Wyer v Hunt [2005] ACTSC 15

3. Although Brisbane Avenue terminates at Wentworth Avenue and Bowen Drive, both parties have referred to the junction as an intersection. I shall use the same terminology.

4. The plaintiff's case is that the defendant failed to stop at the stop sign and continued on into Wentworth Avenue, failing to give way to the plaintiff's motorcycle on the defendant's right, and crossing the plaintiff's intended path. The plaintiff says that he braked heavily to avoid a collision with the defendant's vehicle. He came off his bike and suffered injuries including a fractured left radius and dislocation of the right shoulder.

5. On 19 November 2003, he instructed Blumers to act as his solicitors. On 27 November 2003, Ms Blumer of that firm wrote to NRMA Insurance Limited, the authorised insurer of the defendant's vehicle, notifying the plaintiff's claim and attaching a claim form verified by the plaintiff by statutory declaration. The plaintiff described the circumstances of the accident in the claim form in the following terms:

I was proceeding in a westerly direction along Wentworth Avenue with right of way when vehicle 1 pulled out in front of me from Brisbane Avenue causing me to brake heavily which caused the front wheel to lose traction, hit the ground and end up facing in the opposite direction in front of vehicle 1.

The plaintiff illustrated this description with a diagram of the intersection showing the positions of the vehicles.

6. The claim was evidently assigned within NRMA to Ms D M Watts, a senior injury claims consultant. Ms Watts made application for a police report, received by NRMA on 18 December 2003. The report confirmed that police officers had attended the accident scene at about 10.00 pm. They observed the plaintiff being treated by ambulance officers. He told them that he had been riding his motorcycle in the kerbside lane north on Bowen Drive. As he was approaching Brisbane Avenue, the defendant's van proceeded into his path without stopping at the stop sign. The plaintiff braked heavily and the cycle fell to his right, continuing to move a short distance on the road surface before stopping. There was no impact with the van. The plaintiff told the police that the van driver stopped and helped to remove the motorcycle from the road. The driver then went back to his van and drove away. The plaintiff was able to give the police the registration number of the van and to provide a description of the defendant. The police were unable to locate the defendant, who had apparently moved from the address recorded in connection with the registration of the van. The report noted that no further action was proposed until the defendant was located.

7. On 29 January 2004, Ms Watts wrote to the plaintiff's solicitors saying, inter alia:

The enquiries into the circumstances of the accident are now complete and we admit our insured has breached their duty of care to your client.

8. The plaintiff's solicitors commenced proceedings by originating application in this Court on 26 March 2004. As required by the rules, the originating application was accompanied by a statement setting out particulars of the circumstances of the accident and particulars of the defendant's alleged negligence. The relevant portion of the statement is as follows:

1. At about 9.30 pm on about 30 October 2003:

(a) the plaintiff was riding a Kawasaki ER5 motorcycle ACT registration 59124 in a westerly direction along Wentworth Avenue, Barton in the Australian Capital Territory, intending to pass by the intersection with Brisbane Avenue;

(b) the defendant himself or by his agent was driving a Toyota Hiace 100 series white van, ACT registration YAL-O3A in a northerly direction along Brisbane Avenue in Barton, failed to stop at a "stop" sign at the intersection of Brisbane and Wentworth avenues, and continued onto Wentworth Avenue failing to give way to the plaintiff and crossing in the path of the plaintiff's vehicle, thereby causing the plaintiff to brake heavily to avert a collision, causing the motorcycle to fall to the ground.

2. The plaintiff's fall was caused by the negligence of the defendant, particulars of which are as follows:

PARTICULARS OF NEGLIGENCE

(a) failing to give way to traffic with right of way;

(b) failing to heed stop sign;

(c) failing to keep any, or any proper lookout;

(d) driving under the influence of alcohol;

(e) driving at a speed too fast in all the circumstances;

(f) failing to take any or any adequate evasive action to avoid the plaintiff;

(g) leaving the scene of the accident.

9. There is no evidence as to whether or not the defendant was served personally with the originating process, but on 17 June 2004 an appearance was entered by Hunt & Hunt, one of NRMA's panel firms of solicitors. On 20 July 2004, Hunt & Hunt delivered a defence. The opening paragraphs were:

1. The defendant admits the allegations in paragraph 1 of the Form 1.4 statement to accompany originating application.

2. The defendant admits a breach of duty of care but denies the precise particulars of negligence alleged in paragraph 1 of the Form 1.4 statement to accompany originating application.

The particulars of negligence were set out in paragraph 2 of the statement, and the reference to paragraph 1 in clause 2 of the defence is clearly a mistake. The balance of the defence consisted of denials that the plaintiff was injured, and other matters relevant to quantum. There was no allegation of contributory negligence on the part of the plaintiff.

10. The evidence in support of the application comprises two affidavits by Ms Ana Forster, a solicitor employed by Sparke Helmore, another NRMA panel firm. Her firm received instructions to act for the defendant on 5 November 2004, and she realised from a perusal of the material forwarded to the firm by NRMA that Hunt & Hunt had previously been instructed in the matter. She arranged for the filing of a notice of change of solicitor, and conducted a review of the file. She was concerned that liability had been admitted without a statement having been taken from the defendant. She recommended to NRMA that a statement be obtained. On 23 December 2004, Mr A Reilly of NRMA conducted an oral question-and-answer session with the defendant, which was recorded and transcribed. The defendant gave a Kaleen address different from the addresses the police had had available to them from motor registry records. During the course of the interview, the defendant gave a version of the incident in the following terms:

I was travelling down Brisbane Avenue towards Bowen Drive - as I was approaching the stop sign I was preparing to stop - I could see cars coming around Bowen Drive so I was stopping, I mean there was a stop sign so I had to stop anyway. There was a motorbike approaching the intersection and as I got closer to the stop sign he was on the ground and sliding past me.

11. The defendant said that he had been working at the Landmark Apartments building site off Bowen Drive just north of the intersection and had probably driven through it every day for the previous twelve months. At the time of the incident, he was not coming from work but from a friend's house. He said that he saw at least two cars and a motorbike coming from his right. The motorbike and one car were "pretty much side by side" and there was another car behind the motorbike. The bike and cars were about thirty metres from the intersection when he first saw them, and he was some twenty or thirty metres back from the stop sign. He was asked what he saw in relation to the motorbike at the time he was slowing down for the stop sign. His reply was:

. . . I took my eye off him for a second because, like to stop at the sign and I was looking at the sign as well and he just disappeared and the next thing I realised of him was the sparks flying up off his bike as he slid past in front of me.

He estimated the speed of the motorbike and other traffic at about sixty kilometres per hour which he said was the speed limit in the area. All vehicles had their headlights on, and the defendant had his indicator on (presumably his right indicator.)

12. He was asked what happened next after he saw the shower of sparks. He replied:

After, like when everything stopped? He shot past the front of me and I actually drove across Bowen Drive and pulled up at the side of the road and then got out to help him. His bike was in the gutter further down the street and he got up. He seemed a bit disorientated when he first got up. I picked his motorbike up for him and pushed it off the road. One of the other cars, I am not sure whether it was one of the other cars that was coming around the corner as he did that stopped, but another car stopped and said, asked him if he was all right and he said "yes I'm all right" and the car drove off. I pushed the bike to the side of the road and then he started going on that I'd gone through the stop sign and he didn't. I said "look I am here to help you mate". I didn't like, I didn't go through the stop sign. If I had gone through the stop sign I would have either run him over or he would have gone straight underneath me. He started to get agitated then, told me I was an arsehole, carried on. I said "well right I can't help you any more if you are going to be like this" and I left.

The defendant then went to his girlfriend's house in Queanbeyan. If this was his intention prior to the incident, it would have been consistent with him turning right into Wentworth Avenue. At no time did he hear anything from the police.

13. In April 2004, the defendant received a letter, correctly addressed to his Kaleen address, from a firm of solicitors in Melbourne acting for the property damage insurers of the plaintiff's motorcycle, claiming some $5,500 for damage to the bike and incidental expenses. He replied by letter dated 30 April 2004, denying liability and explaining his version of the incident. Ms Forster telephoned the Melbourne solicitor on 2 March 2005. He told her that he had sent copies of his firm's correspondence with the defendant to the plaintiff and had not heard back from him. He did not say when he had done so.

14. The present application was made by notice of motion dated 23 February 2005. Ms Blumer says in her affidavit that on the basis of the admissions made in the NRMA letter and the subsequent defence, she formed the view that it was not necessary to make any further enquiries as to the defendant's breach of duty. The first she knew of any allegation that there were two other vehicles at the scene of the accident and that the driver of one stopped and spoke to the plaintiff was when she read Ms Forster's affidavit of 24 February 2005. She regards it as unlikely that the drivers of the vehicles could be located so long after the accident.

15. The defendant seeks leave to deliver an amended defence, amending paragraphs 1 and 2 of the defence as delivered, adding a paragraph containing a denial limited to quantum, and adding a paragraph alleging contributory negligence. The proposed amended paragraphs 1 and 2 would read as follows:

1. The defendant does not admit paragraph 1(a) of the Form 1.4 statement to accompany originating application.

2. The defendant denies paragraphs 1(b) and 2 of the Form 1.4 statement to accompany originating application.

16. The proposed paragraph relating to contributory negligence is as follows:

9. Further or in the alternative, if the plaintiff was injured as alleged (which is denied), his injury was caused or contributed to by his own negligence.

PARTICULARS OF CONTRIBUTORY NEGLIGENCE

(a) failing to take proper care for his own safety;

(b) riding his motorcycle at a speed that was excessive in the circumstances;

(c) riding his motorcycle in a dangerous manner;

(d) failing to steer or control his motorcycle so as to avoid the motorcycle falling to the ground.

17. The proposed paragraphs 1 and 2 go beyond a mere denial of negligence. The denials extend to every allegation of fact made by the plaintiff in the paragraphs set out. These include a denial that the defendant was the driver of the van, a non-admission that the plaintiff was riding his motorcycle at the time and place pleaded, and a denial that the motorcycle fell to the ground. The effect of the denials would be to put the plaintiff to proof of every ingredient of his cause of action. This contrasts with the admissions previously made. The insurer specifically admitted that its insured, the defendant, had breached his duty of care to the plaintiff. This encompassed admissions that the plaintiff's motorbike fell and that the plaintiff hit the road, and also that the defendant was driving the van at the time of the incident, that he was negligent and that his negligence was causative of the accident.

18. I had occasion to deal with a similar application in Reinicke v Neilson [2004] ACTSC 5 (27 February 2004, unreported). I there set out the principles governing the question of withdrawal of an admission of liability by a defendant in respect of a motor vehicle accident. I referred to Celestino v Celestino, a decision of the Federal Court of Australia (Spender, Miles and Von Doussa JJ, 16 August 1990, unreported) on appeal from a single judge of this Court. Their Honours quoted a basic statement of principle in relation to amendments, expressed by Bowen LJ in Cropper v Smith (1884) 26 Ch D 700 at 710:

The object of courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases . . . I know of no kind of error or mistake which, if not fraudulent or intended to overreach, the court ought not to correct, if it can be done without injustice to the other party . . . as soon as it appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if it can be done without injustice, as anything else in the case is a matter of right.

As their Honours noted, this passage was approved by the High Court of Australia in Clough & Rogers v Frog (1974) 48 ALJR 4481. Their Honours commented, however, that the principle is applicable only where an error or mistake has been demonstrated.

19. Their Honours also drew attention to the proposition that, in the absence of clear evidence to the contrary, a court is entitled to assume that counsel who makes an admission in the course of the conduct of a trial has satisfied himself or herself that the admission was, on the client's version of the facts, a proper admission to make: Langdale v Danby (1982) 1 WLR 1123 per Lord Bridge of Harwich at 1134. Their Honours extended this assumption to admissions made by solicitors in the course of litigation, whether in pleadings or in correspondence. Where leave is sought to withdraw an admission, a court will require an explanation for the making of an admission which must be a sensible one based on evidence of a solid and substantial character (Celestino at para 12). On the facts in Celestino, the trial judge had correctly refused leave to withdraw the admission on the ground that no sufficient explanation had been given about the circumstances which led to it being made, or the later decision to seek to withdraw it (para 13).

20. Their Honours said that even where there was a satisfactory explanation for the making of an admission in error, the admission could be withdrawn only where no injustice would be occasioned to the other party. If the other party had relied on the admission in good faith to his or her detriment, the court would not permit it to be withdrawn. The longer the lapse of time between admission and withdrawal, the more likely it was that the court would infer prejudice: it is to be expected that memories of witnesses and parties will fade over time, and that lines of enquiry will become cold. Although prejudice in particular respects might not be apparent on the information before the court, the probability of unidentified prejudice, depending upon the length of the delay, can be assumed.

21. The principles governing the exercise of the discretion whether or not to approve the withdrawal of an admission were set out by Santow J, as his Honour then was, in Drabsch v Switzerland General Insurance Co Limited (Supreme Court of New South Wales, 16 October 1996, unreported). His Honour was dealing with a commercial dispute in the equity division of the court, on appeal from a Master, and the principles stated will not necessarily translate precisely to an action for damages for personal injury. They may be summarised, relevantly for the present application, as follows:

(a) Where a party makes a clear and distinct admission which is accepted by the opponent and acted upon, an application to withdraw the admission should not be freely granted.

(b) The question is to be considered in the context of each individual matter, but the general guideline is that the party seeking to withdraw should provide some good reason why the court should disturb what was previously conceded.

(c) Where the court is satisfied that an admission has been made after consideration and advice such as from an expert and after a full opportunity to consider its case and whether the admission should be made, admissions made with deliberateness and formality would ordinarily not be permitted to be withdrawn. The court will not approve the withdrawal of an admission where the application to withdraw is actuated by purely tactical reasons.

(d) It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where the admission was made inadvertently or without due consideration of material matters. Leave may be refused if the other party has changed its position in reliance on the admission.

22. In the present case, as in Reinicke, the admission was initially not made by solicitor or counsel, but by the defendant's insurer, through a claims officer employed in its compulsory third party claims department. It is common knowledge in the territory that NRMA Insurance Limited is the sole authorised insurer under the Road Transport (General) Act 1999, so that all motor vehicles registered in the territory are required to be covered by a third party policy issued by that company. It is common knowledge within the legal profession that the company manages claims under those policies through an experienced staff of claims officers, and that the company generally does not instruct solicitors prior to the institution of proceedings, regularly settling claims involving large sums of money and complex legal issues direct with solicitors representing claimants. These are matters of which I may take notice without proof by evidence: Evidence Act 1995, s 144. An admission made by letter over the hand of a claims officer is in a different category to an admission which might be made by an unrepresented litigant. It is clear from the correspondence that the admission was made after consideration of the police report and the plaintiff's claim form. The admission was stated to be made following the insurer's enquiries into the circumstances of the accident. It was carefully worded as an admission of breach of the defendant's duty of care to the plaintiff, rather than being framed as an admission of liability. I take this to reflect an awareness on the part of the claims officer that damage is a necessary ingredient of the tort of negligence, and that an admission of liability would include an admission of at least some damage. The admission was a clear and distinct one, and was accepted by the plaintiff. I am satisfied that it was made by the insurer after due deliberation by an experienced claims officer aware of the matters which ought to be taken into account in arriving at such a decision, and after a full opportunity to consider the insurer's case and whether the admission should be made. The claims officer was aware from the police report that that the police had been unable to find the defendant. In the absence of any contrary evidence, she must be taken to have turned her mind to the question of whether efforts should be made by the insurer to find the defendant and take a statement from him. The admission was made, to use the words of Santow J in Drabsch, with deliberateness and formality. It was not made inadvertently or without due consideration of any material matters. The admission has not been shown to be contrary to the actual facts: it remains consistent with acceptance of the plaintiff's case.

23. A further relevant factor is that the admission was made by an insurer to which legal advice is readily available. I take judicial notice of the fact that NRMA has a panel of firms of solicitors in Canberra, and that panel firms are regularly instructed by NRMA in actions of this kind. The plaintiff was, to the insurer's knowledge, represented by solicitors. The insurer must be taken to have decided that the obtaining of legal advice prior to making the admission was unnecessary.

24. Notwithstanding Ms Blumer's affidavit and the submissions of counsel for the plaintiff, I am not satisfied that there has been any actual prejudice to the plaintiff arising from reliance on the admission. If the admission had not been made, the plaintiff would not have come into possession of the transcript of the interview with the defendant, and would have been unaware even now that the defendant might ultimately give evidence that there had been other vehicles at the scene of the accident.

25. In the circumstances it seems to me extremely unlikely that the plaintiff's solicitors would have advertised seeking witnesses to the accident, or undertaken other investigations directed to identifying witnesses. If, as the defendant says, another driver stopped to offer assistance to the plaintiff, it is far from clear that that driver witnessed the accident. It seems from the defendant's statement that the plaintiff and the motorbike were already off the road by the time this driver stopped.

26. Although I am not satisfied that there has been any actual prejudice to the plaintiff arising from reliance on the admission, I must take account of the possibility of some unidentifiable prejudice arising from the delay. I have already mentioned the reference to this in Celestino. In a somewhat different context, the extension of a limitation period, McHugh J spoke in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 of the deterioration in the quality of justice arising from delay. As his Honour said, sometimes the deterioration is not recognisable even by the parties: prejudice may exist without the parties or anybody else realising that it exists. Evidence can disappear without anybody knowing that it ever existed. The longer the delay, his Honour said, the more likely it is that the case will be decided on less evidence than was available to the parties at the time the cause of action arose. In the present case, the admission by letter was made three months after the accident, and the plaintiff's solicitors became aware that it was sought to be withdrawn thirteen months later. In the scheme of things, this cannot be seen as an inordinate delay, and the inference of potential prejudice is not particularly strong.

27. Counsel for the defendant placed some reliance on a decision of McLoughlin DCJ, Ness v Graffen (2003) 60 NSWLR 549. His Honour in that case was dealing with an application to strike out a portion of a defence withdrawing a previous admission in an action for damages for personal injury under the Motor Accidents Compensation Act 1999 of the State of New South Wales. His Honour found no justification for the withdrawal of the admission, which had been made deliberately after the insurer had assessed all material and information, and struck out the paragraphs in question. His Honour made reference to a number of NSW decisions at first instance. The decisions relate to applications to withdraw admissions made by insurers under the Motor Accidents Compensation Act and its predecessor, the Motor Accidents Act 1988. Those Acts contain specific provisions imposing obligations on insurers in relation to admissions, and are of limited assistance when dealing with an action for damages at common law.

28. Counsel for the defendant sought to make something of the fact that the existing defence, filed by Hunt & Hunt in July 2004, whilst admitting breach of duty of care, denied the precise particulars of negligence pleaded by the plaintiff. It does not seem to me that there was anything in the defence to put the plaintiff on notice that anything had changed since the admission in correspondence earlier in the year. Breach of duty of care was admitted, and hence the precise particulars of negligence pleaded had become were no longer relevant.

29. As I have mentioned, the defendant now seeks to withdraw not merely the admission of breach of duty of care, but also the admissions of the facts pleaded by the plaintiff. If I permitted the proposed amendments, the defendant would be free to sit mute and require the plaintiff to prove that the defendant was the driver of the van, and the circumstances of his accident. This seems to me to have a touch of the tactical about it.

30. Although there is no evidence of actual prejudice, and the lapse of time is not so lengthy as to give rise to a strong presumption of probable unidentified prejudice, the defendant has not established that the admission was made in error. On the contrary, the inference from Ms Forster's affidavits is that she simply took a different view to the claims officer, Ms Watts, as to whether efforts to locate the defendant and obtain a statement from him were justified.

31. No evidence has been adduced on behalf on the defendant from Ms Watts or any other NRMA claims officer, or from the partner or solicitor who had the carriage of the action at Hunt & Hunt. I draw the available inference that their evidence would not have assisted the defendant to establish that the admission was made by reason of some mistake.

32. It is important in the conduct of litigation of this kind that solicitors should be able to rely on admissions, whether by legal practitioners, or insurers regularly involved in matters before the Court such as NRMA. The onus is on the party seeking to withdraw an admission to satisfy the Court that it is in the interests of justice to permit the admission to be withdrawn. There is no onus on the other party, for example to establish actual prejudice.

33. In the present case, the defendant has led no evidence which could enable the Court to find that the admission was made because of some error. The admission was made after a detailed consideration of all the information then available to the insurer, and in circumstances where the insurer clearly intended the plaintiff to act on it. This is not a case where the admission can be seen to be contrary to facts which will inevitably be found. On the contrary, this is a case where the claims officer who made the admission saw that admission as being, at the time, in the interests of the insurer and of the defendant. Subsequently a solicitor, after reviewing the material, has taken the view that the interests of the defendant and the insurer might be better served by adopting a different position.

34. The application does not satisfy the criteria necessary to be established before an admission will be permitted to be withdrawn. Leave should be refused in relation to the proposed paragraphs 1 and 2 of the amended defence.

35. It has not been suggested by the plaintiff that the defendant should not be permitted to raise the further denial in relation to quantum in the proposed paragraph 5 of the amended defence, and leave will be granted to amend the defence in that respect.

36. The admission of breach of duty of care is not inconsistent with an assertion by the defendant that the plaintiff was guilty of contributory negligence. True it is that contributory negligence is not pleaded in the existing defence, but I am not persuaded that there is any prejudice to the plaintiff by permitting that defence to be raised now although it was not raised in July 2004. An admission of liability would have been inconsistent with a subsequent assertion of contributory negligence, but the defendant was careful not to admit liability. The admission made was only of breach of duty of care. I am accordingly not persuaded that there would be any unfairness to the plaintiff in allowing the defendant to raise now, for the first time, a defence of contributory negligence. Leave should be granted to amend the defence by adding the proposed paragraph 9.

37. As to costs, the defendant comes to court seeking an indulgence. The defendant's application was properly opposed by the plaintiff, who has been successful as to the principal issue sought to be raised. Unless there are any other factors of which I am at this stage unaware, I propose to order that the defendant pay the plaintiff's costs of the application and occasioned by the amendments.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.