Applin v. The Nominal Defendant [2004] NSWCA 217

LOWER COURT District Court JURISDICTION : LOWER COURT 1/02 (Bathurst) FILE NUMBER(S) : LOWER COURT Sorby DCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40776/03 DC 1/02

HODGSON JA TOBIAS JA CRIPPS AJA

Friday 2 July 2004 APPLIN V. THE NOMINAL DEFENDANT Judgment 1 HODGSON JA: On 4 August 2003, Sorby DCJ gave judgment for the defendant in proceedings in which the appellant had sued the Nominal Defendant in respect of injuries he received when struck by an unregistered Yamaha motor cycle ridden by his friend Sam Whalan. The finding of the primary judge was on the basis that this was not a case within s.33(1) of the Motor Accidents Compensation Act 1999 (MAC Act). However, in case he was wrong on this point, he found Mr. Whalan guilty of negligence and found contributory negligence to the extent of 30% against the appellant. He assessed damages at $329,482.35, so that the verdict for the appellant would otherwise have been $230,637.64. 2 The appellant appeals from this judgment. No appeal or cross-appeal has been brought in respect of the findings as to negligence, contributory negligence or damages. 3 The accident occurred on a dirt road passing through a property owned by Sam Whalan's family. At the time, the motor cycle was being ridden purely for recreation. However, at other times it was used as a "farm bike" for such things as checking for open gates, straying stock, and downed fences. 4 It was clear that the motor cycle was not capable of being registered for general use on roads in New South Wales; but the appellant's contention was that it was capable of being registered in the sense of having an unregistered vehicle permit (UVP) under s.8(1)(d) of the Road Transport (Vehicle Registration) Act 1997 (VR Act), and that this was sufficient in the circumstances to make the Nominal Defendant liable under s.33(1) of the MAC Act.

STATUTORY PROVISIONS 5 In order to understand the issues, it is necessary to set out some statutory provisions. 6 The motor cycle was plainly a "registrable vehicle" within the definition of s.4 of the VR Act. Section 18(1) of that Act prohibited the use of unregistered registrable vehicles on a road. However, s.18(2) provided for an exception if the use was otherwise permitted by the Act or Regulations; and s.8(1)(d) of that Act authorised the Roads & Traffic Authority (RTA) to issue a permit for the use of an unregistered registrable vehicle. Clause 44 of the Road Transport (Vehicle Registration) Regulation 1998 provided as follows: 44 Issue of unregistered vehicle permits (1) In this clause, number includes letter. (2) The Authority may issue an unregistered vehicle permit for a registrable vehicle if: (a) it would be unreasonable or impracticable to require that the registrable vehicle be registered during the period of the permit or the vehicle has been driven to a place under clause 17 of Schedule 1 for the purpose of obtaining registration and registration has been refused, and (b) the vehicle complies with any applicable third party insurance legislation. (3) An unregistered vehicle permit authorises use of a registrable vehicle on: (a) a road or road related area, or (b) particular roads or road related areas, subject to any condition specified in the permit. (4) Unless sooner revoked, an unregistered vehicle permit expires on the expiry date recorded in the permit: (a) if the permit specifies an expiry time - at that time on the expiry date, or (b) if no expiry time is specified - at the end of the day recorded as the expiry date. (5) If the Authority issues an unregistered vehicle permit the Authority must: (a) record details of the permit, including any condition to which the permit is subject, in the Register, and (b) assign a temporary identification number to the vehicle. (6) Except if otherwise approved by the Authority, an applicant for an unregistered vehicle permit must pay to the Authority any applicable gazetted fee for issue of the permit before it is issued. (7) The holder of an unregistered vehicle permit must: (a) display a notice affixed securely to the registrable vehicle in a prominent position depicting the temporary identification number assigned to the vehicle by the Authority, or (b) display such information as may be required or authorised by the Authority. (8) An unregistered vehicle permit may be revoked or varied at any time by the Authority. 7 The accident occurred on 30 December 1998; but under s.31 of the MAC Act, Pt.2.4 of that Act (relating to uninsured or unidentified vehicles) applied to accidents occurring before as well as after the commencement of the Act. 8 The most important section of the MAC Act for this case is s.33, which is as follows: 33 Claim against Nominal Defendant where vehicle not insured (1) An action for the recovery of 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 that is not an insured motor vehicle in the use or operation of the vehicle on a road in New South Wales may be brought against the Nominal Defendant. (2) Any such action may be brought despite the fact that the owner or driver of the motor vehicle is dead or cannot be found or is the spouse of the person whose death or to whom injury has been caused. (3) In respect of any such action, the Nominal Defendant is liable as if it were the owner or driver of the motor vehicle. (4) There is no right of action against the Nominal Defendant under this section: (a) if the motor vehicle is owned by the Commonwealth or by any person or body of persons representing the Commonwealth, or (b) if there is a right of action under section 35 in respect of the death or injury, or (c) if, at the time the motor accident resulting in the death or injury occurred, the motor vehicle was registered under the law of a place other than New South Wales or under a law of the Commonwealth and the motor vehicle was covered under a policy of compulsory third-party personal injury insurance or was subject to coverage under a compulsory motor vehicle accident compensation scheme of that place or of the Commonwealth, or (d) if the regulations provide that in the circumstances specified in the regulations there is no right of action against the Nominal Defendant. (5) For the purposes of this section, and any regulations made for the purposes of this section: motor vehicle means a motor vehicle: (a) that is exempt from registration, or (b) that is not exempt from registration and that: (i) is required to be registered to enable its lawful use or operation on a road in New South Wales, and (ii) immediately before the motor accident occurred, was capable, or would, following the repair of minor defects, have been capable, of being so registered. 9 There are important definitions in s.3 of the MAC Act, in particular those of "insured motor vehicle", "registration" and "third party policy". Those definitions are as follows: insured motor vehicle means a motor vehicle in relation to which a third-party policy is in force.

registration means: (a) registration of a motor vehicle under the Road Transport (Vehicle Registration) Act 1997 or the Recreation Vehicles Act 1983 , or (b) the issue of an unregistered vehicle permit under the Road Transport (Vehicle Registration) Act 1997 for an unregistered motor vehicle, or (c) registration in New South Wales of a motor vehicle under the Interstate Road Transport Act 1985 of the Commonwealth.

third-party policy means a policy of insurance under this Act. 10 Section 10 of the MAC Act deals with third party policies, as follows: 10 Third-party policies A third-party policy under this Act is a policy that is in the following terms: 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 (Vehicle Registration) Act 1997 - 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 Accidents Compensation Act 1999 . 11 Further information concerning UVPs was given by a letter from the RTA dated 26 September 2002, in the following terms: As at 30 December 1998, the Roads and Traffic Authority (RTA) issued Unregistered Vehicle Permits (UVPs) for farmers who wish to use unregistered farm vehicles on roads and road related areas. These were generally issued on an annual basis. Farm vehicles that typically operated under UVP coverage included tractors, harvesters and 2-wheeled agricultural motor bikes and 4-wheeled all-terrain motor bikes.

However, not all farm vehicles are required to be registered or have UVPs. Under the provisions of the Road Transport (Vehicle Registration) Regulation 1998, farm vehicles that are driven across roads between primary producer properties are exempt from any requirement to be registered. A UVP would not have been necessary for these vehicles.

In December 1998, a UVP would have been required if a farmer wished to operate an unregistered agricultural motor bike along roads between farm properties. 12 This letter enclosed an application form, which contained the following relevant information: Unregistered Vehicle Permits UVPs are issued for unregistered vehicles that the operator only wants to drive or ride for a specific purpose. UVPs are not intended to cover the regular use of a vehicle on a public street, and must not be regarded as a substitute for full registration except for specific vehicles. Twelve month UVPs are mainly issued to primary producers and for certain items of roadwork and earthwork plant.

Vehicles that may have UVPs UVPs may be issued for: • customers who want to make a single journey. For example, to move an unregistered vehicle to another State, move a caravan to a permanent site, or for a registered vehicle visiting from overseas • unregistered farm tractors and implements used between properties • unregistered farm vehicles used on isolated occasions • veteran and vintage vehicles and street rods • golf buggies, lawn mowers, greenkeeping vehicles, mini bikes and invalid conveyances. See C.21.16 Golf Course Vehicles for further details • forestry vehicles • all-terrain 3/4 wheel balloon tyred vehicles • 'off-road' motorcycles used for moving stock and competitions • recently-expired vehicles from interstate waiting for a REVS clearance • house moving equipment (removalist/dolly wheels).

Agricultural (Ag) Bikes and All-terrain Vehicles Agricultural bikes and all-terrain vehicles used in primary production do not need to be registered. These bikes may or may not have compliance plates and are mainly designed for off-road use.

RSOs may give these vehicles Unregistered Vehicle Permits (UVPs) for up to twelve months, but only if • the applicant is a primary producer providing a Primary Producer Declaration, or a rural contractor providing a Statutory Declaration stating that they are a rural contractor, and • the vehicle will be driven on public streets strictly within the conditions specified in the UVP.

The customer does not have to provide a Safety Inspection report (pink slip), but they must-certify that the vehicle is roadworthy on the UVP application. Below are some examples of the conditions which may be used when issuing a UVP for these vehicles: • they may travel along unpaved roads between properties at a maximum speed of 50 km/h • they may travel up to 10 km on unmarked paved roads between property entrances at a maximum speed of 50 km/h • they may not be operated in built-up areas • they may be used to move stock • during daylight hours only if the vehicle has no head lights • vehicle may only be used for farming purposes • may travel on rural roads which separate the owner's properties.

DECISION OF PRIMARY JUDGE 13 The primary judge noted a submission for the Nominal Defendant that the essential question was whether the use to which the motor cycle was being put immediately before the accident would have entitled the issuing of a UVP for such usage. It was contended that this question should be answered in the negative. The primary judge in effect upheld that submission, in the following terms: I therefore find on the balance of probabilities that at the date of the accident, 30.12.98 the Yamaha WR 200 was motor vehicle and road worthy but the use to which it was being put, namely recreational riding was outside the range of uses for which UVP are granted by the RTA. I make this finding notwithstanding that on other occasions the bike was used specifically for primary production for which a UVP could issue. 14 The primary judge held that this meant the claim against the Nominal Defendant must fail.

GROUNDS OF APPEAL 15 The appellant relies on the following grounds of appeal: His Honour erred in: 1. his construction and application of Section 33(5) of the Motor Accidents Compensation Act 1999 ("the MAC Act"); 2. finding the motor cycle ridden by the respondent was not a motor vehicle, as defined in Section 33(5) of the MAC Act; 3. finding that immediately before motor vehicle accident occurred, the motor cycle was not capable of being registered to enable its lawful use on a road in New South Wales within the terms of Section 33(5)(b) of the MAC Act; 4. the construction and application of the provisions of the Road Transport (Vehicle Registration) Act, 1997 ("the Act") relating to the issue of Unregistered Vehicle Permits; 5. concluding the motor cycle at the relevant time was not capable of being issued an Unregistered Vehicle Permit pursuant to the provisions of the Act; 6. misdirecting himself as to the questions to be determined, or alternatively erring in a. finding the motor cycle was being used for recreational use only at the relevant time; b. finding the conditions exampled in paragraph C21.2 were not wide enough to cover the usage immediately before the motor vehicle accident.

SUBMISSIONS 16 Mr. Maconachie QC for the appellant submitted that "registered" in s.33(5) of the MAC Act includes having a UVP. "Registration" in the MAC Act includes the issue of a UVP for an unregistered motor vehicle, and "registered" in s.33(5) must be given a cognate meaning. I would note here that this submission was not contested; and it is further supported by the consideration that unless "registered" in s.33(5)(a)(i) includes having a UVP, then any vehicle which could be lawfully used on a road with a UVP would not strictly be required to be registered to enable its lawful use on such a road. 17 Mr. Maconachie submitted that the motor cycle was, immediately before the accident, capable of having a UVP, because it was used for farming purposes and was physically adequate; and that such a UVP would have authorised use of the motor cycle on roads passing through the Whalan property. It did not matter that the lawful use or operation that would have been authorised by such a UVP would not have extended to the actual use or operation that gave rise to the accident. Section 33(5)(b)(i) did not say "required to be registered to render lawful the use or operation referred to in subsection (1)"; and it should not be read as if it did. The statutory scheme providing for recourse to the Nominal Defendant was a remedial statute for the benefit of persons injured in road accidents, and should not be read narrowly. 18 Mr. Bartlett SC for the Nominal Defendant submitted that the words "immediately before" in s.33(5)(b)(ii) indicated that it was necessary to have regard to the use to which the motor vehicle was being put immediately before the accident, and to ask whether it was capable of having a UVP for that use. The circumstance that a motor vehicle might in the past, as a matter of history, have been used for a purpose for which a UVP might issue was entirely irrelevant. 19 Mr. Bartlett submitted that the 1995 amendments were intended to cut down the circumstances in which the Nominal Defendant can be made liable. He referred to the second reading speech of the Attorney-General on 16 November 1995: It is therefore proposed to amend the definition of "injury" to adopt an approach similar to that taken in Queensland, South Australia and Western Australia, where "injury" is qualified in terms of its cause. Similarly, the expression "motor vehicle" is widely defined in the Act and covers go-karts and other vehicles, such as forklifts, not normally associated with use on the dedicated public road network. Accidents involving such vehicles have given rise to claims against the Nominal Defendant under the Motor Accidents Act. Under the Construction Safety Act the WorkCover Authority licenses go-kart facilities and public liability insurance is compulsory. It is considered that claims for injury arising from the use of such vehicles should properly be made under such public liability policies and not against the Nominal Defendant.

It is therefore proposed to limit the types of motor vehicles that can give rise to claims against the Nominal Defendant. Claims will only be able to be made in respect of vehicles which are capable of and are required to be registered for use on a public road, or are exempt from registration under the Traffic Act and regulations. Vehicles not capable of registration only because of minor defects may still be capable of giving rise to a claim against the Nominal Defendant. By means of that provision, Nominal Defendant claims arising from accidents in the use of go-karts and other vehicles not capable of registration will not be maintainable.......

Another area where coverage under the Act is considered to be unduly broad relates to unregistered vehicle permits. In third-party policies issued under the Motor Accidents Act coverage is effective should an accident occur anywhere in Australia, whether or not on a public street. Unregistered vehicle permits issued by the Roads and Traffic Authority under the motor traffic regulations carry with them a CTP policy. The permits allow the use of the subject vehicles on public streets in New South Wales. However, the CTP cover is not limited to public streets in New South Wales but is identical to full green-slip cover. The breadth of coverage in this area has been of particular concern in relation to the use of special purpose vehicles used in hazardous industrial operations, for example, mobile forestry equipment undertaking logging operations.

DECISION 20 The legislation, aided by the second reading speech to which reference has been made, indicates an intention to relieve the Nominal Defendant from liability in certain circumstances, particularly where there is likely to be other insurance, such as public liability insurance. Furthermore, it is clear that the Nominal Defendant is relieved from liability in some cases which might be considered anomalous. For example, if one takes an ordinary vehicle that is used for ordinary purposes, and accordingly is a vehicle which could not reasonably be considered a candidate for a UVP, and if that vehicle has a major mechanical defect and through negligent driving causes injury in a road accident, an injured party can plainly recover against the third party insurer if the vehicle is registered. However, if the vehicle happens not to be registered, the injured party cannot recover against the Nominal Defendant, because the vehicle does not satisfy the requirement of s.33(5)(b)(ii), since it has more than minor defects. 21 There is force in some of the arguments for a narrow construction of the provision. 22 First, if one reads the definition in subsection (5) of s.33 into the operative provision in subsection (1), then one would have together in subsection (1) the expression "its lawful use or operation on a road in New South Wales" and also the expression "the use or operation of this vehicle on a road in New South Wales"; and this could suggest that the same use and operation, and the same road, is referred to in both places. 23 Next, as submitted by Mr. Bartlett, the words "immediately before" in s.33(5)(b)(ii) could suggest that the earlier history of the vehicle is irrelevant; and so its candidacy for the issue of a UVP must depend on its use at this time. 24 Third, it might be thought that, if a narrow construction is not adopted, there would be virtually no limit to vehicles satisfying the requirements of s.33(5), because there are no hard and fast limits to the issue of UVPs which would make lawful some use of a motor vehicle on some road. 25 On the other hand, the legislature certainly did not intend that, in the case of vehicles that actually have a UVP, the access of a person injured in a road accident to third party insurance should be available only if the vehicle is used as authorised by the UVP. This is made clear by s.10. The third party policy will answer if the vehicle with a UVP (and otherwise unregistered) is being used or operated on any road in any part of the Commonwealth when the fault of the owner or driver causes injury, irrespective of whether the UVP authorises its use on that road or authorises that particular use. It can therefore be argued that the legislature would not have intended that, in the event that a UVP had not been obtained for that vehicle, the injured party would in the very same circumstances have no recourse to the Nominal Defendant. 26 Another consideration is that the legislature could, but did not, express s.33(5)(b)(i) as limited to the use or operation referred to in s.33(1): s.33(5)(b)(i) is apt in its expression to refer to any use or operation on any road in New South Wales, not just the use or operation and/or the road referred to in s.33(1). 27 Also, the words "immediately before" in s.33(5)(b)(ii) could be taken as directing attention to the physical condition of the motor vehicle, as suggested by the qualifications referring to "repair of minor defects"; that is, as not excluding consideration of a substantial and continuing use of the motor vehicle from some time before the accident and intended to be continued after the accident. If, for example, one had a motor cycle extensively used in farming, and if an accident occurred on a short deviation from such use, one might still say that it was, immediately before the accident, capable of having a UVP in respect of its substantial and continuing use. 28 On that approach, there would be some significant limitations on the vehicles that could qualify under s.33(5) by reason of capability of having a UVP. That is, it must be shown that the vehicle has some substantial ongoing use or purpose which would make the issue of a UVP appropriate. However, if there is shown to be such a use, as in effect the primary judge found in this case, then the circumstance that, immediately before the accident, it was being put to some other use would not prevent s.33 applying. 29 My review of the opposing considerations indicates that the matter is finely balanced. On the whole, although I recognise that the legislature has disclosed an intention to place limits on the circumstances in which the Nominal Defendant can be made liable, it is in my opinion appropriate to give weight to the overall purpose of giving persons injured by motor vehicles in motor accidents on roads access to insurance money; and it is of course to be remembered that the Nominal Defendant is, by s.39 of the MAC Act, given recourse against the owner and/or driver of the vehicle. 30 For those reasons, in this case, in my opinion the motor cycle was one required to be registered to enable its lawful use or operation on a road in New South Wales, in particular the road passing through the Whalan property on which the accident occurred; and, immediately before the motor accident, it was capable of being registered to enable its lawful use or operation on that road, in the sense of having a UVP to enable its lawful use or operation on that road for farming purposes for which it had been used and for which, one may infer, it was intended to be used in the future. The circumstance that the use or operation at the time of the accident would not have been authorised by such a UVP does not prevent the application of s.33. 31 For those reasons, in my opinion the following orders should be made: 1. Appeal allowed with costs. 2. Judgment below set aside. 3. In lieu thereof, judgment for the appellant in the sum of $230,637.64, and the respondent to pay the appellant's costs of the proceedings. 32 I have assumed from the lack of appeal or cross-appeal in relation to the other matters that the third order is the appropriate one. The question was not directly addressed in oral argument. If either party wishes to put forward a contrary submission, then that submission should be put in writing within 7 days, and if that happens, the other party can respond with a written submission with a further 7 days. 33 TOBIAS JA: I agree with Hodgson JA. 34 CRIPPS AJA: I agree with Hodgson JA. **********

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