A 16-year delay in lodging a CTP claim using the same test as prescribed by the Motor Accidents Injuries Act 2017 (NSW) shows that Insurers should look carefully at the legal advice received by claimants when considering whether to accept or reject their explanation for that delay.
Judgment date: 19 March 2019
Citation: Wellington v Lawler  NSWSC 284
Jurisdiction: Supreme Court of NSW
- Motor accident victims who lodge claims out of time must provide a 'full and satisfactory' explanation for their delay. This is consistent across all NSW accident schemes including the Motor Accident Injuries Act 2017 (NSW).
- A 'full' explanation is a complete account of the conduct of the Claimant and others so far as is relevant (including the conduct of others who have acted or purported to act on the Claimant's behalf), including their actions, knowledge and beliefs from the date of the accident to the date of the explanation. It refers to the conduct bearing upon the delay and to the state of mind of the Claimant.
- The explanation is 'satisfactory' if a reasonable person in the position of the Claimant would also have failed to comply or would be justified in experiencing the same delay.
- Any prejudice to the Insurer is only considered in the exercise of the Court's discretion to grant leave to extend time to commence court proceedings and is not a consideration of whether an explanation is 'full and satisfactory'.
The Claimant, Nathan Wellington, allegedly sustained injuries in a motor vehicle accident on 21 October 1998. However, his injuries were initially not significant enough to cause him to immediately lodge a claim but as time wore on his injuries became worse.
The Claimant eventually lodged his claim form with the relevant insurer 16 years after the accident. Section 43 of the Motor Accidents Act 1988 (NSW) sets a time limit of 6 months for lodging a claim and section 52 sets a time limit of 3 years for commencing court proceedings. In the circumstances, one of the requirements of the Act is for an injured person to provide a 'full and satisfactory' explanation for their delay.
The chronology of the matter can be summarised as follows:
- The Claimant was injured in the accident causing him to initially take 10 days off work with ongoing symptoms causing intermittent days off work and even a reduction to lighter duties in later years and, fortuitously, a change in employment to lighter work.
- The Claimant did not see the need to obtain legal advice because all his treatment and lost wages were paid by the Workers Compensation Insurer until 2003 when a denial for a treatment caused the Claimant's GP to recommend he seek legal advice.
- The Claimant was advised in 2003 that his entitlements under the workers compensation scheme (in light of his mild symptoms at the time) were, essentially, equivalent to those under the CTP scheme. Further, he was told he was out-of-time for lodging a CTP claim. The Claimant accepted this advice.
- The Claimant's condition deteriorated in 2006 but his solicitor continued to pursue his workers compensation entitlements and never looked back into the Claimant's potential CTP entitlements in his deteriorated condition.
- In 2013, the Claimant's long time solicitor changed and subsequent practitioners in the same firm or other firms he later sought advice from told him he was 'out-of-time' or that it was 'too difficult' to make a CTP claim at that time. The advice of some of those solicitors was before the Court but, importantly, not all the advice the Claimant received was available for scrutiny.
- The Claimant eventually instructed solicitors who took on the CTP claim and he lodged a claim with Allianz in September 2015. His explanation and subsequent explanations were rejected as not 'full and satisfactory' and the Claimant made the application to the Court for determination in January 2017.
- It is pertinent to note that the Claimant was receiving treatment for physical and psychological injuries throughout this period.
Was there a 'full' explanation?
His Honour, Rothman J, found the Claimant's explanation 'full'. The Insurer had been critical of the absence of an explanation in certain periods where the Claimant seemingly did nothing about his claim such as between the date of accident and 2003 when he first obtained advice. However, His Honour said,
For an explanation to be "full", it must explain… all that relevantly happened… [including] the conduct of the plaintiff, [and] his knowledge and beliefs… [In that period] The plaintiff has made clear that… he was working. When he was absent from work, he was paid and he did not seek or obtain legal advice. The absence of further explanation is the result of the fact that nothing occurred. The explanation is full. Whether or not it is satisfactory is [another matter].
The Insurer was also critical of the Claimant's conduct during the period when his condition deteriorated. His Honour said,
When the plaintiff's injuries deteriorated significantly… [his solicitors were made aware but] …No correction to the advice [was given by his solicitors]… this is a full, even if unsatisfactory explanation…
Was there a 'satisfactory' explanation?
His Honour found the Claimant's explanation was satisfactory up to 2013. In the intervening period, as noted above, the Claimant obtained advice from various solicitors but not all of this advice was before the Court to scrutinise. His Honour said,
The absence of any evidence relating to the advice obtained… must lead to the inference that the evidence does not assist the plaintiff… given the inferences that I draw as to the advices received… it cannot be said that the delay experienced… has been satisfactorily explained…
Was the Insurer prejudiced by the delay?
The Court made it clear that any perceived prejudice suffered by an Insurer is not a relevant consideration in determining whether there was a 'full and satisfactory' explanation. The Court said that considerations of prejudice only mattered when considering whether to grant leave to the Claimant to commence court proceedings. Since the Court found the Claimant's explanation unsatisfactory, this question did not arise.
His Honour made comment about the prejudice allegedly suffered by the Insurer. He noted that the Insurer knew there was a potential CTP claim on foot from as early as 2005 when a section 151Z recovery was set in motion by the workers compensation insurer. The Insurer obtained the Claimant's medical files and opened a CTP claim. Nevertheless, the Insurer still rejected the claim in 2015 and argued that it would be prejudiced if the claim were allowed to go ahead.
The court found that the Insurer had not suffered any prejudice.
Why this case is important
This is an extraordinary case because the Claimant experienced mild to severe symptoms on a daily basis for 16 years without lodging a CTP claim and his conduct was very nearly found to be that of a reasonable person in his same position.
The judgment contains a detailed and comprehensive summary of relevant principles including:
- Any prejudice supposedly suffered to an insurer by a Claimant's delay in lodging a claim is not a consideration in determining whether there has been a 'full and satisfactory' explanation.
- If a Claimant's treatment and wages are being taken care of by a workers compensation insurer, absent extenuating circumstances, the delay in obtaining legal advice is likely to be found reasonable.
- Generally, if a Claimant acts in accordance with incorrect legal advice their explanation will be satisfactory.
- The advice obtained in respect of their CTP entitlements will be a key consideration in determining whether a Claimant's conduct was justified in delaying the lodgement of a claim. If the Court is not provided with the advice the Claimant was given, an adverse inference may be drawn, permitting a finding that the explanation is unsatisfactory.