Matisan v Wilson

Mr P D Ryan (Plaintiff) COUNSEL : Mr R Goodridge (Defendant) Mr R Watson, Turner Whelan SOLICITORS : (Plaintiff)

Mr J Kospetas Firths CATCHWORDS : Appeal decision of Local Court Magistrate - interpretation of ss 50A & 52(4) MAA LEGISLATION CITED : Local Courts (Civil Claims) Act 1970 (NSW) Motor Accidents Act - ss50A & 52(4) Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 CASES CITED : Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Manderson v Ellis (by his tutor) {2002} NSWCA 289 DECISION : (1) The decision of Magistrate Lulham dated 6 May 2002 is affirmed; (2) The appeal is dismissed; The summons is dimissed; The plaintiff is to pay the defendant's costs as agreed or assessed

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

11639/2002 - ELIZABETH MATISAN v LEAH JOY WILSON

JUDGMENT (Appeal decision of Local Court Magistrate - interpretation of ss 50A & 52(4) MAA)) 1 MASTER: By summons filed 14 June 2002 the plaintiff seeks an order that the verdict and judgment for the defendant (the plaintiff in the local court proceedings) given by Lulham LCM on 3 June 2002 be set aside and in lieu thereof there be a verdict for the plaintiff with costs. The plaintiff relied on the affidavit of Robert Gordon Watson sworn 21 August 2002. 2 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the appellant/defendant. Section 69(2) of the Local Courts (Civil Claims) Act 1970 (NSW) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the appellant to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156. 3 On 6 May 2002 the Magistrate gave an extempore judgment on this preliminary point and held that the plaintiff was entitled to file her statement of claim on 15 May 2000.

4 On 22 January 1997 the defendant was involved in a motor vehicle accident. On 18 June 1997 a claim form was submitted to the insurer. On 1 October 1998 the insurer wrote to the solicitor for the defendant stating that the claim was declined and further stating that she was not entitled pursuant to s 52(2)(a) of the MAA to commence proceedings. On 21 January 2000 the solicitor for the defendant supplied particulars pursuant to s 50A. Section 52(4) of the MAA provides that a claimant is not entitled to commence proceedings in respect of a claim more than three years after the date of the accident, except with the leave of the court. The three year limitation period expired on 22 January 2000. The defendant commenced her proceedings on 15 May 2000 approximately four months outside the limitation period. 5 The issue is whether, when an insurer denies liability, the plaintiff is still required to comply with s 50A of the MAA or whether the plaintiff should be obliged to commence proceedings from the date of the denial of liability. 6 Relevantly the defendant in her statement of grounds of appeal stated: "6. Ms Wilson supplied particulars pursuant to s.50A of the Motor Accidents Act on 21 January 2000. Normally, by operation of s.52(1A)(b), Ms Wilson would not be entitled to commence proceedings until 90 days had elapsed since the s.50A particulars were provided. 7. However, s.52(1A) is subject to s.52(2). This provides that despite that sub-section (1A) a claimant is entitled to commence Court proceedings if any one of those three events occurs. The first event is if the insurer denies all liability in respect of the claim. 8. In that case, that event occurred when the insurer wrote a letter to the solicitor for Ms Wilson dated 1 October 1998. Not only did that letter deny all liability in respect of the claim, but it specifically pointed to s.52(2)(a) of the Motor Accidents Act, and asserted that Ms Wilson was entitled to commence court proceedings at that time because of the denial of liability. 9. Ms Wilson was not prohibited from commencing proceedings by s.51(1A)(b), as the statute gave her a right to commence proceedings because of the operation of s.52(2)(a). In those circumstances, Ms Wilson was not entitled to a statutory extension of time provided by s.52(4A)." 7 The defendant submitted that the plaintiff should not be permitted to use these notice provisions as a means to extend time for commencing proceedings. Rather, the plaintiff should have commenced proceedings after 1 October 1998 when the insurer had indicated that it did not consider itself liable to compensate her for her injuries. Accordingly the plaintiff should have sought leave to commence proceedings pursuant to s52(4) of the MAA. 8 The plaintiff contends that the defendant supplied particulars pursuant to s 50A of the MAA on 21 January 2000, and that by the operation of s 52(1A)(b) the defendant would not be entitled to commence proceedings until 90 days had elapsed since the s 50A particulars were provided. Section 52(4) then comes into operation and allows the plaintiff a further 28 days to commence proceedings which meant that the claim was filed in time. 9 Section 52(1A) is subject to s 52(2) which provides that despite subsection (1A) a claimant is entitled to commence court proceedings if any one of three events occurs. The first event is if the insurer denies all liability in respect of the claim. 10 The defendant's counsel referred to the objects contained in s 2A and that the interpretation of the provision of the Act and in the exercise of discretion should promote the objects of the Act. It is the duty of an insurer to endeavour to resolve a claim, by settlement or otherwise, as expeditiously as possible and this object is specifically mentioned in s 52. 11 Sections 50A and 52 are reproduced below. 12 Section 50A of the MAA states:

"Provision of information to facilitate settlement of claim before commencing court proceedings

Subject to section 52 (1A), a claimant is not entitled to commence court proceedings against another person in respect of a claim until the claimant has given the other person's insurer (if any) full details of: (a) the injuries sustained by the claimant in the motor accident, and

(b) all disabilities and impairments arising from those injuries, and

(c) if those injuries, or any of them, have not stabilised, the prognosis for future recovery, and

(d) any economic losses and other losses that are being claimed as damages, sufficient to enable the insurer, as far as practicable, to make a proper assessment of the claimant's full entitlement to damages." 13 Section 52 of the MAA provides: "Time limitations on commencement of court proceedings

(1) The objects of this section are: (a) to encourage and facilitate the investigation, assessment and negotiation of a claim for damages without the commencement of court proceedings, and

(b) to impose a limitation period of 3 years for the commencement of legal proceedings for damages under this Act and to enable the extension of that period only if: (i) the claimant can explain the reasons for the delay in not commencing the proceedings within the 3-year period, and (ii) the claim is likely to result in an award of substantial damages, or in the circumstances described in subsection (4A).

(1A) A claimant is not entitled to commence court proceedings against another person in respect of a claim until: (a) 6 months have elapsed since notice of the claim was given to the other person and (if required by section 43 (4)) to the other person's insurer, or

(b) 90 days have elapsed since the details required by section 50A were given to the other person's insurer, or

(c) if the other person's insurer has made an offer of settlement to the claimant before the claimant commences court proceedings, 28 days have elapsed from the date on which the claimant's response to the offer is communicated to the other person's insurer, whichever is the later or latest.

(1B) Subsection (1A) (c) applies only to the first offer made by the other person's insurer and not to any subsequent offer.

(2) If notice is given to the other person's third-party insurer then despite subsection (1A) the claimant is entitled to commence court proceedings if any of the following occurs: (a) the insurer denies all liability in respect of the claim,

(b) the insurer admits partial liability in respect of the claim but the claimant is dissatisfied with the extent to which liability is admitted,

(c) in the case of a late claim within the meaning of section 43A, the insurer rejects the claimant's explanation for delay in making the claim or rejects the claim on the ground that the total damages of all kinds likely to be awarded to the claimant if the claim succeeds are less than 10% of the maximum amount that may be awarded for non-economic loss under section 79 or 79A as at the date of the relevant motor accident. (3) (Repealed)

(4) A claimant is not entitled to commence proceedings in respect of a claim more than 3 years after: (a) the date of the motor accident to which the claim relates, or

(b) if the claim is made in respect of the death of a person, the date of death,

except with the leave of the court in which the proceedings are to be taken.

(4A) However, if at the end of the 3-year period referred to in subsection (4), the claimant has complied with section 50A but is unable to commence court proceedings because of the effect of subsection (1A) (b) or (c), the claimant may commence court proceedings within 28 days after the period under subsection (1A) (b) or (c), or the later of those periods, has elapsed.

(4B) The leave of the court must not be granted unless: (a) the claimant provides a full and satisfactory explanation to the court for the delay, and (b) the total damages of all kinds likely to be awarded to the claimant if the claim succeeds are not less than 25 per cent of the maximum amount that may be awarded for non-economic loss under section 79 or 79A as at the date of the relevant motor accident.

(4C) Subsection (4B) (b) does not apply to a claimant who is legally incapacitated because of the claimant's age or mental capacity.

(5) The Limitation Act 1969 does not apply to or in respect of proceedings in respect of a claim." 14 The Magistrate's interpretation of the interplay between s 50A and s 52 and his decision are as follows: "In this matter the plaintiff was injured in an accident which occurred on 22 January 1997. The limitation period would therefore expire on 22 January 2000. Section 52(1)(a) says a claimant is not entitled to commence court proceedings against another person in respect of a claim until, and then subpara (b) 90 days have elapsed since the details requited by s 50A were given and to the other person's insurer. Section 52(4A) provides however if at the end of the three year period referred to in subs 4 the claimant has complied with s 50A but is unable to commence court proceedings because of the effect of subs 1(A) importantly (b) or (c), the claimant may commence court proceedings within 28 days after the period under subs 1(A) (b) or (c) or the latter of those periods has lapsed. In this matter, the plaintiff complied with s 50A on 21 January by serving copies of the report of Dr Bayliss the claimant's income tax return and claimant's Notice of Assessment for 1998. In .. (not transcribable) .. the solicitors have noted that s 50A has only been fully complied with service of the abovementioned documents and therefore court proceedings cannot be commenced until 21 April 2000. Under s 52(4A) the plaintiff had 28 days from 21 April in which to commence the proceedings and the proceedings were commenced on 15 May and the plaintiff claims were therefore instituted in accordance with the requirements of the Act. The argument for the defendant is based on 52(2)(b) which provides if notice is given to the other person's third party insurers then despite subs 1(a) the claimant is entitled to commence Court proceedings if any of the following occurs and subs (a) the insurer denies all liability in respect of the claim. The defendant in this matter had written to the solicitors for the plaintiff dated 1 October 1998 denying liability in the matter and pointing out that the plaintiff is entitled under s 52(2)(a) to commence court proceedings if she wishes to dispute their decision. It was not in dispute that even where s 52(2)(a) applies that the plaintiff is still required to comply with the requirements of s 50A. I am of the view that being the case then clearly the plaintiff is entitled to comply with the requirements of s 50A at any time within the three years and if necessary obtain the benefit of the extension of the time provided in s 52(4A). If that is not the case then the result would appear to me to be contrary to the intention of the Act in that it would mean that in the situation where a defendant would argue that although the plaintiff has to comply with the requirements of s 50A the plaintiff is not entitled to the benefit of s 52(4A). Both s 52(2)(a) and s 52(4A) are permissive sections and it would seem strange to me that one permissive section could be used to affect the rights which the plaintiff clearly has under another permissive section. I am satisfied that the statement of claim was issue within the limitation period based on s 52(4A) and that leave is not required." 15 The two letters exchanged between the plaintiff's solicitors and the insurer, which were referred to in the Magistrate's decision, were tendered in evidence in this court. Exhibit A is the insurer's letter to Firths dated 1 October 1998 which relevantly stated: "Our inquiries are now complete and after giving the matter careful consideration it is our view that our Insured is not liable to compensate your client for her injuries. Your client's claim for compensation is therefore declined. Your client is entitled, under Section 52(2)(a) of the Act, to commence Court proceedings if she wishes to dispute our decision." 16 The Firths' letter to the insurer dated 21 January 2000 enclosed for service the report of Dr Bayliss dated 20 January 2000, the claimant's income tax return for 1997 and the claimant's notice of assessment for 1998, and then stated "We note that Section 50A has only today been fully complied with by service of the abovementioned documents and therefore court proceedings cannot be commenced until 21 April 2000". The appellant's counsel submitted that this letter cannot amount to compliance with s.50A as s.50A had been complied with by the plaintiff at an earlier date. This argument was not raised before the Magistrate. Rather it was common ground before the Magistrate that s.50A was complied with on 20 January 2000 (see T2.37; T5.32-33). Whether s.50A was complied with at an earlier date cannot now be ventilated on appeal. 17 In Manderson v Ellis (by his tutor) [2002] NSWCA 289 (30 August 2002), the Court of Appeal examined the operation of ss.50A and 52(2) of the MAA. Santow JA at paragraph 32 stated that the question then is whether those events in s.52(2) are capable of overriding the prohibition in s.50A on commencing court proceedings, where the necessary full details have not been provided. In the case before me the full details had been provided. 18 In Manderson the insurer's arguments on the interplay between s.50A and s.52(2) are summarised at paragraph 33. The insurer's argument was that regard must be had to the objects of s52, namely to encourage and facilitate settlements, without the necessity for commencing court proceedings. That object was said to support a construction of s52(2) where an insurer, as in that case, denies all liability in respect of the claim or else rejects the claimant's explanation for delay in making the claim. For then it is said there is no point in barring the respondent from proceeding, or in mandatorily requiring full details of the relevant losses to be provided or indeed for the earlier requirement of s50A for giving the insurer full details of injuries, disabilities and prognosis. This is because the insurer has made it clear that in any event it denies liability and rejects the claimant's explanation for a late claim. Santow JA disagreed with this interpretation. 19 At paragraphs 34-37 Santow JA stated:

"A fundamental problem with this interpretation is that it finds little support in the language of the Act. Clearly enough s50A is expressed to be subject to s52(1A). But there is no suggestion in s50A that it is also to be subject to s52(2), as must necessarily be the case if the Respondent's preferred construction were to be accepted. Moreover s52(2) does not express itself as prevailing over s50A with its mandatory provision precluding entitlement to commence proceedings. Rather s52(2) is expressed only to be "despite subs(1A)". That means that s52(2) does not purport to override s50A but only overrides the 90 day (and other) pauses, in s52(1A). Finally, when one comes to consider the effect of the objects expressed in s52(1), it is difficult to see how encouraging prior settlement supports the construction that the Respondent favours. Indeed the sanction against failure to provide the "full details", being the inability then to commence court proceedings, works rather in support of the object of avoiding court proceedings and encouraging settlement. If there were no longer any sanction simply because an insurer denied all liability, failure to provide the full details would occur with relative impunity. That in turn would weaken the incentive to provide the full details reflected in that sanction. While there at first appears some plausibility in contending that where the insurer denies all liability, that then the insurer is indicating that he is not interested in being provided with full details, there is a simple answer. Such a denial can only be predicated on the basis of what was known to the insurer at the time. The insurer has been given incomplete details. That insurer may not have denied liability in the event that the full details required by s50A, if lacking, were subsequently given. The credibility of the argument is weakened even further when one looks at sub-para(b) and para(c) of s52(2). Thus there is no logical connection between, for example, the insurer rejecting the claimant's explanation for delay and the supposed result that full details would be no longer material to the insurer. If anything, the opposite is the case." 20 Davies AJA and McClellan J agreed with Santow JA's interpretation of ss.50A and s.52(1A)(b). Although this New South Wales Court of Appeal decision was handed down after the Magistrate's decision, the Magistrate's decision is correct. The plaintiff is obliged to comply with s 50A of the Act. As Santow JA stated the insurer may not have denied liability in the event that full details are given. 21 Full details under s 50A were given on 20 January 2000. Section 52(4A) comes into play and allows the plaintiff a further period of 28 days in which to commence proceedings. 22 The proceedings were commenced in time. 23 The decision of Magistrate Lulham dated 6 May 2002 is affirmed. The appeal is dismissed. The summons is dismissed. 24 Costs are discretionary. Costs follow the event. The plaintiff is to pay the defendant's costs as agreed or assessed. 25 The court orders:

(1) The decision of Magistrate Lulham dated 6 May 2002 is affirmed.

(4) The plaintiff is to pay the defendant's costs as agreed or assessed.

Last Modified: 12/16/2002 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.