Osaulenko v Allianz Australia Insurance Limited
[2022] NSWPIC 136
•28 February 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Osaulenko v Allianz Australia Insurance Limited [2022] NSWPIC 136 |
| CLAIMANT: | Matthew Osaulenko |
| INSURER: | Allianz Australia Insurance Limited |
| MEMBER: | Maurice Castagnet |
| DATE OF DECISION: | 28 February 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 (MAI Act); meaning of “best endeavours”; Held- in the context of the MAI Act and section 7.32(3), the obligation of using “best endeavours” is satisfied if the claimant has taken reasonable steps to make, prepare and advance his claim towards a resolution; no practical utility in pursuing settlement where degree of permanent impairment remains in dispute; the obligation does not require the claimant to capitulate and compromise his claim for the sake of achieving a settlement before referring it for assessment by the third anniversary of the motor accident. |
| DIRECTIONS MADE: | 1. Pursuant to rule 101(2)(a) of the Personal Injury Commission Rules 2021 and clause 10 (a) of Procedural Direction MA 1, I direct that the proceedings be stood over generally. 2. The parties have liberty to restore the proceedings before 26 August 2022. |
INTRODUCTION
The claimant is a 35-year-old man who suffered injuries in a motor accident on 27 September 2018 when the insured’s vehicle reversed out of a driveway along Hector Street, Chester Hill and hit the bicycle he was riding on the footpath.
On 8 July 2021, the claimant made an application to the Personal Injury Commission (the Commission) to refer his claim for common law damages for assessment, pursuant to subsection 7.32(1) of the Motor Accident Injuries Act 2017 (the MAI Act).
As such, the application was lodged within 3 years of the date of the accident and in conformity with section 7.33 of the MAI Act.
DIRECTION SOUGHT BY THE CLAIMANT
The claimant seeks a direction for his application to be referred to the stood over list pursuant to clause 10(a) of the Commission’s Procedural Direction MAI 1, pending the conclusion of a medical assessment of his permanent impairment by the Commission.
THE INSURER’S POSITION
In written submissions made in its Reply, the insurer’s primary submission is that the application should be dismissed because it is premature. The parties have not yet had an opportunity to engage in pre-filing resolution attempts as set out in subsection 7.32(3) of the MAI Act.
In the alternative, the insurer agrees that the claim is not ready for assessment and therefore the matter should be referred to the stood over list.
BACKGROUND
On 30 July 2020, the claimant made a claim for common law damages.
On 9 September 2020, the insurer requested section 6.25 particulars of the claimant.
On 21 October 2020, the insurer denied liability for the claim.
The claimant was unrepresented in his claim until 21 May 2021, when he retained his current solicitors, Gerard Malouf & Partners, to prosecute the claim on his behalf.
On 1 July 2021, the claimant’s solicitors requested the insurer to concede the threshold for permanent impairment.
On 8 July 2021, the claimant made an application to the Commission for referral of his claim for assessment.
On 15 July 2021, the insurer advised the claimant that it did not concede the threshold and served the report of Dr Robert Breit dated 15 October 2020. Dr Breit assessed the claimant as having a whole person impairment of 3%.
On 19 July 2021, the claimant sought an internal review of the insurer’s decision.
On 5 August 2021, the insurer advised the claimant that its original decision is affirmed based on the findings of Dr Breit on 15 October 2020.
On 13 December 2021, the claimant provided the insurer with a reply to a request for particulars dated 20 September 2021.
On 7 March 2022, the claimant is due to be examined by an independent orthopaedic surgeon to obtain an assessment of whole person impairment for the purpose of attempting to resolve the threshold issue of permanent impairment with the insurer. Failing resolution, the claimant intends to lodge an application with the Commission for a medical assessment.
CONSIDERATION
According to subsection 6.14(1) of the MAI Act, a claim for damages cannot be made before the expiration of 20 months after the motor accident to which the claim relates unless the claim is in respect of injury resulting in a degree of permanent impairment of the injured person that is greater than 10%.
In the present case, the insurer has not at any stage of the claim conceded that the claimant’s permanent impairment is greater than 10%. Therefore, by virtue of the provision of subsection 6.14(1), the claimant could not have commenced his claim for damages until 27 May 2020. He did so on 30 July 2020.
The insurer argues the parties have not yet had an opportunity to engage in pre-filing resolution attempts as set out in subsection 7.32(3) of the MAI Act, to settle the claim.
Subsection 7.32 (3) provides that parties to a claim must use their best endeavours to settle the claim before referring it for assessment by the Commission.
For the purposes of subsection 7.32 (3), the parties therefore had a period of 16 months (from 27 May 2020 to 27 September 2021) to use their best endeavours to settle the claim before referring it for assessment by the Commission.
The effect of a `best endeavours' clause is to be determined in the context of the document in which it appears. [See Italo Australian Club Ltd v National Australia Bank Ltd (1981) 9 NSW Conv R58,328 and Nina's Bar Bistro Pty Ltd [1984] 3 NSWLR 613, Mahoney JA, with whom the other members of the Court agreed, (with qualifications which are not relevant for present purposes), at [58337].
The meaning of the term in a contractual context was considered by the High Court in Transfield Pty Ltd v Arlo International Ltd (1980) 144 CLR 83. In that case, Mason J stated at [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 viewed in the light of the particular contract.”
In my view and considering the objects of the MAI Act, the same notion of reasonableness should be applied when considering a party’s best endeavours in the context of subsection 7.32 (3) of the MAI Act.
In the present context, the MAI Act provides steps for making and pursuing claims. I have considered what steps have been taken by the parties towards a resolution of the claim.
Subsection 6.23 (2) of the MAI Act provides that a claim for damages cannot be settled unless the claimant is represented in respect of the claim by an Australian legal practitioner, or the proposed settlement is approved by the Commission. Based on these provisions, any settlement could not have occurred in the present case prior to 21 May 2021, when the claimant first retained legal representation.
The achievement of a settlement prior to that date would have depended solely on the insurer’s endeavours to settle the claim by making an offer of settlement to the claimant and if accepted, for the insurer to have made an application to the Commission seeking an approval of the settlement. No offer of settlement was made by the insurer.
Since 21 May 2021, the claimant’s solicitors have requested the insurer to concede the threshold for permanent impairment. The insurer has not done so.
In circumstances where the insurer has denied liability and has not conceded the permanent impairment threshold, and the claimant is taking steps to resolve the medical dispute of his whole person impairment by the Commission, there is no practical utility, in my view, in pursuing a settlement of his claim until those issues are resolved. Indeed, there is an air of unreality about the proposition that the claim could be settled in these circumstances.
Section 7.33 of the MAI Act provides that a party to a claim cannot refer a claim for assessment by the Commission 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.
In the present case, the three-year time anniversary of the motor accident occurred on 27 September 2021.
If the claimant does not settle his claim by 27 September 2021, he is required pursuant to section 7.33, to make an application to the Commission to refer his claim for assessment. Otherwise, he must provide the Commission with a full and satisfactory explanation for the delay, and he has to be granted leave by the Commission to do so.
Considering the circumstances of this case, I find that it was reasonable for the claimant’s solicitors to have taken steps to conform with section 7.33.
I therefore propose to make the direction sought by the claimant for his application to be referred to the stood over list, pending the conclusion of the medical dispute regarding the degree of his permanent impairment.
DIRECTIONS
Pursuant to rule 101(2)(a) of the Personal Injury Commission Rules 2021 and clause 10 (a) of Procedural Direction MA 1, I direct that the proceedings be stood over generally.
The parties have liberty to restore the proceedings before 26 August 2022.
Member Maurice Castagnet
Personal Injury Commission
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