Luo v AAI Limited t/as GIO

CERTIFICATE OF DETERMINATION OF MEMBER
Citation:	Luo v AAI Limited t/as GIO [2022] NSWPIC 584
Claimant:	Qin (Michael) Luo
insurer:	AAMI Limited t/as GIO
Member:	Terence Stern
DATE OF DECISION:	18 October 2022
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”; test of what is reasonable in the circumstances; Transfield v Arlo applied; Held- “best endeavours” places obligation on claimant to facilitate an opportunity for settlement discussions; claimant did what he reasonably could in circumstances to settle the claim; application to dismiss application declined.
determinations made:	1. For the purpose of s 7.32(3) the Claimant has used his best endeavours to settle the claim prior to making his application to the PIC to refer the claim for assessment.

STATEMENT OF REASONS

INTRODUCTION

The Claimant was born in August 1995.
He was riding his motorcycle on 2 December 2018 when he was injured in the Accident.
At the time he was riding his motorbike through an intersection when a car travelling in the opposite direction is alleged to have made a right turn and in doing so failed to give way causing the collision. The Claimant fell from his motorbike landing on his back and sustaining a number of injuries which the Claimant’s solicitor lists in the Submission 2 June 2022 (the Submission – 2 June 2022).
On 11 April 2019 the Insurer issued their post 26 weeks liability notice assessing the Claimant’s injuries as minor.
The Claimant’s solicitor lodged an application for internal review. On 10 July 2019 the Insurer determined that the Claimant’s injury was Non-Minor.
On 17 February 2020 the Claimant was assessed by Dr Andrew Keller at the request of the Insurer. Following the assessment the Insurer’s solicitor Moray & Agnew (‘M&A’) informed the Claimant’s solicitor that the Insurer did not concede entitlement to Whole Person Impairment (WPI).
On 24 May 2021, the Claimant’s solicitor Law Partners (‘LP’) applied for internal review.
On 11 June 2021, the Insurer determined the internal review by affirming its previous decision.

10. Following this LP wrote to the Insurer and M&A on multiple occasions requesting an informal settlement conference (IFS) but did not as at the date of Submission 5 November 2021 receive a response.

11. On 5 November 2021, LP requested that the matter be placed in the stood over list.

PRELIMINARY CONFERENCE

12. I conducted a preliminary conference on 2 June 2022 and as a result of the directions I made on 2 June 2022, the Claimant’s solicitor lodged on the Portal further Submissions and a Chronology of actions taken by the Claimant’s solicitors and by the Claimant.

LEGISLATIVE FRAMEWORK

13. Section 7.32 of the MAI Act is in the following terms:

“7.32 Reference of claim

(1) A claim for damages may be referred to the Commission by the claimant or the insurer, or both, for assessment under this Division.

(2) (Repealed)

(3) Parties to a claim must use their best endeavours to settle the claim before referring it for assessment under this Division.”

14. Section 7.33 states as follows:

“7.33 Time limits for referring claims and making assessment

A party to a claim cannot refer a claim for assessment under this Division more than 3 years after the motor accident concerned unless the party provides a full and satisfactory explanation for the delay to the Commission and the Commission grants leave for the claim to be referred for assessment in accordance with the Commission rules.”

14. The objects of the MAI Act are found in s 1.3(2) of that Act as follows:

“1.3 Objects of Act

(2) For that purpose, the objects of this Act are as follows—

(a) to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities,

(b) to provide early and ongoing financial support for persons injured in motor accidents,....

(g) to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes,...”

MEANING OF BEST ENDEAVOURS

Case law

15. The meaning of the term “best endeavours” was considered in Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83 in which Mason J in a contractual context stated that [101]:

“A “best endeavours clause” thus prescribes a standard of endeavour which is measured by what is reasonable in the circumstances, having regard to the nature, capacity, qualifications and responsibilities of the licensee…in the light of the particular contract”

THE EVIDENCE

Chronological history of Actions taken in claims by Claimant:

Date	Action
20.12.2018	Claimant contacted Law Partners via telephone and made an initial enquiry. He spoke with Solicitor, Ms Tina Mai‐Wakeford. Ms Mai‐Wakeford provided the Claimant with advice in relation to lodging an Application for Personal Injury Benefits, time limitations to lodge his claim and general advice in relation to the statutory benefits and Common Law Damages claims.
09.01.2019	By way of phone call, the Claimant advised Solicitor, Ms Tina Mai‐Wakeford that he has obtained radiology scan reports and would email her a copy shortly.
17.01.2019	By way of phone call, the Claimant was contacted by Solicitor, Ms Tina Mai‐Wakeford and booked in for a face‐to‐face conference with Senior Associate, Ms Dijana Talevska, on 18 January 2019.
18.01.2019	Claimant attended Law Partners’ Sydney Office for a face‐to‐face conference with Senior Associate, Ms Dijana Talevska. Claimant signed a Client Services Agreement allowing Law Partners to act on his behalf.
01.02.2019	Claimant emailed AAMI attaching the following documents: · ED Discharge referral from RPA Hospital dated 2 December 2018 · Passport photo · 2018 Income Tax Return · Screenshot of his payroll history · Photograph of the accident scene · Medical receipts for reimbursement
01.03.2019	Claimant emailed Law Partners seeking advice on how to dispute AAMI’s denial of rehabilitation services.
02.04.2019	Claimant emailed payslips and current Certificate of Capacity to AAMI and requested back payment of his wage loss since the date of the accident.
15.04.2019	Claimant emailed photographs of scarring to Law Partners. Claimant advised he will arrange an MRI scan of his right knee within the next two weeks and send Law Partners a copy of the report upon receipt of same.
26.04.2019	Claimant emailed Law Partners a copy of his MRI report of the right knee.
04.05.2019	Claimant emailed various Certificates of Capacity and receipts for reimbursement to AAMI.
14.05.2019	Claimant emailed Law Partners and requested that they chase AAMI for his wage back payments.
27.06.2019	Claimant emailed Law Partners seeking advice in relation to his entitlement to treatment and care in light of AAMI’s internal review outcome deeming his injuries as “non‐minor”.
28.06.2019	Claimant emailed his current Certificate of Capacity to Law Partners.
09.07.2019	Claimant emailed Law Partners seeking advice on time limits to lodge a Common Law Damages claim.
31.07.2019	Claimant emailed Law Partners seeking advice in relation to the requirements for lodging a Common Law Damages claim.
12.08.2019	Claimant emailed Law Partners seeking an update in relation to lodging his Common Law Damages claim.
24.09.2019	Claimant emailed Law Partners his current Certificate of Capacity and a referral for physiotherapy and requested an update on his claim.
25.09.2019	Claimant emailed Law Partners to clarify what date he can lodge his Common Law Damages claim and sought advice on expected settlement dates.
24.10.2019	Claimant called Law Partners to seek advice in relation to his employment circumstances and wage payments.
05.11.2019	Claimant emailed Law Partners his current Certificate of Capacity.
16.06.2020	Claimant emailed Law Partners and advised he had been contacted by his claims advisor who asked whether he would be lodging a Common Law Damages claim. The Claimant sought advice from Law Partners as to whether he should lodge an Application for Damages Under Common Law.
12.11.2020	Claimant emailed Law Partners and advised he would return his executed Application for Damages Under Common Law shortly.
17.11.2020	Claimant returned his executed Application for Damages Under Common Law to Law Partners.
25.11.2020	Claimant emailed Law Partners seeking an update on his claim.
08.12.2020	Claimant forwarded Law Partners an email from his claims advisor advising that he is now able to lodge a Common Law Damages claim and sought advice from Law Partners in relation to the next steps.
12.05.2021	Claimant emailed Law Partners and sought advice on damages for economic loss.
12.05.2021	Claimant emailed Law Partners and provided copies of his tax documents.
19.05.2021	Claimant emailed Law Partners and sought further advice on damages for economic loss.
11.06.2021	Claimant emailed Law Partners and sought advice in relation to his statutory benefits claim.
11.06.2021	Claimant called Law Partners and spoke with Solicitor, Ms Sarah Starnovsky. He sought advice in relation to the internal review application with respect to Whole Person Impairment. He also sought advice in relation to entitlement to damages for non‐economic loss.
02.09.2021	Claimant called Law Partners and sought advice in relation to authorities sent to him to execute.
07.09.2021	Claimant emailed Law Partners his executed authorities requested by the Insurer.
09.03.2022	Claimant emailed Law Partners copies of his payslips and tax documents.
10.03.2022	Claimant emailed Law Partners and advised that he will email further copies of his payslips through shortly.
11.03.2022	Claimant emailed Law Partners and provided information about his employment circumstances.
14.03.2022	Claimant emailed Law Partners copies of his Centrelink payment history.
16.03.2022	Claimant emailed Law Partners and confirmed he will attend the upcoming medico‐legal assessment.

16. At the foot of this chronology the Claimant’s Solicitor notes that at all times, the Claimant used his best endeavours to settle the claim. As evidenced above, the Claimant has been extremely proactive throughout the duration of his claim and habitually contacted Law Partners seeking advice and updates in relation to the progression of his claim. In addition, the above indicates a clear history that the Claimant has acted diligently in responding promptly to requests for information and other material at all times. It is submitted that a reasonable person in the position of the Claimant, having reasonably relied upon his instructed solicitors and acted diligently by regularly enquiring into the progression of his claim would be held to have used his best endeavours to settle the claim prior to the expiration of the three‐year anniversary of the subject accident.

Claimant’s statutory declaration of 8 June 2022

17. The Claimant has stated that the facts in the Chronology are true and correct to the best of his knowledge, information and belief.

Chronological history of Actions taken by Claimant’s Solicitors

Date	Action
18.01.2019	Claimant attended Law Partners’ Sydney Office for a face‐to‐face conference with Senior Associate, Ms Dijana Talevska. Claimant signed a Client Services Agreement allowing Law Partners to act on his behalf. Claimant’s file was registered and allocated to Solicitor, Ms Antontela Josipovic.
26.02.2019	Senior Secretary, Ms Odette Nasr, lodged the Claimant’s Application for Personal Injury Benefits with the Nominal Defendant by way of post and email.
20.03.2019	By way of email, Paralegal, Ms Jessica Terre, requested a copy of the Claimant’s statutory benefits file from AAMI.
26.03.2019	Paralegal, Ms Jessica Terre, posted the Claimant an initial letter signed by Solicitor, Ms Tanja Maksimovic, providing general advice and an overview of the NSW CTP scheme.
26.03.2019	By way of email, Claims Support Secretary, Ms Anita Pellizzon, requested a copy of the Claimant’s Centrelink file from Centrelink.
12.04.2019	Law Partners received AAMI’s Liability Notice – Benefits Past 26 Weeks which assessed the Claimant’s injuries as “minor” only. This was reviewed by Solicitor, Ms Antontela Josipovic.
15.04.2019	By way of email, Paralegal, Ms Jessica Terre, provided advice to the Claimant in relation to treatment requests.
20.04.2019	Law Partners received a copy of the Claimant’s statutory benefits file from AAMI. The file was subsequently reviewed by Solicitor, Ms Antontela Josipovic.
01.05.2019	Solicitor, Ms Tanja Maksimovic, was formally given carriage of the Claimant’s file.
09.05.2019	Paralegal, Ms Jessica Terre, called the Claimant and requested copies of his payslips from October 2018 to April 2019 and all Certificates of Capacity to date. She advised the Claimant that AAMI requires these documents to calculate his PAWE and process his wage payments.
09.05.2019	Law Partners lodged an internal review application with respect to AAMI’s minor injury decision.
14.05.2019	Paralegal, Ms Jessica Terre, emailed AAMI to request confirmation of receipt of the Claimant’s request for an internal review of AAMI’s minor injury decision.
03.06.2019	Paralegal, Ms Jessica Terre, emailed AAMI a request for reimbursement for the Claimant’s consultation with Dr Steven Zhang.
18.06.2019	Law Partners received AAMI’s Internal Review Certificate with respect to the minor injury decision which advised that the original decision had been overturned as the Claimant had sustained injuries that fall within the legislative definition of “non‐minor”. This Internal Review Certificate was subsequently reviewed by Solicitor, Ms Tanja Maksimovic.
19.06.2019	Paralegal, Ms Jessica Terre, sent the Claimant a letter signed by Solicitor, Ms Tanja Maksimovic via both post and email advising that AAMI has conducted an internal review and determined that his injuries fall within the legislative definition of “non‐minor”. The Claimant was advised that his entitlement to statutory benefits will continue and that he is entitled to make a claim for Common Law Damages.
01.07.2019	Law Partners emailed the Claimant a copy of a blank Certificate of Capacity and advised that his general practitioner had been previously completing the incorrect version.
02.07.2019	By way of email, Solicitor, Ms Tanja Maksimovic, advised the Claimant that his general practitioner had been incorrectly completing a Worker’s Compensation Certificate of Capacity for his CTP claim.
09.07.2019	By way of email, Solicitor, Ms Tanja Maksimovic, provided advice to the Claimant on the requirements for lodging a Common Law Damages claim.
10.07.2019	Law Partners received AAMI’s updated Liability Notice – Benefits Past 26 Weeks which assessed the Claimant’s injuries as “non‐minor” in light of the Internal Review Certificate. This was subsequently reviewed by Solicitor, Ms Tanja Maksimovic.
31.07.2019	By way of email, Paralegal, Ms Jessica Terre, provided the Claimant with further advice on the requirements for lodging a Common Law Damages claim.
25.09.2019	By way of email, Paralegal, Ms Jessica Terre, advised the Claimant that his Common Law Damages claim could be lodged on 2 December 2020. She also provided an overview of the next steps in his claim.
24.10.2019	By way of telephone, Paralegal, Ms Jessica Terre, provided advice to the Claimant in relation to his employment and wage payments.
24.10.2019	By way of email, Paralegal, Ms Jessica Terre, requested a list of statutory benefits wage payments from AAMI.
20.01.2020	By way of email, Paralegal, Ms Jessica Terre, sent the Claimant a letter signed by Solicitor, Ms Tanja Maksimovic advising him of an upcoming medico‐legal assessment with Dr Andrew Keller arranged by the Insurer.
27.10.2020	Paralegal, Ms Jessica Terre, emailed the Claimant a blank Application for Damages Under Common Law to execute and return. She also provided a general update on his claim.
12.11.2020	Paralegal, Ms Jessica Terre, emailed the Claimant to chase his executed Application for Damages Under Common Law.
12.11.2020	Paralegal, Ms Jessica Terre, spoke with the Claimant’s claims advisor and confirmed that a Common Law Damages claim would be lodged shortly.
08.12.2020	Solicitor, Ms Sarah Starnovsky, emailed the Claimant a further copy of an Application for Damages Under Common Law and requested that he execute and return it.
08.12.2020	By way of email, Solicitor, Ms Sarah Starnovsky, advised the Claimant that Law Partners would lodge his Common Law Damages claim on his behalf.
01.02.2021	By way of email, Solicitor, Ms Sarah Starnovsky, lodged the Claimant’s Common Law Damages claim and requested an updated copy of the Claimant’s file from AAMI.
24.03.2021	Solicitor, Ms Sarah Starnovsky, emailed AAMI to chase an updated copy of the Claimant’s file.
31.03.2021	Solicitor, Ms Sarah Starnovsky, spoke with Mr Julian Kenda from Moray and Agnew Lawyers via telephone. Mr Kenda advised Ms Starnovsky that Moray and Agnew Lawyers had been instructed to act on behalf of AAMI. Mr Kenda and Ms Starnovsky discussed who the correct CTP Insurer for the Claimant’s Common Law Damages claim was.
30.04.2021	Law Partners received the Liability Notice – Claim for Damages from Moray & Agnew Lawyers which accepted liability for the Claimant’s Common Law Damages claim. This was subsequently reviewed by Associate, Ms Tanja Maksimovic.
10.05.2021	By way of email, Solicitor, Ms Sarah Starnovsky, sent Moray & Agnew Lawyers a letter signed by Associate , Ms Tanja Maksimovic, inviting them to participate in an informal settlement conference.
12.05.2021	Solicitor, Ms Sarah Starnovsky, emailed the Claimant and requested copies of his Tax Returns, Notices of Assessment and PAYG Summaries for the financial years 2019 and 2020.
17.05.2021	Solicitor, Ms Sarah Starnovsky, emailed Moray & Agnew Lawyers to chase their response to Law Partners’ invitation to participate in an informal settlement conference.
17.05.2021	Solicitor, Ms Sarah Starnovsky, emailed the Claimant and requested further tax documents.
17.05.2021	By way of email, Solicitor, Ms Sarah Starnovsky, provided the Claimant with advice on damages for economic loss.
24.05.2021	Law Partners lodged an internal review application with respect to the permanent impairment dispute.
25.05.2021	By way of email, Solicitor, Ms Sarah Starnovsky, provided the Claimant with further advice on damages for economic loss.
11.06.2021	By way of email, Solicitor, Ms Sarah Starnovsky, sent Moray & Agnew Lawyers a further letter signed by Associate, Ms Tanja Maksimovic inviting them to participate in an informal settlement conference.
28.07.2021	Solicitor, Ms Sarah Starnovsky, emailed Moray & Agnew Lawyers to chase their response to Law Partners’ invitation to participate in an informal settlement conference.
01.09.2021	By way of email, Paralegal, Ms Sakeena Haider, sent the Claimant authorities from the Insurer to execute and return.
16.09.2021	By way of email, Paralegal, Ms Sakeena Haider, sent Moray & Agnew Lawyers the Claimant’s executed authority to the Department of Home Affairs.
05.11.2021	Law Partners lodged an Application for Damages Assessment on the PIC portal.
07.02.2022	Solicitor, Ms Sarah Starnovsky, was given carriage of the file. A handover meeting between Ms Starnovsky and the Claimant took place via telephone.
18.02.2022	A Preliminary Conference was held between Member Terrence Stern, Ms Sarah Starnovsky and Mr Julian Kenda.
09.03.2022	Paralegal, Ms Sarah Kabbout, had a teleconference with the Claimant to obtain instructions for the Insurer’s request for particulars.
09.03.2022	Law Partners arranged a medico‐legal assessment for the Claimant to attend.
10.03.2022	Paralegal, Ms Sarah Kabbout, emailed AAMI and requested an up to date list of statutory benefits wage payments.
10.03.2022	Paralegal, Ms Sarah Kabbout, emailed the Claimant and requested further copies of his payslips.
11.03.2022	Paralegal, Ms Sarah Kabbout, called AAMI to chase an up to date list of statutory benefits wage payments.
11.03.2022	Solicitor, Ms Sarah Starnovsky, emailed the Claimant and advised him of his upcoming medico‐legal appointment.
11.03.2022	Paralegal, Ms Sarah Kabbout, had a teleconference with the Claimant to obtain further instructions for the Insurer’s request for particulars.
14.03.2022	Paralegal, Ms Sarah Kabbout, had a teleconference with the Claimant to obtain instructions for his claim for damages for economic loss.
14.03.2022	Paralegal, Ms Sarah Kabbout, emailed the Claimant and requested a copy of his Centrelink payment history.
15.03.2022	Law Partners responded to Moray & Agnew Lawyer’s request for particulars.
17.03.2022	Solicitor, Ms Sarah Starnovsky, submitted further PIC submissions, response to the Insurer’s request for particulars and the Claimant’s Schedule of Damages on the PIC portal in accordance with the direction of Member Stern.
18.03.2022	Paralegal, Ms Sarah Kabbout, served a copy of the Claimant’s further PIC submissions, response to the Insurer’s request for particulars and the Claimant’s Schedule of Damages on Moray & Agnew Lawyers.

CLAIMANT’S SUBMISSIONS

18. I briefly summarise the Claimant’s PIC Submissions uploaded to the Portal on 2 June 2022. I reference to the paragraph numbers.

[5]The Claimant submits he fulfilled his obligations under s 7.32(3) and has used his best endeavours in the circumstances. He further submits the matter should be placed in the PIC stood over list until the Whole Person Impairment dispute is finalised.
[6]Refers to s 7.32(3).
[7]Notes that the Insurer relies on the judgment of Member Williams in Mammone v Insurance Australia Limited t/as NRMA [2021] NSWPIC 501 and submits the Claimant did not use best endeavours to settle the claim before referring it for assessment. The Submission continues that the matter is materially different from Mammone. In that case:
·     The Claimant lodged her Application for Damages under Common Law on the same day the claim was referred to the PIC.
·     The Claimant did not even make a basic enquiry of the Insurer as to whether it prepared to enter into any settlement negotiations.
·     No concession had been made by either party with respect to WPI.

[8] In Mammone the Member found that the Claimant made no endeavours at all to settle the claim before referring it for assessment.
[9]The Claimant agrees with the Insurers Submission that the obligation to use best endeavours in the context of 7.32(3) requires the party to act honestly, reasonably and make a positive effort to perform the relevant obligation.
The Submission proceeds:
·     The common law claim was lodged with the Insurer on 1 February 2021, over 43 weeks in advanced of the limitation period prescribed by section 6.14 whereas in Mammone, the claim was lodged only 4 days prior to the expiration of the 3 year statutory limitation period.
·     Contrary to the facts situation in Mammone, the Claimant invited the Insurer to participate in a settlement conference on 3 separate occasions. Further, the Claimant has consistently expressed a desire to settle the claim despite not being in possession of the medico-legal evidence.
·     Unlike in Mammone where no concession had been made in relation to WPI on 12 May 2021 M&A advised that the Insurer did not concede entitlement to WPI. The Claimant subsequently lodged an internal review application with respect to this decision. On 11 June 2021 the Insurer advised that the original decision was affirmed. The Claimant had been unable to lodge a PIC application with respect to WPI and he was not in possession of the medico-legal evidence and his application would be likely to be dismissed in accordance with s 7.20.

[10]The Submission is that the Claimant had at all times used his best endeavours to settle the Claim prior to referral for assessment despite delays which were beyond his control.
[11]Claimant confirms that to date he has not attended any medico-legal assessments arranged by his solicitor and submits that he cannot be penalised for not submitting any substantive medical evidence. The Claimant also refers to the relevance of the Pandemic in respect of medico-legal assessments and the lack of accessibility to medico-legal assessments in the period 2020-2022.
The Claimant confirmed that a medico-legal assessment had been scheduled with Dr Dias for 19 August 2022 and I note that that report has now been uploaded to the Portal with an Application for Admission of late documents.
[12]The Submission refers to s 7.20 which allows PIC to refuse to accept the referral by claim in respect of WPI when the party has provided insufficient evidence of a medico-legal nature.
[13]Section 7.32(3) imposes an obligation on both parties to attempt to settle a claim before referring it to assessment. Section 6.22 imposes a duty on the Insurer (not the Claimant) to make an offer of settlement on a claim for damages. No such offer has been made.
[15]Particulars have been provided to the Insurer in accordance with s 6.25.
The Submission continues that the Claimant should not be penalised for inaction by his previous legal representatives where there has been no fault or negligence directly by the Claimant.
[16]The lodgement of particulars 3 months after the expiration of the 3 year anniversary did not cause any delay in the Assessment of damages given that the Claimant was still waiting (at the time of the Submission) to undergo a medico-legal assessment.
[17]The Claimant has acted in accordance with s 7.32(3) and in the circumstances has used his best endeavours to allows the just and cost-effective resolution of the matter despite delays that were beyond his control. The Claimant has acted honestly, reasonably and made a positive effort to perform the relevant obligations to settle the claim before referring it for assessment.

INSURER’S SUBMISSIONS

19. I briefly summarise the Submissions by paragraph number.

Insurer’s Preliminary Submissions

[5]The Claimant did not use his best endeavours to settle the claim before referring it to assessment.
[7]The meaning of best endeavours in s 7.32(3) has yet to be judicially considered in the context of the Act. The concept itself is not novel, such an obligation for example is to be found in section 20 of the Health Care Complaints Act 1993 (NSW).
[9]Cases such as Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83 and SVI Systems Pty Ltd v Best & Less Pty Ltd [2001] FCA 279 suggests that “best endeavours” are now judged by standards of reasonableness.
[10]Refers to Mason J in Transfield.
[11]Refers to Joseph Street Pty Ltd v Tan (2012) 38 VR 241 the Court unanimously considered that an obligation to use “best endeavours” required a party to do all they reasonably could in the circumstances to achieve the purpose of the obligation. The Submission continued to refer to [256] where the Court interpreted “best endeavours” as requiring a party to:
(a)do all it can reasonably do to act in the same manner as a reasonable and prudent party would act if it was acting in its own interests to achieve a certain object;
(b)do the acts required to achieve the object with the same vigour expected of a party attempting to secure its own interests until the party reasonably considers that further attempts to achieve the object of the obligation would have a remote chance of succeeding; and
(c)within reason, act in a manner so as to leave no stone unturned to achieve the object.

[13]Refers to Centennial Coal Company Ltd v Xstrata Coal Pty Ltd [2011] NSWCA 173 where the NSW Court of Appeal provided further guidance holding that “reasonable endeavours” may require the party under the obligation to take a step where success was not guaranteed and or the chance of succeeding was equal to or less than 50%.
[14]The Submission refers to the decision of Member Williams in Mammone v Insurance Australia Limited t/as NRMA [2021] NSWPIC 501, where it was held that a claimant who did not make any offers of settlement, provide particulars or medical/quantum evidence but, rather, relied upon the mere presence of a minor injury dispute had not used her best endeavours and the claim was dismissed.
Member Williams decided that:
‘49. I consider that what constitutes “best endeavours”, for the purposes of s 7.32(3), must depend on the circumstances of each claim. The provision may not require an offer of settlement to be made in every case. It can be envisaged that, in some circumstances, the provision of particulars and evidence in support of a claim for damages may be found to satisfy the “best endeavours” requirement. Different considerations may also arise in claims that cannot be made before the expiration of 20 months after the accident, in accordance with s 6.14(1).
50. The insurer contends for a construction of s 7.32(3) on the basis that the obligation to use “best endeavours” requires a party to act honestly, reasonably and make a positive effort to settle the claim before referring it for assessment even where success is unlikely.
51. I agree with the construction of s 7.32(3) contended for by the insurer. In my view, it            allows the flexible application of the provision on a case by case basis and in a manner that is consistent with the objects of the MAI Act. In particular, I consider that this construction furthers the stated object of encouraging the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes. It does this by requiring the parties to take reasonable steps to settle the claim before referring it for assessment.
52. The claimant submits that she has acted in accordance with section 7.32(3) and that she    has done what is reasonably practicable in the pursuit of a just and cost effective resolution of the matter, despite delays that were beyond her control. … There was no medical or quantum evidence or particulars provided to the insurer prior to these proceedings being commenced. Particulars of the claim were not provided by the claimant to the insurer until after the claim had been referred by her to the Commission for assessment. Accepting the claimant’s submission would require me to find in effect that by simply making the claim for damages before commencing these proceedings she         had satisfied s 7.32(3). I am not persuaded that I should make that finding.
53. Compliance with s 7.32(3) is mandatory. I find that the claimant failed to use her best          endeavours to settle the claim before referring it to the Commission for assessment under Division 7.6 of the MAI Act.’

[15]The obligation to use “best endeavours” in the context of s 7.32(3) requires the party to act honestly, reasonably and make a positive effort to perform the relevant obligation.
[17]The Submission refers to the following:
(a)Particulars not provided before proceedings were commenced.
(b)No medico-legal evidence.
(c)No material which would support the entitlement to WPI.
(d)No application made to determine a dispute in relation to the Insurer’s internal review with respect to WPI.
(e)Tax returns, payslips, health fund details and authority for Medicare not provided.
(f)No offers for settlement.
(h)Claimant’s Submissions do not reflect the correct position. Insurer on each occasion responded to the Claimant’s lawyers communications with respect to arranging an informal settlement conference (see documents R6, R8 and R11).
(i)Approaches made by the Claimant’s lawyer do not satisfy the best endeavours requirement.
(j)No substantive medical or quantum evidence provided.
(k)The Claimant lodged the application less than one month before the three-year anniversary of the accident. Nothing was in the Acts, Regulations, Rules or Guidelines which permits an application on that basis in circumstances where there has been non-compliance with s7.32(3).

[18]The overwhelming effect of the available evidence is that the Claimant did not use his best endeavours.

CONSIDERATION

20. The meaning of “best endeavours” is well understood and has been formulated by the High Court of Australia in the statement by Mason J, referred to above.

21. The meaning of the phrase is determined in the context in which it appears in this case 7.32(3) of the Act.

22. As in Jones [PIC – Member Castagnet] the Insurer has not at any stage conceded that the Claimant’s permanent impairment is greater than 10%. The application had not been lodged because the Claimant did not have the medico-legal evidence to support it. The PIC therefore has not commenced, let alone completed its assessment of WPI.

23. “Best endeavours” prescribes a standard of endeavour which is an objective and subjective test. As in Transfield it is measured by what is reasonable in the circumstances having regard to the nature, capacity, qualifications and responsibilities of the obligee.

24. I consider that the same notion of reasonableness should be applied to the best endeavours test in the context of s 7.32(3).

25. The best endeavours test in this case should also be considered in the context of the practical utility of attempting a final settlement when the issue of entitlement to WPI has not been resolved.

26. Just as in a late claim dispute, the decision of the Court of Appeal in Smith v Grant [2006] NSWCA 244 is authority for the proposition that in a late claim context a Claimant could reasonably rely upon the conduct and advice of his or her solicitors. Even if such advice was negligent, such reliance could provide a satisfactory explanation for the delay [60].

27. In considering whether the Claimant used his best endeavours relevantly then a Claimant acting reasonably and doing his best cannot be considered to have failed to comply with the duty notwithstanding that the solicitor’s conduct was deficient.

28. The Claimant has submitted that the Claimant’s previous solicitor may well have failed to take sufficient steps, follow up the efforts made to hold a settlement conference, to finalise the medico-legal evidence and any other reasonable steps that should have been taken including provision of replies to particulars.

29. What is important in this context is what the Claimant did as well as what the Claimant’s solicitor did or did not do.

30. What did the Claimant do [this is taken from the chronology above]:

20.12.2018 Gave timely instructions.

18.01.2019Signed the costs disclosure agreement and instructed his solicitors to act.
01.02.2019Provided documents as noted to the Insurer.
02.04.2019Emailed payslips and certificate of capacity to the Insurer.
15.02.2019Emailed photographs of scarring to his solicitors.
26.04.2019Emailed his solicitors with a copy of his MRI report of the right knee.
27.06.2019Emailed his solicitors seeking advice as to his entitlement to treatment in the light of the internal review outcome regarding his injuries as non-minor.
09.07.2019Requested advice on time limits to lodge a common law damages claim.
31.07.2019Emailed his solicitors seeking advice regarding lodging common law damages claim.
22.08.2019Requested an update re lodging a common law damages claim.
24.09.2019Requested an update on his claim.
25.09.2019Enquired as to when he could lodge his common law claim and sought advice on expected settlement dates.
16.06.2020Sought advice from his solicitor as to whether he would be lodging a common law damages claim.
17.11.2020Returned his executed application for damages under common law.
25.11.2020Sought an update on his claim.
08.12.2020Was told by his solicitor that he would now be able to lodge a common law damages claim.
11.06.2021Spoke with his solicitor seeking advice in relation to internal review of the decision regarding WPI and entitlement to damages for non-economic loss.
07.09.2021Returned executed authorities.

31. The above chronology presents a picture of a very active Claimant who is doing everything he reasonably can to try and progress his claim.

32. I refer to the chronology of the steps taken by the Claimant’s solicitors.

33. Steps could well have been taken in relation to medical evidence notwithstanding the difficulties of access in the pandemic. The Claimant cannot be held accountable for the failure of his solicitor to make those arrangements for medico-legal opinions.

34. The Claimant cannot be held accountable for the failure of the solicitor to obtain for him instructions for replies to particulars.

35. The Claimant cannot be held responsible for the failure of his solicitor to arrange an informal settlement conference. The evidence firmly suggests that the Claimant would have cooperated with any such arrangements.

36. It should be noted that not until 7 February 2022 was Sarah Starnovsky given carriage of the file.

DETERMINATION

37. In the circumstances I am satisfied that for the purpose of s 7.32(3) the Claimant has used his best endeavours to resolve the claim prior to making his application to the PIC to refer the claim for assessment.

38. In coming to this view, I have concluded that the Claimant used his best endeavours to settle the claim. He had (quoting the Claimant’s solicitor) been extremely proactive during the case and had frequently contacted his solicitors seeking advice and updates in relation to the progression of the claim indicating a clear history that he had acted diligently and reasonably and he had relied upon his instructed solicitors and acted diligently by regularly enquiring into the progress of his claim.

39. From the above case law, it appears that the Claimant was required to do all he reasonably could in his particular circumstances to attempt to settle the claim or take reasonable steps which a prudent and determined person would be considered to take in their own interests to attempt to achieve a settlement.

40. It is clear that “best endeavours” do not mean offers must be exchanged as that criterion may not be met where one party does not wish to make an offer.

41. “Best endeavours” to settle the claim within the meaning of the MAI Act, requires the Claimant to adequately facilitate with the Insurer an opportunity for settlement discussions to occur.

42. Noting the limitation period issue, the Claimant did all he reasonable could have done in the circumstances to attempt to achieve a settlement. The Claimant lodged the common law claim with the Insurer indicating he sought to engage in settlement discussions prior to the limitation period passing.

43. The Claimant requested advice on time limits to lodge a common law damages claim, was active and sought consistent updates on the matter from his solicitors and was highly responsive to anything requested of him.

44. For all these reasons I am satisfied the Claimant used his best endeavours to settle the claim before referring it to the PIC for assessment by doing what he reasonably could in the circumstances as was required of him and I decline to dismiss the Application.

DIRECTIONS

45. I appoint a further teleconference by Microsoft Teams for Friday 21 October 2022 at 2:30 pm.

[2022] NSWPIC 584

18 October 2022