Motor Accidents Insurance Board v Motor Accidents (Compensation) Commission
[2024] NTCA 5
•10 October 2024
CITATION:Motor Accidents Insurance Board v Motor Accidents (Compensation) Commission [2024] NTCA 5
PARTIES:MOTOR ACCIDENTS INSURANCE BOARD
v
MOTOR ACCIDENTS (COMPENSATION) COMMISSION
TITLE OF COURT: NORTHERN TERRITORY COURT OF APPEAL
JURISDICTION: CIVIL APPEAL from the SUPREME COURT exercising Territory jurisdiction
FILE NO:AP 3 of 2023 (21903729)
DELIVERED: 10 October 2024
HEARING DATE: 10 November 2023
JUDGMENT OF: Grant CJ, Barr and Huntingford JJ
CATCHWORDS:
GUARANTEE AND INDEMNITY – Indemnities – Conditions precedent – Construction – Right of person to be indemnified
Whether Supreme Court erred in giving judgment for respondent against appellant on basis that interim benefits paid by respondent to victim of motor vehicle accident for attendant care services within the scope of indemnity conferred by s 38(1) of the Motor Accidents (Compensation) Act 1979 (NT) – Whether right to indemnity only applies to compensation paid in conformity with formalities imposed under Act – Term ‘payable’ requires legal entitlement with legally enforceable obligation to pay – Trial judge erred in finding substantial compliance with certification requirement – Trial judge erred in finding compliance with certification requirement not mandatory – Trial judge erred in finding interim benefits for attendant care services within the scope of indemnity – Appeal allowed.
Motor Accidents (Compensation) Act 1979 (NT) s 4, s 4A, s 18BD, s 38
Motor Accidents (Compensation) Regulations 1984 (NT) reg 4F
Attorney-General v Arthur Ryan Automobiles Ltd [1938] 2 KB 16, Christopher Chronis Designs Pty Ltd v Citadin Pty Ltd (1997) 8 BPR 15,659, Forrest & Forrest Pty Ltd v Wilson (2017) 262 CLR 510, Grocon Constructors (Victoria) Pty Ltd v APN FF2 Project 2 Pty Ltd [2015] VSCA 190, Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council [2009] NSWCA 59, Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, South Eastern Sydney Area Health Service v Gadiry & Anor (2002) 54 NSWLR 495, Victorian WorkCover Authority v Esso Australia Limited (2001) 207 CLR 520, referred to.
REPRESENTATION:
Counsel:
Appellant:B Roberts KC with R Bönig
Respondent: S Fitzpatrick with J Ingrames
Solicitors:
Appellant:Finlaysons
Respondent: Sparke Helmore
Judgment category classification: B
Number of pages: 34
IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN
Motor Accidents Insurance Board v Motor Accidents
(Compensation) Commission [2024] NTCA 5
AP 3 of 2023 (21903729)
BETWEEN:
MOTOR ACCIDENTS INSURANCE BOARD
Appellant
AND:
MOTOR ACCIDENTS (COMPENSATION) COMMISSION
Respondent
CORAM: GRANT CJ, BARR and HUNTINGFORD JJ
REASONS FOR JUDGMENT
(Delivered 10 October 2024)
THE COURT:
The appellant is the administrator of Tasmania’s compulsory third-party motor accident insurance scheme. The respondent is the administrator of the counterpart scheme in the Northern Territory. This is an appeal from a decision of the Supreme Court giving judgment for the respondent (as plaintiff) against the appellant (as defendant) on the basis that interim benefits paid by the respondent to the victim of a motor vehicle accident for attendant care services came within the scope of the indemnity conferred in favour of the respondent against the appellant by s 38(1) of the Motor Accidents (Compensation) Act 1979 (NT) (‘MAC Act’).
Statutory context
The appellant was established by s 4(1) of the Motor Accidents (Liabilities and Compensation) Act 1973 (Tas). As a designated Government Business Enterprise it is a body corporate by virtue of s 6 of the Government Business Enterprises Act 1995 (Tas).
The respondent was established as a corporate entity by s 4 of the Territory Insurance Office Act 1979 (NT), and was called the ‘Territory Insurance Office’. It continued as the same corporate entity in accordance with s 5(1) of the Motor Accidents (Compensation) Commission Act 2014, but re-named the ‘Motor Accidents (Compensation) Commission’. It administers the no-fault motor accidents compensation scheme established by the MAC Act and pays statutory benefits in accordance with that scheme.
For convenience and ease of understanding, in these Reasons the respondent will be referred to as 'the Commission' and the appellant will be referred to as 'the Board'.
Pursuant to s 38 of the MAC Act, the Commission is entitled to be indemnified by various categories of third party in respect of ‘statutory benefits’ paid to another person in relation to death or injury arising from a ‘motor accident’. Section 38(1) of the MAC Act, which is the relevant part for these purposes, provides:
A person (the indemnifier) is liable to indemnify the Commission for statutory benefits paid to another person in relation to death or injury arising from a motor accident if:
(a) the motor accident was caused by, or arose from, the use of a motor vehicle registered in another jurisdiction; and
(b) the indemnifier is:
(i) a person who would, assuming this Act had never existed, have been liable in damages, in tort or contract, for the death or injury arising from the motor accident; or
(ii) a person who is liable to indemnify such a person for that liability under an insurance contract or a statutory insurance scheme.
Section 38(1)(b)(ii) of the MAC Act is concerned with motor accidents involving a motor vehicle registered under a compulsory third party scheme in another jurisdiction in which the driver of that vehicle would, but for the Northern Territory’s no-fault scheme, be liable for damages at common law in respect of death or injury caused in the accident. The term ‘motor accident’ is defined in s 4A(1) of the MAC Act to mean ‘an occurrence: (a) caused by or arising out of the use of a motor vehicle; and (b) resulting in the death of, or injury to, a person.’ The term ‘statutory benefits’ is defined in s 4 of the MAC Act to mean ‘compensation or other benefits payable under this Act’.
One particular type of statutory benefit for injuries received on or after 1 July 2014 are interim benefits for attendant care services. The term ‘attendant care services’ is defined in s 4D of the MAC Act in the following terms:
Attendant care services
(1) Attendant care services are personal and household services reasonably required by an injured person as a result of the injury.
(2) However, attendant care services do not include:
(a)medical and rehabilitation services; or
(b) nursing care; or
(c)services provided in, or provided while the injured person is in, a hospital, nursing home or other institution for the treatment, rehabilitation or care of injured persons.
(3) In this section:
household services means services of a domestic nature (including cooking, house cleaning, laundry, and gardening) for running and maintaining the injured person's household.
personal services means services for the essential and regular personal care of the injured person.
Eligibility for interim benefits for attendant care services is governed by s 18BD(1) of the MAC Act, which provides:
Eligibility for interim benefits for attendant care services
(1) Benefits for attendant care services are payable under this section to or for the benefit of an eligible person if:
(a)the eligible person suffers an impairment as a result of an injury received in, or as a result of, the motor accident; and
(b)the person requires attendant care services in consequence of the impairment; and
(c)the criteria prescribed by regulation for this section are satisfied.
The regulation referred to in s 18BD(1)(c) is reg 4F of the Motor Accidents (Compensation) Regulations 1984 (NT) (‘Regulations’), which is extracted and discussed later in these Reasons in the context of the grounds of appeal.
The proceedings at first instance
On 22 July 2016, Stella Sullivan suffered severe injuries in a motor vehicle collision which occurred in the Northern Territory between a vehicle in which she was travelling as a passenger and a Land Rover vehicle which was registered in Tasmania and driven by Douglas Cooper. The Land Rover was towing a Millard caravan at the time of the collision. Mrs Sullivan subsequently made a claim for benefits under the MAC Act and received various payments, including interim benefits for attendant care services.
It was an admitted fact in the proceedings at first instance that the Board had insured Mr Cooper ‘in respect of any liability incurred by him in respect of the personal injury to a person resulting directly from a motor accident involving the motor vehicle and caravan’.[1] The Commission pleaded that, assuming the MAC Act never existed, Mr Cooper was a person who would have been liable in tort for Mrs Sullivan’s injury, loss and damage.[2] The Commission claimed an order that the Board indemnify it pursuant to s 38 of the MAC Act ‘for all payments made to, for and behalf of Mrs Sullivan from 13 September 2016 to 21 November 2018, totalling $1,348,617.74’.
The Supreme Court found that the Commission had established that Mr Cooper’s negligence had caused the collision. The relevant finding was that he had driven without due care, skill and attention, and had failed to maintain effective control of his vehicle and caravan.[3] On the basis of that finding, the Supreme Court gave judgment in favour of the Commission in the sum of $1,342,083.99.[4] A substantial part of the judgment sum was constituted by payments made by the Commission, purportedly pursuant to s 18BD of the MAC Act, for interim benefits for attendant care services.
Issue on appeal
The central issue in this appeal is whether the payments of interim benefits for attendant care services made by the Commission came within the scope of the indemnity conferred by s 38(1) of the MAC Act. The Board’s grounds of appeal are all directed to that central issue, and may be summarised as follows:
(a)The court at first instance erred in finding that there was no relevant statutory restriction on indemnity (at [100]), whereas:
(i) s 38 of the MAC Act confines the indemnity to ‘statutory benefits’ properly payable under the Act; and
(ii) interim benefits for attendant care services are payable only if the criteria prescribed by reg 4F of the Regulations are satisfied.
(b)The court at first instance should have found that the prescribed criteria were not satisfied in that:
(i) the prescribed criteria required both that the person has suffered an injury of a kind listed in Schedule 1 and either that the criteria set out in Schedule 1 for the injury are satisfied and the person’s condition is not permanent and stable, or that exceptional circumstances exist which warrant the payment of benefits;
(ii) the criteria set out in Schedule 1 for the claimant’s injury were not satisfied given the absence of a medical assessment meeting criteria 1 or 2 for brain injury;
(iii) the Commission had failed to prove the existence of exceptional circumstances warranting the payment of benefits;
(iv) the Commission had failed to obtain a certificate from an approved medical specialist that satisfies the requirements of reg 4F(4) of the Regulations;
(v) the Commission had failed to prove that it was satisfied that the criteria in reg 4F(1) of the Regulations were met on the date it assessed the claimant’s eligibility as required by reg 4F(5) of the Regulations.
(c)The court at first instance erred in equating medical reports with a certificate for the purpose of reg 4F(4) of the Regulations (at [119]), and in finding that such certification was not mandatory (at [120]).
(d)The court at first instance erred in conflating the entitlement of the claimant to obtain or retain the benefit of the disputed payments with the Commission’s right to make a claim for indemnity under s 38 of the MAC Act (at [108] and [120]), in circumstances where the Commission’s failure to comply with the statutory requirements affected only the claim for indemnity.
The Board’s position on appeal turns on the contention that, on a proper construction of s38(1) of the MAC Act, the indemnity is confined to benefits which are properly ‘payable’ under the Act. That contention is put on the basis that the term ‘statutory benefits’ is defined in s 4 of the MAC Act to mean ‘compensation or other benefits payable under this Act’. Counsel for the Board submits the word 'payable' operates in this context such that the Commission’s right to indemnity only applies to compensation paid by the Commission in conformity with the formalities imposed under the MAC Act.[5] The submission follows that the right and obligation is not attracted merely because compensation was incurred or paid by the Commission.
Eligibility conditions for the payment of interim benefits
For injuries received on or after 1 July 2014, attendant care services are regulated under Part 4, Subdiv 2 of the MAC Act.[6] The subdivision makes provision for ‘short-term benefits’,[7] ‘long-term benefits’[8] and ‘interim benefits’.[9] The inter-relationship between the three kinds of benefits can be summarized briefly. Short-term benefits are payable whenever the injured person has not been assessed as eligible for either interim or long-term attendant care services.[10] However, short-term benefits are only payable for a maximum period of one year after the date of the motor accident.[11] Interim benefits are payable for a period of up to three years from the date the injured person makes a claim,[12] but are not payable where long-term benefits are payable.[13] They apply pending a determination as to whether the injured person is entitled to long-term benefits. The Commission must determine whether an injured person who is receiving interim benefits is entitled to long-term benefits prior to the expiry of the applicable three-year period.[14] Long-term benefits are payable for life.
As extracted above, s 18BD(1)(c) of the MAC Act provides that the eligibility conditions for the payment of interim benefits for attendant care services include the criteria prescribed by regulation. Regulation 4F of the Regulations provides:
4F Eligibility: benefits for interim attendant care services
(1) For section 18BD(1)(c) of the Act, the prescribed criteria are:
(a)the person has suffered an injury of a kind listed in Schedule 1; and
(b) either subregulation (2) or (3) applies.
(2) This subregulation applies if:
(a)the criteria set out in Schedule 1 for the injury (excluding any requirements as to the permanency of the injury) are satisfied; and
(b)the person’s condition at the date of assessment is not permanent and stable.
(3) This subregulation applies if subregulation (2) does not apply but, in the opinion of the Commission, exceptional circumstances exist in relation to the person which warrant the payment of benefits for attendant care services.
(4) The Commission must obtain a certificate from a medical specialist approved by the Commission stating:
(a)the medical specialist has assessed the injured person; and
(b)whether the person has suffered an injury of a kind listed in Schedule 1; and
(c)if the person does have such an injury, whether, at the time the certificate is given, subregulation (2) applies.
(5) For the avoidance of doubt, in assessing whether a person is eligible for benefits under section 18BD, the Commission must be satisfied that the criteria in subregulation (1) are met on the date the Commission assesses the person's eligibility.
(6) In this regulation:
medical specialist means a medical practitioner who holds specialist registration under the Health Practitioner Regulation National Law in a recognised speciality that is relevant to the injury.
Regulation 4F of the Regulations conditions the entitlement to interim benefits under s 18BD(1) of the MAC Act on the claimant having an injury that is ‘not permanent and stable’ at the date of assessment, other than in ‘exceptional circumstances’.[15] The requirement for a specialist assessment and certificate under reg 4F(4) is for the purpose of determining whether the claimant's condition is not permanent and stable, because if the condition is permanent and stable then a determination must be made as to long-term benefits.[16]
The central argument raised in the Board’s case below, and on appeal, is that although the Commission may have paid interim benefits for attendant care services in purported pursuance of s 18BD of the MAC Act, those benefits were not ‘payable’ because the conditions precedent to payment of such benefits imposed by s 18BD(1)(c) of the MAC Act were not met. The Board contends that the Commission failed to obtain a ‘certificate’ for the purposes of reg 4F(4), which the Board contends was a mandatory provision. That failure is said to have resulted in a consequential failure by the Commission to properly satisfy itself of the prescribed criteria in reg 4F(1)(b), when read together with reg 4F(2)(b) or reg 4F(3), and consequently, a failure to be satisfied – as required by reg 4F(5) – that the criteria in reg 4F(1) had been met on the date the Commission assessed the injured person’s eligibility. The ‘criteria prescribed by regulation’ for s 18BD were thus not satisfied, with the ultimate consequence that interim benefits for attendant care services under s 18BD(1) were not ‘payable’ in the relevant sense.
Meaning of ‘payable’
The first question which arises is what meaning is properly accorded to the term ‘payable’ which appears in the definition of ‘statutory benefits’ in s 4 of the MAC Act to mean ‘compensation or other benefits payable under this Act’. In Christopher Chronis Designs Pty Ltd v Citadin Pty Ltd,[17] Young J considered the meaning of the word ‘payable’ in a commercial lease which stated that the rent for a particular year ‘shall be the current rent … provided … that the current rent so determined shall not be less than the minimum rent payable during the immediately preceding 12 [month] period’. His Honour held that rent which was ‘payable’ was ‘rent which can be demanded and, if not paid, sued for’.[18]
The Victorian Court of Appeal cited Christopher Chronis with approval in Grocon Constructors (Victoria) Pty Ltd v APN FF2 Project 2 Pty Ltd,[19] observing as follows (at [115]):
Christopher Chronis demonstrates that the meaning of ‘payable’ can be responsive to the point in time at which it is applied to a cost. At an early point in time, a cost for which there is a legal liability to pay, but which has not yet been paid, can be described as ‘payable’. At a later point in time, once the cost has been paid, it can still be described as a cost that was payable under the contract.
The Court added (at [118]):
It is clear that, when one considers the meaning of ‘payable’ from a limited grammatical perspective, it does not have the same meaning as ‘paid’ and cannot be interpreted as such. From this limited perspective, ‘payable’, when used in a commercial contract, refers to an amount which a person has a legally enforceable obligation to pay.
On proper construction, the term ‘payable’ in s 4 of the MAC Act similarly requires that there be a legal entitlement with a corresponding legally enforceable obligation to pay. Accordingly, compensation and other benefits are not ‘payable’ under the MAC Act unless there is a legal liability to make payment. It falls then to consider whether there was compliance with the matters which condition the liability to pay interim benefits for attendant care services under the MAC Act.
Whether substantial compliance with certification
The trial judge found that the Commission assessed Mrs Sullivan’s eligibility for short-term benefits and commenced to pay short-term benefits on 14 October 2016, and that ‘those benefits were converted to interim benefits on 13 June 2017’.[20]
The trial judge found further that the Commission had obtained ‘an appropriate certificate or certificates for the purposes of Regulation 4F(4)’. In making that finding, the trial judge noted that there was no prescribed form for the certificate, and in default accepted the ordinary meaning given by the Macquarie Dictionary as follows: ‘... a writing on paper certifying the truth of something.’[21] The trial judge referred to s 68 of the Interpretation Act 1978 (NT), which provides that strict compliance with prescribed forms under an Act is not necessary and that substantial or sufficient compliance will suffice, and then reasoned by analogy that ‘a number of reports’ tendered by the plaintiff substantially met ‘the description of certificate and sufficiently address[ed] the injury and criteria in Schedule 1 of the Regulations’.[22]
The reports referred to by the trial judge were specified in a footnote as ‘Exhibit P 23, in the description on imaging of brain abnormalities; Exhibit P 15 and FIM assessments; Dr McCarthy’s report as a rehabilitation physician’.[23] It would appear that the reference to exhibit P 23 was incorrect, and that the trial judge was actually referring to exhibit P 25.[24] That exhibit contained the following radiologists’ reports of brain imaging.
(a)The report of a CT scan of Mrs Sullivan’s brain performed 9 September 2016 (some seven weeks post-accident) which contained a conclusion that the ‘Hypodense area within the left frontoparietal lobes with overlying craniotomy is in keeping with a recent insult’.
(b)The report of an MRI performed on 12 September 2016 which referred to the medial edge of the left frontoparietotemporal region demonstrating ‘diffusion restriction’.
(c)The report of a brain CT performed on 15 September 2016 which contained the following:
Findings:
Left frontoparietotemporal craniotomies again noted with underlying mild dural thickening.
The left MCA territory infarct involving the left frontal and parietal lobes is now of lower density, in keeping with expected evolution.[25]
No haemorrhagic transformation.
There is a tiny SDH overlying the left frontal lobe – not significantly changed from the previous imaging.[26]
No new areas of intracranial haemorrhage.
Comment:
Evolving left MCA infarct, without evidence of haemorrhagic transformation.
Tiny left frontal SDH – stable.
No new intracranial haemorrhage.
It may be accepted that the evidence contained in exhibit P 25 demonstrated brain imaging abnormalities at a point in time approximately two months after the accident, but the significance of any one such abnormality in the assessment of whether the injured person suffered an injury of a kind listed in Schedule 1, and whether the injured person’s condition was permanent and stable, is unclear on the face of the documents.[27]
In drawing the conclusion concerning substantial compliance with the certification requirement, the trial judge also made reference to ‘FIM assessments’ contained within exhibit P 15. The FIM or Functional Independence Measure instrument is a basic indicator of disability. Mrs Sullivan was administered an initial test on 25 October 2016. She scored a total of 43 out of 90, with 10 scores of 2 or less indicating ‘complete dependence on assistance’. The test results indicated that she had suffered ‘an extremely severe traumatic brain injury from which she was unlikely to recover functional independence in most activities of daily living.’[28] A second FIM assessment was made by an occupational therapist in March 2019. Mrs Sullivan scored a total of 46 out of 90 on testing, with 10 scores of 2 or less indicating complete dependence on assistance. She had made little progress with functional independence since the FIM assessment carried out in October 2016.[29] Again, those assessments did not directly address whether the injured person suffered an injury of a kind listed in Schedule 1, and whether the injured person’s condition was permanent and stable.
In drawing the conclusion concerning substantial compliance with the certification requirement, the trial judge also appears to have relied on a report or reports of Dr Kathleen McCarthy, rehabilitation physician, who had been engaged to undertake the management of Mrs Sullivan’s rehabilitation. In her report dated 30 October 2016,[30] Dr McCarthy stated (inter alia):
Mrs Sullivan is a 72 year-old woman who was injured while on holiday in the Northern Territory. ...
Her most significant injury was that of traumatic brain injury complicated by left middle cerebral artery infarct, and seizures. ...
She initially had a subdural haemorrhage that required operative evacuation on 2 August 2016. Complicating this she had a seizure with status epilepticus and was found to have middle cerebral artery (MCA) occlusion at this time. She required intubation and ventilation with difficulty weaning from ventilation.
Despite initial poor neurological progress, Mrs Sullivan has improved significantly in terms of behaviour, cognition, mobility and speech. She has substantial language issues with expression in particular but also comprehension.
In her subsequent report, dated 16 November 2017, Dr McCarthy expressed the opinion that Mrs Sullivan had reached ‘maximal medical improvement’, for the purposes of determining her impairment. Dr McCarthy explained that this did not mean that Mrs Sullivan could not make further gains from her rehabilitation program, but that the gains would be ‘slow and small in increment’ and would need many months if not years to achieve.[31] It may be noted that by the time Dr McCarthy expressed that opinion, the Commission had been paying benefits for interim attendant care services for just over five months.
On this appeal, the Commission argues that a ‘certificate’, being an undefined term, ‘takes its ordinary meaning and can include a medical report’.[32] However, the requirement for the medical specialist’s certificate is satisfied only if the relevantly approved medical specialist certifies as to the matters set out in reg 4F(4). The requirement is for one document: ‘a certificate’. The document need not be headed in any particular way provided that the medical specialist writes words to the effect, ‘I certify that ...’. Alternatively, if the document is headed ‘Certificate’, then the medical specialist could satisfy the requirement by writing words to the effect, ‘I state that ...’ or ‘I confirm that ...’. It must be possible for a person to read the document and to be left in no doubt that it is a certificate or clear statement as to the matters required by reg 4F(4) to be the subject of the certificate.
The purpose of the reg 4F(4) certificate is to have the medical specialist draw together and assess the possibly diverse strands of medical and other information about an injured person and state whether that person has suffered a Schedule 1 injury and, if so, state whether reg 4F(2) has application because the person’s condition is not permanent and stable. On the material in evidence below, the Commission did not obtain a certificate from a medical specialist approved by the Commission which stated that Mrs Sullivan’s condition at the date of the assessment was not permanent and stable. Moreover, there was no evidence that the Commission was satisfied, as required by reg 4F(5), that the criteria in reg 4F(1)(b) read with reg 4F(2)(b) were met. In those circumstances, the Commission could not have been lawfully satisfied that the eligibility conditions for the payment of interim benefits for attendant care services had been met.[33] In the context of a carefully formulated and regulated statutory scheme, it is not enough to say that the injured person obviously qualified for some form of attendant care services, or that it was immaterial whether benefits were paid on an ‘interim’ or ‘long-term’ basis.
For these reasons, the trial judge erred in finding that the Commission had obtained ‘an appropriate certificate or certificates for the purposes of Regulation 4F(4)’ based on the fact that it was in possession of the various medical reports and other documents described above.
Whether certification a mandatory requirement
The trial judge also appeared to accept the Commission’s alternative submission that the certificate was ‘not part of the criteria for eligibility’.[34] The Commission makes a similar submission on this appeal, namely, that reg 4F(4) does not require the certificate to be obtained in order for the respondent to be satisfied of the prescribed criteria.[35] However, that submission fails to take into account the significance of the certificate. The mandatorily expressed requirement to obtain the reg 4F(4) certificate creates an essential step in the prescribed process by which the Commission may satisfy itself that the criteria referred to in reg 4F(1) are met.
The trial judge dealt with the issue in the following way:[36]
Regulation 4F(4) states the Commission must obtain a certificate from a medical specialist stating that the medical specialist has assessed the injured person who had suffered an injury of the type described within the Schedule 1 criteria. The defendant argued the requirement to obtain a Certificate is mandatory and strict compliance is required as s 18BD(1)(c) states benefits are payable if ‘the criteria prescribed by regulation for this section are satisfied’. Regulation 4F(4) states ‘the Commission must obtain a certificate from a medical specialist approved by the Commission’. The defendant emphasises the mandatory nature of the word ‘must’ [Defendant’s written submissions at [73] citing Mildren AJ in Atkinson v Bardon & Anor [2018] NTSC 9 concerning the mandatory nature of ‘must’ used in s 13 of the Personal Violence Restraining Orders Act 2016 (NT)].
I accept there is an expectation of compliance when the word ‘must’ is used by the legislature. The consequences of non-compliance are not however always clear cut. So much is made clear in the often quoted Project Blue Sky Inc v Australian Broadcasting Authority [[1998] HCA 28; (1998) 194 CLR 355 at [91]] where it was observed:
An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by the reference to the language of the statute, its subject matter and objects and the consequences for the parties of holding void every act done in breach of the condition.
The context and statute as a whole and the objectively ascertained intentions of the legislature if there is failure to comply are all relevant matters.
The trial judge ultimately decided that, if she had erred in finding that the Commission had obtained a reg 4F(4) certificate, such failure to comply with the ‘apparent mandatory condition’ did not result in invalidity. The trial judge reasoned that it was highly unlikely that invalidity was the legislature’s intention ‘given the Act is for the benefit of an injured claimant likely to need attendant care services’. The trial judge further reasoned that the structure of the regulation did not readily lean to a reading that would treat the certificate as a condition precedent to the validity of payments, when the person was ‘otherwise eligible’. Finally, the trial judge considered that there was nothing in the relevant regulation to indicate that payments would not be paid as a consequence of any non-compliance, in contradistinction with reg 4K(5) which specified circumstances in which benefits would not be payable for building alterations.[37]
In Project Blue Sky, the majority held that invalidity in the exercise of a statutory power depended upon whether there could be discerned a legislative purpose to invalidate any act that failed to comply with the relevant statutory condition. The majority rejected the earlier mandatory/directory test for validity (and the further test of whether there had been ‘substantial compliance’ with a directory requirement), observing that a better test for determining the issue of validity was to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. However, the majority observed that the statutory provision then under consideration was not one which imposed ‘essential preliminaries to the exercise of [the] functions’ of the respondent Authority.
In Forrest & Forrest Pty Ltd v Wilson,[38] a majority of the High Court referred with approval to a line of authority that, where a statutory regime conferred power on the executive government to grant exclusive rights to exploit the resources of the State, the regime would, subject to any provision to the contrary, be understood as mandating compliance with the requirements of the regime as essential to the making of a valid grant.[39] However, that was not the sole basis for the Court’s conclusion that the exercise of power by the administrative decision-maker was invalid. The majority distinguished the case from that considered in Project Blue Sky, for reasons explained in the following passage (emphasis by underlining added):[40]
In Project Blue Sky, this Court was concerned with whether a statutory requirement that an administrative agency perform its functions in a manner consistent with Australia's obligations under any convention or international agreement to which Australia is a party was intended to invalidate an act done in breach of the requirement. The majority in Project Blue Sky were strongly influenced in reaching a conclusion in the negative by the consideration that the requirement in question regulated the exercise of functions already conferred on the agency, rather than imposed essential preliminaries to the exercise of those functions. Their Honours were also influenced by the circumstance that the provisions did not have ‘a rule‑like quality which [could] be easily identified and applied’, many of the obligations relevant in that case being ‘expressed in indeterminate language’. Also important to the decision was the consideration that ‘public inconvenience would be a result of the invalidity of the act’, especially if those affected by non‑compliance were neither responsible for, nor aware of, the non‑compliance.
The present case is readily distinguishable. A consideration of ‘the language of the statute, its subject matter and objects, and the consequences for the parties of holding void’ acts done in breach of the Act, reveals that ss 74(1)(ca)(ii), 74A(1) and 75(4a) imposed essential preliminaries to the exercise of the power conferred by s 71 of the Act. That this was so was made clear by both the express terms and the structure of the provisions as sequential steps in an integrated process leading to the possibility of the grant of a mining lease by the Minister. These provisions were not expressed in indeterminate terms: they imposed rules which could be easily identified and applied. In addition, any inconvenience suffered by treating the requirements of the Act as conditions precedent to the exercise of the Minister's power would enure only to those with some responsibility for the non‑observance, whereas (as will be explained) the contrary view would disadvantage both the public interest and individuals who were within the protection of the Act. Finally, and importantly, Project Blue Sky was not concerned with a statutory regime for the making of grants of rights to exploit the resources of a State.
The relevant statutory scheme created by the MAC Act also imposes an essential preliminary to the payment of interim benefits for attendant care services which is expressed in rule-like terms as part of a sequential step in an integrated process for the payment for different categories of attendant care services. Moreover, although the scheme under consideration in Forrest & Forrest Pty Ltd v Wilson was not perfectly analogous, the scheme under the MAC Act has the common feature that it prescribes a process for the payment from the financial resources of the Northern Territory. Pursuant to s 30C of the MAC Act, all benefits payable under the Act are paid by the Commission out of the Motor Accidents (Compensation) Fund continued by s 16 of the Motor Accidents (Compensation) Commission Act. All assets of the Fund are the property of the Northern Territory and are held by the Commission on behalf of the Territory.[41] The Fund is thus public money.
The statutory regime under consideration in this case establishes ‘essential preliminaries’ for the assessment of entitlement to payment of benefits from the Motor Accidents (Compensation) Fund. For these reasons, the trial judge erred in finding that compliance with the requirement for certification was not a mandatory requirement under the legislative scheme.
Whether certification a precondition to right to indemnity
The conclusion that the trial judge erred in finding substantial compliance with the certification requirement, and erred in finding that certification was not a mandatory requirement in any event, does not necessarily determine the issue on appeal. This is not an application for judicial review of the exercise by the Commission of its functions under the MAC Act. The relevant question on appeal is whether compensation by way of interim benefits for attendant care services was ever ‘payable’ and hence within the scope of the indemnity conferred by s 38 of the MAC Act.
The Board’s contentions in that respect are summarised in the following passage in its written submissions:[42]
Thus, it is not sufficient for the purpose of the indemnity under s 38 that the injured claimant might have had a ‘moral case’ to receive a particular entitlement if it be an entitlement that is outside the operation of the scheme provided for under the MAC Act. A payment in that circumstance might be made by the Commission on an ex gratia basis, but it will not trigger the indemnity under s 38 to the extent of any such payment not otherwise properly payable under the Act. Likewise, apposite to this case, where there are formalities prescribed under the MAC Act for the claimant’s entitlement to compensation, and those formalities have not been observed by the Commission, it follows that the relevant entitlements were, to that extent, not payable under the MAC Act for the purpose of the definition of ‘statutory benefits’ and, therefore, the operation of the indemnity under section 38. Any failure by the Commission to observe the requirements under the MAC Act does not adversely affect the interests of the claimant who has received a payment in such circumstances, but only the right of recovery of the (defaulting) Commission under the right of indemnity.
Conversely, the Commission contends that the principal issue on this appeal is whether any failure on its part to obtain a certificate for the purposes of reg 4F(1) ‘will (or may) result in benefits not being payable to an injured person under s 18BD’.[43] That contention must be rejected to the extent that it suggests that the appeal is concerned with the entitlement of the injured claimant to retain the compensation received by her. As already stated, the issue on appeal is whether payments made by the Commission, purportedly pursuant to s 18BD of the MAC Act, were ‘statutory benefits’, that is, ‘compensation of other benefits payable under [the] Act’, and hence within the scope of the s 38(1) indemnity.
The Commission contends further that the approach contended for by the Board is to read the provisions of the Act ‘backwards from the point of view of the indemnity claim, instead of forwards from the payment of benefits’. That contention would seem difficult to reconcile with the fact that the function of the trial judge was, and the function of this Court on appeal is, to determine whether the right to indemnity has been triggered, and, if so, the extent of that right. The extent of the right to indemnity is not necessarily coextensive or commensurate with the benefits which had been paid. The Commission’s submission in that respect continues as follows:[44]
The [Board’s] contentions would construe the Act and Regulations in favour of the insurer of an interstate driver at fault, over the intended beneficiaries of the Act – injured Territorians and visitors on Territory roads – and the respondent charged with providing for their care and the financial sustainability of the scheme. Alternatively, the appellant asks the Court to interpret the provisions in different ways depending on whether the party advancing a case is an injured person or a prospective indemnifier.
That submission must be rejected to the extent that it suggests that, as a matter of statutory interpretation, this Court should interpret s 38(1) of the MAC Act in a manner which takes into account the fact that the interstate driver was at fault and which favours the Commission’s position as administrator of the no-fault scheme under the MAC Act. There is no ambiguity in s 38(1) of the MAC Act, and resort to a purposive approach to the interpretation of the section does not assist the Commission. Although the obvious purpose of s 38(1) is to allow the Commission to obtain indemnity in an action in debt deriving from a damages claim in tort or contract, the indemnity is limited to ‘statutory benefits’ paid by the Commission. By express definition, that is compensation or other benefits ‘payable’ under the Act. The indemnity is not ‘for all monies paid’, or ‘for all monies paid in good faith’. The statutory language is clear and the outcome is not unjust or capricious.
The Commission also contends that this Court should not accept ‘an unnecessarily strict construction of the MAC Act and Regulations by which it would be forced to deprive otherwise eligible persons of statutory benefits’.[45] That submission is ill-founded. As the Board says, on the construction it presses any failure by the Commission to observe the requirements under the MAC Act does not adversely affect the interests of a claimant who has received a payment in such circumstances, but only the right of recovery of the Commission under the statutory indemnity. The Commission would face very substantial obstacles in prosecuting any claim for the recovery of monies paid to an injured person (or a third party service provider) on the basis that the Commission had itself failed to comply with the statutory requirements which conditioned such payments.
Leaving aside the issue of benefits already paid, if a claimant is eligible to receive a particular category of statutory benefit under the terms of the statute, adherence by the Commission to the prescribed process does not deny those benefits to that claimant.[46] A construction of the MAC Act and Regulations which would require adherence to those statutory processes has no effect on the rights of injured claimants. Rather, it simply reflects the need on the part of the Commission to comply with its statutory obligations before making payment of public money. Those obligations apply a fortiori in circumstances where the Commission may seek indemnity from a third party pursuant to s 38 of the Act, in order to ensure that whatever compensation or other benefits paid are ‘payable under [the] Act’.
The Commission seeks to rely on the principle that, even in the absence of ambiguity, the provisions of beneficial legislation ‘must be beneficially construed so as to provide the most complete remedy of the situation with which they are intended to deal’.[47] While it may be accepted that the principle applies in relation to the interpretation of those parts of the MAC Act relating to an injured claimant’s rights, it has no application in relation to the provision which creates the Commission’s right of indemnity against a third party insurer.
The Commission also relies on s 12(1) of the MAC Act (and the following subsections) to argue that those provisions ‘make clear that it is the respondent which is responsible for determining, in accordance with the Act and Regulations, whether, and how much, a person is entitled to be paid by way of statutory benefits’.[48] It is unclear how that argument advances the Commission’s case. As the Board points out,[49] the no-fault scheme created under the MAC Act is both the source of the power for the Commission to make payments and the mechanism by which entitlements are regulated. Section 12(1) provides that ‘[t]he right of any person to, and the amount of, a benefit under this Act shall be determined by the Commission, and regulations under this Act may prescribe the manner in which any such determination is to be made’.
Section 7(a) Motor Accidents (Compensation) Commission Act, which is also invoked by the Commission in support of this submission, simply states that one of the functions of the Commission is ‘to administer the MAC scheme in accordance with the Motor Accidents (Compensation) Act 1979.’ There is nothing in the statutory provisions identified by the Commission which provides licence for it to depart from (or not be bound by) the Regulations.
The Commission submits that once it has undertaken an assessment process, and a benefit has been assessed and paid, there is no scope for reconsideration of the process at the suit of an indemnifier.[50] For this submission, the Commission relies on s 38(8) of the Act, which provides that the Commission may recover an indemnity under s 38 as a debt owed to the Commission by the indemnifier. However, any right of recovery is necessarily subject to the limitation imposed by the text of s 38(1) when read with the definition of ‘statutory benefits’ in s 4 of the MAC Act.
The Commission seeks to address that limitation by reference to three authorities which are said to in support the proposition that all that is required to be shown to make out a right to indemnity in this context is that a statutory benefit has been paid. Each of the three decisions concerned an employer’s right of indemnity against a third party for compensation paid to an injured worker. It should be noted at the outset that in none of these cases was there an issue about whether the payments made by the employer were payments otherwise than in accordance with the provisions of the relevant workers’ compensation legislation.
The first authority relied on is the decision in Attorney-General v Arthur Ryan Automobiles Ltd.[51] The issue decided in that case was whether an employer could bring a second action for indemnity in respect of compensation which continued to be paid after a first action for indemnity had been resolved by the plaintiff’s acceptance of a payment into court. It was held that each payment of compensation gave rise to a separate right of action. As Slesser LJ observed (emphasis by underlining added):[52]
The language of the section makes it quite clear to my mind that the condition on which the indemnity arises is primarily that the workman has been paid. That payment must be in respect of compensation under the Act, and the injury must be caused in circumstances creating a liability in some person other than the employer. But the actual claim arises only when the payment is made in fact; and each payment gives rise to a separate right of action, which will succeed or will not succeed according to whether the conditions laid down in the section are or are not satisfied. .....
The more reasonable, and I think proper, view ... is that each time there is a payment, there arises a liability to pay indemnity, if the conditions are satisfied.
Similarly, Scott LJ stated with reference to a second or subsequent action for indemnity (emphasis by underlining added):[53]
The only question of liability that the third party will thereafter be entitled to raise will be in connection with the payments by the employer to the workman on [sic] any suggestion that the payment made at any subsequent date was not a payment in accordance with the provisions of the Workmen’s Compensation Act. Otherwise – and this is the ordinary case – it will simply be a question of ascertaining what was the amount that became payable at subsequent dates and was paid pursuant to the words of s 30, sub-s 2, by the employer to the workman.
On their face, those statements stand contrary to the Commission’s submission that all that is required to make out the indemnity is that a statutory benefit has been paid. At the very least, they provide no support for the Commission’s submission in that respect.
The second authority relied on by the Commission is the decision in Victorian Workcover Authority v Esso Australia Limited.[54] The issue decided in that case was whether, in addition to indemnity for compensation paid, damages in the nature of interest could be awarded pursuant to the Victorian Supreme Court Act. The Commission relies specifically on a passage in which the majority cited Arthur Ryan and stated (emphasis by underlining added):[55]
Some of the indemnity provisions in worker’s compensation statutes have been interpreted as conferring distinct rights of action against the tortfeasor which arise when each compensation payment is made by the employer or insurer and which will succeed if the other conditions laid down in the provision are satisfied.
It is unclear how this statement is said to advance the Commission’s argument. The underlined words serve as a reminder of the observations in Arthur Ryan that the indemnity is confined to compensation paid under the Act, or amounts payable in accordance with the provisions of the Act.
The third authority relied on by the Commission is the decision in South Eastern Sydney Area Health Service v Gadiry & Anor.[56] The issue decided in that case was whether and to what extent the Limitation Act 1969 (NSW) adversely affected an employer’s right of recovery against a third party. It was held, consistently with Arthur Ryan and Victorian WorkCover v Esso, that the indemnity provision in the Workers Compensation Act 1987 (NSW) created a distinct right of action against a tortfeasor when each compensation payment was made by the employer. The effect was that, although the recovery of some amounts sought by way of indemnity was statute barred, the recovery of amounts paid at a later time was not statute barred. This case provides no support for the Commission’s submission in the present appeal.
The final proposition advanced by the Commission is that ‘the use in s 38(1) of words that correspond to a term defined in s 4 should not be construed as inviting litigation by an indemnifier of every step of the respondent’s bona fide conduct of its statutory purpose’.[57] The Commission relies in that respect on the decision in Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council.[58] This was another case in relation to indemnification proceedings by an employer against a third party. The specific issue was whether the putative tortfeasor could require an injured worker (who was not a party to the indemnification proceedings) to be medically examined for the purposes of establishing the limit of the indemnity. The majority held that such an examination was extraneous to the statutory purpose of the particular legislative provision, which obliged the worker to submit to examination by a medical practitioner if required by the employer. That provision was designed for an entirely different purpose and operated in claims for compensation rather than indemnity proceedings.[59]
There is no analogy between the position advanced by the Board on this appeal and the circumstances under consideration in Kurnell Passenger & Transport. In any event, the construction of s 38(1) of the MAC Act propounded by the Board would not operate as an invitation for an indemnifier to litigate every step of the Commission’s conduct. Even if it did operate as such, the Commission’s bona fides is irrelevant to the determination of whether compensation or other benefits paid by the Commission were ‘payable’ under the Act so as to come within the scope of the indemnity.
Conclusion and orders
For the reasons described above, compensation for interim attendant care services was not ‘payable’ at the time those payments commenced on 13 June 2017, and did not subsequently become ‘payable’. As a consequence, the interim benefits for attendant care services paid by the Commission to the injured person did not come within the scope of the indemnity conferred in favour of the Commission against the Board by s 38(1) of the MAC Act.
Accordingly, the following orders are made.
1.The appeal is allowed.
2.The judgment entered for the respondent on 3 May 2023 in the sum of $1,342,083.99 is set aside.
3.Judgment is entered for the respondent in the sum of $895,176.28.
4.The question of costs is reserved, with liberty to make application in relation to the issue of costs within 28 days of the delivery of this judgment in the event that orders as to costs are not agreed.
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[1]Second Amended Statement of Claim, par 4; Second Amended Defence, par 4.
[2]Second Amended Statement of Claim, par 12.
[3]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [51].
[4]That amount was in “claim 4 of 2019”: see Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [124](1).
[5]Appellant's written submissions, 26 June 2023, pars 24-25.
[6]MAC Act, s 18BA.
[7]MAC Act, s 18BB(2).
[8]MAC Act, s 18BC(2).
[9]MAC Act, s 18BD(3)(b).
[10]MAC Act, s 18BB(1)(c).
[11]MAC Act, s 18BB(2).
[12]MAC Act, s 18BD(3)(b).
[13]MAC Act, s 18BD(2).
[14]MAC Act, s 18BD(4).
[15]By combined operation of reg 4F(2) and (3). In the present case, reg 4F(3) was not invoked because the Commission did not form an opinion or make a determination in relation to ‘exceptional circumstances’.
[16]Regulation 4E(2).
[17]Christopher Chronis Designs Pty Ltd v Citadin Pty Ltd (1997) 8 BPR 15,659.
[18]It may be noted that Young J held that, in the context of the clause of the commercial lease in which it appeared, the phrase extended to the rent that had actually been paid in the preceding 12 month period.
[19] Grocon Constructors (Victoria) Pty Ltd v APN FF2 Project 2 Pty Ltd [2015] VSCA 190.
[20]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [112].
[21]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [118]. In support, the trial judge also cited Joam v Minister for Immigration and Multicultural Affairs [2002] FCA 107 at [14].
[22]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [119].
[23]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at fn 102.
[24]The brain imaging reports were annexed to the affidavit of Scott William Moss sworn 19 June 2020, at exhibit P 25, and appear as sub-exhibits SWM-16, SWM-17 and SWM-18 to that affidavit. Counsel for the plaintiff at trial made specific reference to those reports at par 22.34 of their written submissions dated 11 August 2020.
[25]The ‘MCA’ is the middle cerebral artery.
[26]An ‘SDH’ is a subdural hematoma.
[27]In Schedule 1 to the Motor Accidents (Compensation) Regulations, Item 2 (dealing with brain injury) specifies as one alternative criteria that the injury has resulted in the eligible person having ‘a significant brain imaging abnormality’.
[28]Exhibit P 15, affidavit of Judith Courts sworn 22 November 2019, par 12, and exhibit JC-2.
[29]Exhibit P 15, affidavit of Judith Courts sworn 22 November 2019, par 49.
[30]The report was annexed to the affidavit of Judith Courts sworn 22 November 2019, exhibit P 15, and appears as exhibit JC-3 to that affidavit.
[31]Exhibit P 15, exhibit JC-3, AB 229.
[32]Respondent’s written submissions, 13 October 2022, par 48.
[33]As already stated, there was no evidence that the Commission was of the opinion – in the alternative, as required by reg 4F(3) – that exceptional circumstances existed warranting the payment of benefits for interim attendant care services. It is common ground on this appeal that the Commission did not hold that opinion.
[34]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [118].
[35]Respondent’s written submissions, par 50.
[36]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [115]-[117].
[37]Motor Accidents (Compensation) Commission v Motor Accidents Insurance Board [2023] NTSC 40 at [120]. Reg 4K(5) specifies that benefits for building alterations are not payable unless an occupational therapist approved by the Commission certifies that the building is appropriate for the injured person or is capable of being altered so that it is appropriate for the injured person and the Commission has approved the proposed alterations before the alterations are commenced.
[38]Forrest & Forrest Pty Ltd v Wilson (2017) 262 CLR 510.
[39]Ibid at [64].
[40]Ibid at [62]-[63], citations omitted.
[41]Motor Accidents (Compensation) Commission Act, s 16(2)(a).
[42]Appellant's written submissions, par 26.
[43] Respondent’s written submissions, par 9.
[44] Ibid, par 23.
[45] Respondent’s written submissions, par 51.
[46]Although a claimant has no legal entitlement to enforce payments of compensation where the prescribed criteria have not been met, if the Commission is dilatory in obtaining a certificate under reg 4F(4) a claimant could compel the Commission to do so by application for an order in the nature of mandamus or by recourse to the review provisions of the MAC Act (Part 6, Divs 2 and 3).
[47]Ibid, par 52, referring to Thompson v Groote Eylandt Mining Co Ltd (2003) 173 FLR 72 at [28].
[48]Ibid, par 38.
[49]Appellant's written submissions in reply, 25 October 2023, par 13.
[50]Respondent’s written submissions, par 62.
[51]Attorney-General v Arthur Ryan Automobiles Ltd [1938] 2 KB 16.
[52]Attorney-General v Arthur Ryan Automobiles Ltd [1938] 2 KB 16 at 21-22.
[53]Ibid at 23.
[54]Victorian WorkCover Authority v Esso Australia Limited (2001) 207 CLR 520.
[55]Ibid at [18] per Gleeson CJ, Gummow, Hayne and Callinan JJ.
[56]South Eastern Sydney Area Health Service v Gadiry & Anor (2002) 54 NSWLR 495 at [15]-[18], [22]-[24] and [40]-[42].
[57] Respondent’s written submissions, par 63.
[58] Kurnell Passenger & Transport Service Pty Ltd v Randwick City Council [2009] NSWCA 59.
[59]Ibid at [102]-[103] per Basten JA (Giles JA agreeing at [1]).
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