Zelko Gashparac v Francis Joseph Walter [2000] ACTSC 118 (11 December 2000)

Last Updated: 18 January 2001

ZELKO GASHPARAC v FRANCIS JOSEPH WALTER [2000] ACTSC 118 (11 December 2000)

CATCHWORDS

PRACTICE AND PROCEDURE - extension of time - Motor Accidents Compensation Act 1999 (NSW) s 36(5) - "full and satisfactory explanation for not having given notice".

WORDS AND PHRASES - "full and satisfactory explanation".

Motor Accidents Act 1988 (NSW), s 28, 40, 43, 44, 52, Pt 3, Pt 5

Motor Accidents Compensation Act 1999 (NSW), s 31, 34, 36, 66, 72, 74, 76, Part 2.4, Ch 2, Ch 4

Protective Commissioner as Tutor for Parker v Georges Providores Pty Ltd & Others, (unreported, Supreme Court of New South Wales, 5 September 1997, Butterworths Unreported Judgments, BC 9704050

Nicholas v Webb (No. 2) (1993) 19 MVR 65

Nicholas v Webb (1991) Aust Torts Reports 81-099

Guest v Southern & Anor (unreported, Supreme Court of New South Wales, Studdert J, 22 September 1995, Butterworths Unreported Judgments, BC 9505406)

No. SC 620 of 1999

Judge: Gray J

Supreme Court of the ACT

Date: 11 December 2000

IN THE SUPREME COURT OF THE )

) No. SC 620 of 1999

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ZELKO GASHPARAC

Plaintiff

AND: FRANCIS JOSEPH WALTER

Defendant

ORDER

Judge: Gray J

Date: 11 December 2000

Place: Canberra

THE COURT ORDERS THAT:

1. The Notice of Motion be dismissed.

1. By notice of motion filed on behalf of the defendant on 25 September 2000, an order was sought that the time for giving notice to the Nominal Defendant of New South Wales in relation to the accident, the subject of the plaintiff's claim in these proceedings, be extended to 19 January 1999 and a consequential order was sought giving leave to join the Nominal Defendant as a third party.

2. The accident giving rise to the plaintiff's claim occurred on 14 June 1998. The plaintiff, in proceedings filed in this court on 12 August 1999, claims that he was riding a bicycle along Princes Highway, Carlton (Sydney) New South Wales and that the defendant, in a parked car, opened the driver's door of his vehicle, striking the plaintiff's bicycle causing it to fall and the plaintiff to be thrown into a line of traffic where an unidentified vehicle drove over the top of the plaintiff. By his defence filed on 16 August 2000, the defendant specifically denies that the defendant's door struck the plaintiff's bicycle.

3. At the time of the accident, the New South Wales Motor Accidents Act 1988 was in force. That Act was replaced by the Motor Accidents Compensation Act 1999 (NSW) which applied to accidents occurring after 5 October 1999. However, Part 2.4 of the Motor Accidents Compensation Act 1999 (NSW), dealing with uninsured and unidentified motor vehicles, applies to and in respect of motor accidents before and after the commencement of that Act (see s 31). In fact, the applicable provisions are counterparts to provisions in the 1988 Act.

4. Section 34 of the 1999 Act (s 28 of the 1988 Act) permits a claim against the Nominal Defendant where a vehicle, after due inquiry and search, cannot be identified.

5. Section 36 of the 1999 Act (s 28B of the 1988 Act) deals with the position of the Nominal Defendant as tortfeasor. It provides:

"36. (1) The Nominal Defendant may join another person, or may be joined, for contribution or indemnity in respect of a claim or proceedings under this Act as if the Nominal Defendant were a tortfeasor.

(2) Joinder of the Nominal Defendant is required to be effected in accordance with this section.

(3) A person seeking to join the Nominal Defendant in respect of a claim or proceedings must give the Nominal Defendant notice of the person's intention to do so. The notice must include a copy of the notice of claim under section 72 given to the person.

(4) The notice must be given within 3 months after the claim is made against the person under section 72, or within 3 months after the person becomes a party to proceedings in respect of the claim, whichever occurs first.

(5) The court may extend the period for giving notice to the Nominal Defendant if the person seeking to join the Nominal Defendant gives a full and satisfactory explanation for not having given notice within the 3-month period.

(6) Within 2 months after notice is given, the person giving notice must provide the Nominal Defendant with full details of the allegations made against the Nominal Defendant (or against the person to whom the Nominal Defendant is taken to have issued a third-party policy).

(7) An application may not be made to join the Nominal Defendant as a party to proceedings before the court after 3 years from the date on which the claim under section 72 in respect of which contribution or indemnity is sought must be made, except with the leave of the court.

(8) If the Nominal Defendant is sought to be joined because the identity of another motor vehicle is not known, joinder may not be effected unless due inquiry or search to identify the vehicle has been made. The inquiry or search may be proved orally or by affidavit of the person who made the inquiry or search.

(9) Except as provided by this section, nothing in this section affects any rules of court relating to the joinder of parties."

6. In this case a notice was given by letter dated 19 January 1999 addressed to the Nominal Defendant by solicitors for the defendant's third party insurer, Royal and Sun Alliance Insurance Australia Limited (the insurer).

7. On 22 July 1998, the insurer received a claim form referring to the plaintiff in these proceedings, Zelko Gashparac, but containing a date of birth of 30 August 1990, and referring to an accident on 14 June 1997 (although correctly as 14 June 1998 in another part of the document). The claim form was signed but was not in the form of a statutory declaration.

8. By letter dated 12 August 1998 the solicitor for the insurer returned the claim form to a Mr and Mrs Gashparac apparently on the assumption that, because of the date of birth, the claim had been made on behalf of an infant. The letter reads:

"I act for Royal & Sun Alliance Australia Limited.

I am in receipt of your son's claim for personal injuries said to arise out of a motor vehicle accident on 14 June 1997.

I return the claim form to you. It appears as though someone has signed on behalf of your son and I expect it to be one of his parents. However the claim form needs to be sworn in front of either a Justice of the Peace or Solicitor as the document is in fact a statutory declaration.

Would a parent or guardian or legal representative of Zelko please have the document properly completed.

Further, a claim should be made within 6 months of the date of the accident. I note the accident was on 14 June 1997.

On returning the claim form to me, would you please provide me with a full and satisfactory explanation as to why the claim was not made within 6 months of the date of the accident.

Upon receipt of the properly sworn claim form and your explanation I will give further consideration to the matter."

9. Subsequently, an amended claim form was received which corrected the date of birth to 30 August 1960, the date of the accident to 14 June 1998 and had a completed statutory declaration. That claim form was forwarded to the insurer by the plaintiff's solicitors by letter dated 11 September 1998. It may be noted that for these purposes, subs 36(4) of the 1999 Act requires notice to be given:

"... within 3 months after the claim is made against the person under section 72 [cf s 43 of the 1988 Act]".

10. Mr Lunney, counsel for the Nominal Defendant, argued that the time for the notice to be given commenced to run when the claim form was first received. He did so on the basis that insofar as a notice of a claim must comply with s 74 (s 44 of the 1988 Act) and be verified by statutory declaration, the insurer had to reject the claim for non-compliance with that section within two months of receiving it. The effect of not rejecting the claim is that the insurer loses the right to challenge the claim on the ground of non-compliance with s 74 (see s 76(1)) (s 44B(1) of the 1988 Act).

11. In my view, not being able to challenge the claim does not affect the question of when the claim under the Act is made. The claim is "made" under the Act when it complies with s 74, irrespective of whether the insurer rejects it or not. It follows that for the purposes of s 36(4) in this case the relevant commencement of the period in which notice is required to be given is 11 September 1998.

12. Even if I am wrong about the relevance of rejection by the insurer, I am satisfied that the letter constitutes a sufficient rejection of the claim for non compliance. I take "reject" to have the meaning assigned by the Macquarie Dictionary namely, "to refuse to have, take, recognise, etc". I do not regard the section as requiring the insurer to use the express word "reject" in refusing to recognise the claim. I do not construe the letter as a mere request for more information, it specifically requires the return of the form properly sworn and, by clear inference from its terms, it is a refusal to recognise the claim.

13. The other hotly contested issue in these proceedings is the meaning and effect of "full and satisfactory explanation" as it appears in s 36(5) and whether the defendant had made such explanation as the subsection requires.

14. Mr Stretton, for the defendant, based his case on certain decisions in the New South Wales Supreme Court as what might constitute "the full and satisfactory explanation" so as to justify extending the period for giving notice. In particular, reliance was placed on Protective Commissioner as Tutor for Parker v Georges Providores Pty Ltd & Others, (unreported, Supreme Court of New South Wales, 5 September 1997, Butterworths Unreported Judgments, BC 9704050), Nicholas v Webb (No. 2) (1993) 19 MVR 65 and Nicholas v Webb (1991) Aust Torts Reports 81-099. It may be noted that none of those decisions dealt with that expression in s 36(5) or its counterpart, s 28B(5) of the 1988 Act.

15. The cases upon which Mr Stretton relied dealt with matters arising under Part 5 of the Motor Accidents Act 1988 (NSW), Claims and Court Proceedings to Enforce Claims. In particular, they were concerned variously with s 43 (and later s 43A) and s 52. On the other hand, s 28B, dealing with the Nominal Defendant as tortfeasor, was to be found in Part 3 of the Act dealing with Third Party Insurance. This arrangement has been maintained in the Motor Accidents Compensation Act 1999 (NSW) in Chapters 2 and 4 of that Act.

16. By Act No. 66 of 1995, s 3 Schedule 1, s 40(2) of the Motor Accidents Act 1988 (NSW) was inserted. That subsection provides:

"In this Part, a reference to a full and satisfactory explanation by a claimant for non-compliance with a duty or for delay is a reference to 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. 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 been justified in experiencing the same delay.

Note. The requirement for "a full and satisfactory explanation" is made in sections 42 (4), 43A (2), (4), (6) (a) and (7) and 52 (4B)".

Section 40(2) has become s 66(2) in the 1999 Act.

17. The exposition of what is meant by a full and satisfactory explanation is limited to Part 5. Moreover, it is referable to non-compliance with a duty (to report the accident) or delay in making a claim or taking proceedings. For that reason, it is time framed from the date of the accident until the date of providing the explanation. By contrast, the provision with which I am concerned is in another Part of the Act and is a provision "for not having given notice within the 3-month period". In terms of the section, there is no time frame expressed nor obligation to require an explanation in respect of a period after the expiry of the three month period. For these reasons I do not consider that s 40(2) defines the meaning of full and satisfactory explanation for the purposes of s 36(5) of the Motor Accidents Compensation Act 1999 (NSW).

18. The statutory exposition of a full and satisfactory explanation contained in s 40(2) is not referred to in the authorities cited which were decided after 1 January 1996 apparently as the accidents with which they were concerned all occurred before that date.

19. Relying upon the cases cited, it was contended on behalf of the defendant that the words "full and satisfactory" are conjunctive and refer to the explanation to be given. They were said to refer to the qualities of the explanation (the defendant's emphasis) not to behaviour which requires an explanation. The defendant specifically relied upon a passage from a decision of Master Greenwood in the NSW Supreme Court in Nicholas v Webb (No. 2) (supra), at 67:

"The words "full and satisfactory" in s 43(2) are conjunctive and refer to the explanation to be given. These adjectives relate to the qualities of the explanation. They do not relate to the behaviour which requires an explanation. That the claimant has been delinquent in attending to a requirement of him under the Act or his solicitor has been tardy in carrying out his duties are not matters which go to the quality of the explanation. They go to the conduct of the parties.

It is not the insurer's function to sit in judgment on the conduct of the claimant or is solicitors. It is the insurer's function to look at the conduct which is explained to ensure that those matters it is required to turn its attention to are both fully explained and satisfactorily explained."

20. It is to be noted that the context of "full and satisfactory" considered in Nicholas v Webb (No. 2) was that of an explanation by a claimant to an insurer. In the present case it is the court to which the explanation is to be made. It also may be noted that the explanation in that case is directed to the circumstance of delay in making a claim whereas in the present case it is directed to the circumstance of not having given notice within the three month period. Most significantly, the provision which was being considered in that case (s 43(2) of the Motor Accidents Act 1988 (NSW)) provided no direct consequence if the explanation was not provided.

21. All of those factors would seem to indicate that the expression "full and satisfactory explanation for not having given notice within the three month period", to the contrary of what was held by Master Greenwood, requires an assessment of the conduct accounting for the notice not having been given.

22. In Guest v Southern & Anor (unreported, Supreme Court of New South Wales, 22 September 1995, Butterworths Unreported Judgments, BC 9505406), Studdert J, in an appeal from a decision of Master Malpass who had relied upon the approach taken in Nicholas v Webb (No. 2), said:

"Earlier in this judgment I referred to the part of the master's judgment which disclosed his approach to the meaning of the expression "full and satisfactory explanation for the delay". He considered it relevant [to] address the adjectives "full" and "satisfactory" to the "explanation" but, as I understand it, he did not consider it relevant to make an assessment of the conduct accounting for the delay. Hence even though he regarded the conduct of the plaintiff's solicitors to display "incompetence and neglect of the highest order", this did not bear on his decision, satisfied as he was that the evidence placed before him accounted for the delay.

If that construction of the subsection is correct then the subsection has but dubious utility, achieving no more than to call upon the claimant to give an account for the delay. Provided he does so, then no matter how dilatory he has been and no matter how indifferent he has been towards the pursuit of his claim, once the claimant has placed before the court what the court is satisfied is a full account of what he has done or failed to do and his reasons for the default, the requirements of the subsection have been met, however unsatisfactory those reasons may be.

The subsection has to be looked at in the framework of Pt 5. One of the aims of Pt 5 is to have claims processed as quickly as possible. S 52 itself excludes the operation of the Limitation Act of 1969 and sets its own time constraints. If s 52(3) is to be construed so as to have the possible effect of tolerating a delay for which there has been no exculpatory cause shown, then the subsection would not address this objective.

It is to be observed that the subsection not only requires that the claimant given a "full" (or complete) "explanation", but also an "explanation" that is "satisfactory".

It seems to me in the context that before an explanation can be "satisfactory", it must persuade the court that the delay ought to be excused in all the circumstances."

23. In my view, the approach adopted by Studdert J is appropriate to the construction of the full and satisfactory explanation required in s 36(5) of the Motor Accidents Compensation Act 1999 (NSW). I consider that I should have regard to the quality of the explanation proffered to determine whether it is satisfactory and it must persuade me that the failure to give the notice within the prescribed time ought to be excused in all the circumstances.

24. I add that the passage from Nicholas v Webb (No. 2) was cited without qualification or comment in the decision of Master Harrison, Protective Commissioner as Tutor for Parker v Georges Providores Pty Ltd & Ors (supra). In that case, Master Harrison seems to have misapprehended the effect of Studdert J's judgment on the proper construction to be afforded to the expression "full and satisfactory explanation", and in particular, that Studdert J did consider it relevant to assess and judge the conduct.

25. The notice required by s 36(5) of the Motor Accidents Compensation Act 1999 (NSW) is part of a series of steps required to join the Nominal Defendant. After notice is given, within two months the person giving notice must provide the Nominal Defendant with full details of the allegations made against the Nominal Defendant (s 36(6)). In the case where the Nominal Defendant is sought to be joined because the identity of another motor vehicle is not known, due inquiry or search to identify the vehicle must be made (s 36(8)). The purpose of the notice would seem to be to alert the Nominal Defendant promptly of the possibility of joinder inter alia so that the Nominal Defendant can be included in the expeditious determination of claims.

26. It is in that context that I must determine whether the explanation given in this case excuses the defendant from not having given the notice in the prescribed period.

27. By way of proffering the full and satisfactory explanation required, the defendant relied upon affidavit evidence of the factual matters surrounding the receipt of the claim form and the eventual giving of notice as well as evidence given by telephone of Mr Michael Raymond, a solicitor who acted as both solicitor and the defendant's claim manager at the relevant time. When the matter came on for hearing, the defendant sought to relate the full explanation to the period up to the giving of notice rather than seeking to explain why the notice was not given in the three month period after the claim was made.

28. I allowed the defendant to file a further affidavit of Mr Raymond to address the reason why the notice was not given in the prescribed time. In that affidavit, Mr Raymond deposed to there not being, at the relevant time, any protocol or procedure in force relating to notice or joinder of the Nominal Defendant. Each case was simply dealt with on the merits by the solicitor with the carriage of the matter. As I have noted, Mr Raymond acted as claims manager and the solicitor with the carriage of the matter. Mr Raymond's explanation is therefore that of the defendant.

29. He deposes to considering the matter some time between the receipt of the sworn claim form and 9 October 1998. He says that he considered the facts surrounding the subject accident to be unclear. He had before him the plaintiff's sworn claim form, a copy of the police report and the claim form provided by the insured.

30. What is perfectly clear from each of these documents before Mr Raymond is, that, although the accounts of the accident differed, all accounts involved the plaintiff being struck by an unidentified vehicle.

31. Mr Raymond further says that he was unclear as to the circumstances of the accident and did not consider that there was necessarily any liability on the part of an unidentified vehicle so as to involve the Nominal Defendant. He accordingly, on 9 October 1998, wrote to Peter Cox and Associates requesting that they conduct a full factual investigation into the circumstances of the accident. He says that he received that report on 7 December 1998 and considered it at some time between then and 29 December 1998. He then took steps to satisfy the due inquiry and search requirements by putting a notice in the Sydney Morning Herald and, when no response was received, he gave notice by letter dated 19 January 1999 to the Nominal Defendant.

32. Mr Raymond says that when he considered the matter on or about 9 October 1998, he did not consider that he had a sufficient factual basis for involving the Nominal Defendant. He specifically wanted a witness, a Mr Crawford, to be seen by the investigator. However, the report he subsequently received showed that Mr Crawford did not actually observe the unidentified vehicle strike the plaintiff contrary to the statement that Mr Crawford had made to the police. The explanation that Mr Raymond gives is quite inadequate to explain why he should now involve the Nominal Defendant, or why he is justified in giving notice to join the Nominal Defendant.

33. I note that the notice given on 19 January 1999 by the defendant also contained the details of the allegations made against the Nominal Defendant that s36(6) requires to be given within two months after the notice is given. Those details were:

"1. The accident occurred as a result of an unidentified vehicle colliding with the claimant.

2. The person driving the unidentified vehicle was witnessed but their identity was not established, nor was the registration of the vehicle in which they were travelling.

3. A witness to the accident states that the driver of the unidentified vehicle was negligent in that it travelled too close to a bicycle rider in the circumstances.

4. The unidentified vehicle was negligent in that it did not heed the presence of a bicycle rider on the roadway.

5. The Nominal Defendant was negligent in that the unidentified vehicle did not take proper evasive or any evasive action at all in the circumstances.

6. The Nominal Defendant was negligent in that the unidentified vehicle did not heed the presence of the claimant bicycle on the roadway.

7. The Nominal Defendant was negligent in that the unidentified vehicle drove in an unsafe manner."

None of the allegations of negligence find any support in the materials that were before Mr Raymond when he considered the matter on or about 9 October 1998. Nor do they find any support in the report provided by Peter Cox & Associates.

34. In particular, the only asserted factual basis for the allegations of negligence is that contained in point (3) of the allegations concerning what a witness stated. There is no such statement in the materials. There is no other factual basis for the general allegations of negligence that are being made. In my view, there is no basis upon which Mr Raymond could properly consider that the Nominal Defendant be joined in the claim.

35. This too would appear to be the view of the plaintiff who has not sought to join the Nominal Defendant as a defendant.

36. Although Mr Raymond now says he did not advert, as with hindsight he should have, to the difference between joinder of the Nominal Defendant and notice to the Nominal Defendant, that too is an unsatisfactory explanation for his actions. Mr Raymond says that is based upon an incorrect consideration:

"... that s 28B of the Motor Accidents Act [s 36 of the Motor Accidents Compensation Act 1999 (NSW)] required notification to the Nominal Defendant within a time commencing from when the involvement of the Nominal Defendant was known, rather than from the date on which I became aware that an unknown vehicle was involved in the subject accident".

I do not consider that what Mr Raymond says correctly reflects the consideration he should be giving to the question. In my view the section requires, in its terms, a consideration of joinder of the Nominal Defendant in respect of a claim and that involves more than mere awareness that an unknown vehicle was involved in the subject accident. It requires a factual basis for allegations of negligence to be made. As I have said, the materials before Mr Raymond do not provide that factual basis.

37. In my view, the explanations proffered by the insurer do not satisfactorily explain why the notice was not given within the prescribed period or, indeed, why it should have to be given at all. The precondition for me to extend the period is not satisfied.

38. Subsection 36(2) of the Motor Accidents Compensation Act 1999 (NSW) provides:

"Joinder of the Nominal Defendant is required to be effected in accordance with this section."

39. As the provisions of s36(4) are not satisfied, I am not prepared to give the defendant leave to join the Nominal Defendant.

40. I dismiss the Notice of Motion.

I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Gray.

Associate:

Date: 11 December 2000

Counsel for the plaintiff: No appearance

Solicitor for the plaintiff: No appearance

Counsel for the defendant/applicant: Mr G Stretton

Solicitor for the defendant: Hunt & Hunt

Counsel for the Nominal Defendant: Mr G Lunney

Solicitor for the Nominal Defendant: Moray & Agnew

Date of hearing: 10 November 2000

Date of judgment: 11 December 2000