Australia: Time Runs Whilst Late Claim Dispute Assessed

Last Updated: 9 July 2009
Article by Peter Hunt

Paice v Hill 2009 NSWCA 156

Allsop P, Giles and Ipp JJA

In Brief

  • For the purpose of s 109(2) of the Motor Accidents Compensation Act 1999, time on the three year limitation period does not stop running in respect of an Application for Special Assessment under s 96.
  • Time on the three year limitation period in s 109 also does not stop running in respect of a defective Application for General Assessment or a defective Application for Exemption.


The NSW Court of Appeal handed down its decision in Paice v Hill on 7 July 2009.

The case deals with the construction of s 109(3) of the Motor Accidents Compensation Act 1999 and, in particular, whether time stops running on the three year limitation period when an Application for Special Assessment is lodged under s 96 of the Act. Section 109(2) reads:-

"Time does not run for the purposes of this section from the time that a claim has been referred to a Claims Assessor for assessment and until two months after a certificate as to the assessment or exemption from assessment is issued".

The critical issue is whether an Application for Special Assessment of a "dispute" under s 96 constitutes a referral "for assessment" for the purposes of s 109(2).

In this matter, the claimant was injured in a motor accident on 9 June 2004. Proceedings were commenced in the District Court of NSW, without leave, on 6 June 2008, approximately four years post accident.

The claimant argued, however that there were two periods during which time did not run for the purpose of the three year limitation period:- "

  • 1 June 2007 to 11 February 2008 – an Application for Special Assessment of the late claim dispute was lodged on 1 June 2007. A Certificate was issued on 12 December 2007 certifying that a late claim could be made. The two month period expired on 11 February 2008.
  • 29 January 2008 to 7 March 2008 – On 29 January 2008, the claimant lodged an Application for Exemption under s 94 of the Act. On 8 February 2008, the Application was rejected as being incomplete. A fresh, compliant Application was lodged on 7 March 2008.

At first instance, Garling DCJ found that time had stopped running during the disputed periods and, as such, leave to commence proceedings was not required. The insurer appealed from his decision.

Court of Appeal

The leading judgment in the Court of Appeal was delivered by Ipp JA, with whom Allsop P and Giles JA agreed.

Special Assessment

On the first issue, Ipp JA held that time did not stop running on the three year limitation period from the date the Application for Special Assessment was lodged under s 96. At paragraph 41, Ipp JA reasoned as follows:-

"Under s 109(2), time did not run for the purposes of s 109 from the time that "a claim" was referred for assessment. This provision is significant in the present context as s 94 concerned (as s 94(1) provided) only "a claim referred for assessment". S 96, on the other hand, concerned "disputes", only. Thus, the language of the three sections prima facia tends to support the defendant's argument (at s 109(2) concerns claims – as does s 94 – while s 96 concerns disputes)".

The claimant argued that a construction of the Act which resulted in time not stopping on the limitation period, whilst a s 96 dispute was being assessed, would be unfair to the claimant given that, where the claim was made very late, there was no opportunity to avoid becoming out of time to commence proceedings.

However, Ipp JA dismissed these arguments. In summary, at paragraph 61, His Honour reasoned:-

"In my opinion, no significant weight attaches to the opportunities that, according to [Counsel for the claimant], the MACA provided to insurers to act in an obstructive way in cases where a claimant fails, in terms of s 72, to make a claim timeously. In the first place, the claimant can avoid that situation by making the claim in good time. I would infer for the MACA as a whole that this is precisely the conduct on the part of claimants that the MACA wishes to induce and encourage. In the second place, save for the possible instance where the claimant has not provided the insurer will all relevant particulars about the claim, the claimant would be able to stop time running (despite any Assessment Under s 94. For the reasons I have given, I do not accept that the costs and inconvenience in making a s 94 General Application negate the relevance of the existence of the right to make such an Application to the construction exercise required.

As such Ipp JA held that an Application for Special Assessment does not stop time running on the three year limitation period.

Defective Applications

With regard to the second period in dispute, Ipp JA was adamant that an incomplete or defective Application for Assessment or Exemption did not operate to suspend time under s 109(2).

At paragraph 81, His Honour reasoned:-

"It would not be consistent with the objects of the MACA if Chapter 8 were to be construed as meaning that a failure to comply with these requirements ...did not result in invalidity of the Application. On that construction, a claimant could cause time to be suspended simply by submitting a totally incomplete form to the Authority. This would be fundamentally inconsistent with the objects of the legislation".

Justice Ipp therefore held that only a valid Application operates to suspend time running on the three year limitation period.


As such, the Court of Appeal found that time was not suspended during the disputed periods and leave to commence Court proceedings was required. The Appeal was therefore allowed and the lower Court proceedings dismissed.


Limitation Period

The Court of Appeal decision in Paice v Hill confirms that time on the three year limitation period only stops running for the assessment of an Application for General Assessment or an Application for Exemption.

Time does not stop running whilst a procedural dispute is assessed under s 96 by way of Special Assessment.

Equally, the claimant cannot stop time running on the limitation period by lodging an incomplete Application for General Assessment or an incomplete Application for Exemption. For example, if an Application for General Assessment fails to provide a schedule of damages or witness statements, the Application may be rejected by the authority and the limitation period continues to run.

There is nothing in the October 2008 amendments to the Act which would alter the Court of Appeal's reasoning on these issues.

Pre-CARS Claims Procedure

Whilst the decision provides good clarity on these issues, we note the observations made by Ipp JA at paragraph 53. In that paragraph, Ipp JA made the following observations:-

"There is a basic flaw in this scenario. In my opinion, an insurer would not be entitled to avoid its duty to make an offer of settlement under s 82 on the basis that a full and satisfactory explanation for delay had not been provided. Under s 82, the duty of an insurer to make a reasonable offer of settlement arose within one month after the injury had stabilised (s 82(1)(a)) or within two months after the claimant had provided the insurer all relevant particulars about the claim (s 82(1)(b)). The duty of an insurer under s 82 was not predicated on the existence of a claim that was not a late claim or on the provision of a full and satisfactory explanation for any delay in making the claim.

[Counsel for the claimant], indeed, later accepted (correctly in my view) that it would always be open to a claimant to cause time under s 109 to be suspended by making a General Application for an Assessment of the Claim under s 94 (that would be irrespective of whether the dispute concerning the provision of a full and satisfactory explanation for delay had been resolved)".

In other words, Ipp JA was of the view that the general claims procedure continues to operate even though the claim is late and even though there is a dispute as to whether or not the claimant has a full and satisfactory explanation for delay.

Provided the claimant provides full particulars of the claim, an Application for General Assessment (or Exemption) may be lodged even before the Application for Special Assessment of the s 96 late claim dispute (or simultaneously). The Application for General Assessment (or Exemption) would operate to suspend the three year limitation period notwithstanding the outstanding late claim dispute.

However, note that Ipp JA was considering the form of the Act which existed prior to the October 2008 amendments.

For claims made after 1 October 2008, s 73(3) reads:

(3) If a late claim is made, the claim cannot be referred for assessment under Part 4.4 unless:

(a) the insurer has lost the right to reject the claim on the ground of delay, or

(b) a claims assessor has, on the assessment of a dispute as to whether a late claim may be made in accordance with this section, assessed that the claimant has a full and satisfactory explanation for the delay in making the claim, or

(c) the claim is referred only for a certificate of exemption from assessment under Part 4.4.

Accordingly, where the late claim is made after 1 October 2008, the claim can not be referred for a General Assessment until the late claim dispute has been resolved in the claimant's favour. The result is that the three year limitation period continues to run whilst the late claim dispute is being assessed.

However, on the construction of the Act found by Ipp JA, a claimant may lodge an Application for Exemption, provided the time limits are satisfied, notwithstanding a pending Special Assessment of the late claim dispute.

On this scenario time will stop running on the three year limitation period when the Application for Exemption is lodged.

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.

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