Nader v Aboulahaf

Parties 4The contest is effectively between the driver's third party insurer, which is NRMA Insurance, and the Nominal Defendant. The plaintiffs were represented at the bar table but their counsel took no active role in this contest. I have had the benefit of able arguments from competent counsel, Ms M A Kumar for the driver and Mr J B Turnbull for the Nominal Defendant.

Issues 5There are three issues for me to resolve. They are all to do with the prerequisites for joining the Nominal Defendant to the cases. 6The first is this. A person wanting to join the Nominal Defendant to a case must give the Nominal Defendant notice of their intention to do so. There is a time limit for that notice. It has to be within three months after a claim regarding the accident was made against the first person. That procedure is provided for by s 36 of the Motor Accidents Compensation Act 1999 (NSW). In this case, it is agreed that the claims were made against the driver on 7 June 2012. That means the notice had to be given by the driver to the Nominal Defendant by 7 September 2012. But the driver did not give his notice to the Nominal Defendant until 21 November 2012, that is, 2½ months after the expiry of the time limit. All is not lost to such a late notice provider. The law provides, by s 36(5), that the "court may extend the period for giving notice to the Nominal Defendant if the person seeking to join the Nominal Defendant gives a full and satisfactory explanation for not having given notice within the 3-month period". The first issue in this case is whether or not the driver has given a "full and satisfactory explanation" for not giving the notice on time. 7The second issue is this. The law provides, by s 36(6), that within "2 months after notice is given, the person giving notice must provide the Nominal Defendant with full details of the allegations made against the Nominal Defendant". In this case, the Nominal Defendant acknowledges it was provided with certain information but that information did not amount, it argues, to "full details of the allegations made" against it. 8The third issue is this. The law provides that if someone wants to join the Nominal Defendant in a case because the identity of another car is not known, that joinder "may not be effected unless due inquiry or search to identify the vehicle has been made." Here the Nominal Defendant says that the driver has not made "due inquiry or search to identify the vehicle".

Evidence 9The evidence in this case was in the form of affidavits which I admitted as exhibits (to make clear the body of evidence) and other exhibits. There was no cross examination of the deponents of any of the affidavits. I do not propose to recite the evidence but I will refer to it where necessary in these reasons.

Second issue 10It is convenient for me to deal with the second issue at this stage. The driver relies on a letter sent by his insurer, NRMA Insurance, to the Nominal Defendant on 21 November 2012. That letter enclosed a report which NRMA Insurance had from an investigator. The report included a detailed interview between the investigator and the police officer in charge of the police investigation into the accident. That interview in turn included the transcript of police interviews with two eye witnesses. Each witness says what he saw the unidentified car do. 11The letter itself said how it will be alleged that the unidentified car contributed to the accident. Mr Turnbull argues that the letter fails to provide "full details". It does not reveal how the accident happened and the negligent role of the unidentified car. He says the cross-claims (which were prematurely brought against his client) contained more allegations than the letter. To my mind, the driver has provided "full details" of the allegations made. He provided all the details he had at the time, which included a lot of information about the claimed role of the unidentified car. 12I think the word "allegations" must be understood as allegations at the time the "full details" are to be provided. I do not think the provision is mean to preclude the party from making further allegations if the party obtains more information in the future. I think the point is to provide "full details" as then known, formulated into allegations which can be levelled against the Nominal Defendant with that presently known information. If the Nominal Defendant later becomes a party then it will be faced with a pleading containing the allegations which can be made when the pleading is filed. Fresh allegations after that can be dealt with by the Nominal Defendant in the normal way, as a party. As Basten JA said in Nominal Defendant v Staggs [2010] NSWCA 224; 79 NSWLR 309 at 320 ([52]), the notice "must be given by a person 'seeking to join' the Nominal Defendant and merely foreshadows an application for joinder. The latter application is subject to a three year limitation period from the date on which the claim is made: s 36(7). Clearly notification is required in circumstances where further investigations and advice may be necessary before an application to join can properly be made." 13I do not accept the Nominal Defendant's argument on this issue and I find that the driver has provided in time "full details of the allegations made against the Nominal Defendant".

First issue 14I turn now to the first issue, which I described earlier. Has the driver in this case given a "full and satisfactory explanation for not having given notice within the three month period"? Mr Turnbull acknowledges that the explanation is full. I agree. The affidavits relied upon by the driver seemed to give a fulsome and transparent account of why the notice was not served in time. But Mr Turnbull says that although full, the explanation is not satisfactory. 15I will at this stage return to the Court of Appeal judgment in Staggs which is a source of authority and guidance for me. In Staggs at 319 ([48]), Basten JA, with whom Giles JA agreed, appeared to approve of the proposition that 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." On the same page at [50], his Honour referred to the third party insurer at that case and said this - "It is an institutional litigant which, in the absence of evidence to the contrary, should be assumed to be in the position to make informed decisions as to steps to be taken in protecting its interests in litigation. Unlike an accident victim, who is likely to be uninformed about the technical requirements of legislation and is almost wholly reliant on solicitors for advice and timely compliance with legislative requirements, an insurer will generally be knowledgeable as to the legislation and will have a close relationship with solicitors who act for it on a regular basis". At 320 ([51 - 53]) Basten JA referred to three factors to take into account in "assessing any explanation given for the purposes of s 36(5)". His Honour proceeded as follows: "First, a decision to join the Nominal Defendant, as opposed to the commencement of proceedings against the Nominal Defendant by a plaintiff, is subject to strict time limits. Thus, the period of three months from the date of receipt of a claim is undoubtedly a short period. That is no doubt because Ch 2 of the Motor Accidents Compensation Act is concerned with third party insurance, which is compulsory: joinder by a party seeking contribution or indemnity will be the responsibility of a compulsory third party insurer, which may be understood to have the resources and ability to act promptly when the relevant occasion arises." The second factor referred to by his Honour is the one I referred to above about the notice "merely foreshadows an application for joinder". In describing the third factor, his Honour said this: "Thirdly, although the notice does not need to include 'full details of the allegations made against the Nominal Defendant', the insurer considering whether to give such notice will be conscious that such details must be provided within two months after the notice is given, a period which is non-extendable." I also respectfully accord weight to what Hodgson JA said at 310 ([4]): "It follows in my opinion that generally an insurer that receives a claim under s 72: (1) should promptly consider and decide whether it wishes to investigate the possibility of a claim against the Nominal Defendant; and (2) if the decision is to investigate this possibility, should act so as if possible to be in a position, within the three month period, to make a decision whether to give notice and, if the decision is to give notice, to give that notice." 16The driver in this case has put on evidence of a lot of activity by his insurer to investigate the accident. The insurer acted with commendable promptness; but Mr Turnbull argues that there were three basic inadequacies in that prompt investigation which mean that the explanation is not satisfactory. 17The first claimed inadequacy is that there was no early freedom of information request of the police to overcome their failure to volunteer information because of an ongoing police investigation. But such a request was made on 26 November 2012 and the information was limited. I am confident a timely request would have been no more successful. 18The second claimed inadequacy is that three of the notices of claim which the driver received from the four plaintiffs all included a diagram, each very similar, which suggested that there were two cars involved in the accident, not just one. I say "suggested" because Ms Kumar argued - correctly, I think - that the diagrams could be interpreted as illustrating one car only, but in successive positions. Ms Kumar also pointed out that the form posed the question "How many motor vehicles were involved in the accident?" to which the answer given by the plaintiffs was "1". 19Ms Kumar tendered evidence from a Claims Consultant at NRMA Insurance who said that in her experience "the picture is of little assistance in understanding what happened in the accident and I focus on the description and answers to the questions." That appears in [4] of exhibit F, the affidavit of Louise Kerkham sworn 31 January 2014. With commendable frankness Ms Kerkham went on to say the following at [8] - "Before 19 November 2012, I did not suspect the involvement of an unidentified vehicle because I didn't have regard to the sketch/picture in the claim form and chose to wait for the investigation to be returned before making any conclusions. In my view, even if I had placed more weight on that picture in May and June 2012, my actions would have remained the same, namely I would have briefed the investigator to investigate the circumstances of the accident as the picture does not provide proof for an application to join the nominal defendant." 20Ms Kumar argued that the investigation promptly ordered by Ms Kerkham was the action of a reasonable person in her position, who had also not followed up the diagrams. 21Mr Turnbull argues, on the other hand, that NRMA Insurance, as a third party insurer, is an institutional, knowledgable, informed, and experienced litigant who would have followed up on the two-car possibility raised by the diagrams. I think Mr Turnbull is right. A compulsory third party insurer should always be alert to the possibility of another insurer sharing liability. That is not only an obligation but a perspective which is in its own commercial interests. Circumstances pointing to the Nominal Defendant are one example. 22The insurer will be aware of time constraints. I think Ms Kerkham, in saying that she looked for "proof for an application to join the Nominal Defendant", puts the test, at that stage, too high. As Basten JA said, it is a foreshadowing of a joinder. The joinder may not occur. The insurer has three years to decide whether or not to join the Nominal Defendant, but only three months to decide whether or not to issue a notice. There is, in my opinion, no time to wait to see if proof emerges. Any possibility must be investigated. 23As Ms Kumar said, her client acted very promptly in placing the matter into the investigator's hands, but in my opinion the investigator should have been alerted to the possibility of there being more than one car. 24They may have undertaken a door knock in the vicinity at the time of their original instructions. Also, as Mr Turnbull argues, another option was for the insurers to phone the plaintiff's solicitors, who were named in the form, to ask them about the diagrammatic reference to a second car. 25Mr Turnbull's third argued inadequacy is that NRMA Insurance made no attempt to speak to the driver, who became its insured. There is an explanation for this. It makes a lot of sense. Not only was the driver legally a "child", that is, he was under 18, but he was charged by the police with a serious crime. It is understandable that NRMA Insurance may not have regarded it as appropriate to send around a professional investigator to interview a minor about the circumstances giving rise to the police charging him with an indictable offence. That is a legitimate point of view. 26But another point of view is that the insurer has rights and obligations under its insurance contract. Even though the minor was not a party to the contract, he was covered by it. The insurer was faced with a series of claims that it would be solely liable for. There was a suggestion, the diagrams, that someone else should share that liability. That suggestion enlivened its statutory obligations, including time limits. Obviously, the interests of the potential co-defendant become a factor. Provisions in the statute are designed to protect the interests of the Nominal Defendant. It seems to me, in those circumstances, that the contractual or statutory rights, liabilities and obligations of the insurer and a potential third party should have outweighed the considerations about approaching the insured minor. 27At least the insured minor could have been asked at an early stage. Perhaps a parent could have been approached. It would need to be done carefully and with due regard to the minor's rights not to incriminate himself and to obtain advice. But, in my opinion, Mr Turnbull is right to argue that the attempt should have been made. I accept Mr Turnbull's argument that in those two respects - following up the diagram and the insured minor driver - the driver has not provided a satisfactory explanation for not having given notice within the three-month period. 28It follows that joinder of the Nominal Defendant, required to be effected in accordance with the section, cannot be effected. I would refuse order 1 sought in the summonses.

Third issue 29Although not necessary to decide, I will provide my opinion upon the arguments about the third issue, which is the claim that the driver did not make due inquiry or search to identify the other car. Ms Kumar argued that there were a number of reasons why I should find that due inquiry and search has occurred. She argued that there was some correspondence between her client and the Nominal Defendant which had the affect of misleading her client about the issue at stake on the issue of due search and inquiry. In addition, she argued that only 20 months had passed and her client was still well within the three year time limit. She reminded me of some authority that perfection is not required and she argued that due search and inquiry would have made no difference because there were police at the scene who apparently spoke to the driver of the unidentified car and allowed it to leave. 30On the other hand, Mr Turnbull argued that the thorough activity which the driver undertook was all too late. As he said - in terms adopted by Sackville AJA in Nominal Defendant v Meakes [2012] NSWCA 66 at [31] where his Honour was quoting from Jordan CJ's judgment in Blandford v Fox (1944) 45 SR (NSW) 241 at 245 - the "scent is cold". I should also refer to Jordan CJ's judgment for what Sackville AJA described as the statement of the policy considerations underlying the legislation and for what Sackville AJA described as it illustrating "the policy considerations underlying the legislation and the proper approach to the question of due inquiry and search". Jordan CJ relevantly said the following: "The questions then arise, what is meant by due inquiry and search, and is there any evidence on which reasonable men could find that due inquiry and search had been made? I think the due inquiry and search means such inquiry and search as is reasonable in the circumstances. To be reasonable it must be as prompt and thorough as the circumstances will permit. It must be such as a reasonable man who had recourse only against the actual offender would make if he were desirous of identifying the offender in order to commence proceedings against him. The inquiries must if possible be set on foot before the scent is cold, and they must be made by all such means as are reasonably practicable in all quarters in which there is a reasonable prospect of obtaining useful information." Sackville AJA also referred to Dixon CJ's judgment in Cavanagh v Nominal Defendant [1958] HCA 57; 100 CLR 375 at 380 - 381. Sackville AJA said that Dixon CJ elaborated on the requirement of due inquiry and search. Sackville AJA extracted a passage which included the following: "You must look at the circumstances in which he or she was placed and, bearing in mind that the question is one affecting that person's rights, say whether in those circumstances enough was done by or on behalf of or in the interest of that person to warrant the description 'due' inquiry and search." Sackville AJA also referred to what the then President of Court of Appeal Kirby P had said in Oztan v NSW Ministerial Corporation (1995) 23 MVR 259 at 265 - 266 his Honour said that the "requirement of due inquiry and search is for the protection of the nominal defendant." 31Mr Turnbull argued that I must also bear in mind in this context that the effective litigant is an institutional one, being a compulsory third party insurer. 32I am of two minds about whether due inquiry and search has been proved by the driver. The driver was certainly very thorough in the action which was taken on his behalf but, as Mr Turnbull pointed out, it was very late. The scent was cold. I think the weakness in the argument about due inquiry and search - which tips the balance against finding that it has occurred - is the same as the point made by Mr Turnbull about notice. Had the driver, through his compulsory third party insurer, followed up the possibility of a second car being involved as soon as the notice was received, the investigators retained on his behalf may have made more extensive inquiries much earlier. 33One must bear in mind that the search must be such, as Jordan CJ said, that it would be made by a person who had recourse only to the unidentified driver. The provision is there for the protection of the Nominal Defendant. To my mind, on balance, I am not satisfied that the due inquiry and search has been proved. I find in this case that due inquiry or search to identify the unidentified vehicle has not been made. HIS HONOUR: I'll just depart from my reasons there and just inquire as to the orders which I should make. I have foreshadowed one, or at least given one perhaps. I think I refuse order 1 which is the leave sought under - no, Mr Turnbull very helpfully gave me MFI 4. Let me have a look. It seems to me, Ms Prodonovic, that I indicate which orders I would refuse or allow, for example the order concerning satisfaction of the obligation of the fine details I have allowed but I think what Mr Turnbull proposes the formal orders would be, I dismiss the notice of motion and the cross claims, and the applicant pay the Nominal Defendant's cost to the motion. That seems to me - Ms Finlayson? Ms Prodonovic? FINLAYSON: Yes, your Honour. PRODONOVIC: Yes, your Honour. HIS HONOUR: Would you both agree? FINLAYSON: Yes. PRODONOVIC: Yes. HIS HONOUR: That is what Mr Turnbull suggested. FINLAYSON: Yes, we've both..(not transcribable)..instructions.

Orders 34I would refuse order 1 in the notice of motion. Although I would have granted order 1A in the notice of motion in matter 2013/00317362 where the plaintiff is Mr Younes, granting that order would have been futile. I refuse order 2 and order 3. I dismiss all four notices of motion filed in the proceedings. I dismiss any cross claims filed by the defendants in the proceedings against the Nominal Defendant and I order the defendant applicant to pay the respondent Nominal Defendant's costs of the notice of motion.

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