Robert Keast v Dennis Kavanagh and IAG Australia Pty Ltd t/as NRMA Insurance Ltd

[2013] ACTMC 11

ROBERT KEAST V DENNIS KAVANAGH AND IAG AUSTRALIA PTY LTD t/as NRMA INSURANCE LTD
[2013] ACTMC 11 (15 August 2013)

Motor vehicle accident – personal injury damages – separate question – whether claim statute barred – whether cause of action confirmed by defendant, where payments made to plaintiff for medical expenses – whether payments “voluntary” or statutory obligation – whether multiple confirmations of a cause of action possible.

Civil Law (Wrongs) Act 2002 (ACT) s 61.
Court Procedure Rules 2006 (ACT) r 1521.
Limitation Act 1989 (ACT) ss 16B, 32.
Road Transport (Third Party Insurance) Act 2008 (ACT) ss 73-75, 97, 121-122, 185.

AndrewCasey v Richard Luke Alcock (2009) 3 ACTLR 1.
Terry Douch v Michael David Betts & Anor [2013] ACTSC 126.

No. AP 2 of 2013

Magistrate:                  L E Campbell
Magistrates Court of the ACT

Date:   15 August 2013

IN THE MAGISTRATES COURT OF THE         )
  )          No. AP 2/2013
AUSTRALIAN CAPITAL TERRITORY               )

BETWEEN:Robert KEAST

Plaintiff

AND:Dennis KAVANAGH

First Defendant

IAG Australia Pty Ltd t/a NRMA Insurance Ltd

Second Defendant

DECISION

Magistrate:      L E Campbell
Date:                15 August 2013
Place:               Canberra

1. The plaintiff was injured in a motor vehicle accident in the Australian Capital Territory on 25 October 2009. The first defendant was the driver of the other vehicle involved in the accident and the second defendant (the NRMA) is the authorised third party insurer of that second vehicle. The NRMA has carriage of these proceedings on the first defendant’s behalf[1]. Where appropriate I shall refer to the first and second defendants collectively as ‘the insurer’.

[1] See s 83 Road Transport (Third Party Insurance) Act 2008 (ACT).

2. Proceedings were commenced by the plaintiff by way of an originating application lodged with the Magistrates Court on 29 January 2013. An amended originating application was lodged on 26 April 2013. That document more properly reflects the relief sought by the plaintiff and the issue which was actually ventilated before me in the civil motions list on 16 April 2013. The parties agree I have power to deal with this issue as a “separate question” pursuant to r 1521 of the Court Procedure Rules 2006.
3. That separate question is:

Did the email from Jennifer Doyle to Southside Physiotherapy, copied to Bill Andrews, dated 7 February 2012 and/or the payment by “NRMA” to the plaintiff on 6 April 2011, constitute a confirmation under s 32 of the Limitation Act 1985 of the plaintiff’s claim for damages against the defendants in relation to the injuries he received in a motor vehicle accident on 27 October 2009?

4. As the plaintiff points out in his written submissions:

If the question is answered in the affirmative as to either or both of the identified events, then the plaintiff is still within time to continue his claim against the defendants. Alternatively if neither event is a confirmation under section 32 of the Limitation Act 1985 then the plaintiff’s claim is statute barred.

5. Section 32 of the Limitation Act 1989 (ACT) (the Act) relevantly provides:
    
              32 Confirmation

(1) If, after a limitation period fixed by or under this Act for a cause of

action begins to run but before the end of the limitation period, a
  person against whom (either solely or with other persons) the cause
  of action lies confirms the cause of action, the time during which the
  limitation period runs before the date of the confirmation does not
  count in the reckoning of the limitation period for an action on the
  cause of action by a person having the benefit of the confirmation
  against a person bound by the confirmation.


  (2) For this section—
  (a) a person confirms a cause of action if, but only if, he or she—
  (i) acknowledges, to a person having (either solely or with
  other persons) the cause of action, the right or title of the
  person to whom the acknowledgment is made; or

  (ii) makes, to a person having (either solely or with other
  persons) the cause of action, a payment in relation to the
  right or title of the person to whom the payment is made;

6. The language used in this section is somewhat dated but, I infer, the words reflect widely used and well understood terminology which, when originally used, related only to claims for liquidated amounts. However, confirmation of a cause of action in the Australian Capital Territory applies to all causes of action including those for unliquidated damages for tort. This is not the case in all Australian jurisdictions. The term when used in s 32 encompasses conduct constituting both an acknowledgement and a part payment. The relevant cause of action in these proceedings can be broadly described as the plaintiff’s right to recover as yet unquantified damages for the personal injury and expenses he incurred as a result of the first defendant’s negligent use of a motor vehicle.
7. Shortly after the plaintiff was injured his solicitor communicated with the insurer. On 18 November 2009 the insurer responded in a letter which included the following statement:

Our enquiries into the circumstances of the accident are complete and we admit that our insured driver has breached his duty of care to your client.

This letter was received on 24 November 2009.

8. The insurer concedes that this letter amounts to a confirmation (by way of an acknowledgement) of the plaintiff’s cause of action consistent with the authority of the decision of the Supreme Court of the ACT Court of Appeal in AndrewCasey v Richard Luke Alcock (2009) 3 ACTLR 1. However it argues that the three year limitation period imposed by s 16B of the Act that flows from this confirmation expired on 24 November 2009. Hence the plaintiff’s action was statute barred from that date and certainly by 29 January 2013, the date on which the originating application was lodged.
9. The plaintiff through his counsel argues however that there is no reason why there cannot be a number of confirmations of the same cause of action and that this is the case here. He argues there were several confirmations for the purposes of s 32 of the Act after 24 November 2009 and that based on these his cause of action is not statute barred until April 2014 at the earliest.
10. I shall concentrate on the part of the separate question which relates to the payment by the insurer to the plaintiff (a reimbursement for already paid treatment expenses which the plaintiff maintains is a part payment of an acknowledged but as yet unquantified debt) on 6 April 2011. If the answer to the separate question in relation to this payment is “yes” that is sufficient for the plaintiff’s purposes.
11. The insurer concedes that the payment on 6 April 2011:

... was made to the plaintiff and we accept that in other circumstances an agreement to pay treatment expenses could amount to an acknowledgement. What we say, however, is that both the agreement to pay for treatment expenses and the payment of those other treatment expenses in April 2011, in each case, were made pursuant to a statutory obligation to do so[2].

[2] Transcript of Proceedings, Keast v Kavanagh (ACT Magistrates Court, AP 2/2013, Magistrate Campbell,     16 April 2013) 7.

Accordingly it contends that payments made by the insurer since the original admission of liability in November 2009 do not amount to additional independent confirmations as the payments were not made voluntarily but rather pursuant to legislative obligations imposed on the insurer by s 122(1)(a) of the Road Transport (Third Party Insurance) Act 2008 (ACT) (the TPI Act). That section relevantly provides:    

122 Respondent to pay injured person’s medical expenses

           (1) The respondent must pay—
  (a) the injured person’s medical expenses that are reasonably
  incurred because of the personal injury caused by the motor
  accident for the motor accident claim;

Relevant correspondence

12.The insurer’s original letter of 18 November 2009, which is referred to in Annexure 1[3], purports to deal with a number of procedural provisions contained in the TPI Act.  For example there is a paragraph that says:

[3] Agreed chronology – the letter is also contained in exhibit one.

I confirm your client has lodged his claim forms within 28 days and NRMA Insurance will pay up to $5000 in reasonable and necessary treatment expenses which are incurred within six months of the accident.

This statement reflects the obligation imposed on the insurer by ss 73 and 74 of the TPI Act (Chapter 3 – Early payment for treatment of motor accident injuries). It is clear from the terms of s 75 that a payment made in compliance with these particular statutory obligations is not to be taken as an admission of liability.

75 Early payment—no effect on liability


            (1) A payment made by an insurer to a person in relation to a motor
            accident under this chapter—
  (a) is not an admission of liability in relation to the motor
  accident; and
  (b) does not in any way prejudice or affect a claim or proceeding
  arising out of the motor accident

(2) To remove any doubt, an insurer may make a payment under this
            chapter in relation to a motor accident—
  (a) whether or not the insurer has accepted liability in relation to a
  motor accident claim arising from the accident; and
  (b) whether or not a motor accident claim has been made against

an insured person in relation to the motor accident.

13.Later in the same letter the insurer states:

Our enquiries into the circumstances of the accident are complete and we admit that our insured driver has breached his duty of care to your client.

This admission brings into play s 121(a) of the TPI Act which is contained in Chapter 4 Division 4.6.1 (Respondent to pay for medical expenses and rehabilitation services). Thus it is the provisions of s 122 which govern the obligations of the insurer to make payments to the plaintiff rather than the temporally more limited terms of Chapter 3 which refer to payments being made during a six month period.

14.It is clear from the correspondence between the parties that the plaintiff’s solicitor had ongoing contact with the insurer in relation to his client’s treatment needs – on 22 February 2010 the insurer agreed that it would pay for ten physiotherapy treatments, on another occasion the insurer directly discussed the plaintiff’s treatment with his physiotherapist and on 11 March 2010 the insurer agreed to pay for the plaintiff to consult with Doctor Colin Andrews and to have a CT scan. In December 2010 the plaintiff’s solicitor wrote to the insurer enclosing a number of accounts for treatment expenses already paid for by the plaintiff and for which he was seeking reimbursement. On 6 April 2011 the insurer paid directly to the plaintiff an amount reimbursing him for the expense of physiotherapy treatments that he had already incurred. On 15 November 2011 the insurer again advised the solicitor that a further six physiotherapy sessions were “authorised” and that it had “attended to the payment of treatment expenses to date” and again on 7 February 2012 the insurer emailed that it “approved a further six treatments”.

15. What is not apparent from the chronology is that on 24 September 2012 the insurer wrote to the plaintiff’s solicitor requesting that the plaintiff attend a medical appointment it had arranged for him with a specialist in Macquarie Street, Sydney on 3 December 2012, or that the plaintiff attended that consultation. Following this the plaintiff made an offer of settlement of his claim to the insurer. This was met with the response:

In accordance with s 16B the limitation period expired on 18 November 2012[4] and therefore the proceedings filed on 29 January 2013 are not maintainable. Our instructions are that the defendants will rely on the time bar imposed by the Limitation Act. It follows that leave to begin the proceedings would be futile.

[4] It was agreed the letter was received some days after this and hence the reference in court to the later date of 24 November 2012.

16. The plaintiff of course argues that the proceedings are not statute barred because of the insurer’s confirmation of his cause of action in April 2011.
17. In Casey v Alcock Besanko J stated at para 94:

An acknowledgment is a “distinct admission of the debt” to use the words of Dixon J in Bucknell (at 164) (see also Lord Sumner in Spencer at 528). It may well be that an admission made as a result of duress or a material mistake could not constitute an acknowledgement within s 32 of the Limitation Act and in this sense an admission must be voluntary before it can constitute an acknowledgment. However, the admission in this case was not involuntary in that sense. It was an admission properly made after inquiries into the circumstances of the accident were completed. The fact that it was made at the time it was made because of the obligation under s 61(1)(b)(i) of the Civil Law (Wrongs) Act does not prevent it from being an acknowledgement within the clear terms of s 32 of the Limitation Act.

The insurer argues that notwithstanding this clear statement in relation to admissions made pursuant to statutory obligations still being potentially “voluntary” and its apparent relevance to this matter (the terms of s 61(1)(b)(i) of the Civil Law (Wrongs) Act 2002 (ACT) being very similar to those of s 97(1)(b)(i) of the TPI Act) the payments referred to in the separate question cannot be described as “voluntary”.

Voluntary payments

18. The plaintiff’s first response was to point out that the approach adopted by the insurer in its correspondence did not indicate that the payments that it made were simply in compliance with its statutory obligations. Rather from the words it used it appears that the insurer either held the view that it was for it to decide whether or not it would pay for treatment undertaken, or sought to be undertaken by the plaintiff, or alternatively that it was happy to encourage the plaintiff to assume that this approach was the one by which he was bound. Certainly the impression gained from the language used suggests that the insurer had a choice in determining what payments it would or would not make. For example the following statements are scattered through the correspondence:

“I confirm that NRMA Insurance will support five further physiotherapy treatments”, “Should Mr Keast require further treatment I request you submit a review form for consideration” and “NRMA Insurance does not support any treatment without prior approval.”

The tenor of these statements does not accord with the obligation imposed by the words of s 122 of the TPI Act which provides that the insurer must pay:

the injured person’s medical expenses that are reasonably incurred because of the personal injury caused by the motor accident...

19. In response the insurer argued that this is an overly narrow interpretation of s 122 and:

There can be little doubt that many injured persons would not proceed to obtain treatment if  the question of who was liable for the cost of the treatment remained to be determined only after that cost was incurred.

I acknowledge that the insurer’s approach in its correspondence may well reflect common industry practice or simply a practical approach to its obligations to ensure that a plaintiff is reimbursed for their expenses (as expressed in the insurer’s written submissions). However there is nothing to suggest from the words of the section that the insurer is entitled to direct that its approval must be sought before treatment is undertaken. And yet that is what it maintains in its correspondence.

20. Whichever approach is correct the plaintiff argues, and I agree, that this appearance of choice expressed by the insurer as to whether to reimburse the plaintiff or not is not determinative of the separate question. I agree. The question is answered by there being nothing in the wording or the discernible intention of s 32 of the Act which excludes from its operation a payment of this nature even if it is made pursuant to a statutory obligation.
21. The insurer argued that the its conduct did not amount to a confirmation because, unlike the Civil Law (Wrongs) Act 2002 (ACT) which encouraged but did not compel the making of the decision to admit or deny liability the TPI Act mandated the making of such a decision. That is the insurer’s explanation for the emails it sent and the payments it made derived from its obligations under Division 4.6.1 of the TPI Act (ss 121 and 122) and therefore were not “voluntary” in the sense that the word was used by the Court of Appeal in Casey v Alcock. This conclusion it was argued was reinforced by the provisions of s 185 of the TPI Act which make it a condition of a compulsory third party insurer’s licence that s 122 be complied with.
22. There are very few relevant authorities which provide useful examples of when an act or payment has been determined not to be ‘voluntary’ and therefore not to amount to a confirmation. Besanko J in Casey v Alcock refers to possible instances where:

an admission (is) made as a result of duress or a material mistake.

Neither circumstance was argued to arise here. While I have read with interest the cases to which I was referred provided by the insurer it does not seem to me that any are sufficiently analogous to the present matter to be of assistance in persuading me that the insurer’s conduct was not voluntary simply because it was statutorily compelled. Each of the cases was easily distinguishable from the present matter[5].  However the reasoning adopted by the Court of Appeal in Casey v Alcock remains highly persuasive.

[5] Llyod v Coote & Ball [1915] 1 KB 242 – a payment made as a result of undue influence and abuse of a fiduciary duty is not voluntary;

23. There is nothing to suggest that the admission of liability made by the insurer for its insured’s conduct in its first letter was brought about because it was pressured, because of statutorily imposed time limitations, into doing so after inadequate or rushed enquiries on that issue. Rather it was a clear acknowledgement by the insurer of the causal relationship between the plaintiff’s loss or harm and its insured’s conduct. The question as to what extent the insurer is responsible remains of course to be determined. However in light of this admission, and in the ordinary course of things, it would be the insurer’s responsibility to pay for all relevant and necessary medical and treatment expenses attributed to its insured’s breach of duty. There may be differences still to be resolved as to the amount of damages payable for any pain and suffering experienced by the plaintiff, and in relation to more peripheral areas of damage, but special damages such as treatment expenses are usually capable of (more or less) precise quantification.
24. While the payments made by the insurer to the plaintiff may have been made earlier than they might otherwise have been made had there been no legislative scheme in place, the insurer was not coerced or forced into making any payments which it did not have an ultimate legal liability to make. It was simply reimbursing some of the plaintiff’s pecuniary losses which were always recoverable, even at common law, as long as they were “reasonably necessary”. I am satisfied that the payments were voluntary in the sense the insurer intended to make them to the plaintiff and that they were not robbed of this character because of any duress, coercion, fraud, mistake or other vitiating feature.

The objects of the Act

25. The insurer also argued that answering “yes” to the separate question would be contrary to the objects of the Act:

Contrary to the submission of the applicant a decision that every payment of medical expenses made as required by the Act revives the applicant's cause of action would frustrate the  improvement of the compulsory third-party system, cause a potential cost blowout due to ordinary motor vehicle claims becoming "long tail" claims (Such as those for ongoing workers compensation payments.) and positively discourage the speedy resolution of claims (see paragraph 5A(e) of the Act). While it is true that one of the objects contained in section 5A is the promotion and encouragement of rehabilitation it is important to note the qualification in paragraph 5A(f) namely, "as far as practicable". It is plain that the goal of rehabilitation is not intended to be used to undermine the limitation framework which is otherwise entirely consistent with the other objects of the Act as set out in section 5A.

26. However in my view there is nothing inconsistent with the objects of the legislation for an insurer’s conduct in reimbursing a plaintiff for expenses already incurred to be taken as an acknowledgment of an ongoing liability to pay damages. Those damages would ordinarily include, among other things, payment of treatment expenses. Indeed the insurer’s conduct in such a case supports an inference that it did not need, nor was it concerned with, the protection of the limitation system until the expiration of a new limitation period, calculated from the time of its latest payment, notwithstanding the terms of Division 4.6.1.
27. There is no prejudice to the insurer in this approach to the Act being adopted. It is not caught unaware by the plaintiff’s claim and it has had ample opportunity to examine the issue of liability and to consider the veracity of the plaintiff’s condition and his claim for damages. There was no qualification attached to the payment to the plaintiff which could justify the insurer’s conduct, taking place as it has in the process of negotiations in a tort case, as being characterised as anything other than a part payment of a larger sum of damages yet to be ascertained – that is it was a fresh confirmation of its already admitted indebtedness to the plaintiff.
28. In the absence of statutory intervention in the form of the TPI Act the insurer’s conduct in paying (without qualification or reservation) some of the plaintiff’s treatment expenses would in all likelihood amount to a confirmation. The insurer conceded as much. It is not at all clear to me that the legislature intended that the statutory scheme provided for in the TPI Act should result in a different interpretation of s 32 of the Act.
29. Finally it does not seem to me that the wording of s 32 precludes the possibility of there being a number of multiple confirmations of the one cause of action (whether it is in contract or tort) resulting in repeated extensions of the time within which the cause of action must be commenced. The correctness of this approach is reinforced by the tentative views expressed recently by Master Mossop in Terry Douch v Michael David Betts & Anor [2013] ACTSC 126.
30. The separate question is answered “yes”.
31. Unless either party makes an application in relation to the question of costs within seven days of 15 August 2013 the insurer is to pay the plaintiff’s costs of these proceedings as agreed or assessed.

I certify that the preceding 31 paragraphs are a true copy of the Reasons for Judgment of her Honour Magistrate Campbell.

Associate: Nilusha Rajapakse

Date: 15 August 2013

Annexure 1

Agreed chronology (prepared by the plaintiff and agreed to by defendant)

27 October 2009  Motor vehicle accident: the plaintiff suffers injury

11 November 2009                 Letter from plaintiff’s solicitor giving notice of claim and   providing information

18 November 2009                 Date of letter containing admission by defendant of liability to   plaintiff – section 97 of the Road Transport (Third Party   Insurance) Act 2008

24 November 2009                 Letter of 18 November received by plaintiff’s lawyers

17 December 2009                 Defendant indicates that it supports further physiotherapy   treatment

1 February 2010  Defendant indicates that it supports further physiotherapy   treatment

22 February 2010                   Defendant indicates that it supports further physiotherapy   treatment

11 March 2010  Defendant indicates that it approves a CT scan and   assessment by   Dr Andrews

6 April 2011  Defendants make a payment to the plaintiff direct –   reimbursement for the physiotherapy treatment

29 April 2010  Defendants indicate that they are happy to fund a follow up   visit to Dr Andrews

15 November 2011                 Defendants indicate that they support further physiotherapy   treatment

7 February 2012  Defendants indicate that they support further physiotherapy   treatment

18 or 24 November 2012        End of period of three years from admission by defendants

29 January 2013  Originating Application filed in Magistrates Court

6 April 2014  Expiry of limitation period if “yes” to second part of separate   question

7 February 2015  Expiry of limitation period if “yes” to first part of separate   question

The parties agree that these dates are reflected in the schedule of documents tendered as exhibit 1 in the proceedings.

 Taylor v Hollard [1902] 1 KB 676 – a payment under duress of a judgment and not made by the liable party or his agent cannot be treated as a confirmation;
Power v Kenny [1977] WAR 87 – payments made in the course of a bankruptcy as dividends are not voluntary and cannot revive the original judgment debt not made by debtor but trustee. Originally an ‘acknowledgment/part payment must be made by the maker or the maker’s agent and to the person whose title or claim is being acknowledged on their agent.