Honey v Richardson - [2015] SASC 119

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
HONEY & ANOR v RICHARDSON
[2015] SASC 119
Judgment of The Honourable Justice Bampton
14 August 2015
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - IN GENERAL AND PRELIMINARY MATTERS
PROCEDURE - MISCELLANEOUS PROCEDURAL MATTERS - DECLARATIONS
The first plaintiff sustained catastrophic injuries when a prime mover driven by the defendant collided with the rear of a grape tote bin he was towing behind a tractor – the first plaintiff was driving the tractor in convoy with two other vehicles on the Sturt Highway pursuant to a permit issued by the Department for Transport, Energy and Infrastructure – the defendant admits the collision occurred but alleges any injuries suffered by the first plaintiff were caused or contributed to by his negligence – defendant issued third party proceedings against the drivers of the lead and middle vehicles in the convoy, the employer of the drivers and the owners of the three vehicles – the Motor Accident Commission has denied the third parties are covered by the insurance provided for in Schedule 4 of the Motor Vehicles Act 1959 – Motor Accident Commission joined as a third party.
Defendant sought a declaration prior to trial that the Motor Accident Commission is liable to indemnify the third parties for their liability to him for contribution, if any, pursuant to the statutory policies of insurance – whether declaration can be made before liability is determined.
Held (Application dismissed):
1. Court cannot make a declaratory order on hypothetical facts not admitted or determined.
2. The appropriate time to determine whether the MAC is liable to indemnify the third parties is at, or after, the trial of the substantive proceeding and the third party proceedings once findings have been made that would allow the Court to determine the issue of liability.
Motor Vehicles Act 1959 (SA) s 99(3), s 104, s 113, Sch 4; Supreme Court Act 1935 (SA) s 31; Supreme Court Civil Rules 2006 (SA) r 233, referred to.
Allianz Australia Insurance Ltd v National Jet Systems Pty Ltd (2005) 238 LSJS 93; Insurance Commission of Western Australia v Container Handlers Pty Ltd (2004) 218 CLR 89; Motor Accident Commission v ANI Corporation & Garrett (1997) 195 LSJS 226; The Law of Liability Insurance Ashton, Ronald & Derrington, Desmond (Lexis Nexis Butterworths, 3rd edition, 2013), considered.

HONEY & ANOR v RICHARDSON
[2015] SASC 119
Civil: Application
BAMPTON J.

During the grape harvest season, around midnight on 12 March 2008, the plaintiff, David Honey (Mr Honey), sustained catastrophic injuries when a prime mover driven by the defendant collided with the rear of a grape tote bin he was towing behind a Massey Fergusson tractor.
Background
Mr Honey was driving the Massey Fergusson tractor in convoy with two other vehicles on the Sturt Highway near Kingston-on-Murray.
The lead vehicle in the convoy was a Case tractor, driven by Dominic Nobile (Mr Nobile). The Case tractor was also towing a grape tote…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Honey v Richardson

Details

AGLC: Honey v Richardson [2015] SASC 119
Case: [2015] SASC 119
Decision Date: 14 August 2015

CaseChat Overview and Summary

In the case of Honey v Richardson, David Honey, the plaintiff, sustained catastrophic injuries in a road accident when a prime mover driven by the defendant collided with the rear of a grape tote bin he was towing behind a tractor. The collision occurred during the grape harvest season on the Sturt Highway, with Mr Honey driving the tractor in convoy with two other vehicles. The defendant admitted to the collision but argued that any injuries suffered by Mr Honey were due to his own negligence. The defendant issued third-party proceedings against the drivers of the lead and middle vehicles in the convoy, the employer of the drivers, and the owners of the three vehicles. The Motor Accident Commission (MAC), which insured the vehicles involved, was joined as a third party in the proceedings. The defendant sought a declaration before trial that the MAC was liable to indemnify the third parties for their liability to him for contribution, if any, under the statutory policies of insurance.

The court was required to decide whether it could make a declaration regarding the MAC's liability to indemnify the third parties before the liability of the defendant to the plaintiff and the third parties' liability to indemnify the defendant had been determined. The defendant argued that since the MAC had admitted the fact of the collision, it was obliged to indemnify the third parties in accordance with the terms of the statutory policies of Compulsory Third Party (CTP) insurance. The defendant contended that it was not necessary at that stage to make any admissions indicating actual liability on the part of the third parties, and the court could only grant indemnity in respect of the third parties' liability to the defendant for contribution, if any, pursuant to the claim. The MAC, however, opposed the declaration, arguing that it was premature to determine an obligation to indemnify before the liability of the third parties had been established.

The court concluded that it was premature to make a declaration regarding the MAC's liability to indemnify the third parties before the determination of the defendant's liability to the plaintiff and the third parties' liability to indemnify the defendant. The court emphasised that the obligation to indemnify under the statutory policies of insurance would depend on whether the driving of the vehicle caused the death or bodily injury, which would be a question of fact and judgment in every case. The court held that the defendant's application for a declaratory order was essentially hypothetical, as it presumed the defendant's liability without an admission or determination of the same. The court found that the appropriate time to determine the MAC's liability to indemnify the third parties was at or after the trial of the substantive proceeding and the third-party proceedings, once findings had been made that would allow the court to determine the issue of liability. The court dismissed the defendant's application for a declaration, stating that the matter should proceed to trial to resolve all issues, including the defendant's liability to the plaintiff and the third parties' liability to indemnify the defendant. The court also noted that a trial listed shortly would alleviate the plaintiffs' concerns about increased costs, delay, and the prospect of duplication of appeals.

Orders

Orders of the court

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Background

Background to the litigation

During the grape harvest season, around midnight on 12 March 2008, the plaintiff, David Honey (Mr Honey), sustained catastrophic injuries when a prime mover driven by the defendant collided with the rear of a grape tote bin he was towing behind a Massey Fergusson tractor. Background Mr Honey was driving the Massey Fergusson tractor in convoy with two other vehicles on the Sturt Highway near Kingston-on-Murray. The lead vehicle in the convoy was a Case tractor, driven by Dominic Nobile (Mr Nobile). The Case tractor was also towing a grape tote bin. The middle vehicle in the convoy was a Gregoire G120 grape harvester vehicle (the harvester) driven by Kym Cluse (Mr Cluse). The Massey Fergusson tractor was owned by Ambrosia Developments Pty Ltd (Ambrosia). Trevor McPhee (Mr McPhee) owned the Case tractor and the harvester. Mr McPhee, who has since died, was also the employer of Mr Honey, Mr Nobile and Mr Cluse. A permit issued by the Department for Transport, Energy and Infrastructure to Mr McPhee permitted the two tractors and the harvester (the vehicles) to travel in convoy in accordance with conditions specified in the permit (the permit). The vehicles were all registered in South Australia and insured by the Motor Accident Commission (the MAC). The defendant’s vehicle was registered in Victoria and insured by the Transport Accident Commission. The defendant was found guilty of driving without due care on 5 August 2011 and on 17 February 2012 his appeal against his conviction was dismissed.Mr Honey’s claim for damages Mr Honey and his wife issued proceedings against the defendant on 8 March 2011. In his defence filed on 18 October 2011, the defendant admits the collision occurred and alleges any injuries suffered by Mr Honey were caused or contributed to by his negligence. On 25 June 2013, Mr Honey formulated his claim. Third party proceedings On 25 March 2014, the defendant issued third party proceedings against Mr McPhee, Mr Nobile, Mr Cluse and Ambrosia (the third parties). The defendant alleges that any injuries or loss suffered by Mr Honey and his wife were caused or contributed to by the third parties’ negligence in the driving and the state of illumination of the vehicles. Hunt & Hunt Lawyers, acting on instructions from the MAC, filed notices of solicitor acting on behalf of all third parties. On 11 December 2014, Hunt & Hunt made application[1] that they no longer appear as solicitors for the third parties on the grounds the MAC had received advice to the effect that the allegations made against the third parties by the defendant do not give rise to an obligation to indemnity under the policies of insurance provided for in Schedule 4 of the Motor Vehicles Act 1959 (SA) (the MVA).[2][1] FDN 18.[2] Schedule 4 provides:The insurer insures the owner of the motor vehicle and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth.MAC joined as fifth third party

Evidence

Evidence Before The Court

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Decision

Reasons for decision

BAMPTON J

As noted by Cox J in Motor Accident Commission v ANI Corporation & Garrett,[9] whether death or bodily injury was a consequence of the driving of a vehicle will be a question of fact and judgment in every case.[9] (1997) 195 LSJS 226 at 225.Conclusion I agree with the MAC’s submission that it is premature for there to be a finding of an obligation to indemnify prior to a finding of liability against the third parties. The defendant has denied liability for Mr Honey’s injuries. Further, the defendant has alleged that Mr Honey is guilty of contributory negligence. It follows that if the defendant succeeds on the case he has pleaded; there can be no finding of liability against the third parties. What the defendant seeks is a declaratory order based on facts not admitted or determined or, in other words, a hypothetical order. For the Court to make the declaration sought it would have to presume the defendant’s liability and then consider Mr McPhee’s, Mr Nobile’s, Mr Cluse’s and Ambrosia’s liability. As stated in The Law of Liability Insurance:[10]If there is a possibility that a claimant may use a facultative statute to proceed directly against the insurer and threatens to do so, it may seek a declaratory order as to the parties’ respective rights and interests, but not on hypothetical facts such as the presumed liability of the insured that is not admitted nor yet determined.(Emphasis added)[10] Ronald Ashton & Desmond Derrington, The Law of Liability Insurance (Lexis Nexis Butterworths, 3rd edition, 2013) at 13-303. Justice Anderson considered the futility in granting hypothetical declarations of entitlement to indemnity prior to trial in Allianz Australia Insurance Ltd v National Jet Systems Pty Ltd:[11]… namely, their futility when all that the declarations really amount to is saying that the insurer will be liable if the claim falls within the policy. For that purpose, it is necessary to know where the injury was sustained, and to see whether there is an event which is covered by the policy. If, in due course, it is established there was an insured event, then the insured would be entitled to indemnity. That is something that everyone knows in any event and the declaration is not required for that purpose.[11] (2005) 238 LSJS 93. The appropriate time to determine whether the MAC is liable to indemnify the third parties is at, or after, the trial of the substantive proceeding and the third party proceedings once findings have been made that would allow the Court to determine the issue of liability. In my view, there should be a trial at which all of the evidence relevant to the defendant’s liability to Mr Honey and the third parties’ liability to indemnify the defendant is heard. This would ensure that all issues are resolved without the plaintiff having to endure further delays in the finalisation of his claim. The MAC has indicated that it is ready to proceed to trial at short notice. A trial listed shortly would alleviate the plaintiffs’ legitimate concern about increased costs and delay and the prospect of duplication of appeals.

Ratio Decidendi

Legal Principle Established

Established by: BAMPTON J

The defendant made application (FDN 26), seeking orders that there be a separate trial of the issues between the defendant and the MAC prior to the trial of the action between the plaintiffs, defendant and the third parties. The declaration sought At the hearing of FDN 26 the defendant abandoned his application for a separate trial. The defendant seeks, on the basis of the statement of agreed facts, a declaration prior to trial that the MAC is liable to indemnify the third parties for their liability to him for contribution, if any, pursuant to the Third Party Notice as their insurer. In the statement of agreed facts the MAC has admitted: ·that it is the insurer of each of the vehicles;[3] and·that the collision occurred on the Sturt Highway to the west of the Kingston Bridge at Kingston-on-Murray.[3] Agreed facts 8, 17 and 22.Defendant’s submissions The defendant submits that the terms of the Compulsory Third Party (CTP) insurance for each of the vehicles are that the MAC insures both the owner and driver of each vehicle. Therefore, the MAC insures Mr McPhee as the owner of the Case tractor and the harvester, Mr Nobile and Mr Cluse as drivers of the Case tractor and the harvester, and Ambrosia as the owner of the tractor driven by Mr Honey. Pursuant to Schedule 4 to the MVA, that insurance is for all liability for bodily injury caused by or arising out of the use of the vehicle. The defendant argues that as the MAC has admitted the fact of the collision it is obliged to indemnify the third parties in accordance with the terms of the statutory policies of CTP insurance. The defendant points out that the declaration sought only seeks indemnity in respect of the third parties’ liability to him for contribution, if any, pursuant to the claim. It is submitted that it is not necessary at this point for there to be any admissions tending to show actual liability on the part of the third parties. The defendant asserts that he would be entitled to seek judgment by default against the third parties as none of them have filed a notice of address for service. Whilst it is not necessary for me to determine whether or not the defendant is entitled to default judgment, a Court cannot enter default judgment against a third party prior to admission or determination of a defendant’s liability to a plaintiff. The Court would have to determine the nature and extent of a defendant’s entitlement to contribution or indemnity once the defendant’s liability to the plaintiff has been determined. Unless a defendant admits liability or a court determines a defendant’s liability to a plaintiff, the defendant has no liability against which third party liability can be determined. In this matter one of the remedies sought by the defendant is the declaration. The Court cannot make a declaration in entering default judgment without determining the defendant’s entitlement to the declaration sought. In the circumstances of this case, that must involve determination of Mr Honey’s claim.