Motor Accident Commission v Ferraro No. DCCIV-02-1336

Motor Accident Commission v Ferraro
[2004] SADC 79
Judge Simpson
Civil
The Claim

The plaintiff in this action is the Motor Accident Commission. The Motor Accident Commission is a body corporate established first as the State Government Insurance Commission by the State Government Insurance Act 1970 and reconstituted without change of its corporate identity pursuant to section 4 of the Motor Accident Commission Act 1992, which provides:
(1)The State Government Insurance Commission continues (without change of its corporate identity) as the Motor Accident Commission.
(2)The Commission--
(a) continues as the same body corporate;
(b) has perpetual succession and a common seal;
(c) is capable of suing and of being sued in its corporate name;
(d) has the functions and powers assigned or conferred by or under this Act;
(3)The Commission is an instrumentality of the Crown and holds its property by or on behalf of the Crown.
Pursuant to section 14(1)(a) of the Motor Accident Commission Act 1992, the functions of the Commission include the provision of policies of compulsory third party insurance under Part 4 of the Motor Vehicles Act 1959 (“the Act”) and the Commission was the sole approved insurer under that Part.
Section 99A in Part 4 of the Act provides:
(1) An applicant for—
(a) the registration of a motor vehicle; or
(b) an exemption from registration in respect of a motor vehicle; or
(c) a permit in respect of a motor vehicle;
must at the time of application pay to the Registrar the premium upon a policy of insurance in terms of Schedule 4 for the motor vehicle in respect of which the application is made.
(2) The applicant must, in the application, select an approved insurer to be the insurer in terms of the policy of insurance and if the applicant fails so to select an approved insurer the Registrar may, subject to subsection (3), select such an insurer in respect of the application.
Pursuant to section 99A(8), a policy of insurance in terms of Schedule 4 is in force in respect of a motor vehicle as from the time registration becomes effective, and remains in force for the whole of the registration period. The terms of the policy of insurance provided for in Schedule 4 are as follows:
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.
Pursuant to section 107 of the Act:
Notwithstanding any enactment, an insurer under a policy of insurance (whether under this Part or otherwise) in relation to a motor vehicle is, as from the date of the policy, liable to indemnify the persons or classes of persons specified in the policy in respect of any liability which the policy purports to cover.
Section 121 of the Act provides that while a policy of insurance is in force, every person who is insured in terms of the policy is contractually bound by the provisions of the policy in all respects as if the person had agreed with the insurer so to be bound.
On 11 March 1997, the defendant was the driver of a Holden Commodore sedan motor vehicle, registered number UPT 874, when it was involved in an accident. A policy of insurance in terms of Schedule 4 to the Act was in force in respect of the vehicle. Two pedestrians were injured. They each made a claim against the defendant as the driver of the vehicle for personal injury, loss and damage sustained as a result of the accident. The plaintiff dealt with the claims of the pedestrian third parties on behalf of the defendant pursuant to section 125 of the Act. In settlement of the claims against the defendant, the plaintiff incurred a loss in the sum of $165,591.12, which sum included the money paid to the third parties and the costs and disbursements of the third parties and the plaintiff associated with the claims. The plaintiff claims to be entitled to recover the sum of $165,591.12 from the defendant pursuant to section 124A of the Act.
Section 124A 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 result; or
(a) by driving a motor vehicle while so much under the influence of intoxicating liquor or a drug as to be incapable of exercising effective control over the vehicle; or
(b) by driving a motor vehicle while there is present in his or her blood a concentration of .15 grams or more of alcohol in 100 millilitres of blood,
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.
(1a) A finding of a court in proceedings for an offence as to--
(a) the insured person’s incapacity to exercise effective control of the vehicle at the time of the motor accident owing to the influence of intoxicating liquor or a drug; or
(b) the concentration of alcohol present in 100 millilitres of the insured person’s blood at the time of the motor accident,
will be treated as determinative of the issue in an action by the insurer under subsection (1).
“Insured person" is defined in section 99(1) to mean a person insured by a policy of insurance under Part 4 of the Act.
By its statement of claim, the plaintiff asserts that pursuant to paragraph 2(a) of the policy of insurance, set out in Schedule 4, relating to the motor vehicle he was driving, the defendant warranted that he would not 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 resulted.
The plaintiff says that the defendant was in breach of the warranty, in that he:
(a)   drove in a manner dangerous to the public;
(b) failed to have his vehicle under any or any proper control;
(c)   failed to stop, slow, swerve, or otherwise manoeuvre so as to avoid the accident;
(d) drove a vehicle at a speed which was excessive in the circumstances;
(e)   failed to keep any or any proper lookout;
(f)    drove without due care or attention or without any reasonable consideration for other persons using the road and its related footpaths.
The defendant denies:
1. that he provided any warranty, except in so far as he was bound by the provisions of section 121 of the Act; and
2. that he is in breach of the terms of the policy of insurance; and
3. that the particulars pleaded in the Statement of Claim constitute a breach of the terms of the policy of insurance in force in respect of the motor vehicle in any event.
The defendant denies that the plaintiff is entitled to the relief claimed.
The Evidence
The plaintiff tendered a number of witness statements by consent, as follows, the defendant reserving his right to comment on the effect of the material contained in them:
The two pedestrians injured in the accident
Carmelina Mifsud   4 April 1997
Evelyn Muscat  4 April 1997
Other motorists at the scene of the accident
Ian Glen Lampre  30 March 1997
Nicholas Peter Gibbs                   30 March 1997
Michael Robert Peters                 8 April 1997
Clifford Claude Wilson               13 April 1997
Lynn Margaret Taylor                 29 March 1997
A police officer who attended the scene of the accident
Darren Trevor Dilliway               27 June 1997
Police officers from the Major Crash Investigation Section
Graham Sydney John England    30 June 1997 (2 statements)
Euan Angus McLauchlan           30 June 1997
Technical Officer Department of Transport
Roger James Porter  23 June 1997
Medical practitioners who treated the injured pedestrians
Nicholas Gregory Rodgers         13 April 1997
Matthew Rhys Grill  11 April 1997
In addition, the plaintiff tendered the synopsis of a recorded police interview with the defendant dated 20 March 1997, a copy of an information dated 14 August 1997 laid in the Magistrates Court, charging the defendant with offences against section 19A of the Criminal Law Consolidation Act 1935 and section 45 of the Road Traffic Act 1961, the certificate of record of the Magistrates Court and the sentencing remarks of Ms O’Connor SM, delivered on 18 March 1998.
Mr England, an expert in accident reconstruction, was called by the plaintiff to give evidence. The defendant also gave evidence.
The general circumstances of the accident
At around 11 am on 11 March 1997, the defendant drove the Holden Commodore, which belonged to his father, from his home at Salisbury to the Tea Tree Plaza Shopping Centre. His sister had asked him to change a jumper for her. The defendant was twenty-two years old. He had been driving for about four years. There is a recreational park, Civic Park, opposite the shopping centre and behind Tea Tree Gully Council offices. The defendant had been to the shopping centre before.
There is no dispute about the route taken by the defendant or the location of the accident. I have referred to a map of the area to assist only with an understanding of the route taken by the defendant.
N
[1]
[1] Virtual Map (Australia) Ltd (Fullers Street Map)
S
Mr McLauchlan described the location of the accident. It occurred south of the intersection of Reservoir Road and Montague Road. South of Montague Road, Ladywood Road continues as Reservoir Road. Traffic lights control traffic at the intersection. When travelling south on Ladywood Road and before crossing Montague Road into Reservoir Road, traffic must cross a bridge over Dry Creek, 80 metres north of the intersection. As traffic approaches the intersection from the north, vehicles must negotiate a right hand bend in the roadway, which rises slightly before levelling out across the intersection. The roadway commences a downward slope south as it becomes Reservoir Road.
The defendant’s evidence
The defendant travelled south along Ladywood Road towards the intersection with Montague Road. He saw the traffic lights when he was some distance from the intersection. He saw them change from green to amber. The defendant accelerated in order to get across the intersection. He said he entered the intersection while the lights were amber, but he noticed that the lights changed to red while he was still in the intersection. He was not watching the speedometer but felt he would have been going more than 60 kilometres per hour (“kph”) and less than 100 kph. As he was negotiating the right hand curve in the road, coming out of the intersection and into Reservoir Road, the defendant lost control of the vehicle. He had not anticipated that he might lose control and it had never happened to him before. He said that he did not turn his mind to whether his manner of driving, that is, accelerating to go through the intersection with the lights, would endanger other road users or people in the vicinity.
The defendant applied the brakes and the vehicle skidded towards the eastern verge of Reservoir Road, mounting the kerb and colliding with two pedestrians who were walking south along the footpath bordering Civic Park. The defendant’s vehicle finally came to rest in the park after crashing through a permapine railing fence at the perimeter.
The defendant was not hurt. He submitted to a breath test, conducted by Mr Dilliway, for alcohol concentration in the blood. The result of the test was negative.
The pedestrians injured in the accident
One of the pedestrians, Ms Mifsud, had no recollection of the accident itself. She sustained a laceration to her thumb, a painful right shoulder and head, and a severely bruised right ankle, left leg and left foot. The large flap laceration to the thumb was sutured and dressed. She was admitted to Modbury Hospital for observation and discharged after three days.
The other pedestrian, Ms Muscat, heard a screech of tyres behind her and turned to see the bonnet of the defendant’s vehicle approaching about a metre from her, before she was struck. She was thrown through the air by the impact and landed on the ground face down. Her injuries were the more serious. She received bruising all over her body, a laceration to the lower right side of her lip, a soft tissue injury to the neck, a laceration to the posterior right calf, and fractures to two thoracic vertebral bodies and the left distal fibula, which required operative repair. Ms Muscat was admitted to Modbury Hospital, where she remained until discharge on 24 March 1997.
Evidence of other motorists in the vicinity
Mr Lampre was driving his vehicle south on Ladywood Road, about a car length or a little more behind the defendant. They were both travelling at about 60 kph. Mr Lampre had been a licensed driver for 10 months. He saw the lights at the intersection with Montague Road change from green to amber. Mr Lampre was uncertain about precisely where the defendant’s vehicle was when the traffic lights changed to amber, but he said it was in the area of the bridge over Dry Creek. Mr Lampre saw the defendant’s vehicle accelerate suddenly. By the time the defendant’s vehicle reached the intersection, Mr Lampre estimated its speed to be about 90 kilometres per hour. He said that the traffic lights changed to red when the defendant’s vehicle was still 5-10 metres north of the intersection. Mr Lampre crossed over the intersection with the next change of lights and stopped his car near the scene of the accident. He saw the defendant get out of his car. The defendant started crying and appeared to be very upset.
Mr Wilson was a passenger in a car, travelling north on Reservoir Road and turning left into Montague Road. Mr Wilson had been able to drive a car for many years but had never held a driving licence. The traffic lights at the intersection were green and changed to amber as the car in which he was a passenger turned left into Montague Road. As it was turning left, he saw the defendant’s vehicle in the middle of the intersection, travelling at a speed he estimated to be more than 80 kph, and possibly as much as 85-95 kph.
Mr Gibbs was on his motorcycle, travelling east on Montague Road. Mr Gibbs had held a driver’s licence since 1980-1981. He was stationary at the traffic lights waiting to cross the intersection with Ladywood Road. He saw the defendant’s car cross the intersection at a speed he estimated to be 80 kph. He saw the impact between the defendant’s vehicle and the two pedestrians. He thought that the lights had changed to green in his direction of travel at about the time of the impact.
Mr Peters was also travelling east on Montague Road at the time of the accident. He had driving experience extending over 25 years. He was stationary at the traffic lights at the intersection, behind two cars waiting to turn right. He heard a screech of tyres, followed by a loud thump. At the time he heard the screech of tyres, the traffic arrow controlling traffic turning right from Montague Road into Reservoir Road was red. It turned green shortly after and he turned into Reservoir Road. He saw the defendant’s car where it had come to rest about five metres off the eastern footpath in the grassed area of the park. He saw a pedestrian lying on the ground. He did not see the defendant’s car before the impact.
Ms Taylor was travelling north on Reservoir Road at about 60 kph approaching the intersection with Montague Road. She saw the defendant’s vehicle as it lurched out of control onto the footpath on the other side of the road. She formed no impression of its speed. She saw the impact with the pedestrians and the defendant’s vehicle come to a stop against a tree in the park.
Technical evidence regarding the traffic lights at the intersection
Mr Porter was a technical officer, Traffic Operations Unit, Metropolitan Region, Department of Transport. His report to the Major Crash Investigation Section provided the following information:
1.The time the amber light at the intersection of Montague and Ladywood Roads was illuminated for southbound traffic, i.e., traffic travelling in the direction of the defendant’s vehicle, was 4 seconds.
2.The distance across the intersection for southbound traffic was 26 metres.
3.A vehicle travelling at 60 kph travels at 16.67 metres/second.
Travelling at 60 kph, the defendant’s vehicle would have taken 4.8 seconds to cover the 80 metres to the intersection from the bridge. At 80 kph, the defendant’s vehicle would have taken 3.6 seconds. Without attempting a complex calculation, it seems that if the defendant’s vehicle began accelerating in the vicinity of the bridge over Dry Creek, and the traffic lights changed to amber at about the same time, the defendant’s vehicle had to cover something less than the 106 metres to the other side of the intersection, before he noticed the traffic lights turn to red in his direction of travel. Travelling at a uniform speed of 60 kph, the defendant’s vehicle would have taken 6.36 seconds to cover the whole distance. If his vehicle were travelling at 80 kph, it would have taken 4.77 seconds, or 4.24 seconds at 90 kph, to travel the 106 metres.
Making an allowance for:
·the defendant’s vehicle possibly being past the bridge, i.e., closer to the intersection, before acceleration;
·the vehicle accelerating over the distance, rather than travelling at a uniform speed; and
·travelling at a speed between 80-90 kph after accelerating,
it is not inconsistent with Mr Porter’s evidence for the defendant’s vehicle to have entered the intersection while the lights were amber and to have been leaving it as they turned red.
Accident Reconstruction
Mr England was called as an expert in accident reconstruction. His qualifications to give expert evidence regarding the circumstances of the accident were not challenged. His analysis of the scene of the collision suggests that the defendant’s vehicle negotiated the bend approaching the intersection at an excessive speed, which caused the tyres to lose traction and the rear of the vehicle to swing out to the left as it entered Reservoir Road. The critical curve speed, i.e., the speed at which the wheels of a vehicle will lose traction on the particular bend in the road, was calculated by Mr England to have been 92 kph. The defendant probably made a steering correction, which then caused the rear of the vehicle to swing to the right. At that point, it appeared that the defendant had applied the brakes heavily, locking first the front wheels and eventually all four wheels. The car skidded towards the eastern footpath of Reservoir Road. The front wheels struck the kerb and the vehicle mounted the footpath. The speed of the vehicle when it began skidding on Reservoir Road was estimated by Mr England to have been at least in the range of 72-76 kph, and more likely to have been between 80 kph and 90 kph.
Findings

The evidence suggests that in the vicinity of the bridge across Dry Creek, the defendant accelerated to a speed of between 80 - 90 kph in order to get across the intersection of Ladywood Road and Montague Road. The defendant said that the traffic lights were amber at the time he entered the intersection and red as he left it. That is consistent with the evidence of Mr Wilson. Although their evidence is not conclusive, it is also consistent with the evidence of Mr Gibbs, Mr Peters and Mr Porter. It is at odds with the evidence of Mr Lampre, who said that the defendant’s car entered the intersection after the traffic lights had changed from amber to red. Mr Lampre was eighteen years old at the time and had ten months’ experience as a driver. His car was behind the defendant’s car. In my opinion, the evidence of Mr Wilson in particular supports what the defendant said. As a passenger at the intersection itself, Mr Wilson was in a better position than Mr Lampre to make his observations and was not subject to the distraction of duties as a driver. Mr Wilson’s observations are consistent with the evidence of other drivers in the area. In my opinion, it is more likely that the defendant entered the intersection when the traffic lights were still showing amber, than after the traffic lights had changed to red.
I find that at about 11.30 am on 11 March 1997, the defendant was driving his father’s Holden Commodore sedan motor vehicle, registered number UPT 874, in a southerly direction on Ladywood Road, Modbury North, approaching the intersection with Montague Road. It was a fine day. When he was in the vicinity of the bridge over Dry Creek, 80 metres north of the intersection, the defendant noticed the traffic lights at the intersection change from green to amber. He accelerated to a speed of between 80-90 kph to get across the intersection. The traffic lights were amber when he entered the intersection, but had changed to red before he left it. As he negotiated the curve in the road, the defendant lost control of the vehicle, which skidded across the road and onto the eastern footpath. He collided with two pedestrians, causing bodily injury to them. While the defendant may be criticised for thoughtless, and in that sense, reckless driving, the defendant said, and I accept, that he at no time turned his mind to the risk that by accelerating to cross the intersection, he might lose control of his vehicle or that he might cause injury to a person in the vicinity.
The Charges
The defendant was charged on information in the Magistrates Court with offences as follows:
1.On the 11^th day of March, 1997 at MODBURY in the State of South Australia he drove a motor vehicle in a culpably negligent manner, recklessly, or at a speed or in a manner dangerous to the public and by that culpable negligence, recklessness or other conduct, caused bodily harm to EVELYN MUSCAT.
Section 19A(3) Criminal Law Consolidation Act 1935
2.On the 11^th day of March, 1997 at MODBURY in the said State he drove a motor vehicle in a culpably negligent manner, recklessly, or at a speed or in a manner dangerous to the public and by that culpable negligence, recklessness or other conduct, caused bodily harm to CARMELINA MIFSUD.
Section 19A(3) Criminal Law Consolidation Act 1935
3.On the 11^th day of March, 1997 at MODBURY in the said State he drove a motor vehicle namely a MOTOR SEDAN on A ROAD namely RESERVOIR ROAD without due care.
Section 45 Road Traffic Act 1961
Section 19A(3) of the Criminal Law Consolidation Act 1935 provides:
A person who--
(a) drives or rides a vehicle or an animal in a culpably negligent manner, recklessly, or at a speed or in a manner dangerous to the public; and
(b) by that culpable negligence, recklessness or other conduct, causes bodily harm to another,
is guilty of an indictable offence.
The penalty for a first offence under section 19A(3) is imprisonment for a term not exceeding four years and disqualification from holding or obtaining a driver's licence for one year, or such longer period as the court orders, and for a subsequent offence, imprisonment for a term not exceeding six years and disqualification from holding or obtaining a driver’s licence for at least three years.
The defendant pleaded guilty in the Holden Hill Magistrates Court on 18 March 1998 to counts 1 and 2 on the information. Count 3 was withdrawn. The defendant was sentenced to a term of imprisonment of four months, suspended on his entering into a bond in the sum of $200 to be of good behaviour for a period of eighteen months. His driving licence was suspended for fifteen months, commencing on 1 April 1998. The sentencing remarks of, and the penalty imposed by the Magistrate proceeded on facts agreed between prosecution and defence counsel.
There is no provision in section 124A of the Motor Vehicles Act 1959 which makes a finding of a court in proceedings for an offence relating to driving 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 result, determinative of the issue in an action by the insurer under subsection (1) of the section.
It was submitted, and I accept, that by his plea the defendant made no admission that he drove a motor vehicle with the intention of causing bodily injury to a person or with reckless indifference as to whether such bodily injury would result, in the context of the operation of section 124A of the Act. Similarly, the plaintiff in this action cannot be bound by facts agreed in the Magistrates Court on the prosecution for the offences under section 19A(3) of the Criminal Law Consolidation Act 1935.
The defendant accepted before the Magistrate, and in giving evidence in this matter, that he drove in a manner which was dangerous to the public and that by his driving he caused bodily injury to the two pedestrians walking on the footpath. While the manner of the defendant’s driving could be, and was described by the Magistrate as reckless, the defendant does not accept that he drove with reckless indifference to the consequences of his driving, within the meaning of the expression used in the policy of insurance or in section 124A of the Act.
The Issue
The issue for determination is whether the defendant contravened or failed to comply with a term of the policy of insurance 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, or bodily injury or damage resulted.
It was no part of the plaintiff’s case that the defendant intended to cause bodily injury to another person. It was submitted by the plaintiff that the objective facts establish that the defendant drove his motor vehicle with reckless indifference as to whether bodily injury resulted. It was submitted that it was not necessary to find that the defendant realised that there was a risk that bodily injury might result from his driving and proceeded irrespective of the risk to which he had adverted. The plaintiff’s case was that the proper test to be applied was the test applied in civil actions in negligence, that is, whether a reasonable person would have realised that by his or her driving there was a risk of bodily injury to another person. The plaintiff submitted that a reasonable person would have foreseen that by:
(a)   driving in a manner dangerous to the public; and/or
(b) failing to have his vehicle under any or any proper control; and/or
(c)   failing to stop, slow, swerve, or otherwise manoeuvre so as to avoid the accident; and/or
(d) driving a vehicle at a speed which was excessive in the circumstances; and/or
(e)   failing to keep any or any proper lookout; and/or
(f)    driving without due care or attention or without any reasonable consideration for other persons using the road and its related footpaths,[2]
but in particular, by driving in a manner dangerous to the public, there was a risk of bodily injury to another person.
Therefore the defendant must be taken to have been driving his motor vehicle with reckless indifference as to whether bodily injury resulted.
[2] paragraph 9, Statement of Claim
The defendant’s submission was that driving with reckless indifference as to whether death, bodily injury or damage results, in the context of section 124A of the Act, requires the driver to have realised the risk of death, bodily injury or damage resulting, that is, to have adverted to it in fact, and to have proceeded irrespective of the risk involved.
The issue is one which requires construction of the terms of the policy of insurance in force with respect to the vehicle driven by the defendant, as reflected in section 124A of the Act.
The policy of insurance was not a commercial contract between parties at arms length. The terms are imposed by legislation. However, general principles of interpretation applicable to a contract of insurance may be relevant as follows:
(a) words and phrases should be given their ordinary meaning, except where the ordinary meaning conflicts with the meaning expressly given, or where the words or phrases have a legal or technical meaning;
(b) words and phrases are to be interpreted in the context in which they appear;
(c) the main object or purpose should be taken into account; and
(d) if the words are unambiguous, effect will be given to them.[3]
[3]De Vito v Commercial Union Assurance Company Ltd (2001) 78 SASR 439 at 446 - 447, referring to Halsbury’s Laws of Australia, Vol 15, Insurance, [235-370]
The onus of proof of establishing that the defendant’s conduct is in breach of the terms of the policy of insurance and falls within section 124A of the Act rests on the plaintiff insurer.[4]
4 Australian Associated Motor Insurers Ltd v Wright (1997) 70 SASR 110 at 114
Intentional Acts
At common law, an intentional act by the insured person which produces intended loss or injury will normally defeat a claim for indemnity on the ground that, as a matter of construction, the policy does not cover intended loss.[5]
5 Clayton v Mutual Community General Insurance Pty Ltd (1995) 64 SASR 353 at 354 - 356; Daniel v Accident Insurance Mutual Holdings Ltd (1995) 65 SASR 387 at 394
As a matter of public policy, an insured person may not enforce an indemnity in circumstances where the damage arose out of an intentional and unlawful act, on the principle that “no-one can enforce an indemnity against liability for loss or damage which it was the purpose of a criminal act to produce.” There is a distinction to be made between an intentional act which produces intentional loss or damage, and an intentional act in the course of which unintended loss or damage occurs.[6]
[6]Sutton Insurance Law in Australia, 3rd Edition, LBC Information Services, 1999 at 1016-1018, 1021 - 1027; Fire & All Risks Insurance CoLtd v Powell [1966] VR 513 at 519, 523, 527; Clayton v Mutual Community General Insurance Pty Ltd above, at 356-357
In the case of Clayton v Mutual Community General Insurance Pty Ltd (1995) 64 SASR 353 (FC), the court was considering exclusion clauses in an insurance policy relating to residential premises damaged by fire. The fire had spread to the house after the estranged husband of the claimant under the policy committed suicide by deliberately igniting petrol fumes in a motor car in the carport which formed part of the insured premises. The policy excluded cover for “loss or damage caused by the deliberate or intentional acts” committed by the insured person and “loss, damage or liability arising from any unlawful act or omission.”
King CJ said:
“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.”[7]
The other members of the full court agreed with King CJ.
[7] (1995) 64 SASR 353 at 356
In Daniel v Accident Insurance Mutual Holdings Ltd (1995) 65 SASR 387, the driver of a motor vehicle drove at excessive speed and, for a time, with at least half of the vehicle on the wrong side of the road. Bollen J described the manner of driving as follows:
“The appellant drove very badly indeed. He caused damage. He caused danger. He was reckless. His speed was outrageously high for the area. His position on the road was conducive to danger. He was seeking to show that his car could become airborne in certain circumstances on that road.”[8]
[8] (1995) 65 SASR 387at 395
The vehicle collided with another car. The driver sought indemnity for damages awarded against him in respect of injuries he had caused to the other driver, who was not found to be at fault. There was a comprehensive motor vehicle insurance policy in force in respect of his vehicle. It contained a clause or condition:
“This policy does not cover loss, damage or liability caused by or arising from;
(a) Your wilful or deliberate act...”.
The insurer refused to indemnify the driver, relying on the exclusion clause. Bollen J adopted the reasoning of King CJ in Clayton, above. Notwithstanding the manner of driving by the insured person, it was not found to be wilful or deliberate, nor so bad as to be “indistinguishable from intention”. In remarks made obiter, Bollen J said, “The risk of danger to other property by reckless driving by an insured person is part and parcel of daily insurance business.”[9]
[9] (1995) 65 SASR 387at 395
In this case, there is no allegation that the defendant intended, by his driving, to cause injury to another person. There is also no allegation that the defendant’s speed or manner of driving constituted a risk, “realised by the insured, of the unplanned and undesigned damage, (which) 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.”[10]
[10] Clayton v Mutual Community General Insurance Pty Ltd above, at 356-357; Daniel v Accident Insurance Mutual Holdings Ltd (1995) 65 SASR 387 at 394
Reckless indifference
In the area of motor vehicle insurance law in particular, there is no principle at common law, based on public policy grounds, against indemnity in respect of civil liability as a consequence of gross negligence or reckless negligence, as distinct from a wilful or advertent act.[11]
[11] Sutton, Insurance Law in Australia, 3rd Edition, LBC Information Services, 1999 at 1018-1021
In Tinline v White Cross Insurance Association Limited [1921] 3 KB 327, the driver of a motor vehicle drove at an excessive speed and ran into three people crossing the road, injuring two of them and killing the third. The driver pleaded guilty to manslaughter. The injured third parties claimed against him for damages in respect of personal injury occasioned by the accident. The driver claimed indemnity under an insurance policy which provided indemnity against sums the insured became liable to pay to any other person as compensation for accidental personal injury. His claim was resisted by the insurer on the basis that, while the policy was one which insured against the consequences of negligence, where the negligence was so gross and excessive that as a result a man was killed, it was against public policy to indemnify a person against the civil consequences of his criminal act.
In rejecting the submission of the insurer, Bailhache J observed that in the great majority of motor accidents where the insured person is the driver of the car, the accident is due to the breach by the driver of some statute. Many are the result of driving at excessive speed. The policy was against claims for accidents due to negligence. Without negligence there is no liability. Indemnity under the policy should not depend on the degree of negligence, i.e., whether it is slight or great.[12]
[12] Tinline v White Cross Insurance Association Limited [1921] 3 KB 327 at 331-332
The decision was followed in James v British General Insurance Company Limited [1927] 2 KB 311. In that case, the driver of a motor vehicle was involved in a collision with a motorcycle after he had foolishly become drunk at a wedding. The motorcycle rider was killed and his passenger injured. The driver was convicted of manslaughter. The passenger sued for damages in respect of injuries sustained in the collision. The driver sought indemnity from the insurer, which claimed that he was not entitled to indemnity, because the liability arose in the course of a criminal act, in particular, the driver was drunk, was driving in a manner which was dangerous to the public and had created a risk which was never in the contemplation of the parties.
Roche J found that the act of driving which brought about the civil responsibility could be described as an act of gross or reckless negligence, of the kind which constitutes criminality. Nevertheless, it was not wilful or advertent. In such circumstances, there was not, “on the part of the person who does the act, that degree of criminality which in the doing of a known unlawful act makes it against public policy that the perpetrator should be indemnified in respect of it.” If public policy were otherwise, in no case where a person was guilty of driving in a manner dangerous to the public, not wilfully or intentionally, but “in reckless disregard of the lives and limbs of other people”, could the insured person recover any indemnity. [13]
[13] James v British General Insurance Company Limited [1927] 2 KB 311 at 323-325; and see Fire & All RisksInsurance Co. Ltd. v Powell [1966] VR 513
The defendant in these proceedings was charged with an offence against section 19A(3) of the Criminal Law Consolidation Act 1935. That section specifies a number of offences;
(i) driving in a culpably negligent manner;
(ii) driving recklessly;
(iii) driving at a speed which is dangerous to the public; and
(iv) driving in a manner which is dangerous to the public,
although there may be some overlapping of the various offences.[14]
[14] R v Coventry (1938) 59 CLR 633 at 637 per Latham CJ, Rich, Dixon and McTiernan JJ
The offence of driving recklessly, in particular, has been interpreted to import an element of intention, or a variety of intention reflecting a person’s lack of interest or concern about the consequences of his or her actions and implying that a person has adverted to the consequences of his or her action, but is indifferent as to whether they occur or not.
In Thompson v Copeland [1936] SASR 45, the defendant was charged with driving a motor lorry recklessly, an offence created by section 44 of the Road Traffic Act 1934, which then provided:
“(1) Any person who drives a motor vehicle on any road in a culpably negligent manner or furiously or recklessly, or at a speed or in a manner which is dangerous to the public, shall be guilty of an offence, and liable to a penalty for a first offence of not less than ten pounds and not more than fifty pounds, and for any subsequent offence of not less than fifty pounds and not more than one hundred pounds, and may for such subsequent offence be imprisoned for any term not exceeding three months.
(2) In considering whether an offence has been committed under this section, the Court shall have regard to all the circumstances of the case, including the nature, condition, and use of the road upon which the offence is alleged to have been committed, and to the amount of traffic which at the time actually is, or which might reasonably be expected to be, upon such a road.”

Murray CJ considered the definition given to the meaning of the term “recklessly” by Cussen J in the Victorian case of Kane v Dureau [1911] VLR 293. Cussen J had said that ‘recklessness’, which is characterised by indifference to consequences, is to be distinguished from ‘negligence’ in which the consequences are not expected at all. Murray CJ found that “recklessness implies that the possible consequences which may ensue from his act are adverted to by the actor, but he is indifferent whether those consequences occur or not.”[15]
[15] [1936] SASR 45 at 47-48
In distinction, the element of intention or active indifference to consequences is not an essential element of driving in a culpably negligent manner, or of driving at a speed which is dangerous to the public, or of driving in a manner which is dangerous to the public.
The High Court, in R v Coventry (1938) 59 CLR 633, took the opportunity when considering, and in the event refusing, an application for special leave to appeal from a decision of the Supreme Court of South Australia[16] relating to a prosecution under section 14 of the Criminal Law Consolidation Act 1935, to confirm the distinction between driving recklessly on the one hand, and driving with culpable negligence, at a speed which is dangerous to the public and in a manner which is dangerous to the public on the other. Section 14 of the Criminal Law Consolidation Act 1935 provided:
(1)Any person who-
(a) drives a motor vehicle in a culpably negligent manner, or recklessly, or at a speed, or in a manner, which is dangerous to the public; and
(b) by such negligence, recklessness, or other conduct, causes the death of any person, shall be guilty of a misdemeanour, and liable to be imprisoned for any term not exceeding seven years, or to a fine not exceeding two hundred and fifty pounds, or to both such imprisonment and fine as aforesaid.
[16] R v Coventry [1938] SASR 79
The observations made by Cussen J in Kane v Dureau[17] were approved. The court said that reckless driving included an element of indifference to consequences, which was not an essential element applicable to the other offences specified, now created by section 19A(3) of the Criminal Law Consolidation Act 1935.
[17] [1911] VLR 293 at 296
The standard to be applied to driving with culpable negligence, at a speed which is dangerous to the public and in a manner which is dangerous to the public is “an objective standard, ‘impersonal and universal, fixed in relation to the safety of other users of the highway’”. “The expression ‘driving at a speed, or in a manner, which is dangerous to the public’ describes the actual behaviour of the driver and, in general, does not require any given state of mind as an essential element of the offence.” [18]
[18] R v Coventry (1938) 59 CLR 633 per Latham CJ, Rich, Dixon and McTiernan JJ at 637-638 and per Starke J at 639, 640
The defendant in this case could therefore be guilty of an offence against section 19A(3) of the Criminal Law Consolidation Act 1935 without necessarily driving recklessly, i.e., adverting to the risk of damage or injury occurring as a result of his speed or manner of driving, but proceeding with reckless disregard for those consequences.
It is not appropriate to find that because the defendant pleaded guilty to the charges laid against him in the Magistrates Court, he was in breach of the terms of the policy of insurance by driving a motor vehicle with reckless indifference as to whether bodily injury resulted.
The terms “recklessly”, or “recklessly indifferent”, have been interpreted to apply in other criminal charges to action taken by a person where the person realises that there is, or adverts to, a risk of injury or damage, or other consequences associated with his or her actions, but proceeds with those actions regardless of the consequences to which he or she has adverted.
In both Tziavrangos v Hayes (1991) 55 SASR 416 and Durward v Harding (1993) 61 SASR 283, the court was considering the test to be applied to a charge under section 85(3) of the Criminal Law Consolidation Act 1935, which provides:
Where a person-
(a)intending to damage the property of another, or being recklessly indifferent as to whether property of another is damaged; and
(b)without lawful authority to do so, and knowing that no such lawful authority exists,
damages, or attempts to damage, property of another, the person shall be guilty of an offence.
The court held in both cases that in the context of the section, being “recklessly indifferent” as to whether the property of another is damaged involves proof that a defendant was aware of, in the sense of adverting to, the risk of the consequence that property may be damaged and proceeded with the conduct, notwithstanding advertence to the risk of damage.[19]
[19] Tziavrangos v Hayes (1991) 55 SASR 416 at 419-422 per White J; Durward v Harding (1993) 61 SASR 283 at 287-288 per Perry J; see also Dreezer v Duvnjak (1996) 6 Tas R 294 at 299 - 300
Conclusion
There is no authority which supports the submission of the plaintiff that negligent driving by an insured person, even grossly negligent or culpably negligent driving, equates with reckless indifference on the part of the driver as to whether death, or bodily injury or damage results, within the meaning of section 124A of the Act. Before section 124A has any application, an insured person has incurred a liability against which he or she is insured under the Act. Liability arises as a result of negligent driving. If the submission of the plaintiff were to be accepted, the result would be that pursuant to the policy of insurance provided for in Part 4, and section 124A of the Act, the approved insurer could recover from insured persons who have incurred liability as a result of negligent driving, against which they are insured, money paid or costs associated with claims by third parties.
The legislation now ensures that claims by third parties who are injured as a result of negligent, even grossly negligent or criminal acts of driving, are covered by insurance. No question arises of enforcing a contract of insurance at the instance of a third party, following liability which has arisen as a result of an insured driver’s own criminal act, on the grounds of public policy favouring innocent third parties’ entitlement to recover damages.[20] Notwithstanding the provisions in the Act presently which ensure compensation for injuries sustained by third parties as a result of motor vehicle accidents, legislation which allowed an approved insurer to recover from a driver the loss incurred as result of claims in respect of his or her negligent driving, even negligent driving which gives rise to criminal charges, in my opinion, ought to be in plain terms.
[20] See e.g., Hardy v Motor Insurer’s Bureau [1964] 2 QB 745; Gardner v Moore and Another [1984] 1 AC 548
Section 124A of the Act provides that:
· where an insured person incurs a liability against which he or she is insured under Part 4 of the Act, and
· the insured person has contravened or failed to comply with a term of the policy of insurance
· by driving 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 result,
the insurer may recover from the insured person any money paid or costs incurred by the insurer in respect of that liability.
In the context of section 124A, in my opinion, the term driving “with reckless indifference” requires:
1. a state of mind on the part of an insured driver of a motor vehicle which is indistinguishable from intention, that is, where the risk of death, bodily injury or damage “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 (death, bodily injury or) damage was not in fact designed or planned by him, is indistinguishable from intention”;[21] or
2. that the driver realises that there is, or adverts to, a risk of death, bodily injury or damage, associated with his or her actions, but proceeds regardless of the consequences to which he or she has adverted.
[21] Clayton v Mutual Community General Insurance Pty Ltd (1995) 64 SASR 353 at 356
That interpretation of the section is consistent with the authorities relating to indemnity under an insurance policy generally and under a motor vehicle insurance policy in particular. It will be a matter of fact in each case. It will not depend solely on whether or not an insured driver says that he or she did not realise there was, or did not advert to, the risk of death or bodily injury or damage resulting from his or her manner of driving. If the driving of the insured person constituted such a high degree of negligence that a risk of death, bodily injury or damage, should, and would have been obvious, then a serious question would be raised as to whether he or she had in fact realised that risk and proceeded irrespective of it. The test is nevertheless a subjective one.[22]
[22] Hardy v Motor Insurer’s Bureau [1964] 2 QB 745 at 758-759, 764; Motor Accident Commission v Compostella (2002) 220 LSJS 156
In this case, there is no doubt that the manner of the defendant’s driving was dangerous and, in that sense, reckless. His speed was excessive and he accelerated to get through the intersection controlled by traffic lights, rather than slowing down when he saw the traffic lights change from green to amber. I am satisfied that the defendant entered the intersection when the lights were showing amber and that they changed to red as he went through it. His speed was such that he was unable to negotiate the curve and the slope in the road safely. The wheels lost traction and he was unable to steer the car. It skidded out of control, colliding with the two pedestrians and through the permapine railing at the edge of the park near the shopping centre.
I am satisfied however that the defendant at no time gave any thought to the risk of bodily injury or damage created by his manner of driving. I am satisfied that he did not proceed irrespective of a risk of bodily injury or damage to which he had adverted. His manner of driving was thoughtless and it was a danger to the public. The danger was realised when the two pedestrians were injured. But the defendant did not advert to the risk of danger and proceeded regardless of the risk. His driving was typical of a young, relatively inexperienced driver, whose only thought was to get across the intersection before the lights changed against him.
I am not satisfied that the defendant, the insured person, was in breach of any warranty, or contravened or failed to comply with a term of the policy of insurance in force in respect of the motor vehicle he was driving, by driving the 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 resulted.
The plaintiff’s claim pursuant to section 124A of the Motor Vehicles Act 1959 is dismissed.

[2004] SADC 79

21 May 2004