Vorillas v Haratsaris [2005] NSWCA 109 | Case summary

"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." 3 Part 5 of the Act comprises sections 40-67. Section 42 requires a claimant to ensure that a written report of the accident is made to a member of the Police Force within 28 days after the date of the accident, and if this is not done, then the claimant must provide a full and satisfactory explanation to the court for the non-compliance. Sections 43 and 43A require a claimant to make a claim within six months of the accident, and if this is not done, to provide a full and satisfactory explanation for the delay in making the claim. Section 48 requires a claimant to provide to the relevant insurer a good deal of information, before commencing curial proceedings, and s50A provides that a claimant is not entitled to commence proceedings without first providing to the relevant insurer certain information, sufficient to enable the insurer to make a proper assessment of the claimant's full entitlement to damages. 4 That is, generally speaking, the Act requires a claimant to act in such a way as to enable the relevant insurer to assess the merits of the claim, before litigation is commenced, and to act expeditiously; ss42, 43A and 52 all refer to the concept of a full and satisfactory explanation, as defined or described in s40; and ss48 and 50A provide that proceedings must not be commenced without first doing the things mentioned there. 5 For the purposes of the Act, Mr Haratsaris is the "claimant", in that he claims damages, but within the meaning of SCR Part 51 rule 49, Mr Vorillas is the "claimant", in that he seeks leave to appeal. I will therefore refer to the parties by their names. 6 Mr Haratsaris' accident occurred on 29 August 1999. He instructed Bechara & Co, Solicitors, on 13 October 1999. They evidently arranged for an appropriate claim form to be obtained, completed on or about 1 February 2000, and forwarded to Mr Vorillas' insurer, NRMA Insurance Ltd. On 18 February 2000 the insurer wrote a letter to the solicitors requesting a volume of information. It has not been suggested that the insurer was not entitled to do that, under the provisions of s48. The evidence does not disclose the happening of any other relevant event until 20 February 2001, when the insurer wrote to the solicitors again, advising that its inquiries into the circumstances of the accident were complete, and that its stance was that it was not liable to Mr Haratsaris. That is, a year went by, and there is no direct explanation as to why matters were allowed to be delayed during that period. 7 On 28 February 2001 Mr Haratsaris' solicitors wrote to the insurer, providing some but not all of the information that had been requested on 18 February 2000. They said that they had written to Mr Haratsaris asking him to provide copies of his income tax returns and associated documents. It seems that the solicitors collected various medical reports and similar documents during the period between February and June 2001, and forwarded copies of these on to the insurer, and in February 2002 they forwarded to the insurer copies of Mr Haratsaris' taxation returns and associated documents. These had been requested in the insurer's letter of 18 February 2000. There is no direct evidence as to why there was a delay of about two years in providing this information to the insurer. 8 Between May 2002 and August 2002 there were further requests for information, and replies to these requests, and then proceedings were commenced on 28 August 2002, a day short of three years after the accident. 9 The insurer then instructed solicitors, who took the point that Mr Haratsaris had commenced the proceedings in breach of the provisions of ss48 and 50A of the Act. Ms Petroulakis, a solicitor employed by Bechara & Co, deposed (without challenge) to an understanding by the firm as at the date of the commencement of the proceedings, 28 August 2002: she said that the "understanding of the law based on the case" of Diaz v Truong [2002] NSWCA 265, was that once an insurer had denied liability, as had happened in this case on 20 February 2001, a claimant had no further need to comply with the provisions of s50A. The judgment in Diaz was delivered on 19 August 2002, nine days before the proceedings were commenced. In Manderson v Ellis [2002] NSWCA 289, in which judgment was delivered on 30 August 2002, two days after the proceedings had commenced, the Court of Appeal held that this view of the law was incorrect. 10 Mr Vorillas filed a notice of motion seeking an order dismissing the proceedings for lack of compliance with the provisions of ss48 and 50A. Whatever the position was about the understanding of Bechara & Co, Mr Vorillas' solicitors made their position plain, by letter dated 30 October 2002. The motion was adjourned on various occasions, and on 21 February 2003 Mr Haratsaris sought and obtained leave to discontinue the proceedings, his then counsel acknowledging the need to adduce further evidence, to enable an application to be made under s52(4) of the Act. 11 On 9 September 2003 Mr Haratsaris filed a notice of motion, seeking that leave. In due course, McLoughlin DCJ heard the motion and granted that leave, on 11 May 2004. 12 On the present application for leave to appeal from that decision Mr Vorillas focused on upon three periods of delay, said to be not fully or satisfactorily explained: first, in the period up until 28 August 2002, when the first action was commenced; secondly, in the period from that date until 21 February 2003, when the first action was discontinued; and thirdly, from the last-mentioned date until 9 September 2003, when the motion under s52 was filed. 13 As to the first period, a further subdivision seems appropriate, between the period 18 February 2000 and 28 February 2001, and the period June 2001 to February 2002. As already remarked, there is really no direct evidence of the happening of any presently relevant event between 18 February 2000 and 28 February 2001, and no direct explanation for the delay that occurred during this period. The learned primary judge inferred that Mr Haratsaris had left matters to his solicitors, and apparently inferred that they had been generally engaged in the preparation of a case that was in some respects difficult: Mr Haratsaris had various significant physical disabilities said to be the result of the accident, and also a cognitive impairment that might have been the result of the accident, in whole or in part, or might have had another cause. 14 However, there are difficulties here: Mr Haratsaris did not himself give evidence and Ms Petroulakis dealt only with the exchange of documents between her firm and the insurer. If a claimant under the Act is to ask a court to act on the basis that he or she relied entirely upon his or her solicitor, so that the conduct of the solicitor is the conduct of the claimant, then ordinarily the claimant should give evidence to that effect: Russo v Aiello [2002] HCA 53 at 10-11. There are, of course, exceptions, for example, Diaz, where the claimant was a young child. However, that is not this case, and Mr Haratsaris did not give evidence, nor was any explanation proffered for his not giving evidence. 15 Much the same may be said of the period June 2001 to February 2002. By June 2001 the solicitors for Mr Haratsaris had assembled some materials, and had provided these materials to the insurer, but the request of the insurer, made under the provisions of s48 of the Act on 18 February 2000 for detailed information about records concerning Mr Haratsaris' earnings and earning capacity remained largely unanswered. It was not until 28 February 2002 that Mr Haratsaris' solicitors provided the insurer with copies of his tax returns and notices of assessment of taxation, and copies of the financial statements of a company with which he was associated. I cannot discern in the evidence any direct explanation for this delay. Again, the affidavit of Ms Petroulakis was in effect limited to recording the exchange of letters. 16 Mr Vorillas submitted that the learned primary judge had erred in finding that much of the time up until 28 August 2002 had been spent on the preparation of Mr Haratsaris' case, in order for it to be prosecuted, and in order for the giving of the information required by s50A, when the stance that had been taken on behalf of Mr Haratsaris was that it was not necessary for him to comply with s50A. This criticism seems apt, although there is I think force in the proposition that the solicitors would have been acting prudently if what was done was done by reason of a view taken that, because of the case management procedures of the District Court (with which his Honour was no doubt familiar), it was better to delay commencing proceedings until the solicitors were reasonably confident that the case would be able to be properly processed, consistently with the case management procedures of the District Court, once it had been commenced. However, Mr Haratsaris' case was not put on this basis, and no witness deposed to such a view. 17 Mr Vorillas also submitted that the delay that occurred during the second period, 28 August 2002 to 21 February 2003, was not the subject of a full and satisfactory explanation. During this period Mr Haratsaris responded generally to the contentions of Mr Vorillas that the proceedings had been commenced in breach of ss48 and 50A, and ultimately Mr Haratsaris conceded the point. The evidence discloses an explanation, in the form of the affidavit describing the understanding of the firm of Bechara & Co concerning s50A, but no explanation as to why it was thought that, consistently with s48, the action might have been properly commenced, and I find it difficult to see how one can describe the explanation given concerning s50A as either full or satisfactory. The affidavit of Ms Petroulakis does not say when the understanding of the firm about the affect of a denial of liability upon the obligation of Mr Vorillas concerning s50A was formed, nor when that understanding of the firm changed, although perhaps the affidavit points faintly to the view that the firm was aware of the decision in Manderson fairly soon after the delivery of the judgment in that case, but in any event, the attitude of the insurer and of its solicitors had made it plain that they contended that the understanding was misplaced. 18 McLoughlin DCJ held that it was reasonable for Mr Haratsaris to allow time to pass during this period, leaving the matter to his lawyers, and that it was reasonable for the solicitors to act in the way that they did, referring to "an attempt to resolve the outstanding matter", perhaps a reference to the possible compromise of the motion to strike the proceedings out, to the attempt to understand the decisions in Diaz and in Manderson, and of Mr Haratsaris' solicitors "attempting to get agreement for the future conduct of the matter", an expression that had not been explained. Once again, there is no direct evidence going to the cause or causes of the delay, except to the limited extent I have summarised concerning the understanding of Bechara & Co concerning the position under s50A of the Act, and I do not think one can infer a full or satisfactory explanation from the evidence. 19 The third period of delay, between February and September 2003, raises other considerations. Ms Petroulakis spoke of a delay in obtaining a transcript of what had been said on the hearing of the motion on 14 and 21 February 2003, and then of obtaining a transcript of the reasons for judgment given on the latter date. The transcript of the reasons for judgment were not received until 12 August 2003. It seems reasonable to infer that it took longer to obtain these transcripts than had earlier been expected, but the evidence does not establish why it was thought necessary to obtain the transcripts: on 21 February 2003 counsel for Mr Haratsaris conceded that his client needed to make an application under s52, and needed to assemble further evidence in support of that application. On the face of the record, the addition of the transcript was not likely to help Mr Haratsaris' application under s52. 20 The present hearing proceeded on the basis that if leave to appeal was granted, the appeal would be heard concurrently. Counsel for Mr Haratsaris submitted that the decision of McLoughlin DCJ was a discretionary one, citing Russo at 27. Counsel for Mr Vorillas disputed that much, but submitted that in any event, the primary judge had erred in taking irrelevant matters into consideration, had mistaken the facts, and had not taken material matters into consideration. For the reasons set out above, I consider that this is correct.

Vorillas v Haratsaris

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