McDonald v Oceangale

[2004] QDC 283

DISTRICT COURT OF QUEENSLAND

CITATION:

McDonald  v Oceangale & Anor [2004] QDC 283

PARTIES:

WILLIAM JOHN McDONALD

Applicant

v

OCEANGALE PTY LTD

First Respondent

and

ALLIANZ AustraliaN INSURANCE LIMITED

Second Respondent

FILE NO/S:

D319/04

DIVISION:

Civil Jurisdiction

PROCEEDING:

Application

ORIGINATING COURT:

Southport  

DELIVERED ON:

6 September 2004

DELIVERED AT:

Southport

HEARING DATE:

19 July 2004, further written submissions delivered on
27 July 2004

JUDGE:

Rackemann  DCJ

ORDER:

Application allowed.

CATCHWORDS:

LIMITATION OF ACTIONS – TORTS AND PERSONAL INJURY – APPLICATION OF THE STATUTES TO PARTICULAR CAUSES OF ACTIONS – MOTOR VEHICLE INSURANCE – application of order under s57(2)(b) Motor Accident Insurance Act 1994.

Legislation cited:

Motor Accident Insurance Act 1994

Cases cited:

Bermingham v Priest [2003] 1 Qd R 263

Crain v Crocker [2004] QDC 151

Kash v SM & TJ Cedergren Builders & Ors [2004] 1 Qd R 643

Morrison-Gardiner v Car Choice Pty Ltd [2004] QSC 124

COUNSEL:

Mr M E Pope for the applicant  

Ms R M Treston for the respondents

SOLICITORS:

Gall Standfield & Smith for the applicant  

McInnes Wilson for the respondents  

1. This is an application for an order, pursuant to s 57(2)(b) of the Motor Accident Insurance Act 1994 in order to allow a longer period for proceedings to be brought, the limitation period having expired. Section 57 proceeds, in part, as follows:

“(1)     If notice of a motor vehicle accident claim is given under division 3, or an application for leave to bring a proceeding based on a motor vehicle accident claim is made under division 3, before the end of the period of limitation applying to the claim, the claimant may bring a proceeding in court based on the claim even though the period of limitation has ended.

(2)      However, the proceeding may only be brought after the end of the period of limitation if it is brought within-

(a)  6 months after the notice is given or leave to bring the proceeding is granted; or
(b)  a longer period allowed by the court.

(3)      If during the last 14 days of the period of limitation, the claimant wants to give a notice of claim under division 3 but is unsure to which insurer the notice should be given, the notice is validly given if it is given to the commission.”

1. The applicant was injured as a result of a motor vehicle accident which occurred on 16 February 2001.  He promptly engaged solicitors and a compliant notice of accident claim form was delivered on 12 March 2001.  The second respondent duly accepted the form as compliant and a partial admission of liability has been made. 

1. By 28 October 2003 the applicant had undergone all medical examinations asked of him and had disclosed all medical reports.

1. During November and the early part of December 2003 the applicant’s solicitors endeavoured to arrange the compulsory conference, which was ultimately convened on 9 December 2003 but was adjourned, by agreement, on the basis that the parties would return in late January 2004.  The conference was not, however, reconvened.

1. On 30 January 2004 and again on 2 and 13 February the applicant’s solicitor left unreturned messages for the solicitor for the second respondent.  On the last day of the limitation period, the applicant’s solicitor purported to file a claim and statement of claim in this court.  It was only after court hours on that day that the second respondent’s solicitor returned the earlier telephone messages and raised the expiration of the limitation period.  Issue was then taken with the proceedings which had purportedly been commenced.

1. The applicant, who now accepts that the documents filed on 16 February 2004 were of no effect, seeks an order allowing a longer period to bring proceedings.  The making of the subject application was delayed, by agreement between the parties, having regard to other similar applications, the decision on which, it was thought, might provide guidance. 

1. The circumstances of this case warrant the exercise of the court’s discretion, if it is available under s 57(2)(b).

1. The applicant acted with reasonable promptness in the period between the accident occurring and the expiration of the limitation period.  That the necessary pre-litigation procedures had not been completed by the expiration of the limitation period does not appear to be due to any undue delay either on the part of the applicant or his solicitors.  While there was some delay in bringing the subject application after the limitation period expired, that delay has been explained and arose through mutual agreement.  There is no prospect of relevant prejudice were the discretion to be favourably exercised.  On the other hand, a failure to exercise the discretion in favour of the applicant would result in prejudice to him in being permanently shut out of a cause of action in relation to which there is to be a substantial claim for damages where liability has been partly admitted.

1. Counsel for the respondents initially drew attention to the failure, in the affidavit material, to explain why an application had not been made, prior to the expiration of the limitation period, dispensing with the compulsory conference (s 51A) and the exchange of final offers (s 51C) so as to refix the time for bringing an action (s 51D). Whether a failure to explain why such an application was not made should disentitle an applicant from the favourable exercise of the discretion under s 57(2)(b) is not something which I need to dwell on. An explanation was provided in oral evidence by the solicitor for the applicant on the hearing of the application. The decision to file a claim and statement of claim on the last day of the limitation period rather than make any other application was a decision taken by him (rather than by his client) after consultation with counsel in the mistaken belief that the filing of those documents would be effective. In the circumstances I would not be prepared to refuse to exercise the discretion in favour of the applicant simply because his lawyers acted on an erroneous view of the law.

1. The respondents’ primary submission was that the court did not have a discretion to exercise under s 57(2)(b) in the circumstances. In that regard, it was submitted that:

§ s 57 does not give the court an open-ended power to extend time after the expiration of the limitation period;

§    the jurisdiction to allow a “longer period” under subparagraph (b) only arises in circumstances where the six-month period referred to in subparagraph (a) would itself have ended after the expiration of the limitation period;

§    alternatively, “s 57(2)(b) requires any application to be made within this six-month period after the notice is given before the end of the limitation period.”

1. It was submitted that “the only sensible construction to be applied to s 57(2) is that it should only operate where a complying Notice of Claim is given so late that the pre-litigation provisions of the Motor Accident Insurance Act could not be satisfied before the expiry of the limitation period”.  Since, in this case, the notice was given quite promptly on 12 March 2001, the limitation period expired well after the period of six months following the giving of the notice and no application was made within that period, the respondents submit that there is no jurisdiction for the Court to allow a “longer period” or that the Court should not do so.

1. I was referred to some recent decisions which have considered such arguments, although I was informed that two of them are subject to appeal, as this decision will be, if I follow them.

1. The section, in its current form, was considered by McGill DCJ in Crain v Crocker [2004] QDC 151 which concerned a plaintiff who had been injured in an accident which occurred on 16 April 2001. The notice was given on 15 May 2001 and accepted as compliant on 25 May 2001. Liability was admitted, in part, on 3 October 2001. An ineffectual claim and statement of claim were filed on 8 April 2004. While s 57(2)(b) had not initially been raised by the parties, his Honour drew their attention to it. Senior counsel for the defendant submitted that it was not open, on the ground that it was established that s 57(2) was not an independent source of power for a court to grant leave to commence an action outside the limitation period (Bermingham v Priest [2003] 1 Qd R 623). His Honour considered however, that the amendments which had occurred since Bermingham’s case led to a different conclusion. 

1. Having observed that there is a good deal to be done after the point has been reached where a claimant has given a compliant notice of claim and that a situation could easily arise where they do not occur within a requisite period, McGill DCJ dealt with a submission that the proper course was to seek orders dispensing with the outstanding requirements as follows :

“[21]If that situation does arise, one way of dealing with the problem is in the manner suggested initially by the solicitors for the defendant; dispensing with the requirement for a compulsory conference and the exchange of mandatory final offers.  That has the disadvantage referred to earlier, that there is no power under the legislation to postpone those requirements.  Although there can be something like a compulsory conference held after the proceeding is commenced, by agreement between the parties or subject to a condition imposed by order of the court, there is no power in the court or the parties by agreement to impose something like the provisions dealing with mandatory final offers once they have been dispensed with: Lindsay v Aumaalii [2004] QDC 28.

[22]But on the face of it an alternative way exists of overcoming the problem, by making an order under s 57(2)(b) extending the six month period, to give time to enable the parties to complete the pre-litigation procedures in accordance with the requirements of the legislation before a proceeding has to be commenced. That would have the practical advantage of giving the parties all the time that is necessary in order to enable all the relevant information to be gathered and exchanged, so that the parties can then conduct a compulsory conference on a fully informed basis, thereby maximising the opportunity for the parties to settle the matter prior to commencement of litigation. It would also mean that there would be time to exchange mandatory final offers, which are of some significance because of the operation of s 55F, as explained in Gitsham v Suncorp Metway Insurance Ltd [2003] 2 Qd R 251 at 256.

[23]In these circumstances it can be seen to be consistent with the purpose of the Act for the parties to be allowed time to complete all of the pre-litigation procedures before they have to commence a proceeding in a court, and only commence a proceeding if all of those procedures fail to resolve the matter.  It can be seen to be consistent with the objectives of the legislation for the completion of the pre-litigation procedures to take priority over the need to commence a proceeding prior to the expiration of the limitation period specified in the Limitation of Actions Act 1974.

[24]Whatever the problems associated with the drafting of s 57, it has always been an attempt to deal with the fact that difficulties can arise where there is a conflict between the statutory imposition of pre-litigation procedures and the expiration of the limitation period, and to ensure that claimants were not prejudiced, in terms of the requirements of the Limitation of Actions Act, by the imposition of the obligation to comply with the pre-litigation procedures.  It did this by extending the limitation period.  Initially the extension was for a fixed period of six months, which no doubt the legislature expected would be an effective and appropriate concession.  Once it emerged that it was not, the legislature conferred on the court a power to extend that period of six months.  That can only be seen as a power to extend the limitation period, or rather a power to grant an additional extension of the limitation period over and above that already granted by the statute.  Plainly the purpose of that grant of power is to enable the pre-litigation procedures to be completed before a claimant has to commence a proceeding.”

1. His Honour went on to conclude that the court had jurisdiction to make an order under s 57(2)(b) and that it was an appropriate case in which to exercise the discretion.

1. It seems to me that, with respect, there is much force in his Honour’s observations.  While, in paragraph 24 his Honour referred to “a power to grant an additional extension of the limitation period over and above that already granted by the statute”, it is apparent that he was not thereby suggesting that subparagraph (b) could only come into operation where subparagraph (a) already operated to give an extension.  There is no suggestion in the reasons that such a submission was put and, on the facts of that case, subparagraph (a) had not operated to give any extension, since the notice of claim had been given and accepted as compliant years before the expiration of the limitation period.

1. Submissions that subparagraph (b) is limited in the way now submitted by the respondents were recently considered by Holmes J in Morrison-Gardiner v Car Choice Pty Ltd [2004] QSC 124 which concerned an applicant who was injured in a motor vehicle accident on 21 November 2000. A notice of claim had been served on 21 May 2001. On 28 May 2001 the second respondent had acknowledged that the notice was compliant and admitted liability. The claim and statement of claim were filed on 29 October 2003 although, as in this case, it was accepted that had no effect. By an application filed on 4 February 2004, after the expiration of the limitation period, the applicant sought an order pursuant to s 57(2)(b).

1. After discussing the rival contentions and the pre-amendment decisions on s 57, Holmes J dealt with the construction issues. At paragraphs 23-26 it was said:

“[23]That longer period allowed by subsection (2)(b), plainly enough, is a longer period than the six months from the giving of the notice of claim provided for in subsection (2)(a); so (2)(a) and (2)(b) are related, at least to that extent.  But to say that the longer period must not commence any earlier than the six month period could, that is to say any earlier than 5 months and 30 days before the limitation date, is to add a gloss to the section which is not warranted by anything in it.  That the six month period prescribed in (2)(a) can commence no earlier is a practical consequence of the fact that it must start within the limitation period for the subsection to apply, and must end after it for any limitation question to arise, but it is not a prescription.  It is the giving of the notice of claim which sets the six month period running; the limitation date plays no part in fixing it.  Similarly, if a longer period is allowed, it must be a longer period which commences from the giving of the notice of claim, and is not fixed by reference to the limitation date, although the expiry of the latter at some point during the period is, in practical terms, the reason for the application.

[24]Section 57 is, plainly enough, designed to alleviate claimants’ difficulties in meeting the limitation period, caused by the procedural hurdles that the Act puts in their way. It is difficult to see why a claimant who is prompt in giving her notice of claim, but falls at later hurdles, should be in a worse position in seeking the indulgence than a claimant who does not manage to clear even the first hurdle, the giving of notice, until the limitation period is close to its end.

[25]Nor do I think there is any warrant for requiring that the application to extend the period for commencing proceedings be made within six months of the giving of notice.  There is no such constraint to be found in the section.  It would be easy enough, one would think, to make such a requirement if it were intended.

[26]I conclude that the giving of the notice of claim within the limitation period is the only condition (putting aside questions of leave to bring proceedings) which must be met to enliven the discretion under s57(2)(b) to extend the time within which the proceeding may be brought. That construction is not absurd or unreasonable; as McMurdo J noted in Kash, it applies to a context in which the insurer is informed within the limitation period of the nature of the claim and the particulars of the motor vehicle accident relevant to its liability, and the discretion of the court still falls to be exercised by reference to considerations of delay and prejudice.  I do not think there is any need for recourse to extrinsic material such as the explanatory note for the purposes of construing the section; but I do not, in any case, think it inconsistent.”

I respectfully agree with her Honour’s conclusion as to the operation of s 57(2)(b).

1. I was also referred to the judgment of McMurdo J in Kash v SM & TJ Cedergren Builders & Ors [2004] 1 Qd R 643 which considered the operation of a similar section (s 59) of the Personal Injuries Proceedings Act 2002 which provides, in part, as follows :

“59.     Alteration of Period of Limitation

(1)If a complying notice of claim is given before the end of the period of limitation applying to the claim, the claimant may start a proceeding in a court based on the claim even though the period of limitation has ended.

(2)However, the proceeding may be started after the end of the period of limitation only if it is started within –

(a) 6 months after the notice is given or leave to start the proceeding is granted; or
(b) a longer period allowed by the court.”

1. That case related to an accident which occurred on 26 August 2000 and in respect of which it was found that the notice of claim was compliant on 20 January 2003.  By reason of a misunderstanding of the operation of s 77D, proceedings were ineffectively issued on 17 June 2003 without the court’s leave.

1. In the course of rejecting an argument that the operation of s 59 is displaced where the circumstances are within s 77D(1), McMurdo J observed, with respect to the purpose of s 59, that :

“Section 59 appears to recognise the extra burden of bringing proceedings within a limitation period, as a result of the claimant having to take the pre suit steps required by this Act, and therefore allows a claimant extra time where a respondent has had the benefit of a complying notice within the limitation period.  To a large extent the purposes of a period of limitation might be thought to be served by the giving of a complying notice of claim.”

1. Turning to the argument that an application must be made within the limitation period or within the period for which the proceeding could be commenced without leave according to s 59(2)(a), McMurdo J said:

“[20]The respondents’ argument seems to be based on a suggested unfairness from a defendant’s losing a good defence.  But that is also the effect of an order made under s 59 within the limitation period.  In each case, the effect of the order is to permit the proceeding to be commenced out of time and to deprive the defendant of the limitation period defence.  The potential unfairness to a defendant, in a particular case, from an order extending time could be greater where the order is made after the expiry of the period, if a defendant has by then in some way relied upon that expiry to its detriment.  That is a consideration which would affect the exercise of the discretion under s 59, but it does not require the section to be interpreted as precluding an order beyond the limitation period in every case.

[21]The interpretation advanced by the respondents would leave the power under s 59 so limited that it would be difficult to see much purpose for its existence.  The power can only be exercised were a complying notice of claim has been given, at which point the claimant knows enough of the proposed case to supply the particulars which are required for a complying notice.  Such a claimant who has not otherwise complied with chapter 2, part 1, could start the proceeding within the limitation period by obtaining an order under s 43, and would not need an extension of the limitation period.  The cases where a claimant, although within time to sue without leave, would for some reason still need an extension of the limitation period, will be comparatively rare.  To confine the s 59 power of extension to persons who are still within time to sue would be contrary to its apparent purpose.

[22]There is no express limitation on the power under s 59 as the respondents suggest, and in my view, nor should it be implied.  It follows that the power under s 59 can be exercised before or after the date within s 59(2)(a).

[23]In the present case, it can be exercised now.  This interpretation does not effectively deny defendants the benefit period of limitation, because the scope for the operation of s 59 is limited by the requirements for a complying notice within the period and for the court’s discretion to be exercised judicially by due consideration of the relevant circumstances including any relevant prejudice to the defendant.

[24]The second respondent has submitted that its interpretation of s 59 is necessary to prevent ‘sections 18 and 43 (amongst others) becoming largely redundant so long as a compliant notice was served prior to the limitation.’  I do not agree.  Section 43 gives a discretionary power to allow a claimant to start proceedings without having complied with the required preliminary steps.  It exists largely because there will be deserving cases which should be allowed to go forward before the limitation period expires.  Section 59 gives a power to extend the limitation period.  The considerations affecting the respective exercises of these powers are different, and a claimant’s case could warrant a s 43 order to avoid becoming time barred, where the same case might not warrant a s 59 order once it is out of time.  To acknowledge the true extent of the s 59 power is not to encourage claimants to let their claims become time barred.”

1. Counsel for the respondents attempted to cast doubt on the correctness of the decision in Kash by reference to dicta of Jerrard JA in SG v State of Queensland [2004] QCA 215, however, in my respectful view, the reasoning in Kash is persuasive.

1. While none of these decisions are binding upon me, they are persuasive. In my view, the construction contended for by the respondents, which would deny the court the power to exercise a discretion in order to see that justice is done, involves placing a limitation on the operation of s 57(2)(b) which is not justified by its terms or dictated by a purposive approach to interpretation.

1. I consider that the court does have jurisdiction to make an order under s 57(2)(b) and I am prepared exercise the discretion and to make an order in the circumstances of this case. It appears that orders of the kind made in Morrison-Gardiner v Car Choice Pty Ltd (supra) would be appropriate, however, I will invite the parties to make submissions as to the form of order.

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