Judgment date: August 2011

Davis v Moss (Unreported)

District Court of New South Wales1

In Brief

In order to rely upon a Section 110 Notice as a bar to commencing proceedings, it has been held that an insurer must be able to establish that the claimant failed to commence proceedings within 3 months of personally receiving the Notice.

Background

The District Court recently handed down judgment in a motion to reinstate proceedings where the claimant failed to commence within the time required by a Section 110 Notice issued by the insurer.

Section 110 relevantly states:

  1. The insurer of a person against whom a claim is made may give the claimant notice requiring the claimant to commence court proceedings in respect of the claim if:

    1. the claimant has been entitled to commence the proceedings for a period of at least 6 months, and
    2. at least 18 months have elapsed since the date of the motor accident to which the claim relates.
  2. The claimant must comply with the notice within 3 months after its receipt.
  3. If the claimant does not comply with the notice as required by this section, the claimant is taken to have withdrawn the claim.

[emphasis added]

In an ex tempore judgment allowing the motion, Charteris DCJ held that the Section 110 Notice was not valid unless there is proof of receipt by the claimant himself or herself.

Implications

This case provides a strong indication by the District Court that it expects insurers to serve any Section 110 Notice personally on the claimant. The insurer will, of course, also have to serve a copy upon the claimant's solicitors (if represented). This decision is consistent with the subsequent provisions which make it incumbent upon a claimant, who is seeking to reinstate proceedings, to provide a full and satisfactory explanation for the delay.

It is noted that the wording of s 110 contrasts to other provisions in which the insurer may issue a notice, such as s 81 (in respect of liability) and s 85A (in respect of the provision of particulars), which emphasise the time in which the insurer must give notice rather than the time in which the claimant receives notice. It is further noted that those provisions also require notice to be given to the claimant which, according to the reasoning in Davis v Moss, would require the notice to be served directly upon the claimant as well as his or her solicitors.

While this decision may not be followed by other courts, it would be prudent that insurers nonetheless attend to personal service of Section 110 Notices unless and until the District Court or a higher court gives an indication to the contrary.

As a general principle, it is also recommended that a Section 110 Notice not be issued until at least one week after the conditions in subss 110(1)(a) and (b) have been met in order to avoid any misunderstanding as to when the prescribed period expired.

Gerry Tzortzatos

Curwoods Lawyers

1 Charteris DCJ

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