Sally Ann John v Robert Ramsey

Zurich's Argument

1. To understand Zurich's argument, it is necessary to outline some of the provisions of Part 1.2 of the Act.
2. S 7A defines "blameless motor accident" as follows:- ""blameless motor accident" means a motor accident not caused by the fault of the owner or driver of any motor vehicle involved in the accident in the use or operation of the vehicle and not caused by the fault of any other person."
3. "Motor accident" is defined in s 3:- ""motor accident" means an incident or accident involving the use or operation of a motor vehicle that causes the death of or injury to a person where the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during: (a) the driving of the vehicle, or (b) a collision, or action taken to avoid a collision, with the vehicle, or (c) the vehicle's running out of control, or (d) a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle's running out of control."
4. S 7B of the Act creates liability for damages in the case of a blameless motor accident by a deeming effect and reads as follows:- "(1) The death of or injury to a person that results from a blameless motor accident involving a motor vehicle that has motor accident insurance cover for the accident is, for the purposes of and in connection with any claim for damages in respect of the death or injury, deemed to have been caused by the fault of the owner or driver of the motor vehicle in the use or operation of the vehicle. Note: Section 3B defines what is meant by a motor vehicle having motor accident insurance cover for a motor accident. (2) If the blameless motor accident involved more than one motor vehicle that has motor accident insurance cover for the accident, the death or injury is deemed to have been caused by the fault of the owner or driver of each of those motor vehicles in the use or operation of the vehicle."
5. S 7E provides:- "(1) There is no entitlement to recover damages under this Division in respect of the death of or injury to the driver of a motor vehicle if the motor accident concerned was caused by an act or omission of that driver. (2) The death of or injury to the driver is taken to have been caused by an act or omission of the driver for the purposes of subsection (1) even if: (a) the act or omission does not constitute fault by the driver in the use or operation of the vehicle, or (b) the act or omission was involuntary, or (c) the act or omission was not the sole or primary cause of the death or injury, or (d) the act or omission would have caused the death or injury but for the occurrence of a supervening act or omission of another person or some other supervening event."
6. Zurich's contention is that, by reason of s 7E of the Act, the accident which is the subject of the Plaintiff's proceedings cannot enable her to bring an action. It is contended that the act of driving the vehicle was an "act or omission of that driver" for the purposes of s 7E(1). By reason of s 7E(2)(a) it does not matter that the act or omission does not constitute fault by the driver in the use or operation of the vehicle and, further, by reason of s 7E(2)(c) it does not matter that the act or omission was not the sole or primary cause of the death or injury.
7. Zurich further contends that the circumstances of the present case are such that the Plaintiff needs to rely on the deeming provisions contained in s 7B, that is, that the accident is deemed to have been caused by the fault of the owner or driver. It contended that, by reason of the deeming provisions in s 112, the accident must thereby have been deemed to have been caused by the Plaintiff herself and to avoid this absurdity the Plaintiff has thereby commenced proceedings against the third party insurer despite the fact that there is no entitlement to do so under the Act other than the circumstances stipulated in s 113.

The Plaintiff's Argument

1. The Plaintiff relies on a number of authorities to contend that the proceedings under the blameless accident provisions are maintainable.
2. In O'Brien v Davjam Enterprises Pty Ltd [2014] NSWDC 270, P Taylor SC DCJ considered a case where the Plaintiff sought to amend a Statement of Claim to add a claim under the blameless accident provisions in Part 1.2 of the Act. The case concerned a collision in which the Plaintiff was driving a vehicle which collided with a rock wall and the Plaintiff was injured. His Honour granted leave and stated at [9]-[13]:- "[9] Section 7B deems, for the purpose of damages claims, a "blameless motor accident" involving an insured vehicle to have been caused by the "owner or driver". Nevertheless, recovery of damages by the driver seems to be permitted so long as that entitlement is not excluded by s 7E. Whatever be the anomalies in Div 1 of Pt 1.2 of the Act (see Axiak at [25]), it is apparent that s 7E can only assist the owner of the motor vehicle (and exclude the entitlement of a driver to recover) if the accident was "caused by an act or omission" of Mr O'Brien. [10] If the steering failed, as is alleged by Mr O'Brien, it is not apparent that he must, by some act or omission, have caused the accident. On the contrary, it is trite law that causation is a factual question determined by the common sense test (March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 at 515, 522-524). [11] Section 7E(2) identifies some circumstances which do not preclude causation. The text of this provision - "taken to have been caused…even if" - is confusing since there is no provision that deems the driver to have been the cause. Section 7B, which refers to the "owner or driver" does not have this effect. Further, I did not understand the owner to submit that s 7E deems Mr O'Brien to have caused the accident merely by reason of him being the driver of the vehicle and I do not, in any event, think that this is the effect of s 7E(2). [12] In my view, the question of whether Mr O'Brien has caused the accident is a question of fact to be determined at trial and assessed in the context of s 7E(2). On the case pleaded by him, his claim under the "blameless motor accident" provisions does not appear to be futile. [13] The circumstance that the "blameless motor accident" provisions are relatively new legislation and the ambit of their operation, including the effect of s 7E, has received limited judicial consideration seems to me to be another reason why the matter should be determined at a final hearing."
3. In Garry Connaughton v Pacific Railway Engineering Pty Ltd [2015] NSWDC 89, Norton SC DCJ considered a circumstance where the Plaintiff was the driver of a motor vehicle which was involved in a single vehicle accident collision involving a tree which fell on the road. In that case Her Honour comprehensively considered the provisions including s 7E and stated:- "[66]…It was pointed out that in the present case the plaintiff could name the owner as the defendant because of statutory agency, but if he had been both the owner and the driver there would be no available defendant and that circumstance made it clear that drivers were not meant to be covered. The UCPR Part 6 rule 6.4 provides: "(1) Proceedings of the following kinds must be commenced by summons: (a) proceedings in which there is no defendant." Further, there is provision within MACA for joining insurance companies directly as a defendant. I therefore do not accept that the possible absence of a named defendant would prevent an owner/driver from bringing proceedings and thus that possibility does not impact on the process of statutory interpretation being conducted in this case."
4. Dealing with the question of whether the Plaintiff's act of driving would come within the specific exclusion within s 7E, Her Honour stated:- "[70] On behalf of the defendant it was submitted that it was the plaintiff's act of driving which "attracts the specific exclusion in 7E and it is clear there was no intention to cover the driver in a single vehicle accident." [71] On the facts as I have found them the plaintiff did not cause this accident. His driving on the road was no more than a background fact which explains no more than why he was in a position where he could be struck by a tree. Thus the driving of the plaintiff was nothing more than "the mere occasion of the injury." [72] In oral submissions it was emphasised that the section must be read in the context of the Part and that in circumstances such as the present case the plaintiff, as the driver, is deemed to be the person at fault and to have caused the accident. [73] Looking at the words of the section and bearing in mind the words used in the second reading speech I find that even under the extended definition of causation in section 7E there was no act or omission on behalf of the plaintiff, either voluntary or involuntary, which can be said to have caused the accident. I do not accept that the words mean that drivers in single vehicle accidents are deemed to have caused that accident."
5. Her Honour's decision in this case was on a separated issue agreed by the parties. It was not interlocutory.
6. In Hossein v Mirdha [2015] NSWDC 108, Elkaim SC DCJ considered the decision of Norton SC DCJ in Connaughton but distinguished it on the facts of the case before him as the case involved the act of steering the vehicle away from a dog, which His Honour considered to be an act that was the cause of the injury to the Plaintiff. The decision in Hossein involved a decision on a separate issue to determine the blameless accident provisions and involved an agreed statement of facts put before the Court. It was not in this sense an interlocutory decision.

Principles

1. Both the Plaintiff and the Zurich contended that this matter is to be considered in light of the principles in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, in particular, at [129]-[130].
2. That decision was more recently considered by the High Court in Spencer v The Commonwealth (2010) 241 CLR 118. In that case, Hayne, Crennan, Kiefel and Bell JJ emphasised that General Steel and the decision in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 need to be understood by reference to the relevant formulation of the basis upon which the decisions were made. In General Steel Industries, in particular, the Court was exercising its "inherent" jurisdiction.
3. The Court in Spencer considered the provisions in s 31A(2) and (3) of the Federal Court Act 1976 (Cth). Those provisions differed from the UCPR provisions relevant in this case due to the fact that s 31A(3) of the Federal Court Act 1976 (Cth) provided that a defence or proceedings or part of proceedings would not have to be hopeless or bound to fail for it to have no reasonable prospect of success. With that proviso, Hayne, Crennan, Kiefel and Bell JJ went on to state:- "[58] How then should the expression "no reasonable prospect" be understood? No paraphrase of the expression can be adopted as a sufficient explanation of its operation, let alone definition of its content. Nor can the expression usefully be understood by the creation of some antinomy intended to capture most or all of the cases in which it cannot be said that there is "no reasonable prospect". The judicial creation of a lexicon of words or phrases intended to capture the operation of a particular statutory phrase like "no reasonable prospect" is to be avoided. Consideration of the difficulties that bedevilled the proviso to common form criminal appeal statutes,82 as a result of judicial glossing of the relevant statutory expression, provides the clearest example of the dangers that attend any such attempt. [59] In many cases where a plaintiff has no reasonable prospect of prosecuting a proceeding, the proceeding could be described (with or without the addition of intensifying epithets like "clearly", "manifestly" or "obviously") as "frivolous", "untenable", "groundless" or "faulty". But none of those expressions (alone or in combination) should be understood as providing a sufficient chart of the metes and bounds of the power given by s 31A. Nor can the content of the word "reasonable", in the phrase "no reasonable prospect", be sufficiently, let alone completely, illuminated by drawing some contrast with what would be a "frivolous", "untenable", "groundless" or "faulty" claim. [60] Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is "no reasonable prospect" of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to "no reasonable prospect" can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase "just and equitable" when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes."
4. French CJ and Gummow J stated:- "[24] The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this court in Fancourt v Mercantile Credits Ltd said: 'The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.' More recently, in Batistatos v Roads and Traffic Authority (NSW) Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde which included the following: 'Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.' There would seem to be little distinction between those approaches and the requirement of a "real" as distinct from "fanciful" prospect of success contemplated by s 31A. That proposition, however, is not inconsistent with the proposition that the criterion in s 31A may be satisfied upon grounds wider than those contained in pre-existing Rules of Court authorising summary dispositions. [25] Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a "fanciful" prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the court has formed the view that the applicant is unlikely to succeed on the factual issue. Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law. But where the success of proceedings is critically dependent upon a proposition of law which would contradict a binding decision of this court, the court hearing the application under s 31A could justifiably conclude that the proceedings had no reasonable prospect of success."(emphasis added)
5. In the context of the UCPR provisions Harrison AsJ recently summarised the law since Spencer in Drake v Wood Marshall Williams Solicitors [2015] NSWSC 1091. Her Honour stated:- "UCPR 13.4(1) provides that the Court may dismiss proceedings generally, or in relation to any claim for relief, in three circumstances. These are, if the proceedings are frivolous or vexatious, if no reasonable cause of action is disclosed or if the proceedings are an abuse of the process of the court. UCPR 14.28(1) provides that the Court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading firstly, discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, secondly, has a tendency to cause prejudice, embarrassment or delay in the proceedings, or thirdly, is otherwise an abuse of the process of the court. UCPR 14.28(2) provides that the court may receive evidence on the hearing of an application for an order under subrule (1). In O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71, the Court of Appeal applied the High Court decision of Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118. In Spencer, the High Court was concerned with s 31A(2) of the Federal Court Act 1976 (Cth), but the following principles are of general application (O'Brien at [3]): (a) On a summary judgment application, the real issue is whether there is an underlying cause of action or defence, not simply whether one is pleaded (at [23]). (b) The critical question can be expressed as whether there is more than a "fanciful" prospect of success (at [25]) per French CJ and Gummow J) or whether the outcome is so certain that it would be an abuse of the process of the court to allow the action to go forward (at [54] in the judgment of the plurality). Demonstration of the outcome of the litigation is required, not an assessment of the prospect of its success. (c) Powers to summarily terminate proceedings must be exercised with exceptional caution (French CJ at [55] and Gummow J at [24]). See also General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, in which Barwick CJ comments that a lack of a cause of action must be "clearly demonstrated" in terms that the case is untenable and cannot possibly succeed (at 128-129). Recent decisions of this Court and the Court of Appeal demonstrate that the impact of s 56 of the Civil Procedure Act 2005 (NSW) is such as to expand the circumstances where an order for dismissal under UCPR 13.4 may be made. In Simmons v Protective Commissioner of NSW [2012] NSWSC 455 at [28], Hammerschlag J expressed support for the proposition that the combination of the words in UCPR 13.4(1)(b) and s 56 of the Civil Procedure Act lead to a result that: "...it is not incumbent on an applicant under this particular rule to establish certainty of outcome, but rather that the applicable test is whether a defendant has demonstrated that a plaintiffs case has no reasonable prospects of success." Simmons was subsequently cited by Ward J in McDonald v Grech; Bank of WA v McDonald [2012] NSWSC 717 at [32]- [33]. In Bott v Carter [2012] NSWCA 89, also a dismissal application involving a defence of advocate's immunity, Basten JA observed that while s 56 of the Civil Procedure Act may not reduce the conditions for the engagement of the power to dismiss proceedings under UCPR 13.4, it limits the circumstances in which the court, satisfied that the power is available, might be inclined to refuse relief on discretionary grounds (at [14])."

Decision

1. Section 7B deems a causative effect in defined circumstances. It was not contended that the pleaded accident does not otherwise fall within its reach. Section 7E excludes circumstances where the motor accident was "caused by an act or omission of that driver" from "an entitlement to recover damages" not "claim for damages" as referred to in ss 7B and 7C. To this extent s 7E may when engaged, practically limit the deeming effect of s 7B.
2. There are two ways this may be approached.
3. One is to view the deeming provision in s 7B as akin to a rebuttable presumption in the circumstances of s 7E (see Macquarie Bank Ltd v Fociri Pty Ltd (1992) 27 NSWLR 203 per Gleeson CJ at [207]-[208]).
4. The other is to take a contextual approach and reading the provisions together view the scope of ss 7B and 7C as intrinsically limited by the scope of s 7E. (see DC Pearce and RS Geddes Statutory Interpretation in Australia 8th edition p [4.3].)
5. The later approach appears more consistent with the intention expressed in the Minister's Second Reading of 9 March 2006 (s 34 Interpretation Act 1987). Despite the differences in language it would as a matter of logic be anomalous to enable a claim to damages that can not be recovered.
6. The decision in Connaughton was decided following trial. The merits of its reasoning were not directly canvased in submissions. I have doubts as to its correctness. It is arguable in light of the terms of s 7E(2), that "caused" in s 7E(1) refers to factual not legal causation.
7. I have had regard to the Defendant's claim in regard to the limited scope upon which a third party insurer may be joined pursuant to s 113 of the Act and the proposal of the Plaintiff to bring the proceedings against the owner of the vehicle. The Plaintiff's contention, contained in its correspondence to Zurich's solicitors on 5 May 2015 which is annexure C to the affidavit of Alison Jury, is that s 113 is a procedural provision which is relevant to "where a person against whom a claim may be made." It argues that where Zurich disputes "deemed" liability and withholds insurance and the owner/driver cannot be a person against whom a claim can be made the issue of whether "deemed" liability arises falls to be determined under the provisions of s 7B and 7C.
8. In light of the principles set out by the Court of Appeal in O'Brien v Bank of Western Australia Ltd [2013] NSWCA 71 applying the decision of the High Court in Spencer v The Commonwealth (supra) as well as the previous decisions of this Court, I do not regard the Plaintiff as having no reasonable prospects and nor would I regard it as an abuse of the Court's process to allow the action to go forward. In this respect I particularly refer to the decision of French CJ and Gummow J in Spencer (supra) at paragraph [25].
9. This is not an appropriate circumstance for the granting of relief under UCPR 13.4 or 14.28. The factual circumstances of the accident including features of the Plaintiff's driving should be determined at trial. That will provide the context to consider in detail the construction of the provisions and the potential application and correctness of the previous approaches to this question.
10. For these reasons Zurich's Notice of Motion will be dismissed.

Amendments 04 September 2015 - Paragraph [13], "s 7E(c)" to "s 7E(2)(c)" Paragraph [22], "that that General Steel" to "that General Steel" Paragraph [23], "due to fact" to "due to the fact"; "would not be" to "would not have to be" Paragraph [24], Gummow CJ to Gummow J Paragraph [33], "to of the" to "to the" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 September 2015