Harris v Nominal Defendant

Legal Profession Act 2004 LEGISLATION CITED: Motor Accidents Compensation Act 1999 Workers Compensation Act 1987

CASES CITED: Itek Graphix Pty Limited v Elliott 54 NSWLR 207 Salido v The Nominal Defendant 32 NSWLR 5254

PARTIES: Sturat James Reginald Harris (Applicant) Nominal Defendant - NRMA Insurance - (Respondent)

COUNSEL: I Roberts SC & A Black (For the Applicant) Campbell SC (For the Respondent)

SOLICITORS: Michael Kreveld Legal (For the Applicant) Hunt & Hunt Lawyers (For the Respondent)

1 The plaintiff in this matter was injured in an accident that occurred on the night of 12 and 13 August 2004. He suffered serious injuries, including a head injury. He was initially not expected to recover from his injuries.

2 The plaintiff claimed that he was struck by a motor vehicle that was driven at him deliberately and that this was the cause of his injuries.

3 These claims were made when the plaintiff was recovering from the coma into which he lapsed after his injury. They were written in an exercise book at a time when he was unable to speak.

4 In December 2004, the plaintiff's parents retained Attwood Marshall, Solicitors in Coolangatta. At the time that those solicitors were retained, they advised the plaintiff's parents of the three year time limit that was imposed on the commencement of proceedings.

5 In February 2005, a claim form was lodged with the Nominal Defendant.

6 By late 2005, Attwood Marshall had formed the conclusion that the prospects of success in the claim were poor and they advised the plaintiff's father to that effect.

7 In April 2006 the solicitors wrote to the plaintiff's father reminding him of the three year time limit. The plaintiff's parents decided not to pursue the matter further.

8 In February 2007 the plaintiff instructed Mr Flynn, solicitor.

9 In July 2007 an exemption certificate was issued through the CARS process. The plaintiff's father said that at that point he understood that the three year limitation period was no longer a problem.

10 Also in July 2007, the plaintiff's parents were advised by Mr Flynn that the family home could be at risk if the plaintiff's claim was not successful. This was their one major asset.

11 They decided that the would not put the family home at risk and the plaintiff acquiesced in that decision.

12 I am informed that the limitation period expired on 18 September 2007.

13 In November 2008, the plaintiff's current solicitor, Mr Kreveld, coincidentally met the plaintiff at a swimming pool. They had a short conversation, following which instructions were provided to Mr Kreveld.

14 Between November 2008 and February 2009 there was delay in securing the plaintiff's file from Mr Flynn. The file was handed over eventually without the exercise book that had been provided to Mr Flynn.

15 This application was filed in this court on 2 June 2009.

16 The application was supported by affidavit evidence of the plaintiff, his father and mother, and his current solicitor, all of whom were cross-examined.

17 The application is made under s 109 of the Motor Accidents Compensation Act 1999, which requires that the plaintiff obtain the leave of the court to commence his proceedings.

18 There was no real issue with the provisions of s 109(3)(b), given that the plaintiff's injuries were of significant severity. I am satisfied from the material provided to me that it is likely that, if the claim succeeded, the total damages likely to be awarded to him would exceed 25 per cent of the maximum amount that may be awarded for non-economic loss under the Act.

19 The issues went to the question of whether the explanation provided for the delay in the commencement of proceedings was full, whether it was satisfactory, and whether there was prejudice, presumed or actual, caused by the delay, such that the defendant would not secure a fair hearing.

20 Section 66(2) of the Act defines the term "full and satisfactory" as follows: 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 comply with the duty or would have been justified in experiencing the same delay.

21 On the question of whether the explanation was full, the plaintiff was criticised in respect of the period commencing when Attwood Marshall advised that the claim was without prospects in 2005 and ending in February 2007 when Mr Flynn was instructed. It was acknowledged by the plaintiff that nothing was done in this period.

22 The plaintiff said that he was unaware of his parents' consultations with Attwood Marshall until late 2005 or early 2006. He said his parents accepted their advice but he continued to hold the view that some form of claim should be available to him. He was still at that stage undergoing rehabilitation from his injuries. At a local surf club he learned in casual conversation of a person who had made a successful claim for injuries suffered in a hit and run accident.

23 He therefore started thinking about obtaining further legal advice and in January 2007 he saw a television advertisement by Mr Flynn, offering his services on a no win, no fee basis. He rang Mr Flynn and instructed him in February 2007.

24 The instructions were withdrawn from Mr Flynn in August 2007. The plaintiff said at that point, while he had not completely abandoned hope of making a claim, he was discouraged and he did nothing further in respect of it until he met his current solicitor, Mr Kreveld, in November 2008.

25 Mr Kreveld was introduced to the plaintiff at a swimming pool where the plaintiff was swimming laps as part of his ongoing rehabilitation.

26 Mr Kreveld said that an attendant at the pool asked him to speak to the plaintiff.

27 There is no criticism levelled by the defendant at any delay in the period since Mr Kreveld took instructions in November 2008.

28 I am satisfied that, in the periods referred to, the explanation was full and frank in that it was conceded by the plaintiff that nothing was done in those periods and that, although his parents were content with their decision not to pursue a claim, he had not abandoned the prospect of doing so.

29 The more serious question was whether the explanation was satisfactory.

30 There were two aspects for consideration on this point.

31 The first was whether the plaintiff made a deliberate decision not to proceed with the claim and to allow the limitation period to expire.

32 The second was what might be expected of a reasonable person in the plaintiff's position and whether a reasonable person in that position would be justified in experiencing the delay that occurred in this case.

33 In respect of the first aspect, the defendant relied upon the decision of the Court of Appeal in Itek Graphix Pty Limited v Elliott 54 NSWLR 207.

34 The major reasons in that case were delivered by Justice Ipp, who dealt comprehensively with the requirements of a satisfactory explanation but made it clear that leave to commence proceedings would not automatically be granted when there is no evidence of prejudice to the defendant by reason of the delay. The decision has been applied consistently.

35 Although Justice Ipp delivered lengthy reasons, the comments of Justice Sheller should not be overlooked. He noted that discretion under s 151D(2) of the Workers Compensation Act 1987 was expressed so widely that it should be exercised in a way that will best serve the justice of the case. That provision, of course, is very similar in its terms to s 109(1) of the Motor Accidents Compensation Act.

36 He noted that the plaintiff in that case decided quite deliberately and on a fully informed basis not to proceed at common law. She delayed for a further significant period before changing her mind.

37 This sentiment was confirmed by Justice Ipp at [144], where he stated: The fact is that the decision initially taken not to proceed at common law and the decision to allow the three year period under s 151D(2) of the Workers Compensation Act to expire were taken quite deliberately, on a fully informed basis.

38 Justice Ipp noted that the plaintiff had received full legal advice from a barrister and a solicitor. He referred to Chief Justice Gleeson's statement of purpose of limitation periods in Salido v The Nominal Defendant 32 NSWLR 5254 at 530, namely, the protection of defendants from the injustice of facing stale claims and also to promote forensic diligence on the part of the plaintiff and the plaintiff's representatives.

39 Justice Ipp noted that it would be contrary to the justice of the case and would subvert the intent of Parliament if a party was allowed to proceed with a dispute when that party had been careless of his or her rights and careless of the need to proceed with disputes within the limitation period.

40 He noted at [98] that special circumstances were required, when a deliberate decision was made to allow a statutory period to expire, to warrant the grant of leave to commence proceedings.

41 He noted that the true cause of the plaintiff's change of mind in that case remained obscure, and he suggested that it could have been that she realised that she would receive more compensation through a common law claim.

42 It was also noted that, having taken the decision not to proceed and to allow the limitation period to expire, a period of a further two years was allowed to elapse during which nothing was done about bringing common law proceedings.

43 Thus it seemed to me that the Itek principles applied where a decision not to proceed was deliberate, fully informed, and the decision was to allow the three year limitation period to expire.

44 In my view, the circumstances in this case differed markedly from those dealt with by the Court of Appeal in Itek Graphix. I did not accept that the plaintiff was fully informed about the limitation period, about the consequences of failing to commence proceedings within that period, or about alternatives available to him that would have protected his parents' property and would have allowed him to commence proceedings within time.

45 The evidence was that Mr Flynn advised the plaintiff's parents that if the claim was unsuccessful, they could be liable for costs to the extent that they might lose their major asset, namely, the family home.

46 Having digested that advice, the plaintiff's parents decided that they would not continue with the claim. The plaintiff said he accepted their decision.

47 As far as the limitation period was concerned, the plaintiff's evidence was that the first he knew of a three year time limit was when Mr Kreveld told him of it. He said Mr Kreveld made it clear that allowing the period to expire presented a serious problem. He said he had a vague memory of his parents mentioning time limits, but he could not remember what they said, and he said that Mr Flynn had never referred to time limits at the meetings with him.

48 He denied that his father had told him of written advice received concerning time limits and he said that his parents never mentioned it to him. He said he had never seen a document produced by Attwood Marshall, which was exhibit 4, containing general advice for personal injury claims. This document was addressed to Mr Harris senior, as the next friend of the plaintiff, and it gave detailed advice on procedural aspects of motor vehicle accident claims, including advice in respect of the three year time limit.

49 The evidence of the plaintiff's father was somewhat confused and contradictory concerning the extent of the plaintiff's knowledge about time limits and the extent of his own knowledge concerning time limits.

50 He said he was aware from the Attwood Marshall advice of the three year time limit, and said he told the plaintiff of it before the decision was made to proceed no further with Mr Flynn. He said he told the plaintiff that he could lose his right to bring action.

51 He subsequently denied that he knew that the plaintiff was aware of the time limit at the time he and his wife decided not to proceed further with the claim.

52 Mr Harris senior said that he read letters from Mr Flynn and made them available to the plaintiff to read but he said he drew the plaintiff's attention specifically only to those parts of the correspondence that dealt with medical examinations.

53 He did not remember if he showed the plaintiff Mr Flynn's letter of 25 June 2007 in which it was stated that the time limits were critical and that it was necessary to commence proceedings by 12 August 2007.

54 It was evident that Mr Harris senior was confused by the certificate of exemption that was issued on 18 July 2007, and about the effect that this had on the time limit at a time when the expiry date was rapidly approaching.

55 He stated that Mr Flynn told him that the effect was that there was a long extension of time.

56 He was cross-examined on this and was emphatic that this is what he was told by Mr Flynn. He said he took this to mean that a further three years was available.

57 Mrs Harris could add nothing further to this evidence.

58 The result of this evidence was that I could not be satisfied that the plaintiff, at the time the decision was made not to pursue proceedings through Mr Flynn, was fully informed of the time limit and of the consequences of allowing the time limit to expire.

59 I was not satisfied that Mr Harris senior understood precisely when the limitation period expired.

60 There was no sworn evidence from Mr Flynn and he was not called by either party.

61 An affidavit prepared by the plaintiff's solicitor was returned, revised and unsworn. I was left, therefore, with a draft affidavit and Mr Flynn's file.

62 His affidavit conflicts with the evidence of the plaintiff and his parents. Most significantly, he said that he was obliged to inform the plaintiff's parents of the need for a tutor and of risks to their assets if the claim was not successful.

63 The plaintiff and his parents said that the matter of the plaintiff's capacity was never discussed with Mr Flynn.

64 I must conclude that if it was discussed, it was not understood by them.

65 There was no evidence that any assessment of the plaintiff's competence was undertaken in mid-2007 or that this was even suggested.

66 There was no discussion concerning the avoidance of exposure to costs by establishing that the plaintiff had the appropriate capacity or by having someone other than his parents act as a tutor.

67 Mr Flynn also said that he had concluded by this stage that, as a result of his investigations, there was insufficient evidence to establish a causal connection between the plaintiff's injury and the involvement of the motor vehicle and that thus he could not provide a certificate under the Legal Profession Act to the effect that the claim had reasonable prospects of success.

68 He said he advised the plaintiff's parents of this.

69 The plaintiff's father denied this and said that he told them that the claim was a good one.

70 Most significantly, Mr Flynn stated that the plaintiff had no recollection of the circumstances of the accident, and that the parents were relying upon third party information. He said this was confirmed by the plaintiff who volunteered no information at conference held with him and his parents.

71 It was clear that this was wrong. From the time that he was first capable of communicating, the plaintiff claimed that he was run down by a motor vehicle. This was communicated before he was even able to speak. It was wrong to Mr Flynn's knowledge. He was given the original of the exercise book through which the plaintiff communicated until his capacity for speech returned. The exercise book has never been returned by Mr Flynn.

72 Mr Flynn apparently also had a document referred to as Police Brief. It was not in the folder that was said to contain his file but it was referred to in a brief allegedly sent to Mr Bellew of Senior Counsel in March 2007, in material sent to investigators in May 2007, to Mr Joy, a traffic engineer, in June 2007, and to Mr Willis of junior counsel in June 2007.

73 There are police documents in evidence, to which I will make reference at a later stage. Those police documents make it clear that the police understood that the plaintiff had claimed the involvement of a motor vehicle and had given some detail about the circumstances of the accident.

74 While Mr Flynn's file contained documents allegedly briefing Mr Bellew, Mr Willis and Mr Joy, no advices from them were in the file, and he sought no fees in respect of their accounts.

75 I had grave doubts, therefore, concerning the extent of the enquiries that were actually made by Mr Flynn.

76 I am reluctant to make findings of dishonesty when Mr Flynn was not given the opportunity to give evidence but I have placed little weight upon his statement in the light of the obvious errors contained in it and significant omissions in the materials in his file.

77 I have already noted that there was no evidence that the plaintiff's competence to provide instructions in 2007 was assessed.

78 The plaintiff said that Mr Flynn did not address him and at conferences he spoke to his parents. He said he did not ask him what he knew about the accident.

79 The plaintiff attached to his affidavit a report of the neuropsychologist, Robyn Gordon, dated 28 December 2006. I am not aware if that report was available to Mr Flynn.

80 Ms Gordon interviewed the plaintiff in November 2006 and reported that he continued to suffer from cognitive deficits. She indicated that, with further rehabilitation, further improvement might be expected. She stated that it was not clear that he required a substitute decision-maker but that assistance or advice might be helpful in important matters.

81 The plaintiff's current solicitor, Mr Kreveld, had no concerns. He said he was satisfied that the plaintiff had capacity to provide instructions.

82 I did not accept, therefore, that the plaintiff was fully informed of the limitation period, the consequences of allowing it to expire, or that he was fully and properly informed of his legal position.

83 I therefore do not reject the application on the basis that he made a deliberate and fully informed decision to allow the limitation period to expire.

84 In determining whether a reasonable person in the plaintiff's position would be justified in experiencing the same delay, I noted the following concerning the plaintiff's position.

85 He suffered a very serious brain injury. This left him not only with cognitive deficits, but with significant physical impairments. These impairments were detailed in medical reports that were in evidence.

86 It was also indicated that he suffered from a level of depression and other psychological consequences of his injury.

87 The plaintiff was in hospital for a lengthy period, and thereafter his rehabilitation continued, and it continues to the present date.

88 At the time he was told of the advice his parents received from Attwood Marshall in 2005 or 2006, the plaintiff was still undergoing extensive rehabilitation.

89 It appeared from that evidence that a reasonable person in the plaintiff's position would not be expected to give consideration to a claim until mid-2006, when he was sufficiently recovered to go out socially.

90 I considered, therefore, that the period of delay to which attention should be directed extended from mid-2006 to November 2008.

91 The position of this plaintiff in that period was that he was physically and intellectually impaired. He was reliant on his parents for advice and his parents were discouraged by advice from Attwood Marshall.

92 The plaintiff, on his own initiative, and when still within time, consulted Mr Flynn. I am satisfied that but for the advice that his home, being his parents' major asset, was at risk, the proceedings would have been commenced in time.

93 The plaintiff said he respected the decision of his parents not to put their property at risk and he continued in the belief that a claim, if unsuccessful, would risk his parents' property until he took advice from Mr Kreveld.

94 The question is what a reasonable person would have done in that position.

95 It was apparent that neither the plaintiff nor his parents were experienced in legal matters. They consulted a solicitor said to be expert in his field. They accepted his incomplete and incorrect advice.

96 In my view, a reasonable person in that position would have accepted the advice. I did not think that, to be reasonable, it required that they seek a further opinion.

97 I turn then to the question of prejudice. In this case there were two problems facing the parties. The first was that of determining the circumstances of the accident and whether a motor vehicle was in fact involved and also determining whether the nature of the plaintiff's injuries was such that it was probable that they were caused by collision with a motor vehicle.

98 I noted that there are in evidence the records of the treating hospitals, as well as other medical reports, and it was not suggested by the defendant that the delay would cause it difficulty in relation to the nature of the injuries suffered.

99 Its argument was that it would be prejudiced by the delay in determining the circumstances of the accident.

100 The defendant relied upon an affidavit of former Detective Senior Constable Binns, who was responsible for investigation into the circumstances of the plaintiff's injury. He stated that as a result of his enquiries, he was unable to discover how or where the plaintiff was injured. He stated that he had advice from two quarters that suggested that the plaintiff was not involved in a motor vehicle accident.

101 A doctor, who excluded a falling injury, said the most likely case of the injuries was that the plaintiff had been bashed. He agreed that the doctor did not state that the plaintiff could not have been injured in a motor vehicle accident.

102 Mr Binns said he consulted a colleague in the Crash Investigation Unit, who said that the injuries were unlikely to have been caused by a collision with a motor vehicle. Mr Binns did not make a note of this conversation, and said it was very preliminary advice. He agreed that he did not provide to his colleague full details of all of the plaintiff's injuries.

103 Mr Binns also stated that he did not have the information provided by the plaintiff in his affidavit that was filed in support of the leave application concerning the location at which he claimed the motor vehicle accident occurred. He said if he had that information, he would have made detailed enquiries at the time he was responsible for the investigation of the incident.

104 It was apparent, however, from cross-examination and from documents produced on subpoena by the Police Service that in fact the police did have this information and that investigations may well have been undertaken on the basis of it.

105 A briefing note, undated and unsigned, concluded that whilst the cause of the injury could not be confirmed or verified, by reference to the nature of his injuries, it was most probable that the plaintiff had been hit by a car.

106 It was also apparent from the police documents that the Nominal Defendant, through its insurer, made enquiries concerning police investigations in March 2005.

107 A number of witnesses were interviewed concerning their observations of the plaintiff after he was injured. Their names and addresses appear in police material. The defendant argued that it would be prejudiced by the delay in securing evidence from these witnesses.

108 There was no evidence, however, that either party had attempted to locate these witnesses, or that they could not be located.

109 In any event, they could not give evidence of the cause of the plaintiff's injuries. Their statements dealt with their post-injury observations of him.

110 Prejudice in this case obviously presented a difficult issue to both parties.

111 While the plaintiff has always maintained that he was injured by a collision with a motor vehicle, there was little evidence to support it. However, although his claim may be a difficult one, I was not persuaded that it was hopeless.

112 The defendant accepted in March 2006 that the plaintiff had met his obligations of due search and enquiry. This was done through the police, who sought assistance through the media in newspaper articles and by placing posters in the streets at Bondi. The responses to that publicity were minimal.

113 Thus, it appeared to me that both parties were prejudiced from the outset and that this prejudice has not been increased by reason of the delay in the commencement of the proceedings.

114 The issue in this case will be whether the plaintiff's injuries were the result of a motor vehicle accident.

115 Mr Justice Sheller in Itek Graphix at [3] referred to authority that established that the question was whether the delay had made the chances of a fair trial unlikely. I was not satisfied that the delay in this case had that effect.

116 In my view, the justice of this case, given the plaintiff's very severe injuries, and his consistent assertion that he was struck by a motor vehicle as the cause of his injuries, requires that the leave sought be granted.

117 It was suggested that I should make some direction concerning the venue of the proceedings, the defendant requesting that the proceedings be transferred to the Sydney Registry, the plaintiff arguing for Lismore, which is closer to his current home on the Gold Coast.

118 However, I noted that no proceedings have in fact yet been commenced, this matter coming before the court by way of summons for leave to commence proceedings. Thus, I would leave the question of venue to the plaintiff. However, it would appear that since the accident occurred within the area of the Sydney Registry, and witnesses who are to be called are more likely to be located there, that Sydney appears to be the logical venue.

119 As far as costs are concerned, the defendant sought costs. The plaintiff argued that this was a case in which costs should be costs in the cause.

120 The plaintiff has sought an indulgence from the court. It appeared to me that the objection to the application by the defendant was entirely proper and reasonable, and in those circumstances, I consider it appropriate that the plaintiff pay the defendant's costs of the application.

ORDERS 121 The orders that I make are as follows:

1. The plaintiff is granted leave pursuant to s109 of the Motor Accidents Compensation Act 1999 to commence proceedings in respect of the accident that occurred on 12 or 13 August 2004.

2. The statement of claim is to be filed and served by no later than 4pm on 29 January 2010.

3. The plaintiff is to pay the defendant's costs of the application.

4. The exhibits and the affidavit materials are returned.

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.