The unfairness argument
48 Garling DCJ's principal basis for upholding the plaintiff's argument in regard to the first excluded period was as follows:
"If the defendant's argument is correct, then it would require a plaintiff or a claimant to commence their action within three years after the motor vehicle accident, however, where they have given late notice of the claim, they cannot commence the action until they comply with s 96. Providing there is a dispute; I take it the parties can always agree there is no dispute, that where there is a dispute could not commence it until a decision had been made pursuant to s 96. They are then in a position where they have got to commence a claim within three years but they cannot commence it until that decision is made and there is no stay of the proceedings or stay of the time for commencement.
That would mean that a plaintiff would have to make an application pursuant to s 96 at such a time that they were confident that it would be determined prior to the limitation period running out. It can be seen from this case that that could take some time. The difference in this case is … quite a significant period.
… I believe that the correct interpretation and the way it was meant to be interpreted, pursuant to s 109 is to include assessments under s96 in assessments pursuant to 109(2) and therefore the time ceases to run between the date of the application and the period of two months after the certificate has been issued. That would mean that the plaintiff then had until 12 February 2008 to commence the action."
49 Underlying his Honour's reasoning is the notion that the construction advanced by the defendant would lead to potential unfairness. He said, in effect, that a claimant required to make a late claim (that is, a claim made more than six months after the motor vehicle accident) could not commence court proceedings until he or she had made an application for an assessment under s 96 and that application had been resolved. His Honour had in mind, as I understand what he said, that such a resolution was dependent on the conduct of others and the claimant might be kept waiting without being entitled to commence proceedings in court and while time continued to run against him or her. This, his Honour implicitly considered, would be unfair.
50 At the outset I would note that there is nothing in the MACA that provides that an action cannot be commenced until there has been compliance with s 96. His Honour's view that a claimant had to comply with s 96 before commencing court proceedings was erroneous and infected his general approach. The relevant section is s 108, which provides that a claimant may not commence court proceedings in respect of a claim unless an exemption certificate has been issued under s 92 or a claims assessor has issued a certificate under s 94.
51 Mr Stone, of counsel, who acted for the plaintiff, submitted that, nevertheless, his Honour - practically speaking - was correct in his view of the effect of s 96. Initially, Mr Stone gave the example of a claimant who had given late notice of her claim (such as the plaintiff). He submitted that such a claimant could not commence action until s 96 had been complied with. He supported this proposition in the following way. He submitted:
(a) Section 73(1) provided that a late claim could only be made if the claimant provided the insurer with a full and satisfactory explanation for the delay.
(b) If the insurer refused to agree that a full and satisfactory explanation had been made, a claim could not be made.
(c) Relying on the argument that, without a full and satisfactory explanation for the delay, a claim had not been made, the insurer could refuse to admit or deny liability for the claim under s 81(1).
(d) Relying on the same argument, the insurer could deny that it had any obligation under s 82 to make a reasonable offer of settlement (that is, because the insurer could contend that a claim had not yet been made).
(e) In these circumstances, the claimant would not be able to refer the claim for assessment, as (subject to the exceptions contained in s 91(2)) the time periods laid down by s 91(1) would not have commenced.
(f) As a claim could not be then referred for assessment, s 108(1) would have the effect that the claimant would not be entitled to commence court proceedings in respect of the claim. The only practical step a claimant could take would be to apply under s 96 for an assessment of the dispute that had arisen as to whether a full and satisfactory explanation had been given.
52 Mr Stone accepted that, eventually, the claimant might get the certificate, but in waiting for this to occur the three-year limitation period under s 109 might expire. Were that to happen, the claimant would be faced with the obstacles provided by s 109(3) in attempting to obtain leave to commence proceedings on a late claim.
53 There is a basic flaw in this scenario. In my opinion, an insurer would not be entitled to avoid its duty to make an offer of settlement under s 82 on the basis that a full and satisfactory explanation for the delay had not been provided. Under s 82, the duty of an insurer to make a reasonable offer of settlement arose within one month after the injury had stabilised (s 82(1)(a)) or within two months after the claimant had provided the insurer all relevant particulars about the claim (s82(1)(b)). The duty of an insurer under s 82 was not predicated on the existence of a claim that was not a late claim or on the provision of a full and satisfactory explanation for any delay in making a claim.
54 Mr Stone, indeed, later accepted (correctly, in my view) that it would always be open to a claimant to cause time under s 109 to be suspended by making a general application for an assessment of the claim under s 94 (that would be irrespective of whether the dispute concerning the provision of a full and satisfactory explanation for the delay had been resolved).
55 I accept, nevertheless, that a claimant might experience difficulties if an insurer disputed that the claimant had provided all relevant particulars about the claim (as s 82(1)(b) requires). Assessments under s 96(1)(d) - as to whether the insurer is entitled to delay the making of an offer of settlement under s 82 on the ground that any particulars about the claim are insufficient - were binding on the parties: Hayek v Trujillo [2007] NSWCA 139 at [47]. This is to be contrasted with an assessment of a dispute as to whether a full and satisfactory explanation for making a late claim has been given. Such an assessment was not binding on the parties: Hayek v Trujillo at [48].
56 Mr Stone submitted that it would be unfair if a claimant, who had made a late claim, could only cause time under s 109 to be suspended by making an application under s 94 for an assessment of the claim. Mr Stone submitted, by reference to the prescribed form by which claimants are required to make applications under s 94, that the costs involved in complying with the requirements of the form were large and onerous. He submitted that due compliance with the form required much labour and caused much inconvenience.
57 The statutory scheme under the MACA, as I noted in Hayek v Trujillo at [59], is one "whereby all claims, save those that are specifically held to be exempt from assessment under s 92, are to be assessed under s 94 before court proceedings can be commenced." The requirement to provide detailed particulars when an assessment under s 94 is made is an important element of that scheme. Thus, while Mr Stone's submissions concerning costs, labour and inconvenience may be accepted, it should also be accepted that the scheme of the MACA involves deliberate "front-end loading" of preparation and costs (as it was put by Mr King SC, who appeared for the defendant) with the view to promoting settlement of claims before court proceedings are commenced, and in ensuring that all non-exempted claims are assessed under s 94 before court proceedings are commenced.
58 In other words, the difficulties to which Mr Stone referred are merely part of the inducements the legislative scheme provided by the MACA offers to parties to have their cases resolved in accordance with the CARS assessment system and not by way of court proceedings. Accordingly, those difficulties do not support Mr Stone's argument.
59 I would add that a number of the difficulties to which Mr Stone adverted stem from provisions of guidelines (the "Guidelines") the Authority issued pursuant to s 69(1) of the MACA. That section provided that "the Authority may issue guidelines for or with respect to procedures for the assessment of claims under Part 4.4 and associated matters". Part 4.4 concerned claims assessment and resolution and comprised ss 88 to 106. Section 106(1) provided that "claims assessments under [Part 4.4] are subject to relevant provisions of [the Guidelines] relating to those assessments". In other words, as Mr Stone accepted, the Guidelines operate by force of law as if they are delegated legislation.
60 The provisions of the Guidelines cannot be used to construe the MACA itself.
61 In my opinion, no significant weight attaches to the opportunities that, according to Mr Stone, the MACA provided to insurers to act in an obstructive way in cases where a claimant fails, in terms of s 72, to make a claim timeously. In the first place, the claimant can avoid that situation by making the claim in good time. I would infer from the MACA as a whole that this is precisely the conduct on the part of claimants that the MACA wishes to induce and encourage. In the second place, save for the possible instance where the claimant has not provided the insurer with all relevant particulars about the claim, the claimant would be able to stop time running (despite any obstructive tactics on the part of the insurer) by making an application for an assessment under s 94. For the reasons I have given, I do not accept that the costs and inconvenience in making a s 94 general application negate the relevance of the existence of the right to make such an application to the construction exercise required.
62 It must not be forgotten that s 109(1) allows for leave to commence proceedings more than three years after the date of the motor accident. The grant of leave is constrained by s 109(3), including that the likely damages are more than a certain amount. But that is part of the encouragement of timely conduct on the part of claimants, and further represents the legislature's view that a claimant who does not act in a timely manner should, if the likely damages are not great, be unable to commence proceedings if the three years has expired.