Marks v Roads & Traffic Authority of New South Wales [2004] NSWCA 43 (3 March 2004)

Last Updated: 9 March 2004

NEW SOUTH WALES COURT OF APPEAL

CITATION: Marks v. Roads & Traffic Authority of New South Wales [2004] NSWCA 43 revised - 08/03/2004

FILE NUMBER(S):

40932/02

HEARING DATE(S): 23 February 2004

JUDGMENT DATE: 03/03/2004

PARTIES:

William Marks - appellant

Roads & Traffic Authority of New South Wales - respondent

JUDGMENT OF: Handley JA Hodgson JA Stein AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 10917/01

LOWER COURT JUDICIAL OFFICER: Knight DCJ

COUNSEL:

Mr. J.D. Hislop QC with Mr. A. Bowen for appellant

Mr. L. King SC with Mr. J. Ryan for respondent

SOLICITORS:

Henry Davis York, Sydney for appellant

Leitch Hasson Dent, Sydney for respondent

CATCHWORDS:

LIMITATION OF ACTIONS - When cause of action arises in case of retrospective legislation - Postponement of the bar - Confirmation

LEGISLATION CITED:

Limitation Act 1969 ss.14, 54

Workers' Compensation Act 1987 s.151Z

WorkCover Legislation Amendment Act 1995

DECISION:

Appeal dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40932/02

DC 10917/01

HANDLEY JA

HODGSON JA

STEIN AJA

Wednesday 3 March 2004

MARKS V. ROADS & TRAFFIC AUTHORITY OF

NEW SOUTH WALES

Judgment

1 HANDLEY JA: In this appeal I have had the benefit of reading the reasons for judgment of Hodgson JA in draft. I agree with his Honour's reasons and with the orders he proposes but will add some brief supplementary reasons of my own. I need not repeat the facts and background material which are fully set out in his reasons for judgment which need to be read before mine.

2 Under s 151Z(1)(d) of the Workers' Compensation Act 1987 as amended an employer who was has paid workers' compensation is entitled to be indemnified by any tortfeasor who caused the compensable injury, subject to the indemnity being limited to the amount of the damages otherwise payable by that tortfeasor to the worker.

3 An employer's claim for an indemnity under this section is not a claim for damages (Westpac Banking Corporation v Tomassian (1992) 32 NSWLR 207) but the damages otherwise payable by the tortfeasor fixes his maximum liability under the indemnity. Subject to that limitation a new cause of action accrues each time a payment of compensation is made (Attorney General v Arthur Ryan Automobiles Ltd [1938] 2 KB 16 CA).

4 Since the employer must prove that the tortfeasor was liable in damages to the worker in a sum which is not less than the amount sought to be recovered under the indemnity the first claim for an indemnity must be unliquidated but once the liability of the tortfeasor has been established a claim to be further indemnified for later payments within the limit of that liability would appear to be liquidated.

5 Prior to the Limitation Act 1969 written acknowledgments of a cause of action for unliquidated damages could not extend the limitation period: Halsbury's Laws of England 3rd Ed vol 24 "Limitation of Actions" p 298 para 590. However, at least in some circumstances, an admission of liability in such case could create an estoppel if the claimant relied on the admission and refrained from taking proceedings: Wright v John Bagnall & Sons Ltd [1900] 2 QB 240 CA.

6 Section 54 of the Limitation Act 1969 made general provision for written acknowledgments of a cause of action to confirm that cause of action and restart the limitation period. The section applies to causes of action for unliquidated damages: Duncan v Mendes (NSWCA, 29/5/98, U/R). The relevant confirmation for present purposes (s 54(2)(a)(i)) is one which "acknowledges to a person having ... the cause of action the right or title of the person to whom the acknowledgment is made". An acknowledgment must be in writing signed by the maker (s 54(4)).

7 The letters from the defendant's insurer of 3/5/95 and 30/6/95, republished by its letter of 19/6/96, constitute such an acknowledgment. The first letter stated "we are prepared to admit a [breach] of duty of care in this matter ... this matter will be assessed under the Motor Accidents Act". This, fairly read, was an admission of liability which reserved all questions of quantum. The statement that "the matter will be assessed" can mean nothing less. The second letter confirmed this construction because it stated "we are only required to reimburse you the equivalent of what we as CTP insurers, would have paid". (emphasis supplied)

8 These letters "acknowledge [d] ... the right or title" of the RTA. Before the Act it was well established that an acknowledgment of a debt was effective although the amount was not stated in the acknowledgment, and even if its correctness was expressly disputed: Halsbury's 3rd Ed vol 24 "Limitation of Actions" p 300 para 594. The correspondence held to be an effective acknowledgment in Duncan v Mendes (above) admitted liability and not quantum. Accordingly if the RTA acquired causes of action under s 151Z from the dates of its payments those causes of action which accrued more than six years before the proceedings were commenced on 1 November 2001 were not statute barred because the limitation periods had been extended by the acknowledgments.

9 However I agree that Sydney Water Corporation Ltd v Integro (Australia) Pty Ltd (NSWSC, 24/7/95, U/R) a decision of Master Malpass, was correctly decided and the RTA did not acquire causes of action under the section when it made its earlier payments. The correctness of that decision is supported by Smith's Dock Co v John Redhead & Sons [1912] 2 KB 323 and Shirwell v Hackwood Estates Co Ltd [1938] 2 KB 577 CA where employers were held entitled to recover benefits paid to dependants on the death of a worker under provisions in the United Kingdom legislation from which s 64 of the 1926 Act and s 151Z of the 1987 were derived. These decisions were based on the definition of worker in that legislation, which was extended to include his dependants. This was incorporated in the 1926 Act but not in the 1987 Act in its original form.

10 In these circumstances the RTA's causes of action did not accrue until 1 January 1996 when the WorkCover Legislation Amendment Act 1995 came into force. That Act inserted the extended definition of worker as s 3(1A) with retrospective effect to the commencement of the 1987 Act. Since the RTA's causes of action based on earlier payments were not complete until then it could not sue and time could not commence to run. The present proceedings were brought within six years of that date and accordingly the RTA does not have to rely on any acknowledgment.

11 The orders proposed by Hodgson JA should be made.

12 HODGSON JA: On 11 October 2002, Knight DCJ dismissed a Notice of Motion brought by the appellant seeking an order that certain paragraphs of the respondent's Statement of Claim in these proceedings should be struck out, in so far as the Statement of Claim sought an indemnity in respect of payments made by the respondent prior to 1 November 1995. The proceedings had been commenced by the respondent against the appellant on 1 November 2001, and this Notice of Motion had been brought in reliance on the Limitation Act 1969.

13 On 11 July 2003, leave was granted to the appellant to appeal from that decision, and this Court has now heard that appeal.

14 I note that it was agreed before the primary judge that the principle in General Steel Industries Inc. v. Commissioner of Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125 should not apply, and that the primary judge should determine the question raised by the Notice of Motion finally, as a separate issue. This approach has been maintained by both parties in this Court.

CIRCUMSTANCES

15 The respondent was the employer of one Henry William O'Brien. On 13 July 1992, Mr. O'Brien was working beside the road at Kariong, when he was hit by a vehicle driven by the appellant; and Mr. O'Brien died later the same day. The respondent, as employer of Mr. O'Brien and in accordance with s.25 of the Workers' Compensation Act 1987, paid out to his dependants some $264,024.88, including a death benefit of $200,000.00 paid on 18 August 1992. In these proceedings, the respondent seeks to recover the amount of these payments from the appellant, pursuant to s.151Z of the Workers Compensation Act 1987.

16 It was common ground that there was a six year limitation period applying to this cause of action, by reason of s.14(1)(d) of the Limitation Act 1969; and it was common ground that only about $20,000.00 of the amount claimed was paid within six years prior to 1 November 2001. The appellant's contention was that the respondent's cause of action was statute barred, except in relation to this sum of about $20,000.00.

17 However, the respondent claimed to be entitled to rely on s.54 of the Limitation Act, which so far as relevant is in the following terms:

54(1) Where, after a limitation period fixed by or under this Act for a cause of action commences to run but before the expiration 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 the purposes of this section:

(a) a person confirms a cause of action if, but only if, the person:

(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 respect of the right or title of the person to whom the payment is made,

...

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

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

(6) For the purposes of this section a person is bound by a confirmation if, but only if:

(a) the person is a maker of the confirmation,

...

18 The respondent relied on certain correspondence between the respondent and the appellant's insurer (Commercial Union), which was set out in the primary judge's judgment as follows:

That correspondence discloses the following; that by letter dated 8 October 1992 the plaintiff wrote to Commercial Union, the defendant's insurer, and forwarded a recovery notice under s 151Z of the Workers Compensation Act 1987. Subsequently, by letter dated 12 November 1992, the plaintiff again wrote to Commercial Union and enclosed additional details, including a statutory declaration completed by the de facto wife of Mr O'Brien, the deceased. By letter dated 17 March 1993, the plaintiff wrote again to Commercial Union and enclosed police reports in relation to the accident which caused the death of Mr O'Brien.

It would appear that thereafter nothing much happened between the parties until 10 March 1995 and on that date the plaintiff wrote to Commercial Union and said the following:

"I refer to previous correspondence in this matter and advise that our costs are continuing.

Please advise whether your company has accepted liability and the present position of this matter."

That prompted a reply dated 3 May 1995 from Commercial Union over the signature of the claims supervisor for compulsory third party insurance, addressed to the plaintiff. The letter was as follows:

"We refer to the above matter and thank you for your letter dated 10 March 1995.

We write to advise that we are prepared to admit a breech (sic) of duty of care in this matter. We note that your payments are still continuing in this matter and would kindly ask that you provide us with a breakdown of all payments made to date.

You will appreciate that this matter will be assessed under the Motor Accidents Act in respect of the recovery amount.

We confirm that the claimant Ms M S Howe did initially submit a motor accident compensation to relative claim form. However in January 1994 we were advised by her solicitors that this matter was to be discontinued.

We look forward to your reply in due course and invite you to telephone the writer should you wish to discuss this matter further."

By letter dated 18 May 1995 the plaintiff wrote to Commercial Union as follows:

"I refer to your letter of 3 May 1995 and enclose a copy of a computer printout outlining the Workers Compensation payments made to Mr O'Brien pursuant to the Workers Compensation Act 1987.

Payments for dependants have not been paid since 15 March 1995.

I await your response as to reimbursement of payments made to and on behalf of Mr O'Brien."

By letter dated 30 June 1995 Commercial Union wrote to the plaintiff as follows:

"I refer to the above matter and thank you for your letter of 18 May 1995.

I confirm our recent telephone discussion and would now like to attempt settlement of this matter. Please note that under the agreement between workers compensation insurers and compulsory third party insurers, we are only required to reimburse you the equivalent of what we as CTP insurers, would have paid, had this been a CTP claim. Accordingly I am willing to offer the following;"

Then there are set out certain details of calculations in relation to money and an amount of $38,320.10 is specified. Then the letter continues:

"If you have any queries do not hesitate to contact me."

The next letter between the parties would seem to have been the letter of 12 June 1996 which Commercial Union wrote to the plaintiff as follows:

"We refer to previous correspondence in this matter and note the telephone conversation between our office and Peter Barlow of your office on 11 October 1995. In that conversation Mr Barlow indicated he would consider the last offer made by our office in settlement of this claim.

We have not heard from your office since that date.

We await your reply regarding this matter."

Subsequently, by letter dated 19 June 1996, the plaintiff wrote to Commercial Union rejecting the offer contained in Commercial Union's letter of 30 June 1995 as being completely unacceptable and making a demand for full recovery of the plaintiff's payments to date in the sum of $248,684.86. That letter was replied to by letter dated 28 February 1997 from Commercial Union to the plaintiff in the following terms:

"We refer to your letter of 19 June 1996. We apologise for the delay in replying to the above letter, but we advise we have sought counsel's opinion in this matter.

We advise we are seeking further information about this claim, and will contact you when we have received the same with regard to this matter."

There was subsequently further correspondence between the parties leading up to a letter from Commercial Union to the plaintiff dated 11 April 2001 in which Commercial Union confirmed its position that recovery of the workers compensation payments of which they had been advised were statute barred and requested that the plaintiff provide them with an updated list of payments.

That request was complied with and by letter dated 2 August 2001 Commercial Union asserted that the plaintiff's claims for workers compensation payments up to 13 July 1998 were statute barred but was prepared to offer settlement of the claim in the total sum of $6,419.18.

DECISION OF PRIMARY JUDGE

19 Before the primary judge, the appellant referred to Sydney Water Corporation Ltd. v. Integro (Australia) Pty. Ltd. (SCNSW, Malpass M, 24/7/95) and contended that the letters in question could not amount to confirmation, because there was no cause of action in existence until 1 January 1996, when the WorkCover Legislation Amendment Act 1995 came into force with retrospective effect; and that in any event the letters did not amount to a confirmation satisfying s.54 of the Limitation Act. The primary judge held that the letters did satisfy s.54 of the Limitation Act; and he also held that it did not matter that it turned out that the person making the confirmation had made a mistake of law, in believing there to be an extant cause of action.

GROUNDS OF APPEAL

20 The appellant relies on the following grounds:

1. His Honour erred in failing to strike out the opponents' ordinary statement of claim in so far as the ordinary statement of claim seeks indemnity for payments made by the opponent prior to 1 November 1995.

2. His Honour failed to properly construe the provisions of section 54 of the Limitations (sic) Act 1969.

3. His Honour erred in his construction of letters of 3 May 1995, 30 June 1995 and 12 June 1996 as constituting a confirmation for the purposes of section 54 of the Limitations (sic) Act 1969.

4. His Honour erred in finding that the Limitations (sic) Act 1969 was postponed by reason of the confirmation from 12 June 1996.

5. His Honour erred in failing to consider properly or at all, all the evidence in the case.

21 These grounds have been discussed under two headings: first, was there a cause of action prior to 1 January 1996; and second, did the letters amount to confirmation?

CAUSE OF ACTION PRIOR TO 1 JANUARY 1996

22 This question arises in this way. When s.151Z was introduced into the Workers Compensation Act 1987 in 1989, it took the following form, so far as relevant:

151Z(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury, the following provisions have effect:

(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,

(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker's injury under this Act, and the worker is not entitled to any further compensation,

(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,

(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),

(e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,

(e1) if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment,

(f) all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission.

...

(3) This section applies to proceedings taken independently of this Act by a person to whom compensation is payable under this Act in respect of the death of a worker as a result of an injury.

...

23 Section 151Z(1)(d) was in terms similar to s.64(1)(b) of the Workers Compensation Act 1926. However, in the 1926 Act, in addition to a definition of "worker" in s.6(1), s.6(2) provided that "any reference to a worker that has been injured shall, where the worker is dead, include a reference to his legal personal representative or his dependants, or other person to whom or for whose benefit the compensation is payable". In the 1987 Act, there is a definition of "worker" similar to that in s.6(1) of the 1926 Act; but prior to an amendment made in 1995, there was no provision similar to s.6(2) of the 1926 Act. However, s.9 of the 1987 Act referred to payments of compensation, and provided that "a worker who has received an injury (and in the case of the death of a worker, his or her dependants) shall receive compensation from the worker's employer in accordance with this Act".

24 In the case of Integro, a worker employed by the plaintiff died in 1988; and the employer made payments to dependants as required by the Workers Compensation Act 1987. The defendant was a party other than the employer who might have been liable to pay damages to the deceased's dependants in respect of the deceased's death, and the plaintiff sought indemnity under s.151Z. For the defendant, it was submitted that s.151Z gave a right of indemnity only if, in terms of s.151Z(1)(d), "the worker" had recovered compensation under the Act; and not where it was dependants of the worker who recovered compensation.

25 Master Malpass upheld this submission, noting inter alia that the 1987 Act in places used the word "person" rather than the word "worker", as having a wider meaning that the word "worker"; and he noted that the legislature had chosen to use the word "worker" in s.151Z(1)(d).

26 This situation was changed by the WorkCover Legislation Amendment Act 1995, which commenced on 1 January 1996. That Act introduced a new sub-section (1A) inserted after s.3(1), in the following terms:

3(1A) A reference to a worker who has been injured includes, if the worker is dead, a reference to the worker's legal personal representative or the worker's dependants, or any other person to whom or for whose benefit compensation is payable.

27 In par.[96] of Schedule 1, it made the following transitional provision:

[96] Section 3(1A), which was inserted by the WorkCover Legislation Amendment Act 1995, was inserted to avoid doubt and accordingly the section is taken to apply in respect of any injured worker, including a worker who was injured or died before the commencement of that section, but not so as to affect any decision of a court made before the commencement of that section.

Submissions

28 Mr. King SC for the respondent submitted that Integro was wrongly decided: he submitted that the intention of the legislature was to provide an indemnity when the payments were made to dependants, as had been the case under the 1926 Act. However, he submitted, if Integro was correctly decided, the cause of action in any event only arose on 1 January 1996, and so was not statute barred when the proceedings were commenced in November 2001, irrespective of any question of confirmation.

29 Mr. Hislop QC for the appellant submitted that Integro was correctly decided; and that under the 1995 amendment, the cause of action must be considered as having arisen when the elements of the cause of action were complete. The confirmation was ineffective, because there could not be confirmation of a non-existent cause of action.

Decision

30 In my opinion, the better view is that the case of Integro was correctly decided. Generally, the courts have given workers' compensation legislation a beneficial interpretation, so as to promote the purpose of providing protection to workers and their dependants; but it is not obvious that this should apply to provisions dealing with how liabilities to workers and dependants are to be borne as between employers and other persons or insurers. In my opinion, there are insufficient grounds for reading "worker" in s.151Z(1)(d) to extend to a worker's dependants, or to be the same as if the word "person" had been used, where the legislature had omitted the provision to the effect of s.6(2) of the 1926 Act, and had used the word "person" in other sections but not this one.

31 In my opinion, this means that the respondent did not have a cause of action at all until 1 January 1996, and thus is not statute barred in any event. Mr. Hislop's submission was that the confirmation was ineffective because there was no cause of action prior to 1 January 1996: in my opinion, it is inconsistent to say that time ran prior to 1 January 1996. In my opinion, time cannot run during a period when no cause of action has yet arisen. That position is not changed by the retrospective effect of the legislation. What that does is to make the past events sufficient for the existence of a cause of action, as from the date the legislation took effect. The position is in my opinion analogous to a case where, in a cause of action of which damages are an element, damages first occur long after the breach of duty. Time does not then run until the occurrence of the damages.

32 However, even if Integro was not correctly decided, in my opinion the same result is reached by considering the correspondence relied on as confirmation.

CONFIRMATION BY LETTERS

Submissions

33 Mr. Hislop's submissions were set out in writing as follows:

10. The existence of the alleged cause of action, in 1995, was dependent upon the Respondent establishing:

(a) that the Appellant was in breach of the duty of care owed to the deceased;

(b) that the Appellant's breach of duty caused the death of the deceased;

(c) that the deceased was in the course of his employment when struck by the Appellant's vehicle;

(d) that the persons to whom compensation was paid had the necessary relationship to the deceased at the date of death and were at that time totally dependent upon him for support;

(e) the compensation had been paid as alleged in appropriate sums;

(f) the Respondent had not been guilty of negligently contributing to the deceased's death;

(g) a cause of action under s.151Z(1)(d) existed in respect of a claim to recover death benefits.

11. The letter dated 3 May 1995 ("the first letter") (Blue Book 11) was written in circumstances where:

(a) The Respondent had informed the Appellant that the deceased had lived in a de-facto relationship and it did not know if the de-facto wife was working prior to the accident (Blue Book 6). The de-facto wife had discontinued proceedings brought by her against the Appellant (Blue Book 11). No birth certificates were forwarded in respect of the children and no award of the Compensation Court was referred to or provided by the Respondent. Thus the possibility of issues as to the dependents existed.

(b) The Respondent had forwarded a copy of the relevant police report to the Appellant (Blue Book 7). The police report (Blue Book 8 and 9) revealed the deceased was carrying out roadworks when struck. Thus there was the possibility of negligence by the Respondent contributing to the death. If the Respondent had contributed to the death, no s.151Z(1)(d) claim was available (see Public Transport Commission of NSW v J. Murray-Moore (sic) (NSW) Pty Ltd [1975] HCA 28; (1975) 132 CLR 336). The situation was subsequently the subject of legislative change see the WorkCover Legislation Amendment Act 1995 (commencing on 1 February 1996 but with retrospective effect), see also I &. J Foods Pty Ltd v Bergsam (sic) Pty Ltd 14 NSWCCR 486.

(c) It had not been determined by the Courts that a s.151Z(1)(d) cause of action existed where the compensation was paid to dependants. When the issue came before the Courts (Sydney Water Corporation v Intergro Australia Pty Ltd (Master Malpass NSW Supreme Court, unreported, 24 July 1995)) it was held s.151Z(1)(d) did not enable an employer to recover moneys paid to a deceased worker's dependants. This was amended by the WorkCover Legislation Amendment Act 1995 which commenced on 1 January 1996 but with retrospective effect. It is submitted a party cannot confirm a cause of action which does not exist at the time of the alleged confirmation and that his Honour erred in reaching the contrary conclusion (RB 21P-V).

12. The first letter was written in response to the Respondent's letter dated 10 March 1995 (Blue Book 10) which stated, inter alia, "Please advise whether your company has accepted liability".

13. The first letter did not, in its terms, accept liability. It was not an admission that a debt existed and was unpaid. It admitted only one of the ingredients of the alleged cause of action and sought particulars of payments, a normal step by an insurer or anyone faced with a claim, irrespective of their belief in the legitimacy of the alleged cause of action. Such a letter did not contain any clear and unequivocal admission that the Appellant acknowledged that the Respondent had a cause of action against it or that it was liable to pay to the Respondent the debt claimed. It was not a confirmation for the purposes of s.54 either taken alone or with other letters. His Honour erred in reaching a contrary conclusion (RB 16P-17D). There was no onus on the Appellant to assert it did not have to pay any moneys, rather the onus was on the Respondent to prove the Appellant had acknowledged the debt and its obligation to pay it (c/f RB 17J-P).

14. Additionally, as the first letter had been written and received more than 6 years before the Statement of Claim issued on 1 November 2001, it could not constitute an effective confirmation, irrespective of its content.

15. The letter dated 30 June 1995 ("the second letter") (Blue Book 13) is a without prejudice offer to settle the claim. The fact that an insurer chooses to make an offer to settle a claim cannot legitimately be construed as an acknowledgment that the other party has a valid cause of action. In many cases the insurer may believe the other party has no legitimate cause of action but, for commercially prudent reasons, will "buy out" of the risk by negotiating a settlement. It would be wrong to interpret such an action on the part of an insurer as constituting an acknowledgment or confirmation for the purposes of s.54 of the Limitation Act. To so hold would inhibit the settlement of claims, a matter in which on policy and public interest grounds would be totally undesirable.

16. The second letter contained an offer which the Respondent considered completely unacceptable (Blue Book 15M-N). It did not, by itself, constitute in whole or part an acknowledgment of the Respondent's alleged cause of action, nor did it have that effect when read with the first letter.

17. In any event to have an effective confirmation of a cause of action for a liquidated sum (as distinct from a claim for unliquidated damages), it would be necessary to have an acknowledgment in respect of the total sum claimed. His Honour erred in reaching a contrary conclusion (RB 18L-Z).

18. The second letter also was written and received more than 6 years before the issue of the Statement of Claim and could not for that additional reason constitute an effective confirmation.

Decision

34 In my opinion, it is unrealistic to regard the issues identified by the letters (b) to (g) in par.[10] of the appellant's submissions as being matters of contention, independently of the issue identified by the letter (a). Furthermore, if what was set out in the insurer's letter of 3 May 1995 was intended to be an admission solely in relation to issue (a), leaving issues (b) to (g) in dispute, then in my opinion that letter would have been misleading, and deliberately so. I think the preferable view is that the letter, on its true interpretation, was admitting liability.

35 The circumstance that the second letter, that of 30 June 1995, was arguably a without prejudice offer, may have been a basis for a successful objection to its tender in evidence. However, that objection was not taken; and once the letter went into evidence, it must simply be construed to see if it amounts to an admission or confirmation of a cause of action. In my opinion, the reference in the letter to the appellant to being "only required to reimburse ...", in the context of the correspondence as a whole, plainly amounted to an admission that the appellant was required to reimburse to the extent specified.

36 The first two letters, considered alone, were too early to be a confirmation of assistance to the respondent, having been sent prior to six years before 1 November 2001. However, the third letter, that dated 12 June 1996, refers to the earlier correspondence; and in my opinion, does so in such a way as to confirm the contents of the earlier letters, and thus to repeat the admissions made in them so as to acknowledge the relevant right of the respondent and thus confirm its cause of action.

37 I accept that, as stated in Westpac Banking Corporation v. Tomassian (1993) 32 NSWLR 207 at 220, the respondent's claim in this case is a claim for an indemnity, and not a claim for unliquidated damages. However, one condition of the indemnity is proof by the employer that a third party is liable to pay damages to the worker or dependants; and the quantum of the indemnity is limited to the quantum of those damages.

38 In this case, what the appellant admitted included the making by the respondent of some payments to the dependants, and also that the appellant was liable to pay some damages to those dependants. It was unlikely in the extreme that there would be any substantial dispute as to the quantification of payments actually made by the respondent to the dependants. What was left in dispute was merely the quantum of the damages which the appellant would have been liable to pay to the dependants. Accordingly, in my view, the case is closely analogous to that where liability is admitted for unliquidated damages, as considered in Duncan v. Mendes, NSWCA, 29/5/98. As decided in that case, s.54 of the Limitation Act put an end to the distinction for limitation purposes between claims for liquidated and unliquidated damages; and the case confirmed that, in cases where the claim is one for unliquidated damages (or, in my opinion, cases analogous thereto), it is not necessary that there be admission or confirmation of any particular quantum.

CONCLUSION

39 For those reasons, in my opinion this appeal should be dismissed with costs.

40 STEIN AJA: I agree with Hodgson JA and the additional remarks of Handley JA.

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LAST UPDATED: 08/03/2004