AMP General Insurance Limited v Mayne Nickless Limited [2000] NSWCA 213 | Case summary

1 STEIN JA: I agree with Fitzgerald JA. 2 FITZGERALD JA: Mr Lewis Falzon was employed by the respondent, Mayne Nickless Limited, as a truck driver. On Friday, 1 March 1996, Mr Falzon was driving a truck owned by Mayne Nickless when a drum split and chemical spilled on the floor of the payload area of the truck. The spillage rendered the affected part of the truck unsuitable for the carriage of goods in the course of the business of Mayne Nickless until the chemical had been removed. 3 On the following Monday, 4 March 1996, Mr Falzon was injured when he fell while using a high pressure hose to clean the spillage. A combination of the chemical and water from the hose had rendered the floor of the payload area of the truck slippery. The parties are agreed that Mr Falzon's injury was caused during the maintenance of the truck and hence in its "use or operation" within the meaning of s 3(6) of the Motor Accidents Act 1988 (the "Act"). 4 Mr Falzon sued Mayne Nickless for damages for negligence. It is agreed that Mayne Nickless was liable to Mr Falzon and that the amount to be paid to him under a compromise is proper and reasonable. 5 At the time when Mr Falzon was injured, the appellant, AMP General Insurance Ltd, was the licensed insurer of the truck pursuant to a certificate of third-party insurance which it had issued under the Act on 30 September 1995. See the definitions in s 3(1) of the act of "driver", "fault", "injured person", "insured motor vehicle", "insured person", licensed insurer", "motor accident", "motor vehicle", "owner", "public street", and "third-party policy". 6 In the period between AMP's issue of the certificate of third-party insurance on 30 September 1995 and Mr Falzon's injury on 4 March 1996, the Act had been amended by the Motor Accidents Amendment Act 1995 (the "Amendment Act"). 7 The general scheme of the Act was the same before and after the Amendment Act. A third-party policy was required in relation to every motor vehicle used on a public street. Act, s 8(1). A licensed insurer which accepted a premium for insurance under a third party policy was required to issue a certificate of insurance to the owner of the vehicle immediately. Act, s 10(1). When it had issued a certificate of insurance, the licensed insurer was "taken to have issued a third-party policy for the motor vehicle … to which the certificate relates." Act, s 10(3). A third-party policy "taken to have been issued for a motor vehicle" had effect for the period for which "the licensed insurer who was taken to have issued the policy" was "on risk" in accordance with s 12 of the Act. Act, s 12(1). The licensed insurer was liable to indemnify the insured person "in respect of any liability which the policy purports to cover." Act, s 17. So far as presently material, that liability was a liability "in respect of … injury to a person caused by the fault of the owner or driver of the vehicle." Act, s 9 and Schedule 1. 8 Prior to the Amendment Act, a third-party policy provided indemnity against liability in respect of injury to a person which was caused by the fault of the owner or driver of a vehicle in the use or operation of the vehicle. The Amendment Act inserted a new definition of "injury" in s 3(1) of the Act, a new section 9 and a new paragraph 1 in the third-party policy set out in Schedule 1 of the Act. As a result of those changes, a third-party provided indemnity against liability in respect of injury to a person caused by the fault of the owner or driver of the vehicle in the use or operation of the vehicle only if the injury was "a result of and … caused … by a defect in the vehicle." 9 The trial judge held that Mr Falzon's injury was not "a result of and … caused .. by a defect in the vehicle …", but that Mayne Nickless is nonetheless entitled to indemnity from AMP in respect of its liability to Mr Falzon because the changes made by the Amendment Act were inapplicable. In his Honour's opinion, the ambit of the indemnity to which Mayne Nickless is entitled must be determined by reference to the operation of the policy at the time when AMP issued the certificate of insurance. 10 AMP has appealed. Mayne Nickless has filed a Notice contending that the trial judge erred in finding that Mr Falzon's injury was not "a result of and … caused…. by a defect in the vehicle….". 11 In its oral argument in this Court, Mayne Nickless included a submission that, when used in Schedule 1 to the Act, the word "injury" does not bear its defined meaning according to s 3(1) of the Act. However, it was not submitted that Schedule 1 is not part of the Act, cf Interpretation Act 1987, s 35(1)(b). and nothing was pointed to in the context or subject matter cf Interpretation Act 1987, s 6 which might exclude the defined meaning. On the contrary, the overall structure of Part 3 of the Act, and s 9 in particular, point strongly toward the word "injury" in Schedule 1 having the meaning stated in s 3(1). 12 The Act contains another Schedule, Schedule 4, which is given effect by s 137 of the Act. Schedule 4 contains "Savings, Transitional and Other Provisions" Part 1 "Savings and Transitional Regulations" was expanded by the Amendment Act but there is no suggestion that there is any regulation which is presently material.. Part 7 of Schedule 4 "Provisions arising from the enactment of the Motor Accidents Amendment Act 1995" Amendment Act, s 3, Schedule 1 [43]. consists of clause 17 "Application of amendments". Clause 17 includes the following subclauses (2), (3) and (10): "(2) The amendments to this Act made by Schedule 1 … [4] … to the Motor Acts Amendment Act 1995 apply only in relation to motor accidents occurring on or after the commencement of the amendment."

(3) The amendments to this Act made by Schedule 1 [6] and [41] to the Motor Acts Amendment Act 1995 do not apply to limit the insurance under a third-party policy in respect of a permit issued under Regulation 53A of the Motor Traffic Regulations 1935 before the commencement of the amendments. …… (10) Except to the extent provided by this clause or by the regulations, a provision of this Act , as in force immediately before its amendment by the Motor Accidents Amendment Act 1995, continues to apply to and in respect of anything to which it then applied." 13 In order to apply those provisions, it is necessary to understand that the amendments to the Act which were made by the Amendment Act were "set out in Schedule 1" to the Amendment Act. Amendment Act, s 3. Schedule 1 [4] to the Amendment Act was the provision which omitted the previous definition of "injury" and inserted a new definition in s 3(1) of the Act. Schedule 1 [6] to the Amendment Act was the provision which omitted the previous section 9 and inserted a new section 9. Schedule 1 [41] to the Amendment Act was the provision which omitted paragraph 1 of the third-party policy in Schedule 1 to the Act and inserted a new paragraph 1. 14 Some provisions of the Amendment Act, including the provision which inserted Part 7 into Schedule 4 to the Act, "are taken to have commenced at midnight on 26 September 1995." Amendment Act, s 2(2), (3), Schedule 1 [43]. The new definition of "injury" in s 3(1) of the Act, the new section 9 and the new paragraph 1 in the third-party policy set out in Schedule 1 of the Act commenced on 1 January 1996. 1 January 1996 was the day appointed by Proclamation in accordance with s 2(1) of the Amendment Act. Notwithstanding the commencement of those provisions, the previous definition of "injury", the previous s 9 and the previous paragraph 1 in the third-party policy set out in Schedule 1 to the Act would have continued to apply to the policy between AMP and Mayne Nickless pursuant to Schedule 4, Part 7, subclause 17(10) of the Act were it not for Schedule 4, Part 7, subclauses 17(2) and (3). By Schedule 4, Part 7, subclause 17(2), the new definition of "injury" in s 3(1) of the Act applied in relation to the accident in which Mr Falzon was injured because that occurred after the commencement of the amendment whereby the previous definition of "injury" was omitted and the new definition was inserted. Schedule 4, Part 7, subclause 17(3) proceeded on that basis by excluding the consequential limitation to insurance which would otherwise have applied to a third-party policy in respect of a permit to use an unregistered vehicle under Regulation 53A of the Motor Traffic Regulations 1935. 15 Accordingly, on the proper construction of Part 7 of Schedule 4 to the Act, Mayne Nickless was not entitled to indemnity from AMP in respect of its liability to Mr Falzon unless his injury was "a result of and … caused … by a defect in the vehicle." 16 Mr Falzon was injured because he fell on the slippery surface of the floor of the payload area of the truck. For Mayne Nickless to succeed, that slippery surface must have been a "defect in" the floor. There was no other "defect in the vehicle". 17 The floor surface was unsafe because of its slippery surface. The cause of the slippery surface was a mixture of substances which were not part of the floor. The presence of those extraneous substances on the floor was not a "defect in" the floor. Accordingly, there was no "defect in the vehicle". 18 I would allow the appeal with costs, set aside the judgment in favour of the respondent, and dismiss the respondent's claim against the appellant with costs. 19 FOSTER AJA: I agree with Fitzgerald JA. **********

AMP General Insurance Limited v Mayne Nickless Limited

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