BAKER v SALAGIANNIS [2009] NSWCA 385 | Case summary

27 November 2009 Janet BAKER v Georgina SALAGIANNIS Judgment 1 McCOLL JA: I agree with Basten JA. 2 BASTEN JA: On 19 September 2001 Ms Salagiannis ("the plaintiff") was injured in a motor vehicle accident involving a car driven by Ms Baker. (Because Ms Baker was the moving party in this Court it is convenient to refer to her as "the applicant".) 3 On 25 July 2008 the plaintiff sought leave to commence proceedings with respect to her claim against the applicant pursuant to s 109 of the Motor Accidents Compensation Act 1999 (NSW) ("the Act"). Leave was required because of her failure to commence proceedings within the time period specified in s 109(1) and (2). The application came before Garling DCJ in the District Court. On 15 December 2008 his Honour granted leave and purported to extend the time for the plaintiff to bring the proceedings until the date of the notice of motion. This order was treated by the parties as a grant of leave to commence proceedings. 4 Because the grant of leave constituted an interlocutory judgment or order, the applicant requires leave to challenge the judgment or order in this Court: District Court Act 1973 (NSW), s 127(2)(a). 5 The critical statutory provision for present purposes is s 109(3) which reads: " 109 Time limitations on commencement of court proceedings … (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." 6 The primary judge was satisfied in relation to both limbs of s 109(3) and there is no challenge in relation to his Honour's conclusion with respect to paragraph (a). The proposed appeal seeks to challenge his Honour's finding with respect to paragraph (b). 7 The critical passage in his Honour's reasons with respect to this issue read as follows (Judgment, pp 6-7): "As I understand it, I have to be satisfied that the total damages of all kinds likely to be awarded is not less than a certain amount. I really do not have to hear the evidence in the case to decide that or to go into the arguments for and against. I believe it is sufficient that I am aware that the plaintiff claims to be seriously injured, the plaintiff claims to have significant disabilities and for the plaintiff to argue, and obviously argue on the basis of the evidence, that she is entitled to a very significant verdict in this case. Having read all those submissions, there is sufficient there to allow me to be satisfied that the total damages likely to be awarded would exceed 25 per cent and, of course, that has got to be on the basis that the plaintiff can prove her case." 8 The draft notice of appeal filed with the application for leave in this Court identified the appeal grounds in the following terms: "1. His Honour erred in law in finding that the [plaintiff] had satisfied s.109(3)(b) of [the Act]. 2. His Honour erred in law in finding that s.109(3)(b) of the Act was satisfied on the basis of the damages asserted by the [plaintiff]. 3. His Honour erred in failing to evaluate the evidence and base his decision upon the evidence, rather than the assertions, in relation to damages. 4. His Honour erred in law in failing to take into account at all the CARS Assessor's Certificate and Reasons, and the failure of the [plaintiff] to put any evidence before the Court to challenge those Reasons." Identification of issues 9 Although, as his Honour noted, the claim made by the plaintiff was for a "very significant" sum of money, and although the applicant's response was that she was not entitled to anything at all, the case was presented and determined in the District Court on a somewhat haphazard basis, without attention to elementary points. First, neither party ascertained and informed his Honour of the correct threshold amount for the purposes of s 109(3)(b). That figure depended upon the maximum amount which might be awarded for non-economic loss under s 134 as at the date of the accident. As at the date of the accident, s 134 provided: " 134 Maximum of amount of damages for non-economic loss (1) The maximum amount that a court may award for non-economic loss is $284,000. (2) If that amount is adjusted by the operation of section 146 (Indexation of amounts relating to award of damages), the applicable maximum amount is the amount as at the date the award is made." 10 Where there has been an adjustment to the amounts specified in s 134, the two provisions do not fit easily, because of the different dates referred to in each. The figure of $284,000 was inserted in s 134(1) by the Statute Law (Miscellaneous Provisions) Act (No 2) 2000 (NSW), Schedule 1.11, which commenced on 1 January 2001. An adjustment pursuant to s 146 is to be made on or before 1 October of each year and, the Court was informed, was generally made effective from 1 October. If that were the case, the threshold amount at the date of the plaintiff's accident would have been $71,000. However, the District Court was advised that the figure was $74,000. This Court was advised that the correct figure was $67,750. Fortunately, nothing turns on the precise figure. 11 Secondly, an important issue with respect to the application of s 109(3)(b) is the standard of proof required by the term "likely". As was explained by Bowen CJ in Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union [1979] FCA 85; 42 FLR 331 at 339: "The word 'likely' is one which has various shades of meaning. It may mean 'probable' in the sense of 'more probable than not' - 'more than a fifty percent chance'. It may mean 'material risk' as seen by a reasonable man 'such as might happen'. It may mean 'some possibility' - more than a remote or bare chance." 12 In the present case, the parties accepted that in s 109(3)(b), "likely" meant more probable than not. The present application should therefore be approached on that basis, although, given the statutory context, that construction might be doubted. 13 Whilst apparently accepting that construction, counsel for the plaintiff submitted that no determination had to be made as to whether the evidence of damages should be accepted, because the clause "if the claim succeeds" carried with it an assumption that the damages were proved. That construction both contradicts the assumption as to the meaning of the word "likely" and appears to support the proposition that the primary judge need only be satisfied that evidence is available which would establish the threshold amount if accepted. 14 The alternative construction is that the clause "if the claim succeeds" refers to questions of liability. In other words, the assessment of damages may be made on the basis that liability is established. This construction was adopted by the applicant. 15 The Court was assured that there was no authority in this Court on the meaning of "likely" in this provision or its predecessor in the Motor Accidents Act 1988 (NSW). However, the Court was referred to the decision in Reeves v Reeves [2002] NSWCA 181. The question in that case was whether the respondent to the proposed claim was entitled, in resisting an application under s 109(3), to present evidence of contributory negligence which would, if accepted, reduce the award of damages. The Court concluded that material supporting a reduction on account of contributory negligence should properly have been considered. Foster AJA stated (Meagher JA and Campbell AJA agreeing) at [16]: "I am satisfied that 'the total damages of all kinds likely to be awarded to the claimant if the claim succeeds' reasonably, as a matter of construction, refers to damages likely to be recovered in the event of a totally successful claim. They contemplate that the plaintiff must demonstrate a viable primary claim; indeed, the necessity for so doing would be required in any event. That being so, in my view, it is reasonable to interpret the words of the section as contemplating the potential ultimate result of the litigation, having regard to all matters put before the Court in relation to the application to extend time." 16 What was meant by "a viable primary claim" and why it was necessary to establish that "in any event" was not explained by reference to the language of the statute. The underlying assumption appears to be inconsistent with the approach adopted by the parties in the present case as to the meaning of the clause "if the claim succeeds". Because liability was conceded in the present case, the issue does not need to be determined. 17 Thirdly, the plaintiff in the District Court put in evidence a certificate prepared by an assessor under s 94(3) of the Act and reasons for the assessor's conclusions, given in compliance with s 94(5). (That section falls within Part 4.4 of the Act.) It was the plaintiff's rejection of the assessment which led to the commencement of the present proceedings. Needless to say, the plaintiff's case was designed to challenge, rather than rely upon, that assessment. Furthermore, the assessment was well below the statutory threshold referred to in s 109(3)(b). 18 The tender of the certificate by the plaintiff was inexplicable for legal, as well as forensic, reasons. Section 115 of the Act provides: " 115 Disclosure of offers or assessment by claims assessor (1) This section applies to: … (b) the amount of an assessment of damages by a claims assessor under Part 4.4. (2) Except as prescribed by the regulations, any such amount is not to be specified in any pleading, affidavit or other document filed in or in connection with court proceedings, and is not to be disclosed to or taken into account by the court, before the court's determination of the amount of damages in the proceedings." 19 Ground 4 in the notice of appeal complained in part that the primary judge "erred in law in failing to take into account at all the CARS Assessor's Certificate". In her written summary of argument, the applicant asserted that, having put into evidence the certificate and reasons, together with the evidence put before the assessor, the plaintiff "brought forward no new evidence to attempt to demonstrate that the Assessor was wrong in his assessment of damages" in a specified amount. That issue will need to be addressed. 20 Fourthly, the draft notice of appeal identified each of the grounds in terms of error "in law". Not all the grounds identify any such error and the reasons for using that terminology is somewhat obscure. It may have been thought that a challenge to an interlocutory judgment involving matters of evaluation would need to establish errors of principle to attract the intervention of this Court. In any event, the grounds should be assessed according to their terms, there having been no proposal to amend them. 21 Fifthly, the first proposed ground constituted a blanket challenge to the decision of the primary judge and added nothing to the other grounds. 22 Sixthly, proposed grounds 2 and 3 relied on the proposition that his Honour reached a state of satisfaction by reference to the "assertions" or submissions of the plaintiff and eschewed any evaluation of the evidence. The plaintiff sought to resist the application on the basis that this was, in any event, an appropriate approach. These grounds and the response lie at the heart of the application. Central issue: failure to assess evidence 23 The substance of the applicant's complaint thus depends upon a proper understanding of the passage set out at [7] above from the ex tempore judgment of the primary judge. The applicant relied upon a number of statements made in that passage. 24 First, the applicant referred to his Honour's statement that he did not have to hear the evidence. However, that statement must be assessed in its forensic context. The evidence presented was in documentary form. The plaintiff's account of her injuries was largely to be gleaned from material provided to the assessor and from medical reports, the documents being annexed to an affidavit of her current solicitor. No objection appears to have been taken to the matter being put before the Court in that form. At the outset of the hearing before the District Court, counsel for the applicant noted that the solicitor was not available for cross-examination but agreed that she would not be required if both of her affidavits were read in the proceedings. That occurred. 25 The plaintiff gave evidence by way of an affidavit of 9 December 2008, which was directed primarily to her understanding and knowledge of steps being taken on her behalf by her then solicitors. The plaintiff was cross-examined as to her knowledge of the steps taken in the proceedings and her understanding as to the limitation period. Although material had been admitted relating to her state of health, she was not cross-examined in that regard. In short, the cross-examination was directed solely to the question of whether her explanation for the delay was "full and satisfactory" for the purposes of paragraph (a) of sub-s 109(3). 26 In this context, his Honour's statement that he did not have to "hear" the evidence was clearly not a general statement: he had indeed heard the plaintiff give evidence. In fact he assessed her evidence in relation to paragraph (a): Judgment, p 5. In the context, the remark must be understood as referring to the medical evidence which was indisputably before him, but which had not been the subject of cross-examination. 27 Secondly, the applicant contended that his Honour had dealt with the matter on the basis of the plaintiff's claims and not on the basis of any evidential support for those claims. 28 So far as it went, that submission was correct: his Honour clearly did address himself to the claims and the schedule of damages which was included in the tendered material. However, his Honour also stated that the submission was presented "on the basis of the evidence" which, taken in context, can only have been a reference to the medical evidence together with the plaintiff's description of her injuries in the documentation presented to the assessor. 29 That understanding is supported by reference to the submissions of the parties in the District Court. In oral submissions, counsel for the plaintiff stated (Tcpt, 15/12/08, p 29) "I rely upon the schedule of heads of damages submissions in the medical reports that are annexed to the affidavit of the plaintiff's solicitor] …." In the course of submissions in this Court counsel for the applicant accepted that the italicised "in" should have read "and". That being so, it is clear that his Honour was referred to the medical reports, although it is true that he was not taken to them in any detail. Rather, the applicant in effect relied upon his written submissions which summarised the material in the reports. 30 By far the bulk of the debate before the primary judge concerned the calculation of the limitation period provided in s 109 and the justification for the delay. In respect of paragraph (b), the applicant's counsel relied almost entirely upon the assessment which had been placed before the primary judge by the plaintiff. The substance of the submission for the applicant was that, having put the assessor's reasons before the District Court, the plaintiff bore a burden of explaining why the amount identified by the assessor was not a correct assessment of the likely damages: Tcpt, p 39 (25)-(35). 31 Thus, neither party took the primary judge to the detail of the medical evidence. The plaintiff relied upon her written submissions; the applicant relied upon the proposition that the material added nothing to that which had proved insufficient before the assessor. In those circumstances, there was no error, and certainly no error of law, on the part of the primary judge in failing to undertake his own analysis of the medical evidence. Consideration of certificate and reasons of assessor 32 Given the way in which the case was presented in the District Court, the present application must turn on the allegation in ground 4 that his Honour should have treated the assessment as establishing a result which the Court should accept unless the plaintiff demonstrated that it was erroneous. 33 There are two problems with that contention. The first is that if the amount determined by the assessor cannot be taken into account in proceedings in the District Court, pursuant to s 115, then there is no preliminary figure from which departure must be justified. The second difficulty is that, once the figure is removed, it is difficult to see what significance his Honour was expected to attach to the findings made by the assessor with respect to the plaintiff's claims. 34 In relation to the first difficulty, the applicant asserted that the prohibition in s 115(2) did not apply because the amount had been put in evidence by the plaintiff. That was a forensic choice, it was submitted, by which the plaintiff was bound. Reliance was placed upon the principles explained by the High Court in Smits v Roach [2006] HCA 36; 227 CLR 423 at [46] (Gleeson CJ, Heydon and Crennan JJ) to the effect that in an adversarial system of litigation, a party is generally bound by the conduct of his or her counsel. Where a possible objection to the judge sitting arises from a reasonable apprehension of bias, counsel's authority extends to a waiver of the right to seek recusal. 35 The present case is of a different kind. Not only was the prohibition in s 115 directed to the disclosure of the amount in an affidavit or other document, but the section also prohibited the Court from taking the amount into account. Whether one party could waive such a prohibition gives rise to questions of statutory construction of the kind raised in Australian Competition and Consumer Commission v Baxter Health Care Pty Ltd [2007] HCA 38; 232 CLR 1 at [45]-[46] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ); Master Education Services Pty Ltd v Ketchell [2008] HCA 38; 236 CLR 101 at [11] (Gummow ACJ, Kirby, Hayne, Crennan and Kiefel JJ); and Vital Finance Corporation v Taylor (1996) 40 NSWLR 25. Except by reliance on the principle of waiver discussed in Smits, there was no explanation proffered in this case as to why his Honour would have been in error in obeying the statutory injunction and disregarding (as he clearly did) the assessment. 36 The second difficulty arises even though it may be accepted that any reasons given by the assessor do not fall within the terms of the prohibition in s 115(2). For the purposes of the argument, it may also be accepted that any question of inadmissibility under the Evidence Act 1995 (NSW), in relation to opinions expressed by the assessor with respect to the evidence of the plaintiff, are sidestepped by the tender of the material by the plaintiff. Nevertheless, it did not follow, as a matter of law, that the primary judge was required to adopt the assessor's opinions of the plaintiff's evidence as to her medical conditions (and, in particular, her pre-accident state of health) unless persuaded that they were erroneous. In part, that was because the relevance and cogency of the reasons were emasculated once the conclusion, in justification of which the reasons were given, was removed from consideration. In addition, his Honour was quite entitled to reject as of little or no relevance the opinions of another tribunal assessing the credibility, in particular respects, of the plaintiff's evidence. 37 Because the applicant focused almost the entirety of her submissions before the District Court on this issue, it might have been complained that his Honour did not explain his reasons for not accepting those submissions. However, that was not a basis of challenge and, it being clear that the actual basis, namely that his Honour erred in law in failing to take them into account, cannot succeed, that ground of appeal also must be rejected. Conclusions 38 In the circumstances, it is clear that the challenge to the determination of the primary judge has not been made good. Although his Honour expressed his ultimate conclusion as being the provision of an extension of time, it is clear that in substance he granted leave to commence proceedings and no point is taken about the form of the order. (Indeed, the form of the order actually made was not before this Court.) 39 The issue of principle which might have been raised was whether the primary judge was required to be satisfied that the evidence tendered did make it likely that an award of damages would exceed the threshold, or whether it was sufficient that the evidence, if accepted, would support that conclusion. Because the evidence tendered by the plaintiff was admitted, was not the subject of cross-examination and was not contradicted, this issue did not arise. 40 The operation of s 109 of the Act may give rise to a number of issues of principle which remain to be determined. However, none of these requires resolution in the present case. The challenge ultimately turned upon an understanding of the reasons given in an ex tempore judgment, which in turn required reference to the way in which the case had been run in the Court below. Despite the absence of any issue of principle, the consideration addressed to the issues raised allows for a grant of leave to appeal. Because the arguments have not been made good, the appeal must be dismissed. The applicant must pay the costs of the proceedings in this Court. 41 Accordingly I propose the following orders:

BAKER v SALAGIANNIS

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