The Motor Accident Commission, South Australia in its Capacity as the Nominal Defendant, South Australia v The Insurance Commission of Western Australia

[2004] WADC 38

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CHAMBERS

LOCATION:   PERTH

CITATION:   THE MOTOR ACCIDENT COMMISSION, SOUTH AUSTRALIA in its Capacity as THE NOMINAL DEFENDANT, SOUTH AUSTRALIA -v- THE INSURANCE COMMISSION OF WESTERN AUSTRALIA [2004] WADC 38

CORAM:   MULLER DCJ

HEARD:   25 FEBRUARY 2004

DELIVERED          :   10 MARCH 2004

FILE NO/S:   CIVO 15 of 2004

BETWEEN:   THE MOTOR ACCIDENT COMMISSION, SOUTH AUSTRALIA in its Capacity as THE NOMINAL DEFENDANT, SOUTH AUSTRALIA

Plaintiff

AND

THE INSURANCE COMMISSION OF WESTERN AUSTRALIA
Defendant

Catchwords:

Section 47A Limitation Act - Application for leave to commence action out of time - Denial of liability by Western Australian insurer for accident involving unlicensed vehicle - Claim met by South Australian insurer - Subsequent discovery that vehicle may have been licensed in Western Australia at time of accident - Whether reasonable cause for delay - Prejudice to defendant - Statutory power of South Australian insurer to bring action.

Legislation:

Limitation Act 1935, s 47A

Motor Vehicles Act 1959 South Australia

Result:

Application allowed

Representation:

Counsel:

Plaintiff:     Mr D M Bruns

Defendant:     Mr S L Ford

Solicitors:

Plaintiff:     Willers & Co

Defendant:     Dibbs Barker Gosling

Case(s) referred to in judgment(s):

Gligorovski v Water Corporation [2003] WADC 290

Case(s) also cited:

Nil

1. MULLER DCJ: This is an application by the plaintiff pursuant to s 47A of the Limitation Act 1935 ("the Act") for leave to commence an action against the defendant for damages allegedly caused by the negligence and/or breach of statutory duty of the defendant in failing and/or omitting to accept liability as an insurer for claims made against the driver of a motor vehicle by passengers in that vehicle who were injured as a consequence of an accident involving the vehicle.

2. The Minute of Proposed Writ of Summons contains an indorsement of claim which reads as follows:

   "The Plaintiff sues in its capacity as the nominal defendant for the purposes of Part IV of the Motor Vehicle Act, 1959 (SA) and its claim against the Defendant is for damages caused by the negligence and/or breach of statutory duty of the Defendant, its officers, employees or agents when in 1998 the Defendant failed and/or omitted to accept liability as the compulsory third party motor vehicle insurer of Stacey Marie Morgan (Morgan) for claims made against her by the passengers in a motor vehicle licensed under the number 9 KO 283 which claims were for bodily injury directly caused by, or by the driving of the motor vehicle by Morgan on 21 December, 1997 when it rolled over 13 kilometres east of Poochera in South Australia.

   AND THE PLAINTIFF CLAIMS AGAINST THE DEFENDANT

   i)damages

   ii)Costs

   iii)Interest

   iv)Any other relief this Honourable Court deems fit."

   The application is supported by an affidavit of Johan Maritz Willers sworn on 9 February 2004 annexed to which are copies of various documents relating to the accident and correspondence between the defendant and the driver of the motor vehicle and also between the parties themselves.  An affidavit of Tony Principe sworn on 12 February 2004 sets out the grounds upon which the defendant opposes the application.  Annexed to this affidavit are copies of various documents that the defendant relied upon at the hearing of the application.

The provisions of s 47A of the Act

Section 47A(1) of the Act relevantly provides:

"(1)Notwithstanding the foregoing provisions of this Act but subject to the provisions of subsection (2) and (3), no action shall be brought against any person (excluding the Crown) for any act done in pursuance or execution or intended execution of any Act, or of any public duty or authority, or in respect of any neglect or default in the execution of the Act, duty or authority, unless —

(a)the prospective plaintiff gives to the prospective defendant, as soon as practicable after the cause of action accrues, notice in writing giving reasonable information of the circumstances upon which the proposed action will be based and his name and address and that of his solicitor or agent, if any; and

(b)the action is commenced before the expiration of one year from the date on which the cause of action accrued,

and for the purposes of this section, where the act, neglect, or default is a continuing one, no cause of action in respect of the act, neglect, or default accrues until the act, neglect or default ceases but the notice required by paragraph (a) may be given and an action may thereafter be brought while the act, neglect or default continues."

1. Section 47A(3) of the Act relevantly provides as follows:

   "(3)(a)Notwithstanding the foregoing provisions of this section application may be made to the Court which would but for the provisions of this section have jurisdiction to hear the action, for leave to bring an action at any time before the expiration of 6 years from the date on which the cause of action accrued, whether or not notice as required by subsection (1) has been given to the prospective defendant.

   (b)Where the Court considers that the failure to give the required notice or the delay in bringing the action as the case may be, was occasioned by mistake or by any other reasonable cause or that the prospective defendant is not materially prejudiced in his defence or otherwise by the failure or delay, the Court may if it thinks it is just to do so, grant leave to bring the action, subject to such conditions as it thinks it is just to impose.

   …"

2. The plaintiff did not give written notice as soon as practicable as required by s 47A(1)(a) of the Act or commence an action before the expiration of the one year period as required by s 47A(1)(b) of the Act.

3. The motor vehicle accident which gave rise to this proposed claim occurred on 21 December 1997.

Related proceedings (2003 action)

1. In order to understand the background to this application it is necessary to refer to another action in this Court in which the plaintiff is proceeding against a company named 3M Australia Pty Ltd as first defendant and the Insurance Commission of Western Australia as second defendant ("the 2003 action").  In its statement of claim in that action the plaintiff has asserted that the Insurance Commission of Western Australia issued a policy of insurance under the Motor Vehicle (Third Party Insurance) Act 1943 to the first defendant in respect of a Holden Commodore registration number 9KO 283.  On 21 December 1997 the vehicle was being driven by the alleged insured driver when it was involved in an accident in South Australia resulting in injury to several passengers in the vehicle.  As early as January 1998 the Insurance Commission of Western Australia was allegedly given written notice of the accident by the insured driver and notice of the claim being made by the injured passengers.  It was further alleged that the Insurance Commission of Western Australia wrote to the alleged insured driver on 22 January 1998 and again on 19 February 1998 advising her that the licence of the vehicle involved in the accident had expired in April 1997 and that no policy of insurance as required by the Motor Vehicle (Third Party Insurance) Act 1943 existed at the time of the accident.  In this same correspondence the Insurance Commission of Western Australia advised the driver of the motor vehicle to make a claim against the third party insurer in South Australia.  These assertions, according to the plaintiff's statement of claim in the 2003 action, constituted a denial of liability which, it was said, the Insurance Commission of Western Australia knew or ought to have known would be communicated to the first defendant, which owned the vehicle, and ultimately to the claimants and the plaintiff.  The statement of claim in the 2003 action alleges that the Insurance Commission of Western Australia was under a duty to take care in making those statements and, in breach of that duty, failed to ascertain that a policy relating to the vehicle had, in fact, been issued on 6 February 1997 and was effective to 5 February 1998.  As a consequence of the allegedly negligent statements of the Insurance Commission of Western Australia the plaintiff in the 2003 action claimed it had been induced to pay damages to the claimants in an amount of $194,720.65 which, it was said, the Insurance Commission of Western Australia was liable to pay by way of damages.

2. In the alternative the statement of claim alleged that if the Insurance Commission of Western Australia did validly terminate or amend the policy prior to the date of the accident, and the car was not licensed or insured when the accident occurred, the loss flowed from the negligence of the Insurance Commission of Western Australia.

3. In its defence to the statement of claim in the 2003 action the Insurance Commission of Western Australia asserted that the vehicle involved in the accident had initially been licensed for a period of 12 months from 6 February 1997.  It was claimed that on 12 February 1997 an application was made to shorten the period of the vehicle licence and the insurance policy to 30 April 1997.  This was done, it was said, to accommodate the owner's request for a block date which was a common expiry date for all vehicles licensed in that owner's name.  The defence went on to allege that, following this request, the original licence was cancelled and an amended vehicle licence and insurance policy expiring on 30 April 1997 was re‑issued.  It was for this reason the Insurance Commission of Western Australia claimed the vehicle licence and insurance policy had expired on 30 April 1997.

The law to be applied

1. The critical question is whether leave to bring the action should be granted pursuant to s 47A(3(b) of the Act. The criteria to be applied in addressing this question were set out by then Commissioner Reynolds in Gligorovski v Water Corporation [2003] WADC 290:

   "The key provision for the purpose of this appeal is s 47A(3)(b) of the Act. It provides three criteria for consideration namely mistake, reasonable cause and material prejudice. It is important to note that the reference to each of these three criteria is expressed in the alternative. Therefore if any one or more of the criteria applies then the court must consider whether or not it is just to allow the action to be brought. The plaintiff bears the onus of demonstrating that leave should be granted. It follows from all of this that the plaintiff bears the onus of demonstrating any one or more of mistake, reasonable cause or that the defendant is not materially prejudiced in its defence. The plaintiff also bears the burden of demonstrating that the justice of the case requires that he be given an extension of time within which to commence his action despite the limitation period having expired. See Brisbane South Regional Health Authority v Taylor (1996) 70 ALJR 866 per Justice McHugh at 872."

Mistake and reasonable cause

1. The plaintiff claims that its failure to give the required notice and its delay in bringing the action within the required time period was the result of a mistake flowing from the misleading advice given by the defendant to the driver of the vehicle.  It says that there was reasonable cause for the delay.  The starting point in considering this submission is the affidavit of the plaintiff's lawyer, Johan Maritz Willers, sworn on 9 February 2004.  Annexed to this affidavit is an accident report form completed by the driver of the vehicle.  The accident report form appears to be a pro forma document prepared by the Insurance Commission of Western Australia.  The report has been signed by the driver of the vehicle and dated 10 January 1998.  It bears the stamp of the Insurance Commission of Western Australia dated 14 January 1998.  The circumstances of the accident are described in the accident report form and details are given of the other claimants who were passengers in the car at the time.

2. The accident report form shows that the defendant received very early notice of the accident.  According to the correspondence revealed in the plaintiff's statement of claim in the 2003 action the defendant responded by advising the driver of the vehicle in two letters dated 22 January 1998 and 19 February 1998 that the vehicle licence had expired in April 1997 and that any claim should be made to the Third Party Insurer in South Australia.  By purporting to give this advice the defendant had obviously begun investigating the matter.  The extent of its investigations are disclosed in its defence in the 2003 action.  Inquiries made by the defendant with the Department for Planning and Infrastructure had revealed the history of the application for a vehicle licence including the initial period for which the vehicle was licensed, the licence fee paid and the subsequent variations that allegedly occurred on 12 February 1997 when the original motor vehicle licence and third party insurance policy was changed to bring it into line with what was referred to as the owner's block date of 30 April 1997.

3. It was submitted by counsel for the defendant that what the plaintiff did after it received the accident claim shows that it had all the information it needed to lead it to investigate whether, contrary to what the defendant believed, the vehicle had in fact been licensed in Western Australia at the time of the accident.  In support of this submission counsel relied upon correspondence annexed to the affidavit of Tony Principe sworn 12 February 2004.  It is evident from this correspondence that the plaintiff initially received notice of the accident in a letter dated 14 March 1998 from Stewart Morgan, the husband of the driver of the vehicle.  In that letter Stewart Morgan said that at the time of the accident the vehicle, which was owned by his employer, was unregistered.  He said neither he nor his wife were aware of that fact.  Having made that assertion, however, he went on to say the vehicle did have a current West Australian registration sticker as was evident by the fact that following the accident the sticker on the shattered windscreen was of a particular colour.  Having made that observation, however, he went on to say that according to the Department of Transport in Western Australia the vehicle was definitely not registered. 

4. Another document which might have cast some light on this issue was a statutory declaration completed by the driver of the vehicle and delivered to the plaintiff at about the same time.  In par 24 of her statutory declaration the driver claimed she knew the vehicle was licensed because at the time of the accident the registration form on the windscreen was dated 2 February 1998.  Having made that assertion, however, she went on to state in the next paragraph of her statutory declaration that she had since found out that the vehicle's licence had been cancelled to bring it in line with the employer's block expiry date of April in each year and that the licence had apparently not been renewed.

5. What is clear from both these documents is that the plaintiff received conflicting advice from those involved in the accident.  The only positive factor pointing towards the vehicle having been licensed at the time of the accident was the colour of the certificate of registration on the vehicle's window.  That, in my view, was hardly enough to alert the plaintiff to the possibility that the car may have been licensed in Western Australia when the accident happened.  What the plaintiff did after that was consistent with the belief that it was dealing with an accident involving an unlicensed vehicle.  It had access to legal advice from 8 September 1999, appointed investigators on or about 30 November 1999 and arranged for its assessor to interview witnesses in 1999 and 2000.  It also sought and obtained legal advice as to an action for recovery on or about 9 May 2000.  I am not certain what the action for recovery related to.  It may possibly have related to the recovery of the money paid by the plaintiff from the defendant or, equally as possible, it may have related to some other avenue of recovery.

6. What I cannot accept is the submission by counsel for the defendant that the plaintiff had sufficient material before it in early 1998 to lead it to investigate the possibility of the vehicle having in fact been licensed in Western Australia when the accident took place.  The material before the plaintiff on this issue was confused and conflicting.  What the submission also overlooks is the information and advice given by the defendant to the driver of the motor vehicle in its letters dated 22 January and 19 February 1998.  It is inconceivable that the information and advice contained in these two pieces of correspondence were not communicated to the plaintiff in its capacity as the statutory third party insurer in South Australia.  While on this point I should repeat that in its amended statement of claim in the 2003 action the plaintiff actually asserts that this information and advice was passed on to it by the claimants and that it relied on such information and advice in accepting liability for the claims that were made.  For the purposes of this application I am prepared to accept the statement made in par 8 of the affidavit of Johan Maritz Willers, sworn 9 February 2004, that it was not until late December 2002, when the lawyers acting for the plaintiff received a number of documents from the Department for Planning and Infrastructure in Western Australia, that the possibility of the vehicle having been licensed in Western Australia at the time of the accident surfaced for the first time.  In February 2003 proceedings commenced.

7. I believe the critical factor was the defendant's early denial that the vehicle was insured or licensed in this State.  I can readily understand how, on the basis of that information and advice given to the driver of the vehicle, the plaintiff, to whom that information must have been communicated, accepted what had been said by its West Australian counterpart and took it at face value.  That, and the events that followed which I have already referred to, explain the delay that occurred before these proceedings were brought and, in my  judgment, constitute a reasonable cause for the delay.

Prejudice to the defendant

1. The defendant has submitted that it was never notified by the plaintiff of any dispute in relation to whether the vehicle was licensed in this State and, given the time that has elapsed, it has lost the opportunity of obtaining documentary information relating to this issue of the renewal of the licence.  According to the affidavit of Tony Principe the Department of Planning and Infrastructure only kept renewal notices for two years.  Given the time that has elapsed the renewal notice applicable to the vehicle involved in the accident presumably no longer exists.  While the delay may certainly have deprived the defendant of the opportunity of gathering this material it is clear from its defence in the 2003 action that it began investigations at the time the accident was initially brought to its notice as early as January 1998 and that it gathered detailed and precise information relating to the motor vehicle licence which it now claims expired in April 1997.  This information included details of the period covered by the initial licence and third party insurance policy, the amount paid, details of the receipt issued and details of the variation that occurred on 12 February 1997 when the period of the vehicle licence was shortened to bring into line with the block date of 30 April 1997.  Given the precise and detailed nature of the information it gathered I am unable to find that the defendant has satisfied the evidentiary onus on the issue of material prejudice.  There is no evidence that the defendant has been deprived of the opportunity of properly investigating either the circumstances of the accident, which it received notice of in January 1997, or the issue of the vehicle licence and insurance policy.  The argument that had the defendant been notified at an earlier time of the driver's belief that the vehicle was registered it might have obtained access to the vehicle and checked the registration certificate on the car is simply speculative and carries little weight.  The windscreen of the car was apparently shattered and, according to the letter dated 18 March 1998 from Stewart Morgan to the plaintiff, the only identifiable feature was the colour of the document.  While the onus remains on the plaintiff to show that the defendant will not be materially prejudiced if leave is granted for this action to be brought I am satisfied on the material I have referred to that this onus has been satisfied.

Possibility of success

1. The defendant has submitted that leave should not be granted because the Minute of Proposed Writ of Summons does not disclose a cause of action and there is no prospect of success.  This submission is based upon the alleged non‑existence of any statutory basis for this proposed action to be brought.  In support of its argument counsel for the defendant has referred to the provisions of the Motor Vehicles Act 1959 South Australia. Section 116(2) of the Act provides as follows:

   "A person claiming damages in respect of death or bodily injury caused by or arising out of the use of an uninsured motor vehicle on a road may bring an action for the recovery of those damages against the nominal defendant."

2. What counsel for the defendant has emphasised is that the statutory right of the Nominal Defendant to recover any sum paid in satisfaction of such a claim is limited. Section 116(7) of the Motor Vehicles Act 1959 provides as follows:

   "Where:

   (a)a sum is properly paid by the nominal defendant to satisfy a claim made or judgment obtained in respect of death or bodily injury caused by or arising out of the use of an uninsured motor vehicle; and

   (b)the driver of the uninsured vehicle was wholly or partly liable for the death or bodily injury,

   the nominal defendant may bring an action to recover the sum, or such part of the sum as the court considers just and reasonable in the circumstances, together with costs from the driver or a person liable in respect of the acts or omissions of the driver; but it will be a defence to an action under this subsection if the defendant satisfies the court that:

   (c)the vehicle was being used at the relevant time by or with the consent of the owner; and

   (d)the defendant did not know and had no reason to believe that the vehicle was an uninsured motor vehicle."

3. I agree with the submission made by counsel for the defendant that this provision does not confer on the Nominal Defendant the power to bring an action of the type contemplated against the Insurance Commission of Western Australia.  But that is not an end to the matter.  The proposed action is to be brought in the name of the Motor Accident Commission, South Australia, in its capacity as the Nominal Defendant, South Australia.  The Motor Accident Commission in South Australia has the rights, powers and obligations conferred upon it by the Motor Accident Commission Act 1992. Section 15 of that Act provides that subject to any limitations imposed by or under the Act the Commission has all the powers of a natural person. This would include the power to bring an action of the type contemplated. Counsel for the plaintiff submitted that the proposed action is being brought by the Motor Accident Commission as a statutory entity pursuant to its powers under the Motor Accident Commission Act 1992.  In his submission the reference to the Nominal Defendant, South Australia, is simply analogous to a corporate entity bringing legal proceedings in its business name.

4. I do not have to make any specific finding on this legal issue.  It is only if I am satisfied the plaintiff's action has no possibility of success that it would be just not to grant it leave to bring such action.  I believe it is arguable that the Motor Accident Commission, South Australia acting in its capacity as the Nominal Defendant, South Australia, does have the capacity to bring these proposed proceedings.

Conclusion

1. For these reasons I am of the opinion that the plaintiff should be granted leave pursuant to s 47A(3)(b) of the Act.