Paterson v Leigh[2008] QSC 277

SUPREME COURT OF QUEENSLAND

1. McMEEKIN J: The applicant, Robin Ann Paterson, claims that she sustained personal injuries in a motor vehicle accident which occurred on 19 November 2005.  She was then aged 41 years, having been born on 10 February 1964. The limitation period relevant to her action, at the time of the hearing, was due to expire in two weeks time.  She applies for an extension of that limitation period pursuant to s 57(2)(b) of the Motor Accident Insurance Act 1994 (‘the Act’). 

2. Despite still being within the limitation period, the application is opposed. The limitation period for the applicant’s claim will expire on 19 November 2008. The application was filed on 27 October 2008, a little over three weeks prior to the expiration of the limitation period.

3. Ms Paterson cannot commence her proceedings because she is yet to comply with some of the requirements of the Act. Principally there is yet to be a conference between the parties as envisaged by s 51A. No certificate of readiness signed by each party’s lawyer to the effect that the party ‘is in all respects ready for the conference and the trial’ has yet been prepared as required by s 51B(5) of the Act. Nor do I think such a certificate could be signed. It would appear that the applicant’s solicitors are yet to give Ms Paterson a cost statement containing the information required by s 51B(7). As well it may be that it is envisaged a further medical report is required. Thus the requirement that the lawyers certify that all medical and other expert reports have been obtained as envisaged by s 51B(6) cannot be satisfied. There would then remain the “14 day moratorium of proceedings for consideration of the compulsory final offers”.^[1]

4. The applicant could still bring her proceedings within the limitation period but only with the co-operation of the second respondent, the Nominal Defendant, which is not forthcoming.^[2] 

5. The legislature has provided that if a claimant gives a notice of motor vehicle accident claim within the period of limitation then that claimant might still bring a proceeding in a court based on the claim even though the period of limitation then ends. Thus the express pre-condition to the exercise of the power is satisfied.

6. The claimant can only bring such a proceeding if the proceedings are brought within six months of giving the notice or within such a longer period as might be allowed by the court.^[3]  Here the applicant gave her notice long ago in December 2005.  The six month period envisaged by s 57(2)(a) has long expired.  Thus, given that she cannot, without the co-operation of the Nominal Defendant, bring her proceedings within time, it is necessary for her to obtain an order from the court that she be permitted to bring her proceedings within such ‘longer period’ as might be allowed by the court.

7. Applications of this type have come before the courts on a number of occasions. I have been referred to decisions of the Court of Appeal in Morrison-Gardiner v Car Choice Pty Ltd^[4]; Winters v Doyle^[5]; Ward v Wiltshire Australia Pty Ltd & Anor^[6]; Cottle v Smith & Anor^[7] and Gitsham & Ors v Suncorp Metway Insurance Ltd^[8].

8. The principles that seem to be to emerge from these cases are:

(a)The discretion to be exercised in respect of an application pursuant to s 57(2)(b) of the Act is unfettered;

(b)The onus lies on the applicant to show good reason why the discretion ought to be exercised in his or her favour;^[9]

(c)Where an applicant is able to show that the delay which has occurred was occasioned by a ‘conscientious effort to comply’ with the Act then that would normally be good reason for the favourable exercise of the discretion^[10] but is not a ‘dominating consideration’^[11]. Conversely, claimants who ignore the obligations imposed on them by the Act or who make no conscientious effort to comply with them may have difficulty obtaining a favourable exercise of the discretion;^[12]

(d)Where an applicant is not able to show that the delay was occasioned by ‘a conscientious effort to comply’ with the Act that is not fatal to the application;^[13]

(e)Any delay on the part of a claimant in complying with the Act’s requirements or in applying for an extension of time will be relevant to the exercise of the discretion;^[14]

(f) The length of any delay is important and possible prejudice to the defendant is relevant;^[15]

(h)Depriving a defendant of the complete defence afforded by the statutory time bar is an important matter;^[16]

(i)The interests of justice are of course the overriding consideration and in that regard the question of whether a fair trial of the proceedings is unlikely is an important consideration;^[17]

(j)The giving of a notice of claim before the expiry of the limitation period and compliance by a claimant with the provisions of the Act that it provide any information sought by the insurer are both relevant factors.^[18]

9. Here the second respondent argues that the delay that has occurred is such that the application should be denied. As will be seen there appears to be no particular prejudice to the second respondent alleged by this delay; the second respondent has itself been guilty of significant delay and has ignored its own obligations under the Act; whilst some criticism can be levelled at her the applicant has, through her solicitors, been endeavouring to prepare her material; and what delay there has been seems to largely centre on the obtaining of an ultra sound report which might be thought not to be of central relevance to assessing the claim and which, if the second respondent had wished to exercise its powers under the Act, it could have long since obtained.

10. I turn then to the facts here. The subject accident occurred on Facing Island, an island off Gladstone.  Ms Paterson alleges that the accident involved an unregistered vehicle being driven by the first respondent, Vincent Thomas Leigh.  Assuming that the vehicle being driven by Mr Leigh was an ‘uninsured motor vehicle’ as defined then Ms Paterson’s claim for damages is governed by the provisions of the Act.  It seems that this fundamental matter is in issue.

11. Following whatever incident occurred on 19 November 2005, Ms Paterson made a complaint to the police about Mr Leigh’s behaviour and Mr Leigh was charged with dangerous operation of a motor vehicle. The inference that I draw is that the prosecuting authority was satisfied that if the applicant’s version was accepted then a prima facie case could be established. 

12. The applicant’s material shows that the matter came on for hearing in the Gladstone Magistrates Court on 27 June 2006 and the charge dismissed.

13. The Act requires that written notice of the motor vehicle accident be given to the insurer within three months of the accident. Because the vehicle was unregistered the applicant gave notice of her claim to the second respondent, the Nominal Defendant. She did so under cover of a letter dated 18 December 2005, that is within one month of the accident. The Nominal Defendant accepts that it received a compliant notice of accident claim form from Ms Paterson on 20 December 2005.

14. The Act next provides that the insurer is obliged to take steps to resolve the claim within six months of receiving Ms Paterson’s notice.^[19]  In this case the Nominal Defendant sought additional information as it was entitled to do pursuant to s 37A of the Act.  The request was made on 22 December 2005 and responded to under cover of a letter from Ms Paterson’s solicitors on 10 February 2006.

15. Section 41 of the Act imposes on the insurer, and in this case the Nominal Defendant, certain obligations. Within six months of receiving notice of a motor vehicle accident claim the insurer ‘must’ firstly take reasonable steps to inform itself of the circumstances of the motor vehicle accident out of which the claim arises and secondly give to the claimant a written notice stating whether liability is admitted or denied or stating what degree of contributory negligence the insurer thinks is appropriate.

16. Further, by s 41(2) the insurer ‘must’ do two things ‘as soon as practicable after an insurer receives notice of a claim’. Those two things are:

(a)Make a fair and reasonable estimate of the damages to which the claimant would be entitled in an action against the insurer;  and

(b)Make a written offer (or counter-offer) of settlement to the claimant setting out in detail the basis on which the offer is made, or settle the claim by accepting an offer made by the claimant.

17. Here the insurer purported to comply with its obligations under s 41(1)(b)(i) by providing a written notice dated 15 June 2006 (shown as received by the applicant’s solicitors on 20 June 2006) by advising that it gave notice that the Nominal Defendant’s ‘denies liability’ but then added in the next paragraph: ‘This notice is given on a provisional basis only as our investigations are not yet completed’. It continued: ‘We will revert back to you on this issue once our investigations are completed.’

18. No explanation has been offered by the Nominal Defendant as to why it could not appropriately inform itself of the circumstances of the motor vehicle accident out of which the claim arose within the six months provided. The form of the notice given plainly suggests to the claimant that the insurer’s attitude to liability might well change.

19. As matters transpired the Nominal Defendant advised on 7 December 2006 that it had ‘carried out and now completed investigations into the incident’ and ‘from the evidence available it would appear any injuries suffered by your client have not occurred in the manner stated and therefore we have reasonable grounds to suspect fraud in relation matter (sic)’. The Nominal Defendant further advised that pursuant to s 48(3) it was ‘withholding from disclosure its documentary material including investigative reports in relation to the subject claim’. The letter concluded: ‘Accordingly liability is now formally denied.’

20. I observe that the Nominal Defendant took nearly 12 months to reach its conclusion on liability. The insurer has advanced no evidence whatever that the circumstances involving this motor vehicle accident are particularly complex. Why it took the insurer six more months to conclude its investigations is not explained in the material.

21. The further obligation imposed on the insurer was to make ‘a fair and reasonable estimate of the damages to which the claimant would be entitled in an action against the insurer’ and to ‘make a written offer ... of settlement to the claimant setting out in detail the basis on which the offer is made’.^[20]  The insurer was required to do this ‘as soon as practicable’.

22. As White J (as she then was) observed in Gitsham & Ors v Suncorp Metway Insurance Ltd, the effect of these provisions is that ‘an insurer is not permitted ... to stand by and merely be reactive to a claim.  The section imposes a positive obligation to gather information, address it and make an offer’.^[21] To that end the legislation arms the insurer with the power to “force the pace”^[22] by requiring claimants to co-operate with the insurer and to undergo medical examinations.^[23]

23. As best I can see from the material the insurer has entirely ignored this ‘positive obligation’. It sought information from the claimant at an early stage and received a prompt response. Since then I am not sure that the second respondent has done anything.

24. One of the objects of the Act is to encourage the speedy resolution of personal injury claims resulting from motor vehicle accidents (s 3(c)). Given that object, and given the express obligations placed on the insurer, it is surprising, to say the least, that on 21 December 2007 the solicitors acting for the insurer who it seems were retained only about a month before the date of the letter, complained that the notice of accident claim form does not allege any specifics of negligence (I note that the Notice does refer to statements attached which were not annexed to the affidavit material) and then requests ‘that the claimant provide within one month a statutory declaration properly particularising her alleged case in relation to liability and how and when she was injured’. I note that this was more than a year after the hearing in the Magistrates Court in which the applicant and her mother, the only other witness to the incident that she has ever advanced, gave evidence on oath. A statutory declaration was provided under cover of a letter dated 31 March 2008.

25. As to its obligation to make a fair and reasonable estimate of the damages it would seem that the insurer did precisely nothing. No medical examination has ever been requested. No indication has ever been given by the insurer of its estimate of the probably damages. No offer has ever been made.

26. On the applicant’s side things did not proceed with great haste either. On 8 August 2007 she was examined by an orthopaedic surgeon, Dr T K Foote. Dr Foote’s report was provided on 2 October 2007.

27. I have received no detailed submissions relating to the assessment of damages but I observe that a preliminary view based on the only medical evidence available suggests that they are fairly modest. Ms Paterson saw a general practitioner on one occasion. That practitioner made a diagnosis of muscular strains and bruising and sent Ms Paterson for physiotherapy and gave her a prescription. The physiotherapist treated Ms Paterson for a sore right shoulder five or six times. At the time of Dr Foote’s consultation he advised that ‘her cervical spine, thoracic spine and lumbar spine are not causing her any problems’. Ms Paterson complained of a sore right shoulder in respect of which Dr Foote advised that Ms Paterson had ‘clinical evidence of a right rotator cuff syndrome for which she needs to see a doctor, possibly a specialist, may well need some cortisone and local injections, a course of analgesics and anti-inflammatory tablets. There is a small chance that she will require a right subacromial decompression with or without a repair of her rotator cuff’ (my emphasis). That repair of the rotator cuff depended on an ultrasound investigation which Dr Foote requested at that time.  Dr Foote’s opinion makes plain that there was only a ‘small chance’ of any surgery being required.  Dr Foote advised that Ms Paterson’s prognosis was good, that she coped with most of her activities of daily living, that she had required and would require no domestic assistance around the house.  He concluded that she had not reached ‘maximum medical improvement as she has had no consultations or treatment for her right shoulder rotator cuff syndrome.’

28. Dr Foote’s request for an ultrasound investigation appears to have brought the process of assessing damages to a halt. The applicant eventually had the ultrasound investigation on 20 October 2008.

29. On 20 November 2007 Ms Esdale, the applicant’s solicitor, wrote to the Nominal Defendant enclosing the report of Dr Foote and asking the Nominal Defendant to advise whether they required an independent medical examination of the applicant and if so to forward to the applicant a panel from which to select an independent examiner. That has never been done.

30. Following that date the applicant’s solicitor communicated to the solicitors acting for the Nominal Defendant on 10 March 2008 (by telephone), 2 June 2008 (by email), and 3 July 2008 (by email). The effect of those communications was to advise on the applicant’s attempt to have the ultrasound performed. Both parties seem to have taken the view that the performance of the ultrasound was essential to further progressing the assessment of damages. I am puzzled by this. At best the ultra sound might give a clearer picture of the diagnosis. It was only relevant to the doctor to determine the surgery that he could contemplate. The applicant seems to have displayed little interest in any treatment let alone surgery. From the applicant’s perspective she apparently wished to obtain the updated report of Dr Foote before completing her particularisation of her damages claim. From the respondent’s perspective it appeared that they wished not to incur the expense of an independent medical examination until they had the final report from Dr Foote.

31. Whilst the applicant may have been dilatory in this regard the fault was not all hers. The material shows that there were some six appointments made and cancelled to have the ultrasound carried out between September 2007 and July 2008. The first appointment was cancelled because one of her children was sick. The third appointment was cancelled due to the illness of a staff member of her business. The fifth appointment was cancelled by Central Queensland Medical Imaging, the radiological business appointed to carry out the ultrasound. One cancellation is unexplained (that of 17 December 2007) and one was due to what are described as ‘work demands’ (that of 5 June 2008).

32. Ms Esdale deposes that during 2007 and 2008 she continued to obtain up to date details of the applicant’s special damages and financial records in order to complete a statement of loss and damage and quantify her client’s claim.^[24]  This caused some delay as the applicant could not locate copies of income tax returns for the years ending 30 June 2006 and 2007.  It appears for the financial year ending 30 June 2006 the applicant had lodged her own income tax return on the internet.  Eventually an authority was directed to the Australian Tax Office requesting a copy of her return.  That was forwarded to the Tax Office on 11 August 2008 and a reply received on 17 October 2008.  On 27 October 2008 the applicant’s solicitors forwarded to the solicitors of the Nominal Defendant a statutory declaration completed by the applicant together with an attached statement of loss and damage particularising her claim for damages.

33. One of the issues between the parties is whether the motor vehicle being driven by Mr Lee was an ‘uninsured motor vehicle’ for the purposes of the Act. The argument turns on whether there was any requirement that the motor vehicle be registered given the lack of roads on Facing Island.  Much of the applicant’s solicitors’ attention has been directed to precisely where on Facing Island the incident occurred, whether that location is a gazetted road and if not, whether it is a public place such that the obligation to insure arises.  The issue first arose in a letter from the respondent’s solicitors on 21 December 2007.^[25]  Despite raising the issue the second respondent has not provided any information to attempt to resolve it.  So far as appears from the material the second respondent has not conducted any investigation of its own at all into the matter.^[26]  The applicant’s solicitors in the meantime have pursued the Queensland Police Service for information, sought information from the Department of Main Roads, provided the second respondent with a map obtained from the Gladstone Regional Council depicting the gazetted/state reserve roads on Facing Island and during September and October 2008 made several requests of the Department of Main Roads for further information without success.

34. As 2008 progressed it is evident that the solicitors for the respondent were mindful of the approaching expiration of the limitation period. So much is clear from the telephone message left by the respondent’s solicitor as reflected in the email of 2 July 2008.^[27] No suggestion is made of any prejudice in this or any other correspondence.

35. Apart from the telephone calls and emails the applicant’s solicitors corresponded with the Nominal Defendant or their solicitors on 23 January 2007, 12 July 2007, 20 November 2007, 31 March 2008, 4 June 2008, 27 October 2008 and 31 October 2008. There were prompt or reasonably prompt responses by the applicant to requests for information. In no sense did the matter go to sleep.

36. The applicant’s personal circumstances are not irrelevant. It emerges from the material that she is a mother with dependent children and was conducting her own small business, at least for a significant part of the time since the accident. She has found the sequelae of the accident distressing. Ms Esdale has deposed that her instructions are that the applicant was distressed by the incident, advised by a general practitioner to obtain psychological treatment and that her distress has been compounded by the trial in the Magistrates Court and the second respondent’s attitude towards her claim which she perceives as one involving an allegation of fraud. The applicant has instructed her solicitor that she feels anxious when discussing the incident. The inference sought to be drawn is that this has caused some delays in having Ms Paterson attend to the necessary steps in progressing the claim. There is some independent support for these claims in that the medical certificate attached to the notice of accident of claim form refers to ‘post-traumatic stress’ and ‘very emotional and anxious’, which certificate was completed by Dr Nicolai, the general practitioner that the applicant saw following the incident.

37. I turn then to the exercise of the discretion conferred on the court. Here the three year limitation period is yet to expire. Mr Crow, counsel on behalf of the applicant, informed me that in each of the decisions cited to me the limitation period had expired prior to the bringing of the application. Thus but for the requirements of the Act, the applicant could launch her action within time. Indeed I was informed that on the day of the hearing (3 November 2008) if I was prepared to order that the compulsory conference take place the following day, which I have power to do under the Act, then the applicant would be able to launch her action within time, even allowing for the 14 days required for the expiration of any mandatory offers made.

38. The second respondent was extremely critical of the applicant and the way in which this matter has proceeded over the years. I would have thought that the second respondent might have considered its own conduct before being so critical of the applicant. It took the respondent 12 months to decide that it would formally deny liability. No explanation for that has been offered and it is clearly contrary to the obligation imposed on the respondent by the Act. It has raised the fundamental issue of whether there was any requirement that the motor vehicle be insured but appears to have taken not one step towards clarifying where the accident occurred on its instructions. In my view this is in complete defiance of the objects of the Act and its obligation to endeavour to settle claims expeditiously. Plainly enough if it can demonstrate that the accident occurred at a place such that no obligation to insure the car involved could arise then that will go a long way to disposing of the claim. Its failure to offer any assistance to the applicant’s solicitors has meant that her energies and attention have been diverted away from the issue of properly assessing the claim.

39. Further, the second respondent seems to have taken not one step towards assessing the damages. In my view it is not good enough to say that they were awaiting an ultrasound being carried out. As I read Dr Foote’s report the ultrasound went only to the issue of whether there was a tear of the rotator cuff. If such a tear was demonstrated then that might bear on the issue of whether an operation would be required. But there is nothing in the Act to suggest that the obligation to obtain necessary medical information lies only on the applicant. One could only assume that the second respondent’s reluctance to take any step is motivated by some financial consideration. Perhaps it wished to avoid the expense of the ultrasound and perhaps the expense of an independent medical examination. If so that provides no justification for its conduct at all. One need only compare the resources of the second respondent to that of a working mother running a small business to appreciate the irrelevancy of such a consideration.

40. It is relevant that the applicant gave early notice of the accident to the second respondent and promptly complied with its requirement for further information. Since February 2006 when that further information was provided, the second respondent has been in the position of being entitled to request a medical examination and progressing its own assessment of the damages which it has refused to do.

41. It is evident that the applicant has relied upon her solicitors to prepare the claim. The only real criticisms that could be levelled at her personally is that she has failed to obtain the ultrasound investigation requested by Dr Foote in a timely way and failed to obtain copies of her post accident tax returns. While she might well have been more diligent in regard to both matters, it is evident from the material that the fault in obtaining the required examination has not been all hers.

42. As to the delay in obtaining detailed information relevant to the assessment of damages the applicant might well have been better advised to have provided estimates of her income and expenses and insisted on a compulsory conference rather than attempting to obtain income tax returns with the inevitable consequent delays given that she did not retain copies of them. But this reflects her willingness to inform the insurer accurately of the detail of her claim. It is ironic that her attempts to do so are now said to be brought into the scales against permitting her to bring her action.

43. In my view all the considerations are one way in this case. The second respondent can point to no prejudice. It was given early notice of the claim. In this case not only does the second respondent have the statement of their client (which I assume they must have obtained in the first six month period) but they have the advantage of sworn evidence having been given in relation to the matter by the applicant and her mother and the respondent, and as well they have a statutory declaration from the applicant. The only prejudice that the second respondent can point to is the general prejudice that delay brings and its effect upon the accuracy of the memories of the witnesses of the type discussed in Brisbane South Regional Health Authority v Taylor.^[28]  Such prejudice of course affects both sides and it is the applicant who will bear the onus of proof on all significant issues.  No evidence was led to suggest that a fair trial on the merits cannot be had.

44. The only real point that the second respondent can make is that the solicitors, and perhaps the applicant, could have been more diligent. But it is plain that there has been no letting of the claim go to sleep. Given the second respondent’s refusal to comply with its obligations under the legislation, this is not a case where that criticism carries much weight.

45. I should observe too that Mr Dickson, who appeared on behalf of the second respondent, was critical of the applicant for not providing an affidavit. He has drawn my attention to the observations of Keane JA in Winters v Doyle at [54].  I observe two things.  Firstly the only matter on which it seems to me the applicant could have shed any great light was the failure to have the ultrasound in a more timely way.  Otherwise it would seem that her solicitor, Ms Esdale, who had the conduct of the matter, was in a better position than the applicant to advise on the steps that were being taken.  Secondly it is evident that Ms Esdale herself did not expect there to be a need for any detailed affidavit.  She pointed out in her second affidavit that her first affidavit had been a brief one ‘as [she] anticipated the second respondent would consent to the application’.  She pointed out that no other CTP insurer ‘has ever refused to consent to an application made within the limitation period’ within her nine years of experience practising in this area.^[29]  I do not think this is a case where the plaintiff sought to ‘shy away’ from providing an affidavit that may have been of some assistance to the court.

46. I am satisfied that if justice is to be done then the applicant should be given the extension contemplated by s 57(2)(b).

47. Mr Crow sought an order that I fix the time and place for the compulsory conference at 10 am on 4 November 2008. I was not prepared to make that order (requiring that the conference be held on the day following the hearing) as it was apparent that neither set of lawyers had complied with their obligations under the Act. In those circumstances I doubted that any conference held would be anything more than an irrelevant formality.

48. In the alternative Mr Crow sought that I dispense with the holding of a compulsory conference. I am reluctant to do that as the holding of the conference and the exchange of genuine offers is central to the pre-litigation procedures envisaged by the Act.

49. To enable compliance with the provisions of the Act I propose extending the limitation period as envisaged by s 57.

50. To that end I order that the applicant be given leave to commence proceedings within 60 days of one of the following events occurring:

(a)The conference being held pursuant to s 51A and s 51B of the Act and mandatory final offers being exchanged in accordance with s 51C of the Act;

(b)In the event of the parties agreeing to dispense with the holding of the conference pursuant to s 51A(4) of the Act the date of such agreement;

(c)In the event of the court making an order dispensing with the holding of the compulsory conference, pursuant to s 51A(5)(b) of the Act, the date of such order.

51. Each party contends that they should have their costs of the application. On the one hand the applicant seeks the indulgence of the court to have the limitation period extended. Had preparation of the matter proceeded diligently then the applicant would not be in this position. On the other hand the second respondent has opposed what seems to me to be a very clear case where the discretion ought to be exercised in the applicant’s favour. I am concerned too that in so clear a case counsel was brought up from Brisbane, the solicitor for the applicant was cross-examined and the application took well over two hours to be heard.  I am concerned too that the Nominal Defendant seems to have simply ignored its own obligations under the Act and that has materially contributed to the delays that have occurred in this case. 

52. In my view the justice of the case is best met by ordering that there be no order as to costs.