Nominal Defendant v Hi-Light Industries Pty Limited; the Nominal Defendant v New South Wales

[2004] NSWCA 423

NEW SOUTH WALES COURT OF APPEAL

CITATION:      The Nominal Defendant v Hi-Light Industries Pty Limited; The Nominal Defendant v State of New South Wales [2004]  NSWCA 423

FILE NUMBER(S):
40124/04
40376/04

HEARING DATE(S):               11/11/04

JUDGMENT DATE: 26/11/2004

PARTIES:
CA 40124/04
The Nominal Defendant (Appellant)
Hi-Light Industries Pty Limited (Respondent)
CA 40376/04
The Nominal Defendant (Appellant)
State of New South Wales (Respondent)

JUDGMENT OF:       Beazley JA Ipp JA Tobias JA   

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S):          DC 7049/02, DC 4946/03

LOWER COURT JUDICIAL OFFICER:     Sorby DCJ (DC 7049/02); Truss DCJ (DC 4946/03)

COUNSEL:
CA 40124/04
K Rewell SC/C Taylor (Appellant)
D F Jackson QC/M J Jenkins (Respondent)
CA 40376/04
D J Russell SC/J Ryan (Appellant)
D F Jackson QC/M J Jenkins (Respondent) 

SOLICITORS:
CA 40124/04
TL Lawyers (Appellant)
Nevill & Edwards (Respondent)
CA 40376/04
Blake Dawson Waldron (Appellant)
Hunt & Hunt (Respondent)

CATCHWORDS:
WORKERS' COMPENSATION - Statutory interpretation - Recovery actions under s 151Z(1)(d) of the Workers' Compensation Act 1987 (NSW) - Whether a recovery action may be brought against the Nominal Defendant - Whether the Motor Accidents Compensation Act 1999 (NSW) denies the availability of such recovery actions - Applicability of Nominal Defendant v Australian Associated Press [1982] 1 NSWLR 127 - Whether s 37 of the Motor Accidents Compensation Act 1999 (NSW) is a code for the recovery of damages from the Nominal Defendant - Liability of the Nominal Defendant under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) - Availability of the Motor Accidents Authority Fund to pay liabilities of the Nominal Defendant arising from a recovery action - Effect of policy considerations.  D

LEGISLATION CITED:
Motor Accidents Compensation Act 1999 (NSW) ss 31, 32, 33, 33, 34, 35, 36, 37, 39(1), 40, 41(4), 198, 206(1) 212, 213, 214, cl 10 Schedule 5
Motor Accidents Act 1988 (NSW), cl 5.6 Schedule 5
Workers Compensation Act 1987 (NSW), s 151Z(1)(d)
Workers Compensation Act 1926 (NSW), s 64(1)
Motor Vehicles (Third Party Insurance) Act 1942 (NSW), ss 29, 30, 31(1), 32(1)
Insurance Protection Tax Act 2001 (NSW), ss 16B, 16G
Law Reform (Miscellaneous Provisions) Act 1946 (NSW), s 5(1)(c)

DECISION:
(1) In CA40124/04: Appeal dismissed with costs. (2) In CA 40376/04: Appeal dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40124/04
DC 7049/02
CA 40376/04
DC 4946/03

BEAZLEY JA
IPP JA
TOBIAS JA

Friday, 26 November 2004

THE NOMINAL DEFENDANT v HI-LIGHT INDUSTRIES PTY LIMITED
THE NOMINAL DEFENDANT v STATE OF NEW SOUTH WALES

FACTS

A “recovery action” is an action brought under s 151Z(1)(d) of the Workers’ Compensation Act 1987 (NSW) (“the WCA”) by an employer who has paid workers’ compensation to an employee injured by an uninsured or an unidentified vehicle.  The employer seeks recovery of the compensation paid to the employee from the Nominal Defendant, said to be “a person liable for causing the injury”. 

The appeals were heard together, as both turned on an identical common issue.  That issue is whether the Nominal Defendant can be the target of a recovery action.

In The Nominal Defendant v Hi-Light Industries Pty Limited the vehicle that caused the injuries to the employee was uninsured. Hi-Light Industries paid its employee compensation and brought proceedings against the Nominal Defendant based on s 33 of the Motor Accidents Compensation Act 1999 (NSW) (“the MACA”), read with s 151Z(1)(d) of the WCA.

In The Nominal Defendant v State of New South Wales the vehicle that caused the injuries to the employee was not identified. The State paid its employee compensation and brought proceedings against the Nominal Defendant based on s 34 of the MACA, read with s 151Z(1)(d) of the WCA.

HELD per Ipp JA (Beazley and Tobias JJA agreeing):

1. The approach adopted is to first determine whether s 151Z(1)(d) of the WCA is sufficiently broad to encompass the employer’s right to recover from the Nominal Defendant, and then to consider whether the MACA nevertheless excludes liability on the part of the Nominal Defendant under s 151Z(1)(d).

2. According to the general words of s 151Z(1)(d) of the WCA, each respondent is entitled to be indemnified by the Nominal Defendant in respect of the compensation so paid. Section 151Z(1)(d) is therefore sufficiently broad to encompass an employer’s right to recover from the Nominal Defendant.

3. The basic contention of the Nominal Defendant regarding the MACA was that, save as set out in s 40, s 37 of the MACA amounts to a code containing the extent of and limiting its liability, which would preclude a recovery action being brought against the Nominal Defendant.

4. Section 37 of the MACA does not limit the liability of the Nominal Defendant in any way other than by providing that amounts payable in relation to claims made or judgments obtained under ss 33, 34 or 35 are to be paid out of the Nominal Defendant’s Fund. Section 37 of the MACA has no bearing on liabilities incurred by the Nominal Defendant otherwise than in respect of the amounts referred to in that section.

5. Another reason for not regarding s 37 of the MACA as an exclusive code is that, the Nominal Defendant may incur a liability under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW), to which no reference is made in s 37 (or s 40(3)) of the MACA.

6. Section 40(3) of the MACA is a further indication that the legislature did not intend s 37 to be a code and accepted that the Nominal Defendant might incur lawful liabilities other than those referred to in s 37.

7. It is arguable that the WCA impliedly requires the Nominal Defendant to pay liabilities arising under s 151Z(1)(d) out of the Nominal Defendant’s fund, even though the WCA does not expressly say so. It is not necessary to decide this question, as there is another source of moneys from which the Nominal Defendant would be entitled to pay such liabilities - the Motor Accidents Authority Fund.

8. It is difficult to ascertain reliably any policy factors that might bear upon the issue of whether the Nominal Defendant might be liable under recovery actions. The issue may involve complex relationships between insurers to which the court is not privy. Whatever the policy reason underlying s 39(1) of the MACA, it is not sufficiently clear or persuasive so as to disturb the natural meaning of s 37.

ORDERS:

The two appeals are dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40124/04
DC 7049/02
CA 40376/04
DC 4946/03

BEAZLEY JA
IPP JA
TOBIAS JA

Friday, 26 November 2004

THE NOMINAL DEFENDANT v HI-LIGHT INDUSTRIES PTY LIMITED
THE NOMINAL DEFENDANT v STATE OF NEW SOUTH WALES

Judgment

1. BEAZLEY JA:  I agree with Ipp JA.

2. IPP JA: 

   The recovery actions issue

3. These two appeals were argued together.  Each turns on an identical common issue. 

4. The appeals concern actions known as “recovery” actions. A recovery action is an action brought under s 151Z(1)(d) of the Workers Compensation Act 1987 (NSW) (the “WCA”) by a plaintiff employer who has paid workers’ compensation to an employee injured by an uninsured or unidentified vehicle. By the action, the plaintiff employer seeks recovery of the compensation paid to the employee. The issue that arises is whether the Nominal Defendant can be the target of a recovery action.

5. The first appeal (The Nominal Defendant v Hi-Light Industries Pty Limited) is a case where the vehicle that caused the injuries to the employee was uninsured. Hi-Light Industries, as employer, paid the employee compensation in connection with those injuries and brought proceedings against the Nominal Defendant based on s 33 of the Motor AccidentsCompensation Act 1999 (NSW) (“the MACA”), read with s 151Z(1)(d) of the WCA.

6. Section 33 of the MACA provides:

   “(1)An action for the recovery of damages in respect of the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle that is not an insured motor vehicle in the use or operation of the vehicle on a road in New South Wales may be brought against the Nominal Defendant.

   (2)…

   (3)In respect of any such action, the Nominal Defendant is liable as if it were the owner or driver of the motor vehicle.

   …”

7. Section 151Z(1)(d) of the WCA provides:

   “(1)If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:

   …

   (d)if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages)”.

8. The second appeal (The Nominal Defendant v State of New South Wales) is a case where the vehicle that caused the injuries to the employee was not identified. The State, as employer, paid the employee compensation in connection with those injuries and brought proceedings against the Nominal Defendant based on s 34 of the MACA, read with s 151Z(1)(d) of the WCA. Section 34 of the MACA provides:

   “(1)An action for the recovery of damages in respect of the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle on a road in New South Wales may, if the identity of the vehicle cannot after due inquiry and search be established, be brought against the Nominal Defendant.

   (2)          …

   (3)In respect of any such action, the Nominal Defendant is liable as if it were the owner or driver of the motor vehicle.”

9. It is common ground that no question arises from the fact that in the one case the vehicle in question was uninsured and in the other it was unidentified.

10. In each appeal, the Nominal Defendant is the appellant and the employer of the injured worker is the respondent.

    The trial judges’ reasons

11. The trial judge in the Hi-Light Industries case, Sorby DCJ, based his decision on Nominal Defendant v Australian Associated Press [1982] 1 NSWLR 127. That case concerned s 64(1) of the Workers Compensation Act 1926 (NSW) (the “1926 Act”) – which was the predecessor of and in form similar to s 151Z(1)(d) of the WCA – and ss 30(1) and 30(2) of the Motor Vehicles (Third Party Insurance) Act 1942 (NSW) (“the MVA”), the latter sections being predecessors of and in form similar to ss 33 and 34 of the MACA.

12. The Nominal Defendant submitted before Sorby DCJ that no reliance could be placed on Australian Associated Press as the relevant legislative provisions now contained in the MACA were substantially different to the relevant provisions in the MVA. Sorby DCJ rejected this argument; he considered that he was bound by Associated Press.  His Honour granted a verdict and judgment for the employer, Hi-Light Industries.

13. In Nominal Defendant v State of New South Wales, the trial judge, Truss DCJ, adopted the reasoning of Sorby DCJ in the Hi-Light Industries case and upheld the claim of the employer, the State of New South Wales.

14. Before this Court, Mr Rewell SC (who appeared with Mr Taylor for the Nominal Defendant in the Hi-Light Industries case) and Mr Russell SC (who appeared with Mr Ryan for the Nominal Defendant in the State of New South Wales case) reiterated and developed further the arguments that had been advanced below.  Mr Jackson QC, together with Mr Jenkins, appeared for the respondent in each appeal.

    Australian Associated Press and the earlier legislation

15. Prior to the hearing of the appeals, the Nominal Defendant gave notice that it intended to seek leave to argue that Australian Associated Press had been wrongly decided.  Mr Rewell, however, at the outset of his argument informed the Court that he did not think it was necessary to seek such leave and he would not argue that Australian Associated Press had been decided in error.  He explained that his submission would be merely that the statutory scheme presently in force differed so significantly from that considered by Australian Associated Press that the decision in that case was of no relevant force.  Mr Russell adopted Mr Rewell’s submission.

16. In Australian Associated Press an unidentified vehicle injured an employee. The employer paid the employee workers’ compensation. The employer then sued the Nominal Defendant to recover the compensation paid, relying upon s 30(2) of the MVA read with s 64(1)(b) of the 1926 Act. The Nominal Defendant argued that that legislation did not render him liable to the claim made by the employer. The Nominal Defendant failed at trial and on appeal to this Court.

17. Section 30(1) of the MVA provided that claims for death or bodily injury arising out of the use of an uninsured motor vehicle “shall be made to the Nominal Defendant and not to the owner or driver of the uninsured motor vehicle”. Proceedings to enforce any such claim were to be taken against the Nominal Defendant alone.

18. Section 30(2) of the MVA Act provided that, where the death of or bodily injury to any person was caused by the use of an unidentified motor vehicle, “any person who could have enforced a claim for damages against the owner or driver of the motor vehicle in respect of the death or bodily injury may enforce against the Nominal Defendant the claim which he could have enforced against the owner or driver of the motor vehicle”.

19. Section 64(1) of the 1926 Act provided:

    “Where the injury for which compensation is payable under this Act was caused under circumstances creating a legal liability in some person other than the employer to pay damages in respect thereof –

    …

    (b)if the worker has recovered compensation under this Act, the person by whom the compensation was paid shall be entitled to be indemnified by the person so liable to pay damages as aforesaid”.

20. On appeal, Moffitt P said (at 131-132):

    “In the case now before us, it is the liability of the driver to pay damages which, subject to due search and inquiry in relation to the vehicle, is imposed on the nominal defendant.  Before there is legal liability imposed on the nominal defendant, the injury has to be caused in circumstances which create the legal liability in tort, which the statute then makes enforceable against the nominal defendant.

    Second, even if, as a matter of construction, the legal liability referred to in s 64(1) must exist at the time of injury and depend on circumstances which have some relation to the causes of the injury, then I think the liability of the nominal defendant under s 30(2)(a) answers that description. Steps that may have to be taken after injury is received before action can be brought or maintained do not determine the question. It is sufficient that there was a relevant legal liability (in this case in the nominal defendant) at some earlier time, eg the time of injury, although not perfected until later in some respects: Harding v Lithgow Municipal Council (1937) 57 CLR 186.

    Further, although it is not necessary precisely to decide the matter, it would seem that, in the fullest sense, the liability of the nominal defendant arises at the time of injury and the accompanying departure of the offending vehicle:  Harrison v Nominal Defendant (1975) 50 ALJR 330, and that these events themselves are part of the circumstances ‘under’ which the injury was caused.”

    Hutley JA said (at 132-133):

    “The nominal defendant is a legal person and it was liable to the injured employee to pay damages, if he had elected to pursue the claim.  I was at a loss, and still am, to see what answer there is to the plain words of the statute.  Counsel for the appellant took the Court to the Motor Vehicles (Third Party Insurance) Act 1942, which provides for actions to be brought against the nominal defendant and suggested that claims by workers’ compensation insurers were outside the policy of that Act. It may be assumed that it was not any tenderness to workers’ compensation insurers on the part of the legislature which produced the Motor Vehicles(Third Party Insurance) Act, but this is irrelevant.  Section 64(1)(b) embodies part of the policy of the Workers Compensation Act 1926, that where a compensable injury is the result of a legally wrongful act of a third party, the ultimate financial burden should be borne by the third party.  Such third party is designated as the person ‘liable to pay damages’ for the wrongful act, not the person who did it.  The nominal defendant is such a person.

    It being established in this case that all conditions of its liability have been made out, the appeal must fail.  The same conclusion was reached by the Full Court of the Supreme Court of Victoria in respect of precisely parallel legislation in Australian SafewaysStores Pty Ltd v Incorporated Nominal Defendant [1980] VR 118.”

    Reynolds JA agreed with Moffitt P and Hutley JA.

    The effect of the general words of s 151Z(1)(d)

21. In Australian Associated Press this Court, having determined that s 64(1)(b) of the 1926 Act was sufficiently broad to encompass the employer’s right to recover from the Nominal Defendant, proceeded to consider whether the MVA, nevertheless, excluded liability on the part of the Nominal Defendant under s 64(1)(b). This method of dealing with the issue was consistent with that adopted by the High Court in Tickle IndustriesPty Limited v Hann (1974) 130 CLR 321 (where a not dissimilar inquiry was undertaken) and by the Full Court of the Supreme Court of Victoria in Australian Safeways Stores Pty Ltd v Incorporated NominalDefendant [1980] VR 118. I shall adopt the same approach.

22. Accordingly, it is necessary first to determine whether a recovery action against the Nominal Defendant lies within the general terms of s 151Z(1)(d) of the WCA without considering whether there are provisions of the MACA that exclude such liability on the part of the Nominal Defendant.

23. In terms of s 33(3) and s 34(3) of the MACA, in respect of any action against the Nominal Defendant where the vehicle is not insured or not identified, “the Nominal Defendant is liable as if it were the owner or driver of the motor vehicle”. That is to say, the Nominal Defendant is liable to the injured plaintiff for the damages for personal injuries caused by such a vehicle as if it were the owner or driver of the vehicle.

24. As I have mentioned, in Hi-Light Industries and State of New South Wales, compensation was payable under the WCA by each employer to each plaintiff under circumstances where the vehicle involved was either not insured or not identified.

25. In the Hi-Light Industries case, by s 33(3), the Nominal Defendant (being “some person other than the worker’s employer”) became liable to the injured plaintiff to pay damages in respect of the injury as if it were the owner or driver of the vehicle. The same result flowed by reason of s 34(3) in the State of New South Wales case. 

26. It follows that, in accordance with the opening words of s 151Z(1), paragraph (d) of that section “ha[s] effect”. 

27. The course of reasoning in the preceding four paragraphs follows the approach taken in Australian Associated Press with respect to the equivalent legislation considered in that case; see also Tickle Industries Pty Limited v Hann and Australian Safeways Stores Pty Limited v Incorporated Nominal Defendant.  I would add that none of the changes to the relevant legislation affect this particular aspect of the reasoning in Australian Associated Press; the changes on which the Nominal Defendant relies are directed to other matters (to which I refer below). 

28. As I have mentioned, in each of Hi-Light Industries Pty Limited and State of New South Wales the worker recovered compensation under the WCA from the respondent employer in each appeal. By para (d) of s 151Z(1), each respondent, being “the person by whom the compensation was paid,” is entitled to be indemnified by “the person so liable to pay those damages”. In accordance with the reasoning in Australian Associated Press, which I again adopt, the Nominal Defendant is the person so liable to pay those damages. 

1. Therefore, according to the general words of s 151Z(1)(d), each respondent is entitled to be indemnified by the Nominal Defendant in respect of the compensation so paid.

   The Nominal Defendant’s argument based on s 37 and s 40 of the MACA

2. The next stage of the inquiry is to determine whether the provisions of the MACA that differ from the provisions of the MVA considered in Australian Associated Press, identified and relied on by the Nominal Defendant, exclude the Nominal Defendant from liability under s 151Z(1)(d).

3. The Nominal Defendant relied particularly on s 37 of the MACA and the differences between that section and s 31 of the MVA.

4. Section 37 of the MACA provides:

   “37The Nominal Defendant is not personally liable to pay any amount payable in satisfaction of any claim made or judgment obtained under section 33, 34 or 35 or the amount of any costs or expenses incurred by it in relation to any such claim or judgment, but every such amount is to be paid by the Nominal Defendant out of the Nominal Defendant’s Fund established under this Part.”

   Sections 33 and s 34 are set out above. Section 35 involves claims against the Nominal Defendant resulting from the use of “a registered trailer” and is not presently relevant.

5. Mr Rewell (who advanced the major part of the oral argument on behalf of the Nominal Defendant) emphasised that, whereas s 37 of the MACA provides that the Nominal Defendant is not personally liable for claims made or judgments obtained under ss 33, 34 and 35 of that Act, s 31(1) of the MVA (the predecessor of s 37) provided that no personal liability attached to the Nominal Defendant in respect of any claim or judgment made or obtained against him or her. 

6. Section 31(1) provided:

   “31(1)The nominal defendant shall not be personally liable to pay any amount payable in satisfaction of any claim made or judgment recovered against him … but every such amount shall be paid by the nominal defendant out of moneys provided by the authorised insurers in accordance with this Division.”

7. Mr Rewell submitted that s 37, properly construed, means “[subject to s 40] there is no other liability in the Nominal Defendant other than under those three sections [ss 33, 34 and 35]”. This argument rested to a large degree on the exclusion of personal liability on the part of the Nominal Defendant in the terms set out in s 37.

8. To understand this argument it is necessary to have regard, firstly, to the way in which the Nominal Defendant is established under the MACA and how this differed from the establishment of the Nominal Defendant under the MVA and, secondly, to the terms of s 40.

9. Section 32(1) of the MACA provides that the Authority (that is, the Motor Accidents Authority of New South Wales constituted under Pt 8.1 of the MACA) “is, for the purposes of this Act, the Nominal Defendant” and s 32(2) provides that any action or proceeding by or against the Nominal Defendant is to be taken in the name of the ‘Nominal Defendant’”. Moreover, the Authority, by s 198 of the MACA, is a corporation and a statutory body representing the Crown.

10. Section 29(1) of the MVA, on the other hand, provided for the appointment of “any person resident in New South Wales” to be the Nominal Defendant for the purposes of that Act. Section 29(2) (like s 32(2) of the MACA) provided that any action or proceedings by or against the Nominal Defendant “may be taken in the name of ‘The Nominal Defendant’”.

11. It follows that, unlike the position that applied under the MVA, the Nominal Defendant under the MACA is not a natural person.

12. Mr Rewell submitted that because the Nominal Defendant is a statutory authority, no “personal” liability could ever attach to it. Accordingly, he said, the MACA should be construed to mean that the Nominal Defendant is only liable for those claims or judgments referred to in s 37 (in respect of which personal liability is expressly excluded).

13. He submitted that this construction was further supported by the provision in s 37 that dealt with the payment of amounts in satisfaction of claims made or judgments obtained under ss 33, 34 and 35 out of the Nominal Defendant’s Fund. He argued that, by s 37, the Nominal Defendant was only empowered to make payment of claims made or judgments obtained against it out of the Nominal Defendant’s Fund and such payments could only be made in respect of claims made or judgments obtained under ss 33, 34 and 35 .

14. It is then necessary to have regard to s 40 of the MACA. This section provides:

    “(1)There is established a fund, to be known as the Nominal Defendant’s Fund, belonging to and vested in the Authority.

    (2)          The following is to be paid into the Fund:

    …

    (3)          The following is to be paid from the Fund:

    (a)money required to be paid from the Fund under section 37,

    (a1)money required to be paid from the Fund into the Policyholders Protection Fund in accordance with section 16G of the Insurance ProtectionTax Act 2001,

    (b)all other money required to be paid from the Fund by or under this or any other Act.

    …”

15. The Policyholders Protection Fund referred to in s 40(3)(a1) is a fund established under s 16B(1) of the Insurance Protection Tax Act 2001 (NSW). Section 16B(2) of that Act provides for money from several sources to be paid into the Policyholders Protection Fund. One of those sources, by s 16B(2)(c), is:

    “Money required to be paid into the Fund from the Nominal Defendant’s Fund in accordance with section 16G”

    Section 16G provides:

    “(1)This section applies in relation to money recovered by the Nominal Defendant:

    …

    (2)If the Treasurer determines that any money to which this section applies is not needed for payments in connection with third-party policies issued by declared insolvent insurers, the money is to be paid from the Nominal Defendant’s Fund into the Policyholders Protection Fund in accordance with arrangements made between the Treasurer and the Nominal Defendant.”

16. Mr Rewell submitted that there was no legislative enactment contemplated by s 40(3)(b) in existence, other than s 16G of the Insurance ProtectionTax Act, that “required” money to be paid from the Nominal Defendant’s Fund “by or under this or any other Act” within the meaning of those words in s 40(3)(b). He argued that, as s 151Z(1)(d), in particular, does not require money to be paid from the Nominal Defendant’s Fund, no liability in terms thereof could attach to the Nominal Defendant.

17. In effect, the basic contention of the Nominal Defendant was that, save as set out in s 40, s 37 amounts to a code containing the extent of and limiting its liability. The Nominal Defendant submitted that, for that reason, Australian Associated Press had no application to the current legislation.

    The significance of the exclusion of the Nominal Defendant’s personal liability in s 37

18. The argument on the part of the Nominal Defendant was presented with care and skill but, in my view, it contains a number of fallacies.

19. The first involves the implications to be drawn from the limitation of the Nominal Defendant’s personal liability referred to in s 37.

20. Section 31(1) of the MVA, as I have noted, provided that the Nominal Defendant was not “personally liable to pay any amount payable in satisfaction of any claim made or judgment recovered against him”. As, under s 29(1) of the MVA, the Nominal Defendant was a natural person, it was necessary to make it plain that the liability under that Act, attaching to the Nominal Defendant, was not personal; the Nominal Defendant was liable only in his or her capacity as such. Thus, s 31(1) was premised on the need to distinguish between personal liability and liability as the Nominal Defendant in that capacity.

21. The phrase “personally liable” is apposite when used in connection with a natural person. It may be used to distinguish the personal liability of a natural person from his or her liability as a trustee or in some representative or official capacity. But it is not a phrase normally used in connection with a statutory authority that is a corporate body. On one possible view the phrase is nothing more than an historical relic and does not play a helpful role in determining the extent of the liability of the Nominal Defendant under the MACA.

22. On the other hand, a possible purpose of the phrase as it is used in the opening passage of s 37 (“The Nominal Defendant is not personally liable to pay any amount payable in satisfaction of any claim made or judgment obtained under section 33, 34 or 35 or the amount of any costs or expenses incurred by it in relation to any such claim or judgment … ) is simply to emphasise the general import of the section as a whole, namely, that the Nominal Defendant is required to pay the amounts referred to in that passage out of the Nominal Defendant’s Fund and not from any other source.

23. In my view, however, s 37 does not limit the liability of the Nominal Defendant in any way other than by providing that amounts payable in satisfaction of claims made or judgments obtained under ss 33, 34 or 35 or costs or expenses incurred by it in relation to any such claim or judgment are to be paid out of the Nominal Defendant’s Fund.

24. Section 37 says nothing about liabilities the Nominal Defendant may lawfully incur otherwise than in respect of the amounts referred to in s 37 and does not, implicitly, limit those other liabilities. Section 37 has no bearing on such other liabilities. Also, s 37 does not say that no liabilities other than those incurred in connection with ss 33, 34 or 35 may be paid out of the Nominal Defendant’s Fund.

25. The natural meaning of the language of s 37 is that it is concerned only with liabilities incurred by the Nominal Defendant under or in connection with ss 33, 34 or 35 and there is nothing in the MACA to gainsay that meaning. The language of s 37 does not support the construction advanced on the Nominal Defendant’s behalf.

    Liabilities the Nominal Defendant may incur that differ from those referred to in s 37

26. Another reason for not regarding s 37 as an exclusive code is that, as the Nominal Defendant itself concedes, the Nominal Defendant may incur a lawful liability (apart from the challenged liability under s 151Z(1)(d)) to which no reference is made in s 37 (or s 40(3)). The liability in question is the liability of the Nominal Defendant for contribution or indemnity under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW).

27. The liability of the Nominal Defendant for contribution or indemnity as a joint tortfeasor under s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act is recognised by the MACA. This is apparent from s 36(1) of the MACA which provides:

    “The Nominal Defendant may join another person, or may be joined, for contribution or indemnity in respect of a claim or proceedings under this Act as if the Nominal Defendant were a tortfeasor.”

    Sections 36(2) to 36(9) are provisions relating to notice to the Nominal Defendant of joinder and other provisions relating to joinder.

28. This court has accepted that claims against the Nominal Defendant for contribution or indemnity as a joint tortfeasor under s 5(1)(c) fall within the ambit of s 36(1): Wythes v McCaffery [2004] NSWCA 367.

29. An action claiming contribution or indemnity under s 5(1)(c) is not an action for recovery of damages. It follows that such a claim could not be a claim under ss 33, 34 or 35 of the MACA.

30. Mr Rewell was driven to argue that s 37 should be construed as providing for the inclusion of claims under s 36, or that the implication must be drawn that claims under s 5(1)(c) are covered by s 37. But, in my view, there can be no substance in these arguments. There is simply no basis for them.

31. The recognition that the Nominal Defendant may become liable for a contribution or indemnity under the Law Reform (MiscellaneousProvisions) Act demonstrates that s 37 is not a code and is not intended to limit the extent of the liabilities of the Nominal Defendant.

32. I would add that s 40(3) is itself a powerful indication that the legislature did not intend s 37 to be a code and accepted that the Nominal Defendant might incur lawful liabilities other than those referred to in s 37.

33. Section 40(3)(a) provides that money to be paid from the Nominal Defendant’s Fund includes moneys required to be so paid under s 37. Section 40(3)(a1) provides that moneys paid in accordance with s 16G of the Insurance Protection Tax Act are to be paid from the Nominal Defendant’s Fund. And s 40(3)(b) provides for the payment from the Nominal Defendant’s Fund of “all other money required to be paid from the Fund by or under this or any other Act.”

34. According to the ordinary canons of construction, s 40(3)(b) must be intended to cover moneys other than those payable “under s 37” or “in accordance with s 16G of the Insurance Protection Tax Act”, otherwise s 40(3)(b) would have no work to do.

35. Also, according to those canons, the words “by … this or any other Act” must be given a meaning different from the words “under this or any other Act”.  The difference, in my view, is that “by … this or any other Act” refers to an express statutory direction to pay money from the Nominal Defendant’s Fund, whereas “under this or any other Act” refers to an implied statutory direction to that effect.

36. Thus, s 40(3)(b) contemplates that the Nominal Defendant will incur liabilities that differ from those incurred under s 37 or in accordance with s 16G of the Insurance Protection Tax Act and those different liabilities would include those impliedly required by any Act to be paid from the Nominal Defendant’s Fund.

    The Motor Accidents Authority Fund

37. Section 151Z(1)(d) does not expressly require payment of the Nominal Defendant’s liabilities in respect thereof to be made out of the Nominal Defendant’s Fund. Nevertheless, it is arguable that the WCA impliedly requires the Nominal Defendant to pay such liabilities out of that fund. It is, however, not necessary to decide this question as, should the WCA not have this implied effect, there is another source of moneys from which the Nominal Defendant would be entitled to pay such liabilities (and, I would add in passing, to pay liabilities that may be incurred for contribution or indemnity under s 5(1)(c) of the Law Reform (MiscellaneousProvisions) Act).  The alternative source in question is the Motor Accidents Authority Fund. 

38. Section 212(1) of the MACA provides for the establishment of the Motor Accidents Authority Fund and provides further that the Motor Accidents Authority Fund belongs to and vests in the Authority. Section 212(3) provides:

    “(3)        The following is to be paid from the Fund:

    …

    (d) all payments required to meet expenditure incurred in relation to the functions of the Authority … where money is not otherwise provided for that purpose,

    …”

39. Section 206(1) provides that the Authority has such functions conferred or imposed on it by or under the MACA or any other Act. These include functions the Authority performs as the Nominal Defendant.

40. “Expenditure” involves the making of payments. A function of the Nominal Defendant is to pay its lawful liabilities. It follows, in my view, that payments required to meet expenditure in relation to lawful liabilities are payments that fall within s 212(3)(d). On this basis, lawful liabilities that may not be paid out of the Nominal Defendant’s Fund may be paid out of the Motor Accidents Authority Fund

41. The Nominal Defendant submitted that payments that fall within s 212(3)(d) are confined to payments of administrative expenses, and not payments in respect of claims or judgments. The section is not, however, confined in this way. Moreover, expenses of the kind that would commonly be regarded as “administrative” are covered by paras (a), (b) and (c) of s 212(3). Unless para (d) applies to something different, it is difficult to see what work it would do. The natural meaning of s 212(3)(d) does not support the argument of the Nominal Defendant on this issue and in my view that argument cannot be upheld.

    The effect of policy considerations

42. Mr Rewell sought to argue that policy reasons supported s 37 being construed as a general, limiting, provision. This argument was largely based on s 39(1) of the MACA which provides:

    “39(1)Any amount properly paid by the Nominal Defendant in satisfaction of a claim made or judgment obtained under section 33, 34 or 35 and the amount of any costs and expenses properly incurred by it in relation to any such claim or judgment may be recovered by the Nominal Defendant as a debt:

    (a)from the person who, at the time of the occurrence out of which the claim arose or in respect of which the judgment was obtained, was the owner of the motor vehicle, or

    (b)where at the time of such occurrence some other person was driving the motor vehicle, from the owner and the driver jointly or from either of them severally.”

43. The MACA does not provide elsewhere for the entitlement of the Nominal Defendant to recover from the uninsured owner or driver payments made by it in respect of other claims made or judgments obtained against it (in particular, by employers under s 151Z(1)(d) of the WCA).

44. The position was different under the MVA. Section 32(1) of the MVA provided:

    “32(1)Any amount paid by the Nominal Defendant in satisfaction of a claim made or judgment recovered against him and the amount of any costs and expenses 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:

    …”

    Therefore, under the MVA, the Nominal Defendant was entitled to recover from the uninsured owner and driver payments made by the Nominal Defendant to the employer of the injured worker.

45. Mr Rewell submitted that it would be contrary to policy to allow recovery actions under s 151Z(1)(d) by employers against the Nominal Defendant in circumstances where the legislation did not entitle the Nominal Defendant to bring proceedings against uninsured owners and drivers for reimbursement of amounts it was obliged to pay employers in consequence of such actions.

46. In my view, however, it is difficult to ascertain reliably any policy factors that bear upon the issue. The issue may involve complex relationships between insurers to which the court is not privy. For example, the MACA contains elaborate provisions relating to the establishment of the Motor Accidents Authority Fund and the determination of the moneys to be paid into that Fund. See ss 41(4), 212, 213 and 214 and cl 10 of Schedule 5 to the MACA as well as the Insurance Industry Deed set out in Schedule 5 to the Motor Accidents Act 1988 (NSW) (cl 5.6). These provisions contemplate the making of sophisticated arrangements amongst insurers relating to the payment of contributions to the Motor Accidents Authority Fund. These matters raise the possibility that the change introduced by s 39(1) of the MACA may be the result of commercial negotiation. Whatever the reason may be it is not sufficiently clear or persuasive so as to disturb the natural meaning of s 37.

47. I would add that in Australian Associated Press Moffitt P said (at 130) that if policy considerations were relevant in construing s 64(1) of the 1926 Act, “the extension of liability under s 64(1) to the Nominal Defendant in an appropriate case would further that purpose or policy”. He proceeded, “[t]o deny such a liability could frustrate it in some respects”. His Honour was not impressed by the Nominal Defendant’s arguments based on “supposed policy considerations” under the MVA. In my opinion, the factors that led Moffitt P to these views apply also, as regards the purpose or policy of the MACA and the WCA, to the extension and denial of liability on the part of the Nominal Defendant under s 151Z(1)(d).

    Conclusion

1. In my opinion, the MACA does not limit the liabilities of the Nominal Defendant to those referred to in s 37 and those contemplated by s 40(3). By s 151Z(1)(d) of the WCA recovery actions by employers may be brought against the Nominal Defendant.

2. I would dismiss the two appeals with costs.

3. TOBIAS JA:  I agree with Ipp JA.

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LAST UPDATED:     26/11/2004