District Court New South Wales Medium Neutral Citation: Sweetman v Ritter [2014] NSWDC 110 Hearing dates: 28 February and 22 May 2014 Decision date: 23 May 2014 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: (1) Leave be granted pursuant to s 109 of the Motor Accidents Compensation Act 1999 for leave to proceed. (2) Leave to the parties to file and serve written submissions on costs within 14 days (maximum 5 pages). (3) On receipt of those submissions, I will determine whether the matter will be re-listed for further argument on costs or for orders. Catchwords: MOTOR ACCIDENT COMPENSATION - late claim - limitation period - expiration of time limit - delay in making claim for damages - full and satisfactory explanation for delay - reasonable person in position of claimant - statutory minimum damages Legislation Cited: Motor Accidents Compensation Act 1999, s 5, s 6, s 62, s 66, s 78, s 82, s 89A, s 89C, s 109, s 110 Cases Cited: ASB-Tech Services Pty Ltd (In Liquidation) v Doeland & Anor [2003] NSWCA 167 Eades v Gunestepe [2012] NSWCA 204 Khoury v Linfox Australia Pty Ltd [2006] NSWCA 51 Smith v Grant [2006] NSWCA 244 Walker v Howard [2009] NSWCA 408 Category: Principal judgment Parties: Colleen Sweetman (plaintiff) Jarrod Martin Ritter (defendant) Representation: Mr R Quickenden (plaintiff) Mr J Turnbull (defendant) Nash Allen Williams & Wotton (plaintiff) Sparke Helmore Lawyers (defendant) File Number(s): 2014/39875 Publication restriction: None Judgment INTRODUCTION 1Colleen Sweetman was injured in a motor vehicle accident on 8 January 2007. She filed a summons on 5 February 2014 seeking leave to commence proceedings under s 109 of the Motor Accidents Compensation Act 1999 ("MAC Act"). Leave is opposed. The matter raises two issues: (a)whether Ms Sweetman has provided a full and satisfactory explanation of the delay in commencing proceedings under s 109(3) of the MAC Act; and (b)whether the total damages of all claims to be awarded to Ms Sweetman satisfies the statutory minimum. BACKGROUND 2Ms Sweetman had, prior to the accident, never previously been injured in any accident and had only ever consulted a solicitor in relation to divorce and the sale of real estate. 3The ambulance report dated the date of the accident refers to Ms Sweetman stating, "HEAD WAS THROWN BACK" and suffering "CERVICAL NECK PAIN". After the accident, she was off work for three weeks. A few days after the accident her doctor's notes record: "Neck upper Thoracic amd Cx pain, constant, 'like strain'. ...mildly tendr R>L para spinal soft tissues ... Assess Mild 'whiplash injury'." 4On a body diagram prepared at the time, Ms Sweetman indicated at that time pain in the neck and upper back and wrote, "felt an instant pain mostly on the [right] side of the neck". Ms Sweetman was given painkillers, underwent physiotherapy and was determined to be unfit for 10 days. By 23 January 2007 the doctor's note recorded "pain mainly on right side of neck". 5On 6 July 2007, doctor's notes indicate a complaint of abdominal pain that is "worse with stretch/turn" and there is in those notes a reference to her back. On 8 August 2007 Ms Sweetman was loading promotional material onto a work van and felt pain in her lower back. A visit to the doctor that day records: "S> MVA January at work, hurt back and neck, had physio; still having neck and back pain; 2 weeks ago at work felt pulling in lower back; today, picked up light box, turned, felt gradually worsening neck and low back pain ...Exacerbation of pre-existing injury ...Physio". 6A body diagram in that report indicates that the affected area was the mid to lower back. The form referred to "Niggling pain...since MVA [motor vehicle accident]" under the heading "PAST/PREVIOUS TREATMENT" and "Back really sore today occasional neck aches". 7 Ms Sweetman returned to work in December 2007 on her doctor's advice but that proved unsuccessful. She was only able to work the two hours. A similar attempt in January 2008 produced a similar result. Throughout 2008 she had injections on occasions and engaged in physiotherapy and Pilates. She gave evidence as follows: "I consulted my solicitor in relation to my workers compensation claim. I made the appointment to see the solicitor on 30 January 2009. It was not until I consulted my solicitor on this date that I knew that I had entitlements under the Motor Accidents Compensation Act and moreover that I had an obligation under that Act to lodge my claim within 6 months of the date of the accident...Quite simply I was unaware of any entitlements, rights or obligations in respect of compensation whatsoever until I consulted my solicitor on 30 January 2009. I was not advised by any person prior to my solicitor, that if I did not lodge a claim in respect of the motor vehicle accident within any period of time, let alone 6 months, that I would lose rights or entitlements to compensation. Indeed I was not even aware that I had any rights or obligations in respect of compensation." 8On 5 February 2009, Ms Sweetman served a personal injury claim form on the defendant's Compulsory Third Party insurer. The claim form referred to "BACK AND NECK INJURIES" and her past treatment of "PHYSIO FOR REHAB" and "DIAGNOSTIC INJECTIONS TO LOWER BACK". The insurer responded on 17 February 2009 seeking a full and satisfactory explanation for the delay and sought particulars of a number of matters "[t]o the extent that it is not already provided in the claim form". In June 2009, Dominic Nash, Ms Sweetman's solicitor, arranged for her to consult an orthopaedic surgeon on 28 July 2009 for a medico-legal opinion. The report was received about 3 August 2009. 9On 8 October 2009, Mr Nash asked the insurer to concede that Ms Sweetman's injuries exceeded the non-economic loss threshold and made an application for a MAS permanent impairment assessment. On 14 October 2009, Mr Nash supplied the insurer with the Medicare, hospital and medical authorities the insurer had requested. On 17 December 2009 the plaintiff's explanation for delay in serving the claim form was provided to the insurer. The insurer rejected the application on 21 December 2009 and on that same day Mr Nash made an application for a special assessment with the Claims Assessment & Resolution Service ("CARS") in respect of the late claim. On 8 January the Motor Accidents Authority acknowledged receipt of the special assessment application and indicated a period of time until 8 February 2010 for the insurer to respond. 10The orthopaedic surgeon conducted the MAS assessment on 29 January 2010, three weeks after the three-year period for commencing proceedings in court expired. On 16 February 2010, a preliminary conference in respect of the CARS application was held. Further preliminary conferences were held on 12 March 2010 and 20 May 2010. Both parties filed written submissions in respect of the late notification of the claim. By the third preliminary conference, the insurer conceded that the explanation was full but continued to maintain it was not satisfactory. On 9 June 2010 the CARS assessor gave reasons for her decision, upholding Ms Sweetman's application for the special assessment. The assessor accepted Ms Sweetman was unaware of her rights until she consulted a solicitor and accepted that a reasonable person in the position of Ms Sweetman would have been justified in experiencing the same delay in lodging the claim. 11Shortly thereafter, on 15 July 2010, the insurer contacted Mr Nash stating, "[W]e are interested in arranging a settlement conference". 12As a consequence of the insurer's invitation to attend a settlement conference, Mr Nash began undertaking steps to prepare the claim, including obtaining comparable earnings from Ms Sweetman's former employer and obtaining counsel's advice on quantum. The settlement conference was organised for 16 November 2010. The conference did not proceed, the insurer notifying Mr Nash about that time that it was "not in a position to negotiate a settlement of the Plaintiff's claim and that the settlement conference would need to be postponed". Also at that time, on 11 November 2010, the insurer requested further particulars from Mr Nash of Ms Sweetman's claim and those particulars were supplied on 27 May 2011. Further arrangements for a settlement conference were made and a settlement conference was held on 25 October 2011. The matter did not settle. 13On 6 November 2011 the insurer sent a further request for particulars and tax records and advised of a medical appointment arranged by the insurer for Ms Sweetman to attend an orthopaedic surgeon, Dr Brian Noll. That occurred on 17 May 2012. After that appointment, the insurer requested further authorities from Ms Sweetman. On 31 July 2012, the insurer arranged another appointment with Dr Noll for 31 January 2013. On 27 September 2012, the insurer served a s 81 notice admitting fault in the accident but denying liability due to the late service of the claim. The letter continued: "Please be advised that we do not accept the decision of the Assessor in respect to the section 96 Special Assessment and suggest that you seek an exemption of this matter as we do not consider ourselves bound by the decision and suggest that it would be a waste of the parties costs proceeding through CARS." 14Ms Sweetman did not receive notification of the January 2013 medico-legal appointment with Dr Noll. The insurer wrote on 12 April 2013 advising of a further appointment with Dr Noll on 2 December 2013. That was subsequently brought forward to 20 August 2013. On 14 May 2013 the insurer again wrote about seeking an exemption in these terms: "We refer to our Section 81 Notice dated 27 September 2012 and request that you seek an exemption of this matter from CARS on the basis that we have admitted fault but denied liability. Please be advised that we do not accept the decision of the Assessor in respect to section 96 Special Assessment and suggest that you seek an exemption of this matter. Could also confirm with your client that she is pursuing her claim". 15Mr Nash responded the next day, noting the request regarding the exemption and seeking to be informed of the basis why the insurer was not bound by the assessor's decision. After Ms Sweetman attended on Dr Noll in August 2013, on 2 October 2013 the insurer wrote in the following terms: "We confirm we have determined this matter is ready to participate in a Section 89A conference. Would you kindly provide your available dates and times in the next month. We are instructed to lodge a CARS application to attempt to move the matter forward if the matter does not settle at the conference. We look forward to hearing from you and we propose to conduct the conference by telephone." 16A s 89A conference, or the readiness and willingness of a party to participate in such a conference, is a necessary prerequisite to a CARS general assessment of the claim (see s 89A(2) and (3)). The conference was scheduled for 20 November 2013. The conference did not take place due to miscommunication between the insurer and its solicitors. In any event, Ms Sweetman made an exemption application to CARS on 13 November 2013. The insurer accepted that the claim was an "exemptible claim". A CARS exemption certificate was issued on 12 December 2013 and received by the plaintiff's solicitor on 16 December 2013. The summons was filed at the beginning of the new term. ANALYSIS 17Although the basis of the insurer's denial of liability is the failure of Ms Sweetman to provide a satisfactory explanation of the delay in lodging a claim, that is not the basis of the insurer's opposition to the application for leave. Rather, the insurer says that Ms Sweetman has not provided full and satisfactory explanation of the delay in commencing proceedings and also does not satisfy the minimum likely damages provision. 18The relevant provisions are ss 109 and 66(2) of the MAC Act which provide as follows: "109 Time limitations on commencement of court proceedings (cf s 52 MAA) (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 the Authority 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." "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 failed to have complied with the duty or would have been justified in experiencing the same delay." EXPLANATION FOR THE DELAY 19The insurer conceded before the CARS assessor that the explanation was full so far as to explain the delay in lodging the claim, however, whether the delay up to the period of lodging the claim was satisfactorily explained (presumably insofar as it related to delay in commencing proceedings), although determined in favour of Ms Sweetman by the CARS assessor, remained in issue before me. In addition, the subsequent delay in commencing proceedings was also relied upon by the insurer. 20Section 109 requires Ms Sweetman to provide a full and satisfactory explanation to the Court for the delay. In context, that must refer to the delay in commencing proceedings such that there was no adherence to the three-year limitation period. Section 66 speaks of the need for a "full account of the conduct...from the date of the accident until the date of providing the explanation". No definition of "the conduct" is provided. There is authority to establish that it is not merely the conduct of the plaintiff. In Walker v Howard [2009] NSWCA 408 Allsop P, as his Honour the Chief Justice of the Federal Court then was, in a judgment agreed to by the other four members of the Court, stated at [106]: "I disagree with the primary judge's conclusions that strictly only the conduct of [the plaintiff] needed to be explained. The authorities speak with one voice that the acts and omissions of all relevant persons should be canvassed in the explanation to allow the court to make an evaluation." 21Adapting what Young JA stated at [133], s 66(2) requires that the "conduct of persons additional to the claimant must feature if relevant". There can be no debate that the conduct must be "relevant" and it must be relevant to what is required by s 109, an explanation for the delay in commencing proceedings. 22In many cases, the conduct after commencing proceedings but occurring before the explanation is proffered, although within the ambit of the period stated in s 66(2), is simply not relevant to the delay in commencing proceedings. I do not doubt that in some cases that conduct in the post-commencement period could be relevant. This case is not one of them. Similarly, conduct well before the three-year period, although it again is within the s 66(2) period, might not be relevant to explain the delay beyond three years in commencing proceedings, the focus of s 109. 23In Walker at [54] the President stated: "The claimant, to provide the requisite explanation, must address acts and omissions relevant to the delay 'from the date of the accident until the date of providing the explanation.'" 24The internally quoted words of the President can be read as applying to the "acts and omissions" and not to the "delay". So read, the meaning of the passage can also be written as the claimant must address acts and omissions from the date of the accident until the date of providing the explanation, which are relevant to the delay in commencing proceedings. Of course, every case must be determined on its own merits and, in many cases, conduct occurring soon after the accident may be relevant to the question of why the commencement was delayed beyond three years. 25In the present case, Ms Sweetman gives a full history of her conduct, beliefs and knowledge up to the time of lodging the claim soon after she consulted her solicitor. Thereafter, the relevant conduct to explain the delay is provided by the solicitor. In circumstances where the plaintiff has no familiarity with the litigious process, I do not see anything unusual or unreasonable in this. Her evidence about her conduct was not relevant to the legal procedures being undertaken in respect of her claim because that involved the conduct of the solicitor. It can hardly be surprising, with all the procedures mandated by the MAC Act, some of which stop time running and some of which do not, that a reasonable litigant unfamiliar with court procedure would have no understanding of what time limits needed compliance and by what date. 26In other circumstances in ASB-Tech Services Pty Ltd (In Liquidation) v Doeland & Anor [2003] NSWCA 167, Hodgson JA at [30] - [33] emphasised the need for the applicant to provide an explanation for the delay including, in an appropriate case, evidence whether documents or otherwise from the plaintiff's solicitor. At [34] Hodgson JA stated: "the correct approach is to regard the provision of an explanation as a necessary step in the application, and the nature of the explanation as being a matter which has to be taken into account in the ultimate determination of whether it is fair and just to grant the extension. The weaker the explanation, the greater the need to show that there would be little prejudice to a respondent." 27Although that passage deals with a different statutory regime, the suggestion that sometimes the question of what is a full and satisfactory explanation is to be informed by the extent or lack of prejudice seems to have application to the present case: see also Smith v Grant [2006] NSWCA 244 at [69], which is considered below. In the present case, no prejudice is alleged. In my view, as the CARS assessor found, there is a full and satisfactory explanation for the period from the accident until the claim was lodged in early February 2009 to the extent that this has any bearing on the failure to commence proceedings by January 2010. 28The following period, from 1 February 2009 until June 2010, involved the dispute about the delay in lodgement of the claim and whether there was a satisfactory and full explanation for that delay. Although the insurer may not have been bound by the result in the special assessment, it was nevertheless content to undertake the CARS process. The insurer made no application for exemption during this period or, indeed, at any time. The parties were content to adopt the CARS procedure to resolve their dispute. In my view, it was reasonable to delay commencing court proceedings whilst that procedure was undertaken. That delay concluded on 9 June 2010 when the special assessment determination was made in favour of the plaintiff. At that stage, Ms Sweetman was a few months out of time to commence proceedings. 29However, shortly after the assessment the insurer requested a settlement conference. 30The discussions concerning settlement, or at least a settlement conference, continued until November 2013. Is it reasonable for the plaintiff to postpone commencing proceedings whilst those settlement proposals continue to be ventilated? I think it is. Section 6 of the MAC Act states: "6 Interpretation and application of Act by reference to objects (cf s 2B MAA) (1) In the interpretation of a provision of this Act or the regulations, a construction that would promote the objects of this Act or the provision is to be preferred to a construction that would not promote those objects. (2) In the exercise of a discretion conferred by a provision of this Act or the regulations, the person exercising the discretion must do so in the way that would best promote the objects of this Act or of the provision concerned." 31The objects of the Act are set out in s 5 and they include "to encourage the early resolution of compensation claims" and refer to "keeping the overall costs of the scheme within reasonable bounds". These objects are promoted by resolution by negotiation rather than litigation where possible. The requirement for offers and settlement conferences in ss 89A and 89C support this object. Section 78 provides, or at least acknowledges, the prospect of negotiations after the lodgement of a claim. Section 82 obliges the insurer, in certain circumstances, to make a timely reasonable offer of settlement after receipt of a claim. These provisions indicate the object of the Act and its provisions include early, inexpensive resolution by negotiation. That object is not promoted if a party in negotiation is required to commence court proceedings. It is significant that it was the insurer that, on three occasions, initiated the settlement conferences. 32However, on two occasions the insurer invited the plaintiff to make an exemption application. I consider this to be of some significance. By itself, these requests indicate that it is reasonable for a plaintiff not to further delay the exemption application and the consequent proceedings. However, during this period, the insurer was requesting that the plaintiff attend medico-legal appointments and also suggested a settlement conference, pursuant to s 89A, a pre-requisite to a CARS general assessment of the claim. This invitation in October 2013 indicates a willingness to adopt the CARS procedure and a negotiated settlement, rather than court proceedings. The insurer gave no further evidence explaining the letter. In these circumstances, it seems reasonable for the plaintiff to proceed with the procedures advocated by the insurer. No s 110 notice directing the commencement of court proceedings was ever given by the insurer. 33It seems that the principal argument of the insurer is that the solicitor has provided no evidence that he believed that the matter could be resolved without litigation. Although the authorities recognise the possible relevance of the conduct of the solicitors, they do not specifically refer to the beliefs of the solicitors. But if the belief of the plaintiff is relevant, as s 62(2) provides, so also might be the belief of the solicitor. In the present case, the continued reference to settlement conferences and procedures such as medico-legal appointments, strongly point to the inference that the solicitor was content to adopt a procedure of trying to resolve the matter by negotiation or, alternatively, by the CARS process rather than by litigation. 34The significance of the suggestion for an exemption application, as I have indicated, is diminished by the request for a s 89A settlement conference. Nor was there any cross-examination of the solicitor to indicate negligence on his part in failing to commence proceedings. 35But if it were the case that a solicitor was negligent in not commencing proceedings that does not provide any real assistance to the insurer in this application. In Walker at [108], Allsop P stated: "No doubt things might have been done more quickly; perhaps if [the solicitor] had been both more pressing with the experts...things may have moved more quickly. But perfection or the most rapid despatch is not the test." 36Although the circumstances in that case are not the same as the present, there was no suggestion during the period when negotiations were being undertaken that the solicitor was guilty of delay in commencing the proceedings. 37Another authority that provides some support for the plaintiff is Smith v Grant. At [60] the Court held: "if a claimant could reasonably rely upon the conduct and advice of his or her solicitors, although it was negligent, such reliance could provide a satisfactory explanation for delay in commencing proceedings." 38That is consistent also with the approach revealed in Khoury v Linfox Australia Pty Ltd [2006] NSWCA 51 (Beazley JA, Tobias JA agreed in relation to the Motor Accidents Compensation Act). 39The Court in Smith v Grant stated at [63]: "There are two aspects of this case which are critical to its resolution. The first is whether the claimant sought to put all her eggs in the CARS basket, to the deliberate exclusion of the possibility of taking proceedings in the District Court if the alternative option proved unavailable. The second issue concerns the engagement by the insurer in considering the claim up to its application for exemption from the CARS process, and even thereafter." 40And at [69]: "On the other hand, the fact that the insurer, from the time of its admission of liability on 29 August 2000 through to the settlement discussions on 28 May 2004, did nothing to suggest to the claimant that appropriate steps were not being taken in a timely fashion, led to her belief that the insurer was not complaining of delay. Those matters were relevant to considering whether a reasonable person in the position of the claimant would have been justified in experiencing the same delay." 41In the present case, even if the solicitor was negligent in not commencing proceedings earlier, rather than (or in addition to) continuing to negotiate at the request of the insurer, that does not vitiate the reasonableness of the plaintiff in relying upon her solicitor. The quoted passages from Smith v Grant give direction about the interaction between the CARS process, where apparently no limitation periods apply, and the court process. In my view, these passages apply equally to the position of the present plaintiff. Ms Sweetman and her solicitor took a course encouraged by the insurers, to negotiate and engage in the CARS process. That seems to me to be reasonable and to be a satisfactory explanation for the delay occasioned by proceeding in that way. 42As I indicated earlier, there was no cross-examination of the solicitor in respect of the period of the negotiations. Thus, the evidence persuades me that it was a reasonable course for the solicitor to adopt to not take steps to commence proceedings that might interfere with the negotiation process being encouraged by the insurer. Accordingly, I find the explanation to be a full and satisfactory explanation in accordance with s 109 and s 66 of the MAC Act. THE STATUTORY MINIMUM 43The insurer with a little less vigour also pressed s 109(3)(b) as a reason why leave should not be granted. This enlivens the question of whether the plaintiff would be likely to receive an award of damages of at least $91,500. Likely in this context does not mean "more likely than not" but, rather a "real chance" or a "real prospect": see Eades v Gunestepe [2012] NSWCA 204 at [10]. The insurer accepted that it was not a demanding test. The insurer also accepted that the test would be satisfied if the plaintiff's present condition was attributable to the motor vehicle accident. But the insurer submitted that I should not be satisfied that there was a real chance that the motor vehicle accident caused the plaintiff's present condition. 44I have recounted the early records in the summary of facts earlier in this judgment. It is fair to say that the records are not unequivocal as to the extent of the plaintiff's injury resulting from the motor vehicle accident. However, the plaintiff does not need to establish that matter on the balance of probability. Rather, if there is a real chance the plaintiff could succeed in attributing her present disabilities to a motor vehicle accident, then the insurer concedes she satisfies s 109(3)(b). 45On 28 July 2009, Dr Roger Pillemer, orthopaedic surgeon retained by the plaintiff, opined "In my opinion the impairment of her lumbar spine is due to the injury in January 2007". Further, the MAS certificate stated that the lumbar spine injuries were caused by the motor accident. 46In these circumstances, there is a real chance that the plaintiff will be able to establish that her present back injury is caused by the motor vehicle accident and, therefore, the requirement of s 109(3)(b) is satisfied. CONCLUSION 47I am satisfied the requirements of s 109(3)(a) and (b) are satisfied in the present case and, there being no prejudice alleged, the plaintiff ought be granted leave. The orders of this Court are: (1)Leave be granted pursuant to s 109 of the Motor Accidents Compensation Act 1999 for leave to proceed. (2)Leave to the parties to file and serve written submissions on costs within 14 days (maximum 5 pages). (3)On receipt of those submissions, I will determine whether the matter will be re-listed for further argument on costs or for orders. ********** 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: 23 July 2014