New South Wales Supreme Court CITATION : McAuliffe v Bell [2005] NSWSC 214 HEARING DATE(S) : 11 March 2005 JUDGMENT DATE : 21 March 2005 JURISDICTION : Common Law Division JUDGMENT OF : Master Harrison DECISION : (1) Leave is granted under s 109 of the MAC Act for the plaintiff to commence proceedings; (2) The plaintiff's solicitors are to show cause why they should not pay the defendant's costs of the notice of motion. CATCHWORDS : Extension of time to file ASC due to solicitor's failure - MAC Act 1999 Motor Accidents Act - s 52(3) LEGISLATION CITED : Motor Accidents Compensation Act 1999 (NSW) - ss 66(2) & 109 Supreme Court Rules - Part 20 r 4(5A) Guest v Southern & Anor (NSWSC, unreported 22 September 1995) McAndrew v Wyoming Nursing Home (Sperling J, unreported, 5 December 1997) CASES CITED : Morton v Jools (1992) ATR 81-164 Russo v Aiello (2003) 201 ALR 231; [2003] HCA 53 Maddison Louise McAuliffe by her tutor Stephen Benjamin McAuliffe (Plaintiff) PARTIES : Shirley Anne Bell (Defendant) FILE NUMBER(S) : SC 20081/2003 Mr D W Elliott (Plaintiff) COUNSEL : Mr M Elkaim SC (Defendant) G H Healey & Co - Sydney Sutherland (Plaintiff) SOLICITORS : Sparke Helmore (Defendant) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON MONDAY, 21 MARCH 2005 20081/2003 - MADDISON LOUISE McAULIFFE by her tutor STEPHEN BENJAMIN McAULIFFE v SHIRLEY ANNE BELL JUDGMENT (Extension of time to file ASC due to solicitor's failure– MAC Act 1999) 1 MASTER HARRISON: By amended notice of motion filed 28 October 2004 the plaintiff seeks an order that the time for filing and serving the amended statement of claim in these proceedings be extended pursuant to Part 20 r 4(5A) of the Supreme Court Rules (SCR) or in the alternative an order that leave be granted pursuant to s 109(1) of the Motor Accidents Compensation Act 1999 (NSW) (MAC Act). 2 On 3 April 2003 the plaintiff's solicitor filed a statement of claim naming Nicholas John Holden as the defendant. The plaintiff's solicitor had sued the wrong defendant. The Police report referred to the person to charged as Shirley Bell. What follows reflects very poorly on the competence of the plaintiff's solicitors. Since 1993 to date, with the exception of a period of about five months, the firm of solicitors acting for the plaintiff is G H Healey & Co. The plaintiff is a 12 year old girl. Her father is her tutor. 3 On 2 March 2004, Registrar Riznyczok ordered the plaintiff to file an amended statement of claim by 30 March 2004, so as to name the correct defendant. The plaintiff's solicitor was given a chance to rectify his critical error, but failed to comply within the time stipulated. On 21 September 2004 Registrar Howe ordered that the statement of claim be struck out but granted leave to the plaintiff to bring an action pursuant to s 109 of the MAC Act by 5 October 2004. The motion was actually filed on 28 October 2004. 4 The plaintiff is now seeking leave to commence proceedings. The law 5 Section 109 of the MAC Act provides: "109 Time limitations on commencement of court proceedings (1) 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. (2) Time does not run for the purposes of this section from the time that a claim has been referred to a claims assessor for assessment and until 2 months after a certificate as to the assessment or exemption from assessment is issued. (3) 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% of the maximum amount that may be awarded for non-economic loss under section 134 as at the date of the relevant motor accident. (4) Subsection (3) (b) does not apply to a claimant who is legally incapacitated because of the claimant's age or mental capacity. (5) The Limitation Act 1969 does not apply to or in respect of proceedings in respect of a claim." 6 The thresholds referred to in s 109(3)(b) do not apply as the plaintiff was an infant at the time of the accident. 7 A full and satisfactory explanation is defined in s 66(2) of the MAC Act. It is in identical terms to s 40(2) of its predecessor in title, the Motor Accidents Act 1988. 8 Section 66(2) of the MAC Act reads: "(2) In this Chapter, a reference to a full and satisfactory explanation by a claimant for non-compliance with a duty or for delay is a reference to a full account of the conduct, including the actions, knowledge and belief of the claimant, from the date of the accident until the date of providing the explanation. The explanation is not a satisfactory explanation unless a reasonable person in the position of the claimant would have failed to have complied with the duty or would have been justified in experiencing the same delay." 9 Thus, the explanation must cover the period from the date of the accident until the date of providing the explanation. Both parties referred to Russo v Aiello (2003) 201 ALR 231; [2003] HCA 53. The first point that needs to be made is that in Russo, the claimant was not under a legal disability, nor and more importantly the claimant received prompt and competent legal advice. Thus, any delay was caused by the plaintiff himself at [6] the Chief Justice stated that in Russo the Court was not concerned with the possible significance of incompetent or inadequate legal advice. 10 In Russo, the Chief Justice explained that what the Act required is a justification for delay, not a demonstration that delay caused no harm. 11 McHugh JA elucidated at [27]: It is a question of fact whether the application for a s 43A(7) order has proved that a plaintiff does not have a full and satisfactory explanation for the delay in making a late claim. But although it is a factual and not a legal issue, the criterion of a "full and satisfactory explanation" for delay does not involve any perception by the senses of some matter, event or entity in the external world. It does not depend on sight, hearing, feeling or touch. A "full and satisfactory explanation" for delay is an intellectual construct involving a value judgment, a judgment on which reasonable persons may have widely differing views. It is therefore properly described as a discretionary judgment." 12 However, in cases where it is the solicitor who is the cause of the delay, this court has taken the view that where the plaintiff was not personally responsible for the delay and it considered it to be reasonable for the plaintiff to have relied upon his solicitors to the extent he did is a very material consideration. It was in this context, that Studdert J said that the function of the provision s 52(3) of the Motor Accidents Act (a predecessor of s 109) is to require the claimant to explain that conduct in the course of providing a full and satisfactory explanation for the delay. It is not to provide a weapon which may enable an insurer to defeat the claim because of such conduct [see Guest v Southern & Anor (NSWSC, unreported 22 September 1995). Similar statements have been made in Morton v Jools (1992) ATR 81-164 and McAndrew v Wyoming Nursing Home (Sperling J, unreported, 5 December 1997) in relation to an extension of time pursuant to s 151D of the Workers Compensation Act. In considering the second limb of the test in s 66(2) a person in the position of the plaintiff, ie, a 12 year old child or her father would be totally reliant on the advice of the solicitor. 13 The solicitor's explanation for the delays is multifarious. An adjournment in this motion was granted, because the explanation for delay did not commence from the date of the accident. It did not comply with s 66(2). Ms Joanna Brouwer swore an affidavit and explaining that there have been serious staff problems at the G H Healey & Co – Sydney practice operating from Sutherland. She expanded this explanation stating that this office was temporarily closed. Ms Brouwer prepared a chronology of events from the date the firm received initial instructions, namely 21 November 1999 to date. 14 On 4 February 2003 the insurer issued a certificate of exemption. Once this issued, the plaintiff could commence these proceedings. On 3 April 2003 the statement of claim naming the wrong defendant was filed. As early as 1 May 2003 the insurer wrote to the plaintiff's solicitor querying whether there had been an error naming Mr Holden as defendant and not Ms Bell but in the circumstances, they would assume that the solicitors had been instructed to commence against Mr Holden. 15 On 20 February 2004 the insurer's solicitors wrote to Webb Thom & Associates (the other firm of solicitors who were on the record for a very short time) informing them that that as their client did not insure Mr Nicholas Holden they had no involvement in the matter. They helpfully advised that the compulsory third party insurer was Royal and Sun Alliance but they should make their own enquiries of the MAA. 16 The chronology of events reveal that on 9 February 2004 the plaintiff's then solicitors Webb Thom & Associates wrote to the defendant's solicitors stating that Shirley Bell would be joined as the correct defendant to the proceedings. On 16 February 2004 Mr Brad Gower commenced employment with G H Healey & Co – Sydney (Sutherland office) and took over conduct of the plaintiff's proceedings. On 20 February 2004 the defendant's solicitors wrote to Webb Thom & Associates advising that they did not act for Nicholas Holden (the defendant named in the statement of claim) and hence would not be appearing until the statement of claim was amended. 17 On 2 March 2004, at a status conference, Registrar Riznyczok granted leave to file an amended statement of claim naming the correct defendant, by 30 March 2004. This would, in the circumstances be relatively simple for a solicitor. However, on 12 March 2004 Webb Thom & Associates filed amended statements of claim in the related matters of Stephen and Benjamin McAuliffe, joining the correct defendant Shirley Bell. There are two other associated matters travelling concurrently, Benjamin McAuliffe (20080/2003) and the plaintiff father, Stephen McAuliffe (20079/2003) who were also injured in the same motor vehicle accident. An amended statement of claim (ASC) was not filed in Maddison's matter. On 30 March 2004 the defendant solicitors wrote to Webb Thom & Associates claiming a breach of s 109 of the MAC Act. 18 On 11 May 2004 Webb Thom & Associates wrote to the defendant's solicitors stating that they had received instruction to return the file to the former solicitors G H Healey & Co – Sydney. On 20 May 2004 G H Healey & Co – Sydney received instructions and the files were returned. 19 On 1 June 2004 Mr Gower from G H Healey & Co appeared at a status conference for the plaintiff where Registrar Riznyczok ordered the defendant to file and notice of motion to strike out the statement of claim by 27 July 2004. On 25 July 2004 the defendant filed a notice of motion. 20 On 4 August 2004, over five months after the ASC was due to be filed, Mr Gower made a file note asking Danielle Gower to check whether this had been done in Maddison's matter. On 12 August 2004 Mr Gower instructed his secretary to telephoned the Supreme Court and enquire as to whether an ASC had been filed. On 17 August 2004 Mr Gower's secretary telephone Webb Thom & Associates to ascertain whether an ASC had been filed in Maddison's matter. They confirmed that they had not filed an ASC. On 19 August 2004 an ASC was filed naming Shirley Bell as defendant. On 26 August 2004 the Supreme Court wrote to the plaintiff's solicitors requesting a 198L Certificate. On 31 August 2004 a 198L Certificate was filed. 21 On 14 September 2004 the defendant's solicitors advised to the plaintiff's solicitors that leave had not been granted to commence proceedings out of time against Shirley Bell. 22 Bradford William Gower solicitor [aff 16/10/04] deposed that on about 19 March 2004 and 10 March 2004 he had filed amended statements of claim in respect of Stephen and Benjamin and that it was intended and he cannot explain why it did not occur, to file the equivalent statement of claim in Maddison's claim. Mr Gower deposed that he first became aware that the amended statement of claim (ASC) in respect of Maddison had not been filed on the occasion of the first return date of the defendant's motion to dismiss the claims pursuant to s 109 of the MAC Act. 23 After his court appearance on 27 July 2004 Mr Gower reviewed the files and discovered that Maddison's ASC had somehow not been filed. On about 19 August 2004 he filed an ASC for Maddison. In his initial affidavit, Mr Gower was not able to provide any explanation for the delay in filing Maddison's statement of claim but inferred from his review of the respective files that it was an administrative error or oversight that lead to this situation. He explained that there was no intention to not file the ASC and until being alerted to the omission by the defendant and that he was of the belief that the statement of claim had been filed. 24 After reflection [aff 25/11/04] para 3, Mr Gower wished to correct a "typographical" error in that statement "I can provide no explanation for the delay in filing Maddison's statement of claim" so it should read "I can provide no other explanation for the delay in the filing Maddison's Statement of Claim". Mr Gower left the firm of G H Healey & Co on 10 December 2004. 25 The plaintiff (being a 12 year old girl) and her tutor were entitled to rely upon his solicitors to determine the correct defendant and commence proceedings in a timely manner. The plaintiff is blameless for this delay. I have come to the view that finally the plaintiff's solicitors on behalf of the plaintiff have finally provided a full and satisfactory explanation to the court for delay. I might add the defendant's insurer was notified of the details of the accident shortly after it occurred and it is that prejudice caused by delay that is asserted. I grant leave under s 109 of the MAC Act for the plaintiff to commence proceedings. 26 As foreshadowed to the parties, upon the delivery of these written reasons, the plaintiff's solicitors will be called upon to show cause why they should not pay the costs of the notice of motion. The court orders: (1) Leave is granted under s 109 of the MAC Act for the plaintiff to commence proceedings. (2) The plaintiff's solicitors are to show cause why they should not pay the defendant's costs of the notice of motion. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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