Insurance Australia Limited t/as NRMA Insurance v Iuli
[2014] ACTSC 336
•18 December 2014
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Insurance Australia Limited t/as NRMA Insurance v Iuli & Anor |
Citation: | [2014] ACTSC 336 |
Hearing Date: | 4 November 2014 |
DecisionDate: | 18 December 2014 |
Before: | Ross J |
Decision: | That the appeal be dismissed with costs. |
Category: | Principal Judgment |
Catchwords: | APPEAL - GENERAL PRINCIPLES - Appeal from decision of Master - Third party insurance - cyclist injured by debris forty minutes after motor vehicle collision - must injury occur at the time of the accident - causal link between injury and actions of motor vehicle - Road Transport (Third-Party Insurance) Act 2008. |
Legislation Cited: | Legislation Act 2001 (ACT) Road Transport (General) Act 1999 |
Cases Cited: | Allianz Australia v GSF Australia (2005) 221 CLR 568 Casey v Alcock (2009) 3 ACT LR 1 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 Insurance Australia Limited t/as NRMA Insurance v Iuli & Anor [2014] ACTCA 50 Taylor v Owners - Strata Plan No 11564 [2014] HCA 9 Zotti v Australian Associated Motor Insurers Ltd (2009) 54 MVR 111 |
Parties: | Insurance Australia Limited t/as NRMA Insurance (Appellant) Tu’Ulenana Iuli (First Respondent) Bensah Afiabo (Second Respondent) |
Representation: | Counsel Mr J Pappas (Appellant) Mr B Meagher QC with Mr Sharwood (First Respondent) Mr M Treffers (Second Respondent) |
| Solicitors Moray & Agnew Lawyers (Appellant) Maurice Blackburn Lawyers (First Respondent) Minter Ellison Lawyers (Second Respondent) | |
File Number: | SC 235 of 2013 |
Decision under appeal: | Court/Tribunal: Supreme Court of the ACT Before: Master Mossop Date of Decision: 11 October 2013 Case Title: Insurance Australia Ltd t/as NRMA Insurance v Iuli & Afiabo Citation: [2013] ACTSC 209 Court File Number(s): SC235 of 2013 |
ROSS J:
Background
At about 3am on 29 May 2011, Mr Afiabo (the second respondent) was driving his motor vehicle when he left the roadway and crashed down an embankment near a bicycle and pedestrian underpass, passing under Eggleston Crescent. Some 40 minutes later, at about 3:40am, Mr Iuli (the first respondent) was riding his bicycle to work on the path that ran beneath Eggleston Crescent at the underpass. At that time Mr Afiabo’s motor vehicle was still in the position where it had come to rest after his accident and police were in attendance, but Mr Afiabo was not at the scene. For present purposes it is accepted that as Mr Iuli rode through the area he struck some debris which was on the path as a result of Mr Afiabos earlier accident and he fell from his bicycle, sustaining various injuries.
Mr Afiabo held a CTP policy with Insurance Australia Limited T/a NRMA Insurance (the appellant, the Insurer) issued under the Road Transport (Third Party Insurance) Act 2008 (the 2008 Act). The Insurer sought a declaration that the accident involving Mr Iuli was not a motor accident within the meaning of s.7 of the 2008 Act. If this incident was not a ‘motor accident’ within the meaning of the 2008 Act then the Insurer will not be required to indemnify Mr Afiabo in relation to any claim brought against him by Mr Iuli. At first instance Master Mossop dismissed the Insurer’s application. The Insurer has appealed his Honour’s decision and that is the matter before the Court.
The appeal in this matter was originally made to the Court of Appeal and was heard on 4 November 2014. At the commencement of the hearing a threshold issue was raised by the court about the competence of the appeal to the Court of Appeal. Section 37E(2)(a)(i) of the Supreme Court Act 1933 (ACT) provides that the Court of Appeal may hear appeals in relation to “orders of the Master, except interlocutory orders”. The matter before the Master was an application for a declaration and the Master declined to make the declaration sought. The Court of Appeal handed down a decision on 8 December 2014 ([2014] ACTCA 50) finding that the refusal to make a declaration was an interlocutory order and that the appeal was therefore incompetent. The matter was referred to a single judge for determination. The parties were given the opportunity to make further submissions but consented to the matter being determined on the basis of submissions already made to the Court of Appeal.
The appeal
As previously mentioned, the issue in these proceedings is whether the driver of the motor vehicle which ran out of control (Mr Afiabo) gets the benefit of the indemnity provided by his CTP policy with the Insurer in respect of any subsequent cause of action instituted by the injured cyclist (Mr Iuli). Section 21 of the 2008 Act is relevant in this regard, it states:
“What risks are covered by a CTP policy?
A CTP policy insures against the risk of liability for personal injury caused by a motor accident”
The resolution of the issue in the proceedings turns on the proper construction of the definition of ‘motor accident and injured person’ in s.7 of the 2008 Act. Section 7 relevantly states:
‘7 Meaning of motor accident and injured person
In this Act:
motor accident means an incident that-
(a) involves the use or operation of a motor vehicle; and
(b) causes personal injury to an individual (the injured person); and
(c) happens when-(i) someone is driving the motor vehicle; or
(ii) someone or something collides with the motor vehicle; or
(iii) someone takes action to avoid colliding with the motor vehicle; or
(iv) the motor vehicle runs out of control
(2) Also, if a trailer being towed by a motor vehicle becomes detached from the vehicle and runs out of control, the use of the vehicle is taken to include the trailer while it is running out of control.’
At first instance and on appeal, the Insurer contended that there was no ‘motor accident’ within the meaning of s.7 because the personal injury which was caused to the cyclist did not happen at the time someone was driving a motor vehicle or when Mr Iuli or his bicycle collided with a motor vehicle or when he took action to avoid colliding with a motor vehicle or, when a motor vehicle ran out of control. The Insurer submits that the second element of the test of whether something is a ‘motor accident’ (ie in paragraph (b) of the definition) involves a temporal criterion. The Appellant relied on the decision of the NSW Court of Appeal in Zotti v Australian Associated Motor Insurers Ltd (2009) 54 MVR 111 (Zotti) in support of its contention. I return to Zotti shortly.
The Legislation Act 2001 provides that the exercise of “working out the meaning of an Act” means resolving an ambiguity, confirming or displacing the apparent meaning of the Act, finding the meaning of the Act when it’s apparent meaning leads to a result that is manifestly absurd or is unreasonable or finding the meaning of the Act in any other case (s 138). In performing the exercise of working out the meaning of the Act, the provisions of the Act must be read in the context of the Act as a whole (s 140). Section 141 provides that in working out the meaning of an Act, material not forming part of the Act may be considered in certain circumstances, and it provides for the matters to be taken into account in deciding if these circumstances exist, and the weight that material should be given. Section 142 provides a non-exhaustive list of the material which may be considered in working out the meaning of an Act or statutory instrument.
The starting point is to construe the words of s.7 according to their ordinary meaning having regard to their context and legislative purpose. Context includes the existing state of the law and the mischief the provision was intended to remedy. Regard may be had to the legislative history in order to work out what the current legislative provision was intended to achieve. An interpretation that would best achieve the purpose of the 2008 Act is to be preferred to any other interpretation (see s.139(1) Legislation Act 2001), subject to the preferred interpretation being one which is open having regard to the words of the relevant provision. As Besanko J said in Casey v Alcock [(2009) 3 ACTLR 1 at 20-12 (103)]
“Subject to one qualification, s 139 of the Legislation Act can be described as the Territory’s equivalent of s 15AA of the Acts Interpretation Act 1901 (Cth). It is clear enough that under s 139 a Court can have regard to the purpose of a provision to determine if more than one construction of the provision is open, even though on its face the provision is not ambiguous. That follows from the definition of ‘working out the meaning of an Act’ (which is the exercise referred to in the section), which includes as part of the definition in s 138 ‘(b) confirming or displacing the apparent meaning of the Act’ and from the reasons for judgment of Dawson J in Mills v Meeking. Neither s 139 nor s 15AA of the Commonwealth Act authorises a court to rewrite legislation and the construction adopted must be one which is open having regard to the words of the legislation. The qualification referred to earlier is that the words in s 139 differ from those in s 15AA. Section 139 refers to an interpretation which would ‘best achieve’ the purpose of the provision, whereas s 15AA refers to preferring a construction that would promote the purpose or object underlying he provision to a construction that would not promote that purpose or object. It is not clear on the authorities whether the difference in the words used means that the sections have different effects.” (citations omitted).
The 2008 Act set up a scheme for compulsory third-party insurance for motor vehicles in the Territory. The objects of the 2008 Act are set out at s.5A as follows:
(a) to continue and improve the system of compulsory third-party insurance, and the scheme of statutory insurance for uninsured and unidentified vehicles, operating in the ACT; and
(b) to promote competition in setting premiums for compulsory third-party insurance policies; and
(c) to keep the costs of insurance at an affordable level; and
(d) to provide for the licensing and supervision of insurers providing insurance under policies of compulsory third-party insurance; and
(e) to encourage the speedy resolution of personal injury claims resulting from motor accidents; and
(f) to promote and encourage, as far as practicable, the rehabilitation of people who sustain personal injury because of motor accidents; and
(g) to establish and keep a register of motor accident claims to help the administration of the statutory insurance scheme and the detection of fraud; and
(h) to promote measures directed at eliminating or reducing causes of motor accidents and mitigating their results.
10. Prior to the 2008 Act the provisions for third-party insurance were contained within the Road Transport (General) Act 1999 (the 1999 Act). Under the 1999 Act, a third-party insurance policy insured the owner of a motor vehicle "against liability in relation to the death of, or bodily injury to, a person caused by, or arising out of the use of, the vehicle anywhere in Australia (whether or not on a road or road related area)". The central expression to the determination of liability in the previous Act was whether death or injury was "caused by, or arising out of the use of the vehicle". This phrase had been construed broadly and in a manner that did not require the use of the vehicle to involve any actual locomotion.
11. Over a period of time the legislatures in a number of States took steps to limit the coverage of CTP insurance so as to require a more direct connection between what is generally understood to be a motor vehicle accident and the injury than the connection required by a general connecting phrase such as "caused by, or arising out of” or "by, through or in connection with" a motor vehicle. The relevant State provisions are canvassed in the decision subject to appeal and need not be repeated here. Suffice to say that while the relevant legislation in South Australian, Western Australian, Queensland and New South Wales legislation has listed the qualifying activities which must be involved so as to be within the schemes, the precise wording of the provisions varies from State to State.
12. When the Road Transport (Third-Party Insurance) Bill 2007 was introduced in the Legislative Assembly the Explanatory Statement said:
The current CTP scheme in place in the ACT has not changed significantly since 1948. The new legislation is expected to bring about cost savings flowing through to CTP premiums, without diminishing the compensation available for negligently injured persons. The legislation will also remove barriers to competition and give insurance companies clear guidelines for providing CTP insurance in the ACT, which should now give consumers a choice of provider.
13. In relation to the definition of motor accident the relevant part of the Statement said:
Clauses 6 to 8 define personal injury, motor accident, injured person and the use of a motor vehicle. The aim of these definitions is to link more closely to the principle that compensation under· this statutory scheme should only arise if the personal injury derives directly from an accident that reflects the insured risk.
14. The Minister’s Presentation Speech on 22 November 2007 makes reference is made to the provisions of Chapter 2 of the Bill. Chapter 2 contained clause 21 (now s 21) which defined the scope of the insurance provided by a CTP policy by reference to the defined term "motor accident". The Minister said (at 3691-3692).
This bill does three fundamental things, and in doing so draws upon the most modem statutory provisions available:
·Chapter 2 of the bill, derived from the equivalent New South Wales and Queensland provisions, establishes a new basic structure for the CTP scheme, including provisions regulating CTP insurance premiums that are very familiar to the seven insurers selling CTP in New South Wales, six of whom also offer CTP insurance in Queensland.
...
15. The references both to the intention of clauses 6, 7 and 8 as well as the provisions of chapter 2 being "derived from" the New South Wales and Queensland provisions are matters which may be taken into account in working out the meaning of s 7 of the 2008 Act (see s.142 Legislation Act 2001). Having regard to the amendments made in New South Wales and Queensland and the pre-existing state of the law in the Australian Capital Territory, it can be seen that the 2008 Act was intended to, among other things, narrow the scope of statutory scheme by moving a very broad connecting phrase ("caused by, or arising out of the use of') to a definition of motor accident which tied liability to defined aspects of the use or operation of a motor vehicle. The intent of these changes was to bring about cost savings in the operation of the CTP scheme. I now turn to the text of s.7.
16. On a plain grammatical reading of the text of s 7 an incident will be a motor accident for the purpose of the 2008 Act if three elements are satisfied. The three elements are set out in paragraphs (a), (b) and (c). The elements are discrete and while paragraph (c) provides that the incident ‘happens when’ (ie contemporaneously with) the use of or interaction with a motor vehicle in the manner specified in s.7 (c)(i)-(iv), there is no warrant for interpreting paragraph (b) of the definition such that the injury must occur at the same time as the incident. The injury element of the definition requires a causal link between the injury and the incident, as is clear from the use of the word ‘causes’ in paragraph (b) which may be contrasted with the use of the expression ‘happens when’ in paragraph (c), which connotes a temporal link.
17. It is also relevant to observe that the definition defines two discrete concepts - the meaning of ‘motor accident’ and the meaning of ‘injured person’. Paragraph (b) in s 7 provides a definition of "injured person”. The term "injured person” is an important concept in the 2008 Act: see s 22, 69, 70, 72, 78, 97, 118, 122 and 135. Thus, the inclusion of paragraph (b) can be explained by reasons other than a desire to temporally limit the injuries to those which occur during the events described in paragraph (c).
18. I reject the appellant’s contention that the word "when" in paragraph (c) of s 7 should qualify paragraph (b) such that there must be a temporal link with one or other of the items in paragraph (c)(i)-(iv). That would mean that the personal injury referred to in paragraph (b) must happen at the time of the activities in paragraph (c)(i)-(iv). In my view, s 7 requires that there be a causal link between the personal injury (referred to in paragraph (b))and the actions of the motor vehicle (referred to in paragraph (c)), but does not require that the injury is caused during the continuation of one or other of those actions.
19. The construction contended for by the appellant requires words to be read into the provision; is not necessary to give effect to the legislative intention and would give rise to unintended consequences.
20. While it may be permissible to give words a strained interpretation to give effect to the purpose of a provision, it is generally not permissible to add words to achieve that purpose (see Taylor v Owners - Strata Plan No 11564 [2014] HCA 9 at [37]-[40] per French CJ, Crennan and Bell JJ), unless the literal meaning of the words used would have produced a result that was ‘incongruous’ or ‘capricious and irrational’ (Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 305 per Gibbs CJ and 321 per Mason and Wilson JJ). There is no warrant for the adoption of such a course in this matter. It is not necessary to construe the definition of ‘motor vehicle’ in the manner contended by the appellant in order to align the proper construction of the provision with the legislative intent. The construction I have adopted sits conformably with the legislative intent. A construction based on the plain grammatical reading of the provision operates to limit the scope of the CTP scheme (when compared to the 1999 Act), consistent with the legislative intention.
21. It is also relevant that the construction contended for by the appellant would give rise to some unfortunate and unintended consequences. Cyclists, bystanders or rescuers whose injuries are caused by an incident involving the activities referred to in paragraph (c) but not during the continuation of those activities would be excluded from the CTP scheme. The interpretation contended for by the appellant would have the effect of significantly narrowing the scope of the protection given by CTP insurance not only to persons injured as a consequence of a motor accident but also to the drivers who are at fault.
22. The appellant submits that no meaningful distinction can be drawn between the words considered in Zotti ("is caused during") and those in paragraph 7(c) ("happens when"). It submits that this Court is bound to follow the "seriously considered dicta" of the High Court which was influential in the Court of Appeal's decision in Zotti.
23. Zotti involved a similar question to that which arises in the present case, albeit in a different legislative context. A cyclist alleged that he had slipped on a patch of oil that remained on the road at the scene of a motor vehicle collision. That collision had occurred some two hours before. Vehicles involved in the collision had been towed away. The legislation in question contained the following definitions:
motor accident means an accident or incident caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle which causes the death of or injury to a person.
injury:
(a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:
(i) the driving of the vehicle, or
(ii) a collision, or action taken to avoid a collision, with the vehicle, or
(iii) the vehicle's running out of control, or
(iv) such use or operation by a defect in the vehicle, and(b) includes:
(i) pre-natal injury, and
(ii) psychological or psychiatric injury, and
(iii) damage to artificial members, eyes or teeth, crutches or other aids or spectacle glasses, and injured person means a person who suffers such an injury.
24. The issue in Zotti was whether the facts alleged by the plaintiff could fall within the definition of "injury" particularly having regard to the words in paragraph (a) of the definition "the injury is a result of and caused during''. In Allianz Australia v GSF Australia (2005) 221 CLR 568 there was, in the judgment of Gummow, Hayne and Heydon JJ at [93]-[94], seriously considered dicta which appeared to be inconsistent with the propositions for which the plaintiff in Zotti was contending.
25. In Zotti the plurality (Spigelman CJ, Allsop P and McColl JA) held that the effect of the dicta in Allianz was that the injury must be sustained, relevantly, "during" a collision. For the plurality the issue was then how long did "a collision" continue. Whilst Spigelman CJ (with whom Allsop P and McColl JA agreed), considered that a collision "may well" continue while the vehicles which collided remained in their post-collision positions, it did not extend until all effects of the collision had been removed. Therefore the plaintiff could not succeed because the alleged slip on oil occurred after the colliding vehicles had been removed.
26. Zotti is of no assistance in the resolution of the present matter as it turns on the very specific statutory wording of a different legislative provision which had been subject of seriously considered dicta by the High Court in Allianz.
27. During the course of oral argument counsel for the appellant advanced an alternate construction of s 7 which, it was submitted, would lead the Court to conclude that the insurer was not ‘on risk’ in the circumstances of this case. The submission put was as follows:
You start from the proposition that the Master was right and that ‘motor accident’ means an incident that happens when (i), (ii), (iii) or (iv) [in paragraph (c)] then ... there is still a temporal link but the temporal link is in relation to what the incident constitutes. It may ... not be a temporal link in terms of the cause of personal injury but if you accept that and you look at the present tense of each of things set out in paragraph (c)(i) to (iv), even on the Master’s view of the correct reading of section 7, the insurer was not on risk. Because at the time of the cyclist running into the debris, no one was driving the motor vehicle. He was not doing anything - he did not collide with the motor vehicle. He didn’t take action to avoid colliding with the motor vehicle and the motor vehicle did not run out of control.” (Transcript pp 32-33).
28. I do not find the alternate construction persuasive. In the context of this matter the incident was the motor vehicle running off the road and in doing so knocking some debris on to the bike path. At the time that incident occurred the requirements of paragraph 7(c) had been met, in that the vehicle was out of control.
29. In my view the Master was correct in dismissing the application for declaratory relief and accordingly the appeal should be dismissed with costs.
| I certify that the preceding twenty-nine [29] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Ross. Associate: Date: |
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