Insurance

The true power of S85B MACA and S6.26 MAIA and ensuring they are effectively utilised

14 June, 2021

Can a Claimant bring a claim multiple times (by lodging the same claim form) in respect of the same cause of action even after the matter is deemed withdrawn in accordance with S85B(3) of the Motor Accident Compensation Act 1999? The NSW Supreme Court recently explored these issues in Wahhab v Insurance Australia Ltd [2021] NSWSC 521.

Principles

The Motor Accident Compensation Act 1999 (MACA) does not allow Claimants to make a claim more than once in respect of the same underlying cause of action, in circumstances where the original claim is deemed withdrawn in accordance with S85B (3).
Claimants can lose their right to take and maintain judicial proceedings at an interlocutory stage of proceedings without a hearing on the merits, where there is wilful non-compliance with statutory time limits.

Background

The subject MVA occurred in March 2016 and liability was admitted. There was an expanse of time where the Plaintiff failed to answer several of the Insurer’s requests for particulars. The Insurer legitimately deemed the claim to be withdrawn (S85B(3) of MACA). However, thereafter, the Plaintiff expressed the desire to pursue his claim.

The Insurer advised the Plaintiff that a CARS 5A would have to be lodged to reinstate the claim (s85B (6) of MACA). Upon conclusion of the special assessment, the CARS Assessor found that the claim should not be reinstated, and the claim remained withdrawn.

The reasons for the CARS Assessor’s decision were as follows:

There was no evidence that the Plaintiff had a reasonable excuse for not providing relevant particulars.
The Plaintiff had not personally provided any explanation for his failure to respond to the Insurer’s numerous requests for particulars.
The explanation by the Plaintiff’s solicitor only covered a short period of time instead of properly explaining the 3 years that had passed. There was no explanation detailing either the Plaintiff or his solicitors’ failure to acknowledge or respond to the Insurer’s seven requests for S85A particulars.
The Plaintiff’s explanation could not be accepted as full until the whole period as required by S66 of the Act was covered.

After this occurred, the Plaintiff’s solicitor re-served the original Claim Form (an identical copy). The Insurer rejected the claim on grounds that the first claim was deemed withdrawn and that a claimant cannot make two claims in respect of the same MVA. Furthermore, the Insurer advised that even if the second claim could be made, the claim was rejected on the grounds that it was made 3 years and 3 months after the MVA and that the Plaintiff had not provided a full and satisfactory explanation for the delay. The Insurer referred to the decision from the CARS Assessor and argued that lodging a second claim does not allow a claimant to sidestep the need to explain that inactivity.

Some time passed and the Plaintiff lodged a CARS2A. The Principal Claims Assessor dismissed the Plaintiff’s CARS 2A based on the original CARS Assessor’s decision, noting that the claim was taken to be withdrawn and could not be re-instated.

The Principal Claims Assessor’s reasons were as follows:

A claimant cannot make a second claim once their original claim was found to be withdrawn.
The Plaintiff ought to have sought judicial review in the Supreme Court if he disagreed with the CARS Assessor’s decision. The Plaintiff did not discharge his duties to provide a full and satisfactory explanation for failure to provide the requested particulars.
Overall, the Plaintiff’s arguments did not support the intention of the Act.

Supreme Court

The Supreme Court dismissed the proceedings for judicial review.

In summary, the Plaintiff’s submissions were as follows:

There was no provision in the Act which prevented a claim from being made more than once. Therefore, the Principal Claims Assessor was obliged to refer the Plaintiff’s claim for general assessment.
The intention of the Act with respect to finalisation of the claim was for it to only resolve either by way of settlement, an award of damages or rejection of an award of damages and proceedings to be commenced in Court.
The terminology used, i.e., ‘deemed withdrawn’ was not final and conclusive, such that it did not terminate the claim as the words ‘determination’ or ‘dismissal’ did. Due to this, all that was withdrawn was a procedural step, where the Plaintiff signified an intention to claim damages by making a claim.

The Defendant’s submissions were as follows:

There is only one claim which is intrinsically linked to the underlying cause of action.
The Plaintiff was attempting to avoid and frustrate a previous decision of the Authority.
The Plaintiff’s submissions were inconsistent with the objects of the Act. That is, to encourage early resolution of claims and provisions concerning the duty to progress claims expeditiously. Furthermore, the Plaintiff did not appreciate the consequences that follow a breach of S85B of MACA.
The Plaintiff had still not provided a full and satisfactory explanation for the failure to provide particulars and there was no evidence that the monetary threshold required by S85B(7) would be satisfied.

The Supreme Court’s decision

Basten J grappled with the question of whether a Plaintiff can make a claim more than once in respect of the same matter.

The Court noted that the Statutory Scheme suggested two answers:

Firstly, the Court noted that the Plaintiff had one claim relating to an incident which occurred at a particular time and place, and once disposed of, there was no power to make the same claim again.

If the claim had been properly made and proceeded through various steps prescribed by the Act and was taken to have been withdrawn, that claim can no longer be referred for assessment. Furthermore, the Court held that the provisions of ss72, 73 and 74 did not envisage repetition. The current matter was not a late claim as the claim was made within six months of the MVA. Instead, the delay was the non-compliance with the later procedures under the Act.

The Court emphasised that sending a claim form multiple times to an Insurer does not constitute the making of a claim on each occasion. In this case the Plaintiff’s request for an assessment assumed that all relevant particulars had been provided. The Plaintiff’s case required that all prior non-compliance with the Act be disregarded. The Court noted that to imply the availability of such a course would be to subvert the scheme of the legislation.

Secondly, the Court acknowledged the difference between a ‘deemed withdrawal’ versus a ‘determination’ or ‘dismissal’.

The Court explained that the difference was explicable on two bases. The first is that no judicial process had been undertaken and secondly there had not been any determination of the merits of the claim. The Court stated that it does not follow that a withdrawn claim somehow remains on foot.

Significantly, the Court noted that the right to take and maintain judicial proceedings is usually constrained by time limits, non-compliance with which can result in the right being lost at an interlocutory stage without a hearing on the merits.

The Court also noted that the meaning of S85B of MACA is clear – if a claim is withdrawn, there is no claim in existence. Therefore, there is no claim which can be referred by either party for assessment. It follows that there is no obligation or power on the part of the Principal Claims Assessor to arrange for an assessment to be undertaken. Therefore, in the current case, there was no claim for referral under S90 of MACA and the decision of the Principal Claims Assessor correctly recognised that.

Jurisdictional Fact

The parties approached the matter on the assumption that the decision of the Principal Claims Assessor not to refer the subsequent claims for assessment and her decision, constituted the record for the purposes of judicial review.

However, the Court noted that it was not clear that the function being exercised by the Principal Claims Assessor dismissing an application for a general assessment, fell under any of the separate limbs of S96(1) of MACA. This meant that the refusal to arrange an assessment under S93 of MACA was not the subject of any dispute resolution mechanism under MACA.

Due to this, it was held that the validity of a refusal to arrange an assessment under S93 of MACA could only be resolved by the Court. The Court took a step further in clarifying that it must be a jurisdictional fact to be determined by the Court in circumstances where the reason for the refusal was that there was no claim in existence.

In this case, ultimately, the Court found that since 2019 there had been no existing claim which could be referred by the Plaintiff for assessment and the failure of the Principal Claims Assessor to arrange for such an assessment was correct.

Why this case is important

This case highlights that there is power behind S85B of MACA and its equivalent in s6.26 of MAIA, as the Court has affirmed that should a claimant fail to comply with statutory requirements in a timely fashion, they may permanently lose their rights to pursue the claim.

The case shows that the Courts will not necessarily tolerate gross non-compliance with statutory requirements by claimants. Therefore, this case could have wide application in other circumstances (outside of requests for particulars) both within the MACA and MAIA framework where claimants are in wilful breach of statutory requirements.

This case underscores the importance, for insurers, of pressing for particulars (S85A MACA and S6.25 MAIA). It is imperative that S85B directions (MACA) and S6.26 notices (MAIA) are sent to claimants during the relevant window where particulars have not been supplied.

Insurers should deem matters withdrawn & close their files if S85B directions and S6.26 notices are not complied with.
Insurers should consider defending reinstatement applications particularly where there is wilful non-compliance with statutory requirements, such as not responding to requests for particulars.
Arguably, this case can be applied in other circumstances where claimants are in wilful breach of statutory requirements.

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Canadian Court elevates thumbs-up emoji to signature status

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After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed. Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph [18], Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). 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Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter. Judgment At paragraph [36], Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship. Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph [63]: "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the dictionary.com definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest. What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.

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