Australia: "Full & Satisfactory Explanation for Delay, Revisited"

Curwoods Case Note
Last Updated: 12 January 2013
Article by Renée Sadler and Terry O'Riain

Lyu v Jeon [2012] NSWCA 446

Judgment date: 21 December 2012
Jurisdiction: New South Wales Court of Appeal1

In Brief

  • It is not relevant to question whether a delay was prejudicial to an insurer when determining whether an explanation is "full and satisfactory" in applications seeking leave to make a late claim and/or commence proceedings out of time under the Motor Accidents Compensation Act (the Act).
  • Behaviour "calculated to mislead or known to involve falsehood" would not constitute conduct of a "reasonable person", as is required for an explanation to be found satisfactory pursuant to s 66(2) of the Act.


The claimant was seriously injured when the insured, whilst intoxicated, drove a motor vehicle over her right foot. The claimant and the insured were South Korean compatriots studying physiotherapy in Australia.

The insured was fearful that the claimant's accident could lead to her being charged by the police. It was therefore agreed that the claimant would tell the hospital that she was injured as a result of falling down stairs. Although the hospital staff told the claimant that they doubted that she had been injured in that way, the claimant, with the encouragement of the insured, persisted with the version that she fell down the stairs. The insured also agreed to meet the claimant's medical expenses.

The claimant required surgery and was hospitalised for 3 weeks. The claimant asserted that she failed to arrange for a claim to be made due to her being heavily sedated and in pain.

Further, the claimant gave evidence that whilst she was in hospital she had been in contact with her mother in South Korea who had encouraged her to make a claim against the motor accident insurer. The claimant also gave evidence that, on 2 occasions, she had spoken to the insured about making a claim on her motor accident insurance. It was not contested that the insured told the claimant she could not claim because she had already told the hospital and her own insurer that the accident happened as a result of a fall. The insured continued to make intermittent payments to the claimant to cover her medical expenses.

The claimant did, however, around October 2007, make a claim on her overseas health care insurer (OSHC), on the basis that she had been injured as a result of a fall. The claimant was aware at the time she made the claim on OSHC that, if she stated she had been injured as a result of a motor vehicle accident, she would have been required to make a claim on the vehicle's insurer and would not have been eligible to overseas health care insurance.

In September 2008, the claimant sought legal advice from a Korean-speaking solicitor. The claimant was advised to talk to the insurer direct if she did not want her friend to be prosecuted. Instead, the claimant spoke to the insured again who repeated the earlier assertion that the CTP insurer had already denied the claim.

In November 2009, the insured told the claimant that she could no longer pay all the claimant's continuing medical expenses. The claimant sought further legal advice and thereafter lodged a claim.

Her Honour Judge Sidis of the District Court granted the claimant an extension of time to make a late claim and to commence proceedings out of time, being satisfied, inter alia, that the explanation was full and satisfactory. The judge's justification was as follows:

"I considered [sic] that a reasonable person who was a young person of 24, living at a distance from her native country and family, unfamiliar with the language and the law relating to personal injury compensation in a foreign country, would agree and would be justified in agreeing to protect a close friend who was also in a foreign environment from potential criminal conviction, deportation and exclusion from her field of study. A reasonable person in this position would, in my view, be fortified by the [applicant's] agreement to meet all medical expenses and would be affected by the shock and pain of the serious injuries suffered.

[32] The [respondent's] continuing delay in seeking independent legal advice from lawyers specialising in personal injury law was the result of misinformation provided by the [applicant].

[33] Ultimately the period of delay was not excessive. As already noted, there was no suggestion of prejudice to the [applicant], nor was it suggested that the [applicant] could not secure a fair trial of the issues. The [respondent] suffered serious injuries to her foot with potential ongoing consequences to her career in physiotherapy."

The insurer sought leave to appeal on the basis that her Honour did not take into account the conversation between the claimant and her mother that she should make a claim whilst she was in hospital; that she erroneously concluded the claimant failed to seek legal advice as a result of being provided with misinformation by the insured; that she erroneously concluded the claimant did not deliberately deceive her overseas health care insurer; and that she wrongly focused upon whether the delay ought to be excused because there was no suggestion of prejudice.

Court of Appeal

The Court of Appeal allowed the appeal and ordered the claimant to pay the insurer's costs of the appeal.

Meagher JA, with whom Macfarlan JA and Davis J agreed, found that a reasonable person in the claimant's position would not have delayed notifying the CTP insurer of a claim beyond late 2007.

It was found that, given the serious nature of the claimant's injuries and the absence of any payment from an insurer (prior to the OSHC claim that is), the "overwhelming likelihood is that a reasonable person in her position would then have been advised to and would have notified the insurer".

His Honour stated this would have led to the claimant making a claim within 6 months following the accident, but there was a delay for a further 2 years. It was found the delay occurred because the claimant was in receipt of payments from OSHC and had an arrangement with the insured in relation to payment of the balance of the medical expenses.

He found a reasonable person in the position of the claimant would not have joined in the making of a false claim.

In relation to the question of prejudice, the Court of Appeal referred to the judgment of Gleeson CJ in the decision of Russo v Aiello2:

"... what the Act requires is justification for delay; not demonstration that the delay caused no harm ... The focus of the statutory concept of a satisfactory explanation is upon justifying delay, rather than excusing it. It is one thing to say that conduct is justified by reference to the way in which a reasonable person in the position of a claimant could have been expected to behave. It is another thing to say that delay ought to be excused because it caused no identifiable harm to an insurer."

Meagher JA stated it was not relevant for her Honour Judge Sidis to take into account there was no prejudice to the insurer when determining whether the explanation was satisfactory.


  • When considering whether an explanation for delay is "full and satisfactory", as is required by s 66(2) of the Act, it is not relevant to consider any lack of prejudice to an insurer if the late claim or late proceedings were to be allowed. The test remains whether the delay was "justified", as determined by the High Court in Russo v Aiello.
  • If there is an attempt to make a late claim or commence proceedings out of time in a situation where the claimant has previously made a false allegation as to the circumstances of the accident, it will be difficult for that claimant to prove his or her conduct was "reasonable" when considering whether a satisfactory explanation has been provided.


1 Macfarlan and Meagher JJA; Davies J, [2012] NSWCA 446
2 [2003] HCA 53; 215 CLR 643 at [7], [73]

Ranked No 1 - Australia's fastest growing law firm' (Legal Partnership Survey, The Australian July 2010)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.