Douch v Betts and Insurance Australia Limited t/as NRMA Insurance [2013] ACTSC 126

2. Section 136 imposes an obligation on parties to have a compulsory conference prior to a claimant for a motor accident claim bringing court proceedings. Subsection (3) of that section permits the Court to decide the time and place for the compulsory conference and make any other orders the Court considers appropriate in the circumstances. I have treated the current application as being an application for orders under subs (3).

3. The facts of the matters as are relevant for the present purposes are as follows. There was a motor vehicle accident on 6 January 2010. The plaintiff communicated with the NRMA and apparently sent a claim form to it by letter dated 17 February 2010. The NRMA corresponded directly with the plaintiff by letter which included the following:

We have looked at the available information relating to your accident and we admit our insured driver was at fault. We will now pay for all reasonable and necessary treatment expenses related to the injuries you sustained in the accident.

4. The parties accept that this letter amounts to an acknowledgement of the cause of action consistent with the decision of the Court of Appeal in Casey v Alcock (2009) 3 ACTLR 1. The limitation period that flows from this acknowledgement as a consequence of ss 32 and 16B of the Limitation Act 1985 would expire on 17 February 2013. That is, it would have long expired. There is no capacity under the Act to extend that period.

5. The plaintiff subsequently saw his current solicitors on 15 June 2010. Those lawyers wrote to the NRMA requesting copies of various documents including, "A copy of your letter admitting liability." On 2 July 2010 the NRMA wrote back. The letter did not provide a copy of the earlier letter but said instead:

We advise that our investigations are complete and we admit that our insured driver has breached his duty of care to the claimant.

6. This is said by the plaintiff to amount to a second acknowledgement of the cause of action for the purposes of s 32 of the Limitation Act. If this contention is correct, then the limitation period will expire on 2 July 2013 and hence it is still presently open to the plaintiff to commence those proceedings, having regard to the terms of s 16B of the Limitation Act.

7. The defendants contend that the letter of 2 July 2010 is not effective as a second acknowledgement of the cause of action for the purposes of s 32 of the Limitation Act and that only the first acknowledgement, that arising from the letter of 17 February 2010, is effective. The NRMA has refused to participate in a compulsory conference as a consequence of taking the view that the limitation period has expired, and expired on 17 February 2013. The matter has to be dealt with today as a matter of some urgency, given that the limitation period will expire, on any view, very shortly and if the plaintiff is to commence proceedings there are various procedures that need to be carried out before then. Section 32 of the Limitations Act 1985 provides, relevantly:

(1) If, after a limitation period fixed by or under this Act for a cause of action begins to run but before the end of the limitation period, a person against whom (either solely or with other persons) the cause of action lies confirms the cause of action, the time during which the limitation period runs before the date of the confirmation does not count in the reckoning of the limitation period for an action on the cause of action by a person having the benefit of the confirmation against a person bound by the confirmation.

(a) a person confirms a cause of action if, but only if, he or she -

(i) acknowledges, to a person having (either solely or with other persons) the cause of action, the right or title of the person to whom the acknowledgment is made; or

(ii) makes, to a person having (either solely or with other persons) the cause of action, a payment in relation to the right or title of the person to whom the payment is made; and

(b) a confirmation of a cause of action to recover interest on principal money operates also as a confirmation of a cause of action to recover the principal money; and

(c) a confirmation of a cause of action to recover income falling due at any time operates also as a confirmation of a cause of action to recover income falling due at a later time on the same account.

(4) An acknowledgment for this section shall be in writing and signed by the maker.

(5) For this section, a person has the benefit of a confirmation if, but only if, the confirmation is made to him or her or to a person through whom he or she claims.

8. There are essentially four reasons that are advanced by the defendants for contending that no order should be made compelling the NRMA to participate in a compulsory conference. The first submission is that there can only be one acknowledgement under s 32 of the Limitation Act. Although this does not appear, in terms, from the text of the section, such a conclusion is said to be consistent with the policy of the Limitation Act and it is submitted that it would be inconsistent with that policy to allow multiple extensions as a consequence of multiple acknowledgements.

9. I was not referred to any authority directly on point. I was, however, referred to the remarks of Refshauge J in Casey v Alcock at [36] and following which explain the general purposes of limitation periods. The plaintiff referred me to the provisions in s 32 relating to the acknowledgement of debts and submitted, having regard to the way in which debts are treated in s 32, that just as there can be multiple acknowledgements by part payment of debts so to, by parity of reasoning, could there be multiple confirmations by acknowledgements in the way said to be possible by the decision in Casey v Alcock.

10. For present purposes, in my view I only need to be satisfied that the position adopted by the plaintiff is a reasonably arguable one. In circumstances of urgency that would be sufficient to warrant the directing of the conduct of a compulsory conference knowing that the point, so far as the defendants are concerned, will be preserved and can be agitated as a limitation argument after the commencement of any proceedings if the matter does not resolve at compulsory conference.

11. There are three reasons why I am satisfied that the plaintiff's position as to the operation of s 32, in the light of the uncontested facts, is arguable.

12. First, the words of s 32 do not, in terms, confine the position so that there can only be one confirmation by acknowledgement. Second, I accept the submission relating to part payments. Part payments are dealt with in an equivalent way to acknowledgements in s 32(2), and it appears to me clear that multiple payments can have the effect of confirming a cause of action on multiple occasions. Having regard to the equivalent way in which the two means of confirmation are treated, I consider it arguable that there may be more than one acknowledgement. Third, the conclusion that there can be more than one acknowledgement gains some support from the decision of Lawton J in Busch v Stevens [1963] QB 1, where his Honour said of an equivalent section dealing with confirmation of causes of action:

The subsection does not change the nature of the right; it provides that in the specific circumstances of an acknowledgement or payment the right shall be given a notional birthday and on that day, like the phoenix of fable, it rises again in renewed youth - and also like the phoenix, it is still itself.

13. That decision has been relied upon by the author of the relevant part of The Laws of Australia which provides, at para 5.10.2300, footnote 1: "The cause of action may thus be repeatedly extended by successive acknowledgements: see Busch v Stevens [1963] 1 QB 1."

14. The second submission made by the defendants is that any acknowledgement is prevented by the operation of s 10 of the Limitation Act. Section 10, which is in Part 2 of the Act provides:

If, under each of 2 or more provisions of this part, an action is not maintainable if brought after a specified time, the action is not maintainable if brought after the earlier or earliest of those times.

15. The defendants submitted that this would have the effect of preventing reliance on a second acknowledgement under s 32 of the Act. I do not accept that submission. It is clear, having regard to the terms of s 10, that it only applies to bars operating under Part 2 of the Act and does not apply to a period which is extended under s 32. I am certainly satisfied that the plaintiff's contention to that effect is arguable.

16. The third argument of the defendants was that, as a matter of construction, the letter of 2 July 2010 was merely a confirmation of the earlier letter. That certainly might have been the case, had the letter of 2 July been drafted in different terms or had it done what the plaintiff's solicitor asked to be done, namely to provide a copy of the earlier correspondence. However, the terms of the letter read as though they amount to a freestanding acceptance of liability rather than a mere recitation of an earlier acceptance of liability. In my view, it is clearly arguable that as a matter of construction the letter involves a freestanding acknowledgement of liability.

17. The fourth argument put by the defendants was perhaps an argument deployed to buttress the other arguments, namely that there were statutory obligations on the defendants to make admissions and to act in good faith in relation to claims, and the conduct in making admissions should not be held against the defendants. In my view, it is not a case of holding anything against the defendants or penalising them for acting in good faith and making admissions, it is merely a case of giving effect to the very clear decision in Casey v Alcock as to the effect of letters which constitute an admission of liability. As a consequence, the fourth argument does not deter me from finding that the plaintiff's position is an arguable one.

18. In my view, it is clear that the contentions of the plaintiff concerning the second letter are arguable. It is arguable that the second letter amounts to a freestanding confirmation of the cause of action that, in my view, is sufficient for present purposes. The ordering of a compulsory conference will allow, if proceedings are ultimately commenced, the issues in contention between the parties to be determined on a final basis.

19. As a consequence, I will make an order under s 136(3) and I will hear the parties as to the terms of that order. In relation to costs, in my view the plaintiff is entitled to his costs. The defendants submitted that its costs should be paid by the plaintiff in any event, because the plaintiff was seeking an indulgence. I do not accept that submission. In circumstances where there was a clear refusal to participate in a compulsory conference the plaintiff had no choice.

20. In my view, the plaintiff was not seeking an indulgence, simply seeking to compel the defendants to comply with their obligations under the Act, having regard to the very clear refusal by the defendants to participate in a conference which appears to have been taken on a considered basis. I think I should simply say that the defendants pay the plaintiff's costs of the originating application and not make an order, which has been made on other occasions, to the effect that the costs of this application abide the outcome of any subsequent court case.

[The solicitor for the defendants made further submissions on costs]

21. In relation to costs, in my view the appropriate order is the order that I announced earlier. In relation to the fact that proceedings have subsequently, to argument this morning, been commenced, Mr Solomon who appeared for defendants this afternoon has indicated that there were some verbal communications suggesting that it may be an appropriate course for the plaintiff to have simply commenced proceedings and had them stayed, pending compliance with the procedures required under the legislation see Racic v Haltiner [2010] ACTSC 63. In my view, whilst the adoption of that position might, in another case, be a basis for not making a costs order or deferring a costs order pending the outcome of later stages in the present case, I am not satisfied that it should.

22. It appears to me that if a defendant faced with an application like this wants to put itself in a better costs position it needs to make an offer like that very clearly in writing in advance of the hearing so there can be no doubt about the defendant's position, and the position that it will adopt if a plaintiff is being asked to run the gauntlet of noncompliance with a set of statutory procedures.

23. I accept that the limitation point will be agitated, now that proceedings have been commenced, but in my view, having regard to the fact that the plaintiff only needed to establish the arguability of its position in order to warrant compulsion of the defendant to participate in a compulsory conference, it is appropriate that he have the costs associated with compelling the compulsory conference, and that those costs should not be made contingent upon its success or otherwise in relation to a subsequent final argument of the limitation point.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Master Mossop.