Johnson v Insurance Australia Limited t/as NRMA Insurance
[2024] NSWPICMR 68
•26 September 2024
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
CITATION: | Johnson v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMR 68 |
CLAIMANT: | Priscilla Johnson |
INSURER: | Insurance Australia Limited t/as NRMA |
MERIT REVIEWER: | Elizabeth Medland |
DATE OF DECISION: | 26 September 2024 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); Civil Liability Act 2002 (CL Act); dispute as to entitlement to statutory benefits; claimant alleges mental harm due to her granddaughter being involved in a serious motor accident and suffered significant burn injuries; liability denied on the basis that the claimant is not a “close family member” for the purposes of Part 3 of the CL Act; claimant attended the hospital after the accident and assumed care of her granddaughter whilst she was admitted for a lengthy period; the Family Court later issued interim parenting orders granting claimant sole parental responsibility; Held – the insurer’s liability is invoked by the injury itself and the injury can occur after the occurrence of the motor accident; the injury occurred at the time that the claimant had parental responsibility and therefore the insurer is liable to pay statutory benefits. |
DETERMINATIONS MADE: | CERTIFICATE In accordance with Division 7.4 of the Motor Accident Injuries Act 2017: 1. The reviewable decision is set aside. 2. The insurer is not entitled to refuse payment of statutory benefits in accordance with Part 3 of the Civil Liability Act 2002. 3. The claimant is entitled to recover legal costs in the amount of $1,919 plus GST. |
STATEMENT OF REASONS
INTRODUCTION
The matter involves a dispute as to the entitlement to statutory benefits under the Motor Accident Injuries Act 2017 (MAI Act). The claim involves a particularly tragic set of circumstances.
On 22 January 2024, Ms Priscilla Johnson’s (the claimant) granddaughter, Emily Johnson (aged 7 at the time) was a passenger in a vehicle driven by her mother on the Great Western Highway, Katoomba New South Wales. The vehicle was involved in a head-on collision, seemingly due to the vehicle veering to the wrong side of the road, resulting in Emily suffering serious burns.
Emily was airlifted to Westmead Children’s Hospital. I am advised that her mother has been charged with attempted murder of Emily.
The claimant has lodged a claim for statutory benefits with Insurance Australia Limited t/as NRMA (the insurer) who are the compulsory third party insurer of the vehicle considered at fault.
By way of notice dated 3 May 2024 the insurer denied liability for statutory benefits up to 52 weeks from the date of the accident on the basis that the claimant did not witness the accident and as the grandmother of Emily, did not fall under the definition of close family member. An internal review upheld the original decision.
It is this dispute that forms the basis of subject proceedings.
The application has been lodged with the Personal Injury Commission (Commission) as a Merit Review matter under Schedule 2 cl 1(t) of the MAI Act which provides, relevantly, that a Merit Review matter includes: “whether the insurer is entitled to refuse payment of statutory benefits in accordance with Part 3 of the Civil Liability Act 2002 (as applied by section 3.39 (Limitation on statutory benefits in relation to certain mental harm)) …”
On 7 August 2024 I held a teleconference with the legal representatives. A timetable was set for the provision of further written submissions. The submissions have been received in accordance with those directions, with me receiving the claimant’s submissions on 4 September 2024.
The parties agreed that it was appropriate that I determine the dispute on the papers. I agree that is appropriate that I determine the matter on the papers.
STATUTORY FRAMEWORK
Section 3.39 of the MAI Act provides as follows:
“3.39 Limitation of statutory benefits in relation to certain mental harm
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.”
Section 30 of the Civil Liability Act 2002 (CL Act) provides the following:
“(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 the Act or any other written or unwritten law.
(5) In this section –
close member of the family of a victim means –
a)a parent of the victim or other person with parental responsibility for the victim, or
b)the spouse or partner of the victim, or
c)a child or stepchild of the victim or any other person for whom the victim has parental responsibility, or
d)a brother, sister, half-brother or half-sister, or stepbrother or stepsister of the victim.
…”
SUMMARY OF EVIDENCE
I have carefully considered the material provided by the parties in their application and reply and the additional written submissions. I do not propose to refer to all the documentation provided in this determination. However, by not expressly referring to a particular document, it should not be thought that all evidence has not been considered. In this regard, a large proportion of the material has assisted me in putting the crucial evidence into context, but is not directly relevant to my determination.
Application for personal injury benefits dated 19 April 2024
The claim form includes the following description: “…my granddaughter Emily Johnson was a passenger in a vehicle being driven by my daughter Alicia Johnson and they were involved in a head on collision with another vehicle…”
Medical evidence
A Centrelink medical certificate dated 27 March 2024 documents the claimant having been diagnosed with an adjustment disorder with anxiety and depression.
Medical evidence from the Westmead Children’s Hospital documents Emily receiving injuries as a result of the accident and having been an inpatient from 22 January 2024 to 22 April 2024. The documents evidence Emily tragically suffering extensive and significant burns.
Order from the Federal Circuit and Family Court of Australia dated 9 May 2024
This document includes interim parenting orders as follows:
“The Applicant maternal grandmother shall have sole parental responsibility for the child, Emily Johnson born 4 July 2016 (‘the child’).
The child shall live with the Applicant maternal grandmother.”
SUBMISSIONS
Claimant’s submissions dated 30 May 2024
These submissions were provided in support of the application for internal review.
Essentially, it is submitted that the claimant fits the definition of “close family member” for the purposes of s 30 of the CL Act.
It is submitted that this is the case due to the claimant being the primary carer for the claimant with parental responsibility in accordance with the abovementioned orders of the Family Court.
The submissions state that “at the time of the MVA, the claimant has taken on the primary care of Emily.” It is noted that the claimant stayed at the hospital with Emily for around 16 weeks until she was discharged and slept in the same room with Emily during her stay at hospital. In addition the claimant assisted Emily with toileting, preparing to change dressings, provided emotional support, attended various meetings with medical personnel and authorities and enrolled Emily into hospital schooling.
Following discharge from the hospital Emily moved into the home of the claimant and the claimant took on the primary care duties of Emily.
It is further submitted that “…it is not relevant whether the claimant had parental responsibility at the time of the MVA or after the MVA. Regardless of this, the claimant had parental responsibility at the time of the MVA.”
Claimant’s submissions dated 9 July 2024
The submissions set out a number of relevant facts. These include the claimant receiving a phone call early in the morning of the accident from Fire and Rescue NSW. The claimant was advised her daughter was in an accident, and the claimant confirmed that her granddaughter was also involved.
After making enquiries of her own, the claimant ascertained that her daughter and granddaughter had likely been taken to Westmead Hospital. The claimant and another of her daughters (Emily Senior) went to the hospital, with Emily Senior going to see the claimant’s daughter, and the claimant going to her granddaughter.
The claimant took Emily’s hand and said “Nan’s here” and Emily was quiet. She was covered by a sheet. It is then stated:
“After seeing her granddaughter, learning about the charges against her daughter and knowing she would need to care for Emily in the long term, the claimant said she went into shock. She felt frightened. She couldn’t speak, listen or hear and didn’t’ have any questions. She couldn’t eat or drink and had no contemplation of the time and said ‘everything stopped for me.’ These feelings continued for weeks.”
A few days later the claimant went to see her daughter who was under police guard at the hospital. They did not speak to each other.
It is submitted that the claimant was a close family member for the purposes of s 30(2)(b) of the CL Act at the time she suffered nervous shock. The submissions refer to s 3 of the Children’s and Young Persons (Care and Protection) Act 1988 NSW which provides that “parental responsibility” means “all duties, powers, responsibilities and authority which, by law, parents have in relation to their children.”
It is then stated:
“The claimant took on parental responsibility of Emily on 22 January 2024 when she attended Westmead Hospital and learnt of the charges against her daughter and saw Emily’s serious injuries. The claimant’s psychological injury was suffered after she had assumed parental responsibility for Emily”
Insurer’s submissions dated 19 July 2024
The orders of the Federal Court are acknowledged and the insurer submits that at the time of the motor accident the claimant did not have sole parental responsibility over her granddaughter.
Insurer’s further submissions dated 21 August 2024
The insurer refers me to the High Court case of Wicks v State Rail Authority of New South Wales: Sheehan v State Rail Authority of New South Wales [2010] HCA 22 (Wicks).
The case of Wicks is a leading authority on the application of s 30 of the CL Act. Insofar as it is relevant to the insurer’s submissions, the High Court found that a person remains in “peril” until the person ceases to be at risk, and therefore being put in a position of peril does not “begin and end in an instant.”
The insurer points out that the claimant observed her granddaughter after the accident at the hospital and did not witness her after the accident “at the scene”.
In respect of the definition of parental responsibility, the insurer notes that CL Act does not include a definition of same. The insurer notes that s 61B of the Family Law Act1975 provided the following definition of “parental responsibility”:
“…parental responsibility, in relation to a child, means all the duties, powers, responsibilities and authority which, by law, parents have in relation to children”
The insurer goes on to note that parental responsibility includes day to day care and “major long-term issues” in relation to the child and notes that s 4(1) of the Family Law Act 1975 defines “major long-term issues” as:
“…major long-term issues in relation to a child, means issues about the care, welfare and development of the child of a long-terms nature and includes (but is not limited to) issues of that nature about:
a)the child’s education (both current and future); and
b)the child’s religious and cultural upbringing; and
c)the child’s health; and
d)the child’s name; and
e)changes to the child’s living arrangements that make it significantly more difficult for the child to spend time with a parent.
To avoid doubt, a decision by a parent of a child to form a relationship with a new partner is not, of itself, a major long-term issue in relation to the child. However, the decision will involve a major long-term issue if, for example, the relationship with the new partner involves the parent moving to another area and the move will make it significantly more difficult for the child to spend time with the other parent.”
It is not precisely clear from the submissions if the insurer says that the parental responsibility began during the hospital admission, with the insurer noting the care that the claimant provided to Emily. However, those comments begin with the following: “the insurer notes that Ms Emily Johnson moved in with Ms Johnson only after she was discharged from hospital.”
What is clear, however, is that the insurer submits that the claimant did not have parental responsibility for Emily at the time of the accident and “…as such was not a close family member of Ms Emily Johnson for the purposes of s30(2)(b) of the Civil Liability Act 2002.”
What the insurer puts in issue is the question of whether s 30 of the CL Act can be applied “retrospectively”. The insurer submits that the present tense of “is” a close member of the family in s 30(2)(b) of the CL Act implies that the claimant must be a close family member at the time of the accident and “as such, the insurer submits that Section 30 of the Civil Liability Act 2002 cannot be applied retrospectively.”
Claimant’s further submissions dated 4 September 2024
The submissions refer to the cases of Tame v New South Wales [2002] HCA 35 and Annetts v Australian Stations Pty Ltd [2002] HCA 35, in asserting that liability for nervous shock is not limited by a need to directly perceive the relevant distressing incident or its immediate aftermath to suffer nervous shock.
The submissions take issue with the insurer’s assertion that the claimant was not able to see “anything about how serious her injuries were” because Emily was covered by a sheet at the hospital. In this regard, it is stated:
“The claimant attended the hospital shortly after the motor vehicle accident on the same day and witnessed her granddaughter with serious burns to 38 per cent of her body, witnessed her granddaughter asking to see her mother in circumstances when her own mother had allegedly attempted to murder her and learning her own daughter had tried to murder her granddaughter. There are not many more harrowing situations than this and to state that the claimant ‘could not see anything’ is naïve.”
It should be noted, however, that such wording is included in the claimant’s submissions dated 9 July 2024.
In addition, the submissions refute the insurer’s suggestion that parental responsibility only began once Emily had moved in with the claimant after discharge from hospital. In this regard, it is submitted that parental responsibility as per the definition under s 4(1) of the Family Law Act1975 when she attended the hospital, not when the discharge occurred. It is stated:
“Emily Johnson’s mother had allegedly attempted to murder her and was not in any position to provide parental responsibility to Emily by the fact of this allegation. Someone had to assume parental responsibility for Emily when her mother was unable to. The claimant did not leave her granddaughter for the 16 weeks while she was in hospital and took on the major long term issues about care, welfare and development for her granddaughter including education, religious and cultural upbringing, health, name and changes to her living arrangements.”
It is submitted that it was not until after the claimant had assumed parental responsibility of her granddaughter that she suffered nervous shock.
FINDINGS AND REASONS
There seems to be no controversy between the parties that prior to the motor accident the claimant did not have parental responsibility for her granddaughter for the purposes of the relevant legislation. Moreover, there is no evidence that this is the case.
As noted above, it is not precisely apparent whether the insurer submits that “parental responsibility” began once Emily was discharged from hospital or whether it was during the hospital admission.
Each party are content for the purposes of this dispute to apply the relevant definitions as to “parental responsibility” that are contained within the Family Law Act1975. I agree that such definitions are appropriate to utilise to in assisting me in making my findings in this dispute.
There is limited evidence on file, however, the insurer does not take any issue with the assertion that the claimant cared for Emily continuously whilst she was in hospital. From the description provided in the submissions, the claimant had provided all physical and emotional care needs (outside of the medical professionals), and had attended meetings as to the medical care of Emily and had enrolled her in hospital schooling.
Accordingly, I find that at the very least the claimant had assumed parental responsibility for the purposes of s 30 of the CL Act at the time she arrived at the hospital and specifically when she learned of the injuries and the circumstances of the accident, when she is said to have gone into shock.
The insurer submits that the claimant must have parental responsibility at the time of the accident. Having very carefully considered the wording of s 30(1) of the CL Act, I disagree with this assertion.
I note that s 3.39 of the MAI Act essentially provides that Part 3 of the CL Act is to be modified to apply its provisions to the MAI Act statutory benefits scheme. On this basis, it appears that there can be no other interpretation that the words “(the defendant)” should be read as the “insured driver” and the words “(the plaintiff)” is to be read as the “claimant”.
On my reading of s 30(1) of the CL Act, the insurer’s liability is invoked by the injury itself, or the “pure mental harm”. As stated within the section, the injury needs to be “in connection” with accident. Which to my mind, means that the injury can occur after the occurrence of the accident, and it is the injury that gives rise to the liability.
On the uncontroversial history that the claimant cared for Emily continuously from arrival at the hospital and thereafter during the hospital admission, I am satisfied that she had assumed parental responsibility from arrival at the hospital. The duties she took comfortably satisfy the definition of parental responsibility that is contained within the Family Law Act1975. Those duties began at least at the time the claimant arrived at the hospital.
Accordingly, she had parental responsibility (thereby classifying her as a close family member for the purposes of ss 30(2)9b) and 30(5)(b) of the CL Act) for Emily at the time of injury when the insurer’s liability arose.
It follows therefore that the insurer is liable to make payments of statutory benefits to the claimant in accordance with the provisions of the CL Act.
I further observe that it is arguable that the claimant assumed parental responsibility from the time the motor accident happened. In this regard, whilst I have no primary evidence as to the charges against the claimant’s daughter, it is apparent that she has been charged with attempted murder of Emily. If that is indeed the case, then I consider it more likely than not that claimant’s daughter relinquished parental responsibility of Emily from the moment she (allegedly) decided to veer her vehicle to the incorrect side of the road, thereby causing the head-on collision and the horrific injuries suffered by Emily. Further, the transference of that parental responsibility landed with the claimant at that time. However, given the lack of primary evidence as to the charges laid and the evidence that is based on, I do not consider that I can make that finding on the balance of probabilities.
As an aside, and whilst not touched upon by the parties in their submissions, I note that the claimant’s daughter was clearly involved in the motor accident. The claimant is prima facie a close family member of her daughter.
Section 30 of the CL Act has been modified by cl 8 of the Motor Accident Injuries Regulation (2017) (Regulation) which 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.”
I concur with the findings of Member Cassidy in the case of Borrow v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPICMR 67, that for the purposes of s 30(1) of the CL Act, the necessary modifications to the text as required by s 3.39 of the MAI Act, means that the insured driver can also be the “victim”. This is due to the no fault statutory scheme provided for in the MAI Act.
However, in terms of statutory benefits beyond 52 weeks and for a claim for damages, the modification of s 30(3) as set out by cl 8 of the Regulation would necessarily require there to be three separate individuals involved (ie the insured driver, the victim and the claimant).
I also echo Member Cassidy’s comment for a need for an adjustment to the terminology used by s 30(1) of the CL Act, “...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.”
COSTS
Schedule 1, cl(1)(d) of the Regulation provides that the subject dispute is a regulated merit review matter. In accordance with Schedule 1 cl(1) of the Regulation the maximum costs for legal services provided to the claimant is 16 monetary units.
The current value of 16 monetary units is $1,919.
There is no express claim for costs made, nor is there any express objection to any costs orders.
I consider it reasonable that the claimant recover an amount for legal costs.
I award costs in favour of the claimant in the amount of $1,919.
CONCLUSION
On the basis of the above reasons, the reviewable decision is set aside. The insurer is not entitled to refuse payment of statutory benefits in accordance with the Part 3 of the CL Act.
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