Perrett v Robinson

High Court of Australia|1988-07-01|Before: Gaudron JJ, Deane J, Brennan J

The application for special leave to appeal should be granted and the appeal should be dismissed.

The facts surrounding this application are set out in other judgments.

Subject to the question raised by the applicant concerning s. 41 of the Motor Accidents (Compensation) Act 1979 N.T. ("the Act"), the decision of the Court in Breavington v. Godleman [41] requires the rejection of the submission of the applicant that the limits of the cause of action which the applicant sought to litigate in the Supreme Court of Queensland were to be determined by the lex fori. Subject to s. 41 of the Act, the applicant was limited to a claim for damages for pain and suffering and for loss of amenities of life (see s. 5 of the Act as it stood at the relevant time).

Section 41(3) authorizes the Board of the Territory Insurance Office, as a condition of paying or continuing to pay a benefit under the Act in a case where the recipient has a right of action against any other person as a result of the accident in question, to require the recipient to commence an action against that person. The present proceedings were commenced by the applicant in response to such a requirement.

Counsel for the applicant argues that the opening phrase of s. 41(3) - "Notwithstanding anything in this Act" - allows full rein to the words following thereon without the importation of any restriction on a cause of action from s. 5 of the Act. The applicant therefore has an unlimited right of action to damages, including damages for loss of earnings.

The answer to this submission rests in the proper construction of the words "a right of action" in s. 41(3). The section does not confer a right of action. The accident in which the applicant (a resident of the Northern Territory) was injured occurred in the Territory. Section 5(1) of the Act declared that, subject to s. 5(2), no action for damages in respect of such injury shall lie in the Territory. Sub-section (2) provided that nothing in s. 5(1) deprived a person of the right to bring an action for damages for pain and suffering or loss of amenities of life. This must be the only "right of action" possessed by the applicant. The common law right of action an injured person might have had in tort arising out of an accident in the Territory before the Act was enacted cannot withstand the demolition occasioned by s. 5(1). The existence of a third-party policy of insurance covering the respondent's vehicle and issued by a Queensland insurer does not create the liability against which it provides an indemnity.

In our view, the presence in s. 41(3) of the words "Notwithstanding anything in this Act" cannot operate to remove the limitation imposed by s. 5 on the common law right of action, nor can those words affect the operation of s. 5. The presence of those words in s. 41(3) was designed to ensure that notwithstanding the obligations placed by other provisions of the Act on the Territory Insurance Office, those obligations were in no way to interfere with the right conferred on the Board of the Office by the sub-section to require a person entitled to a benefit to institute or continue an action.

The application for special leave to appeal should be granted but the appeal dismissed.

In the Supreme Court of Queensland, the plaintiff sued for damages for personal injuries sustained in a motor car accident which occurred in the Northern Territory. Shepherdson J. found the plaintiff to be a "resident of the Territory" within the meaning of that term in s. 4 of the Motor Accidents (Compensation) Act 1979 N.T. ("the Act"). Section 5 of the Act permits such a plaintiff to recover damages only "for pain and suffering or loss of amenities of life". His Honour held that in the assessment of damages no claim under the head of impairment of earning capacity should be allowed. That was the ruling against which this appeal was brought directly to this Court by special leave.

The appeal was argued in conjunction with the appeal in Breavington v. Godleman [1] . In accordance with the principles stated in Breavington v. Godleman, which accord substantially with the submissions made by counsel for the respondent (defendant) in this case, the Act determines the kind of claim which the plaintiff may make in the Supreme Court of Queensland. However, the appellant (plaintiff) submits that the restriction on heads of recoverable damage imposed by s. 5 of the Act has no application to this action. The action was brought by the plaintiff in compliance with a requirement imposed by the Board of the Territory Insurance Office ("the T.I.O.") as a condition of paying the plaintiff a benefit under the Act. It is argued that the restriction imposed by s. 5 has no application in this case because of the provisions of s. 41(3)(b) and (4) of the Act which read:

(3) Notwithstanding anything in this Act, the Board may, as a condition of paying or continuing to pay a benefit under this Act -

(b) in a case where a person entitled to a benefit under this Act has a right of action against any other person as a result of the accident in respect of which that entitlement arose,

require the person to commence or continue an action against that other person

(4) Where a person recovers damages as a result of an action commenced or continued in pursuance of a requirement under sub-section (3) -

(a) the payment of benefits under this Act to that person shall cease; and

(b) there shall be reimbursed to the Office from any amount so recovered the amount of benefits under this Act paid by the Office to or on behalf of that person, and that amount shall be paid to the Office by the person against whom judgment is given before any amount of the judgment (other than the costs in the action) are paid to the person.

It is submitted that the words "[n]otwithstanding anything in this Act" in s. 41(3)(b) have the effect of suspending the operation of s. 5 of the Act upon any action brought in compliance with a requirement under s. 41(3)(b). But the proposition which is affected by that phrase is not the restriction on the common law remedy which s. 5 imposes; the phrase relates to the T.I.O.'s power to impose a condition on the paying or continuing of a benefit "notwithstanding" the unconditional right to compensation created by Pts IV and V of the Act and to a beneficiary's right to commence or continue an action for damages for pain and suffering and loss of amenities of life "notwithstanding" the prohibition against doing so in s. 5(3). The restriction on the common law remedy created by s. 5(1) and (2) remains whether or not the T.I.O. requires a beneficiary to sue. Where the provisions of s. 5(1) and (2) are intended to be overridden, as in s. 41(2), the intention is clearly expressed and the circumstances in which the overriding provision is to operate are spelt out. However, to construe s. 41(3)(b) as leaving the operation of s. 5(1) and (2) unaffected is not to avoid the difficulties inherent in the language of that paragraph.

In the first place, a plaintiff who is required by the T.I.O. to sue in the Northern Territory and who recovers damages restricted to the heads of pain, suffering and loss of amenities of life loses the right to any future benefits under the Act and the amount of benefits already received must be reimbursed. The injustice of such a result is manifest. It may be that, on the true construction of the Act, the T.I.O. would not have been authorized to impose a condition to sue in the Northern Territory in cases in which the compensation payable includes substantial amounts in respect of lost earning capacity, medical or rehabilitation expenses. However that may be, that difficulty has now disappeared. Section 5 of the Motor Accidents (Compensation) Amendment Act (No. 2) 1984 N.T. has now abolished the residual common law claims which had been left by the 1979 Act and no damages can now be recovered by a resident of the Territory in an action brought in the Northern Territory in respect of an injury caused by an accident occurring in the Territory. No condition could now be imposed requiring the commencement of an action in the Northern Territory.

Another difficulty arises with respect to actions brought outside the Northern Territory by a resident of the Territory who has suffered injuries "in or from a Territory motor vehicle" (s. 7) but at a place outside the Territory. Such a resident of the Territory may elect to claim benefits pursuant to s. 7 and, if he does, it may be reasonable to impose a condition requiring him to sue on his cause of action arising under the lex loci - especially if that law leaves a plaintiff's common law rights substantially intact. The purpose of s. 41 seems to be the recovery from an insurer (other than the T.I.O.) of damages which the T.I.O. receives more or less to restore the amount it is bound to pay as compensation to an injured resident. (That appears to be the effect also of s. 41(2) and (3)(a) of the Act.) However, if an action is brought outside the Territory in consequence of a requirement imposed under s. 41, a problem arises as to the extraterritorial operation of s. 41(4)(b) which purports to direct a judgment debtor to discharge the judgment debt by reimbursing the T.I.O. what it has paid out before paying the judgment creditor. These difficulties must be acknowledged but they are not to be avoided by attributing to s. 41(2) the effect of overriding the provisions in s. 5(1) and (2). Such a construction is inconsistent with the words of s. 41(3)(b) and leaves the problem of the extraterritorial operation of s. 41(4)(b) unaffected.

It follows that the operation of s. 5(1) and (2) is unaffected and, as the lex loci, that is the reference point for determining the kind of claim which may be brought in the Supreme Court of Queensland under the principles restated in Breavington v. Godleman. The appeal must be dismissed.

The plaintiff in this action claims damages for injuries arising out of a motor vehicle accident which occurred in the Northern Territory on 5 July 1979. He was driving a motor vehicle registered in the Northern Territory which collided with a motor vehicle driven by the defendant and registered in Queensland. The defendant's vehicle was covered by an insurance policy issued in accordance with the Motor Vehicles Insurance Act 1936 Q.. The plaintiff has been found to be a resident of the Northern Territory at the time of the accident and that finding has not been challenged. Negligence is admitted by the defendant.

The plaintiff received benefits under the Motor Accidents (Compensation) Act 1979 N.T. ("the Act") consisting of the reimbursement of medical and other expenses and sums for loss of earning capacity for various periods. That Act came into force on 1 July 1979 and introduced into the Northern Territory a partial no-fault scheme of compensation for injuries sustained by residents of the Northern Territory arising from motor vehicle accidents. Section 13 makes provision for the payment of benefits for loss of earning capacity and s. 17 provides for compensation according to a scale for certain bodily disabilities. Section 18 provides for the reimbursement of medical and rehabilitation expenses.

At the relevant time s. 5 of the Act provided that:

(1) Subject to sub-section (2), no action for damages shall lie in the Territory in respect of the death of or injury to a resident of the Territory in or as a result of an accident that occurred in the Territory.

(2) Subject to sub-section (3), nothing in sub-section (1) deprives a person of the right to bring an action for damages for pain and suffering or loss of amenities of life.

(3) A person who has received or has elected to receive a benefit under section 17 shall not commence or continue an action referred to in sub-section (2).

The effect of the section is that if a resident of the Northern Territory elects to receive benefits under s. 17, he is precluded altogether from bringing an action for damages. If he does not so elect, he may bring an action but is precluded from claiming damages for loss of earnings or of earning capacity. The plaintiff has not received any sum pursuant to s. 17 of the Act although he has, as I have said, received compensation for loss of earning capacity pursuant to s. 13.

Under s. 41 of the Act, the Board of the Territory Insurance Office, which administers the compensation scheme under the Act, may, as a condition of paying or continuing to pay a benefit under the Act require the person entitled to the benefit to commence an action against another person. This action was commenced by the plaintiff in Queensland pursuant to such a requirement by the Board. The actual words of s. 41 are of significance and are as follows:

(1) In this section "authorized insurer" and "third-party policy" have the same meaning as they respectively have in Part V of the Motor Vehicles Act as in force immediately before the commencement of this Act.

(2) Notwithstanding anything in this Act, where an action in respect of the death or injury of a person in or as a result of an accident would have lain under the law applicable immediately before the commencement of this Act had the accident then occurred, nothing in this Act shall apply so as to prevent a person pursuing such action against a person who, at the time of the accident, was the holder of a current third-party policy.

(3) Notwithstanding anything in this Act, the Board may, as a condition of paying or continuing to pay a benefit under this Act -

(b) in a case where a person entitled to a benefit under this Act has a right of action against any other person as a result of the accident in respect of which that entitlement arose,

require the person to commence or continue an action against the person holding a current third-party policy of that other person, as the case may be.

(4) Where a person recovers damages as a result of an action commenced or continued in pursuance of a requirement under sub-section (3) -

(a) the payment of benefits under this Act to that person shall cease; and

(b) there shall be reimbursed to the Office from any amount so recovered the amount of benefits under this Act paid by the Office to or on behalf of that person, and that amount shall be paid to the Office by the authorized insurer concerned, in a case referred to in sub-section (2), or the person against whom judgment is given in any other case, before any amount of the judgment (other than the costs in the action) are paid to the person.

(5) Where a person commences or continues an action in pursuance of a requirement under sub-section (3), and that action is unsuccessful or the amount recovered is not sufficient to reimburse the person for the costs in bringing the action, the Office shall pay to the person the reasonable amount of those costs or the amount by which the amount recovered falls short of the amount of those costs, as the case may be.

(The ninth last word of sub-s. (3) is clearly in error for the word "or".)

In accordance with the view which I expressed in Breavington v. Godleman [2] , I think that the choice of law in this action, brought as it is in Queensland, is to be determined by the application of the rule in Phillips v. Eyre [3] , modified in accordance with the remarks of this Court in Koop v. Bebb [4] . That, however, raises a problem. It is clear that the wrong alleged by the plaintiff is actionable under the law of Queensland, the lex fori. The difficult question is whether it gives rise to civil liability under the law of the Northern Territory, the lex delicti. Plainly there was a cause of action in the Northern Territory for damages for pain and suffering or loss of amenities of life. Section 5(2) preserved such an action provided no claim was made under s. 17 of the Act. It is open to the plaintiff to pursue such an action in Queensland according to the law of that State. The problem is whether the plaintiff is also able to claim, as he purports to have done, damages for loss of earnings or loss of earning capacity. Damages under the latter head are not recoverable in the Northern Territory and there is no civil liability in respect of them unless s. 41(3)(b) of the Act qualified s. 5, as it then was, so as to preserve common law rights in relation to those actions to which it applied.

Ante, p. 41. 2. (1870) L.R. 6 Q.B. 1. 3. (1951) 84 C.L.R. 629, at p. 643.

Before turning to the actual wording of s. 41 it may be helpful to observe that the aim of the section is apparently to ensure that the compensation scheme may be reimbursed out of insurance moneys payable in respect of injuries for which benefits are paid under the Act. Section 41(2) is transitional and preserves actions against persons holding current third party policies which expire after the commencement date of the Act. The policies referred to in s. 41(2) are policies under the compulsory third party insurance scheme in the Northern Territory which was replaced by the no-fault scheme under the Act. Those policies would now have expired and, as a consequence, it would seem unlikely that s. 41(2) has any longer any operative force. But under s. 41(3)(b) the Board might require an action to be brought, not only in a case contemplated by sub-s. (2), but also "in a case where a person entitled to a benefit under this Act has a right of action against any other person as a result of the accident in respect of which that entitlement arose". In such a case, however, unlike the case contemplated by sub-s. (2), no right is expressly preserved, that is to say, no reference is made to the law applicable immediately before the commencement of the Act. Upon that basis, it might be said that the "right of action" to which par. (b) refers must take account of the effect of the Act and, in particular, s. 5 and so limit the claim in this action to damages for pain and suffering or loss of amenities of life.

I suspect that in drafting s. 41(3)(b), the draftsman had in mind accidents occurring in some other place than the Northern Territory. Under s. 7 of the Act a resident of the Northern Territory is entitled to the benefits provided by the Act where he dies or suffers injury outside the Territory in or from a Territory motor vehicle. A "Territory motor vehicle" is defined under s. 4 to mean, in relation to an accident occurring outside the Territory, a motor vehicle currently registered in the Territory. If in that situation an action were available by the law of the place where the accident occurred, there may be good reason for the Board's requiring the injured Northern Territorian to pursue such an action, particularly where the ultimate liability would be borne by an insurer. As I have said, the one thing that is clear about s. 41 is that it was intended to facilitate the recovery of insurance moneys so that benefits paid pursuant to the Act might be recouped from them. However, s. 41(3)(b) applies not only to a right of action arising as the result of an accident occurring outside the Northern Territory, but also to a right of action arising from an accident occurring within the Northern Territory. Such a right of action may, as in this case, be against a person entitled to indemnity under a private insurance policy issued outside the Territory, and, in accordance with the underlying policy of s. 41, the Board may require an action to be commenced outside the Territory. Thus the question arises whether in the Northern Territory civil liability was preserved under s. 41(3)(b) unaffected by s. 5 or whether the right of action referred to in that paragraph is that remaining under s. 5 which, at the relevant time, was confined to an action for damages for pain and suffering or loss of amenities of life and did not include damages for loss of earnings or earning capacity. The question arises because the action required to be brought is an action in Queensland for a tort occurring outside that State and, according to the view which I took in Breavington v Godleman , is to be determined in accordance with the rule in Phillips v. Eyre with the modification supplied in Koop v. Bebb. For an action to be maintainable in Queensland for damages for loss of earnings or earning capacity, civil liability in respect of such a claim must have existed at the relevant time in the Northern Territory. That would only have been so if, in the circumstances, s. 5 had no application.

The only way in which it could be said that s. 5 had no application is by adopting a construction of the words "Notwithstanding anything in this Act" in s. 41(3)(b) such that they qualify not only the words "the Board may require" but also the words "has a right of action". Such a construction is awkward and is contradicted when a comparison is made with sub-s. (2) of s. 41. That sub-section expressly provides for the situation "where an action would have lain under the law applicable immediately before the commencement of this Act had the accident then occurred".

On the other hand, to adopt an alternative construction, under which one has regard to the right of action remaining under s. 5, leads to a curious result. The only right of action remaining was, under s. 5, a right to recover damages for pain and suffering or loss of amenities of life. Upon damages being recovered under that head in an action brought pursuant to the requirement of the Board, any benefits paid under the Act must be reimbursed. These benefits will consist of payments for loss of earning capacity notwithstanding that no damages will have been recoverable under that head. Moreover, the payment of benefits under the Act, including compensation for loss of earning capacity, ceases upon damages being recovered.

In 1984 common law rights were abolished entirely in respect of injuries caused to a resident of the Northern Territory as the result of a motor vehicle accident occurring in the Territory. Sub-sections (2) and (3) of s. 5 were repealed and sub-s. (1) was amended by s. 5 of the Motor Accidents (Compensation) Amendment Act (No. 2) 1984 N.T. so that the section now reads:

No action for damages shall lie in the Territory in respect of the death of or injury to a resident of the Territory in or as a result of an accident that occurred in the Territory. Section 41 was not amended at the same time. If the effect of the amendment of s. 5 had been to render s. 41(3)(b) otiose, there would have been some ground for reading it in such a way as to avoid that result. See Interpretation Act 1978 N.T., s. 54. But even with s. 5 as amended, s. 41(3)(b) has a remaining operation with respect to accidents occurring outside the Northern Territory which cause death or injury to a resident of the Northern Territory for which benefits can be claimed under the Act.

Section 41(3)(b) is a difficult provision and it is not possible to reach an entirely satisfactory conclusion. But in the end, I do not think it possible to give the words "Notwithstanding anything in this Act" an interpretation which qualifies the reference to "a right of action" in that paragraph. I have come to this conclusion having regard to the specific provision made in s. 41(2) for the preservation of rights existing prior to the commencement of the Act and the failure to make such provision in s. 41(3)(b). The fact that the result is anomalous in this case is unfortunate but, it may be observed, the anomaly for future cases is removed by the 1984 amendment to s. 5.

Accordingly, at the relevant time the only civil liability which existed in the Northern Territory in respect of the wrong alleged by the plaintiff was in respect of pain and suffering or loss of amenities of life. Applying the rule in Phillips v. Eyre, as I would do, the scope of the plaintiff's action is similarly limited and does not extend to damages for loss of earnings or earning capacity.

In the court below an order was made that damages be assessed under the law of the Northern Territory. I would allow the appeal in order to amend that order, although the practical result will not differ.

This application for special leave to appeal was heard immediately following the conclusion of the argument in Breavington v. Godleman [5] , in which judgment has just been delivered. Both matters have much in common. At the outset the Court invited counsel to proceed on the footing that special leave would be granted; it is convenient therefore to refer to the parties as appellant and respondent respectively.

The appellant was injured in a motor vehicle accident on 5 July 1979 near Mataranka in the Northern Territory ("the Territory"). In proceedings brought in the Supreme Court of Queensland, the learned trial judge held that, at the time of the accident, the appellant was a "resident of the Territory" as that term is defined in s. 4 of the Motor Accidents (Compensation) Act 1979 N.T. ("the Act"). That finding is no longer the subject of any challenge.

The scheme of the Act, in particular the terms of s. 5, are set out in the judgments in Breavington v. Godleman. It will be necessary to refer to some provisions of the Act, not germane to that decision. But, for the moment, it is enough to say that a person who is a resident of the Territory, and who is injured in an accident that occurred there, may not recover in the Territory damages at common law save for pain and suffering or loss of amenities of life. In particular, that person may not recover damages for loss of earning capacity. Section 5 was amended in 1984 to preclude any action for damages in the circumstances there mentioned; the amendment does not apply to the present case. Part IV of the Act contains a scheme of benefits for compensating a person who is a resident of the Territory and who "suffers an injury in or as a result of an accident that occurred in the Territory or in or from a Territory motor vehicle " (s. 13(1)).

At the time of the accident the respondent lived in the Territory and he has lived there since. The vehicle he was driving was a Toyota, registered in Queensland and the subject of a policy of insurance issued pursuant to The Motor Vehicles Insurance Act 1936 Q. by Fire & All Risks Insurance Co. Ltd. By arrangement between the respondent's insurer and the Territory Insurance Office ("the T.I.O."), which is the administrator of the scheme under the Act, the respondent travelled to Mt Isa in Queensland, as the primary judge held, "for the sole purpose of accepting service of the writ". The effectiveness of that service to ground jurisdiction in the Supreme Court of Queensland was upheld [6] .

For reasons which were extensively canvassed in his judgment but which in the end turned upon an adoption of the approach taken by Lord Wilberforce in Chaplin v. Boys [7] , the trial judge held that, "on the assessment of damages for impairment of earning capacity the law of the Northern Territory should be applied and a claim for damages under that head is not actionable in Queensland". The primary issue before this Court is whether his Honour was right in the conclusion he reached regarding the law applicable to the appellant's claim for damages for the negligent driving of the respondent.

In passing, it may be noted that the Full Court of the Supreme Court of Queensland did not hear an appeal from his Honour's judgment. Because Breavington v. Godleman was pending in this Court, the appellant sought special leave to appeal from the decision of the primary judge. An appeal lodged to the Full Court was not pursued.

Breavington v. Godleman held that the law to be applied by the Supreme Court of Victoria in the circumstances there obtaining was the domestic law of the Territory. This had the consequence that the Act governed (and circumscribed) the damages recoverable by the appellant in that matter. That conclusion was reached by reference to the development of the common law and by reason of the relationship of the States and territories within the "Federal Commonwealth". Except in so far as the present appeal is distinguishable, the conclusion reached in Breavington v. Godleman must necessarily apply. It was said on behalf of the appellant that there were distinguishing features and that these features demanded application of the lex fori, that is the law of Queensland.

Counsel for the appellant supported this submission by an analysis of considerations of convenience, certainty and justice, taking in turn the application of the lex loci, the flexible model referred to by Lord Wilberforce in Chaplin v. Boys and the lex fori. That analysis, it was submitted, demonstrated that application of the lex fori generally proved more convenient for a plaintiff, produced total certainty and achieved greater justice, at least in motor vehicle cases, by avoiding a windfall to the insurer. With respect to counsel, the analysis is not persuasive. It is not hard to show, by illustration, that considerations of convenience, certainty and justice point in the direction of the lex loci. But, more importantly, the analysis does not displace the broader considerations which led, in Breavington v. Godleman, to the application of the domestic law of the Territory.

However each of the appeals had a factor that was not present in the other. In Breavington v. Godleman it was the presence of the Australian Telecommunications Commission ("Telecom") as a defendant to the proceedings. As it happened, for reasons appearing in the judgments in that matter, the presence of Telecom as an emanation of the Commonwealth proved to have no significance. In the present appeal the consideration absent in Breavington v. Godleman is that the action brought by the appellant against the respondent was at the instance of the T.I.O.

Section 41(3) of the Act, to be found in Pt VII - Miscellaneous, provides that the Board of the T.I.O. "may, as a condition of paying or continuing to pay a benefit under this Act", require a person in the circumstances there mentioned to commence an action against the persons referred to in the sub-section.

Counsel for the appellant submitted that the effect of s. 41 of the Act was that any action brought at the instance of the T.I.O. was not subject to the limitations in s. 5. A similar submission was upheld recently by Martin J. in Godhino v. Willard [8] . Before this Court it was submitted that s. 41 was a law for the peace, order and good government of the Territory and presupposed that proceedings would be brought outside the Territory to indemnify the T.I.O. in the case of an insurer of a motor vehicle registered outside the Territory but involved in an accident therein.

It is unnecessary to set out the whole of s. 41 but it is helpful to reproduce sub-ss. (2) and (3):

(3) Notwithstanding anything in this Act, the Board may, as a condition of paying or continuing to pay a benefit under this Act -

(b) in a case where a person entitled to a benefit under this Act has a right of action against any other person as a result of the accident in respect of which that entitlement arose,

require the person to commence or continue an action against the person holding a current third-party policy or that other person, as the case may be.

Where a person recovers damages as a result of an action commenced at the instance of the T.I.O., s. 41(4)(b) provides for reimbursement to the T.I.O. of any benefits paid by it under the Act. Where the action is unsuccessful, the T.I.O. must pay the costs of bringing the action: s. 41(5).

Section 41(2) was described in argument as a transitional provision. It is not in its terms a transitional provision for, although s. 41(2) speaks of the situation in which an action "would have lain under the law applicable immediately before the commencement of this Act", it follows with the words "had the accident then occurred". In other words, the sub-section refers to an accident, whenever occurring, so long as it is an accident such as would have given rise to a claim for damages under the law existing before the Act came into operation.

However, the scope of s. 41(2) is limited by its reference to an "action against a person who, at the time of the accident, was the holder of a current third-party policy". Section 41(1) gives "third-party policy" the meaning it had in Pt V of the Motor Vehicles Act 1949 N.T. as in force immediately before the commencement of the Act. Part V dealt with the insurance of motor vehicles and, broadly speaking, required a third-party policy in the case of a motor vehicle used on a public street. In order to comply with Pt V, a third-party policy must be issued by an authorized insurer, that is a person carrying on the business of insurance and who had been approved by the Administrator as an authorized insurer under Pt V, and must insure the owner of the vehicle "against all liability in respect of the death of, or bodily injury to, any person caused by or arising out of the use of the motor vehicle in any part of the Commonwealth": s. 52(1)(b). The obligation to insure under that Act did not apply to a visiting motor vehicle in relation to which there was in force a contract of insurance under various statutes including the Queensland Act mentioned earlier in these reasons: see s. 91.

While not in express terms a transitional provision, s. 41(2) of the Act is of that character, for reasons explained by Forster C.J. in Boyd v. Boynton [9] . When the Act came into force on 1 July 1979, Pt V of the Motor Vehicles Act was repealed. The compulsory third-party scheme existing under Pt V was replaced by the no-fault scheme under the Act. An amendment to the Motor Vehicles Act, also operative from 1 July 1979, provided for compensation contributions to be made by all persons seeking to register or re-register a motor vehicle. Forster C.J. explained the transition in this way [10] :

In order to make the transition from the old scheme to the new the legislature intended that third party policies current on 1 July 1979, with respect to which premiums had already been paid, should continue in force until they expired whereupon with the re-registration of the relevant vehicle the compensation contribution would be made in lieu of a premium to renew the third party policy. 1. (1984) 28 N.T.R. 1. 2. (1984) 28 N.T.R., at pp. 4-5.

But the vehicle driven by the respondent was not registered in the Territory and so there was no "holder of a current third-party policy" within s. 41(2). Section 41(3)(a) was therefore inapplicable.

The situation was however within the terms of s. 41(3)(b) for the appellant was entitled to a benefit under the Act and had a right of action against the respondent. That right of action, despite the contrary conclusion reached in Godhino v. Willard, was a restricted one limited by s. 5(2) to damages for pain and suffering or loss of amenities of life. Section 41(3) is not an easy provision to construe but it appears to be looking at two quite different situations. The first is that covered by par. (a), a provision aimed at third-party insurance holders and therefore of limited duration. The circumstances envisaged by par. (b) may arise at any time during the operation of the Act; more accurately, they could have arisen at any time until the Act was amended in 1984. I shall explain later what is meant by that comment.

There was at trial an issue as to whether the appellant had received a benefit under s. 17 of the Act, a section providing compensation for specified injuries in the form of percentages of a fixed sum. Section 5(3) precludes a person who has received or elected to receive such a benefit from commencing or continuing an action under s. 5(2). The trial judge was satisfied that the appellant had neither received nor elected to receive such a benefit; s. 5(3) may therefore be disregarded.

But there is still a difficulty with s. 41(3)(b) and, although the point does not emerge with clarity from the papers before the Court, it is to be taken from what was said by counsel that par. (b) was the source of the T.I.O.'s direction to the appellant to sue the respondent. The difficulty arises in this way. Section 41(2) aside, a resident of the Territory injured as a result of an accident in the Territory may not recover damages in the Territory save for pain and suffering or loss of amenities of life. Is it the case therefore that s. 41(3)(b) is concerned only with the situation in which an injured resident has a right of action against another for damages for pain and suffering or loss of amenities of life? What is not clear is the nature of the "action" that a person may be directed to bring in those circumstances. Consistent with the view expressed as to the scope of par. (b), it might be thought to be an action for damages for pain and suffering or loss of amenities of life. That interpretation lies awkwardly with s. 41(4)(a) which provides that where a person recovers damages as a result of an action under sub-s. (3), then "the payment of benefits under this Act to that person shall cease". Now the range of benefits under Pt IV of the Act includes compensation for loss of earning capacity, medical and rehabilitation expenses and the cost of appliances as well as the benefits under s. 17. Is a person to lose all those benefits because he recovers damages for pain and suffering or loss of amenities of life by reason of an action forced upon him by the T.I.O., especially when s. 41(4)(b) gives to the T.I.O. a statutory right of reimbursement from any amount so received for any benefits paid by it? There is no necessary correlation between damages recovered and benefits received.

These anomalous results of such a construction of s. 41(3)(b) might suggest that an action directed under s. 41(3), whether springing from par. (a) or par. (b), is an action for damages at large. But there can be no such action in the Territory for injury to a resident of the Territory, at any rate not as a result of an accident in the Territory. In that event, is par. (b) concerned, as counsel for the appellant argued, with an action for damages at large brought outside the Territory, as in the present case? If it is, s. 41(4)(b) still presents problems for not only does it secure reimbursement to the T.I.O. of benefits paid by it; it obliges the person against whom judgment is given to make the reimbursement before paying the judgment to the person directed to bring the action. But, by definition, the person against whom judgment is given will be the defendant in proceedings brought outside the Territory. How is the obligation to be enforced? These difficulties apart, it is most unlikely that a section to be found among the miscellaneous provisions should somehow confer a right of action which s. 5 has expressly eliminated, even though s. 41(3) is prefaced with the words "Notwithstanding anything in this Act ". Rather, sub-s. (3) is by way of a machinery provision, its scope to be measured by the general scheme of the Act.

It is hard to be dogmatic as to all the ramifications of s. 41(3)(b). But I am of the opinion that its intention is to do no more than empower the T.I.O. to direct an injured resident to bring proceedings, whether within or without the Territory, to recover damages for pain and suffering or loss of amenities of life where the person has elected to accept benefits under s. 17 of the Act. The anomaly this construction once produced has been noted. And, it should be noted further, when s. 5(2) was repealed in 1984 no amendment was made to s. 41. By 1984 par. (a) of s. 41(3) would appear to have run its course and thereafter no right of action could arise on which par. (b) could operate. Presumably s. 41 was left untouched so as to preserve any circumstances still existing in 1984 that might give rise to a direction under sub-s. (3).

Because of the view I have taken of the scope and operation of s. 41(3)(b), the appellant was not thereby entitled to recover from the respondent damages for impairment of earning capacity. The conclusions reached in Breavington v. Godleman are not distinguishable.

There should be special leave to appeal but the appeal must be dismissed.

High Court of Australia Mason C.J. Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ. Perrett v Robinson [1988] HCA 41

At a glance

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Decision date

Before

Source

Judgment (78 paragraphs)

Parties

Cases Cited (1)