Sessions v Phengsiaroun [2008] ACTSC 132 (28 November 2008)

Last Updated: 23 December 2008

JILL PAMELA SESSIONS v TA M PHENGSIAROUN

[2008] ACTSC 132 (28 November 2008)

LIMITATION OF ACTIONS – application to extend time to commence proceedings for personal injury – Limitation Act 1985, s 36 – motor car accident whilst driving to work – workers compensation claim – claim for damages for personal injury – proceedings not commenced due to oversight – no consent to extension of time – whether it is “just and reasonable” to grant the application – whether a fair trial is possible – relevance of possible cause of action against solicitors for delay – action taken by plaintiff to prosecute claim – reason for delay not satisfactory – prejudice to defendant / respondent – preservation of right of defendant to fair trial – no significant prejudice to defendant – justice favours granting of extension – application granted.

LIMITATION OF ACTIONS – whether the time for commencement of proceedings had been extended by reason of confirmation of the cause of action – Limitation Act 1985, s 32 – defendant’s insurer reimbursed employer’s workers compensation insurer – whether acknowledgment by defendant’s insurer of liability to pay damages to employer’s insurer is confirmation – right of employer to indemnity – whether s 183 of the Workers Compensation Act 1951 creates separate cause of action – s 32 satisfied – limitation not expired.

Limitation Act 1985 (ACT), ss 11, 32, 36

Workers Compensation Act 1951 (ACT), s 183

Civil Law (Wrongs) Act 2002 (ACT), s 61

Alcock v Casey [2007] ACTSC 87

Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 547

Noja v Civil and Civic Pty Ltd & Ors [1990] FCA 135; (1990) 93 ALR 224

Daroczy v B & J Engineering Pty Ltd (in liq) (1986) 67 ACTR 3

Hamilton v Madden [2007] ACTSC 89

Brozinic v PHC Operations Pty Ltd t/as Hyatt Hotel Canberra [2008] ACTSC 20

No. SC 248 of 2008

Judge: Higgins CJ

Supreme Court of the ACT

Date: 28 November 2008

IN THE SUPREME COURT OF THE )

) No. SC 248 of 2008

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: JILL PAMELA SESSIONS

Applicant

AND: TA M PHENGSIAROUN

Respondent

ORDER

Judge: Higgins CJ

Date: 28 November 2008

Place: Canberra

THE COURT ORDERS THAT:

1. The application be granted.

2. The period within which the action may be brought be extended to 27 March 2008.

1. This is an application pursuant to s 36 of the Limitation Act 1985 (ACT) (Limitation Act) to extend the time within which the plaintiff may commence proceedings against the defendant for damages for personal injury. The primary time limit is imposed by s 11 of the Limitation Act. During the course of argument, a further question arose as to whether the time for commencement of proceedings had, in any event, been extended by reason of confirmation of the cause of action pursuant to s 32 of the Limitation Act.

The Facts

2. The facts relating to the application were not in dispute.

3. The plaintiff was involved in a motor vehicle accident on 18 June 1999 when she was in the course of driving to work. She was then employed by Gary Robb & Associates, lawyers who specialised in personal injury claims albeit through a corporate vehicle Underlea Pty Ltd. The vehicle she was driving was stationary at a red light when it was struck from behind by the defendant’s vehicle.

4. It is apparent that, on those facts, if established, there would be little dispute as to liability.

5. The plaintiff suffered back injury. She made a claim for workers compensation upon MMI Limited, now known as Allianz Australia Limited (Allianz), her employer’s insurer. That claim was accepted and compensation payments were made. She also instructed her employers to act as her solicitors to make a claim for damages for personal injury against the driver/registered owner of the apparently negligently driven vehicle which collided with her. The defendant is that person.

6. The Originating Claim was filed on 27 March 2008. By a Defence filed 8 May 2008, the defendant pleaded that the plaintiff’s claim was statute barred, pursuant to s 11 of the Limitation Act. The breach of duty was admitted, confirming that any dispute in relation to the claim would be confined to the assessment of damages.

7. Hence, the plaintiff applied, on 24 June 2008, for extension of time to commence proceedings pursuant to s 36 of the Limitation Act.

8. The circumstances leading to that point were addressed in affidavits of Karen Narelle Fogarty, the solicitor representing the plaintiff. She received instructions from the plaintiff on 10 July 2007. It appeared, and was properly acknowledged by the plaintiff’s previous solicitors, that, due to oversight, proceedings were not commenced by them before a period of six years from the accident causing injury had expired, namely, before 19 June 2005.

9. This was acknowledged in letters from them to the plaintiff dated 17 October 2005 and, more particularly, 29 June 2007.

10. The compulsory third party insurer of the defendant is and was Insurance Australia Limited trading as NRMA Insurance (the insurer). The plaintiff’s present lawyers wrote to the insurer on 7 September 2007 giving notice that they had instructions in respect of the matter and seeking consent to extension of time.

11. On 10 September 2007, the insurer responded declining such consent. It indicated that no negotiations would be entered into.

12. On 3 August 2007, the plaintiff’s lawyers asked for details of a property damage claim in respect of the same incident. The insurer returned a form of authority for the plaintiff to complete. That was executed and returned on 30 August 2007. Even so, it was not until 1 April 2008 that the insurer further responded, demanding a “service fee” of $110.00 before providing that information. That fee was forwarded to it on 14 April 2008.

13. The material forwarded on 26 May 2008 included eight pages of correspondence between Allianz and the insurer concerning Allianz’s claim for reimbursement of compensation payments made to, or on behalf of, the plaintiff by reason of the insurer’s obligation to indemnify the defendant for his negligence in injuring the plaintiff.

14. It appears that on 9 August 2002 the insurer paid $3,952.54 to Allianz in respect of the plaintiff’s claim.

15. On 6 June 2008, the insurer advised that, whilst there had been such a property damage claim, the file had been destroyed. The only details on the insurer’s system merely referred to the subject collision. A claim was lodged on 18 June 1999. It is noted that it was “finalised”, but the date of finalisation is not noted. However, repairs to the plaintiff’s motor vehicle were authorised and paid for following assessment on 28 June 1999.

16. The lawyers for the insurer, Sparke Helmore Lawyers, have produced and exhibited the contents of the insurer’s file.

17. This revealed that on or about 14 September 2001, the insurer received from Allianz notice of a potential claim on behalf of Underlea Pty Ltd, the nominal employer of the plaintiff, for recovery of sums paid pursuant to the Workers Compensation Act 1951 (ACT) (Workers Compensation Act). That claim was expressly put on the basis that:

Details available indicate your insured (M. Phengsiaroun) was the negligent party in this incident and therefore we hold him/her liable for damages caused to J SESSIONS.

18. By letter dated 21 September 2001, the insurer sought particulars relevant to liability and damages. That was provided by Allianz on 3 October 2001.

19. That material included a claim form signed by the employer and the injured worker, that is, the plaintiff.

20. On 18 June 2002, Allianz provided a list of payments made on behalf of the plaintiff.

21. The file further revealed that, as recently as 30 November 2007, the insurer paid $1,341.40 to Allianz by way of a finalisation of its claim for reimbursement of compensation payments made to, or on behalf of, the plaintiff.

22. It is apparent that, by August 2002, at the latest, the insurer had all information relevant to assess the plaintiff’s claim both as to liability and as to damages subject to further information as to the extent of and progress of the plaintiff’s injuries and disabililties.

23. It is apparent from the medical files produced to the insurer’s lawyers in August 2008 that the plaintiff has complained of moderate disability to her neck and shoulder, and has reasonable evidence to support those complaints and their connection to the accident of 18 June 1999, though working conditions at Gary Robb and Associates (Underlea Pty Ltd) may have complicated her disabilities (see Claim no SCC 844/2007 Sessions v Underlea Pty Ltd – Exhibit A).

Preliminary Question

24. A preliminary question emerged as to whether, given that the defendant, by his insurer, had admitted liability in tort for the injury caused by him to the plaintiff on 18 June 1999 before the expiry of the period of time set by s 11 of the Limitation Act, that time was extended by virtue of s 32 of that Act.

25. The relevant provisions of the Limitation Act are as follows:

11 General

(1) Subject to subsection (2), an action on any cause of action is not maintainable if brought after the end of a limitation period of 6 years running from the date when the cause of action first accrues to the plaintiff or to a person through whom he or she claims.

(2) Subsection (1) does not apply to a cause of action in relation to which another limitation period is provided by this Act.

...

32. Confirmation

(1) If, after a limitation period fixed by or under this Act for a cause of action begins to run but before the end of the limitation period, a person against whom (either solely or with other persons) the cause of action lies confirms the cause of action, the time during which the limitation period runs before the date of the confirmation does not count in the reckoning of the limitation period for an action on the cause of action by a person having the benefit of the confirmation against a person bound by the confirmation.

(2) For this section—

(a) a person confirms a cause of action if, but only if, he or she—

(i) acknowledges, to a person having (either solely or with other persons) the cause of action, the right or title of the person to whom the acknowledgment is made; or

(ii)makes, to a person having (either solely or with other persons) the cause of action, a payment in relation to the right or title of the person to whom the payment is made; and

(b) a confirmation of a cause of action to recover interest on principal money operates also as a confirmation of a cause of action to recover the principal money; and

(c) a confirmation of a cause of action to recover income falling due at any time operates also as a confirmation of a cause of action to recover income falling due at a later time on the same account.

(3) If a person has (either solely or with other persons) a cause of action to foreclose the equity of redemption of mortgaged property or to recover possession of mortgaged property, a payment to him or her of principal or interest secured by the mortgage or a payment to him or her otherwise in relation to his or her right or title to the mortgage is a confirmation by the payer of the cause of action.

(4) An acknowledgment for this section shall be in writing and signed by the maker.

(5) For this section, a person has the benefit of a confirmation if, but only if, the confirmation is made to him or her or to a person through whom he or she claims.

(6) For this section, a person is bound by a confirmation if, but only if—

(a) he or she is a maker of the confirmation; or

(b) he or she is, in relation to the cause of action, a successor of a maker under a devolution from the maker occurring after the making of the confirmation; or

(c) if the maker is, at the time when he or she makes the confirmation, (either solely or with other persons) a trustee of the will or of the estate of a deceased person—the firstmentioned person is at the date of the confirmation or afterwards becomes a trustee of the will or of the estate; or

(d) if the maker is, at the time when he or she makes the confirmation, (either solely or with other persons) a trustee (other than a trustee of the will or of the estate of a deceased person)—the firstmentioned person is at the date of the confirmation or afterwards becomes a trustee of the trust of which the maker is a trustee; or

(e) he or she is bound under subsection (7).

(7) If a maker of a confirmation of a cause of action in relation to property is, on the date of the confirmation, in possession of the property, the confirmation binds a person subsequently in possession of the property who claims through the maker of the confirmation.

26. In this case, the contention is that by acknowledging, on behalf of its insured, the liability of the defendant to pay damages to the plaintiff in respect of her pleaded cause of action to the insurer of the employer seeking to recover its payment of compensation to or for the plaintiff, the defendant is to be taken to confirm that cause of action.

27. There is no doubt that the communication from the defendant’s insurer acknowledges that the plaintiff had a good cause of action at that time against the defendant for the damage now sued upon. There is also no doubt that that acknowledgement occurred on or about 9 August 2002, that is, before the time limit prescribed by s 11 of the Limitation Act, had expired. Further the plaintiff’s action was, undoubtedly, commenced within six years from that event.

28. In Alcock v Casey [2007] ACTSC 87, Gray J found that an indication by a third party insurer to a prospective plaintiff in response to a notice of intended claim admitting liability pursuant to s 61(1)(b) of the Civil Law (Wrongs) Act 2002 (ACT) amounted to a confirmation within the meaning of s 32 of the Limitation Act.

29. Counsel for the defendant, Ms Elbourne, sought to distinguish that decision by reference to a number of points.

30. First, that s 32(2)(a) distinguishes between a cause of action vested in the plaintiff and the cause of action vesting in the employer pursuant to the provisions of the Workers Compensation Act.

31. The right of the employer to indemnity from the negligent third party is provided by s 183(1) of the Workers Compensation Act.

32. It is based on the fundamental proposition that a third party has a legal liability to pay damages in respect of the compensable injury to the worker. Section 183(1) provides:

Remedies against employer and stranger

(1) If an injury in relation to which compensation is payable under this Act is caused under circumstances that appear to create a legal liability in a person other than the employer to pay damages in relation to the injury—

(a) the worker may take a proceeding against the person to recover damages and may also make a claim against the employer under this Act; and

(b) if the worker receives both amounts under this Act and damages from the other person—the worker must repay to the employer so much of the amounts as does not exceed the amount of the damages received from the person; and

(c) on notice to the other person, the employer has a first charge on money payable by the person to the worker to the extent of any amounts that the employer has paid to the worker under this Act; and

(d) if the worker has received amounts under this Act, but no damages or less than the full amount of the damages to which the worker is entitled—the person liable to pay the damages must indemnify the employer against so much of the amounts paid to the worker as does not exceed the damages for which that person is liable; and

(e) payment of money by the other person to the employer under paragraph (c) or (d) is, to the extent of the amount paid, a satisfaction of the liability of that person to the worker.

(2) If an amount of compensation is paid in relation to a lump sum claim, this section applies as if a reference to amounts paid under this Act by an employer to a worker included a reference to any legal costs as between party and party that the employer is liable to pay in relation to the claim.

33. It is apparent from the terms of s 183 that there is but one cause of action, albeit remedies vest in more than one person in respect of it. That cause of action is the cause of action vested in the plaintiff for damages for personal injury caused by the negligence of the defendant. The sums, if any, paid by the employer (or its insurer) are part of those damages. It is, therefore, money paid to, or on behalf of, the plaintiff. Thus if a defendant pays such a sum, he or she is acknowledging his or her liability to the plaintiff.

34. However, the demands for payment and the satisfaction of it, the defendant submits, may be confirmation of the existence of the cause of action of the plaintiff but that confirmation was not directed to the plaintiff but to her employer. Thus, the defendant submits, s 32(2)(a)(i) is not satisfied.

35. I do not accept that submission. The acknowledgement, directed to the employer, is an acknowledgement to a person having, concurrently with the plaintiff, a remedy in respect of the cause of action, being the right to recover payments it made to or for the plaintiff in respect of the injury.

36. In any event, s 32(2)(a)(ii) is satisfied, even if I am wrong about s 32(2)(a)(i) being satisfied. The payment was made to the employer “in relation to the right or title of the person to whom the payment was made” such “right or title” being held concurrently with the plaintiff.

37. I conclude, therefore, that, by virtue of s 32 of the Limitation Act, the time limited by s 11 had not expired, the time between 18 June 1999 and, at the earliest, 9 August 2002 not being counted. I say “at the earliest” because there was a second and later payment made by the third party insurer to the workers compensation insurer in 2007.

The Claim under s 36 of the Limitation Act

38. In case I am wrong about s 32 of the Limitation Act, I turn to the substantive application.

39. I accept as the starting point that the plaintiff bears the onus of persuading the Court that it should exercise the discretion conferred by s 36. That section provides:

Personal injuries

(1) This section applies to any action for damages if the damages claimed consist of or include damages in relation to personal injuries to any person.

(2) If an application is made to a court by a person claiming to have a cause of action to which this section applies, the court, subject to subsection (3) and after hearing such of the persons likely to be affected by that application as it considers appropriate, may, if it decides that it is just and reasonable so to do, order that the period within which an action on the cause of action may be brought be extended for the period that it determines.

(3) In exercising the powers given to it by subsection (2), a court shall have regard to all the circumstances of the case, including, for example, the following:

(a) the length of and reasons for the delay on the part of the plaintiff;

(b) the extent to which, having regard to the delay, there is or is likely to be prejudice to the defendant;

(c) the conduct of the defendant after the cause of action accrued to the plaintiff, including the extent (if any) to which the defendant took steps to make available to the plaintiff means of ascertaining facts that were or might be relevant to the cause of action of the plaintiff against the defendant;

(d) the duration of any disability of the plaintiff arising on or after the date of the accrual of the cause of action;

(e) the extent to which the plaintiff acted promptly and reasonably once he or she knew that the act or omission of the defendant, to which the injury of the plaintiff was attributable, might be capable at that time of giving rise to an action for damages;

(f) the steps (if any) taken by the plaintiff to obtain medical, legal or other expert advice and the nature of the advice the plaintiff may have received.

(4) The powers given to a court by subsection (2) may be exercised at any time notwithstanding—

(a) that the limitation period in relation to the relevant cause of action has ended since the cause of action accrued; or

(b) that an action in relation to such personal injuries has been begun.

(5) This section does not apply in relation to a cause of action to which either of the following applies:

(a) section 16B (Other claims for damages for personal injury);

(b) the Civil Law (Wrongs) Act 2002, part 3.1 (Wrongful act or omission causing death).

(6) Also, this section does not apply in relation to the period mentioned in section 30B (2) (Special provision in relation to children—claims relating to health services).

40. The primary question is whether, in all the circumstances, it is “just and reasonable” to grant the application.

41. I accept, too, that a material consideration is whether, by reason of the time which has elapsed, a fair trial is possible (see Toohey and Gumnow JJ in Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541 at 547).

42. The criteria specifically referred to in s 36 are not exhaustive. However, they do point reasonably comprehensively to areas of relevance. One matter not mentioned is the relevance of a possible cause of action vested in the plaintiff for damages for any neglect of default on the part of her solicitors in prosecuting her claim (see, for example, the decision of Sheppard, Neaves and Miles JJ in Noja v Civil and Civic Pty Ltd & Ors [1990] FCA 135; (1990) 93 ALR 224).

43. Their Honours, in that decision, approved a statement earlier made by Kelly J in Daroczy v B & J Engineering Pty Ltd (in liq)(1986) 67 ACTR 3 at 18:

The possibility of an action against the plaintiff’s solicitors in respect of the delay has to be considered. On the whole, I think the proper view to take is that the alleged primary wrong – doers (the suppliers) should be looked to rather than the alleged secondary wrong – doers (the solicitors). In taking this view, I follow, with great respect, the general view taken in Birkett v James [1978] AC 297. At the same time I accept that there may be occasions when a proper balance between the blame which ought to be attributed to a plaintiff’s solicitor and prejudice to a defendant would mean that an applicant under s 36 of the Ordinance ought to be required to pursue his remedy against his solicitor rather than against the primary wrong – doer.

44. Their Honours commenced, at 239:

In our opinion the approach adopted by Kelly J in the passage cited was correct but we are not satisfied that that approach was in fact followed in the present case. The prejudice to the respondents did not extend beyond the general prejudice which would result from their being deprived of a defence under the Limitation Ordinance to which they would otherwise be entitled. In such circumstances, we are of opinion that the primary judge erred in refusing an extension of time on the basis that the appellant should be required to pursue a claim against her solicitors rather than against the respondents.

45. The existence or not of such a claim was not urged by this respondent as a reason to dismiss this application, no doubt after due consideration of both Daroczy’s case and Noja’s case (supra). However, Ms Elbourne did focus on four areas. First, and this is a significant matter, upon any action taken by the plaintiff to prosecute her claim and the reasons for the delay.

46. The letter from her employer, also her lawyers, on 17 October 2005 and, more particularly, 29 June 2007, expressly told the plaintiff that they had failed to commence proceedings in a timely manner. She instructed her present lawyers on 10 July 2007. The respondent complains that there is little or no detail as to what occurred by way of the plaintiff personally progressing her matter between the date of the accident and 29 June 2007. Nor is there any detail, though there is some hearsay evidence as to what occurred between 17 October 2005 and 18 April 2007, to explain the delay. It is clear enough that the plaintiff reasonably assumed that her action would progress until informed that her lawyers had let the limitation period expire without commencing proceedings. She did not take further action until after 18 April 2007, being concerned for her employment. Her concern as to her employment is understandable. It does explain her lack of alternative action, supported by an inference that the particular junior solicitor involved had apparently not told his (and her) employers of his default.

47. It does not seem to me fair to conclude, as Ms Elbourne urged, that the plaintiff had changed her mind about pursuing a common law remedy. Nor, given its payout of the compensation payments made to her, or on her behalf, could it be assumed that the defendant’s insurer so inferred.

48. Nor do I conclude that, once new lawyers were instructed, their conduct of the matter would or could have been so interpreted.

49. Nevertheless, it is clearly not a satisfactory explanation of the entire delay, even for the plaintiff personally, that between 17 October 2005 and 10 July 2007 she took no steps to enforce her common law rights including the making of an application to extend the limitation period.

Prejudice to the Respondent

50. The respondent does suffer the prejudice of being deprived of an otherwise good defence.

51. The defendant’s insurer enquired of the employer, then also the plaintiff’s lawyers, as to all such details as would be relevant to the plaintiff’s claim. It conceded liability and could, if asked, have made a realistic offer to assess damages. I accept that it was not asked then to do so.

52. It can be accepted that, between expiry of the limitation period and the request to consent to extend time for the purposes of the Limitation Act, the defendant’s insurer could have assumed no action would be forthcoming. However, nothing suggests any adverse alteration to its position as a result of any such assumption. Nor would it be prudent, as Master Harper pointed out in Hamilton v Madden [2007] ACTSC 89, when it may be that an originating process, though issued, remained unserved, to assume no action will be or has been commenced.

53. Indeed, once action is mooted, it is reasonable for a defendant to assume, even if the time limited by s 11 of the Limitation Act has expired, an application under s 36 thereof (if applicable) might be made.

54. In the present case, though the explanation for the delay cannot be regarded as satisfactory so as to lend significant weight to the plaintiff’s claim to an exercise of discretion in her favour, it is not so unsatisfactory as to warrant refusal. Nor was the defendant misled by her silence, particularly as her employer was, through Allianz, pursuing recovery of compensation payments made.

55. It is apparent that the plaintiff suffered moderately serious injuries and has continuing disabilities. Those injuries were inflicted, and admittedly so, by the negligence of the defendant. Justice, to that extent, favours a grant of an extension of time.

56. The primary consideration is the preservation of the right of the defendant to a fair trial.

57. As Master Harper noted in Brozinic v PHC Operations Pty Ltd t/as Hyatt Hotel Canberra [2008] ACTSC 20, citing McHugh J in Brisbane South Regional Health Authority v Taylor (supra), there are four broad rationales for limitation periods which favour their enforcement, at 14:

First, relevant evidence was likely to be lost as time went by. Second, it was oppressive to a defendant to allow an action to be brought long after the circumstances which gave rise to it. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims could no longer be made against them. Insurers had a particular interest in knowing that they had no liabilities beyond a definite period. Fourth, the public interest required that disputes be settled as quickly as possible.

58. There is no presumptive right to an order under s 36. A long delay may give rise to a presumption of prejudice, particularly where contemporary unrecorded conversations may be relevant to the provision of information favourable to the defendant’s case.

59. However, in the present case, there is no issue concerning liability and the plaintiff’s disabilities have been monitored since shortly after the accident happened, with full details supplied to the third party insurer specifically since 14 September 2001.

60. It follows that there can be no significant prejudice to the defendant in relation either to liability or quantum if the extension of time is granted.

61. It is true that the delay is greater in this case than was the case in Brozinic (supra)but the involvement of the workers compensation insurer, even if it did not give rise to confirmation, certainly avoids any prejudice to the defendant and adds to the strength of the conclusion that it would be in the interest of justice to allow the application to extend time.

62. I grant the application accordingly.

I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Chief Justice Higgins.

Associate:

Date: 28 November 2008

Counsel for the applicant: Mr G Stretton

Solicitor for the applicant: Colquhoun Murphy

Counsel for the respondent: Ms E Elbourne

Solicitor for the respondent: Sparke Helmore

Date of hearing: 1 October 2008

Date of judgment: 28 November 2008