Blundstone v Johnson & Anor [2009] QDC 351

DISTRICT COURT OF QUEENSLAND CITATION: Blundstone v Johnson & Anor [2009] QDC 351 PARTIES: WARWICK CHARLES BLUNDSTONE (plaintiff/applicant) v WAYNE PHILLIP JOHNSON (first defendant/ respondent) and ALLIANZ AUSTRALIA INSURANCE LIMITED ACN 000 122 850 (second defendant/respondent) FILE NO/S: DC No 2365 of 2009 DIVISION: District Court at Brisbane PROCEEDING: Application for extension of time ORIGINATING COURT: District Court at Brisbane DELIVERED ON: 26 November 2009 DELIVERED AT: Brisbane HEARING DATE: 28 October 2009 JUDGE: Judge Devereaux SC ORDER: 1. Pursuant to s 57(2)(b) Motor Accident Insurance Act (as amended) order the time for issuing proceedings be extended to 24 August 2009 rather than 17 August 2009. 2. The Applicant be granted leave to continue proceeding 2365/09 3. The Applicant pay the Respondent’s costs of $3,331.12 CATCHWORDS: LIMITATION OF ACTIONS – EXTENSION OR POSTPONEMENT OF LIMITATION PERIODS – EXTENSION OF TIME IN PERSONAL INJURIES MATTERS – PRINCIPLES UPON WHICH DISCRETION IS EXERCISED - whether the Court has power to exercise discretion under s 57 Motor Accident Insurance Act (as amended) a second time - where consent orders made extending limitation period – where applicant filed claim 7 days outside the period calculated under the consent orders. -- 1 of 9 -- 2 Limitation of Actions Act 1974 s 11, s 31 Motor Accident Insurance Act (as amended) s 34, s 37, s 45, s 46A, s 51, s 57 Archie v Archie; Smyth third party [1980] Qd R 546 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 Crain v Crocker & Anor [2004] QDC 151 Lindsay v Smith [2002] 1 Qd R 610 Morrison-Gardiner [2005] 1 Qd R 378 O’Dare v Vitanza & Ors [2004] QCA 480 Paterson v Leigh & Anor [2008] QSC 277 Perdis v Nominal Defendant [2003] QCA 555 Sophron v The Nominal Defendant (1957) 96 CLR 469 Spencer v Nominal Defendant [2007] QCA 254 Venz v Moreton Bay Regional Council (formerly Caboolture Shire Council) [2009] QCA 224 Ward v Wiltshire Australia P/L & Anor [2008] QCA 93 COUNSEL: A J Williams for the applicant R Myers for the second respondent SOLICITORS: KM Splatt & Associates for the appellant McInnes Wilson for the second respondent [1] The applicant seeks leave to commence proceedings outside the limitation period, pursuant to s 57(2) of the Motor Accident Insurance Act (as amended)(‘MAIA’). The second respondent (whom I will refer to as ‘the insurer’1) argues: (1) that in the circumstances of this case, the court has no power to grant the application; alternatively, (2) that the discretion should be exercised against the applicant. [2] It is convenient to set out the factual background, gleaned from the pleadings and affidavits supporting the application, before examining the insurer’s arguments. This is the second time the applicant has sought an order under s 57. I take some of the following from material supporting the earlier application. Factual Background. 1 Adopting the language of the MAIA -- 2 of 9 -- 3 [3] The applicant’s claim arises from personal injuries suffered in a motor vehicle accident on 2 September 2005. He retained solicitors on 26 October 2005. Since then, there has been steady and continuous activity in the progress of the claim. [4] On 21 November 2005, the applicant’s solicitors wrote to the insurer telling it the applicant had given notice of the accident to police2 and enclosing the Notice of Claim form.3 On 11 January 2006, the insurer wrote admitting liability in full.4 [5] The applicant’s solicitors sent the insurer employment records in February 2006 and a medical report in October 2006. In November 2006, the insurer wrote giving notice that it required the applicant to be independently examined and inviting the applicant’s nomination of a specialist from a panel5. On 10 December 2006, the applicant’s solicitors wrote to the insurer enclosing more medical reports. In the meantime, the applicant was examined by the selected specialist. On 22 January 2007, the insurer wrote to the applicant’s solicitors enclosing the specialist’s report and requiring disclosure under MAIA s 45. In April 2007, the applicant’s solicitors sent copies of various tax, employment and medical documents to the insurer. Other medical and tax records were sent by way of correspondence in May, July, August and October 2007. [6] In February 2008, an appointment was made for the applicant to see an occupational therapist on 6 June 2008. The applicant’s solicitor wrote to the insurer telling it of the appointment. Also in February 2008, the applicant’s solicitors sent more medical records to the insurer. [7] By August 2008, with the expiry of the limitation period imminent, the applicant’s solicitors had not yet received the occupational therapist’s report. It was clear the parties could not comply with the requirements of MAIA Part 4 Division 5A within time. The applicant applied for orders under MAIA s 57. On 1 September 2008, the following order was made, by consent: “1. Pursuant to section 57(2)(b) of the Motor Accident Insurance Act (as amended) (‘the Act’) the Applicant be granted leave to commence proceedings within 60 days of one of the following events occurring:- (a) A conference being held pursuant to section 51A and 51B of the Act and mandatory final offers being exchanged in accordance with section 51C of the Act; or (b) The date of agreement, if the parties dispense with the compulsory conference by agreement pursuant to section 51A(4) of the Act; or (c) In the event of the Court making an order to dispense with (a) above pursuant to section 51A(5)(b) of the Act, the date of such order. 2. That each party have liberty to apply by giving three (3) business days notice in writing to the other party. 3. That there be no order as to costs.” 2 MAIA s34 3 MAIA s37 4 But reserving its right to rely on any statute of limitations. Cf Lindsay v Smith [2002] 1 Qd R 610 5 MAIA s46A -- 3 of 9 -- 4 [8] Thereafter, the parties maintained steady progress of the claim. In September 2008, the applicant’s solicitors sent the insurer the occupational therapist’s report. In October, the insurer requested an independent specialist examination.6 That led to the applicant being examined in November 2008. The insurer sent to the applicant’s solicitors the report of that specialist in early December 2008 and again requested disclosure under MAIA s 45. On 22 December 2008, the applicant’s solicitors suggested the case was ready for conference. In January and February 2009, the applicant’s solicitors sent medical and tax documents to the insurer. On 27 March 2009, the applicant’s solicitors suggested a date for the conference in May 2009. In early May, the conference was set for 17 June 2009. In the meantime, the applicant’s solicitors certified that disclosure had been made and the matter was ready for trial.7 [9] The parties did not settle the claim at the conference. They exchanged mandatory final offers.8 [10] There was another offer to settle the claim, made by the insurer by telephone on 25 June 2009. Obviously, the applicant did not accept it. Delay in filing the claim. [11] As the conference had been held on 17 June 2009, the order made by consent allowed the applicant until 17 August 2009 to commence court proceedings. The Claim was filed, however, on Monday 24 August 2009. Notice of Intention to Defend was filed on 17 September 2009. The defendants admitted liability but pleaded the claim was statute barred by virtue of the operation of s 11 of the Limitation of Actions Act 1974. After discussion and correspondence between solicitors for the applicant and the insurer, this application was filed on 13 October 2009. [12] The delay in filing the claim is explained by an articled clerk in the employ of the applicant’s solicitors. He deposes to having been responsible for diarizing the 60 day period following the compulsory conference. He did so in a calendar on the computer screen within the firm’s e-mail system. The method was to count 4 days across and 8 weeks down. But he mistakenly counted 9 weeks down and this led to the proceedings being commenced one week late. The articled clerk explains he did not attend to filing the claim earlier within the 60 day period because he was sick with severe flu for about 2 weeks during the period and required time off work. That put him behind in his workload. Section 57 of the Motor Accident Insurance Act (as amended). [13] Relevant to this application, MAIA s 57 provides: “Alteration of period of limitation (1) If notice of a motor vehicle accident claim is given 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 6 MAIA s46A 7 MAIA s51B 8 MAIA s51C -- 4 of 9 -- 5 the period of limitation if it is brought within— (a) 6 months after the notice is given . . .; or (b) a longer period allowed by the court.” [14] The principles governing the application of the provision and its relationship with the Limitation of Actions Act 1974 emerge from several decisions of the Queensland Court of Appeal. I respectfully adopt the summary compiled by McMeekin J in Paterson v Leigh & Anor [2008] QSC 277 at [8]: “(a) The discretion to be exercised in respect of an application pursuant to s 57(2)(b) of the Act is unfettered; (b) The onus lies on the applicant to show good reason why the discretion ought to be exercised in his or her favour; (c) Where an applicant is able to show that the delay which has occurred was occasioned by a ‘conscientious effort to comply’ with the Act then that would normally be good reason for the favourable exercise of the discretion but is not a ‘dominating consideration’. Conversely, claimants who ignore the obligations imposed on them by the Act or who make no conscientious effort to comply with them may have difficulty obtaining a favourable exercise of the discretion; (d) Where an applicant is not able to show that the delay was occasioned by ‘a conscientious effort to comply’ with the Act that is not fatal to the application; (e) Any delay on the part of a claimant in complying with the Act’s requirements or in applying for an extension of time will be relevant to the exercise of the discretion; (f) The length of any delay is important and possible prejudice to the defendant is relevant; (h) Depriving a defendant of the complete defence afforded by the statutory time bar is an important matter; (i) The interests of justice are of course the overriding consideration and in that regard the question of whether a fair trial of the proceedings is unlikely is an important consideration; (j) The giving of a notice of claim before the expiry of the limitation period and compliance by a claimant with the provisions of the Act that it provide any information sought by the insurer are both relevant factors.” (References deleted) The exercise of discretion [15] Subject to the second respondent’s argument that the court has no power to grant the application, I am satisfied the time within which the applicant may bring the proceeding should be extended to 24 August 2009. The statutory pre-condition has been met – the applicant gave notice of the claim under Part 4 Division 3 well within the limitation period. The insurer admitted liability in full in January 2006. The period of delay in bringing the proceedings in court is short. The applicant has co-operated with the insurer throughout the intervening period, making disclosure, subjecting himself to examination by specialists, attending the compulsory conference and giving instructions regarding the mandatory final offer. The applicant and his solicitor have deposed to the applicant’s steady and conscientious -- 5 of 9 -- 6 efforts to comply with the requirements of the MAIA and co-operate with the insurer. The delay is explained. The applicant was not personally at fault. In the particular circumstances of this case that is very material.9 He retained a solicitor early and did everything reasonably required of him.10 This may not be a case where the delay was obviously caused by a conscientious effort to comply with the Act, but the delay occurred in the context of a timeline set by reference to an order of the Court made under the Act. Given the early notice of the claim, the short period of delay and the full disclosure regarding the only issue – quantum – one can be confident a fair trial can be had. These matters outweigh, in this case, the prejudice to the insurer of the loss of the defence afforded by the statutory time bar. [16] It could not be said the claim had been let go to sleep. The insurer does not assert loss of evidence. The applicant has not, but for his solicitors’ 7 day lapse, failed to prosecute his claim.11 The second respondent’s argument. [17] In his written outline of submissions, counsel for the insurer expressed the argument in several ways: ‘the Court has no jurisdiction to accede to the application’; the claim ‘became statute barred’ on 17 August 2009; ‘the Court is functus officio’; the consent order did no more than to extend the period imposed by section 11 of the Limitation of Actions Act 1974; the Court has ‘no power, short of an application pursuant to section 31 of’ that Act;12 there is ‘simply no jurisdiction available pursuant to which the Court can exercise another discretion’; the legislation ‘does not contemplate any more than one application’. [18] The essence of the insurer’s argument is that, there having been an order under s 57 made on 1 September 2008, the Court’s power under the MAIA is exhausted. The applicant having failed to commence court proceedings within the time calculated under that order, the Court may not again exercise discretion under the section. The insurer did not refer to authority for this proposition. Discussion [19] The MAIA did not effect a repeal, for cases within its purview, of the Limitation of Actions Act. However, once notice is given pursuant to s 37, ‘whilst no proceeding claiming damages can be commenced in a court until other statutory requirements have been satisfied, the court is given jurisdiction by the Act to make orders with respect to the claim’.13 That jurisdiction includes the discretion provided for in s57. [20] Chesterman J (as he then was), in Morrison-Gardiner v Car Choice P/L &Anor; Crain v Crocker & Anor; O’Dare v Vitanza & Ors [2004] QCA 480, referred to it as an unfettered discretion. It was not surprising, his Honour said, ‘….that Parliament should, as part of the legislative scheme governing the processes for making a motor vehicle accident claim, confer power on the Court to extend the 9 Sophron v The Nominal Defendant (1957) 96 CLR 469 10 Perdis v Nominal Defendant [2003] QCA 555 11 Morrison-Gardiner v Car Choice P/L &Anor; Crain v Crocker & Anor; O’Dare v Vitanza & Ors [2004] QCA 480 Williams JA at [30] referring to Hoare J in Archie v Archie; Smythe third party [1980] Qd R 546 12 The applicant has not applied for an extension of time under s31 of the Limitation of Actions Act 1974 and does not assert such an application could succeed. 13 Morrison-Gardiner per Williams JA at [23] -- 6 of 9 -- 7 period imposed by the Limitation of Actions Act whose application has largely been supplanted.’14 [21] It seems to me that the insurer’s submission ignores the very existence of the MAIA. The discretion provided for in s 57 is there to be used, even after the limitation period had expired,15 if one of its preconditions is met, according to the principles articulated in the cases. According to those principles, the discretion should be exercised in the applicant’s favour in this case. [22] Nothing in the words of s 57 prohibits the discretion it provides for being exercised twice. If the legislature intended the discretion should be exercised only once per claim, it would have been easy enough to say so, in terms such as those employed in s 51D(5). As Williams JA observed in Morrison-Gardiner at [25], ‘the statute on occasions provides that failure to comply with the court’s direction bar the starting of a proceeding in a court claiming damages.’ It does not do so in s 57.16 [23] Contrary to the import of the insurer’s written outline of submissions, it is not necessary, for the exercise of discretion under s 57 favourable to the applicant, that the applicant must demonstrate that his delay was occasioned by attempts to comply with the MAIA.17 [24] Although I have concluded that the Court’s order of 1 September 2008 does not preclude the further exercise of discretion under s 57, the applicant’s failure to observe the earlier order is relevant to the exercise of discretion. It is, as I have set out, part of the factual background and is to be taken into account when assessing whether the interests of justice require the present application to succeed. 14 Morrison-Gardiner at [80] 15 Morrison-Gardiner v Car Choice P/L &Anor; Crain v Crocker & Anor; O’Dare v Vitanza & Ors [2004] QCA 480 McMurdo P at [9] and [12]; Williams JA at [28 –[29]; Chesterman J (as he then was) at [88 -89]; Ward v Wiltshire Australia P/L & Anor [2008] QCA 93 per McMurdo P at [26] 16 Section 51D also provides an example, within the MAIA if in a different context, of circumstances in which the court may fix a time (upon the application of the insurer) within which the action must be commenced even after the expiry of a period set by the court under subsection 51D(1). Relevantly, the section provides: 51D Time for bringing action (1) An action for damages should be started in the court— (a) within 60 days after the conclusion of the compulsory conference; or (b) within a further period— (i) ….; or (ii) fixed by the court on an application made by the claimant within the 60 day period mentioned in paragraph (a). (2) ….. (3) …. (4) The expiry of the time within which an action should be started under subsection (1), (2) or (3) does not prevent the claimant from starting the action but— (a) …..; and (b) the court may, on the insurer’s application, make an order fixing a time limit within which the action must be started. (5) If the claimant fails to start an action in the court within a time limit fixed under subsection (4)(b), the claim is barred. 17 Ward v Wiltshire Australia P/L & Anor [2008] QCA 93 per Fraser JA at [64-67] and [70] -- 7 of 9 -- 8 Was the consent order a contract? [25] The insurer also argued that ‘the contractual obligations of the parties in terms of the consent order …. are also of significance’. Counsel referred to Spencer v Nominal Defendant [2007] QCA 254. In that case, a consent order was made which dispensed with a compulsory conference and the exchange of final offers. The order also provided for an action for damages to be started in respect of the claim no later than 14 July 2006, with certain other orders.18 That applicant did not commence proceedings until 5 October 2006. The application for an extension of time on 21 February 2007 was refused. [26] Keane JA thought that the making of an order under s 57(2)(b) ‘would defeat the respondent’s rights under the consent order’. The respondent had ‘agreed to facilitate the commencement of the action by dispensing with requirements of the Act on the basis that the claim was to be started no later than 14 July 2006.’ His Honour continued: “A consent order operates both as a contract and an order of the court. Whether the contract embodied in a consent order can be set aside depends on "the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it". No such ground is said to exist in this case. To accede to the application under s 57(2)(b) of the Act would be to deprive the respondent of the benefit of the contract which underlay the consent order of 14 July 2006 where there is no other basis for setting aside that bargain. It is unnecessary to decide whether s 57(2)(b) authorises such a course. Even if the power conferred on the court by s 57(2)(b) extends to the destruction of contractual rights, it is a power which should be exercised only for the most compelling reasons because of the prejudice which it will inflict on the other party.”19 (References deleted) [27] The order made in the present case was quite different from that in Spencer. It reads rather more like an order of the Court, albeit with the consent of the parties, than an order embodying a compromise.20 It required the exercise of discretion by the Court and gave the parties liberty to apply.21 It was, at least in that sense, like the consent order Muir JA was concerned with in Venz v Moreton Bay Regional Council (formerly Caboolture Shire Council) [2009] QCA 224. Paragraph 1 of that order was as follows: “That the Applicant be granted leave to initiate proceedings, pursuant to section 43 of the Personal Injuries Proceedings Act 2002 (Qld) against the Respondent for damages for personal injuries allegedly sustained on 14 August 2004, with such proceedings to be filed on or before 14 August 2007.” Muir JA said at [21]: “Counsel for the respondent argued that there was a contractual obligation on the applicant to file the "proceedings" by the stipulated date. If that is 18 [2007] QCA 254 at [3] 19 [2007] QCA 254 at [13] 20 Compare Harvey v Phillips (1956) 95 CLR 235 21 See Venz v Moreton Bay RegionalCouncil(formerly Caboolture Shire Council) [2009] QCA 224 per Muir JA, with whom Mullins and Philippides JJ agreed at [23] -- 8 of 9 -- 9 correct, which I think unlikely, the applicant breached that obligation. But the breach, if it existed, did no more than give the respondent the right to claim damages. The applicant did not agree expressly or implicitly that if he failed to file the proceedings on or before the stipulated date he would not bring another application pursuant to s 43 or under some other provision of the Act. Any such implied term would not meet the test propounded in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347.” [28] Similar reasoning applies in the present case. If the Court’s order embodied an agreement, it was that the insurer consented to leave being granted at the time calculable under the order. The applicant did not commence proceedings within that time. This was a breach of the asserted agreement and the insurer would be no longer bound by it. The applicant did not agree that should he breach the asserted agreement he would not apply under s 57. Conclusion. [29] The application should be granted. That there has already been an exercise of discretion in the claimant’s favour under s 57 does not preclude the Court from allowing a longer period for a claimant to bring court proceedings, under s 57. As set out above, I am satisfied the applicant has shown the justice of the case requires the exercise of the discretion in his favour.22 [30] I will hear submissions from the parties on the form of orders and costs. 22 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at 551 -- 9 of 9 --