 57(1) provided expressly that the right to bring a proceeding even though the period of limitation had ended arose, in the second situation, where “an application for leave to bring a proceeding … is made under Division 3, before the end of the period of limitation applying to the claim.”  But there is nothing in s 57 as it presently stands confining the power in s 57(2)(b) to an application made at that time. 

31. [31]
    Indeed, it would be absurd to confine it in that way, in circumstances where the same amending Act which inserted the power in the court to extend the period also removed the provision for the court to entertain an application for leave to bring a proceeding under Division 3.  Because of the changes to s 39(5), s 57 ought to have been amended as well to remove reference to the second situation identified by Williams JA in Bermingham.  Had that occurred, the outcome would have been a section almost identical with s 59 of the Personal Injuries Proceedings Act.  But again the explanation is obviously bad drafting, rather than some devious legislative intention to take away with one hand what it was apparently giving with the other. 

32. [32]
    I do not think this should be seen as a legislative conferral of an open-ended discretion to tear up the Limitation of Actions Act.  Plainly it was intended that the discretion be exercised in the context of a situation where a notice of claim was given under Division 3 prior to the expiration of the limitation period, in circumstances where the extension of that period already provided by the section has proved inadequate, and for the purposes of furthering the objects of the Act identified in s 3, in particular object (c), and to support the proper operation of the legislative program, in furtherance of that object, for pre-litigation procedures with a view to settlement of claims before proceedings are commenced.

33. [33]
    In the present case there has been a partial admission of liability for the purposes of the Act, so the plaintiff is bound to be at least substantially successful. The defendants’ solicitors were willing to cooperate to enable the proceeding to be commenced within time, and there was no suggestion the defendants were prejudiced by an extension of the time. The failure to commence the proceeding within time was obviously due to a mistake on the part of the plaintiff’s solicitor rather than any default of the plaintiff personally, and the extension required would be very short. On the other hand, it would be open to make an order for an extension of the limitation period for long enough to enable a compulsory conference to be held under the Act, and to enable an exchange of mandatory final offers to occur. That would be a better outcome in terms of the object of the Act than what had been contemplated, a consent order dispensing with the compulsory conference and the exchange of mandatory final offers.

34. [34]
    In all the circumstances it is in my opinion an appropriate case to exercise the power under s 57(2)(b) to extend the time.  I will circulate these reasons and invite submissions from the parties as to whether the extension should be a short one (in which case I should also make orders under s 51A(5)(b) and 51C(11)) or a longer one to enable those steps to be completed, and if so for how long.  A new proceeding will have to be commenced however.  The current proceeding must be struck out, and the second defendant is entitled to its costs of that proceeding, and the applications.