Benjamin Mitchell v Australian Capital Territory
[2018] ACTSCFC 1
•12 October 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
FULL COURT
Case Title: | Benjamin Mitchell v Australian Capital Territory |
Citation: | [2018] ACTSCFC 1 |
Hearing Date: | 10 February 2016 |
DecisionDate: | 12 October 2018 |
Before: | Penfold, Burns and Wigney JJ |
Decision: | See [196] |
Catchwords: | APPEAL – Applicable legislation – Road Transport (Third Party Insurance) Act 2008 (ACT) – Republication 12 PERSONAL INJURY – Motor Vehicle Accident – relevance of the terms of s 97 of the Act to determining the correct interpretation of s 141 of the Road Transport (Third Party Insurance) Act 2008 (ACT) – whether a respondent to a motor accident claim can deny liability prior to the commencement of court proceedings and still make a mandatory final offer to settle a claim in a sum greater than $0 STATUTORY INTERPRETATION – objects of the Act – legislative scheme – encourage the speedy resolution of personal injury claims arising from motor vehicle accidents – whether a respondent is entitled to make a mandatory final offer without making some admission of liability – “denying liability altogether” – whether there was a basis for the appellant to give the respondent a compliance notice under s 158 of the Act |
Legislation Cited: | Civil Law (Wrongs) Act 2002 (ACT) ch 14 Legislation Act 2001 (ACT) ss 139, 140 Supreme Court Act 1933 (ACT) s 13 |
Cases Cited: | Insurance Australia Ltd v Albrecht [2015] ACTSC 68 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 Theodorelos v Nexus Products Pty Ltd [2009] ACTSC 149 |
Texts Cited: | Explanatory Statement, Road Transport (Third-Party Insurance) Bill 2007 (ACT) The Australian Concise Oxford Dictionary (Oxford University Press, 4th ed, 2008) |
Parties: | Benjamin Mitchell (Appellant) Australian Capital Territory (Respondent) |
Representation: | Counsel Mr N Hutley with Mr S Hausfeld (Appellant) Dr K Rewell SC with Mr D Crowe (Respondent) |
| Solicitors Maliganis Edwards Johnson (Appellant) ACT Government Solicitor (Respondent) | |
File Number: | SCA 56 of 2015 |
Decision under appeal: | Court/Tribunal: Magistrates Court Before: Magistrate Morrison Date of Decision: 23 June 2015 Case Title: Benjamin Mitchell v Australian Capital Territory Citation: [2015] ACTMC 1 |
Penfold J:
Introduction
This is an appeal from a decision of the Magistrates Court that was referred to a Full Court under s 13 of the Supreme Court Act 1933 (ACT).
It concerns the interpretation of a provision of the Road Transport (Third Party Insurance) Act 2008 (ACT) (the 2008 Act). Among other things, that Act sets up a scheme for dealing with personal injuries claims arising out of motor vehicle accidents. The scheme provides that court proceedings to enforce such claims may not be commenced until there have been extensive, structured, exchanges between people claiming damages for such injuries (claimants) and those responsible for compensating injured people under third party insurance arrangements (generally, insurers or the Nominal Defendant, referred to as respondents).
The provision in question in this case (s 141 of the 2008 Act) relates to one of the last steps in those structured exchanges, the step which usually involves the exchange of mandatory final offers (MFOs) if the matter has not resolved at a compulsory conference.
Applicable legislation
As explained by Mossop AssJ in Insurance Australia Limited v Albrecht [2015] ACTSC 68 (Albrecht) at [21], the version of the 2008 Act applicable to motor accident claims arising from motor accidents before 1 January 2013 is the Act as in force immediately before then, which is set out in Republication 12. There have been minor amendments to the Act since then, but none apparently applicable or relevant to this case.
Background
The appellant, Mr Mitchell, claims that on 23 October 2009 he suffered injuries while travelling as a passenger on an ACTION bus. The ACTION bus service is run by the ACT government, making the ACT (the respondent in this appeal) the appropriate defendant in Mr Mitchell’s negligence action. To avoid confusion between the parties to this appeal and the claimants and respondents referred to in the 2008 Act, I shall refer to the parties to this appeal as Mr Mitchell and the ACT.
On 26 November 2009 solicitors for Mr Mitchell made a claim on his behalf against the ACT, alleging that he suffered his injuries due to the negligence of the bus driver.
The parties exchanged various documents and letters in the next 14 months; importantly, on 31 May 2010, the ACT wrote to Mr Mitchell’s solicitors denying liability for the purposes of s 97(1)(b) of the 2008 Act. No claim of contributory negligence was made under s 97(1)(b)(ii). It is agreed between the parties that this was a denial of liability under s 97(1)(b)(i), and that the ACT has not sought to resile from this denial at any point.
Little or nothing happened in the matter for most of the 21-month period from January 2011 until October 2012.
In October 2012, shortly before the expiry of the relevant limitation period, Mr Mitchell’s solicitors commenced a proceeding against the respondent in the ACT Magistrates Court, claiming damages under the 2008 Act. Before the commencement of that proceeding, the parties had not participated in a compulsory conference in accordance with s 136 of that Act, and nor had they taken steps under s 141 of that Act.
10. No issue is taken in this matter about the fact that, despite s 145 of the 2008 Act, proceedings were commenced before there had been a conference or action under s 141 (see Albrecht at [24] – [38] for a discussion of this approach). In October 2012 Mr Mitchell consented to a stay of the Magistrates Court proceedings to enable the parties to participate in a compulsory conference and to take steps under s 141.
11. Little progress was made in 2013, but in the course of 2014 each party obtained two medical reports.
12. The compulsory conference took place on 11 March 2015, but the claim was not settled at the conference.
13. At the conclusion of the conference on 11 March, and relying on s 141(2) of the 2008 Act, Mr Mitchell’s solicitor gave the ACT’s solicitor an MFO of $45,000 plus costs. Over the next few days, Mr Mitchell’s solicitors conveyed to the ACT the view that because it denied liability in relation to the claim, the ACT was not entitled to serve an MFO and was only entitled, and was required, to serve a mandatory final notice (MFN) under s 141(3) of the 2008 Act.
14. Despite this, on 16 March 2015, the ACT served what was described as a mandatory final offer of $25,000 on the appellant. No issue is taken in this matter about the fact that the ACT’s offer was not served “at the end of the compulsory conference” (s 143(1)(b) of the 2008 Act).
15. The ACT filed its defence on 26 March 2015; it denied that Mr Mitchell suffered the specific injuries alleged, or that any such injuries were caused by negligence on the part of the bus driver, and further asserted contributory negligence on Mr Mitchell’s part. However, the ACT did admit that if it was established that it had breached the duty of care owed to the appellant, that breach of duty caused the appellant’s injury, loss and damage. The defence was served by letter dated 31 March 2015.
16. On 2 April 2015 Mr Mitchell’s solicitor wrote to the ACT requiring it to provide an MFN within 7 days.
17. On 22 April 2015 Mr Mitchell’s solicitors filed an application in the Magistrates Court seeking judgment in his favour under pt 4.10 of the 2008 Act, because the ACT had failed to comply with its obligation under s 141(3) of the 2008 Act to provide an MFN to Mr Mitchell following the compulsory conference.
Magistrates Court proceedings
18. Mr Mitchell’s application was heard by Magistrate Morrison on 5 May 2015. His Honour dismissed the application on 23 June 2015 (Benjamin Mitchell v Australian Capital Territory [2015] ACTMC 1), ruling in essence that s 141(3) of the 2008 Act only requires a defendant to provide a final notice when the defendant declines to make any offer of settlement.
19. By a notice of appeal dated 29 June 2015 the appellant appealed to the Supreme Court from Magistrate Morrison’s decision. On 19 October 2015, that appeal was referred for hearing by a Full Bench.
Notice of appeal
20. The notice of appeal sets out 15 “appeal grounds”, of which 13 are complaints about the decision given in the Magistrates Court, as follows:
b) The learned Magistrate at first instance (“His Honour”) erred in concluding that a settlement offer other than a Mandatory Final Offer (“MFO”) or a Mandatory Final Notice (“MFN”) would undermine arrangements in the Act about costs disclosure and/or undermine the Act’s encouragement of settlement claims: see particularly paragraph 64 of His Honour’s reasons for decision (“Reasons”).
c) Further, His Honour erred by failing to provide adequate reasons for his conclusions referred to in ground b) above.
d) His Honour erred in rejecting the Plaintiff’s/Appellant’s submissions as to the interpretation of “denying liability altogether” by reference to s97 of the Act: see paragraphs 32 and 35 Reasons.
e) His Honour erred in concluding that specific costs consequences cannot be described as unconscionable because they are a product of the express design of the scheme of the Act: see particularly paragraph 65 Reasons. It was a [sic] question begging to consider the express design of the scheme of the Act prior to determining the correct interpretation of the Act.
f) Further, the unconscionability issue submitted on before His Honour was that it would be unconscionable for a Respondent to be able to both deny liability (thus forcing either withdrawal of a claim or a trial) and simultaneously being able to engage the advantageous costs consequences of s.155 of the Act by making a non-zero dollar MFO. His Honour erred by failing to address this submission.
g) His Honour erred in not providing adequate reasons for his concluding that neither the ordinary meaning of the words of the Act nor references to legislative purpose justify the Plaintiff’s/Appellant’s submissions: see particularly paragraphs 42 & 67 Reasons.
h) His Honour erred in not providing adequate reasons for his concluding that reference in s.141(3) of the Act to a Respondent who “denies liability altogether” is a reference to a Respondent who “declines to make any offer of settlement”: see particularly paragraph 68 Reasons.
i) His Honour erred in concluding that reference in s141(3) of the Act to a Respondent who “denies liability altogether” is a reference to a Respondent who “declines to make any offer of settlement”:
i.The Act precludes a Respondent from declining to make an offer of settlement: s.141(2); see also s.140(1)(b) & s.97(1)(d) of the Act.
ii.His Honour’s interpretation gives no meaning to and takes no account of the mandatory nature of “must” in s.141(3) of the Act.
iii.His Honour’s interpretation of s.141(3) renders it nugatory or without any work to do. His Honour’s interpretation amounts to interpreting s.141(3), including the effects pf s.141(4), to mean that if a party makes no offer they must offer nothing. That renders s141(3) of the Act all but tautological.
j) His Honour erred in not accepting that by simply and totally denying liability, without qualification, in its solicitor’s letter of 31 May 2010 and in its filed Defence, the Respondent had denied liability altogether.
k) His Honour erred in failing to give sufficient weight to the ordinary or usual meaning of the word “altogether” in the context of the phrase “denies liability altogether”.
l) His Honour erred in accepting the Respondent’s interpretation and the implication His Honour sets out in paragraph 12 Reasons that a Respondent may deny liability and then retain the choice or discretion after the compulsory conference whether to make an MFO or an MFN.
m) Further, His Honour erred in not adequately addressing the specific costs consequences of his interpretation of s.141(3) of the [Act], despite his general allusion to such matters in paragraph 6 Reasons. For instance, His Honour’s interpretation allows a Respondent to abuse the costs provisions by forcing a Plaintiff to court (by denying liability) but denying them costs through nevertheless being able to utilise the costs provisions of s.155 by making a non-zero dollar MFO.
n) His Honour erred in failing to address the specific orders sought in the Plaintiff’s/Appellant’s application.
21. Before this Court, some of the grounds, including in particular grounds c), g), h) and n), were not pressed.
Nature of the appeal
22. This is an appeal by way of rehearing, described by Refshauge J in Theodorelos v Nexus Products Pty Ltd [2009] ACTSC 149 at [78] as follows:
Appeal by way of rehearing is also one where the appeal court must determine whether the decision of the body from which the appeal is taken is wrong, by that body falling into error of law, making a finding of fact that is clearly wrong or exercising a discretion on a wrong principle or in a way that is clearly wrong. Ordinarily, however, facts found based on the assessment of witnesses will not lightly be overturned. The appeal court usually has power to receive further evidence, though this is ordinarily subject to some restrictions. The appeal court may also draw inferences itself from primary facts found by the body from which the appeal is taken. The decision, however, is not restricted to making the decision that should have been made by the body from which the appeal is taken but in determining it the appeal court must have regard to the circumstances which exist at the time of the appeal and by making its own decision on these circumstances.
23. In the current case, the central issue is a legal one, being whether the Magistrate erred in his interpretation of s 141 of the 2008 Act, and the effective ground of appeal is that his Honour did so err.
24. The interpretation of legislation in the current context does not involve a discretionary decision, and determining whether the interpretation adopted by the Magistrate is right or wrong is not conveniently undertaken by considering a series of appeal grounds alleging errors at various points in the Magistrate’s consideration of the question. This is especially the case in relation to errors framed in terms of the sufficiency of the weight or adequacy of the consideration given by his Honour to particular matters, or errors said to consist of rejecting particular submissions, which would generally not provide appeal grounds even against decisions involving the exercise of discretions; see, for instance, Gageler J’s explanation, in Bugmy v The Queen [2013] HCA 37; 249 CLR 571 at [51] – [53], of the “categories of appellate intervention” in relation to a discretionary decision of the kind dealt with in House v The King [1936] HCA 40; 55 CLR 499.
25. Accordingly, I have considered and reached a conclusion about how the disputed legislative provisions should be interpreted. In explaining the basis on which I reached that conclusion, I address the specified grounds of appeal only to the extent necessary for such explanation.
The argument
26. The argument that was made before the Magistrate on behalf of Mr Mitchell was as follows:
(a)Section 141 applied because the claim was not settled at the compulsory conference.
(b)Mr Mitchell and the ACT both made written offers of settlement. Mr Mitchell’s MFO amounted to $45,000. The ACT’s offer specified payments totalling $25,000.
(c)Because the ACT “denied liability altogether”, it was neither required nor permitted to make an MFO under s 141(2) of the 2008 Act, and was instead required to give an MFN (s 141(3)), which is taken to be an MFO of $0 (s 141(4)).
(d)The ACT, having failed to comply with the requirement to give an MFN, also failed to comply with a “compliance notice” given by Mr Mitchell on 2 April 2015 in reliance on s 158 of the 2008 Act.
(e)The conditions specified in s 159(1) of the 2008 Act were therefore satisfied, and Mr Mitchell accordingly sought judgment in his favour as provided for in s 159(2)(b) of that Act.
(f)The Magistrate should, under s 161(1) of the 2008 Act, subject to considering s 161(2), have made the order sought.
(g)Although the ACT’s offer is said by Mr Mitchell to have been ineffective as an MFO, Mr Mitchell says it nevertheless falls within the words of s 162(2)(a) of the 2008 Act as the ACT’s “last written offer”.
(h)The amount of damages awarded should, under s 162(2), have been half the total sum of the offers made by Mr Mitchell and by the ACT after the compulsory conference failed to resolve the matter.
(i)That award of damages also has costs consequences in Mr Mitchell’s favour.
27. Many of the steps in this argument are not in dispute. What is initially in dispute between the parties is the appellant’s claim as set out in step [26(c)] above, that is:
Because the ACT “denied liability altogether”, it was neither required nor permitted to make an MFO under s 141(2) of the 2008 Act, and was instead required to give an MFN (s 141(3)), which is taken to be an MFO of $0 (s 141(4)).
28. Mr Mitchell’s proposition depends on a particular interpretation of s 141(3). The Magistrate rejected that interpretation, and the ACT disputes it on the appeal. The interpretation of that provision is the first matter for determination on this appeal.
29. Depending on the Court’s conclusions about s 141, there may then be a question whether the Court could or should exercise the discretion under s 161 to enter judgment for Mr Mitchell and, if that discretion is to be exercised, a further question about the quantum of damages payable under that judgment. Alternatively, any question whether and to what effect the discretion under s 161 could or should be exercised could be remitted to the Magistrates Court for determination.
Approach to statutory interpretation
30. In Project Blue Sky v ABA [1998] HCA 28; 194 CLR 355 (Project Blue Sky) the plurality in the High Court (McHugh, Gummow, Kirby and Hayne JJ) said at [69] – [71]:
Conflicting statutory provisions should be reconciled so far as is possible
69 The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.
70 A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
71Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".
(citations omitted)
31. Other relevant comments were made in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 (Alcan) at [47] by Hayne, Heydon, Crennan and Kiefel JJ, who said:
This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.
(citations omitted)
32. In Alcan, French CJ noted at [4]:
The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose. That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill as: "dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage." In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy.
(citations omitted)
33. Finally, I note that in Project Blue Sky, Brennan CJ said at [13] that:
the interests of persons concerned in the litigation and the assumptions made in the rival submissions cannot divert the Court from its duty to construe the statute. "Judges are more than mere selectors between rival views", said Lord Wilberforce in Saif Ali v Sydney Mitchell & Co, "they are entitled to and do think for themselves".
(citations omitted)
34. In this case each party has, not surprisingly, made submissions aimed at establishing an interpretation that best suits its current position; those submissions have not necessarily promoted an objective consideration of the legislation that stands to be construed. The task has not been aided by some apparent misunderstandings or misdescriptions of a party’s position that have been relied on by the other party in submissions. To a considerable extent I have had to think for myself, and in the end have not adopted the entirety of either party’s submissions.
Section 141 in context
35. Although s 141 is the provision directly raised by the first part of this appeal, ss 97 and 155 of the 2008 Act are significant in the interpretation of s 141; various other provisions of that Act, in particular ss 84, 96 and 269, may be relevant to that question. Sections 97, 141 and 155 were relevantly as follows:
97Respondent to try to resolve motor accident claim
(1)A respondent must, not later than 6 months after the day the respondent receives, or is taken to have received, a complying notice of claim for a motor accident claim—
(a) take any reasonable steps necessary to find out about the motor accident for the motor accident claim; and
(b)tell the claimant, in writing—
(i)whether liability is admitted or denied; and
(ii)if contributory negligence is claimed—the degree of the contributory negligence expressed as a percentage; and
(c)if the claimant—
(i) made an offer of settlement in the notice of claim—tell the claimant whether the respondent accepts or rejects the offer; or
(ii) did not make an offer of settlement in the notice of claim—invite the claimant to make a written offer of settlement; and
(d) make a fair and reasonable estimate of the damages to which the claimant would be entitled in a proceeding for the motor accident claim against the respondent; and
(e)either—
(i) make a written offer, or counteroffer, of settlement to the claimant setting out in detail the basis on which the offer, or counteroffer, is made; or
(ii)settle the motor accident claim by accepting an offer made by the claimant.
(2)An offer, or counteroffer, of settlement must be accompanied by a copy of medical reports, assessments of cognitive, functional or vocational capacity and all other material, including documents relevant to assessing economic loss, in the offerer’s possession or control that may help the person to whom the offer is made make a proper assessment of the offer.
(3)A respondent or claimant to whom a written offer, or counteroffer, of settlement is made must, unless a response to the offer is to be made under subsection (1) (c), respond in writing to the offer not later than 3 months after the day the respondent or claimant receives the offer, indicating acceptance or rejection of the offer.
(4)An admission of liability by a respondent under this section is not binding on the respondent—
(a)in relation to another claim; and
(b)at all if it later appears the admission was induced by fraud.
Note 1A respondent may be obliged to make early payments for an injured person’s medical expenses whether or not liability is admitted for the motor accident claim (see ch 3).
Note 2If a respondent admits liability for a motor accident claim, the respondent may be obliged to pay for the injured person’s medical expenses and rehabilitation services (see pt 4.6).
141Mandatory final offers
(1) This section applies if, for a motor accident claim—
(a) ...; or
(b) the motor accident claim is not settled at the compulsory conference.
(2) The claimant and the respondent for the motor accident claim must exchange written final offers (each of which is a mandatory final offers [sic]).
(3) However, if a respondent denies liability altogether, the respondent must give the claimant a written notice of denial (a mandatory final notice).
(4) If the respondent gives the claimant a mandatory final notice, for this Act, the respondent is taken to have given the claimant a mandatory final offer of $0.
155 Costs—small awards of damages—generally
(1) This section applies if a court awards $50 000 or less in damages in a proceeding (other than an appellate proceeding) based on a motor accident claim.
Note Damages does not include damages for non-economic loss (see s (5)).
(2)If the court awards $30 000 or less in damages, the court must apply the following principles:
(a) if the amount awarded is less than the claimant’s mandatory final offer but more than the respondent’s mandatory final offer, no costs are to be awarded;
(b) if the amount awarded is equal to, or more than, the claimant’s mandatory final offer, costs must be awarded to the claimant in the way prescribed by regulation as from the date on which the proceeding began (but no award is to be made for costs up to that date);
(c) if the amount awarded is equal to, or less than, the respondent’s mandatory final offer, costs must be awarded to the respondent as prescribed by regulation.
(3) If the court awards more than $30 000 but not more than $50 000 in damages, the court must apply the following principles:
(a) if the amount awarded is less than the claimant’s mandatory final offer but more than the respondent’s mandatory final offer, costs must be awarded to the claimant in accordance with the Civil Law (Wrongs) Act 2002, chapter 14, up to the maximum amount prescribed by regulation or, if no amount is prescribed, $2 500;
(b) if the amount awarded is equal to, or more than, the claimant’s mandatory final offer, costs must be awarded to the claimant as follows:
(i) costs up to the date on which the proceeding began must be awarded in accordance with the Civil Law (Wrongs) Act 2002, chapter 14, up to the maximum amount prescribed by regulation or, if no amount is prescribed, $2 500;
(ii) costs on or after the date on which the proceeding began must be awarded on an indemnity basis;
(c) if the amount awarded is equal to, or less than, the respondent’s mandatory final offer, costs must be awarded as follows:
(i) costs up to the date on which the proceeding began must be awarded to the claimant in accordance with the Civil Law (Wrongs) Act 2002, chapter 14, up to the maximum amount prescribed by regulation or, if no amount is prescribed, $2 500;
(ii) costs on or after the date on which the proceeding began must be awarded to the respondent in accordance with the Civil Law (Wrongs) Act 2002, chapter 14.
(4) This section is subject to section 156.
(5) In this section:
damagesdoes not include damages for pain and suffering.
36. In summary, s 97 requires a respondent to a motor accident claim, within 6 months after receiving a complying notification of that claim, to take various steps intended to facilitate resolution of that claim, and in particular to tell the claimant whether it admits or denies liability; that advice may be accompanied by a claim of contributory negligence, but there is no suggestion that any other details of the respondent’s attitude to the claim are required at that point.
37. Section 155, in general terms, provides costs consequences in cases that have not resolved during the pre-trial processes but in which the claimant, having taken the claim to court, obtains an award of up to $50,000. In such a case, a respondent who has made a very low MFO is unlikely to be the beneficiary of a costs order, and may have significant costs awarded against it.
Conclusion: what does s 141(3) mean?
38. For the reasons set out below, I am satisfied:
(a)that a respondent who “denies liability altogether” is a respondent who, as required by s 97(1) of the 2008 Act, has told the claimant in writing that liability is denied (s 97(1)(b)(i)) and has not told the claimant in writing that contributory negligence is claimed (s 97(1)(b)(ii); and
(b)that if a respondent denies liability altogether, then, if and when s 141 becomes applicable as set out in s 141(1), s 141(3) means that the respondent is not permitted to give an MFO under s 141(2), but must give an MFN under s 141(3), which is in turn taken to be an MFO of $0 (s 141(4)).
39. Given the matters raised in the course of argument, I note that I am also satisfied:
(a)that whether a respondent “denies liability altogether” depends on what the respondent has told the claimant under s 97(1)(b), and does not depend on what might at any point emerge in a defence filed by the respondents in answer to a statement of claim; and
(b)that there is no basis in the 2008 Act for interpreting references in either of ss 97 and 141 to admitting or denying liability as references to admitting or denying:
(i)negligence;
(ii)a breach of a duty of care;
(iii)responsibility for any particular injuries suffered by the claimant; or
(iv)any other particular aspect of the claimant’s claim.
Reasons for conclusions
40. Both parties made submissions based on textual analysis, including some comparisons with other legislation, and on the underlying purposes or objects of the 2008 Act. Those submissions, and relevant appeal grounds, are addressed as appropriate in the discussion below.
The Magistrate’s approach
41. In his judgment, the Magistrate said:
32Mr Hausefeld’s [sic] submission is in these terms – “... denying liability altogether may be a reference to a simple denial under section 97(1)(b)(i) as opposed to a reduction in liability under section 97(1)(b)(ii) in which the respondent’s/defendant’s liability is reduced because of contributory negligence by the claimant/plaintiff”.
33As I understand the submission, it points to the difference between on the one hand a bare denial of liability and on the other hand an admission of breach of duty of care accompanied by a claim of contributory negligence – with the suggestion that the use of the composite expression “denies liability altogether” captures only the former.
42. Curiously given his comments at [34] (see [65] below), his Honour appears at [33] to have assumed that the "reduction in liability” described by counsel must involve “an admission of breach of duty of care accompanied by a claim of contributory negligence”, rather than a denial and a claim of contributory negligence (as to the availability of which, see the discussion at [60] – [70] below). I note that in the current case, the advice required by s 97(1)(b) and given on behalf of the ACT in the letter mentioned at [7] above referred to that provision and went on:
I am instructed to deny liability on behalf of the respondent in respect of [the alleged incident concerned]
43. It seems likely that notifications under s 97(1)(b) that include a claim of contributory negligence generally also use the exact words of the provision rather than relying on other concepts such as breach of duty. I am not persuaded that re-framing the references to denials of liability in s 97 as references to admissions (or even denials) of breach of duty was a useful step in his Honour’s attempt to interpret the various references to denials of liability (see my further comments at [73]-[82] below).
44. His Honour concluded, in effect, that a respondent who “denies liability altogether” is simply a respondent who “declines to make any offer of settlement”; at [68] he said:
In the end result my conclusion is that the proper construction of section 141(3) is that pressed for by the respondent – that is that the reference to a respondent which “denies liability altogether” is intended to mean a respondent which declines to make any offer of settlement. It is only where no offer of settlement is forthcoming that a respondent is then obliged to give a mandatory final notice, and will be taken to have made a mandatory final offer of $0.
45. That is, his Honour has read the reference to a respondent who “denies liability altogether” as shorthand for (or a definition of) respondents who, irrespective of how they have conducted themselves to that point, including under s 97, choose, when s 141 becomes relevant, to give mandatory final notices instead of making settlement offers. This interpretation of s 141(3) renders the provision as, in effect, reading:
No respondent is required to give a mandatory final notice, but any respondent [or perhaps, “any respondent who denies liability in any way”] may give a claimant a written notice of denial (a mandatory final notice) and a respondent who does so is a respondent who denies liability altogether.
46. There are various problems with his Honour’s conclusion, but the most obvious ones as a matter of interpretation are:
(a)that in concluding that anyone may but no-one must give a mandatory final notice, his Honour gives no significance to the word “must” in s 141(3);
(b)that there is no apparent legislative purpose or rationale for using the expression “respondent who denies liability altogether” as a phrase to describe a respondent who has given a mandatory final notice; the phrase is not used anywhere else in the 2008 Act, so has no function as a defined term, and is neither shorter, simpler nor more easily comprehended than the concept which, in the Magistrate’s view, it seeks to describe (that is, a “respondent who has given a mandatory final notice”); and
(c)that if s 141(3) has the meaning determined by his Honour, then both it and s 141(4) have no purpose at all: there is nothing in subs 141(2) which would, in the absence of s 141(3), prevent a respondent making an MFO of $0 anyway (and if there were any uncertainty about that option, an explicit provision stating that an MFO could be for $0 would not look like ss 141(3) and (4)).
47. That is, as noted on behalf of Mr Mitchell, the interpretation adopted by his Honour renders s 141(3) nugatory or tautological (or perhaps both).
48. An alternative reading of s 141(2) is that the reference to a respondent who “denies liability altogether” defines the class of respondents to whom the provision applies and who are therefore subject to the obligation (identified by the use of “must”) to give a mandatory final notice rather than a mandatory final offer. This reading not only accords far better with the structure and words of the provision than does his Honour’s reading, but it gives the provision some work to do: specifically, a respondent who denies liability altogether (thus rendering it likely that the matter will go to trial) is forced to commit itself to the costs consequences of that approach (at [37] above) by making an offer of $0.
49. This reading, however, in treating the reference to respondents who deny liability “altogether” as defining the scope of s 141(3) rather than simply giving an after-the-fact title to respondents who choose to operate under that provision, does raise the question of the meaning to be given to denying liability “altogether”.
Need to give meaning to “altogether”
50. I agree with the parties (and with the High Court in Project Blue Sky) that it is necessary to look for a construction of the provisions concerned that gives some meaning to “altogether” in s 141(3).
51. Counsel for Mr Mitchell said that the reference in s 141(3) to denying liability “altogether” implies that there is scope under the legislation for something that could be regarded as a partial denial of liability.
52. Counsel for the ACT, however, argued that the expression “denies liability altogether” in s 141(3) of the 2008 Act must be construed differently from the expression “liability is denied” in s 97(1). Any other approach, counsel said, would render the word “altogether” superfluous, offending the principle that “a word used purposively by the legislature” is not to be treated as meaningless.
53. In particular, counsel for the ACT submitted that the construction of s 141(3) of the 2008 Act for which Mr Mitchell contends would have precisely the effect of rendering “altogether” superfluous (although this submission may have responded not to Mr Mitchell’s submissions made on the appeal but to those made in the Magistrates Court). However, I reject any submission, if such was intended, that “altogether” is rendered superfluous by a conclusion:
(a)that the legislation seems to contemplate two forms of denial of liability; and
(b)that a denial under s 97(1)(b), if it includes a claim of contributory negligence, is not a denial “altogether”.
54. That is, the denials of liability mentioned in ss 97 and 141 fall into two categories – the denials described in s 141(3) are a subset of the denials available under s 97(1)(b); they are not the only denials available under s 97(1)(b). Counsel for the ACT is correct that the two expressions (“denies” and “denies altogether”) must be given different meanings in order to give meaning to “altogether”, but not correct in suggesting that the two different meanings are or must be distinct and unrelated and with no overlapping content.
55. Section 97 does not provide for something involving a more forceful denial than the “bare” denial under s 97(1)(b)(i) – but it does provide for something less than an unqualified denial, being a qualified denial of the kind permitted by s 97(1)(b)(ii). Once the two forms of denial are identified as qualified and unqualified, an unqualified denial can readily be described as a denial “altogether”, in contrast to a qualified denial.
56. I note that, in the Magistrates Court, Mr Mitchell’s counsel referred to a “simple” denial under s 97(1)(b)(i) of the 2008 Act, but the Magistrate referred to this as a “bare” denial rather than, as I prefer, an “unqualified” denial. This may have influenced his Honour’s conclusion: mention of a “bare” denial suggests that the alternative is a more substantial denial, whereas the alternative to an “unqualified” denial is clearly a less substantial denial, being a qualified denial. However, the expression “bare denial”, although used to describe the strongest denial available under s 97, is not obviously an appropriate alternative description of a “denial altogether”.
57. This interpretation of “altogether” as identifying an unqualified denial under s 97(1)(b) fits neatly into my description at [48] above of the work done by s 141(3) as I read it. The claim of contributory negligence suggests that there may still be room for a compromise of the claimant’s claim, and may therefore justify giving the respondent one more opportunity to make a real offer (that is, an offer of a sum of money) before the matter proceeds to court.
58. For those reasons, I consider that a respondent who has denied liability under s 97(1)(b)(i) and has not claimed contributory negligence under s 97(1)(b)(ii) is a respondent who “denies liability altogether” for the purposes of s 141(3).
Significance of details of respondent’s position
59. Much argument before us, both oral and written, focussed on the various bases on which a respondent might deny liability, and the implications of different kinds of denials for the operation of the provisions concerned. I am not persuaded that this focus was useful.
Relationship between attitude to liability and claims of contributory negligence
60. Discussion in the Magistrates Court proceedings and before this Court revealed a degree of uncertainty about the correct relationship between a respondent’s attitude to liability and a respondent’s claim of contributory negligence.
As drafted, s 97(1)(b) appears to contemplate not only an unqualified admission and an unqualified denial of liability (s 97(1)(b)(i)) but also the options of a denial accompanied by a claim of contributory negligence and an admission accompanied by a claim of contributory negligence (s 97(1)(b)(ii)). The opportunity, or requirement, provided in s 97(1)(b)(ii) to identify any claim of contributory negligence is not restricted to only one of the cases described in s 97(1)(b)(i); rather, the addition of a claim of contributory negligence is on the face of the provision available whether it is associated with an admission or a denial of liability.
62. This may reflect the fact that a claim of contributory negligence may have a different significance in different cases: when coupled with an admission, the claim may be aimed at reducing the quantum of the respondent’s admitted liability, but when coupled with a denial of liability, the claim may be an attempt to preserve a second line of defence in case the denial of liability is unsuccessful. Given these two possibilities, there is no obvious reason why s 97(1)(b) should not, as its structure suggests, be read as permitting claims of contributory negligence to be made whether liability is denied or admitted.
Contributory negligence claim implies denial of liability?
63. In Barker v Gifford and Anor [2005] ACTSC 55; 192 FLR 347 (Barker), Harper M said at [10]:
I note in passing that it would have been open to [the original NRMA claims officer] to admit breach of duty of care rather than liability. An admission in such terms is frequently made by NRMA, and it is reasonably clear that claims officers understand the distinction. An admission of breach of duty of care is not inconsistent with an allegation that the other party was guilty of some degree of contributory negligence. An admission of liability is inconsistent with any such allegation.
64. It is worth pointing out that the 2008 Act did not exist when Barker was decided. That Act made quite significant changes to the ACT law dealing with motor vehicle accident claims; among other things, it deals with admissions and denials of liability, not admissions or denials of breach of duty of care.
65. Harper M’s comments were referred to by the Magistrate in his judgment at [34], in which he said:
The distinction between admitting breach of duty of care and admitting liability is referred to by his Honour Master Harper in Barker v Gifford and Anor [2005] ACTSC 55 (“Barker”). His Honour there made the observation that, as a matter of legal principle, an admission of liability is inconsistent with an assertion of contributory negligence. In doing so his Honour is giving a precise and technically correct meaning to the expressions to which he refers.
66. The proposition set out by Harper M and adopted by Magistrate Morrison was that an admission of liability is as a matter of legal principle inconsistent with an allegation of contributory negligence.
Contributory negligence claim implies admission of liability?
67. The ACT on the other hand, while conceding that the language and structure of s 97(1)(b) permit a respondent to admit liability and claim contributory negligence, rejected as incongruous the possibility of a denial of liability with a contributory negligence claim. The ACT said at [41] of its written submissions:
if, for the purposes of s.97, the respondent to a claim seeks only to put contributory negligence in issue, then “liability” will be “admitted” subject to a reduction of the claimant’s damages for contributory negligence, not “denied” [s 97(1)(b)(i)], and the degree of contributory negligence claimed by the respondent is stated as a percentage in the response to the claim [s.97(1)(b)(ii)].
(emphasis in original)
68. The ACT’s submission has some logic, given that as a matter of language (if not of “legal principle”) a respondent’s reference to “contributory” negligence by a claimant seems to imply that the claimant was not the only negligent participant in the motor accident, and that the respondent might be liable to the claimant to an extent.
69. We were referred to Smalley v Motor Accident Authority of New South Wales [2013] NSWCA 318; 85 NSWLR 580, which dealt with the Motor Accidents Compensation Act 1999 (NSW). That Act (the NSW Act) sets up a very different scheme dealing with claims arising out of motor accidents, but contains some provisions not unlike provisions of the 2008 Act. In that case, the NSW Court of Appeal seemed to assume that a claim of contributory negligence would commonly be made in conjunction with an admission of liability (Leeming JA, with whom Meagher and Barrett JJA agreed, at [54]).
Contributory negligence claim may accompany admission or denial of liability
70. Having regard to the apparent confusion in the relevant law (or at least among the lawyers involved in this matter), I do not accept the ACT’s submission that the only options under s 97(1)(b) are to deny, to admit, or to admit and claim contributory negligence. The words and structure of the provision contemplate a fourth option (denial with a claim of contributory negligence), and it seems that “as a matter of legal principle”, this option is as legitimate as the option of admission and a contributory negligence claim.
71. Once it is accepted that a denial of liability may be made under s 97(1)(b) with or without a claim of contributory negligence, then there are two forms of denial available under s 97(1)(b), and scope for identifying one of them as a denial of liability “altogether” – or, perhaps more accurately, for identifying one of them (the denial with a contributory negligence claim) as not a denial of liability “altogether”.
72. This in turn permits s 141(3) to be read as referring to a denial with no mention of contributory negligence, while a denial with a claim of contributory negligence does not exclude a respondent from making an MFO, or from the costs benefits that may come with such an offer.
Nature of denials of liability
73. Mr Mitchell made the following problematic submissions:
(a)that a partial denial of liability would be constituted by confining the acceptance of liability to liability for particular injuries; but
(b)that a denial of one or more of the elements of liability (as the ACT did in its pleaded defence), by denying breach of duty and the specific injury or damage caused, while conceding causation, would amount to “[denying] liability altogether”.
74. The ACT argued that a respondent who has denied liability does not necessarily deny that the claimant has suffered harm, only that the respondent has been negligent, and that a respondent who denies negligence is not required to admit or deny harm to the claimant. The ACT also said that these propositions are “completely consistent” with the defence in this case. These propositions may be correct, but they do not seem to matter.
75. Mr Mitchell’s submissions are problematic, and the ACT’s propositions do not seem to matter, for reasons set out below. It is also not clear that the distinction drawn by Harper M between denying liability and denying breach of duty of care has any significance in the context of the provisions of the 2008 Act dealing with processes before court proceedings are instituted.
Timing issues
76. First, under s 97 of the 2008 Act, the initial indication of the respondent’s position requires an admission or denial of liability, not an admission or denial of breach of duty or of negligence, or any other kind of admission or denial in relation to any other element of a respondent’s liability.
77. Both parties seem to refer to versions of “denial” that would emerge only in the pleadings. However, in the normal course of events, and even in this case, the obligations under s 97 and 141 of the 2008 Act have arisen before a defence is filed.
78. Section 84 precludes the commencement of a “court proceeding” in relation to a motor accident before a notice of claim is given to the respondent under Pt 4.2 of the 2008 Act, and s 96 prevents the claimant proceeding with action until a complying notice of claim (defined in s 76 of the 2008 Act) has been given. Accordingly, since a denial “altogether” needs to be recognisable at the point when s 141 applies, the meaning to be given to the reference in s 141(3) to denying liability “altogether” cannot depend on the details, and any qualifications, of the defence that may emerge when pleadings are exchanged (including qualifications of the kind described in the defence mentioned at [15] above).
79. Secondly, there is no basis in the legislation to assume that any explanation of a denial will or should be included in the s 97(1)(b) advice. Neither s 97 nor s 141 contemplates a detailed exposition of which parts of the claimant’s claim are disputed, conceded or not denied. Section 97 requires an admission, a denial or a qualified admission or denial (qualified, that is, by a reference to contributory negligence).
80. I accept the ACT’s submission that s 97 does not require, or contemplate, any detailed dissection of the denial or the claim, and adopt counsel’s description of s 97 as “a blunt instrument for a specific purpose”. A choice of one of the responses available under s 97(1)(b) is enough to underpin the series of exchanges, discussions, negotiations and other actions required or permitted by the subsequent parts of Ch 4 of the 2008 Act, up to and including Pt 4.8 dealing with mandatory final offers.
81. I note in this context that the roughly equivalent New South Wales provision (s 81 of the NSW Act) requires notice of whether the insurer admits or denies liability (at s 81(1)), but refers at s 81(2) to an insurer admitting liability “for only part of the claim”.
82. The 2008 Act, however, does not refer to any qualification of the s 97 admission or denial except by reference to contributory negligence. The fact that s 97(1) does not apparently preclude the respondent providing an explanation of the admission or denial required does not help Mr Mitchell’s argument, or render the ACT’s argument useful. As already noted, a denial “altogether” needs to be recognisable at the point when s 141 applies, so the meaning to be given to the reference in s 141(3) to denying liability “altogether” cannot depend on a detailed explanation of the respondent’s position that might, but need not, be included with the s 97(1)(b) advice.
83. The interpretation of legislative provisions must involve consideration of the provisions in the context of the legislation more broadly. However, that consideration does not in my view require the provisions to be interpreted having regard to questions of how those provisions might operate in particular factual circumstances:
(a)that would not have existed if other parts of the legislation had been complied with; or
(b)where parties have taken it upon themselves to go beyond the requirements of the legislation.
Legislative purposes
84. The approach set out in ss 97 and 141 to the relevant stages of the negotiation process may be surprising when compared with earlier approaches to resolving motor vehicle claims through litigation, but the provisions seem to be aimed at producing a speedy progress through the pre-litigation processes, without too much detail needing to be pursued. The use of the “blunt instrument” constituted by s 97 may be a fundamental aspect of the scheme aimed at simplifying and speeding up the processes generally and, especially, aimed at avoiding an unnecessarily sophisticated approach to the fine details of a dispute in cases in which, realistically, there is little scope for argument.
85. I note also that even where there has been a denial of liability in some form under s 97(1)(b), the other provisions of s 97 require the respondent:
(a)to estimate the claimant’s damages, make a settlement offer or counter-offer to the claimant or accept the claimant’s offer; and
(b)if the respondent makes an offer, to provide all relevant medical reports, assessments and other relevant material (including documents relating to economic loss) to the claimant.
86. That is, even a respondent who, for s 141 purposes, denies liability “altogether” is required to engage in a process of exchanging information, narrowing the issues and, ideally, settling the matter. It seems likely that by the time the processes begun by s 97 are finished, a large proportion of claims will have been settled, and only the relatively difficult matters will reach the s 141 point. At that point, the following arrangements, which are consistent with my interpretation of s 141(3), would seem to make sense:
(a)that in general, remaining respondents are obliged to make an MFO, and to make it a realistic offer, to avoid:
(v)first, the risks of paying more than the claimant would have been willing to accept; and
(vi)secondly, the risks of offering substantially less than a properly advised claimant would be willing to accept, such that litigation becomes almost inevitable and there is a good chance that a court will make a higher award and adverse cost consequences will follow; and
(b)that those respondents who deny liability “altogether”, and who have not managed to resolve the matter before the end of the compulsory conference, are obliged to confirm that position in a context in which, again, there are clear costs consequences if their obduracy is not found by a court to be justified.
87. The ACT’s argument that the objects of the 2008 Act would be furthered by allowing the respondent one last chance, after the compulsory conference, to compromise the matter may overlook the benefits of pushing the respondent to settle before the MFO stage rather than allowing the matter to slide into a situation in which litigation becomes the only real option for the claimant. In the current case, for instance, the offer the ACT ultimately tried to make after the compulsory conference might have been made somewhat earlier if the ACT had realised the risk that the only offer it could make after that conference was one with potentially significant negative costs implications.
The words of s 141
88. The appellant made the following submissions about the text of ss 97 and 141 of the 2008 Act:
(a)That contrary to the findings of the Magistrate at [67], an admission of liability ought to be read as a pre-requisite to the making of a settlement offer under s 141(2) of that Act. Section 141 stipulates a number of conditions as to when and how a mandatory final offer may be made, and is to be contrasted with s 97 of the 2008 Act, which permits a respondent to make settlement offers in a broader range of circumstances.
(b)That a respondent retains no discretion as to whether to make a mandatory final offer pursuant to s 141(2) or provide a mandatory final notice pursuant to s 141(3). The contrary interpretation of s 141 apparently embraced by the Magistrate takes no account of the presence of the word “must” in s 141(3) of the 2008 Act.
89. The ACT argued:
(a)that Mr Mitchell contended before the Magistrate that a respondent to a claim is required to admit breach of duty as a precondition for an entitlement to make an MFO; and
(b)that if this is what s 141 means, it would say so.
90. I agree with Mr Mitchell’s propositions to the effect that s 141 is more restrictive than s 97 about the circumstances in which relevant offers may be made, and that the use of the word “must” in s 141(3) cannot be ignored in interpreting the provision.
91. I note again that s 97(1) refers to liability, not breach of duty; for reasons set out at [76] to [82] above, if Mr Mitchell did make any contention in the form described at [89(a)] above, I reject it.
92. However, I also note Mr Mitchell’s submission that the Magistrate mi-stated his position as being that the respondent must admit breach of duty before an MFO can be made, whereas his real (or current) position is that “some liability” must be admitted. As already indicated, I share the view that moving away from the concept of admitting or denying liability and referring instead to aspects of liability such as breach of duty is not helpful in determining a meaning for the provisions concerned. I have in fact gone beyond Mr Mitchell’s submissions in concluding that a denial of liability with a claim of contributory negligence does not amount to a denial of liability “altogether”.
93. If my interpretation of s 141 at [38] above is correct, then what is required for an entitlement to make an MFO is any written advice under s 97(1)(b) that does not constitute a denial “altogether” – that is, either:
(a)an admission of liability, whether qualified or unqualified; or
(b)a denial of liability qualified by a claim of contributory negligence.
94. That is exactly what s 141 does say, when it provides for an MFO to be made by any respondent except one who denies liability “altogether”.
Comparisons with Queensland legislation
Source of “altogether”
95. As the then Treasurer noted, when the Bill that became the 2008 Act was introduced into the Legislative Assembly, Ch 3 of the Bill was “derived from equivalent Queensland provisions, coupled with provisions from the Civil Law (Wrongs) Act 2002 [to provide] a new structure for dealing with CTP insurance claims”. The “equivalent Queensland provisions” appear to be provisions included in either or both of the Motor Accident Insurance Act 1994 (Qld) (the Queensland Act) and the Personal Injuries Proceedings Act 2002 (Qld) as in force before the ACT Bill was introduced in 2007.
96. Chapter 3 of the Bill contained clause 89, which became s 97 of the 2008 Act, and also clause 135, which became s 141 of the 2008 Act.
97. The Queensland Act contained s 51C, part of which appears to have been the model for s 141; it was in 2007 relevantly as follows:
(1)If a motor vehicle accident claim is not settled at the compulsory conference, each party must (unless the court has dispensed with this obligation) exchange written final offers—
(a)at the conference; or
(b)if the conference has been dispensed with—within 14 days after the date of the agreement or order dispensing with the conference.
(2)A written final offer required under subsection (1) is called a mandatory final offer.
(3)A mandatory final offer for $50000 or less is to be exclusive of costs.
(4)...
(5)Even though an insurer denies liability altogether, the insurer must nevertheless make a mandatory final offer but, in that event, the offer is to be expressed as an offer of $nil.
…
(9)The court must not read the mandatory final offers until it has decided the claim.
(10)However, the court must (where relevant) have regard to the mandatory final offers in making a decision about costs.
98. A comparison with the equivalent Queensland provision raises some difficult questions for the interpretation of s 141 of the 2008 Act. It is apparent that subs 141(3) and (4) of the 2008 Act are intended to have at least a superficially similar effect to s 51C(5) of the Queensland Act, and in particular it seems clear that the Queensland origins of s 141 explain the use of “altogether”. However, it is not so clear that the ACT version of the Queensland provisions has the same meaning as the Queensland provisions.
99. Section 141(2) requires MFOs to be given by the parties if the matter is not resolved at the compulsory conference. Section 141(3) carves out an exception to that provision if a respondent “denies liability altogether”. That is, the respondent’s denial of liability “altogether” is the condition for excluding the respondent from s 141(2) and subjecting the respondent to a separate requirement to give an MFN.
By s 141(4), the MFN is taken to be an MFO for $0: this means that, if an award of damages is made by a court, the costs provisions in s 155 will be applied as if the respondent had made the lowest possible MFO, which in turn means that the respondent may suffer adverse costs consequences of some sort.
Section 51C(5) of the Queensland Act, however, is framed differently, although it reaches the same end point. Respondents who “deny liability altogether” are not excluded from the MFO provisions. Rather, the provision refers to such respondents, and uses language that emphasises that despite their particular characteristic of “denial altogether”, they remain subject to the MFO requirement: even though they deny liability, and even though they deny it altogether, they must nevertheless make an MFO, and that MFO must be of $nil. On one reading, the denial of liability is not the condition for the application of a separate set of provisions, but is simply a characteristic of a category of respondents for whom the application of the MFO requirement may need to be confirmed more emphatically.
However, despite the use of words that seem to emphasise that respondents who deny liability “altogether” remain within the class required to make MFOs, those respondents are in fact subject to a different requirement from other members of the class, to the extent that they are obliged to make MFOs of $nil.
With one possible exception, the different drafting approaches taken in the ACT and Queensland do not seem to have any significance in the current case. The Queensland provision, like the ACT one, by the use of “must”, clearly articulates the imposition of an obligation on respondents who deny liability “altogether” and therefore raises the need to identify such respondents by explaining the meaning to be given to “altogether”. The question arising in this case (whether the respondent was required to give an MFN) would also have arisen in Queensland, although it would have been framed as whether the respondent was required to give an MFO of $nil. It does not seem, however, that there is any help to be found in any consideration of s 51C by the Queensland courts.
The exception mentioned above is that the Project Blue Sky obligation to give meaning to “every word in the provision” might in relation to the Queensland provision be satisfied by concluding that “altogether” in that provision simply contributes to the emphatic form of the provision also shown by the use of “even though” (instead of “although” or simply “where”), and “nevertheless” (which provides emphasis but is otherwise unnecessary). In the ACT provision, “altogether” cannot be explained in the same way, and accordingly the court in this case must find a meaning for “denies altogether” that is different from “denies”.
Finally in this context I note that even if I were satisfied that the ACT provision was, when drafted and put before the legislature, intended to mean the same as the Queensland provision, it would not be appropriate to adopt, simply for that reason, whatever meaning might have been given to the provision in Queensland. First, my obligation is to interpret s 141(3) in context, that being the Act in which it sits and if necessary the ACT statute book more generally, as well as matters external to the legislation such as policy considerations. Whether the drafter intended to produce a provision that might mean something different from the Queensland provision, or whether he or she was simply succumbing to “the passion to alter someone else's draft" (apparently, and perhaps apocryphally, described by HG Wells as a passion equalled by no other passion in the world), is irrelevant: what matters is what the provision now means in the ACT legislation.
In this respect the Queensland legislation does not seem to help in the interpretation of s 141 of the 2008 Act.
Reference to “extent to which liability is admitted”
The Magistrate referred to the form of s 269 as suggesting “a lack of technical precision” in the 2008 Act, saying:
37Section 269 of the Act also makes reference to admission or denial of liability. The section imposes a reporting obligation on insurers, requiring them to provide certain information to the Compulsory Third Party regulator established by the Act.
38The example following the section notes that, in accordance with the section, an insurer may be required to provide “information about whether liability was admitted by the insurer, when liability was admitted or denied and, if liability was admitted, the extent to which liability was admitted.”
39The reference in the example to the extent of [sic] to which liability was admitted is curious. Section 101 of the Act makes reference to both “liability” and “quantum” making it unlikely that use of the words “the extent to which liability [was] admitted” is intended as some reference to some level of admitted quantum – something which is probably unlikely in any event.
40It is possible that the example is intended to deal with claims where there are multiple insured respondents and some agreement is reached between them as to the shares of liability for a claim, although such an interpretation again seems unlikely in the absence of any mention elsewhere in a section dealing with mandated disclosure to the regulator of any reference to other respondents.
An examination of legislative history may provide an explanation for the reference, in the example in s 269, to the extent to which liability is admitted.
As already noted at [95] above, the ACT provisions owe much to the equivalent Queensland legislation as in force before 2008. Section 269 of the 2008 Act, which is relevantly in identical terms to s 88 of the Queensland Act, is as follows:
269 Information to be provided by licensed insurers
(1) A licensed insurer must give the CTP regulator—
(a) periodic returns, as prescribed by regulation, containing the information prescribed by regulation; and
(b) information about claims against the insurer that is prescribed by regulation, or that the CTP regulator requires by written notice to the insurer; and
(c) other information that is relevant to the administration of this Act that is prescribed by regulation, or that the CTP regulator requires by written notice to the insurer.
Example
An insurer may be required to provide—
(a) details of motor accident claims against the insurer, and the dates when notice of the claims were received by the insurer; and
(b) information about the claimants; and
(c) information about whether liability was admitted by the insurer, when liability was admitted or denied and, if liability was admitted, the extent to which liability was admitted; and
(d) information about the rehabilitation services made available to the claimant and the extent to which the rehabilitation services were used by the claimant; and
(e) information about the costs of the insurer on claims, and how the costs are made up.
Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).
The original form of the Queensland Act (as in force in 1994) contained:
(a)s 39(5), which barred court proceedings for damages based on a motor vehicle accident claim unless, after notice is given to the insurer, the insurer has denied liability or “has admitted liability but only in part and the claimant has given the insurer written notice that the extent of liability is disputed”; and
(b)s 88(2), which permitted the Motor Accident Insurance Commission to require a licensed insurer to provide “information about whether liability was admitted by the insurer, when liability was admitted or denied and, if liability was admitted, the extent to which liability was admitted”.
The Queensland Act was amended a number of times after 1994, but the last amendments before the 2008 Act was enacted took effect in 2003. By that time:
(a)s 39(5) had been replaced with a provision (s 41(1)(b)) more similar to s 97 of the 2008 Act, which required an insurer to given written notice whether liability is admitted or denied and “if contributory negligence is claimed—the degree of the contributory negligence expressed as a percentage”; but
(b)the description of the information required by s 88 remained in its original form.
That is, in relation to denials or admissions of liability, the link in the Queensland Act between the information required of insurers responding to particular claims and the information required of insurers providing general information to the regulator had been broken.
When the 2008 Act was enacted, it contained:
(a)s 97(1)(b), which was relevantly in the same terms as s 41(1)(b) of the Queensland Act; and
(b)s 269(1), which said that an insurer could be required to provide to the CTP regulator information about liability described in the same form as in s 88 of the Queensland Act.
That is, the relevant provisions of the 2008 Act reflected the 2003 form of equivalent provisions of the Queensland Act. The difference in expression in the current versions of ss 97 and 269 of the 2008 Act seems to be directly attributable to the divergence that had emerged by 2003 between the two equivalent provisions of the Queensland Act.
It is possible that the language diverged in the Queensland Act, and was adopted in that divergent form in the 2008 Act, because, as a matter of policy, what a claimant needs to be told by a respondent in order to further negotiations on an individual claim may be different from the statistics that a regulator needs to receive about an insurer’s operations.
Whether or not the differences in expression within the 2008 Act can fairly be said to indicate “a lack of technical precision” may not matter, but once the history of the two provisions is recognised, it is in my view neither necessary nor appropriate to treat the words of s 269 as carrying any particular implications for the proper reading of the significantly different words of s 97.
Purpose and policy
Both parties noted that the purpose and policy behind the legislation ought to influence its interpretation, and made brief submissions about the impact of purpose and policy on the interpretation contended for.
Costs consequences of MFOs
Before referring to specific arguments, it is useful to summarise the costs consequences of MFOs, as provided by s 155 in relation to “small claims”, those in which a court ultimately awards an amount of no more than $50,000 in damages other than for pain and suffering (now called non-economic loss).
Section 155 as relevantly in force deals separately with cases of awards up to $30,000, and those above $30,000 but not more than $50,000.
There are several cases in which the level of the respondent’s MFO may be relevant to the costs outcome.
An MFO of $0 would necessarily exclude the respondent from the opportunity to have certain costs paid by the claimant where the award is less than the respondent’s MFO (under s 155(2)(c) where the award is no more than $30,000, and under s 155(3)(c)(ii) where the award is greater than $30,000).
On the other hand, an MFO of $0 would be adequate to excuse the respondent from paying any of the claimant’s costs if the claimant’s award is no more than $30,000, and is less than the claimant’s MFO (s 155(2)(a)).
No doubt the costs opportunities that the respondent loses as a result of the imposition of a statutory MFO of $0 may in some cases have a substantial value. On the other hand, it is apparent from the above summary that some of those costs opportunities would only arise from the making of an MFO that was relatively high (at least in the context of an award of no more than $50,000). For instance, the chance under s 155(3)(c)(ii) of having costs paid by the claimant from the commencement of court proceedings would only arise if the respondent made an MFO of more than $30,000, and there is always the chance that such an offer would be accepted, such that there would be no operation for s 155.
Objects and purposes of the 2008 Act
The submissions made by the parties relied on the objects specified within the 2008 Act, and did not refer to any other material. Section 5A of that Act is as follows:
5A Objects
The main objects of this Act are—
(a) to continue and improve the system of compulsory third-party insurance, and the scheme of statutory insurance for uninsured and unidentified vehicles, operating in the ACT; and
(b) to promote competition in setting premiums for compulsory third-party insurance policies; and
(c) to keep the costs of insurance at an affordable level; and
(d) to provide for the licensing and supervision of insurers providing insurance under policies of compulsory third-party insurance; and
(e) to encourage the speedy resolution of personal injury claims resulting from motor accidents; and
(f) to promote and encourage, as far as practicable, the rehabilitation of people who sustain personal injury because of motor accidents; and
(g) to establish and keep a register of motor accident claims to help the administration of the statutory insurance scheme and the detection of fraud; and
(h) to promote measures directed at eliminating or reducing causes of motor accidents and mitigating their results.
Counsel for Mr Mitchell pointed to ss 5A(c) and (e) in particular, and said that these objects are to be pursued, among other things, by encouraging respondents to admit liability rather than going to trial on that question. In oral submissions counsel for Mr Mitchell explained that the aim of encouraging people to resolve claims as quickly as possible, and to reduce costs, would be promoted by a regime under which a respondent who is not willing to admit liability in any form or to any extent is to have no recourse to the costs advantages that may flow from engaging in the mandatory final offer process.
Counsel for the ACT said that the objects set out in s 5A(c) and (e) would be furthered by leaving it open to respondents to settle claims for relatively small amounts even where they do not accept liability and where, given the nature of the injuries, they would not admit liability as part of such a settlement. Counsel for the ACT said in written submissions:
73. To adopt the Appellant’s construction would be to frustrate the purpose of the compulsory conference and the exchange of MFOs. It would encourage a claimant to ignore any offer of settlement made by a respondent, if such offer is deprived of the force of a MFO, by removing the potential adverse consequences as to costs a MFO carries.
Counsel for the ACT also noted that s 5A(f) of the 2008 Act, which refers to the purpose of promoting rehabilitation, is furthered by bringing forward the respondent’s responsibility to fund rehabilitation once liability is admitted (ss 97 and 127(1)(a)). This is another indication that the 2008 Act seeks to encourage respondents to admit liability.
Each party has identified a more or less rational policy argument explaining how, in its view, its preferred interpretation of s 141 would further one or more of the objects of the 2008 Act set out in s 5A. However, I can see no basis in those objects for choosing between the propositions put by the parties about the significance of a particular operation of the more specific provisions that are in issue in this appeal. The objects of the 2008 Act are too general, and the asserted impacts of the various interpretations are too speculative, to provide any basis on which I could conclude that one particular interpretation “would best achieve the purpose of” the legislation as required by s 139 of the Legislation Act 2001 (ACT).
However, I note:
(a)in response to Mr Mitchell’s submission at [125] above – that there may be some substance to his argument if that argument assumes that a qualified denial of liability can be seen as a limited admission of liability; otherwise, concluding that a respondent who under s 97 advises a qualified denial is not willing “to admit liability in any form or to any extent”, and is therefore intended to be excluded from the MFO process, would not satisfy the obligation to give meaning to “altogether” in s 141;
(b)in response to the ACT’s submission at [126] above:
(i)that the legislative scheme does not prevent respondents, at any stage (including at the compulsory conference), settling claims for relatively small amounts even where they are not willing to accept liability;
(ii)that at some point there should be real consequences for a respondent who unreasonably maintains an outright denial of liability;
(iii)that the compulsory conference would be an appropriate last opportunity for the respondent to be able to negotiate from a position of denial without any consequences; and
(iv)that a claimant at a compulsory conference may in fact be more focussed on any offer of settlement made by a respondent who maintains a denial of liability if it is clear that this will be the last realistic offer under the legislation, and that the next required offer will be $0 (if the matter is not settled at the compulsory conference, the claimant’s choices are to abandon the claim, or to run a court proceeding, and even the costs opportunities provided to the claimant by a $0 MFO may provide little compensation for that risk); and
(c)in response to the ACT’s submission at [127] above – that s 127(1)(b) permits rehabilitation funding by agreement between the parties even if the respondent does not admit liability, so that a respondent who is not willing to admit liability may nevertheless agree to fund rehabilitation (presumably in the interests of minimising the award made to an ultimately successful claimant): that is, the promotion of rehabilitation is not entirely dependent on pushing respondents to early admissions of liability.
Conclusion: what was the ACT’s obligation?
It is in this context that s 97 of the Act must be considered. The section provides:
97 Respondent to try to resolve motor accident claim
(1) A respondent must, not later than 6 months after the day the respondent receives, or is taken to have received, a complying notice of claim for a motor accident claim—
(a) take any reasonable steps necessary to find out about the motor accident for the motor accident claim; and
(b) tell the claimant, in writing—
(i) whether liability is admitted or denied; and
(ii) if contributory negligence is claimed—the degree of the contributory negligence expressed as a percentage; and
(c) if the claimant—
(i) made an offer of settlement in the notice of claim—tell the claimant whether the respondent accepts or rejects the offer; or
(ii) did not make an offer of settlement in the notice of claim—invite the claimant to make a written offer of settlement; and
(d) make a fair and reasonable estimate of the damages to which the claimant would be entitled in a proceeding for the motor accident claim against the respondent; and
(e) either—
(i) make a written offer, or counteroffer, of settlement to the claimant setting out in detail the basis on which the offer, or counteroffer, is made; or
(ii) settle the motor accident claim by accepting an offer made by the claimant.
(2) An offer, or counteroffer, of settlement must be accompanied by a copy of medical reports, assessments of cognitive, functional or vocational capacity and all other material, including documents relevant to assessing economic loss, in the offerer’s possession or control that may help the person to whom the offer is made make a proper assessment of the offer.
(3) A respondent or claimant to whom a written offer, or counteroffer, of settlement is made must, unless a response to the offer is to be made under subsection (1) (c), respond in writing to the offer not later than 3 months after the day the respondent or claimant receives the offer, indicating acceptance or rejection of the offer.
(4) An admission of liability by a respondent under this section is not binding on the respondent—
(a) in relation to another claim; and
(b) at all if it later appears the admission was induced by fraud.
Note 1 A respondent may be obliged to make early payments for an injured person’s medical expenses whether or not liability is admitted for the motor accident claim (see ch 3).
Note 2 If a respondent admits liability for a motor accident claim, the respondent may be obliged to pay for the injured person’s medical expenses and rehabilitation services (see pt 4.6).
The purpose of s 97 is clearly expressed in the heading to the section: it compels a respondent to try to resolve a motor accident claim. At the point in time where s 97 would be expected to operate there are no court proceedings and therefore no formal pleadings. The intention in s 97(1)(b) is to oblige the respondent to provide to the claimant information relevant to the claimant framing any offer of settlement to the respondent, or in considering the offer of settlement made by the respondent. In considering whether to accept the offer of settlement made by a respondent, it is obviously relevant and important for a claimant to know whether the respondent is admitting liability or is alleging contributory negligence. Any determination whether to accept or reject an offer of settlement involves weighing uncertain factors, or risks. The intention of s 97(1)(b) is to provide the claimant at an early time with information relevant to assessing those risks.
An admission of liability made pursuant to s 97(1)(b)(i) is binding on the respondent thereafter, except in relation to “another claim” or if the admission was induced by fraud: s 97(4). Such an admission may also oblige the respondent to pay the claimant’s medical expenses: see Part 4.6 generally. While the Act endeavours to ensure that respondents are provided with sufficient information to accept liability before s 97 is engaged, there will be many cases where the respondent will not be in a position to formally admit liability before having to comply with s 97. It is not without significance that s 97 does not preclude a respondent from denying liability and at the same time making an offer of settlement; indeed, the provision appears to mandate the respondent making an offer of settlement irrespective of whether liability is admitted or denied. There is nothing in the Act which binds a respondent thereafter to a denial of liability communicated pursuant to s 97(1)(b)(i). This is because different considerations apply to a change from a denial of liability to an admission of liability as opposed to the opposite situation. A claimant who has been informed pursuant to s 97(1)(b)(i) that liability is admitted has a right to assess the offer of settlement made by the respondent on that basis. Considerations of fairness would often militate against a respondent being given leave to withdraw such an admission at a later time.
Before a claimant for a motor accident claim brings a court proceeding based on the claim, the parties must attend a compulsory conference: s 136. The obligation to attend a compulsory conference is in addition to, and logically postdates, the obligations imposed on a respondent by s 97. Each participant at a compulsory conference must attend the conference and actively take part in an attempt to settle the claim: s 140. What is remarkable is that up to the point in time where s 97 applies, the Act provides time limits for the parties to comply with the various obligations imposed by the Act. There is, however, no time limit as such imposed by the Act for the holding of a compulsory conference, albeit that either party can call the conference if more than 6 months have passed since the respondent received the notice of claim.
Where a claim is not settled at the compulsory conference, s 141 applies. This section provides:
141 Mandatory final offers
(1) This section applies if, for a motor accident claim—
(a) the compulsory conference has been dispensed with under section 137 (Compulsory conference may be dispensed with); or
(b) the motor accident claim is not settled at the compulsory conference.
(2) The claimant and the respondent for the motor accident claim must exchange written final offers (each of which is a mandatory final offers).
(3) However, if a respondent denies liability altogether, the respondent must give the claimant a written notice of denial (a mandatory final notice).
(4) If the respondent gives the claimant a mandatory final notice, for this Act, the respondent is taken to have given the claimant a mandatory final offer of $0.
(5) A mandatory final offer must identify how much of the offer is for pain and suffering.
Note 1 If a form is approved under s 276 for a mandatory final offer or a mandatory final notice, the form must be used.
Note 2 A mandatory final offer for $50 000 or less must be exclusive of any amount for costs (see s 144 (1)).
The issue that arises in the present proceedings is whether a respondent is entitled to make a mandatory final offer without making some admission of liability, or whether such a respondent is one who “denies liability altogether” and consequently must give a mandatory final notice. The consequence of giving a mandatory final notice is that the respondent is taken to have given the claimant a mandatory final offer of $0. The practical importance of the question is purely one relating to costs. It is therefore appropriate to briefly consider the approach taken by the Act to the entitlement of claimants to costs insofar as the entitlement is affected by the operation of s 141.
The Act makes special provision for entitlement to costs in “small claims”, being claims of $50,000.00 or less. It also treats differently claims of or below $30,000.00. A mandatory final offer for $50,000.00 or less must be exclusive of costs: s 144(1). If a mandatory final offer is for $50,000.00 or less, but for more than $30,000.00 and is accepted, costs must be worked out and paid as prescribed by regulation: s 144(2). Regulation 27 of the Road Transport (Third Party Insurance) Regulation 2008 (ACT) (the Regulation) prescribes that costs (including disbursements) in such cases must not exceed $5,000.00. If a mandatory final offer is for $30,000.00 or less and is accepted, costs are not to be paid. Subsequently, s 144 of the Act has been amended, but not in such a way as to affect the present exercise of determining the proper interpretation of s 141.The scheme of s 144, as it stood at the relevant time, which governed entitlement to costs where a mandatory final offer for $50,000.00 or less was accepted, is therefore tolerably clear; costs for small claims, being claims of $50,000.00 or less, are heavily regulated. The apparent rationale for this is to encourage claimants with less serious injuries, as measured by the level of damages, to resolve their claim as quickly and cheaply as possible. The unavailability of costs also operates as an incentive to insurers to pitch their offer at a level likely to resolve the claim.
What s 144 reveals is that the legislature has placed a premium on early resolution of small claims, even to the extent of requiring claimants to bear their own costs in many cases. In some circumstances the claimant’s entitlement to costs is capped, and is not fixed according to the amount actually expended by the claimant in preparing the claim. The section operates as an incentive to claimants to resolve small claims, and as a penalty to those claimants expending significant amounts by way of costs and disbursements in preparing a small claim.
The next relevant cost provision is s 155, which applies where a court awards $50,000.00 or less in damages in proceedings based on a motor accident claim. For the purposes of s 155, “damages” does not include damages for pain and suffering: s 155(5). It is apparent that the provisions of s 155 may only apply where damages are awarded by a court, which of course can only occur where the claim has not resolved by the giving of mandatory final offers as prescribed by s 141.
If the court awards $30,000.00 or less in damages, and the amount awarded is less than the claimant’s mandatory final offer but more than the respondent’s mandatory final offer, the claimant is not entitled to costs (s 155(2)(a)). At first blush this appears counterintuitive, or even unfair. It clearly, however, is intended to remove any incentive for a claimant with a small claim to litigate their claim. The necessity for such a claimant to pay their own costs of the proceedings operates both as an incentive to the claimant to settle the claim, and as a penalty to a claimant who does not settle such a claim. If the amount awarded by the court is equal to or more than the claimant’s mandatory final offer, costs must be awarded to the claimant as prescribed by regulation from the date on which the proceedings began, but no award of costs is to be made for costs up to that date: s 155(2)(b). Regulation 28 of the Regulation provides that where the amount awarded by the court exceeds the amount of the respondent’s mandatory final offer by at least 15 per cent, the claimant is entitled to costs on a party and party basis, but capped at $10,000.00. In any other case the claimant is not entitled to costs. In order to obtain an award for costs under s 155(2)(b), therefore, it is not enough to be awarded damages exceeding the respondent’s mandatory final offer – the damages awarded must exceed the respondent’s mandatory final offer by at least 15 per cent. This again demonstrates the premium that the legislature has placed on early resolution of small claims. A claimant must approach the resolution of such a claim in the knowledge that a “reasonable offer” on the part of the respondent to settle the claim is to be refused at the claimant’s peril. The claimant may pursue a greater sum if he or she chooses, but not at the respondent’s cost unless he or she achieves an award of damages at least 15 per cent more than the respondent’s mandatory final offer. The 15 per cent differential required by the Regulation before costs may be awarded is effectively a statutory determination of unreasonableness. In the operation of s 155(2)(b) we again see in operation both an incentive to resolve small claims, and a penalty for unreasonably failing to do so.
If a court awards more than $30,000.00 but not more than $50,000.00 in damages the provisions of s 155(3) apply. If the amount awarded is less than the claimant’s mandatory final offer but greater than the respondent’s mandatory final offer, costs must be awarded to the claimant in accordance with the Civil Law (Wrongs) Act 2002 (ACT) (Civil Law (Wrongs) Act), Chapter 14, but presently capped at the sum of $2,500.00: s 155(3)(a). If the amount awarded is equal to or more than the claimant’s mandatory final offer, costs must be awarded to the claimant for the period up to the date of commencement of the proceedings in accordance with the Civil Law (Wrongs) Act, Chapter 14, and thereafter on an indemnity basis: s 155(3)(b). Regulation 30 of the Regulation provides that if the amount of the court order is at least 15 per cent more than the respondent’s mandatory final offer, the maximum costs that can be awarded up to the date on which proceedings began is $15,000.00, otherwise costs for that component are capped at $2,500.00. If the amount awarded to the claimant is equal to or less than the respondent’s mandatory final offer, costs must be awarded to the claimant up to the date of commencement of the proceedings in accordance with the Civil Law (Wrongs) Act, but presently capped at $2,500, and thereafter must be awarded to the respondent in accordance with the Civil Law (Wrongs) Act, Chapter 14 (uncapped). Here again we see the legislature providing an incentive to claimants to resolve small claims, and a penalty for failing to do so.
Exceptions to the provisions of s 155 are found in s 156. It is unnecessary to consider those in detail, but it is worth observing that s 156(5) prohibits a court from awarding costs to a party related to investigations or the gathering of evidence after the end of the compulsory conference, unless the award of damages is affected by factors that were not reasonably foreseeable at the time of the exchange of mandatory final offers. This is a clear indication that the legislature intended to encourage both claimants and respondents to have their cases prepared by the time they participate in a compulsory conference.
From the above, I conclude:
(f)one of the primary objects of the Act is to encourage parties to settle motor accident claims without resorting to litigation;
(g)the first point at which an attempt must be made to resolve a claim is dictated by s 97, and must be no later than six months after the respondent receives a complying notice of claim;
(h)at that point it is not expected that the parties will have completed all the investigations or preparations necessary to conduct court proceedings;
(i)for the purpose of informing a claimant so as to enable the claimant to accept or reject an offer made by the respondent, the respondent must tell the claimant whether liability is admitted or denied, and whether contributory negligence is claimed;
(j)a respondent is obliged by s 97 to make an offer to settle the claim, even if liability is denied. Such an offer could be for a nominal amount, but an offer must nevertheless be made;
(k)between the date of the process mandated by s 97 and the compulsory conference the parties are expected to have undertaken all investigations and preparations necessary to conduct court proceedings;
(l)the object of the compulsory conference is to resolve the claim without the need for court proceedings. It may be anticipated that the information available to the parties will, however, be significantly greater at this point than when the first attempt at resolution under s 97 was made;
(m)an examination of the scheme of the Act regarding the entitlement to costs for parties at various stages of this statutory process reveals that the legislature has within the Act consistently adopted a process of providing incentives to settle claims, and penalties where a claimant unreasonably declines an offer, which are mandatory and set out in the legislation; and
(n)the act differentiates between small claims (mandatory final offers of $50,000.00 or less and damages awards of $50,000.00 or less) with regard to a claimant’s entitlement to costs. Significant penalties apply where claimants refuse a “reasonable” mandatory final offer, even in some cases where they receive more than the offer by way of an award of damages.
The interpretation of s 141 urged by the appellant in these proceedings, and before the Magistrate, seeks to give meaning to s 141(3), and the reference therein to a respondent who “denies liability altogether”, by reference to s 97 of the Act. In my opinion this is an error. The legislative purpose behind s 97, and in particular s 97(1)(b), is not to restrict the ability of a respondent in thereafter taking a flexible approach to resolving motor accident claims and having the benefit of the incentives for claimants to resolve claims provided by the Act. The purpose of requiring the respondent to inform a claimant whether liability is admitted or denied, and whether contributory negligence is alleged, is to provide the claimant with information against which he or she may assess the offer of settlement. It would be entirely contrary to a principle object of the Act to lock-in a respondent to effectively having to make no offer to settle the claim at a compulsory conference because the respondent does not admit liability and has not claimed contributory negligence for the purposes of s 97. The events which are governed by ss 97 and 141 are divorced in time, perhaps to a significant degree; the matrix of information available to the parties may be expected to differ between the two events. Other than the fact that s 97 refers to the issue of liability, there is no logical reason to base the interpretation of s 141(3) on s 97(1)(b). In my opinion, there is simply no warrant or need to do so.
It is very common for a respondent to be in a position prior to the taking of evidence in court proceedings where it cannot know with any certainty whether it is liable, or may believe tentatively that it may not be liable. In practice, the issue of liability may not become clear until the end of the claimant’s case. One example of where this may occur is where there are no witnesses to the relevant events other than the plaintiff; many others may be hypothesised. Such a respondent may nevertheless recognise the risk that it will be found to be liable and will be willing to make an offer of settlement in recognition of that risk notwithstanding its unwillingness to formally admit liability. It is well to remember that respondents in motor accident claims are performing a quasi-public function; all owners of registered motor vehicles must have third party insurance under the Act, and failure by respondents to exercise due diligence in the conduct of claims will affect not only the respondent’s profits, but also the cost of insurance to the public. It is worth remembering that one of the main objects of the Act as expressed in s 5A is “to keep the costs of insurance at an affordable level”. To require a respondent to either admit liability where liability is not clear, or alternatively to preclude a respondent from giving a mandatory final offer with the certain costs incentives that attach to the making of such an offer serves neither the purpose of early resolution of claims nor that of maintaining the affordability of third party insurance.
The giving of a mandatory final offer is important because it is the final step in the statutory process prescribed by the Act for resolution of claims before court proceedings are commenced. The resolution of a claim either at the compulsory conference or by acceptance of a mandatory final offer is not likely to turn upon whether liability has been admitted or denied, or whether contributory negligence is alleged. For the reasons I have given with respect to s 97, information about the respondent’s attitude to liability is not irrelevant to the approach taken by a claimant to the compulsory conference or to accepting a mandatory final offer, but the importance of that information should not be overstated; after all, a claimant who has been told that liability is denied and that contributory negligence is alleged is in practice no better informed so as to make a decision whether to accept an offer than a claimant who is simply informed that liability is denied. The factors most likely to influence the decision of a claimant whether to accept a mandatory final offer are the size of the offer, the likelihood of receiving an award of damages greater than the offer, and the risks inherent in refusing the offer.
As I have observed, a prudent respondent will often approach a compulsory conference willing to make an offer of settlement but not willing to admit liability. If such a respondent is restricted to giving a mandatory final notice, effectively a mandatory final offer of $0, the claimant will not be at risk of any of the costs orders mandated by s 155 of the Act. This will significantly dilute the effectiveness of those costs provisions in encouraging early resolution of claims, and will lead to greater costs being incurred by respondents. Such outcomes are entirely inconsistent with the objects of the Act, and with the scheme of the Act which consistently provides incentives for claimants to resolve claims, particularly small claims, at an early time, and also provides penalties for claimants who unreasonably refuse a reasonable offer of settlement.
In working out the meaning of s 141, the provisions of the Act must be read as a whole: s 140 of the Legislation Act 2001 (ACT). In the above I have attempted to demonstrate that the interpretation of s 141 urged by the appellant is inconsistent with the objects of the Act and the legislative scheme. It is still necessary, however, to confront the text of s 141.
If the legislature had not included subsections (3) and (4) in s 141, it would be arguable that a respondent would not be entitled to make a mandatory final offer of $0, as it would be arguable that this would not constitute an offer as contemplated by the section. The legislature has taken a different approach to mandatory final offers under s 141 to that which it takes to offers under s 97. A respondent has no obligation to make even a nominal offer under s 141. A respondent approaching a compulsory conference, or making a mandatory offer, may have a state of mind (corporate or otherwise) that it will not admit liability, but it acknowledges there is a risk that it will be found to be liable. Such a respondent may well be prepared to make an offer of settlement. On the other hand, the respondent may suspect fraud or for some other reason be unwilling to make any offer of settlement at all. The first such respondent may be said to be denying liability, but not altogether in the sense of “completely” or “totally” denying liability: see The Australian Concise Oxford Dictionary (Oxford University Press, 4th ed, 2008), definition of “altogether”. The second of these posited respondents may truly be said to be denying liability altogether. What s 141 addresses, therefore, is the state of mind of the respondent, and acts so as to allow a respondent to make no offer at all.
I do not perceive any difficulty in adopting this interpretation to be presented by the use of the word “must” in subsections (2) and (3) of s 141. A respondent who denies liability altogether must give a mandatory final notice to the claimant. By doing so the respondent complies with s 141(3). By giving the mandatory final notice the respondent is deemed to have given a mandatory final offer, thus complying with s 141(2).
I do not derive any assistance in interpreting s 141 by consideration of s 51C of the Motor Accidents Insurance Act 1994 (Qld).
It is not necessary, in my opinion, to finally determine whether the Act contemplates a respondent being entitled to deny liability and at the same time allege contributory negligence for the purposes of s 97, although as the provisions of s 97(1)(b) are directed to ensuring that a claimant is fully informed there is a strong argument that it does.
If it be correct that a denial of liability with an allegation of contributory negligence is something less than a denial of liability “altogether” for the purposes of s 141(3), respondents could easily avoid the obligation to give a mandatory final notice by the simple expedient of denying liability and alleging 100 per cent contributory negligence. This would allow the respondent to give a mandatory final offer, thereby preserving the availability of any cost penalty provisions, without conceding anything useful to the resolution of the claim concerning liability. This would effectively make ss 141(3) and (4) irrelevant.
It was submitted by the appellant that his interpretation of s 141 would advance the object of encouraging early resolution of claims by penalising respondents for unreasonable failure to admit liability. This submission is logical, but in my view unpersuasive. Such an interpretation may advance the object of early resolution of claims, but would frequently operate contrary to the object of maintaining the cost of insurance of affordable levels. By contrast, interpreting s 141 as I have suggested satisfies both of these objects.
The respondent was entitled to give the appellant a mandatory final offer. As such, there was no basis for the appellant to give the respondent a compliance notice under s 158 of the Act. The Magistrate was therefore correct to refuse the appellant’s application for judgment. The present appeal should therefore be dismissed with costs.
To the extent that either party invited this Court to review the question of costs of the proceedings in the Magistrates Court, the Court should decline the invitation. The Magistrate reserved the question of costs and left it up to the parties to relist the matter for the issue to be ventilated at a later time should the parties wish to do so. This was a sensible approach. The parties may relist the matter before the Magistrate if they wish to do so.
The appropriate orders are:
(a)appeal dismissed;
(b)the appellant is to pay the respondent’s costs of the appeal as agreed or assessed.
| I certify that the preceding thirty-three [33] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Burns. Associate: Date: 12 October 2018 |
Wigney J:
I have read the separate reasons to be published by Penfold J and Burns J. I agree with Burns J that the appeal should be dismissed with costs for the reasons given by his Honour.
Like Burns J, I am unable to agree with the construction of the relevant provisions of the Road Transport (Third Party Insurance) Act 2008 (ACT) that was advocated by the appellant and accepted by Penfold J.
While the text of s 141 of the Act is rather clumsy, if not obscure, when read in context and in light of the apparent purpose and objects of the relevant statutory scheme, the preferable construction of that section is that a respondent is only taken to deny liability “absolutely” for the purposes of s 141(3) if they are unwilling to make a mandatory final offer to the claimant pursuant to s 141(2) in an amount of greater than $0, and as a result have given, or are required to give, the claimant a written notice of denial pursuant to s 141(4). It follows that a respondent who has done no more than communicate a denial of liability to the claimant, either pursuant to s 97(1)(b)(i) of the Act or otherwise, may nonetheless give the claimant a mandatory final offer in an amount of greater than $0 pursuant to s 141(2) of the Act. Likewise, a respondent may give a claimant a mandatory final offer without admitting, or being taken to admit, liability to the claimant, either in whole or in part.
In those circumstances, the Magistrate was correct to refuse the appellant’s application for judgment. The respondent had given the appellant a mandatory final offer in compliance with s 141(2). There was accordingly no proper basis for the appellant’s compliance notice pursuant to s 158 of the Act.
| I certify that the preceding four [4] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Wigney. Associate: Date: 12 October 2018 |