Whitfield v Melenewycz

[2016] NSWCA 235

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Whitfield v Melenewycz [2016] NSWCA 235
Hearing dates:	6 May 2016
Decision date:	31 August 2016
Before:	Meagher JA at [1]; Simpson JA at [49]; Sackville AJA at [50]
Decision:	1. Grant leave to the appellants to appeal from the judgment and orders of the primary judge of 4 December 2015. 2. Direct the appellants to file their Notice of Appeal within 7 days. 3. Appeal allowed. 4. Set aside the judgment and orders made on 4 December 2015. 5. Judgment for the appellants as defendants in the proceedings. 6. Order the respondent pay the appellants’ costs of the proceedings at first instance. 7. Order the respondent pay the appellants’ costs of the application for leave to appeal and the appeal.
Catchwords:	TORTS – negligence – Motor Accidents Compensation Act 1999 (NSW) – “blameless accident” – where respondent driver of motorcycle injured in collision with kangaroo – where respondent not owner of motorcycle – where injury not caused by any use or operation of owner – where motor accident “blameless” because not caused by fault of owner or driver or any other person - whether respondent entitled to recover damages from owner – whether s 7B deems injury to have been caused by fault of owner in “use or operation” of vehicle where motor accident causing injury does not involve any use or operation by owner.
Legislation Cited:	Motor Accidents Compensation Act 1999 (NSW), ss 3, 3A, 5, 6, 7A, 7B, 7E, 7F, 7K, 10, 112 Motor Accidents Compensation Amendment Act 2006 (NSW) Motor Vehicles (Third Party Insurance) Act 1942 (NSW)
Cases Cited:	Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568 Axiak v Ingram [2012] NSWCA 311; 82 NSWLR 36 Davis v Swift [2014] NSWCA 458; 69 MVR 375 Huseyin v Container Terminals Australia Ltd [2006] NSWCA 382; 46 MVR 1 Izzard v Dunbier Marine Products (NSW) Pty Ltd [2012] NSWCA 132 JA & BM Bowden & Sons Pty Ltd v Doughty [2009] NSWCA 82; 52 MVR 552 Leach v Nominal Defendant [2014] NSWCA 257; 67 MVR 494 Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; 228 CLR 529 Nominal Defendant v Uele [2012] NSWCA 271; 82 NSWLR 308 Portlock v Baulderstone Hornibrook Engineering Pty Ltd [2005] NSWSC 775; 44 MVR 147 RG & KM Whitehead Pty Ltd v Lowe [2013] NSWCA 117; 63 MVR 375 Simpson & Co v Thomson (1877) 3 App Cas 279 Syed v Crumpton [2016] NSWSC 500 TVH Australasia Pty Ltd v Chaseling [2012] NSWCA 149; 60 MVR 535 Wagga Truck Towing Pty Ltd v O’Toole; IAG Ltd t/as NRMA Insurance v O’Toole [2011] NSWCA 191 Zotti v Australian Associated Motor Insurers Ltd [2009] NSWCA 323; 54 MVR 111 Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193
Texts Cited:	New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 9 March 2006
Category:	Principal judgment
Parties:	David Patrick Whitfield (First Appellant) AAI Limited t/a Suncorp Metway (Second Appellant) Anthony Melenewycz (Respondent)
Representation:	Counsel: K P Rewell SC with M Cleary (Appellants) R S Sheldon SC with J Gumbert (Respondent)   Solicitors: Curwoods Lawyers (Appellants) Burgan Lawyers (Respondent)
File Number(s):	2015/376815
Decision under appeal	Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Division Citation: [2015] NSWSC 1482 Date of Decision: 04 December 2015 Before: Hamill J File Number(s): 2014/00233733

HEADNOTE

[This headnote should not be read as part of the judgment]

On 12 August 2011 the respondent driver was injured when the motorcycle he was riding collided with a kangaroo on an unsealed road in rural New South Wales. He brought proceedings in the Supreme Court against the first appellant as owner of the vehicle and second appellant as third-party insurer. There was no suggestion that the appellant owner had caused or contributed to the accident by any relevant use or operation of the vehicle.

The respondent claimed damages on the basis that the accident was a “blameless motor accident” and that the injury was deemed, by s 7B(1) of the Motor Accidents Compensation Act 1999 (NSW) (MAC Act) to have been caused by the fault of the first appellant owner in the use or operation of the vehicle.

The primary judge found that the accident was “blameless”, that the deeming provision was engaged, and that s 7E did not operate to deny the respondent’s entitlement to recover damages. Accordingly he found that the appellants were liable to the respondent for damages to be assessed. Because the decision was interlocutory, the appellants required leave to appeal.

The issues in the proposed appeal were:

Whether s 7B of the MAC Act deems injury to have been caused by “fault of the owner … in the use or operation of the vehicle” where the “incident or accident involving the use or operation” causing the injury does not involve any use or operation by the owner;

If s 7B applied as contended by the respondent, whether the primary judge erred in finding that s 7E did not apply to deny the respondent any entitlement to recover damages.

The Court held (per Meagher JA, Simpson JA and Sackville AJA agreeing), granting leave to appeal and allowing the appeal:

In relation to (i)

Section 7B(1) deems fault on the part of the owner or driver (or both) only if their use or operation was use or operation involved in the motor accident that caused the injury or death. As there was no causally related use or operation of the motorcycle by the first appellant owner, s 7B did not deem him to have been at fault: [37]-[40], [58]-[59].

Allianz Australian Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568.

In relation to (ii)

Although this issue does not arise, s 7E is capable of applying where there is only one or more than one motor vehicle involved in the motor accident which is said to be “blameless”: [43], [51], [60].

The respondent driver did not cause the accident by any “act or omission” so as to be disentitled from recovering damages (s7E(1)): [44]-[47].

Judgment

1. MEAGHER JA: The issue in this appeal is whether the respondent driver was entitled to recover damages under the Motor Accidents Compensation Act 1999 (NSW) (MAC Act) for injuries sustained when the motorcycle he was riding collided with a kangaroo on an unsealed red dirt road near Bourke. The respondent was not the owner of the motorcycle and no other motor vehicle was involved in the accident. He claimed damages from the first appellant on the basis that the accident was a “blameless motor accident” with the claimed outcome being that his injury was deemed, by s 7B(1) of the MAC Act, to have been caused by the fault of the first appellant as owner in the use or operation of the motorcycle. (The relevant provisions of the MAC Act are set out at [11], [12] and [14] below.)

2. The second appellant is the third-party insurer of the first appellant. Under that insurance, the former is liable to indemnify the owner against liability in respect of “injury to a person caused by the fault of the owner or driver of the vehicle”: MAC Act, s 10.

3. Before the primary judge (Hamill J), the appellants maintained, addressing the circumstances of the accident, that it was not a “blameless motor accident”. They also contended that if it was, so that the deeming provision was engaged, the respondent was not entitled to recover because of the application of s 7E. Four arguments were advanced in support of that proposition (see [42] below).

4. The primary judge held that the accident was a “blameless motor accident” on the basis that the respondent was not negligent in his driving of the motorcycle and there was no negligence of any other person. That conclusion is not challenged. His Honour also held that s 7E did not apply to deny any entitlement to recover damages: Melenewycz v Whitfield [2015] NSWSC 1482. That conclusion is challenged.

5. In the course of oral argument in this Court, the appellants also submitted that in the circumstances of this motor accident s 7B did not deem any fault on the part of the owner, as distinct from the driver, in “the use or operation” of the motorcycle. That argument, which focusses on the construction and application of s 7B, was not made to the primary judge. It was not suggested that it could not be put for the first time on appeal.

6. The primary judge described the question raised by the respondent’s reliance on the blameless accident provisions as “moderately interesting”. It arises in circumstances where no use or operation of the vehicle by the owner was causally or temporally related to the happening of the accident and injury. Formulated by reference to the language of s 7B, and the definition of “motor accident”, the question is whether s 7B deems “fault of the owner … in the use or operation of the vehicle” where the “incident or accident involving the use or operation” that caused the injury does not include any use or operation of the owner.

7. Because the primary judge’s decision was as to liability only, the appellants require leave to appeal. The question raised is of general application and obvious importance. For that reason leave should be granted.

Relevant facts as agreed or found

8. The following facts were agreed. In the early afternoon of 12 August 2011 the respondent was riding the first appellant’s motorcycle along Hungerford Road near Bourke, at approximately 90 to 100 km/h. The road was dirt, gravel and unsealed without any visible road markings or bitumen. It was about 20 m wide with a clearing on either side before the growth of foliage. The speed limit was 100 km/h. When the respondent first saw the kangaroo, it was approximately 20 m ahead of him and approximately 6 m to the right of the graded surface of the roadway. It bounded onto the roadway and collided with the respondent and his motorcycle. As a result he was knocked off the motorcycle and injured.

9. The primary judge made the following additional findings as to the facts in issue. None of these findings is challenged on appeal:

• Although the agreed facts included that the respondent first saw the kangaroo when it was only around 20 m ahead of him and about 6 m to the right side of the roadway, the agreement was that this was the respondent’s own estimate, to which he adhered at the trial. The distance of 20 m ahead of the respondent may well have been and probably was an underestimation: Judgment at [56].

• The respondent did not notice the kangaroo earlier, because the kangaroo blended with its surroundings: Judgment at [59].

• The respondent was maintaining focus on the road well ahead of him and was scanning the roadway: Judgment at [58].

• The speed at which the respondent was travelling at the time of the accident was not excessive or unreasonable in the circumstances: Judgment at [70].

10. His Honour made no finding that suggested that anything done or not done by the first appellant owner with respect to the use or operation of the motor vehicle caused or contributed to the accident and injuries suffered by the respondent. Nor was any such allegation made by the respondent. His case was that the accident was caused by the unfortunate kangaroo.

Relevant legislative provisions

11. The applicability of the MAC Act and access to its scheme of compensation is governed by s 3A, which provides:

(1)   This Act (including any third-party policy under this Act) applies only in respect of the death of or injury to a person that is caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle and only if the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during:

(a)   the driving of the vehicle, or

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

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

(d)   a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle’s running out of control.

(2)   This Act (including any third-party policy under this Act) does not apply in respect of an injury that arises gradually from a series of incidents.

12. The key terms of the Act are defined in s 3 as follows:

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

…

driver means a person driving a motor vehicle, and includes:

(a)   a person riding and operating a motor cycle, and

(b)   a person for the time being in charge of a motor vehicle.

…

fault means negligence or any other tort.

…

injury means personal or bodily injury and includes:

(a)   pre-natal injury, and

(b)   psychological or psychiatric injury, and

(c)   damage to artificial members, eyes or teeth, crutches or other aids or spectacle glasses.

…

motor accident means an incident or accident involving the use or operation of a motor vehicle that causes the death of or injury to a person where the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during:

(a)   the driving of the vehicle, or

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

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

(d)   a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle’s running out of control.

…

use or operation of a motor vehicle includes:

(a)   the maintenance or parking of the vehicle, or

(b)   in the case of a motor vehicle that is not a trailer – the use or operation of a trailer attached to the motor vehicle …

(c)   in the case of a motor vehicle that is a tow truck …

13. The provisions relating to blameless motor accidents are contained in Pt 1.2, Div 1 of the Act and were introduced by the Motor Accidents Compensation Amendment Act 2006 (NSW) (the 2006 Amending Act). That Act also inserted s 3A (see [11] above) and relevantly commenced on 1 October 2006.

14. It is convenient to set out ss 7A, 7B and 7E.

7A   Definition of “blameless motor accident”

In this Division:

blameless motor accident means a motor accident not caused by the fault of the owner or driver of any motor vehicle involved in the accident in the use or operation of the vehicle and not caused by the fault of any other person.

7B   Liability for damages in case of blameless motor accident

(1)   The death of or injury to a person that results from a blameless motor accident involving a motor vehicle that has motor accident insurance cover for the accident is, for the purposes of and in connection with any claim for damages in respect of the death or injury, deemed to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle.

(2)   If the blameless motor accident involved more than one motor vehicle that has motor accident insurance cover for the accident, the death or injury is deemed to have been caused by the fault of the owner or driver of each of those motor vehicles in the use or operation of the vehicle.

…

7E   No coverage for driver who caused accident

(1)   There is no entitlement to recover damages under this Division in respect of the death of or injury to the driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver.

(2)   The death of or injury to the driver is taken to have been caused by an act or omission of the driver for the purposes of subsection (1) even if:

(a)   the act or omission does not constitute fault by the driver in the use or operation of the vehicle, or

(b)   the act or omission was involuntary, or

(c)   the act or omission was not the sole or primary cause of the death or injury, or

(d)   the act or omission would have caused the death or injury but for the occurrence of a supervening act or omission of another person or some other supervening event.

15. The parties accepted that subs (2)(d) is to be understood as if it read “the act or omission would not have caused the death or injury …”, the emphasised “not” being an obvious and unintended omission. That must be so because the premise of each of the circumstances in (a) to (d) is that it remains consistent with the death or injury having “been caused by an act or omission of the driver”.

The grounds of appeal

16. The appellants challenge the primary judge’s conclusion that the respondent was entitled to damages by the operation of Pt 1.2, Div 1 of the MAC Act (grounds 1 and 2). The submissions made in support of ground 2 include those as to the construction and operation of s 7B. The appellants also challenge the primary judge’s rejection of their arguments as to the application of s 7E (grounds 3, 4, 5 and 6).

17. Finally, the appellants contend that in one respect Axiak v Ingram [2012] NSWCA 311; 82 NSWLR 36 was wrongly decided (ground 7). In Axiak it was held that in accordance with its defined meaning in s 3, as used in the definition of “blameless motor accident”, “fault” means “negligence or any other tort”. The appellants accept that this question does not directly arise. The primary judge’s conclusion that the accident was “blameless” did not depend on “fault” referring only to negligence or any other tort. Nor do they contend that it is necessary to consider this question in order to address their arguments as to the construction of s 7E. That being the position, ground 7 does not arise and I do not address it.

Application of ss 7A and 7B

Legislative Background

18. The MAC Act provides a scheme for the compulsory third party (CTP) insurance of motor vehicles and the payment of compensation under that insurance. CTP insurance was first introduced in New South Wales by the Motor Vehicles (Third Party Insurance) Act 1942 (NSW). Under the current scheme, motor vehicles used on roads are required to be the subject of a third party insurance policy, which by s 10 of the MAC Act, insures the owner and driver of the vehicle “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” in its use or operation. For the purposes of any claim brought in respect of that liability against the owner by a person other than the driver of the vehicle, that driver is presumed by s 112 to have been the agent of the owner acting within the scope of their authority to use or operate the vehicle.

19. The MAC Act does not provide “a universal, comprehensive scheme to award damages to every person who sustains an injury that was in some way connected to a motor vehicle”: Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568 at [43] (McHugh J). Indeed, the scheme was, at least in part, designed to stabilise or reduce insurance premiums: Allianz Australia v GSF at [47], [53] (McHugh J), [80], [101] (Gummow, Hayne and Heydon JJ).

Approach to construction

20. The objects of the MAC Act are to be taken into account “not only when its provisions are capable of more than one construction but also in determining whether more than one construction is open”: Nominal Defendant v Uele [2012] NSWCA 271; 82 NSWLR 308 at [18]; ss 5, 6. However, the words of the statute continue to have paramount significance in the determination of its meaning: see Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; 228 CLR 529 at [22] (Gleeson CJ, Gummow, Hayne and Heydon JJ), [42], [81]-[82] (Kirby J). As Spigelman CJ observed in Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193 at [26], notwithstanding an evident legislative purpose being to confine the application of the Act, the “restriction adopted by Parliament was reflected in specific words which must be construed in the normal way”.

21. There is a substantial body of authority in this Court and in the High Court considering the definition of “injury” and the application of the MAC Act prior to 2006. That authority remains relevant and continues to be applied when construing the Act as amended, particularly the definition of “motor accident” and s 3A: see Zotti v Australian Associated Motor Insurers Ltd [2009] NSWCA 323; 54 MVR 111 at [48] (Allsop P), [113]-[114] (Campbell JA); RG & KM Whitehead Pty Ltd v Lowe [2013] NSWCA 117; 63 MVR 375 at [41] (Tobias AJA); Leach v Nominal Defendant [2014] NSWCA 257; 67 MVR 494 at [40], [52] (McColl JA), [81] (Gleeson JA).

20. Prior to the 2006 amendments, the restriction on the recovery of compensation was principally affected through the narrow definition of “injury” in s 3. The first part of that definition provided:

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

…

23. Following those amendments the content of that definition and accordingly the restriction on recovery is included in s 3A(1). As McHugh J observed in Allianz Australia v GSF at [17] this definition of “injury” emphasised the element of “cause” as the key factor governing the entitlement to compensation. A claimant had to establish that their injury was “caused by the fault of the owner or driver … in the use or operation of the vehicle”. This required that the claimant establish as against the driver or owner (or both) that they were negligent or had committed another tort, that their relevant “fault” was “in the use or operation” of the vehicle and that the injury was caused “by” that fault: Allianz Australia v GSF at [16]. Thus there had to be fault, the fault had to be in the use or operation of the vehicle and had to cause the injury. That remains the position under s 3A(1).

24. The claimant also had to establish (and still must establish) that the injury was “a result of” and “caused during” the driving of the vehicle, a collision, or action taken to avoid a collision, the vehicle’s running out of control, or such use or operation by a defect in the vehicle. This additional requirement is of a causal and temporal connection between the death or injury and the use or operation of the vehicle, to the extent that that use or operation is involved in the accident: Allianz Australia v GSF at [17], [24] and [38] (McHugh J). (There have been minor amendments that do not affect this analysis.)

The 2006 Amending Act

25. This Act introduced the blameless accident provisions, as well as inserting s 3A and amending the definitions of “motor accident” and “injury”. As earlier defined, a motor accident was an accident or incident “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”. The definition of “injury” relevantly was as set out above. The 2006 amendments removed the references to the fault of the owner or driver from each of these definitions and included the new definition of a motor accident as an incident or accident involving the use or operation of a motor vehicle that causes death or injury where that injury also satisfies the causal and temporal requirements that were previously in the definition of “injury”.

26. It is clear from the Second Reading Speech to the 2006 Amending Act (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 9 March 2006) that the blameless accident provisions were intended to extend the scope of the existing CTP scheme to circumstances in which death or injury had been caused by the use or operation of a motor vehicle by its driver or owner (or both) where that use or operation could not be shown to have involved fault on the part of the owner or driver. They do so by deeming fault in the relevant use or operation, so as to give rise to a claim to which the CTP scheme responds.

27. Consistent with that being the position, the Minister for Transport stated:

The Motor Accidents Compensation Amendment Bill introduces enhancements to the existing CTP motor accidents injury scheme …. Secondly, the bill extends the scope of the CTP scheme to provide compensation entitlements for injury or death resulting from a blameless or inevitable accident, which is a motor vehicle accident where no-one is considered to have been at fault – for example, when a person is injured because a driver experiences an unforeseen illness or medical condition, which results in a loss of control over the vehicle. Currently, under the common law, if a court finds that no-one was at fault in an accident the CTP compensation entitlements are not available to those injured in the accident.

… The blanket application of legal rules and principles can on occasions have unfortunate and even undesirable consequences. The principal of fault is a case in point. For example, when a person injured in a motor accident is unable to access CTP assistance because no-one is found to have been at fault in causing their injury, or when children are penalised for behaving as children do. The enhancements to the motor accidents scheme proposed by the bill will provide greater support and security to injured people and their families

Part 1.2 of the bill provides a right of recovery to people injured in motor vehicle accidents occurring in New South Wales when no-one is at fault. That is an “inevitable” or “blameless” motor accident. For the purpose of making this new claim for death or injury, the motor accident is deemed to have been caused by the fault of the owner or driver of the motor vehicle. The injury must also be caused by a motor vehicle accident of a kind recognised by the Act. A person who is injured in a blameless accident will be entitled to CTP scheme benefits. The one exception is that the driver of the motor vehicle causing the accident will not be entitled to make a claim under these provisions. However, if that driver is catastrophically injured an application for entry to the Lifetime Care and Support Scheme may be made. [emphasis added]

28. Further examples of circumstances in which these blameless accident provisions might apply were given in Davis v Swift [2014] NSWCA 458; 69 MVR 375 at [34]-[35]:

The owner and driver may be without fault in circumstances where the driver loses control because of some catastrophic failure of a component of the vehicle which involves no negligence in its care and maintenance. They may also be without fault because an event or incident on or in the vicinity of the roadway (such as an animal running on to the roadway) results in the driver losing control, or having to take evasive action, and causing an incident or accident involving injury.

In these cases, notwithstanding that the driver may have lost control of the vehicle or otherwise driven in a way that caused an accident and injury, there was no fault involved in his or her doing so. …

29. The emphasised reference in the Second Reading Speech to “a motor vehicle accident of a kind recognised by the Act” must be understood as being to an incident or accident involving use or operation of a motor vehicle that causes death or injury.

Discussion

30. The respondent driver claims damages for his injuries from the owner on the basis that they were caused by the owner’s fault in the use or operation of the vehicle. In doing so he does not rely on the deeming of fault on his part as driver and the presumption of agency in s 112(1) as making the owner liable for his (deemed) fault as driver in the use or operation of the vehicle. Nor could he because the presumption in that subsection only operates where the injured person and driver are different persons. That is the effect of s 112(1)(a) which limits the application of the presumption to proceedings “against the owner of a motor vehicle, whether severally or jointly with the driver of the vehicle, for the recovery of damages for liability in respect of the death of or injury to a person caused by the fault of the driver of the vehicle in the use or operation of the vehicle”.

31. Had the respondent owned the motorcycle he could not have had a claim for damages against himself as owner: cf Syed v Crumpton [2016] NSWSC 500 which decides otherwise. I respectfully disagree with the conclusion in that judgment. Section 7B deems fault for the purposes of a claim which depends on the claimant establishing liability under the common law. It does not deem liability. Under the common law a driver cannot have a claim in negligence against him or herself: see in the context of an asserted subrogated claim, Simpson & Co vThomson (1877) 3 App Cas 279.

32. The respondent relies on the deeming provision in s 7B in circumstances where there was a motor accident which undoubtedly involved his use or operation of the vehicle but did not involve any use or operation of the vehicle on the part of the owner, either in a causal or temporal sense. In other words, there was nothing done or not done by the owner in relation to use or operation of the motorcycle that was of any causal significance in relation to the collision with the kangaroo; and the occurrence which constituted that incident or accident did not include any driving or other use or operation of the motorcycle by the owner.

33. It is instructive at this point to consider some of the circumstances in which the driver of a vehicle, who is not the owner, might claim damages from the owner in respect of injury caused by the owner’s fault. To maintain such a claim, the injury must be caused by fault of the owner in the use or operation of the vehicle, and must satisfy the further causal and temporal requirements in s 3A(1). The use and operation of the vehicle includes its maintenance: s 3. In Huseyin v Container Terminals Australia Ltd [2006] NSWCA 382; 46 MVR 1, this Court upheld a claim for negligence in such use and operation, finding an owner who failed to exercise reasonable care in the maintenance of a vehicle’s engine liable for injuries suffered by the driver as a result of the sudden failure of that engine: [36], [39]-[40] (Handley JA). See also Wagga Truck Towing Pty Ltd v O’Toole; IAG Ltd t/as NRMA Insurance v O’Toole [2011] NSWCA 191 at [46] (Hodgson JA).

34. Claims by a driver against the owner of a vehicle also commonly arise in the context of an employer-employee relationship. For example, in Nominal Defendant v GLG an employee was injured when the vibrations from a forklift caused part of its load to fall on him whilst driving the forklift; and in JA & BM Bowden & Sons Pty Ltd v Doughty [2009] NSWCA 82; 52 MVR 552 an employee was injured when the tractor he was driving rolled over. In such cases, a distinction is drawn between a defect in the vehicle which causes injury, and an unsafe system of work that contributes to or is a precondition of the injury: Allianz Australia v GSF at [2] (McHugh J); Izzard v Dunbier Marine Products (NSW) Pty Ltd [2012] NSWCA 132 at [25] (Basten JA); TVH Australasia Pty Ltd v Chaseling [2012] NSWCA 149; 60 MVR 535 at [24] (Basten JA). This distinction focusses attention “on the fault of the owner in its capacity as owner” of the vehicle, rather than as employer: Allianz Australia v GSF at [21] (McHugh J), [133] (Callinan J).

35. Returning to the present case, the accident involved use or operation of the motorcycle by the driver, but not of the owner, and the driver’s use or operation did not involve fault. Accordingly there was no fault of the owner or driver in the use or operation of the vehicle so that the first part of the definition of a “blameless” motor accident was satisfied. In different circumstances, that requirement might equally have been satisfied if there was use or operation of the owner, as well as the driver, provided that there was no fault on the part of either of them in that use or operation (and there was no fault of any other person).

36. The deeming worked by s 7B(1) is expressed to apply “for the purposes of and in connection with any claim for damages in respect of the death or injury”. Such a “claim” (s 3) might be made against the owner or driver or both, depending on whether it can be established against one or the other or both of them, that there was fault in their use or operation of the vehicle and that fault caused the death or injury.

37. The deemed fault is in respect of death or injury that results from a “blameless” motor accident. A “motor accident” is one involving use or operation of a vehicle that causes death or injury. Although not expressly stated, that causative use or operation must be by the owner or driver (or both of them). A “blameless” motor accident is one in which there was causative use or operation by the owner or driver (or both) but no fault in that use or operation. It is in relation to such an accident that the deeming applies.

38. Section 7B(1) deems death or injury caused by the use or operation of the vehicle by the owner or driver “to have been caused by the fault of the owner or driver … in the use or operation of the vehicle”. The use or operation is, in each case, the causative use or operation of the owner or driver (or of both). So understood the deeming is of fault on the part of the owner or driver (or of both) whose use or operation caused the death or injury.

39. This construction of ss 7A and 7B gives effect to the purpose for the inclusion of the blameless accident provisions which, as described in the Second Reading Speech (see [27] above), was to deem fault on the part of the person or persons whose use or operation of the vehicle caused the death or injury. By the deeming of “fault” s 7B extends the application of the Act to a “blameless” motor accident, which is one caused by use or operation that does not involve fault.

40. As there was no causally related use or operation of the motorcycle by the first appellant owner, s 7B did not deem him to have been at fault. Ground 2 should be upheld and the appeal allowed.

Application of s 7E

41. This conclusion makes it unnecessary to consider the appellants’ arguments in relation to the application of s 7E.

42. Four arguments were advanced. By the first and second it was submitted that the effect of s 7E was to exclude any claim for damages by the driver of a motor vehicle, or the driver of a vehicle in a single motor vehicle accident. The third argument was that in the circumstances of this case the accident was caused by an “act or omission” of the respondent driver within s 7E(1). The relevant acts were the act of travelling at a speed that involved a greater risk of collision, and the act of colliding with the kangaroo.

43. The first and second arguments should be rejected. Section 7E is capable of applying whether there is one or more than one motor vehicle involved in the motor accident which is said to have been blameless. Where one or more than one motor vehicle is involved, each driver is capable of formulating a claim for damages in respect of their injuries caused by something done or not done by any other driver or the owner of the vehicle, or of any other vehicle involved. Each driver may propound a claim and the entitlement of each, by operation of subs 7B(1) and (2), is subject to s 7E.

44. The difficulty for the appellants’ third argument is the primary judge’s finding at [71] which is not challenged:

While it must be accepted as a matter of logic and common sense, that a slower speed creates a longer reaction time, the evidence does not lead to a conclusion on balance that a slower speed would have resulted in the collision not occurring.

45. The fourth argument of the appellants was that the kangaroo’s movement onto the road and its collision with the motorcycle was a “supervening event” within the terms of s 7E(2)(d). While that is so, there is no finding as to any “act or omission” on the part of the respondent that “would not have caused the death or injury but for the occurrence of … [the] supervening event.” The definition of driver in s 3 is the “person driving [the] motor vehicle”, including one “riding and operating a motor cycle”. Accordingly, s 7E(2)(d) describes an act or omission in the course of riding and operating the motorcycle. Travelling on a motorcycle at a particular speed which is found to be not excessive or unreasonable in the circumstances does not describe anything done or not done beyond the mere riding of the motorcycle.

46. It may not always be clear what acts or omissions are inherent in the driving of the vehicle, and that inquiry will depend on the circumstances of each case: see RG & KM Whitehead v Lowe at [1] (Barrett JA), [56], [64] (Tobias AJA); Portlock v Baulderstone Hornibrook Engineering Pty Ltd [2005] NSWSC 775; 44 MVR 147 at [68]-[72] (Hoeben J). Here, it was not established that a slower speed would have prevented the collision.

47. It may be accepted that the speed at which the respondent was riding the motorcycle had the effect of placing him at the particular point on the road where the kangaroo bounded forward. The respondent’s travelling at that speed was not an act or omission that caused the injury. It was a purely coincidental fact.

Conclusion

48. The following orders should be made:

1.   Grant leave to the appellants to appeal from the judgment and orders of the primary judge of 4 December 2015.

2.   Direct the appellants to file their Notice of Appeal within 7 days.

3.    Appeal allowed.

4.   Set aside the judgment and orders made on 4 December 2015.

5.   Judgment for the appellants as defendants in the proceedings.

6.   Order the respondent pay the appellants’ costs of the proceedings at first instance.

7.   Order the respondent pay the appellants’ costs of the application for leave to appeal and the appeal.

49. SIMPSON JA: I agree with Meagher JA.

50. SACKVILLE AJA: I have had the advantage of reading the judgment of Meagher JA in draft. I agree with the orders proposed by Meagher JA and with his Honour’s reasons. I add the following observations.

51. The argument in this case, at least initially, concentrated on s 7E of the Motor Accidents Compensation Act 1999 (NSW) (MAC Act). Section 7E provides that there is no entitlement to recover damages in respect of the death of or injury to the driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver. If the accident in the present case, which involved a motorcycle colliding with a kangaroo, was caused by an act or omission of the respondent (the motorcycle driver), he would be precluded by s 7E from claiming damages under s 7B of the MAC Act. This would be so even if the injuries were sustained by the respondent in a “blameless motor accident”, as that term is defined in s 7A of the MAC Act.

52. If, however, the accident in the present case was not caused by an act or omission of the respondent (as he contends), this does not necessarily mean that he is entitled to claim damages under Part 1.2 of Chapter 1 of the MAC Act. Section 7E limits the entitlement of an injured person to damages; it does not create such an entitlement.

53. The driver in a single vehicle accident will often be the owner of the vehicle. If the accident is not caused by the “fault” of the owner/driver in the use or operation of the vehicle and is not caused by the fault of any other person, the definition of “blameless motor accident” in s 7A of the MAC Act is satisfied. Accordingly, the injury to the owner/driver, for the purposes of a claim for damages, is deemed to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle (s 7B(1)).

54. This deeming provision, however, does not suffice to give the owner/driver in a single vehicle blameless motor accident a right to claim damages under Part 1.2 of Chapter 1 of the MAC Act. Section 7B(1) does not say that the insurer of the owner/driver or any other person is liable to pay damages in respect of the injuries suffered by the owner/driver in the blameless motor accident. Deeming the owner/driver to be negligent, as Meagher JA has pointed out, does not permit the owner/driver to claim damages for the injuries he or she sustains in the blameless motor accident. That is because deeming a driver to be negligent in the use or operation of the motor vehicle does not entitle the driver to sue himself or to claim damages from a third party. It would require much clearer language than that used in s 7B(1) of the MAC Act to construe the provision as conferring on the owner/driver in a single vehicle blameless motor accident case an entitlement to claim damages by reason of his or her own deemed negligence.

49. Mr Sheldon SC, who appeared with Ms Gumbert for the respondent, distinguished between two cases. The first is where an owner/driver is injured in a single vehicle blameless motor accident. Mr Sheldon did not seem to dispute that s 7B(1) of the MAC Act does not operate in that situation to confer an entitlement to claim damages on the owner/driver, at least if no other person was involved in the use or operation of the motor vehicle at the relevant time.

50. The second case is where the driver who is injured in a single vehicle blameless motor accident is not the owner of the vehicle. In the second case, so Mr Sheldon argued, s 7B(1) of the MAC Act deems the injury to the driver to have been caused by the fault of the owner of the vehicle, regardless of whether the owner was involved in the use or operation of the vehicle. Thus in the present case, the injury to the respondent, the motorcycle driver, is deemed to have been caused by the fault of the appellant, the owner of the vehicle, in the use or operation of the vehicle. Accordingly, the respondent is entitled to claim damages from the appellant in respect of the injuries the respondent sustained in the blameless motor accident.

51. The difficulty with this argument is that s 3A(1) of the MAC Act provides that the Act applies only in respect of the death of or injury to a person “that is caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle”. In the present case the motorcyclist was involved “in the use or operation of the vehicle” at the time the accident occurred, but the owner of the motorcycle was not. Section 7B(1) of the MAC Act, in my view, operates to deem a blameless motor accident to have been caused by whichever of the owner or driver of the vehicle was involved “in the use or operation of the vehicle” at the relevant time. Depending on the circumstances, as Meagher JA has explained, this may be either the driver or the owner or both.

52. I agree with Meagher JA that s 7B(1) does not deem an owner of a vehicle to be at fault in the use or operation of the vehicle if there is no relevant act or omission of the owner that can be described as “in the use or operation of the vehicle”. Section 7B(1) is intended to deem, contrary to the fact, an owner or driver of a vehicle to be at fault for the purposes of a claim for damages arising out of injuries sustained in a blameless motor accident. It is not intended to deem an owner to have been involved in the use or operation of the vehicle, when in fact the owner had no such involvement at the relevant time.

53. This construction seems to me to give a harmonious operation to the legislation, which uses deeming provisions to graft what amounts to a partial no-fault compensation scheme onto a fault-based compensation scheme. The mechanism employed by the legislation is that the death or injury resulting from a blameless accident is deemed to have been caused by the fault of whichever of the owner or driver was involved in the use or operation of the vehicle at the relevant time. If s 7B(1) said that the death or injury resulting from a blameless motor accident is deemed to have been caused by the fault of the owner and driver of the motor vehicle in the use or operation of the motor vehicle, the respondent’s argument would have more force. But s 7B(1) refers to the fault of the owner or driver. The statutory language supports a construction of s 7B(1) that limits its effect to deeming someone not at fault to be at fault, rather than deeming someone who was not involved in the use or operation of the vehicle to be involved in that use or operation.

54. I should add that this construction leaves work for s 7E of the MAC Act to perform. In the absence of s 7E, s 7B(2) would entitle each of the two drivers in a two vehicle blameless accident to claim damages from the other. Section 7E precludes this entitlement where the death or injury to the driver concerned “was caused by an act or omission of that driver”.

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Amendments

11 April 2017 - [45] Quotation marks removed

Decision last updated: 11 April 2017