IAG New Zealand Limited v Forde
[2020] NZHC 3233
•8 December 2020
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2019-412-000087
[2020] NZHC 3233
BETWEEN IAG NEW ZEALAND LIMITED
Plaintiff
AND
BRYAN WILLIAM FORDE
Defendant
Hearing: 30 November 2020 Appearances:
I J Thain and A L Sweeney for Plaintiff D R Tobin for Defendant
K Stevens for Insurance & Financial Services Ombudsman
Judgment:
8 December 2020
JUDGMENT OF DUNNINGHAM J
This judgment was delivered by me on 8 December 2020 at 2.30 pm, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date: 8 December 2020
Introduction
[1] On the morning of Saturday, 3 February 2018, the defendant, Bryan Forde, and his fiancée, Charlene Day, were returning home from work along State Highway One near Milton. Ms Day was driving the car and held a learner licence. Although weather conditions were fine, the road was straight, and there was good visibility, the car crossed the centreline. It travelled on the wrong side of the road for about 40 to 50 metres before crashing into an oncoming campervan.
IAG NEW ZEALAND LIMITED v FORDE [2020] NZHC 3233 [8 December 2020]
[2] The campervan driver braked heavily but was unable to avoid the collision. Ms Day took no evasive action at all. All three occupants suffered serious injuries, and Ms Day was subsequently charged with two charges of careless use causing injury. While Ms Day cannot remember the accident, she accepts she fell asleep at the wheel.
[3] Mr Forde made a claim under his insurance policy for the damage to both vehicles involved in the crash. IAG declined the claim, in reliance on an exclusion clause in the policy. It said “[t]here is no cover if your vehicle is being driven by or in the charge of any person who … is not driving according to the conditions of his or her driver licence”. IAG said Ms Day was not driving in accordance with the conditions of her learner licence because Mr Forde, who was a fully licensed driver, was not “in charge” of the vehicle as required by cl 16(1)(a)(ii) of the Land Transport (Driver Licensing) Rule 1999 (the Rule). This is because, on the balance of probabilities, Mr Forde must also have fallen asleep shortly before the crash.
[4] When IAG advised Mr Forde that it was declining the claim on that ground, Mr Forde, through his lawyer, requested a review of the claim. On 18 July 2018, IAG advised Mr Forde’s lawyer that its decision was unchanged, and the matter had reached “deadlock”, allowing the matter to be referred to the Insurance and Financial Services Ombudsman (IFSO) Scheme for resolution.
[5] After receiving information provided to it by the parties, the IFSO issued an initial decision on the complaint (referred to as an Assessment) upholding the complaint and concluding that IAG should meet the claim under the policy.
[6] IAG did not accept this Assessment and, as provided for under the IFSO Scheme Terms of Reference, commenced these proceedings seeking the following declarations:
AIf asleep, a person is not “in charge of” a vehicle for the purposes of 16(1)(a)(ii) of the Rule.
BWhen the defendant was asleep:
(i)the defendant was not “in charge of” the Car for the purposes of the Rule;
(ii)Ms Day was not driving according to the conditions of her driver licence under the Rule;
(iii)the Exclusion Clause in the Insurance Policy applied; and
(iv)there was no cover under the Insurance Policy.
CThe plaintiff was entitled to decline the Claim.
[7]At issue is:
(a)whether, as a matter of law, the declarations sought are correct; and, if they are
(b)whether I should exercise my discretion to decline to make some or all of the declarations because to do so would be contrary to the IFSO Scheme Terms of Reference (which preclude any right of review or appeal of the IFSO’s decision), or for any other reason.
The Insurance and Financial Services Ombudsman Scheme
[8] The IFSO Scheme was set up in 1995 as a joint initiative by the government and the financial services industry,1 to provide a dispute resolution service to customers who had unresolved complaints, as an alternative to the Courts.
[9] The IFSO Scheme is an approved scheme under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (the Act). It has over 4,600 financial service provider participants and, since its inception, has responded to over 66,500 complaint enquiries, and investigated more than 7,000 complaints. The Scheme is independent of both the industry and consumers, and its principle powers and duties are to resolve, without charge to a complainant, complaints arising out of the provision of financial or insurance services and to do so in a way that is accessible, independent, fair, accountable, efficient and effective.2 The responsibility for exercising the powers and duties of the Scheme is vested in the Ombudsman who may delegate those powers to employees or contractors of the Scheme.
1 Which is defined to include insurance providers.
2 Reflecting the principles set out in s 52(2) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
[10] The IFSO Scheme operates in accordance with Terms of Reference which reflect the provisions of the Act and which require the Ombudsman to make decisions about complaints “by reference to what is, in its opinion, fair and reasonable in all the circumstances”3 and having “regard to any applicable rule of law”.4
[11] This principle gives the Ombudsman some latitude to depart from a strict legal approach when considering a complaint and making recommendations. This flexibility was identified in Contact Energy Ltd v Moreau, which considered a similar provision in a complaints resolution scheme for electricity and gas users.5 There Thomas J observed “the Commissioner may depart from the relevant law if it is fair and reasonable to do so”.6 Similarly, Courtney J, discussing the same complaints resolution service, made the following observation:7
[9] However, as I come to later, the Commissioner was not actually required to apply the law, merely to have regard to it. The obligation to “have regard to” a specified matter is commonly imposed on administrative decision-makers and its meaning is well settled as requiring the decision-maker only to give genuine attention and thought to the specified matter, rather than actually give effect to it.
[12] The decision-making process which the Ombudsman must follow is set out in para 13 of the Terms of Reference. The first stage is for the Ombudsman (or the Ombudsman’s delegate) to prepare an Assessment and provide it to both the complainant and the Scheme member (the Participant). The Assessment considers the information provided by the parties and expresses a view on whether the complaint should be upheld or not.
[13] The parties may agree to resolve the complaint in accordance with the Assessment. However, either party can request a review of the Assessment, although the Ombudsman has a discretion as to whether to carry out a second Assessment. If the Ombudsman does, that can result in a further written decision (called a Recommendation) and, again, the parties can agree to resolve the complaint in
3 Insurance & Financial Services Ombudsman “Terms of Reference” (1 July 2015) at 12.1.
4 At 12.2.
5 Contact Energy Ltd v Moreau [2018] NZHC 2884, [2019] NZLR 692.
6 At [121].
7 Vector Ltd v Utilities Disputes Commissioner [2018] NZHC 3096.
accordance with the Recommendation.8 If the Recommendation is accepted by the complainant but not by the Participant, the Ombudsman may, on behalf of the Scheme, issue a decision, called an Award, which is binding on both parties.9
[14] Paragraph 13.3 of the Terms of Reference provides that “[n]o decision of the Scheme is capable of review or appeal in any form, to any other person, court, tribunal, statutory complaints authority, or any other body, except as contemplated by the Act”.10 However, para 15 of the Terms of Reference sets out specific circumstances when a Participant can bring Court proceedings in relation to a complaint. Specifically, paragraph 15.4 provides:
A Participant may not prevent the Scheme from considering, or continuing to consider, the Complaint by issuing proceeding in court, unless:
(a)the Participant determines that the Complaint involves an issue which has important consequences for the business of the Participant or of Participants generally or an important or novel point of law; and
(b)the Participant has notified the Scheme, prior to the Scheme making an Award in relation to the Complaint, that it intends to institute High Court proceedings to resolve the issue by way of declaratory judgment and the Participant provides an undertaking that it will:
(i)within 3 months of the date of the notice, institute proceedings in the registry of the High Court nearest the Complainant’s residence;
(ii)pay the Complainant’s costs and disbursements (if not otherwise agreed, on a solicitor and own client basis) of the proceedings at first instance and any subsequent appeal proceedings commenced by the Participant (including the Complainant’s costs and disbursements associated with any cross-appeal instituted by the Complainant in relation to the Participant’s appeal proceedings);
(iii)make interim payments in relation to those costs and disbursements if and to the extent that this is reasonable; and
(iv)prosecute the Complaint expeditiously.
8 Terms of Reference, above n 3, at 13.1(b).
9 At 13.1 (c) and (d). However, I was advised at the hearing that in its 25 year history, the Scheme has never needed to make an Award.
10 The Financial Service Providers (Registration and Dispute Resolution) Bill removed a proposed appeal process before the Bill was enacted, but the Select Committee Report noted that parties “would continue to have the usual right of appeal through judicial review”.
[15] Paragraph 15.5 provides that when the IFSO Scheme is notified by the Participant that it intends to institute High Court proceedings, the Scheme must cease considering the complaint for so long as the Participant complies with the undertakings required by paragraph 15.4(b).
[16] In this case, an Assessment issued in respect of Mr Forde’s complaint under the Terms of Reference. At that point, IAG considered the Assessment raised an issue which had important consequences for its insurance business and it began this proceeding seeking the declarations set out at [6] above.
The Assessment
[17] The Assessment issued on 22 May 2019. It set out the background to the complaint, the terms of the relevant exclusion clause from the policy, and the learner licence requirements under cl 16(1) of the Rule. It summarised IAG’s submission, noting IAG considered it was “almost an irresistible inference” that Mr Forde must have been asleep at the time of the accident, otherwise he would have alerted Ms Day or taken some other action to try and correct the vehicle. It referred to the fact that Ms Day had appeared before the District Court on two charges of operating a vehicle carelessly and thereby causing injury, but not with breaching the conditions of her learner licence. It also noted that the Judge said, when sentencing her, that it appeared that both she and Mr Forde had been asleep at the time the accident occurred.11
[18] The Assessment then went on to discuss the meaning of the requirement in cl 16(1) of the Rule, that a person who has held a full licence for at least two years must be “in charge of the vehicle”. The author of the Assessment said:
I believe it is clear in the context of the policy and the Rule that to be “in charge of” means to take responsibility for, or be in supervision of, and is not the same as taking control of the vehicle in an active, physical sense.
She went on to say:
Mr Forde was “in charge of” the vehicle, which means that he was responsible for supervising Ms Day’s driving of the vehicle. It appears most likely that he was asleep, or was otherwise not paying attention, when Ms Day fell asleep and veered across the road.
11 Police v Day CRI-2018-012-000652 DC Dunedin, 1 November 2018.
[19]However, she concluded that this did not mean that:
Ms Day was “not driving according to the conditions of … her driver licence”, but rather … that Mr Forde was negligent in his performance of his obligations to be “in charge of” the vehicle.
[20] The Assessment found Mr Forde was either asleep or not paying attention, but considered neither scenario meant he was not “in charge of” the vehicle. Accordingly, it reached the following conclusion:
IAG must establish that Ms Day was “not driving according to the conditions of … her driver licence”. I do not believe there is any evidence to establish that Ms Day was driving in breach of her driver’s licence conditions, as set out in the Rule. Therefore, I believe that IAG must meet the claim under the policy.
These proceedings
[21] IAG disagreed with the conclusion that Ms Day was not in breach of her learner licence if the fully licensed driver accompanying her was asleep, and these proceedings commenced under para 15 of the Terms of Reference.
[22] The parties have prepared an agreed statement of facts for the purpose of this application. In it they outline the facts as set out at the introduction to this decision. They agree that the “facts surrounding the Crash are inexplicable unless [Ms Day] fell asleep either before or at the time that the Car crossed the centreline of State Highway 1, and [Mr Forde] did not take any action to intervene in time”. They also agree, albeit for the purposes of this proceeding only:
(a)that on the balance of probabilities, Mr Forde had fallen asleep prior to the car crossing the centreline. He says that may have been just prior; and
(b)the evidence does not establish, on the balance of probabilities, the particular length of time for which Mr Forde had been asleep when the car crossed the centreline.
[23] Mr Tobin appeared for Mr Forde. He candidly acknowledged that his client was “agnostic” as to the outcome of the hearing as IAG had made an ex gratia payment to his client and, as required by the Terms of Reference, IAG was meeting Mr Forde’s solicitor/client costs in representing Mr Forde’s position at this hearing.
[24] Submissions were also made on behalf of the IFSO Scheme by Ms Stevens. She participated primarily to inform the Court about the working of the Scheme and to ensure that the terms of any declaration did not usurp the function of the Scheme, nor breach the restrictions found in para 13.3 of the Terms of Reference on reviewing or appealing decisions of this Scheme.
The declaratory judgment jurisdiction
[25] IAG brings the application under either the Declaratory Judgments Act 1908 or the Court’s inherent jurisdiction. It does that out of an abundance of caution because of uncertainty as to whether interpretation of the Rule is covered by s 3 of the Declaratory Judgments Act. Section 3 says a declaratory judgment or order may be obtained in circumstances which include “where any person has done or desires to do any act the validity, legality or effect of which depends on the construction or validity of any statute, or any regulation made by the Governor-General in Council under statutory authority, …”. The Rule is not “any regulation made by the Governor-General in Council under statutory authority”, but rather, it is a rule made by the Minister of Transport.
[26] However, what is sought is a declaration on the interpretation of the Rule, for the purposes of construing the exclusion clause in IAG’s policy. As such, it is encompassed by s 3 as an “agreement made or evidenced by writing”. In any event, it is clear this Court has inherent jurisdiction to make a declaration about the interpretation of the Rule.12
12 Bartle Group Ltd v New Zealand Transport Agency [2020] NZHC 35 at [70].
[27] Although I have jurisdiction to determine IAG’s application, I may nevertheless decline to grant relief in the exercise of my discretion. As the Court of Appeal said in New Zealand Insurance Co Ltd v Prudential Assurance Inc Co Ltd:13
The jurisdiction to make orders under the Declaratory Judgments Act is wholly discretionary. The cases defining the attitude of the courts in the exercise of that discretion are numerous … and they establish certain guidelines which will generally be followed. The Court will not answer purely abstract questions in anticipation of an actual controversy. It will not deal with mixed questions of fact and law. The procedure is designed to provide a speedy and inexpensive method of obtaining a judicial interpretation where the matter in dispute cannot conveniently be brought before the court in its ordinary jurisdiction and where a declaratory judgment would be appropriate relief. But the procedure should not be adopted where the party who institutes them can without real difficulty have the matter in dispute disposed of in an ordinary action.
[28] I will consider these issues further when discussing whether declarations should be made as sought in this case.
Submissions
IAG’s submissions
[29] Counsel for IAG, Mr Thain, explains the declarations are sought because IAG is not aware that any Court has determined whether a learner driver is driving in accordance with the conditions of their licence when their accompanying person is asleep. IAG says this issue has important consequences for its business and for the business of other insurers.
[30] IAG points out that the Rule is an “enactment” to which the Interpretation Act 1999 applies. Therefore, the meaning of cl 16(1) must be ascertained from its text and in light of its purpose.14 The expressly stated purpose of the Rule is “[t]o make significant gains in land transport safety through the implementation of an improved system for driver licencing”.15
13 New Zealand Insurance Co Ltd v Prudential Assurance Co Ltd [1976] 1 NZLR 84 (CA) at 85.
14 Interpretation Act 1999, s 5.
15 Land Transport (Driver Licensing) Rule 1999, sch 1, which sets out the Objective of the Rule.
[31] Mr Thain submitted that the clear purpose of the Rule is to improve road safety by targeting the risks associated with young and novice drivers. With that in mind, the requirement for a fully licensed driver to be “in charge”, must be a requirement to act in a supervisory capacity.
[32] This is supported by judicial decisions. In Anderson v Police, the Court considered an appeal against sentence for disqualification for driving contrary to the condition of a learner licence.16 In explaining the role of a fully qualified driver to accompany a learner driver, Miller J said:17
The qualified driver’s task is to supervise a learner whose practical skills have not been tested, and so ensure that the vehicle is operated safely and lawfully. The legislature’s purpose in imposing these requirements was plainly that of ensuring road safety.
[33] Similarly, in Maneff v Police, Mallon J dismissed an appeal against a sentence of disqualification for driving in breach of the conditions of a learner licence, including without being accompanied by a fully licensed driver. She confirmed that the supervisory task of the licensed driver is “one directed to road safety and the failure to comply with the requirement is accordingly an offence that relates to road safety”.18
[34] In light of the road safety purpose of the Land Transport Act 1998, and the Rule made under it, Mr Thain submits that the requirement to be “in charge of” the vehicle must mean to be actually in charge, in the sense of supervising the learner and being able to give instructions or commands and to take corrective action when required. An interpretation which allowed for a sleeping person to be “in charge” would defeat the purpose of the requirement and would be contrary to the ordinary meaning of the words in the context of a moving vehicle.
[35] In addition, he says, the position is not affected by the intention of the learner driver. Lack of intention or knowledge by the learner driver does not change the fact that the sleeping person is not, in fact, in charge of the vehicle, nor does it change the road safety risk posed by a learner driver driving with no actual supervision.
16 Anderson v Police HC Wellington CRI-2009-435-7, 24 November 2009.
17 At [7].
18 Maneff v Police HC Wellington CRI-2011-485-56, 8 September 2011 at [9].
[36] Mr Thain pointed out that the exclusion clause applies to driving in breach of licence conditions because to do so increases the risk of loss, not because it constitutes an offence, and he cautioned against applying the test for criminal liability to the question of whether the Rule was complied with in terms of the policy. He acknowledged that the offence of driving contrary to the conditions of a licence is one of strict liability and therefore, a defence of total absence of fault would be available to a defendant. However, the road safety objective that arises from the lack of supervision (and therefore, for the insurer, the consequent risk), is independent of considerations of whether the driver deserves to be punished under our criminal law. It is the increased risk caused by a learner driver not having supervision which the exclusion clause addresses.
[37] Any harshness of this strict approach can be ameliorated by the application of s 11 of the Insurance Law Reform Act 1977 (if the breach of the exclusion clause did not cause or contribute to the accident), or by the ability to moderate the strict legal position by what is “fair and reasonable” in the circumstances, if a dispute is referred to the Scheme.
[38] Mr Thain pointed out that what IAG was seeking was simply a declaration as to the strict legal position when interpreting the exclusion clause in the circumstances of the fully licensed driver being asleep. That declaration of the law could then be taken into account when resolving disputes through the Scheme.
[39] Given the Assessment had not distinguished between a supervising driver carrying out his or her duties negligently, and a supervising driver being asleep, Mr Thain said it was important for IAG to obtain clarity that the latter was clearly in breach of the Rule, whereas the former circumstance was one to be determined on the facts of the particular case.
Mr Forde’s submissions
[40] Counsel for Mr Forde, Mr Tobin, advanced the position that, properly interpreted, the term “in charge of” means being responsible and having legal control of the thing or person, but it did not require the person to be in control in any active or physical sense.
[41] Mr Tobin accepts that the question of construction which arises in this case should be approached with the road safety purposes identified in sch 1 to the Rule in mind. However, he says that there is no definition of the term “in charge of” in the Rule. The Collins Shorter English Dictionary states that “in charge of” means “having responsibility for” or being “under the care of”,19 but this does not require active attention to the object of that responsibility all the time.
[42] By way of analogy he referred to the Animal Welfare Act 1999 which defines “person in charge” as:
… in relation to an animal, includes a person who has the animal in that person’s possession or custody, or under that person’s care, control or supervision.
He submits it is clear from the context that such persons would be subject to the duties under the Animal Welfare Act even if they were, for example, asleep for a time while the animal was in their care.
[43]Mr Tobin also relies on Ross v Police, where the High Court said:20
Clearly enough, …, a distinction is to be drawn between “being driven by” and being “in the charge of”. …. Such a distinction is not novel. It is recognised as possible, for example, as between a learner driver (driver) and owner (passenger) … It is a distinction between actual physical control behind a wheel (driving), and the legal right to control or command (being in charge).
[44] In his submission, while Mr Forde’s ability to exercise legal control or the power of command as to Ms Day’s driving was inhibited by the fact he had inadvertently fallen asleep, that did not mean that the car was no longer under his legal control during the time. Rather, it meant that he was unable to properly perform his obligations to be “in charge of” the car.
[45] Similarly, he points to the case R v Crossan, where the accused, the intoxicated owner of a car, was still found to be “in charge” of it, and therefore in breach of a duty imposed by s 156 Crimes Act 1961 to avoid a danger to human life, when he allowed
19 Collins Shorter English Dictionary (Harper Collins, 1993).
20 Ross v Police HC Masterton M 29/87, 17 February 1988 at 10
it to be driven by another drunk driver.21 If an intoxicated owner who was merely a passenger in a vehicle could be held to be “in charge” of a vehicle, that pointed against such a role involving active supervision.
[46] Mr Tobin also raised concerns about the practicality of requiring the fully licensed driver to be actively supervising the learner driver throughout the journey. For example, if they were distracted at any point in time in the journey, that would mean they were not in charge and therefore the learner driver was in breach. In his view, that outcome would be absurd and not what was intended by the Rule.
[47] Mr Tobin was also critical about the breadth of the declaration sought by IAG. In his view, declarations B and C represent a rejection of the merits of the determination made by the Ombudsman and breached the prohibition on pursuing an appeal of a decision of the Scheme in any form. This position was supported by Ms Stevens for the IFSO.
[48] Finally, Mr Tobin argued that the declaration sought should not be granted in the exercise of the Court’s discretion. Any new case that may arise will not fall within the exact same factual setting as this case and so there is little utility in making the declarations sought, as each future case will still need to be determined on its own facts.
Analysis
Is a sleeping licence holder “in charge of” a vehicle for the purposes of the Rule?
[49] I have little difficulty accepting the submissions of the plaintiff that in light of the road safety purpose of the Land Transport Act and the Rule, the requirement to be “in charge” of the vehicle must mean to be actually in charge, in the sense of supervising the learner and being able to give instructions or commands and to take corrective action when required.
[50] That is supported by the totality of the provisions in cl 16.1(a) of the Rule which require the full licence holder:
21 R v Crossan HC Invercargill T980970, 7 July 1998.
(a)to have held the appropriate licence for at least two years and to not be subject to any conditions;
(b)to be in charge of the vehicle; and
(c)to be seated in the front passenger seat or, if there is no front passenger seat available, to be seated as close as is practicable to the driver.
[51] There can be no doubt that this is to ensure that the full licence holder is sufficiently experienced themselves to supervise a learner and is in a physical position in the vehicle to enable that person to exercise those supervisory responsibilities.
[52] I consider any lesser reading of the responsibilities of someone who is “in charge of” the vehicle would be contrary to the road safety purpose of the Rule. Where the fully licensed driver is asleep, he or she simply cannot exercise those responsibilities, and the learner driver would be in breach of the Rule.
[53] I do not consider the examples provided by Mr Tobin of where a person was held to be “in charge” of something without exercising active control over it, are relevant to the interpretation of the Rule. Those examples arise where the purpose of the statute is to require accountability to avoid harm. Thus, where a person has an animal in their care, or has the ability to control a dangerous thing, it is appropriate that they can not avoid liability by failing to fulfil their duty to prevent such harm.
[54] While Mr Tobin raised concerns about the practicality of this approach and whether it would then, by analogy, be extended to a distracted supervisor, that is not the concern in this particular case. I accept that there is a difference between carrying out the supervisory duties negligently, and not carrying them out at all because the licensed driver is asleep. This case only concerns the latter scenario.
[55] Accordingly, I am satisfied that a full licence holder who is asleep is not “in charge of” a vehicle for the purpose of cl 16(1)(a)(ii) of the Rule.
Was Ms Day not driving according to the conditions of her driver licence under the Rule in this case?
[56] The second part of the declaration sought by IAG relates to the specific circumstances of this case, albeit on the assumption that the defendant, Mr Forde, was asleep. That creates a quandary. The Assessment left that issue open. It concluded that Mr Forde was either asleep or not paying sufficient attention. It did not conclude, on the balance of probabilities, that Mr Forde was asleep nor did it say how likely one scenario was over the other. However, IAG seeks a suite of declarations regarding its ability to decline the claim on this particular case on the assumption, for the purposes of this hearing alone, that the correct position is that he was asleep.
[57] That then leads to the third declaration sought by Mr Thain which is a declaration that IAG was entitled to decline the claim.
[58] In my view, I am being asked to make a suite of declarations which are not consistent with the factual findings in the Assessment, and which, accordingly, have no obvious utility to the IFSO. It is for the IFSO to determine what the factual circumstances were and if so, what regard should be had to the strict legal position in deciding what is “fair and reasonable” in the circumstances.
[59] These issues all lead directly on to whether I should exercise my discretion to make the declarations sought by IAG.
Should I make the declarations sought in the exercise of my discretion?
[60] I accept the question of whether a sleeping licensed driver is in charge of a vehicle for the purposes of a Rule has arisen in the circumstances of this case because of the real possibility that Mr Forde was asleep when the accident occurred and the IFSO’s apparent assumption that a sleeping driver was simply negligently discharging that duty. It is appropriate, therefore, that IAG sought to have that issue determined in the courts, both in the event this claim continues through the dispute process, but also if that issue arises in future insurance claims.
[61] I accept, too, that given the barrier on appealing any decision of the IFSO Scheme, it is appropriate that a declaration should be made at this juncture. That enables this and future decisions to proceed with a correct understanding of the legal position. Accordingly, I make declaration A as set out in [6] above.
[62] However, in my view, it would be inappropriate to make the other declarations sought. I say this for two reasons.
[63] First, IAG’s desire to have the legal position clarified is achieved by having declaration A made. If (although it seems unlikely), the current complaint progresses further, that can be taken into account. However, it is not determinative of the claim. This is because the issue of whether, on the balance of probabilities, Mr Forde was also asleep before the accident has not yet been determined by the IFSO, and Mr Forde does not concede that for the purposes of the claim. In any event, the strict legal position is not inevitably determinative of the claim. While due regard must be had to it, the decision must ultimately turn on what is fair and reasonable in the circumstances.
[64] Second, there is the concern that was raised by Ms Stevens, that making such declarations is effectively exercising an appeal right in contradiction to the prohibition on appealing any decision of the IFSO Scheme. While Mr Thain argued that no decision arose which was subject to the prohibition until an award was made, I do not consider that is correct. At each stage of the decision-making process, a decision is made as to whether the complaint is upheld or not. What differs is the extent to which the parties are bound by it. That said, I accept that IAG was not intending this to be a de facto appeal. Rather, it sought that the law be clarified so that it could, potentially, rely on that finding, both in this case and in others. However, I consider that is satisfied by making declaration A. The declarations sought at B and C are of no utility if the factual basis is not agreed for the purposes of the IFSO Scheme’s dispute resolution processes. Declaration A can be taken into account in the facts of any particular case, including this one, as they are found to be.
Result
[65]For the reasons given above, I make the following declaration:
AIf asleep, a person is not “in charge of” a vehicle for the purposes of 16(1)(a)(ii) of the Rule.
[66] Noting that the plaintiff has met the defendant’s costs in bringing this proceeding, there is no issue as to costs and no costs order is required.
Solicitors:
DLA Piper, Auckland Sumpter Moore, Milton
Karen Stevens, Barrister (for IFSO, Wellington)
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