Ingram v Axiak and Ors

[2013] HCATrans 64

[2013] HCATrans 064

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S305 of 2012

B e t w e e n -

MATTHEW DAVID INGRAM

Applicant

and

ALANA FAY AXIAK BY HER TUTOR DONNA MARIE AXIAK

First Respondent

MIKAELA AXIAK BY HER TUTOR DONNA MARIE AXIAK

Second Respondent

MICHAEL AXIAK

Third Respondent

Application for special leave to appeal

HAYNE J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 15 MARCH 2013, AT 11.44 AM

Copyright in the High Court of Australia

____________________

MR K.P. REWELL, SC:   I appear for the applicant with my learned friend, MR M.A. CLEARY.  (instructed by Curwoods Lawyers)

MR R.S. SHELDON, SC:   May it please the Court, I appear with my learned friend, MR P.J. NOLAN, for the respondent.  (instructed by Stacks/Goudkamp Solicitors)

HAYNE J:   Yes, Mr Rewell.

MR REWELL:   Your Honour, this application involves a question of statutory interpretation which is of critical importance to the motor accidents scheme in New South Wales, but is also important to each and every interstate insurer, private or public, which deals with compulsory third party insurance of vehicles in each State and Territory of Australia, and I will explain shortly why.

The facts of the case are very straightforward, not in dispute and tragically common.  This is what is colloquially called a dart‑out case.  Ms Axiak, the accident victim, was a 14‑year old schoolgirl who ran from behind a departing bus straight into the path of the applicant’s vehicle.  The applicant had no possibility of avoiding a collision.  Unfortunately, Ms Axiak’s injuries are very severe.  She is a permanent participant in the Lifetime Care and Support Scheme in this State.  As such, fortunately her care and treatment is catered for by that scheme for the rest of her life.

At first the proceedings brought on behalf of Ms Axiak were quite conventional.  A statement of claim was filed setting out as particulars the, what I might call, usual particulars of negligence against the applicant.  Since the decision of this Court in Derrick v Cheung in 2001, it has been rather difficult for pedestrians such as Ms Axiak in dart‑out cases to succeed in obtaining damages.  But this case took a novel turn when the statement of claim was amended so as to abandon each and every allegation of negligence against the applicant and to substitute instead a claim that this was a blameless motor accident as defined in section 7A of the Motor Accidents Compensation Act, and I will come back shortly to the legislative history of that provision and indeed the part of the Act in which it is included.

The withdrawal of the allegations of negligence was understandable.  There can never have been much real doubt on the evidence that the driving of the applicant was beyond any criticism at all.  But to describe the accident as blameless was rather innovative, given that it was plain that it was the conduct of Ms Axiak at the age of 14 that was solely the cause of the accident and of her severe injuries.  Could I take the Court to section 7A of the Motor Accidents Compensation Act, which is the section that defines “blameless motor accident”, and I can tell the Court that this section was introduced as part of the legislative package that also introduced the Lifetime Care and Support Scheme and various other matters in New South Wales.  It came into effect on 1 October 2007, more than five years ago.  The definition is deceptively simple in its terms:

blameless motor accident means 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.

That is the phrase that caused the problem in this case.  Perhaps more particularly, it was the word “fault” that caused the problem in this case because “fault” is defined in section 3 of the Act.  The Act defines “fault” to mean “negligence or any other tort”.  The Court of Appeal came to the construction that the definition of “fault” should be read as “fault means the tort of negligence or any other tort” and, in short, the court found that Ms Axiak’s responsibility for the accident could be disregarded because she could not be guilty of negligence in the sense of the tort of negligence but, rather, she was clearly guilty of contributory negligence, although the use of the word “contributory” is a little curious in this context where there is no other negligence.

In all events, the applicant proposed that the word “fault” should be construed as meaning “non‑tortious or tortious negligence or any other tort” which, as the Court will note, does no violence at all by way of the language of the provision or definition.  At least it involves no more reading in of words to the definition than the Court of Appeal’s approach did.

What the applicant’s proposed construction would achieve is, firstly, to give a common sense meaning to the word “blameless” in the expression “blameless accident” and, perhaps more importantly, to give effect to the clear legislative purpose of these provisions, and that legislative purpose, we submit, was to provide a remedy to persons who were unfortunate enough to be injured in so‑called inevitable accidents.  The Court will be familiar with those.  They were the rare circumstances in which, for example, a driver lost consciousness for some unforeseeable reason, causing the driver to lose control of a vehicle and to injure innocent bystanders.

HAYNE J:   I think we are generally familiar with the way in which the issue arises, Mr Rewell, but do you not have then to grapple with what is 7F doing there?

MR REWELL:   Yes.

HAYNE J:   Do you not also perhaps have to grapple with the composite phrase “fault of any other person” and who is an “other person”?  Does it mean only other than the owner or driver of does it mean other than the owner or driver or victim?

MR REWELL:   Our contention has always been that the words “other person” or in particular the word “other” means other than the owner or driver.

HAYNE J:   I understand that.

MR REWELL: And that is because the Act itself, absent Division 1.2, or Part 1.2, only applies in circumstances where there is fault on the part “of the owner or driver of a motor vehicle in the use or operation of the vehicle” – section 3A(1). That is the keystone, as it were, of the Act. So owners and drivers of motor vehicles have an obvious special status in the motor accidents scheme. Furthermore, of course, it is owners and drivers of motor vehicles that are insured under compulsory third party policies; no‑one else. That was why, for example, in section 7B, fault has to be deemed to have been attributed to the owner or driver of a motor vehicle, because if there was no deemed fault, the Act would not apply because of section 3A(1) which specifically deals with the application of the Act and, therefore, the application of the compulsory third party insurance policies issued under the Act.

But what was the mischief that Parliament intended to remedy or deal with by inserting the blameless accident provisions?  Well, the Court of Appeal itself set out the relevant parts of the second reading speech - page 47 of the application book, your Honours – and in particular the second paragraph of the quotation:

Part 1.2 of the Bill provides a right of recovery to people injured in motor vehicle accidents occurring in New South Wales where no‑one is at fault.  That is an “inevitable” or “blameless” motor accident.

So it is clear as crystal what Parliament had in mind by the expression “blameless motor accident” and it then states that fault has to be deemed in such cases and that is because of section 3A(1).  It is our respectful submission that the Court of Appeal misidentified this legislative purpose.  Can I take your Honours to page 57 of the application book?  Referring in paragraph 58 from line 20 Justice Tobias said:

the mischief or object to which Part 1.2 of the Act is directed . . .As to the former, prior to the Amending Act, a person injured in a motor vehicle accident could only recover damages where he or she could establish “fault” on the part of the driver of the vehicle.

Well, that was not the “mischief” to which the provisions are directed.  His Honour went on to say at line 34:

The stated purpose of the Amending Act was to provide compulsory third party scheme entitlements to persons injured in motor vehicle accidents where there was “no fault” in the sense that the driver of the motor vehicle involved in the motor vehicle accident could not be made tortiously liable to the injured person for damages.

With respect, that was not the stated purpose of the amendments.  The stated purpose of the amendments was to deal with inevitable accidents where one can see how it is unjust that an innocent bystander injured in such an accident goes without damages.  As we all know, inevitable accidents are historically very rare.  The effect of the Court of Appeal’s decision is to extend the benefit of the blameless accident provisions to every pedestrian of any age injured in a motor accident, to every bicyclist of any age injured in an accident.  That, with respect, was not the legislative purpose.  So our submission is that in purporting to apply the purposive approach to statutory construction, the court actually misdirected itself as to what the legislative purpose was.

There are, we submit, two clear indicia that the Court of Appeal’s approach is in error.  The first is the stark inconsistency in construction of the word “fault” on the Court of Appeal’s approach between the use of that word in section 7A to which I have referred, and the use of the same word in section 7K, which is part of the next division of the Act dealing with a special entitlement for children introduced, of course, at the same time.  There is no doubt, and the Court of Appeal acknowledged that there is no doubt, that in section 7K the word “fault” embraces contributory negligence, exactly the thing that the court said that word could not do in section 7A.  If I could take the Court quickly to page 59 of the application book, there the Court of Appeal said at paragraph 64:

It is true that a construction of s 7A which includes only a motor accident caused by the tortious negligence or other tort of a driver of the relevant vehicle or any third party is inconsistent with the use of the word “fault” in s 7K(1) where it can only refer to a child’s contributory negligence in the conventional sense.  There can be little doubt that this is an anomaly.

Then the court goes on to state that the anomaly:

is dictated by the context in which the word “fault” is used –

But we respectfully submit, first, there is no anomaly when the word “fault” or the definition of the word “fault” is correctly construed.  Under the construction we propose, there is no anomaly.  Second, the fact that the Court of Appeal arrived at a construction of the word “fault” which led to a complete inconsistency in meaning in two different sections in the same part of the same Act means that that construction should have been avoided if it was possible to avoid it, and it was.

The second indicator of error, we respectfully submit, is that the Court of Appeal was left to assess Ms Axiak’s contributory negligence without any logical or scientific basis for doing so, because of course the applicant was entirely blameless, so no comparative analysis could be made of the contribution either to the accident or to the severity of injury between the two parties.  Any such comparison would inevitably lead to contributory negligence of 100 per cent.

The approach of the Court of Appeal was to make an evaluative judgment or value judgment which the court found led to an assessment of contributory negligence of 50 per cent, but that could have been any result without the parties being any wiser as to how the assessment was made.

HAYNE J:   But does the construction which you would urge give 7F any work to do?

MR REWELL:   Yes, it certainly does, your Honour.

HAYNE J:   Namely?

MR REWELL:   What is more, the Act could not work without 7F being there, on our construction.  It is at first blush apparently supportive of the Court of Appeal’s reasoning that section 7F is there permitting or requiring a reduction of damages for contributory negligence in a blameless accident.  But section 138 of the Act mandates that there be a finding of negligence in certain circumstances relevant to this case.  One is, for example, if a bicyclist fails to wear a helmet.  Section 138 mandates that there must be a finding of contributory negligence in those circumstances.  Section 7F permits the court to reduce the damages of a cyclist involved in a blameless accident if the cyclist does not wear a helmet.

Similarly, section 138 requires that there be a finding of contributory negligence if a passenger in a motor vehicle fails to wear an available seatbelt.  Again, if the accident is otherwise blameless, but the passenger is not wearing a seatbelt, section 7F permits the mandatory reduction of damages for contributory negligence to be made.  If section 7F was not there, section 138 could not work in blameless accident cases, yet section 138 was not amended as part of this package to exclude blameless accident cases.  So the logic is there.  Section 7F does have work to do, to answer your Honour’s question.

There is appellate authority for the approach to statutory construction that we urge upon the Court, in particular the approach to the construction of the word “negligence”.  We have included in the materials a case called Insurance Commission of Western Australia v Leigh where the Court of Appeal in Western Australia specifically contemplated giving the word “negligence” an expanded meaning which we have chosen to call non‑tortious or tortious negligence and the court made it clear there that non‑tortious negligence would embrace contributory negligence.  Again, the critical thing is here that that eliminates this impossible anomaly between section 7A and 7K.  We would respectfully submit that it is just not sufficient to say, “Well, we can’t reconcile the two sections.  It’s an anomaly”; it is not.

To deal specifically then with the application of the Court of Appeal’s decision, the respondents contend that this decision will affect only a small number of plaintiffs.  Frankly, that could not be further from being accurate.  Any pedestrian case in which liability is in dispute can now attract a pleading of blameless accident, and I can assure the Court that such amendments are being made in significant numbers in this State, and hardly surprisingly.  Nor should it be thought that – just to make that point clearer, if a statement of claim is filed, as it was in this case, and the defendant driver denies negligence and says, “The accident was all the fault of the pedestrian” it is now a simple matter of amending the statement of claim to say, “Well, if that’s right we’re compensated anyway under the blameless accident provisions”.  So it applies to every pedestrian, every bicyclist, every passenger.

The other matter is that it does apply to interstate insurers because where an interstate vehicle is involved in an accident in New South Wales, of course the lex loci applies. There has already been an attempt by Australia’s biggest CTP insurer, Suncorp Metway, to escape from the provisions of Part 1.2. That was in the Suncorp Metway Insurance Ltd v Wickham Freightlines Pty Ltd.  That was unsuccessful in the Supreme Court in Queensland and there has been no appeal.

In other words, the legislation in that State which provides for a compulsory third party policy, does respond.  We have included in the materials similar legislation from every other State in Australia, all of which will be caught.  In other words, when there is an accident here and the lex loci applies, the insurer is caught by these provisions regardless of its own policies in its own State, and of course that affects its ability to compute its premiums and revenues in each State and Territory of Australia.

For these reasons, we would respectfully submit that the question of statutory interpretation here is of such importance as to warrant the intervention of this Court.  If the Court pleases.

HAYNE J:   Yes, thank you, Mr Rewell.  Mr Sheldon.

MR SHELDON:   Thank you, your Honour.  Your Honours, can I deal firstly with the suggestion that the purpose of the Act was misunderstood in the Court of Appeal by taking your Honours back to page 47 of the application book and by pointing out to your Honours that the submission that the applicant makes that what was sought to be caught by these provisions was only those accidents which might be said to be inevitable.  As your Honours will see in the third line of the second extract at about point 42 on page 47, the Minister reading the Bill for a second time, does not say that is an inevitable motor accident.  He says:

That is an “inevitable” or “blameless” motor accident.

Your Honours, in my respectful submission, that clearly broadens the scope from the scope contended for by the applicant and begs the question, “What is a blameless motor accident?” a question which is, in my respectful submission, answered by reference to the Act.  The important feature, in my respectful submission, of section 7A where it talks about what is a blameless motor accident is that it picks up the definition of a motor accident and so one is driven back to section 3 where one sees that:

motor accident means an incident or accident involving the use or operation of a motor vehicle that causes the death of or injury to a person –

Now the reason that I take the Court in particular to the “definition of motor accident” is because it undermines, if not entirely destroys, the proposition that there can be a discernible difference between, as it were, an incident that is caused by a breach of duty and an injury that is caused by a failure to wear a seatbelt or a helmet.  The reason for that is that you do not have a motor accident unless you have an injury.

So the consequence is that the problem that my learned friend says section 7F is directed to, namely, marrying up with the contributory negligence provision in the general area of the Act, does not justify the construction urged for this reason, that if there is fault in failing to wear – I withdraw that.  If the plaintiff does not wear a seatbelt and the failure to do so contributes to the injury, then that is fault in a motor accident.  It is on the applicant’s construction because that failure contributes to the injury and the presence of injury is an essential element in the definition of “motor accident”.

So the construction which my learned friend urges does not, in my respectful submission, justify the view that there is some work for section 7F to do, because section 7F would nevertheless confront the fact that the injury was contributed to by the failure to take reasonable care by the plaintiff and, on the construction that the applicant urges in relation to the meaning of “fault”, that would constitute fault.  So, irrespective of this argument about what section 7F can do, we are back to the point where there is fault and, if my learned friend is right, fault means it cannot be a blameless accident.  For that reason, in my respectful submission, this construction produces as many problems, if not more problems, than it solves.

The suggestion that this has transformed the position in New South Wales into an entirely blameless scheme is wrong, with respect, because it is open to any defendant, just as it was open to the applicant in this case, to dispute that the accident is in fact blameless.  Now, it may well be in the interests of any given defendant to do that because of these provisions but, in my respectful submission, the court below approached the construction of these provisions bearing in mind the purpose of the provisions and adjusting the meaning of the word “fault” in one section, rather than confronting the anomaly that will arise from the interaction of section 7F with the contributory negligence provisions later in the Act, and rather than, as your Honours would have observed at page 58 of the appeal book at point 22, where the Court of Appeal observed that there are some 14 provisions in which the word “fault” is picked up which were not amended and were not apparently adverted to when the Act was amended.

Now, the consequences of reading “fault” so as to connote contributory negligence would be to potentially alter the meaning of each of those 14 provisions.  For those reasons, in my respectful submission, the construction adopted below was correct.  May it please the Court.

HAYNE J:   Yes.  Yes, Mr Rewell.

MR REWELL:   Your Honours, as to the point concerning the “definition of motor accident” in section 3, the critical fact is that section 3 defines a

motor accident as “an incident or accident”.  The matters with which section 137 deals have nothing to do with causation of an accident, failure to wear a seatbelt, failure to wear a helmet.  Those things are irrelevant to the cause of the accident.  They are relevant to the severity of injury and that is why it is necessary for section 7F to be there to pick them up because they are relevant to damages but they have nothing to do with the occurrence of the accident.

HAYNE J:   But are not both failure to wear a belt and failure to wear a helmet a species of want of care for one’s own safety?

MR REWELL:   Yes.

HAYNE J:   Is not your definition of “fault” in this provision immediately at stake, want of care for your own safety?

MR REWELL:   Certainly in one sense, yes; contributory negligence, to put it ‑ ‑ ‑

HAYNE J:   And Ms Axiak’s injuries, you would say, were caused by her fault because she did not take care for her own safety?

MR REWELL:   In a manner directly causative of the accident.

HAYNE J:   I understand that, yes.

MR REWELL:   Your Honour, the second thing I wish to say is that nothing my learned friend says attempts to address the inconsistency in the meaning of the word “fault” in section 7K and we would respectfully submit that simply cannot be disregarded, nor can it be disposed of by referring to it as an anomaly.  There is a stark inconsistency there which does not need to exist if our construction is adopted.  As the Court pleases.

HAYNE J:   Thank you, Mr Rewell.

The construction of Part 1.2 of the Motor Accidents Compensation Act 1999 (NSW) adopted by the Court of Appeal of New South Wales in this matter was an available construction of the provisions. If, as the applicant submitted, that construction extends the operation of the provisions beyond what was intended, it is for the Parliament of New South Wales to amend the Act accordingly. It is not shown to be in the interests of justice generally or in this particular case that there be a grant of special to appeal. Special leave is accordingly refused with costs.

AT 12:13 PM THE MATTER WAS CONCLUDED