Hickey's Transport Pty Ltd v Gordon  NSWCA 167
Ipp and McColl JJA
- Even where delay is sought to be explained by solicitor error, the explanation will ordinarily not be full unless the claimant also explains his or her state of mind and the role he or she played in the delay.
The NSW Court of Appeal handed down its decision in Hickey's Transport Pty Limited v Gordon  NSWCA 167 on 8 August 2008.
The claimant was injured in an accident on 2 December 2003. In general terms, the claimant attempted to climb into a Volvo prime mover and was injured when he gripped a handle attached to the rear cabin which broke, causing the claimant to fall backwards onto a concrete surface.
A claim form was not lodged with the CTP insurer of the vehicle until 12 January 2005. The insurer denied liability, under s 81, on 18 August 2005 and an exemption certificate was issued by the PCA on 13 September 2005.
Importantly, the insurer served a Section 110 Notice, requiring the claimant to commence court proceedings, on 14 March 2006.
Section 110(2) operated to deem the claim withdrawn if proceedings were not commenced within 3 months of the Section 110 Notice. The claimant commenced proceedings against the manufacturer of the vehicle but failed to name the owner of the vehicle as a defendant.
The claimant successfully applied for reinstatement of his claim before Hungerford DCJ. The defendant appealed from that decision.
Explanation for Delay
Pursuant to s 110(5), a claim can be reinstated if the claimant provides a full and satisfactory explanation for the failure to comply with the Section 110 Notice.
The claimant must explain the whole of the period from the date of the Section 110 Notice and that date of the application for reinstatement and not just the three month period contemplated by s 110(2): McNamara v Fitzgibbon  NSWCA 274.
In this case, the claimant relied upon explanations provided by two legal representatives; namely a law clerk and her supervising partner.
In general terms, the claimant's lawyers stated that the failure to comply with the Section 110 Notice was as a result of their error in failing to include the owner of the vehicle as a defendant in the Statement of Claim. They explained that counsel had drafted the Statement of Claim, the law clerk had checked it and the partner had signed it, yet each had failed to notice the error.
However, both the claimant's lawyers explained that it was always the claimant's intention to pursue a motor accident claim against the owner of the vehicle involved in the accident.
The claimant, himself, provided no evidence to explain the failure to comply with the Section 110 Notice. Rather, it was argued that the failure to comply with the Section 110 Notice was fully explained by the lawyers' error and that nothing the claimant could say would add to that explanation.
Court of Appeal
The leading judgment in the Court of Appeal was delivered by Ipp JA, with whom McColl JA agreed.
Justice Ipp identified a number of anomalies in the explanation provided on the claimant's behalf. Most importantly, Ipp JA noted evidence that the claimant's law firm had communicated doubt to defendant's solicitors as to whether a claim against the owner of the vehicle would be pursued. This doubt was communicated in both a telephone conversation and in written correspondence after the expiry of the Section 110 Notice.
At paragraphs 79 to 81, Ipp JA found that the trial judge erred in finding no real distinction between the evidence given by the defendant's solicitor and the claimant's lawyers, as follows:
"80 There are four basic problems with this reasoning. Firstly, it does not address the evidence of [the partner] that when first instructed, by reason of lack of evidence of negligence, he did not have an unqualified intention to bring proceedings against [the owner of the vehicle]. Secondly, it does not address the fact that counsel drafted a statement of claim only against Volvo, that [the partner] signed that statement of claim and that [the law clerk] looked at it and issued it. Thirdly, it does not address the unequivocal file note and letter of [the law clerk], as supported by the evidence of [the partner], to the effect that in mid-August 2006 [the claimant's lawyers] were still reluctant to commence proceedings against [the owner]. Fourthly, it does not address the notion that [the claimant's lawyers'] desire to make further enquiries to support a notice of motion to join [the owner] to the action was inconsistent with an unqualified intention to sue [the owner].
"81 In my view, the versions of [the law clerk] and [the defendant's solicitor] cannot be reconciled and his Honour was mistaken in deciding to the contrary."
In addition, Ipp JA found that the explanation was also deficient in that:
- No evidence was given by counsel as to why he omitted the owner of the vehicle from the draft statement of claim,
- No explanation was provided by two other law clerks as to their involvement in the failure to comply with the Section 110 Notice,
- It was unclear as to whether the claimant had paid some money into trust as requested by his solicitors in one of the letters in evidence,
- There was no explanation for the inactivity from the 14 March 2006, when the Section 110 Notice was served and 24 November 2006 when the reinstatement application was made.
Ultimately, Ipp JA held that the claimant had not provided a full and satisfactory explanation for the failure to comply with the Section 110 Notice, as follows:
"90 While it is the explanation of [the claimant] and not that of [his solicitors] that is ultimately in issue, where there is no evidence from [the claimant] himself, and inadequate evidence from his legal representatives, it cannot be said that [the claimant] has provided a full and satisfactory explanation for the delay in complying with the s 110 notice.
"91 In the circumstances of this case, I do not think that a full and satisfactory explanation within the meaning of s 66(2) could be given without the testimony of [the claimant]. There are far too many aspects that require proof of [the claimant's] state of mind concerning what needed to happen and what was happening with his claim that could only be proved by [the claimant], himself."
As such, the Court of Appeal allowed the appeal and dismissed the application for reinstatement.
The principles in Hickey's Transport extend beyond cases involving Section 110 Notices and extend to all "full and satisfactory explanation" cases, including late claims.
Even where the central plank of an explanation for delay is error by a lawyer, it is arguable that the claimant's explanation is not full until the claimant explains his or her state of mind and his or her role in the delay.
In this case, for example, whilst the claimant's lawyers said "the intention" was always to pursue a motor accident claim against the owner of the vehicle, there was no evidence as to whether the claimant had provided instructions to pursue such a claim.
For all the Court knew, the claimant had weighed up the advice as to his prospects of success and decided not to pursue such a claim (particularly given the costs implications).
The need for the claimant to provide an explanation was heightened by the anomalies in the explanation provided by his solicitors.
At paragraph 59, Ipp JA made some further general observations as to the need for a claimant to provide an explanation, even where the primary explanation is that the delay was caused by solicitor's carelessness or neglect:
"59 The actions (and inaction) of [the claimant's solicitors] are undoubtedly a relevant part of the explanation for the delay in the present case. As Basten JA pointed out [in Smith v Grant  NSWCA 244], s 66(2) does not require a claimant to "justify" the conduct of a solicitor whose conduct causes delay. Of course, however, as his Honour notes, the conduct of the solicitor may be relevant to determining whether a reasonable person in the position of the claimant would have been justified in experiencing the delay. Where the delay is not insignificant, and where the conduct of claimants' solicitors has obviously been careless or slack, one would ordinarily expect the claimants concerned to explain what they knew of that conduct, whether they understood its legal implications, whether they questioned the solicitors about what was taking place and whether they themselves, in the particular circumstances, took reasonable steps to combat the delay."
As such, generally speaking, even where delay is allegedly caused by solicitor error, an explanation will not be full unless both the claimant and his solicitors provide an explanation. Once the explanation is provided, an assessment can then be made as to whether a reasonable person in the claimant's position would have been justified in experiencing the same delay. In order words, would a reasonable person in the Claimant's position have allowed his solicitors' neglect to cause the relevant period of delay?
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