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ACZ v AAI Limited trading as GIO [2019] NSWDRS CA 078

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMiscellaneous Claims Assessment
CatchwordsNot wholly or mostly at fault – legal costs – motorcycle – statutory income support and treatment benefits – no fault accident – blameless accident – kangaroo – police report – single vehicle accident – onus of proof – non-minor injuries – third party policy
Legislation cited Motor Accident Injuries Act 2017 (NSW) ss 3.1, 3.11, 3.28, 7.36(4), 7.36(5), Schedule 2(3)(d) & (e)
Motor Accident Injuries Regulation 2017
Motor Accident Guidelines 2017 (as amended on 15 January 2019) cl 7.441
Cases cited Whitfield v Melenewycz (2016) NSWCA 235
Text cited N/A
Parties AGZ – Claimant
AAI Limited trading as GIO – Insurer 
Disclaimer This decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Miscellaneous Claims Assessment Certificate

Reasons for Decision

Issued in accordance with section 7.36(5) of the Motor Accident Injuries Act 2017

Introduction

1.   On 8 May 2018 ACZ was riding his motorcycle in the Eastern Creek area of Western Sydney when, at the roundabout at the intersection of Wonderland Drive and Honeycomb Drive an accident occurred and ACZ was injured.

2.   ACZ made a claim firstly against the Nominal Defendant but then against GIO the third party insurer of his own motor bike.

3.   ACZ makes a claim for statutory income support and treatment benefits. GIO has accepted liability for payment of these benefits for the first 26 weeks after the accident but has denied liability to pay any further benefits beyond the first 26 weeks. ACZ sought an internal review of that decision (the outcome of which was to affirm the original decision) and has now referred the dispute to the Dispute Resolution Service.

4.   I have conducted three teleconferences in this matter. The determination of the dispute was deferred on two occasions as the parties agreed to await the outcome of a meeting between SIRA, the Insurers and representatives of the legal profession on the topic of no- fault blamless accidents and there was the prospect of the dispute resolving.

5.   At the third teleconference both parties requested the dispute be determined and advised that no further evidence or submissions would be lodged.

6.   Having drafted these reasons I was then contacted by the Insurer who requested I defer my decision (no time frame was given) pending a further meeting (no date was given) and that the Insurer may wish to provide further submissions.

7.   The Claimant opposed the deferral and pressed for me to determine the dispute.

8.   ACZ’s accident occurred on 8 May 2018, 10 months ago and he has therefore been deprived of his statutory benefits for a period of four months. The dispute in this matter was lodged with the Dispute Resolution Service on or about 23 November 2018 and there have been three teleconferences. The determination of this dispute has already been delayed. I advised the parties that I did not intend to defer the determination of the dispute any further.

Factual Background

9.   In his claim form [A1], ACZ describes the accident as follows:

ACZ who was riding at approx. 50km was approaching the roundabout when a kangaroo collided with ACZ.

10.   In the Ambulance report [A3] the case description states:

33 YO Male motor cycle accident at unknown speed. Pt amnesic of incident. Per Bystander Pt

? attempted to miss a kangaroo when fell over handle bars landing face/head first on Road.

11.   I have not been provided with a copy of the police report, but it is cited in the Insurer’s internal review decision [A8] as follows:

At 18:00 Hrs on 8th May 2018 The rider, rode his Suzuki XXXXX motorcycle along Honeycomb Drive, Eastern Creek. Travelling at approx.. 50km/hr the cycle travelled direcly into a Kangaroo which came from an unknown direction.

12.   ACZ was therefore involved in a single vehicle accident and was the driver of the only vehicle involved in the accident.

13.   I have no statement from the Claimant. While this might be considered unusual, in the light of the agreed facts in this matter, a statement is not necessary and would not assist me in my determination.

14.   The parties have agreed during the course of this assessment that:

a.   ACZ’s accident was a motor vehicle accident within the definition in the Act;

b.   Under s 3.1(1) of the Act, ACZ has an entitlement to statutory benefits;

c.   The cause of the accident was the sudden presence of the kangaroo in front of ACZ’s motor cycle;

d.  ACZ was not actually at fault for causing the accident based on the evidence the Insurer has obtained to date; and

e.   No other person caused the accident.

15.   I do not have a copy of the Insurer’s original liability decision however the interal review decision [A8] says:

Who is at fault for the accident?

You were the only person in the only vehicle involved in the accident. You state you collided with a Kangaroo…

The writer does not consider any other person to be at fault for the accident. The accident appears to have been caused by a Kangaroo coming in our path from an unknown direction, causing a collision with your vehicle.

Do the no-fault provisions apply?

Part 5 of the Act allows for ongoing coverage for injured people where the accident is 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.

As above, the accident appears to have been caused by a Kangaroo in your path, which came from an uknown direction. The writier considers the accident does fall under the definition of a no-fault accident.

However, the writer further notes: Section 5.2 deems you, as the driver, to be at fault. Section

5.4 operates to exclude drivers at fault and states a driver has no entitlement if the motor accident concerned was caused by an act or omission of that driver. The act or omission need not constitute fault, can be involutary, and need not be the sole or prime cause of the injury. Accordingly, the writer considers sections 5.2 and 5.4 operate you exclude your claim [sic].

Conclusion

With reference to the above, the writr affirms the decision of GIO’s claims team that you are deemed wholly or mostly at fault for the accident. That means you are not entitled to statutory benefits past 26 weeks after the motor vehicle accident.

16.   There is no issue in this matter about minor or non-minor injury. GIO accepts ACZ has sustained non-minor injuries (the hospital discharge summary [A5] refers to a fractured right clavicle). GIO has however terminated the Claimant’s statutory benefits under ss 3.11(2)(b) and 3.28(2)(b) on the basis that GIO is of the view ACZ is wholly or mostly at fault for causing his accident.

17.   There is also no issue in this matter about contributory negligence. GIO has never raised any issue of contributory negligence on the part of ACZ and therefore GIO conceded there is no issue about whether ACZ is ‘mostly at fault’ for causing this accident.

Legislative Framework

18.   ACZ’s claim for statutory benefits is made under Part 3 of the Motor Accident Injuries Act 2017. Section 3.1 of the Act provides as follows:

(1)   If the death of or injury to a person results from a motor accident in this State, statutory benefits are payable in respect of the death or injury as provided by this Part.

(2)   Statutory benefits are payable (except as otherwise provided by this Part):

(a)   whether or not the motor accident was caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle, or

(b)   even if the motor accident was caused by the fault of the person to whom the statutory benefits are payable.

19.   Statutory benefits are payable by the relevant insurer in accordance with s 5.2 which provides:

(1)  The statutory benefits payable under this Part are payable by the relevant insurer.

(2)  The relevant insurer is (subject to this section and section 3.3):

a)    if the motor accident concerned involved only 1 motor vehicle with motor accident insurance cover—the insurer of the motor vehicle, or

b)      if the motor accident concerned involved more than 1 motor vehicle—the insurer of the at-fault motor vehicle, or

c)    in any other case—the Nominal Defendant.

(4)  The insurer of the at-fault motor vehicle is the insurer who provides motor accident insurance cover to:
a)    the owner or driver of the motor vehicle whose fault in the use or operation of the vehicle caused the death or injury in respect of which the statutory benefits are payable, or

b)  if there is more than one such motor vehicle—the owner or driver of the motor vehicle who was most at fault.

(5)  For the purposes of this Act (including any motor accident insurance cover in respect of a motor vehicle) a liability that the relevant insurer has to pay statutory benefits under this Part in respect of death or injury is deemed to be a liability in respect of death or injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle (being a motor vehicle for which the insurer is the relevant insurer).

20.   ACZ’s claim has been made again his own third-party insurer because there is no other vehicle. The terms of the third-party policy that covers ACZ’s motor cycle as issued by GIO is provided for in s 2.3 of the Act as follows:

Third-party Policy

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:

a)    if the motor vehicle is not one to which paragraph (b) applies—in the use or operation of the vehicle in any part of the Commonwealth (whether or not on a road), or

b)  if the motor vehicle is subject to an unregistered vehicle permit under the Road Transport Act 2013—in the use or operation of the vehicle on any road in any part of the Commonwealth.

In this policy, words and expressions have the same meanings as in the Motor Accident Injuries Act 2017.

21.   ACZ’s payments of benefits beyond the first 26 after the accident can be terminated by the Insurer in accordance with sections 3.11 and 3.28. The wording of both is similar and I have reproduced only s 3.11.

3.11  Cessation of weekly payments to injured persons most at fault or with minor injuries after 26 weeks
1)  An injured person is not entitled to weekly payments of statutory benefits under this Division for any period of loss of earnings or earning capacity that occurs more than 26 weeks after the motor accident concerned if:
(a)   the motor accident was caused wholly or mostly by the fault of the person, or

(b)the person’s only injuries resulting from the motor accident were minor injuries.

2)  (2) A motor accident was caused mostly by the fault of a person if the contributory negligence of the person in relation to the motor accident (as referred to in section 3.38) was greater than 61%.

22.   Part 5 of the Act contains a number of provisions under the heading ‘no-fault accident’. These provisions are modelled largely on the blameless accident provisions of the Motor Accidents Compensation Act however they are not identical and include references to statutory benefits.

23.   Section 5.1 of the Act defines a no-fault accident as follows;

no-fault motor accident means a motor accident in the State 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.

24.   Section 5.2 is contained in Part 5 of the Act (not Part 3 of the Act) and says:

(1)   The death of or injury to a person that results from a no-fault motor accident involving a motor vehicle that has motor accident insurance cover for the accident (within the meaning of section 1.10) is, for the purposes of and in connection with any claim for damages or statutory benefits 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 no-fault motor accident involved more than one motor vehicle that has motor accident insurance cover for the accident (within the meaning of section 1.10), 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.

25.   Section 5.3 provides for the presumption that an accident is a no-fault accident as follows:

1)  In proceedings on a claim for damages in respect of the death of or injury to a person resulting from a motor accident, an averment by the plaintiff that the motor accident was a no-fault motor accident is evidence of that fact in the absence of evidence to the contrary.

2)  In connection with an application for statutory benefits in respect of the death of or injury to a person resulting from a motor accident, a declaration by the applicant that the motor accident was a no-fault motor accident is evidence of that fact in the absence of evidence to the contrary.

26.   Section 5.4 provides there is no recovery of damages for the driver who caused accident and the current version of this section reads as follows:

1)   There is no entitlement to recover damages because of the operation of this Part 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 a person 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.

What is in issue in this matter?

27.   ACZ declares that his accident is a no-fault or blameless accident. He says that his accident comes within the definition of a ‘no-fault accident’ as set out in s 5.1.

28.   While the parties appear to agree that ACZ was not actually at fault for causing the accident, the Insurer argues that because of s 5.2 of the Act, ACZ is deemed to be wholly at fault for causing his accident and that ss 3.11 and 3.28 should be interpreted to allow GIO to terminate ACZ’s benefits for both actual or real fault or fault deemed by operation of the legislation.

29.   Both parties have provided submissions in this matter. There are deficiencies in both parties’ submissions which were pointed out in reports issued following two previous teleconferences. At the third teleconference, both parties said they did not wish to provide any further evidence or submissions in this matter and have requested I determine the matter on the papers.

Claimant’s submissions

30.   The Claimant’s submissions refer extensively to the case of Whitfield and Anor v Melenewycz [2016] NSWCA 235. This case is of limited relevance to the matter before me because that case involved a claim for common law damages under the Motor Accident Compensation Act and the claim before me is a claim for statutory benefits under the Motor Accident Injuries Act. While the provisions in the two Acts are similar with regards to the availability and application of common law damages the former legislation has no regime of statutory benefits.

31.   The Claimant cites sections 3.11, 5.2 and 5.3 of the Act and says [at para 30] that a blameless accident must involve a causative use or operation by the owner or driver of the vehicle but not fault. He further says [at 31] that if the Insurer’s interpretation were to prevail, no driver ever involved in a blameless accident could recover damages or benefits after the first 26 weeks. He also says [at 32] that ss 5.2 and 5.3 are not ‘blanket exclusions’ and in summary that the Claimant cannot be deemed at fault.

Insurer’s submissions

32.   The Insurer’s submissions ‘reiterate and affirm the findings and conclusion’ made in its internal review decision that the Claimant is wholly or mostly at fault for the accident.

33.   The Insurer says this accident is a no-fault (blameless) accident, that s 5.2 deemes ACZ to be at fault and s 5.4 operates to exclude drivers at fault.

34.   Section 5.4 has been amended. At the time these submissions were drafted, section 5.4 contained a reference to statutory benefits however that section has been amended with the manemdnet coming into retrospective effect on 8 January 2019 to delete any reference to statutory benefits. Section 5.4 and the driver exclusion now only operates in a claim for common law damages.

Does wholly at fault include 'deemed' fault?

Who bears the ‘onus of proof’?

35.   Part 3 of the Act provides a right or entitlement to statutory benefits to someone injured in a motor accident in NSW. In my view, once it is agreed or the Claimant establishes that he was injured in a motor accident in this state then, as the Insurer is seeking to take that right and entitlement away from ACZ, the Insurer bears the burden of satisfying me that ACZ should not receive statutory benefits beyond the first 26 weeks.

36.   In this matter, the Insurer has agreed that ACZ was injured in a NSW motor accident.

Do statutory benefits begin and end in Part 3?

37.   ACZ seeks statutory benefits under Part 3 of the Act. Section 3.1 says that these statutory benefits are payable ‘as provided by this Part’ or ‘except as otherwise provided by this Part’. The words ‘This Part’ are clearly a reference to Part 3.

38.   The no-fault (blameless) accident provisions are not found in Part 3 but are found in Part 5. It is hard to understand why the no-fault provisions of Part 5 are needed in relation to statutory benefits when s 3.1(2)(a) would appear to provide statutory benefits for someone injured in a no-fault accident.

39.   In my view, when considering an injured person’s rights in relation to the receipt or cessation of statutory benefits under the Motor Accident Injuries Act I must restrict myself to a consideration of the provisions in Part 3 only.

40.   Section 3.1 provides an entitlement to statutory benefits for anyone involved in a motor accident. Those benefits are payable by the relevant insurer (in accordance with s 3.2) unless there is some disentitling action or conduct such as having a workers compensation claim (s 3.35) or committing a serious driving offence (s 3.37). Statutory benefits are payable unless those benefits cease in accordance with some other section of the Act. For example, s 3.13 permits the termination of weekly income support benefits when someone reaches retirement age and s 3.32 provides that treatment and care benefits cease when Lifetime Care and Support steps in.

41.   Sections 3.11 and 3.28 are contained in Part 3. Those sections say that a Claimant is not entitled to statutory benefits if (leaving aside injury and contributory negligence) the accident was caused wholly by the fault of ACZ. If I confine myself to the provisions of Part 3 (which do not include the no-fault provisions of Part 5) in my view noting the agreement between the parties and in any event on the evidence presented to me in this matter, ACZ is not wholly at fault for causing his accident. Therefore his statutory benefits should continue beyond the first 26 weeks.

42.   I note the Insurer has accepted ACZ was not actually at fault and there is nothing the Insurer has taken me to in Part 3 that in my view prevents ACZ from recovering statutory benefits beyond the first 26 weeks after the accident.

What is the relevance of Part 5?

43.   If I am wrong and the provisions of Part 5 do apply to the regime of statutory benefits then I note the parties agree ACZ’s accident is a blameless accident within the meaning of s 5.1 and that he has declared his accident is a blameless accident in accordance with s 5.3(2).

44.   Section 5.4 has been amended to remove any reference to statutory benefits and does not apply therefore the driver of the vehicle that caused an accident is prima facie entitled to statutory benefits under Part 3.

45.   Section 5.2(2) is not relevant because ACZ was involved in a single vehicle accident.

46.   Section 5.2(1) provides that in a claim for damages or statutory benefits, if a person is injured in a no-fault accident involving a motor vehicle that has motor accident insurance cover (within the meaning of s 1.10), that injury 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’.

47.   There is no dispute between the parties that ACZ had his motor cycle insured by GIO and I have set out above the terms of the statutory policy covering that motor cycle. It is entitled ‘third party policy’ and covers the owner or driver of the vehicle for injuries or death caused by their fault. The blameless accident provisions of the Motor Accident Compensation Act extended the availability of common law damages to persons injured in accidents where there was no fault on the part of the owner or driver and there needed to be a mechanism to enable the payment of those common law damages under a policy that required there to be fault. The mechanism adopted in the Motor Accidents Compensation Act was the ‘deeming’ of fault under s 7B. The deeming of fault created a liability in the third-party insurer to pay benefits under the policy.

48.   ACZ is not claiming common law damages. He is claiming statutory benefits. In Part 3 of the Act, section 3.2 provides the mechanism for payment of statutory benefits. In summary, statutory benefits are payable by the ‘relevant insurer’. In the case of a single vehicle accident the relevant insurer is the insurer of that vehicle (s 3.2(2)(a)). In the case where two or more vehicles are involved in the accident the relevant insurer is the insurer of the at-fault vehicle (s 3.2(2)(b)). And in any other case (where the vehicle is uninsured or unidentified) the Nominal Defendant is the relevant insurer.

49.   Section 3.2(4) provides that the insurer of the at-fault vehicle is the insurer of the vehicle whose owner or driver’s fault caused the injury or if there is more than one vehicle whose owner or driver’s fault caused the injury then the insurer of the vehicle which was most at fault.

50.   As there was only one motor vehicle involved in ACZ’s accident, the relevant insurer is by virtue of s 3.2(2)(a) the insurer of that vehicle, GIO. Section 3.2(2)(b) and (c) and s 3.2(40 are therefore not relevant.

51.   Because the policy issued under the Act is in the terms of a third-party policy this would ordinarily require there to be fault in order for the policy to respond to the claim. In a scheme of statutory benefits, where s 3.1 does not require there to be fault, there needs to be a mechanism for the third-party policy to respond. Section 3.2(5) provides:

For the purposes of this Act (including any motor accident insurance cover in respect of a motor vehicle) a liability that the relevant insurer has to pay statutory benefits under this Part in respect of death or injury is deemed to be a liability in respect of death or injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle (being a motor vehicle for which the insurer is the relevant insurer).

52.   It is difficult to understand why s 5.2(2) is needed in the regime of statutory benefits when s 3.2 and in particular 3.2(5) provide a mechanism for the payment of statutory benefits. In my view s 3.2(5) creates or deems a liability on the part of the relevant insurer under a third-party policy to pay first party statutory benefits as if there was fault on the part of the owner or driver.

53.   It is my view that when read together ss 3.2(5) and 5.2(1) operate to deem someone to be at fault who is not actually at fault for the purposes of creating a liability in a third- party insurer to pay first-party statutory benefits or common law damages.

54.   In my view these deeming provisions relate only to the deeming of liability on the part of the insurer to pay benefits or damages. To extend the reach of this deeming provision and import the notion of deemed fault into the wording of s 3.11 and 3.28 would require, in my view, a much clearer legislative intention.

Conclusion

55.   Sections 3.11(1)(a) and 3.28(1)(a) provide that statutory benefits are to cease when the accident was caused wholly by the fault of the injured person. When those words are given their ordinary meaning, in a case such as this where the cause of the accident was, as both parties agree, the sudden movement of an undomesticated animal, it cannot be said that the accident was caused wholly by the fault of ACZ. The Insurer has therefore not satisfied me that ACZ is wholly at fault for causing this accident.

56.   The Insurer has never raised an issue of contributory negligence and has put no evidence before me to suggest there is any contributory negligence on the part of ACZ. The Insurer has not satisfied me that ACZ is mostly at fault for causing this accident.

57.   The Insurer agrees ACZ has sustained non-minor injuries.

58.   It therefore follows that GIO cannot cease or should not have ceased payment of statutory benefits to ACZ under s 3.11 and 3.28.

59.   I note that the interaction between Part 3 and Part 5 of the Act is, as evidenced by this dispute, somewhat unclear. In my view legislative or other clarification would be of benefit to prevent further disputation and enable injured persons and insurers to understand the reach or restriction of statutory benefits in circumstances where someone is killed or injured in a no-fault or blameless accident.

Costs

60.   The Claimant has lodged submissions seeking the maximum amount allowed under the Motor Accident Injuries Regulation 2017. No disbursements are claimed.

61.   The Insurer does not object to the claimed costs.

62.   ACZ has been represented by the firm Danawe Lawyers since the early days. It was that firm that lodged the internal review application (no costs are permitted under the regulation for work associated with that application) and it was that firm that referred the dispute about liability to the Dispute Resolution Service for determination.

63.   There have been three tele-conferences and submissions made by the Claimant and a reply and submissions from the Insurer which the Claimant’s solicitor has had to consider.

64.   In my view the Claimant is entitled to the maximum amount of costs permitted by the regulation that is the sum of $1,633 plus GST.

Belinda Cassidy
Claims Assessor
Dispute Resolution Service
21 March 2019