Stratton v Kairouz

PARTIES: Lisa Stratton (Plaintiff) Rafic Kairouz (Defendant)

COUNSEL: Mr K Andrews (Plaintiff) Mr A Black (Defendant)

SOLICITORS: Keddies Lawyers (Plaintiff) Moray & Agnew (Defendant)

The Plaintiff proceeds upon a Notice of Motion filed on 7 August 2008 seeking an extension of time in which to bring proceedings against the Defendant in respect of injuries she sustained in a motor vehicle collision that occurred on 23 July 2000 when the Plaintiff was a passenger in a motor vehicle being driven by the Defendant.

Section 109 of the Motor Accidents Compensation Act, 1999 requires that in the circumstances of this case the Plaintiff is not entitled to commence proceedings without the leave of the Court. Section 109(3)(a) provides that the Court must not grant leave to commence proceedings unless the Plaintiff provides a full and satisfactory explanation for the delay in commencing proceedings. Section 109(3)(a) is informed by section 66(2) in which a full and satisfactory explanation for delay is defined as one which a reasonable person in the position of the Plaintiff would have experienced. Section 109(3)(b) provides that the Plaintiff must also show that the amount of damages awardable to her is likely to be not less than 25% of the maximum amount that would have been awardable under Section 134 of the Act as at the date of injury. In this instance 25% of the applicable section 134 amount is $68,250.

Defendant's concession concerning period of delay requiring explanation

The Defendant concedes that the relevant period of delay requiring explanation is the period between 15 July 2003 which was the date on which the Plaintiff appears to have last consulted her former solicitor, and 18 April 2007 which was the date on which she first consulted her present solicitors.

The materiality of these dates becomes apparent. Whereas since the latter date the pursuit of the procedural requirements of the claim has moved with appropriate despatch, it was argued that this was not the case for the period between 15 July 2003 and 18 April 2007.

It becomes material to review the background facts and reasons why, when the Plaintiff was injured on 23 July 2000, by 15 July 2003 she ceased to have active contact with her former solicitor and did not appear to seek to prosecute her claim until she consulted her present solicitor on 18 April 2007.

The starting point for such a review is the relationship between the parties. For the 5 years between 1997 and 2001 the Plaintiff was in a personal relationship with the Defendant's brother, Mr John Kairouz. In the collision in question the Plaintiff sustained injury when she was a passenger in the Defendant's vehicle. The Defendant is alleged to have started to drive that vehicle erratically which then led to a collision in which the Plaintiff sustained serious injuries. I am informed that as a consequence of this incident the Defendant faced the charge that by negligent act he caused grievous bodily harm to the Plaintiff.

The Plaintiff gave evidence that following the collision the Defendant had threatened her with serious injury and death if she pursued a claim for damages against him. The Defendant's stated reason for such threats was that he did not want to go to gaol. The Plaintiff gave evidence, which I accept, that such threats have, even to the present time, continued to operate on her thinking about her claim and generally. I infer from this evidence and from my impression of the Plaintiff's general reticence in wanting to address the detail of her claim, that such threats have had and continue to have a deleterious effect on her psyche and the consideration of her interests in pursuing her claim. I find that this reticence extended even to inquiring as to her rights and obligations under the applicable legislation that deals with claims such as hers.

It is also relevant to note that the Plaintiff had been sexually assaulted several years before her injury and as a consequence had suffered continuing psychological sequelae and had experienced difficulties in maintaining employment. It is against this background that I come to consider the Defendant's threats of injury and death and the effects such threats had on the Plaintiff. I find that as a consequence of these threats the effect on the Plaintiff was an intimidation and clouding of her will and therefore, an intimidation of her ability and resolve to prosecute her claim efficiently and expeditiously. I find that this occurred against a background of the Plaintiff's psychological vulnerability arising from the earlier sexual assault compounded by the intimidatory effects of the Defendant's threats.

I accept that although the Plaintiff agreed in her evidence that from early 2003 her state of mind concerning her claim was that until she paid her former solicitor the sum of $550 for a further medical report, she nevertheless did not know that her claim was not on foot or viable to be prosecuted, although, based on earlier advice she had received from her father, she believed that she had a period of seven years in which to file her claim.

I accept that in early 2003 she spoke to her former solicitor to inquire as to what was happening with her claim. I accept that on that occasion, he said that he could not act for her if she did not make the payment. I accept that he told her that he wanted to give her the file and I accept that she replied to the effect that she still wanted him to act for her although she understood she had to pay him some monies for disbursements to advance the claim further. However, I also accept that she did not ever receive any advice from her former solicitor either to the effect that he had ceased to act for her or that she had to observe a stated limitation period to preserve her right to claim damages. I therefore accept that the Plaintiff believed, reasonably at that time, that her claim was still on foot and capable of being progressed in line with her understanding of a seven year limitation period as was advised to her by her father.

I also accept that in 2007 she felt that her claim was taking too long, which led her to consult her present solicitor, following which the preparation of her claim has proceeded with due expedition.

The issues that were argued by the parties were: (a) Whether the Plaintiff has provided a full and satisfactory explanation for the delay incurred;

(b) The role and actions of the Plaintiff's former solicitor;

(c) Whether the Plaintiff is able to satisfy the requirements of s 109(3)(a) of the Act.

(d) Whether there is prejudice to the Defendant if leave were to be granted;

Before the Court can make an order for an extension of time in a case of this kind there must be a full and satisfactory explanation for the delay : s 109(3)(a) of the Act. Full and satisfactory is defined in s 66(2) of the Act and refers to a full account of the conduct of the Plaintiff from the date of the accident until the date the explanation was provided, which is in effect the date of hearing of the motion. The subsection provides that the explanation is to be considered to be satisfactory if a reasonable person in the position of the claimant would have failed to comply with the requirement of filing the claim within the period of 3 years or would have been justified in experiencing the same delay.

The Defendant has conceded that the relevant period for an examination of the Plaintiff's conduct for the purposes of the subsection is 15 July 2003 to 18 April 2007.

In the period prior to 15 July 2003 I find that the Plaintiff was in the process of recovering from the effects of the injuries she sustained in the collision and, in addition, was affected by her experience of an adverse psychological reaction to the Defendant's intimidatory threats to cause her further serious injury and death. In 2001 she nevertheless instructed a solicitor to assist her with a claim in relation to her injuries. The relevant claim CTP form was completed on 25 February 2001 and provided to the CTP insurer shortly afterwards. In my view these background circumstances are relevant to an examination of the period between 15 July 2003 and 18 April 2007.

I find that between 25 February 2001 and 15 July 2003 the Plaintiff believed, reasonably, that having engaged a solicitor to represent her interests, apart from being aware that she needed to find monies to fund the cost of medical reports, the Plaintiff was unaware that any further action of significance was required of her for the proper pursuit of her claim. At the hearing the Defendant drew to the Plaintiff's attention a series of letters apparently sent to her by her form solicitor in the period 31 January 2003 to 27 May 2003 inviting her to make contact. The Plaintiff explained that she did not receive this correspondence and when challenged about this she explained that she had changed addresses in the period. There was no evidence called from the former solicitor on this subject. In these circumstances I see no basis upon which I should doubt the reasonableness of the Plaintiff's explanation concerning this correspondence.

I accept the Plaintiff's evidence that on or about 18 April 2007 she contacted her former solicitors to ascertain the progress of her claim in the context of a background awareness of what she thought was a seven year limitation period and was told that the individual solicitor who had been handling her matter had left the firm. This response put her on her inquiry which led her to instruct her present solicitors about three months later. Thereafter she then left the pursuit of her claim in the hands of her current solicitors until the present time. I do not regard the 3 month delay as being of any significance.

I consider that a reasonable person in the position of the Plaintiff, in the period 18 April 2007 to date, would have acted in the same manner as the Plaintiff had acted.

Against this background it must be remembered that since 1997, which was when she had been the victim of sexual assault, those circumstances created a vulnerability in the Plaintiff to further psychological stressors. Significantly, in this case, the Plaintiff was the recipient of repeated threats from the Defendant. Those threats included the threats of serious injury and death. The effects of those threats still operate on the Plaintiff's psyche. In these circumstances it is little wonder that the Plaintiff is reticent and apprehensive about matters to do with her damages claim.

In these circumstances I consider the Plaintiff has given a full account of her conduct in the relevant periods as is required by section 109(3)(a) of the Act. I also consider that she has provided a satisfactory explanation for the delay experienced to date.

In these circumstances it is necessary to undertake an examination of other factors relevant to the exercise of the Court's discretion on the issues raised.

The role and actions of the Plaintiff's former solicitor

I find that the Plaintiff's former solicitor did not formally advise her that he had ceased to fact for her in connection with her claim. I am of the view that in the absence of such advice from the former solicitor a reasonable person in the Plaintiff's position would have assumed that the solicitor would continue to act for her to protect her legal rights concerning the pursuit of litigation to seek compensation for injuries sustained in the motor vehicle collision in question.

There is no doubt that the Plaintiff was aware, from her dealings with her former solicitor, that there was some kind of delay in connection with her claim because she was aware of the fact that her solicitor required her to pay him $550 to obtain a medical report, and ultimately, she was concerned to ascertain what was happening and made an inquiry accordingly. In the context of the delay between the solicitor's request for disbursement monies for a medical report and the subsequent inquiry to ascertain what was happening with her claim, which led her to consult her present solicitors following advice to the effect that her former solicitor was no longer with the firm she had instructed, I am of the view that a reasonable person in the position of the Plaintiff would have been justified in experiencing and accepting that delay : Blackburn v Allianz Australia Insurance Ltd (2004) 61 NSWLR 632; [2004] NSWCA 385 at [54] per Hodgson JA. I find that this is especially so in view of the fact that the Plaintiff's consciousness and thoughts about her claim continued to be clouded by the effects of threats and intimidation she had earlier received from the Defendant.

Further, insofar as the Plaintiff relied upon her former solicitor to advise her of the need to comply with relevant limitation periods and the apparent failure to so advise, which I find was the case here, is a satisfactory explanation for the delay in commencing proceedings : Smith v Grant [2006] NSWCA 244 at [60] per Basten JA followed in Khoury v Linfox Australia Pty Ltd [2006] NSWCA 51 at [22]. Confirmation of that view is found in the subsequent conduct of the Plaintiff in instructing her present solicitors after she had ascertained that her proceedings were not on foot.

It appears from Annexure "A" to the Affidavit of the Defendant's solicitor, Mr Parker, that on 15 July 2003 the Plaintiff's former solicitor sent the Defendant's insurer a Tax Invoice for payment of his fees notwithstanding that the Plaintiff's claim had not been filed or resolved in any way. There is no evidence that the Plaintiff was made aware of this fact. In the present application it is not necessary for me to speculate upon whether such a course was in any way influential in the former solicitor's file becoming inactive with regard to communications to the Plaintiff from mid 2003. However, the fact remains, the Plaintiff did not hear from her former solicitor after mid 2003 notwithstanding that the retainer to act for her was apparently still current.

On behalf of the Plaintiff, Mr Andrews submitted a schedule of damages totalling $658,362.48 which was marked MFI "1". I find that in the context of the Plaintiff's evidence given in the hearing of the motion, including her affidavit of 6 August 2008, taken together with the medical reports annexed to the affidavits of the solicitors for the parties, it is likely that damages of the order outlined in MFI "1" are reasonably arguable as being awardable to the Plaintiff. In view of that finding, it follows that the requirements of s 109(3)(b) of the Act are satisfied in that the likely damages are not less than $68,250. On behalf of the Defendant, Mr Black does not seek to make and argument to the contrary.

The Defendant argues that prejudice arises in the defence of the Plaintiff's claim due to the effluxion of time and the destruction of the court papers in relation to the criminal charges brought against the Defendant. I do not accept that argument. There is no evidence that the Defendant is unable to instruct his insurer and his solicitors in relation to factual matters that might be relevant to the defence of the Plaintiff's claim. In the absence of such evidence I infer that the Defendant is able to provide proper instructions for the defence of the Plaintiff's claim against him. I reject the prejudice argument.

I am satisfied that the Plaintiff has provided a full and satisfactory explanation for the delay in commencing proceedings. I am satisfied that the Defendant is not prejudiced by the making of an order extending the time in which the Plaintiff may commence proceedings. I therefore conclude that it is just and reasonable for an order to be made in favour of the Plaintiff as claimed.

Accordingly, I am satisfied that the Plaintiff should be given leave to commence proceedings outside the 3 year period specified by that section. I extend the time for filing a statement of claim to 7 August 2008.

I accept the Defendant's cost argument that in this case, namely that the Defendant was justified in opposing the Plaintiff's application for leave including justification for testing the Plaintiff's evidence by which she sought to justify the orders sought. Consequently, in this case the customary order for costs should be made.

In respect of the Plaintiff's motion filed on 7 August 2008 I order that:- (a) The time for commencing proceedings be extended until 7 August 2008; and

(b) The Plaintiff is to pay the Defendant's costs of the motion, such costs are not to become payable until after the conclusion of the proceedings.

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