Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Barnett v Harrison [2016] NSWCA 184 Hearing dates: 26/07/2016 Date of orders: 26 July 2016 Decision date: 26 July 2016 Before: Basten JA at [33]; [41]; Leeming JA at [38]; McDougall J at [1]. Decision: (1) Dismiss the application for leave to appeal. (2) The applicant is to pay the respondent's costs on the ordinary basis up to 30 June 2016 and thereafter on the indemnity basis. Catchwords: APPEAL – leave to appeal – extension of time to commence proceedings for compensation – whether respondent gave full and satisfactory explanation for delay – whether respondent aware of time limit for bringing proceedings – leave refused MOTOR ACCIDENT – delay in commencing proceedings – whether full and satisfactory explanation – timely claim made – claim referred for assessment – assessment process pursued – calculation of time for commencement of court proceedings Legislation Cited: Motor Accidents Compensation Act 1999 (NSW), ss 66, 72, 81, 108, 109 Cases Cited: Itek Graphix Pty Ltd v Elliot [2002] NSWCA 104; (2002) 54 NSWLR 207 Walker v Howard [2009] NSWCA 408; (2009) 78 NSWLR 161 Category: Principal judgment Parties: Kelli Barnett (Applicant) Tulasi Harrison (Respondent) Representation: Counsel: Mr J Turnbull SC / Ms S Warren (Applicant) Mr A J Stone SC / Ms H Wall (Respondent) Solicitors: Curwoods Lawyers (Applicant) Shine Lawyers (Respondent) File Number(s): 2015/361576 Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Date of Decision: 12 November 2015 Before: Norton SC DCJ File Number(s): 2014/269446 [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.] Judgment 1. MCDOUGALL J: The respondent (Ms Harrison) was injured in a motor vehicle accident on 2 August 2002. The car in which she was then a passenger collided head on with another car driven by the applicant (Ms Barnett). Ms Harrison suffered significant injuries and disabilities, apparently as a result of the accident. 2. Ms Harrison gave Notice of Claim, pursuant to s 72 of the Motor Accidents Compensation Act 1999 (NSW), (the MAC Act). She did so within time. Further, either within time or irrelevantly out of time, the insurer gave notice pursuant to s 81 of the MAC Act admitting liability. Ms Harrison's claim for compensation was thus launched upon the Claims Assessment and Resolution Service (CARS) process. By virtue of s 108(1) of the MAC Act, Ms Harrison could not commence proceedings until the CARS process had been resolved one way or the other. 3. For reasons that it is unnecessary to recount, the CARS process ended inconclusively. Two assessments were issued. Each was set aside by the Supreme Court. Thereafter, the insurer sought and was given exemption from the assessment process. 4. In those circumstances, if Ms Harrison wished to pursue her claim for compensation, it was necessary that she should commence proceedings in a Court. However, because this process ended long after the expiry of the three year time limit set out in s 109 of the MAC Act, it was necessary for her to obtain leave. That was the matter with which the primary judge was concerned. 5. After a three day hearing, the primary judge gave a decision on 12 November 2015. Her Honour concluded that leave should be granted to Ms Harrison to file her statement of claim. It is from that decision that Ms Barnett seeks leave to appeal. 6. Section 109 of the MAC Act reads as follows: 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 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. 1. The expression, "full and satisfactory explanation", in s 109(3)(a) invokes s 66(2) of the MAC Act: 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. 1. The dispute before the primary judge focused on the adequacy ‑ in terms of s 109(3)(a), the full and satisfactory character – of the explanation that Ms Harrison gave. The primary judge dealt with that in careful and detailed reasons. 2. In this Court, the attack on the reasons of the primary judge focused on her Honour's finding at [159] that Ms Harrison was relevantly unaware of the time limit set out in s 109(1), notwithstanding advice given to her in conference with a Ms Brookes of Maurice Blackburn Cashman in September 2004, confirmed in a letter dated 28 September 2004. 3. Mr Turnbull of Senior Counsel, who appeared with Ms Warren of Counsel for Ms Barnett, submitted that there was compelling evidence inconsistent with the conclusion of the primary judge, that the solicitors' evidence was insufficient "to displace the plaintiff's evidence that she was unaware of [the] time limit." The primary judge added that the letter in question contained "very little detail about the numerous time limits in motor accident proceedings", and said that in her view it was "unlikely that the oral advice was any more extensive at the initial conference." 4. The evidence of the solicitor in cross examination was, perhaps not surprisingly given the lapse of time, that she had no recollection of the "contents of the conference". She gave evidence of her usual practice that, being aware as she was of the general three year time limit to bring Court proceedings, she would inform prospective plaintiffs of that time limit. She said, also, that it was her practice to tell them "about the six month time limit", which I assume refers to the six months' time limit in s 72 of the MAC Act. 5. The solicitor agreed that, although she could not "give sworn evidence that [she] said to Ms Harrison, you've got three years in which to bring a claim or words to that effect", nonetheless, "it was [her] invariable practice at that time to tell such clients that information." 6. The solicitor was then referred to the letter which she said was sent on 28 September 2004, and which undoubtedly was received by Ms Harrison or by her advisor, Mr Phillip Powell, at some time thereafter. 7. In that letter, the solicitor informed Ms Harrison that Maurice Blackburn Cashman "are not able to represent you" and would not do so "on a no win/no fee basis." The letter advised Ms Harrison "to seek alternate representation" and told her how she might do this. It then said: We further remind you that you have three years from the date of the accident within which to make a claim. As the date of accident was 7 August 2002, you have until 7 August 2005 to make a claim. 1. As I have noted, the primary judge found that it was unlikely that the oral advice was any more extensive than what was said in the letter. I do not think that this finding of her Honour's was attacked; but if it were, it would seem to me in any event to be plainly correct on the material before her. 2. The real question is, thus, as to the content and effect of the advice that was given in conference and apparently confirmed in the letter. 3. The first point to make is that there are many time limits in Ch 4 of the MAC Act, and the letter referred, at best, to one only of those time limits. The second point to make is that read literally (or carefully) the letter did not convey accurately the real situation. There is no doubt that Ms Harrison was a "claimant", in respect of a "claim", as those expressions are defined in s 3 of the MAC Act. Thus, there is no doubt that she had to make a "claim", as contemplated by s 72. However, by s 72(1), the time for doing so was "within six months after the relevant date for the claim": in this case, within six months of 7 August 2002. Thus, read literally or carefully (as one might expect a letter from a law firm to be read) the advice given in respect of time limits was incorrect. 4. Further, in the context in which it was given, the advice was at least potentially misleading. At the time the conference was held, and at the time the letter was written, the insurer had admitted liability pursuant to s 81 of the MAC Act. It was thus not open Ms Harrison to commence proceedings unless the CARS procedure had been worked through, or unless there had been issued a certificate of exemption. No one suggested that in this case, at that time, there was any basis for the issue of a certificate of exemption. Accordingly, at the time the conference was held and the letter written, it was not open to Ms Harrison forthwith (or at all, pending completion of the CARS process) to commence proceedings in Court for compensation arising out of the accident. The letter made no reference to that. 5. In those circumstances, I have the greatest difficulty in seeing what it was or how it was that the primary judge erred in the conclusion that she expressed at [159] of her reasons. For convenience, I set out that paragraph in full: Ms Brookes frankly admitted that she had no recollection of what she said at the conference, nor did she recall whether she explained to either the plaintiff or Mr Powell what was meant by making a claim. In all the circumstances I do not think the evidence of usual practice is sufficient to displace the plaintiff's evidence that she was unaware of such a time limit. The letter which is relied on to corroborate that this is contains very little detail about the numerous time limits in motor accidents proceedings. I find that it is unlikely that the oral advice was any more extensive at the initial conference. 1. There is no doubt, putting that paragraph in context, that the "time limit" to which her Honour referred was the three year limitation period for commencing Court proceedings, as set out in s 109(1) of the MAC Act. 2. To my mind, the primary judge was confronted with a situation where there was evidence from Ms Harrison as to her state of mind, sought to be rebutted by what was described as an irresistible inference that, it was said, should be drawn from the letter of 28 September 2004 and the conference that took place a few days earlier. That irresistible inference was said to be that Ms Harrison must have been aware that she had three years within which to commence proceedings. 3. In circumstances where the letter in terms did not say that, and in circumstances where it should have said (but did not say) that proceedings could not be commenced in any event until the CARS process had been completed, I do not think that the conclusion to which the primary judge came at [159] of her reasons is attended with sufficient doubt to justify the grant of leave. 4. There were other issues raised on the application for leave. One of those referred to the suggested misapplication by the primary judge of what was said in Walker v Howard [2009] NSWCA 408; (2009) 78 NSWLR 161. In that case, this Court was concerned, among other things, with the requirement in s 66(2) that the position of the applicant for extension of time was to be assessed, or more accurately, the explanation given by that applicant was to be assessed, by reference to the views of the hypothetical reasonable person in the position of the claimant. There was some discussion as to the extent to which that statutory transmogrification, which one might think would have the effect of negating the concept of the reasonable person, could take across to that hypothetical reasonable person all the capacities of the claimant. There is no doubt, as appears from the judgment of Allsop P, with whom, to a greater or lesser extent, all members of the Court agreed, at [65], that the position of a claimant with a legal or physical disability necessarily included that disability, "at least if it be caused by the motor vehicle accident in question". It is clear, both from what his Honour said later in that paragraph and from other passages in his Honour's reasons, that his Honour was not suggesting that the "position" should be confined only to that disability. 5. Young JA, who agreed generally with Allsop P but gave separate reasons, said at [146] that one would transfer across to the hypothetical reasonable person "the basic characteristics of the claimant". However, he said, "one does not transfer across the claimant's particular emotional characteristics, such as his or her ability to control anger, be a wishful thinker or dreamer, a persistent ditherer or a person who is well known to be slow in reaching a decision or taking action." 6. The apparent brightline distinction seemingly drawn, does not seem to me to be one that his Honour maintained, as appears in particular from what his Honour said at [149]: This question must be approached by reminding oneself of the object of the exercise. That is, to measure the delay experienced by this claimant with the delay that would have been experienced by the hypothetical reasonable person. How can one do this unless one places the hypothetical reasonable person not only in the shoes of the claimant but also with his abilities and disabilities and in his home surrounded by his or her friends and relations? 1. Further, if his Honour were intending to express a brightline distinction, I do not think that his Honour's views would be consistent with those of Allsop P as I have briefly summarised them. 2. The primary judge approached this task at [149] of her reasons in the following words: There has been significant delay in this matter. The delay was primarily due to a combination of the plaintiff's trust in Mr Powell, and the fact that she was a person who was suffering from PTSD, major depressive disorder, social phobia and generalised anxiety disorder, caused or contributed to by the accident of 2002 together with a pre-accident vulnerability caused by her dependent behaviour. The plaintiff had very little in the way of formal education and had spent only one year when she was 15 or 16 engaged in the workforce. 1. Mr Turnbull accepted that everything except "pre-accident vulnerability caused by her dependent behaviour", could properly be taken into account. Once that concession is recorded, and once the composite nature of the reasons given by the primary judge on this point is recognised, I see no basis for finding error in the way in which her Honour approached the statutory transmogrification to which I have referred. 2. There were two residual points. One related to the decision of this Court in Itek Graphix Pty Ltd v Elliot [2002] NSWCA 104; (2002) 54 NSWLR 207. In that case, in the context of a different statutory limitation scheme, the Court concluded that a deliberate and informed decision not to commence proceedings within time would stand as a powerful discretionary factor telling against the grant of leave. That is undoubtedly correct at the level of principle. It is not however a rule of general application to all applications for extension of time under all manner of limitation provisions. In any event, it seems to me, the facts in Itek Graphix was so far removed from the facts in this case, that nothing of utility turns on the decision for present purposes. 3. Mr Turnbull acknowledged that this point rose no higher than the letter of 28 September 2004 and the antecedent conference. Once that letter is regarded, as I think it should be, as an incorrect and incomplete representation of the relevant time limitation provisions, the point goes nowhere. 4. Finally, there was some complaint of the costs order made by the primary judge. It was open to Ms Barnett to ask the primary judge to discharge or vary that order. She did not do so. I see no reason in those circumstances to grant leave simply to argue a question of costs. 5. I would dismiss the application for leave with costs. 6. BASTEN JA: I agree with the reasons given and the order proposed by McDougall J. I would add the following observations. 7. The delay in this case arose not from the failure of the claimant to commence proceedings, but from the delay in commencing an assessment of damages with the non-judicial Motor Accidents Claims and Assessment Resolution Service (CARS) under Pt 4.4 of the Motor Accidents Compensation Act 1999 (NSW). A claim having been lodged within the six months of the accident (pursuant to s 72) and liability having been admitted by the insurer (under s 81 of the Act) the claimant was not entitled to commence proceedings until, in the usual course, by virtue of s 108(1) of the Act, the assessment process was completed. If the claimant accepted the outcome of that process, the award would be binding on the insurer. 8. In fact the process did not run the usual course. After two assessments, each accepted by the claimant but each set aside by the Supreme Court, the case was exempted from the CARS process on the application of the insurer. The claimant commenced proceedings in Court five months later. 9. The period of three years within which to commence proceedings under s 109(1) does not run while the process of assessment is on foot with CARS, as provided by s 109(2). However, time did run, even though proceedings could not then be commenced, once the insurer admitted liability and prior to the application for a general assessment by CARS. The significant delay in this case was caused by not seeking in a timely way, a general assessment from CARS, although there was no statutory time limit on taking that step. If, as the judge was entitled to accept, the claimant and her de facto father-in-law pursued attempts to settle the claim during that time, the delay was readily able to be explained and justified within the terms of s 109(3) and s 66(2) of the Act. 10. The application for leave to appeal raised no issue of principle, nor did it demonstrate a sufficiently arguable case for interfering with the judgment of Norton DCJ in the District Court. 11. LEEMING JA: I agree that this application for leave to appeal should be dismissed. I agree with the reasons given by McDougall J. 12. I would add one thing in relation to the letter dated 28 September 2004 from Ms Brookes. Ms Harrison never became a client of her firm, something which the primary judge found at [158] of her Honour's reasons which is not subject to challenge in this Court, and an evaluation of the defects in that letter to which other members of the Court have referred to is to be conducted on that basis. 13. I also agree with the observations of Basten JA. 14. BASTEN JA: Accordingly, the orders of the Court are: 1. dismiss the application for leave to appeal; 2. the applicant is to pay the respondent's costs on the ordinary basis up to 30 June 2016 and thereafter on the indemnity basis. ********** 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: 04 August 2016