Reeves v Reeves

COUNSEL : Mr J.D. Hislop QC with Mr D. J. Russell - Appellant Mr G.R. Petty SC with Mr D. Hooke - Respondent SOLICITORS : Turner Whelan - Appellant Burston Cole & Co - Respondent CATCHWORDS : Appeal from an interlocutory judgment in which it was found in favour of the respondent - question of contributory negligence issue. LEGISLATION CITED : The Motor Accidents Act, 1988 CASES CITED: Nicholson v Nicholson (1994) 35 NSWLR 308 at 318F-G and 332G-334A DECISION : 1. Appeal should be allowed.; 2. Appellant pay costs; 2. Application remitted to the District Court to be heard and determined in accordance with these reasons.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40243/01 DC 57/01

MEAGHER JA FOSTER AJA CAMPBELL AJA

WEDNESDAY, 19 JUNE, 2002 Belinda REEVES v Tania REEVES Judgment 1 MEAGHER JA: I agree with Foster AJA. 2 FOSTER AJA: This is an appeal from an interlocutory judgment given by Delaney DCJ in the District Court at Parramatta on 16 March 2001 in which he found for the present respondent. Leave to appeal has been granted. His Honour had for decision an application, brought by Notice of Motion dated 6 February 2001, in which the present respondent sought leave to commence proceedings against the present appellant pursuant to s 52(4) of the Motor Accidents Act, 1988. That section provides as follows:- "(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) ……… except with the leave of the court in which the proceedings are to be taken."

3 The granting of leave under this subsection is made subject to s 52(4B) which provides as follows:- (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." 4 It is common ground that, in the present case, the "maximum amount" referred to in the section is $61,750.00. 5 The amounts claimed by the respondent in her application, as being the damages she would seek if she were permitted to bring her action out of time, exceeded this amount. However, if the appellant, at the hearing of the action, were to be successful in obtaining a reduction of the damages assessed in favour of the respondent on the basis of the respondent's contributory negligence, the amount finally obtained as verdict, might readily fall below the prescribed maximum amount. 6 His Honour granted the respondent's application for the extension of time to sue the appellant. In so doing, he rejected an application made by the appellant to cross-examine the respondent on the basis of her alleged contributory negligence and also to introduce evidence on this question. His Honour held that the wording of s 54(4B)(b) did not, as a matter of construction, permit the question of contributory negligence to be raised in determining what was "the total damages of all kinds likely to be awarded". 7 This is the question for decision in this appeal. If the appellant be correct in her contention that the question of contributory negligence of the respondent should have been an issue before his Honour, then the application must be returned for a new hearing.

The appellant first submits that, had contributory negligence been taken into account, then the damages likely to be awarded to the respondent if the claim succeeded were not likely to be greater than $61,750.00. However, I do not feel that this submission is of any assistance in the construction of the section. Contributory negligence is either a proper matter to be considered in the application of the section, or it is not. 9 The appellant made reference to s 74 of the Motor Accidents Act which makes provisions in respect of contributory negligence. Section 74(2) requires a finding of contributory negligence in certain cases, which include travelling in a vehicle when the driver is affected by alcohol (s74(2)(b)) and failure to wear a seat belt (s74(2)(c)). In the present case there was available evidence as to both matters, with the result that, as submitted by the appellant, a finding of contributory negligence would be mandatory at the hearing. However, as Nicholson v Nicholson (1994) 35 NSWLR 308 at 318F-G and 332G-334A decides, this mandated finding of contributory negligence does not involve an automatic finding that the negligence so found had a causal connection with damage claimed by the person in respect of whom the finding was required. This remained as a factual issue to be determined at the trial, as did the matters raised under s 74(3)and (4) namely the appropriate percentage reduction on just and equitable grounds, for the plaintiff's contributory negligence and the reasons for such reduction. 10 On behalf of the appellant it was submitted that, in considering an application under s 52(4), it was appropriate, when considering the effect of ss (4B) upon the application, to regard the word "awarded" where appearing in ss (4B)(b), as referring to the final amount of a verdict that might be awarded to the applicant, having regard to any potential reduction occasioned by a finding of causative contributory negligence. In relation to this argument reference was made to s 52(1)(b)(ii) which indicates that one of the objects of the various provisions of s 52 is: "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) ……..; and (ii) the claim is likely to result in an award of substantial damages…." 11 It is the appellant's submission that a Court considering an application to extend time under s 52(4) should have regard to this subsection. If, as a result of the potential reduction in any verdict because of the contributory negligence of an applicant, it is held that the applicant's claim is not "likely to result in an award of substantial damages," then the application should be dismissed. Such a view of the effect of s 52(1)(b)(2) upon the interpretation and application of s 52(4) and s 52(4B) involves, of course, the interpretation of what the legislature meant by the words "likely to result in an award of substantial damages." Does it refer to the ultimate result of the case sought to be brought out of time or to the reasonable assessment of the quantum of the applicant's claim, before any consideration of reduction for contributory negligence falls for consideration? 12 The appellant contends that the word "award", used in relation to a claim for damages, necessarily indicates the final result of the claim, expressed in the verdict given to the plaintiff at the conclusion of the Court's consideration of all the issues in the case, including any defence of contributory negligence. 13 In this regard, it is submitted that, in an application for extension of time, the applicant is seeking the Court's indulgence and should be required to establish that the grant of the privilege of bringing an action out of time is founded upon the reasonable prospect of achieving an ultimate result in damages exceeding the amount calculated in accordance with ss 52(4B). Although this will involve the Court hearing the application in receiving and considering evidence relating to the question of the contributory negligence of the applicant, this requirement will not differ in kind from the requirement already imposed upon it of determining whether the applicant has established a prima facie right to recover damages in an amount, absent questions of contributory negligence, exceeding the statutory threshold. In either case the Court, at the interlocutory level, is obliged to consider, in a broad way, whether the facts put before it show a prima facie right on the part of the applicant to recover damages in excess of the prescribed minimum and whether those damages can, potentially, be reduced below the limit by the respondent's projected case, based upon contributory negligence. Each aspect of the application involves an evaluative process which cannot claim to have the authority of a final decision. However, as the applicant seeks to sue a respondent who is, otherwise, protected by the expiry of a limitation period, it is appropriate that the section be construed as requiring that the words "likely to be awarded" embrace the total amount likely to be received by the plaintiff as a result of the projected litigation, rather than the amount which he might establish as being receivable by him as the fruits of that litigation, undiminished by any defence of contributory negligence. 14 The appellant contends that "to ignore contributory negligence is to potentially allow extensions of time to small claims, which clearly would be contrary to the intention of the legislature." This would be contrary to the legislative object expressed in s 52(1)(b)(ii) set out above. 15 The respondent's submissions

On behalf of the respondent it is contended that the reference in s52(4B)(b) is "the total damages of all kinds likely to be awarded to the claimant if the claim succeeds" must refer only to the likely amount of the damages flowing from the plaintiff's claim without regard to any diminution occasioned by a defence of contributory negligence or, indeed, any other defence which might diminish that total. As I apprehended this submission, it was based not so much upon the ordinary meaning that might be attributed to an "award of damages" but to the absence from the section of any reference to the reduction of that award, based upon considerations of contributory negligence. It is submitted that the absence of any such qualification indicates that the section should be interpreted without regard to the potential effect of such a defence. It would follow that material relating to such a potential defence would be irrelevant in deciding an application brought under the section. Submissions, on both sides, have been put, based upon other wording in other sections of this legislation. I have, with respect, derived no significant assistance from these submissions, nor from references to the second reading speech which introduced the relevant sections in 1995.

I was at first attracted to the respondent's submission that the consequences of an interpretation which would involve a consideration of matters relating to contributory negligence in the interlocutory proceedings for extension of time would impose upon a Court hearing such an application a burden which the legislature could not have contemplated. On further consideration of this argument I have decided that it should be rejected. It must be remembered that an applicant under the section is seeking an indulgence, in circumstances where the basic purpose of the legislation is to require proceedings to be brought within a strict time frame, the relaxation of which is to be permitted only if the applicant establishes an entitlement to leave. I am satisfied that "the total damages of all kinds likely to be awarded to the claimant if the claim succeeds" reasonably, as a matter of construction, refers to damages likely to be recovered in the event of a totally successful claim. They contemplate that the plaintiff must demonstrate a viable primary claim; indeed, the necessity for so doing would be required in any event. That being so, in my view, it is reasonable to interpret the words of the section as contemplating the potential ultimate result of the litigation, having regard to all matters put before the Court in relation to the application to extend time. Those matters would reasonably include material placed before it by the respondent to the application by way of alleging a potential reduction for contributory negligence. The respondent would, of course, bear the onus of establishing such matters and also the potential percentage reduction that their establishment might result in. I can see no reason, based upon an interpretation of the legislation why such material should not be placed before the Court hearing the application and be considered by it in arriving at a decision as to the total damages likely to be awarded. 17 Although it may be burdensome upon a Court to consider this additional material, I have formed the view that the legislation requires that it undertake that task. 18 I have considered the additional submission that the legislative provisions are not, as a matter of construction, aimed at preventing large claims being brought out of time, even though, in the ultimate, they may be reduced by the operation of a finding of contributory negligence to a figure below the required threshold. Although I felt some attraction to this proposition during argument, I have come to the conclusion that it should be rejected. If the Court hearing the interlocutory application were to form the view that, on the probabilities, the defence of contributory negligence could succeed to the extent that it would reduce even a large claim to a figure below the statutory threshold, then it would be obliged to reject the application. 19 I have, accordingly, reached the conclusion that this appeal should be allowed. Appellant to pay costs. The application remitted to the District Court to be heard and determined in accordance with these reasons. 20 CAMPBELL AJA: I agree with Foster AJA.

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