Arici v AAI Limited t/as GIO

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Arici v AAI Limited t/as GIO [2022] NSWPIC 301
CLAIMANT:	Erdem Arici
INSURER:	AAI Limited t/as GIO
MEMBER:	Anthony Scarcella
DATE OF DECISION:	14 June 2022
CATCHWORDS:	MOTOR ACCIDENTS – assessment of damages under division 7.6, section 7.36 of the Motor Accident Injuries Act 2017 (2017 Act) in the Commission; whether the Claimant had used his best endeavours to settle the claim before referring it to the Commission for assessment under section 7.32(3) of the 2017 Act; the meaning of ‘best endeavours’; comparison with authorities in contract law; Sheffield District Co v Great Central Railway, Transfield Pty Ltd v Arlo International Ltd, SVI Systems Pty Ltd v Best & Less Pty Ltd, Joseph Street Pty Ltd v Tan, Cypjayne Pty Ltd v Babcock & Brown International Pty Ltd, Waters Lane Pty Ltd v Sweeney and Centennial Coal Company Ltd v Xstrata Coal Pty Ltd; 2017 Act authority of Mammone v Insurance Australia Limited t/as NRMA applied; Held- the Claimant did not approach the insurer to propose settlement discussions nor did he serve an offer of settlement; there was a failure to prepare the matter with sufficient evidence to enable either party to engage in any settlement negotiations; on the available evidence the claimant failed to use his best endeavours to settle the claim before referring it for assessment; the proceedings are misconceived and lacking in substance, for the purposes of section 54(b) of the Personal Injury CommissionAct 2020, because they have been commenced in circumstances where there has been both substantive and temporal non-compliance with section 7.32(3) of the 2017 Act.
DETERMINATIONS MADE:	1. For the purposes of section 7.32(3) of the Motor Accident Injuries Act 2017, the claimant has failed to use his best endeavours to settle the claim before referring it for assessment under Division 7.6 of the Motor Accident Injuries Act 2017.
ORDERS MADE:	2. The proceedings are dismissed in accordance with section 54 of the Personal Injury Commission Act 2020.

STATEMENT OF REASONS

BACKGROUND

The matter for determination relates to an assessment of damages under Division 7.6, section 7.36 of the Motor Accident Injuries Act2017 (the MAI Act) in the Personal Injury Commission (the Commission).
The claimant, Mr Erdem Arici, was involved in a motor accident on 13 March 2018 (the motor accident).
The three-year limitation period under section 7.33 of the MAI Act expired on 13 March 2021.

PROCEDURE BEFORE THE COMMISSION

Mr Arici’s application to assess damages (the Application) was lodged on 16 April 2021, that is, about one month after the three-year limitation period expired.
On 22 July 2021, the insurer, AAI Limited t/as GIO (GIO), lodged a reply to the Application (the Reply).
The dispute was referred to me to determine the preliminary issues under sections 7.32(3) and 7.33 of the MAI Act.
On 17 January 2022, the parties participated in a teleconference with me.
Ms Tanja Maksimovic, solicitor of Law Partners, appeared for Mr Arici and Mr Julian Kenda, solicitor of Moray & Agnew Lawyers, appeared for GIO.
The parties agreed that I should deal with the preliminary issue as to whether Mr Arici had complied with section 7.32(3) of the MAI Act before considering the section 7.33 issue. That is, the issue of whether Mr Arici had used his best endeavours to settle the claim before referring it to the Commission for assessment under Division 7.6 of the MAI Act.
At the time of the teleconference on 24 January 2022, there were outstanding matters relevant to any assessment, including Mr Arici’s taxation material, authorities, medico-legal assessments and his entitlement to non-economic loss damages.
At the teleconference on 24 January 2022, I issued a direction to Mr Arici for the lodgement of written submissions on the section 7.32(3) issue by 21 February 2022. I issued a direction to GIO for the lodgement of written submissions in reply by 8 March 2022. The parties agreed that, at the conclusion of the time allowed for submissions, the preliminary issue would be determined ‘on the papers’. I have concluded that the preliminary issue can be determined ‘on the papers’ under section 52 of the Personal Injury Commission Act 2020 (the PIC Act) and Procedural Direction PIC2, in that, I am satisfied that sufficient information is available in connection with the proceedings to allow me to determine the dispute without holding a formal hearing.
On 19 May 2022, GIO completed an internal review of its decision in respect of whole person impairment.[1] The outcome of the internal review was that GIO set aside its original decision and accepted that Mr Arici’s whole person impairment as a result of the injuries he sustained in the motor accident were greater than 10%.

EVIDENCE

[1] AD12.

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)   the Application and attached documents;
(b)   the Reply and attached documents;
(c)   Mr Arici’s Application to Admit Late Documents dated 24 June 2021 and attached written submissions;[2]
(d)   Mr Arici’s written submissions dated 8 February 2022 and attached documents;[3]
(e)   GIO’s written submissions dated 8 March 2022;[4]
(f)    Mr Arici’s Application to Admit Late Documents dated 21 April 2022 and attached clinical records of Dr Selwyn Smith,[5] and
(g)   Mr Arici’s Application to Admit Late Documents dated 28 May 2022 and attached GIO outcome of review dated 19 May 2022.[6]
[2] AD2.
[3] AD6.
[4] AD8.
[5] AD10.
[6] AD12.

Oral evidence

Neither party sought to adduce oral evidence from or to question any witness.

SUBMISSIONS

Mr Arici’s submissions

Mr Arici provided detailed written submissions dated 8 February 2022.[7] I only intend to provide an overview of those detailed submissions.
[7] AD6.
Mr Arici’s overarching submission was that, despite using his best endeavours to resolve the claim, it was simply not capable of resolution given his injuries were yet to stabilise and that his entitlement to non-economic loss damages remained in dispute (at the time of lodging the Application).
Mr Arici’s submissions provided the following chronology by way of background:
(a)   Mr Arici lodged his application for personal injury benefits on 11 April 2018;
(b)   GIO accepted liability for statutory benefits for up to 26 weeks by way of a notice dated 4 May 2018;
(c)   GIO denied liability for statutory benefits beyond 26 weeks by way of a notice dated 6 July 2018 due to an allegation that Mr Arici’s vehicle was not involved in the motor accident;
(d)   GIO’s decision dated 6 July 2018 was internally reviewed and overturned, resulting in liability being accepted in full (non-minor injuries and fault);
(e)   Mr Arici lodged his application for damages under common law on 19 November 2019;
(f)    GIO, through its lawyers, accepted liability for the claim for damages on 29 April 2020;
(g)   GIO requested particulars of Mr Arici’s claim on 29 April 2020 and 28 July 2020;
(h)   Mr Arici responded to GIO’s request for particulars on 18 December 2020;
(i)    Mr Arici’s condition deteriorated and on 29 May 2020, he underwent an L5/S1 decompression surgery;
(j)    Mr Arici consulted Dr Jeffrey Burtucen, psychiatrist, at the request of his lawyers on 21 July 2020;
(k)   Dr Burtucen was unable to assess Mr Arici’s whole person impairment in respect of his motor accident related psychological injuries because he had not undergone appropriate psychiatric treatments and therefore, had not reached maximum medical improvement;
(l)    Mr Arici consulted Dr Sikander Khan, general surgeon, at the request of his lawyers on 2 February 2021 (the chronology failed to refer to Mr Arici’s first consultation with Dr Khan on 3 September 2019);
(m) Mr Arici’s lawyers discovered, on 15 April 2021, that his Application had not been lodged with the Commission in accordance with section 7.33 of the MAI Act;
(n)   Mr Arici’s Application was lodged in the Commission on 16 April 2021 submitting that the matter was not ready to proceed to assessment given that non-economic loss remained a live issue and that the matter would not be ready to proceed to assessment until May 2022;
(o)   Dr Khan assessed Mr Arici’s whole person impairment in respect of his motor accident related physical injuries at 11% on 22 April 2021;
(p)   GIO, in its reply, took issue with the late filing of the Application and otherwise, agreed that the matter was not ready to proceed to assessment;
(q)   Mr Arici consulted Dr John Bentivoglio, orthopaedic surgeon, at the request of GIO on 28 May 2021 and assessed a 10% whole person impairment;
(r)   GIO requested further and better particulars on 15 September 2021;
(s)   Mr Arici consulted Dr Graham Vickery, psychiatrist, at the request of GIO on 26 October 2021 and assessed a 6% whole person impairment;
(t)    Mr Arici was re-examined by Dr Burtucen at the request of his lawyers on 3 November 2021 and assessed a 24% whole person impairment;
(u)   Mr Arici served Dr Burtucen’s report on GIO on 10 December 2021 and requested it to concede that his degree of impairment exceeded 10% whole person impairment;
(v)   GIO had not, at the time of making written submissions, conceded that Mr Arici’s degree of impairment exceeded the 10% whole person impairment threshold;
(w)     Mr Arici responded to GIO’s further request for particulars on 16 December 2021, and
(x) GIO had not yet made any offer of settlement under section 6.22 of the MAI Act.
At the time of the lodgement of Mr Arici’s Application, his injuries had not stabilised and his entitlement to damages for non-economic loss was still in issue. Despite the Application having been lodged outside the three-year limitation period, it was lodged with the principal intention of preserving the limitation period prescribed by section 7.33 of the MAI Act. Both parties agreed that the Application was not ready to proceed to the assessment of damages until May 2022.
The delay in resolving the dispute about permanent impairment was because Mr Arici’s psychological injuries had not stabilised at the time of the lodgement of the Application. Such delay could not be reasonably attributed to any fault or negligence on the part of Mr Arici.
Mr Arici was at the mercy of his treatment progress and consequential stabilisation of his injuries. Whilst his psychological injuries have since stabilised to an appropriate degree to permit an assessment of permanent impairment, the issue of entitlement to damages for non-economic loss remains outstanding.
At the time of the lodgement of the Application, GIO had yet to qualify any medico-legal evidence.
Another barrier to Mr Arici resolving his claim was that GIO had yet to comply with requests for a copy of its file made by Mr Arici on 14 February 2020 and on 13 July 2021. As such, GIO’s conduct has, in part, added to the delay in the resolution of the claim, albeit to an inconsequential degree.
In the circumstances, Mr Arici has used his best endeavours to settle the claim before referring the dispute to the Commission. Despite his best efforts, the matter was simply not capable of resolution at the time of the lodgement of the Application.

GIO’s submissions

GIO provided detailed written submissions dated 8 March 2022.[8] I only intend to provide an overview of those detailed submissions.
[8] AD8.
In the absence of judicial consideration of the meaning of the phrase ‘best endeavours’ in section 7.32(3) of the MAI Act, GIO referred to a number of cases, including, Sheffield District Co v Great Central Railway[9] (Sheffield), Transfield Pty Ltd v Arlo International Ltd[10] (Transfield), SVI Systems Pty Ltd v Best & Less Pty Ltd[11] (SVI), Joseph Street Pty Ltd v Tan[12] (Joseph), Cypjayne Pty Ltd v Babcock & Brown International Pty Ltd[13] (Cypjayne), Waters Lane Pty Ltd v Sweeney[14] (Waters) and Centennial Coal Company Ltd v Xstrata Coal Pty Ltd[15] (Centennial).
[9] Sheffield District Co v Great Central Railway (1911) 27 T.L.R.451.
[10] Transfield Pty Ltd v Arlo International Ltd (1980) CLR 83.
[11] SVI Systems Pty Ltd v Best & Less Pty Ltd [2001] FCA 279.
[12] Joseph Street Pty Ltd v Tan (2012) VR 241.
[13] Cypjayne Pty Ltd v Babcock & Brown International Pty Ltd [2011] NSWCA 173.
[14] Waters Lane Pty Ltd v Sweeney [2006] NSWSC 222.
[15] Centennial Coal Company Ltd v Xstrata Coal Pty Ltd [2009] NSWCA 341.
GIO submitted that the obligation to use ‘best endeavours’ in the context of section 7.32(3) of the MAI Act requires a party to act honestly, reasonably and make a positive effort to perform the relevant obligation (that is, to settle the claim before referring it to assessment).
Section 7.32(3) of the MAI Act requires ‘best endeavours’ to be made before the claim is referred for assessment.
GIO drew attention to the following position prior to the lodgement of the Application:
(a)   Mr Arici had made no offers of settlement to GIO;
(b)   Mr Arici had not approached GIO to propose settlement discussions occur;
(c)   Mr Arici had not provided GIO various materials relevant to a proper assessment of his full entitlement to damages, including his tax returns, notices of assessment and PAYG summaries for the 2015 to 2020 financial years, notwithstanding the GIO’s longstanding requests, and
(d)   Mr Arici has since refused to provide a signed authority directed to the Department of Housing.
Mr Arici did not attach any substantive quantum evidence to the Application in accordance with rules 67 and 100 of the Personal Injury Commission Rules (the PIC Rules).
Whilst Mr Arici lodged the Application after the three year anniversary of the motor accident, there is nothing within the MAI Act, Regulations, Rules or Guidelines which permit an application unless there has been compliance with section 7.32(3) of the MAI Act.
The effect of the available evidence is that Mr Arici did not use his best endeavours to settle the claim before referring it for assessment.
None of those matters referred to could be fairly characterised as Mr Arici having used his best endeavours to settle the claim before commencing the proceedings. There was nothing which expressly or impliedly excused him from compliance with section 7.32(3) of the MAI Act.
Mr Arici had not approached GIO to propose settlement discussions occur, nor did he serve an offer of settlement. Taking that into account, GIO submitted Mr Arici made no genuine or reasonable attempt to settle the claim. He had a mandatory obligation to make ‘best endeavours’ to settle the claim prior to commencing the proceedings and did not do so. In this regard, GIO referred to Mammone v Insurance Australia Limited t/as NRMA[16] (Mammone).
[16] Mammone v Insurance Australia Limited t/as NRMA^{^[16]} [2021] NSWPIC 501.
Furthermore, by reference to Joseph, GIO submitted that it could not be suggested that Mr Arici did all he could reasonably do (as a reasonable and prudent party would do) to settle the claim before referring it for assessment. It certainly could not be said that Mr Arici, even with the qualification of ‘within reason’, left no stone unturned.
The proceedings should be dismissed.

FINDINGS AND REASONS

The legislation and legal principles

Section 7.32 of the MAI Act states:
“7.32 Reference of claim
(1)A claim for damages may be referred to the Commission by the claimant or the insurer, or both, for assessment under this Division.
(2)(Repealed)
(3)Parties to a claim must use their best endeavours to settle the claim before referring it for assessment under this Division.”
Section 7.33 of the MAI Act states:
“7.33 Reference of claim
A party to a claim cannot refer a claim for assessment under this Division more than 3 years after the motor accident concerned unless the party provides a full and satisfactory explanation for the delay to the Commission and the Commission grants leave for the claim to be referred for assessment in accordance with the Commission rules.”
The objects of the MAI Act are found in section 1.3(2). The objects relevantly include encouraging early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities;[17] providing early and ongoing financial support for persons injured in motor accidents;[18] and encouraging the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes.[19]
[17] MAI Act section 1.3(2)(a).
[18] MAI Act section 1.3(2)(b).
[19] MAI Act section 1.3(2)(g).
The meaning of the phrase ‘best endeavours’ in section 7.32(3) of the MAI Act has not yet been judicially considered in the context of the Act. However, ‘best endeavour’ obligations are well known in contract law.
In Sheffield, it was found that a ‘best endeavours’ obligation in a contract required the obliged party ‘to leave no stone unturned’, subsequent cases have modified this approach. Transfield and SVI suggest that ‘best endeavours’ clauses are now judged by standards of reasonableness. In Transfield, Mason J stated that an obligation to use ‘best endeavours’ is measured by what is reasonable in the circumstances, and in consideration of the nature, capacity, qualifications and responsibilities of the person who owes the obligation, in the context of the relevant contract.
In Joseph, it was stated that an obligation to use ‘best endeavours’ is measured by what is reasonable in the circumstances, and in consideration of the nature, capacity, qualifications and responsibilities of the person who owes the obligation, in the context of the relevant contract. Further, ‘best endeavours’ requires:
(a)   a party to do all it can reasonably do to act in the same manner as a reasonable and prudent party would act if it was acting in its own interests to achieve a certain object;
(b)   a party do the acts required to achieve the object with the same vigour expected of a party attempting to secure its own interests until the party reasonably considers that further attempts to achieve the object of the obligation would have a remote chance of succeeding, and
(c)   a party, within reason, is to act in a manner so as to leave no stone unturned to achieve the object.
In Cypjayne and Waters, it was considered that an obligation to use ‘reasonable endeavours’ and an obligation to use ‘best endeavours’, were terms that imposed similar obligations.
In Centennial, the NSW Court of Appeal considered that reasonable endeavours may require the party under the obligation to take a step even where success was not guaranteed and/or the chance of succeeding was equal to or less than 50%.
In Mammone, Member Williams found that the overwhelming effect of the available evidence in the matter before him was that the claimant had made no endeavours at all to settle the claim prior to referring it to the Commission for assessment. The claimant did not make an offer of settlement or enquire of the insurer if it was prepared to enter into settlement negotiations prior to the commencement of proceedings. Member Williams found that, whilst the insurer’s answer to any approach in respect of settlement, particularly given the basis of its denial of liability for the damages claim, may have been a resounding “no”, that enquiry would have been consistent with the claimant’s obligation under section 7.32(3) of the MAI Act.

Consideration and findings

I now turn to the application of the relevant legislation and the legal principles referred to above and to the evidence in this matter.
It is not disputed that the Application was lodged with the Commission about one month outside the three-year time limit.
The matters put by GIO in its submissions at [27] above were not disputed by Mr Arici.
Section 7.32(3) of the MAI Act imposes in clear and unambiguous terms a mandatory obligation on the parties to a claim to use their best endeavours to settle the claim before referring it to the Commission for assessment.

The authorities referred to above should be treated with some caution as they deal with the term ‘best endeavours’ in a contractual/commercial context. Therefore, it is necessary to consider the term by reference to the objects of the MAI Act. Section 1.3(4) states that, in the interpretation of a provision of the MAI Act or the Regulations, a construction that would promote the objects of the Act or the provision is to be preferred to a construction that would not promote those objects. In reaching my determination, I have considered the objects of the MAI Act.
Acknowledging the caution referred to above, the Australian authorities referred to by GIO suggest that ‘best endeavours’ clauses are now judged by standards of reasonableness; the obligation to use best endeavours is measured by what is reasonable in the circumstances; and in consideration of the nature, capacity, qualifications and responsibilities of the person who owes the obligation. Notions of reasonableness and context are the critical considerations that emerge from these authorities. They are considerations that should be applied when determining the meaning of ‘best endeavours’ for the purposes of section 7.32(3).
What constitutes ‘best endeavours’, for the purposes of section 7.32(3), will depend on the circumstances of each claim. The provision may not require an offer of settlement to be made in every case. It can be envisaged that, in some circumstances, the provision of particulars and evidence in support of a claim for damages may be found to satisfy the ‘best endeavours’ requirement. Different considerations may also arise in claims that cannot be made before the expiration of 20 months after the accident, in accordance with section 6.14(1).
The Application lodged by Mr Arici on 16 April 2021 had attached to it 40 pages of supporting documents, which included written submissions;[20] the application for personal injury benefits;[21] the application for common law damages;[22] the report of Dr Burtucen dated 21 July 2020;[23] the report of Dr Khan dated 3 September 2019;[24] and the NSW police report dated 21 July 2018.[25]
[20] Application at page 1.
[21] Application at pages 2-7.
[22] Application at pages 8-10.
[23] Application at pages 11-19.
[24] Application at pages 20-30.
[25] Application at pages 31-40.
The written submissions attached to the Application sought that the assessment of the matter be deferred until May 2022 or until the live issue as to Mr Arici’s entitlement to non-economic loss had been resolved. The written submissions did not address the section 7.32(3) issue or the section 7.33 issue.
The application for personal injury benefits, the application for common law damages and NSW police report were of little assistance in respect of the issue I am required to determine.
In his report dated 3 September 2019, Dr Khan opined that Mr Arici sustained the following injuries as a result of the motor accident:
(a)   musculo-ligamentous and facet joint trauma of the cervicothoracic spine;
(b)   pain in the right shoulder and arm radiating from the neck injury;
(c)   musculo-ligamentous injury and disc trauma at the T11/12 level of the thoracolumbar spine;
(d)   musculo-ligamentous injury and facet joint and disc trauma at the L5/S1 level of the lumbosacral spine;
(e)   radiculopathy affecting the left lower limb;
(f)    soft tissue injury to the lower jaw, and
(g)   psychological sequelae.
Dr Khan noted that Mr Arici had undergone appropriate investigations carried out by his general practitioner, followed by assessment with two neurosurgeons. None of the investigations or clinical records of Mr Arici’s general practitioner or neurosurgeons were attached in support of the Application. In fact, the only medical evidence attached to the Application were the reports of Dr Khan and Dr Burtucen, who were engaged by Mr Arici’s lawyers. There was nothing in Mr Arici’s submissions that assisted in identifying whether or when any such investigations or clinical records were provided to GIO. If such documents were in existence at the time of lodgement, I would have expected them to be included in the Application.
Dr Khan further opined that Mr Arici required surgery in the form of a microdiscectomy at L5/S1 as advised by his treating neurosurgeon, Associate Professor Mark Sheridan. On 15 May 2019, Medical Assessor James Bodel issued a Medical Assessment Treatment and Care – Causation Certificate concluding that, based on the medical information available at the time of the assessment, the proposed L5/S1 microdiscectomy was not reasonable and necessary.[26]
[26] R2.
Dr Khan also opined that, in respect of his psychological sequelae, Mr Arici required review by his treating psychologist and may require further counselling, If so advised by the psychologist. There are no clinical records or reports from any treating psychologist or psychiatrist supporting the Application. There was nothing in Mr Arici’s submissions that assisted in identifying whether or when any such clinical records were provided to GIO. If such documents were in existence at the time of lodgement, I would have expected them to be included in the Application.
Mr Arici consulted Dr Burtucen on 20 July 2020 at the request of his lawyers, being more than 10 months after Dr Khan had flagged psychological sequelae as a result of the motor accident. Dr Burtucen opined that Mr Arici had suffered chronic post-traumatic stress disorder of mild to moderate severity as well as a chronic adjustment disorder as a result of the motor accident. Dr Burtucen further opined that Mr Arici may suffer from some degree of permanent psychiatric whole person impairment but that his conditions had not been subjected to the appropriate repertoire of psychiatric treatments and therefore, had not reached the stage of maximum medical improvement.
In his written submissions, Mr Arici stated that he again consulted Dr Khan at the request of his lawyers on 2 February 2021. There is no report in evidence pertaining to that re-examination on 2 February 2021. Although, Mr Arici’s submissions did state that Dr Khan assessed Mr Arici’s whole person impairment in respect of his motor accident related physical injuries at 11% on 22 April 2021.
Mr Arici’s lawyers conceded that, on 15 April 2021, they realised that the Application had not been lodged with the Commission in accordance with section 7.33 of the MAI Act and proceeded to lodge it the following day.
The chronology provided in Mr Arici’s submissions at [16(o)-(w)] above were not relevant to the issue I am required to determine. Similarly, Mr Arici’s Application to Admit Late Documents dated 21 April 2022 and attached clinical records of Dr Selwyn Smith and his Application to Admit Late Documents dated 28 May 2022 and attached GIO outcome of review dated 19 May 2022, were not relevant to the issue I am required to determine. The events in the chronology and the late documents referred to above post-dated the lodgement of the Application.
I reject Mr Arici’s submission that, despite the Application having been lodged outside the three-year limitation period, it was lodged with the principal intention of preserving the limitation period prescribed by section 7.33 of the MAI Act. The submission is unconvincing because the limitation period had already expired and could not be preserved. The belated realisation that the limitation period had expired did not expressly or impliedly excuse Mr Arici from complying with section 7.32(3) of the MAI Act.
I find Mr Arici’s submission that both parties agreed that the Application was not ready to proceed to the assessment of damages until May 2022 to be of little assistance in respect of the issue of whether he had used his best endeavours to settle the claim before referring it to the Commission for assessment.
I reject Mr Arici’s submission that, despite using his best endeavours to resolve the claim, it was simply not capable of resolution given his injuries were yet to stabilise and that his entitlement to non-economic loss damages remained in dispute at the time the Application was lodged. It is clear from the observations made in [53]-[58] above that, evidence relied on by Mr Arici in support of his damages claim, together with particulars of the claim, could have been provided to GIO when the claim for damages was made and continuing thereafter until sometime before the Application was lodged. Mr Arici should have marshalled sufficient medical evidence and other evidence to support the heads of damage being claimed and provided it to GIO.
I find that, Mr Arici’s submission that he was at the mercy of his treatment progress and consequential stabilisation of his injuries unconvincing in the absence of medical evidence from his treatment providers.
The fact that, at the time of the lodgement of the Application, GIO had yet to qualify any medico-legal evidence does not excuse Mr Arici from complying with section 7.32(3) of the MAI Act.
Mr Arici submitted that another barrier to resolving his claim was that GIO had not complied with his requests for a copy of its file and as such, GIO’s conduct had, in part, added to the delay in the resolution of the claim, albeit inconsequentially. The submission is without merit and ignores his obligations under section 7.32(3) of the MAI Act.
I reject Mr Arici’s submission that, despite his best efforts, the matter was simply not capable of resolution at the time of the lodgement of the Application. The issue is not that the matter was incapable of resolution at the time of lodgement but rather that, Mr Arici used his best endeavours to settle the claim before referring it to the Commission for assessment, even where success was unlikely (refer to Mammone).
I agree with GIO’s submission that the obligation to use ‘best endeavours’ in the context of section 7.32(3) of the MAI Act requires a party to act honestly, reasonably and make a positive effort to perform the relevant obligation of settling the claim before referring it to the Commission for assessment. Such a construction of section 7.32(3) of the MAI Act allows the flexible application of the provision on a case by case basis and in a manner that is consistent with the objects of the MAI Act. In particular, it furthers the stated object of encouraging the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes. It does this by requiring the parties to take reasonable steps to settle the claim before referring it for assessment.
I agree with GIO’s submission that Mr Arici did not attach any substantive quantum evidence to the Application in accordance with rules 67 and 100 of the PIC Rules.
I agree with GIO’s submission that, whilst Mr Arici lodged the Application after the three-year anniversary of the motor accident, there is nothing in the MAI Act, Regulations, Rules or Guidelines which permit an application unless there has been compliance with section 7.32(3) of the MAI Act.
I agree with GIO’s submission that the effect of the available evidence is that Mr Arici did not use his best endeavours to settle the claim before referring it for assessment. None of the matters referred to in Mr Arici’s submissions could be fairly characterised as Mr Arici having used his best endeavours to settle the claim before commencing the proceedings. There was nothing which expressly or impliedly excused him from compliance with section 7.32(3) of the MAI Act.
The unchallenged evidence is that Mr Arici had not approached GIO to propose settlement discussions occur, nor did he serve an offer of settlement. In all the circumstances, Mr Arici made no genuine or reasonable attempt to settle the claim. He had a mandatory obligation to make ‘best endeavours’ to settle the claim prior to commencing the proceedings and did not do so.
In this matter, Mr Arici had legal representation and the parties were aware or ought to have been aware of time limitations. Mr Arici’s lawyers admitted to inadvertently having allowed the three-year time limit imposed by section 7.33 of the MAI Act to expire. On realising this oversight, the reaction of Mr Arici’s lawyers was to immediately lodge the Application in its present form. In the circumstances, I find that there was a failure to prepare the matter with sufficient evidence to enable either party to engage in any settlement negotiations for the reasons already stated above. Accordingly, I find that Mr Arici has failed to use his best endeavours to settle the claim before referring it to the Commission for assessment.
For the purposes of section 7.32(3) of the MAI Act, Mr Arici has failed to use his best endeavours to settle the claim before referring it for assessment under Division 7.6 of the MAI Act.
Section 54(b) of the PIC Act provides that the Commission may at any stage dismiss proceedings before it if it is satisfied that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance. Section 54(c) of the PIC Act provides for dismissal for any other relevant matters specified in the Commission Rules.
I find that the proceedings are misconceived and lacking in substance, for the purposes of section 54(b) of the PIC Act, because they have been commenced in circumstances where there has been both substantive and temporal non-compliance with section 7.32(3) of the MAI Act. That being so, the matter cannot be progressed any further as the non-compliance cannot be cured by any other provisions.
The proceedings are dismissed in accordance with section 54 of the PIC Act.
The dismissal of the proceedings does not mean Mr Arici is necessarily disentitled from lodging a further application in the Commission in the future. Section 7.33 of the MAI Act expressly permits him to seek leave to apply to do so after the three year anniversary of the motor accident. Of course, he will still be required to satisfy the provisions of section 7.32(3) of the MAI Act.

LEGISLATION

In making my decision I have considered the following legislation and guidelines:
(a) the PIC Act;
(b) the MAI Act;
(c) the PIC Rules, and
(d) Procedural Direction PIC2.

CONCLUSION

My determination and orders are set out in the Certificate of Determination attached to this Statement of Reasons.

[2022] NSWPIC 301

14 June 2022