Serrao (by his Tutor Serrao) v Cornelius

Court of Appeal (NSW)|2016-08-29|Before: Leeming JA

e Cornelius (Respondent/Cross-Appellant) Representation: Counsel: Mr G Laughton SC / Mr T Boyd (Appellant/Cross-Respondent) M P Deakin QC / Mr D Wilson SC (Respondent/Cross-Appellant)

Solicitors: Herbert Weller Solicitor (Appellant/Cross-Respondent) Hall & Wilcox (Respondent/Cross-Appellant) File Number(s): 2015/67841 Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: Serrao (by his tutor) v Cornelius [2015] NSWDC 4 Date of Decision: 6 February 2015 Before: Hatzistergos DCJ File Number(s): 2013/215744

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

LEEMING JA: I agree with Sackville AJA.
SACKVILLE AJA: In a judgment delivered on 6 February 2015 (Primary Judgment), [1] the District Court concluded that, subject to an allowance for the costs of funds management, judgment should be entered for the appellant against the respondent in the sum of $1,241,107.80. This amount represented the damages awarded to the appellant by reason of the respondent's negligence in a motor accident, taking into account a reduction of 40 per cent by reason of the appellant's contributory negligence.
The primary Judge decided that the question of damages for funds management should be determined separately. On 13 February 2015, judgment was entered for the appellant in the sum of $1,556,378.80. The additional amount of $315,271.20 was awarded in respect of the costs of funds management. An order was also made that the judgment sum was to be paid to the NSW Trustee and Guardian (Trustee) pursuant to s 77 of the Civil Procedure Act 2005 (NSW).
The appellant appealed on the ground that the damages award was inadequate, while the respondent cross-appealed against the finding that she was liable to the appellant. In a judgment delivered on 31 March 2016, (Principal Judgment), [2] this Court allowed the cross-appeal and set aside the orders made by the primary Judge. The effect was that the appellant's claim in negligence failed.
The appellant pleaded an alternative claim based on the "blameless motor accident" provisions of the Motor Accidents (Compensation) Act 1999 (NSW) (MAC Act). [3] For reasons that will appear, neither the Primary Judgment nor the Principal Judgment addressed the alternative claim. This judgment addresses the appellant's blameless motor accident claim.

The Proceedings

The respondent's claims arose out of a motor vehicle accident which occurred on Homestead Road, Orchard Hills at about 1.40am on 14 August 2010. The appellant, who was walking along the unlit road at night, was struck from behind by a car driven by the respondent. Both the appellant and the respondent were affected by alcohol at the time of the accident.
As explained in the Principal Judgment, [4] the primary Judge found that: "although the respondent had a high alcohol blood reading, her intoxication was not causally related to the respondent's failure to stop in time to avoid the accident. His Honour also found that none of the other particulars of negligence had been made out. Nonetheless, his Honour found that the respondent was negligent in that she drove her vehicle off the bitumen road surface onto the gravel verge. Her negligence caused the vehicle to collide with the appellant who (on his Honour's findings) was walking along gravel verge near the bitumen surface of the road. His Honour therefore found that the respondent's actions in driving her vehicle partially on the gravel verge caused the injuries sustained by the appellant."
The primary Judge also found that the appellant had been contributorily negligent in that he had walked along a narrow, unlit road in the same direction as the respondent's vehicle. Accordingly, the primary Judge reduced the damages that otherwise would have been awarded ($2,068,513.00) by 40 per cent (to $1,241,107.80).
This Court allowed the respondent's cross-appeal on the ground that the evidence did not support the primary Judge's finding that the appellant was standing or walking on the gravel verge of the road immediately before the accident (as distinct from walking on the road itself). [5] This finding was crucial to his Honour's conclusion that the respondent's breach of duty caused the collision. Although it was not necessary to decide, the Court said that it would also have set aside his Honour's finding that the respondent breached her duty of care by allowing her vehicle to travel for a relatively short distance with the near wheels of the vehicle on the gravel verge. [6] Since the cross-appeal succeeded, it was not necessary for the Court to consider the grounds in the Notice of Appeal challenging his Honour's findings as to contributory negligence (Grounds 1‑4).
As I have noted, the appellant pleaded that if no finding of negligence was made against the respondent, his injuries had been sustained in a "blameless motor accident" within the meaning of s 7A of the MAC Act. The appellant further alleged that pursuant to s 7B of the MAC Act, his loss and damage from the accident were deemed to have been caused by the fault of the respondent and thus he had a statutory entitlement to damages for his injuries.
Presumably because the primary Judge found that the respondent's negligence caused the appellant's injuries, his Honour did not address the appellant's blameless motor accident case. The Notice of Appeal did not include a ground contending that the primary Judge should have dealt with the appellant's alternative cause of action. Nor did the appellant's written submissions in the appeal advert to the pleaded blameless motor accident claim.
During the hearing of the appeal and cross-appeal, Mr Laughton SC, who appeared with Mr Boyd for the appellant, sought and was granted leave to amend the Notice of Appeal by including Ground 5 as follows: "The trial judge erred in failing to find in the alternative that this was a blameless accident." The Amended Notice of Appeal was filed in Court on 10 March 2016.
The orders made in the Principal Judgment dismissed Grounds 1-4 of the Amended Notice of Appeal. Directions were made for the appellant to file and serve written submissions in support of Ground 5 of the Amended Notice of Appeal and to address any issues as to costs. The respondent was directed to file and serve written submissions in reply, including submissions as to costs.

The Statutory Provisions

Part 1.2 of the MAC Act is headed "No-fault claims - children and blameless accidents", while Div 1 of Part 1.2 (ss 7A - 7I) is headed "Recovery for blameless accidents". Division 1 includes the following provisions: "7A Definition of "blameless motor accident" In this Division: 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. 7B Liability for damages in case of blameless motor accident (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. 7C Presumption that motor accident is blameless In proceedings on a claim for damages in respect of the death of or injury to a person resulting from a motor accident, an averment by the plaintiff that the motor accident was a blameless motor accident is evidence of that fact in the absence of evidence to the contrary. … 7F Contributory negligence This Division does not prevent the reduction of damages by reason of the contributory negligence of the deceased or injured person." The word "fault" is defined in s 3 of the MAC Act to mean "negligence or any other tort".
Section 138 of the MAC Act, which is in Chapter 5 ("Award of damages"), includes the following provisions: "(1) The common law and enacted law as to contributory negligence apply to an award of damages in respect of a motor accident, except as provided by this section. … (3) The damages recoverable in respect of the motor accident are to be reduced by such percentage as the court thinks just and equitable in the circumstances of the case. (4) The court must state its reasons for determining the particular percentage. … (6) This section does not exclude any other ground on which a finding of contributory negligence may be made." In addition, s 138(2) states that a finding of contributory negligence must be made in certain specified circumstances. Such a finding must be made, for example, where the injured person was not wearing a seat belt or a protective helmet when required to do so by law. [7]
The effect of s 138(1) of the MAC Act and s 3B(2)(a) of the Civil Liability Act 2002 (NSW) (CL Act) [8] is to apply ss 5R and 5S of the CL Act to motor accidents. Section 5R(1) provides as follows: "Standard of contributory negligence (1) The principles that are applicable in determining whether a person has been negligent also apply in determining whether the person who suffered harm has been contributorily negligent in failing to take precautions against the risk of that harm. (2) For that purpose: (a) the standard of care required of the person who suffered harm is that of a reasonable person in the position of that person, and (b) the matter is to be determined on the basis of what that person knew or ought to have known at the time." Section 5S provides that in determining the extent of a reduction in damages by reason of contributory negligence, a court may determine a reduction of 100 per cent if the court thinks it just and equitable to do so, with the result that the claim for damages is defeated.

Post-Judgment Events

Since the Court delivered the Principal Judgment on 31 March 2016, a number of events have occurred.
On 14 April 2016, the respondent (cross-appellant) filed a Notice of Motion seeking leave to re-open the cross-appeal and to file an Amended Notice of Cross-Appeal. The proposed amendment seeks an order that the appellant repay the respondent all monies paid pursuant to the Primary Judgment, together with interest at the rate prescribed by s 101 of the Civil Procedure Act 2005 (NSW). The affidavit in support of the Notice of Motion establishes that on 17 April 2015 the respondent paid the judgment sum, less statutory deductions, to the New South Wales Trustee and Guardian (Trustee). It appears that the respondent has made additional payments to the Trustee in respect of post-judgment interest.
The respondent's Notice of Motion was returnable before the Registrar on 2 May 2016. On that day, the parties handed up consent short minutes of order. The effect of the orders is to grant the respondent leave to re-open the cross-appeal and amend the Notice of Cross-Appeal and to stand over the question of restitution pending determination of the appeal. Orders were not made by the Registrar on 2 May 2016, but have now been made in accordance with the short minutes.
On 15 April 2016, the appellant filed written submissions in support of Ground 5 of the Amended Notice of Appeal. The written submissions advanced substantive arguments in support of Ground 5, but proposed that the balance of the appeal should be stood over to await the outcome of what was said to be a five member bench considering a conflict in the authorities concerning the proper construction of the blameless accident provisions of the MAC Act.
This was apparently a reference to Davis v Swift, [9] in which two members of the Court expressed the view that it might be appropriate to reconsider the approach taken in Axiak v Ingram [10] to the reduction of damages in a blameless accident case where the plaintiff has been contributorily negligent. I refer later in more detail to these authorities.
On 10 May 2016, the solicitors for the respondent wrote to the Court stating that the respondent wished to rely upon the defence, as originally pleaded by her, that the accident is "taken out of the blameless accident provisions as a result of the [appellant's] own negligence". The letter asserted that the point had not been pressed in the District Court because the primary Judge "was plainly bound by the Court of Appeal's decision in Axiak v Ingram" as to the construction of s 7A of the MAC Act. The letter requested that the parties' submissions be deferred until this Court ruled on the correctness or otherwise of the decision in Axiak v Ingram.
The issue the respondent wishes to raise is different from the one identified by the appellant in his written submissions. The respondent's contention is that Axiak v Ingram was wrongly decided insofar as it held that a plaintiff could rely on the blameless motor accident provisions of the MAC Act notwithstanding that he or she was contributorily negligent. The appellant's submissions point to a conflict in the authorities as to the approach required when considering the reduction in damages that should be made by reason of the plaintiff's contributory negligence. The respondent's letter, like the appellant's written submissions, apparently assumed that the correctness of Axiak v Ingram on the construction of s 7A of the MAC Act would be resolved by a five member bench.
On 11 May 2016, the Court replied to the solicitor's letter, pointing out that if they were referring to the appeal that had been heard, Whitfield v Melenewycz, [11] the correctness of Axiak v Ingram was not likely to be in issue in that appeal. The Court directed that the respondent's submissions on Ground 5 of the Amended Notice of Appeal should be filed within 14 days. The Respondent did so on 25 May 2016.

Axiak v Ingram

Before considering the parties' written submissions, it is convenient to refer to the two authorities that are said to be in conflict.
In Axiak v Ingram, a child suffered catastrophic injuries when struck by a motor vehicle driven by the defendant. The child failed to establish that the driver had been negligent. The child's alternative claim was that she had been injured in a "blameless motor accident" and that s 7B(1) of the MAC Act deemed her injuries to have been caused by the fault of the driver. The driver contended that the child had been contributorily negligent and thus the accident had been "caused by the fault of [any other] person" for the purposes of the definition of "blameless motor accident" in s 7A of the MAC Act. It followed, so the driver argued, that the accident fell outside the definition of "blameless motor accident" and the child's claim could not succeed.
This Court rejected the driver's argument. It held that the word "negligence" in the definition of "fault" in s 3 of the MAC Act does not include non-tortious negligence, such as the contributory negligence of a plaintiff. [12] Accordingly, even though the child had been contributorily negligent, the accident was "not caused by the fault of any other person" within the meaning of s 7A of the MAC Act. Section 7B(1) deemed the accident to have been caused by the fault of the driver and the child was entitled to damages, subject to a reduction for her contributory negligence as required by s 7F.
The Court also held that in a blameless motor accident claim by a contributorily negligent plaintiff, it was inappropriate to attempt to apportion responsibility between the plaintiff and the blameless defendant. [13] The latter approach is used in cases where both the plaintiff and defendant are at fault and requires the Court to compare the culpability of each party and the relative importance of their acts in causing the damage. [14] As the Court explained: [15] "Part 1.2 of the [MAC] Act proceeds upon the assumption that the defendant driver is not at fault. Accordingly, comparison of culpability and of the relative importance of the acts of the parties in causing [the plaintiff's] injuries is inappropriate. …[T]he deeming provision of s 7B(1) has no part to play in the … exercise. That is because it is simply impossible to determine the degree of fault which is to be attributed to the driver which … may be assumed to be miniscule."
The Court considered that the reduction of damages for the plaintiff's contributory negligence could be assessed consistently with the objectives of the legislation: [16] "by inquiring how far the plaintiff has departed from the standard of care he or she is required to observe in the interests of his or her own safety." Since the plaintiff was 14 years old at the time of the accident, the assessment required a value judgment as to the extent to which her conduct failed to conform to the standard of care expected of a 14 year old girl in her position. [17]

Davis v Swift

In Davis v Swift [18] an adult pedestrian was injured when she was struck by a vehicle driven by the defendant. The trial Judge found that the driver had not been negligent and that the pedestrian had been injured in a blameless motor accident. However, her Honour assessed the pedestrian's contributory negligence at 100 per cent and dismissed the pedestrian's claim for damages. On appeal, Meagher JA (with whom Leeming JA agreed) upheld the finding that the driver had not been shown to be negligent. This made it necessary for his Honour to consider the pedestrian's blameless motor accident claim.
Meagher JA noted that neither party had submitted that Axiak v Ingram had been wrongly decided. On the contrary, both parties accepted the approach taken in that case to the definition of a "blameless motor accident" and to the reduction of damages by reason of the plaintiff's contributory negligence. [19] His Honour therefore applied the reasoning in Axiak v Ingram to conclude that the pedestrian's contributory negligence did not prevent her from claiming damages pursuant to s 7B of the MAC Act. [20]
Meagher JA observed that the circumstances in which a motor accident may be "blameless" are varied. [21] They include, as the second reading speech on the legislation had made clear, cases where a driver has suddenly become incapable of controlling the vehicle by an unforeseen debilitating illness or where the driver loses control because of a catastrophic failure of a mechanical component of the vehicle. [22]
His Honour pointed out that in Axiak v Ingram, the Court considered the reduction of damages by reason of contributory negligence without referring to the terms of ss 7F or 138(3) of the MAC Act. [23] While neither party had submitted that Axiak v Ingram was wrongly decided in relation to the apportionment of responsibility in a blameless motor accident, Meagher JA commented on the possible operation of s 138 of the MAC Act: [24] "…where there has been some event which results in the driver losing control of the vehicle or having to take evasive action that causes an accident or incident." His Honour said this: [25] "[44] Section 138(3) requires that where a finding of contributory negligence is made the damages should be reduced by such percentage as the court thinks just and equitable in the circumstances. In a 'blameless accident', those circumstances include the fact that it is such an accident as well as the conduct of each of claimant and driver or owner which has resulted in that accident. Consideration of those circumstances, having regard to the purpose and object of Pt 1.2 (which is stated in the second reading speech to provide compensation in relation to a motor accident where no one is considered to have been at fault), may require that a different approach be taken to that adopted in Axiak, at least in a case which involves a 'blameless accident' of the kind referred to in the Second Reading Speech. [45] Where the driver is incapacitated from continuing in control of the vehicle, but not in circumstances involving fault, an assessment of what is 'just and equitable' as between the injured plaintiff and driver could have regard to their respective shares in the responsibility for the injuries, making the assumption that the driver had not been incapacitated or otherwise prevented from continuing in control of the vehicle. The conduct which caused the accident would be treated as having involved fault on the part of the driver and responsibility would be apportioned on that basis. The injured person would be put in the position he or she might reasonably have expected to be in as a result of another person's driving that in other circumstances would have involved fault. Such an outcome is consistent with a stated purpose of the 'blameless accident' provisions being to provide for compensation in cases where the application of the 'fault' principle has 'unfortunate and even undesirable consequences': (Second Reading Speech at p 21,403). [46] The adoption of such an approach could require further consideration of whether, in relation to an accident in which there has been no conduct on the part of the driver which in other circumstances would have involved fault, the assessment should be undertaken in the manner laid down in Axiak."
In the absence of any challenge to Axiak v Ingram, Meagher JA determined the reduction of damages for the pedestrian's contributory negligence by reference to the principles stated in Axiak v Ingram. Leeming JA agreed with Meagher JA and expressly noted that it might be desirable for the Court to revisit the approach in Axiak v Ingram. [26]
Adamson J dissented on the ground that no error had been shown in the trial Judge's finding of 100 per cent contributory negligence. Her Honour observed, however, that the effect of the construction of s 7A in Axiak v Ingram was to "obliterate" any relevant statutory distinction between contributory negligence causative of the event (such as a pedestrian walking onto a road without looking) and contributory negligence which only aggravates damage (for example, not wearing a seat belt). [27] Since the parties had not invited the Court to reconsider Axiak v Ingram, her Honour said nothing more about the reasoning in that case.

Appellant's Submissions

The appellant points out, presumably in response to the respondent's letter to the Court of 10 May 2016, that counsel for the respondent informed the primary Judge at the outset of the trial that the respondent did not press her pleaded denial that the appellant had been injured in a blameless motor accident. I infer, although the appellant's written submissions do not expressly say so, that he would resist any attempt by the respondent to resurrect her pleaded defence.
The appellant puts his argument in relation to contributory negligence on two alternative grounds. The first proceeds on the basis that Axiak v Ingram is correct and requires consideration of how far the appellant departed from the standard of care he was required to observe in the interests of his own safety. The second applies the reasoning in Davis v Swift and inquires: "as to the conduct that caused the accident, the contributory fault on the part of the driver and the apportionment on that basis, putting the injured person in the position he or she might reasonably have expected to be in as a result of another person's driving which in other circumstances would have involved fault."
The appellant submits that on the second approach (Davis v Swift) the most significant fact is that the respondent was driving partly off the road at the time her vehicle collided with the appellant. If she had driven wholly on the bitumen surface, the accident would have been avoided. Since 7B of the MAC Act deems the cause of the accident to have been the fault of the respondent, the appellant contends that the respondent should bear a high proportion of responsibility for the accident. A reduction of 20 per cent, so it is argued, makes due allowance for the respondent's level of intoxication (bearing in mind that he was walking on the road because taxis failed to arrive at the party) and for his decision to walk on the left side of a dark road in the same direction as the traffic approaching him from behind.
The appellant accepts that on the first approach (Axiak v Ingram), the reduction in damages could be greater, but contends that the reduction should be no more than 30 per cent. A reduction of this magnitude would take account of the need for the appellant to react in the "agony of the moment" in his attempt to avoid an imminent collision. His reaction involved him suddenly moving to the right, rather than the left, thereby contributing to the collision and to the extent of his injuries.

Respondent's Submissions

The respondent's written submissions rely on the pleaded defence that the accident was not a "blameless motor accident" as defined in s 7A of the MAC Act because of the appellant's contributory negligence. The respondent repeats the assertion in the letter of 10 May 2016 that the point was not pursued at trial because the primary Judge was clearly bound by Axiak v Ingram. The respondent submits that this is an appropriate case for an enlarged bench to be constituted to reconsider the construction of s 7A of the MAC Act and, in particular, whether "the fault of any other person" includes the contributory negligence of a plaintiff.
Whether or not an enlarged bench is constituted, the respondent invites the Court to accept the construction of s 7A of the MAC Act adopted by the trial Judge in Axiak v Ingram, but rejected by this Court. She relies on the observations of Adamson J in Davis v Swift as supporting the case for a reconsideration of the proper construction of s 7A.
In the alternative, the respondent contends that a finding should be made that the appellant was wholly responsible for the accident and that his damages should therefore be reduced by 100 per cent. She contends that the appellant's submissions ignore key findings in the Principal Judgment which demonstrate that a very high degree of responsibility for the accident must be attributed to the appellant. Specifically the respondent emphasises the findings that the appellant was on the roadway at the point of collision and that although the wheels of the respondent's vehicle came in contact with the gravel verge immediately before the accident, they did so "only marginally". The respondent submits that if the approach in Axiak v Ingram is applied, the appellant departed so far from the standard of care he was required to observe in the interests of his own safety that a reduction of 100 per cent in the damages award is justified.

Issues

The written submissions raise the following issues: 1. Should the respondent be permitted to argue that the construction of s 7A of the MAC Act adopted in Axiak v Ingram was wrong? (If the argument succeeds, the appellant's claim under the blameless motor accident provisions of the MAC Act must be dismissed.) 2. If so, should the Court as presently constituted consider the argument or should an enlarged bench be constituted (as the respondent requests)? 3. Assuming the respondent is permitted to challenge the correctness of the construction of s 7A adopted in Axiak v Ingram, should this Court decline to follow the decision? 4. Should the parties be permitted to challenge the correctness of Axiak v Ingram insofar as it states the test for reducing damages in a blameless motor accident by reason of the plaintiff's contributory negligence? 5. If so, should the Court (whether as presently constituted or as an enlarged bench) decline to follow Axiak v Ingram on this issue? 6. In any event, assuming the appellant is entitled to rely on s 7B of the MAC Act, what reduction should be made to the award of damages by reason of his contributory negligence?

Reopening Decisions

The extent to which the highest appellate court in a State regards itself as free to depart from its own decisions is a matter of practice for the court itself to determine. [28] However, the High Court has emphasised that where an appellate court holds itself free to depart from an earlier decision: [29] "it should do so cautiously and only when compelled to the conclusion that the earlier decision is wrong. The occasions upon which the departure from previous authority is warranted are infrequent and exceptional and pose no real threat to the doctrine of precedent and the predictability of the law."
In Gett v Tabet [30] this Court said that the authority to depart from earlier decisions should be exercised only if two preconditions are satisfied. These are: [31] "the strong conviction of the later court that the earlier judgment was erroneous and not merely the choice of an approach which was open, but no longer preferred…and the nature of the error…can be demonstrated with a degree of clarity by the application of correct legal analysis." [Citation omitted.] If the preconditions are satisfied, the Court may need to take a variety of other considerations into account in determining whether earlier decisions should be followed. These considerations include the importance placed on certainty and predictability of the law. However, the Court needs to be satisfied that there are "compelling reasons" to depart from the earlier decision. [32]
The practice of this Court is generally to require a party to obtain leave to challenge the correctness of an earlier decision. [33] The reason is that the Court will not reconsider its own decisions unless a case for review is made out. However, the practice does not necessarily mean that the question of leave is to be dealt with separately from the substantive argument. [34]

The Present Case

The present case is unusual because the respondent's invitation to reconsider the decision in Axiak v Ingram comes at a late stage of the appeal. This, of itself, is not fatal to the Court granting leave to the respondent to argue that Axiak v Ingram incorrectly construed s 7A of the MAC Act. As the respondent's written submissions point out, the appellant belatedly sought and was granted leave to amend his Notice of Appeal during the hearing of the appeal in order to rely on the blameless motor accident provisions of the MAC Act. Nonetheless, in my view, there are four reasons why leave should be refused to the respondent to argue that the Court in Axiak v Ingram wrongly construed s 7A of the MAC Act.
First, as I have noted, the respondent's counsel expressly stated at the outset of the trial that he did not press the pleaded defence that the appellant had not been injured in a "blameless motor accident" within the meaning of s 7A of the MAC Act. It was of course open to the respondent to acknowledge that the primary Judge was bound by Axiak v Ingram, but to reserve the right to challenge the correctness of the decision on appeal. However, this course was not followed and the trial proceeded on the basis that the pleaded defence was not pressed.
Secondly, the reasoning of the majority in Davis v Swift does not cast doubt on the construction of s 7A of the MAC Act adopted in Axiak v Ingram. Meagher JA indicated that there might be grounds for reconsidering the approach taken in Axiak v Ingram to the reduction of damages for a plaintiff's contributory negligence, but his Honour did not criticise the Court's construction of s 7A. Adamson J, in dissent, made a remark that perhaps suggests that she thought that there might be some merit in reconsidering the construction of s 7A, but her Honour did not express a firm view. There is therefore no conflict in the authorities as to the proper construction of s 7A and no judgment of an appellate court that has cast doubt on the reasoning in Axiak v Ingram on that issue.
Thirdly, the respondent's submissions do not identify an error in the reasoning of the Court in Axiak v Ingram of the kind that might justify reopening the decision. The submissions in essence repeat arguments that were considered at length in Axiak v Ingram and rejected by the Court. This is not to suggest that the reasoning in Axiak v Ingram is necessarily beyond challenge. It is merely to apply the well-established proposition that a party inviting the Court to review an earlier decision must provide cogent reasons for the Court doing so.
I would therefore refuse leave to the respondent to reopen the decision in Axiak v Ingram insofar as it deals with the construction of s 7A of the MAC Act. It follows that there is no occasion to convene an enlarged Court to consider this question.
There is a stronger case for this Court to reconsider the reasoning in Axiak v Ingram, insofar as it lays down a test for determining how far damages in a blameless motor accident case should be reduced by reason of the plaintiff's contributory negligence. Two members of the Court in Davis v Swift expressed the view that such a reconsideration might be warranted. Moreover, Meagher JA pointed out that the Court in Axiak v Ingram did not refer to statutory provisions that could have a bearing on whether it might be appropriate, at least in some circumstances, to apportion responsibility between the plaintiff and the defendant in determining the extent to which the plaintiff's damages should be reduced for contributory negligence.
If the approach suggested by Meagher JA was to be applied to the circumstances of the present case, some difficult questions would arise. Given the findings of the Court in the Principal Judgment, it is not clear what counterfactual assumptions (if any) would have to be made about the respondent's driving in order to compare her degree of responsibility with that of the appellant. However, it is not necessary to take the matter any further in the present case because neither party invited the Court to reconsider the test laid down in Axiak v Ingram.
The appellant's submissions ask the Court to defer the final determination of the appeal pending the outcome of an appeal to a five member bench which (according to the appellant) was constituted to consider a challenge to Axiak v Ingram. (In fact no such bench has been constituted.) But the appellant does not invite this Court itself to reconsider Axiak v Ingram. Instead, as I have noted, the appellant advances arguments on two alternative bases, depending upon whether the test in Axiak v Ingram is to be preferred over the approach suggested in Davis v Swift.
The respondent's submissions also do not invite this Court to reconsider the reasoning in Axiak v Ingram on the damages issue. No doubt the respondent's approach reflects a view that the Axiak v Ingram test is likely to be more favourable to her case than the competing approach suggested in Davis v Swift. Whatever the motivation, the respondent has not sought to reagitate the issue.
For these reasons, if there is to be a reconsideration of the reasoning in Axiak v Ingram, I do not think that this case is an appropriate vehicle to undertake that task. The appellant's damages should be assessed on the basis that he was injured in a blameless motor accident and that any reduction by reason of his contributory negligence is to be determined in accordance with the test stated in Axiak v Ingram.

Contributory Negligence

In support of her contention that the appellant's damages award should be reduced by 100 per cent, the respondent identifies a number of matters: "(a) the appellant was on the bitumen surface of the roadway directly in the path of the respondent's vehicle; (b) he was walking with his back to the traffic approaching from behind him, notwithstanding the fact that as is now accepted, the headlights of the approaching vehicle were clearly illuminated and visible to him; (c) he failed to take any action at all to remove himself from the position of danger which must have been apparent to him with the vehicle travelling for a significant distance up to the point of impact in extremely dark conditions; (d) he was dressed in black clothing with only his shoes providing any colour at all to warn of his presence; (e) whilst his vigilance and perception may have been affected by the amount of alcohol that he had consumed, his behaviour is to be judged by the standards of a reasonable person notwithstanding the alcohol which he had consumed; [35] (f) as the appellant himself properly conceded in cross-examination, his location on that area of the road, dressed as he was, amounted to "a death wish" which was the cause of the injuries he sustained; (g) he failed to keep any form of lookout for the approaching vehicle and failed to react in any way to the approach of the vehicle with its headlights illuminated; (h) he travelled on the road when the nature strip was readily available to him (and utilised by his friend, Mr Schneider) in breach of Regulation 238(1) of the Road Rules; (i) he also travelled on the road whilst failing to keep as far to the left of the road as was practicable in breach of Regulation 238(2(a)) of the Road Rules; (j) … he travelled along the road not facing the oncoming traffic in breach of Regulation 238(2(ab)) of the Road Rules; and (k) he should have realised that with no street lighting or any other ambient lighting available to a driver, he would be next to impossible to pick out wearing the clothing that he was." [Citations included.]
The respondent's submissions must be assessed by reference to the relevant legislation. Section 7F of the MAC Act states that Div 1 of Part 1.2 does not prevent the reduction of damages by reason of the contributory negligence of the injured person. Section 138(1) of the MAC Act provides that the common law and enacted law as to contributory negligence apply to an amount of damages in respect of a motor accident. This provision is subject to s 138(3), which directs that the damages recoverable in respect of the motor accident are to be reduced by such percentage as the Court thinks just and equitable. It is not in dispute that s 138 applies to the assessment of damages in a blameless motor accident case, since the injured plaintiff invoking s 7B of the MAC Act claims damages in respect of a "motor accident". [36] As I have explained, s 138(1) of the MAC Act and s 3B(2)(a) of the CL Act apply ss 5R and 5S of the CL Act to motor accidents. Those sections have been reproduced earlier in this judgment. [37]
In Council of the City of Greater Taree v Wells, [38] Basten JA pointed out that neither the purpose nor operation of s 5R is self-evident. This is because determining whether a defendant has been negligent is a different exercise to deciding whether the plaintiff has been contributorily negligent. In assessing whether a defendant has breached his or her duty of care to another person, the Court takes account of the risk and the precautions that a reasonable person in the position of the defendant would have taken, having regard to the statutory criteria. [39] The purpose of determining whether a plaintiff has been contributorily negligent is ordinarily to apportion responsibility for the injury and to the damages recoverable by the plaintiff accordingly. [40]
In a blameless accident case, assuming Axiak v Ingram to be correctly decided, the reduction of damages awarded to a contributorily negligent plaintiff is not based on a comparison between the conduct of the plaintiff and that of the defendant. The question is how far the plaintiff has departed from the standard of care he or she is required to observe in the interests of his or her own safety. This is consistent with the language of s 138(3) of the MAC Act which, unlike s 9(1) of the Law Reform (Miscellaneous Provisions) Act 1965 (NSW), does not assume that any reduction of damages must be based on an apportionment of responsibility between the plaintiff and defendant. It also reflects the common law principle that contributory negligence does not involve breach of a duty of care owed to others. [41]
Section 5R(2) of the CL Act has been construed to require the determination of whether a plaintiff has been contributorily negligent to be decided objectively on the basis of the facts and circumstances of the case. [42] Allowance can be made for the particular circumstances of a child [43] or of a plaintiff whose capacity to appreciate or avoid the risk of harm is limited by physical or mental disability. [44] However, no such allowance is made for a plaintiff whose neglect for his or her safety is the result of self-induced intoxication. In this respect, s 5R accords with the common law as expounded by McHugh J in Joslyn v Berryman. [45]
In the present case, the appellant clearly failed to take basic precautions for his own safety. Most obviously, he chose not to walk on the right-hand side of Homestead Road facing the traffic approaching in the opposite direction. Instead, he walked on the left hand side of the road, in breach of the Road Rules. [46] Furthermore, the appellant walked on the bitumen surface, rather than on the gravel verge or the grassed area between the gravel verge and the neighbouring property. This, too, was in breach of the Road Rules, which on one view required him to walk on the grassed area, but at the least required him to keep as far to the left of the road (including the verge) as practicable. [47] These breaches were compounded by the appellant's failure to notice the approach of the respondent's vehicle from the rear and his inability to take effective evasive action.
It may be that the appellant's degree of intoxication impaired his capacity to take sensible safety measures and limited his ability to avoid impending danger. However, the standard of care that he was required to exercise was that of a reasonable person in his position having regard to what he should have known. The appellant therefore cannot rely on his intoxication to excuse or mitigate the seriousness of his failure to take reasonable precautions for his safety. His conduct involved a serious departure from the standards reasonably to be expected of an adult walking along an unlit semi-rural road on a dark night.
Although the appellant's conduct showed a serious disregard for his own safety, there are several ameliorating factors that should be taken into account in determining the extent to which his damages should be reduced by reason of his contributory negligence.
First, the appellant was not walking in or near the centre of the road (as the respondent alleged), but close to the edge of the bitumen surface. Had the appellant been walking closer to the centre of the relatively narrow road, the risk of harm, viewed prospectively, would have been considerably greater. By walking close to the edge of the bitumen surface, the appellant made it less likely that the driver of a vehicle approaching from the rear, even with headlights on low beam, would be unable to avoid a collision.
Secondly, Mr Jamieson, a consulting forensic engineer, gave evidence that Homestead Road in the area of the accident had a width of about 5.8 to 6.0 metres and was bounded by "semi-formed unpaved footpaths … of variable width". He expressed the view that although it would not be unreasonable for a pedestrian to walk on the footpath area during the day, it would not be suitable at night. Mr Jamieson accepted that it would be safer for a pedestrian to walk on the gravel verge rather than on the bitumen surface, but he pointed out that "the actual edge … was an irregular surface and from a pedestrian point of view … not really suitable to walk on".
The primary Judge did not find that Mr Jamieson's evidence established that it was impracticable for the appellant to walk on the footpath area or the verge and Mr Laughton did not submit that a finding in these terms should be made. The evidence shows, however, that the appellant's decision to walk on the edge of the bitumen surface, rather than the grassed footpath or gravel verge, was by no means completely irrational. (Of course this does not overcome the difficulty that the appellant should have been walking on the other side of the road.)
Thirdly, the appellant was walking in the company of another person, Mr Schneider. Without suggesting that Mr Schneider was in any way responsible for the accident, his presence might reasonably have been expected to provide some protection to the appellant in the event of a dangerous situation arising during their journey.
Fourthly, the appellant faced a difficult situation once the party ended. The taxis ordered for the partygoers did not arrive. Had they arrived, the appellant's intoxication would not have placed him in any danger. As events transpired, he had little choice but to walk along a semi-rural road in order to reach transport. He could hardly have anticipated that wearing dark clothes to the party would contribute to the hazard that later confronted him on Homestead Road.
The ultimate question that must be answered in this case is that posed by s 138(3) of the MAC Act: what reduction in the damages recoverable by the appellant by reason of his contributory negligence is just and equitable in the circumstances of the case? The ameliorating factors to which I have referred do not alter the fact that the appellant displayed a serious failure to take reasonable care for his own safety. But they provide a sound basis for rejecting the respondent's submission that the appellant's damages should be reduced by 100 per cent. In my view, having regard to the particular circumstances of the case, it is just and equitable to reduce the appellant's blameless motor accident damages by 50 per cent.

Orders

In view of the appellant's success on Ground 5 of the Amended Notice of Appeal, he is entitled to damages against the respondent pursuant to s 7B of the MAC Act. Taking into account the appellant's contributory negligence, he is entitled to 50 per cent of the total damages assessed by the primary Judge - that is, 50 per cent of $2,068,513.00, or $1,034,256.50. It is also necessary to allow damages for the cost of funds management.
The appellant's written submissions propose that the question of damages for funds management be determined separately pursuant to Uniform Civil Procedure Rules r 28.2. This course is necessary only if the parties are unable to agree on the quantum of damages under this head.
Orders will also need to be made providing for the restitution of moneys paid by the respondent in satisfaction of the orders made by the primary Judge, to the extent to which the payments exceed the appellant's entitlement to damages in accordance with this judgment.
Both parties have had some success and some failure in this Court. The respondent has succeeded on her cross-appeal but the appellant has succeeded on Ground 5 of the Amended Notice of Appeal. As at present advised, I am inclined to make no order as to the costs of the appeal or cross-appeal, with the intent that each party bear his or her own costs.
The appellant succeeded in his negligence claim before the primary Judge, but that claim has been effectively dismissed on appeal. The appellant has succeeded in his claim for damages, but on a basis that was not addressed at the trial. My present view is that there should be no order as to the costs of the trial, again with the intent that each party bear his or her own costs.
I propose the following orders:
Allow the appeal on Ground 5 of the Amended Notice of Appeal.
Direct the parties to bring an agreed short minutes of order within fourteen days giving effect to this judgment.
In the absence of agreement, direct the appellant to file and serve his proposed short minutes of order within fourteen days on any outstanding issues, including any issues as to costs, supported by written submissions not exceeding five pages in length.
Direct the respondent to file and serve within a further fourteen days her proposed short minutes of order on any outstanding issues, including any issues as to costs, supported by written submissions not exceeding five pages in length.
EMMETT AJA: I agree with Sackville AJA.

Endnotes

Serrao (by his tutor Serrao) v Cornelius (unrep, 6 February 2015, District Court).
Serrao (by his tutor Serrao) v Cornelius [2016] NSWCA 60 (Principal Judgment).
Part 1.2 Div 1. The relevant provisions are reproduced at [14] below.
Principal Judgment at [19].
Principal Judgment at [91].
Principal Judgment at [73].
MAC Act s 138(2)(c),(d). The seat belt provision does not apply to a minor.
Section 3B(2)(a) of the CL Act applies Part 1A Div 8 (including ss 5R and 5S) to motor accidents.
[2014] NSWCA 458; 69 MVR 375 (Meagher JA, Leeming JA agreeing; Adamson J dissenting).
[2012] NSWCA 311; 82 NSWLR 36 (Tobias AJA, Beazley JA and Sackville AJA agreeing).
An appeal from the judgment of Hamill J in Melenewycz v Whitfield [2015] NSWSC 1482 was heard by a three member bench on 6 May 2016. Judgment is reserved.
Axiak v Ingram at [59]-[63], [71].
Axiak v Ingram at [83].
Podrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; 59 ALJR 492 at 494 per curiam.
Axiak v Ingram at [83]-[84].
Axiak v Ingram at [85].
Axiak v Ingram at [88].
[2014] NSWCA 458; 69 MVR 375 (Meagher JA, Leeming JA agreeing; Adamson J dissenting).
Davis v Swift at [3].
Davis v Swift at [32], [36].
Davis v Swift at [33].
NSW Legislative Assembly, Parliamentary Debates,(Hansard) 9 March 2006 at 21,403.
Davis v Swift at [37]. These provisions are reproduced at [14]-[15] above.
Davis v Swift at [42].
Davis v Swift at [44]-[46].
Davis v Swift at [84].
Davis v Swift at [88].
Nguyen v Nguyen [1990] HCA 9; 169 CLR 245 at 268 (Dawson, Toohey and McHugh JJ, Brennan and Deane JJ agreeing on this point).
Nguyen v Nguyen at 269.
[2009] NSWCA 76; 254 ALR 504, affirmed Tabet v Gett [2010] HCA 12; 240 CLR 537.
Gett v Tabet at [294]-[295]. See also Nightingale v Blacktown City Council [2015] NSWCA 423 at [62] (Macfarlan JA, Meagher JA agreeing).
Gett v Tabet at [301] citing RJE v Secretary of the Department of Justice [2008] VSCA 265 at [104] (Nettle JA); Nightingale v Blacktown City Council [2015] NSWCA 423 at [23] (Basten JA).
Proctor v Jetway Aviation Pty Ltd [1984] 1 NSWLR 166 at 171 (Moffitt P); Rankin v Baldi (1985) 1 NSWLR 274 at 276 (Glass JA) at 279 (Priestley JA, Samuels JA agreeing); Bromley v Housing Commission of New South Wales (1985) 3 NSWLR 407 at 422 (Glass JA); at 424 (Samuels JA); Nightingale v Blacktown City Council at [2] (Beazley P); at [53] (Basten JA).
Bromley v Housing Commission of New South Wales at 424 (Samuels JA).
Section 5R(2) of the CL Act; Joslyn v Berryman [2003] HCA 34; 214 CLR 552 at [38] (McHugh J); AAMI Ltd v Hain [2008] NSWCA 46; 50 MVR 58.
Section 3 of the MAC Act defines "motor accident" to mean: "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 … during: (a) the driving of the vehicle, or (b) a collision, or action taken to avoid a collision, with the vehicle..."
See above at [15].
[2010] NSWCA 147 at [106]-[107].
CL Act s 5B.
Where both the plaintiff and defendant are at fault, the plaintiff's damages are to be reduced "to such extent as the Court thinks just and equitable having regard to the [plaintiff's] share in the responsibility for the damage" Law Reform (Miscellaneous Provisions) Act 1965 (NSW) s 9(1).
Commissioner of Railways v Ruprecht [1979] HCA 37; 142 CLR 563 at 570 (Mason J).
Council of the City of Greater Taree v Wells at [83] (Beazley P, McColl and Basten JJA agreeing).
Doubleday v Kelly [2005] NSWCA 151 at [26] (Bryson JA, Young CJ in Eq, Hunt AJA agreeing); Waverley Council v Ferreira [2005] NSWCA 418 at [86] (Ipp JA, Spigelman CJ and Tobias JA agreeing).
Smith v Zhang [2012] NSWCA 142; 60 MVR 525 at [22], [32] (Meagher JA, Tobias AJA agreeing); Town of Port Hedland v Hodder (No.2) [2012] WASCA 212 at [259] (Martin CJ) (addressing Civil Liability Act 2002 (WA), s 5K).
[2003] HCA 34; 214 CLR 552 at [37]-[40].
Road Rules 2008 (NSW) r 238(2)(ab) required a pedestrian travelling along a road, when moving forward, to face approaching traffic moving in the opposite direction, unless it was impracticable to do so. Road Rules 2014 (NSW) r 238(2)(ab) is in identical terms.
Road Rules 2008 (NSW) r 238(1) prohibited a pedestrian from travelling along a road if there was a "footpath or nature strip" adjacent to the road, unless it was impracticable to do so. Rule 238(2)(a) required a pedestrian travelling along a road to "keep as far to the left or right side of the road as is practicable". Rule 238(3) defined "road" to include "any shoulder of the road". Rule 12 defined "shoulder" to include any part of the road not designed to be used by motor vehicles travelling along the road including, for a sealed road, any unsealed part of the road. These rules have counterparts in Road Rules 2014 (NSW). 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: 29 August 2016

Motor Accidents Act 1999(NSW)

Motor Accidents (Compensation) Act 1999(NSW)

Road Rules 2008(NSW)r 238(2)(ab), r 238(1)

Road Rules 2014(NSW)r 238(2)(ab)

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