Bamford v Periloo Pty Limited

LEGISLATION CITED: Insurance Contracts Act 1984 (Cth) Local Court Act 2007

Bayswater Car Rental Pty Ltd v Hannell (1999) 10 ANZ Ins Cas 61-437 CASES CITED: Employers Reinsurance Corporation v Ashmere Cove Pty Ltd [2008] FCAFC 28 Morris v Betcke [2005] NSWCA 308 Prudential Insurance Company v Inland Revenue Commissioners [1904] 2 KB 658

REPRESENTATION: Mr G Carolan (instructed by Gells Lawyers) Mr S Y Reuben (instructed by Fraser Clancey, Lawyers)

REASONS FOR JUDGMENT BACKGROUND 1 The factual circumstances that bring this matter before the Court are not contentious. The Plaintiff, Narelle Bamford, was the owner of a Ford Fiesta, registration number [xxx-xxx]. At the time the events occurred, the motor vehicle was being driven by the Plaintiff's husband, Gavin Bamford. There is no issue in relation to the status of the Plaintiff to bring this claim: it is accepted he was driving the car as the agent of his wife. 2 The Second Defendant, Petra Herling, was the driver of a Ford Falcon, registration number [xxx-xxx]. The two vehicles were involved in a collision that occurred at about 6.00am on 25 November 2008 on the Bruce Highway, near Mackay, in Queensland. She was a resident of Germany. She hired the Ford Falcon whilst she was in Australia on a holiday; she had hired it from the First Defendant, Periloo Pty Limited trading as "The Travellers Auto Barn", which was the owner of this motor vehicle. The First Defendant had entered into a contract of insurance with the Third Defendant, Holland Insurance Company Pty Limited, this organisation being a registered insurer. 3 Following the collision both motor vehicles sustained damage. The quantum of the claim is not in issue. It is the sum of $17,100. It was agreed that the extent of damage to the vehicle made it uneconomical to repair and this sum is the accepted pre-accident value of the Plaintiffs motor vehicle. 4 The Second Defendant has not filed an Appearance, nor a Defence in this matter. There are issues between the parties as to the effect of the attempts at service of the Court process, that is the Statement of Claim. No order was sought from the Court for substituted service. In any event, it is agreed that if such an order had been sought it would have failed in this Court because the Local Court of NSW has no power to make orders for substituted service of process outside the Commonwealth, of Australia. 5 The contract of hire between the Second Defendant and the First Defendant and the report of the collision by the Second Defendant to the First Defendant, filled out whilst she was still in Australia, indicate that she resides at an address in Düsseldorf, Germany. These documents also provide certain other details concerning the Second Defendant. These are as follows: - (a) Her German licence number; (b) Her date of birth; (c) A mobile phone number and email address. 6 The Plaintiffs case as to how the collision occurred is set out in a statement of Mr Gavin Bamford and he was called to give evidence before me on 12 July last. He says he was travelling in a southerly direction on the Bruce Highway at the time and date that I have indicated, on his way to work. It was a clear day and he had his headlights on. He was travelling in a line of traffic heading towards a service station known as the B.P. Mac's Truck Stop. It was on his left as he drove along the highway, that is on the eastern side. The highway at this particular point did not have a median strip, and there was one lane for traffic travelling in either direction. He says that he was behind another motor vehicle that slowed and indicated that it was going to move to its left into the truck stop. He says that he in turn slowed. He denied that he attempted to overtake this motor vehicle - there was no need as it was turning off the roadway some short distance ahead. He did observe what turned out to be the Second Defendant's motor vehicle on the left coming out of the stop. At this time of observation it was stationary. However, subsequently, this vehicle moved out onto the highway into the path of the Plaintiffs motor vehicle. It all happened very quickly. He had time only to apply the brakes and swerve but not sufficient time to avoid the collision with the vehicle being driven by the Second Defendant. Mr Bamford said that there was a speed limit at this point of the highway which was 100kmh. There is no evidence to suggest that he was travelling in excess of this limit. 7 Another version of the collision before the Court was that contained in the document headed "Collision for Damage Report Form" prepared by the Second Defendant. As I have said this was prepared after the accident before me Second Defendant left Australia and was provided to the First Defendant. It states as follows: - "I pulled out of the petrol station as the first car [not the Plaintiffs motor vehicle but one that was in front of the Plaintiffs motor vehicle] was pulling into the station. Vehicle 2 [that being driven by Mr Bamford] the car behind [i.e. behind the vehicle that was pulling into the station] swerved to overtake the turning car. We collided near centre line where front end damage to my car, passenger side damage to his car." 8 A diagram follows setting out the accident details, roughly consistent with the verbal description just set out. 9 A local police officer, Constable Streeting, attended the scene of the collision. There is a document headed "Occurrence Details" attached to an affidavit prepared by Mr Philip Grady. He is the National Fleet and Operations Manager employed by the First Defendant. It bears a report number and obviously was prepared by the police officer who attended the scene of the accident, Constable Streeting. It records details of observations made and indicates that both drivers were spoken to. The Second Defendant is referred to as a "German national with limited English". The report indicates further that both drivers sustained "sprains and strains" as a result of the collision. The report indicates, needless to say, that both vehicles sustained damage. At one point in the report, in respect of the Second Defendant, the following is noted: - "Traffic violations: Failure to give way, turn in face of oncoming traffic." 10 Further on in this report the following is noted: - "Unit 1 [the Second Defendant's motor vehicle] failed to give way whilst entering a road." 11 At the completion of this document in a section headed "Narrative", the following appears: - "Unit 2 [the vehicle being driven by Mr Bamford] was travelling south bound in a100kph zone approaching BP Mac's Truck Stop. Unit 2 was travelling behind a large truck which was in the inside left hand turn lane into the service driveway of BP Mac's Truck Stop. Unit 1 [the vehicle being driven by the Second Defendant] was at the service driveway waiting to turn right onto the Bruce Highway and proceed north. Unit 1's view was blocked by the vehicle. Unit 1 has begun to turn right and has collided with passenger side of Unit 2." 12 This is the extent of the evidence before the Court in relation to the circumstances of the collision. It is clear that on this evidence a conclusion can be reached, on the balance of probabilities, that the collision was a result of the negligence of the Second Defendant Whether this liability could be ameliorated by an allowance for contributory negligence would be a subject of argument. This may or may not be successful. However, I note that the Defence does not rely on contributory negligence. 13 As I have said, there is no issue as to the quantum of damage claimed by the Plaintiff. Formally, I note the statement of Mr Rob McPherson, a loss assessor, attesting to this.

STATUTORY FRAMEWORK 14 The Plaintiff sues the First and Third Defendants, relying upon s 51 of the Insurance Contracts Act 1984 (Cth). This provision states as follows: - "(1) Where: (a) the insured under a contract of liability insurance is liable in damages to a person (in this section called the third party); (b) the insured has died or cannot, after reasonable enquiry, be found; and (c) the contract provides insurance cover in respect of the liability; the third party may recover from the insurer an amount equal to the insurer's liability under the contract in respect of the insured's liability in damages." 15 As noted, the Second Defendant did not appear. There are a number of observations I would make about the statutory provisions which I would regard as non-controversial. 16 Firstly, it is one that has as its aim the facilitation of bringing claims directly against the insurer, thereby overcoming, in the appropriate circumstances, the need to bring a claim by the prospective Plaintiff against the actual tortfeasor, which otherwise would have to be the Defendant. The insurer, by use of this section, would thereby become an actual party to the proceedings, rather than becoming involved in the litigation by its rights of subrogation under the insurance policy covering the liability of the tortfeasor. 17 Secondly, the successful utilisation of this provision would potentially put an insurer at a disadvantage because the operation of the statutory provision would be in circumstances where it had not had access to a version of events that would otherwise be available to it, if the tortfeasor was actually available to be sued. This is the situation obviously anticipated by s 51(l)(b). Even if there was some material available providing a version of events provided by the non-available tortfeasor (as is the case in this particular matter), there may well be problems placing the material before the Court, and even if it was before the Court, argument as to the weight that should be given to that version of events as there would be no scrutinising of the evidence of the tortfeasor which obviously would occur during the course of cross-examination. 18 Thirdly, it would follow that the situation that an insurer would thus find itself in, by use of this section, would require, in my view, that the provisions setting out that which was required of a prospective Plaintiff to utilise the section, should be strictly complied with. 19 Finally, it is to be noted that it is the insurer of the insured, i.e. the non-present alleged tortfeasor, that is the party to the proceedings and responsible for the liability of the insured directly to the Plaintiff. 20 As already noted, there is no issue that leave has not been sought by the Plaintiff for substituted service of the Statement of Claim. Given that the Plaintiff has joined the Second Defendant to the proceedings before the Court and given effectively the non-service of the Statement of Claim and her non-appearance, she cannot be found potentially liable by a verdict against her as a party to the proceedings. However, s 51(l) has as its presumption, by virtue of paragraph (b) the fact that the insured tortfeasor cannot be found and hence sued.

ISSUES TO BE CONSIDERED 21 It is necessary for the Court to determine what must be established by the Plaintiff for the section to be successfully utilised. The issues in this regard are as follows: - (1) Section 51(l)(a) requires that the insured (that is the tortfeasor) be under a contract of liability insurance, and is liable in damages. In the circumstances of this case, this requires a fmding of law as to whether the contract for hire, entered into between the First and Second Defendants, could also be found to be a contract of insurance entered into between the two. It is conceded by Mr Conlan, Counsel for the Plaintiff, and accepted (understandably) by Mr Reuben, Counsel for the First and Third Defendants, that there is no evidentiary basis on the facts of this case that would permit the Third Defendant to be a potential Defendant. If anything, the Third Defendant may be a re-insurer of the First Defendant, if, of course, the First Defendant is found, to be an insurer for the liability of the property damage. The agreement between the First Defendant and Third Defendant, I note, was entered into on 1 February 2008. Section 5l(l)(a) also requires a consideration of what is meant by "is liable in damages to a person" (that is a third party) and the issue as to whether "liable in damages" requires an antecedent declaration by the Court considering this issue as to the actual legal liability of the tortfeasor, or whether something somewhat less juridical is required. There is no issue that this Court has no power to grant declaratory relief so that if such a declaration is necessary, the Plaintiff would fail because of lack of jurisdiction in this Court. (2) The considerations brought to bear in (1) above, would also bear upon the Court's determination of the matter referred to in s 51(l)(c), namely, whether the contract provides insurance cover in respect of the liability and this liability is the liability to be covered, that is for property damage. (3) Section 51(l)(b) requires that the Plaintiff show that the tortfeasor, that is, the insured, "has died or cannot, after reasonable enquiry, be found". This requires the Court to evaluate the steps taken by the Plaintiff in this regard and a determination as to whether, on the facts, it can be concluded that these steps constitute "reasonable enquiry". 22 I formally note that during the course of argument I was referred by Mr Reuben to s 30 of the Local Court Act, which confers upon this Court sitting in its General Division (which it is doing in this case) jurisdiction to hear and determine, relevantly, "...proceedings on any money claim". Money claim is defined in s 29 as follows: - "a claim for recovery of any debt, demand or damage (whether liquidated or unliquidated)." 23 It seems to me that, since the need to have recourse to a declaratory power before this section can be utilised, s 30 gives adequate jurisdiction to this Court because there is no doubt that this is a claim for the recovery of liquidated damages. 24 I will consider each of the three areas that I have delineated even though an adverse finding in respect of any one of them may well determine the matter. For instance, if I determine that the Plaintiff has not carried out "reasonable enquiry" which is required by s 51(l)(b), it "would not matter if the other aspects of the section were indeed satisfied, this alone would be sufficient to cause the Plaintiff to fail in utilising s 51.

SECTION 51(1)(a): "the insured under a contract of liability insurance is liable in damages to a person" 25 As noted already, the only contract that Ms Petra Herling entered into relevant to these proceedings is the one with Periloo Pty Ltd t/as The Traveller's Auto Barn, namely the First Defendant. It was entered into on or about 23 October 2008. This contract undoubtedly related to the hire of the Ford Falcon. The period of hire was from 23 October to 26 November 2008. It is made up of two parts, namely Part A and Part B. The first issue to determine is whether this contract is also, additionally, a contract for insurance. 26 Section 11(7) of the Insurance Contracts Act states as follows: - "For the purposes of this Act, a contract of liability insurance is a contract of general insurance that provides insurance cover in respect of the insured's liability for loss or damage caused to a person who is not the insured." 27 Relevantly, s 10(2) of the same Act states as follows: - "A reference in this Act to a contract of insurance includes a reference to a contract that includes provisions of insurance in so far as those provisions are concerned, although the contract would not ordinarily be regarded as a contract of insurance." 28 During the course of argument, I was referred to Bayswater Car Rental Pty Limited v Hannell (1999) 10 ANZ Ins Cas 61-437, a decision of the Full Court of the Supreme Court of Western Australia. In the judgments of Kennedy and Steytier JJ, there is approving reference to the text "MacGillivray and Partington on Insurance Law". At paragraph 10, Kennedy J states as follows: - "MacGillivray and Parkington on Insurance Law, Edition (1988) at 1, indicate that a satisfactory definition of contract of insurance is illusive but they go on to say: - "A useful working definition can be derived from that given by Channell J in Prudential Insurance Company v Inland Revenue Commissioners [1904] 2KB 658. A contract of insurance is one whereby one party (the "insurer") promises in return for a money consideration (the "premium") to pay the other party (the "assured") a sum of money or provide him with some corresponding benefit, upon the occurrence of one or more specified events." " 29 This case involved the interpretation of a rental agreement (similar to that the subject for consideration in the case before this Court) and whether it could be construed as also a contract of liability insurance within the meaning of the Act Regard was had to the particular clauses of the agreement which, in my view, are somewhat different to the contract entered into by the parties in the instant case. The critical question for the Court in Bayswater was crystallised by Kennedy J at paragraph 9 where he states that the consideration in this regard was: - "...whether the owner is undertaking itself to indemnity the Renter or whether it is undertaking simply for an outside insurer to indemnity the Renter against the risks identified in the clause [i.e. a particular clause peculiar to the contract under consideration] " The Court obviously has to have regard to what the document discloses about the agreement between the parties. As Pidgeon J (the other Judge in this matter) says at paragraph 43: - "Section 51 was not intended and, in my view, could not alter the terms of the contract actually agreed between the parties so long as the parties are not contracting out of the section." 30 Whilst the case of Bayswater is of interest, and deals with the availability of s.51 in the circumstances of that case, it confirms that a Court will examine the terms of the contract that actually binds the parties in each individual case. 31 The contract entered into by the parties in the matter under consideration has many terms but those that are of interest and importance in determining whether the contract is, inter alia, a contract of insurance (particularly as allowed for in s 10(2)) are as follows: - (a) In Part A, the following clause is noted under the heading "Damage/Lost Liability": - "I elect a $2,000 non-refundable, non-waiverable liability, for any damage. Hirer may be responsible for additional single vehicle incident liability (see condition 3(c)(0) on the reverse side of this rental agreement)." This section is signed by Ms Herling. There is no issue that she paid the additional sum of $2,000.

(b) On the reverse side, under the heading "3. Financial Obligations" the following, relevantly, is set out: - "You are responsible for and by entering into the agreement on page 1 you authorise the company to debit the credit card provided or any other credit card provided (and you will pay on demand any balance) the following charges: - … (c) all loss or damage to the motor vehicle (including loss of use) legal expenses, assessment fees, towing and recovery, consequential third party damage, storage and company service charges where: - … (ii) the vehicle is involved in a single vehicle incident (or not under the control of the authorised hirer at the time of loss) unless the company waives such loss to a single vehicle incident liability amount shown on page 1 (which amount will apply in addition to the standard liability charge noted on page 1). A single vehicle incident is defined as an incident where the vehicle suffers loss or damage as a result of am impact with any or all objects whether animate or inanimate except another vehicle which can be fully identified and all details provided." (c) Condition 2 is headed: "Unauthorised and prohibited use" relevant to the argument before me was the following that followed on the sub-heading "Circumstances in which and/or for which the vehicle must not be used": "…(o) in contravention of any regulation or regulation controlling vehicular traffic or for any illegal purpose." (d) Also in Part A of the contract is clause 4 which states as follows: - " DAMAGE COVER If you act within the terms and conditions of this agreement the company will grant damage cover (including legal costs' incurred with our consent) for your benefit in respect of damages to the vehicle or third party damage other than any property owned by you (or any friend, relative, associate or passenger) or in your physical or legal control The cover is subject to: - … (b) Your not having acted or having caused any other person to have acted in any manner which is in contravention of this agreement including the special conditions on page 1. (c) ... (d) Your providing such information and assistance as may be requested and, if necessary, authorising the company insurer to bring, defend or settle proceedings, but the company shall have sole conduct of the proceedings."

Paragraph (d) appears to be a fairly standard clause giving to the company a right of subrogation in the event of a situation where there are damages to the hired motor vehicle or damages to a third party's motor vehicle. (e) In Part B of the contract is the following clause: - "PROPERTY DAMAGE The vehicle is covered for damage to it or damage to the property of the third party. However, the renter is responsible up to the amount of the applicable liability for the cost of such damage to third party property, or to the rented vehicle. The renter is also responsible for administration costs and the costs of demurrage for the period the vehicle is unavailable due to repairs. The liability applies in respect of each claim not per rental. The liability is applicable regardless of who is at fault and must be paid at the time the accident is reported to Travellers Auto Barn, not at the completion of the rental period In the event of a no-fault accident, Travellers Auto Barn will make every attempt to refund to the hirer any cost recovered from the party at fault less a minimum $150 administration fee." (f) My attention was also drawn to the evidence of Simon Hillary, Accounts Manager of the Third Defendant His evidence was that the First Defendant entered into an insurance agreement with the Third Defendant. This was in February 2008. The relevant part of that agreement as to what cover is being provided to the First Defendant by the Third Defendant is as follows: - "We will also provide the protection detailed in the Third Party Property Damage Cover for claims made against you by another party as a result of an accident involving your vehicle." THIRD PARTY PROPERTY DAMAGE COVER We will cover you, the hirer and any authorised driver, for legal liability to pay compensation for accidental loss or damage to someone else's property arising out of an accident during the period of insurance where you, the hirer or the authorised driver, was at fault and the legal liability arises out of the use of your vehicle." 32 I have read the helpful written submissions of Mr Conlan and Mr Reuben and listened to their addresses in relation to the issues as to whether or not the contract between Ms Herling and Periloo Pty Limited is, inter alia, a contract of insurance by s 10(2) set out above. 33 I have had particular regard to the provisions of the contract set out above. They are not drafted in a mellifluous fashion. It is the combination of the "non-refundable" and "non-waiverable liability for any damage" election at the start of Part A of the contract, combined with that clause in Part B headed "Property Damage" that are, in my view, determinative. The reference to "the liability regardless of who is at fault..." (although it refers to an up-front payment initially) is indicative of the intention of the First Defendant to insure Ms Herling in a situation such as arose in the circumstances of this case before the Court. The sustaining of damage, either to the hirer's car, or a third party's car, or both, arising out of an event such as this collision, regardless of fault, is what this insurance provides. It seems to me that clause 2(o) combined with clause 4(b) in Part A of the contract, must be read in the context of the two matters that I have referred to, namely, the extra payment of $2,000 and the "Property Damage" clause in Part B. If not the contract makes no sense, as Part B gives a cover in situations regardless of fault, only to be taken away by these clauses in Part A. The clause in Part B, in my view, assists in understanding what is intended to be covered, or not covered, by the contract. Clause 2(o), it seems to me, when looked at with the benefit of the clause in Part B, would mean, for instance, that if the motor vehicle was used as a getaway car following a robbery, or in breach of legislation covering road worthiness of the vehicle, or used contrary to that which it was intended to be used with regard to its construction (for example, as a taxi cab or as a removalist van) then it would not be covered by the insurance. It just would not make sense to provide cover, regardless of fault, and say at the same time that clause 2(o) meant that driving the motor vehicle, in contravention of any legislation or regulation controlling vehicular traffic meant that the failure to give way such as occurred in this case, meant that no cover was provided. Such a reading would render meaningless for practical purposes the clause in Part B, and leave unexplained the purpose of the payment of the extra $2,000 for "damage/loss liability" other than for the unfair enrichment of the First Defendant. 34 The extracted clause from the insurance agreement between the First and Third Defendants is consistent with this interpretation of the contract under consideration as it is just such a liability that the First Defendant is seeking to protect itself against by entering, in turn, with this contract with the Third Defendant. 35 Returning to the extract from "MacGillivray and Parkington on Insurance Law" that I set out above, this can be adapted to the circumstances of this case in the following fashion. The contract is one whereby Periloo Pty Limited promises, in return for a money consideration, that is, a premium, and in this case it is the payment not only of the hire fee but the further payment of $2,000 paid by Ms Herling, to pay Ms Herling a corresponding benefit, i.e. payment of the damage, that is payment of the damage done to the other vehicle, and her own, upon the occurrence of an accident such as a collision, regardless of who is at fault I have no difficulty in concluding as a matter of law that the contract for hire is one within the meaning of s l0(2) of the Act, namely, a contract of hire which also incorporates a contract of insurance. 36 The next matter to consider is the meaning of the phrase "is liable in damages". 37 The Shorter Oxford Dictionary defines "liable" both in a legal and non-legal way as follows: - "(1) LAW bound or obliged by law or equity; answerable at law... (2) susceptible, exposed, or open to (something undesirable)..." 38 In Bayswater the terms of the agreement between the parties was critical, in particular, clause 3 of the contract there considered, specifically sets out the hirer was not an insurer but went on to say that it would provide indemnity to the hirer "on a Court judgment". That is, a verdict and judgment had to be obtained as a sina qua non for the indemnity to be provided, i.e. there had to be a legal obligation on the hirer to pay following on a judgment against it. There is no such term in the contract under consideration. 39 In "The Law of Liability Insurance" (2nd Edition) by Darrington and Ashton, in dealing with what is comprehended by s 51, the use of the phrase "liable in damages" the following is said at page 1298, cognisant of the decision in Bayswater: - "Whether this remedy [that is, the use of s 51] may be pursued before judgment is obtained against the insured has also been left open, but it has been suggested [in Bayswater ] that, unless the insured's right to indemnity is tied to a judgment against him or her, it is not necessary to obtain it having regard to the circumstances to which the remedy is related and to its remedial nature" 40 In Morris v Betcke [2005] NSWCA 308, the Court specifically left the issue of what was meant by "liable in damages to a person" open (see paragraph 60). In Employers' Reinsurance Corporation v Ashmere Cove Pty Limited [2008] FCAFC 28 the Court (Heerey, Sackville and Siopis JJ) said at paragraphs 73 and 74 as follows: - "73. The reality is that the joinder of the insurers, as directed by the primary Judge, will prove to be of practical utility. There are good reasons, explained by His Honour, for all the issues to be litigated in one proceeding. The direction that has been made will facilitate the orderly, expeditious and just resolution of justiciable controversy. 74. In substance, the effect of the joinder orders made by the primary Judge is no different to the situation involved in the every day case of an insured joining an insurer as a third party (by whatever procedural means may be appropriate in the particular Court). This enables issues of liability and assessment of damages for insured and insurer, to be determined in the one proceeding. There are obvious reasons in terms of efficiency and economy. There is no reason in modem times why form should trump substance, where the interests of justice suggest that all related issues should be resolved in a single proceeding." 41 The circumstances of that case were somewhat different to those of the instant case in that the insurer had been joined by the Judge at first instance (French J as he then was). However, the extract I have set out indicates the desirability of having issues dealt with in one proceeding, facilitated by recourse to s 51 of the Insurance Contract Act. 42 I was not referred to any other authority in relation to this matter, and I am told that it has not been determined by authority. My own independent research, as it has been given time limits, has also not yielded any further decisions that may have a bearing on the issue. 43 It is my view that a combination of the remedial nature of the section and the views set out in Ashmere would persuade me that the words "liable in damages to a person" would not require an antecedent juridical determination as to a liability of the insured, but rather should be understood in the way as defined above, namely, that the insured has to be "susceptible, exposed or open to (something undesirable)". The Plaintiff has amply shown that a liability has potentially arisen, i.e. for the payment of damages done to the Plaintiffs motor vehicle by Ms Herling. The judicial determination of the facts that effect that liability would still have to be determined by a Court, namely, whether in fact a tort has been committed by Ms Herling, causing her to be potentially liable.

CONCLUSION IN RELATION TO S>51(l)(a) 44 It follows from the reasons and conclusions I have reached that I am, on the balance of probabilities, satisfied that the contract of hire entered into between Ms Herling and Periloo Pty Limited includes also a contract of insurance. Further, by virtue of the fact of the accident (not in dispute) a potential liability to a person has been established, although, of course, it would still be up to the Plaintiff to establish, on the balance of probabilities, that Ms Herling had been negligent. Any issue of contributory negligence (which I note is not pleaded by the Defendants in this case) would still be open to proof and argument if it were pleaded. 45 It follows from what I have said that there is no need for a declaratory power as to liability before s 51 can be utilised. It is a section that facilitates the direct joinder of the insurer to the proceedings. The provisions of s 51(l)(b), if satisfied, mean that the tortfeasor will not be a party to the proceedings as she "has died or cannot after reasonable enquiry, be found". This is disjunctive. As long as one state of affairs is established the tortfeasor will not be a party to the proceedings. There is no requirement necessarily for substituted service, as this would merely be of use if she is to be joined as a party, a situation that would not arise if s 51 is successfully utilised. In the proceedings brought by the Plaintiff directly against Periloo Pty Limited, the extent of the insurance cover provided by Periloo Pty Limited is circumscribed by the terms of the agreement Periloo Pty Limited is liable for accidents regardless of fault, except as excluded by the operation of clause 2(o) and clause 4(b) restricted in their meaning and operation in the manner that I have dealt with earlier. The onus of proof remains upon the Plaintiff to prove ail the facts necessary to succeed in its claim against the insurer and this would include the establishing of all the facts supporting the circumstances of liability. 46 I have set out the circumstances of the accident before and there is no need to set them out again. There is no evidence in the material before the Court that suggests that clause 2(o) or clause 4(b) can be said to take effect. The circumstances of the accident are straightforward. Ms Herling came out of the truck stop and ran into the Plaintiffs motor vehicle. Contributory negligence is not relied upon in the Defence. It would follow, on the balance of probabilities, that the Plaintiff has established a liability covered by the contract of insurance which is Included in the contract of hire. There is no issue as to quantum.

SECTION 51(l)(c): "the contract provides insurance cover in respect of the liability" 47 Given what I have said above and my finding that the contract of hire also included a contract of liability insurance, there can be little doubt that the cover is in respect of the liability for the property damage that occurred as a result of the collision. I therefore do not need to give any further consideration to this matter.

SECTION 51(l)(b): "the insured has died or cannot, after reasonable enquiry, be found" 48 The entitlement of the Plaintiff to bring the claim against Periloo Pty Limited is circumscribed by this clause. The Plaintiff must establish as a matter of fact, on the balance of probabilities, that the requirements of the clause have been complied with. The Plaintiff says its reasonable enquiry has not allowed it to find the Defendant or alternatively, to establish that she is dead. What the Court has to do is to consider the facts that have been put before the Court in relation to these enquiries and determine whether or not they are reasonable. What would constitute "reasonable enquiry" would vary from case to case and would be determined by having regard to the circumstances of each case. 49 I have said earlier that it is my view that this paragraph of the section should be looked at rigorously in the context of the circumstances of each case. I have indicated that my view in this regard is founded upon the premise that the prospective insurer will be at a disadvantage if the section is to be utilised because the person (the tortfeasor) who can give a first-hand version of the events for the Defendant as to how an accident occurred will not be present 50 The extent to which a Court will judge that which is reasonable will, to some extent, be influenced by the value of the claim. For instance, a claim that is centred around damage of $5,000 will be looked at somewhat differently to a claim of $150,000 or more. To expect a Plaintiff to carry out an enquiry in the former circumstances may not be reasonably expected to expend, for instance, $10,000, whereas in the latter circumstance, this expenditure may well be considered reasonable. This is one matter for consideration going to the question of reasonableness. In the matter before the Court, the sum is $17,100 and this is the context as far as value is concerned within which "reasonable enquiry" will have to be judged. 51 There is no issue that Ms Petra Herling was ordinarily resident in Germany. The documents that she executed on the hire of the Ford Falcon and the matters set out in the Collision Report Form provide the following details: - (a) The address in Düsseldorf, Germany. (b) Her date of birth. (c) A mobile telephone number. (d) Details of her visa credit card number (e) Her email address (f) Details of her German license number 52 The investigations and enquiries that the Plaintiffs solicitors carried out are detailed in the affidavit and evidence given in Court of Mr Nathan Shuttleworth. These were as follows: - (a) Enquiries were made of the prospective Defendant's insurer and solicitors in May 2009. The information was provided in relation to Ms Herling. (b) On 15 June 2009, Ms Herling's mobile telephone was rung. It did not answer. A text message was sent which included the telephone number of the Plaintiffs solicitor in Australia. (c) When the number was called again, a recording indicated the number was not correct and should be checked. There was also a number for international directory assistance provided. (d) International directory assistance was called but information provided did not end in successfully contacting Ms Herling by telephone. (e) After these failed attempts to contact Ms Herling by phone, the Plaintiffs solicitor again wrote to the solicitors acting in the interests of the prospective insurer of the Defendant on 16 June 2009. A further letter was sent on 6 August 2009- (f) On 6 August 2009 an internet database search of Ms Herling was carried out. This did not yield any information as to her whereabouts. (g) There was further contact with the solicitors who were to act in the interests of the Defendant's insurer in August 2009 and under cover letter of 24 August 2009 these solicitors, Messrs Fraser Clancey, provided the address and email of Ms Herling. (h) On 25 August 2009 a letter was forwarded to Ms Herling at the address provided in Düsseldorf. This letter enclosed a copy of a Statement of Claim which had been issued out of the Local Court on 14 August 2009. In addition to being sent by post it was also sent to the email address provided. The email address was found to be inoperative, and it was returned as "undeliverable". The solicitors for the Plaintiff advised Messrs Fraser Clancey of this. Further, there was no response by Ms Herling to the letter that was sent by post. (i) The covering letter addressed to Ms Herling dated 25 August 2009 enclosing the Statement of Claim had a letterhead providing full contact details for the solicitors acting in the interests of the Plaintiff, and these included the address, telephone numbers, facsimile number and an email address. (j) Ms Herling has not replied by any means to the solicitors acting for the Plaintiff. Needless to say, no Appearance or Defence has been filed in her interests by anyone. 53 In the evidence of Mr Shuttleworth, given on 12 July last, the following exchange took place in cross-examination at pages 27-28: - Q. "Coming back to Petra Herling, no attempt has been made to identify whether Petra Herling is at that address of [xxx xxx xxx xxx] has there?"

A. "Not from my perusal of the file no but I can't comment conclusively." Q. "Nothing has been done since 25 August 2009 in terms of identifying or ascertaining whether that is her address?" A. "My perusal of the file would indicate so." Q. "You have never sought to instruct a process server in Düsseldorf with a view to attending those premises?" A. "My perusal of the file would indicate that's correct." 54 What is included in the two preceding paragraphs is the full extent of all evidence relating to enquiry that is before the Court. As I have indicated, "reasonable" has to be judged in the context of the value of the claim, in this case, $17,100. 55 There are two matters that have not been the subject of any action on the part of the Plaintiff. The first is that which is touched upon in cross-examination that I have set out above. No process server or private investigator has been retained to ensure service of the process. Such an investigator could attend at the address that Ms Herling has provided to establish whether or not she is there and in the process of doing this making enquiries of neighbours as to her whereabouts if she indeed is not there. Those enquiries indeed, could ascertain whether or not she has died since returning to Germany. This process server could also be asked to investigate with the relevant authorities details of the address associated with the license number that has been provided. Further, there may be enquiries of any registry of voters in the area if such registry exists in Düsseldorf. 56 The second line of enquiry would be associated with the credit card details that were provided. 57 Whether or not either of these enquiries would yield information about Ms Herling's whereabouts obviously is not known. If they had been made, they may have proved unfruitful. The fact of the enquiries, and their failure to provide any further information, would be matters to be taken into account in determining whether "reasonable enquiry" had been carried out. If they did disclose the whereabouts of this lady, how the matter was to be further progressed could be decided upon. If she was found to have died, obviously this would be of value to the Plaintiff, given the provisions of the paragraph.

CONCLUSION IN RELATION TO S 51(l)(b) 58 The issue for determination is whether the steps that were carried out constituted "reasonable enquiry" in the context, bearing in mind the material available, and the evidence that no investigation had been carried out in Germany. Obviously the cost of the retaining of the investigator would be a relevant consideration, if this had led to a determination not to pursue such a line of enquiry and investigation. If there was evidence before the Court that such cost would be disproportionate to the value of the claim, then that material could be before the Court, so that reasonableness of the steps that indeed and in fact were carried out could be judged. 59 The fact is that the Court can only judge "reasonable enquiry" on the evidence before it. The ten matters that I have referred to above are in evidence. There is no evidence in relation to the question of retaining a private investigator. 60 It seems to me that failure to have evidence before the Court as to either the disproportionate cost relating to the retaining of an investigator, or details of what he in fact established following investigation, is an enquiry that I would regard as reasonable, and in the circumstances, important. The failure to have such evidence causes me to conclude, on the facts, that the Plaintiff has not carried out "reasonable enquiry". Therefore, the Plaintiff has failed to establish on the evidence what is required of it by s 51(l)(b) and for this reason the Plaintiff cannot utilise s 51 to bring this claim solely against the insurer. The Plaintiff's case against the First Defendant therefore fails. 61 I will hear the parties further in relation to what orders I should make, and in relation to the question of costs. Magistrate G Curran 23 November 2010

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