Sparke Helmore's MAD (Motor Accidents Division) - special edition
15 October 2024
Welcome to this special edition of Sparke Helmore’s MAD publication!
This edition provides more substantive analysis of a recent important Supreme Court decision. All references to legislation are to the Motor Accident Injuries Act 2017 (NSW) (the MAI Act) unless otherwise noted.
If you have any questions or would like to discuss the implications of this case, please contact a member of our CTP team.
Supreme Court of NSW
AAl Limited t/as GIO v Evic (2024) NSW 1272 (11 October 2024)
Mitchelmore J
Statutory construction and interpretation — whether an owner driver injured in single vehicle accident can be considered "wholly or mostly" at fault and construed to include contributory negligence - error of law established but relief refused in exercise of Court's discretion due to utility of declaration and no foreseeable consequence or legal controversy.
The claimant was injured in a single vehicle motorcycle accident on 20 November 2020.
He mounted his motorcycle and when he lifted his leg to move the lever into neutral, the foot peg became stuck between the claimant's boots and riding pants, immobilising his leg and causing him to lose his balance. The motorcycle fell to the left and crushed the claimant's left leg. He was trapped under the bike until assisted by a family member.
The claimant applied for statutory benefits under Part 3 of the MAI Act. The parties did not dispute that the accident occurred in the course of the driving of the motorcycle nor that the claimant sustained a non-threshold injury. The CTP insurer of the claimant's motorcycle (the insurer) denied liability for statutory benefits after 26 weeks on the basis that the claimant was wholly at fault for the motor accident because he failed to maintain control of his vehicle to avoid an accident.
On 7 July 2023, the insurer upheld the decision on internal review. The claimant applied to the Personal Injury Commission (the Commission) for a miscellaneous claims assessment under Part 7 seeking a determination that for the purposes of ss 3.11 and 3.28, the motor accident was not caused wholly or mostly by his fault.
On 22 November 2023 Member Bridie Nolan of the Commission overturned the insurer's decision. She determined that the claimant was not wholly or mostly at fault for the motor accident and, in doing so, directed the parties to reasons she had delivered that same day in the matter of Fatoula v GIO t/as AAMI (Fatoula). Fatoula was authority for a finding that as a matter of construction, an owner driver injured in a single vehicle accident could not be "at fault" and thus could not be wholly or mostly at fault. Her reasoning was that:
- 'Fault' as defined by s 1.4 is "negligence or any other tort" and thus requires an element of tortious conduct.
- Decision makers should be careful not to appropriate the meaning ascribed to the expression "fault" as it appeared "in an incongruent statutory context". She said that where there was a clear contrary legislative intention, statutory definitions are not a source of substantive power but an aid to construction, are not absolute and could be departed from.
- The legislative intention for no-fault provisions "was to provide for a period of cover for up to two years for loss of income, or treatment for life, in so far as it is reasonable and necessary, where no driver is actually at fault for the motor accident”.
- That the distinction drawn between fault and contributory negligence in s 3.44 (which directs that a statutory benefits decision on fault or contributory negligence is not binding in relation to common law claims) lends “constructional force to the proposition that fault denoted liability". The Member said that this supported the contention that the scheme of statutory benefits in fact contained "multiple incongruities with the traditional common law scheme of personal injury damages".
The Member concluded that fault must be construed in ss 3.11 and 3.28 "consistently, through the prism of the actionable tort of negligence such that an owner driver injured in a single motor accident cannot be 'at fault', and therefore cannot be wholly or mostly at fault". She stated that it would "not be consistent with the objectives of the legislation to introduce, as the insurer contends, a constructional dissonance to the application of the term 'fault' as housed [in] the provisions based solely on the facts of each case, even if to not do so would produce hypothetical unintended consequences or the perception of unfairness."
The insurer commenced judicial review proceedings by way of Summons. The plaintiff argued that "the Member erred in law in finding that the term 'fault' in sections 3.11 and 3.28 … must be construed to refer only to the actionable tort of negligence, thus excluding contributory negligence, where an owner driver is injured in a single vehicle accident."
The claimant, the Member and the President of the Commission (the first, second and third defendants) filed submitting appearances, and absent of an active contradictor, the Attorney General was joined as a party to the proceedings.
The insurer did not seek to quash the decision of the Commission and advised the claimant that it would continue to abide by the decision with respect to his claim for statutory benefits. As the Member made alternate findings aside from the issues above that the claimant did not fail to exercise reasonable care and skill in his operation of the motorcycle and that aspect was not challenged, the plaintiff accepted that there was no potential for the decision to be quashed as the finding was not invalid.
The Attorney General agreed that the Member had made an error of law but submitted that whilst there was a power to make a declaration under s 75 of the Supreme Court Act 1970 (NSW), no such declaration should be made because it lacked utility; the plaintiff did not seek relief in the nature of certiorari and had agreed to continue to pay statutory benefits to the claimant.
The proceedings were ultimately dismissed because a declaration would produce no foreseeable consequences for the parties, referencing the decision of Ainsworth v Criminal Justice Commission [1992] HCA 10, but not before the Court made notable comments regarding the construction of ss 3.11 and 3.28.
With respect to the entitlement to statutory benefits, the Court highlighted that s 3.2(2)(a) confirms that the statutory benefits scheme is available to a person who is injured in a single motor vehicle accident. It defines the relevant insurer is:
- if the motor accident concerned involved only 1 motor vehicle with motor accident insurance cover—the insurer of the motor vehicle, or
- if the motor accident concerned involved more than 1 motor vehicle—the insurer of the at-fault motor vehicle, or
- in any other case—the Nominal Defendant.
The Court looked at the difference between 3.2(4) which identifies the relevant insurer in a claim for statutory benefits as originally enacted, and the provision that now sits within the legislation. The Court said that:
"The Explanatory Note to the Motor Accidents and Workers Compensation Legislation Amendment Bill 2022 (NSW), pursuant to which s 3.2(4) was repealed and replaced, stated that the amendment was to clarify that "the insurer of an at-fault motor vehicle is the insurer who provides motor accident insurance cover for the motor vehicle concerned rather than the owner or driver". The determination of the relevant insurer now rests on which of the motor vehicles, in its use or operation, caused (or contributed most to) the death or injury for which the statutory benefits are payable." (our emphasis added).
Sections 3.11 and 3.28 cease payment of statutory benefits in two circumstances, one of which is where the motor accident was caused "wholly or mostly by the fault of the person". In these sections, "fault" is accompanied by a qualifying phrase ("wholly or mostly") which clearly invokes contributory negligence, as the Court found. The Court stated that the words "wholly or mostly" are "intended to address the same mischief, namely contributory negligence" for the motor accident, in a manner that accommodates all types of motor accidents, including single vehicle accidents where the injured person is the owner driver."
The Court agreed with the Attorney General's submission that the words "wholly or mostly" do not require a comparison of culpability, and that contributory negligence could apply to owner driver single vehicle accidents. Here, the Court relied on the decisions of Axiak v Ingram [2012] NSWCA 311 and Davis v Swift [2014] NSWCA 458.
The Court noted that the Member's reasoning could create "a logically inconsistent outcome" if an owner driver who failed to take reasonable care received the maximum statutory benefit by virtue of it being a single vehicle accident, but if another vehicle was involved, that same negligence would be measured against the 61% threshold.
The Court applied the Member's reasoning to Whitfield v Melenewycz [2016] NSWCA 235 but amended the facts to an alternate scenario where the motorcyclist in a single vehicle accident was intoxicated at the time of the collision with the kangaroo. On the Member's construction, the Court stated that the insurer could not consider whether, by reason of that intoxication, the motor accident was "wholly or mostly by the fault of the motorcyclist".
The Court concluded that this was not a consistent application of statutory construction, and that the Member had made an error of law. The Court stated that it was the construction that the insurer and Attorney General contended that was consistent with the text of s 3.11 and 3.28, informed by context and purpose.
