Karklins v QBE Insurance (Australia) Limited
[2023] NSWPICMR 47
•8 September 2023
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
CITATION: | Karklins v QBE Insurance (Australia) Limited [2023] NSWPICMR 47 |
| CLAIMANT: | Ivar Karklins |
| INSURER: | QBE (Insurance) Australia Limited |
| MERIT REVIEWER: | Terence O'Riain |
| DATE OF DECISION: | 8 September 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); on the papers; correct and preferable; no fault accident; driver deemed at fault; insurer accepted liability for statutory benefits to continue after |
| DETERMINATIONS MADE: | CERTIFICATE 1. The reviewable decision is about whether for the purposes of s 3.12 (Cessation of weekly payments to other injured persons after maximum weekly payments period) an injured person's injury is the subject of a pending claim for damages under Division 3.3 of the Motor Accident Injuries Act 2017 (the MAI Act)and is therefore a merit review matter under Schedule 2(1)(b) of the MAI Act. 2. The reviewable decision dated 21 July 2023 is affirmed. |
REASONS
Background
On 1 August 2021, the claimant was injured in a motor vehicle accident (the accident).
The police statement shows the claimant told the police that he swerved to avoid two deer running across his path, and this was the reason he collided with a vehicle heading in the opposite direction. The insurer’s investigators canvassed the residents at the accident location and it was confirmed that deer are known to frequent that area.
The accident caused the claimant’s catastrophic injuries.
On 2 February 2022, the insurer issued a liability letter accepting liability for statutory benefits to continue past 26 weeks after the date of the accident.
There was no dispute as to whether the motor vehicle accident was by definition under s 5.1 of the Motor Accident Injuries Act 2017 (MAI Act) a “no fault motor accident”. Accordingly, Mr Karklin’s entitlement to weekly payment of statutory benefits would expire eventually under the time limit set in s 3.12.
On 23 May 2023, the claimant’s legal representative lodged an application for damages under common law.
On 26 May 2023, the insurer rejected the common law damages claim. The insurer manager provided the following reason:
“The claimant is the driver who is deemed to be at fault for the accident pursuant to Section 5.2(1) of the Motor Accident Injuries Act 2017.
Pursuant to Section 5.4 of the Motor Accident Injuries Act 2017 there is no entitlement to recover damages in respect of the death or injury to the driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver.”
On 7 July 2023, the case manager confirmed that the claimant was not entitled to lodge a common law claim and statutory benefits would cease at 104 weeks after the accident as this is a blameless accident.
On the same day, the claimant applied for an internal review of the decision requesting ‘That statutory payments continue to be made, by virtue of s 3.12(3) and lodgement of the claimant’s damages claim’.
The claimant requested an internal review seeking that statutory payments would continue, by virtue of s 3.12(3).
The internal review dated 21 July 2023 affirmed the insurer’s decision to cease benefits after 104 weeks.
The claimant applied for a merit review seeking the Personal Injury Commission (Commission) decision that statutory payments would continue, by virtue of s 3.12(3).
Section 3.12 states the maximum period for entitlement of statutory benefits as follows:
“(2)(a[BG1] ) 104 weeks unless there is a pending claim for damages,
(2)(b) 156 weeks unless there is a pending claim for damages where the injury is not greater than 10% WPI,
(2)(c) unless there is a pending claim for damages where the injury is greater than 10% WPI.”
Section 3.12 (3) states:
“(3) The maximum weekly payment period ends if any such pending claim for damages is withdrawn, settled or finally determined after the period of 104 weeks after the motor accident concerned.”
The insurer has declined to continue payments past 104 weeks because of s 5.4 of the MAI Act which states:
“…(1)There is no entitlement to recover damages because of the operation of this Part in respect of the death of or injury to the driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver…”
The claimant’s case is that notwithstanding the merits of the blameless accident and the potential differentiation of a successful damages claim, noting decided cases such as Whitfield v Melenewycz [2016] NSWCA 235 (Melenewycz), the claimant has not withdrawn, settled or finally determined his damages claim and statutory payments.[1]
The claimant submits the payments must continue beyond 104 weeks up to 156 or 260 weeks depending upon severity of injury.
Legislation and guidelines
[1] Paragraph 9 claimant’s submissions.
I considered the following:
· MAI Act;
· Personal Injury Commission Act 2020 (the PIC Act);
· Motor Accident Guidelines (the Guidelines);
· Motor Accident Injuries Regulation 2017 (the Regulation), and
· Personal Injury Commission Rules.
I note that the claimant’s application on form M31 seeks a merit review under Schedule 2(1)(a) of the MAI Act in respect of the amount of weekly payments. That is not the correct section as the dispute is about whether benefits could continue after 104 weeks and whether the claimant has a damages claim.
Schedule 2(1)(b) of the MAI Act empowers me to decide this merit review.
Section 52(3) of the PIC Act provides:
“(3) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act and enabling legislation without holding any conference or formal hearing.”
Considering Procedural Directions PIC2 – Determination of matters ‘on the papers'; the documents that are before me, the parties’ submissions in the documents and at the preliminary conference on 29 August 2023, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.
The insurer decision to cease payments in its notice dated 21 July 2023 is the reviewable decision.
Section 7.13 requires the Merit Reviewer to decide what the correct and preferable decision is in respect to this merit review.
The rules of evidence do not bind this merit review and I may inquire into any matter relevant to the issues in dispute in such manner as I see fit.
I have decided that the insurer’s Internal Review Certificate dated 21 July 2023 is the reviewable decision.
Documents considered
I considered the Application and the documentation attached to the Application and Reply.
Submissions
Claimant’s submissions
On 7 July 2023, the claimant’s legal representative emailed a request to review the 26 June 2023 decision to cease statutory payments after 104 weeks and the insurer’s notice dated 21 July 2023, informed the applicant that the decision to cease payment was upheld and he is not entitled to claim damages.
The claimant’s submission is that notwithstanding the legal dispute as to whether he has a damages claim, under s 3.12(3) of the MAI Act he remains entitled to receive statutory payments.
Insurer’s submissions
The insurer maintains that the insurer is entitled to cease payment of weekly statutory wage payments at 104 weeks pursuant to s 3.12(3) of the MAI Act because the subject collision was a no-fault motor vehicle accident under Part 5 of the MAI Act.
Section 5.4 confirms that there is no entitlement to recover damages in respect of an injury to the driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver.
The decision in NSW Court of Appeal in Melenewycz where the Court stated (with regard to analogous provisions to s 5.4 MAI Act under the Motor Accidents Compensation Act 1999):
“[43] Had the respondent owned the motorcycle he could not have had a claim for damages against himself as owner... Section 78 deems fault for the purposes of a claim which depends on the claimant establishing liability under the common law. It does not deem liability. Under the common law a driver cannot have a claim in negligence against him or herself… [44] The driver in a single vehicle accident will often be the owner of the vehicle. If the accident is not caused by the ‘fault’ of the owner/driver in the use or operation of the vehicle and is not caused by the fault of any other person, the definition of ‘blameless motor accident’ in Section 7A of the MAC Act is satisfied. Accordingly, the injury to the owner/driver, for the purposes of a claim for damages, is deemed to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle (s. 78(1)).
This deeming provision, however, does not give the owner/driver in a single vehicle blameless motor accident a right to claim damages under Part 1.2 of Chapter 1 of the MAC Act Section 78(1) does not say that the insurer of the owner/driver of any other person is liable to pay damages in respect of the injuries suffered by the owner/driver in the blameless motor accident Deeming the owner/driver to be negligent, as Meagher JA has pointed out, does not permit the owner/driver to claim damages for the injuries he or she sustains in the blameless motor accident. That is because deeming a driver to be negligent ... does not entitle the driver to sue himself or to claim damages from a third party” (Emphases added).
As the claimant is not able to sue himself or a third party, he does not have a lawful pending claim for damages or cause of action. Accordingly, it is submitted that the claimant cannot have a ‘pending’ claim for damages for the purposes of
s 3.12(2)(a) of the MAI Act.This position is supported by the decision in ACV v The Nominal Defendant (No 2) [2022] NSWPIC 634 (ACV). In that case, the insurer denied liability for the common law claim on the basis that the accident was a no-fault accident and the claimant has no entitlement to damages due to the operation of s 5.4 of the MAI Act.
Member Cassidy agreed there is no authority for the proposition that a person could owe a tortious duty of care to themselves and then sue themselves for breach of that duty (emphases added):
“[57] The no-fault provisions in the MAI Act achieve the same goal [as the blameless accident provisions in the MAC Act]. If the claimant in the current proceedings had lost control of his Commodore and collided with a vehicle on the right-hand side of the road instead of a power pole on the left-hand side of the road, anyone injured in the other car would have a claim and an entitlement to recover damages under the no-fault provisions of Part 5 of the MAI Act. They could not prove actual fault on the part of the claimant but fault on his part would be deemed.
[58] As the Court said in Melenewycz, the blameless accident and no-fault provisions deem fault where there is no fault, but they do not deem liability. Liability for damages in a motor accident requires three elements to be proven only one of which is fault.
[59] I agree with the insurer’s submissions that the claimant does not have an available claim because he cannot have an action in negligence or on any other basis against himself. Negligence, fault or breach of duty of care cannot be deemed in a situation where no duty of care exists.”
In the alternative, Member Cassidy determined that s 5.4 of the MAI Act prevented the recovery of damages.
In this case, the claimant’s submission at paragraph 9 seemingly agree with the position that he is not entitled to common law damages.
Further the insurer’s interpretation of the no-fault provisions and s 3.12(2)(a) of the MAI Act is consistent with the NSW Parliament’s intent with respect to no-fault accidents.
While the ‘intention of Parliament’ is not a final or authoritative limit to the interpretation of a provision, the intention is relevant and appropriate.
The insurer referred to a number of decisions on statutory interpretation including Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, [41].
Minister Dominello’s Second Reading Speech–discussing the Motor Accidents and Workers Compensation Legislation Amendment Bill 2021(passed into law as the Motor Accidents and Workers Compensation Legislation Amendment Act 2022)–illustrated that the NSW Parliament’s intention was for statutory benefits for loss of income to be payable up to two years (104 weeks) in no-fault motor vehicle accidents.
A scenario mentioned in the Second Reading speech is analogous to the subject claim, referring to drivers taking urgent evasive action to avoid animals on the road.
The claimant has not cited contrary authority in his submissions to indicate that the insurer’s decision to cease weekly statutory wage payments at 104 weeks is incorrect or contradicts the NSW Parliament’s intent.
In circumstances where the claimant is not able to sue himself or a third party, he does not have a lawful ‘pending claim for damages’ or cause of action as required by s 3.12(2)(a) of the MAI Act.
Member Maurice Castagnet’s decision in Lay v QBE Insurance (Australia) Limited [2023] NSWPICMR19 held that a damages claim in a no-fault motor accident was ‘pending’, notwithstanding there were no prospects of success. Referring to the insurer’s arguments that the claimant had no pending claim, Member Castagnet determined as follows:
“[41] I do not accept that argument for the following reasons.
[42] First, there is nothing in the terms of Section 3.12 to suggest that a claim for damages is no longer pending if the insurer does not accept liability. This is made apparent by the words “whether or not the insurer has accepted liability”.
[43] Secondly, it cannot be said that a claim for damages is no longer pending on the mere assertion by the insurer that the claim is doomed to fail. Liability for the claim will be determined by others. As indicated by Section 3.12(3) the maximum weekly payment period ends if the pending claim finally determined, or otherwise withdrawn or settled.”
Member Castagnet’s determination was wrong because that Member did not consider Part 5 of the MAI Act, as Member Cassidy in ACV did.
Member Castagnet’s determination is also inconsistent with the NSW Parliament’s intention with respect to payment of weekly statutory wage benefits up to 104 weeks in no-fault motor accidents.
Member Castagnet’s focus on the use of the word ‘liability’ in s 3.12 of the MAI Act fails to consider ‘fault’ in no-fault motor vehicle accidents and the entitlement to bring a claim for common law damages. It is significant that the NSW Parliament added the following notation to s 5.6 of the Act in the Motor Accidents and Workers Compensation Legislation Amendment Act 2022: ‘Note - The definition of no-fault motor accident in Section 5.1 is focused on the fault for causing a motor accident rather than the fault for causing death or injury occasioned by the accident’.
Outcome
Schedule 2(1)(b) of the MAI Act requires me to decide whether the claimant has a pending damages claim, in order to satisfy s 3.12 of the MAI Act.
Mr Karklin’s injury situation is tragic, and his need for ongoing statutory payments could be indefinite. While he is less unfortunate than people injured in car accidents where there was no fault before the MAI Act and blameless accident provision, those payments ceased 104 weeks after the accident.
To establish that he had a pending claim for damages it would require him to be able to argue that he was owed an existing tortious duty which this fact situation breached.
Then s 3.12(2)(a) would be satisfied and s 3.12(3) would ensure payments would continue until the damages claim was resolved. Leaving it unresolved and extant would be the only way to ensure the benefits continued.
This would be against the NSW Parliament’s intent, which was to set up a scheme for statutory payments under Division 3.3 which provided entitlements which would expire after a certain time, or when a damages claim was resolved.
That is not the case here, as his injuries were suffered when he took evasive action to avoid a collision with deer. There is no-one to sue and therefore no damages liability to be resolved.
The decisions in Melenewycz by analogy and ACV emphasise that under Division 3 the claimants in no fault accident have a continuing entitlement to statutory payments past 104 weeks, which is not tied ultimately to finding that an insurer was liable for damages but rather is tied to being entitled to establish liability to make a claim for damages.
Mr Karklins injuries were suffered in a no fault accident as defined under the MAI Act. Accordingly, the claimant cannot establish a claim for negligence against himself, as stated in s 5.4.
The insurer’s reviewable decision made 21 July 2023 was correct, and accordingly it is affirmed.
This type of merit review is not included as a regulated merit review matter in the Regulation, accordingly there is no directions as to costs.
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