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14 March 2014

Nominal Defendant wins recovery test case on limitation periods

A recent decision of Judge Dorney QC of the Queensland District Court has clarified the limitation period for recoverable sums under section 60 of the Motor Accident Insurance Act 1994 (Qld) (‘MAIA’).

Nominal Defendant v Star Motorcycles Pty Ltd & Anor [2014] QDC 41

A recent decision of Judge Dorney QC of the Queensland District Court has clarified the limitation period for recoverable sums under section 60 of the Motor Accident Insurance Act 1994 (Qld) (‘MAIA’).

By way of background, on 15 November 2003 a motorcycle collision caused an injury to the claimant resulting in the original personal injuries action. The rider of the other motorcycle was an employee of Star Motorcycles, and was riding an unregistered motorcycle that was owned by his employer. Nominal Defendant paid damages to the claimant for his injuries and sought to recover that amount from Star Motorcycles Pty Ltd.

The application concerned whether the Nominal Defendant’s claim, or part of it, was statute barred. The argument centred on whether the Nominal Defendant’s cause of action accrued solely upon first reasonably incurring specific costs in relation to the personal injuries claim, or whether there were successive causes of action for such costs as each individual cost was incurred.

In support of a single cause of action, the English Court of Appeal decision of Legal Services Commission v Rasool [2008] 3 All ER 381 was raised. The issue in that case was whether the Legal Services Commission had a claim that was statute barred under similar legislation to that of Queensland. The outcome depended upon whether time began to run from the date of the revocation of the relevant legal aid certificate, or from the date of assessment of costs, which determined the recoverable amount. The former meant the claim was barred and the latter meant the claim had not expired.

Ward LJ thought it was important that the words used in the regulation that founded the recovery were ‘the costs paid or payable’. An extract was relied upon from Nourse LJ in Hillingdon London Borough Council v ARC Ltd [1999] Ch 139, which noted it was established by authority that a cause of action for a sum recoverable by virtue of an enactment ‘accrues’ notwithstanding that it remained to be quantified.

Dorney DCJ thought the point of distinction between Rasool and the present case was that Ward LJ could see no justification at all for time running differently if the costs had been paid or were simply payable – they must have been, at the very least, payable. Dorney DCJ found it difficult to see how Rasool or Hillingdon had application in the case before him. The fact that the ascertainment of the extent of those costs had not been determined at the time of the revocation did not prevent the cause of action accruing on revocation. His Honour thought that was in distinct contrast to what could occur in the present case. Although, undoubtedly, a liability to pay future ‘costs’ would exist if they were to be ‘reasonably incurred’, such costs could not be said to be other than, at best, ‘impending, threatened or expected’.

His Honour ultimately found the words in section 60(1) MAIA bespeak a right of separate recovery for every set of ‘costs’ incurred.

You would expect a similar approach to recoveries under section 58 MAIA.

If you would like to obtain more information in relation to this judgment or the recovery process, please contact Quentin Owen on (07) 3231 2910.

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