Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Nominal Defendant v Browne [2013] NSWCA 197 Hearing dates: 19 June 2013 Decision date: 19 June 2013 Before: Basten JA at [1]; Barrett JA at [28]; Gleeson JA at [29] Decision: (1) Grant leave to appeal. (2) Allow the appeal and set aside the orders made in the District Court. (3) In place thereof, (a) dismiss the plaintiff's proceedings in the District Court; (b) order that the plaintiff pay the defendant's costs in the District Court. (4) Order that the respondent pay the applicant's costs in this Court. (5) Grant the respondent a certificate under the Suitors Fund Act 1951 (NSW) in respect of her costs in this Court. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: MOTOR ACCIDENTS COMPENSATION - claim against nominal defendant - whether respondent made "due inquiry and search" to attempt to establish identity of vehicle - what constitutes "due" inquiry and search - whether futile search required to satisfy test - where accident occurred near café in business complex - whether respondent should have placed notice in café seeking witnesses - whether respondent should have canvassed businesses to ascertain identity of vehicle - Motor Accidents Compensation Act 1999 (NSW), ss 34(1AA) and 34A(3) MOTOR ACCIDENTS COMPENSATION - claim against nominal defendant - respondent failed to claim within six months of accident - whether respondent provided "full and satisfactory explanation" for delay - respondent instructed, and relied on advice from, solicitors and counsel - whether "full" explanation required details of instructions to, and advise from, solicitors and counsel - Motor Accidents Compensation Act 1999 (NSW), ss 73(1), 73(5) and 73(7) WORDS AND PHRASES - due inquiry and search - Motor Accidents Compensation Act 1999 (NSW), ss 34(1AA) and 34A(3) WORDS AND PHRASES - full and satisfactory explanation - Motor Accidents Compensation Act 1999 (NSW), ss 73(1), 73(5) and 73(7) Legislation Cited: Motor Accidents Compensation Act 1999 (NSW), ss 34, 34A, 66, 70, 72, 73 Cases Cited: Harrison v Nominal Defendant (1975) 50 ALJR 330 Nominal Defendant v Meakes [2012] NSWCA 66 Walker v Howard [2009] NSWCA 408; 78 NSWLR 161 Category: Principal judgment Parties: Nominal Defendant (Applicant) Sharon Browne (First Respondent) Owners of Strata Plan No 55497 (Second Respondent) Representation: KP Rewell SC (Applicant) S Norton SC/M Fraser Moray & Agnew (Applicant) Brydens Law Office (First Respondent) File Number(s): CA 2012/190214 Decision under appeal Jurisdiction: 9101 Date of Decision: 2012-05-25 00:00:00 Before: Curtis DCJ File Number(s): DC 2011/295499 Judgment 1BASTEN JA: On 5 January 2009, Ms Sharon Browne, the respondent to the present application, injured her right ankle when she stepped into a drain by a driveway which was not covered by a grate. Ms Browne claimed that she stepped backward into the drain in order to avoid a pantechnicon vehicle speeding up the adjacent driveway. The injury required surgery, which took place in May 2009. The injury occurred whilst she was returning from a lunch break to her place of work. She received weekly compensation payments for time off work and payment by the worker's compensation insurer of her medical bills. 2On 17 April 2009 she gave instructions to her present solicitors, Brydens, and, on 30 April 2009, conferred with senior counsel. In February 2011 Ms Browne had a second conference with senior counsel and it was about that time that her solicitors decided to treat the matter as involving a motor accident claim. On 29 July 2011, she commenced proceedings against the occupiers of the premises on which the accident occurred; those proceedings remain on foot, the occupier being the second respondent to this application. On 14 November 2011 she sought to join the Nominal Defendant. 3The motor accident claim was confronted by three procedural obstacles. First, there is a requirement to report a motor accident to a police officer within 28 days of the occurrence of the accident: Motor Accidents Compensation Act 1999 (NSW), s 70(1). Failure to take such a step requires provision to the insurer of a "full and satisfactory explanation for any non-compliance" - see s 70(2) - and the possibility of the proceedings being dismissed unless the court is satisfied that "sufficient cause existed to justify the delay in reporting": s 70(5) and (7). 4Secondly, Ms Browne had no means of identifying the owner or driver of the vehicle which she alleged had forced her to take the step backwards into the drain. The vehicle she described was of a common size, make and colour and she did not observe the registration details. Not being able to identify the vehicle, proceedings could be brought against the Nominal Defendant, the present applicant: s 34(1). However a claim cannot be made against the Nominal Defendant unless "due inquiry and search" had been made to attempt to establish the identity of the vehicle concerned: s 34(1AA) and s 34A(3). 5Thirdly, a motor accident claim is required to be brought within six months of the accident: s 72(1). If proceedings are brought on a late claim, the insurer may apply to have them dismissed for delay. If the claimant fails to provide a "full and satisfactory explanation for the delay in making the claim", the court must dismiss the proceedings: s 73(1): s 73(5) and (7). 6On 25 May 2012 the matter came before Judge Curtis in the District Court on an application by the insurer to have the proceedings dismissed on the three bases set out above. Curtis DCJ accepted the respondent's evidence as establishing the necessary elements of inquiry and justification for delay. He dismissed the applicant's motion. The applicant now seeks leave to appeal in respect of two of the three grounds upon which it was unsuccessful in the District Court. Senior counsel for the applicant accepted, understandably in the circumstances, that there were inadequate prospects of obtaining leave based on the failure to report the accident to police: that aspect requires no further consideration. (1) Failure to make due search and inquiry 7As noted above, a claim cannot be made against the Nominal Defendant unless "due inquiry and search" has been undertaken to identify the vehicle concerned. Unlike the other elements relied upon, the precondition to proceeding against the Nominal Defendant is not limited to a particular time period following the accident. Nevertheless, it is clear that any significant delay, in cases like the present one, is likely to render futile any belated inquiry and search. Accordingly, a question arises as to what in those circumstances constitutes "due" inquiry and search. 8The primary judge referred to some brief evidence by the respondent that, a few days after the accident, that she had asked in the café, where she obtained her lunch, whether anybody had witnessed the accident, but had been told that nobody saw anything as far as the original owners were aware: Tcpt, p 21(30). The primary judge stated at [10]: "I am satisfied that the plaintiff, by her inquiry as to whether they [sic] were any witnesses, discharged her duty of conducting due inquiry and search to establish the identity of the vehicle." 9However, the primary judge had also stated at [7]: "In the circumstances of this accident Ms Browne had, as she thought, an obvious tortfeasor in the occupier of the premises who had failed to cover the drain. That it did not occur to her that the motor vehicle might be concurrently liable is understandable. In these circumstances, it was not inappropriate that she made no search and inquiry." 10This Court recently considered in some detail the principles relevant to the requirement for carrying out "due inquiry and search": Nominal Defendant v Meakes [2012] NSWCA 66. As noted by Sackville AJA at [56] in a judgment with which McColl JA and I agreed, the question for the primary judge was "not whether it was 'understandable and excusable' for the respondent not to have recorded vehicle identification details immediately after the accident", nor whether it was "unreasonable" for the respondent to have allowed the driver to leave the scene without taking his or her details but rather "whether the respondent had shown that the identity of the vehicle would not be established after due inquiry and search". Similar comment may be made in respect of the expression of the test applied by the primary judge in the present case. However, as noted by senior counsel for the respondent, the circumstances of that case were far removed from this case. 11The applicant relies on the asserted likelihood that two steps would have revealed the identity of the vehicle, namely the posting of a notice in the café where lunch had been obtained and, secondly, canvassing the businesses to find out if a delivery took place within the business complex into which the truck appeared to be driving. Both courses, it was suggested, would have been likely to reveal the identity of the truck. The respondent was cross-examined to establish that she took neither of those steps. 12However, to suggest that a notice in the café would have revealed a witness who could identify the truck is in the realm of fantasy. As senior counsel for the respondent noted, no one from the café came to her assistance when she was sitting on the grass verge after the accident for some little time. It is quite improbable that any customer in the café witnessed the accident, let alone noted details of the passing truck. 13The other step (of canvassing the businesses in the business complex at which there may have been a delivery made by the truck in question) gives rise to a faint possibility of uncovering relevant information, but the failure to take that step within an unidentified period does not readily demonstrate a failure to make due search and enquiry. 14Although the primary judge appeared at one stage to suggest that the respondent made relevant inquiries (at [10]), the preferable conclusion was that she made no relevant inquiry or search to identify the motor vehicle, which seems to have been the approach adopted at [7]. On the evidence as to the circumstances of the accident and the surrounding built environment, it can readily be accepted that inquiry and search would have been futile, given the paucity of information available and the fact that neither the driver nor anyone else would have been likely to take note of the events of the accident, which involved no direct collision between the vehicle and the respondent. As noted in Meakes at [37]-[38] inquiry and search which would be "no more than a ritual and unlikely to be productive" is not required in order to satisfy the test of what is "due inquiry and search": Harrison v Nominal Defendant (1975) 50 ALJR 330 at 331 (Barwick CJ). The primary judge was entitled to hold that inquiries in the present case would have been unproductive and there were, therefore, no due inquiries to be carried out. (2) Explanation for delay in bringing proceedings 15The delay in bringing proceedings was the failure to make the claim within six months of the date of the accident, as required by s 72 of the Motor Accidents Compensation Act. That delay required a "full and satisfactory explanation". That concept is the subject of exegesis by way of a 'definition' in s 66 of the Motor Accidents Compensation Act, in the following terms: "66 Definitions ... (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 been justified in experiencing the same delay." 16In the present case, the respondent's explanation was required to cover the period from the date of the accident (5 January 2009) until the date of the motor accident claim. The personal injury claim form was served on the Nominal Defendant on 16 June 2011; an amended statement of claim joining the Nominal Defendant was served on 28 November 2011. 17The short explanation given by the respondent for each element of non-compliance or delay was that she did not realise that she had a claim against the driver or owner of the motor vehicle which caused her to step backwards, until so advised by her solicitors or counsel (or probably both), either in February 2011 or in the middle of that year (the particular date not being of present significance). She contended that a reasonable person in her position would not be expected to have understood that her circumstances could give rise to a motor accident claim and that any failure on the part of her solicitors to advise her to that effect for a period of some 20 months involved no unreasonable conduct or failure to take steps on her part. 18Given her evidence as to the cause of the accident, it might seem surprising if no earlier consideration was given to making a motor accident claim. Ms Browne was cross-examined as to whether she gave her solicitors the same explanation as to the cause of her stepping backward into the drain as she gave to the Court: Tcpt, 25/05/12, p 20. She believed that she had. 19Despite the decision taken in February 2011, further procedural steps in relation to the motor accident claim were not taken until June 2011. Ms Browne gave evidence that she had moved house in that period and that, at least for a time, her mobile phone had been disconnected. There was evidence of attempts by her solicitors to get in touch with her in that period. The applicant accepted that there was an explanation given for that period. 20In relation to the earlier period, the explanation given by the respondent was that she sought legal advice in a timely fashion when she realised the seriousness of her injury and thereafter relied upon her solicitors to take whatever steps were necessary and appropriate to recover compensation from any party responsible. The "full account" required to be given related to her actions, knowledge and belief, and not those of her solicitors. The respondent submitted that it was reasonable for a person in her circumstances to rely upon her solicitors. In support of that approach, which was accepted by the primary judge, reference was made to the reasoning of Allsop P in Walker v Howard [2009] NSWCA 408; 78 NSWLR 161 at [55]: "That the explanation should cover the conduct of agents (such as a solicitor) or those purporting to act on the claimant's behalf, does not broaden the meaning of 'claimant' in s 66(2) to 'the person who makes or is entitled to make the claim and any person acting or purporting to act on his or her behalf.' No warrant appears in the text or structure of the MAC Act or these provisions for this interpretation." 21As the reasoning continued, reference to the actions, knowledge and belief of the claimant did not include the actions, knowledge and belief of those acting on her behalf: at [56]. That principle is to be accepted: the purpose of the explanation is not to explain the conduct of the solicitors. But an explanation may not be "full" if it does not provide some detail as to the instructions given to, and the advice received from, solicitors (and, where relevant, as here, counsel). 22The respondent in effect avoided that aspect of the events by saying that she had "instructed Brydens to bring a case for me and ... left it to them to do whatever was necessary": affidavit, par 24. She noted that she had attended a conference with senior counsel on two occasions but said, "I do not recall anything he said". 23An explanation is not a "full" explanation simply because it recounts all that the claimant can remember three years later. One would expect both solicitors and counsel to have some note of the instructions given and the advice relayed. In this case her lack of recollection is understandable, but the explanation given by her was not "full" in the absence of any attempt to obtain further information from her own solicitors and counsel. 24The primary focus of Walker v Howard, a case involving a claimant with serious brain damage who was not in a position to look after his own interests, was upon the second limb of the test, namely whether the explanation was "satisfactory". That element cannot be assessed if the explanation is incomplete. It nevertheless affirms the need to look to the actions of persons other than the claimant where those actions may form part of the position or circumstances of the claimant. 25Whether the partly objective test of satisfactoriness was satisfied will depend to a large extent on precisely what the claimant told her lawyers in April 2009, what advice they gave her and what instruction she gave, based on the advice. For example, it could make a great deal of difference to the outcome if her account to them failed to suggest a plausible claim against the Nominal Defendant in the minds of either a solicitor or senior counsel experienced in personal injury matters. Alternatively, if her instructions had been such that senior counsel advised that steps should be taken to pursue a motor accident claim, but that was not done, a different issue would arise. It is precisely for these reasons that the Act requires a "full" explanation. The explanation given in the present case was patently not "full" and the section was therefore not satisfied. The Court should therefore not have been affirmatively satisfied under s 73(7) as to the completeness of the explanation and was therefore obliged to dismiss the proceedings. 26It follows that, on this last ground, there should be a grant of leave to appeal, the appeal should be allowed, the orders in the District Court set aside and, in place thereof, the respondent's proceedings in the District Court should have been dismissed. The respondent must pay the applicant's costs in this Court and in the District Court. 27The respondent seeks and (not being a corporation) should have a certificate under the Suitors Fund Act 1951 (NSW) in respect of her costs in this Court. 28BARRETT JA: I agree. 29GLEESON JA: I also agree. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 June 2013