The New South Wales (NSW) Court of Appeal's ruling in Dahdah v Witte offers further insight into what constitutes a "full and satisfactory explanation" in motor vehicle accident claims in NSW. Although the decision concerns the Motor Accidents Compensation Act 1999 (NSW) (MACA), it is equally relevant to similar provisions in the Motor Accidents Injuries Act 2017 (NSW) (MAIA).
Background
Mr Dahdah was involved in a motor vehicle accident on 18 April 2017 due to the negligence of the defendant.
As a result of the accident, he reported severe neck pain, stiffness, and numbness extending into his hands in the years following the accident. On 24 October 2019, approximately 2 and a half years after the accident, Mr Dahdah told his general practitioner about the accident and his ongoing symptoms. He had initially expected that his symptoms would subside.
Mr Dahdah made a personal injury claim with the relevant insurer GIO, on 2 November 2019. The claim was made late, as it was submitted more than 2 and a half years after the accident (see section 72 of the MACA).
GIO initially rejected the claim, arguing that Mr Dahdah had not provided a full and satisfactory explanation for the delay, as required by sections 72 and 73 of the MACA (equivalent to sections 6.13 and 6.14 of the MAIA). After Mr Dahdah provided additional information, GIO accepted liability on 12 February 2020. He then waited for GIO to undertake relevant investigations, and make a reasonable settlement offer in accordance with statutory requirements.
Following receipt of a medical report commissioned by GIO, Mr Dahdah sought legal advice from his son, a practising solicitor (but not a specialist in personal injury). His son, acting on Mr Dahdah's instructions, rejected a settlement offer from GIO in March 2021. The claim was subsequently assessed by the Personal Injury Commission (PIC) in May 2022. Mr Dahdah rejected the PIC award and commenced proceedings in the NSW District Court on 2 June 2022.
District Court proceedings
Mr Dahdah required leave under section 109(3) of the MACA to proceed, as the accident occurred more than three years before filing the statement of claim. GIO opposed the grant of leave.
The Primary Judge refused to grant leave, determining that Mr Dahdah had not provided a full and satisfactory explanation as required by section 66(2) of the MACA. The Primary Judge concluded that a reasonable person in Mr Dahdah's situation would not have experienced the same delay, especially given that his son was a practising solicitor.
Court of Appeal proceedings
Since the District Court's decision was interlocutory, the application for leave to appeal was granted.
White JA, with Mitchelmore JA and Griffiths AJA concurring, allowed the appeal.
Key findings included that:
- An explanation for delay is "full" if it provides a thorough account of a claimant's actions, knowledge, and beliefs from the accident date until the explanation is provided. The unchallenged accounts from Mr Dahdah and his son met this requirement.
- A delay explanation is "satisfactory" if at least one hypothetical reasonable person might have experienced the same delay.
The Court recognised that after GIO accepted the late claim and admitted liability, Mr Dahdah reasonably believed no further steps were necessary except waiting for the settlement offer. This was deemed reasonable despite his son being a solicitor.
A notable issue was whether Mr Dahdah could maintain client legal privilege while providing a full and satisfactory explanation. The Primary Judge ruled he could not, but the Court of Appeal disagreed. It found that asserting client legal privilege does not negate the requirement for a full and satisfactory explanation.
The Court also provided guidance on the damages threshold in leave applications. Under section 109(3)(b) of the MACA and section 6.32(3)(b) of the MAIA, leave is not granted unless the damages likely to be awarded exceed a prescribed threshold. The Court clarified that "likely" means a "real or substantial chance" rather than a probability above 50%.
This decision is significant for interpreting "full and satisfactory" explanations under several sections of the MAIA, including section 6.13 regarding the time for making claims for statutory benefits, section 6.14 regarding the time for making claims for damages, section 6.26 regarding the consequences of failing to provide relevant particulars of a claim for damages and section 6.32 regarding the time limitations on commencing court proceedings.
The Court's stance on client legal privilege in the context of providing full explanations is particularly noteworthy. Insurers often argue that without full access to prior legal advice, an explanation cannot be deemed full or satisfactory. However, this decision supports a claimant's right to withhold privileged communications while still meeting the explanation requirements.
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