Dillon v RACQ - AMP General Insurance Ltd [2001] QSC 347

SUPREME COURT OF QUEENSLAND CITATION: Dillon v RACQ – AMP General Ins Ltd [2001] QSC 347 PARTIES: MICHAEL DILLON (applicant) v RACQ – AMP GENERAL INSURANCE LIMITED (ABN 50 009 704 152) trading as RACQ INSURANCE (respondent) FILE NO: 8310 of 2001 DIVISION: Trial Division DELIVERED ON: 25 September 2001 DELIVERED AT: Brisbane HEARING DATE: 19 September 2001 JUDGE: Mackenzie J ORDERS: 1. That the application be dismissed with costs to be assessed. 2. That recovery of those costs be postponed until after judgment is given in the applicant’s claim. CATCHWORDS: INSURANCE – THIRD-PARTY LIABILITY INSURANCE – MOTOR VEHICLES – RISKS INSURED – application that the respondent pay the applicant’s rent as a rehabilitation expense – whether liability for “reasonable rehabilitation services” - whether in these circumstances rent is such a service. Motor Accident Insurance Act 1994, s 47, s 47(1)(a), s 47(1)(b), s 47(2)(a), s 47(3), s 51(3), s 51(5) McMullen v Suhr (1998) 2 QdR 406, considered COUNSEL: G J Cross for the applicant P V Ambrose for the respondent SOLICITORS: Thompson Hannan Lawyers for the applicant Hunt & Hunt Lawyers for the respondent [1] MACKENZIE J: The applicant suffered significant orthopaedic and other injuries in a motor vehicle accident on 17 June 2000. The respondent has admitted 100% -- 1 of 6 -- 2 liability for the accident. Once liability has been admitted on a claim the insurer must, at the claimant’s request, ensure that reasonable rehabilitation services are made available to the claimant. (s 51(3) Motor Accident Insurance Act 1994). If not satisfied that the rehabilitation services made available are reasonable the claimant may apply to the court to decide what services are reasonable and appropriate in the circumstances of the case. (s 51(5)) The term “rehabilitation” is defined to mean: “the use of medical, psychological, physical, social, educational and vocational measures (individually or in combination)- (a) to restore, as far as reasonably possible, physical or mental functions lost or impaired through personal injuries; and (b) to optimise as far as reasonably possible, the quality of life of a person who suffers the loss of impairment of physical or mental functions through personal injury.” [2] To understand the nature of the application, it is preferable to summarise the facts before reciting what is sought. Until about mid-May 2000 the applicant had lived in rented accommodation at Goodna. Then he obtained 6 months leave, gave up his rented premises and went to live with his sister and brother-in-law at Taromeo, which is off the D’aguilar Highway in the Blackbutt area. [3] After 10 weeks hospitalization he was cared for at Taromeo. He was taken by his relatives to Yarraman to a wheelchair accessible pool and to physiotherapy at Kingaroy and Nanango. He also had to go to Nambour Hospital in connection with his orthopaedic injuries. [4] Feeling that his rehabilitation was being hindered by his location, he approached the respondent for assistance to rent a unit in Brisbane. The respondent advanced $4,550 for this purpose, to cover 6 months rent. The question whether this should be considered as a rehabilitation expense or an advance against general damages seems not to have been the subject of consensus, although it appears that the applicant signed a document referring to the sum as an advance on damages to be brought into account in any assessment of and payment of damages in settlement of the claim. [5] Prior to the 6 month period elapsing (which was to occur on 14 August 2001) the question of continuation of rental payments to enable the applicant to live in Brisbane was raised again with the respondent. By that time the applicant had verbal advice from his surgeon, Dr Fraser, that he would need to have a bone graft to his femur. [6] On 31 July 2001 his solicitors requested confirmation: 1. that the respondent would meet the cost of surgery by Dr Fraser; 2. that, post-surgery, it would make available rehabilitation services in accordance with the recommendation of the treating orthopaedic surgeon; and 3. that it would meet the cost of the applicant’s rent for the 6 month period after 14 August 2001 to enable him to access the surgery and rehabilitation services. -- 2 of 6 -- 3 [7] On 6 August 2001 the respondent’s solicitors advised that a further report from Dr Fraser was being urgently sought. It appears that he was away at a conference at the time. However, the letter stated that: 1. the respondent would pay the reasonable costs of any surgery reasonably required as recommended by Dr Fraser for accident related injuries; 2. it would pay the reasonable costs of rehabilitation services by way of physiotherapy, etc reasonably required by the applicant arising out of the surgery etc for injuries sustained in the accident; and 3. it would pay the reasonable quantum of rent for his client for the period of time that was reasonably required to access appropriate medical treatment for accident related injuries; but it was unable to agree at that point of time to fund rent for a 6 month period when it did not have the benefit of advice from Dr Fraser as to the pertinent period of time involved for such treatment. The respondent would fund whatever reasonable period of time was, according to medical advice, necessary for his recovery from the surgery. [8] Almost immediately the proposal was accepted and the payment of 1 month’s rent was requested. The applicant also asked for one month’s notice of any intention to stop payment of rent. [9] Shortly afterwards, Dr Fraser reported that a bone graft to the femur was required. It would involve hospitalization for about 10 days and may require physiotherapy, but not much, post-operatively. He recommended the applicant not have further physiotherapy pending the operation, which he said he would perform as soon as practicable after an undertaking that the respondent would meet the estimated cost of the procedure of $10,000 to $12,000. [10] The respondent’s solicitors proposed payment of $2,500 in a lump sum in view of the uncertainty about the time which might elapse before the applicant recovered from surgery. Tendered for the applicant’s signature was an agreement that that amount would be an advance on damages. However, it appears that this was not signed by the applicant. The question whether the advance should be treated as a reasonable rehabilitation service rather than an advance against general damages was again raised and an assurance about receiving 1 month's notice of intended cessation of rental payments was requested. An undertaking concerning payment to Dr Fraser was also sought. [11] More precise costing of the operation was sought from Dr Fraser by the respondent. By the end of the hearing of this application the respondent had communicated approval of the operation to him. [12] When the expiry of the period for which rent was paid was approaching, answers to the requests for payment of further rent as a rehabilitation service and for 1 month’s notice of cessation of payments were requested. The respondent’s reply was to the effect that it was prepared to provide further rent assistance in the amount of $2,500, “being an advance on damages”, but was not willing to pay it as a “rehabilitation expense”. -- 3 of 6 -- 4 [13] The applicant then filed the present application. Since it is confusingly numbered I have substituted consecutive letters for the numbers used in the application, which seeks the following: (a) The Respondent pay the Applicant’s rent as a rehabilitation expense pursuant to the Motor Accident Insurance Act 1994. (b) Alternatively, the Respondent be estopped from ceasing to pay the Applicant’s reasonable rent in Brisbane whilst he is receiving treatment in Brisbane necessary as a result of injuries sustained in the motor vehicle accident of 17 June 2000. (c) The Respondent provide not less than one (1) calendar month’s notice of its intention to cease paying the Applicant’s rent. (d) The Respondent provide within seven (7) days such information as is reasonably required by Dr Fraser to enable Dr Fraser to proceed with the proposed surgery upon the Applicant. (e) The Respondent provide a Statutory Declaration to confirm that it has provided to the Applicant copies of all reports and other documents re material in the Insurer’s possession about the Claimant’s medical condition or prospects of rehabilitation pursuant to Section 47(3) of the Motor Accident Insurance Act 1994. [14] With regard to these, it has been noted in para [11] above that the undertaking to pay for the operation sought in (d) was provided by the respondent during the course of the hearing. The order sought in (e) is premised on the existence of a duty to provide such a statutory declaration. In my view this involves a misconstruction of s 47. [15] A report with which this part of the application is concerned has been supplied but outside the period prescribed in s 47(2)(a). Section 47 requires an insurer to cooperate with a claimant and specifically refers to two aspects of cooperation. Section 47(1)(a) concerns provision of reports and documentary material in the insurer’s possession concerning the circumstances of the accident and the claimant’s medical condition and prospects of rehabilitation. This obligation arises irrespective of whether the claimant requests the reports or material or not. Section 47(1)(b) is concerned with giving, at the claimant’s request, information in the insurer’s possession or that can be found out from the insured about the accident. This obligation is triggered by a request from the claimant. [16] Under s 47(3) the obligation to provide a statutory declaration arises in relation to information provided by the insurer. Given the distinction drawn in s 47(1) between reports and documentary material, on the onehand, and information on the other, the use of the word “information” in s 47(3), without reference to reports and documentary material, suggests that the operation of s 47(3) is confined to information supplied under s 47(1)(b). There is no obligation to provide a statutory declaration verifying reports and other documentary material supplied pursuant to s 47(1)(a). There was therefore no obligation to provide a statutory declaration as requested. This aspect of the application fails. -- 4 of 6 -- 5 [17] With respect to the relief sought in (a), when Mr Cross sought to argue on behalf of the applicant not only that future rental payments should be treated as reasonable rehabilitation services but also those in the past, Mr Ambrose for the respondent objected that he had been taken by surprise concerning the past payments. Having regard to the correspondence which preceded the application, it is understandable that he might not have apprehended that, in that context, para (a) of the application was intended to extend to past payments. [18] In any event, it seems to me that issues arise which are inadequately addressed in the evidence before me on the subject of past payments. The correspondence suggests that there were conversations as well as correspondence between the solicitors. There is nothing to indicate whether either side relies on them. Nor is there much elaboration on the circumstances in which the written agreement to treat the advance as an advance against damages was signed while a reservation of the right to argue otherwise was maintained. It may also be necessary to consider the efficacy of an agreement to diminish what might otherwise be a right given by statute to a certain class of payment. More importantly the lack of detail about the precise nature and extent of the treatment undergone by the applicant during that period would make it somewhat speculative to resolve the issue on the material before me. For those reasons, I should not attempt to decide that issue in the present application. [19] The question in (b) was not the subject of submissions before me. The facts upon which an estoppel might be founded were not elaborated on. There is also the difficulty involved in establishing that obligation to pay money by reference to a statutory scheme can arise by estoppel irrespective of whether circumstances defined by statute which create the obligation exist or not. [20] So far as future payments are concerned, on the current state of the evidence the applicant is currently undergoing no treatment related to the injury. Dr Fraser advised cessation of physiotherapy. There is no evidence that it is necessary to remain in Brisbane while the applicant waits for the operation to be performed. In the circumstances there is no basis on the evidence for a finding that rental might during that period be a reasonable rehabilitation service. There is no reason to doubt that payment of rental expenses may in certain circumstances qualify as “reasonable rehabilitation services”. (McMullen v Suhr (1998) 2 QdR 406). However, on the facts as they stand at the moment it has not been established that there is an obligation to treat rental payments for the period prior to the operation in that way. It is premature and speculative to express an opinion about the character of the post-operative period after the applicant leaves hospital. The character of the payments will depend on the facts which emerge at that time. [21] Since there is no obligation to pay the rent in the circumstances now existing an order sought in (a) cannot be imposed upon the respondent. [22] Lest it be thought that this outcome has harsh consequences for the applicant, who is an invalid pensioner, if he prefers to remain in Brisbane rather than return to Taromeo, it must not be overlooked that an offer was made to pay a lump sum as an advance against damages he will undoubtedly recover, since liability has been fully admitted. He has been disinclined to accept a payment on this basis to date. Equally, the insurer seems to have been disinclined to leave the issue open for -- 5 of 6 -- 6 resolution later, apparently seeking to exclude as far as possible the possibility that it may be resolved wholly or partly against it later. An intimation that the lunch break during the hearing be used in an attempt to resolve the matter was to no avail. Since this aspect of the application must fail at this time on the state of the evidence, the relief sought in (c) becomes academic. [23] The application therefore fails in all respects. I order that the application be dismissed with costs to be assessed. I further order that recovery of those costs be postponed until after judgment is given in the applicant’s claim. -- 6 of 6 --