Mammone v Insurance Australia Limited t/as NRMA
[2021] NSWPIC 501
•6 December 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Mammone v Insurance Australia Limited t/as NRMA [2021] NSWPIC 501 |
| CLAIMANT: | Franca Mammone |
| INSURER: | Insurance Australia Limited t/as NRMA |
| MEMBER: | Brett Williams |
| DATE OF DECISION: | 6 December 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS - Claims assessment matter; claim for damages submitted to insurer on the same day the claim was referred to the Personal Injury Commission under Division 7.6 of the Motor Accident Injuries Act 2017 (MAI Act) for assessment; no particulars or evidence provided when claim was lodged; no offer of settlement made or invitation to engage in settlement discussions; whether the claimant had complied with section 7.32(3) of the MAI Act; meaning of “best endeavours”; whether proceedings should be dismissed; Held - for the purposes of section 7.32(3) of the MAI Act the claimant failed to use her best endeavours to settle the claim before referring it for assessment under Division 7.6 of the MAI Act; proceedings dismissed in accordance with section 54 of the Personal Injury Commission Act 2020. |
| DETERMINATIONS MADE: | 1. For the purposes of s 7.32(3) of the Motor Accident Injuries Act2017 the claimant failed to use her best endeavours to settle the claim before referring it for assessment under Division 7.6 of the Motor Accident Injuries Act 2017. 2. The proceedings are dismissed in accordance with s 54 of the Personal Injury Commission Act 2020. 3. Attached to this certificate are reasons for my decision. |
Reasons for Decision
Introduction
On 9 August 2018 Franca Mammone was a pedestrian crossing Haldon Street, Lakemba, when she alleges that an unidentified vehicle reversed into her causing injury.
An application for personal injury benefits (statutory benefits) was submitted by Ms Mammone on 8 February 2019. Liability for the statutory benefits claim was initially accepted by the insurer on 18 June 2020. Liability was subsequently declined on 13 October 2020 on the basis that she sustained only minor injuries as a result of the accident.
Ms Mammone made a claim for damages on 5 August 2021 and, on the same day, commenced these proceedings, which seek to have the damages claim assessed under Division 7.6 of the Motor Accident Injuries Act 2017 (MAI Act).
The insurer argues that the proceedings should be dismissed because of the claimant’s failure to comply with s 7.32(3) of the MAI Act. That provision requires parties to a claim to use their best endeavours to settle the claim before referring it for assessment under Division 7.6 of the MAI Act.
The critical issues for determination are whether the claimant failed to comply with
s 7.32(3) and, if so, what flows from that failure.
Teleconference
A teleconference was held on 19 October 2021. The insurer pressed its application for the proceedings to be dismissed. The claimant opposed the insurer’s application.
The parties agreed that the insurer’s application to have the proceedings dismissed should be determined on the papers. The parties also submitted that, if the proceedings were not dismissed, they should be referred to the stood over list.
I made directions for the provision of submissions by the parties.
On the papers
Having considered both s 52 of the Personal Injury Commission Act 2020 (PIC Act) and Procedural Direction PIC2 I have concluded that the proceedings can be determined on the papers. I am satisfied that sufficient information is available in connection with the proceedings to allow me to determine the dispute without holding a formal hearing.
Legislative framework
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.”
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.”
The objects of the MAI Act are found in s 1.3(2) of that Act as follows:
“1.3 Objects of Act
(1)…
(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,
(c)…
(d)…
(e)…
(f)…
(g) to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes,
(h)…
…”
Insurer’s submissions
Submissions were lodged with the insurer’s reply dated 16 September 2021. In those submissions the insurer noted the following:
a. the claimant lodged her application for common law damages on 5 August 2021;
b. the claimant did not attach any medical or quantum evidence to her application;
c. no concession had been made by either party in relation to whole person impairment nor had the claimant been assessed at the Commission in that regard. The claimant did not attach to her claim form, or provide to the insurer, any material which would support the proposition her whole person impairment as a result of the accident is greater than 10%;
d. the claimant had not provided particulars of her claim to the insurer notwithstanding her obligations under s 6.25 of the MAI Act;
e. the claimant made no offers of settlement, and
f. the claimant referred her claim to the Commission for assessment four days before the three year anniversary of the accident. She conceded in her submissions that occurred ‘prematurely’ so as ‘to protect [her] interests’. There is nothing within the Act, Regulations, Rules or Guidelines which permits an application on that basis.
The insurer submitted that there had been no endeavour by the claimant to settle the claim, that the application does not comply with s 7.32(3) of the MAI Act and that the application should be dismissed.
The insurer also relies on written submissions dated 16 November 2021. The submissions record that, by notice dated 20 September 2021, the insurer denied liability in respect of the claim for damages on the basis that the claimant sustained only a minor injury in the accident. The insurer also alleged contributory negligence of 30%.
The insurer notes that, as far as it is aware, the term “best endeavours” in s 7.32(3) is yet to be judicially considered in the context of the MAI Act. The legal concept, it is submitted, is not novel given that “best endeavours” obligations are well known to contract law. Such an obligation is also found in legislation including s 20 of the Health Care Complaints Act1993 (NSW).
Whereas in Sheffield District Co v Great Central Railway[1], the Court found that a “best endeavours” obligation in a contract required “the (obliged party) … [to] leave no stone unturned”, subsequent cases have modified this approach. Australian cases such as Transfield Pty Ltd v Arlo International Ltd[2] and SVI Systems Pty Ltd v Best & Less Pty Ltd[3] [2001] suggest that “best endeavours” clauses are now judged by standards of reasonableness. Mason J in Transfield[4] stated that the obligation to use best endeavours is measured by what is reasonable in the circumstances, and in consideration of the nature, capacity, qualifications and responsibilities of the person who owes the obligation, in the context of the relevant contract.
[1] (1911) 27 T.L.R. 451.
[2] (1980) 144 CLR 83.
[3] [2001] FCA 279.
[4] Approved by Dawson J in Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41.
The insurer refers to Joseph Street Pty Ltd v Tan[5], where the Court (unanimously) considered that to use “best endeavours” requires a party to do all they reasonably can in the circumstances to achieve the purpose of the obligation. The Court (at 256) further considered a number of authorities and 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.
[5] (2012) 38 VR 241.
The insurer says that, whilst it is often argued that the obligation to use “reasonable endeavours” imposes a lesser standard than the obligation to use “best endeavours”, Bathurst CJ in Cypjayne Pty Ltd v Babcock & Brown International Pty Ltd[6] considered that the Courts regarded the terms to impose similar obligations. Rein AJ reached a similar conclusion in Waters Lane Pty Ltd v Sweeney[7]. Whether the “best endeavours” obligation is more onerous or not, in Centennial Coal Company Ltd v Xstrata Coal Pty Ltd[8], the NSW Court of Appeal held that reasonable endeavours may require the party under the obligation to take a step even where success was not guaranteed and or the chance of succeeding was equal to or less than 50%.
[6] [2011] NSWCA 173.
[7] [2006] NSWSC 222 at [47] to [60].
[8] [2009] NSWCA 341.
It is submitted that the obligation to use “best endeavours” in section 7.32(3) of the MAI Act requires a party to act honestly, reasonably and make a positive effort to perform the relevant obligation (i.e. to settle the claim before referring it to assessment) even where success is unlikely.
The insurer argues that the overwhelming effect of the available evidence in these proceedings is that the claimant has made no endeavour at all to settle the claim before referring it for assessment under Division 7.6. It is argued that the claimant did not even make a basic enquiry of the insurer as to whether it was prepared to enter into any settlement negotiations prior to the commencement of proceedings. Nor, it is noted, did she serve a settlement offer. Whether the claimant regarded the prospects of settling the matter as poor or otherwise, the insurer argues that she still had a mandatory obligation to make some attempt at doing so prior to commencing the proceedings and did not do so. The fact that the three year anniversary of the accident was approaching when she commenced the proceedings did not expressly nor impliedly excuse her from compliance with section 7.32(3).
The insurer submits that the consequence of the claimant’s failure to comply with the mandatory obligation in section 7.32(3) of the MAI Act is dismissal of the proceedings for the following reasons:
(a) The obligation imposed by section 7.32(3) is mandatory in terms of both its substance and timing. There is no other provision within the MAI Act which relieves or excuses the claimant from non-compliance with her mandatory obligation. If the obligation was intended to be of no or modified consequence in circumstances where a three year anniversary was approaching, it can reasonably be expected that the legislature would have expressly stated as much. It did not do so.
(b) Dismissal of the proceedings does not mean she is necessarily disentitled from lodging a further application in the Commission or commencing court proceedings in the future. Sections 7.33 and 6.32 of the MAI Act expressly permit the claimant to seek leave to apply to do so after the three year anniversary of the accident. This tells against section 7.32(3) being read down in the context of an approaching 3 year anniversary. Further, sections 7.33 and 6.32 can be fairly viewed as protecting the claimant’s interest in such a scenario.
(c) It cannot reasonably be expected that section 10(a) of the procedural direction MA1 or rule 101 of the Personal Injury Rules 2021 were intended to create some sort of holding yard for potential common law claims such as this (noting that on the available evidence the claimant has been certified as suffering from only a minor injury) that are approaching the three year anniversary. What is more, the likely delay associated with this damages claim is significant given that the claimant is yet to lodge any application for assessment of whole person impairment. The delay is likely to be significantly longer than six months as is contemplated by rule 101 and procedural direction MA1.
(d) While the terms of section 7.32(3) of the MAI Act are different to sections 89A to 89E and section 91 of the Motor Accidents Compensation Act 1999 (MACA), such provisions in the MACA nevertheless remain instructive. In this respect, it is of some relevance that the claimant did not provide all relevant particulars and evidence on which she intended to rely, nor did she make any attempt to engage the insurer in settlement discussions prior to the commencement of the proceedings. Similarly, it is of some relevance that claims referred for assessment under Chapter 4 of the MACA in breach of sections 89A(2) and 89C(2) were regularly dismissed by Assessors in the then Claims Assessment and Resolution Service (and have also been dismissed by the Commission in the context of the MACA).
(e) Dismissing the proceedings for breach of section 7.32(3) sits comfortably with the objects of the MAI Act set out at section 1.3. In particular, 1.3(2)(g) states that one of the objects of the Act is to “encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes”. Neither the claimant nor the insurer were afforded the opportunity of attempting to resolve the claim at an early point and prior to the commencement of the proceedings. In other words, the claimant commenced the proceedings in direct contrast to the object of section 1.3(2)(g). Whether the settlement prospects were poor or otherwise, she ought to have made at least some endeavour to settle the claim before commencing the proceedings. The dismissal contended for by the insurer is consistent with the object contained at section 1.3(2)(g) in the sense that if the proceedings are dismissed, they may not be recommenced at all if the minor injury dispute is not resolved in favour of the claimant. Further, there is no reason why the claim would not be capable of informal resolution in any event once the parameters are better known to the parties without the recommencement of any proceedings.
Neither the objects set out in section 3 of the PIC Act or the guiding principle in section 42 expressly or impliedly excuse the claimant from complying with her obligations in section 7.32(3). Further, s 42(5) of the PIC Act expressly states that nothing in that section “requires or permits the Commission to exercise any functions that are conferred or imposed on it under enabling legislation and in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions”.
(f) The specific power to dismiss the proceedings relied on by the insurer is found at section 54(b) of the PIC Act in that it is contended that the proceedings are otherwise misconceived or lacking in substance because they have been commenced in circumstances where there has been both substantive and temporal non-compliance with section 7.32(3) of the MAI Act. That being so, they cannot progress any further as the non-compliance cannot be cured by any other provisions.
In the alternative, the Insurer submits that the Commission does not have the requisite jurisdiction to determine the dispute because the claimant has not complied with section 7.32(3) and/or has commenced the proceedings for an improper purpose in the sense that she commenced proceedings ‘prematurely’ and to ‘protect her interest’ where a dispute may not exist at all given that there was no endeavour to settle the claim before commencing the proceedings.
In submissions dated 29 November 2021[9], the insurer argues that that component of the claimant’s submissions which are germane to the dispute may be distilled into one simple proposition – she made no endeavours to settle the claim before referring it for assessment. Taking into account the claimant’s concession, the insurer submits that the Commission would find there has been no compliance with the clear requirement of s 7.32(3) of the MAI Act for at least some endeavour to be made to settle the claim before referring it for assessment.
[9] AD5.
Claimant’s submissions
The claimant relies on submissions dated 5 August 2021. The submissions confirm that on 5 August 2021 she served an Application for Damages. The application was lodged to protect the claimant’s interests despite an ongoing minor injury dispute that is before the Commission. It was noted that, pursuant to s 7.33 of the MAI Act, a claimant cannot refer a claim for assessment under Division 7.6 more than three 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. Accordingly, it is said that the claimant lodged the proceedings to comply with the MAI Act, Regulations and Guidelines and to protect her interests. She submits that her claim suffered significant disruption and delays in 2020 and 2021 due to the COVID-19 pandemic and the resulting restriction of access to treatment and medical assessments to substantiate her claim. The claimant submits her matter was not ready for assessment at the three year juncture, 9 August 2021. Pursuant to section 10(a) of Procedural Direction MA1, the claimant submits her matter should be referred to the Stood Over List on the basis that a medical dispute is yet to be finalised.
The claimant relies on further submissions dated 29 November 2021. She argues that neither party attempted to settle the matter before the three year limitation for claims assessment in circumstances where an ongoing medical dispute regarding minor injury had not been resolved. She submits that she has at all times, circumstances permitting, acted in accordance with section 7.32(3) of the MAI Act.
It is submitted that s 7.32(3) of the MAI Act clearly imposes an obligation to attempt to resolve the matter, before it is referred for assessment, on both parties. It is asserted that the insurer had not made any endeavours to resolve the matter before the claim was referred for assessment. The claimant submits that the insurer had no intention of resolving the matter before the minor injury dispute was determined.
With respect to the insurer’s submission that the claimant had an obligation to “make some attempt at [settling the matter] prior to commencing the proceedings” and that she had not done so, the claimant submits that any attempts at settling the matter would have been futile and frivolous. It is noted that s 4.4 of the MAI Act expressly provides that “No damages may be awarded to an injured person if the person’s only injuries resulting from the motor accident were minor injuries”, and that the insurer has relied on this provision in the damages liability notice. The claimant further submits that attempting to settle the matter prematurely, prior to the extent of her injuries being determined, would have been unpractical and misguided.
It is submitted that there are no provisions in the legislation which prevent the insurer from making attempts to resolve the matter. The claimant points to s 6.22, which imposes a duty on the insurer to make an offer of settlement on a claim for damages. There is no corresponding duty imposed on the claimant. The claimant notes that such an offer was not made by the insurer. However, the claimant concedes that the making of such an offer would have been premature on the part of the insurer as there was a dispute regarding whether the claimant’s injuries are non-minor.
It is recorded that on 24 November 2021 the claimant provided particulars to the insurer in accordance with s 6.25 of the MAI Act. She also proposed a panel of orthopaedic surgeons, psychiatrists and urologists to the insurer and invited the insurer to participate in a joint-independent medico-legal examination of her injuries and proposed an informal settlement conference.
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. Accordingly, she has not breached her obligations under 7.32(3) of the MAI Act.
The claimant maintains the matter should be referred to the stood over list on the basis that there are two medical disputes on foot that must be determined before the matter can be ready for assessment.
It is submitted that the insurer’s position that the claim should be dismissed instead of being referred to the stood over list because the claimant “is not necessarily disentitled from re-lodging a further PIC or commencing Court proceedings in the future” is a position that is in contravention of the objects of the legislation and the very purpose of the stood over list as envisaged by the legislature; to allow matters to be stood over until they are ready for assessment and to relieve pressure from the Courts.
It is argued that, should the claimant’s injuries be determined to be non-minor by the Commission, she would be forced to re-lodge a new application, file applications with the Commission and provide a full and satisfactory explanation for the delay. The claimant submits that this is contrary to the objectives of the legislation to provide a quick, cost effective and just resolution, particularly in circumstances where she has at all times acted in good faith and in a timely manner and where a clear, simple and effective alternative is to allow more time for the requirements to be satisfied.
The claimant argues that the insurer’s submission, that it cannot be reasonably expected that the stood over list provisions “were intended to create some sort of holding yard for potential common law claims such as the current one, is erroneous. Procedural Direction MA1 expressly provides that proceedings may be referred to the stood over list where a medical dispute has not been finalised. Further, it is argued that the Procedural Direction clearly provides that an application may be made to the Commission to have the time on the stood over list extended if required.
In relation to the references made by the insurer to the objects and guiding principles set out in ss 3 and 42 of the PIC Act, and the submission that there is nothing in those sections that “can cure or ought to excuse the non-compliance [with the enabling legislation]”, the claimant submits that, in the circumstances of the matter, she has complied with the objects of the legislation and there is nothing in the insurer’s submission nor the sections referred to of the PIC Act which supports the dismissal of the proceedings on the basis alleged by the insurer. She submits that none of the grounds for dismissing an application, found in s 54 of the PIC Act and Rule 77, are applicable.
The claimant submits that while the meaning of misconceived or lacking in substance has yet to be defined in the context of the PIC Act or the PIC Rules, the terms are prefaced by “frivolous or vexatious” which are well established concepts relating to claims that are devoid of merit and reasonable prospects of success. The claimant submits that although the matter is presently not ready for assessment the application is by no means frivolous or vexatious or otherwise misconceived or lacking in substance.
The claimant submits that it was not possible for her to comply with s 7.32(3) in the circumstances and that she has sought to have the matter referred to the stood over list so that she may have an opportunity to comply with the section.
The claimant submits that the application was lodged in good faith, in accordance with the objects of the MAI Act and that it was not lodged for an improper purpose or as an abuse of process. She argues that the insurer has not provided any substantive evidence to support its submissions in this regard, apart from alleging that the claimant has not undertaken her best endeavours to settle the claim before referring it for assessment.
The claimant submits that she has acted honestly, reasonably and has made a positive effort to bring the matter to a resolution and that she should not be prejudiced by the dismissal of the proceedings.
Determination
It is not in dispute that the claimant both lodged her claim for damages and commenced these proceedings on the same day, 5 August 2021. At the time the proceedings were commenced there had been no offers of settlement made or any settlement discussions. By notice dated 20 September 2021, some seven weeks after the proceedings were commenced, the insurer denied liability for the claim for damages. At the time the proceedings were commenced particulars of the claim had not been provided to the insurer by the claimant. Particulars were not provided by the claimant to the insurer until 24 November 2021. It is frankly conceded by the claimant in her submissions that the proceedings were commenced when they were so as to comply with s 7.33 of the MAI Act.
Best endeavours
Section 7.32 is set out in full earlier in these reasons. The provision is found in Subdivision 2 of Division 7.6 of the MAI Act. That Division deals with the assessment of claims for damages. It is found in Part 7 of the MAI Act, which contains provisions in relation to dispute resolution.
Section 7.32(3) is in clear and unambiguous terms and mandates certain action: parties to a claim must use their best endeavours to settle the claim before referring it for assessment under Division 7.6.
An issue arises as to what the term “best endeavours” means in the context of
s 7.32(3). As noted in the insurer’s submissions, the term has not been judicially considered in this context. The legal concept of “best endeavours” is not novel given that “best endeavours” obligations are well known to contract law. The insurer has referred to a number of authorities that address the meaning of the term in that context. Those authorities, in my view, should be treated with a degree of caution as they deal with the term as used in a commercial context, and not in the context in which the term arises in the MAI Act. Those authorities do not consider the term by reference to the objects of the MAI Act. In this regard, s 1.3(4) states that in the interpretation of a provision of the MAI Act or the regulations, a construction that would promote the objects of the Act or the provision is to be preferred to a construction that would not promote those objects.Acknowledging these limitations, the Australian authorities referred to by the insurer suggest that “best endeavours” clauses are now judged by standards of reasonableness[10] and the obligation to use best endeavours is measured by what is reasonable in the circumstances, and in consideration of the nature, capacity, qualifications and responsibilities of the person who owes the obligation[11]. Notions of reasonableness and context are, in my view, the critical considerations that emerge from these authorities. They are considerations that should be applied when determining what the term “best endeavours” means for the purposes of s 7.32(3).
[10] See Transfield Pty Ltd v Arlo International Ltd and SVI Systems Pty Ltd v Best & Less Pty Ltd.
[11] Per Mason J in Transfield.
The insurer submits that the overwhelming effect of the available evidence in these proceedings is that the claimant has made no endeavours at all to settle the claim before referring it for assessment under Division 7.6. I agree. She did not make an offer of settlement or enquire of the insurer whether it was prepared to enter into settlement negotiations prior to the commencement of proceedings. While the insurer’s answer to any approach in relation to settlement, particularly given the basis of its denial of liability for the damages claim, may have been a resounding “no”, that enquiry would have been consistent with the claimant’s obligation under s 7.32(3).
I agree with the insurer’s submission that the fact the three year anniversary of the accident was approaching when she commenced the proceedings did not expressly nor impliedly excuse her from compliance with section 7.32(3).
The claimant acknowledges that s 7.32(3) clearly imposes an obligation on both parties to attempt to resolve the matter before it is referred for assessment. It is argued that the insurer did not make any endeavours to resolve the claim before it was referred for assessment. The claimant submits that the insurer had no intention of resolving the matter before the minor injury dispute was determined. This last point may be correct. However, given the insurer received the claim for damages on the same day these proceedings were commenced, it is difficult to identify what, if anything, the insurer could reasonably have done to further its obligations under
s 7.32(3).The claimant submits that the requirements of s 7.32(3) could not have been satisfied in any meaningful way before the minor injury dispute had been resolved. I don’t agree. Evidence relied on by the claimant in support of the damages claim, together with particulars of the claim, could have been provided to the insurer when the claim for damages was made or at some time before these proceedings were commenced.
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).
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.
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.
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. She argues that matters such as the Covid-19 pandemic, the resulting restriction of access to treatment and medical assessments to substantiate her claim, together with delays in appointment by the Commission of medical assessors and cancellations of medical appointments due to the pandemic, are relevant matters in the context of this claim that should be taken into consideration. I agree, however, these matters do not excuse the claimant from not taking any steps at all to settle the claim prior to these proceedings being commenced. 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.
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.
Consequences of the claimant’s failure to comply with s 7.32(3)
The insurer submits that the consequence of the claimant’s failure to comply with the mandatory obligation in s 7.32(3) is that the proceedings should be dismissed. The specific dismissal power relied on by the insurer is found in s 54(b) of the PIC Act. It is contended that the proceedings are otherwise misconceived or lacking in substance because they have been commenced in circumstances where there has been both substantive and temporal non-compliance with s 7.32(3). That being so, it is submitted that they cannot progress any further as the non-compliance cannot be cured by any other provisions.
The claimant submits that dismissal of the proceedings in the circumstances is contrary to the intentions and objects of the legislation. I agree that the objects of both the MAI Act and the PIC Act are relevant, particularly given that s 1.3(4) of the MAI Act states that in the interpretation of a provision of the MAI Act, a construction that would promote the objects of the Act or the provision is to be preferred to a construction that would not promote those objects. However, I do not agree that any of the objects operate so as to excuse the failure of a party to comply with a mandatory provision, such as s 7.32(3).
The claimant submits that none of the grounds for dismissing an application found in
s 54 of the PIC Act or Rule 77 of the PIC Rules are applicable to these proceedings. She submits that the proceedings should be referred to the stood over list until the medical disputes have been finalised and to enable the parties to meaningfully comply with s 7.32(3) before the matter is allocated for assessment. The problem with this submission is that the horse has bolted. The claimant has already referred the claim for assessment. Prior to doing so she had not used her best endeavours to settle the claim. As the insurer submits, she made no endeavours at all to settle the claim before referring it for assessment. I do not consider that s 7.32(3) can be complied with retrospectively. I am not satisfied that the arguments put forward by the claimant in relation to the stood over list overcome non-compliance with s 7.32(3).If the claimant’s submission that the proceedings could not be dismissed were accepted, it would render s 7.32(3) a toothless provision. Given the use of the mandatory “must” in the provision, the legislature clearly considered the requirement to use best endeavours to resolve a claim prior to referring it for assessment to be integral to the overall operation of the MAI Act, particularly the operation of Division 7.6. The requirement sits comfortably with the stated object of encouraging the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes.
As the insurer submits, dismissal of the proceedings does not mean the claimant is necessarily disentitled from lodging a further application in the Commission in the future. Section 7.33 of the MAI Act expressly permits her to seek leave to apply to do so after the three year anniversary of the accident.
I find that the proceedings are misconceived and lacking in substance, for the purposes of s 54(b) of the PIC Act, because they have been commenced in circumstances where there has been both substantive and temporal non-compliance with section 7.32(3) of the MAI Act. As the insurer submits, that being so, they cannot progress any further as the non-compliance cannot be cured by any other provisions.
Orders
For the purposes of s 7.32(3) the claimant failed to use her best endeavours to settle the claim before referring it for assessment under Division 7.6 of the MAI Act.
The proceedings are dismissed in accordance with s 54 of the PIC Act.
Member Brett Williams
Personal Injury Commission
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