Golding v NRMA
[2021] NSWPIC 98
•13 December 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Golding v NRMA Insurance Limited [2021] NSWPIC 98 |
| Claimant: | Courtney Golding |
| insurer: | NRMA Insurance Limited |
| Member: | Susan McTegg |
| DATE OF decision: | 13 December 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS - Claims assessment application; whether claimant had used “best endeavours’ to settle claim before referring it for assessment; section 7.32(3) of the Motor Accident Injuries Act, 2017; meaning of “best endeavours”; prior offer conveyed by insurer indicated sufficient evidence to make assessment of claim; claimant put insurer on notice of need to protect limitation period; Foster v Hall considered; Held- “best endeavours” not mean necessary for offers to be exchanged; duty not impose an obligation on claimant to disregard her own interests; “best endeavours” places obligation on claimant to facilitate an opportunity for settlement discussions; claimant did what she reasonably could in circumstances to settle the claim; application to dismiss application declined. |
INTRODUCTION
Courtney Golding (the claimant) is a 31-year-old woman who sustained injury in a motor vehicle accident on 11 September 2018.
The claimant filed an application for common law damages in the Personal Injury Commission on 10 September 2021.
Liability for the common law claim was admitted by the insurer on 22 March 2021.
I am asked by the insurer to dismiss the application on the basis the claimant had filed the application in an attempt to preserve the three-year limitation period, but in doing so had failed to discharge her obligations pursuant to s 7.32 of the Motor Accident Injuries Act 2017 (MAI Act) . Section 7.32(3) states that parties to a claim must use their best endeavours to settle the claim before referring it for assessment.
The claimant opposes the application for dismissal.
TRANSITIONAL PROVISIONS
The Personal Injury Commission (PIC) commenced operation on 1 March 2021, and I am a member of the Motor Accidents Division of the PIC.
Clause 14A(1) of the Personal Injury Commission Regulation 2020 designates this application pre-establishment proceedings and cl 14D empowers me to assess the claim.
Because of the date of the accident, cl 14D(3)(b) provides that the MAI Act), the Motor Accident Injuries Regulation and Chapter 7 of the Motor Accident Guidelines continue to apply.
THE RELEVANT LAW
Division 7.6 of the MAI Act relates to claims assessment.
Section 7.32(3) of the MAI Act provides:
“Parties to a claim must use their best endeavours to settle the claim before referring it for assessment under this Division.”
PROCEDURAL HISTORY OF THE CLAIM
In submissions dated 4 October 2021 the insurer provided a chronology of events. The claimant provided a chronology of events in submissions uploaded to the portal on 29 November 2021.
It is agreed arrangements were made for the parties to engage in settlement discussions on 21 April 2021. On that date the insurer asserts the claimant’s legal representative made one attempt to contact their office and thereafter failed to engage or return any of the insurer’s phone calls and no offers of settlement were exchanged. The claimant on the other hand states the insurer was not available to take the solicitor’s call.
The insurer states shortly afterwards, the claimant was invited to convey an offer in writing, in the event they remained interested in exploring settlement. The insurer asserts no response was received. The claimant does not comment on this assertion but does not dispute this occurred.
The insurer states on or around 23 July 2021, the claimant’s solicitor contacted the offices of the insurer’s solicitor and queried whether the insurer was willing to turn an open mind to conveying a formal offer in writing for the claimant’s consideration. Again, the claimant does not comment on this assertion but does not dispute it occurred.
The insurer states for the sake of genuine compromise and to utilise its best endeavours, a written offer was conveyed to the claimant and the insurer was again met with no response or communication. The claimant has provided a copy of this letter dated 27 July 2021.
The insurer requested particulars of the claim for damages under s 6.25 of the MAI Act on 4 August 2021. Those particulars remain outstanding.
I note the Sydney region was impacted by restrictions as to movement for extensive periods from mid-2021. Whilst no evidence is before me as to the impact of COVID-19 on the preparation of this claim it would be surprising if it was not impacted in some way, having regard to the limitations on movement for lengthy periods of time, the requirement for persons to work from home and the cancellation of medical assessments.
The parties agree in a letter dated 2 September 2021, the claimant’s legal representatives provided a schedule of damages and “appointed” a settlement conference to be conducted by phone on 6 September 2021 at 12.00 pm. In that letter CMC Lawyers advised they had been instructed to refer the matter to the PIC to protect the limitation period but understood they were first required to make an effort to settle the matter.
It is agreed the insurer did not participate in the appointed settlement conference on 6 September 2021.
By letter dated 7 September 2021, the claimant again “appointed” a “final settlement conference” on Thursday, 9 September 2021. In that letter CMC Lawyers stated, “We advise we will contact you by phone and should you not be available or otherwise unable to undertake the settlement conference at that time, we intent to lodge our client’s PIC application shortly thereafter.” It is agreed the insurer did not participate on that day.
On 7 September 2021 the claimant’s lawyer received a letter from Sparke Helmore for the insurer which stated inter alia:
”You cannot simply ’appoint’ an ISC at your convenience and expect that we become available. Following your ’appointment’ of an ISC on Monday, 6 September 20212, we were not met with a follow up to confirm availability nor were we contacted by your office on that day.
We are unavailable on 9 September 2021 and invite you to propose alternative dates in the coming weeks which are mutually agreeable.“On 8 September 2021 the claimant’s lawyer wrote to Sparke Helmore. That letter is in the following terms:
”We refer to the above matter and your correspondence dated 7 September 2021.
We are unable to appoint dates in the coming weeks as doing so would put our client’s claim out of time within which to refer the matter to the PIC in the event the matter does not settle.
We advise that we are able to make ourselves available for a telephone settlement conference on any day and time this week.
Alternatively, if you prefer, we can undertake negotiations by way of exchanging email offers during this week.
We note you are not available on the date we nominated and await your reply as to a suitable time this week or your preparedness to undertake negotiations by email.”A file note evidences a telephone conversation between Stephanie Mancini of CMC Lawyers and Tania Hanna of Sparke Helmore on the morning of 9 September 2021. Assuming the file note is an accurate depiction of the conversation Ms Mancini asked Ms Hanna if her client would be participating in the settlement conference that day. Ms Hanna purportedly replied that she emailed her client the day before but had not received any instructions, however, any offer in writing would be forwarded to her client for a response.
On 9 September 2021, the claimant conveyed a written offer of settlement to Sparke Helmore.
On 10 September 2021 the claimant lodged the application with the PIC.
SUBMISSIONS The insurer’s submissions
The insurer submits, in an attempt to preserve the three-year limitation period, the claimant has lodged her application prematurely and has failed to discharge her obligations under s 7.32(3) of the MAI Act.
The insurer submits prior to serving the Schedule of Damages on 2 September 2021 no response to the insurer’s request for particulars or particulars pursuant to s 6.25 of the MAI Act had been provided and no genuine attempt was made by the claimant to settle the claim.
The insurer says it did not attend the settlement conference on 6 September 2021 where the claimant had appointed, at her own expediency, a settlement conference two business days after providing a schedule of damages, affording the insurer with no opportunity to consider the claim and obtain instructions.
The insurer submits the settlement conference appointed on 9 September 2021 was appointed by the claimant with urgency and with complete disregard to the insurer’s availability.
The insurer relies upon the decision of Claims Assessor Broomfield in AQM v NRMA [2020] NSWSIRADRS 238 (AQM) who dismissed an application due to the failure to comply with s 6.25 and s 7.32 of the Act. Specifically, Assessor Broomfield stated at [29]:
“A claim may be referred to the Dispute Resolution Service however there is cast upon both parties an obligation pursuant to Section 7.32(3) to ‘use their best endeavours to settle the claim before (my emphasis) referring it for assessment under this Division’. It appears to me that such contemplates a genuine attempt to settle the claim with a minimum exchange of offers from both parties before the matter can be referred to the Dispute Resolution Service.”
The insurer submits the claimant did not exercise her best endeavours to resolve the claim prior to proceeding to the PIC and asks that the claim be dismissed.
The claimant’s submissions
The claimant submits it is incorrect to say that no serious attempt was made to settle the claim in circumstances where the claimant’s lawyers advised the urgency of undertaking settlement negotiations in the week prior to the expiry of the limitation period and where they indicated they were available to conduct those negotiations by telephone, email or otherwise prior to the limitation period expiring.
The claimant submits that given both parties have made an offer, the criteria has been satisfied where an attempt to resolve the matter has been made.
CONCLUSION
What is meant by the term “best endeavours”?
Case law which has considered the term “best endeavours” has largely been confined to commercial disputes where the court has been required to consider a contractual clause requiring a party to use “best endeavours” to achieve a particular outcome.
In Foster v Hall the Court of Appeal considered an agreement to use “best reasonable endeavours” to register a plan of subdivision.[1] McFarlane JA stated:
[1] Foster v Hall [2012] NSWCA 122
“33. The addition of the word ‘best’ to the expression ‘reasonable endeavours’ raises the `required standard to a level somewhat higher than that imposed
by a simple ‘reasonable endeavours’ obligation. However, I do not consider that there is any significant difference, at least for present purposes, between the content of an obligation to use ‘best reasonable endeavours’ and one to use ‘best endeavours’. In Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; 156 CLR 41 Gibbs J explained the meaning of the latter expression as follows:
‘[A]n obligation to use 'best endeavours' does not require the person who undertakes the obligation to go beyond the bounds of reason; he is required to do all he reasonably can in the circumstances to achieve the contractual object, but no more’. (at 64).
In the same case Mason J referred to the extent of the obligation of best efforts (or endeavours) as ‘governed by what is reasonable in the circumstances’ (at 91 - 2). Dawson J noted that the obligation does not impose a duty upon a party to disregard his or her own interests (at 143 - 4).
34. To those statements may be added the proposition that a party subject to the obligation is bound to take ‘steps which a prudent, determined and reasonable [party], acting in his own interests and desiring to achieve [the results specified in the contract] would take’ (Hawkins v Pender Bros Pty Ltd [1990] 1 Qd R 135 at 151 quoting Buckley LJ in IBM United Kingdom
Ltd v Rockware Glass Ltd [1980] FSR 335 at 343).”
It seems that what is required of the claimant was to do all she reasonably could in the circumstances to attempt to achieve a settlement of her claim, or to take steps which a prudent, determined and reasonable person acting in her own interests and desiring to achieve a settlement would take.
The claimant correctly submits that “best endeavours” does not mean that it is necessary for offers to be exchanged because one party may not wish to make an offer and that criteria may never be met.
The decision of Assessor Broomfield in AQM can be distinguished on the facts from the current dispute where in AQM there had not even been a minimum exchange of offers before proceedings were commenced in the Dispute Resolution Service, the forerunner of the PIC.
It is of concern that the claimant had not provided details of the claim under s 6.25 of the MAI Act. However, where the parties had agreed to enter into settlement discussions in April 2021, I am satisfied the insurer at that time considered it had sufficient evidence to make an assessment of the quantum of the claim. I also note that the schedule of damages served by the claimant on 2 September 2021 provided additional particulars of the claim for damages.
In the context of the MAI Act “best endeavours” to settle the claim places an obligation on the claimant to facilitate an opportunity for settlement discussions with the insurer.
I agree with the insurer that it is not appropriate for the claimant to appoint a date and time for settlement discussions regardless of the insurer’s availability.
Furthermore, whilst the claimant’s solicitor indicated on Wednesday 8 September 2021 that they would make themselves “available on any day and time this week” that window of opportunity was limited where the limitation period expired on 11 September 2021.
However, the insurer’s response of 7 September 2021 that the claimant proposed alternative dates in the coming weeks did not take into account the concern expressly raised by the claimant’s solicitor on 2 September 2021 of the need to protect the limitation period.
Having regard to the forthcoming limitation period, I am satisfied that the claimant did all she reasonably could in the circumstances to attempt to achieve a settlement of her claim. On 2 September 2021 the claimant put the insurer on notice of the need to protect the limitation period and, in my view, that was sufficient to put the insurer on notice that the claimant would be seeking to engage in settlement discussions prior to 11 September 2021.
The claimant was only required to do what she reasonably could in the circumstances. Notwithstanding the limited time frame I am satisfied the claimant did use her best endeavours to settle the claim by her correspondence of 2 September 2021 inviting the insurer to participate in a settlement conference, in putting the insurer on notice that she intended to make an effort to settle the claim prior to referring the claim to the PIC by 11 September 2021, by serving a schedule of damages, by indicating to the insurer her availability to discuss the matter any day, any time, by telephone or email, and by serving an offer of settlement and inviting the insurer to respond.
I find a prudent, determined, and reasonable party acting in her own best interests, noting the duty does not impose an obligation on her to disregard her own interests, did use her best endeavours to settle the claim before referring it to the PIC for assessment.
DIRECTIONS
I decline to dismiss the application.
I confirm the matter is listed for a teleconference on 27 January 2022 at 10.00 am.
Susan McTegg Member
(Motor Accidents Division)
Personal Injury Commission
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