Haider v Lane; Lane v Haider
[2014] ACTSC 205
•22 August 2014
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Haider v Lane & Anor; Lane v Haider & Anor |
Citation: | [2014] ACTSC 205 |
Hearing Date(s): | 3, 4 July 2014, 22 August 2014 |
DecisionDate: | 22 August 2014 |
Before: | Mossop M |
Decision: | See [61]-[62] |
Category: | Interlocutory Application (SC 355 of 2012) Principal Judgment (SC 205 of 2014) |
Catchwords: | INSURANCE – motor vehicle accident ‑ compulsory third-party liability insurance – whether motor vehicle accident was a motor vehicle accident within the meaning of Road Transport (Third Party Insurance) Act 2008 (ACT) s 7 – definition of “use or operation of a motor vehicle” |
Legislation Cited: | Road Transport (Third-Party Insurance) Act 2008 (ACT) |
Parties: | SC 355 of 2012 Tedo Iquitar Haider (Plaintiff) Paul Gregory Lane (First Defendant) Insurance Australia Limited t/as NRMA Insurance (Second Defendant) SC 205 of 2014 Paul Gregory Lane (Plaintiff) Tedo Iquitar Haider (First Defendant) Insurance Australia Limited t/as NRMA Insurance (Second Defendant) |
Representation: | Counsel: Mr AJ Stone (Dr Haider) Mr S Pilkinton SC (Mr Lane) Mr W Fitzsimmons (3-4 July 2014) and Mr A Black SC (22 August 2014) (NRMA) |
| Solicitors: Blumers Personal Injury Lawyers (Dr Haider) Prail Lawyers (Mr Lane) DLA Piper Australia (NRMA) | |
File Number(s): | SC 355 of 2012 SC 205 of 2014 |
Introduction
Proceedings SC 355 of 2012 were commenced by originating claim dated 29 October 2012 seeking damages in relation to an injury sustained by Dr Haider, the plaintiff, as a result of a motor vehicle accident.
A defence was filed by the second defendant, Insurance Australia Limited trading as NRMA Insurance, on 28 January 2014 which, relevantly, stated:
4.The Second Defendant denies that it is the Insurer for the motor vehicle accident within the meaning of section 151 of the Road Transport (Third Party Insurance) Act 2008 (ACT) and says:
(i)The Plaintiff alleges in the Statement of Claim that the collision occurred within a garage at 23 Putt Lane, Harrison in the Australian Capital Territory.
(ii)The policy issued by the Second Defendant in respect to the First Defendant’s motor vehicle insures the First Defendant against the risk of liability for personal injury caused by a motor accident (section 21).
(iii)A motor accident is an incident that involves the use or operation of a motor vehicle (section 7).
(iv)Use of a motor vehicle includes driving, parking or stopping a vehicle on a road or road related area (section 8).
(v)The collision as pleaded in the Statement of Claim did not occur on a road or road related area.
(vi)The Second Defendant denies that it is liable to indemnify the First Defendant in respect to the Plaintiff’s claim.
The defence therefore raised the proposition that the terms of s 7 of the Road Transport (Third-Party Insurance) Act 2008 (ACT) (the Act) were relevantly qualified by the terms of s 8 and the proposition that the location where the accident occurred was neither a road nor a road related area.
On 15 May 2014 an application in proceeding was filed by the Mr Lane seeking a declaration that the motor vehicle accident that had occurred was a motor vehicle accident within the meaning of s 7 of the Act.
On 16 May 2014 the parties appeared before me and the defendant, Mr Lane, foreshadowed the filing of an originating application to the same effect as the application in proceeding dated 15 May 2014. That had the benefit that if there was a point of principle as to the interpretation of the statute then any decision that I, as Master, made as master would be a final one able to be appealed to the Court of Appeal. I then directed that any such application be filed prior to 23 May 2014. The originating application was subsequently filed on 22 May 2014 and commenced proceedings SC 205 of 2014.
On 12 June 2014 I made orders directing that the issues of liability and damages be severed and that proceedings SC 355 of 2012 and SC 205 of 2014 be heard together in relation to liability only. That was appropriate because the parties agreed that the declaration proceedings would in any event involve findings of fact about the accident that had occurred.
On the first day of the hearing, 3 July 2014, I also ordered that the proceedings be heard together, and that evidence in one be taken as evidence in the other, subject to any particular issue that might arise.
The matters were heard on 3 and 4 July 2014 but were adjourned shortly after they were commenced on 4 July 2014 prior to Mr Lane being called to give evidence because there was an objection to counsel for the NRMA cross-examining Mr Lane. That was because during the period when NRMA accepted that it was liable to indemnify Mr Lane, that is, prior to the filing of the defence on 4 January 2014, counsel then acting had taken part in a conference with Mr Lane. Counsel accepted that it would not be appropriate for him to cross-examine Mr Lane and the proceedings were adjourned so that alternative counsel could be engaged, at least for the purposes of the cross examination.
The hearing was resumed and completed on 22 August 2014.
Identification of parties
In these reasons, notwithstanding that the parties have different titles in the two sets of proceedings I will refer to the parties as Dr Haider and Mr Lane. I will refer to Insurance Australia Ltd trading as NRMA Insurance as “NRMA”.
Evidence
The evidence given was admitted in both proceedings. The evidence of Dr Haider and Mr Lane was given by affidavit. Both were cross-examined. There was also an affidavit of Mr Lane’s solicitor dated 10 July 2014. A number of exhibits were also tendered.
By the close of submissions on the third day of the hearing the issue had resolved itself to one of fact namely whether or not the Court accepted, on the balance of probabilities, that an accident occurred in the manner described by the plaintiff, Dr Haider. The statutory interpretation issue which was raised by NRMA’s defence and which was the reason the declaration proceedings had been commenced had evaporated as a result of the engagement of different counsel and a change in the advice being given to NRMA.
On the factual issue NRMA submitted that the result turned on whether or not the Court was “sufficiently disturbed” by aspects of the evidence that it did not accept that the accident occurred in the manner in which the plaintiff said it did. The NRMA accepted that the evidence of Mr Lane corroborated the evidence of the plaintiff. It also accepted that there was no direct evidence of collusion between Dr Haider and Mr Lane. It pointed to evidence arising in cross-examination showing that Mr Lane had regularly communicated with Dr Haider both in the period surrounding the incident and during the period when an investigator was obtaining a written statement from Mr Lane. It is submitted that that evidence cast significant doubt on the reliability of the plaintiff’s version of events.
Dr Haider and Mr Lane had been friends for over 20 years.
The accident occurred on 1 November 2009. Between 9 October 2009 and 20 January 2010 there were 40 telephone calls between the two men. The longest of those telephone calls was three minutes and 29 seconds. Most of them were less than a minute. The evidence does not disclose whether they involved telephone conversations or voice mail messages or of the mix of those two possibilities.
Mr Lane was approached by an investigator working for the NRMA in early March 2011. He declined to be interviewed by the investigator but indicated a willingness to answer a list of questions. Those questions were forwarded to him. On 4 March 2011 Mr Lane sent an email dated 5 March 2011 requesting that the questions be forwarded electronically. They were forwarded electronically on 7 March 2011. Mr Lane posted the completed questionnaire on 7 April 2011. He in fact completed the questionnaire by filling it out by hand.
Dr Haider saw his solicitor in relation to be proceedings on 8 April 2011. The evidence disclosed that between 6 March 2011 and 8 April 2011 there were 13 telephone calls between Mr Lane and Dr Haider. The longest was of 299 seconds (just short of five minutes). All the rest were less than two minutes and all but three of the rest were less than one minute. There were also four other occasions when Mr Lane sent text messages to Dr Haider and one occasion when Dr Haider sent one or more text messages to Mr Lane. Dr Haider’s evidence about the text messages was that Mr Lane had a predisposition to send him joke pictures via text message.
Mr Lane denied discussing either the accident or the terms of his statement to the insurance investigator with Dr Haider during this period. The terms of the statement itself (Exhibit 2) disclose, in answer to the question “Is there anything else you would like to add to this statement?”, that Mr Lane volunteered “currently I am in dispute with NRMA in respect of a claim for payment pursuant to a comprehensive motor vehicle insurance policy. Proceedings have been commenced in the Magistrates Court of the ACT (CS 105 of 2010)”.
In cross-examination Mr Lane was asked whether during the course of the telephone conversation that he had had with Dr Haider he had mentioned the claim. Mr Lane denied that he had ever mentioned the claim in this conversation. That appeared to me to be not a believable answer having regard to the extent of communication between the men and the length of their friendship. It was also inconsistent with what Mr Lane had in fact told NRMA during the period when it was acting for him. In his signed statement dated 19 September 2013 he said (at paragraph 29-31) that after being contacted by the investigator he contacted Dr Haider and informed him that he had been so contacted. He said he enquired what was going on and Dr Haider told him that he did not want to submit a claim but did so on his solicitor’s advice. Dr Haider told him that it was standard procedure and recommended that he fill it out to the best of his ability and return it. Mr Lane said that he was surprised that Dr Haider had submitted a claim without informing him of his legal advice to submit a claim.
It appears to me likely that these statements were reliable in that they were made at a time when NRMA was, so far as Mr Lane understood it, on his side.
The evidence in the written statement is also consistent with the evidence given by Dr Haider that Mr Lane contacted him when he had been contacted by the investigators and Dr Haider told him that he had lodged the claim and that Mr Lane should cooperate. Otherwise there was no discussion about the facts of the accident other than a discussion quite recently when Mr Lane was upset because he could potentially be liable personally for the damages.
I am therefore not satisfied that Mr Lane’s denials of having discussed the claim between being contacted by the insurance investigator and the return of the questionnaire was accurate. I find that he discussed with Dr Haider in the manner disclosed in his written statement (Exhibit 3). However the fact that Mr Lane’s evidence was inaccurate in this respect does not cause me to disbelieve Dr Haider and Mr Lane generally. Similarly, the cross-examination of Dr Haider about transactions with his doctors did not lead me to consider that his evidence generally and, in particular, the evidence that he gave in relation to the circumstances of the accident, was unreliable. Both men gave evidence on oath and the cross-examination did not cause them to alter that evidence or give evidence that in my view cast doubt upon the versions of events relating to the accident.
Facts
In the light of my assessment of the evidence I find the facts as follows.
Dr Haider is a general practitioner who practices in Batlow. He also has a house in Canberra. As at November 2009 he was also the owner of some investment properties in the Canberra suburb of Harrison. Those properties are two-storey properties which have garages which face onto Putt Lane.
On 1 November 2009 Dr Haider travelled with his friend, Mr Lane, from his house to Putt Lane in Mr Lane’s Lexus LS 430.
The vehicle was insured for compulsory third-party insurance purposes by NRMA Insurance.
The purpose of the expedition was to collect some left over bags of cement which were being stored in the garage of one of Dr Haider’s units. The units were owned by Dr Haider but were still under construction at the time. Mr Lane’s car was initially parked on Putt Lane on the opposite side of the road from the garage entries to the properties.
Mr Lane and Dr Haider got out of the car and went round the side of the building to look into one of the units. Dr Haider then continued around to the front door of one of the units which was located on Jenolan Street. He went in the front door and straight through to the garage at the back. He opened the garage door from the inside. He turned the light on and saw that there was debris on the floor. That debris was builders waste including nails, nail gun strips, cartridge gas bottles, screws and bits of wood. There were a number of bags of cement at the back right corner of the garage and along the back wall. The plaintiff bent down to clear away the rubbish. At the same time Mr Lane was reversing his vehicle into the garage. As Dr Haider was picking up some nails he was hit from behind by the Lexus vehicle which Mr Lane had reversed slowly into the garage. He was hit on the right side of his hip and back. He was knocked to the ground. He felt a pain in his back and right hip and right foot were painful. He exclaimed “what the [expletive] are you doing?” Mr Lane stopped the car and got out. Mr Lane offered to take Dr Haider to the hospital but the plaintiff said that he would wait and see how he was. The pair left the premises within five or 10 minutes.
Photographs that were in evidence indicate that between the bitumen that constitutes Putt Lane and the door of the garage there was an area of red brick paving. That brick paving joined each of the three garages which were next to each other and facing onto Putt Lane. At the point of impact, the rear of the Lexus was 1 to 1.5 meters inside the garage. The balance of the vehicle was facing out toward Putt Lane. While most of the vehicle was above the brick paving, some of the vehicle was on or overhanging the bitumen of Putt Lane.
Liability
In my view Mr Lane breached his duty of care by failing to keep a proper lookout for Dr Haider who he knew was in the garage or reasonably suspected might be in the garage. I am also satisfied that Dr Haider suffered some damage as a consequence of being reversed into by Mr Lane’s vehicle and falling to the ground. The extent of the damage is a matter to be determined by assessment.
It is therefore appropriate that there be judgment in favour of Dr Haider for damages to be assessed.
Indemnity
In relation to the issue of indemnity the position of NRMA changed during the course of the proceedings. Counsel appearing at the adjourned hearing made submissions which effectively conceded that the statutory interpretation point taken in the defence could not be made out.
Those submissions made the following points.
Firstly, s 8(1)(b)-(e) and s 8(2) of the Act are provisions designed to create an extended definition of “use” in relation to a motor vehicle. The maintenance of the vehicle, the use of a trailer attached to the vehicle, the use of an uninsured vehicle which is in the process of being towed or carried upon a tow truck, or the trailer which becomes detached from a motor vehicle are all matters which would not generally be regarded as the use of a motor vehicle were it not for the expanded definition within s 8.
Secondly, s 8 is plainly inclusive ‑ see the reference to “includes” ‑ it is not exclusive. In other words it does not define the outer limits of “use”.
Thirdly, s 8 says nothing about the meaning of “operation”, which appears in s 7.
Fourthly, while it is difficult to see why the legislative drafter included paragraph 1(a) in s 8, at least in so far as it refers to the word “drive”, the considerations above indicate that it does not operate to restrict the meaning of “use or operation” in s 7.
Fifthly, that the definition of “the use or operation” is to be considered widely is reinforced by the use of the word “involved” in s 7, a connecting word of considerable generality.
Finally, the conclusion is reinforced by the consideration that if s 8 was to be read in a manner which restricted not only the definition of “use” but also restricted the phrase “the use or operation”, then the result would be a dramatic lacuna in CTP coverage unique to the Territory and giving rise to potentially arbitrary distinctions between circumstances that would give rise to insurance coverage and those that would not.
Therefore NRMA effectively conceded that if an accident occurred it was a motor accident within the meaning of the Act. The submissions that it put were effectively the same as the submissions put on behalf of Mr Lane and Dr Haider. In my view the submissions put by the parties as to the interpretation of the Act were correct, and that the accident was a motor accident within the meaning of the Act.
Costs
In relation to costs, Dr Haider has been successful in obtaining judgment with damages to be assessed in his favour. Mr Lane has been successful in establishing that he is entitled to an indemnity pursuant to his compulsory third-party (CTP) insurance policy.
Both men applied for costs on a solicitor and client basis. They submitted that the separate proceedings were the result of NRMA taking the statutory interpretation point that the accident, if it occurred, was not covered by the CTP policy.
The plaintiff tendered a letter dated 14 March 2014, prior to there being any question of there being proceedings for a declaration, which outlined very specifically the arguments to be put against the statutory interpretation position adopted by NRMA in its defence. Mr Lane tendered a letter dated 15 April 2014 which foreshadowed, in the light of the defence filed on 28 January 2014, the necessity to make an application to the Court for a declaration that NRMA was the insurer for the purposes of the Act.
Dr Haider submitted that without the statutory interpretation point being taken, the matter would have proceeded in the usual way and not been subject to a separate hearing.
Mr Lane submitted that because the approach taken by NRMA he has been obliged to instruct separate solicitors and bring legal proceedings for a declaration as well as suffering the angst of dealing with the possibility that he may not be insured in relation to the motor vehicle accident.
Both Dr Haider and Mr Lane submitted that any costs order in their favour should be immediately recoverable and not postponed until the conclusion of the personal injury proceedings.
The NRMA submitted that there were two separate issues to be determined, namely, the statutory interpretation issue and the issue concerning whether or not an accident had occurred. In relation to the statutory interpretation issue, it submitted that the NRMA had been demonstrated to be prepared to take legal advice as to the approach to be adopted to the claim, and that the change of position was reflective of a reasonable and responsible approach. It submitted that there was a degree of obscurity in the drafting of s 8(1)(a). In relation to the factual issue, it submitted that there was a degree of suspicion surrounding the circumstances of the accident in the light of the material that was available to it. It therefore submitted that, if NRMA was unsuccessful, that the costs order should be on a party and party basis. It also submitted that, in relation to Dr Haider, any payment of costs should be deferred until the conclusion of the conclusion of the substantive personal injury proceedings.
In my view, it is appropriate to make orders as sought by Mr Lane and Dr Haider, that is, an order that the costs of the separate question and the declaration proceedings be paid on a solicitor and client basis.
The point taken by the NRMA was a significant one. If it was correct, then it would have had dramatic consequences for the operation of the CTP insurance scheme in the Territory.
Prior to the decision to determine the question separately Dr Haider’s solicitors wrote to the NRMA’s solicitors setting out a version of the facts consistent with the facts I have found and seeking agreement to those facts. In relation to the statutory interpretation argument the letter outlined, over some three pages of single-spaced text, the arguments that would be put in response to the argument put at that stage, as Dr Haider understood it, namely, that the CTP policy under the Act only provided indemnity for the use of a motor vehicle where the motor accident involved a collision on a road or road related area. Not only was there an articulation of the strictly legal statutory interpretation questions, but the letter also dealt with the policy ramifications of the interpretation being contended for in this case and invited the NRMA to consider the broader ramifications of its position. There was no response to the letter.
With the benefit of new counsel the NRMA has effectively accepted that the interpretation advocated in the letter of 14 March 2014 was correct.
At no point prior to the identification of NRMA’s changed position was the submission that might be made in favour of the interpretation articulated in the defence explained to me.
In my view, in circumstances where:
(a)very fair notice was given by Dr Haider of the ultimately correct position;
(b)the proceedings were substantially delayed by the NRMA persisting with its point; and
(c)the NRMA ultimately accepted the correctness of Dr Haider’s position,
those matters in combination warrant a more than usually favourable costs order.
In relation to the position of Mr Lane, he has been put to the anxiety and expense of being abandoned during the course of proceedings by his CTP insurer. That has required him to bring proceedings to finally resolve his entitlement to insurance.
I do not accept the submission made on behalf of NRMA that because it had some suspicions in relation to the facts, that was an issue which made it appropriate to have the question of liability and indemnity determined separately.
Firstly, as a matter of substance, the issue sought to be agitated in its defence was a statutory interpretation point. It is the taking of that statutory interpretation point which led to the necessity to determine questions of indemnity prior to the trial of the substantive personal injury proceedings. It was only because that necessarily involved some findings of fact that the question of liability was to be determined at the same time.
Secondly, it is not an unusual circumstance that a CTP insurer might have some suspicions about the circumstances in which an accident occurred. The Act recognises that an insurer may be in a position where it has to challenge the insured’s version of events and hence gives an entitlement in s 154 to call the insured person as a witness and, with the Court’s leave, cross-examine the insured person. Further, where proceedings are brought based on a motor accident and the respondent is a CTP insured person, then the insurer is not entitled to defend proceedings on the basis of any breach of contractual or statutory obligation by the insured person. The intention of the Act is to ensure that there is an insurer to respond to such claims. In my view, in so far as there was any doubt about the circumstances of the accident so far as the NRMA was concerned, its position would have been protected had the matter proceeded in the ordinary course to a substantive hearing. In my view, as matter of substance, it was the taking of the statutory interpretation point, now abandoned, that compelled the separate proceedings which have undoubtedly caused cost, expense and anxiety to Mr Lane. Therefore, in my view it is appropriate that he has his costs on a solicitor and client basis.
In relation to the submission that the costs order in favour of Dr Haider should be deferred until the conclusion of the substantive proceedings, that was put on the basis that there may be potential for costs orders going both ways depending on the outcome of the assessment, having regard to the terms of mandatory final offers or other offers made for the purposes of settlement of the proceedings. I accept that such a situation may arise and it is obviously not appropriate at this stage for me to explore that issue in too much detail. In my view the appropriate way of dealing with that issue is to allow Dr Haider to recover the disbursements paid for the purposes of the determination of the question of liability and Mr Lane’s declaration proceedings, but to not permit enforcement of the order otherwise.
Orders
In the orders that I will make I will obviously refer to the parties by the formal titles in the respective proceedings. Section 151(4) of the Act requires that if judgment is given in favour of a claimant on a motor accident claim for personal injury the judgment must be given against the insurer and not the insured person. Therefore, in relation to the substantive personal injury proceedings, s 151(4) requires that the judgment for damages to be assessed be entered against the second defendant, NRMA.
In proceedings 355 of 2012, the orders of the Court are:
1. Judgment be entered in favour of the plaintiff against the second defendant for damages to be assessed.
2. The second defendant is to pay the plaintiff’s and first defendant’s costs of the separate determination of the issue of liability on a solicitor and client basis as agreed or assessed.
3. In relation to the costs order made in favour of the plaintiff, except in relation to disbursements, those costs may be assessed but not otherwise enforced until final judgment in the proceedings or settlement of the proceedings.
In proceedings 205 of 2014, the orders of the Court are:
1. The Court declares that the accident involving the plaintiff and the first defendant which occurred on 1 November 2009 was a motor accident within the meaning of s 7 of the Road Transport (Third Party Insurance) Act 2008.
2. The second defendant is to pay the costs of the plaintiff and first defendant of the proceedings on a solicitor and client basis.
3. In relation to the costs order made in favour of the first defendant, except in relation to disbursements, those costs may be assessed but not otherwise enforced until final judgment or settlement of proceedings 355 of 2012.
| I certify that the preceding sixty-two [62] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Master Mossop. Associate: Date: 30 January 2015 |
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