Laidlaw & Anor v Touma

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40580/01 DC 2053/99

HANDLEY JA STEIN JA DAVIES AJA

The opponent, Ms Touma, suffered injury in a motor vehicle accident. The time limit to commence proceedings with respect to her claim for damages arising out of the accident is 3 years. The time limit expired on 9 January 1999.

A motion seeking an extension of time to file a Statement of Claim under s 52(4) of the Motor Accidents Act 1988 (the Act) was heard by Cooper DCJ on 5 July 1999. His Honour found that a 'full and satisfactory' explanation for the delay was given, however, he was not satisfied that the threshold requirement for non-economic loss was likely to be exceeded by Ms Touma. Accordingly, he did not grant an extension of time.

More than 18 months later the opponent made a second application to extend time for filing of her Statement of Claim. This application was heard before Naughton DCJ on 4 July 2001. His Honour granted leave having found that the delay had been satisfactorily explained and that Ms Touma's damages were likely to reach the threshold.

The claimants submit that Naughton DCJ should not have found that there had been a full and satisfactory explanation for the delay because the evidence did not establish this. The claimants further contend that his Honour should not have found on the evidence that the threshold was likely to be reached. Lastly, it is submitted that when his Honour came to exercise his discretion to grant the extension, he failed to take into consideration the significant prejudice to the claimants.

Held (per Stein JA, Handley JA and Davies AJA in agreement)

1. The word 'full' in the context of the Act means that a complete explanation for the delay is required. This full explanation is necessary before one turns to consider whether an explanation is satisfactory within the meaning of the definition in s 40(2).

2. The delay up until the first application before Cooper DCJ in July 1999 was 'full'. The explanation for the delay from 5 July 1999, when the first application for an extension was refused, to 18 November 1999 was also 'full'. However, the opponent failed to discharge the onus to provide a full and satisfactory explanation for the delay from November 1999 until January 2001.

3. Naughton DCJ did not err in concluding that the total damages of all kinds likely to be awarded were not less than 25% of the maximum amount which may be awarded under s 79A of the Act.

4. When exercising the discretion in granting an extension of time under s 52(4) the question of prejudice to the defendants must be considered. There is no doubt that the delay caused significant prejudice to the potential defendants. Naughton DCJ erred in failing to turn his mind to the prejudice to the defendants.

3. Judgment of Naughton DCJ of 4 July 2001 set aside and, in lieu thereof, order that the opponent's Notice of Motion to extend time be dismissed with costs.

4. Opponent to pay the claimants' costs of the appeal but receive a certificate under the Suitor's Fund Act if she is otherwise entitled thereto.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40580/01 DC 2053/99

HANDLEY JA STEIN JA DAVIES AJA

Monday, 24 June 2002 LAIDLAW & ANOR v TOUMA Judgment

1 HANDLEY JA: I agree with Stein JA. 2 STEIN JA: Introduction 3 This is an application for leave to appeal, and if granted to appeal, from a judgment of Judge Naughton in the District Court granting the opponent, Carolin Touma, an extension of time within which to file a Statement of Claim claiming damages for personal injury.

Essential events 4 A brief reference to key events and dates reveals that the application by the opponent was a second bite of the cherry. 5 The opponent suffered injury in a motor vehicle accident on 8 January 1996. The time limit for the opponent to commence proceedings with respect to her claim for damages arising out of the accident is 3 years. Accordingly, the time limit expired on 9 January 1999. Liability was admitted by the potential defendant on 5 July 1996.

6 Section 52(4) of the Motor Accidents Act 1988 provides that after 3 years has passed, proceedings may only be instituted with the leave of the court. Leave must not be granted unless the claimant provides 'a full and satisfactory explanation' for the delay (s 52(4B)(a)). Further, the total damages likely to be awarded to the claimant must be not less than 25% of the maximum amount which may be awarded for non-economic loss under s 79A (s 52(4B)(b)). It is common ground that the relevant figure in this case is $61,750. 7 In March 1999 solicitors for the opponent filed a Notice of Motion seeking an extension of time to file a Statement of Claim. This motion was heard by Cooper DCJ on 5 July 1999, in association with an application by Townsend, who was also injured in the same accident. Townsend was granted an extension. Touma was not. According to his Honour, the delay was satisfactorily explained by the evidence of the solicitor, in that he erroneously believed the limitation period to be 3 ½ years. Judge Cooper found that a full and satisfactory explanation for the delay had been given. 8 His Honour turned to the question of whether the threshold would likely be exceeded by Touma. It was then said to be $58,750. Judge Cooper was not so satisfied, noting that there was no evidence of any economic loss or evidence of impaired earning capacity. 9 More than 18 months later (on 19 January 2001) the opponent made a second application to extend time for filing of her Statement of Claim. This came on for hearing before Naughton DCJ on 4 July 2001. His Honour granted leave having found that the delay had been satisfactorily explained and that Ms Touma's damages were likely to reach the threshold.

The issues on appeal 10 On behalf of the claimants (the potential defendants) three submissions are made why his Honour's decision should be reversed. First, it is submitted that his Honour should not have found that there had been a full and satisfactory explanation for the delay because the evidence did not establish this. Secondly, that his Honour should not have found on the evidence that the threshold would likely be reached. Lastly, that when his Honour came to exercise the discretion to grant the extension, he failed to take account of the significant prejudice established by the claimant. His discretion therefore miscarried.

The delay 11 In examining whether there was a full and satisfactory explanation for the delay, there are several periods to be considered. The first is the delay up to 5 July 1999 when the first application was before Cooper DCJ. While Judge Naughton had to exercise his own judgment as to this period, he was in my view entitled to say that he saw no reason to differ in his conclusion from Judge Cooper and that there was a satisfactory explanation. This is to be accepted. 12 The second period is from 5 July 1999, when the first application for an extension was refused, to 18 November 1999 when the opponent had an appointment with a Dr Langeluddecke, a consultant neuro-psychologist. The appointment was arranged following the suggestion of Dr Dunn, a psychiatrist who had earlier seen the opponent. The appointment was made prior to 2 July 1999. Psychometric testing is usually a lengthy process and this may explain the delay in the appointment. However, for whatever reason, the appointment did not go ahead. The evidence contains no explanation. 13 The next period to consider is between 19 November 1999 and 14 April 2000. During this period appointments were made for the opponent to see Dr Marlowe, a consultant clinical psychologist, on 9 February 2000. Further, an appointment was made for Ms Touma to see Mr Taylor, a vocational psychologist on 14 April 2000 for assessment. Dr Marlowe provided a report dated 9 February 2000 and also a further report dated 6 March 2000 following an interview with the opponent's parents. Mr Taylor provided a report on 14 April 2000 and a further vocational report dated 20 April 2000. None of these reports were provided to the defendant. 14 The next period of delay is between 21 April 2000 and the filing of the Notice of Motion in the District Court on 19 January 2001, a period of almost 9 months. With respect to this period, there is not a skerrick of evidence explaining the delay. Mr Shalovsky, the opponent's solicitor, swore an affidavit on 21 December 2000 in support of the application. The affidavit referred to the appointments with Dr Marlowe and Mr Taylor and annexed copies of their reports. It contained no explanation as to what, if anything, took place between April and December 2000 in relation to the preparation of the fresh application to extend the limitation period. The solicitor did not give evidence before his Honour. 15 The Act contains a definition in s 40(2) of a 'full and satisfactory explanation' required by various provisions, including s 52(4B). It is as follows: … 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 clamant would have failed to have complied with the duty or would have been justified in experiencing the same delay. 16 In Mancini v Thompson [2002] NSWCA38 Rolfe AJA discussed the requirement for the explanation to be 'full'. He said: … What was required was a full explanation for delay and, in order for the explanation to be full, it had to include "the actions, knowledge and belief of the claimant from the date of the accident until the date of providing the explanation". In other words, the requirement that the explanation be full focussed upon the period from the date of the accident until the date of providing it, and the necessity to set out fully "the conduct, including the actions, knowledge and belief of the claimant". The purpose of this is so that the Court can evaluate all of the reasons for the delay and decide whether they are full and satisfactory. The applicant, therefore, cannot "pick and choose" the information to be given relevant to the delay and which the Court has to decide is "satisfactory". 17 In Nicholas v Webb (No 2) Supreme Court, Unreported, 19 March 1993 Master Greenwood said: It is my view that in order properly to constitute the explanation required under s43 it will usually be necessary for both the claimant and his solicitor to set out in written form precisely what has and has not been done and the reasons for the acts and the omissions of each. These explanations must be detailed. It is not for the claimant's side to determine the relevance of behaviour going to the delay. Only then can an explanation be said to be full and satisfactory. 18 I am prepared to accept that the delay up until the hearing before Judge Cooper in July 1999 was 'full'. Despite the absence of any tangible evidence, I would also accept that the explanation for the delay to November 1999 was 'full'. However, it would require a great leap of faith into the unknown to be satisfied that the explanation for the delay between November 1999 until January 2001 was relevantly a 'full' one. 19 The word 'full' must be given some meaning and content. In its context in the Act, I think that it means complete - that is, that a complete explanation is required. This full explanation is of course necessary before one turns to consider whether it is a satisfactory explanation. Here, perhaps because the appellant's solicitors considered that delay had been explained to Judge Cooper, absolutely no explanation was given for the relevant delay. The affidavit of the opponent said nothing about it. The affidavit of the solicitor merely recited events and exhibited reports. The last event was Mr Taylor's report of 17 April 2001. Counsel for the opponent, Mr Colquhoun, submits that the court should somehow fill in the gaps and accept that matters were being attended to during the relevant period, such as consideration of the medical reports and taking instructions. If this be the case, it would have been simple to provide the explanation by evidence. At the hearing before Naughton DCJ, counsel for the defendant put the whole of the delay (from 9 January 1999 when the primary limitation period expired) in issue. The onus with respect to the full and satisfactory explanation for the delay lay with the opponent. Little or no effort was made to discharge it. Without any explanation for the delay between April 2000 and January 2001, the court was not in a position to consider whether the explanation was a full and satisfactory one. 20 It follows that I am quite unable to see how his Honour could have concluded that the explanation was full and satisfactory in the absence of any explanation for the delay between April 2000 and January 2001 when the Notice of Motion was filed. 21 This of itself, is sufficient to convince me that leave to appeal should be granted, the appeal allowed and his Honour's extension of time set aside.

The threshold 22 His Honour found that he was satisfied that the threshold would be exceeded in that it was likely that the opponent would receive more than $61,750 in damages for economic and non-economic loss. Part of the context of this issue is that in July 1999 Judge Cooper refused to extend time on the basis that the opponent would not be likely to achieve the then threshold of $58,750. One may ask, what had changed between July 1999 and July 2001 when the second application was heard? The response of the opponent is to point to the additional psychological reports and the quantification of future economic loss in an annexure to the solicitor's affidavit in support of the application. 23 In the accident Ms Touma suffered a temporomandibular joint dysfunction, an injury to her septum (which required two operations), a number of facial lacerations and soft tissue injuries to her spine. The jaw has healed and the nose operations have been successful. She has a number of small facial scars but they do not constitute 'a significant disfigurement'. For some time she suffered a depressive adjustment disorder but this had largely resolved by February 2000. She has no cognitive difficulties but complained of a problem with concentration and numbers. She does not appear to have been rendered unconsciousness by the accident. 24 Out-of-pocket expenses were accepted as a little more than $6,000. Past economic loss was quantified in two sums - $8,000 for loss of waitressing work between January 1996 and June 1997 and 9 weeks off the opponent's normal work at various times in 1996, totalling $3,735.00. Both these figures appear to be gross and the evidence is unclear whether Ms Touma was off work for the whole of the periods claimed. However, let it be assumed in her favour that the opponent could prove $11,735 past wage loss. 25 In an annexure to an affidavit of Mr Shalovsky sworn 11 May 2001, a proposed statement of particulars pursuant to Part 9 Rule 27 of the District Court Rules was annexed. Apart from particularising injuries and disabilities from (a) to (nnn), it attached a schedule of future economic loss. This claimed that if the opponent was not employed by her parents (as she was) her continuing loss would be between $140 and $200 per week net. Utilising a weekly loss figure of $187.00 produced a future economic loss of $146,996 after a 15% vicissitudes deduction. The solicitor's affidavit of 21 December 2000 maintained that his client's loss of wages, if she was not employed by her parents, would be between $100 and $200 per week. An affidavit of the opponent alleged a similar potential loss. 26 The opponent's father also swore an affidavit. He said that his daughter's earnings present remuneration package was $75,000 pa. However, it was the company's intention to publicly float by the end of 2001. That would likely mean that new senior management would be appointed and his daughter's position would likely be effected. If that occurred, it was Mr Touma's view that his daughter would either have to seek alternative employment or remain at a lower position and lower level of remuneration. 27 None of the evidence supports the future wage loss set out in the proposed particulars. An assessment of the material available to his Honour in July 2001 leads to the conclusion that given the evidence of the opponent's disabilities, the only reasonable conclusion available was that a modest cushion, in the vicinity of $20,000 - $30,000, would be appropriate. 28 What of non-economic loss? A reading of the medical reports and other relevant evidence before his Honour would lead to the conclusion of a range of between 20 to 25% of a most extreme case. This translates to between $8,500 and $16,000. 29 The acceptance of the top of these ranges in favour of the opponent yields a potential verdict of $63,735. However, this figure is marginally above the agreed threshold. 30 In these circumstances, I would not be prepared to find that his Honour erred in concluding that the total damages of all kinds likely to be awarded were not less than 25% of the maximum amount which may be awarded under s 79A of the Act.

The discretion and prejudice 31 If the court is satisfied that there was a full explanation for the delay, it must proceed to consider whether it was a satisfactory one. However, since there was not in my opinion a full explanation for the delay, the issue of satisfaction is not reached. Nonetheless, since his Honour found that he was relevantly satisfied as to the explanation for the delay, it is convenient to proceed to a consideration of the exercise of the discretion under s 52(4). It is here that, amongst other factors, the question of prejudice to the potential defendant must be considered. His Honour did not do this. He moved directly from his findings on delay, and the exceeding of the threshold, to immediately exercise the discretion to grant the extension. Nowhere in the reasons for judgment did his Honour refer to prejudice, although it was put to him by counsel for the claimants. 32 There is no doubt that there was a significant prejudice to the potential defendant. He could not have the opponent medically examined from July 1999 to July 2001, notwithstanding the psychological examinations and testing of the opponent in early 2000. The prejudice to the defendant was not helped by the failure of the opponent's solicitor to provide the four psychological reports to the defendant until January 2001. The defendant was in the dark as to these aspects of the opponent's claim. It is not to the point to say, as Mr Colquhoun submits, that the defendant could have the opponent examined after the extension of time was granted. The prejudice had already occurred and it was a not insignificant one. 33 Holt v Wynter (2000) 49 NSWLR 128 held that an application for an extension of time under s 52(4) should be refused if the effect of granting it would result in significant prejudice to the potential defendant. See Sheller JA at 147 [119], with whom Meagher JA, Handley JA and Brownie AJA agreed. 34 Since his Honour failed to turn his mind to the prejudice to the defendant if the application for extension be granted, his discretion must have miscarried. He erred in not finding that there would be prejudice to the defendant. That, of itself, may be sufficient to refuse to grant the extension of time. 35 Were it not for my earlier conclusion that there was not a full explanation for the delay, it would be necessary for this court to either remit the matter to the District Court for the discretion to be properly exercised or re-determine the discretion ourselves. 36 However, in the circumstances it is unnecessary to consider the question further since the application should have been refused because of the absence of compliance with s 52(4B) of the Act.

Orders 37 In the result, the following orders should be made:

3. Judgment of Naughton DCJ of 4 July 2001 set aside and, in lieu thereof, order that the opponent's Notice of Motion to extend time be dismissed with costs.

4. Opponent to pay the claimants' costs of the appeal but receive a certificate under the Suitor's Fund Act if she is otherwise entitled thereto. 38 DAVIES AJA: I agree with Stein JA. **********

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