Martino Developments Pty Ltd v Doughty

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6941 of 2006

MARTINO DEVELOPMENTS PTY LTD (ACN 005 477 690)	Plaintiff
v
JOHN DOUGHTY	Defendant

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JUDGE:	VICKERY J
WHERE HELD:	Melbourne
DATE OF HEARING:	10 September 2008
DATE OF JUDGMENT:	27 November 2008
CASE MAY BE CITED AS:	Martino Developments v Doughty
MEDIUM NEUTRAL CITATION:	[2008] VSC 517

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ACCIDENT COMPENSATION – Transport Accident - Transport Accident Act1986 (Vic) – scheme of the Act - construction of s 93 – whether per quod servitium amisit actions extinguished in relation to transport accidents - meaning of ‘Person’ first mentioned in s 93(1) – meaning of “in respect of” in s 93

TORT - per quod servitium amisit action - history and current application in Australia

STATUTES – General principles of construction – Abrogation of common law rights by statute - the rule in Potter v Minahan considered - use of an amending bill in statutory interpretation - meaning of ‘Person’ first mentioned in s 93(1) Transport Accident Act1986 (Vic) – meaning of “in respect of” in s 93 (1) Transport Accident Act1986 (Vic)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R P Gorton QC with Mr J P Gorton	Burt & Davies
For the Defendant	Mr P Solomon	Solicitor to the Transport Accident Commission

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Approach to Statutory Interpretation............................................................................................. 2

Abrogation of Common Law Rights by Statute – the Rule in Potter – Approach to Statutory Construction.......................................................................................................................................................... 6

Use of an Amending Act as an Aid to Interpretation............................................................... 10

The Per Quod Action at Common Law........................................................................................ 14

Transport Accident Compensation Scheme under the Act...................................................... 23

The Text of s 93 of the Act.......................................................................................................... 30
The Meaning of ‘Person’ First Mentioned in s 93(1).............................................................. 33
The Meaning of “in respect of”................................................................................................. 36

Object and Purpose of the Act....................................................................................................... 39

Conclusion......................................................................................................................................... 44

HIS HONOUR:

Introduction

The Plaintiff employer has commenced proceedings in the County Court of Victoria claiming damages suffered by it as a result of a motor vehicle accident which caused injury to its employee. The issue which arises for determination in this case is whether the cause of action per quod servitium amisit relied upon by the Plaintiff has been extinguished in Victoria by s 93 of the Transport Accident Act 1986 (‘the Act’).

This matter comes before the Court as a preliminary trial of separate questions which arise in the proceeding. On 26 August 2008 I ordered, pursuant to r. 47.04 of the Supreme Court (General Civil Procedure) Rules 2005, that a preliminary trial on two stated questions be conducted. The preliminary trial proceeded on the assumption that the facts alleged by the Plaintiff in its Statement of Claim were true, together with certain additional agreed facts.

In essence the agreed facts pleaded in the Statement of Claim were as follows: the Plaintiff, Martino Developments Pty Ltd (“Martino Developments”) is a proprietary company which carries on business as a property developer. On 15 November 2000 it employed Mr Angelo Martino as a property manager. On that day Mr Martino was crossing Johnson Street, Collingwood in the State of Victoria when a vehicle being driven by the Defendant, John Doughty, struck him. The accident caused Mr Martino injuries, in particular to his right leg, ankle and foot. At the time of the accident Mr Martino was preparing land situated at 26 Shuter Street, Moonee Ponds for development. However, since then and as a result of the accident, Mr Martino has been unable to perform the work of a property manager for Martino Developments, and it has been deprived of his services and the consequent income and profits it would have derived.

The additional agreed facts for the purposes of the preliminary trial were:

(a)the Transport Accident Commission (the “Commission”) has not made an impairment determination in respect of the Plaintiff pursuant to sections 46A, 47(7) or 47(7a) of the Transport Accident Act 1986 (‘the Act’);
(b)the Plaintiff has not been issued with a certificate in writing consenting to the bringing of the proceedings, pursuant to Section 93(1) of the Act;
(c)the Plaintiff has not obtained judicial leave to bring this proceeding, pursuant to section 93(4)(d) of the Act; and
(d)In 2003, Mr Martino issued proceedings in the County Court of Victoria, against John Doughty as defendant, in accordance with the Act, in relation to the same incident set out in the Statement of Claim of the Plaintiff in this proceeding. In 2004, the County Court proceedings were compromised and a payment was made to Mr Martino.

The two questions for determination by the Court are whether, by virtue of the provisions of the Act:

(a)the claim pursued by the Plaintiff in the proceeding is extinguished? And
(b)whether the Plaintiff is precluded from recovering damages from the Defendant?

Approach to Statutory Interpretation

I here set out the fundamental principles of statutory interpretation which have guided me in the construction of s 93 of the Act.

Speaking extra-curially in 2008, Chief Justice Murray Gleeson said:

The responsibility of discovering, expounding and applying the meaning of legislation is discharged according to legal principles. Observing those principles goes to the essence of the role of courts in a liberal democracy, and of the relationship between courts and citizens, whose elected representatives are the authors of the legislation that courts are duty bound to understand and apply.[1]

[1]Chief Justice Murray Gleeson “The Meaning of Legislation: Context, Purpose and Respect For Fundamental Rights” Victoria Law Foundation, Melbourne 31 July 2008 at 4-5.

The starting point is the text of the enactment. It is the meaning of the text which governs. ‘Text’ in this context is not confined to the individual words or phrases under consideration. Chief Justice Gleeson in the same paper said (at 8-9) that the meaning of the text is:

[A]lways influenced, and sometimes controlled, by context. The immediate context of a statutory provision may include surrounding provisions or, perhaps, the entire Act. The wider context may include historical circumstances at the time of its enactment, a background of other legislation or judge-made law, the Constitution, and any other matter that could rationally assist understanding or meaning.

Moreover, the modern approach to statutory interpretation calls for the context to be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise[2].
[2] CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408.

It has been said that "[i]ntention of the Legislature" is a "very slippery phrase"[3]. Nevertheless, the purposive construction of legislation is mandated by statute. Section 35(a) of the Interpretation of Legislation Act 1984 requires the Court to prefer a construction that promotes the purpose or object of the act. However, the illumination of the purpose or object of a provision is rarely straightforward. It may not be plainly obvious from the text or the context and, more often than not, the provision which is to be construed finds itself in legislation which has more than a single purpose. Furthermore, in some cases the object or purpose of a provision may become blurred because the legislation is the result of compromise, or the particular issue of construction may have arisen from facts or circumstances not considered by the draftsman or the Parliamentarians and a ‘gap’ is exposed.
[3] Salomon v Salomon & Co [1897] AC 22 at 38 per Lord Watson.

Section 35 of the Interpretation of Legislation Act 1984 provides that consideration may be given to any matter or document that is relevant, and then identifies various extrinsic materials which may be used, including reports of proceedings in any House of Parliament. If the material is relevant, it may be taken into account. However, in A.C.C. v Zurich Australian Insurance Ltd[4] Ashley J, quoting with approval the judgment of Brennan and Gaudron JJ in Catlow v Accident Compensation Commission[5], said (at 10-11):

Whether or not extrinsic material is considered in interpreting a statutory provision, it is clear that the meaning attributed to the statute must be consistent with the statutory text. If the meaning which would otherwise be attributed to the statutory text is plain, extrinsic material cannot alter it. It is only when the meaning of the text is doubtful … that consideration of extrinsic material might be of assistance. It follows that it would be erroneous to look to the extrinsic material before exhausting the application of the ordinary rules of statutory construction. If, when that is done, the meaning of the statutory text is not doubtful, there is no occasion to look to the extrinsic material.

[4][1992] 2 VR 1.

[5](1989) 167 CLR 543 at 549-550.

To similar effect is the opinion of Mason CJ and Toohey J in Mills v Meeking[6], which also considered the operation of s 35. Their Honours said:

Later, reference is made to the difficulties associated with an argument which relies upon discerning the intention of Parliament with respect to the operation of the provisions in issue, other than that which may be inferred from the statute itself. For the present, there is no need to have resort to extrinsic material; the provisions may be given their ordinary grammatical meaning. If the language of a statute is ambiguous or uncertain, a risk of injustice will bear upon the construction to be given to words used. But, if the language is not ambiguous or uncertain, a court will apply its ordinary and grammatical meaning unless to do so will give the statute an operation which obviously was not intended: see generally Cooper Brookes (Wollongong) Pty. Ltd. v. Federal Commissioner of Taxation[1981] HCA 26; (1981) 147 CLR 297 at pp 304-305, 320-321; also Catlow v. Accident Compensation Commission (1989) 63 ALJR 619 at p 622; 87 ALR 663 at p 668. This legislation is not relevantly ambiguous or uncertain.

[6](1990) 169 CLR 214 at 223.

More often than not, a question will arise as to whether extrinsic material of the kind referred to in s 35 of the Interpretation of Legislation Act 1984 is capable of providing assistance. In reviewing the conclusion arrived at by Mason CJ and Toohey J in Mills v Meeking[7] Ashley J said (at 11):
[7]A.C.C. v Zurich Australian Insurance Ltd [1992] 2 VR 1.

They succinctly observed that such material provided, in the circumstances, a very unreliable conveyance for discerning ‘the intention of Parliament’. That is an observation which must, I believe, be kept firmly in mind if and when resort is ever had to consideration of extraneous material in the course of statutory interpretation.

Nevertheless, bearing in mind the necessary caution reflected in the above passage in determining the reliability of any extraneous material to which recourse may be had, in my opinion, Lord Browne-Wilkinson was also helpful in his appraisal in Pepper v Hart[8] when his Lordship observed that:

In many, I suspect most, cases references to Parliamentary materials will not throw any light on the matter. But in a few cases it may emerge that the question was considered in passing the legislation. Why in such a case should the courts blind themselves to a clear indication of what Parliament intended in using those words?

[8](1993) AC 593 at 634-635.

Finally, the Court must approach its task of construction of legislation within recognised boundaries. In Sovar v Henry Lane Pty Ltd[9] Kitto J warned that the intention that a private right shall exist in legislation is not to be conjured up by judges to give effect to their own ideas of policy, and then imputed to Parliament. His Honour said (at 405):

The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, scope and terms of the statute, including the nature of the evil against which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation ... . It is not a question of the actual intention of the legislators, but of the proper inference to be perceived upon a consideration of the document in the light of all its surrounding circumstances.

[9](1967) 116 CLR 397.

Gleeson CJ spoke in similar terms in Singh v The Commonwealth[10] when he said:

In Wilson v Anderson I sought to explain the objectivity of the concept of intention comparing the position with respect to construction of a contract, and stressing that the exercise is not formal or literalistic but demands consideration of background, purpose and object, surrounding circumstances, and other matters which throw light on the meaning of unclear language. The danger to be avoided in references to legislative intention is that they might suggest an exercise in psychoanalysis of individuals involved in the legislative process; the value of references to legislative intention is that they express the constitutional relationship between courts and the legislature. As Kitto J said, references to intention must not divert attention from the text, for it is through the meaning of the text, understood in the light of background, purpose and object, and surrounding circumstances, that the legislature expresses its intention, and it is from the text, read in that light, that intention is inferred. The words "intention", "contemplation", "purpose", and "design" are used routinely by courts in relation to the meaning of legislation. They are orthodox and legitimate terms of legal analysis, provided their objectivity is not overlooked.

[10] Singh v Commonwealth (2004) 209 ALR 355 at 362 - 363 (footnotes omitted).

Lord Steyn summarised the basic principles of statutory construction and the limits imposed on the judicial method when, writing extra-curially, he stated[11]:

The apparent meaning of statutory language is the starting point, but not the end of interpretation. A judge must consider all relevant contextual material in order to decide what different meanings the text is capable of letting in and what is the best interpretation among competing solutions. But the judge’s task is interpretation, not interpolation. Interpretation is not finitely expandable. What falls beyond that range of possible meanings of text will not be a result attainable by interpretation. There is a Rubicon which judges may not cross: principles of institutional integrity forbid it.

[11]Lord Steyn, “Dynamic Interpretation Amidst an Orgy of Statutes” (2003) 35 Ottawa Law Review 163 at 166.

It is in the light of the principles analysed in this part of the judgement that I will proceed to construe s 93(1) of the Act. However, there are two unique features of this case which call for an overlay to be applied to the conventional rules of statutory interpretation. The first is the approach to be applied where, as here, the extinguishment of a common law right is in issue. The second is the approach to be taken to amending legislation which has recently been introduced with the object of amending relevant parts of the principal Act.

Abrogation of Common Law Rights by Statute – the Rule in Potter – Approach to Statutory Construction

The ambit of any presumption against the modification or abrogation of fundamental rights, or of common law rights founded in the general system of law, is important to the administration of the rule of law. In Electrolux Home Products v AWU[12] Gleeson CJ, in describing the joint judgment of the High Court in Coco v The Queen[13], said (at 329) on the subject:

The joint judgment in Coco went on to identify as the rationale for the presumption against modification or abrogation of fundamental rights an assumption that it is highly improbable that Parliament would "overthrow fundamental principles, infringe rights, or depart from the general system of law" without expressing its intention with "irresistible clearness". In R v Home Secretary; Ex parte Pierson, Lord Steyn described the presumption as an aspect of the principle of legality which governs the relations between Parliament, the executive and the courts. The presumption is not merely a common sense guide to what a Parliament in a liberal democracy is likely to have intended; it is a working hypothesis, the existence of which is known both to Parliament and the courts, upon which statutory language will be interpreted. The hypothesis is an aspect of the rule of law.

[12][2004] 221 CLR 309 (footnotes omitted).

[13](1994) 179 CLR 427 at 437 per Mason CJ, Brennan, Gaudron and McHugh JJ.

In the passage quoted from Electrolux Home Products v AWU[14] Gleeson CJ referred to the traditional position which had been adopted in Australia as to the extinguishment or curtailment of common law rights by legislation. The ‘rule in Potter’, as it came to be known, was that expressed in Potter v Minahan[15] by O’Connor J (at 304):

It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness.

[14][2004] 221 CLR 309.

[15](1908) 7 CLR 277.

The rule in Potter came to represent the law in Australia for the best part of a century. However, there have been forceful pronouncements from the High Court during this decade which have significantly qualified the principle. As McHugh J observed (at 298) in Malika Holding Pty Ltd v Stretton[16] (Malika), after re-stating the long-held requirement for ‘irresistible clearness’:

But times change. What is fundamental in one age or place may not be regarded as fundamental in another age or place. When community values are undergoing radical change and few principles or rights are immune from legislative amendment or abolition, as is the case in Australia today, few principles or rights can claim to be so fundamental that it is unlikely that the legislature would want to change them. No doubt there are fundamental legal principles – a civil or criminal trial is to be a fair trial, a criminal charge is to be proved beyond reasonable doubt, people are not to be arrested or searched arbitrarily, laws, especially criminal laws, do not operate retrospectively, superior courts have jurisdiction to prevent unauthorised assumptions of jurisdiction by inferior courts and tribunals are examples. Clear and unambiguous language is needed before a court will find that the legislature has intended to repeal or amend these and other fundamental principles. But care needs to be taken in declaring a principle to be fundamental. Furthermore, infringement of rights and departures from the general system of law are in a different category from fundamental principles.

[16](2001) 204 CLR 290.

In Malika McHugh J further observed (at 299) that legislatures now amend or abolish rights or depart from the general system of law with such frequency that “it is difficult to accept that it is ‘in the last degree improbable’ that a legislature would intend to alter rights or depart from the general system of law unless it did so ‘with irresistible clearness’ ”. His Honour concluded (at 299):

Hallowed though the rule in Potter v Minahan may be, its utility in the present age is open to doubt in respect of laws that ‘infringe rights, or depart from the general system of law.’ In those areas, the rule is fast becoming, if it is not already, an interpretative fiction. Such is the reach of the regulatory state that it is now difficult to assume that the legislature would not infringe rights or interfere with the general system of law.

Kirby J in Malika (at 328) expressed his general agreement with McHugh J, and expressed the view that “legislation is presumed not to erode fundamental rights unless this object is clearly expressed”, and that the principle (the rule in Potter) needs “to be considered in the context of the quantity and variety of legislation today.”

In an appeal from the Supreme Court of NSW, Gifford v Strang Patrick Stevedoring Pty Ltd[17], McHugh J (at 284) again emphasised that the presumption against the legislature altering or abolishing common law rights was weak. His Honour again drew the distinction between fundamental and other rights and noted that “[c]ourts should not cut down the natural and ordinary meaning of legislation evincing an intention to interfere with these lesser rights by relying upon [such a] presumption”. Of some relevance to the present case, in Gifford McHugh J considered that the right to bring an action for psychiatric injury was an ‘ordinary legal right’, as opposed to a ‘fundamental right’. In those circumstances His Honour approached the issue of construction by an examination of the “wording … and history” of the relevant act without being constrained by the presumption against abrogation of common law rights.
[17](2003) 214 CLR 269.

The approach of McHugh J in Gifford was affirmed by Gleeson CJ in Electrolux Home Products Pty Ltd v Australian Workers’ Union[18] (at 328) where the Chief Justice said:

Reliance was placed in argument upon what was said to be a general principle of construction that, where a statute takes away or interferes with common law rights, then it should be given, if possible, a narrow interpretation. The generality of that assertion of principle requires some qualification. It is true that courts do not impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language … However, as McHugh J pointed out in Gifford v Strang Patrick Stevedoring Pty Ltd modern legislatures regularly enact laws that take away or modify common law rights. The assistance to be gained from a presumption will vary with the context in which it is applied. For example, in George Wimpey & Co Ltd v British Overseas Airways Corporation, Lord Reid said that in a case where the language of a statute is capable of applying to a situation that was unforeseen, and the arguments are fairly evenly balanced, "it is ... right to hold that ... that interpretation should be chosen which involves the least alteration of the existing law". That was a highly qualified statement and, if it reflects a presumption, then the presumption is weak and operates only in limited circumstances.

[18] [2004] 221 CLR 309 (footnotes omitted).

In the more recent case of Harrison v Melham[19] Spigelman CJ was definitive in his rejection of the Potter principle in its traditional embodiment, saying (at 2): “I do not believe any weight can be attributed to the principle that Parliament is presumed not to intend to abrogate common law rights” and that in His Honour’s opinion (at 3) this principle of statutory interpretation “is now of minimal weight”
[19][2008] NSWCA 67.

Thus the present law on the application of the rule in Potter in Victoria may be summarised under two categories. The first category is the case where fundamental rights, principles or freedoms are potentially abrogated or curtailed by legislation. Fundamental rights, principles or freedoms can be overridden only by legislation which is expressed in clear and unambiguous language. Reduced to its essence, the principle was stated in Re Bolton; Ex parte Beane[20] by Brennan J (at 523) in the following terms:

Unless the Parliament makes unmistakeably clear its intention to abrogate or suspend a fundamental freedom, the courts will not construe a statute as having that operation.

[20](1987) 162 CLR 514.

The statement of Brennan J in Beane was approved by Mason CJ, Brennan, Gaudron, and McHugh JJ in Coco v R[21], who then went on to say in their joint judgment (at 437):

The insistence on express authorization of an abrogation or curtailment of a fundamental right, freedom or immunity must be understood as a requirement for some manifestation or indication that the legislature has not only directed its attention to the question of the abrogation or curtailment of such basic rights, freedoms or immunities but has also determined upon abrogation or curtailment of them. The courts should not impute to the legislature an intention to interfere with fundamental rights. Such an intention must be clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose if they do not specifically deal with the question because, in the context in which they appear, they will often be ambiguous on the aspect of interference with fundamental rights (See Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1 at 12 per Mason CJ).

[21](1994) 179 CLR 427.

The second category is where a statute may give rise to an infringement of or a departure from the general system of law short of what may be described as law enshrining fundamental rights and freedoms or a corollary of such rights and freedoms. In such a case, construction of legislation may still be assisted in some cases by the application of an approach which shadows the earlier rule. However, the degree of assistance is limited and will vary with the context in which it is applied. If for example a ‘gap’ in the legislation is exposed or the arguments for and against an intention to curtail, qualify or abrogate a law of this type are fairly evenly balanced, it may be appropriate to prefer an interpretation which involves the least alteration to the existing body of general law.

I will proceed to construe the language of s 93 of the Transport Accident Act 1986 in its natural and ordinary meaning, having regard to its context – which will include other provisions of the Act, its history and the state of the law as to its meaning – as well as the purpose sought to be achieved by the Act. Only then, if a ‘gap’ is exposed or the arguments remain evenly balanced, would it be appropriate to resolve the question in favour of the continuation of general law entitlements by adopting a construction which involves the least alteration of the existing law.

Use of an Amending Act as an Aid to Interpretation

A further principle of construction needs to be considered in this case arising from the recent introduction of amending legislation into the Parliament of Victoria. On 9 September 2008 the Compensation and Superannuation Legislation Amendment Bill[22] (‘the Bill’) was introduced into the Legislative Assembly. A stated purpose of the Bill is to amend the Transport Accident Act 1986 to ensure that only natural persons who sustain serious injuries as a result of transport accidents, and not corporations, can claim damages under the scheme in the Act and only in respect of damages claimed by the person who is injured.
[22]At the time of writing the Compensation and Superannuation Legislation Amendment Bill had passed the Legislative Assembly (on 28 October 2008), been read a second time in the Legislative Council, but was yet to pass that House or receive Royal Assent.

The Bill contains the following clauses of relevance:

1 Purpose
The purpose of this Act is to—
(a) amend the Transport Accident Act 1986 to—
(ii)clarify that only a natural person can bring proceedings in accordance with section 93;

5 Amendment of section 93—Actions for damages
After section 93(1) of the Transport Accident Act 1986 insert—
"(1A)For the avoidance of doubt, it is hereby declared that the effect of subsection (1) is that any person, whether or not a natural person, cannot recover any damages in any proceedings to which that subsection applies unless the person is a natural person in which case the natural person can only bring proceedings in accordance with this section to recover damages in respect of the injury sustained by him or her or the death of a person specified in subsection (1).

The Bill goes on to provide:

197 Section 93 (Actions for damages)
(1)Subject to subsections (2) and (3), section 93, as amended by section 5 of the Compensation and Superannuation Legislation Amendment Act 2008, applies in respect of any proceedings to which section 93 applies irrespective of when the injury or death occurred.
(2)Despite subsection (1), section 93, as in force before the commencement of section 5 of the Compensation and Superannuation Legislation Amendment Act 2008, continues to apply in respect of any proceedings lodged before that commencement.
(3)Despite subsection (1), the amendment of section 93 by section 5 of the Compensation and Superannuation Legislation Amendment Act 2008 does not affect the rights of the parties in the proceedings known as Martino Developments Pty Ltd (ACN 005 477 690) v John Doughty (No. 6941 of 2006) in the Supreme Court of Victoria (Common Law Division).

Thus it is clear that the Bill has been introduced specifically with the present litigation in contemplation and is in direct response to the legal issue which has been raised in this proceeding. Sub-clauses 197(2) and (3) of the Bill provide that, although the Bill (through sub-clause 197(1)) purports to operate retrospectively with respect to causes of action that have already arisen and where proceedings have not yet been commenced, the Bill does not, as it is presently framed, seek to alter the capacity of the plaintiff Martino Developments to prosecute its current action if the per quod cause of action has not otherwise already been extinguished by the operation of the Act.

There is high authority for the proposition that the terms of an amending enactment can throw light on the intention of an earlier enactment[23]. The generally accepted foundation for the learning in Australia is the judgment of Dixon J in Grain Elevators Board (Vic) v Dunmunkle Corp[24]. In 1942 the Grain Elevators Act 1942 (Vic) was enacted as an act to amend the Grain Elevators Act 1934. This was only three weeks after the striking of the municipal rate which was in issue in the proceeding. The amending act provided a specific exemption from the liability to pay certain rates. The question was whether the exemption already existed under the earlier legislation which operated prior to the introduction of the amending act. His Honour said (at 86):

Although the provision was passed too late to apply to the present case, I think that it may be considered on the question of interpretation. It would be a strange result if we were to interpret the prior legislation as giving a wider exemption than that conferred by the provision so that the express exemption it makes would prove unnecessary and the qualifications it places upon that exemption would be futile.

[23]Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492 at 539 per McHugh J citing Grain Elevators Board (Vic) v Dunmunkle Corp (1946) 73 CLR 70 and the earlier English case of Cape Brandy Syndicate v Inland Revenue Commissioners [1921] 2 KB 403 at 414.

[24](1946) 73 CLR 70.

In Hunter Resources Ltd v Melville[25] Dawson J (at 254 – 255) expanded upon the approach in Grain Elevators with the following observations:

In Grain Elevators Board (Vict.) v. Dunmunkle Corporation[1946] HCA 13; (1946) 73 CLR 70, at p 86 Dixon J. expressed the view that an amending Act might be taken into account in the interpretation of the prior legislation, at least to avoid a result that would render the amending legislation unnecessary or futile. I would add that it is but a short step to take, having regard to the expanded scope of the materials which now may be considered, to adopt the same approach in order to avoid rendering the amending legislation deficient. After all, what lies behind the observation of Dixon J. in Dunmunkle is that it is permissible to ascertain the intention of the legislature with regard to prior legislation by reference to amending legislation. No doubt there are limits to this approach for as the House of Lords said in Ormond Investment Co. v. Betts (1928) AC 143, at p 154 it is not permissible to construe an unambiguous phrase in an earlier Act by an erroneous assumption of its effect contained in a later Act which did not purport to amend or alter the earlier Act.

[25](1988) 164 CLR 234.

In Commissioner of State Revenue v Pioneer Concrete(Vic) Pty Ltd[26] Callinan J, in citing both Dixon J in Grain Elevators and Dawson J in Hunter Resources, said (at 670):

That a legislature has subsequently made particular provision to cover relevant events or circumstances may provide an indication that the legislation as earlier enacted was not intended to cover those events or circumstances at an earlier time.

[26](2002) 209 CLR 651.

Kirby J (in dissent) in Cook v Benson & Ors[27] adopted a similar approach in expressing the following view on the issue (at 394):

Although subsequent amendments to legislation do not necessarily control the construction of statutory language as it existed prior to the amendment, in some cases the perceived need for a specific exemption may reinforce an impression, derived from the pre-amendment statutory provisions, that they did not go so far as the later amending provisions did.[28]

[27](2003) 214 CLR 370 (annotations omitted).

[28]Kirby J in this passage cited the following supporting authority: Grain Elevators Board (Vict) v Dunmunkle Corporation [1946] HCA 13; (1946) 73 CLR 70 at 85-86; R v Reynhoudt [1962] HCA 23; (1962) 107 CLR 381 at 388; Zickar v MGH Plastic Industries Pty Ltd [1996] HCA 31; (1996) 187 CLR 310 at 351.Taikato v The Queen [1996] HCA 28; (1996) 186 CLR 454 at 471-472; Trust Company of Australia [2003] HCA 23 at [89]- [91]; but compare [87], [92].

Consistently with the prevailing authority in Australia, I accept that an amending Act might be taken into account in the interpretation of the prior legislation. However, I approach the use of the amending Bill in this case in the construction of the Act with caution because the Bill has not yet passed into law. If there are difficulties in using the terms of an amending enactment to throw light on the intention of an earlier enactment[29], those difficulties are compounded when reference is made to the text of legislation which is merely proposed in the form of a Bill presented to Parliament.
[29]See Hepples v Federal Commissioner of Taxation (1992) 173 CLR 492 at 539 per McHugh J.

Further, the precise text of the relevant provisions of the amending Bill is of some importance. A new sub-section 1(A) is proposed to be added, not for the stated purpose of extinguishing a cause of action which was not extinguished by s 93(1) of the original Act, but for the purpose of declaring this as being the existing effect of s 93(1) “[f]or the avoidance of doubt”. Sub-clause 1(a)(ii) of the amending Bill supports this object by stating that a purpose of amending the Act is to “clarify that only a natural person can bring proceedings in accordance with section 93”.

Thus the amending Bill, as reflected in clauses 1 and 5 of its text, are of only limited, if any, assistance in the construction of s 93 of the Act. Put at its highest, the fact that the Bill in its present form has been introduced into Parliament, can go no higher than demonstrating a perceived need for clarification of the existing provision, which is the accepted premise of the present proceeding.

It is here that I should make an observation as to the effect of the proposed Bill in relation to the clause which seeks to introduce s 93(1A) into the Act. A declaration that s 93(1) applies only to natural persons, may well give rise to uncertainty as to whether executors and administrators which may be appointed to the estate of a person who dies as a result of a transport accident, and which happen to be companies or other incorporated bodies, are precluded from commencing a proceeding under s 17 of the Wrongs Act 1958. Although I doubt whether this will be the effect of the proposed s 93(1A), if the point should ever call for determination, the matter would not be beyond argument. Further, if the intention is to extinguish per quod claims insofar as such claims may result from a transport accident, the Bill would not be likely to achieve this if the employer is a natural person or a partnership of natural persons. Given these potential shortcomings in the Bill, I place no weight on it as an aid to the construction of s 93(1) of the present Act. The possibility that the Bill may be amended in this case emphasises why it is that the text of an amending Bill, before it is passed into law, will rarely if ever be of any assistance in the construction of the legislation which is the subject of the amendment.

The Per Quod Action at Common Law

The cause of action pursued by Martino Developments in the proceeding is an action per quod servitium amisit, or simply a ‘per quod’ action as it is commonly called. In determining whether the action is extinguished by the operation of s 93 of the Act, a brief analysis of the action and its current place in the common law of Australia is called for. The evolution of the action in its contemporary form is essential to the consideration of the status of the rights claimed to be affected by the legislation, namely whether those rights are to be characterised as being ‘fundamental’ in the relevant sense, or whether they are merely part of the general law, despite the antiquity of its origins.

The historical origins of the per quod action are ancient and somewhat obscure. An action in trespass at common law was available in feudal England if a servant of the complainant was taken out of his service. The earliest recorded example of a per quod action able to be traced by Gareth Jones in his article “Per Quod Servitium Amisit”[30] was in 1293[31]. The action was the subject of further development during the Black Death of the fourteenth century. The plague caused a severe labour shortage. It has been estimated that in less than two years, between 1348-1349, a third or possibly a half of the inhabitants of England died[32]. Poaching of the surviving workforce became all too frequent. The serious economic situation propelled the enactment of the Statute of Labourers of 1351 (23 Ed III) which, although having a primary purpose of containing wages[33], also entrenched the per quod cause of action and expanded its field of operation[34]. Actions on the case for enticement from service were based on the statute and became part of the common law, surviving the repeal of the Statute of Labourers by the Artificers and Apprentices Act 1562.
[30]G H Jones* “Per Quod Servitium Amisit”(1958) 74 LQR 39 (*Today, Professor G H Jones, Emeritus Downing Professor of the Laws of England, Faculty of Law, University of Cambridge).
[31](1293) Y.B. 21 Edw. 1 (Rolls Series, p. 119).
[32]See: G M Trevelyan** Illustrated English Social History (London, The Reprint Society, 1963), Vol. 1 at 8 (**Master of Trinity College, Cambridge 1940-1951; formerly Regius Professor of Modern History in the University of Cambridge 1927 – 1942).
[33] G M Trevelyan Illustrated English Social History at 10.
[34]G H Jones “Per Quod Servitium Amisit” at 40.

Subsequently, the action evolved in the common law of England to provide a remedy in damages where a servant was injured by a third party, the result being that his service to his master was interrupted. If the injury to the servant was committed with force but was the consequence of unintended but negligent conduct, as in a running down case, where the master could sue in trespass for the forcible wrong or in case for the negligence.[35]
[35]See also Williams v Holland (1833) 10 Bing 112 (131 ER 848).

One of the earliest cases arising from a driving accident, was Everard v Hopkins in 1614[36]. An action on the case was brought against the defendant, who was a ‘common surgeon’. It was alleged in the pleading that the defendant had undertaken the care of the plaintiff’s servant. In the course of the defendant’s custody of him, the servant was injured by a cart wheel. It was also alleged that the defendant had applied to the servant a variety of “unwholesome medicines”. Croke J, in supporting the plea on the case in respect of the injury caused by the cart wheel, posited the following illustration:

If a man digs a hole in a highway into which my servant falls and hurts himself so that he cannot further his master’s message, I shall have an action on the case against him (the man) for the loss of his services.

[36]2 Bulstrode 332; see Rolle, Abridgment, Part 1, p 88.

Under this form of action the master's remedy was to recover for the loss of services, not for the loss of the performance of a contract of service. In such a case, the master had an action per quod servitium amisit even though the third party did not intend to injure the master[37]. However, the relationship of master and servant had to exist. In earlier cases the servant was nearly always a son, a daughter, a wife, or a domestic servant, apprentice, or a labourer within the terms of the Statute of Labourers. The loss of a servant was considered to be an injury to the master's proprietary rights in the servant or in his services which justified a direct right of action against the person responsible for causing the injury.
[37] Robert Mary’s Case, 9 Coke 111b (Eng 1613); Ames v Union Railway Co., 117 Mass. 541, 19 Am. Rep. 426 (1875).

At least by the twentieth century the view came to prevail in England that the cause of action was confined to the case where injury was caused to a menial or domestic servant who was a member of the master’s household. Although it has been suggested that this restriction was a purely twentieth-century development[38], an isolated and colourful example presented itself at the close of the eighteenth century in 1795. In Taylor v Neri[39] Eyre CJ non-suited the plaintiff because the person injured was not found to be a servant. The plaintiff was the manager of an opera house. A person called Breda was engaged as a public singer during the season at a salary. The defendant was alleged to have assaulted and beaten the hapless Breda, and as a consequence the plaintiff lost his services as a public performer. The Chief Justice expressed a doubt whether the action was maintainable or not. His Lordship said, that he did not think the Court had ever gone further than the case of a menial servant, “for that if a daughter had left the service of her father, no action per quod servitium amisit would lie for debauching her."
[38] Commissioner for Railways (N.S.W.) v Scott (1959) 102 CLR 392 at 402 per Dixon CJ.
[39](1795) 1 Esp 386 (170 ER 393).

The approach reached its zenith in the mid-1950’s in the United Kingdom. Denning LJ in I.R.C. v Hambrook[40] relied in part upon Blackstone’s Commentaries for the proposition that the action per quod servitium amisit was confined to injury to or the loss of menial servants. The passage from Blackstone quoted by Denning LJ concludes:

The reason and foundation upon which all this doctrine is built, seem to be the property that every man has in the service of his domestics; acquired by the contract of hiring, and purchased by giving them wages.

[40][1956] 2 QB 641 at 663.

By 1975 the theory had become doctrine in English law. The limitation is noted, for example, in Bullen and Leake and Jacob’s Precedents of Pleadings[41]: “Actions per quod servitium amisit are available only where the servant is a member of the master’s household.”
[41]12^th edition (London: Sweet and Maxwell, 1975) at 661.

The position that the right of action did not extend beyond the case of a menial or domestic servant was given traction in Australia by the Privy Council in Attorney–General for New South Wales v Perpetual Trustee Co. (Ltd)[42]. On appeal from the High Court of Australia, in finding that an action did not lie at the suit of the Crown in respect of the loss of the services of a member of the police force, their Lordships made it clear that they were not prepared to extend the action beyond the realm of domestic servitude, Viscount Simonds noting that the master’s action against a wrongdoer for the loss of the services of his servant traditionally had

rested at the bottom on the idea that the master had a quasi-proprietary interest in his servant’s services: and that idea is connected with ideas as to the status of a servant which originated in the rules of law applicable to villain status.[43]

[42](1955) 92 CLR 113; (1955) A.C. 457.

[43](1955) 92 CLR 113 at 122-123.

However, the narrow approach of the Court of Appeal in I.R.C. v Hambrook was not without its critics. G H Jones, in the course of presenting a compelling argument that “[t]he available evidence would, it is suggested, lead to the conclusion that labourers as well as domestic servants were within the scope of the actio per quod servitium”[44], opined that the conclusion of Denning LJ could not be drawn from the Commentaries of Sir William Blackstone. Dixon CJ in Commissioner for Railways (N.S.W.) v Scott[45] was of the same view, when he observed (at 402):

I do not think that Blackstone meant to say that the remedy in trespass per quod servitium amisit was restricted to menial or domestic service. All he says about the remedy is "a master also may bring an action against any man for beating or maiming his servant; but in such case he must assign, as a special reason for so doing, his own damage for the loss of his service; and this loss must be proved upon the trial": Blackstone's Commentaries, 5th ed. (1773) Bk 1, p 429.

[44]G H Jones “Per Quod Servitium Amisit”(1958) 74 LQR 39 at 55 and 57.

[45](1959) 102 CLR 392.

The action per quod servitium amisit had a long course of legal development. However, in Australia during the industrial development of the post-war era of the 1950’s, it did not take long for it to be recognised that it was a mistake to stultify the action by confining it to the medieval conceptions of its origin. As Dixon CJ observed in Commissioner for Railways (N.S.W.) v Scott[46] (at 400):

In examining any of our legal institutions which can be traced back in changing forms into the indefinite past it is always possible to fix on a period remote in time and thought from our own and bring into contrast considerations of then and now. It is however a contrast which seldom has any relevance in a legal system the growth of which has been gradual and has proceeded in no small degree by reasoning from accepted notions about remedies and rights to rules thus evolved to govern new or changed situations to which an ever developing social order gives rise.

[46](1959) 102 CLR 392.

Dixon J in Attorney-General (NSW) v Perpetual Trustee Co (Ltd)[47] considered that the High Court was compelled to follow its precedent in Commonwealth v Quince[48] in rejecting any entitlement of the Crown to rely upon a per quod cause of action. However, his Honour ventured a number of useful observations about the historical origin of the cause of action if the matter were to be considered afresh and free of the constraint of binding precedent, observing (at 244) that:

Had the matter been res integra I would for myself have adopted the view that an action does lie at the suit of the Crown for damage suffered by reason of the loss of the services of a Crown servant caused by a wrongful act and that the services of a member of the police force of New South Wales are of a description falling within the principle.

[47](1952) 85 CLR 237.

[48](1944) 68 CLR 227.

In adopting this approach Dixon J expressed the view that the per quod action was not confined to a domestic servant and extended to an employee of the Crown. As to this he said (at 248):

There is no reason to suppose that the action per quod servitium amisit would lie only for the loss of the services of persons of low degree. In the historical development of the actions per quod servitium amisit there has not been any limitation upon the class of services for the loss of which a private employer may sue. All that is required is that the relation of master and servant shall exist. A modern trading company whose general manager is disabled through the negligence of a stranger may sue him for the loss of the manager's services in the same way as the company might have sued had the injured man been an artisan in its employment. The remedy has followed the relation of master and servant unaffected by the changes that have taken place in the social and economic purposes for which the relation has been used. Nor has the essential character of the cause of action been influenced by the fluctuating changes over the centuries in the extent to which the terms and conditions of the employment are left to free contract.

Nevertheless, the English approach, which confined the action to the case of domestic servants, lingered in Australian common law until the High Court decided Commissioner for Railways (N.S.W.) v Scott. Dixon CJ in dissent[49], found himself bound to follow the Privy Council decision in Attorney–General for New South Wales v Perpetual Trustee Co. (Ltd), in stating that the principle which bound the High Court and applied in Australia was that “the right of action commonly referred to by these four words of Latin pleading does not extend beyond the case of a menial or domestic servant”[50]. However the majority[51] was of a different mind. In recognition of the fact that the new industrial economy had made the classification of servants described by Sir William Blackstone[52] meaningless, Kitto J said (at 417, emphasis added):
[49]McTiernan and Fullagar JJ were also in dissent.
[50] Commissioner for Railways (N.S.W.) v Scott (1959) 102 CLR 392 at 397-8 per Dixon CJ.
[51]Kitto, Taylor, Menzies and Windeyer JJ.
[52]Blackstone in his Commentaries divided servants into four categories: menial servants, that is, domestic staff; apprentices; labourers and superior servants such as stewards, factors and bailiffs.

I would venture the respectful suggestion that too much has been extracted from the notion that the basis of the action per quod is the ancient idea of the master having a property in his servant. From this it seems to have been inferred that the availability of the action depends upon whether it is (or used to be) appropriate to think of the servant as a chattel, and that, as none but the humblest class of servants could be so considered, the action lies only in respect of such a servant. But although it is true that the basic idea of the action is sometimes in the books described as the notion of a master's having a proprietary interest in his servant, the fuller and (I think) the more accurate way of stating it is more often found, namely that the master's quasi-proprietary right which founds the action is in the services which he would have received but for the defendant's wrongdoing.

From this position, Kitto J concluded (at 418):

I am in favour of holding that the action per quod lies whenever the plaintiff and the person injured by the wrongdoing stood to one another at the time of the injury in the relation of master and servant.

Adopting a similar approach, Taylor J said (at 423):

If the action has survived to enable a master to sue for the loss of his servant's services it is, I should think, no less logical to afford relief in cases where the servant may be so described by current terminology than to endeavour to confine it to the case of those servants - if, indeed, any appropriate category or categories may be found - who, according to the notions of the Middle Ages might have been then found answering that description.

However, the cause of action came to be root-bound in the United Kingdom by the device of confining it to cases involving domestic servants and actions arising in a familial context. The per quod action became limited to a quaint collection of cases and in the United Kingdom found itself on the ‘endangered species list’ of critical review[53]. The forms of the per quod action which had survived to this point were generally accepted as being confined to the following:

(a)in the case of the related action per quod servitium amisit to any person on the ground of having deprived another of the services of his menial servant, of having deprived another of the services of his female servant by raping or seducing her or of enticement of a servant or harbouring a servant; and
(b)in the case of the related action per quod consortium amisit to a husband on the ground of deprivation of the services or society of his wife, or to a parent (or person standing in the place of a parent) on the ground of deprivation of the services of a child

The result was to effectively deprive the action of any usefulness as a method of loss distribution. Withered by judicial constraint and starved of attentive legal husbandry, all of these causes of action were finally extinguished in the United Kingdom by the operation of s 2 of the Administration of Justice Act 1982.

[53]Law Commission (GB), Report on Personal Injury Litigation -Assessment of Damages (Law Com No 56, 1973) para [142].

In Australia, like the course plotted by per quod consortium amisit in the United Kingdom, the antiquated action has largely fallen into disuse. Although it has been extended by statute in South Australia and has been recognised and modified in Queensland, it has been extinguished or radically limited in most jurisdictions[54].
[54] CSR Ltd v Eddy (2005) 222ALR 1 at 17 per Gleeson CJ, Gummow and Heydon JJ. It was noted further (at 17) that “[t]he torts of seduction, enticement and harbouring have been abolished in South Australia, the Australian Capital Territory and England and for decades have not been relied upon elsewhere.”

However, the action per quod servitium amisit followed a different path in Australia. Although it has now been abolished in some jurisdictions in cases of motor accidents[55], since Commissioner for Railways (N.S.W.) v Scott, in jurisdictions where it has survived, the action has continued to be applied in this country with wide reach. It is an action which is capable of arising in a variety of cases whenever the relationship of master and servant exists. Thus in Scott the Commissioner for Railways (NSW) was able to rely upon a per quod action to recover damages in respect of the injured engine driver’s entitlement to salary while he was unable to perform his duties and the cost of his medical treatment. The injuries arose in a level crossing accident alleged to have been caused by the negligence of the defendant Scott in driving his motorcycle. Similarly, in Sydney City Council v Bosnich[56] the plaintiff was able to recover damages in an action per quod servitium amisit in respect of monies paid by the Council to an employee as accident pay pursuant to the provisions of the relevant industrial award. The injuries in that case arose from the defendant’s negligence in a collision between a water wagon owned by the Council and driven by the employee and the motor vehicle driven by the defendant. Asprey JA summarised the common law in Australia when he said (at 728-729):

The decision of the High Court in Commissioner for Railways v Scott has relieved me from considering the question (which has been discussed in earlier decisions) as to what class of servant, whose services are lost to the master, can give rise in this class of action to a valid claim by the master because, by majority, that case held that the action per quod servitium amisit lies in any case where the relationship between the plaintiff and the person injured by the trespass is that of master and servant and is not confined to situations in which the person injured is a domestic or menial servant of the plaintiff.

[55]See: s 142 of the Motor Accidents Compensation Act 1999 (NSW); and, s 5 Motor Accidents (Compensation) Act (NT).

[56][1968] 3 N.S.W.R. 725.

The action has therefore found a potentially valuable, although perhaps a somewhat neglected place in Australian law. As Dixon CJ said in Scott (at 404):

For the most part in the past the employee might be replaced and the employer was involved in neither expense nor other monetary loss. Probably in the fourteenth century the considerations giving importance to the action on the case for the loss of the servant gave importance to the action of trespass per quod servitium amisit. Perhaps the economics of other periods of time have for brief intervals given it the same importance. Now as I see it the fact that many employers have in various ways become chargeable when an employee suffers an incapacitating physical injury has given greater importance to the action. The question whether the loss which is so occasioned to the employer by a wrongdoer who injures the employee is recoverable has thus become of serious economic importance.

The action was the object of a passing reference by the High Court in CSR Ltd v Eddy[57]. In the course of considering whether the rule in Sullivan v Gordon[58] was part of the common law of Australia, Gleeson CJ, Gummow and Heydon JJ said (at 17)[59]:

The recovery of the market value of the services which plaintiffs can no longer supply to others creates an indirect avenue of compensation to the persons no longer supplied. The common law gave only limited direct avenues of recovery to those who have lost the benefit of an injured plaintiff's services: the husband's action per quod consortium amisit; the employer's action per quod servitium amisit; and the torts of seduction, enticement and harbouring, by which a father could recover for the loss of his daughter's domestic services. These avenues are now sometimes seen as "antique". Hence the existence of the husband's action for loss of consortium was not held to justify recognition of an equivalent action in wives.
…
The action per quod servitium amisit has been abolished in England and in large measure in Victoria and the Northern Territory. There are admittedly statutory exceptions to the ban on recovery by those who have lost the services of the deceased, but they are carefully confined.

[57] (2005) 222 ALR 1.

[58]The rule in Sullivan v Gordon (1999) 47 NSWLR 319 was to the effect that where a personal injury prevents the plaintiff from providing gratuitous personal or domestic services for another person, the damages recoverable can include an amount calculated by reference to the commercial value of such services. The High Court determined in CSR Ltd v Eddy that the principle was not part of the common law of Australia.

[59]Footnotes omitted and emphasis added. With regard to the extinguishment of the action per quod in Victoria, the Court referred specifically, at n 96, to s 93(1) and (2) of the Transport Accident Act 1986 (Vic).

The observation made as to the extent to which the action per quod servitium amisit has been abolished in Victoria in the passage quoted from CSR v Eddy is obiter dicta. Further, and importantly it appears not to have involved any detailed analysis of s 93 of the Act and none is expressed in support of the conclusion, which is stated in broad and imprecise terms. In my opinion, it carries little weight in consideration of the present matter.

As to the damages claimable in the surviving form of a per quod action , there is little doubt that damages in the nature of pecuniary loss actually sustained by the employer through the loss of the services of the employee and medical expenses and the like necessarily incurred in consequence of the injury to the servant are recoverable[60]. Beyond this the measure of damages is far from settled[61].
[60] Fullagar J in Attorney–General for NSW v Perpetual Trustee Co. (Ltd) (1952) 85 CLR 237 at 289-290.
[61]Asprey J A in Sydney City Council v Bosnich [1968] 3NSWLR 725 at 729.

The gist of the modern action in Australia is the loss of the service of a servant. The statement of Lord Sumner in Admiralty Commissioner v S S Amerika[62] that: “It is the loss of service which is the gist of the action, and loss of service depends upon a right to the service, and that depends on the contract between the master and the servant” was cited with approval by McTiernan J in Attorney-General (NSW) v Perpetual Trustee Co (Ltd)[63].
[62](1917) AC 38 at 55.
[63](1952) 85 CLR 237 at 257.

In the present case, having briefly examined the history and modern sphere of operation of the action per quod servitium amisit, I am of the view that it is a cause of action under the general system of law in Australia and does not give rise to rights which could be regarded as fundamental.

Transport Accident Compensation Scheme under the Act

The purpose of the Act, is set out in s 1 as follows:

The purpose of this Act is to establish a scheme of compensation in respect of persons who are injured or die as a result of transport accidents.

By s 3 of the Act ("Definitions") 'Transport accident' is defined to mean “an incident directly caused by the driving of a motor car or motor vehicle, a railway train or a tram”.

Consistently with the stated purpose of the Act in s 1, s 35, which appears in Part 3 of the Act ("Compensation"), gives rise to an entitlement to compensation for a person who is injured as a result of a transport accident. The Act provides by sub-ss 35(1) and (3) that:

(1)A person who is injured as a result of a transport accident is entitled to compensation in accordance with this Act if-
(a)the accident occurred in Victoria; or
(b)the accident occurred in another State or in a Territory and involved a registered motor vehicle and, at the time of the accident, the person was –
(i)a resident of Victoria; or
(ii)the driver of, or a passenger in, the registered motor vehicle.
…

(3)The Commission is not liable to pay compensation to a person in accordance with this Act unless the person is entitled to compensation.

The Act imposes a liability on the Commission to pay compensation for motor accidents. This is achieved by s 94 in combination with s 27.

Section 94 appears in Part 6, Division 1 under the heading "Damages in respect of death or serious injury". It relevantly provides:

94. Indemnity
(1) The Commission is liable to indemnify-
(a)the owner or driver of a registered motor vehicle in respect of any liability in respect of an injury or death of a person caused by or arising out of the use of the motor vehicle in Victoria or in another State or in a Territory; and
(b)…

other than liability to pay compensation under the Accident Compensation Act 1985 or an Act or law referred to in section 37.

Section 27 of the Act provides for the establishment and maintenance of the Transport Accident Fund (‘the Fund’)[64]. Sources of money to be paid into the Fund are provided for[65]. The monies received into the Fund include "transport accident charges" (s 27(2)(a)). These are amounts payable each year by owners of registered motor vehicles (s 109(1)). From the point of view of the owner, they serve the same purpose as insurance premiums paid under the former compulsory third party insurance schemes. The functions of the Commission include administering the Fund and determining and collecting transport accident charges. The Commission is authorised to pay out of the Fund payments of compensation under Pt 3 and damages for which it is liable (s 27(3)(a) and (b))[66].
[64]Sub-section 27(1) of the Act.
[65]Sub-section 27(2) of the Act.
[66]See: Transport Accident Commission v Lease Auto Pty Ltd [2002] FCAFC 430 at 9 per Heerey, Moore and Kiefel JJ.

Sub-section 27(3)(b) of the Act therefore provides for money to be paid out of the Fund to cover the liability of the Commission to indemnify the persons specified in, and under the circumstances described in, s 94(1)(a) of the Act.

In the present case, if Martino Developments retains the right to pursue its per quod claim and ultimately succeeds in the proceeding, the Commission will become liable to indemnify it in respect of the damages awarded.

I accept the submission of the Defendant that the Transport Accident Act 1986 was designed, at least in part, to contain the costs of claims for death and personal injury arising out of the use of motor vehicles. The Act as it was upon its commencement repealed the Motor Accidents Act 1973 and the Commission established by s 10 of the Act was made the successor in law of the Motor Accidents Board of Victoria. Ashley J in Bentley v Furlan[67], described the salient features scheme as they were reflected in the Second Reading Speech of the responsible Minister in introducing the Act to Parliament:

The Minister (Hansard, Assembly, 8 May 1986) referred to the "present dual system of motor vehicle personal injury compensation". By that he referred to the existence of common law rights and the no-fault scheme set up under the Motor Accidents Act. That dual system was to be replaced by a system "relying totally on the principle of no fault", this being a "comprehensive reform" of the existing system. (It did not happen, but that is another story).
On a number of occasions the Minister referred to the intolerable cost of the existing system. The new arrangements, he said, would keep the cost of motoring within the reach of the average Victorian family. Base premiums would only rise 16% immediately, and penalties for a range of driving offences would only be increased by 50%.
The Minister referred specifically to impairment entitlement. It was to be payable only if impairment "made on the basis of an exhaustive guide" was at least 10%. He said that "all injured persons will be eligible to apply for this payment, as it reflects pain and suffering and other loss associated with the accident itself or the stabilised results of impairment".
Relevantly, the burden of the Second Reading Speech was that the government intended to rationalise the then existing "hybrid system" by the introduction of a comprehensive no-fault system which would be affordable and would provide, inter alia, impairment benefits in more serious instances of injury. What was to be replaced was a system that provided no-fault benefits not including benefits for pain and suffering; a common law system that did enable an award of damages for pain and suffering; and in each instance a system that depended largely upon the premiums paid by motor vehicle drivers and which protected them against personal liability under the "hybrid system" in return for the payment of premium.

[67][1999] V.S.C. 481.

The objectives of the Commission provided for in s 11 of the Act are stated as being:

The objectives of the Commission are as follows-
(a)to manage the transport accident compensation scheme as effectively, efficiently and economically as possible;
(b)to ensure that appropriate compensation is delivered in the most socially and economically appropriate manner and as expeditiously as possible;
(c)to ensure that the transport accident scheme emphasises accident prevention and effective rehabilitation;
(d)to develop such internal management structures and procedures as will enable it to perform its functions and exercise its powers effectively, efficiently and economically;
(e)to manage claims under the Accident Compensation Act 1985 as an authorised agent of the Victorian WorkCover Authority as effectively, efficiently and economically as possible;
(f)if appointed as an agent of a self-insurer under section 143A of the Accident Compensation Act 1985, to carry out the functions and powers of a self-insurer as effectively, efficiently and economically as possible.

Under the scheme provided for in the Act, the primary liability to pay compensation for injury and death arising from motor accidents falls upon the Commission. However, provision is made for the recovery of damages at common law outside the Act in defined cases. That provision is found in s 93 of the Act which appears in Part 6 ("Legal rights outside this Act"). Part 6 is in turn subdivided. Section 93 appears in Division 1 ("Damages in respect of death or serious injury") under the heading "Actions for damages". The section has been repeatedly amended since its commencement in 1986.

Sub-section 93(1) is a key provision of the scheme and is central to this case. It provides:

93. Actions for damages
(1)A person shall not recover any damages in any proceedings in respect of the injury or death of a person as a result of a transport accident occurring on or after the commencement of section 34 except in accordance with this section.

Section 93 then proceeds, by sub-ss (2), (3), (4) and (8), to provide a number of ‘gateways’ for the recovery of damages. These are as follows:

2)A person who is injured as a result of a transport accident may recover damages in respect of the injury if-
(a)the Commission has determined the degree of impairment of the person under section 46A, 47(7) or 47(7A); and
(b)the injury is a serious injury.

(3)If-
(a)under section 46A, 47(7) or 47(7A), the Commission has determined the degree of impairment of a person who is injured as a result of a transport accident; and
(b)the degree so determined is 30 per centum or more-

the injury is deemed to be a serious injury within the meaning of this section
(4)If-
(a)under section 46A, 47(7) or 47(7A), the Commission has determined the degree of impairment of a person who is injured as a result of a transport accident; and
(b)the degree so determined is less than 30 per centum-

the person may not bring proceedings for the recovery of damages in respect of the injury unless-
(c)the Commission-
(i)is satisfied that the injury is a serious injury; and
(ii)issues to the person a certificate in writing consenting to the bringing of the proceedings; or

(d)a court, on the application of the person, gives leave to bring the proceedings.
…

(8)A person may recover damages under Part III of the Wrongs Act 1958 in respect of the death of a person as a result of a transport accident.

In Wilson v Nattrass[68] the Court of Appeal[69] considered the operation of s 93 of the Act. In that case a question arose as to whether two plaintiffs, who were residents of Victoria but who had been injured in a motor car accident in South Australia, could bring proceedings in Victoria to enforce a common law right of action. In concluding that a common law action previously enjoyed by persons injured in a transport accident, wherever occurring, was extinguished by s 93 of the Act, Ashley J, who wrote the leading judgment, reasoned (at 54, emphasis added):
[68](1995) 21 MVR 41.
[69]Constituted by Brooking, Ashley and Hedigan JJ.

Section 93(1) is the central provision. It is framed in terms of "recover(y) of damages in any proceedings". It precludes recovery "except in accordance with this section". That verbiage might be said to support a conclusion that any previously existing right of action continues, there being no more than inhibitions upon what may be recovered. But an analysis of the section shows, in my opinion, that subs (1) addresses subject-matters of quite different kinds. Unless subss (2), (4) or (8) is satisfied, no damages at all are to be recoverable. On the other hand, subss (7), (9), (10), (13), (14), (15), (16) differently regulate the measure of damages. Subsections (11) and (12) are of a different character; one relates to costs; one to "claw-back" by the Commission of compensation paid. Both, save for subs (12)(a), address corollaries of damages assessed or awarded. Once this structure of s 93 is understood, the proper construction of subss (1), (2) and (4) appears to me to be that, subject to a condition or contingency being established, the common law right of action previously enjoyed by persons injured in transport accidents in this State is extinguished - except to the extent that such a person might fall within subs (18)(b) or (c). This situation may be contrasted, I think, with that applying in the case of a death as a result of a transport accident where the combined effect of subss (1) and (8) preserves without restriction the right of action previously enjoyed.

In the same decision Hedigan J (at 59) described the process in the following terms:

In my opinion, the effect of s.93(1) is contingently to extinguish the right to recover common law damages for personal injuries in Victoria in respect of a transport accident, wherever occurring.

The scheme of the Act was further considered in Edwards v Jepson[70] wherein Winneke P stated that:
[70][1998] 1 VR 197 at 200.

In addition to the compensation benefits to which I have referred, the Act preserves, in Pt 6, limited rights to certain persons to recover general damages in respect of injury or death resulting from transport accidents. These rights are preserved by s.93 of the Act entitled “Actions for damages”. The section limits the right which had previously existed in persons to bring actions for common law damages for injuries resulting from transport accident.

After setting out the terms of s 93(1) of the Act, Winneke P continued:

The section prescribes the limited class of persons who can bring such actions and the limits of damages which can be received by those who bring them. Such damages are limited to “pecuniary loss damages” and damages for “pain and suffering”. The class of injured persons who can bring such actions are described as those who have suffered “serious injury”.

In Swannell v Farmer[71], Batt and Buchanan JJA analysed alternative approaches to the operation of s 93 in the following terms:

The cause of action in the present case is the product of the common law, not the Act: Wilson v Nattrass [at 41] per Brooking J. Once the deceased sustained his injuries, all the elements of the cause of action that would spring into life if the requirements of s. 93 were satisfied were present, but no damages could be recovered until there was a determination of the deceased's impairment by the commission and his injury met the description of a serious injury. In that state of affairs there was no cause of action vested in the deceased, for the cause of action was extinguished. The same result ensues if the cause of action is regarded as contingent, that is, rather than its non-existence being defeated by satisfaction of the requirements of a determination by the commission and serious injury, its existence depends upon that satisfaction: cf. Southgate v Waterford (1990) 21 N.S.W.L.R. 427 at 438.

[71][1999] 1 VR 299 at 309.

Subsequently in Transport Accident Commission v Murray[72] Buchanan JA described the extinguishment effected by s 93(1) of the Act as being “defeasible”.
[72](2005) 12 VR 314 at 317.

`The process contemplated by s 93(1) of the Act was discussed more recently by Ashley JA in Hynes v Hynes[73] as follows:

Section 93(1) of the TA Act, as is well-known, precludes recovery of damages for injury to or death of a person as a result of a transport accident except in accordance with the section. With respect to persons injured, the section sets up three so-called gateways. The initial requirement for access to any of the gateways is that the person has been injured as a result of a transport accident. Thereafter, the putative claimant must establish that he or she has suffered a "serious injury”.
If a gateway is accessed then, again as is well-known, various restrictions apply to the amount of damages recoverable, the method of assessment of damages, and so on. Nothing need be said about those provisions.

[73](2007) 15 VR 475 at 478.

In this way, sub-ss (2), (3), (4) and (8) of s 93 operate to delineate the specific circumstances and the classes of persons able to recover damages in a proceeding that is described in s 93(1).

The Text of s 93 of the Act

Whether or not the per quod action has been extinguished in Victoria, insofar as it may arise as a result of a transport accident as defined in the Act[74], depends on the proper construction of s 93(1).
[74]Section 3 of the Act defines “transport accident” to mean an accident directly caused by the driving of a motor car or motor vehicle, a railway train or tram.

The question of the extinguishment of the per quod action was touched upon in Scott v Bowyer[75]. In that case, the Bowyers were the employers of a 12 year old paper boy. The boy was badly injured when struck by a car driven by Scott. The Bowyers sued Scott. One claim pursued was based on the action per quod. The Court of Appeal, comprising Winneke P, Brooking and Hayne JJA, commented as follows (at 219):

It remains to mention a point that was not raised in argument, either before us or below. By s.93(1) of the Transport Accident Act 1986:
‘A person shall not recover any damages in any proceedings in respect of the injury or death of a person as a result of a transport accident occurring on or after the commencement of section 34 except in accordance with this section.’

Further provisions of the section show that the phrase ‘any damages in any proceedings in respect of the injury or death of a person’ comprehends damages in an action under Part III of the Wrongs Act 1958. Balkin and Davis, Law of Torts, 2^nd ed., (1996), pp.593-4 appear to incline to the view that provisions like s.93 abolish the right to bring a per quod action. On the other hand, in Australian Torts Reporter, vol. 1, para. 17-120 it is suggested that a provision like s.93 should not be interpreted as abolishing the per quod action. The authorities cited in the two texts mentioned would merit consideration should it ever become necessary to consider whether, assuming that (contrary to our view) the relationship of proximity contended for by the respondents in this case should be held to exist, s.93 will prevent the recovery of any damages.

[75][1998] 1 VR 207.

In Balkin and Davis[76], a principal authority cited in support of the proposition that provisions like s 93 abolish the right to bring a per quod action is the decision of the New South Wales Court of Appeal in Rheem Australia Limited v Manufacturers Mutual Insurance Limited[77]. The facts of the case are remote from the present matter. In that case a female worker employed by Rheem Australia Limited was injured and as a consequence her husband lost the benefit of her services. He recovered a judgment against the employer for loss of consortium. T he question for determination was whether the employer was entitled to an indemnity from the insurer under its worker’s compensation policy. The policy was in a standard form prescribed by the Workers Compensation Regulations 1926 (NSW). The Court held that the phrase in the policy “liability ... for any injury to” a worker meant not merely the primary liability to the injured party, but included any secondary liability which a negligent party may incur to others as a result of or consequent upon that injury. It was submitted by the Defendant in this case that Rheem supports the proposition that is contended for by the learned authors in Balkin and Davis that s 93 abolishes the right to bring a per quod action. However, I find this submission unconvincing. First, Rheem is not directly on point. The Court in that case was called upon to construe a phrase appearing in a worker’s compensation insurance policy, which is a significantly different instrument having different purposes to the legislation involved in this case. Second, in Rheem the Court was required to consider the phrase ‘liability for’ rather than, as in the present case, the phrase ‘liability in respect of’. Third, the object and context of the passages in which the contentious phrases appear is again significantly different in each case.
[76]Balkin and Davis, Law of Torts, 2^nd ed., (Sydney: Butterworths, 1996) at 593-4, cited by Winneke P, Brooking and Hayne JJA in Scott v. Bowyer [1998] 1 VR 207 at 219..
[77][1984] 2 NSWLR 370.

In the Australian Torts Reporter, there is reference in the commentary to a judgment of the Full Court of the Supreme Court of Victoria in the matter of Petricola v Metropolitan Transport Authority[78]. The Full Court was constituted by Murphy, Gobbo and Phillips JJ. The principal judgment was delivered by Murphy J. The judgment of Murphy J concerned the proper construction of s 23A of the Victorian Limitation of Actions Act 1958. In that matter, the Appellant was an individual (Mario Petricola), and the wife of the Appellant had been injured in a transport accident in May 1981. In 1987, her husband issued a Writ a few weeks after the six-year limitation period expired. The claim the husband brought was a claim in tort for loss of consortium. The question of characterisation concerned the phrase in s 23A(1) of the Limitation of Actions Act which provided that the section applied to an action for negligence “where the damages claimed consist of or include damages in respect of personal injuries to any person”. In Petricola, Murphy J, after reviewing the historical basis of the claim for loss of consortium, and its foundation in the kindred action per quod consortium amisit, concluded that damages for loss capable of being measured in monetary terms, and flowing from the physical injury negligently inflicted on Petricola’s wife, did constitute “damages which consist of or include damages in respect of physical injury to any person”, for the purposes of the Limitation of Actions Act. It was held therefore that the facts of the case giving rise to the action per quod, were subject to s 23A of the Act. Again, this conclusion is of little assistance in resolving the construction of s 93 of the Act. As with the position in RheemAustralia, the legislation involved in Petricola was significantly different to the Act, with dissimilar objects and purposes.
[78]Unreported, 6 December 1988.

The other principal case on the issue cited in Balkin and Davis in the passage referred to above, Cardakliya v Mount Isa Mines[79], is similarly of little or no assistance, principally because, like Rheem, it fails to address the unique issues of interpretation involved in the construction of s 93(1) of the Act.
[79][1995] 1 Qd R 500.

The Meaning of ‘Person’ First Mentioned in s 93(1)

The Defendant made the following submission on the question of the meaning of the word ‘Person’ where it first appears in s 93(1):

By force of s.93(1) of the Act, its claim is extinguished. The term “person” when first used in s 93(1) includes Martino Developments. Indeed, that this is so can be seen from the fact that the Parliament commenced s.93(1) with the words “A person”, whereas s.93(2) was commenced with the words “A person who is injured as a result of a transport accident” (as to the meaning of which, see s.3(3) of the Act). Further, if Parliament had wished to limit the bar in s.93(1) to a bar in respect of claims by injured persons alone then the term “person” when second used in s.93(1) would have been preceded by the definite article rather than the indefinite article.[80]

[80]In relation to the term “Person” the Defendant referred the Court to s 38 of the Interpretation of Legislation Act 1984 which provides that in all Acts unless the contrary intention appears “person includes a body politic or corporate as well as an individual”.

In relation to the Act, section 3(3) relevantly provides:

“(3)In this Act –

(a) ...

(b) a reference to a person who is injured or dies (not being a reference to a dependent partner or dependent child of a deceased person) is a reference to a person who sustains injuries that were, or whose death was, as the case may be, caused by a transport accident; and

(c) a reference to an injury or death in or as a result of or resulting from a transport accident, or to a person who is injured or dies in or as a result of a transport accident, is a reference to an injury or death directly caused by the driving of a motor vehicle, a railway train or a tram or to a person who sustains injuries that were, or whose death was, directly caused by the driving of a motor vehicle, a railway train or a tram.”

(d)

It is common ground that Mr Angelo Martino was injured on 15 November 2000 as a result of a transport accident as defined in the Act.

Proceedings in respect of the injury or death of a person as a result of a transport accident are extinguished by the Act if they are brought by ‘a person’ who is the ‘person’ first referred to in s 93(1). The provision raises two further questions: (a) Who is the relevant first mentioned ‘person’? and (b) in what circumstances may a proceeding be brought ‘in respect of the injury or death of a person as a result of a transport accident’?

In this case, if Martino Developments is not ‘a person’ within the meaning of the ‘person’ first referred to in s 93(1), the section does not apply to the plaintiff, the plaintiff’s common law right to an action per quod is not extinguished by the Act, and no further enquiry is necessary.

On the other hand, if Martino Developments is ‘a person’ within the meaning of the ‘person’ first referred to in s 93(1), the second question must be addressed, namely is the plaintiff’s claim per quod a proceeding ‘in respect of the injury or death of a person as a result of a transport accident’? Only if the answer to both questions is ‘yes’ does s 93(1) extinguish the plaintiff’s right to initiate a proceeding per quod servitium amisit.

In my opinion, the Act is intended to affect only the rights and entitlements of persons injured in transport accidents and their dependants. It follows that the ‘Person’ first referred to in s 93(1) applies only to natural persons who have the capacity to suffer personal injuries or, in the case of the death of an accident victim, the natural person dependants of the deceased person. The word does not, as the Defendant submits, apply to bodies corporate such as Martino Developments.

The explanation for the term “person”, where the word next appears in s 93(1), and immediately preceded by the definite article rather than the indefinite article, is to be found in the fact that the sub-section deals with claims for damages in respect of persons who have been injured as well as in respect of persons who have died as a result of a transport accident. Persons other than the person who has died must bring an action under Part 111 of the Wrongs Act 1958, namely the executor or administrator of the deceased person for the benefit of the dependants or the dependants themselves[81]. A specific ‘gateway’ is provided by s 93(8) which enables these persons to recover damages under Part 111 of the Wrongs Act 1958 in respect of the death of another person as a result of a transport accident. This facility explains why the ‘gateway’ provided in s 93(2) is limited to the “Person who is injured as a result of a transport accident”. This is because such a person falls within the other category of persons contemplated in s 93(1), namely the person who is injured, as opposed to the person who has died.
[81]Sections 17 and 18 of the Wrongs Act 1958.

Section 38 of the Interpretation of Legislation Act 1984 provides that in all Acts unless the contrary intention appears “person includes a body politic or corporate as well as an individual”. The question is, does sub-s 93(1) of the Act manifest another intention? I think it does. In my opinion, when s 93 is read as a whole in the context of the Act, the scope of s 93(1) is best determined by reference to the exceptions which follow in the form of the several ‘gateways’ provided for in s 93(2). The matter may be considered in the context of the two categories of claims which are dealt with in s 93 of the Act, namely claims in respect of death on the one hand and claims in respect of injury on the other hand, where in both cases damages are sought to be recovered for the death or injury of a person as a result of a transport accident.

In relation to claims brought in respect of the death of a person as a result of a transport accident, a person may recover damages under Part 111 of the Wrongs Act 1958 under the ‘gateway’ provided by s 93(8) of the Act. Sections 17 and 18 of the Wrongs Act permit proceedings to be instituted by or on behalf of the dependants of a deceased person - under s 17 by an executor or administrator, and under s 18 by the dependents themselves. In both cases the dependants are natural persons. The fact that in some cases the party which instigates and prosecutes the proceeding for recovery under s 17 of the Wrongs Act happens to be an executor or administrator which is a company or other incorporated body, or even an arm of government, does not materially alter the position. This is because an action under s 17 of the Wrongs Act is to be formally undertaken by an executor or administrator on behalf of the dependants who are the persons who may then recover damages under s 93(1) of the Act. Alternatively, the dependants of a deceased person may institute proceedings in their own right under s 18 of the Wrongs Act and may then become the persons who recover damages under s 93(1).

As to proceedings instituted by a person who is injured as a result of a transport accident, the extinguishment of the rights of those persons to bring an action for the recovery of common law damages, is contingent upon them not being able to bring themselves within the ‘gateways’ provided for in ss 93(2), (3) and (4) of the Act. The purpose is to prevent a claim for damages being brought by persons injured in transport accidents who are not seriously injured within the meaning of the Act and to limit those persons to their statutory no-fault benefits. The extinguishment of rights in s 93(1) is limited to the extinguishment of the rights of those persons who by the very same Act instead receive no-fault benefits, and who have the potential to regain the right to sue by establishing serious injury. In this way the Act operates with an internal consistency which is compelling as an aid to divining the legislative intention of the text.

In my opinion, the text of s 93(1) of the Act does not disclose a purpose to extinguish an independent and long-standing common law cause of action which vests in persons other than the person who has been injured as a result of a transport accident and in which loss of service is the gist of the action. The Act, and the Parliamentary debates upon it, are entirely silent on the action per quod servitium amisit.

Had the intention of Parliament been to extinguish the per quod action in the Act, there was precedent readily available to the draftsman in which this intention is expressed in terms which are perfectly clear. In this regard reference may be made to s 142 of the Motor Accidents Compensation Act 1999 (NSW) which simply provides by sub-s (1): “No damages for the loss of the services of a person are to be awarded in respect of a motor accident”.

The Meaning of “in respect of”

Having arrived at the conclusion I have as to the meaning of “A person”, where the phrase first appears in s 93(1), it is unnecessary to consider the second question arising from the sub-section in any detail. Nevertheless, I will make some observations upon it because the parties advanced substantial argument on the issue.

It was submitted for the Plaintiff that the damages claimed by Martino Developments fell outside any extinguishment of rights affected by s 93(1) of the Act, the Plaintiff’s argument being that the damages claimed by the Plaintiff in this case are not ‘in respect of’ an injury or injuries suffered in a transport accident, but rather are damages ‘in respect of’ the loss of services founded on the contractual right of the employer to the services of an employee.

The Defendant on the other hand, submitted that the presence of the phrase ‘in respect of’ in s 93(1) meant that the extinguishment affected by that subsection included the extinguishment of the rights of Martino Developments, whose action was ‘in respect of’ a personal injury sustained in a transport accident.

According to their natural and ordinary meaning the words ‘in respect of’ have a very wide scope. These words have been held to be “difficult of definition” but to have “the widest possible meaning of any expression intended to convey some connection or relation between the two subject-matters to which the words refer”[82].
[82] The Trustees Executors & Agency Co Ltd v Reilly [1941] VLR 110 at 111 per Mann CJ. The width of the phrase “in respect of or in relation to” was also stressed in the English case of Paterson v Chadwick [1974] 2 Al ER 772 where Boreham J adopted the comments of Mann CJ. These or similar observations have been cited in numerous cases: see, Powers v Maher (1959) 103 CLR 478 at 484-485, per Kitto J; Smith v Federal Commissioner of Taxation (1987) 164 CLR 513 at 533, per Toohey J; Construction Industry Long Service Leave Board v Irving as Administrator of Bettaform Constructions (SA) Pty Ltd (8 May 1997, 23 May 1997) at 13, per Spender, Drummond, Sackville JJ, in relation to Corporations Law s 556(1)(g)(ii) and s 556(1)(g)(iv)). See also Shell New Zealand v CIR (1994) 16 NZTC 11 303 at 306 which endorsed the very wide meaning of the phrase ‘in respect of or in relation to’ (per McKay J).

In GIO Australia Ltd v Robson & Or[83] it was held that a compulsory third party insurance policy providing cover against “liability in respect of death or injury to a person” caused by the fault of a driver included liability to an injured person’s employer under a claim for loss of services. One of the reasons given by Mason P for this interpretation (at 441) was that it “gives to the words ‘in respect of’ their well established amplitude”.
[83][1997] 42 NSWLR 439.

In the widely cited Canadian case of Nowegijick v R[84] the words ‘in respect of’ are said “to import such meanings as ‘in relation to’, ‘with reference to’ or ‘in connection with’”[85].
[84](1983) 144 DLR (3d) 193 at 200.
[85]Nowegijick v R has been cited on this point of interpretation in numerous Australian cases: see, Smith v FCT (1987) 164 CLR 513 at 533 per Toohey J; Ting v Blanche (1993) 118 ALR 543 at 523 per Hill J; Miba Pty Ltd & Ors v Nescor Industries Group Pty Ltd & Or (1996) 141 ALR 525 at 536 per Merkel J.

However, the case law demonstrates that the reach of the words ‘in respect of’ will very much depend on the context in which the words appear. Some subject matters are simply too far removed to be regarded as being ‘in respect of’ each other[86]. The ambit conferred on the words will reflect the statutory text and context in which they appear, and the purposes of the particular legislation [87].
[86] Construction Industry Long Service Leave Board v Irving as Administrator of Bettaform Constructions (SA) Pty Ltd (1997) 74 FCR 587 AT 607.
[87] Nintendo Company Ltd v Centronic Systems Pty Ltd (1994) 181 CLR 134 at 145-148.

In State Government Insurance Office v Rees[88] the High Court considered the meaning of the phrase ‘in respect of’ in determining whether the debt due to the Government Insurance Office fell within s 292(1)(c) of the Companies Act 1961-1975 (Qld). Mason J observed (at 561) that “the meaning ascribed to the words ‘in respect of’ depends very much on the context in which it is found”. Stephen J followed a similar line of reasoning when he said of the legislation under consideration (at 553-554) that “a context does exist which is in my view sufficient to confine the operation of s 292(1)(c) to bounds too narrow to be of service to the appellant”[89].
[88](1979) 144 CLR 549.
[89]See also FCT v Dixon (1954) 5 AITR 443 at 446 per Dixon CJ, and at 450 per McTiernan J; Fraser v CIR (1995) 17 NZTC 12,356 at 12,363 per Doogue J; TRA Case R34 (1994) 16 NZTC 6,1960 at 6,200; and FCT v Rowe(1995) ATC 4,691 (Note: the ATO sought, and has now been granted, special leave to appeal to the High Court).

In Technical Products Pty Ltd v State Government Insurance office (Queensland)[90] the High Court stated that the considerable width of the phrase is limited by its particular usage. In that case a workman who had fallen from a pallet supported by a forklift was found not to have suffered damage in respect of a motor vehicle. The High Court reasoned that there needed to be some “discernible or rational link” between the act or omission which gives rise to the legal liability to pay damages, and the particular motor vehicle [91].
[90](1989) 167 CLR 45 at 47-48.
[91]Followed in Fraser v South East Queensland Electricity Board, Supreme Court of Queensland, Full Court, 31 May 1991 108/90 where it was held that there was no discernible and rational link between the negligence of a co-worker causing a pole to fall towards the appellant who was forced to jump to the ground from the cherry picker in which he was working: the liability of the employer for the negligent acts of the co-worker was not ‘in respect of’ the truck to which the cherry picker was attached; but compare Donohue v Kenlaw Contracting Pty Ltd, Supreme Court of Queensland, 19 April 1991 534/88 per Shepherdson J, where the system of work exposed the plaintiff to risk of injury through handling heavy wheelie bins for the purpose of unloading the contents into a truck, and there was held to be a discernible and rational link between the basis for legal liability in the defendant and the truck.

By way of summary of the authorities regarding the application and scope of the phrase ‘in respect of’ it may be concluded that:

(a) First, that the phrase ‘in respect of’ is of wide scope.
(b) Second, that the width of the phrase does not mean it will provide a connection between any two subject matters. Some subject matters are simply too far removed to be ‘in respect of’ each other [92].
(c)Third, the ambit of the words is contained by the context in which they appear. The meaning of the phrase will reflect the statutory context in which the words are employed, the particular usage of the phrase and of the objectives of the particular legislation.

[92] Construction Industry Long Service Leave Board v Irving as Administrator of Bettaform Constructions (SA) Pty Ltd (1997) 74 FCR 587 at 607.

Returning to the case at hand, in my opinion, if contrary to my construction the phrase “A person”, where it first appears in s 93(1), is not confined to a natural person, and if an object or purpose of the sub-section is to extinguish per quod servitium amisit claims, the words “in respect of the injury” are clearly wide enough in their context to connect the employer’s loss with the employee’s injury suffered as a result of a transport accident. It would follow that, in these circumstances, the per quod action of the employer in this case would be extinguished by the operation of s 93(1). However, as I have found against the construction on which the two stated assumptions are predicated, the per quod action survives in favour of Martino Developments.

Object and Purpose of the Act

The Defendant submitted that financial considerations were relevant to the construction of s 93(1) of the Act in that the funds applied to the scheme were not intended to support claims of the kind sought to be made by Martino Developments. It was submitted further that the potential for the achievement of the object of the Act to contain the cost of claims for personal injury arising from transport accidents would be diminished if the per quod action was not extinguished by s 93(1). It followed, so it was put, that the object of the Act would be better served if the construction advanced by the Defendant was accepted. However, in my opinion, there are other factors which outweigh this consideration.

First, in spite of the Act having been in operation for some twenty-two years, there is no evidence of the Fund being placed under stress by vehicle owners or drivers seeking indemnity against liability for per quod claims. No extrinsic material was sought to be relied upon by the Defendant to this effect. Nor did the Parliamentary materials referred to reveal any concern in this area. Indeed, I accept that per quod claims are relatively rare, particularly insofar as they may arise from transport accidents as defined in the Act.

Second, s 93(1) of the Act does not operate to extinguish all actions for damages in respect of which the Commission may become liable to indemnify under s 94(1). In Transport Accident Commission v Lease Auto Pty Ltd[93] the Full Court of the Federal Court held that the Commission was liable to provide indemnity to a vehicle owner who became liable on contract-based claims to a driver for injuries he sustained in driving a defective motor vehicle supplied by a leasing company. Heerey, Moore and Kiefel JJ held that the respondent Lease Auto Pty Ltd (‘Lease Auto’) was entitled to indemnity by the Commission under s 94(1)(a) of the Act. In that case the liability, in respect of which it was found that the Commission was liable to indemnify Lease Auto, arose out of a claim by Mr Lavrick, a resident of South Australia. Mr Lavrick ordered a rental car from Lease Auto for collection from Melbourne Airport. On 23 February 1996 he picked up the vehicle, a two-week old Ford Falcon with 700 kilometers on the odometer, and set off for Bendigo. At about 9.00 pm that evening a wheel came off. The vehicle veered off the road and Mr Lavrick was injured.
[93][2002] FCAFC 430.

Mr Lavrick’s rights to sue for common law damages were arguably restricted by s 93(1) of the Act. However, Mr Lavrick sued Lease Auto in the South Australian District Registry of the Federal Court on a number of causes of action based, in whole or in part, on the Trade Practices Act 1974 (Cth) (‘the TP Act’). The cause of action on which he succeeded was the contention that his contract with Lease Auto contained an implied term by virtue of s 71(2) of the TP Act that the car would be fit for the purpose of travel to Bendigo. At first instance, Mansfield J upheld the claim with the consequence that Mr Lavrick was entitled to damages for breach of contract. Lease Auto did not contend that s 93 of the Act operated to preclude Mr Lavrick's claim and accepted that s 71 of the TP Act implied the alleged term into its contract with Mr Lavrick and that the term had been breached. The quantum of damages was agreed.

The issue on appeal was whether Lease Auto was entitled under s 94 to indemnity from the Commission, which had been joined as a cross-respondent. It was accepted that the incident in which Mr Lavrick sustained injury was a "transport accident" as defined in s 3 of the Act, that the rental car was a "registered motor vehicle" and that at all relevant times Lease Auto was the owner of that vehicle. The primary contention of the Commission was that the extent of its obligation to indemnify under s 94(1) of the Act was co-terminous with the extent of the permitted entitlement under s 93 to recover damages for death or injury arising out of a transport accident, at least in respect of transport accidents occurring in Victoria.

The Full Court upheld the reasoning of the trial Judge, Mansfield J, in which his Honour spoke of s 93 in the following terms (at 10 – 12):

It has been decided that s 93 of the (Act) contingently extinguished the common law right to recover damages for injuries sustained under transport accident through negligence: Wilson v Natrass (1995) 21 MVR 41, Swanell v Farmer [1991] 1 VR 299. But it can do so only to the extent of the legislative competence of the Victorian Parliament. Significantly, in my judgment, the legislative restriction upon the exercise of any rights to recover damages at common law cannot apply in all circumstances. In this matter, the TAC acknowledges that s 93 cannot operate so as to prevent Mr Lavrick from recovering damages at common law for breach of contract, where the relevant clause of the contract is implied by s 71 of the (TP Act), even though the contract was made in Victoria and the transport accident occurred in Victoria. The TAC also acknowledges that the restriction imposed by s 93 cannot operate generally outside Victoria.
Once it is accepted that the persons owing or driving motor vehicles in Victoria may incur common law liability to persons injured in transport accidents in circumstances beyond those provided by s 93 of the (Act), the issue in the present proceedings becomes more stark. Is it intended that the use of the words "any liability" in s 94 should entitle such persons to indemnity against such liability from the TAC? Or is it intended that such persons should not be entitled to indemnity from the TAC on the basis that the words "any liability" should be read down to include only a liability arising under s 93 of the (Act) and the liability incurred, or arising from a judgment given, outside Victoria?
The Victorian Parliament, by enacting s 94(1) in its terms, has recognised the desirability of providing to such persons indemnity in respect of liabilities arising outside Victoria. It has recognised that its statutory powers extend only so far in restricting the entitlement of persons to recover against the owners or drivers of motor vehicles registered in Victoria damages for injuries sustained in a transport accident. This matter exposes another respect in which, it is accepted, its powers do not reach to achieve the restrictions intended by the (Act) to apply generally in Victoria upon such claims. In my judgment, however, s 94(1) is nevertheless intended to provide indemnity to Lease Auto in the particular circumstances.

The Full Court in Lavrick concluded by citing an observation of Brooking J in National Mutual Fire Insurance Co Ltd v Insurance Commission[94], where his Honour said (at 818):
[94][1985] VR 811.

[O]nce one has observed the plain ordinary meaning of the words used, it is no reason for withholding from the words their full and ordinary ambit that Parliament may not have adverted to some of the consequences, provided of course they are not consequences so absurd that they could not have been intended.

From that point the Full Court reasoned that neither the subject matter of the Act nor the context of s 94 of the Act provided a reason to restrict the wide words ‘any liability’ from applying to the liability of Lease Auto to Mr Lavrick in the matter. Thus it was held that the Commission may become liable to indemnify under s 94(1) in respect of a claim which is outside the reach of s 93. The Full Court reasoned that there was

no reason in logic or … in policy, for reading down the clear words of s 94(1). As the famous dictum has it [that of Lord Mersey in Thompson v Gould], ‘It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do.’ [95]

[95]Citations omitted. The dictum referred to is to be found in Thompson v Gould & Co [1910} AC 409 at 420 per Mersey LJ.

Given the fundamental purpose of the Act, which is defined in s 1 as that of the establishment of a scheme of compensation in respect of persons who are injured or die as a result of transport accidents, in my opinion s 93 is concerned with the circumstances in which an injured person is permitted to bring a traditional common law action for damages or in which the dependants of a person who has died are permitted to bring an action founded on Part 111 of the Wrongs Act 1958. Such proceedings are to be conducted outside the direct regulation of the Act.

Applying the approach of Lord Mersey in Thompson v Gould, derived from the passage referred to by the Full Court in Lavrick[96], in my opinion, the text of s 93(1) does not achieve the abolition of the per quod action as it may be applied to the injury or death of a person as a result of a transport accident, nor is there any intention evident in the Act to do so. To have this result would call for additional words to be read into the sub-section. Such words are not present and there is no necessity for them to be there.
[96][2002] FCAFC 430.

The construction of s 93(1) which I prefer receives some support from the analysis undertaken by Ashley J in Wilson v Nattrass, where his Honour said in relation to the Act as it was at the time of his decision (at 54, emphasis added):

[T]he proper construction of sub-ss (1), (2) and (4) appears to me to be that, subject to a condition or contingency being established, the common law right of action previously enjoyed by persons injured in transport accidents in this State is extinguished - except to the extent that such a person might fall within subs (18)(b) or (c).

Furthermore, in Bentley v Furlan[97], Ashley J, in summarising the process under s 93 (citing Wilson v Nattrass and Swannell v Farmer) said that:

There is no doubt that the Division is concerned with the circumstances in which an injured person is to be permitted to bring a traditional common law action for damages or an action founded on Pt 3 of the Wrongs Act; and the inhibitions upon a claim once permitted.

[97][1999] 3 VR 63 at 74-5.

The construction of s 93 contended for by the Defendant would have the effect of abolishing the per quod action for the recovery of damages arising from a transport accident. This would involve a departure from the general system of law. Although, as I have found, the cause of action as it currently operates in Australia falls short of what may be described as law enshrining fundamental rights and freedoms, even if a construction of the text of s 93(1) was fairly evenly balanced, in my opinion, an interpretation which would involve the least alteration to the existing body of general law is to be preferred. On this basis too, I find that it was not intended by the Act, as is evident from its text, for the per quod action to be extinguished in respect of injury or death arising from a transport accident.

Conclusion

Notwithstanding the submissions of the Defendant, which were advanced persuasively by counsel, I conclude that the better view of s 93 of the Act, and the statutory scheme provided for under the Act when considered as a whole, is that it does not extinguish the action per quod servitium amisit as it would apply to the agreed facts of this case.

It follows that my answers to the questions are:

(a)is the claim pursued by the Plaintiff in the proceeding extinguished?
No.

(b)is the Plaintiff precluded from recovering damages from the Defendant?
No.

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[2008] VSC 517

27 November 2008