Insurance Commission of Western Australia v Wesfarmers Transport Ltd - [1999] WADC 82

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: INSURANCE COMMISSION OF WESTERN AUSTRALIA -v- WESFARMERS TRANSPORT LTD [1999] WADC 82

CORAM: NISBET DCJ

HEARD: 23 SEPTEMBER 1999

DELIVERED : 12 OCTOBER 1999

FILE NO/S: CIV 855 of 1998

BETWEEN: INSURANCE COMMISSION OF WESTERN AUSTRALIA
Plaintiff
AND
WESFARMERS TRANSPORT LTD
Defendant

Catchwords:

Statutory interpretation - Motor Vehicle (Third Party Insurance) Act 1943 - Action by statutory insurer for recovery of damages (paid to injured third party) from defendant uninsured owner of vehicle - Injuries caused by use of uninsured vehicle - Uninsured vehicle a mobile crane being used on Broome Jetty - Whether jetty a road requiring vehicle to be insured - Mobile crane hired out by defendant owner to Department of Transport at time of injury - Whether defendant owner the owner within the meaning of s8(3) of the Act - Whether defendant must first be shown to have been liable to the injured party in any event before recovery by statutory insurer pursuant to s8(3) - Discussion of principles.

Legislation:

Motor Vehicle (Third Party Insurance) Act 1943 (WA)

Motor Car Act 1951 (Victoria)

Road Traffic Act 1974 (WA)

Result:

Judgment for plaintiff.

Representation:

Counsel:

Plaintiff: Mr J Staude
Defendant: Mr P Mendelow

Solicitors:

Plaintiff: John G Staude
Defendant: Julian Lentzner

Case(s) referred to in judgment(s):

Sherritt Gordon Mines Limited v FCT (1976) 10 ALR 441
Urwin v Duperouzel [1960] WAR 216

Case(s) also cited:

Balog v Independent Commission Against Corruption (1990) 169 CLR 625
Bropho v The State of Western Australia (1990) 171 CLR 1
Coco v The Queen (1994) 179 CLR 427
Liquor Administration Board of New South Wales v Wolfe (1993) 32 NSWLR 328
McBain v Reyne [1997] SASC 6501
Nominal Defendant v Marsh (1998) 71 SASR 511
Schubert v Lee (1946) 71 CLR 589

NISBET DCJ: On 27 January 1995 Michael Gerard Parker was struck by a BHB mobile crane registration number 8JK 411 which was owned by the defendant (as "owned" is ordinarily understood) and let out on hire to the Department of Transport of Western Australia for use solely in the activities of the Department, namely the loading and unloading of fishing boats and pearling vessels using the Broome jetty. The crane was hired by the Department solely for use on the Broome jetty and for no other purpose. At the relevant time it was being driven by Sidora Stephen Tolentino.
By a separate action in this Court instituted in 1995 Mr Parker as plaintiff claimed damages from the Minister for Transport as first defendant and Mr Tolentino as second defendant. Pursuant to the powers conferred on it by s11(1) of the Motor Vehicle (Third Party Insurance) Act 1943 ("the Act") the plaintiff assumed the conduct and control of the action on behalf of Mr Tolentino. Mr Parker's claim was settled prior to trial and by a consent order dated 10 November 1997 judgment was entered for him against the Minister for Transport and Mr Tolentino for the sum of $125,000.00 and costs. On behalf of Mr Tolentino the plaintiff agreed to contribute to the settlement the sum of $100,000.00 together with the sum of $5,000.00 in costs both of which sums were paid.
The plaintiff now brings this action to recover the sum of $105,000.00 from the defendant, as owner of the uninsured vehicle, pursuant to the provisions of s8(3) of the Act. That section provides as follows:
"8(3)The Commission may recover from
(a)the owner; or
(b)the driver,
of the motor vehicle, and if they are both liable from them jointly and severally, such sum as the Commission has paid in settlement, payment or compromise of the claim of, or any judgment obtained by, the judgment creditor against it:
Provided that –
(i)it shall be a good defence in any action against the owner of such motor vehicle if he establishes to the satisfaction of the Court that –
(I)the fact that the motor vehicle was an uninsured motor vehicle was not due to his own fault; or
(II)at the time of the occurrence out of which such death or bodily injury arose the driver was not driving the motor vehicle with the consent or authority of the owner;
(ii)in any case where the owner of the motor vehicle is the judgment debtor as aforesaid, no sum shall be so recoverable against the driver of the motor vehicle unless judgment could have been obtained against the driver in respect of the death or bodily injury aforesaid;
and
(iii)it shall be a good defence in any action against the driver of such motor vehicle if he establishes to the satisfaction of the court that at the time of the occurrence out of which such death or bodily injury arose he was driving the motor vehicle with the authority of the owner and that he had reasonable grounds for believing, and did in fact believe, that the motor vehicle was a motor vehicle in relation to which there was in force a contract or policy of insurance under this Act."
The defendant denies its liability and, admits all of the facts recited above save that it says:
1.The Broome jetty is not a road and therefore the mobile crane was not an uninsured motor vehicle in accordance with the provisions of the Act.
2.By reason of the definition of "owner" in s3(1) of the Act the owner of the mobile crane was the Department of Transport as hirer and, further because the mobile crane was being used solely in the public business of the State there was no obligation under the Act to insure and
3.Section 8(3) of the Act does not authorise recovery from an owner unless the owner could have been held liable to the injured plaintiff in negligence.
I will deal with each of these defences in turn.

Broome jetty not a road

Section 2(1) of the Act requires the Act to be read "in conjunction with and as supplementary to the Traffic Act". Further, by s2(2):
"Words and expressions defined in the Traffic Act shall have the same respective meanings in this Act, unless the contrary intention appears."
By s3(1) of the Act "Traffic Act" means the Road Traffic Act 1974 as amended from time to time and for the time being.
By s5(1) of the Road Traffic Act 1974:
""Road" means any highway, road or street open to, or used by, the public and includes every carriageway, footway, reservation, median strip and traffic island thereon."
As the evidence of Mr Masters makes plain, the Broome jetty is and at all material times has been open to the public and in frequent daily use by the public. Indeed, the public use of the Broome jetty is so notorious that I think I could take judicial notice of it. The wharf at Geraldton has been held to be a road within the meaning of the former Traffic Act1919‑1958, the definition of "Road" in which is not materially different to that in the Road Traffic Act 1974: Urwin v Duperouzel [1960] WAR 216. The wharf at Geraldton is not materially different to the Broome jetty. I find that the Broome jetty is a road within the meaning of the Act and hence the first ground of defence must fail.

Defendant not owner

By s3(1) of the Act "Owner" is defined thus:
"'owner' when used in relation to a motor vehicle which is the subject of a hire purchase agreement means the person in possession of that vehicle under that agreement; and when used in relation to a motor vehicle which is the subject of a hiring agreement (other than a hire purchase agreement) includes any persons who have hired the vehicle under that hiring agreement.
Save as aforesaid the term 'owner' means and includes every person who is the owner or part owner or joint owner of the motor vehicle, but does not include the grantee under a Bill of Sale by way of security granted in respect of a motor vehicle except when such grantee takes possession of the motor vehicle under the authority of and by way of enforcing his rights as grantee under such Bill of Sale."
This definition comes as a result of amendments to the Act in 1994 prior to which the definition of "owner" was (relevantly):
"…and when used in relation to a motor vehicle which is the subject of a hiring agreement (other than a hire purchase agreement) under which that vehicle is hired for a period of not less than six months means the person in possession of that vehicle under that hiring agreement…"
As can be seen the definition of "owner" in force as at the date of this accident on 27 January 1995 does not admit of an interpretation which deems the Department of Transport as hirer of the mobile crane to be the owner for the purposes of the Act.
The change of the definition of "owner" in respect of hired vehicles from "means" to "includes" is a highly significant change. It has been held that "means" is used if the definition is intended to be exhaustive whilst "includes" is used if it is intended to enlarge the ordinary meaning of the word: Sherritt Gordon Mines Limited v FCT (1976) 10 ALR 441 at 455.
Accordingly the second defence must fail.

Proper interpretation of section 8(3)

The defendant argues that the phrase "and if they are both liable" in this section of the Act means liable to indemnify an injured plaintiff in damages in negligence. This, the defendant argues, is because the position at common law is clearly that an injured plaintiff could only bring an action for damages against a tortfeasor, and in a situation where the tortfeasor was not the owner of a motor vehicle which was negligently driven so as to cause the plaintiff's injuries, the plaintiff could never bring an action against the owner. This of course is perfectly correct. But it does not help with the proper interpretation of this provision.
Both counsel before me submitted that neither could locate any authority or body of work which expressed an opinion on the proper working out of s8(3) of the Act. The defendant argued that the word "liable" in s8(3) was intended by the legislature to mean liability in negligence because of the way in which the Act is framed and the constant references to the need to establish negligence on the part of the owner or driver of the motor vehicle concerned, as seen in ss4(1), 6(1)(b), 6A(1), 7(1), 7(2), 7(3) 7(5), 8(3), 8(5), 8A(1)‑(3), 14 and 26.
These provisions may very well speak of negligence in the owner or the driver although it should be observed that s7(5) clearly contemplates recovery from the insured "and from the owner where the insured person liable in respect of any such accident is not the owner of the motor vehicle concerned and at the time of the accident the owner was guilty of any of the matters mentioned in subs(4)…" demonstrating that the legislature has not tied the concept of "liability" to the concept of liability in negligence in respect of the right of recovery of the Commission from the owner of a motor vehicle.
Apart from the fact that in my opinion the provision of s8(3) is perfectly plain and gives to the Commission a right of recovery against the owner of an uninsured motor vehicle in the circumstances of this case, there is a commentary on this provision and like provisions in other Acts which supports my opinion that the insurer's right of recovery from the owner of an uninsured vehicle is not dependent upon the owner being proven to have been negligent in the sense that it was the uninsured owner's negligence which occasioned the damage to the injured plaintiff. In Lewis' Third‑Party Insurance 2nd Edition (Butterworth, 1954) the author has annotated Part V of the Motor Car Act 1951 (Victoria). As Mr Lewis notes in his introduction (page 1):
"Compulsory Insurance by motorists against third‑party risks was first introduced in Victoria by the Motor Car (Third‑Party Insurance) Act 1939, which came into operation on 22 January 1941. So far as the writer is aware, the earliest legislation on the subject was that of Massachusetts, USA, adopted about 1926, and similar legislation has since come into operation in other of the American States and in provinces of Canada. In 1928 the New Zealand Parliament, always to the fore in the field of experimental legislation, passed the Motor Vehicles Insurance (Third‑Party Risks) Act, on which, more than any other statute, the Victorian Act was based. In 1930 compulsory third‑party insurance was introduced in England, and is now in operation in all States of Australia and in the Australian Capital Territory, although only Tasmania (1935), South Australia (1936), and Queensland (1936) were in the field before Victoria.
…
It is somewhat remarkable that, notwithstanding the volume of litigation after the Act, very few decisions on points of law arising from it have reached the law reports. The original 1939 Act has now become Part V of the Motor Car Act 1951, but that was, in this regard, no more than a consolidating Act."
Under the heading "Rights of Third Parties Against Insurers" (p5) Mr Lewis writes:
"In case of uninsured cars, however, judgment must be obtained against the owner or driver before proceeding against the nominal defendant, unless such owner or driver cannot be found. Any sum paid to satisfy a judgment obtained against a nominal defendant in respect of an uninsured car may, subject to certain limitations, be recovered by the nominal defendant on behalf of insurers from the owner or driver of the car.
Of these provisions, those contained in ss48 and 49 with respect to uninsured cars were peculiar to Victoria, but have been followed in Western Australia."
In his second reading speech introducing the legislation in Western Australia the Honourable the Minister for Works said (inter alia):
"Having regard to the desirability of obtaining reasonable uniformity, the measure is based on the South Australia Act 1936 and subsequent amendments, and on the more recent acts of New South Wales (1942) and Victoria (1939). All of the principles in this Bill are included in similar legislation in the other States."
The provision in the Motor Car Act 1951 (Victoria) is remarkably similar to s8(3) of our Act. There, s48(3) is as follows:
"(3)The sum paid as aforesaid to satisfy the judgment obtained against the nominal defendant and his costs shall be recoverable by the nominal defendant against the owner or driver of the motor car:
Provided that:
(a)it shall be a good defence in any action against the owner of such a motor car if he establishes to the satisfaction of the Court that the fact that such motor car was an uninsured motor car was not due to his own default;
(b)in any case where the owner of the motor car is the judgment debtor as aforesaid no sum shall be so recoverable against the driver of the motor car unless judgment could have been obtained against the driver in respect of the death or bodily injury aforesaid;
(c)it shall be a good defence in any action against the driver of such a motor car if he establishes to the satisfaction of the Court that at the time of the occurrence of which such death or bodily injury arose he had or had reasonable grounds for believing that he had the authority of the owner to drive the motor car and that he had reasonable grounds for believing and did in fact believe that the motor car was a motor car in relation to which there was in force a contract of insurance under this division;
(d)notwithstanding anything in the foregoing provisions of this subsection the sum so paid and costs shall be recoverable by the nominal defendant against, and such defences shall not be available to, the driver (whether or not he is the owner) of such motor car if such driver is convicted of having, at the time of the occurrence out of which the death or bodily injury aforesaid arose, been under the influence of intoxicating liquor whilst driving such a motor car."
Mr Lewis in his commentary on this section had this to say:
"SHALL BE RECOVERABLE ‑ The subsection clearly contemplates new proceedings, not an execution of the original judgment. The sum referred to may be recovered by action brought in any court of competent jurisdiction (s.60).
AGAINST THE OWNER OR DRIVER OF THE MOTOR CAR ‑ Subject to the provisos to this subsection, its effect is that the amount paid under subsection (2) may be recovered against either the owner or driver, irrespective of who the original judgment debtor was, and irrespective also, in the case of owner, of whether the third party could have obtained judgment against him at all. To this extent at least, therefore, the subsection is a penal, and as such to be construed strictly, so that the words "owner or driver" must be read exactly as they stand, and proceedings cannot be taken against both the owner and the driver although if proceedings against one prove abortive, it may be that they can thereafter be taken against the other." (My emphasis.)
Thus it is recognised by Mr Lewis, as I suggested during the course of the argument, the legislative scheme is such that it makes the insurance of motor vehicles compulsory and one of the sanctions for failing to insure is being rendered liable to indemnify the insurer. As a matter of policy the legislature was clearly concerned to provide that all vehicles used on roads in Western Australia would be insured so that the burden of insurance covered by the relevant premium would be borne by all road users, in effect, not just those who decided to insure. The mischief which the legislature was seeking to remedy was that there were many instances of persons being injured by the negligent driving of motor vehicles who were unable to recover damages to compensate them for their injuries let alone the costs of the medical treatment incurred, a burden which the hospitals in the State were bearing in disproportionate amount because the negligent driver was too often impecunious and uninsured. The incentive to insure is higher by reason of s8(3) of the Act than it might otherwise be. Hence the third defence also fails.
Accordingly there will be judgment for the plaintiff against the defendant in the sum of $105,000.00 together with interest at 6 per cent from 9 December 1997 to today. No evidence was led as to why interest should run from this date. I assume it was the date the settlement was perfected.
My calculation is:
$105,000 x 6 per cent p.a. x 1/308 = $11,616.08
365
The total judgment is $116,616.08.
I will hear the parties as to costs.