Nominal defendant: strict compliance works both ways

Sanders v The Nominal Defendant [2011] QSC 391

In circumstances where the Nominal Defendant raised non-compliance based on the failure to identify the provider number in the medical certificate, Boddice J found that their failure to further respond at the expiration of the time period pursuant to s. 39(1)(b) of the Motor Accident Insurance Act 1994 was a failure in their statutory obligation and hence the claim was deemed compliant:

[22] The statutory regime imposed in respect of claims made for damages for personal injuries requires strict compliance with the obligations under the Act. The specific terms of s 37(3) and s 39(8) of the Act are consistent with the legislature placing claims for damages in respect of unidentified vehicles into a special category, justifying an even stricter regime in respect of compliance with the obligations of a claimant.[8] Such a conclusion is consistent with the legislature having given explicit recognition of the position of the Nominal Defendant as the steward of public moneys.[9]

[23] A strict and literal interpretation of the requirements of the Act was endorsed in Miller v Nominal Defendant.[10] Davies JA (with whose reasons Williams JA and Mackenzie J generally agreed) said:

“[39] Here both the creation of the right to sue the Nominal Defendant and the barring of the right or any claim based on that right are contained in the same Act. There are, moreover, two other indications that, so far as claims against the Nominal Defendant are concerned, it was the intention of the Act to terminate the right to make any such claim if notice is not given within nine months after the motor vehicle accident.

[40] The first of these is that s 37(3), in terms, bars not just the action but the claim on which it is based. And the second, even stronger indication, is that, as mentioned earlier, s 39(8) provides that, unless such notice is given within nine months after the motor vehicle accident, the Nominal Defendant cannot waive compliance with the requirement to give notice within that time, nor can the court give leave to bring a proceeding in a court despite the non-compliance. These provisions appear to be intended not merely to bar an existing right of action but to impose a condition which is of the essence of the right, created by the Act, to sue the Nominal Defendant. Reading s 37(3) with s 39(5) and s 39(8) that alternative condition, it seems to me, is that a notice is given within nine months of the motor vehicle accident, or that, within that period, compliance with the requirement for giving such notice is waived or the court gives leave to bring a proceeding despite the non-compliance. It follows that s 57(1), in my opinion, has no application.”

[24] The mandatory statutory obligations imposed by s 39 of the Act are not restricted to a claimant. Section 39(1) of the Act specifies in mandatory terms the steps which must be taken by an insurer in response to a notice or purported notice given by a claimant. Section 39(3) of the Act provides that if the insurer does not respond to the notice “within 14 days after receiving it”, the insurer is conclusively presumed to be satisfied that notice has been given as required under Division 3. In Haydon v Gread,[11] Mackenzie J said:

“[21] S39(3) provides that if a notice of claim is given under Division 3 or purportedly given under it and ‘the insurer does not respond to the notice within one month after receiving it’ the insurer is conclusively presumed to be satisfied that notice has been given as required under Division 3. Whilst s39(3) does not reproduce the words of s39(1) the words ‘does not respond’ can only sensibly refer to invoking the procedure under s39(1). Where that has not been done there is a statutory estoppel against denying that the notice has been given as required.

[22] If that seems to encourage formality and discourage informal resolution of issues concerning compliance, it is at least consistent with the emphasis in the Act upon the need to follow the prescribed steps in a timely way to facilitate prompt resolution of claims. The particular procedure seems to be designed to promote speedy resolutions of arguments about compliance with the requirements of the Act and Regulations in a notice given or purportedly given under s37.”

[25] I respectfully agree with Mackenzie J that the words “does not respond” in s 39(3) can only sensibly refer to invoking the procedure under s 39(1). If the mandatory requirements of s 39(1) are not followed by the insurer, there is a statutory estoppel against denying that the notice has been given as required.

[26] The second letter was given within 14 days of the receipt of the applicant’s notice. It stated the respondent was not satisfied the applicant had given a compliant notice, and that the respondent did not waive the non-compliance. The letter identified the non-compliance, and gave the applicant one month to comply. Whilst it did not specify the reasonable action to be taken, the specific notice of non-compliance identified the action to be taken, such that further specification was unnecessary. The second letter satisfied the requirements of s 39(1)(a)of the Act.

[27] That was not the respondent’s only obligation under s 39(1) of the Act. Where, as here, the insurer is not prepared to waive compliance, the Act imposes upon the insurer a further obligation. Within 14 days after the end of the initial reasonable period, the insurer must give the claimant a written notice stating that it is satisfied the applicant has complied with the relevant requirements, is satisfied with the action taken by the applicant to remedy the non-compliance, or waives the non-compliance in any event, or stating that the insurer is not satisfied that the complainant has taken reasonable action to remedy the non-compliance giving full particulars of the non-compliance and of the applicant’s failure to remedy it.[12] The respondent gave no such notice. As such, it failed to comply with its statutory obligation.

[28] The respondent contends that as the applicant did not advise the respondent he had taken steps to obtain the doctor’s provider number, there was no requirement for the respondent to send a further notice pursuant to s 39(1)(b) of the Act. A plain reading of s 39(1)(b) does not support such a contention. Subsection (1)(b) is not conditional on a claimant corresponding with the insurer in response to the initial notice of non-compliance given under s 39(1)(a) of the Act. It is expressly framed as operating where the insurer is not prepared to waive compliance “with the requirements in the first instance”. In that event, the insurer is required to give a further written notice, within 14 days after the end of the period specified in the initial notice of non-compliance.

[29] The requirement for a second notice, irrespective of whether there has been a response by the claimant to the first notice, is understandable. Non-compliance with the Act by a claimant has drastic consequences. The shortness of the time limits imposed are equally understandable. They are consistent with the regime of prompt notice, and prompt response to outstanding requests. The requirement for a further notice ensures the claimant is aware of the insurer’s continued insistence on compliance, or of its waiver of any non-compliance.

[30] The respondent contends that the default provision in s 39(3) of the Act only operates if a notice is not given pursuant to s 39(1)(a) of the Act. That submission, if correct, would mean there was no consequence for a failure by an insurer to meet its statutory obligations other than when it failed to respond at all to the notice of claim within 14 days. Such a conclusion does not sit with the mandatory nature of the insurer’s obligations under s 39(1) of the Act as a whole. The preferable interpretation, and the one I adopt, is that the reference in s 39(3) to “does not respond within 14 days” is a short form reference to a response in accordance with s 39(1) as a whole.

Conclusion

[31] The respondent did not follow the statutory requirements of the Act. Its failure to do so means it did not respond in accordance with the Act. The failure to respond to the notice as required by the Act renders the respondent conclusively presumed to be satisfied that the notice was given as required under Division 3. The respondent is statutorily estopped from denying that the notice has been given as required. Notice having been given, the applicant’s claim is not barred by s 37(3) of the Act. Section s 39(8) therefore has no application.

[32] This conclusion is not inconsistent with the strict interpretation endorsed by the authorities, having regard to the unique position of the Nominal Defendant and its obligation to protect public moneys. It would be an odd result if a claimant could lose a right to claim, where the claimant has given notice under the Act but the Nominal Defendant did not comply with its obligations to respond to the notice as required by s 39(1)(b) of the Act. This is particularly so where, as here, the respondent, after giving the first notice, proceeded to exchange information with the applicant in accordance with the Act, and expressly stated so in its correspondence.

Brisbane Barrister – David Cormack

 

 

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