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[2014] NSWCA 433
Court of Appeal (NSW)
2014-12-01
Basten JA, Meagher JA, Simpson J
Original judgment source is linked above.
Judgment 1BASTEN JA: I agree with Meagher JA. 2MEAGHER JA: This is an appeal by leave from a decision of the primary judge (Sorby DCJ) dismissing proceedings brought by the appellant against the respondents for damages in respect of injuries sustained in a motor accident. Those proceedings were dismissed under s 73(7) of the Motor Accidents Compensation Act 1999 (NSW) (MAC Act) because the primary judge was not satisfied that the appellant had a "full and satisfactory explanation" for her delay in not making her claim (by giving notice in the required form to the respondents' third-party insurer) within six months of the motor accident: s 72(1), (2). Leave to appeal was granted on 5 June 2014: Karambelas v Zaknic [2014] NSWCA 187.
The making of the late claim and commencement of proceedings 3The motor accident occurred on 27 March 2009. The respondents' vehicle ran into the rear of the appellant's vehicle causing it to collide with the stationary vehicle in front of it. The appellant's two year old son was also in her vehicle and was injured in the accident. 4The appellant first consulted solicitors in June 2010 and in August 2010 notice of her claim was given to the respondents' third-party insurer, Allianz Australia Insurance Limited (Allianz). That was 10 and a half months after the six month period under s 72(1) had expired. 5Section 73(1) of the MAC Act governs the making of a late claim: (1) A claim may be made more than 6 months after the relevant date for the claim under section 72 (in this section called a late claim) if the claimant provides a full and satisfactory explanation for the delay in making the claim. The explanation is to be provided in the first instance to the insurer. 6The reference to a "full and satisfactory explanation" is, by s 66(2), 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 have complied with the duty or would have been justified in experiencing the same delay. 7The notice of the appellant's claim was, as required by s 74(1), in the form approved by the Motor Accidents Authority. That form is headed "Personal Injury Claim Form". It was accompanied by an explanation for the delay in the form of a statutory declaration made by the appellant on 23 July 2010. There followed correspondence between the appellant's solicitors and Allianz concerning the sufficiency of that explanation. 8Three further statutory declarations were made. They were dated 4 February 2011, 17 June 2011 and 12 August 2011. Notwithstanding the content of those declarations, Allianz continued to maintain that the appellant had not provided a full and satisfactory explanation. 9The dispute as to whether the appellant was entitled to make a late claim was referred to the Authority for assessment under Pt 4.4 of the MAC Act: s 96(2). In November 2011, that dispute was determined in the appellant's favour. However that assessment was not binding: s 96(4). In March 2012, as permitted by s 73(3)(b), the appellant's claim for damages also was referred to the Authority for assessment under Pt 4.4. In early June 2013 an assessment was made under s 94. Because that assessment was as to the amount of damages, it was only binding on Allianz if accepted by the appellant: s 95(2). 10The appellant did not accept the assessment. Instead, on 30 July 2013 she commenced District Court proceedings against the owner and driver of the other vehicle. On 17 September 2013 those defendants applied under s 73(5) to have the proceedings dismissed on the ground of delay. The appellant, as the person making the claim, bore the onus of satisfying the Court that she had a "full and satisfactory explanation" for the delay in making her claim: s 73(7).
The reasoning of the primary judge 11Having referred briefly to the sequence of events between the date of the accident and the time when notice of her claim was given in August 2010, the primary judge concluded at [21] to [23]: [21] The test is that "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 explaining the delay". [22] The length of the delay in this case is 4 years and 9 months. [23] In my view, the Respondent has not provided a full and satisfactory explanation for the delay. She was advised by Allianz on what she should do on numerous occasions, both in writing and over the telephone. She could have sought advice outside of what she received from Allianz including from her osteopath Mr Zekis and Dr Selim. She failed to do so.
Conceded error on the part of the primary judge 12The grounds of appeal include that the primary judge erred in identifying the period of "delay" for the purposes of s 73(7) as "4 years and 9 months". The respondents rightly concede that ground identifies error. The delay that had to be explained was from late September 2009 to early August 2010, a period of ten and a half months. 13The respondents accept that error was material to the primary judge's conclusion in [23] and that, for that reason, the District Court's orders must be set aside. They also agree that this Court should deal with the remaining question as to whether the appellant has a satisfactory explanation. That is possible, and appropriate in the circumstances of this case, where the primary judge made no findings as to the credibility of the appellant.
A "full and satisfactory" explanation 14Before considering whether the appellant has such an explanation, it is necessary to say something as to the basis upon which the primary judge apparently proceeded when concluding that the length of the delay to be explained was four years and nine months - being the period from the accident to the time of the hearing of the motion in the District Court. 15Section 73 permits a claim to be made more than six months after the date of the accident if the claimant provides a full and satisfactory explanation for the delay. That explanation has to be provided, "in the first instance", to the third-party insurer. Although its provision is the condition that must be satisfied to enable the making of the late claim, s 73(1) does not expressly require that the explanation be given at the time the late claim is made and s 73(4) contemplates that the explanation to be provided "in the first instance" to the insurer may be given after the late claim has been made. 16An explanation is "full and satisfactory" within s 66(2) if it satisfies two requirements. First, it must include 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". In the case of a late claim under s 73(1) that is the date on which the explanation is first provided. Secondly, the explanation must be such that a reasonable person in the position of the claimant "would have been justified in experiencing the same delay". The delay is the period during which the claimant was late in making his or her claim; a period commencing six months after the date of the motor accident and continuing until the claim is first made by giving notice to the third-party insurer. This summary of the position accords with the observations of this Court in Nominal Defendant v Browne [2013] NSWCA 197; 64 MVR 214 at [15] - [16] (Basten JA, Barrett and Gleeson JJA agreeing) as to the application of the definition in s 66(2) to the circumstances of a late claim, and is not inconsistent with the decision in Mancini v Thompson [2002] NSWCA 38, which makes clear that the focus of the "full" account is on the period of delay to be explained: at [46] - [47] per Rolfe AJA, Beazley and Stein JJA agreeing. 17The concept of a satisfactory explanation in s 66(2) requires the making of an evaluative judgment or assessment as to whether, by reference to an objective standard and given the claimant's position, the delay which occurred was reasonably justifiable. The precise question that arises under s 73(7) is whether the Court is satisfied that the claimant "has a full and satisfactory explanation". The use of the present tense makes plain that the Court is not restricted to a consideration of the explanation which was provided "in the first instance". However, the position remains that the explanation is directed to the delay which occurred to the time when the claim was made.
Does the appellant have a full and satisfactory explanation for delay in making the claim? 18The respondents do not contend that the explanation provided by the appellant was not a "full" one covering the period from the date of the accident until notice of her claim was given in August 2010. Nor do they contend that the appellant does not have a satisfactory explanation for the delay in not making her claim before 13 October 2009. The respondents focus on the period from that date to June 2010 and submit that her delay during that period was not reasonably justifiable. 19At the time of the accident, the appellant did not know that, if she wanted to pursue a claim for damages in respect of her injuries, she was required to lodge a claim in an approved form with the other driver's third-party insurer within six months of the accident. Her unchallenged evidence was that she first became aware of that requirement in June 2010 when she received advice from a solicitor of Brydens Law Office. In the period from the time of the accident to when she first saw that solicitor, the appellant completed and forwarded to Allianz an accident notification form and received five letters from Allianz. The completed form was dated 16 April 2009 and the letters were dated 17 April 2009, 1 May 2009 (three letters) and 13 October 2009. She also had dealings with Allianz in relation to the payment of treatment expenses. 20Following the accident, the appellant received treatment from an osteopath, Mr Zekis, who advised her that she was able to lodge a form so as to be entitled to payment of treatment expenses. As a result the appellant telephoned the Motor Accidents Authority and was told that Allianz was the respondents' third-party insurer. She contacted Allianz and obtained and completed accident notification forms for herself and her son. 21It was necessary for an accident notification form to be completed and submitted to enable the appellant to be entitled under Pt 3.2 of the MAC Act to payment of treatment expenses incurred within six months of the accident: s 48. If, as occurred in this case, the third-party insurer accepted provisional liability for those expenses, it was required to pay up to $5,000 for treatment provided or loss of earnings suffered in that six month period: ss 50, 51. 22Allianz's letter of 17 April 2009 acknowledged receipt of the appellant's completed accident notification form. That letter made no reference to any requirement to complete a separate notice of claim. It did, however, refer to a "claim reference number". On 1 May 2009 the appellant received three letters from Allianz. Each was signed by Ms Zahrabi, an Allianz claims consultant. One of the letters (of two pages) acknowledged receipt of the completed notification form. It advised that "provisional liability" had been admitted and that Allianz would pay the appellant's reasonable and necessary medical expenses up to $5,000 for treatment received within the first six months from the date of the accident. The letter requested that the appellant give her claim reference number to all treatment providers and continued: If any of the following occurs as a result of the accident, I recommend you lodge a Personal Injury Claim Form with Allianz as soon as possible. ● Your treatment and wage loss will exceed $5,000.00 ● Your treatment will last longer than 6 months from the date of accident. This will assist in avoiding any delays in your recovery. ... Once I receive your completed Personal Injury Claim Form, full liability will be determined. Failure to lodge a Claim Form within the 6 month period from the date of accident may result in your claim not being accepted. 23This letter did not advise the appellant that if she wished to secure her entitlement to make any claim for damages in respect of injuries sustained as a result of the motor vehicle accident, including for treatment or wage loss in excess of $5,000 or future economic loss or non-economic loss for permanent impairment, that she "must" give notice of that claim to Allianz in the form approved and within six months of the accident. Nor did it explain that if she did not give such a notice within that period she may only be able to proceed with any claim if she had a justifiable explanation for her delay. Instead, the letter suggested that the reason for lodging the claim form as soon as possible was to assist in avoiding delays. Although it stated that failure to lodge the form might result in the claim not being accepted, it did not make clear that a consequence of not doing so could be losing forever the entitlement to make any claim whatsoever. 24Another of the letters (of one page) acknowledged receipt of the appellant's "personal injury claim form" and enclosed two Motor Accident Authority publications, one relating to rehabilitation and the other to recovery from whiplash injury. That acknowledgement was apt to mislead because it suggested that the accident notification form which had been completed could correctly be described as a "personal injury claim form". 25The third of the letters (of three pages) explained the claims consultant's role in the management of the claim for treatment expenses. The letter described in general terms the appellant's rights under Pt 3.2 of the Act to past treatment and wage loss up to $5,000. It noted that "if, at any stage your claim will exceed $5,000 we will forward you a Personal Injury Claim Form to be completed". The letter also pointed out that payments for past wage loss could only be made "after 6 months has elapsed since your motor vehicle accident". It concluded that if it is "determined your claim is likely to exceed $5,000 we will forward you a Personal Injury Claim Form and we will be unable to make an interim payment for your past wage loss". Again, the letter leaves the reader blissfully ignorant of the emphatic terms of s 72(1) and the consequences of not making a claim within the six month period. 26In the period up to the end of September 2009 the appellant received treatment from Mr Zekis approximately once every fortnight until "around 2010" when she commenced treatment once a month. She did not have any time off work. In her statutory declaration dated 4 February 2011, the appellant said that in the period to the end of September she rang "Allianz frequently to have claims for medical expenses processed. I rarely spoke to the same person. There were at least four people who I dealt with". Although she was hopeful that her injuries would improve over time, six months after the accident the appellant believed that she required further treatment. She did not, however, think that her injuries were such that she would need to make a claim against Allianz other than for the reimbursement of on-going treatment expenses. 27On 9 October 2009, the appellant spoke to someone at Allianz about its continuing to pay her treatment expenses. She agreed in cross examination that she had made the telephone call because she understood that under the existing arrangement with Allianz it would only pay claims for treatment received in the six month period from the accident. In her statutory declaration made 23 July 2010 she gave the following evidence concerning this conversation: 18. ... I was told by the representative whom I spoke with that the timeframe for payment of treatment expenses was up but if I wanted to make any further claims then I would have to lodge new forms which they would send me. They also told me that just by lodging these forms does not mean that the treatment expenses would be approved. They would still have to be looked at by Allianz and would determine whether those treatment expenses would be paid or not. 28That was slightly expanded upon in her declaration made 4 February 2011: 6. Once the six months after the accident ran out I spoke to someone at Allianz about paying my continuing treatment expenses. I don't remember the person's name. She told me that I could lodge some more paperwork but there was no guarantee that they would pay any more of my medical expenses. I was told that they would look at them all and decide whether or not they would pay anything else. She was very discouraging... . 29Following that conversation the appellant received Allianz's letter dated 13 October 2009 which referred to "your claim for personal injury" and to the earlier telephone conversation on 9 October. It enclosed a Personal Injury Claim Form. The letter said: In order for us to consider payment of any further accounts, you are required to complete a Personal Injury Claim Form which we have attached to this letter. Completion of this form is a requirement of the Motor Accidents Compensation Act 1999. It continued: This form must be submitted to Allianz within six (6) months from the date of accident. If it is not received within this time, you will be required to provide an explanation for the delay in lodging this claim which may result in your claim not being accepted. 30The reference to payment of any "further accounts" was, in this context, reasonably to be understood as being to accounts for treatment expenses. It was in relation to that subject that the appellant had telephoned Allianz a few days earlier. How the following paragraph was to be understood in the circumstances is not obvious. The six month period had expired and yet the letter did not in terms require that the appellant give any explanation. Her evidence in cross examination was that she thought that she had submitted a claim form to Allianz in April 2009 and thus complied with any requirement that she do so within six months. That she held that belief was justifiable. The letter of 13 October 2009 referred to her "claim for personal injury" and the absence of any requirement that she provide "an explanation" for the delay was reasonably seen as explained by the fact that she had submitted a claim within the six month period. 31The appellant's explanation for not completing and lodging a Personal Injury Claim Form after receipt of that letter is summarised in her statutory declaration made 17 June 2011: 6. My main concern at that time was getting treatment. I was mindful that Allianz had advised in our telephone conversation that merely lodging the subsequent form would not guarantee approval of my treatment expenses. Furthermore, as previously stated, I experienced past difficulties with Allianz in relation to obtaining payment of my treatment [expenses] by having to telephone Allianz frequently and having to speak with a different representative on several occasions. 7. So after I received the forms I saw no point in lodging them. I did not believe that Allianz would pay for any further treatment, given the discouragement I was met with previously. If I was aware of the importance of lodging the form and if I understood that there was a 6 month time limit within which to lodge the form, I would have attended to this without delay. 8. I was of the belief that I had to lodge a new form for each time I sought reimbursement of my treatment expenses. 9. I continued to seek treatment from Mr Zekis, an Osteopath at my own expense and through my health fund. I continued to suffer from pain and took pain relieving medication to deal with my pain. I was always hopeful that my injuries and disabilities would improve and I continued to work, albeit with difficulty. 10. I kept thinking about the treatment I needed for my injuries and was dissatisfied with the service I received from Allianz. I heard an ad on the radio for Brydens and called them for advice about how I could deal with my situation with Allianz. 32In cross examination the appellant gave evidence to the same effect: A. ... on the phone they were very discouraging so I just put them away and didn't bother with them. I was clearly told that it doesn't get accepted. and Q. Are you sure that the conversation wasn't closer to, "we can't approve any further treatment" ... A. Yes. Q. -- unless you lodge a claim form? A. No, they said that, "Even if you do they don't guarantee that it's going to be approved". That's what I was told. That I may have to do more forms but that doesn't mean it is going to go any further. 33In argument before this Court, the respondents focused on part only of this explanation. That part was her reason for not completing and lodging the claim form having regard to her circumstances and understanding of its significance. That reason is dealt with in the first part of paragraph 7 of her declaration of 17 June 2011. The respondents submit that by the letter of 13 October 2009 the appellant was told clearly that for Allianz to consider payment of any further claims, she was required to complete and return the enclosed claim form. In the face of that advice, they submitted, her delay in doing so was not reasonably justifiable. They relied, in particular, upon the following exchange in cross examination: Q: I'd like to suggest to you, Ms Karambelas, that you well knew as at October 2009 that there was an additional form that needed to be lodged with the insurer if you were to pursue the claim any further? A. Yes. Q. Yet you did nothing about that until going to talk to Brydens in June of the next year. A. Yes. 34This argument does not confront the substance of the appellant's explanation for not completing and returning the form. A fundamental part of that explanation was that she did not understand that she had to lodge the claim form within the six months, or as soon as possible thereafter, to secure her entitlement to claim at any time any damages whatsoever in relation to the motor accident. That understanding, which was not challenged, meant that she did not appreciate that by not completing and returning the form she was putting at significant risk her right ever to make a claim, in respect of treatment expenses or any other damages. The other part of her explanation, upon which the respondents focused, was that as she saw the position there was no compelling reason for her to complete and return the form. 35Assuming her injuries improved as she hoped they would, the appellant did not think that she would have to make any further claims other than in respect of treatment expenses. She also understood Allianz to be saying that she would have to make a new claim for each set of treatment expenses incurred and she expected that Allianz would not pay those claims. From her perspective and with her justifiable but incomplete understanding of the significance of not lodging the claim form, there was no compelling need for her to do so in October 2009. Her concern was only as to the payment of future treatment expenses. She believed that at least some of those expenses would be paid by her health fund. She did not believe that she might be foregoing forever the right to claim those expenses or any other damages. Further, the appellant explained that she was a "busy mum" with two very young children who was also working four days a week. She did not want to re-engage in the time-consuming process of pursuing with Allianz claims for those treatment expenses. 36In my view, a reasonable person in the appellant's position would have been justified in acting in the way in which she did following receipt of the letter of 13 October 2009. She did not understand the significance of not completing and returning the form and there was no compelling reason for her to do so having regard to her circumstances and incomplete understanding of its significance. Her affirmative answer to the proposition that she knew there was an additional form that needed to be lodged with the insurer if she were to pursue the claim any further does not suggest any different conclusion. Whilst the appellant appreciated that if she wanted to make a further claim for recovery of treatment expenses she had to lodge the additional form, she did not appreciate that not doing so at that time meant that she might never be able to pursue that or any other claim to damages in respect of the accident. 37For these reasons, I am satisfied that the appellant has a full and satisfactory explanation for her delay in notifying her claim. The respondents' notice of motion filed on 17 September 2013 should have been dismissed. 38That being the position, the orders I propose are:
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. Decision last updated: 15 December 2014
Karambelas
Zaknic