Motor Accident Commission v Dinh - [2015] SASCFC 184

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
MOTOR ACCIDENT COMMISSION v DINH
[2015] SASCFC 184
Judgment of The Full Court
(The Honourable Acting Chief Justice Gray, The Honourable Justice Sulan and The Honourable Justice Lovell)
9 December 2015
INSURANCE - MOTOR VEHICLES - COMPULSORY THIRD PARTY INSURANCE AND LIKE SCHEMES - GENERALLY - SOUTH AUSTRALIA
INSURANCE - MOTOR VEHICLES - COMPULSORY THIRD PARTY INSURANCE AND LIKE SCHEMES - RECOVERY OR RECOURSE BY INSURER WHERE UNAUTHORISED USE, INEFFECTIVE CONTROL, DEFECTIVE VEHICLE, ETC
Appeal against a decision of a District Court Judge dismissing an action for recovery of monies paid out pursuant to a statutory insurance policy. The appellant is the sole approved compulsory third party insurer in South Australia under the Motor Vehicles Act 1959 (SA). The appellant was the insurer of the vehicle owned by respondent. The respondent was involved in a collision with a pedestrian while driving the vehicle. At trial, it was the appellant’s case that the respondent breached the statutory policy of insurance by driving the vehicle with the intention of or, in the alternative, with reckless indifference as to, causing death, bodily injury or property damage. Pursuant to section 124A of the Motor Vehicles Act, and consequent to the alleged breach of policy, the appellant claimed from the respondent the monies paid and costs incurred in respect of the claim of the pedestrian.
Whether the trial Judge erred in his formulation of the test of reckless indifference.
Held per Gray ACJ (Sulan and Lovell JJ agreeing):
1. Reckless indifference, as appearing in the statutory policy of insurance, should be interpreted in accordance with the approach of Diplock LJ in Fraser v B N Furman (Productions) Ltd [1967] 1 WLR 898.
2. The Judge erred in importing objective considerations into the test of reckless indifference.
3. In the ordinary course, it would be necessary to remit the matter for further hearing and determination. However, having regard to the clarification of the issue of law and, as the appellant no longer seeks any recovery from the respondent, it is appropriate to dismiss the appeal.
Motor Vehicles Act 1959 (SA) s 124A; Sch 4, referred to.
Fraser v B N Furman (Productions) Ltd [1967] 1 WLR 898, applied.
Legal and General Insurance v Eather (1986) 6 NSWLR 390 (1986) 6 NSWLR 390; State Government Insurance Commission v Lane (1997) 68 SASR 257; Mead v Allianz Australia Insurance Ltd [2006] NSWSC 366; Clayton v Mutual Community General Insurance Pty Ltd (1995) 64 SASR 353; Motor Accident Commission v Compostella (2002) SADC 128, considered.

MOTOR ACCIDENT COMMISSION v DINH
[2015] SASCFC 184
Full Court: Gray ACJ, Sulan and Lovell JJ
GRAY ACJ.

This is an appeal against a decision of a District Court Judge dismissing an action for recovery of monies paid out pursuant to an insurance policy.
The plaintiff and appellant, the Motor Accident Commission, is the sole approved compulsory third party insurer in South Australia under the Motor Vehicles Act 1959 (SA). The plaintiff was the insurer of the vehicle owned by the defendant and respondent, Cathy Phuong Dinh. The policy relevantly insured the defendant for all liability incurred in respect of the death of, or bodily injury to, any person caused by or arising out of the use of that vehicle.
On 10 January 2010, the defendant was involved in a collision with a pedestrian, Angelo Quici, while driving the vehicle. At trial, it was the plaintiff’s case that the defendant breached the policy of insurance by driving the vehicle with the intention of or, in the alternative, with reckless indifference as to, causing death, bodily injury or property damage. The defendant denied that she was in breach of the insurance policy.
The plaintiff paid an amount of $310,809.67 to Mr Quici in respect of injuries suffered as a result of the collision. Pursuant to section 124A of the Motor Vehicles Act, and consequent to the alleged breach of policy, the plaintiff claimed the monies paid and costs incurred in respect of the claim by Mr Quici from the defendant.
Background
Mr Quici is the former husband of the defendant. The Judge described the relationship between the defendant and Mr Quici as acrimonious. They had been married for six years between 1999 and 2005. They shared a daughter, AQ, who was nine years of age at the date of the incident. The defendant and Mr Quici shared custody of AQ on a 50:50 basis. There was a Domestic Violence Restraining order in place that prohibited Mr Quici from contacting the defendant or AQ other than in relation to prior arranged access visits.
The Judge found that the collision occurred in the course of an arranged access visit. At about 9.30 am on 10 January 2010, Mr Quici drove his vehicle from his home to Straud Street, Cheltenham. Mr Quici parked on the eastern side of the street, which runs in a north south direction. The defendant arrived sometime after 10.00 am. The Judge found she parked her vehicle at least 2 to 3 metres, but perhaps as much as 12 metres, behind Mr Quici’s vehicle. Mr Quici got out of his vehicle and walked to the rear of his vehicle. The defendant and AQ also got out of the defendant’s vehicle. AQ greeted Mr Quici and got into his vehicle.
The Judge found that the defendant and Mr Quici then argued about access arrangements and that Mr Quici was the promulgator of the issue. The defendant told Mr Quici that she would not discuss the access arrangement and got back into her vehicle. Mr Quici hit the window of the driver’s door of the defendant’s vehicle with his hand in a forceful way. The defendant was frightened and said that she wanted to leave. She loudly revved the engine of the vehicle. Mr Quici moved away toward the back of his vehicle and stood by the rear wheel on the driver’s side. The defendant drove her vehicle out of the carriageway to travel in a general southerly direction. In doing so, the front left wheel of the vehicle went over the right foot of Mr Quici and the left side of the car struck Mr Quici’s right leg. Mr Quici sustained several injuries as a result.
The plaintiff’s claim was for monies paid to Mr Quici as a consequence of injuries sustained by Mr Quici. The plaintiff relied on its statutory right of recovery as provided by section 124A of the Motor Vehicles Act, which relevantly provides:
(1) Where an insured person incurs a liability against which he or she is insured under this Part and the insured person has contravened or failed to comply with a term of the policy of insurance—
(aa) by driving a motor vehicle, or doing or omitting to do anything in relation to a motor vehicle, with the intention of causing the death of, or bodily injury to, a person or damage to another's property, or with reckless indifference as to whether such death, bodily injury or damage results; or
...
the insurer may, by action in a court of competent jurisdiction, recover from the insured person any money paid or costs incurred by the insurer in respect of that liability.
As noted above, the plaintiff claimed that the defendant drove the motor vehicle with the intention of or, in the alternative, reckless indifference as to, causing bodily injury. The Judge rejected the claim of intentional driving. There is no appeal against that rejection. The Judge also dismissed the contention that the defendant had driven with reckless indifference. The appeal is against that finding.
The Appeal
On appeal, the Court was informed that the primary concern of the plaintiff was the proper interpretation of the meaning of reckless indifference within the statutory policy of insurance. It was contended that the Judge was incorrect in the formulation of the test of reckless indifference. It was said that this was an important aspect to be resolved having regard to the general public interest in the proper interpretation of the statutory policy of insurance. The Court was informed that the defendant accepted that the plaintiff had acted properly in the settlement of Mr Quici’s claim. The Court was further informed that the plaintiff, if successful on the appeal, would not seek to enforce any judgment against the defendant. The plaintiff had also agreed to pay the costs of the appeal of the defendant.
As noted above, the plaintiff did not challenge the Judge’s conclusion that the defendant had not acted intentionally to injure Mr Quici. However, the plaintiff did challenge the Judge’s conclusion that the defendant had not driven with reckless indifference. The plaintiff challenged a number of findings of fact made by the Judge concerning the incident and the defendant’s manner of driving. A review of the written submissions of the parties and of the plaintiff’s oral submissions on the appeal gives rise, in my opinion, to an arguable case that the Judge had erred with respect to relevant findings. If this view were confirmed it would not, in the circumstances, be appropriate for this Court to substitute its own views as issues concerning credibility and reliability would need to be resolved. In the present proceedings, where the plaintiff does not wish to pursue the defendant for any monetary recovery, it is my view that it is wholly unproductive to further explore the challenge to the Judge’s findings.
The issue to be determined is whether the plaintiff’s challenge to the Judge’s formulation of the relevant test is made out. The plaintiff contended that the test articulated by Lord Diplock in Fraser v B N Furman (Productions) Ltd[1] should be applied. Diplock LJ relevantly observed:[2]
... What, in my judgment is reasonable as between the insured and the insurer, without being repugnant to the commercial purpose of the contract, is that the insured, where he does recognise a danger should not deliberately court it by taking measures which he himself knows are inadequate to avert it. In other words, it is not enough that the employer's omission to take any particular precautions to avoid accidents should be negligent; it must be at least reckless, that is to say, made with actual recognition by the insured himself that a danger exists, and not caring whether or not it is averted. ...
[1] Fraser v B N Furman (Productions) Ltd [1967] 1 WLR 898.
[2] Fraser v B N Furman (Productions) Ltd [1967] 1 WLR 898, 906.
On the appeal, the defendant did not challenge the appropriateness of this test and, in particular, contended that the test was a subjective test, not an objective test. The defendant accepted that there were inconsistencies in the findings made and conclusions reached by the Judge but contended that, in the particular circumstances, reckless indifference had not been established.
Against this background, it is convenient to turn to the Judge’s reasons concerning the test to be applied when determining whether reckless indifference has been established and whether there has been any error by the Judge in his approach.
The Statutory Contract of Insurance
As earlier observed, the plaintiff is the sole approved compulsory third party insurer in South Australia and the compulsory third party insurer of the motor vehicle driven by the defendant at the time of its collision with Mr Quici. The terms of the statutory policy of insurance are to be found in Schedule 4 of the Motor Vehicles Act, which, at the relevant time, provided:
1 The insurer insures the owner of the motor vehicle and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth.
2      A person so insured warrants that he or she will not—
(a)     drive the vehicle, or do or omit to do anything in relation to the vehicle, with the intention of causing the death of, or bodily injury to, a person or damage to another's property or with reckless indifference as to whether such death, bodily injury or damage results; or
(b)     drive the vehicle while so much under the influence of intoxicating liquor or a drug as to be incapable of exercising effective control of the vehicle; or
(c)     drive the vehicle while there is present in his or her blood a concentration of .15 grams or more of alcohol in 100 millilitres of blood; or
(d)     drive the vehicle while not duly licensed or otherwise permitted by law to drive the motor vehicle; or
(e)     drive the vehicle while the vehicle is overloaded, or in an unsafe, unroadworthy or damaged condition; or
(f)      use the vehicle otherwise than—
(i) for purposes stated in the application for registration, renewal of registration, exemption from registration or a permit, in respect of the vehicle; or
(ii) if trade plates are affixed to the vehicle—for purposes stated in the application for the issuing of those plates; or
(iii) for purposes agreed on between the insurer and the registered owner of the vehicle.
3 The owner of the vehicle warrants that no other person will, with his or her knowledge or consent (which will be presumed in any proceedings in the absence of proof to the contrary), drive or use the vehicle, or do or omit to do anything in relation to the vehicle, contrary to any of the paragraphs of clause 2.
4 This policy of insurance does not extend to liability arising from death of, or bodily injury to, a participant in a road race caused by the act or omission of another participant in the road race.
[Emphasis added.]
The plaintiff contended that the critical terms of warranty are as emphasised above and, in particular, it was said that the defendant, being insured, drove the vehicle with reckless indifference as to whether bodily injury or damage to Mr Quici resulted. The particular question to be determined is whether the Judge applied the correct test in determining whether the defendant had been recklessly indifferent within the meaning of the statutory policy.
The plaintiff’s statutory right of recovery in respect of these warranties is the subject of section 124A of the Motor Vehicles Act as extracted above. The Judge addressed the definition of reckless indifference:[3]
[3] Motor Accident Commissioner v Dinh [2015] SADC 36, [95]-[99].
I turn then to the more difficult question of reckless indifference. The decided cases relating to the determination of what conduct is sufficient to amount to reckless indifference generally refer to the judgement of King CJ in Wright’s case and a number of other authorities. Having regard to the decision of King CJ in Clayton’s case, it is necessary that two things be proved by the plaintiff. First that act of driving by the defendant created some obvious risk that there would be collision between her vehicle and Mr Quici. Second that the defendant has gone on driving the vehicle in that fashion without having given any thought to the possibility that there was such a risk or has recognised that there was such risk and has gone ahead and driven in that manner in any event.
Consistent with the decision of the Full Court in Wright, reckless indifference must mean more than mere carelessness or negligence because in Wright, the court at first instance and the court of appeal were only satisfied that Mr Wright acted carelessly or negligently (both may be considered the same thing in that case).
In my opinion, there is no doubt that the defendant drove in a careless and negligent manner and that this conduct was the cause of the collision. I have formed the very clear view that the defendant knew that the collision had occurred at the scene, her attendance at the Port Adelaide Police station was a panicked reaction and an attempt to save face and that her alleged ignorance of the injury to Mr Quici (as she told the police) borders on the disingenuous. On the question of reckless indifference, at one level it may be said that the defendant proceeded whilst being indifferent to the position of Mr Quici. This is because I find that she moved her vehicle forward into a space that, objectively assessed, was either too narrow for her car to pass, or that was so narrow and because of her own lack of skills as a driver, she was incapable of driving through safely. The important issue is that the defendant appears to have given no thought to the possibility of a collision with Mr Quici. She was not attempting to perform a ‘U-turn’ at that time, she always intended to drive in a southerly direction along Straud Street.
In Dreezer v Duvnjak Zeeman J said:
… Australian authorities take approaches which have an underlying common feature, namely that recklessness is doing an act while contemplating the chance of it having the relevant consequence or quality with indifference to that consequence or quality.
In Compostella Judge Kitchen at [62], after referring to Zeeeman J [sic] in Dreezer, said as follows:
In my opinion that passage reflects the meaning of the phrase “reckless indifference” in s124A(1)(aa) of the Motor Vehicles Act; that is I must be satisfied the defendant contemplated there was a probability “a substantial risk (Boughey v R (1986) 161 CLR 10 at 22) of bodily injury where (he) to drive (in that fashion) but (he) nonetheless went on to do that.
[Emphasis added. Footnotes omitted.]
On appeal, the plaintiff claims that the Judge imported an objective element into the test as emphasised above. The plaintiff contended that, in an insurance context, the test to be applied is entirely subjective.
The Judge went on to consider the subjective element of the test as follows:[4]
Applying Briginshaw, I am very far from being satisfied that the defendant had any regard for Mr Quici and his position on the day in question. So much is self evident from the fact that she executed the driving manoeuvre and immediately struck Mr Quici. The important feature is that Mr Quici was standing with his back to the drivers’ side of his vehicle (adjacent the rear wheel arch) when he was struck. Less than a body width space was left between the two vehicles. Of itself that fact is not determinative but the position is very different when a person is standing between the two cars. The dynamic of the need for and the application of proper judgement changes quite considerably in those circumstances. I am satisfied that the defendant gave no consideration to the presence of Mr Quici on the roadway at the time she drove her vehicle. That finding is plainly open on the evidence for the reasons that I have set out. It is not appropriate that I postulate that if the defendant had proper regard for the presence of Mr Quici the collision would not have occurred although that is ordinarily a valid form of a priori reasoning. Rather, my view is that the collision of the defendant’s vehicle with Mr Quici is, ipso facto, demonstrative of the failures of the defendant.
It is not possible to say that the collision with Mr Quici is a matter that should have been in the contemplation of the defendant. On the facts as I have found them, the presence of Mr Quici on the roadway was known by the defendant. I find that she had Mr Quici in her contemplation at the time that she commenced to move her vehicle but her state of mind was affected by the upset, fear and nervousness that she was experiencing as a result of the inappropriate behaviour of Mr Quici. Her mindset was to remove herself from a very difficult situation created by Mr Quici.
...
I think that the law as it stands would not take into account any particular idiosyncratic features of a driver when making the assessment. The reason is fairly obvious: any driver could claim a reason affecting the driver’s subjective contemplation which should then be taken into account in the objective assessment of what is required (to be in the contemplation of the defendant). I cannot think that the assessment of the necessity of the contemplation is an entirely subjective exercise. Rather I am of the view that, once it is decided that Mr Quici stood in the roadway adjacent to the vehicle, then immediately from the time that the defendant moved her vehicle into that roadway, she had Mr Quici in her contemplation. That said, I am not satisfied that when she moved her vehicle the defendant contemplated that there was a substantial risk of bodily injury to Mr Quici when she moved her vehicle into the carriageway of Straud Street to travel southwards. This is my view even though it may be said that, objectively assessed, the space that was left on Straud Street was narrow she may not have been able to control her vehicle properly and skilfully in that space and there was a risk of injury to Mr Quici (if she drove in that fashion).
The defendant proceeded to drive into that carriageway but not in any a way that was identifiably deliberately directed at Mr Quici or in any way that suggests that she contemplated a probability of bodily injury to Mr Quici but she nonetheless proceeded. At the time the defendant was burdened in the way I have described: with fear, trepidation and anticipation of difficulty associated with Mr Quici’s behaviour. These circumstances were serious, burdensome and to an extent were debilitating for the defendant. They had such an impact upon the defendant that her whole aim at the time was to remove herself from that situation. Her conduct did not amount to driving recklessly for the purpose of s124A(1)(aa) of the Motor Vehicles Act. For these reasons I find for the defendant and I dismiss the plaintiff’s claim. I will hear the parties on the question of costs and any consequential orders.
[Emphasis added.]
The Judge appears to import a further objective element, as emphasised above, as to what should be in the contemplation of the defendant. In my view, for the reasons that follow, the Judge erred in stating that there must be an objective assessment of what is required.
[4] Motor Accident Commissioner v Dinh [2015] SADC 36, [100]-[101], [103]-[104].

Finally, the Judge found against reckless indifference on the basis that the defendant did not contemplate the collision with Mr Quici. This is against a background of the Judge describing the mental element of the test as follows:[5]
... Second that the defendant has gone on driving the vehicle in that fashion without having given any thought to the possibility that there was such a risk or has recognised that there was such risk and has gone ahead and driven in that manner in any event.
[5] Motor Accident Commissioner v Dinh [2015] SADC 36, [95].
The Correct Construction of the Statutory Policy of Insurance
In the plaintiff’s submission the seminal definition of reckless indifference for the purpose of insurance law appears in the judgment of Diplock LJ in Fraser. The issue in Fraser was when a “reasonable precautions” condition in a policy of insurance could be relied upon by an insurer to deny indemnity when the loss claimed was a result of negligence. The policy provided that “[t]he insured shall take reasonable precautions to prevent accidents and disease”.[6]
[6] Fraser v B N Furman (Productions) Ltd [1967] 1 WLR 898, 904.
As earlier extracted, Diplock LJ held that, in order for the insurer to be able to establish a breach of the reasonable precautions condition, the insurer would have to prove that the insured’s failure to take safety precautions was a reckless failure and that mere negligence on the part of the insured would not be sufficient to enliven the condition.
The New South Wales Court of Appeal applied Fraser in the case of Legal and General Insurance v Eather,[7] a case concerning a policy of insurance against loss, after holding that it should not be limited to cases of policies of insurance against negligence. Kirby P explained that the Fraser principle has been followed repeatedly in the context of the construction of the term “reckless” in insurance cases. His Honour said:[8]
[7]    Legal and General Insurance v Eather (1986) 6 NSWLR 390.
[8]    Legal and General Insurance v Eather (1986) 6 NSWLR 390, 397.
... But if Fraser applies, there is stamped on condition 1, by long established and frequently applied doctrine of insurance law, the limited application of the condition to cases of reckless indifference to the normal precautions that should be taken, simply because of the provision of insurance.
...
... although Fraser is not binding on this Court, there are many reasons why it should be followed. They include repeated references to and applications of the case in numerous decisions in England, Australia and New Zealand; the desirability of a common interpretation of the terms of the subject condition appearing as it does so frequently in policies used in countries throughout the common law world; and above all the good commercial sense which lies behind the decision and which, in my judgment, reflects the reasonable expectations which would exist in the community concerning the respective obligations of insurer and insured under a policy such as is here in question. I can detect no reason of principle for narrowing the application of Fraser, particularly in the circumstances of this composite policy. On the contrary, I can see many reasons for insisting upon its application here.
McHugh JA considered the meaning of the phrase “reasonable precautions” in the following terms:[9]
I am unable to accept the insurer's contention as to the meaning of the words “all reasonable precautions”. It is well settled that in policies indemnifying an insured against liability to third persons those words have to be read down to give effect to the commercial purpose of the contract which is to indemnify the insured against liability for his personal negligence ...
Glass JA, who agreed with McHugh JA, said:[10]
I agree with his conclusion that the promise by the insured to take all reasonable precautions to prevent loss should be read down below the level of obligation denoted by such language in the realm of negligence law. In such context the words describe a duty to avoid the loss of or damage to the property by perceiving such risks to it as would be foreseeable by reasonable care and taking such preventative action as would have been taken by a reasonable person. Such an obligation is clearly repugnant to the commercial purpose of a contract to indemnify a person against liability which he may incur for negligent conduct. ...
[9]    Legal and General Insurance v Eather (1986) 6 NSWLR 390, 405.
[10] Legal and General Insurance v Eather (1986) 6 NSWLR 390, 402.
In this State, the approach of Diplock LJ in Fraser was adopted by Debelle J in State Government Insurance Commission v Lane, where his Honour observed:[11]
Thus, when construing clauses of this kind, regard will be had to the commercial purpose of the contract of insurance. Such a clause will not be construed to mean that every negligent act of an insured constitutes a breach of the policy or triggers the operation of the exclusion clause. Instead, the condition to take reasonable precautions requires that the insured is not reckless in the sense explained in the decisions I have mentioned. It will have been noticed also that the test of recklessness is subjective, not objective. So in Plasteel Windows v Sun Alliance Insurance Ltd (1989) 5 ANZ Insurance Cases 75,881, it was held that the test of the existence of a risk should be determined by the perception of the insured and not by that of a reasonable person. See generally the discussion in Sutton, Insurance Law in Australia, pars 10.27 to 10.29.
… The exclusion from liability where the vessel is being operated “in an unsafe manner” will apply where the vessel is being operated recklessly in the sense described by Diplock LJ. The exclusion will, therefore, apply when the insurer satisfies the court that when operating or sailing the vessel, the insured recognised that a danger existed and, perceiving its existence, took no action to avoid it and was indifferent to whether the danger was averted or not.
[Emphasis added.]
[11] State Government Insurance Commission v Lane (1997) 68 SASR 257, 262-3.
A similar approach has been adopted more recently in New South Wales, where Bergin J observed in Mead v Allianz Australia Insurance Ltd:[12]
In the context of insurance law, perhaps thankfully, "reckless" has been held to mean an act made with actual recognition by the insured that a danger exists and not caring whether or not it is adverted...
[Emphasis added.]
[12] Mead v Allianz Australia Insurance Ltd [2006] NSWSC 366, [56].
In the course of the trial Judge’s reasons, reference was made and reliance was placed on the observations of King CJ in Clayton v Mutual Community General Insurance Pty Ltd.[13] Clayton considered the phrase “deliberate and intentional acts” in the context of a motor vehicle that had been set on fire by a husband, when committing suicide, and the fire spread to the home he had jointly owned with his wife. The wife claimed under the insurance policy. There the Chief Justice observed:[14]
Generally speaking, to say that a person deliberately or intentionally causes damage imports that that person desires to cause that damage. Intention in law, however, is not equated with desire. There is an intentional act of causing damage when a person who has no desire to cause the damage, deliberately does so because of a desire to achieve some collateral purpose. Neither is intention equated with recklessness. The act of causing damage is reckless in contra distinction to deliberate or intentional where the person realises the risk that damage will probably result but proceeds irrespective of that risk.
Although intention and recklessness are distinct states of mind and the latter is not within the policy exclusion, there is a point at which the risk of damage to the insured premises, as it exists and as it is realised by the insured to exist in consequence of the insured's actions is so high that the insured's state of mind, notwithstanding that the damage was not designed or planned by him, is indistinguishable from intention.
It is difficult to formulate a satisfactory test for the determining when unplanned and undesigned damage is to be regarded as intentional. In the American cases cited above the test adopted is that the insured believes that the damage is “substantially certain to result” from his actions and MacGillvray refers to embarking “upon a course of conduct in which there was a clear risk of the loss occurring.” I do not think that the adoption of a precise formula would be useful. It must be a question for the tribunal of fact whether the risk, as realised by the insured, of the unplanned and undesigned damage was so high that his state of mind should be equated with intention because it amounted to imposing on the insurer a risk which it could not reasonably be thought to have intended to assume.
[13] Clayton v Mutual Community General Insurance Pty Ltd (1995) 64 SASR 353.
[14] Clayton v Mutual Community General Insurance Pty Ltd (1995) 64 SASR 353, 356-7.
As I read the observations of King CJ, they were not intended to, and do not in any way, qualify the test propounded by Diplock LJ in Fraser. Clayton concerned the interpretation of “deliberate and intentional acts”. The discussion on recklessness was only in reference to the point at which conduct is so reckless that it could be considered intentional for the purposes of an insurance policy that includes reckless acts but not deliberate acts.
Further, in so far as the Judge relied on the decisions of Kitchen DCJ in Motor Accident Commission v Compostella,[15] it is my view that those decisions, to the extent that they are inconsistent with the observations of Diplock LJ as applied in Australia, do not represent a correct statement of the law.
[15] Motor Accident Commission v Compostella [2002] SADC 128.
Conclusion
Reckless indifference, as appearing in the statutory policy of insurance, should be interpreted in accordance with the approach of Diplock LJ, as applied in this country in the cases of Legal and General Insurance v Eather and State Government Insurance Commission v Lane. In the present case, the issue is whether the defendant drove her motor vehicle with the actual recognition herself that a danger existed and not caring whether or not the danger was averted.
The Judge erred in articulating a different test than that referred to above, and, in particular, by importing objective considerations into the test of reckless indifference. As a consequence, the Judge erred in his approach such that, in the ordinary course, it would be necessary to remit the matter for further hearing and determination. Having regard to the clarification of the issue of law and as the plaintiff does not ultimately seek any recovery from the defendant, I consider that it is appropriate to dismiss the appeal.
SULAN J: I agree with the reasons of Gray ACJ. I would dismiss the appeal.
LOVELL J: I agree with the reasons of Gray ACJ. I would dismiss the appeal.