JUDGMENT
1 MEAGHER JA: I agree with Young CJ in Eq.
2 HODGSON JA: The circumstances of this case are set out in the judgment of Young CJ in Eq.
3 Section 43A of the Motor Accidents Act 1988 is in the following terms:
(1) The objects of this section are:
(a) to ensure that the issue of the lateness of a claim is dealt with as soon as possible after receipt of the claim, and
(b) to ensure that any delay caused to the consideration of the substantive claim by the lateness issue is kept to a minimum, and
(c) to ensure that the lateness issue is either resolved or made a mutually apparent substantive issue at an early date.
(2) A claim may be made more than 6 months after the relevant date for the claim under section 43 (in this section called "a late claim") if the claimant provides a full and satisfactory explanation for the delay in making the claim. The explanation is to be provided in the first instance to the third-party insurer concerned (if there is one) or to the Nominal Defendant.
(3) Evidence as to any delay in the onset of symptoms relating to the injury suffered by the injured person as a result of the motor accident may be given in any such explanation.
(4) A late claim may not be made more than 12 months after the relevant date for the claim under section 43 unless, in addition to the provision of a full and satisfactory explanation, the total damages of all kinds likely to be awarded to the claimant if the claim succeeds are not less than 10 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.
(5) Subsection (4) does not apply to a claimant who is legally incapacitated because of the claimant's age or mental capacity.
(6) This subsection applies if the late claim is made against the Nominal Defendant or a person who is insured by a third-party insurer. A reference in this subsection to an insurer includes a reference to the Nominal Defendant.
(a) If, within 2 months after receiving a late claim for which no explanation for delay is provided, the insurer does not reject the claim or ask the claimant to provide a full and satisfactory explanation for the delay in making the claim, the insurer (and the person against whom the claim is made) lose the right to challenge the claim on the ground of delay.
(b) If, within 2 months after receiving an explanation for delay in the making of a late claim, the insurer does not reject the explanation, the insurer (and the person against whom the claim is made) lose the right to challenge the claim on the ground of delay.
(c) If court proceedings are commenced in respect of a late claim, an insurer (or the person against whom the claim is made) may apply to have the proceedings dismissed on:
(i) the ground of delay, or
(ii) in the case of a late claim that is made more than 12 months after the relevant date for the claim under section 43, the ground of the amount of damages,
or both, only within 2 months after the statement of claim is served on the defendant and received by the insurer. The insurer (or the person against whom the claim is made) may only apply to have the proceedings dismissed on the ground of delay if the insurer (or the person) has not lost the right to challenge the claim on the ground of delay.
(7) A court must dismiss proceedings commenced in respect of a late claim if the court is satisfied that the claimant does not have a full and satisfactory explanation for the delay in making the claim and, alternatively or in addition in the case of a late claim that is made more than 12 months after the relevant date for the claim under section 43, that the total damages of all kinds likely to be awarded to the claimant if the claim succeeds are less than 10 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 The reference in s.43A(7) to "a full and satisfactory explanation" is elaborated in s.40(2) in the following way:
(2) In this Part, 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 claimant would have failed to have complied with the duty or would have been justified in experiencing the same delay
5 I agree with Young CJ in Eq. that the insurer's letter of 3rd May 1999 was a rejection within s.43A(6), so that the insurer and the respondent are not precluded from relying on the appellants' delay.
6 As noted by Young CJ in Eq., the primary judge stated that "the onus is on the plaintiff" to provide the explanation for delay. In one sense, that might be considered correct in that s.43A(2) requires a claimant to provide an explanation to the insurer. However, under s.43A(7) the onus is squarely on the applicant, in this case the respondent, to satisfy the Court "that the claimant does not have a full and satisfactory explanation for the delay"; and I do not think the primary judge recognised this.
7 Of course, in deciding whether a defendant has discharged its onus of proving that a claimant does not have a full and satisfactory explanation for the delay, a Court would have regard to the explanation provided to the insurer, and to the circumstance that normally only the claimant is able to give evidence of the claimant's explanation for delay; and if the Court considered that the explanation provided to the insurer was not full and satisfactory, and if there was no relevant additional material before the Court, the inference that the claimant did not have a full and satisfactory explanation would readily be drawn.
8 However, in the present case there was material before the primary judge in addition to the explanation provided to the insurer, but the primary judge disregarded that material.
9 The primary judge noted that it was only the period 6th December 1997 to 6th October 1998 in respect of which the respondent said there was not a full explanation. In relation to that period, the primary judge said this:
I note that there is no further information given in relation to the plaintiff's work activities, if any, from 6 December to 6 October 1998, apart from the reference in paragraph 10 to returning to Australia in relation to a job offer. There is no attempt to identify when it was that the plaintiff realised that his disabilities had not improved, thus leading to the decision to seek further legal advice, and there is no attempt to identify when that decision was made. It can readily be seen that different consequences might flow in terms of whether the explanation is satisfactory if the realisation that disabilities had not improved had taken place in December 1997, or close to that time, as opposed to having taken place, for instance, in September 1998, or close to that time. There is just a dearth of detail over that period of approximately eleven months, which, in my view, prevents the conclusion being made that the explanation is full in the sense required under the Act.
10 The reference to paragraph 10 in that passage was to paragraph 10 of the Statutory Declaration of the first appellant dated 25th March 1999 and provided to the insurer. There was in fact evidence before the primary judge additional to that statutory declaration in relation to the relevant period.
11 First, there were particulars provided by the appellants, which included the following material:
3. The first named plaintiff as a result of the accident, was unable to work for the following periods:
13.1.97-27.1.97
27.1.97-April 1997
Apr - May 1997
June - Dec 1997
4. As a result of the accident, the first named plaintiff and his co-owner sold the business, Red Zucchini Bar, in July 1997. Following the sale of his business the first named plaintiff travelled to Italy to stay with his family from July to December 1997 in order to recuperate. The first named plaintiff claims a diminution in his capacity to work during this period.
5. From December 1997 to July 1998 the first named plaintiff set up a business by the name of Ceruti's Bistro and the plaintiff worked in the Bistro as the manager until July 1998.
6. From July 1998 to December 1998 the first named plaintiff set up the Lido Bar with his brother, Vidor Russo. During the period July to December 1998 the proprietor at Ceruti's Bistro, Mr. David Gray, employed the first named plaintiff two nights per week to manage the Bistro.
7. The plaintiff was employed as a manger by the Ceruti's Bistro in December 1998 earning approximately $700.00 net per week. The plaintiff ceased employment with the Ceruti's Bistro in March 1999. The first named plaintiff claims $700.00 net per week from March 1999 to 31 October 1999, (30.5 weeks) or $21,350.00 net.
12 That evidence was admitted without objection, and no order was made under s.136 of the Evidence Act limiting its effect. It was in my opinion evidence of the truth of those matters: cf. Evidence Act ss.60, 75.
13 Next, there was a medical report of Dr. Rao, dated 10th December 1998. That report included the following passages:
Progress:
Mr. Russo persistently complained of the following ailments:
1. Current headaches.
2. Recurrent episodes of dizziness.
3. Difficulty to lift and carry objects, which interfered considerably in his participation and contribution in the business in Cremorne known as "Red Zucchini Bar" which subsequently had to be sold in May 1997.
4. Because of his recurrent ailments relating to the injury sustained, his personal relationship with his girlfriend got strained continuously hence he made the decision to make a trip to Italy to stay with his sister, to obtain some rest and change in his life style until he returned in December 1997.
His brother Vic Russo encouraged him to come back on his feet to participate in a gainful employment situation hence he has been working in the new business called "Lido Bar" in City of Sydney since May-June 1998.
….
Opinion:
1. Mr. Russo's ailments are consistent with the history of injury sustained due to the M.V.A. in question.
2. He sustained the injury to many part of his body as described above.
3. He also suffered some degree of mental trauma as a result of the same, eventuated in psycho-sociological disruption in his case, straining of his relationship with his girlfriend, going overseas to seek a change in his lifestyle and so on.
4. His performance at work got affected hence the result was selling the "Red Zucchini Bar" without having a chance to create and realise some realistic capital gain in the business.
5. Similar experience seems to have been suffered by him during the process of re-establishing himself in the hospitality industry by way of starting "Lido Bar" but not being able to perform satisfactorily hence he had to sell the business in December 1998.
6. In my opinion his multiple ailments may be expected to bother him for some considerable period in the future.
The progress report will be made available at a later date upon request.
14 Thirdly, there was the affidavit dated 14th October 2000 sworn by the first appellant, pars.13-15 and 23 of which were as follows:
13. I remained with my sister in Italy for some months, returning to Australia on or about 6 December 1997. By this time some of my disabilities had improved, however I was still suffering headaches, dizziness and difficulty with concentration, problems with my neck and left shoulder, my knee and my upper back.
14. Over a period of time I formed the view that my disabilities were not going to improve and that some had in fact have (sic) become worse, affecting my life to a greater extent than I had initially believed they would.
15. I decided to seek further legal advice and on or about 6 October 1998 I attended the offices of Teakle Ormsby Conn in relation to my claim and instructed them to obtain my file from my former solicitors.
…
23. As a result of my attendance upon Dr Dixon, on 18 January 1999, 27 January 1999 and 10 February 1999, I became aware that the injuries and disabilities sustained in the accident were more serious than had been initially thought. Annexed here to (sic) and marked "B" is a copy of the report of Dr. Dixon dated 31 May 1999.
15 Finally, there was Dr. Dixon's report, referred to in par.23 of the affidavit. That report concluded with the following paragraphs:
His prognosis for working as a Restraunteur is guarded. He will have difficulty with residual headache and arthralgia in the left shoulder especially on changes of weather and pain in the middle of his lumbar spine. He has residual neck symptoms of pain and stiffness and has C3/4 disc lesion of his cervical spine on MRI which could be contributing to his shoulder pain as well.
His residual disabilities are permanent.
16 In the light of that material, the primary judge's statement in the first sentence of the quoted passage is a very plain error. In my opinion also, it was a serious error, which was highly material to his decision, and accordingly it vitiated his decision. This Court is therefore required to decide the matter itself or else send the matter back to the District Court for decision.
17 In considering what course to take, it is first necessary to note that s.40(2) sets a high standard for explanations of delay. However, in my opinion it should not be read as making it necessary, for an explanation of delay to be satisfactory, that any reasonable person in the position of the claimant would have experienced the same delay. There is a substantial spectrum of reasonableness, and in my opinion it is sufficient that there is a hypothetical person within that spectrum who would have experienced the same delay. In other words, it is not necessary that no reasonable person would not have experienced the same delay. That in my opinion would be a test virtually impossible to satisfy, and could not have been intended by the legislature.
18 In this case, until submissions were made before the primary judge, no indication was given by the respondent of the respects in which it alleged the appellants' explanation was less than full and satisfactory. The respondent's Notice of Motion sought dismissal of the proceedings "upon grounds set forth in the affidavit of Snadar Rapaport sworn and filed herein". That affidavit annexed the first appellant's statutory declaration dated 23rd March 1999 and the insurer's letter in response, but did not indicate any grounds on which the explanation in that statutory declaration was said to be less than full and satisfactory. The insurer's letter did not itself specify any reason for not accepting the appellants' explanation. Before the primary judge, the first appellant was not cross-examined on his affidavit.
19 Apparently, in making submissions before the primary judge, the appellants went first on the question of whether the appellants had a full and satisfactory explanation, notwithstanding that the onus of proof in that respect was on the respondent. The alleged gap in the explanation was raised for the first time in the respondent's submissions. The appellants at that stage did not apply to re-open to lead more evidence to deal with that alleged gap, but were permitted to address in reply. In submissions before this Court, Mr. Lakeman for the appellants said that he was not suggesting the appellants were denied natural justice.
20 Notwithstanding that concession, I am inclined to think that the circumstances I have outlined mean that the appellants were denied procedural fairness in the manner discussed in Browne v. Dunn (1894) 6 R 67 and Allied Pastoral Holdings Pty. Limited v. Commissioner of Taxation [1983] 1 NSWLR 1. But whether or not this is so, these circumstances are highly pertinent to whether the Court should be satisfied that the appellants do not have a full and satisfactory explanation for the delay from 6th December 1997 to 6th October 1998.
21 The appellants produced extensive material in explanation of the whole of the delay in question. The material relevant to the particular delay ultimately relied on by the respondent, namely that between 6th December 1997 and 6th October 1998, showed plainly that the appellants could, if required, have provided more material in relation to that period. Notwithstanding that the onus was squarely on the respondent to prove the absence of an explanation, the respondent chose not to specify any respect in which the explanation was said to be deficient, and chose not to cross-examine the first appellant on his affidavit. Whether or not the material actually provided to the Court does itself amount to a full and satisfactory explanation, in my opinion it would be quite wrong to draw the inference against the appellants in those circumstances that they do not have a full and satisfactory explanation.
22 Young CJ in Eq. stated that he would "reach the conclusion that there was not a full and satisfactory explanation given in this case". With respect, I do not agree that that is the question to be determined: rather it is whether the court is satisfied that the appellants do not have a full and satisfactory explanation. For my part, particularly having regard to the way the respondent conducted its application, I am not so satisfied. The legislature could have made an application of the kind made in this case depend upon whether or not a claimant had given a full and satisfactory explanation, and indeed could have imposed the onus of proof on the claimant. But it did not do so. It made such an application depend upon whether or not the claimant had a full and satisfactory explanation, and imposed the onus of proof on the defendant.
23 In my opinion, leave to appeal should be granted, the appeal should be allowed with costs, and the respondent's motion should be dismissed with costs.
24 YOUNG CJ in Eq: Mr Russo, the first appellant says that on 11 January 1997, he was a passenger in a motor vehicle driven by the respondent in McCarrs Creek Road, Terrey Hills. The second appellant is the first appellant's employer, a company in which he has a substantial equity interest. The appellants say that the first appellant suffered personal injury when the respondent's vehicle failed to negotiate a sharp bend and hit a rock face. The first appellant suffered personal injury. The second appellant sues per quod servitium amisit.
25 Section 43A of the Motor Accidents Act 1988 requires such claims to be made within six months of the relevant accident. Late claims may be entertained in certain circumstances. However, late claims may not be made later than 12 months after the accident unless: