Hunter New England Area Health Service v Nominal Defendant

CATCHWORDS: Motor vehicle accident on country road - Workers compensation recovery action - Whether requirement for due inquiry and search applies

Limitation Act 1969 LEGISLATION CITED: Motor Accidents Compensation Act 1999 Workers Compensation Act 1987

Harrison v Nominal Defendant (21975) 50 ALJR 680 Malcolm v Urban Transit Authority of NSW (1994) 20 MVR 87 CASES CITED: Penrith Rugby Club Ltd v Nominal Defendant U/R NSWLC 28.11.05 Tickle Industries Pty Ltd v Hann (1974) 130 CLR 321 at 327-8 Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207

PARTIES: Hunter New England Area Health Service The Nominal Defendant

COUNSEL: Plaintiff - W Austron Defendant - P R Cummings

SOLICITORS: Plaintiff - Hunt & Hunt - Newcastle Defendant - Sparke Helmore - Newcastle

1 Hunter New England Area Health Service has claimed against the Nominal Defendant for recovery of monies paid to its worker, Mrs Wendy Vera Mather, as a result of an injury she suffered whilst on a journey to work. The injury was the result of a motor vehicle accident. The claim is made pursuant to s 151Z(1)(d) of the Workers Compensation Act 1987.

2 The circumstances in which the claim arises are as follows.

3 Mrs Mather was injured when the car that she was driving ran off Emmaville Road at Deepwater on 23 July 2000 at about 2.30pm. At the time she was travelling from Deepwater to Emmaville in northern New South Wales to start work at the Vegetable Creek Nursing Home where she was employed as an enrolled nurse. After running off the road the car she was driving overturned a number of times before coming to rest on its passenger side in a paddock adjacent to the road. Mrs Mather was left hanging in the seat belt. She was assisted by a local farmer, Jock Cunningham, who by crawling into the car through the rear window was able to release the seat belt. Mr Cunningham's father was also present. It was necessary for the State Emergency Service to cut away the roof of the car before Mrs Mather could be released.

4 The issues in respect of the recovery action were as follows: (1) whether it was necessary for the plaintiff to comply with the requirements of s 34(1) of the Motor Accidents Compensation Act 1999 in respect of the obligation for due inquiry and search; (2) if so whether due inquiry and search in the circumstances of Mrs Mather's accident would have been futile; (3) whether the driver of another car on Emmaville Road at the time of the accident was liable for the accident in which Mrs Mather suffered injury; and (4) the extent of the damages which Mrs Mather might have recovered under the Motor Accidents Compensation Act had she brought proceedings against the driver of the unidentified motor vehicle.

Issue 1 - S 34(1) of the Motor Accidents Compensation Act 1999

5 The plaintiff presented eight arguments as the basis for its proposition that the obligation of due inquiry and search did not apply to an employer in circumstances where it sought indemnity from the motor vehicle insurer pursuant to s 151Z(1)(d).

6 S 151Z(1) permits recovery if the injury for which compensation is payable under the Workers Compensation Act 1987 occurs under circumstances creating a liability in some person other than the worker's insurer. The arguments were as follows: 1. There were a number of authorities from which one could determine that policy considerations apply when dealing with recovery actions under s 151Z. On the basis of these decisions it was argued that it was necessary that I consider the policy behind the provisions of the recovery legislation in determining the extent of the rights of recovery and that I should give priority to the provisions of s 151Z over those of s 34(1) of the Motor Accidents Compensation Act . Thus it was argued that I should look only at whether the elements of s 151Z(1)(d) had been fulfilled and that due inquiry and search was an additional obligation placed on the insurer that was not provided for in that section. 2. The requirement for due inquiry and search was procedural rather than substantive and on the basis of Westpac Banking Corporation v Tomassian (1993) 32 NSWLR 207, procedural requirements of the motor accidents legislation do not apply to an employer's recovery action. 3. A claim under s 151Z was a claim for indemnity limited to the amount of the damages to which the worker was entitled and it was not a claim for damages. It was argued that the plaintiff in this action was not seeking damages and was not bringing an action for the recovery of damages and that since due inquiry and search was tied to an action for the recovery of damages it did not apply to the claim in this case. 4. Due inquiry and search was a requirement imposed upon a worker and it applies to the worker's claim and not to that of the employer. Thus it was said if due inquiry and search was necessary the question was whether the worker had made those enquiries and for that purpose the worker becomes the employer's agent. Since the employer has no control over the worker and could not compel the worker to undertake inquiry and search in a timely way it was argued that the section did not apply to the employer. The argument relied upon the reasons of Chief Justice Barwick in Tickle Industries Pty Limited v Hann (1974) 130 CLR 321 at 327-8 when he said: The right of the employer is regarded as independent of the action or inaction of the employee. 5. There were practical consequences of the requirement, namely: (1) The claim may not come to the employer's attention at a time contemporaneous with the action. It was pointed out that it could be months or years before the employer becomes aware of the claim. (2) A right of action does not accrue until each payment is made and thus the right of action may accrue much later than the date of the accident. (3) It was a sensible and practical approach to commence proceedings when sufficient sums had been paid, necessarily involving time delays. This could be as much as six years from the date of the first payment. 6. Application of the requirement could cost an employer valuable and long standing rights. 7. There would be an anomaly if the focus were to be placed upon s 34(1) of the Motor Accidents Compensation Act , because the worker's right of action was limited to three years by s 109 of that Act and not the six years under s 14(1) of the Limitation Act 1969 which applied to the employer's right or recovery. Further it was said that this claim is not a cause of action for recovery of damages and therefore it did not attract the application of s 34(1) and s 109 and according to the decision in Tomassian the procedural requirements did not apply. On that basis it was argued that the provisions of s 151Z(1)(d) had always prevailed over the provisions of the motor accidents legislation. 8. The provisions of the motor accidents legislation in relation to medical disputes and assessments of whole person impairment to determine a worker's rights to non economic loss do not apply in relation to a s 151Z claim, the rationale being that it was not the worker who was making the claim. It was argued that the same philosophy ought apply to the s 34(1) requirement for due inquiry and search.

7 I am grateful to the plaintiff for the submissions and the alternative arguments put forward. The difficulty that I have with them is identical to that expressed by his Honour Magistrate Dillon in Penrith Rugby Club Limited v Nominal Defendant [U/R NSWLC 28.11.05], that is, that before proceeding to consider s 151Z(1)(d) it is necessary to consider the words that lead into that subsection. Those words read as follows: If the injury for which compensation is payable was caused under circumstances creating a liability in some person other than the worker's employer to pay damages in respect of the injury the following provisions have effect.

8 The Nominal Defendant's liability, if any, to pay damages in respect of the injury to the worker in this case arises only under s 34(1) of the Motor Accidents Compensation Act. The circumstances in which that liability arises are: 1. the death of or injury to a person, 2. caused by the fault of the owner or driver of a motor vehicle, 3. in the use or operation of the motor vehicle on a road in New South Wales, 4. in circumstances where the identity of the owner or driver cannot after due inquiry and search be established.

9 The section provides that all four elements must be present before there is a liability in the Nominal Defendant. The proposition that one of these elements does not apply to the question of the circumstances creating a liability in the Nominal Defendant may be tested by asking whether the employer would be entitled to recover against the Nominal Defendant if the accident had not been caused by the fault of another driver, or if it had not been caused in the use or operation, of a motor vehicle on a road in New South Wales.

10 Those questions indicate the far reaching consequences of accepting the plaintiff's proposition in respect of one only of the elements of s 34(1).

11 In the circumstances, I reject the plaintiff's proposition that the requirement for due inquiry and search does not apply.

Issue 2 - Whether due inquiry and search would have been futile

12 No inquiry or search was undertaken either by the worker, Mrs Mather, or by the plaintiff. Mrs Mather's evidence was that she was run off Emmaville Road by a car travelling in the opposite direction. She said this car was on the wrong side of the road as it came around a bend. She said the car was white and she believed that it had been driven by a woman with blond hair. Mrs Mather's attention, not unnaturally, was more focused upon controlling her car and avoiding a collision with a tree stump on the roadside than with identifying the other vehicle.

13 The plaintiff relied upon Harrison v Nominal Defendant (1975) 50 ALJR 680 and Malcolm v Urban Transit Authority of NSW (1994) 20 MVR 87 to argue that no due inquiry and search that could have been undertaken would have identified the other vehicle involved in Mrs Mather's accident. In support of the argument I was provided with extracts from the reasons of Chief Justice Barwick in Harrison and Justice Priestley in Malcolm. I have noted that Justice Priestley said that the Harrison principle would apply: If the plaintiff could establish that nothing she could have done was likely to establish the identity of the vehicle which caused the accident.

14 In this case Mrs Mather gave evidence that Mr Jock Cunningham was in a position on his farm where he saw dust, another car and her car in the paddock. The accident occurred on 23 July 2000 and was reported on that date to Mrs Mather's employer. A formal claim was lodged on 25 July 2000, two days later. Thus the employer had written notice within two days that the claim involved another vehicle. Mrs Mather in Exhibit 2 nominated the white car as potentially responsible for the accident.

15 There was no evidence put before me of what investigation was undertaken at this time. Mr Cunningham was said to have seen another car. There was no evidence that Mr Jock Cunningham was interviewed, or that his father was interviewed in respect of identification of the vehicle involved. Emmaville Road appears to be a secondary road. It was described as narrow with no centre or fog line markings. It was not a main road such as would be likely to have been used by through traffic. The road connected two small rural communities. There was no evidence that enquiries were made of those communities. There was no evidence of advertisements placed in newspapers circulating in those communities.

16 In the absence of evidence that enquiries such as these would have borne no fruit, I am not in a position to conclude that inquiry and search would have been futile.

17 In the circumstances the plaintiff's claim fails and there will be a verdict for the defendant.

18 I proceed to deal with the other issues in the event that the matter goes further.

19 Mrs Mather stated that she was forced to move to the left hand side of the road, because the white car was travelling on its wrong side. To the left of the road was an area of blue metal remaining after roadworks undertaken by Severn Shire Council. The blue metal was soft and loose and it caused her to skid. In an effort to avoid tree stumps and a letterbox she steered onto a gravel road where she further skidded and crashed through a fence where the car overturned.

20 Mrs Mather said her speed at the time was 80 kilometres an hour. A police report noted her speed to have been 90 kilometres an hour. Mrs Mather said that the area of blue metal that caused her initial skid was deceptive because it looked like a sealed hard road surface. It was apparent from correspondence sent by Mrs Mather to Severn Shire Council that she considered the condition of the road had some involvement as a cause of her accident. She did not concede in evidence that it was a major contributing cause. She was pointed to claim forms completed two days after the accident. In the first claim form she stated: I remember a white car coming towards me. In the second she stated: I remember a white car coming toward me, it passed, I then remember sliding in blue metal/gravel towards a large post with a letterbox. In stating her opinion as to who was responsible for the accident she stated: Perhaps white car rounded bend too hard? I went into loose blue metal and skidded and slid. Road very bad due to works by council.

21 In evidence as Exhibit 3 was a letter dated 7 August from Mrs Mather to the council complaining about the condition of the road, in particular the deceptive appearance of loose blue metal and the tree stump on the roadside. She stated: It seemed I moved over into the blue metal as another car coming the other way could also have contributed to my accident.

22 Mrs Mather sought legal advice concerning her rights to compensation as a result of the injuries that she suffered. Exhibit 5 is a letter dated 4 December 2000 from Hazelwoods, solicitors, to Mrs Mather dealing with the prospects of a claim against Severn Shire Council for negligence in performing repairs to the road. The letter also referred to Mrs Mather's instructions that: Part of the reason for your accident may have been that the oncoming white car may have moved into your lane causing you to move your car towards the outside of the lane.

23 A police notebook entry, Exhibit 9, contains no information to assist in determining the cause of the accident. The police report event reference number 11450095 reads:

24 Vehicle travelling west on the Emmaville Road observed a white sedan driven by elderly lady travelling in the opposite direction veered to nearside to avoid collision.

26 Nowhere in any of these records is there any reference to the white car proceeding on the wrong side of the road, although Mrs Mather insisted in her evidence to the court that this had been the case. She agreed that the road was narrow and that there was no centre line. She stated that she did know whether it would have been necessary to move to her left in any event to allow for passing another vehicle.

27 In making my decision I have noted that the preponderance of evidence indicated that the white car may have occupied a greater part of the sealed road surface as it rounded the bend. The evidence further indicated that the width of the road was such that, except when passing, a vehicle might well occupy the centre of the road and that, when passing, both vehicles needed to move to the left. These were circumstances that did not point to negligent driving on the part of the driver of the other vehicle.

28 In the circumstances the plaintiff has failed to establish a breach of duty of care on the part of the driver of the unidentified vehicle for whom the Nominal Defendant bears liability.

29 It was agreed between the parties that Mrs Mather's injuries were such that she would not qualify for an award of non economic loss under the provisions of the Motor Accidents Compensation Act. A claim was made for past and future income loss, superannuation and past and future treatment expenses. At the time of the accident Mrs Mather was forty-four years old, she is now fifty-one.

30 Mrs Mather was taken by ambulance to Emmaville Hospital after the accident and discharged home that evening. It was evident that her injuries were soft tissue in nature and that they affected in particular her head, neck, back and right foot. At the time of the accident she complained of headaches, generalised pain, nausea and dizziness. She was treated with medication, physiotherapy and massage.

31 There was a second incident involving her car sliding on wet road surface in October 2000. There was no evidence that she was further injured in this incident. She did however complain of shock and exacerbation of her symptoms and she claimed that this set back her recovery.

32 Mrs Mather stated that her symptoms have not improved, rather they have become progressively worse. There is some evidence that prior to the accident she complained to her general practitioner of pain in her neck, shoulders and low back, for which she received occasional treatment. One such complaint was made in April 2000, some three months prior to this accident. Mrs Mather attributed these pains to the normal occupational strains suffered from time to time by nurses. There was no evidence of any significant pre-accident medical condition affecting Mrs Mather's capacity to work as an enrolled nurse.

33 Mrs Mather returned to work on 4 August 2000. Initially she undertook clerical work and she gradually returned to full time nursing duties. She said that working full time on a normal roster, with lifting restrictions, placed some strain upon her and she regularly took days of annual leave in order to rest. As a consequence she was provided with a doctor's certificate that allowed her to take two workers' compensation days per fortnight. She ceased work in September 2007 as a result of comments from her supervisor that Mrs Mather regarded as indicating an absence of support for her ongoing problems.

34 Medical evidence comprised hospital notes and clinical notes of Mrs Mather's general practitioners, together with reports from a number of doctors. There were in 2001 and 2002 a number of reports which indicated that examining doctors were aware of her prior medical history and that they accepted her complaints as related to the motor vehicle accident. They considered that Mrs Mather's condition was unlikely to improve and that physiotherapy and massage were appropriate treatments. They also regarded it appropriate that she work full time.

35 A number of further reports were presented dated in 2004 and 2005. Dr McKay, Mrs Mather's general practitioner, reported that she was making a concentrated effort at rehabilitation. Dr Loeve questioned whether the point had been reached where it was necessary to provide for permanently modified duties. Dr Hughes directed that an MRI of the cervical spine be undertaken. This showed degeneration in the plaintiff's neck at C5/C6. I was not provided with any subsequent report from Dr Hughes.

36 In 2007 the plaintiff was examined by Dr Bentivoglio, who noted that she denied significant problems with her neck or back in the past.

37 Mrs Mather was criticised on the basis that she had not revealed the true extent of her pre-accident medical history. Any such proposition is rejected. There was no history of any significant pre-accident problem with the plaintiff's neck and back. There was evidence of treatment for bilateral carpal tunnel syndrome of which Dr Bentivoglio was aware. Otherwise the only evidence was of intermittent neck and back problems. Dr Bentivoglio was provided with unidentified documentation for the purposes of his report. He reported only that Mrs Mather had claimed no significant prior history, not that he was unaware of her history.

38 Dr Bentivoglio gave an opinion in respect of the cause of the complaints to the plaintiff's neck based upon radiology performed over a period of time. He declined to give an opinion in respect of the complaints concerning her back because he said there had been inadequate investigation. In respect of the neck Dr Bentivoglio was satisfied that her condition was probably the result of the motor vehicle accident. He said the symptoms were likely to continue indefinitely and that Mrs Mather needed to avoid arduous activity. He said it was reasonable that she work at the certified level for 32 hours a week. As far as the back was concerned Dr Bentivoglio said that Mrs Mather had suffered at least a musculoligamentous strain but that her condition needed further investigation. Overall he accepted a need for permanently modified duties.

39 The result of this evidence is that I accept Mrs Mather suffered and continues to suffer from soft tissue injuries to her neck and her low back. There was no suggestion from any medical examiners that the time that she took from work was unreasonable, or unwarranted. I therefore would have allowed the loss of income as claimed to the date upon which Mrs Mather ceased employment.

40 It was apparent that at that date she retained some part time income earning capacity and that her current unemployed status is the result of the loss of support of her supervisor. Mrs Mather accepted that she has some residual income earning capacity and she stated that she intended to obtain suitable employment and to work to the age of somewhere between 55 and 58 before retiring. I would therefore have allowed from the time her employment ceased to the age of 56½, income loss on the basis that 40 per cent was attributable to the motor vehicle accident.

41 Out of pocket expenses would have been allowed in the amounts claimed. Only Dr Loeve indicated that ongoing physiotherapy and massage was inappropriate. This appeared to be because it was palliative only and not remedial. I consider some allowance for these treatment appropriate to provide Mrs Mather with pain relief albeit temporary Past treatment and expenses would have been allowed in the sums claimed of $20,362.80 for medical expenses, $9,390.59 for rehabilitation and $6,060.99 for travel expenses.

42 For the future the medical evidence indicated Mrs Mather is likely to suffer from ongoing symptoms and to need medication and other palliative treatments. In the circumstances I would have allowed the sum of $10,000.

43 Interest calculations are not relevant in the circumstances. I did not hear argument in response to the plaintiff's submissions on interest and therefore I make no determination on that issue.

44 The result is that there will be a verdict for the defendant.

45 The defendant asks for costs on an indemnity basis, having regard to an offer of compromise served on 8 November 2007. The offer allowed the plaintiff a period of seven days within which to accept it. The plaintiff suggests that this was an inordinately short period of time However, as pointed out by the defendant the proceedings involved two insurance companies. No request for an extension of the time was sought by the plaintiff in response to the offer and in the circumstances I consider it appropriate that an order for indemnity costs be made.

1. Verdict for the defendant.
2. The plaintiff is to pay the defendant's costs on an indemnity basis from 8 November 2007 and on an ordinary basis up to that date.
3. The exhibits are returned.

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