FEDERAL COURT OF AUSTRALIA Bartlett v Bartlett [1999] FCA 120 APPEAL – limitations – whether s 52(1A) of the Motor Accidents Act 1988 (NSW) imposes a time limitation on the commencement of proceedings within the meaning of s 56 of the Limitation Act 1985 (ACT) – whether a proceeding commenced before expiration of the six months period prescribed by s 52(1A) is premature – whether s 52(1A) is a "limitation law". LIMITATIONS – appeal against an order granting an extension of time within which to institute proceedings – relevant considerations – rejection of evidence of the applicant's tax returns – relevance to prejudice to the defendant – relevance of excessive delay of six and a half years between the date of accident and first notification of the claim to the relevant insurer – excessive delay – significance of possibility of prejudice. LIMITATIONS – application for extension of time – exercise of discretion – whether the applicant for leave has demonstrated that it is fair and just that leave be granted – failure to satisfy that test. Motor Accidents Act 1988 (NSW), ss 43, 52 Limitation Act 1985 (ACT). ss 55, 56, 57 Byrne v Australian Associated Motor Insurers Ltd (unreported, Gallop J, Supreme Court of the Australian Capital Territory, 6 November 1998) Budge v Kimmorley (1991) 14 MVR 245 Dousi v Colgate Parmolive Pty Ltd (1987) 9 NSWLR 374 House v King (1936) 55 CLR 499 GRAEME BARTLETT v JOAN BARTLETT NO. A39 of 1999 JUDGES: GALLOP, WILCOX and KENNY JJ DATE: 18 FEBRUARY 2000 PLACE: CANBERRA IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY A39 of 1999 DISTRICT REGISTRY BETWEEN: GRAEME BARTLETT Applicant AND: JOAN BARTLETT Respondent JUDGES: GALLOP, WILCOX and KENNY JJ DATE OF ORDER: 18 FEBRUARY 2000 WHERE MADE: CANBERRA THE COURT ORDERS THAT: 1. Leave be granted to appeal against the order made by Higgins J on 13 May 1999 granting leave to the respondent to commence proceedings in the Supreme Court of the Australian Capital Territory. 2. The appeal be allowed and the said order set aside. 3. In lieu of the said order, the Notice of Motion dated 22 December 1998 be dismissed with costs. 4. The respondent pay to the applicant his costs of the application for leave. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY A39 of 1999 DISTRICT REGISTRY BETWEEN: GRAEME BARTLETT Applicant AND: JOAN BARTLETT Respondent JUDGES: GALLOP, WILCOX and KENNY JJ DATE: 18 FEBRUARY 2000 PLACE: CANBERRA REASONS FOR JUDGMENT 1 GALLOP J: I have read the judgment of Wilcox J in draft form. I am grateful to his Honour for his exposition of the facts, the relevant legislation and the relevant histories of that legislation. I agree with his Honour's reasons and the conclusion reached that leave to appeal should be granted, the appeal allowed and the decision of Higgins J extending time be set aside. 2 Because I took a different view about the operation of s 52 of the Motor Accidents Act 1988 (NSW) in Byrne v Australian Associated Motor Insurers Ltd (unreported, Supreme Court of the Australian Capital Territory, 6 November 1998), it is necessary that I say something about the submissions by the parties in this matter. 3 As Wilcox J has pointed out, the critical question in this case is whether s 52(1A) is a "limitation law" within the meaning of ss 55, 56 and 57 of the Limitation Act 1985 (ACT). I held in Byrne (supra) that s 52(1) of the Motor Accidents Act 1988 (NSW) is not a law that provides for the limitation or exclusion of any liability in the barring of a right of action by reference to the time when a proceeding on the claim is commenced. I said that the relevant limitation law of New South Wales is s 52(4) of that Act which prescribed a three year time limit after the date on which the claim had to be made pursuant to s 43 of that Act. 4 I now agree that the better view is that s 52(1) of the Motor Accidents Act as in force in relation to the plaintiff's claim is a "limitation law". I have come to that conclusion having considered the submissions of the parties in this case and with the benefit of Wilcox J's conclusions. Shortly put, a law which bars the institution of proceedings, if only temporarily, until the expiration of a period, in this case six months, after appropriate notice is given can properly be described as a limitation law. Such a law does bar the institution of proceedings by reference to the time when the proceeding on the claim is commenced. 5 I think that Studdert J in Budge v Kimmorley (1991) 14 MVR 245 properly analysed the scheme of the Motor Accidents Act 1988 as being to provide for proper opportunity for the relevant third party insurer to endeavour to resolve a claim by settlement prior to the institution of proceedings on the claim. Furthermore, the Act imposes the duty on the claimant to "cooperate fully in respect of the claim with the person against whom the claim is made and the person's insurer". 6 I also agree with Wilcox J, for the reasons propounded by his Honour, in his conclusion that Higgins J was wrong to disallow cross-examination of the claimant's solicitor in relation to the claimant's pre-accident income and health. 7 In regard to the question whether an application for an extension of time is interlocutory or final, it seems now to be clear law that any order made on such an application, whether allowing or disallowing the application, is interlocutory in nature (see the full discussion of the matter in Dousi v Colgate Parmolive Pty Ltd (1987) 9 NSWLR 374 per Kirby and Glass JJ at p 367 et seq and per Mahoney JA at p 381). Hence the applicant bears the onus of demonstrating error in the exercise of a discretion in accordance with the well-known authority of House v King (1936) 55 CLR 499. 8 Wilcox J has propounded the guidelines laid down by the New South Wales Court of Appeal in respect of applications to extend time and the observations of Toohey and Gummow JJ on the subject in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541. In the same case, the observations of McHugh J are of substantial weight and compelling authority, at pp 551-554, "The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that "[w]here there is delay the whole quality of justice deteriorates" (R v Lawrence [1982] AC 510 at 517, per Lord Hailsham of St Marylebone LC). Sometimes the deterioration in quality is palpable, as in the case where a crucial witness is dead or an important document has been destroyed. But sometimes, perhaps more often than we realise, the deterioration in quality is not recognisable even by the parties. Prejudice may exist without the parties or anybody else realising that it exists. As the United States Supreme Court pointed out in Barker v Wingo (1972) 407 US 514 at 532, "what has been forgotten can rarely be shown". So, it must often happen that important, perhaps decisive, evidence has disappeared without anybody now "knowing" that it ever existed. Similarly, it must often happen that time will diminish the significance of a known fact or circumstance because its relationship to the cause of action is no longer as apparent as it was when the cause of action arose. A verdict may appear well based on the evidence given in the proceedings, but, if the tribunal of fact had all the evidence concerning the matter, an opposite result may have ensued. The longer the delay in commencing proceedings, the more likely it is that the case will be decided on less evidence than was available to the parties at the time that the cause of action arose. ... The effect of delay on the quality of justice is no doubt one of the most important influences motivating a legislature to enact limitation periods for commencing actions. But it is not the only one. Courts and commentators have perceived four broad rationales for the enactment of limitation periods. First, as time goes by, relevant evidence is likely to be lost (Jones v Bellgrove Properties Ltd [1949] 2 KB 700 at 704). Second, it is oppressive, even "cruel", to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed (RB Policies at Lloyd's v Butler [1950] 1 KB 76 at 81-82). Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them (New South Wales Law Reform Commission, Limitation of Actions for Personal Injury Claims (1986) LRC 50, p 3; Law Reform Commission of Western Australia, Limitation and Notice of Actions, discussion Paper (1992) Project No 36, Pt II, p 11). Insurers, public institutions and businesses, particularly limited liability companies, have a significant interest in knowing that they have no liabilities beyond a definite period (In Limitation of Actions for Latent Personal Injuries (1992) Report No 69, p 10, the Law Reform Commissioner of Tasmania said: "The need for certainty can be justified in many cases. For example, manufacturers need to be able to 'close their books' and calculate the potential liability of their business enterprise with some degree of certainty before embarking on future development. Under modern circumstances, an award of damages compensation may be so large as to jeopardise the financial viability of a business. The threat of open-ended liability from unforeseen claims may be an unreasonable burden on business. Limitation periods may allow for more accurate and certain assessment of potential liability."). ... In enacting limitation periods, legislatures have regard to all these rationales. A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature's judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. Against this background, I do not see any warrant for treating provisions that provide for an extension of time for commencing an action as having a standing equal to or greater than those provisions that enact limitation periods. A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. The purpose of a provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case. The purpose of a provision such as s 31 is "to eliminate the injustice a prospective plaintiff might suffer by reason of the imposition of a rigid time limit within which an action was to be commenced" (Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628 at 635). But whether injustice has occurred must be evaluated by reference to the rationales of the limitation period that has barred the action. The discretion to extend should therefore be seen as requiring the applicant to show that his or her case is a justifiable exception to the rule that the welfare of the State is best served by the limitation period in question. Accordingly, when an applicant seeks an extension of time to commence an action after a limitation period has expired, he or she has the positive burden of demonstrating that the justice of the case requires that extension." 9 There was gross delay on the part of the claimant. It was demonstrated that on the hearing of the action there would be such prejudice to the defendant's conduct of the action if it were allowed to proceed that there would be a real risk that a fair trial would not be possible. I, too, would grant leave to appeal, allow the appeal and set aside the order extending time. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gallop. Associate: Dated: 18 February 2000 IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY A39 of 1999 DISTRICT REGISTRY ON APPEAL FROM A JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN: GRAEME BARTLETT Applicant AND: JOAN BARTLETT Respondent JUDGE: GALLOP, WILCOX and KENNY JJ DATE: 18 FEBRUARY 2000 PLACE: CANBERRA REASONS FOR JUDGMENT 10 WILCOX J: This is an application for leave to appeal against a decision of a Judge of the Supreme Court of the Australian Capital Territory (Higgins J) granting leave under the Limitation Act 1985 (ACT) to the respondent, Joan Bartlett, to commence an action for damages against her husband, Graeme Bartlett, the applicant for leave to appeal. The necessity for leave arises out of the terms of s24(1A) of the Federal Court of Australia Act 1976, the decision of Higgins J being an interlocutory one. On the hearing of the application for leave, the Court heard full argument concerning the merits of the proposed appeal. The facts 11 On 9 January 1992, Ms Bartlett was a passenger in a Western Australian registered vehicle driven by Mr Bartlett. They were travelling to Canberra in order that Mr Bartlett might take up a Defence Force posting. Somewhere near Hay, in New South Wales, Mr Bartlett moved to the left of the road to allow more clearance between his vehicle and an oncoming semi-trailer. He lost control of the vehicle and collided with a concrete bridge guard. Ms Bartlett was jolted but had no immediately obvious injury. She may have suffered a whiplash injury. That evening Ms Bartlett experienced pain and nausea. A few days later, she consulted a general medical practitioner. Since then, she has suffered on-going symptoms, including psychiatric symptoms. Higgins J found that: "[I]f it proceeds, the claim would be a substantial one and, but for being out of time, would enjoy a reasonable prospect of success, assuming the facts to be found as the plaintiff asserts them to be." 12 Notwithstanding her symptoms, until August 1995 Ms Bartlett took no legal advice about the possibility of making a claim for damages. In that month she met a solicitor, Mr Graeme Blank of Vandenberg Reid, solicitors, at a social function. She mentioned her accident and he suggested she consult him. She did so on 28 August 1995. Higgins J described what then happened: "7. She told him that, following the accident, a claim form had been filled out by her husband and delivered to his insurer, CIC Insurance Ltd (CIC). Mr Blank wrote, on 19 September 1995, requesting a copy of that form. A copy was received on 9 October 1995. 8. As he frankly concedes, Mr Blank at that time made two erroneous assumptions. The first was that CIC was the defendant's third-party personal injury insurer. It was not. The correct insurer was the State Government Insurance Commission of Western Australia (ICWA). The second erroneous assumption was that the relevant period of limitation was that imposed by s11 of the ACT Limitation Act. That period is six years. In fact, by virtue of s56 of the ACT Limitation Act, as the plaintiff was injured in New South Wales by tortious conduct and her cause of action arose in that State, the limitation law of that place is to be applied by this court as if it was part of the substantive law of that State. 9. Even so, despite the fact that, on the assumption that the limitation period was six years, thus expiring on 9 January 1998, nothing further was done, even in relation to CIC, until 25 February 1998. It seems that, in the meantime, Mr Blank had, however, proceeded to obtain some medical information concerning the plaintiff's accident related injuries and disabilities." 13 On 25 February 1998, Mr Blank wrote a letter to CIC in which he itemised Ms Bartlett's alleged injuries and disabilities, and her claims for loss of wages and out of pocket expenses. Receiving no response to his letter, he made inquiries. On 29 May 1998, an employee of CIC informed him the correct insurer was the State Government Insurance Commission of Western Australia ("ICWA"). 14 On 5 June 1998, Mr Blank wrote to ICWA stating that Vandenberg Reid acted for Ms Bartlett "who was injured in a motor vehicle accident on 9 January 1992 while travelling from Western Australia to Canberra". He gave no other information about the circumstances of the accident but repeated the particulars of damage he had supplied to CIC. Mr Blank concluded with an expression of hope "that this matter could be resolved without the extra expense of litigation being incurred". 15 Although Mr Blank made no reference to the matter in his evidence before Higgins J, it appears that, on 9 June 1998, his office faxed to ICWA a copy of the claim form sent to CIC. This claim form contained detailed information about the circumstances of the accident. However, ICWA was not disposed to negotiate a settlement. On 10 August 1998, its solicitors, Hunt & Hunt, wrote to Vandenberg Reid denying liability "on the basis that the claim is statute barred." 16 On 22 December 1998, Vandenberg Reid filed a Notice of Motion in the Supreme Court seeking an order that time for filing an originating application be extended to 19 February 1999. The motion came before Higgins J on 12 February 1999. His Honour delivered a reserved judgment, granting the application, on 13 May 1999. The Limitation Act 17 Section 11(1) of the Limitation Act (ACT) stipulates that, subject to subs (2), "an action on any cause of action is not maintainable if brought after the expiration of a limitation period of 6 years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom he or she claims". Subsection (2) excludes from the application of subs (1) a cause of action in respect of which another limitation period is provided by the Act. As is common ground between the parties, at least one other limitation period is provided, relevant to the present case: the limitation period of three years imposed by s52(4) of the Motor Accidents Act 1988 (NSW). To explain how this is so, it is necessary to state some legal history and refer to other provisions of the Australian Capital Territory Limitation Act. 18 As a result of two decisions in the High Court of Australia, it is now clear that a person may sue in the courts of one Australian jurisdiction to enforce a liability in respect of a wrong occurring outside the territory of the forum only if two conditions are satisfied: "1. The claim arises out of circumstances of such a character that, if they had occurred within the territory of the forum, a cause of action would have arisen entitling the plaintiff to enforce against the defendant a civil liability of the kind which the plaintiff claims to enforce; and 2. by the law of the place in which the wrong occurred, the circumstances of the occurrence gave rise to a civil liability of the kind which the plaintiff claims to enforce." See Breavington v Godleman (1988) 169 CLR 41 at 110-111 (Brennan J) and McKain v R W Miller & Company (South Australia) Pty Limited (1991) 174 CLR 1 at 39 (Brennan, Dawson, Toohey and McHugh JJ). However, in McKain, the Full Court held (by majority) that a limitation barrier was procedural in nature, so a limitation barrier imposed by the law of the place where the wrong occurred did not afford a defence to the action; in other words, it did not preclude satisfaction of the second stipulated condition. 19 In Mason v Murray's Charter Coaches and Travel Services Pty Ltd (1998) 159 ALR 45 at 60-63, Sackville J set out what happened after McKain. The Australian Law Reform Commission in its report Choice of Law (ALRC 58, 1992) recommended that limitation periods should be treated as matters of substance, so that the exercise of discretion under a limitation period would be governed by the law of the place where the cause of action arose. The Standing Committee of Attorneys General adopted this proposal. Model legislation was prepared and enacted, with minor variations, in all States and Territories. Sections 55 to 57 of the Limitation Act, which were enacted in 1993, represent the Australian Capital Territory version of that legislation. 20 Section 56 of the Limitation Act reads: "If the substantive law of another place being a State, another Territory or New Zealand, is to govern a claim before a court of the Territory, a limitation law of that place is to be regarded as part of that substantive law and applied accordingly by the court." 21 The term "limitation law" is defined by s55 of the Act in this way: "`limitation law¢ means a law that provides for the limitation or exclusion of any liability or the barring of a right of action in respect of a claim by reference to the time when a proceeding on, or the arbitration of, the claim is commenced." 22 Section 36 of the Limitation Act relates to actions for personal injuries. It relevantly provides: "(2) Where an application is made to a court by a person claiming to have a cause of action to which this section applies, the court, subject to subsection (3) and after hearing such of the persons likely to be affected by that application as it sees fit, may, if it decides that it is just and reasonable so to do, order that the period within which an action on the cause of action may be brought be extended for such period as it determines. (3) In exercising the powers conferred on it by subsection (2), a court shall have regard to all the circumstances of the case including (without derogating from the generality of the foregoing) the following: (a) the length of and reasons for the delay on the part of the plaintiff; (b) the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant; (c) the conduct of the defendant after the cause of action accrued to the plaintiff, including the extent (if any) to which the defendant took steps to make available to the plaintiff means of ascertaining facts which were or might be relevant to the cause of action of the plaintiff against the defendant; (d) the duration of any disability of the plaintiff arising on or after the date of the accrual of the cause of action; (e) the extent to which the plaintiff acted promptly and reasonably once he or she knew that the act or omission of the defendant, to which the injury of the plaintiff was attributable, might be capable at that time of giving rise to an action for damages; (f) the steps (if any) taken by the plaintiff to obtain medical, legal or other expert advise and the nature of any such advice he or she may have received. (4) The powers conferred on a court by subsection (2) may be exercised at any time notwithstanding – (a) that the limitation period in respect of the relevant cause of action has expired since the cause of action accrued; or (b) that an action in respect of such personal injuries has been commenced." 23 Section 57 of the Act should also be noted. It provides: "Where a court of the Territory exercises a discretion conferred under a limitation law of a place being a State, another Territory or New Zealand that discretion, as far as practicable, is to be exercised in the manner in which it is exercised in comparable cases by the courts of that place." The Motor Accidents Act 24 The relevant New South Wales legislation is the Motor Accidents Act 1988 (NSW). In its short life this statute has been amended 31 times. Mercifully, not all those amendments are presently relevant. 25 The Transport Accidents Compensation Act 1987 (NSW) abolished common law rights to recover damages for personal injuries arising out of motor accidents. The Motor Accidents Act reversed that abolition. However, it applied to common law claims the restrictions on damages awards contained in Part 6 of the Act. The Act also imposed (by Part 5) requirements and limitations in respect of the notification of claims. By virtue of Schedule 3, Item 12 of the Motor Accidents Compensation Act 1999, Part 5 of the Motor Accidents Act has no application to motor accidents occurring after the commencement of the 1999 Act. However, it continues to apply to earlier accidents, such as the accident the subject of this application. 26 The word "claim" was defined by s40, for the purposes of Part 5, as meaning "a claim for damages in respect of the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the motor vehicle". The term was not limited to claims against residents of New South Wales or persons insured by an insurer licensed under the Act. Section 40 defined the term "third party insurer" as "an insurer under a third-party policy"; that is, a policy issued under the Act. However, the word "insurer" had a wider connotation. It was defined to mean, in relation to a person, "the insurer who insures the person against the person's liability for damages in respect of a claim, whether or not under a third-party policy". 27 One of the limitations imposed by Part 5 was that in s43, to the effect that a claimant was not entitled to commence court proceedings against another person in respect of a claim until after six months notice of the claim was given. I will not set out the original form of the section. It was omitted from the Act, and a replacement section enacted, by the Motor Accidents (Amendment) Act 1989 (Schedule 1, Item 21). That section read: "43(1)A claim must be made within 6 months after – (a) except as provided by paragraph (b), the date of the motor accident to which the claim relates; or (b) if the claim is made in respect of the death of a person, the date of death. (2) If a claim is made more than 6 months after the date determined under this section, the claimant shall provide a full and satisfactory explanation for the delay in making the claim. (3) Evidence as to any delay in the onset of symptoms relating to the injury suffered by the injured person as a result of the motor accident may be given in any such explanation. (4) Notice of a claim is required to be given to the person against whom the claim is made and, if that person's insurer is a third-party insurer, to the insurer. (5) The requirement under subsection (4)(only in so far as it is a requirement to give notice of a claim to the person against whom the claim is made and without affecting the requirement to give notice to the insurer) does not apply if – (a) that person is dead; or (b) that person cannot be given notice." 28 This substituted section was amended by the Motor Accidents (Amendment) Act 1990 (Schedule 1, Item 11), by the Motor Accidents (Amendment) Act 1993 (Schedule 1, Item 5), by the Motor Accidents Amendment Act 1995 (Schedule 1, Item 14), and again by the Motor Accidents Amendment Act 1997 (Schedule 1, Item 13). After that last amendment, it took the following form: "(1) The object of this section is to promote the early making of claims to enable the insurer: (a) to commence investigations while evidence relating to a claim is available, and (b) to identify injuries and facilitate the access of claimants to appropriate injury management and rehabilitation services and thus to expedite the claimant's recovery, and (c) to allow the insurer to more accurately predict claim frequency and hence formulate premiums. (2) A claim must be made within 6 months after the relevant date for the claim. The relevant date is the date of the motor accident to which the claim relates unless the claim is made in respect of the death of a person, in which case the relevant date is the date of the person's death. (3) (Repealed) (4) A claim is made by giving notice of the claim to the person against whom the claim is made and, if that person's insurer is a third-party insurer, to the insurer. (5) The requirement under subsection (4)(only in so far as it is a requirement to give notice of a claim to the person against whom the claim is made and without affecting the requirement to give notice to the insurer) does not apply if: (a) that person is dead, or (b) that person cannot be given notice." 29 Section 43A of the Motor Accidents Act permits the making of a late claim, in the period between six months and 12 months after the relevant date for the claim, provided the claimant gives "a full and satisfactory explanation for the delay in making the claim". A claim may be made after 12 months if, in addition, the total damages, of all kinds, likely to be awarded to the claimant if the claim succeeds, are not less than 10% of the maximum amount specified in ss79 or 79A of the Act. In the present case, that maximum is $180,000. On Higgins J's assessment of the situation, the 10% requirement is likely to be met. 30 Section 44(1) of the Motor Accidents Act requires a notice of a claim to be in an approved form and accompanied by such particulars and information as may be required by that form. Sections 44A and 44B contain some relaxation of this requirement but it was not contended they apply to this case. The application was argued before us on the basis that Ms Bartlett has not complied with s43 of the Motor Accidents Act and no "full and satisfactory explanation" for non-compliance has been offered. 31 When s43 came to take its present form, in 1997, it was, of course, impossible for Ms Bartlett to comply with the command of s43(2) that she make a claim within six months after the relevant date. In her case the relevant date was the date of the accident; so the six month period had long since elapsed. However, a similar requirement applied in 1992, when the accident happened, by virtue of the form of s43(1) substituted in 1989. 32 Section 45 of the Motor Accidents Act imposes on insurers the duty of endeavouring to resolve claims, by settlement or otherwise, as expeditiously as possible. To this end claimants are required to co-operate in supplying information (s48) and submitting to medical examinations (s49) and owners and drivers of vehicles are required to supply information to insurers (s50). 33 Section 52 of the Motor Accidents Act imposes what the section calls "Time limitations on commencement of court proceedings". The current section is an amended version of a section substituted in 1989. The 1989 section applied at the time of Ms Bartlett's accident. It read: "52(1) A claimant is not entitled to commence court proceedings against another person in respect of a claim until 6 months have elapsed since notice of the claim was given to the other person and (if required by section 43(4)) to the other person's insurer. (2) If notice is given to the other person's insurer (being a third-party insurer) then despite subsection (1) the claimant is entitled to commence court proceedings if either of the following occurs: (a) the insurer denies all liability in respect of the claim; (b) the insurer admits partial liability in respect of the claim but the claimant is dissatisfied with the extent to which liability is admitted. (3) If a claimant commences proceedings in respect of a claim more than 12 months after the date on which the claim must be made in accordance with section 43, the claimant must provide a full and satisfactory explanation to the court for the delay. (4) A claimant is not entitled to commence proceedings in respect of a claim more than 3 years after the date on which the claim must be made in accordance with section 43 except with the leave of the court in which the proceedings are to be taken. (5) The Limitation Act 1969 does not apply to or in respect of proceedings in respect of a claim." 34 The current section relevantly reads: "(1) The objects of this section are: (a) to encourage and facilitate the investigation, assessment and negotiation of a claim for damages without the commencement of court proceedings, and (b) to impose a limitation period of 3 years for the commencement of legal proceedings for damages under this Act and to enable the extension of that period only if: (i) the claimant can explain the reasons for the delay in not commencing the proceedings within the 3-year period, and (ii) the claim is likely to result in an award of substantial damages, or in the circumstances described in subsection (4A). (1A) A claimant is not entitled to commence court proceedings against another person in respect of a claim until: (a) 6 months have elapsed since notice of the claim was given to the other person and (if required by section 43(4)) to the other person's insurer, or (b) 90 days have elapsed since the details required by section 50A were given to the other person's insurer, or (c) if the other person's insurer has made an offer of settlement to the claimant before the claimant commences court proceedings, 28 days have elapsed from the date on which the claimant's response to the offer is communicated to the other person's insurer, whichever is the later or latest. (1B) … (2) … (3) (Repealed) (4) A claimant is not entitled to commence proceedings in respect of a claim more than 3 years after: (a) the date of the motor accident to which the claim relates, or (b) if the claim is made in respect of the death of a person, the date of death, except with the leave of the court in which the proceedings are to be taken. (4A) … (4B) The leave of the court must not be granted unless: (a) the claimant provides a full and satisfactory explanation to the court for the delay, and (b) the total damages of all kinds likely to be awarded to the claimant if the claim succeeds are not less than 25 per cent of the maximum amount that may be awarded for non-economic loss under section 79 or 79A as at the date of the relevant motor accident. (4C) … (5) The Limitation Act 1969 does not apply to or in respect of proceedings in respect of a claim." 35 Despite several changes in the section since its substitution in 1989, it has always provided that a claimant "is not entitled to commence court proceedings against another person in respect of a claim until 6 months have elapsed since notice of the claim was given to the other person". The section has also always contained a three year limitation period, although in 1989 the three years ran from the date of expiration of the six months claim period, not the date of the accident. The application of s55 36 It is common ground between the parties to the present application that the three year limitation period prescribed by s52(4) of the New South Wales Act applies to Ms Bartlett's claim. However, counsel for Mr Bartlett, Mr R L Crowe, goes further. He says s52(1A) also applies to the claim: no proceeding may be commenced until after the expiration of six months after notice of the claim is given under s43. He contends that a proceeding commenced before the expiration of that six months period is premature and liable to be struck out. In that connection, Mr Crowe cites a decision of Studdert J of the Supreme Court of New South Wales: Budge v Kimmorley (1991) 14 MVR 245. In that case the date of the alleged accident was 17 July 1989. A notice of claim was given to the insurer on 16 February 1990 but the notice was deficient in that it lacked any medical certificate or certificate of earnings. These deficiencies were not finally rectified until 7 June 1991. Before that date, the plaintiff filed a Statement of Claim instituting the proceeding. Studdert J held it was premature for him to have done so. At 249-250 his Honour said: "Section 52 postpones any right to sue until after the expiration of a period of 6 months, subject to subs (2). The right asserted by the plaintiff was not immediately available when the statement of claim issued, and the date of the issue of the statement of claim is the relevant date for the purposes of s52(1) … The conclusion is inescapable that the scheme of Pt 5 requires the giving of notice of the claim before a statement of claim can issue. Under s52(2) once a notice of claim has been given a claimant need not wait for the period of 6 months contemplated by s52(1) if the insurer denies liability in respect of the claim or if it only admits partial liability: s52(2)." 37 Counsel for Ms Bartlett, Mr Bryan Meagher, does not suggest that Budge v Kimmorley was incorrectly decided, but he argues it is irrelevant to the critical question in this case concerning s52: whether s52(1A) is a "limitation law" within the meaning of the Australian Capital Territory Limitation Act. He argues the definition in s55 should be read as referring only to the barring of a right of action because of the effluxion of time after a particular event; this is the usual and well-understood meaning of the term "limitation", as exemplified by the Australian Capital Territory Act itself. Mr Meagher calls in aid a decision of Gallop J in the Australian Capital Territory Supreme Court, Byrne v Australian Associated Motor Insurers Limited (6 November 1998, not reported). That was an application for extension of time to commence a proceeding in relation to a motor accident that had occurred near Albury, in New South Wales. No notice of claim had been given and it was argued that s52(1) barred the action until it was given. Counsel for the defendant argued s52(1) was a "limitation law" within the meaning of s55 of the Limitation Act but Gallop J rejected that submission. He said at para 11: "In my opinion, s 52(1) of the Motor Accidents Act 1988 is not a law that provides for the limitation or exclusion of any liability in the barring of a right of action by reference to the time when a proceeding on the claim is commenced. The relevant limitation law of New South Wales is s52(4) of that Act which provides that proceedings are to be brought within three years after the date on which the claim must be made in accordance with s43 of that Act. The failure of the plaintiff to give notice pursuant to s52(1) does not bar the plaintiff's action. But he still needs an extension of time pursuant to s52(4)." Although the question is not easy to resolve, I think the better view is that s52(1A) of the current New South Wales Act is a "limitation law" within the meaning of s55 of the Australian Capital Territory Act. It is true, as Mr Meagher points out, that it does not follow the traditional form of barring an action by reference to the time that has elapsed since the cause of action arose; so, if the term were not defined, it would not be considered to be a limitation law. But the term is defined and, it seems to me, s52(1A) falls within that definition. The section bars a right of action (although possibly only temporarily) in respect of a claim (as defined) by reference to the time when a proceeding on the claim is commenced (that is, before the expiration of six months after the making of a s43 claim). 38 I see no policy reason for reading down the words of the definition so as to exclude a "not before" limitation. Sections 55 to 57 of the Australian Capital Territory Act, like their counterparts in other States and Territories, were enacted to prevent people avoiding time limitations imposed by the law of the place where the right of action arose by suing in another jurisdiction. That purpose is as relevant to a "not before" limitation, enacted to maximise the possibility of extra-curial settlement of claims, as it is to a "not after" provision, enacted to minimise litigation of old claims. 39 I agree with the statement of Gallop J in Byrne that s52(4) of the New South Wales Act is a "limitation law". However, with respect, I do not think it follows that s52(1)(or s52(1A), as the case may be) cannot also be a "limitation law". I see no reason to exclude the possibility that there may be two laws within a particular jurisdiction that fall within the s55 definition of "limitation law". It seems this possibility was not advanced in argument in Byrne. 40 It follows that an extension of time ought not have been granted in May 1999, if only because the institution of the action at that time would have involved a contravention of s52(1A) of the New South Wales Act. The primary judge's exercise of discretion 41 If the effect of s52(1A) was the only problem about the primary judge's decision, any success in the appeal achieved by the appellant might prove transitory. Ms Bartlett could give a proper notice under s43 and, after the expiration of six months or an earlier relevant event, make a fresh application for extension of time. That application would have to be evaluated in the light of the circumstances then ensuing, but those circumstances would include the fact that the insurer had been on notice of the claim since June 1998. The subsequent application would probably raise issues like those addressed by Mr Crowe in his alternative submission. Accordingly, notwithstanding my view about the first point, it seems desirable for me to deal with those issues. 42 Mr Crowe recognises that the decision of Higgins J was a discretionary decision; so it is necessary for him to demonstrate an error of the kind described by Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. Their Honours said: "It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so." In the present case, Mr Crowe argues, the primary judge did err in exercising the discretion; he wrongly rejected material evidence. 43 Mr Blank made an affidavit in support of the application for extension of time. He was required to attend for cross-examination before Higgins J and Mr Crowe asked him about references in his affidavit to his investigation of Ms Bartlett's claim. Mr Blank agreed he was aware the claim included an allegation of loss of earning capacity. Mr Crowe then asked Mr Blank whether he obtained from Ms Bartlett "copies of all of her tax returns for the years leading up to and since the time of the accident". Higgins J inquired whether this was relevant. Mr Crowe said it was; the question whether copies of tax returns were available was relevant to the question whether the defendant would be prejudiced, if the extension of time was granted. However, Higgins J was not persuaded; he rejected the question. He also said, when asked by Mr Crowe, that he took the same view about medical records. In particular, he rejected the submission that it was relevant to the issue of extension of time for questions to be asked as to the existence of pre-accident medical records. 44 I respectfully think Higgins J was wrong to reject evidence about these matters. Section 36(3)(b) of the Limitation Act requires a court, in considering whether or not to grant an extension of time, to have regard to "the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant". Whether prejudice has been caused by delay is a matter likely to be affected by the availability or non-availability of relevant records. Ms Bartlett claimed she had suffered health problems as a result of a whiplash injury sustained in the accident of 9 January 1992. In considering that claim, it would be material to know something about her prior state of health; in particular whether she had previously suffered any neck or spinal problems. If prior medical records were lost, during the period of delay, the effect was to prejudice the defendant's ability to test, and possibly rebut, Ms Bartlett's apparent claim that her problems all stemmed from the accident. Furthermore, records of her post-accident medical history and course of treatment were relevant in relation to both the causation and extent of her present disabilities. 45 Similarly, it seems to me, it was relevant to know whether taxation records were available. Ms Bartlett made a claim for loss of earning capacity, albeit a small one. So her working history was material. In cases where a claim of economic loss is made, it is commonplace for defendants to inspect copies of income tax returns. Sometimes the returns contain information that enables the defendant to rebut or reduce the claim. If copies of taxation returns have been lost or destroyed during a period of delay in bringing the action, this may adversely affect defence of the claim. 46 If it had turned out these records were unavailable, that fact would not necessarily have required Higgins J to refuse the application for extension of time. Although this would have been an important factor, it would have been only one of several matters requiring consideration. But it seems to me the availability or otherwise of the records was a most material matter; it was an error of law for his Honour to reject questions about it. This is one of the exceptional cases, listed in House v The King, in which an appellate court is entitled to substitute its own discretion for that of the primary judge. The proper exercise of discretion 47 In my opinion, the Court's discretion ought to be exercised in favour of the appellant, the defendant below. This follows from my view about the application of s52(4) of the Motor Accidents Act. But I would take that view in any event. 48 Paragraph (a) of s36(3) of the Limitation Act requires the court to have regard to "the length of and reasons for the delay on the part of the plaintiff". The delay in this case was extensive. There was a delay of some six and a half years between the date of the accident and the first notification of the claim to the relevant insurer. This compares with the period of six months required under the New South Wales legislation, which governs claims in respect of accidents occurring in that State. Even a "late claim" is required to be made within 12 months, and then with a "full and satisfactory explanation" for the delay. 49 There was not only excessive delay relative to the period within which notices of claims are required to be given; the delay was excessive in relation to the date of commencement of the action. No proceeding was commenced until the Notice of Motion was filed in December 1998, almost seven years after the date of the accident. This was well outside the three year period stipulated by s52(4) of the Motor Accidents Act and even outside the normal six year limitation prescribed by s11 of the Limitation Act. The delay can only be described as gross, and not satisfactorily explained. 50 In considering delay, it is relevant also to note para (e) of s36(3): "the extent to which the plaintiff acted promptly and reasonably once he or she knew that the act or omission of the defendant, to which the injury of the plaintiff was attributable, might be capable at that time of giving rise to an action of damages". There is no evidence as to whether Ms Bartlett had any such knowledge until August 1995, but she certainly did have after 28 August 1995. Yet she seems to have left the matter entirely in the hands of her solicitors, without any instructions for more decisive action, for almost another three years. A similar comment may be made in relation to para (f), which directs attention to any steps taken by the plaintiff to obtain expert (including legal) advice. 51 Little need be said about the other matters itemised in s36(3). There seems to be no conduct of the defendant falling within (c). Not much is known about the plaintiff's disabilities, save that they are apparently continuing: see para (d). This factor cuts both ways. On the one hand, it excites sympathy and the wish not to allow the plaintiff to go uncompensated, if she has a good cause of action. On the other hand, it underlines her failure to safeguard her own interests. 52 In the present case, the Supreme Court did not exercise a discretion conferred under New South Wales law. The source of its power to extend time was s36(2) of the Limitation Act. Therefore, s57 of the Limitation Act did not directly apply. However, the Court's discretion had to be exercised in relation to the period of three years fixed by the New South Wales Act, a period that was extendable, by a New South Wales court, under that Act. Under those circumstances, it was relevant for the Supreme Court to take into account the principles applied by New South Wales courts in relation to an extension of the three year period. Harmony in approach to the exercise of the discretion to extend time is more than a matter of comity; it is a necessary safeguard against forum shopping. 53 The proper approach to be taken to applications to extend time under s52(4) of the Motor Accidents Act was discussed in the New South Wales Court of Appeal by Cole JA (with whom Beazley and Stein JJA agreed) in Henricks v Agnew (1997) MVR 277 at 283-285. His Honour commenced by noting the Court of Appeal decision in Salido v Nominal Defendant (1993) 32 NSWLR 524, made in respect of the form of s52(4) originally enacted in 1988. In Salido Gleeson CJ at 532 enunciated some guidelines. They included: "1. Section 52(4) confers a discretion which is to be exercised judicially, in a manner that furthers the purposes of the statutory context in which it appears. The immediate purpose, as with any limitation period, is to protect defendants against the injustice of stale claims; the statute is also aimed at promoting forensic diligence. 2. Bearing in mind those statutory purposes, the question is whether, in the circumstances of each individual case, the applicant for leave has demonstrated that it is fair and just that leave should be granted. 3. The diligence, or lack of diligence, shown by a plaintiff or a plaintiff's representatives, in ascertaining and asserting his or her rights will ordinarily be a material factor, as will the extent of the relevant delay, and the reason for it. 4. The nature and extent of any forensic disadvantage to a defendant resulting from a plaintiff's delay will also be material. The effect, if any, of the delay upon the defendant's ability to defend an action is a matter to be taken into account, and may in some cases be of decisive importance." Kirby P also propounded some guidelines, similar in principle although differently expressed. 54 In Henricks Cole JA went on to refer to statements made in the High Court, in Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; in particular the following extracts from the judgment of Toohey and Gummow JJ at 547-550: "The discretion conferred by the sub-section is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant. Where prejudice is alleged by reason of the effluxion of time, the position is as stated by Gowans J in Cowie v State Electricity Commission (Vict)[1964] VR 788 at 793 in a passage which was endorsed by Gibbs J in Campbell v United Pacific Transport Pty Ltd [1966] Qd R 465 at 474: 'It is for the respondent to place in evidence sufficient facts to lead the Court to the view that prejudice would be occasioned and it is then for the applicant to show that these facts do not amount to material prejudice.' … Once an applicant satisfies pars (a) and (b), the Court has a discretion to extend the time for the bringing of an action. A material consideration (the most important consideration in many cases) is whether, by reason of the time that has elapsed, a fair trial is possible. Whether prejudice to the prospective defendant is likely to thwart a fair trial is to be answered by reference to the situation at the time of the application. It is no sufficient answer to a claim of prejudice to say that, in any event, the defendant might have suffered some prejudice if the applicant had not begun proceedings until just before the limitation period had expired. … … we have difficulty with the notion of weighing prejudice to an applicant against prejudice to the respondent. In one obvious sense the prejudice to the present respondent is absolute if her application is refused. She can never litigate her claim. But that cannot be enough of itself to warrant an extension of time; in truth there would be no discretion to be exercised. For that reason we do not accept the respondent's argument that the District Court fell into error in failing to balance the prejudice to the appellant against the prejudice against the respondent. It may be appropriate to temper that approach and to say that because the respondent has satisfied par (b) of sub-s (2), there is therefore evidence to establish her right of action. Even then, a weighing process is not called for. The real question is whether the delay has made the chances of a fair trial unlikely." 55 Cole JA applied the approach taken in Brisbane South Regional Health Authority to s52(4) of the Motor Accidents Act Motor Accidents Act. He found there was a seven months unexplained delay between the date the plaintiff consulted a solicitor and the date of his notice of claim. "Liability not being in issue", Cole JA said at 286, "the issue which would arise is the extent to which the injuries and disabilities from which the respondent plainly suffers are attributable to the motor accident, or to the work injury". He agreed with the primary judge that there was prejudice to the defendant in having no opportunity to examine the plaintiff "in a case where confusion with regard to the real cause of the ongoing condition of the plaintiff is likely to have been further clouded by time". Although some medical reports were available, Cole JA thought the plaintiff had not discharged the onus of establishing it is likely there could now be a fair trial. 56 Unlike the situation in Henricks, there is no suggestion that Ms Bartlett suffered two accidents. However, there are questions as to Ms Bartlett's pre-accident condition and the course of her post-accident disability. She will be able to give evidence about those matters, but there may be little material available to the defendant to check the accuracy of her evidence. Furthermore, there may not be any documents concerning her earnings. The delay in this case is very considerable. There is a real prospect that it would prejudice the defendant's conduct of the action, if the action were allowed to proceed. 57 I do not think it is possible to say the defendant would certainly suffer prejudice in the conduct of the action; so much depends on the number and quality of the medical examinations that Ms Bartlett has undergone over the years. However, there is at least a significant possibility of prejudice. This points up Gleeson CJ's comment about protecting defendants from the injustice of stale claims and promoting forensic diligence. His Honour said, in guideline 2, "the question is whether … the applicant for leave has demonstrated that it is fair and just that leave should be granted". That test is not dissimilar from the one posed by Toohey and Gummow JJ in Brisbane South Regional Health Authority: whether the applicant has satisfied the court "that grounds exist for exercising the discretion in his or her favour". Having regard to the gross delay, both in notifying the claim and instituting legal action, and the real possibility of prejudice, I am not able to hold that either of these tests has been met. Disposition 58 I would grant leave to appeal, allow the appeal and set aside the order of Higgins J extending time. In lieu of that order, I would order that the Notice of Motion dated 22 December 1998 be dismissed with costs. The respondent, Joan Bartlett, should pay the costs of the application for leave to appeal. I certify that the preceding paragraphs numbered ten to fiftyeight (10-58) are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. Associate: Dated: 18 February 2000 IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY A 39 OF 1999 ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY BETWEEN: GRAEME BARTLETT Applicant AND: JOAN BARTLETT Respondent JUDGES: GALLOP, WILCOX and KENNY JJ DATE: 18 FEBRUARY 2000 PLACE: CANBERRA REASONS FOR JUDGMENT 59 KENNY J: I have had the advantage of reading in draft the reasons for judgment prepared by Wilcox J. I agree in them and in the disposition that his Honour proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 18 February 2000 Counsel for the Applicant: Mr R L Crowe Solicitor for the Applicant: Hunt & Hunt Counsel for the Respondent: Mr B A Meagher Solicitor for the Respondent: Ken Cush & Associates Date of Hearing: 12 November 1999 Date of Judgment: 18 February 2000