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COUNSEL: G R Mullins for the applicant/appellant / K F Holyoak for the respondents

SOLICITORS: Maurice Blackburn Cashman for the applicant/appellant / Suncorp Metway Insurance Limited for the respondents

McMURDO P: Subject to the following comments, I agree generally with the reasons for judgment of Davies JA in which the facts and issues are set out.

The learned primary judge in my view erred in exercising his discretion to give leave to bring proceedings under s 39(5)(c) Motor Accident Insurance Act 1994 (Qld) ("the Act") in considering that there was "really no prima facie case of negligence established against the defendant, in any case. No fact is mentioned which could point to liability in the employer."

There is nothing in the Act to suggest that, to be successful, an applicant must establish that he or she has a prima facie case.

The material placed before his Honour included a Personal Injury Notice of Claim under s 37 the Act which was sworn or affirmed by the applicant before a Justice of the Peace on 22 November 2001. The Notice stated that the applicant was a driver for the respondent, Transpacific Industries Pty Ltd ("Transpacific") and that he was injured at 10am on 11 December 1998 whilst driving south down the Gateway Arterial, past the Greendale Way overpass, Carindale, when the road dipped, causing him to be thrown upwards and to sustain an injury to his back. In response to question 22 of the Notice "Who do you think was the person that caused the accident and why do you think that?", he answered "The truck had defective seat belt mechanism and/or defective seat causing a severe jolt thereby causing injury". He described the truck he was driving as a Western Star truck registration number 373 EGU, insured by the respondent insurer and owned by Transpacific.

Those facts were in my view sufficient to give rise to an inference, albeit unstated, that Transpacific was liable for the accident and the ensuing injury to the applicant's back. In suggesting that the applicant needed to establish a prima facie case of negligence against the respondent, his Honour raised the bar too high and further erred in concluding that on the material before him there was no fact which could point to liability in the employer: see McKelvie v Page¹ and cf Pascoe v Nominal Defendant (Queensland) (No 2).²

This has the result that his Honour erred in determining the application at first instance and this Court can exercise its discretion under s 39(5)(c) the Act afresh.

The applicant concedes there was no clear and satisfactory explanation for his delay in giving notice to the respondent insurer. At its highest, the applicant noted in the s 37 Notice that he was not in a position to make an offer for the settlement of his claim because his "Injuries have not stabilised." His Honour noted that the applicant did not see his present legal advisers until 26 June 2001. The applicant's solicitor gave an explanation for the delay in making the application after November 2001: he had conversations with the respondent insurer's employed solicitors in November 2001 and believed that there were good prospects that once he provided the applicant's s 37 Notice, the respondent insurer would waive compliance under s 39(5)(a) the Act.

Explanation for delay is a relevant factor but is only one factor for the Court's consideration in exercising its discretion to give leave to bring the proceeding under s 39(5) the Act: see Dempsey v Dorber³ and Re Tonks.⁴

His Honour rightly noted that it was likely that the respondent would suffer some prejudice because of the passage of time and the disentangling of symptoms caused by pre-existing conditions aggravated by supervening trauma. The respondents did not point to specific prejudice.

On the other hand, to refuse the application was to forever shut the applicant out of his cause of action against the respondent. Although the material before his Honour did not suggest the applicant's case was necessarily strong, the s 37 Notice stated sufficient facts to conclude that the granting of leave would not obviously be a futile exercise. In my view, a consideration of the competing interests favoured the granting of the application.

In any case, I agree with Davies JA, that once the further evidence in the affidavit of Mr Koutsoukos filed on 2 April 2002 is received by this Court under UCPR r 766, the applicant demonstrates adequate reason for delay in giving notice under s 37(2) the Act and better particularises the facts upon which his claim against the respondents is based. There are then even stronger reasons for granting the application.

I am not entirely persuaded that the difference between the phrase in UCPR r 766(1)(c) "on special grounds" and the phrase "without special leave" in UCPR r 766(2), which refers to sub-rule (1)(c), is deliberate. Nevertheless, I agree with Davies JA that, for the reasons he gives, there are "special grounds" for receiving Mr Koutsoukos' affidavit which contains the further evidence.

I especially note my agreement with Davies JA in [44] of his reasons and the footnote thereto, for concluding this was an "application for leave to bring a proceeding … made … before the end of the period of limitation applying to the claim" under s 57(1) of the Act.

I agree with the orders proposed by Davies JA.

DAVIES JA: This is an application for leave to appeal against a refusal of a District Court judge to give leave to bring proceedings pursuant to s 39(5)(c) of the Motor Accident Insurance Act 1994, despite non-compliance with the requirements of Division 3 of Part 4 of the Act. The second respondent contends and the applicant concedes that the order is one other than a final judgment and that consequently leave is required under s 118 of the District Court Act 1967. The decision of the primary judge was given on 11 December 2001. The application also seeks an extension of time within which to file the application and the notice of appeal if the application is granted. A notice of appeal was wrongly filed, without leave, on 9 January 2002.

The substantive claim which the applicant seeks to make is in respect of an injury to his back which occurred on 11 December 1998 when he was driving a truck owned by his employer, the first respondent, along the Gateway Arterial Road. He says that the truck went over a dip in the road causing him to be thrown upwards, sustaining injury presumably when he came down again. The negligence asserted, according to an answer which he gave in his statement purportedly pursuant to s 37 of the Act, is that the truck had a defective seat belt mechanism and/or a defective seat. The second respondent was at relevant times, the insurer under the Act, of the truck.

Section 37 requires a claimant to give a notice of claim to the insurer containing and accompanied by the matters referred to in subsection (1), relevantly, within nine months after the motor vehicle accident.⁵ However, if the notice is not given within nine months, the obligation to give it continues and the notice when given, must contain an explanation of the delay.⁶ No such notice purporting to comply with s 37 was given by the applicant to the second respondent until the notice posted on 28 November 2001 was received by the second respondent on 4 December 2001. It did not contain an explanation of the delay.

Pursuant to s 39(5), a claimant's failure to give notice "as required under this Division" will not prevent him or her from proceeding further with the claim if, relevantly, either the insurer has waived compliance with the requirement⁷ or the court, on application by the claimant, authorizes further proceedings despite non-compliance⁸. However it is not entirely clear what is a notice "as required under this Division".⁹

Two requirements for such a notice are stated in s 37. The first is that it must contain and be accompanied by the matters referred to in s 37(1) and be given within nine months,¹⁰ and the second is that, if not given within that time, it also contain an explanation of the delay.¹¹ Although it is not completely clear, it seems that these requirements are cumulative.¹² In other words a notice complying with s 37(1) but not given within nine months and not containing an explanation of the delay would fail to comply with the requirements of the Division in two respects; in failing to have been given within nine months and in failing to contain an explanation of the delay; and would require waiver or leave to bring proceedings in respect of both failures.

On 26 November 2001 the applicant's solicitor spoke to a solicitor employed by the second respondent asking her whether he needed to bring an application pursuant to s 39(5)(c) in order for his client to proceed with the claim. She informed him that provided the notice, which the applicant's solicitor indicated he intended to give, complied with s 37 the second respondent would be prepared to forward a letter undertaking not to rely on s 39(5). It is not entirely clear what she meant by that statement but, in terms of Division 3 of Part 4 of the Act, it can relevantly be only a promise that upon the applicant forthwith giving a notice complying with the requirements of s 37(1) and (4), the second respondent would waive the requirement that the notice be given within nine months of the accident.

The notice which was given on 4 December 2001, did not comply with all of those requirements because it did not contain an explanation of the delay. By this time more than two years had elapsed since, pursuant to s 37(2), the notice was required to be given. Then on 10 December 2001 the applicant made an application to the District Court for leave to bring proceedings despite non-compliance with the requirements of the Division, and the application was heard and decided on 11 December 2001.

In exercising his discretion to refuse to give leave the learned primary judge took into account the fact that this delay remained unexplained. Mr Mullins, for the applicant, submitted that his Honour erred in doing so.

The other factors which his Honour considered, in the exercise of his discretion, were the likelihood of prejudice to the insurer and the prospects of success of the action. As to the first of these, his Honour noted that, according to the form of notice, there was no witness to the accident; and he said that, though this was not possible to be identified with precision, the disentangling of symptoms caused by pre-existing conditions and aggravated by a supervening trauma are often difficult. He expressed the view that, in those circumstances it was likely that some prejudice would be suffered by the second respondent. However the applicant submitted that, in the absence of evidence or specific complaint from the respondent, his Honour should not have taken the likelihood of prejudice into account.

As to the second, Mr Mullins criticized his Honour's statement that "it seems there is really no prima facie case of negligence", submitting that it was not necessary, on an application of this kind, to establish a prima facie case.

Mr Mullins also sought to adduce further evidence relevant to the reasons for and consequently an explanation of, the delay, and to the prospects of success in the action. Mr Holyoak, for the respondent, whilst conceding that this Court had a discretion under r 766 of the Uniform Civil Procedure Rules to admit further evidence, opposed its admission on a number of bases. I shall discuss each of those questions in that order.

The unexplained delay and prejudice

It was not suggested by the respondent that, except in its failure to contain an explanation for the delay, the notice given on 4 December 2001 failed to comply with the requirements of Division 3 of Part 4 of the Act. If, in that notice an explanation had been given for the delay and the applicant had commenced proceedings within six months thereof then, subject to the operation and application of s 39, he could have done so notwithstanding that, by the time those proceedings were commenced, the limitation period had expired.¹³ However Mr Mullins went further, submitting that a notice otherwise complying with Division 3 of Part 4 of the Act, containing an explanation of the delay and given on the day before, or even upon the day on which the application was heard, would have complied with the requirements of the Division and, presumably, would have entitled the appellant to a declaration to that effect pursuant to s 39(5)(b) if the second respondent's response to it had been unsatisfactory.

From this Mr Mullins submitted that the only prejudice to the respondent is that which flowed from the failure to give a complying notice on 4 December 2001 and that that did not include any prejudice which might flow from delay before that date. Therefore, he submitted, delay before that date was irrelevant.

I cannot accept that submission. In the first place the premiss on which it is based, that a notice, given after the expiration of nine months after the accident, complying with s 37(1) and containing an explanation for the delay, would be a notice "given as required under this Division", is false. It is not such a notice because it fails to comply with the mandatory requirement of s 37(2). That the failure to give it within nine months does not automatically bar the claim (as it would if it were a claim against the Nominal Defendant) is beside the point. The provisions of s 39 still apply to it.

Secondly, because the non-compliance in this case, which required either waiver of the second respondent or leave of the court, was the failure, in the notice, to explain the delay which has occurred since 11 September 1999, nine months after the accident, it followed that, in considering whether leave should be granted notwithstanding a failure to explain the delay since 11 September 1999, the extent of that delay, the adequacy of any explanation for it and the likelihood of prejudice flowing from it are relevant matters in the exercise of the court's discretion. It may well be true that if the applicant had, in the notice which he gave, given an explanation of the delay, the second respondent would have waived compliance with the requirement that the notice be given within nine months of the accident. But that is not this case and, in an application for leave pursuant to s 39(5), the Court was entitled to take into account the whole of the delay since 11 September 1999.¹⁴

No explanation of the delay was given to the learned primary judge. On the other hand, as his Honour indicated, there was no witness to the accident and no fact was mentioned which could point to liability in the employer. In other words the respondent was presented more than two years after a notice was required to be given with little, if anything, to indicate the factual basis upon which negligence against it would be alleged. In addition, as his Honour also pointed out, the applicant's alleged injury was to his back, an injury of a kind which is notoriously difficult to disentangle from conditions or events which may have occurred before or since. These were, in my opinion, appropriate matters for his Honour to consider, in the exercise of his discretion, in deciding whether to grant leave to bring the proceedings notwithstanding the failure by the applicant to comply with the requirement to give notice of injury within nine months of the accident.

The failure of a respondent to depose to any actual prejudice ought not, in my opinion, preclude consideration by the court of the likelihood of prejudice to the respondent because of the difficulty in investigating questions of the kind to which I referred above. It may be impossible at the time an application such as this is made to identify any specific prejudice. But that does not mean that there is no risk of prejudice or even that that risk is not substantial. The risk of it should ordinarily be assessed notwithstanding that it cannot be identified specifically without substantial further inquiry.

The applicant's prospects of success

I would accept that, in an application of this kind, it is not necessary to show a prima facie case. However I do not think that that is what the learned primary judge was saying in the passage relied on by the applicant only a small part of which I have quoted above. The passage should be set out in full.

"In my opinion it is likely that some prejudice would be suffered under circumstances such as these. It is not possible to identify it with precision, but the disentangling of symptoms caused by pre-existing conditions and then aggravated by a supervening trauma are often difficult. This case seems likely to be in that category. Also, it seems there is really no prima facie case of negligence established against the defendant, in any case. No fact is mentioned, which could point to liability in the employer."

It is that it is significant that, immediately upon the conclusion of this passage, his Honour referred to the decision in McKelvie v Page¹⁵ in which Wilson J said:

"A factor which weighs heavily against the grant of leave is that there is no evidence before me as to how the accident happened, beyond the fact that there was a head on collision between the plaintiff's bicycle and a motor vehicle."¹⁶

The last sentence in the passage quoted from his Honour's judgment, in my opinion, echoes this sentence which I have quoted from the judgment of Wilson J in McKelvie and the sentence was referred to specifically in argument shortly before his Honour delivered his judgment. It seems to me, therefore that his Honour was saying no more than that there was no fact stated which pointed to liability of the employer. The absence of anything to indicate liability in a respondent is in my opinion a relevant factor in the exercise of the discretion under s 39(5)(c), as indeed would be some indication that the applicant had a strong case against the respondent in negligence.

I cannot be satisfied therefore that, on the evidence before him, the learned primary judge either took into account irrelevant matters or failed to take into account relevant matters or that, in any other way, he erred in law in exercising his discretion in the way he did.

The application to adduce further evidence

That is not the end of the matter because, as I mentioned earlier, the applicant seeks to adduce further evidence before this Court pursuant to r 766 of the Uniform Civil Procedure Rules. Sub-rule (1)(c) permits this Court on special grounds to receive further evidence as to questions of fact and sub-rule (2) provides that for that purpose, further evidence may be given without special leave unless the appeal is from a final judgment and, even in that case, as to matters which happened after the date of the decision appealed against. It being common ground that the order in this case is one other than a final judgment, special leave is not necessary in order to adduce such further evidence but there must be some special grounds for it.

The further evidence sought to be adduced goes to two issues: an explanation for the delay and a more detailed explanation of the case which the applicant seeks to prove against the respondent. As to the first of these, it appears that the applicant delayed seeking legal advice about his back condition until about mid 2001 because he thought it would improve over time. It was only then that he came to the conclusion that his condition was permanent and that he needed to seek legal advice. So the delay for which the applicant was solely responsible was from 11 December 1998 until about June 2001.

The history of the appellant's back condition, as appears from his instructions to his solicitor and his proposed statement of claim is that there were a number of events, apparently, in 1996, 1997, 1998 and 2001 which caused him back pain and arguably caused or exacerbated an injury to his back. It is not uncommon for conditions such as this to wax and wane. It is therefore unsurprising and quite credible that the applicant was hopeful that his back condition would improve over time and that it was only by mid-2001 that he concluded that the condition was permanent. That, it seems to me is an explanation of the delay until then and one which is not obviously unreasonable.

It was then that he first consulted his solicitors who commenced proceedings against the first respondent on 19 September 2001 after obtaining conditional damages certificates from WorkCover Queensland in respect of this injury and an earlier injury on 17 September 2001. This was plainly the wrong procedure and it is unclear whether the claim against the first respondent was ever served on it. However the delay between when he first gave instructions to his solicitors and the notification to the second respondent of the accident was less than six months and not attributable to any fault of the applicant.

As to the second of these issues, a more detailed explanation of the applicant's case, it appears that a statement of claim had been prepared before and could have been filed and served prior to the hearing of this application in the District Court. However when, on the hearing of the application, the learned primary judge referred to the absence of facts showing whether the applicant had a case, the applicant's counsel sought to tender this document on an undertaking to verify its contents by affidavit. That application was refused.

That statement of claim, which has now been exhibited to an affidavit and verified, sets out, with some particularity, the allegations of negligence against the first respondent in respect of the truck which had been identified, by registration number, in the notice given in purported compliance with s 37. The particulars include failing to fix the seat belt to the floor beside the seat, attaching the seat belt to the seat, failing to heed complaints by the applicant that the seat belt was activating prematurely and failing to provide seating with proper and adequate cushioning. The applicant's back injury is further particularized as bilateral facet joint subluxation and discal injury at L5-S1 level. The name and address of his treating doctor had been included in the notice just referred to.

The first question then is whether on those facts there are special grounds justifying the receipt of the further evidence. In my opinion there are.

In the first place, as I have already mentioned, the applicant's counsel sought to put the proposed statement of claim before the learned District Court judge on his undertaking to file an affidavit verifying the facts contained in it. Had his Honour acceded to his application, his Honour's concern that there were no facts pointing to liability of the first respondent would have been overcome. Secondly the respondent has been apprised of the facts alleged in the statement of claim since, it seems, the date of that hearing, 11 December 2001, but certainly since 5 February 2002, the date on which the affidavit exhibiting the proposed statement of claim was filed and served; and, notwithstanding having had more than two months to investigate the facts alleged in it, has not asserted that it cannot meet them. Thirdly, the applicant's explanation for the delay, which he now gives, is not something which could reasonably have been contradicted had he given it earlier. And fourthly, the effect of refusing leave is, effectively, to terminate the applicant's cause of action.

None of these matters would, alone, constitute special grounds for the receipt of this evidence but I think that, together, they do so. Procedural fairness, I think, requires that course.

In those circumstances, for reasons I have already made clear, I would now be inclined to give leave to bring the proceeding despite non-compliance with a requirement of Division 3 of Part 4 of the Act. The question then is whether s 57 prevents an order giving leave from having any effect. In support of that contention Mr Holyoak, for the respondent, relied on the decision of this Court in Horinack v Suncorp Metway Insurance Ltd.¹⁷ Section 57 relevantly provides:

"(1)If notice of a motor vehicle accident claim is given under Division 3 (Claims procedures), or an application for leave to bring a proceeding based on a motor vehicle accident claim is made under Division 3, before the end of the period of limitation applying to the claim, the claimant may bring a proceeding in court based on the claim even though the period of limitation has ended.

(2)However, the proceeding may only be brought after the end of the period of limitation if it is brought within 6 months after the day on which the notice is given or leave to bring the proceeding is granted.

… "

In Horinack no notice of claim had been given or application for leave made before the limitation period had expired. The court held that in such a case there was no basis as a matter of construction for making an order giving leave to bring proceedings. That is undoubtedly correct. However it is irrelevant to this case because the application, on any view, was made before the end of the period of limitation. The accident occurred on 11 December 1998, the application was filed on 10 December 2001 and was heard by the court on 11 December 2001.¹⁸

The substantive matters argued on this application involve important questions of construction of the Act. Accordingly I think it is appropriate to grant leave to appeal. And I would, in the circumstances outlined earlier, grant an extension of time within which to seek leave and to appeal. I would extend both to the date of this judgment.

In view of the fact that the applicant has succeeded only because of further material which he has filed in this application I would not make any order with respect to the costs of the application for leave to appeal or the appeal. Nor would I disturb the costs order made by the learned District Court judge.

Orders

Extend the time within which to seek leave to appeal and to appeal to 10 May 2002.

Grant the application for leave to appeal.

Allow the appeal.

Set aside the order of the District Court refusing leave to bring this proceeding.

Grant leave to the applicant to bring this proceeding notwithstanding non-compliance with the requirements of Division 3 of Part 4 of the Motor Accident Insurance Act 1994 (Qld).

HELMAN J: I agree with the orders proposed by Davies JA and with his reasons, and also with the reasons of McMurdo P.