ACV v The Nominal Defendant (No 2)
[2022] NSWPIC 634
•17 November 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | ACV v The Nominal Defendant (No 2) [2022] NSWPIC 634 |
| Claimant: | ACV |
| insurer: | The Nominal Defendant |
| Member: | Belinda Cassidy |
| DATE OF DECISION: | 17 November 2022 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (2017 Act); claim for damages; separate assessment of liability; assessment undertaken on the papers; facts of accident and evidence included in reasons in earlier decision made during the course of the statutory benefits claim: ACV v The Nominal Defendant; accident occurred during a medical (psychotic) episode; claimant was owner and driver of only car involved and made a damages claim under the no-fault accident provisions of Part 5 of the 2017 Act; insurer disputed liability; Held – accident was a no-fault accident; section 5.2 of the 2017 Act deems fault when there is no fault but does not deem liability which requires proof of three elements, duty, breach of duty and loss; claimant owes no duty of care to himself; as no duty of care exists there can be no breach, actual or deemed; claimant has no action against himself; if he did he would be prevented by section 5.4 of the 2017 Act from recovering damages in any event; no costs awarded. |
| determinations made: | CERTIFICATE OF DETERMINATION In accordance with Division 7.6 of the Motor Accident Injuries Act 2017, the Commission’s assessment is: 1. The insurer has no liability to pay any damages to the claimant. 2. No costs are awarded to the claimant. |
STATEMENT OF REASONS
INTRODUCTION
On 12 August 2019 ACV(the claimant)[1] was driving his Commodore sedan in rural New South Wales when it left the road and collided with a power pole.
[1] Due to the sensitive nature of the evidence in this matter steps have been taken to protect the claimant’s identity by not revealing his name or for example where he lives.
The claimant was seriously injured sustaining multiple fractures to his ribs, fractures to both lower limbs and a fractured left index finger.
The claimant made a claim for statutory benefits against the Nominal Defendant because the car he was driving was unregistered and therefore uninsured. Liability was denied by the insurer and the dispute about liability was heard and determined by me in earlier proceedings[2].
[2] My decision in that matter has been published as ACV v The Nominal Defendant [2022] NSWPIC 64.
On 18 February 2022 the claimant made a claim for damages against the Nominal Defendant. When the Nominal Defendant denied liability for the claim[3], the claimant sought an internal review of the decision. When the decision was affirmed by the internal reviewer, the claimant referred his claim to the Personal Injury Commission (the Commission) for assessment.
[3] The insurer’s initial liability notice was dated 31 March 2022 and a further notice was issued on 28 September 2022.
The proceedings were allocated to me, and I have held two teleconferences in the matter[4] before deciding to assess liability separately from quantum and to undertake the assessment on the papers.
[4] On 14 and 28 September 2022.
At the time the proceedings were commenced, the claimant was self-represented however he retained Mr Jeremy to act for him in respect of this claim. QBE Insurance (Australia) Limited has, at all times, being acting on behalf of the Nominal Defendant.
STATUTORY FRAMEWORK
The claim and the claimant’s entitlements are covered by the provisions of the Motor Accident Injuries Act 2017 (the MAI Act). That Act provides:
(a) a scheme of compulsory third-party insurance for all motor vehicles registered in NSW, and
(b) a scheme for the provision of statutory benefits and damages to persons injured in car accidents in NSW.
Statutory benefits are paid in accordance with Part 3 of the MAI Act on a no-fault basis for the first 26 weeks after the accident[5]. Thereafter the insurer’s liability to pay ongoing statutory benefits depends upon whether the claimant is wholly or most at fault[6].
[5] See s 3.1(2) of the MAI Act which provides that statutory benefits are payable regardless of whether anyone is at fault and even if it is the claimant who is at fault.
[6] See ss 3.11 and 3.28 of the MAI Act. Ongoing benefits also depend on whether the injured person’s only injuries are “minor injuries” within the definition in s 1.6 but that is not relevant in this claimant’s case.
Persons injured in a motor accident may also have claim for damages and that claim will usually be brought in accordance with the law of the tort of negligence. The three elements of the tort of negligence which must be proved by the injured person in order for them to recover compensatory damages are:
(a) a duty of care exists to the person injured;
(b) the duty of care was breached, and
(c) the person’s injury was caused by that breach which has resulted in loss.
The quantum or amount of the damages or compensation that can be awarded for the loss sustained is regulated and limited by the provisions of Part 4 of the MAI Act.
Part 5 of the Act provides for “no-fault motor accidents” as follows:
(a) a no-fault accident is a motor accident “not caused by the fault of the owner or driver of any motor vehicle involved in the accident in the use or operation of the vehicle and not caused by the fault of any other person”[7];
(b) the injury to a person resulting from a no-fault accident is “deemed to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle”[8];
(c) the accident is presumed to be a no-fault accident if there is “an averment by the plaintiff that the motor accident … unless there is evidence to the contrary”[9], and
(d) damages can be reduced for the injured person’s contributory negligence[10].
[7] Section 5.1.
[8] Section 5.2(1).
[9] Section 5.3(1).
[10] Section 5.5.
Section 5.4 provides:
“(1) There is no entitlement to recover damages because of the operation of this Part in respect of the death of or injury to the driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver.
(2) The death of or injury to a person is taken to have been caused by an act or omission of the driver for the purposes of subsection (1) even if—
(a) the act or omission does not constitute fault by the driver in the use or operation of the vehicle, or
(b) the act or omission was involuntary, or
(c) the act or omission was not the sole or primary cause of the death or injury.”
THE EVIDENCE
The facts and circumstances of the accident were set out in the decision published in the previous proceedings and no additional evidence has been provided by either party. I do not propose to recite all of the facts and summarise the material but will provide a brief precis of what happened to the claimant.
The description of the accident was provided in the police report as follows:
“About 6.30am on 12th August 2019 a 41-year old male driving a Holden Commodore in a SE direction at approx speed of 160 km/h has left the Mid-Western Hwy and struck a power pole at the intersection of … and Mid-Western Hwy … causing the vehicle to roll. Driver injured as a result of the collision, Driver conveyed to hospital”.
Emergency personnel and the hospital notes document histories given by the claimant that he was attempting to take his own life when he drove the car at speed down the road. The claimant’s evidence was that he did so in an attempt to avoid persecution by non-human beings he thought were pursuing him, but they were hallucinations and did not exist. They were part of an intense psychotic episode experienced by the claimant who had longstanding mental health issues since being abused as a child.
In the previous proceedings I was satisfied, on the medical and lay evidence before me at the time, that the claimant was, in the lead up to his accident, in this psychotic state and not responsible for his actions. I said:
“[88] In my view the claimant was not solely responsible or solely to blame and therefore not wholly at fault because he was in a psychotic state, having hallucinations and delusional thoughts in the lead up to his accident. In my view having read the whole of the evidence, the claimant was not operating in any sphere of reality and therefore was not aware of what he was really doing or why he was doing it. He thought he was being chased by ‘Ancients’ or ‘Archons’ when he was not. He thought he was able to communicate with these imaginary robed figures without speaking and that he was going to be killed or dismembered by them, but he was not. He wanted to go to the hospital but thought the ‘Ancients’ or ‘Archons’ would be there, but they were not. He thought the police discovered him soon after the accident and then left him, but they did not. He thought his mother had been killed, and she had not. He attempted to stand up on his two broken legs while in hospital, but could not.
[89] Whatever choices the claimant made in the hours leading up to his accident, they were not, on the evidence, rational choices made by someone in full possession of their faculties. The claimant’s actions before this accident were not voluntary or as a result of his own will appreciating the nature of what he was doing and the likely impact or consequences of it but were a result of his psychotic and delusional state. I make this finding, in particular noting the Canberra Hospital staff found the claimant had no legal capacity to make decisions for his own treatment and as a result had him scheduled, presumably under the mental health legislation of that jurisdiction.”
Having found the claimant not wholly at fault, I went on to determine that he was also not “mostly at fault” and therefore his statutory benefits should continue beyond the first 26 weeks after the accident.
Submissions
Preliminary matters
The original submissions lodged by the claimant (then self-represented) and the insurer in the current proceedings, deal with matters not directly relevant to the issue about liability that I need to determine. For example, the claimant had a complaint about the insurer’s behaviour, he wished to lodge further disputes in his statutory benefits claim and he was considering obtaining legal representation.
The insurer’s original submissions dealt with some aspects of the issue of liability and asked that the proceedings be dismissed on the basis the claimant had no right to make a claim.
After the two teleconferences, the parties agreed:
(a) that the assessment of liability should occur separately from any assessment of quantum;
(b) the parties were ready to proceed to the assessment of liability;
(c) there was no additional evidence necessary from the parties, they were content to rely on the evidence already gathered and the evidence that was before me in the statutory benefits claim;
(d) no oral evidence would be necessary, and
(e) both parties wanted the opportunity to provide further submissions.
Both parties have lodged further submissions which focus on the matters in issue.
The insurer’s liability notice
The insurer’s revised liability notice dated 28 September 2022 denies liability. The Nominal Defendant accepts the accident is a “no-fault accident” as defined in s 5.1 of the MAI Act but says that the claimant has no entitlement to damages.
Claimant’s submissions
The claimant’s submissions[11] note that the circumstances of the accident are not in dispute.
[11] Document AD3 in the Commission’s electronic file, filed on 14 November 2022.
The claimant sets out s 5.4 of the MAI Act and says at [6] the relevant issue is whether the claimant’s injury was caused by his act or omission and says “implicit in the section is an element of consciousness.”
The claimant quotes the paragraphs of my earlier decision set out at [15] above and says at [9] that on the basis of those findings he could not have acted with an element of consciousness as to the nature and effect of his actions.
The submissions state at [10] that there was no involuntary act or omission of the claimant as “involuntary” suggests something done without choice or any control of will. The claimant says he made choices, but they were not rational choices.
The claimant says at [11] his “accident falls within an interesting lacuna in the Act where it cannot be said that any act or omission of the Claimant caused the accident, nor could it be said that an involuntary act on his part caused the accident.”
The claimant says at [12] in response to the insurer’s argument that the claimant cannot sue himself and cannot bring a common law claim, that this does not apply because the claim is made in relation to an uninsured vehicle and under s 2.29 of the MAI Act may be brought against the Nominal Defendant.
Insurer’s submissions
The insurer suggests at [3] that the legal position in this matter is “extremely complex”.
The insurer recites ss 5.1 and 5.2 and notes the similarity between the no-fault accident provisions and the blameless accident provisions of ss 7A and 7B of the Motor Accidents Compensation Act 1999 (the MAC Act) before referring to the Court of Appeal’s decision in Whitfield v Melenewycz[12] (Melenewycz) and quoting [30] and [31] with emphasis given to this passage in [31]:
“Section 7B deems fault for the purposes of a claim which depends on the claimant establishing liability under the common law. It does not deem liability. Under the common law a driver cannot have a claim in negligence against him or herself.”
[12] [2016] NSWCA 235.
The insurer says at [8] that the no-fault provisions (or the previous blameless accident provisions) do not create a new tort but operate to deem one element of the tort of negligence (fault or breach of duty of care) on the part of the owner or driver.
The insurer says further at [9] that in a no-fault accident claim, the claimant still needs to prove the other elements of the tort of negligence, that is that a duty of care was owed and that there has been causative loss. The insurer says there must be an actionable duty of care owed to the claimant by the proposed defendant in order for there to be a deemed breach of that duty.
The insurer refers to the passage of Melenewycz where the Court said that a driver cannot claim against himself and, while that may have been obiter dicta, submits the principle should be applied because it was espoused by three members of the Court of Appeal and “there is no authority for the proposition that a person could owe a tortious duty of care to themselves and then sue themselves for breach of that duty.”
The insurer then submits at [15]-[24] citing QBE Insurance (Australia Limited) v Abberton[13] that the definition of “motor accident” in s 1.4 requires there to be an incident or accident which involves the use or operation of a motor vehicle and that use or operation must cause the claimant’s injuries. At [17] the insurer says if there was no use by the claimant as the owner or driver, he would not have a common law claim and there would be no “motor accident” at all within the definition in s 1.4 of the MAI Act.
[13] [2021] NSWSC 588.
The insurer submits at [21] and [22] there was no use of the vehicle by the claimant, as the owner, that caused the accident (such as the failure to maintain it) but there was causative use by the claimant as the driver of the vehicle.
The insurer then says at [24] that “the claimant’s driving of the vehicle must have been a cause of the accident, albeit without fault. He was operating the vehicle in such a way that it led to the occurrence of the accident. This must have been a cause of the accident”.
The insurer submits that as the claimant’s driving of the vehicle caused the accident the entity against whom the claim is made is the claimant as the driver of the vehicle and “he has the fundamental problem that he has no legal right to claim in negligence against himself”.
The insurer points out at [26] that regardless of whether the defendant or respondent to the claim is named as the Claimant or the Nominal Defendant “the underlying legal basis for the claim … is a claim in negligence against the owner or driver”. The Nominal Defendant is an entity created by statute that stands in the place of the owner or driver under s 2.29 of the MAI Act.
Finally, at [28] the insurer says that if the claimant has an action against himself and can make a claim against himself, he is prevented from recovering damages by virtue of s 5.4. If the claimant’s acts or omissions caused the injury he is barred from recovering damages. No fault is required and even if he was completely without fault because of his psychotic episode, if there was anything he did that caused the accident he cannot recover damages. The insurer says at [31] the act or omission does not have to be classed as voluntary or involuntary and there is no lacuna. Involuntary acts are specifically not excluded from the operation of the provisions.
In summary at [32] the insurer says the claimant cannot recover damages because:
(a) if his driving was not a cause of the accident then the accident is not a motor accident, the MAI Act does not apply, and the Nominal Defendant does not respond to the claim;
(b) if the claimant’s driving was a cause of the accident, then, as there is no other vehicle his only claim is against himself and there is no available claim in negligence for which fault can be deemed, and
(c) he is barred from recovery in any event by s 5.4.
CONSIDERATION OF THE ISSUES
Was the accident a “motor accident”?
The clamant was the owner and driver of the only motor vehicle involved in this accident.
The claimant’s accident fulfils the definition of “motor accident” in s 1.4 of the MAI Act because there was:
(a) an incident or accident - the claimant’s Commodore left the road, an impact occurred between the Commodore and a pole and the vehicle rolled;
(b) involving the use or operation of a motor vehicle - the incident or accident occurred while the car was being used, that is, while it was being driven by the claimant, and
(c) this use or operation (driving) caused the injury to the claimant - the claimant was seriously injured as a result of him losing control, colliding with the pole and the subsequent rolling of the motor vehicle.
Further, the actual accident happened during a journey while the car was being driven, when the claimant lost control in loose gravel and following a collision with a pole.
Was the accident a no-fault motor accident?
The parties are not in dispute about this but for completeness I will deal with it.
Following my reasoning in the statutory benefits dispute, the claimant’s accident was not caused by the fault of the claimant or any other person or thing. The accident was caused while the claimant was in the throes of a medical (psychotic) episode which he was driving his car.
By operation of s 5.2 of the MAI Act, the claimant’s injuries are “deemed to have been caused” by his own fault as the driver of his own vehicle.
Is the claimant claiming against himself?
Before the Motor Accidents Act 1988 (the MA Act), there was no regulated claims process and the first a defendant would know about an action was when the statement of claim was served. The MA Act introduced a claims process before litigation in respect of personal injury sustained in motor accidents. Under s 43(4), claim forms had to be served on both the at-fault owner (or driver) and the insurer of the vehicle. Litigation, if and when it was commenced was usually conducted in the names of the injured person as the plaintiff and the at-fault driver (or owner) as the defendant[14].
[14] Unless the person against whom the claim had been made was dead or could not be served in which case, under s 54 of the MA Act, proceedings would be taken against the insurer of the vehicle.
Under s 72(2) the MAC Act and s 6.12(2) of the MAI Act, a claim for damages is made against the insurer direct and the claim form does not have to be served on the owner or driver. Court proceedings however, still nominate the owner or driver of the at-fault vehicle as the defendant. This is because the action for damages under the MAC Act or the MAI Act is founded upon the tort of negligence and a wrong committed by one person resulting in harm sustained by another.
At the Commission there are only two parties to the proceedings, the claimant and the insurer[15]. The at-fault driver is not notified of the proceedings, does not have to be served with the application to assess damages and cannot even be summonsed to appear in the proceedings[16].
[15] See s 88 of the MAC Act and s 7.30(1) of the MAI Act.
[16] See s 102 of the MAC Act and s 7.45 of the MAI Act (both now repealed) and s 51(2) of the Personal Injury Commission Act 2020.
The claims process, and the assessment (or exemption) of claims are two steps that have to be taken before proceedings can be commenced. In the claim and the assessment, the insurer stands in the shoes of the insured, manages the claim and the assessment process and pays the compensation or damages at the end of the day.
The claimant says he can make a claim against the Nominal Defendant under s 2.29(1) because his car is not insured. His submission suggests that enables him to then bring an action against the Nominal Defendant. Section 2.29(1) does indeed provide for an action for the recovery of damages to be brought against the Nominal Defendant in circumstances where the vehicle is uninsured, however, s 2.29(3) provides that in any such action, the Nominal Defendant is liable “as if it were the owner or driver of the motor vehicle”. In my view, ss 2.29(1) and (3) enable an actionable case in negligence (where there is duty, actual or deemed breach, and causative loss) to be brought against the Nominal Defendant and the Nominal Defendant becomes liable for any damages awarded to the injured person in the absence of an insurer and a policy of insurance which would respond to the claim.
In this claimant’s case, before he can pursue the action he brings against the Nominal Defendant, he must first make a claim against the Nominal Defendant. When the claim is made, he then proceeds to have liability for that claim determined by the Commission or the Court. Proceedings may be commenced against the Nominal Defendant, but liability for the claim rests upon the underlying cause of action, namely an action in negligence against the owner or driver of the uninsured vehicle which caused the accident. I agree with the insurer that the Nominal Defendant is simply the name of the entity which responds to the claim in the place of the owner or driver who would be named and sued if they were insured.
Does the claimant have an action under the MAI Act?
Damages are awarded under the MAI Act, to compensate an injured person for the injury, loss and damage they sustain resulting from a motor accident caused by the negligence (fault) of the owner or driver of a motor vehicle. Negligence (fault) occurs when there is an actual or deemed (by operation of s 5.2) breach of a duty of care owed by the owner or driver of a motor vehicle to that injured person.
Drivers of motor vehicles owe a duty of care to other road users who may be passengers in their vehicle, the drivers and passengers of other vehicles in the vicinity, pedestrians, cyclists and so on. Drivers do not owe themselves a duty of care. Drivers may have a responsibility to themselves and the wider community to look after themselves and avoid imposing a burden on say the hospital system or the social security scheme, but I agree with the insurer that “there is no authority for the proposition that a person could owe a tortious duty of care to themselves and then sue themselves for breach of that duty”.
Before the introduction of the blameless accident provisions into the MAC Act, a person injured in a motor accident caused when the driver of a motor vehicle had a medical misadventure such as a heart attack “at the wheel” could have their claim defeated. While they could establish that the driver having the medical misadventure owed them a duty of care, they could not establish breach of that duty because there would be no fault or negligence in circumstances where the driver had no warning of the impending heart attack. This was the unfortunate outcome for the catastrophically injured infant in the case of Layton Smith by his tutor Troy Smith v NRMA Insurance Limited[17].
[17] [2014] NSWSC 1518.
The blameless accident provisions in the MAC Act were introduced to eliminate the inevitable accident defence and expand the common law compensation scheme to persons injured in situations similar to Layton Smith’s accident.
The no-fault provisions in the MAI Act achieve the same goal. If the claimant in the current proceedings had lost control of his Commodore and collided with a vehicle on the right-hand side of the road instead of a power pole on the left-hand side of the road, anyone injured in the other car would have a claim and an entitlement to recover damages under the no-fault provisions of part 5 of the MAI Act. They could not prove actual fault on the part of the claimant but fault on his part would be deemed.
As the Court said in Melenewycz, the blameless accident and no-fault provisions deem fault where there is no fault, but they do not deem liability. Liability for damages in a motor accident requires three elements to be proven only one of which is fault.
I agree with the insurer’s submissions that the claimant does not have an available claim because he cannot have an action in negligence or on any other basis against himself. Negligence, fault or breach of duty of care cannot be deemed in a situation where no duty of care exists.
Can the claimant recover damages?
If I am wrong, and the claimant does have an action in negligence or on some other basis under the MAI Act and the no-fault provisions of part 5 apply, then in my view he is prevented from recovering damages in any event by the operation of s 5.4.
Section 5.4(1) says that the driver of a motor vehicle has no entitlement to recover damages under the no-fault provisions of part 5 if the motor accident was caused by an act or omission of that driver. Section 5.4(2) deems an injury to have been caused by an act or omission of the driver even if the act or omission does not constitute fault or the act or omission was involuntary or the act or omission was not the sole or primary cause of the injury.
The claimant says it is “implicit” in s 5.4 that there is an element of consciousness, and the claimant was not acting with any consciousness as to the nature and effect of his actions.
I disagree. The clear intention of s 5.4 is that the driver of the vehicle that causes the no-fault accident cannot recover damages. The three provisions in s 5.4(2) cast a wide net over the acts or omissions of a driver and deems certain things that might not be considered acts or omission to come within the prohibition in s 5.4(1).
In my view it does not matter what the motivation of, or rationale behind the claimant’s actions when he was driving his car, it is what he was doing (the act of driving) that determines whether he can recover damages or not. If he had been sitting in his car under a tree and a large branch fell on top of his car, crushing the cab and causing him injury, then there would be no act or omission on his part that had caused his injury and therefore potentially no prohibition on him recovering damages (providing that sort of incident came within the definition of a motor accident).
The act of the claimant was his driving of the vehicle, he was driving at speed and he lost control of his car and crashed into a pole. He was psychotic at the time and was not responsible for what he was doing, but it was the act of driving his car that resulted in the accident and his injuries and it is that act that prevents him from recovering damages under s 5.4.
CONCLUSION
I find that the insurer has no liability to pay the claimant any damages under the MAI Act in respect of the claim made under part 4 of the MAI Act arising out of the accident on 12 August 2019 because either:
(a) the claimant has no action available against himself and the insurer and if he did, and
(b) section 5.4 prevents him from recovering any damages from the insurer.
As the claimant has failed in his assessment, I will not award him any costs for any legal costs incurred by him in respect of the claim.
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