Insurance Australia Limited t/as NRMA Insurance v Borrow

DETERMINATION OF MERIT REVIEW PANEL
CITATION:	Insurance Australia Limited t/as NRMA Insurance v Borrow [2024] NSWPICMRP 6
CLAIMANT:	Leonie Borrow
INSURER:	Insurance Australia Limited trading as NRMA Insurance
MERIT REVIEW PANEL MEMBERS:	John Harris Bianca Montgomery-Hribar Anthony Scarcella
DATE OF DECISION:	5 December 2024
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); review of merit review decision; whether insurer entitled to refuse payment of statutory benefits in accordance with part 3 of the Civil Liability Act (CL Act) as applied by section 3.39 of the MAI Act; pure mental harm; claimant’s husband riding motorbike when he lost control, struck another vehicle and collided with guard rail dying shortly thereafter; claimant seeking statutory benefits against insurer of husband’s vehicle; finding that husband wholly at fault for the purposes of this dispute; concept of review; doubtful or no requirement of satisfaction of error; Tan v National Australia Bank Ltd applied; statutory interpretation where section of MAI Act specifically requires that it be read “subject to any necessary modifications”; court or tribunal should refrain from projecting policy views into the interpretation process; Australian Education Union v Department of Education and Children’s Services applied; insurer submitted that section 30 of CL Act required the presence of tortious defendant; no tortious defendant required given no-fault statutory scheme; Homsi v Homsi referred to; AAI Ltd (t/as GIO) v Evic and AAI Ltd v Singh applied; section 3.39 applies to payment of statutory benefits; text of legislation does not require tortious defendant; necessary modifications to section 30 of the CL Act requires that insurer is liable for statutory benefits for pure mental harm in connection with another person being killed or injured; section 3.39 of the MAI Act subject to clause 8 of the MAI Regulations; clause 8 modifies application of CL Act in relation to mental harm under section 3.39; necessary intendment of clause 8(2) and (3) that the cessation of benefits applies because no fault benefits are payable in the first 52 weeks; Held – merit review decision confirmed.
DETERMINATIONS MADE:	CERTIFICATE The review panel confirms the decision of the merit reviewer dated 3 September 2024. 1.

STATEMENT OF REASONS

INTRODUCTION

Mr Christopher Borrow died in a motorcycle accident on 17 March 2024.
Mr Borrow was riding his motorcycle travelling in a north-easterly direction on The Lakes Way, Boolambayte, as part of a charity ride.[1] It was raining heavily and Mr Borrow commenced a tight left bend. The motorcycle lost traction, causing his motorbike to drop onto the road and slide across into the oncoming lane.
[1] Insurer’s Supplementary Bundle A4, p8.
At this time, Mr Kelly was travelling in a south-westerly direction on The Lakes Way and approaching the same bend. Mr Kelly stated that, about a third of the way around the bend, he noticed a group of motorcyclists coming around the corner in the opposite direction. He saw the front wheel of Mr Borrow’s motorcycle slip, then the motorcycle hit the roadway and slid into Mr Kelly’s lane. Mr Kelly heavily applied the brakes but could not prevent a collision between the front left of his vehicle and Mr Borrow. Mr Borrow then slid off the roadway and collided with the Armco railing.[2] Mr Borrow was pronounced dead a short time later.
[2] Insurer’s Supplementary Bundle A4, p8.
Mr Borrow’s wife, Leonie Borrow, was unable to work for 12 weeks following the accident. On 13 May 2024, Ms Borrow made a claim on NRMA Insurance (insurer), the third-party insurer of Mr Borrow’s motorcycle, seeking financial assistance for the leave she took during the period immediately following the motor accident, and to cover any future leave that may be required.[3]
[3] Leonie Borrow – Supporting Documents p1.
Ms Borrow alleges that her husband’s death caused her “significant mental trauma and distress”, and that she is “overwhelmed with grief, sadness and a deep sense of loss”.[4] She stated that:
“His passing has left me struggling with anxiety, insomnia, and difficulty concentrating. These challenges have made it impossible for me to return to work.”[5]
[4] Insurer’s Supplementary Bundle A5, p11.
[5] Insurer’s Supplementary Bundle A5, p11.
Ms Borrow did not witness the motor accident.
Dr Victoria Frostis, general practitioner, provided a certificate of capacity dated 21 May 2024 which certified that Ms Borrow had no capacity for any work from 18 March 2024 to 31 May 2024 and diagnosed “bereavement post husband passing away in MVA”.[6] The treatment listed was “grief counsellor via SIRA / CTP”.[7]
[6] Insurer’s Supplementary Bundle A11, p2.
[7] Insurer’s Supplementary Bundle A11, p4.
Ms Borrow further alleged that she suffered subsequent distress due to administrative issues on the part of the insurer, including as a result of the insurer sending a copy of the police report to her deceased husband’s email address.[8] Prior to this administrative error, Ms Borrow was unaware that a second vehicle was involved in the motor accident.
[8] Leonie Borrow – Supporting Documents A4 (Application for internal review), p19.
The medical evidence provided by Ms Borrow in respect of her alleged psychological injuries is the certificate of capacity dated 21 May 2024, described above at paragraph 7.
A dispute has arisen between Ms Borrow and the insurer as to whether she is entitled to statutory benefits under the Motor Accident Injuries Act 2017 (NSW) (MAI Act).
The issue before the review panel is whether the insurer is entitled to refuse payment of statutory benefits in accordance with Part 3 of the Civil Liability Act 2002 (NSW) (CL Act) (as applied by section 3.39 of the MAI Act). This is a merit review matter for the purposes of Part 7 of the MAI Act and within the meaning of Schedule 2 clause 1(t).

Relevant legislation

Weekly benefits are payable pursuant to Division 3.3 of the MAI Act based on the earner being “injured as a result of a motor accident”. Various sections provide time periods for the payment of statutory benefits and quantify the minimum and maximum statutory benefits payable.[9]
[9] See ss 3.6 – 3.10 of the MAI Act.
Section 3.11 of the MAI Act provides for the cessation of weekly statutory benefits after 52 weeks to injured persons where the motor accident was “caused wholly or mostly by the fault of the person”.
Section 3.24 of the MAI Act provides that an injured person is entitled to statutory benefits for treatment and care expenses. The right to payment under that section is not dependent upon a finding of fault. Section 3.28, like s 3.11, limits statutory benefits to a period of 52 weeks if “the motor accident was caused wholly or mostly at fault by the person”.
Division 3.5 of the MAI Act specifies restrictions and limitations on the entitlement to statutory benefits. These limitations include where the at-fault driver was uninsured,[10] where workers compensation benefits are payable[11] or where the injured person commits a serious driving offence.[12]
[10] Section 3.36 MAI Act.
[11] Section 3.35 MAI Act.
[12] Section 3.37 MAI Act.
Within the limitations and restrictions of Division 3.5 is s 3.39 of the MAI Act, which provides:
“Part 3 (Mental harm) of the Civil Liability Act 2002 applies to the payment of statutory benefits under this Part in connection with an injury in the same way as it applies to the award of damages in connection with an injury, subject to any necessary modifications and to any modifications prescribed by the regulations.”
That provision specifies that it is “subject to any necessary modifications and to any modifications prescribed by the regulations”.
Part 3 (Mental harm) of the CL Act consists of sections 27 to 33. Section 30 regards “Limitation on recovery for pure mental harm arising from shock”.
Section 30 of the CL Act relevantly provides:
(1) This section applies to the liability of a person (the defendant) for pure mental harm to a person (the plaintiff) arising wholly or partly from mental or nervous shock in connection with another person (the victim) being killed, injured or put in peril by the act or omission of the defendant.
(2) The plaintiff is not entitled to recover damages for pure mental harm unless—
(a) the plaintiff witnessed, at the scene, the victim being killed, injured or put in peril, or
(b) the plaintiff is a close member of the family of the victim.
(3) Any damages to be awarded to the plaintiff for pure mental harm are to be reduced in the same proportion as any reduction in the damages that may be recovered from the defendant by or through the victim on the basis of the contributory negligence of the victim.
(4) No damages are to be awarded to the plaintiff for pure mental harm if the recovery of damages from the defendant by or through the victim in respect of the act or omission would be prevented by any provision of this Act or any other written or unwritten law.
Close family member is defined in subsection 30(5) and includes the spouse or partner of the victim.
Clause 8 of the Motor Accident Injuries Regulation 2017 (NSW) (Regulations) is expressed to modify Part 3 of the CL Act to the payment of statutory benefits. This provision falls within the meaning of “any modifications prescribed by the regulations” in s 3.39 of the MAI Act and provides:
(1) The application of Part 3 (Mental harm) of the Civil Liability Act 2002 to the payment of statutory benefits under Part 3 of the Act in connection with an injury is subject to the modification set out in this clause.
(2) The requirement in section 30 (3) of the Civil Liability Act 2002 (to reduce damages awarded to the plaintiff for pure mental harm in the same proportion as any reduction in the damages that may be recovered from the defendant by or through the victim on the basis of the contributory negligence of the victim) is to be read as a requirement to apply the at-fault statutory benefits limitations to the payment of statutory benefits to the claimant in the same way as they apply to the payment of statutory benefits to the victim.
(3) The at-fault statutory benefits limitations are the provisions of Part 3 of the Act that provide for the reduction of, or cessation of entitlement to, weekly payments of statutory benefits to injured persons wholly or mostly at fault in the motor accident from which the injury resulted.
(4) Words and expressions used in subclause (2) have the same meaning as they have in section 30 of the Civil Liability Act 2002. [emphasis in original]

Procedural history and conduct of the review

On 13 May 2024, Ms Borrow lodged an application for personal injury benefits with the insurer. On 24 May 2024, the insurer issued a liability notice declining her application on the following basis:
“For your claim to have satisfied the requirement of point 1 [of section 30 of the Civil Liability Act 2002], there must be 3 distinct parties to the incident, being the Defendant (Insured Driver), the Plaintiff (Claimant) and the Victim (Third Party). In this case the Insured driver is both the Defendant and the Victim given there was only one occupant in the vehicle and Late Christopher Borrow was held to be the responsible party at fault.
The wording of section 30(1) of the Civil Liability Act 2002 (NSW) (Civil Liability Act) which limits the scope of such claims as follows:
‘This section applies to the liability of a person (the defendant) for pure mental harm to a person (the plaintiff) arising wholly or partly from mental or nervous shock in connection with another person (the victim) being killed, injured or put in peril by the act or omission of the defendant.’
However, the NSW Police considered that the insured driver was at fault for the subject accident, and he was subsequently held to be the responsible party.
In accordance with section 30 of the Civil liability Act 2002 (NSW) the fault aspect in terms of liability flows through to the person claiming and hence since the Insured driver is at fault this aspect of the fault will apply to your claim.
Therefore, we regret to inform you that your claim for statutory benefit is declined.”[13]
[13] Insurer’s Supplementary Bundle A6, p17-18.
On 6 June 2024, Ms Borrow sought internal review of the insurer’s decision. On 21 June 2024, the insurer informed Ms Borrow that it had completed a review of the decision dated 24 May 2024 and decided that the original decision should be affirmed. The internal review found that the insurer was entitled to refuse payment of statutory benefits in accordance with Part 3 of the CL Act, as applied by section 3.39 of the MAI Act. Relevantly, the insurer found:
“Applying the Act and Regulations, as your late husband was the at fault party in the subject MVA, you are not entitled to statutory benefits for the first 52 weeks from the date of the subject MVA.”[14]
[14] Insurer’s Supplementary Bundle A8, [9]
On 29 July 2024, Ms Borrow referred the dispute to the Personal Injury Commission (Commission) for merit review in accordance with Division 7.4 of the MAI Act.[15] On 3 September 2024, the Commission set aside the insurer’s decision of 24 May 2024 to deny Ms Borrow statutory benefits and, in substitution for that decision, held that the insurer is not entitled to refuse payment of statutory benefits to Ms Borrow.[16]
[15] Insurer’s Supplementary Bundle A9, p31.
[16] Borrow v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMR 67 (Borrow).
The insurer has sought a review of the Merit Reviewer’s decision pursuant to section 7.15 of the MAI Act.
The review panel met and is satisfied that sufficient information has been supplied to it in connection with the proceedings so that the review panel may determine the matter on the papers without holding a conference or formal hearing.[17]
[17] See s 52(3) of the Personal Injury Commission Act 2020 (NSW) and Procedural Direction PIC2.

Merit Reviewer’s reasons

Merit Reviewer Cassidy issued a certificate and reasons dated 3 September 2024.
Reference was made by the Merit Reviewer to the scheme of statutory benefits under Division 3.3 of the MAI Act. It was noted “[h]ow the CL Act mental harm provisions are to be applied to the statutory benefits scheme is the real issue in the current proceedings”.[18] This involved an examination by Merit Reviewer Cassidy of whether the relevant sections of the CL Act required modification and, if so, what “necessary modifications” were required.[19]
[18] Borrow, [51].
[19] Borrow, [57]-[58].
Merit Reviewer Cassidy set out various “necessary modifications” to the CL Act provisions when importing them into Part 3 of the MAI Act, and concluded:
“[83] Section 3.39 of the MAI Act imports the provisions of the mental harm provisions of the CL Act subject to any necessary modifications and any modification prescribed by the Regulation.
[84] Section 30(1) of the CL Act needs to be modified to adjust the terminology used and to allow persons with pure mental harm to recover statutory benefits in circumstances where there was no fault on the part of the owner or driver of a motor vehicle or even if the motor accident was caused by the fault of the primary victim of the accident.
[85] Section 30(1) should therefore be modified to read as follows:
"This section applies to the liability of the relevant insurer to pay statutory benefits for pure mental harm to the claimant arising wholly or partly from mental or nervous shock in connection with a victim being killed, injured or put in peril in a motor accident.”
[86] There is no dispute in this matter that the claimant, as Chris Borrow’s wife, is a close member of the family of the victim within the proposed modified version of s 30(2). The insurer has not raised an argument to suggest s 30(4) applies and NRMA has not disputed that the claimant has sustained a psychological or psychiatric illness as a result of the accident.
[87] It follows therefore that the insurer is not entitled to refuse payment of statutory benefits to Mrs Borrow.” [20]
[20] Borrow, [83]-[87].

SUBMISSIONS

The review panel has considered the Insurer’s submissions in support of the review application dated 27 September 2024 (review submissions) and the insurer’s merit review reply submissions dated 15 August 2024 (reply submissions). Certain submissions in the reply submissions are adopted in the review submissions.
Ms Borrow made no submissions although support for her position is found in the reasons of the Merit Reviewer.

Insurer’s reply submissions

The insurer referred to the distinction between “primary” or “immediate” victims and “secondary” victims, focusing on the different duty of care owed to a primary victim and a secondary victim.[21] The insurer submitted that s 30 of the CL Act “codifies the common law in respect of secondary victim claims”[22] and submitted that the claimant was not an “immediate or primary victim” and was only entitled to compensation if she satisfied the requirements in s 30 of the CL Act.[23]
[21] Insurer’s reply submissions, [19]-[24].
[22] Insurer’s reply submissions, [21].
[23] Insurer’s reply submissions, [23].
The insurer cited various common law authorities concerning “primary” or “immediate” victims and claims for damages involving psychiatric injury.[24] The insurer submitted that Ms Borrow does not satisfy the definition of an immediate or primary victim as there was no immediate physical proximity between her and the motor accident.[25]
[24] Insurer’s reply submissions, see [25]-[37].
[25] Insurer’s reply submissions, [38(a)].
In respect of whether the claimant was a “secondary” victim, the insurer submitted there was a requirement that psychiatric injury was caused by direct perception of harm “as a result of the tortious action of another” citing Homsi v Homsi[26]:
“The Claimant does not satisfy the definition of a secondary victim. What is missing is the presence of an established pre-existing duty between the tortfeasor and the primary victim, which gives rise to a discrete duty owed to the secondary victim. As was made clear in Homsi, the common law does not recognise a general duty on the part of the driver of a motor vehicle not to cause psychiatric injury to a close relative as a result of injury to himself or herself”.[27]
[26] [2016] VSC 354.
[27] Insurer’s reply submissions, [38].
For these reasons, the insurer submitted that Ms Borrow does not satisfy the requirements of s 30 of the CL Act and would have no entitlement to damages under Part 3 of the CL Act. Accordingly, pursuant to s 3.39 of the MAI Act, Ms Borrow had no entitlement to statutory benefits under Part 3 of the MAI Act.[28]
[28] Insurer’s reply submissions, [38(c)-(d)].
The insurer referred to clause 8 of the Regulations and submitted that “clause 8 [Regulations] has no relevance in the context of the current dispute”.[29]
[29] Insurer’s reply submissions, [16].

Insurer’s review submissions

The insurer’s review submissions focused on principles of statutory interpretation and alleged error in the merit review decision.[30] The insurer submitted that the Merit Reviewer re-wrote the provisions which cannot be justified as a necessary modification. It submitted:
“No matter what it might be thought the context of the legislation discloses, the interpretation process must begin and end with the text of the legislation. A court or tribunal cannot legislate”.[31]
[30] Insurer’s review submissions, [1.4], [3.9].
[31] Insurer’s review submissions, [2.5].
The insurer submitted that, in the current circumstances, where an Act contains a provision requiring it to be read and construed with provisions of another, the effect is to require the relevant parts of the CL Act notionally to be written into the MAI Act, with each of the provisions of the two Acts to be construed as if they were included in the one Act.[32]
[32] Insurer’s review submissions, [2.14].

The insurer also submitted that cl 8(4) of the Regulations provides that the words in subclause (2) have the same meaning as s 30 of the CL Act.[33] That submission was not developed.
[33] Insurer’s review submissions, [3.38].
Notably, this submission deviates from the insurer’s reply submissions, where it was said that cl 8 of the Regulations has no relevance to the current dispute.[34] Further, the insurer’s review submissions stated:
“It is noteworthy that Clause 8 MAIR, which is the extent of the modification to Part 3 CLA prescribed by the regulations, includes the following provisions:”.
Subclauses (2) to (4) of Clause 8 of the Regulations were referenced, with emphasis placed on subclause 8(4).[35]
[34] Insurer’s reply submissions, [16]; Insurer’s review submissions, [3.7].
[35] Insurer’s review submissions, [3.7].
It was noted that, as a general principle, courts are not at liberty to consider any word or sentence as superfluous or insignificant, and all words must, prima facie be given some meaning and effect.[36] The court or tribunal is required ‘to construe an Act, not to rewrite it, in the light of its purpose’.[37] The insurer submitted that the reference in s 3.39 of the MAI Act to “necessary modifications” is no more than a recognition that there can be circumstances of “clear necessity” where it is appropriate to make modifications to the legislation as part of the interpretation process.[38]
[36] Insurer’s review submissions, [2.18].
[37] Insurer’s review submissions, [3.11].
[38] Insurer’s review submissions, [3.10].
The insurer referred to “cutting and pasting with editing that is ‘necessary’” and to the adoption of s 30(1) of the CL Act “subject to modification” in the reasons of the Merit Reviewer, which was submitted to highlight the Merit Reviewer’s erroneous approach to statutory interpretation.[39]
[39] Insurer’s review submissions, [3.9].
It was submitted that the Merit Reviewer erred in assuming the incorporating Act should be given pre-eminence and failed to give proper weight to the context and purpose of the provisions being incorporated. Section 3.39 of the MAI Act was said to require the relevant parts of the incorporated Act (Part 3 of the CL Act) notionally to be written into the incorporating Act (Part 3 of the MAI Act).[40] Further, it was submitted that the effect of Part 3 of the CL Act is clear and is a codification of the law in respect of secondary victims,[41] and that:
“[T]he incorporation of section 30(1) CLA, with its well-known meaning, into Part 3 MAIA must be intended.”[42]
[40] Insurer’s review submissions, [3.33].
[41] Insurer’s review submissions, [3.34]-[3.35]
[42] Insurer’s review submissions, 3.37.
The insurer submitted that the process adopted by the Merit Reviewer of reading words into a provision was otherwise inconsistent with the decision of the High Court in Taylor v Owners – Strata Plan No 11564.[43] The Merit Reviewer’s substantial re-writing of provisions as part of the statutory construction process, particularly s 30(1) of the MAI Act, was submitted to create a category of claimant previously not recognised by law.[44] It submitted that this cannot be justified on the basis that it was a ‘necessary modification’ or one necessary to effectuate the purpose of the relevant provisions within the meaning of s 3.39 of the MAI Act.[45]
[43] [2014] HCA 9; (2014) 253 CLR 531 (Taylor).
[44] Insurer’s review submissions, [3.39], [3.40], [3.45].
[45] Insurer’s review submissions, [3.39], [3.40], [3.45].

REASONS

Factual findings

The dispute before the review panel, crystallised by the insurer’s submissions, focuses on the interpretation of s 3.39 of the MAI Act and whether, by its operation, the insurer is entitled to refuse payment of statutory benefits to Ms Borrow in accordance with Part 3 of the CL Act with focus on s 30 of the CL Act.
Whether Ms Borrow is entitled to statutory benefits requires satisfaction of other requirements contained in the MAI Act. Any associated findings are unnecessary because they are beyond the scope of the dispute before the review panel.
However, for the purposes of these proceedings, the evidence establishes, and we find that Ms Borrow has brought a claim for statutory benefits against the insurer of her husband’s vehicle. Mr Borrow lost control of his vehicle on a bend in wet conditions, suggesting that he failed to drive at a safe speed in the circumstances.
There is no basis on the evidence before us to find any fault on the driver of the vehicle heading in the opposite direction. Mr Kelly was driving in his own lane with no suggestion of excessive speed and minimal time to react to the collision when Mr Borrow slid across the path of his vehicle.
It is otherwise unclear how Mr Borrow sustained the injuries which caused the loss of his life, although on the witness evidence these injuries were likely due, in part, to his impact with the Armco railing.

Concept of review

This is a referral of a merit review decision to a review panel pursuant to s 7.15 of the MAI Act. The review panel is to conduct a “review” of a single merit review decision (s 7.15(1)) and may confirm or set aside and make a decision in substitution of the single merit review decision (s 7.15(4)).
In Tan v National Australia Bank Ltd,[46] Basten JA noted a series of decisions of the NSW Court of Appeal which held that it was “doubtful” or “no requirement” to find error before revoking a decision.[47] His Honour also noted the observations of the plurality of the High Court in Brandy v Human Rights and Equal Opportunity Commission[48] when they stated:
“But what emerges from the judicial decisions and, for that matter, from statutes is that ‘review’ has no settled pre-determined meaning; it takes its meaning from the context in which it appears”.[49]
[46] [2008] NSWCA 198 (Tan).
[47] Tan at [7], Bell JA (as his Honour then was) and Young CJ in Eq agreeing.
[48] [1995] HCA 10 (Brandy).
[49] Brandy at [31].
Read contextually, the review panel is conducting a “review” (s 7.15(1)). The application for a referral of a decision to a review panel may only be on the grounds that the decision was “incorrect in a material respect” (s 7.15(2)). The President is to refer the application to a review panel if satisfied “there is reasonable cause to suspect that the decision determining the review was incorrect in a material respect”.
The powers of the review panel to confirm or vary the decision are contained in s 7.15(4) of the MAI Act.
The legislation imposes a low bar test for enabling a review to proceed to a merit review panel in that the President must be satisfied that there is “reasonable cause to suspect” that the original decision was “incorrect in a material respect”.
There is no statutory requirement that the review panel is required to be satisfied of error “in a material respect”.
The initial decision being reviewed is of a merit reviewer (s 7.13) who is required to provide a “brief statement to the certificate” setting out the reasons for determination. The requirement to provide a brief statement of reasons supports the position that the review panel would not look to the reasons to determine error but resolve the review based on the material before it.
In these circumstances, we are of the view that the authorities referenced in Tan have application to the definition of the review by a review panel under s 7.15 of the MAI Act.

Principles of statutory construction

As the plurality stated in Military Rehabilitation and Compensation Commission v May,[50] the “question of construction is determined by reference to the text, context and purpose of the Act” citing Project Blue Sky Inc v Australian Broadcasting Authority[51] and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue.[52]
[50] [2016] HCA 19 (May) at [10].
[51] [1998] HCA 28 at [69]–[71].
[52] [2009] HCA 41 (Alcan) at [47].
In Grain Growers Limited v Chief Commissioner of State Revenue (NSW),[53] Beazley P stated (with whom Bathurst CJ and Leeming JA agreed) that “the starting point and end point is with the text of the provision”, citing the comments of the High Court in Alcan at [47] when the plurality stated:
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.” (footnotes omitted)
[53] [2016] NSWCA 359 at [108].
In SZTAL v Minister for Immigration and Border Protection,[54] Kiefel CJ, Nettle and Gordon JJ stated:
“The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.” (footnotes omitted)
[54] [2017] HCA 34 at [14].
The insurer otherwise referenced other High Court decisions such as Baini v R,[55] Commissioner of Taxation v Consolidated Media Holdings Ltd[56] and SAS Trustee Corporation v Miles,[57] which is consistent with the above principles.
[55] [2012] HCA 59 at [14]
[56] [2012] HCA 55 at [39].
[57] [2018] HCA 55 at [64]

Preliminary observations

We make some preliminary observations prior to an analysis of the various provisions.
First, the insurer referenced various authorities and correctly submitted that a court or tribunal should refrain from projecting their own policy views into the interpretation process. We agree with this submission.[58] We do not intend to comment on necessary modifications to s 3.39 of the MAI Act unless this is required to address the merit review dispute.
[58] The insurer referred to Australian Education Union v Department of Education and Children’s Service [2012] HCA 3; Esso Australia Pty Ltd v Australia Workers Union [2017] HCA 54 at [52]
Secondly, we do not read words into the provision in accordance with common law principles of interpretation. The test for reading words into a statutory provision is articulated in Taylor where the plurality of the High Court stated:[59]
“The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills ‘gaps disclosed in legislation’ or makes an insertion which is ‘too big, or too much at variance with the language in fact used by the legislature’.”
[59] At [38].
The principles set out in Taylor have been applied by the Court of Appeal in two appeals concerning the construction of the Workers Compensation Act 1987 and the Work Injury Management & Workers Compensation Act, 1998: State of NSW v Chapman-Davis[60] and Cram Fluid Power Pty Ltd v Green.[61]
[60] [2016] NSWCA 237 at [1] and [49].
[61] [2015] NSWCA 250 at [1], [12], [88] and [131].
The relevant test from Taylor would not be satisfied. However, it is otherwise unnecessary to apply the test enunciated in Taylor because s 3.39 of the MAI Act provides that the provisions of Part 3 of the CL Act apply to the payment of statutory benefits “subject to any necessary modifications and to modifications prescribed by the regulations”. We return to the relevance of these words later in our reasons.

Relevant statutory construction

The general entitlement to statutory benefits is conferred by s 3.1 of the MAI Act which provides:
(1) If the death of or injury to a person results from a motor accident in this State, statutory benefits are payable in respect of the death or injury as provided by this Part.
(2) Statutory benefits are payable (except as otherwise provided by this Part)—
(a) whether or not the motor accident was caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle, or
(b) even if the motor accident was caused by the fault of the person to whom the statutory benefits are payable.
The requirement for an entitlement to statutory benefits is dependent upon the existence of an injury that “results from a motor accident”. Injury is defined in s 1.4 of the MAI Act to include “psychological or psychiatric injury”.
Motor accident is defined in s 1.4 of the MAI Act and involves the use or operation of a motor vehicle causing death or injury. The notion of fault is irrelevant to whether there is a defined motor accident.
If it is accepted that Ms Burrow suffered a psychological injury, that injury was caused by the motor accident when her husband lost his life and she was advised of his death. Accordingly, Ms Burrow has a general entitlement to recover statutory benefits for psychological injury as defined in s 3.1 of the MAI Act.
Statutory benefits are paid by the relevant insurer.[62] If a motor accident involves more than one motor vehicle, the relevant insurer is defined as “the insurer of the at-fault motor vehicle”.
[62] Section 3.2, MAI Act.
The motor accident involved two vehicles. Ms Borrow has proceeded against the insurer of her husband’s motor vehicle, which, on the facts of this case discussed above, was the vehicle “which contributed most to causing the death or injury for which statutory benefits are payable”.[63]
[63] Section 3.2(4(b)), MAI Act.
There is no requirement in any of these provisions to show fault to recover statutory benefits unless there is an issue as to which vehicle is liable to make the payments. That issue does not arise in this matter as Ms Borrow only proceeded against the insurer of her husband’s vehicle.
The insurer’s submissions accept that Mr Borrow was wholly at fault for the motor accident.
The analysis of the legislation that the payment of statutory benefits under the MAI Act is a no-fault scheme is consistent with the observations of Mitchelmore J in AAI Ltd (t/as GIO) v Evic[64] and the Minister’s second reading speech on the introduction of the relevant Bill which is referenced by her Honour. Her Honour stated:
“Part 3 of the MAI Act, which deals with statutory benefits, did not form part of the motor accident scheme in earlier legislation; and, significantly, the entitlement to statutory benefits is not fault-based. In the second reading speech to the Motor Accident Injuries Bill 2017 (NSW), the then Minister described Part 3 as “[o]ne of the landmark changes” from the previous statutory regime, which would see “all injured people receive support soon after they lodge a claim”. The Minister stated (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 9 March 2017 at 1-2):
‘…Part 3 of the bill includes provisions for a statutory income, medical and care benefits for up to six months for all injured people, without any need for fault to be proven. At the moment, at-fault drivers can only claim a maximum of $5,000 under the accident notification form. This includes drivers, for instance, who may have been injured due to a momentary lapse in concentration or being blinded by the sun. The Government believes denying those people adequate support is not fair and only delays their recovery. NCTP [New South Wales compulsory third party] will extend coverage by providing a six-month safety net for all at-fault drivers.
…
Income benefits will be paid for up to two years for injured people not mostly at fault… If there is contributory negligence, such as not wearing a seatbelt or helmet in the case of a motorcyclist, payments for loss of earnings or earning capacity are subject to being reduced after six months.’”
[64] [2024] NSWSC 1272 (Evic) at [39]
A subsequent amendment to the MAI Act extended the provision of statutory benefits from 26 weeks to 52 weeks.[65] This amendment applied to this motor accident.
[65] Motor Accident Injuries Amendment Act 2022 (NSW).
In AAI Ltd v Singh[66] Fagan J expressed similar observations to those made in Evic. His Honour stated:
“The effect of s 3.1 is that statutory benefits are payable to a person who is injured in a motor accident notwithstanding that it was not caused by the fault of the owner or driver of any motor vehicle in the use or operation of that vehicle and even if the injury was caused by the fault of the injured person himself or herself.”[67]
[66] [2019] NSWSC 13 at [10] (Singh).
[67] Singh at [9].
The various contextual provisions and Supreme Court authority establish that the payment of statutory benefits for 52 weeks is based on a no-fault system.
As noted above, s 3.39 of the MAI Act limits the payment of statutory benefits under Part 3 in relation to mental harm, providing:
“Part 3 (Mental harm) of the Civil Liability Act 2002 applies to the payment of statutory benefits under this Part in connection with an injury in the same way as it applies to the award of damages in connection with an injury, subject to any necessary modifications and to any modifications prescribed by the regulations.”
Clause 8 of the Regulations provides for the “Application of provisions of Civil Liability Act 2002 relating to mental harm (section 3.39)”. This clause was referenced by the Merit Reviewer and the insurer. In our view, the significance of cl 8(2) and (3) has not been appreciated.
Clause 8(2) of the Regulations provides that s 30(3) of the CL Act:
“[I]s to be read as a requirement to apply the at-fault statutory benefits limitations to the payment of statutory benefits to the claimant in the same way as they apply to the payment of statutory benefits to the victim.”
The at-fault statutory benefits limitations are defined in cl 8(3) of the Regulations as “the provisions of Part 3 of the [MAI] Act that provide for the reduction of, or cessation of entitlement to, weekly payments of statutory benefits to injured persons wholly or mostly at fault in the motor accident from which the injury resulted”. An injured person who is wholly at-fault ceases to be entitled to statutory benefits beyond the 52-week period.
Clause 8 of the Regulations amends the application of Part 3 of the CL Act to provide statutory benefits are payable in connection with pure mental harm injuries where the claimant is a close family member of the family of the deceased or injured person. This is because it is a necessary intendment of reading cl 8(2) into s 30(3) of the CL Act that the reduction or cessation of statutory benefits after 52 weeks due to the “at-fault statutory benefits limitations” means that the claimant is entitled to statutory benefits on a no-fault basis in the first 52 weeks. The entitlement to statutory benefits cannot cease if, as the insurer submitted, they were never available because there was no tortious defendant.
If, as the insurer submitted, s 30 of the CL Act imposes a requirement for a tortious defendant, then there would be no need for cl 8(2) and (3) of the Regulations in situations where the driver was “wholly at fault”. This is because there would be no need to state that the claimant’s statutory benefits cease after 52 weeks where the deceased or injured person was “wholly at-fault” as the right to recover in pure mental harm cases would never arise.
The insurer’s submissions focus on the distinction at common law between primary or immediate victims and secondary victims and note that the duty of care owed by a road user to the secondary victim is separate to that owed to the injured or deceased person, citing Homsi. It was submitted that s 30 of the CL Act “codifies the common law in respect of secondary victims” and imposes restrictions and limits on common law rights. These common law rights, however, regard rights to claim damages and are separate and distinct from the rights provided by the MAI Act for statutory benefits.

Whether Mr Borrow owed Ms Borrow a tortious duty of care is, on our view, irrelevant to the issue before the review panel. The current matter is not a claim for damages but a claim for statutory benefits under a no-fault statutory scheme.
As set out in our reasons above, it is well established that the starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is to be had to its context and purpose.
It is clear from the text that s 3.39 of the MAI Act imports Part 3 of the CL Act to the “payment of statutory benefits”, subject to “any necessary modifications and to any modifications prescribed by the regulations”. Section 3.39 expressly provides that it applies to payments for statutory benefits, not payments for damages. Further, s 3.39 specifically refers to the CL Act applying to the “payment” of statutory benefits, rather than applying to the restriction or denial of a person’s entitlement to statutory benefits.
The insurer’s submission introduces a fault-based test for the receipt of statutory benefits in relation to a certain class of claimants, requiring the establishment and breach of a tortious duty of care. In our view, the text of the legislation leaves no room for this test to be imposed. This also aligns with the context and purpose of Part 3 of the MAI Act, which establishes a no-fault scheme for statutory benefits for persons injured in a motor vehicle accident for a temporal period.
There are “necessary modifications” to Part 3 of the CL Act when it is imported into the MAI Act, in addition to those specifically prescribed by cl 8 of the Regulations.[68] However, those modifications are minimal and limited to aligning the language of the CL Act to the MAI Act. They involve minor amendments to the language of s 30(1) to read that the insurer is liable for the payment of statutory benefits for pure mental harm in connection with another person being killed or injured resulting from the motor vehicle accident.
[68] This is distinct from the approach in Taylor, discussed above at [64]-[65].
We have also considered the wording of s 3.39 of the MAI Act in the context of the legislation and recent Supreme Court authority. To the extent that s 30 of the CL Act is incorporated into the statutory benefits scheme, that section is subject to cl 8 of the Regulations. It is clear from the contextual reading of the various provisions and the recent Supreme Court decisions that have considered the no-fault statutory benefits scheme that the necessary intendment of these provisions is that the statutory benefits scheme under Part 3 of the MAI Act apply to situations of pure mental harm.
We reject the insurer’s submission that there is an error in assuming that the incorporating Act (the MAI Act) should be given pre-eminence over the CL Act. Section 3.39 states that Part 3 of the CL Act applies “subject to any necessary modifications and any modifications prescribed by the regulations”. The meaning of “necessary modifications” must relate to the application of the no-fault provisions in the MAI Act. Accordingly, Part 3 of the CL Act applies “subject” to the necessary modifications required by the no-fault provisions of the MAI Act.
The insurer has conceded that Ms Borrow satisfies the definition of “close member of the family of a victim”, for the purposes of s 30(2) of the CL Act.
It is for these reasons that we reject the insurer’s submissions that Ms Borrow has no entitlement to statutory benefits under Part 3 of the MAI Act.

Purpose

For completeness, we will briefly consider purpose. The insurer referred to s 33 of the Interpretation Act 1987 (NSW) and the observations in Mills v Meeking[69] where Dawson J explained the effect of the similar provision under the Victorian legislation noting:
“The approach required by section 35 needs no ambiguity or inconsistency; it allows a court to consider the purposes of an Act in determining whether there is more than one possible construction…. However, if the literal meaning of a provision is to be midwifed by references to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the working otherwise adopted by the draftsman.”
[69] [1990] HCA 6 at [19]
There is a limit to which purpose can be taken particularly where the legislation, such as the MAI Act, contains inconsistent provisions as to the purposes of the legislation.
The principle of reading legislation in accordance with its purpose was discussed in All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd[70] when Leeming and Payne JJA observed:[71]
“42. The applicant repeatedly invoked in support of its construction the legislative purpose, which was to benefit subcontractors in its position. But Gleeson CJ observed in Carr v Western Australia (2007) 232 CLR 138; [2007] HCA 47 at [6] that:
‘[T]he underlying purpose of an Income Tax Assessment Act is to raise revenue for government. No one would seriously suggest that s 15AA of the Acts Interpretation Act has the result that all federal income tax legislation is to be construed so as to advance that purpose.’
43. In Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd[72] it was said, by reference to Carr, that:
‘Legislation rarely pursues a single purpose at all costs. Where the problem is one of doubt about the extent to which the legislation pursues a purpose, stating the purpose is unlikely to solve the problem’.”
[70] [2017] NSWCA 289.
[71] At [42]-[43], White JA agreeing.
[72] (2013) 248 CLR 619; [2013] HCA 36 at [40].
It is unclear from the insurer’s submission what purpose should be adopted and therefore how the insurer says the legislation should be construed in light of the unstated purpose. The MAI Act lists a number of competing objects which include:
-      encourage early and appropriate treatment and care;
-      early financial support; and
-      to keep premiums for this party polices affordable.
The provision of both early financial support and encouraging early and appropriate treatment is an object supporting any construction in support of Ms Borrows of receiving statutory benefits, particularly within the first 52 weeks. It is assumed, although not the subject of precise submission, that the insurer suggests its construction limits potential recipients, in this case described by it as secondary victims, and limits the payments of statutory benefits under the MAI Act and thus supporting the object of keeping premiums affordable.
We found no assistance from identifying a specific object which supported a purposive approach to construction. The text and context of the legislation is clear and there is no need to resort to a purposive construction.
However, we observe that there is a clear purpose in Part 3 of the MAI Act to provide for the payment of statutory benefits for a limited period on a no-fault basis. That purpose is not inconsistent with the MAI Act limiting the entitlement to claim damages under the MAI Act by the inclusion of the threshold injury test and a separately defined purpose limiting the right of injured persons to claim damages. This latter purpose has no relevance to the present proceedings.

FINDINGS

For different reasons, we have reached the same conclusion as the merit reviewer. The review is dismissed, and the decision of the single merit reviewer dated 3 September 2024 is confirmed.

[2024] NSWPICMRP 6

5 December 2024