Nominal Defendant v Bagot's Executor and Trustee Co Ltd

[1971] HCA 42

HIGH COURT OF AUSTRALIA

Barwick C.J., McTiernan, Menzies, Windeyer and Walsh JJ.

NOMINAL DEFENDANT v. BAGOT'S EXECUTOR &TRUSTEE CO. LTD.

(1971) 125 CLR 179

22 September 1971

Insurance

Insurance—Third Party—Judgment recovered by injured person from nominal defendant where insured dead—Subsequent action by nominal defendant to recover from estate of insured—Motor Vehicles (Third Party Insurance) Act, 1942-1963 (N.S.W.), s. 32 (1).

Decisions

September 22.
BARWICK C.J., MENZIES, WINDEYER AND WALSH JJ. The Court proposes to deliver judgment in this matter and I shall read the reasons of the Court. My brother McTiernan will add further reasons on his own behalf. (at p180)

2. In a motor car accident in New South Wales on 3rd March 1959 K.L. Taylor, the driver of a Holden car SA 60-036, was killed. C.R. Taylor, a passenger in the car, was injured. The car was registered in South Australia and there was in force in respect of it a third party insurance complying with the provisions of the Traffic Act, 1958 (S.A.). South Australia is a part of the Commonwealth prescribed under s. 15(2)(a)(ii) of the Motor Vehicles Third Party Insurance Act, 1942-1963 (N.S.W.). There was no third party policy in respect of the motor car effected under the New South Wales Act. (at p181)

3. In the circumstances stated C.R. Taylor sued the nominal defendant for the purposes of the New South Wales Act pursuant to s. 15(2) thereof, alleging the death of K.L. Taylor and alleging further negligent driving on his part causing the accident. (at p181)

4. Judgment was recovered for 13,500 pounds damages and 1,021 pounds 4s. 9d. for costs. The Nominal Defendant satisfied this judgment. The Nominal Defendant then sued the executor of the will of K.L. Taylor to recover the payment made to C.R. Taylor in satisfaction of the judgment. (at p181)

5. Although the action was not based solely upon s. 32(1) of the New South Wales Act it is with that subsection alone that we are now concerned. The question is whether it supports the action commenced by the nominal defendant. The subsection so far as it is relevant is as follows:

"32. (1) Any amount properly paid by the nominal defendant in satisfaction of a claim made or judgment recovered against him and the amount of any costs and expenses properly incurred by him in relation to any such claim or to the proceedings in which the judgment was obtained may be recovered by the nominal defendant as a debt from the person who, at the time of the occurrence out of which such claim arose or in respect of which such judgment was obtained, was the owner of the motor vehicle or, where at the time of such occurrence some other person was driving the vehicle, from the owner and the driver jointly or from either of them severally." (at p181)

6. At a preliminary hearing in the nature of a demurrer to determine certain questions of law arising in the action Bright J. declared, inter alia, that s. 32 of the Motor Vehicles (Third Party Insurance) Act (N.S.W.) creates a debt which is actionable by the plaintiff in the State of South Australia against the defendant (1971) SASR, at pp 353, 354, 357 . This declaration the Full Court (Hogarth and Mitchell JJ., Bray C.J. dissenting) set aside and declared that the section does not create a debt which is actionable in the State of South Australia against the defendant (1971) SASR, at pp 373, 378 . Leave to appeal to this Court was granted by the Supreme Court and it is now for this Court to determine whether s. 32 authorized the action that has been brought. The question is solely one of construction of that section. (at p181)

7. In terms the section does authorize the recovery of what was paid by the nominal defendant in the circumstances stated "as a debt from the person who at the time of the occurrence, i.e. the accident, "was the owner of the motor vehicle". This description fits K.L. Taylor for he was at the time of the accident the owner of the motor vehicle concerned. However, when payment was made by the nominal defendant to C.R. Taylor in satisfaction of the judgment K.L. Taylor was long since dead, and the majority of the Full Court decided in effect that as s. 32 only authorized recovery from a specified person it was implicit in the section that the person specified should be alive at the time when the cause of action conferred by the section arose (1971) SASR, at pp 372-373, 376-377 . (at p182)

8. In supporting the decision of the Full Court counsel for the respondent here drew attention to the fact that, at the time when ss. 15 and 32 became law, no action for damages for negligence was maintainable against a deceased tortfeasor, and relied upon this circumstance to indicate a legislative intention that s. 32, notwithstanding the width of the language used, should not be considered to subject the estate of a deceased tortfeasor to liability for what are, in reality, damages for his tort. (at p182)

9. It appears to us, as a matter of construction, that the language of s. 32 is apt to impose liability as a debt upon the person specified therein and that it matters not that in the particular circumstance a person so specified is dead. It is within legislative competence to impose such a liability upon a person who is dead by reference to what he did while living, and, in our opinion, s. 32 does not distinguish between owners of motor cars who are alive and owners of motor cars who have died when the nominal defendant satisfies the claim. The liability which the section imposes is recoverable as a debt from the person specified. It is in that character, viz. as a debt, that what has been paid by the nominal defendant is recoverable from the personal representatives of any person who, although dead, has nevertheless been made liable for payment. There is no ground that we have found for reading down the section so that it imposes liability upon a person within the description therein only if that person happens to be alive when the nominal defendant made payment. (at p182)

10. There are, we think, a number of considerations which support the conclusion that the words of the section themselves indicate. (at p182)

11. The first is to avoid giving the section a capricious operation. In his reasons for judgment Hogarth J. said (1971) SASR, at p 373 :

"I agree with the learned Chief Justice that this interpretation of the section may lead to a capricious result, but it is the function of the Court to give effect to the will of the Parliament as expressed in the act, even though a capricious result follows."

Mitchell J. said (1971) SASR, at p 378:

"I have found myself in considerable doubt on this matter. I have not been able to comprehend any reason why the Legislature of New South Wales should have excluded the estate of a deceased driver from liability to reimburse the nominal defendant." (at p183)

12. It seems to us quite unnecessary to read s. 32 as if the estate of a deceased owner or driver were excluded from its operation with the result which their Honours recognize as capricious. (at p183)

13. Secondly, s. 32 applies not only when the nominal defendant has been sued because a person is dead. An action may be brought under the section when a person cannot be served with process (s.15) or when a motor car is uninsured (s.30). If, as a matter of construction, s. 32 only applies to persons living when the nominal defendant made the payment which it is sought to recover, needless difficulties could be introduced in cases when death is not the occasion for suing the nominal defendant. (at p183)

14. Thirdly, it seems to us that once provision was made by s. 15(2) to enable an injured person to recover damages for injuries negligently caused by a person who has died, it was natural to provide that the person who became bound to pay such damages, without any default on his part, should be enabled to recover what had been paid from the estate of the person at fault. (at p183)

15. It appears to us in keeping with the whole legislative scheme to construe s. 32 as authorizing recovery of damages paid by the nominal defendant from the estate of a person who was the owner of the motor vehicle covered by a policy of insurance as described in s. 15(2)(a)(ii) at the time of an occurrence giving rise to the claim or judgment which the nominal defendant has satisfied. In this way the burden of the damages is ultimately borne by the insurer of the motor car concerned. (at p183)

16. Accordingly, we are in agreement with the judgments of the Chief Justice and of Bright J. and consider that the declaration made by the latter should be restored. (at p183)

McTIERNAN J. I agree that the appeal should be allowed. (at p183)

2. Section 32(1) is in terms applicable to any amount of the kind paid or incurred which is described in the subsection. I think that the subsection should be construed as giving the nominal defendant a remedy commensurate with its terms. The intention of the subsection is to give the nominal defendant a right to recover any amount which falls within the terms of the subsection. It grants the right by enacting that any such amount

". . . may be recovered by the nominal defendant as a debt from the person who, at the time of the occurrence out of which such claim arose or in respect of which such judgment was obtained, was the owner of the motor vehicle or, where at the time of such occurrence some other person was driving the vehicle, from the owner and the driver jointly or from either of them severally."

In my opinion there is nothing deducible from the words which follow "the person" denying the nominal defendant the right to recover against his estate if the nominal defendant did not or could not commence proceedings against him in his lifetime. the words "as a debt" operate to equate any amount which is within the words of the subsection to a debt in the full sense of the word. For this reason such an amount is recoverable by action against the estate of a "person" to which the subsection is expressed to refer. His death does not extinguish any right of action impliedly given by the words "as a debt". (at p184)

Orders

Appeal allowed with costs. Order of the Full Court of South Australia setting aside the first declaration made by Bright J. and making a declaration in the opposite sense on the same subject matter, and so much of the order for costs as relates to the costs of the appeal against that declaration of Bright J. be set aside, and in lieu thereof, order that the appeal to the Full Court against that declaration of Bright J. be dismissed with costs.