Hamilton v Madden [2007] ACTSC 89

Supreme Court of the ACT|2007-11-09

The period within which this action may be brought be extended until 3 November 2006.
The application by the defendant for summary judgment be dismissed.
The defendant's costs of the plaintiff's application for extension be the defendant's costs in any event.

**1. In this action for damages for personal injury arising out of a motor accident, the plaintiff applies for an extension of the limitation period. The defendant applies for summary judgment because the action was commenced out of time: the fate of that application will depend upon the outcome of the extension application by the plaintiff.

2. The cause of action arose on 6 June 2000. The action was not commenced until 3 November 2006, about five months out of time. Although there is contemporaneous corroboration that the plaintiff suffered an injury to the right knee in the collision (in the form of an x-ray report dated 26 June 2000 addressed to her general practitioner), she did not seek legal advice about her entitlement to claim damages until 7 December 2004. On 16 October 2004 she was injured in another motor accident, and she consulted her solicitors, Maliganis Edwards Johnson, about the second accident. On taking instructions, they formed the view that she appeared to have a right to damages arising from the first accident also. NRMA Insurance Limited was fortuitously the third-party insurer of both of the vehicles whose drivers had been apparently at fault in the two accidents.

3. The plaintiff's solicitors had the plaintiff sign a completed personal injury claim notification form in relation to the 2000 accident, which they sent to NRMA on 8 December 2004. They then obtained a copy of the police report into the circumstances of the collision, and sent a copy of this to NRMA on 7 January 2005. The police report recorded that the accident had been a single vehicle collision a little after midnight on 7 June 2000. The defendant had been driving a Holden car on McLuckie Crescent, Banks, when she had lost control and struck a light pole and junction box. The plaintiff was a passenger. The accident was described as follows:

Vehicle parked behind another vehicle on battleaxe block of 40A McLuckie Crescent Banks. Owner Darren Ray Fitzpatrick... gave keys to Leanne Madden. Madden reversed vehicle out of driveway to allow the other vehicle to leave. Madden decides to drive around the block as she cannot reverse or turn the vehicle around within the confines of the street to return to back into the driveway. Vehicle driven to the end of McLuckie Crescent and turn left onto Wiburd, left on Tom Roberts before the driver lost control and collided with the light pole and junction box... outside 1 McLuckie Crescent. Damage to the vehicle, dent through the driver's side headlight and the front spoiler pulled from vehicle. The windscreen was damaged. Police initially of the opinion that the passenger had struck her head on the screen. However enquiries revealed that the windscreen was damaged prior to the accident. Light pole knocked over and junction box damaged.

Driver - when located Leanne Madden subject to a screening test the result of which was positive. Madden conveyed to Tuggeranong Police Station where she participated in a breath analysis recording a reading of 0.08 grams of alcohol per 100 millilitres of blood. Further police enquiries reveal that the reading was illegitimate due to the expiry of the two hours time limit... Leanne Madden issued with two TINs, one for negligent driving and the other for unaccompanied learner. Driver participated in a TROI - start time 2.40 finish time 3.06 hours. Exhibit number 42753.

4. The police report was prepared by Constable SJ O'Callaghan. He noted the defendant's address as shown on her learner's licence as 38/35 Popplewell Place, Gordon, but recorded her address at the time of the accident as 9/6 Wilkins Street, Mawson. He also recorded a fixed-line telephone number and a mobile telephone number for Ms Madden. In addition, contact details were recorded for Mr Fitzpatrick and for two other persons shown as witnesses, Nathan Arthur Sepaitis and Kelly Ann Cahill.

5. During the following months (January to April 2005) some correspondence took place between the plaintiff's solicitors and NRMA about the adequacy and timeliness of the notification form having regard to the requirements of the Civil Law (Wrongs) Act 2002.

6. On 4 April 2005, NRMA wrote to the plaintiff's solicitors, in relation to the 2000 accident, in the following terms:

...You have provided all of the information required under the Civil Law (Wrongs) Act 2002 and the complying notice is accepted by NRMA Insurance. The inquiries regarding the above motor vehicle accident are now complete. Based on the investigations carried out to date we deny liability. Enclosed is a copy of the investigation report. Please advise if your client will consent to being interviewed...

7. The letter enclosed a copy of a report by a firm of private enquiry agents, much of which had been rendered illegible by the application of a black felt pen, apparently in a misconceived if laudable attempt to avoid infringing privacy legislation. An unedited copy of the report was tendered on the hearing of the applications, and reveals that in February 2005 an investigator, Mr Streat, took a signed statement from Darren Fitzpatrick which was generally consistent with the police report. Mr Streat reported that he spoke to Nathan Sepaitis, who remembered attending parties at the house in Mcluckie Crescent but did not recall the incident in question, and did not know the plaintiff or the defendant. The other witness recorded in the police report, Kelly Cahill, had been his girlfriend during 2000 but had moved to Port Macquarie in 2001, and Mr Sepaitis had no knowledge of her whereabouts. Mr Streat took some photographs of the general area where the collision took place.

8. On 20 April 2005, NRMA wrote to the plaintiff's solicitors asking for detailed particulars going to the quantum of the plaintiff's claim. These were provided on 21 June 2006. By that date, the limitation period had expired, though it is clear that the plaintiff's solicitors did not advert to this.

9. During the hearing I drew attention to the mention in the police report of a taped record of interview. The hearing was adjourned to enable the production of the tape on subpoena, and the transcription of the tape by Auscript Australasia Pty Ltd. The transcript was tendered, running to fourteen pages and recording 165 questions and answers. At answer 34, the defendant said:

...Firstly, I did take it.... I was at a friend's place, I'd been drinking at the club with the owner of the car. He had driven back to a friend's place, we'd all been in my friend's place. Another person was leaving, and his car was parked behind the other person's. He was intoxicated, I was intoxicated, he knew I was drunk because we'd all been drinking together and I was mucking around, I said "I'll reverse out". And he goes, "well, here," and he threw me the keys, and I said, "are you serious?" and he said, "yep". So I reversed the car out of the driveway and the other car came out after me but instead of reversing, I reversed and then drove forward. Now I couldn't reverse all the way back into the driveway again, so I had to go around the block, and I went around the block and I turned the first corner fine, then the second corner, and the corner coming back I remember being just, being and then I don't remember anything about that till about, oh, I don't, till I opened the door, and Kelly was next to me and Kelly said, "run". And I just wasn't thinking and I just got out of the car and I ran, I was bawling my eyes out, I ran all the way home and just sort of locked myself in the house, and thinking, yeah, no one can get me. And that's all I know that happened. I'm not sure what happened afterwards, I'm not sure what he did. I'm not sure what the other person did.

10. In subsequent questions, the defendant said that she had gone to the Lanyon Sports Club earlier that night, at about 8:30pm, walking there with the plaintiff. The plaintiff at that time had been living with the defendant and her mother. The defendant said that she and the plaintiff had two drinks at the club, and that they had left at about 10:15 or 10:20 pm. A friend, Darren (presumably Darren Fitzpatrick) drove them to the house of another friend, Kelly (presumably Kelly Cahill).

11. The defendant said that at the time of the collision she was wearing a seatbelt but was unable to say whether or not the plaintiff was wearing one. The defendant was insistent that she had had only two drinks, schooners of beer, at the club over a period of two hours, well prior to the collision.

12. The present action was commenced, as I have previously said, on 3 November 2006. Service was effected on 22 November by handing a copy of the originating claim to a Mrs Madden, apparently the defendant's mother, at her home at 3 Haines Street, Curtin.

13. The defendant's solicitors, DLA Phillips Fox, were then instructed by NRMA. They were apparently instructed at about the same time to act for the defendant in the action brought by the plaintiff arising out of her second accident, (Hamilton v Barrett, SC 787 of 2006). They wrote to the plaintiff's solicitors on 13 February 2007 seeking particulars in the Barrett action, but it is not apparent that there was any correspondence in relation to the present action. On 7 March 2007 the defendant's solicitors filed a notice of intention to respond and a defence. The defence did not address any of the factual assertions made in the statement of claim, but simply said;

The defendant relies on the following facts in defence of the claim;

1. The alleged cause of action did not arise within six years of the proceedings being instituted on behalf of the plaintiff, and the plaintiff is barred from bringing any claim arising out of injuries she allegedly sustained in the subject accident.

The defendant's solicitors followed this almost immediately with an application for summary judgement. Unless the plaintiff persuades the court to exercise its discretion in her favour by extending time, it would seem inevitable that the application will succeed.

14. Rule 443, which applies to motor vehicle personal injury claims, relevantly provides as follows:

443 (2) The defendant must, in the defence, specifically admit or deny every material allegation of fact in the originating claim and statement of claim, including any allegation by way of particulars.

(3) The allegation is taken to be admitted if the defendant does not comply with sub-rule (2) in relation to it.

(6) The defendant must plead every ground of defence to be relied on, together with the facts necessary to establish each ground.

15. At the time the defence was delivered, the plaintiff's application for an extension of time had not been made. The solicitors for the defendant must be taken to have formed the view that their client had an unanswerable defence based on the limitation point, and that it was hence unnecessary to respond specifically to the allegations of fact in the statement of claim. Counsel for the plaintiff did not submit that I should hold the defendant to rule 443, nor did counsel for the defendant advert to the rule. I remind myself that the insurer denied liability for the plaintiff's claim well before the expiry of the limitation period. The hearing of the applications was conducted on the footing that if the extension sought by the plaintiff were to be granted, there would be prejudice to the defendant in relation to liability. I think that I must approach the applications on the basis that if the extension is granted, the defendant will seek to deliver an amended defence addressing the merits of the plaintiff's claim.

16. The major area of prejudice asserted by the solicitors for the defendant is that they have been unable to locate and interview her. It would follow that they would expect that they would not be in a position to call her to give evidence on hearing. They say that NRMA instructed a firm of investigators to interview the defendant in January 2005, and that the investigators told NRMA that they were unable to locate her. In January 2007, the defendant's solicitors conducted an electoral roll search, apparently limited to the Australian Capital Territory, and found a Leanne Margaret Madden, but not a Leanne Maree Madden. The fixed-line telephone number given by the defendant in the police report had been disconnected, and calls to the mobile number were unanswered, with no facility to leave a message. NRMA wrote to the defendant in December 2004 at the address she had given the police but the letter was returned unclaimed. The solicitors searched the White Pages online for any person named Madden at the Curtin address where service had been effected, with two results: L Madden with a mobile number, and W J Madden with a fixed-line number. In May 2007 a solicitor made contact on the fixed-line number with a male who said "Leanne is not here. What are you calling about?." Later in the conversation, the male said "Leanne is not here. If I happen to see her I'll tell her you called".

17. Also in May, the solicitors sent a letter addressed to the defendant at the Curtin address by express post. The letter was not returned but there was no response to it. Also during May, one of the solicitors called the mobile number. A woman answered but denied that she was Leanne Madden. She said that she was her cousin, and sometimes babysat her children. She said that she would pass the message on to Leanne if she saw her.

18. I am satisfied from this evidence, if I had any doubt about it, that service of the originating process more probably than not brought the process to the attention of the defendant, and that more probably than not the defendant was informed of the attempts by the solicitors to contact her. I also infer that the defendant has no wish to be involved in the proceedings, and that she is unlikely to take the initiative in contacting the insurer or the solicitors, though I have no doubt that she is still available and I suspect that more determined efforts may find her in time to give evidence at the hearing.

19. Having said that, it seems to me that the answers she gave to the police in the record of interview on the night of the accident are far more likely to be accepted as factually accurate than any oral evidence which she might now give, seven years later. For this reason it seems to me highly unlikely that the insurer and the solicitors would gain any benefit from finding her, interviewing her or calling her to give evidence.

20. I completed the hearing of the application on 25 May 2007. On 13 June, my associate received a letter from the solicitors for the defendant stating that further information had come to hand which provided some hope that the solicitors might be able to contact the defendant and confer with her. I was asked to defer making a decision. Having heard nothing further I re-listed the matter. This prompted a letter from the defendant's solicitors dated 22 August stating that efforts to contact the defendant with the assistance of investigators had proved fruitless. They were no longer confident that they would be able to locate her, and hence there had been no significant change in circumstances since I had reserved my decision. There was nothing further they wished to put to the Court.

21. The plaintiff's solicitors sent their client to Dr G G Griffith, consultant surgeon, on 26 April 2005, for the purposes of a report dealing with both accidents. Dr Griffith in his report of 2 May 2005 set out a history obtained from the plaintiff as to the circumstances of the 2000 accident, which was consistent with the police report and record of interview, with the addition of an admission by the plaintiff to him that she had not been wearing a seatbelt. She confirmed to him that she and the defendant had both consumed alcohol. Dr Griffith also took a history in relation to the plaintiff's injury. The plaintiff told him that both of her knees had struck the glove box of the car on impact. Within a few hours, her right knee had swollen to a much greater extent than the left, and was the site of heat and burning pain. Her father took her to hospital. X-rays showed no abnormality, but the pain became greater the following day. She took painkillers. Her knee symptoms slowly improved. In late 2002 or early 2003 she developed further pain in both knees, which she thought might have been activity-related. She saw a general practitioner and an orthopaedic surgeon during 2003, from whom no reports were available. The surgeon, Dr Coyle, performed an arthroscopy in November 2003; the plaintiff believed he had performed a chondroplasty and possibly a partial medial meniscectomy. The swelling remitted and previous crepitus was markedly reduced. Some symptoms continued, but the plaintiff improved slowly and was minimally symptomatic by the time of the 2004 accident.

22. The defendant has, of course, lost any opportunity for a medical examination of the plaintiff between the two accidents. So too have her own solicitors. The medical evidence in relation to the first accident will be limited to the records of the treating doctors. However, considering that the plaintiff told Dr Griffith in April 2005 that her knee symptoms had almost disappeared by October 2004, that statement is more likely to be accepted by a court hearing the action than anything inconsistent with it which the plaintiff might give in oral evidence three or more years later. Hence it seems to me that the claim arising out of the first accident is not much more than a claim for a closed period, and that those representing the interests of the defendant have not suffered any measurable prejudice arising from the loss of opportunity to have the plaintiff examined prior to the second accident. As a practical matter, I must recognise that if the plaintiff's solicitors had commenced proceedings properly and within time, the opportunity would have already been lost. As against this, in exercising this discretion I must look at the whole of the period of delay, and must recognise that the plaintiff was herself responsible, if anyone was, for the delay from 2000 until late 2004. Even looking at the matter from that perspective, it does not seem to me that there has been any measurable prejudice to the defendant so far as quantum of damages is concerned.

23. The discretion to extend time is conferred on the court by s 36 of the Limitation Act 1985, which relevantly provides as follows:

(1) This section applies to any action for damages, if the damages claimed consist of or include damages in relation to personal injuries to any person.

(2) If an application is made to a court by a person claiming to have a cause of action to which this section applies, the court, subject to subsection (3) and after hearing such of the persons likely to be affected by that application as it considers appropriate, may, if it decides that it is just and reasonable so to do, order that the period within which an action on the cause of action may be brought be extended for the period that it determines.

(3) In exercising the powers given to it by subsection (2), a court shall have regard to all the circumstances of the case, including, for example, the following:

(a) The length of and reasons for the delay on the part of the plaintiff;

(b) The extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant;

(c) The conduct of the defendant after the cause of the action accrued to the plaintiff, including the extent (if any) to which the defendant took steps to make available to the plaintiff means of ascertaining facts that were or might be relevant to the cause of action of the plaintiff against the defendant;

(e) The extent to which the plaintiff acted promptly and reasonably once he or she knew that the act or omission of the defendant, to which the injury of the plaintiff was attributable, might be capable at that time of giving rise to an action for damages;

(f) The steps (if any) taken by the plaintiff to obtain medical, legal or other expert advice and the nature of the advice the plaintiff may have received.

24. The section goes on to provide that the discretion may be exercised notwithstanding that the limitation period has already expired, and notwithstanding that an action has already been commenced.

25. The principles to be applied in exercising the discretion were set out by the High Court of Australia in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541. The plaintiff in that case claimed damages for negligence and breach of statutory duty in respect of a failure by an employed gynaecologist to give proper medical advice. On the recommendation of the gynaecologist, she had undergone a hysterectomy which, she said, had been unnecessary and inappropriate. These events had taken place in 1979: by the time the plaintiff made her application, the gynaecologist was living in Hong Kong. Attempts by the solicitors for the Health Authority to contact him were unsuccessful. As Toohey and Gummow JJ explained at p 546, it was apparent that if the proposed action were to proceed to trial, the crucial issue would be what was said during the conversation then more than seventeen years earlier between the intending plaintiff and the gynaecologist. The limitation period was three years. An application for extension of time had been refused in the District Court. The Queensland Court of Appeal had upheld the appeal and granted the extension. The High Court by majority (Dawson, Toohey, McHugh and Gummow JJ; Kirby J dissenting) allowed the appeal and restored the orders made in the District Court. As Toohey and Gummow JJ said at p 548, a material consideration was whether, by reason of the time that had elapsed, a fair trial was possible. This was a question to be answered by reference to the situation at the time of the application, and it was no answer to a claim of prejudice to say that in any event, the defendant might have suffered some prejudice if the applicant had not brought proceedings until just before the limitation period expired.

26. McHugh J at p 552 identified four broad rationales for the enactment of limitation periods. First, relevant evidence was likely to be lost as time went by. Second, it was oppressive to a defendant to allow an action to be brought long after the circumstances which gave rise to it had passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims could no longer be made against them. Insurers had a particular interest in knowing that they had no liabilities beyond a definite period. Fourth, the public interest required that disputes be settled as quickly as possible.

27. McHugh J made it clear at p 551 that a statutory provision such as s 36 of the Limitation Act was not to be read as giving an applicant a presumptive right to an order upon satisfying listed conditions. The applicant bore an onus of showing that the justice of the case required the exercise of the discretion in her favour. The longer the delay in commencing proceedings, the more likely it was that the case would be decided on less evidence than was available to the parties at the time the cause of action arose. In the case before the court, quite apart from proved prejudice, the long delay gave rise to a general presumption of prejudice. It was probable in the ordinary course of events that the plaintiff had discussed her operation and the reasons for it with friends and relatives and perhaps nursing staff. If the action had been commenced within the limitation period, one or more persons in those categories might have been able to provide evidence or information favourable to the defendant. By the time an application for extension was made, it was likely that any such conversations would no longer be in the memory of the participants. The finding of actual prejudice, and the possibility of other prejudice, gave rise to an overpowering case for resisting the application (at p 556).

28. In a case like Brisbane South v Taylor, where success in the action depends on findings of fact about a conversation which took place many years ago, the prejudice is obvious. The longer the delay the greater the prejudice, particularly in cases where evidence about conversations is crucial.

29. Counsel for the defendant relied on a decision of Connolly J in Nguyen v Jajic [2007] ACTSC 12 , in which his Honour dismissed an appeal from a Magistrate who had refused an application to extend a limitation period in relation to a motor vehicle accident. In that matter, the plaintiff had served a personal injury insurance form a month after the accident, but had done nothing more until five years later when he instructed solicitors. The applicant gave evidence before the Magistrate but the solicitor did not, and the Magistrate found that there was no explanation for the delay between instructing the solicitor and the expiry of the limitation period. The solicitor had had about eight months to start proceedings, had not done so and had given no explanation for the delay. There had been no medical evidence to support the application. Connolly J found that the Magistrate had not fallen into appealable error in concluding that the application had not satisfied the burden of establishing that the discretion should be exercised in her favour.

30. It seems to me that the present application is factually distinguishable from both Brisbane South v Taylor and Nguyen v Jajic. In the present case the solicitor has accepted responsibility for the delay and explained that it happened because of an oversight by the firm. The defendant and its insurer have been in possession of as much information about liability and damages as the plaintiff's solicitors since soon after the latter were instructed. The insurer has been on notice since late 2004 that the plaintiff was represented by a solicitor and intended to claim damages.

31. For the reasons I have explained above, I am satisfied that there is not likely to be any significant prejudice to the defendant in relation to either liability or quantum if the extension is granted. This is not a case where the insurer could reasonably have assumed when the limitation period expired that its liability had been extinguished. In the first place, the insurer was by then well aware that the plaintiff was legally represented and was pursuing a claim. Secondly, provided that the originating process is filed within the limitation period, there is no obligation on the plaintiff to serve it immediately. By virtue of rule 74 of the Court Procedures Rules 2006, an originating process is valid for service for one year from the date of filing. A prudent insurer would accordingly wait for a year after expiry of a limitation period before arranging its affairs on the assumption that its liability had been extinguished.

32. Having regard in particular to the fact that at the time the limitation period expired, the plaintiff's solicitors and the insurer were in communication, and that proceedings were commenced only a matter of months after expiry of the limitation period, I am satisfied on balance that the circumstances of the case make it just and reasonable that the limitation period be extended. I order that the period within which the action may be brought be extended to 3 November 2006, the date of filing of the originating claim. The defendant's application for summary judgment must be dismissed.

33. As to costs, the plaintiff comes to the court seeking an indulgence. The defendant has acted reasonably in my view in opposing the application, and is entitled to an order for costs. The costs should not be recoverable immediately, but on the making of final orders in the action. That is to say, the defendant's costs of the application for extension should be the defendant's costs in any event. There will be no order for costs in relation to the defendant's application.

34. Although one could mount a case for some criticism of the plaintiff personally for not seeking legal advice for more than four years, the reality is that the application for extension has been made necessary by an oversight by her solicitors. It is unnecessary for me to make any specific orders to reflect this: I simply express, probably unnecessarily, my view that it is the solicitors rather than the plaintiff personally who should ultimately bear the responsibility for the costs of the extension application. This is something which will no doubt be achieved by an adjustment at the conclusion of the matter.**

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.

Solicitors for the plaintiff: Maliganis Edwards Johnson

Procedures Rules 2006

Law (Wrongs) Act 2002

Procedures Rules 2006

Law (Wrongs) Act 2002

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