Motor Accident Commission v Leslie
[2017] SADC 54
•25 May 2017
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
MOTOR ACCIDENT COMMISSION v LESLIE & ANOR
[2017] SADC 54
Reasons for Decision of Her Honour Judge Davison
25 May 2017
LIMITATION OF ACTIONS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - JUDGMENTS AND ORDERS
On 16 December 2008 the first plaintiff, Peter John Leslie, was injured in an incident at Olympic Dam. He was assaulted by Shane Smith following an incident with a motor vehicle driven by Malcolm Keith Shore. The first plaintiff issued proceedings against Shane Smith and Malcom Keith Shore on 14 December 2011. The proceedings against Shane Smith have since been discontinued. On 13 October 2013 Malcolm Keith Shore passed away. His partner, Tracey Lee Shore, has been joined as a representative of the estate of Malcolm Keith Shore.
The plaintiffs now seek to join the Motor Accident Commission (MAC) as the second defendant. Issues in relation to s 113 of the Motor Vehicles Act 1959, s 36 of the Limitations of Actions Act 1936, and s 99 of the Motor Vehicles Act 1939.
Held: No error demonstrated in the decision of the learned Master. Appeal dismissed.
Motor Vehicles Act 1959 s 113; Motor Vehicle (Third Party Insurance) Amendment Act 2011 s 4; Limitation of Actions Act 1936 s 36, referred to.
Carslake v Guardian Assurance Co (1977) SASR 378, considered.
MOTOR ACCIDENT COMMISSION v LESLIE & ANOR
[2017] SADC 54
This is an appeal by the second defendant, the Motor Accident Commission (MAC), against the orders of Master Rice made on 18 and 23 March 2016. On 18 March 2016 Master Rice ordered:[1]
1That Tracey Lee Shore, as the personal representative of Malcolm Keith Shore, be substituted as the first defendant in the action.
2That MAC be joined as the second defendant in the action whilst noting that the claims against the first and second defendants are alternative claims.
3Leave to the plaintiffs to file an amended summons and statement of claim within seven days.
[1] See FDN 35 Reasons for Decision of District Court Master Rice 18 March 2016.
On 23 March 2016, Master Rice made further orders that MAC have its costs from 17 July to 13 October 2014, and the plaintiffs have their costs from 14 October 2014 to 19 November 2015 on issues related to joinder and substitution. An order that defences be filed within 21 days of the receipt of the amended summons and statement of claim was also made.
Grounds of Appeal
The grounds of appeal are as follows:[2]
[2] FDN 39
1. That the Learned Master erred in law in joining MAC as a defendant to this action in that no cause of action against MAC under section 113 of the Motor Vehicles Act arises in that no notice pursuant to section 113 was given until three years from the date of the injuries the subject of the claim on 16 December 2008.
2. That in any event the Learned Master erred in law in joining the Motor Accident Commission as a second defendant to this action in that:
2.1the death of Mr Shore and the giving of any purported notice under section 113 of the Motor Vehicles Act occurred after 10 July 2011, being the date on which the Motor Vehicle (Third Party Insurance) Amendment Act 2011 came into force,
2.2 that no cause of action against MAC accrued until after 11 July 2011; and
2.3accordingly the indemnity afforded by the statutory policy under Schedule 4 of the Motor Vehicles Act applicable to any claim against the Motor Accident Commission under section 113 for the injuries incurred on 16 December 2008 was limited by section 4 of the Motor Vehicle (Third Party Insurance) Amendment Act 2011 to injuries which were the direct result of the driving of a motor vehicle;
2.4given the plaintiff’s pleaded facts as to the circumstances of the incident and the concession by the plaintiff’s counsel in submissions before the Learned Master (as is the case) that the injuries in respect of which the plaintiffs seek to claim damages against MAC were not the direct result of a driving of a motor vehicle, it is not arguable that the MAC is liable to the plaintiff pursuant to section 113 of the Motor Vehicles Act.
Overview of Case
The facts are set out in the reasons for decision of Master Rice dated 18 March 2016 and can be summarised as follows.
In December 2008 the first plaintiff, Peter John Leslie, was working at Olympic Dam as an independent contractor for Built Environs. That company had a Christmas function, held at the clubrooms of the Olympic Dam Football Club, on the evening of 15 December 2008. The first plaintiff, other employees and contractors living in accommodation blocks at Olympic Dam, attended the Football Club about a kilometre from the township of Olympic Dam. In the early hours of 16 December 2008 the first plaintiff and others were offered a ride back to the accommodation by the late Malcolm Keith Shore, the first defendant. It is asserted many of the workers, including Mr Shore, had consumed a significant amount of alcohol.
Mr Shore drove a vehicle on a track being used at the time by other persons walking back to the accommodation area. It is said that Mr Shore drove in a dangerous and reckless manner and deliberately drove his vehicle at persons so as to frighten, intimidate, alarm or provoke them. It is said that Mr Shore endangered the safety of the pedestrians and caused them to become agitated and angry because of his reckless driving. To date, there has been no detail given as to the precise manner of driving of Mr Shore.
Mr Shore ultimately drove past the other workers to the accommodation area where he stopped the vehicle and allegedly fled. At that stage, those that he had apparently endangered approached the vehicle and dragged the passengers from the vehicle. The first plaintiff was assaulted during the altercation that followed and suffered significant injuries.
In the proposed Statement of Claim filed before the orders made by Master Rice on 18 and 23 March 2016, the plaintiffs pleaded that the injuries sustained by the first plaintiff were reasonably foreseeable because of the deliberate and dangerous driving by Mr Shore which endangered and enraged the pedestrians to the point where it was likely they would seize and assault the first plaintiff and others. Further, it is pleaded that the first defendant’s conduct in driving the vehicle dangerously precipitated the assaults, and that the injury was caused by, or, arose out of the use of his motor vehicle.
It is further pleaded that Mr Shore was in a special relationship to the first plaintiff and therefore owed a special duty of care. It is said that it was Mr Shore’s duty to maintain the safety of the first plaintiff.
It is convenient to set out a chronology in relation to this matter.
CHRONOLOGY OF EVENTS Date Description of event 15-16 December 2008 Incident occurred at Olympic Dam. 14 December 2011 Original proceedings issued. 13 October 2013 Malcolm Keith Shore (first defendant) passed away. 10 July 2014 Telephone conversation and letter from plaintiffs’ solicitor to Allianz. 11 July 2014 Acknowledgment by Allianz of plaintiffs’ solicitor claim letter. 14 July 2014 Mr McCafferie, the plaintiffs’ solicitor, spoke to Ms Fiona Brady of Finlaysons and is said to have “provided further details of the circumstances of the matter” and Andersons solicitors instructions in relation to the application to substitute MAC. 15 July 2014 Ms Anita King, plaintiffs’ solicitor, wrote to Ms Brady noting that the claim against the second defendant, Shane Smith (the attacker), was discontinued and confirming that the claim remained against the first defendant and they were pursuing MAC. 12 September 2014 Letter from plaintiffs’ solicitors to Finlaysons, acting on behalf of MAC, enclosing the third party injury claim form. Relevant Legislation
For the purposes of this appeal the relevant legislation is to be found in the Motor Vehicles Act (the Act): [3]
[3] Motor Vehicles Act 1959 (SA) s 113.
113—Liability of insurer where the insured is dead or cannot be found
(1) Where—
(a) death or bodily injury has been caused by, or has arisen out of the use of, an insured motor vehicle, but any person insured under a policy of insurance in respect of the vehicle who is wholly or partly liable for the death or bodily injury is dead or cannot be served with process; and
(b) a person who could have obtained a judgment in respect of that death or bodily injury against the insured person if he or she were living or had been served with process, has given notice of a claim under this section and a short statement of the grounds of the claim as soon as possible after ascertaining that the insured person was dead or could not be found, or within such time as would prevent the possibility of the insurer being prejudiced by want of such notice,
the person who could have so recovered judgment against the insured person may recover the amount of that judgment by action against the insurer.
(2) Without limiting the scope of subsection (1), it is declared that a right of action against the insurer under that subsection in a case where the insured person is dead exists and has existed since the enactment of that subsection notwithstanding that the claimant has or had a right of action against the estate of the deceased person under the Survival of Causes of Action Act 1940 or any other law.
Section 99 of the Act prior to the amendment in July 2011:
99—Interpretation
…
(2)Other words and expressions used in this Part have the meaning assigned to them in section 5, unless the context otherwise requires.
(3)Subject to subsection (3a), for the purposes of this Part and Schedule 4, death or bodily injury will be regarded as being caused by or arising out of the use of a motor vehicle if it is a consequence of‑
(a)the driving of the vehicle; or
(b)the vehicle running out of control; or
(c) a person travelling on a road colliding with the vehicle when the vehicle is stationary, or action taken to avoid such a collision.
(3a) For the purposes of this Part and Schedule 4, death or bodily injury will not be regarded as being caused by or as arising out of the use of a motor vehicle if the death of bodily injury is caused by a terrorist act.
(4) For the purposes of this Part and Schedule 4, death or bodily injury will be regarded as being caused by or as arising out of the use of a motor vehicle conditionally registered under section 25 that is a tractor, agricultural machine, mobile fork lift or self-propelled lawn care machine only if it is caused by or arises out of the use of the vehicle (as referred to in subsection (3)) on a road.
(emphasis added)
By amendment in 2011, the word ‘direct’ was added to s 99(3) of the Act so that it provides:
(3) Subject to subsection 3(a), for the purposes of this Part and Schedule 4, death or bodily injury will be regarded as being caused by or as arising out of the use of a motor vehicle only if it is a direct consequence of-
(a) the driving of the vehicle; or
(b) the vehicle running out of control; or
(c) a person travelling on a road colliding with the vehicle when the vehicle is stationary, or action taken to avoid such a collision.
(emphasis added)
The 2011 Transitional provision provides:
Subject to this clause, an amendment made to the Motor Vehicles Act 1959 by the Act does not affect a cause of action, right or liability that arose before the commencement of the amendment.
Section 36 of the Limitation of Actions Act 1936 (SA) (Limitation of Actions Act) provides:
36—Personal injuries
(1) All actions in which the damages claimed consist of or include damages in respect of personal injuries to any person, shall be commenced within three years next after the cause of action accrued but not after.
(1a) However, in the case of a personal injury that remains latent for some time after its cause, the period of 3 years mentioned in subsection (1) begins to run when the injury first comes to the person's knowledge.
(2) In this section—
personal injuries include any disease and any impairment of a person's physical or mental condition.
(emphasis added)
Master’s Decision
The learned Master was initially asked to substitute MAC as the second defendant on the basis that Mr Shore had died, and the claim arose out of the use of his motor vehicle. However following argument, and because of possible problems establishing that the injuries were caused as a result of the use of a motor vehicle, there was an application to substitute MAC and in the alternative the executrix of Mr Shore’s estate. As can be seen from the grounds of appeal this decision is only concerned with the application for the substitution of MAC as the second defendant.
The learned Master determined in respect of the amendment in 2011:[4]
[4] FDN 35 Reasons for Decision of District Court Master Rice 18 March 2016 at [95] – [106] and [110].
Although a lot of argument took place on this, in my view the amended provision with the word “direct” does not apply and does not have a retrospective effect on the application of the section 99, that is, “arising out of the use of a motor vehicle”. It is a change to the substantive law. It is not procedural in effect.
The Motor Accident Commission wants to argue by analysis with the facts of other cases that there can be no arguable basis at all for the plaintiff to assert that the plaintiff’s injuries could be “caused by or arising out of…the driving of the vehicle…” In many of the other cases the legislation is different and the facts are fully known.
In the case at bar, the facts are not known. There is a general description of the events using adjectives such as “reckless” and “dangerous” which provide no requisite detail of when and how and to what extent during the journey back to the accommodation block these events took place.
There is no adequate description of the evidence of the behaviour of Mr Shore and between the vehicle and the workers walking along the track who are said to be enraged by Mr Shore’s conduct, to the point where they seriously assaulted a number of passengers.
It is obvious on the information provided that there was, at the very least, negligent driving of the vehicle which brought about, indirectly, the assault. It was arguably caused or arising out of, the use of the motor vehicle.
It is unnecessary to go down the path of whether the vehicle was intentionally being used as a weapon to threaten those walking nearby. We know nothing of the road service conditions, the consumption of alcohol, the aggression in the group, if any, and the timing of all of these events relative to one another. This can only be determined at trial.
The facts could come within the ambit of section 99(3) Motor Vehicles Act or they may be such that they are not covered within the scope of the indemnity given by the statutory policy. Clause 1, Schedule 4, Motor Vehicles Act, does not in any way limit section 99(3).
It serves to confirm that the scope of the policy is in respect of any “…injury…caused by or arising out of the use of the vehicle…” It does not require that the injury be a “direct” result or consequence of the driving.
It was obvious to anyone involved in this matter that there may well be difficulties encountered by the first plaintiff in establishing liability within the scope of the indemnity given by the policy. There are many cases that go either way in these matters but following a trial which determines the facts.
The plaintiffs submit that the claim against Motor Accident Commission should not be denied. They should be given the opportunity to place their case before the Court in the ordinary way, particularly in a contentious area of the law; see Spencer v The Commonwealth [2010] HCA 28 at 24, referring to Batistatos. Also see Agar v Hyde (2000) 201 CLR 552 at 575-6.
The legislature in South Australia has been tightened to further limit what is meant by “caused by or arising out of”. In Government Insurance Office (NSW) v RJ Green & Lloyd Pty Ltd (1966) 114 CLR 437, Windeyer J said:-
“But the question that arises in cases such as this is not answered simply by asking was the vehicle being used. The words “injury caused by or arising out of the use of the vehicle” postulate a casual relationship between the use of the vehicle and the injury. “Caused by” connotes a “direct” or “proximate” relationship of cause and effect. “Arising out of” extends this to a result that is less immediate; but it still carries a sense of consequence. It excludes cases of bodily injury in which the use of the vehicle is a merely casual concomitant, not considered to be, in a relevant causal sense, a contributing factor.”
I agree. If the 2013 amendments of section 99(3), which added the word “direct” before the word “consequence”, the first plaintiff’s claim against Mr Shore would be very much weaker.
…
To finalise this point, it is necessary merely to note that on the wording of section 99(3) as at the time of this incident in 2008, and without knowing much more detail about what actually occurred prior to the assault on the plaintiff, the plaintiff’s case is at least arguable that Motor Accident Commission under the policy could be liable for the injury as it was within the scope of the indemnity given by the policy.
In considering the question of whether MAC can be joined as a defendant pursuant to s 113 of the Act, the learned Master considered the judgment in Carslake v Guardian Assurance Co[5] (Carslake), and recognised crucial differences in the facts of that matter and the present case in that the action against Mr Shore had been issued within time and an order for presumptive service was also made in that time.
[5] Carslake v Guardian Assurance Co (1977) 15 SASR 378.
The learned Master noted the comments of Bray CJ and Walters J in Carslake, to the effect that with respect to a cause of action under s 113, time runs from the time when the notice is given.
The learned Master concluded that the question of any prejudice suffered by MAC due to the delay of notice, is a matter that could not be determined at this stage and would need to be determined by evidence in the course of a trial.
Understood in this way, the action against MAC was not statute barred and this issue would need to be finally determined by the Trial Judge.
Further, he concluded that many of the arguments raised by MAC, although important trial issues, do not arise for consideration on the argument of whether MAC should be joined in the first instance in this matter.[6]
[6] FDN 35 Reasons for Decision of District Court Master Rice 18 March 2016 at [146] and [147].
The Appeal
The appellant put two substantive arguments as to why the learned Master was incorrect to rule that MAC should be joined in this action.
Firstly, the learned Master was in error to conclude that the action pursuant to s 113 of the Act was issued within time, and in doing so, has misunderstood the effect of the judgments in Carslake.
Secondly, the learned Master incorrectly concluded that the 2011 amendment of s 99 of the Act does not apply, as it does not have retrospective effect. The appellant argued that such a conclusion is contrary to the authority of Carslake that the cause of action against MAC only arises when all the preconditions of s 113 are met, including the giving of the notice which did not occur until after the amendment to the Act.
The respondent argues that an acceptance of the appellant’s first argument would lead to the rather surprising consequence that whenever the death of an insured person occurs more than three years after the motor vehicle accident, a plaintiff cannot recover from MAC pursuant to s 113, because the plaintiff would always be time barred. Further, they argue that such a proposition is not supported by the ratio decidendi in Carslake, rather, they submit, the comments of the Court in Carslake in this regard are obiter dictum. The respondent submits that on any view, as the proceedings had been issued against the deceased driver at a time prior to the three year requirement to commence the action arising from s 36 of the Limitation of Actions Act 1936, the judgment in Carslake has little application in this case.
In respect of the second argument, the respondent argues that on the occurrence of the incident in the early hours of 16 December 2008, the tortfeasor had a right of recovery against MAC under the statutory policy which was then subject to the earlier version of s 99(3) of the Act. The respondent argues that the transitional provisions in 2011 make it plain that this amendment does not affect rights and liabilities that arose prior to the amendment and that while the subsequent death of the first defendant and the giving of notice pursuant to s 113 of the Act, gives rise to a separate cause of action, its existence depends upon, and is intended to be, co-extensive with MAC’s liability to the second defendant under the statutory policy.
Discussion
I had the advantage in this case of hearing extensive argument that was well considered and comprehensive from both the appellant and the respondent.
I do not consider that there is any error by Master Rice in respect of either of the grounds of appeal that have been argued in this case.
The decision of Carslake is authority for an interpretation of s 113 of the Act that the cause of action does not arise until each of the preconditions have been met, as explained by Bray CJ in the following paragraph:[7]
What are the facts which have to happen to entitle an injured plaintiff who sues the insurer of a deceased driver under s. 113 to succeed? As I see it they are:
1. An insured person must have caused bodily injury by negligence in the use of an insured motor vehicle.
2. The insured person must be dead.
3. The plaintiff must be a person who could have obtained a judgment in respect of that bodily injury against the insured person if he were alive.
4. As such a person he must have given a notice sufficient to satisfy the requirements of s. 113(1)(b)
The cause of action against the insurer does not accrue until after all these events have happened. Clearly no cause of action against the insurer can accrue until the notice has been given. The time cannot start to run in his favour before then.
[7] Carslake v Guardian Assurance Co (1977) 15 SASR 378, 381.
The facts were in Carslake as set out by Bray CJ as follows:[8]
The facts are agreed and they are in a short compass. They are:
1. The appellant was injured in an accident on 1st December, 1971, between a car driven by him and a car driven by one Agnew.
2. Agnew died on 26th March, 1972.
3. The respondent, Agnew's insurer within the meaning of the Motor Vehicles Act, was given notice of the appellant's claim under s. 113 by letter dated 28th June, 1973. The sufficiency of this notice is not admitted for the ultimate purposes of the action, but for the purposes of deciding the preliminary point of law with which we are concerned I will assume that it is a good notice within the meaning of s. 113.
4. The appellant's action against the respondent insurer was commenced on 18th December, 1975.
[8] Ibid 379-380.
As is clear from this chronology, notice was given within three years of the date of the accident and therefore at a time when the deceased could have been sued if he were alive, so the cause of action against the insurer thereby accrued on the day of the notice and time began to run in the insurer’s favour as from that day.[9] Understood in this way, the claim against the insurer and the issue of the proceedings were issued within time.
[9] Ibid 381.
One of the preconditions is, of course, that the insured person must be dead. Secondly, the plaintiff must be a person who could have obtained a judgment in respect of the bodily injury against the insured person if they were alive.
These preconditions ensure that s113 can only be invoked if the plaintiff has done what reasonably needs to be done to issue the proceedings within the relevant time frame, so as to ensure compliance with the precondition that they could have obtained judgment against the insured person if they were alive. When there has been compliance, and there is a subsequent death of the insured person, and sufficient notice has been given, then the cause of action pursuant to s 113 is enlivened, subject to the issue of prejudice.
On the facts of the case at bar, all preconditions have been met. As the cause of action only arises at that point, the action is not statute barred. There is no reason to limit s 36 of the Limitation of Actions Act to the narrow interpretation as is suggested by the appellant, that is, s 113 can only be invoked if the death of the tortfeasor occurs less than 3 years from the time the cause of action against him arises. Clearly, upon fulfilling the preconditions in s 113, a new or further cause of action may arise against MAC. There still remains the question of any prejudice to MAC in relation to the manner in which this cause of action arises. However, that is a matter, in my view, to be dealt with at trial when all of the factual issues can be canvassed.
In respect of the second argument, relating to the amendment made to the Act in 2011, I consider this too, is a matter that can only be determined on the evidence at a trial. It is arguable that while the cause of action pursuant to s 113 gives rise to a separate cause of action to that against the first defendant, I accept that the legislation is intended to be coextensive with the liability of MAC to the tortfeasor under the statutory policy. It must be the intention of Parliament to mirror the plaintiffs’ entitlement to recover against the insurer after the tortfeasor’s death, to that of a tortfeasors entitlement to recover under the statutory policy.
In this respect, I adopt the view of the learned Master that many of the arguments raised by MAC are important trial issues but do not arise for consideration on the argument as to whether MAC should be joined as a defendant in this case.
As observed by the learned Master this is a complex matter and not without its difficulties for the plaintiffs. It would benefit significantly from mediation prior to a trial process commencing.
The ruling of the court is therefore that I dismiss the appeal.
Orders
1That the appeal filed on 1 April 2016 be dismissed.
2Costs to the respondents of this action Peter John Leslie and Caroline Leslie.
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