Helou v NRMA Insurance Australia Ltd

Helou v NRMA Insurance Australia Ltd - [2009] NSWSC 197 - NSWSC 2009 case summary — Zoe

[20]

20 Counsel for the defendant submitted that the "the Motor Accidents Compensation Act provides an express statutory prohibition in respect to the claim for interest made by the Plaintiff". It is said that this prohibition is to be found in s 137, which is in these terms: 137 Payment of interest (1) Limited statutory entitlement A plaintiff has only such right to interest on damages payable in relation to a motor accident as is conferred by this section. (2) Attendant care services No interest is payable on damages comprising compensation under section 128. A court cannot order the payment of interest on such damages. (3) Non-economic loss No interest is payable on damages awarded for non-economic loss. A court cannot order the payment of interest on such damages. (4) Other heads of damages The following provisions apply to damages, other than damages to which subsection (2) or (3) applies, payable in relation to a motor accident: (a) Interest is not payable (and a court cannot order the payment of interest) on such damages unless: (i) information that would enable a proper assessment of the plaintiff's claim has been given to the defendant and the defendant has had a reasonable opportunity to make an offer of settlement (where it would be appropriate to do so) in respect of the plaintiff's full entitlement to all damages of any kind but has not made such an offer, or (ii) the defendant has had a reasonable opportunity to make a revised offer of settlement (where it would be appropriate to do so) in the light of further information given by the plaintiff that would enable a proper assessment of the plaintiff's full entitlement to all damages of any kind but has not made such an offer, or (iii) if the defendant is insured under a third-party policy or is the Nominal Defendant, the insurer has failed to comply with its duty under section 83, or (iv) if the defendant has made an offer of settlement, the amount of all damages of any kind awarded by the court (without the addition of any interest) is more than 20% higher than the highest amount offered by the defendant and the highest amount is unreasonable having regard to the information available to the defendant when the offer was made. (b) The highest amount offered by the defendant is not unreasonable if, when the offer was made, the defendant was not able to make a reasonable assessment of the plaintiff's full entitlement to all damages of any kind. (c) For the purposes of this subsection, an offer of settlement must be in writing. (5) Calculation of interest If a court is satisfied that interest is payable under subsection (4) on damages: (a) the amount of interest is to be calculated for the period from when the loss to which the damages relate was first incurred until the date on which the court determines the damages, and (b) the amount of interest is to be calculated in accordance with the principles ordinarily applied by the court for that purpose, subject to this section. (6) Rate of interest The rate of interest to be used in any such calculation is three-quarters of the rate prescribed for the purposes of section 101 of the Civil Procedure Act 2005 for the period concerned. (7) Judgment debts Nothing in this section affects the payment of interest on a debt under a judgment or order of a court.

[24]

28 The plaintiff relies upon the provisions of s 100 of the Civil Procedure Act 2005 ("the CP Act") which is in the following terms: 100 Interest up to judgment (1) In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit: (a) on the whole or any part of the money, and (b) for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect. (2) In proceedings for the recovery of a debt or damages in which payment of the whole or a part of the debt or damages has been made after the proceedings commenced but before, or without, judgment being given, the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit: (a) on the whole or any part of the money paid, and (b) for the whole or any part of the period from the time the cause of action arose until the time the money was paid. (3) This section: (a) does not authorise the giving of interest on any interest awarded under this section, and (b) does not authorise the giving of interest on a debt in respect of any period for which interest is payable as of right, whether by virtue of an agreement or otherwise, and (c) does not authorise the giving of interest in any proceedings for the recovery of money in which the amount claimed is less than such amount as may be prescribed by the uniform rules, and (d) does not affect the damages recoverable for the dishonour of a bill of exchange. (4) In any proceedings for damages, the court may not order the payment of interest under this section in respect of the period from when an appropriate settlement sum was offered (or first offered) by the defendant unless the special circumstances of the case warrant the making of such an order. (5) For the purposes of subsection (4), appropriate settlement sum means a sum offered in settlement of proceedings in which the amount for which judgment is given (including interest accrued up to and including the date of the offer) does not exceed the sum offered by more than 10 per cent.

[30]

37 I am of the view that the position taken by the plaintiff in rejecting offers of part payment was entirely open to him and not unreasonable. He was entitled to payment of the full amount and was not in a position in which he should have been expected to reach some compromise of the defendant's choosing. The defendant chose to contest the assessment by bringing its proceedings for judicial review that failed. The institution of those proceedings did not operate to stay the defendant's liability under s.95 of the MAC Act and the defendant's refusal to pay was in breach of its licence as a third party insurer. The MAC Act at the time did not contain any provision to meet a situation in which an insurer sought to challenge an assessment. Once the pre-conditions in s 95(2)(a) and (b) (insurer accepting liability and claimant accepting the amount assessed) were satisfied, the insurer was bound to pay the claimant and it was a condition of its licence to do so. If the defendant wanted to put off making payment so as to challenge the assessment then it was open to it to ask the Court for an order staying the assessment. Absent such a stay, the defendant had an immediate liability. No stay was sought until the orders made by Rothman J on 14 February 2008. 38 The defendant had the benefit of the entire amount of the assessment from October 2007 until it made the payments in February 2008. A final point raised was that the plaintiff could have had the benefit of some of the money at an earlier time and, if he had, he would have been unlikely to have achieved an interest rate as high as that provided in Schedule 5 of the Uniform Civil Procedure Rules 2005. S 100 of the CP Act provides for "interest to be calculated at such rate as the court thinks fit". One possibility is that some adjustment be made to the interest awarded to take this into account but it seemed to be agreed that this would either be extremely difficult to calculate accurately, or it would simply be a matter of guesswork. Counsel for the defendant submitted that in the all the circumstances it would be appropriate to deny any interest on $500,000 from the date that sum was offered in October 2007 and any interest on a further $250,000 from when a payment of $750,000 was offered in December 2007. However, having regard to the conclusion I have reached as to the reasonableness of the position taken by the plaintiff in relation to the interim payment offers I do not propose adopt this approach. The plaintiff was owed money that he was not paid in full, as he was entitled, for some time. Interest in the terms sought should be ordered.

At a glance

Court

Decision date

Before

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Judgment (35 paragraphs)

Parties

Cases Cited (3)

Cited By (1)