Owen v State of New South Wales

[2004] NSWCA 165

CITATION:	Owen v State of New South Wales [2004] NSWCA 165
HEARING DATE(S):	27 April 2004
JUDGMENT DATE:	9 June 2004
JUDGMENT OF:	Beazley JA at 1; Ipp JA at 2; Campbell AJA at 3
DECISION:	(1) The appeal is upheld in part. (2) The verdict for the respondent in respect of the alleged injury of 17 January 1996 is set aside and a new trial ordered in respect of that claim. (3) The costs order in respect of the first trial is set aside and the costs of that trial are to be determined by the trial judge on the retrial. (4) The cross appeal is dismissed with costs. (5) The respondent is to pay 65% of the Appellant's costs of the appeal.
CATCHWORDS:	Appeal - compensation - personal injuries - damages - second injury exacerbating the first - cross claim - compulsory third party vehicular insurance. Appeal against District Court decision which dismissed claims for two personal injuries - Appeal concerning first injury (on stairs) dismissed - Appeal concerning second injury (alleged to have occurred whilst Appellant being transported involuntarily by the Respondent) allowed - new trial ordered limited to the incidents of the second alleged injury - Respondent to pay the Appellant 65% of the costs of the Appeal - Cross Claim by Respondent against 2nd Cross Respondent (seeking indemnity (including costs) under a compulsory third party policy) dismissed.
LEGISLATION CITED:	Motor Accidents Act 1988 Motor Vehicles (Third Party Insurance) Act 1942
CASES CITED:	Commercial and General Insurance Company Ltd v Government Insurance Office of New South Wales (1973) 129 CLR 374 Emad Trolley Pty Ltd v Shigar (2003) NSWCA 231; Lee N Dunn & Sons Pty Ltd v McPhillamy (2000) NSWCA 343 ; Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 ; Yellow Express Courier Ltd v Government Insurance Office of New South Wales (1959) 60 SR (NSW) 22;
PARTIES :	Allan Thomas Owen (Appellant/First Cross Respondent) State of New South Wales (Respondent/Cross Appellant) Zurich Australian Insurance Limited (Second Cross Respondent)
FILE NUMBER(S):	CA 40214/2003
COUNSEL:	S Norton SC/ M. Fraser for Appellant/First Cross Respondent RC Tonner for Respondent/Cross Appellant D Feller SC for Second Cross Respondent
SOLICITORS:	Bryden's Law Office for Appellant/First Cross Respondent Crown Solicitor's Office for Respondent/Cross Appellant Vardanega Roberts for Second Cross Respondent

LOWER COURTJURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	462/1997
LOWER COURT JUDICIAL OFFICER :	Nield DCJ

CA:40214/03

BEAZLEY JA
IPP JA
M.W. CAMPBELL AJA

Wednesday 9 June 2004

ALLAN THOMAS OWEN v STATE OF NEW SOUTH WALES

STATE OF NEW SOUTH WALES v ZURICH AUSTRALIA INSURANCE LTD

FACTS

The Appellant (Owen) was unsuccessful at trial in an action against the Respondent (NSW) seeking damages in respect of two alleged injuries to his back (on 17 Dec 1995 and 17 Jan 1996), and appeals that decision.

With respect to only the second alleged injury (17 Jan 1996), the Respondent (NSW) cross-appeals against the dismissal of a cross-claim against the second cross-respondent (Zurich), seeking indemnity (including as to costs incurred) under a compulsory third party policy (issued by Zurich to NSW) made under the Motor Accidents Act 1988 (NSW).

Facts related to the two alleged injuries, and to the coverage and/or application of the said insurance policy and indemnity issues, are drawn from the DCT trial.

DECISION

Appeal upheld in part:

1. Verdict for the Respondent (NSW) in respect of the alleged injury of 17 January 1996 is set aside and a new trial ordered in respect of that claim (including costs);

2. Cross-Appeal by NSW against Zurich dismissed with costs; and

3. Respondent to pay 65% of the Appellant’s costs of the appeal.

CA:40214/03

BEAZLEY JA
IPP JA
M.W. CAMPBELL AJA

Wednesday 9 June 2004

ALLAN THOMAS OWEN v STATE OF NEW SOUTH WALES

STATE OF NEW SOUTH WALES v ZURICH AUSTRALIA INSURANCE LTD

Judgment

1 BEAZLEY JA: I agree with Campbell AJA.

2 IPP JA: I agree with Campbell AJA.

3 M.W. CAMPBELL AJA:

Introduction

4 This is an appeal from a judgment of His Honour Judge Nield for the respondent in an action brought by the appellant seeking damages in respect of two injuries to his back.

5 There is also a cross-appeal by the respondent (the State) against the dismissal of a cross-claim by the State against the 2nd cross respondent Zurich Australia Insurance Limited (Zurich) seeking indemnity, including as to costs incurred, under a compulsory third party policy issued by Zurich to the State.

6 The cross-claim and certain other issues arising under the Motor Accidents Act 1988 are only relevant to the second alleged injury and it is convenient to deal with the first alleged injury before turning to these aspects.

The alleged injury of 17 December 1995

7 Allan Thomas Owen, the appellant, was in custody at the Long Bay Reception and Industrial Centre on 17 December 1995 and had been so from at least 27 November 1995.

8 It was the appellant’s case that, on 17 December 1995, he left his cell on the second level of 7 Wing and descended down steel stairs to level one where he collected certain food items for breakfast. He alleges that, as he returned up the stairs to have breakfast in his cell, he fell and suffered significant injury to his back.

9 Judge Nield formed an adverse view of the appellant’s credit. This view is the subject of grounds of appeal, however I do not find it necessary to deal with them as I do not consider that the appellant’s case, even if his evidence is accepted as truthful, supports a finding that, more probably than not, he fell because of the condition of the stairs or that the respondent failed to take reasonable care for his safety.

10 A tendered photograph of the stairs or an identical set of stairs shows some 15 steps or treads as Judge Nield found. The appellant thought there were approximately 20-24 in the full flight, however nothing turns upon this difference.

11 The appellant in chief gave evidence in chief as follows:

Q. Now can you describe those stairs, what were they constructed of?

A. Metal, steel, like a moulded steel, green in appearance, or a high coloured green, high gloss paint and they were rounded on the edge, on the lip. A lot of rounded on it.

Q. You mean the lip of the tread?

A. Yeah. It wasn’t a sharp edge as such, the same as the hand holds on the stairs, everything was rounded off.

Q. Did you notice anything about the edge of the treads?

A. Very shiny, very – particularly in that time of the year.

…

Q. And what was the appearance of the stairs?

A. Very bright, very shiny, very slippery.

12 It is common ground that the stairs had a diamond pattern tread. The photograph showed them painted grey with some green which was the colour the appellant thought them to have been painted at the time of his fall. He gave evidence:

Q. Mr Owen, does that photograph show the appearance of the stairs as at about 18 [sic] December 1995?

A. Yes.

Q. So even though it was taken relatively recently, it showed the stairs upon which you were walking and the state on which you walked on them on 18 [sic] December 1995?

A. Yes. Except--

Q. Except what?

A. It is not as shiny, it is not as new as when I had my accident, but they are yes, that’s the stairs.

Q. What’s not as shiny, what’s not as new?

A. The tread, the tread. It is more worn away compared to what it used to be.

13 It was also not disputed that the sweepers cleaned the stairs once or twice a day and that detergent was used but not polish.

14 Mr De Urbago, a correction officer on duty on 17 December 1995 in areas including 7 Wing gave evidence in cross examination:

Q. And the aim of all this cleaning was to keep the stairs looking clean and shiny, is that correct?

A. Nice and clean, always clean for health hygienic purposes.

15 Mr De Urbago gave evidence, which was not challenged, that except when fights occurred, he had not seen or heard of anyone suffering injury on the stairs. He had worked in that area for three years at the relevant time. He used the stairs about twenty times a day including carrying boxes up and down in both hands.

16 Mr Thompson, the area manager of Section A (which included 7 Wing) from 1994 to 1997, gave evidence that he was not aware of any injury or accident occurring on the stairs.

17 No evidence was called as to previous falls or incidents on the stairs. No expert evidence was called. Amongst other things this means that there is no expert evidence to suggest that it is unsafe to use gloss paint on stairs.

18 The appellant said that his fall occurred about four stairs from the top. He gave evidence in chief as follows:

A. My foot hit – these thick thongs I was wearing hit the tread of the stairs, and that started to throw me and my foot then missed the tread all together. I couldn’t get on the tread, it just slipped straight off the tread and I twisted to try and stop myself because I knew I was going down and plates went everywhere. The inmate behind me tried to grab me, but he missed me as well, and then I bounced down the stairs on my backside all the way to the bottom just about until an inmate grabbed me and an officer grabbed me and stopped me from bouncing any further.

Q. About how far did you fall?

A. Well I was nearly at the bottom, so, a good seven to ten stairs.

Q. Had you been in any particular hurry to get up those stairs?

A. No, no. It is just normal breakfast routine.

19 In cross-examination by Mr Tonner of Counsel, who appeared for the respondent, the appellant gave evidence:

Q. You had walked up and down those stairs on numerous occasions before this incident, had you not?

A. I had, yes.

Q. Without any problems?

A. Without any problems.

Q. And I suggest to you that what happened was, wearing the thongs you just hit the front of the stair and lost your footing?

A. That’s partially it, yes.

Q. That’s how you fell isn’t it?

A. Partially correct.

Q. It had nothing to do with the stairs being slippery?

A. Oh it did so sir? I would like to disagree with you there because my foot slipped on the paint, it wasn’t as if my foot had just hit the tread of the stairs and then I went upside down.

…

Q. How thick were your thongs?

A. Very thick. Very thick.

Q. Well when say very thick, how --

A. At least an inch thick, they were ridiculous

Q. And didn’t the front of your thong hit the edge of the step?

A. It did, yes.

Q. And that caused you to fall didn’t it.

A. No it didn’t.

20 The appellant denied that he was ‘just making up’ the slipperiness and asserted that he was keeping a proper look out as he walked up the stairs.

21 When recalled later in the case the appellant gave evidence as follows in answering a number of questions asked by Judge Nield:

Q. Which foot were you standing on when the other foot slipped on the next step?

A. I was standing on my left foot and I was raising my right foot.

Q. So you were standing on your left foot and leading with your right foot?

A. That’s correct, and when that foot hit the tread, and it slipped when I went to put the weight on it.

Q. And so it’s the toe section of the thong that hit the curved section of the …

A. Yes it hit and skipped up.
Q. Pardon?

A. It hit the edge, the tread, skipped up and when I went to put, as I was putting my foot up its come up and I’ve put my weight on it and its gone, its left me.

Q. So this morning the impression that I received from your evidence, and my impression may be incorrect, is that the front edge of the curved section of the thong …

A. Yes

Q. … hit the curved section of the tread?

A. Yes, that’s the edge, this is the step, right, this is the edge of the stair. My foot hit the edge as in such, hit the edge with my foot, with the thongs, they’re big thongs, thick thongs, they’ve got a big thick lip on them, its hit the front, and its hit, as I’ve skidded up and I put weight on to try and stop my fall from going any further and that’s when I’ve gone, my foot’s gone straight back from down from underneath me.

Q. So the foot’s gone straight back?

A. Yes.

Q. And dynamics would suggest to me that you would go straight forward?

A. No, I twisted, to grab myself, to grab hold of the top railing and the wire gate in front of me.

Q. So you’re telling me that you actually had the sole of the thong on the curved face of the tread.

A. Yes

22 In cross examination by Mr Tonner the appellant said:

Q. Mr Owen, what’s actually happened is that the thick part of the front of your thong has hit the edge of the step, correct.

Q. And after that you’ve fallen?

A. Pretty much, except …

23 In re-examination he said:

Q. Mr Owen you were just asked some questions about the relative positions of the tread in [sic] the thong at the moment you slipped?

A. Yes.

Q. Can you just say where they were, whether the thong was wholly on the tread, or partly on the tread?

A. It was going onto the tread.

Q. Did any part of the thong come in contact with the tread?

A. Yes it was starting to go down on the tread, the sole. It was starting to go down on the tread on the step.

Q. And then you slipped?

A. Yes.

24 Judge Nield considered that the appellant had altered his account. Whether this be so or not, it is apparent that the appellant’s difficulty began when he failed to lift his leading foot sufficiently to clear the next tread up. On the available evidence it could be no more than speculation to conclude, that had the stairs been in some way different, the appellant would have been able to save himself from falling once his problems began.

25 Further, the extensive prior use of the stairs by prisoners and correction officers without incident strongly supports the view that the stairs were not defective in any regard nor should have been perceived to be so by the respondent.

26 I should add that, insofar as the appellant describes the stairs as slippery, the relevant slipperiness for the purposes of a case such as this is whether the stairs should have the characteristic that persons walking on them (or it) with ordinary care, will from time to time slip (Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 per Priestley JA at 707). These stairs have not been shown to have this characteristic; indeed the evidence is to the contrary.

27 In my view, the conclusion of Judge Nield that the claim based upon the incident of 17 December 1995 is not made out, is correct. I propose that the appeal be dismissed in as far it relates to that incident.

The alleged Injury of 17 January 1996

28 The appellant gave evidence that, on 16 January 1996, he had not recovered from the fall on December 1995. He said that he was still engaged in bed rest and that he “couldn’t move out of my cell”. He was taking Panadeine Forte, a strong analgesic.

29 I shall return to the appellant’s back condition and to the treatment he had had and was having later. For the present, it is sufficient to accept that he was in considerable back pain. It was the view of Dr Johnstone, an orthopaedic surgeon whose report was tendered for the appellant, and Dr Blue, an orthopaedic surgeon whose report was tendered for the cross defendant, that the appellant had suffered a disc protrusion by that time.

30 On the morning of 17 January 1996, the appellant was told to pack his belongings as he was to be moved to Lithgow. He said that he asked, “How am I supposed to do that in my condition with my back?”. He also said that he could not move. According to the appellant, the reply was “well that’s up to you how you do it”. Probably with some assistance from an officer, he went at least to the reception area. A nurse was called and she read his file. She did not examine him. He was not allowed to talk to her. After reading the file the nurse said, “He’s okay, he can go”.

31 Thereupon, the appellant was conveyed to Lithgow, a journey of at least “a couple of hours”. He described the prison escort van as having a long straight and narrow steel bench that was not padded and was not equipped with seat belts.

32 The appellant gave the following evidence in chief:

Q. And do you recall anything happening?

A. Yes. It was a bit painful for me, I was moving all around the place to try and get comfortable because every bump you hit was like being hit in the back, the shot of pain. As a consequence I ended up trying to lay down on the floor and basing myself between the seat and the wall.

Q. And did that help?

A. A little. A little. Then it got to the stage where I couldn’t move …

33 The appellant said that, on arrival at Lithgow, he was carried from the truck. He was given medical treatment including an injection. A few days later he was transferred to Long Bay by ambulance and there admitted to the prison hospital. A later CT scan disclosed a right sided lumbar disc protrusion with nerve root compression.

34 The appellant did not refer to any specific incident upon the journey. In cross examination by Mr Feller of Counsel, who appeared for the cross-respondent, he gave evidence:

Q. At the time of the trip in the prison van, you tell us that you felt worse?

A. Oh definitely, yes.

Q. And by that do you mean that the pain that you were feeling before the trip in the prison van, was in fact more acute?

A. Very much so.

…

Q. And is it the case then that when you saw Dr Johnstone on 17 November 1997, that’s the first occasion--
A. Yes.

Q. … you told him that you then still had symptoms which you, yourself, attributed to the injury on 18 December 1995 when you fell down the stairs?

A. Yes.

Q. Was that then the situation in your mind, you dated back all your symptoms to that initial fall?

…

A. Yes, yes I do date it back to that.

Q. And is it the case then that you, in your view, you had no new symptoms after the trip in the police van, but simply a worsening of how you felt?

A. Yes

Q. And that was alleviated by the subsequent operation?

A. Yes.

35 Much of the above account of the circumstances of the journey was taken from the appellant’s evidence, however there was no real challenge to it in cross examination and no evidence was called to deny it. It is true that Judge Nield said that he would have expected confirmation by way of entry in the Lithgow Centre’s records or the clinical notes there. However, as the Judge noted, a certificate issued at Lithgow by a medical practitioner for transport back by car contained the entry:

Justification of medical reason for requesting car: severe lower back pain with a past history of L4/5 Laminectomy. Pain exacerbate (sic) on truck trip to Lithgow from Long Bay.

36 Judge Nield accepted that the level of the appellant’s lower back pain was worsened or increased by his transfer but he was unable to ascertain the extent of that worsening or increase.

37 Despite that difficulty, he doubted that the aggravation was other than minor and said that he thought that, by the time of the laminectomy of 4 April 1996, the level of lower back pain had returned to its pre 17 January level.

38 Some of the Judge’s reasoning is, with respect, not easy to follow, however it is clear enough that he did not attribute the worsening of the lower back pain to any specific event on the journey. The appellant did not do so, either at trial or in the histories given to medical attendants or doctors. The medical evidence does not point or refer to such an event.

39 The appellant’s claim in respect of the alleged injury of 17 January 1996 is framed in common law negligence and there is no reference in the statement of claim to the Motor Accidents Act 1988.

Motor Accidents Act 1988 (NSW)

40 The particulars of negligence alleged in the statement of claim were as follows:

(a) Failing to taken any or any adequate precautions for the Plaintiff’s safety;

(b) Putting the Plaintiff in a position of peril in the circumstances;

(c) Failing to transport the Plaintiff to Lithgow Prison in a vehicle which would not induce added stresses to the Plaintiff’s spine.

(d) Transporting the Plaintiff to Lithgow Prison when it was unsafe to do so.

(e) Failing to wait until the Plaintiff had recovered from his initial injury on 18 December 1995 before transporting him to Lithgow Prison.

(f) Failing to transport the Plaintiff to Lithgow Prison in a suitable vehicle.

41 The respondent’s notice of grounds of defence included the following:

… these allegations arise out of the use of a motor vehicle and should be dealt with under the provisions of the Motor Accidents Act , the Compulsory Third Party Insurer being the appropriate defendant.

42 The reference to the Compulsory Third Party Insurer being the appropriate defendant was not pursued. It was accepted at trial and before us that the ground sufficiently raised the issue as to whether the action was caught by the prescriptions and limitation provisions of the Motor Accidents Act 1988.

43 Quite apart from threshold problems in relation to quantum which would arise if this contention were correct, Ms Norton of Senior Counsel, who appeared with Ms M Fraser of Counsel for the appellant, conceded that the necessary notice had not been given under the Motor Accidents Act 1988 (and no doubt would concede that proceedings had not been commenced in time) and that this action would fail even if steps could be taken “to fix it up”.

44 Judge Nield did not deal with this ground of defence as he determined that there was no fault on the part of the respondent in respect of the injury of 17 January 1996. However, as I propose that there be a retrial of this issue (for reasons I shall give later), I should address the defence which, if made out, would defeat the present action.

45 As at 17 January 1996 the Motor Accidents Act 1988 provided, inter alia, as follows:

Part 1
3. Definitions

Injury :

(a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:

(i) the driving of the vehicle, or

(ii) a collision, or action taken to avoid a collision, with the vehicle, or

(iii) the vehicle’s running out of control, or

(iv) such use or operation by a defect in the vehicle; and

(b) …

motor accident means an accident caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle which causes the death of or injury to a person.
Part 5- Claims and court proceedings to enforce claims
Division 1

40 Definitions
(1) In this Part:

claim means a claim for 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.
claimant means a person who makes or is entitled to make a claim

40A Objects- Part 5
The objects of this Part are:

(a) to ensure that claims are quickly brought to the attention of insurers:
(i) to enable early investigation and assessment of the claims, and
(ii) to enable the early identification of the nature and severity of the injuries sustained in the motor accident and of the likely treatment and rehabilitation needs of the injured person, and
(iii) so that insurers can readily predict claim frequency and hence make appropriate provision for the calculation of premiums, and
(iv) to enable accident victims to receive treatment and rehabilitation and prompt payment of earnings where liability is clear, and

(b) to promote negotiation between the parties and, by means of alternate dispute resolution, to ensure that the resolution of disputed claims by the courts is kept to a minimum, and
(c) to underscore the need to deter and prevent the making of fraudulent and exaggerated claims.
41 Application of this part
This Part applies to and in respect of a claim whether or not it is a third-party policy in respect of the claim.

Division 2- Claims and other matters preliminary to court proceedings

42 Accident must be reported within 28 days
(1) It is the duty of a person who is entitled to make a claim to ensure that a written report of the motor accident concerned is made to member of the Police Force (…..) within 28 days after the date of the accident.
43 Time for and notice of making of claims
(2) A claim must be made within 6 months after the relevant date for the claim. The relevant date is the date of the motor accident to which the claim relates unless the claim is made in respect of the death of a person, in which case the relevant date is the date of the person’s death.
52 Time limitations on commencement of court proceedings

4) A claimant is not entitled to commence proceedings in respect of a claim more than 3 years after:
(a) the date of the motor accident to which the claim relates, or
(b) if the claim is made in respect of the death of a person, the date of death,

except with the leave of the court in which the proceedings are to be taken.
(4B) The leave of the court must not be granted unless:
(a) the claimant provides a full and satisfactory explanation to the court for the delay, and
(b) the total damages of all kinds likely to be awarded to the claimant if the claim succeeds are not less than 25 per cent of the maximum amount that may be awarded for non-economic loss under section 79 or 79A as at the date of the relevant motor accident.

46 There are various provisions for extension of time and other forms of relief, however, it is unnecessary to refer to them for present purposes.

47 Mr Feller, supported by Ms Norton, submitted that the appellant’s injury did not fall within the meaning of injury as defined for the purpose of the Act. However, I do not need to reach a concluded view on this issue.

48 Submissions were directed mainly to the issue of “injury”, however, it is to be kept in mind that the prescriptive and limitation provisions of the Motor Accidents Act 1988 are to be found in Pt 5. The key concept is that of “claim” albeit an injury of the relevant kind is part of the definition of “claim” in Pt 5.

49 The fact that the appellant’s claim was framed in common law negligence and that it was capable of being characterised as having resulted from a breach of the respondent’s duty of care as custodian of the appellant does not exclude the operation of the Act and its limitations (see Emad Trolley Pty Ltd v Shigar [2003] NSWCA 231.

50 However it was submitted that for the appellant’s claim to be caught by the Act it must be one which has the characteristic identified by Mason P in Leo N Dunn & Sons Pty Ltd v McPhillamy [2000] NSWCA 343 at para 17). He there said:

The word “claim” when found in s 40 appears in a context and with a purpose, namely that of regulating due notice to insurers and the timely and efficient prosecution of proceedings in courts. That part seems to me to be directed and only to be directed at the type of accident that occurs at one fixed point of time.

51 In Dunn, the opponent had been granted leave to commence proceedings against the claimant under s151D of the Workers Compensation Act 1987. The action was founded upon an allegation that the opponent, during his employment with the claimant over some seven months, had been negligently required to drive a tanker which shuddered at certain speeds and had a twisted seat. He had, it was to be alleged, suffered an injured back as a result of so doing.

52 Pursuant to the terms of s151D, leave could not be obtained for the commencement of court proceedings in respect of a claim within the meaning of Pt 5 of the Motor Accidents Act 1988.

53 Mason P (with whom Meagher and Heydon JJA agreed) held that Pt 5 was only directed at the type of accident that occurred at a fixed point of time: He considered the matters relied upon, which he characterised as an injury arising out of the nature and conditions of employment, as something different to an accident occurring at a fixed point of time.

54 In Emad, which dealt in terms with the later Motor Accidents Compensation Act 1999 (MAC Act), Hodgson JA, after concluding that the relevant event in that case was a motor accident, went on:

55

If the respondent’s claim had been in respect of an injury caused progressively over a period of time, even if caused by the fault of the owner of a motor vehicle, and even if a result of and caused by the driving of that vehicle, the result would have been different. Chapter 4 of the MAC Act is plainly directed at regulating claims arising out of motor accidents, and has no application where an alleged injury is caused, not by a motor accident, but progressively over a period of time …

56 He also said:

In my opinion a similar argument was the basis of the decision in Leo N Dunn & Sons Pty Ltd v McPhillamy [2000] NSWCA 363; although the relevant provisions of the Motor Accidents Act 1988, with which that case was concerned, were not so clearly tied to the occurrence of a motor accident as are the relevant provisions of the MAC Act.

57 Mr Tonner pointed out that ownership of the relevant vehicle was not pleaded in Dunn, however the same situation applies in this case.

58 Subject to what is said in paras 56-59, I consider that I should accept, and it accords with my own view, that, for the appellant’s injury to be caught by Pt 5 of the Motor Accidents Act 1988, it must be one which was caused by a motor accident which occurred at a fixed point of time.

59 This case does not require, nor did Dunn or Emad, an examination of the concept behind the use of the phrase “a fixed point in time”. Other factual situations may do so.

60 In my opinion the context and reasoning in Dunn indicate that the phrase is not intended to refer to a fixed instant in time.

61 The context involved consideration of a motor accident. Most motor accidents do not occur instantaneously. Usually, at least, motor accidents occur over time-spans of seconds, and it is quite possible for a motor accident to occur over a period longer than that.

62 The reasoning, to my mind, conveys the concept that for a motor accident to be caught by Pt 5 it must be sufficiently circumscribed in time to allow it to be identified as such and to set in train the reporting and other provisions of the Part. Common sense suggests that the time involved would be short.

63 Mr Tonner also submitted that the two hour period locked in the van without the ability to communicate was in marked contrast to the six or seven months of driving a variety of vehicles, which was the situation in Dunn. This is a matter of degree and it is, I consider, inappropriate to characterise what occurred over the journey from Long Bay to Lithgow as something which occurred at a fixed point in time.

64 Judge Nield did not make any findings as to whether the aggravation he accepted was caused by one or more specific events or as a result of the journey as a whole. I am of the view that the evidence, not dependent to any significant extent on the appellant’s credit, supports the probability that the causative factor was the journey as a whole. In any event, it was the respondent who raised the defence. The onus of establishing the occurrence of an event (the motor accident) occurring at a fixed point of time lies upon it. That onus has not been discharged.

65 In any event it is sufficient to say that an injury sustained by being jolted about, on and off, for some two hours while being conveyed in a van is not an injury sustained in an “accident” within the ordinary meaning of the word.

66 In my view, the defence based upon the applicability of the Motor Accidents Act 1988 has not been made out. In these circumstances, the claim in relation to the events of 17 January 1996 (the journey injury) falls to be determined as pleaded.

The common law claim

67 It is convenient to note that Ms Norton and Mr Tonner agreed that, if the decision of Judge Nield in respect of the journey injury is set aside, there should be a new trial.

68 Judge Nield dealt with the issue very briefly. He said:

As to the plaintiff’s complaint that he should not have been taken by standard truck from the Long Bay Centre to the Lithgow Centre, it is easy to say, with the benefit of hindsight, that he should not have been so taken, but, notwithstanding the benefit of hindsight, it is a question whether the Department’s officers were negligent in the approval for the plaintiff to be taken by standard truck. The available medical evidence does not allow me to find that it was unreasonable for such approval to be given.

69 The only reference to that medical evidence then followed when the Judge said:

Indeed, although the cross defendant’s counsel submitted that I should not accept the evidence of Dr Varga that “Up until that time”, that is, I interpose, the transfer from Long Bay to Lithgow, “the patient”, who was, I interpose, the plaintiff, “was making a good recovery from his injury” on, I interpose, 17 December 1995, “with minimal residual symptoms”, see paragraph 2 of exhibit K. I cannot see any reason to reject what he said . Indeed the plaintiff’s evidence of the nurse’s approval for his transfer confirms the view of Dr Varga that the plaintiff’s injury was settling, if not settled.

The emphasis is mine.

70 The brevity of Judge Nield’s reference to the medical evidence and the statement as to not seeing any reason to reject Dr Varga’s view leads me to conclude, with respect, that the Judge did not take into account relevant material appearing from the records tendered and the opinion of other doctors.

71 To explain that view, it is necessary to go to the records tendered from the prison material and from the Prince of Wales Hospital.

72 The prison’s clinical record noted on 17 December 1995 the appellant attending the clinic at 09:00 hours complaining of severe back pain and “pins and needles in both legs”. Registered Nurse Osman noted “having difficulty walking, is visibly trembling and appears to be in much discomfort”. Dr Melman was contacted. He prescribed Panadeine Forte, two tablets four times a day as needed. A “sick in cell” certificate was issued. It is convenient to observe that I accept Ms Norton’s submission that the probability is that that certificate continued and was in force at the time of the appellant’s move to Lithgow. The notes recorded a history of removal of a disc in the appellant’s lumbar region in the 1980’s.

73 At 14:00 hours on that day, the appellant was seen in his cell. He complained that the Panadeine Forte was not helping and of spasm in the small of his back.

74 A routine treatment sheet shows that, on 18 December 1995, Dr Varga prescribed Panadeine Forte for three days, Naprosyn and another drug. The sheet shows the Panadeine Forte was supplied up to 20 December 1994 and the Naprosyn to 19 December.

75 Neither counsel nor I can identify any further reference in the records to Dr Varga or to his view as to the appellant’s conditions until after the appellant returned from Lithgow.

76 A routine treatment sheet shows that, on 19 December 1995, Dr Melman prescribed Panadeine Forte, two tablets as needed four times a day for seven days. The sheet shows three days issue, with the 19th not given, presumably because of overlap.

77 On 22 December 1995, Registered Nurse Osman referred the appellant to casualty at Prince Henry Hospital. In her referral note, she said that there had been no improvement since 17 December 1995. The appellant was complaining of loss of feeling in his rectum. There were no medical officers available at the clinic.

78 The hospital’s notes were tendered. A copy of those notes was sent to the clinic with a letter which said:

Please see above notes – Reviewed by Spinal Reg & case discussed with Neurosurgical Reg who suggested that there was no neurosurgical problem to be assessed & suggested Indocid suppository 100mg bd po diazepam 5-10mg bd-tbs po for 1/52 & if no improvement or deterioration in neurological status – for represent’n to cas.

79 The notes contained an entry:

Unlikely to have an acute spinal injury ( do not admit ward 1 at this stage)
? partial cauda equina lesion but atypical features:
…

80 The appellant was noted to see a neurosurgeon. It would appear that that reference is one of the matters dealt with in the letter of the hospital.

81 X-rays of the thoracic and lumbar spine were taken on that day. The report of Dr Palmer on the x-rays is dated 12 January 1996. That x-ray merely showed some osteophytic lipping and slight narrowing of the disc space at T11/13 with no evidence of fracture. No doubt the date of the report was the cause of Ms Norton’s understanding that the x-rays were carried out on that day and her reference in address as to the absence of any record of that being done.

82 The clinical record, with Dr Melman referred to as the doctor, notes on 12 January 1996:

See reports – especially from PHH 22-12-95. Back playing up – due to see orthopod. Valium & Indocid & Panadol …

83 There follows a line in the clinical record which is hard to understand. There is a suggestion that it refers to an examination by the “orthopod”. I doubt that, although it is the appellant’s recollection that he was examined by an orthopaedic surgeon about a week after his visit to Prince Henry Hospital.

84 A routine treatment sheet signed by Dr Melman on 12 January 1996 prescribes Panadeine Forte (two tablets as needed four times a day for seven days). The sheet shows that he was being provided with eight tablets a day up to 17 January 1996. On that day, he was shown as being provided with two.

85 This, it is reasonable to conclude, meshes with the entry in the clinical record which contains an entry of 12 January 1996 as follows:

17.1.96 Panadeine Forte x 6 given to Allan at 0730 this am as per above order to cover his escort to Lithgow.

86 The “above order” is clearly the routine treatment sheet to which I have just referred. I pause to observe that the nurse who said “He can go” must have known that he was at that time being treated by Dr Melman for his back condition with an ongoing regime of a significant dosage of a high strength analgesic.

87 After his return from Lithgow, the appellant appears to have come under the regular care of Dr Varga. That doctor referred the appellant for a CT scan in February 1996 and for a neurology consultation in March 1996. The CT scan showed a prominent right L4/5 disc protrusion. Following the neurology consultation, spinal surgery was arranged.

88 On 21 March 1996, Dr Varga, in answer to a medical report request, wrote a letter to a District Court Judge in which he said, amongst other things:

On 17/01/96 Mr Owen had an aggravation of a back injury which occurred on 18/12/95 when he fell down some stairs in Long Bay’s Reception and Industrial Centre.
The aggravation occurred in the course of this patient’s escort to Lithgow Prison by standard Department of Corrections Service in a truck. Up until that time the patient was making a good recovery from his injury with minimal residual symptoms.
Following his arrival at Lithgow this patient reported acute low back pain of such intensity that it interfered with his ability to attend to activities of daily living and medical staff at that jail arranged for his admission to B Ward, Long Bay Hospital, for investigation and treatment.

89 I should observe that Dr Varga’s letter was written for a different purpose to that with which this appeal is concerned. No doubt the doctor set out his then understanding of the position, however it was not an aspect of his letter calling for accuracy or checking.

90 However it came about that the statement of opinion upon which Judge Nield relied came to be made, it cannot in my view be regarded as consistent with the contemporaneous material to which I have referred. At the very least, that material provided a reason not to accept Dr Varga’s view even if, after consideration, that reason did not prevail.

91 If Dr Varga’s report is to be regarded as going to the fact of the appellant’s physical state, as opposed to what the nurse might reasonably have thought, it would be relevant to consider the views of Dr Johnstone and Dr Blue as to when the disc lesion more probably than not occurred.

92 As I have said above, I consider that the Judge has not taken into account relevant material and I propose that his decision be set aside for that reason.

93 There are, I consider, further difficulties with the judgment which support that proposal. As noted above the Judge observed:

Indeed the plaintiff’s evidence of the nurse’s approval for his transfer confirms the view of Dr Varga that the plaintiff’s injury was settling, if not settled.

94 The appellant’s evidence is that the nurse did not examine him and that he was not allowed to talk to her. She looked at his file. The appellant and the respondent both tendered medical records and it may be inferred that the relevant parts of the file are in evidence.

95 The events and materials do not support a conclusion confirming that, as at the date of transfer, the appellant’s injury was settling if not settled.

96 The passage does suggest that the judge considered that a nurse would not give approval unless the appellant’s condition was at least settling. An examination of the available contemporaneous material shows that the condition was not settling. It may be that had Judge Nield appreciated that fact he would have reached a different conclusion.

97 I should mention, lest it be overlooked before any new trial, that Mr Tonner was allowed, despite the absence of pleading (DCR Pt 9 r 9), to call evidence to found a defence that the respondent relied upon the advice of medical personnel who were not employees of the respondent but of the Correctional Health Services. The judge did not refer to the defence in the judgment. It was not necessary to do so on the view he had taken of other issues.

Cross-Claim

98 Although it was not argued in this way, it is not self evident that the failure of the appellants’ claim by reason of non compliance with Pt 5 had the consequence that the event in which he was injured was not covered by the Statutory Policy issued by the cross respondent.

99 The language of the Motor Accidents Act 1988 and the associated Statutory Policy does not so provide. Section 41 tends to disassociate the policy and the Part. Mason P in Dunn would appear not to have accepted the submission that “Pt 5 should be construed having some regard to the extent of cover given by the compulsory third party insurance policy.”

100 Argument was presented as to the entitlement of the state to the relief it sought if the policy applied. As I have come to the view that it is not entitled to the payment it seeks even if the policy applied, I think it is best not to deal with the issue of applicability.

101 It was not in dispute that at all relevant times the State held a valid third-party policy issued by the cross-appellant in respect of the prison van.

102 Section 9 of the Motor Accidents Act 1988 provided at the relevant date:

A third-party policy under this Act is a policy that:
(a) insures the owner of the motor vehicle to which the policy relates and any other person who at any time drives the vehicle (whether or not with the consent of the owner) against the liability in respect of the death or injury to a person caused by the fault of the owner or driver of the vehicle:
… … …
(b) is in the terms of Schedule 1

103 Schedule 1 at the relevant date provided:

Motor Accident Act 1988 Third Party Policy
1. The insurer insures the owner of the motor vehicle and any other person who at any time drives the vehicle (whether or not with the consent of the owner) against liability in respect of the death of or injury to a person caused by the fault of the owner or driver of the vehicle:
… … …
2. In this policy, words and expressions have the same meaning as in the Motor Accidents Act 1988.

104 Section 43(4) provides that a claim is made by giving notice to the person against whom the claim is made and the third party insurer.

105 Section 43A(6) and 44B give insurers, in effect, discretionary powers in respect of late or incomplete claims.

106 Section 45 provides that it is the duty of an insurer to endeavour to resolve a claim, by settlement or otherwise. It also provides for payments to be made once liability has been admitted or determined.

107 Section 46 prevents an insured, without written consent, entering into or incurring expense in litigation. There are related restrictions in respect of settlement or the making of admissions.

108 Section 47(1) provides:

When a claim is made against a person, the person’s insurer may:
(a) conduct and control negotiations in respect of the claim, and
(b) conduct, or take over the conduct of, any legal proceedings in respect of the claim and may conduct those proceedings in the name and on behalf of the person, and
(c) at any stage of those negotiations or proceedings, compromise or settle the claim, and
(d) exercise any function conferred by this Part on the person in respect of the claim.

109 The cross respondent did not exercise the power given by section 47 and the State incurred costs in defending the applicants’ claim in respect, inter alia, of the alleged injury of 17 January 1996.

110 Whilst Mr Tonner did refer in submissions to a suggested duty of the cross respondent to the take over the conduct of the matter the remedy he sought was that the cross respondent indemnify the State in respect of the costs of defending the claim. The cross appeal referred to a declaration, however, that was not pursued.

111 Mr Feller submitted that the third party policy was a liability based policy and that its terms did not cover the costs claimed by the State.

112 I agree with his submission that the matter is effectively so determined by the decision of the Full Court in Yellow Express Courier Ltd v Government Insurance Office of New South Wales (1959) 60 SR (NSW) 22. In that case an insured sought to recover the costs of defending a claim after the third party insurer had done so for a time and then in effect, handed the defence back to the insured.

113 The insured succeeded upon a contractual basis arising between the insured and the insurer from correspondence between them, however, he failed upon the alternative basis of reliance on the policy.

114 Owen J, with whom Street CJ agreed, held that the words “liability incurred… in respect of the bodily injury to any person caused or arising out of the use of a motor vehicle”, being the language of s10(1)(b)(i) of the Motor Vehicles (Third Party Insurance) Act 1942, did not indemnify the insured against the costs of defending the claim. Herron J left that matter open.

115 A subsection of that Act did provide that the insurer indemnify the insured as to costs whilst exercising its right to take over the conduct of proceedings. However I do not think, and Mr Tonner did not put to me, that circumstance was material to the decision reached.

116 Commercial and General Insurance Company Ltd v Government Insurance Office of New South Wales (1973) 129 CLR 374 was an appeal from a decision of the Supreme Court of New South Wales which dismissed a claim for contribution between two insurance companies.

117 Yellow Express was referred to in submissions. The Court delivered one judgment which contained the following passage:

There is a further matter. The claim for contribution extended to one half of $30,283.41 (i.e. judgment of $28,000 with $925.20 costs, plus the employer's costs of defending the action $1358.21). For the respondent it was argued that no part of $1358.21, the costs of defending the action, was proper subject matter for contribution. With that we agree. The costs were incurred by the appellant in the exercise of its right to defend the action brought against the employer which it had insured. The indemnity granted to the employer, however, was against claims for which the employer should be liable for any injury to an employee. Accordingly, the policy of the appellant did not cover the costs which the appellant incurred in defending the action. Nor did the third party policy. The indemnity thereby granted was against liability "incurred by the owner and/or the driver in respect of the death of or bodily injury to any person caused by or arising
out of the use of the motor vehicle". Neither policy, therefore, covered the costs incurred by the employer or the appellant in
defending the rigger's action. Accordingly, in our opinion, the liability of the respondent is limited to one half of $28,925.20, i.e. $14,462.60.

118 This statement provides strong support for the view that the State was not indemnified in respect of the costs which it incurred.

119 Mr Tonner did put that the obligations imposed upon insurers and the powers given to them by sections such as section 43, 43A, 44B, 45 and 47 and the limitations imposed upon the insured by section 46 introduced an all embracing regime which should lead to a different construction of the terms of the statutory policy. It may be, as Mr Tonner put, that this would produce a fairer result but is not one that the terms of the legislation or the course of authority supports.

120 In my view the cross-defendant is not bound to indemnify the State as to the costs of defending the cost claim even if otherwise entitled to indemnity under the policy. I propose that the cross appeal be dismissed with costs.

Orders

121 I propose the following orders:

(a) The appeal is upheld in part.

(b) The verdict for the respondent in respect of the alleged injury of 17 January 1996 is set aside and a new trial ordered in respect of that claim.

(c) The costs order in respect of the first trial is set aside and the costs of that trial are to be determined by the trial judge on the retrial.

(d) The cross appeal is dismissed with costs

122 The appellant was successful in respect of the alleged injury of 17 January 1996 but not of that of 17 December 1995. On balance I think justice would be served if the respondent paid the appellant 65% of the costs of the appeal and I propose that such an order be made.

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Last Modified: 06/10/2004