Let’s get to the point. What’s it really worth?

Exploring the s 109 monetary threshold – Kaihee Bawoh v Eddie Coates1

There needs to be a sound evidentiary basis for a claim to be made so that the “real chance of success” can be properly evaluated on the basis of the evidence taken at its highest.

The issues

The plaintiff was involved in a motor vehicle accident on 3 July 2009 when she suffered injury after being struck by the defendant’s vehicle whilst on a pedestrian crossing. The plaintiff had come to Australia from Liberia in 2007 after successfully claiming asylum.

Following the accident the claimant consulted Brydens Compensation Lawyers on 3 June 2010 and lodged the claim form on 27 August 2010. The insurer for the defendant rejected the claim on 17 September 2010, and leave to proceed with the late claim was granted on 2 February 2012.

The plaintiff made an application for general assessment on 3 July 2012 (3 years after the accident), but it was dismissed by the Claims Assessment and Resolution Service (CARS) on 30 August 2012 on the basis that it was made invalidly. A further application was made on 30 August 2012.

The matter was eventually assessed at CARS on 27 October 2014 and a certificate issued by the Assessor on 20 February 2015.

The plaintiff did not accept the CARS award and filed a statement of claim in the District Court on 6 May 2015. The insurer was of the view that proceedings were commenced outside the limitation period and she required leave of the court to commence proceedings (s 109 of the Motor Accidents Compensation Act 1999).

The motion

The plaintiff’s motion was heard before His Honour, Judge Knox.

Section 109(3) provides:


The leave of the court must not be granted unless:

  1. The claimant provides a full and satisfactory explanation to the court for the delay, and
  2. The total damages of all kinds likely to be awarded to the claimant if the claim succeeds are not less than 25% of the maximum amount that may be awarded for non-economic loss under section 134 as at the date of the relevant motor accident.

The plaintiff was put to proof regarding her explanation for the delay. The application was vigorously opposed on the question of damages.

The decision

His Honour found that a full and satisfactory explanation had been provided. He also undertook a useful review of the law relating to assessing damages pursuant to s 109(3).

There was no contention that having regard to when the accident occurred the plaintiff must establish that her damages were likely to exceed $97,500 (threshold amount).

In considering the question of what was “likely” for the purposes of s 109(3)(b) counsel for the defendant argued that primacy ought to be accorded to the assessment reports of the Medical Assessment Authority. Not only with respect to findings in relation to whole person impairment to which the court must be bound, but also persuasive force ought to be given to determinations in relation to other matters they dealt with, including causation, diagnosis and consideration of the degree of care required. Counsel cautioned against reliance on the plaintiff’s qualified experts when considering the plaintiff’s claim at its “highest” in circumstances where they had not been provided with all relevant treating records, in particular those revealing relevant pre-accident health complaints.

Considering relevant authorities2, His Honour noted that

“[t]he relevant standard is whether I consider the material taken at its highest indicates a “real chance” or a “real prospect” of success. This does not mean that any estimate of damages should be accepted on an uncritical basis. There needs to be a sound evidentiary basis for a claim to be made so that the “real chance of success” can be properly evaluated on the basis of the evidence taken at its highest”.

The plaintiff particularised a claim amounting to almost $600,000 for the purposes of the application, which was twice as much as that claimed in her CARS submissions. His Honour was of the view that the plaintiff’s claim at its “highest” was only $150,000. He considered that the plaintiff’s claim was “best described as ambitious”, particularly having regard to the plaintiff’s lack of education and work history, language skills and her family situation in relation her domestic assistance claim.

His Honour expressed significant concern that the damages ultimately awarded could be consumed due to mounting legal costs. As such he made an order that parties participate in a mediation.

Don’t ignore the monetary threshold

On its face s 109 attempts to limit access to the courts with respect to small claims in which there has been a long delay for which there has been no proper explanation. However, in circumstances where it is so rare that these claims fail, in practice it takes on more of a complexion of an administrative function, particularly where it is asserted that the delay was caused by inadvertence on the part of the plaintiff’s solicitor2. The focus of s 109 applications has tended to be on delay rather than damages, probably because most insurers assume that the plaintiff’s case taken at its “highest” will easily satisfy the court that it meets the threshold amount.

This decision is a reminder that in appropriate cases the court will give serious consideration as to whether the s 109 damages threshold has been met. It highlighted a clear concern by the court about the additional legal costs incurred by attempting to further agitate a case where there were legitimate questions about whether it met the threshold damages requirement.

It is also a cautionary tale for plaintiffs. A plaintiff is penalised if they fail to better their CARS award by prescribed amounts4 and incur additional legal costs in running the s 109 application and the ultimate hearing. All the while party/party costs remain regulated unless the plaintiff convinces the court it is an exceptional case and there would be substantial injustice should costs remain regulated5. The plaintiff was unable to convince the court in this case. Even if the plaintiff succeeds in making their s 109 application, for the plaintiff it could ultimately be a Pyrrhic victory.

It is hoped that the mediation will successfully resolve this claim at an earlier time than was otherwise likely. It is expected that Knox DCJ’s comments on damages may be of some assistance in this regard.

Defendants are encouraged to bear in mind the damages threshold component of s 109. At its “highest” is the plaintiff’s claim plausible, or simply fanciful? Strongly agitating this issue may assist in resolving otherwise difficult and potentially long running and costly claims.


1His Honour Judge Knox unreported judgement 16 December 2015
2See Dijakovic v Perez [2015] NSWCA 174 [120] & Sundher v Darwich [2010] NSWCA 195 [36] – [37].
3Smith v Grant [2006] NSWCA 244 [74].
4See s 151(2)(a) of the Motor Accidents Compensation Act 1999.
5Section 153 of the Motor Accidents Compensation Act 1999.

Contact

Nathan Kennedy

Nathan Kennedy

Partner, Head of Pro Bono & Community and ESG Co-Lead

Nathan is the firm's Head of Pro Bono & Community. His practice covers employment, administrative law and human rights.

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