Toone v AAI Limited t/as GIO
[2021] NSWPIC 536
•21 December 2021
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Toone v AAI Limited t/as GIO [2021] NSWPIC 536 |
| CLAIMANT: | Charlene Toone |
| INSURER: | AAI Limited t/as GIO |
| MEMBER: | Belinda Cassidy |
| DATE OF DECISION: | 21 December 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); damages claim; leave to commence proceedings more than three years after the accident; referral to the Personal Injury Commission (Commission) one week outside the time limit in section 7.33 of MAI Act; insurer conceded claimant had full and satisfactory explanation but argued a discretion was involved before the grant of leave and that in exercising the discretion the Commission could have regard to the futility of the application; blameless accident and claimant owner and driver of only vehicle involved in the accident; Held - leave given to refer damages claim to the Commission for assessment; claimant had full and satisfactory explanation for the delay; section 7.33 of the MAI Act did not involve any additional discretion and issue of futility could not be considered; issue of liability separated from quantum and to be heard separately. |
INTERIM DECISION
INTRODUCTION
Factual background
Ms Toone was involved in a motor accident on 19 March 2018 on the M1 near Mount White. Her vehicle was the only vehicle involved in the accident and Ms Toone says she sustained injury in that accident.
Ms Toone made a claim for statutory benefits against GIO, her own insurer on 22 March 2018[1] and on 18 March 2021 the claimant served a claim for damages on GIO[2].
[1] The application for personal injury benefits (statutory benefits claim form) is document A1 attached to the claimant’s application and is signed and dated 22 March 2018.
[2] The application for common law damages (damages claim form) is document R2 attached to the insurer’s reply and is signed and dated 17 March 2021.
On 26 March 2021, the claimant lodged an application with the Personal Injury Commission (the Commission). The application sought leave of the Commission to refer Ms Toone’s claim for assessment more than three years after the accident in accordance with section 7.33 of the Motor Accident Injuries Act2017 (the MAI Act).
Ms Toone also asks that the proceedings be referred to the Commission’s stood over list as the claimant is not ready to proceed with the assessment of her claim.
On 29 April 2021, the insurer lodged a reply to the application opposing the granting of leave on the basis it would be futile to do so, as the claimant’s common law damages claim is, in GIO’s view, destined to fail.
Issue in dispute
The claim has been allocated to me for determination of whether the Commission should grant leave for Ms Toon’s claim to be referred for assessment and, if so, to conduct the assessment. Should leave be granted, I would be required to assess the insurer’s liability for the claim and the quantum of the claimant’s damages arising from the injuries sustained in the accident.
I held a teleconference in these proceedings on 22 November 2021 and requested, amongst other things, submissions from the parties concerning the following:
(a) whether the claimant’s application for leave to commence proceedings under section 7.33 is limited to the issue of whether she has a full and satisfactory explanation for the delay or whether I can or must consider the issue of futility raised by the insurer;
(b) whether there is anything in the rules of the Commission relevant to the application for leave or the granting of leave, and
(c) if I am not to consider futility, whether I should separate the issue of liability from the issue of quantum and determine that before the issue of whole person impairment is to be determined.
I directed the insurer to lodge submissions by 3 December 2021 and I received those submissions from the insurer’s solicitor, Mr Ian Izzard of Suncorp Legal on the due date[3].
[3] I will refer to those submissions as the insurer’s ‘supplementary submissions’ and the submissions lodged with the reply form as the ‘original submissions’.
I had also directed the claimant to lodge submissions in response by 10 December 2021 however I have received no further communication and in particular no submissions from the claimant or her solicitor Mr Ivan Vukic of PK Simpson Lawyers.
I have determined that Ms Toone should be given leave to refer her claim for assessment under s 7.33 of the MAI Act for the reasons which I have set out below.
LEGISLATIVE FRAMEWORK
Objects of the relevant Acts
Ms Toone’s claim is made under, and is subject to, the provisions of the MAI Act. The assessment of her claim is undertaken by the Commission in accordance with the Personal Injury Commission Act 2020 (the PIC Act), the Commission’s rules and any relevant provisions of the MAI Act.
The objects of the MAI Act are set out in section 1.3(2) and include matters relevant to statutory benefits claims, compulsory insurance, premium affordability, fraud and data and relevantly ‘to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes’.
Section 1.3(4) provides that when interpreting the provisions of the Act, a construction that would promote the objects of the Act is to be preferred over one that would not. Section 1.3(5) provides that when exercising a discretion conferred by the Act, that discretion must be exercised in a way that would also promote the objects of the Act.
The objects of the PIC Act are set out in section 3 and include ensuring that the Commission’s decisions are timely, fair, consistent and of a high quality and that the Commissions is enabled to decide matters justly, quickly, cost effectively and with as little formality as possible.
Section 4 of the PIC Act echoes sections 1.3(4) and (5) of the MAI Act and requires interpretations of provisions to adopt constructions that promote the objects of the PIC Act and the exercise of discretions conferred in the Act in a way which that promotes the objects of the PIC Act.
Section 42(1) of the PIC Act contains the ‘guiding principle’ for the Act and the rules of the Commission which is that they must facilitate ‘the just, quick and cost-effective resolution of the real issues in the proceedings’. Section 42(2) requires me, as a member of the Commission to give effect to the guiding principle when exercising any power given to me under the Act or the rules of when interpreting any provision of the Act or the rules.
Time limits
The MAI Act, like its predecessor, the Motor Accidents Compensation Act1999 (the MAC Act) contains many time limits.
Part 6 of the MAI Act provides for the making of both claims for statutory benefits and claims for damages and associated matters. Section 6.14(1) provides that a claim for damages cannot generally be made until 20 months have passed since the motor accident[4] and section 6.14(2) provides that a claim must be made ‘within 3 years after the date of the motor accident’.
[4] There are exceptions if the claim is a death claim or if the person making the claim has a whole person impairment of more than 10% (see s 6.14(1).
Dispute resolution of claims by the courts is provided for in Division 6.5 of Part 6 of the MAI Act. Section 6.32(1) provides a three-year limitation period for commencing court proceedings and proceedings can only be commenced outside that time frame ‘with leave of the court’ and that leave must not be granted unless the claimant provides a full and satisfactory explanation for the delay to the Court[5].
[5] Section 6.32(3)(a). There is another requirement set out in section 6.32(3)(b), that is that the Court must be satisfied that the total of all damages likely to be awarded are not less than 25% of the maximum amount for non-economic loss.
There is a definition of ‘full and satisfactory explanation’ in section 6.2 as follows:
“6.2(1) For the purposes of this Part [that is Part 6], a full and satisfactory explanation by a claimant for non-compliance with a duty or for delay is a full account of the conduct, including the actions, knowledge and belief of the claimant, from the date of the accident until the date of providing the explanation.
6.2(2) The explanation is not a satisfactory explanation unless a reasonable person in the position of the claimant would have failed to have complied with the duty or would have justified in experiencing the same delay.”
Dispute resolution of claims for damages and claims for statutory benefits outside the Court system is provided for in Part 7 of the MAI Act and in particular Division 7.6.
Section 7.33 provides a time limit for the referral of claims for damages to the Commission as follows:
“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.”
There is no definition of ‘full and satisfactory explanation’ in Part 7.
No-fault accidents
Chapter 5 of the MAI provides for the recovery of benefits and damages in a no-fault accident which is defined[6] as:
“an accident not caused by the fault of the owner or driver of any motor vehicle involved in the accident in the use or operation of the vehicle and not caused by the fault of any other person.”
[6] Section 5.1.
Section 5.2(1) deems a no-fault accident to have been caused by the fault on the part of the owner or driver in the use or operation of the vehicle.
Section 5.3 provides that if the claimant ‘avers’ the accident is a no-fault one, then it is deemed to be a no-fault accident, in the absence of evidence to the contrary.
Section 5.4(1) (in Part 5) of the MAI Act provides that a person cannot recover damages under the no-fault provisions ‘if the motor accident concerned was caused by an act or omission of that driver’.
What an ‘act or omission’ is, is set out in s 5.4(2). It does not require fault, can be involuntary and does not have to be the sole or primary cause of the injury.
DOES THE CLAIMANT HAVE A FULL AND SATISFACTORY EXPLANATION?
The claimant’s submissions[7] provide the explanation for the delay in referring the claim for assessment as follows:
(a) the accident occurred on 19 March 2018;
(b) the three-year limitation period expired on 19 March 2021;
(c) the solicitor with carriage of the matter (unnamed) left the firm on 2 March 2021, and
(d) the new solicitor was given carriage and conduct of the matter on 22 March 2021.
[7] The original submissions lodged with the application form [A2] signed by Ivan Vukic and dated 26 March 2021.
The insurer concedes[8] the claim for damages was made on time (the day before the third anniversary of the claim). The insurer also submits that the parties have been unable to explore settlement of the claim because of the short time frame between the making of the claim and the referral of the claim for assessment.
[8] In its original submissions lodged with the reply form.
The insurer notes the claim was referred for assessment by way of lodging an application for assessment with the Commission one week outside the three-year limitation period.
The insurer says no explanation has been provided by the claimant herself but that the solicitor has explained that the delay in commencing the proceedings was due to a change in solicitor.
The insurer does not dispute that the explanation is full and satisfactory and notes there is a minimal delay.
In the insurer’s second submissions, the insurer confirms there is no dispute about the claimant’s explanation and that she has a full and satisfactory explanation for commencing her proceedings.
I note the claimant’s explanation has been provided by her solicitor. The delay is short (one week) and the cause of the delay in commencing the proceedings was due to a change in personnel within the claimant’s solicitor’s firm.
The definition of full and satisfactory in section 6.14 applies only to Part 6 because it explicitly says so. The definition does not apply to section 7.33 because section 7.33 is in Part 7 of the Act and not part 6 of the Act.
I note Member Williams in Lee v Allianz Australia Insurance Limited[9] determined that:
“… in order to interpret s 7.33 in a way that is harmonious, logical and consistent with the MAI when read as a whole, it is appropriate to proceed on the basis that the term ‘full and satisfactory explanation’ used in s 7.33 means a full account of the conduct, including the actions, knowledge and belief of the claimant, from the date of the accident until the date of providing the explanation and the explanation is not a satisfactory explanation unless a reasonable person in the position of the claimant would have been justified in experiencing the same delay.”
[9] [2021] NSWPIC 351 at [23].
I agree with Member Williams’ approach and adopt it.
I am satisfied that Ms Toone’s explanation for the one-week delay in referring her claim for assessment is full and satisfactory. While there is no statutory declaration or statement from her, in the light of the short delay I do not think one is necessary. She has placed the resolution of her claim in the hands of her solicitors and a reasonable person in her position would have been justified in experiencing the same delay.
IS THERE A DISCRETION, AND IS FUTILITY RELEVANT?
What is the nature of these proceedings?
The Limitation Act1969 provides set periods and extension provisions for many actions including personal injury actions. There is, for example an ultimate bar of 30 years, a 12 year long stop period, provisions for latent injuries and special provisions for minors and those with a disability.
In MAI Act damages claims, the Limitation Act 1969 does not apply and its complicate provisions have given way to an arguably simpler regime. Court proceedings must be commenced within three years of the date of the accident but may be commenced later if there is a full and satisfactory explanation for the delay and if the claim is likely to be substantial enough to overcome a monetary threshold. There appears to be no ultimate bar or no long stop period.
Section 7.33 is concerned with the Commission giving permission (granting leave) to do something (commence proceedings) that is outside the established rule or procedure (a three year ‘limitation’ period).
A claimant has the right to refer a claim for assessment by making an application to the Commission. If the damages claim has been made and it is within the three-year period since the accident, a claimant does not have to ask for permission first before referring the claim.
However, in the case of a referral made more than three years since the accident, a claimant has to first seek the permission of the Commission to refer the claim by providing an explanation which the Commission judges to be full and satisfactory.
The proceedings that are before the Commission are therefore essentially extension of time proceedings, seeking the leave of the tribunal to commence proceedings in the tribunal outside the set three year ‘limitation’ period.
Should the ‘proceedings’ be ‘dismissed’?
The insurer says[10] I should dismiss the claimant’s application in accordance with section 54 of the PIC Act.
[10] Paragraph 27 of the original submission and paragraphs 16 – 18 of the supplementary submissions.
The insurer submits that I should consider whether the application has ‘reasonable prospects of success’ and notes that section 54 of the PIC Act empowers the Commission to dismiss proceedings if they are frivolous, vexatious or otherwise misconceived or lacking in substance. The insurer says the claimant has no reasonable prospects of success which I take to mean that the insurer is saying the proceedings are misconceived or lacking in substance.
As the current proceedings are ‘leave’ proceedings, I am of the view that the leave application should be heard and determined, and leave granted or not granted. I do not think it is appropriate to dismiss the current application and therefore not decide whether the claimant should or should not be given leave to refer her claim late for assessment. If the insurer seeks the summary disposition of the claim, then in my view that is something that should be done once the leave to refer the claim has been given and the claim has actually been referred.
The insurer argues[11] that leave and liability should be determined on the papers separately to the issue of quantum and before the issue of whole person impairment is determined.
[11] At paragraph 19 of the supplementary submissions.
While I agree with the insurer that liability and quantum should be separated (and I will make directions about that later), I do not agree that the leave issue should be determined with the liability issue. The leave issue is ready to be determined. The insurer has submitted that the claimant has a full and satisfactory explanation for the delay. The liability issue is not, in my view ready to proceed. I simply do not have enough evidence before me about how this accident happened to undertake a just and fair assessment at this stage.
What is the liability status of the claim?
The insurer says the claimant has ‘no right to bring a claim for motor accident damages in relation to the motor accident’.[12]
[12] Paragraph 26.
In the claimant’s statutory benefits claim form[13] Ms Toone provided this description of the accident:
“I was driving vehicle [details removed] in a northerly direction in the near side lane of the M1 (Pacific Highway) motor way near Mount White when the driver’s side front and rear tyres blow out causing me to have to drive the vehicle on the wheel rims being violently shaken inside the car for at least 200 metres. I consider that this was a No Fault Accident [claimant’s emphasis].”
[13] Document A2 annexed to the claimant’s application form.
The car appears to be the claimant’s own car. There is no evidence from either party as to why the tyres blew out, but the admission by the insurer in the statutory benefits claim that the claimant was not wholly or mostly at fault suggests that the tyres blew out, not because of any failure on the part of the claimant to maintain them or the vehicle.
The insurer’s original submissions accept that Ms Toone’s accident is a motor accident within the meaning of section 1.4 and a ‘no-fault’ accident within the meaning of section 5.1 of the MAI Act[14].
[14] Paragraphs 7 and 16.
The insurer has denied liability for the damages claim in a notice dated 18 June 2021[15]. The notice includes this relevant section:
“Based on this information[16] we have determined that your injury is deemed to have been caused by an act or omission as the driver in a single vehicle motor accident. Section 5.4 of the Motor Accident Injuries Act 2017 (the Act) provides that there is no entitlement to recover damages in respect of the death or injury of a driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver.
We therefore deny liability for your common law damages claim.
Because we have denied liability for your claim, we are not required to make any payments in relation to your common law claim for damages.”
[15] The liability notice is identified as document AD1 in the portal.
[16] The notice refers to the only two documents considered being the claim form and a photograph of a flat tyre.
The insurer’s original submissions[17] set out the various no-fault provisions of Part 5 of the MAI Act and notes that they follow closely the ‘blameless accident’ provisions of the MAC Act. The insurer also refers to the Court of Appeal’s decision in Whitfield v Melenewycz[18] which interpreted some of the blameless accident provisions of the MAC Act.
[17] At paragraphs 14 – 25.
[18] [2019] NSWCA 235.
With respect, the insurer is incorrect in suggesting the claimant has ‘no right to bring a claim’ for damages. The wording of section 5.4(1) is clear and refers to there being ‘no entitlement to recover damages’ in certain circumstances but there is nothing in Part 5 that prevents a claimant from making a claim. Ms Toone’s claim may eventually be found to be unsustainable, but she has the right to make it, investigate it, marshal evidence to support it and argue her entitlements under the claim.
While I have not been assisted by any submissions from the claimant or her solicitors, at the teleconference on 22 November 2021, Mr Vukic said that the Melenewycz case related to a different Act and another scheme and that it has not yet been held to apply to Ms Toone’s claim. Mr Vukic says that his advice to his client is that the claimant has a right to recover damages and she wishes to pursue her claim.
Liability is clearly contested in respect of the claim. But at this stage, the question before me is not whether GIO is liable to pay any damages to Ms Toone or whether the Act prevents her from recovering damages. The question before me on the current application for leave is whether the claim should be referred for assessment, including the assessment of liability.
Is there a discretion contained within section 7.33?
The insurer originally submitted[19] that the Commission should not exercise its discretion and leave should not be granted pursuant to section 7.33 because it would be futile to do so.
[19] Paragraphs 26 – 28.
In the insurer’s supplementary submissions, the insurer explained[20] that in its view section 7.33 involves a ‘two-step process’ as follows:
(a) the Commission must first be satisfied that a full and satisfactory explanation has been provided, and
(b) the Commission must then decide whether to grant leave for the claim to be referred for assessment and that this involves an exercise of discretion.
[20] At paragraph 3.
The insurer says that in exercising its discretion the Commission must consider:
(a) the Personal Injury Commission Rules 2021 (the Rules), specifically rule 3 which provides that the object of the Rules is to give effect to the guiding principle in the Act,
(b) the PIC Act, specifically section 4(2) which guides the exercise of a discretion and sections 42(1) and (2) which set out the guiding principle, and
(c) the MAI Act, specifically the objects in section 1.3(4) and (5)
There is no explicit reference in section 7.33 to a discretion, there is for example no phrase which says the Commission ‘may grant leave’ and nothing in that section or anywhere else that I have been taken to that sets out what should or should not be taken into account when exercising such a discretion.
Section 7.33 can be compared to the process required by the Court. In section 6.32, a claimant is not entitled to commence proceedings more than three years after the accident ‘except with the leave of the court’ and subsection (3) says the leave of the court ‘must not be granted unless …’. The Parliament could have adopted similar wording in section 7.33, but did not. The Court appears to have a very limited discretion to consider only the explanation and the monetary threshold in giving leave. It would seem very odd if the alternate, less formal form of dispute resolution had a wider discretion than that given to the courts.
In my view there is no additional discretion provided for in section 7.33. The simple interpretation of this section is that a claimant cannot refer a claim for assessment unless they satisfy the Commission they have a full and satisfactory explanation for the delay and until the Commission grants leave. Once the leave is granted, the claimant is free to refer her claim for assessment in accordance with rule 94 of the Rules.
Is futility a consideration?
If I am wrong and a discretion is to be implied that extends beyond the explanation and allows the Commission to take into account other things, is futility one of those things?
I note the insurer argues that I should interpret the provisions of both the MAI Act and the PIC Act to ensure proceedings are dealt with justly (or fairly), quickly and cost effectively. With respect, by demanding the summary disposal of the liability issue now, at the same time as I am determining the leave application, the insurer’s submissions emphasise the ‘quick’ and ‘cost effective’ objects of the Act but neglect the ‘just’ or ‘fair’ aspect.
The application before me contains barely any evidence relevant to liability or quantum. It contains sufficient information in relation to the leave (and the explanation that has been provided) but I have no factual investigations into the accident and no expert evidence, I do not even have the photograph of the tyre referred to in the insurer’s liability notice. I have no medical evidence, no bio-medical evidence, no evidence from the claimant or any witnesses and only the insurer’s submissions. I have no evidence about how the tyres ‘blew out’, whether the claimant could have stopped immediately when that occurred, whether she was in a position of danger and had to move her car off the road and so on. I also only have the insurer’s submissions as to liability and noting from the claimant.
I do not believe I could make a fair assessment of liability on the information before me. In my view a fair and just assessment of the merits of the claim is a matter for a properly prepared and contested hearing (or on the papers with co-operation and engagement from both parties). It is not appropriate for it to be dealt with summarily at this time.
CONCLUSION
I grant leave for Ms Toone to refer her claim for assessment.
I will make no order as to costs. The costs of this application will be considered when considering costs in the substantive matter.
As I foreshadowed earlier, I will separate the issues of liability from the issues associated with quantum noting that the claimant’s entitlement to non-economic loss is in issue and it may be some time before that is determined.
I will hold a teleconference in this matter at 10.00am on 20 January 2022. I expect on that occasion to discuss the issue of liability and set a timetable for the lodgement of evidence and the assessment of that part of the claim.
Member Belinda Cassidy
Motor Accidents Division
Personal Injury Commission
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