RECENT APPEAL DECISION CLARIFIES ‘BLAMELESS ACCIDENT’ PROVISIONS IN NSW MOTOR VEHICLE ACCIDENTS

Motor Vehicle Directions

Whitfield and Anor v Melenewycz [2016] NSWCA 235

Decision of the NSW Court of Appeal on 31 August 2016 before Meagher JA, Simpson JA and Sackville AJA.

Background

On 12 August 2011, the respondent (‘the rider’) was injured in a single vehicle accident when the motorcycle he was riding alone collided with a kangaroo. The rider was not the owner of the motorcycle. The rider brought proceedings in the NSW Supreme Court against the first appellant as owner of the vehicle (‘the owner’), and second appellant as the compulsory third party (CTP) insurer of the motorcycle (‘the insurer’).

It was accepted that the owner was not involved in the use or operation of the motorcycle in relation to the accident – that is, there was nothing done or not done by the owner in relation to the use or operation of the motorcycle that was of any causal significance to the occurrence of the accident.

Justice Hamill, at first instance, found that the accident was a ‘blameless motor accident’ in line with the blameless accident provisions of the Motor Accidents Compensation Act 1999 NSW (‘the Act’), on the basis that the rider was not negligent in his driving of the motorcycle, and nor was any other person.

The owner and insurer appealed.

The issues on appeal were as follows:

  1. Whether section 7B of the Act operated to ‘deem’ fault on the owner of the motorcycle, where the accident did not involve any use or operation of the motorcycle by the owner; and
  2. Whether section 7E of the Act operated to exclude the rider from claiming damages.

The legislation

It is necessary to set out relevant sections of the Act to follow the Court of Appeal’s reasoning.

3A General restrictions on application of Act
(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.

7A Definition of “blameless motor accident” 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 [emphasis has been added].
(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.

Key Definition of Terms in Section 3
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

Determination

The Court of Appeal (Meagher JA, Simpson JA and Sackville AJA agreeing) unanimously allowed the appeal on the basis that, in the circumstances of the plaintiff’s injury, section 7B did not ‘deem’ fault of the owner of the motorcycle.

Operation of section 7B
The Court of Appeal confirmed on the proper construction of section 7B, a ‘blameless’ accident must involve a causative use or operation by the owner or driver (or both) but no fault in that use or operation.

There was no dispute that the accident did not involve negligence or fault of the owner or driver, so in that sense, the accident was ‘blameless’. However, the Court of Appeal found that there was no causally related use or operation of the motorcycle by its owner and that meant the rider’s claim had to fail.

This was because the general restrictions on the operation of the Act in section 3A (requiring that injury occurs in the use of operation of the vehicle) had to be applied to the task of the proper construction of section 7B. That is very significant (and contrary to previous judicial engagement with interpretation of these provisions for instance, by Judge Norton SC in Connaughton v Pacific Rail Engineering Pty Ltd [2015] NSWDC 89), because once those restrictions are applied, it must follow that section 7B of the Act does not deem the owner to have been at fault where (as in this case), there was no identifiable use or operation of the vehicle by the owner in the circumstance of the rider’s injury.

The Court of Appeal observed that had the rider owned the motorcycle in this case, he could not have brought a claim for damages against himself as owner. This is because section 7B deems fault, but does not deem liability. Under the common law, a driver cannot have a claim in negligence against himself or herself.

For these reasons, the verdict in the rider’s favour against the owner and insurer had to be set aside and judgment entered for the appellants as defendants in the proceedings.

Operation of section 7E
The above determination regarding the operation of section 7B made it unnecessary to consider whether section 7E of the Act operated to exclude the respondent rider from recovering damages. Nevertheless, the Court of Appeal considered the issues.

On behalf of the owner and insurer, it was argued that:

  • The kangaroo’s movement and collision with the motorcycle was a ‘supervening event’ within the terms of section 7E(2)(d); and
  • Section 7E excluded any driver of a motor vehicle, or in the alternative, a driver of a vehicle in a single motor vehicle accident from claiming damages.

The Court of Appeal found as follows.

In order for section 7(2)(d) to apply, there must first be an act or omission in the course or riding and operating the motorcycle. Travelling on a motorcycle at a particular speed (not excessive or unreasonable in the circumstances) was not an ‘act or omission’ beyond the mere riding of the motorcycle, in circumstances where it was not established that travelling at a slower speed would have prevented the collision with the kangaroo. This echoes Judge Norton SC’s reasoning in Connaughton, where her Honour found that merely driving along the roadway under the place where a tree fell onto a vehicle, severely injuring the driver (in a single vehicle accident), was ‘the mere occasion of the injury’ and not, for section 7E purposes, an act or omission of the driver.

The Court of Appeal noted it may not always be clear what acts or omissions are inherent in the driving of the vehicle, and that will depend on the facts of each case. In this case, although it is common sense that the speed at which the rider was travelling had the effect of putting him in a particular point on the roadway where the kangaroo bounded forward, that was a ‘purely coincidental fact’. The rider travelling at that speed was not, in the relevant sense required in section 7E, an act or omission to trigger the exclusions in that section.

The Court of Appeal rejected the insurer’s contention that no driver involved in a blameless accident could ever recover blameless accident damages, because it did not accept that section 7E operated as a blanket exclusion. Each driver involved in a blameless motor accident is entitled to claim damages in respect of their injuries, whether or not the accident involves one vehicle, or more than one vehicle.

Justice Sackville helpfully added that a driver in a single vehicle accident will often be the owner of that vehicle. If such an accident is not caused by the fault of the driver (and therefore also not caused by the fault of the owner) in the use or operation of the vehicle, then the definition of ‘blameless motor accident’ in section 7A is satisfied. However – importantly – he pointed out that section 7B(1) does not say that the insurer of the owner/driver of any other person is liable to pay damages in respect of injuries suffered by an owner/driver in a blameless motor accident. Deeming a driver to be negligent in the use or operation of the vehicle does not entitle the driver to sue himself (or herself) or claim damages from a third party.

Implications

The Court of Appeal has clarified a number of issues regarding the application of the blameless accident provisions:

  1. In order for a motor vehicle accident to be considered ‘blameless’ under the blameless accident provisions, it must be one that is caused by the use or operation that does not involve fault. Mere ownership of the vehicle (that does not involve any use or operation causally significant to the occurrence of the accident) will not be sufficient.
  2. A driver who is also the owner of the vehicle in which he was injured will not be entitled to claim damages against himself as an owner.
  3. It follows from that that single vehicle accidents may fall within the ambit of the blameless accident provisions, provided that the driver is not also the owner of the vehicle, but only where there is some relevant causal conduct by the owner in the use or operation of the vehicle.
  4. Each driver of a vehicle involved in an accident that is said to be ‘blameless’, may make a claim for damages in respect of injuries caused by any other driver or owner of the vehicle, or any other vehicle involved. Whether the provisions of section 7E apply then to restrict one (or both) drivers will depend on the facts of the case.

This decision also confirms that the mere act of driving is not an ‘act or an omission’ (for the purposes of section 7E). What acts or omissions are inherent in the driving of the vehicle will depend on the circumstances of each case.

This decision provides much needed clarification of the blameless accident provisions, in particular, drivers’ entitlement to claim damages against owners in single vehicle accidents. The decision provides insurers with reason to expect that many claims encouraged by the Connaughton decision will not be pursued, or if pursued, should fail.

An application for Special Leave to Appeal to the High Court of Australia may well be made in this case – stay tuned.

Authored by Judith Waldock, Partner and Kim Wijesooriya, Senior Associate, Sydney.

** The parties accepted that subsection (2)(d) of the Act 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, and the Court of Appeal agreed that must be the case for the provision to make sense in the scheme of the section.


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