CAL No 14 Pty Ltd t-as Tandara Motor Inn & Anor v Motor Accidents Insurance Board

The appellants, CAL No 14 Pty Ltd trading as Tandara Motor Inn and another, appealed to the High Court of Australia against a decision of the Full Court of the Supreme Court of Tasmania. The dispute concerned the interpretation of a statutory indemnity provision within the *Motor Accidents Insurance Board Act 1973* (Tas) (the Act), specifically whether it extended to cover liability for nervous shock sustained by a third party. The Motor Accidents Insurance Board (MAIB) was the respondent.

The central legal issue before the High Court was whether the MAIB was liable to indemnify the appellants for a judgment obtained against them by a third party who suffered nervous shock as a result of witnessing the aftermath of a motor vehicle accident. The appellants argued that the indemnity provided by the Act extended to such a claim, while the MAIB contended that the indemnity was limited to claims for physical injury arising directly from the accident.

The High Court considered the language of section 16(1) of the Act, which provided that the MAIB "shall be liable to pay to the person injured or killed in a motor accident, or to his dependants, such sum as would be awarded against the owner or driver of the motor vehicle concerned if he were liable for damages in respect of the injury or death." Their Honours interpreted "person injured" in its ordinary sense, meaning a person who has suffered physical injury. They reasoned that the Act was concerned with compensating victims of motor accidents for their direct physical injuries and that claims for nervous shock, while recognised in tort law, did not fall within the scope of the statutory indemnity as it was framed. The Court distinguished between the common law tort of negligence, which could give rise to liability for nervous shock, and the specific statutory scheme of indemnity established by the Act.

The appeal was dismissed.