Transport Accident Commission v Sweedman [2004] VSCA 162

2. In this matter, I have had the considerable benefit of reading, in draft form, the reasons which Nettle, J.A. proposes to publish. For the reasons which his Honour gives, I agree that the questions stated in the special case should be answered in the manner proposed by his Honour.

7. On 18th July 2003 the County Court reserved three questions in the form of a special case for the opinion of the Court of Appeal. The questions, as set out in the order, read:

"A. Whether, given the agreed facts set out in paragraphs 1-9 of the special case, s.104(1) of the Transport Accident Act 1986 (Vic.) is capable as a matter of construction of applying to the defendant so as to give the plaintiff a right of indemnity against the defendant. B. Whether, given the agreed facts set out in paragraphs 1-9 of the special case, this proceeding is a matter within federal jurisdiction and, if so, whether s.104(1) of the Act is capable of applying as against the defendant in light of ss.79 and 80 of the Judiciary Act 1903 (Cth). C. Whether, given the agreed facts set out in paragraphs 1-9 of the special case, in its potential application to the defendant in this proceeding s.104(1) of the Act is invalid or inapplicable as being: (a) contrary to Chapter III and s.118 of the Commonwealth of Australia Constitution Act (`the Constitution'); or (b) contrary to s.117 of the Constitution; or (c) inconsistent with the operation of the provisions of the Motor Accidents Act 1988 (N.S.W.), as it applied at the time of the accident."

Paragraphs 1 to 9 of the special case, which were headed "Agreed Facts", and paragraph 10, which was headed "Assumed Fact", are set out in the reasons of Nettle, J.A. at [26] below. Paragraphs 11 to 15 set out statutory provisions and the parties' contentions.

B: If this proceeding is a matter within federal jurisdiction (which part of the question it is unnecessary to answer), Yes.

21. It is one of the functions of good appellate advocacy to refine the issues. This case was very well argued on both sides. At the end of the hearing, there were only two issues left for the Court to consider, although other points were kept alive should the case proceed to the High Court.

24. The first issue related to s.104 of the Transport Accident Act 1986 as in force at the relevant time. (An earlier version of sub-s.(1) of that section is set out in paragraph 12 of the special case. The Court should make an order correcting that paragraph. Although we have no rules relating to questions reserved pursuant to s.76 of the County Court Act 1958, the amendment would not alter the facts stated or the questions reserved.) The issue was whether, where the Transport Accident Commission has made payments of compensation in respect of an injury arising out of a transport accident that occurred in New South Wales, s.104 entitles the Commission to be indemnified by the New South Wales tortfeasor to the extent prescribed in sub-ss.(1) and (2) of that section. It will be convenient to put relatives to one side and to refer to a person to whom payments of compensation have been, or may be, made as "the victim".

27. The second issue was whether, if s.104 would entitle the Commission to be indemnified in those circumstances, the tortfeasor was protected by s.117 of the Constitution.

30. Mr Hutley conceded that the constitutional points he wished to argue, except that relating to s.117 of the Constitution, fell away if the Court was unwilling or unable to accede to two propositions. The first was that a claim for indemnity under s.104 is "a claim for damages" within the meaning of s.40 of the Motor Accidents Act 1988 (N.S.W.). It is plainly not a claim for damages and counsel very properly drew our attention to the decision of the New South Wales Court of Appeal in Westpac Banking Corporation v. Tomassian[1]. The second proposition was that "the better comparator under s.64"of the Judiciary Act 1903 was a claim for damages rather than a suit for indemnity. In my opinion, that proposition is plainly wrong too.

33. In the light of Mr Hutley's concession, we did not call on Mr Karkar in relation to question B or question C except for the s.117 point. Mr Hutley formally submitted that a claim for indemnity under s.104 is a claim for damages despite the state of the authorities and, whilst acknowledging that we could not say so, that the views expressed by Deane, J. in Breavington v. Godleman[2] should now be accepted.[3]

37. The Commission has made payments of compensation under the Act to Mr and Mrs Sutton. It is not suggested, nor do I think it could be, that those payments were not properly made. They depleted the fund available for the compensation of victims. It is only to be expected, and s.104 provides, that, where the fund is depleted, the Commission should have recourse against the tortfeasor unless, of course, the tortfeasor is entitled to be indemnified by the Commission pursuant to s.94. Mr Hutley conceded that s.104 is a law in and for Victoria within the meaning of s.16 of the Constitution Act 1975. He submitted that it should be read down in the interests of comity, but that submission depended on its being accepted that a claim for indemnity under s.104 is, or should be assimilated to, a claim for damages in tort. The section should therefore be given its natural meaning, and apply in relation to a transport accident that occurred in New South Wales, unless the Commission has adequate means of recouping the fund in some other way or the result is to expose the tortfeasor to the prospect of double recovery.

40. As to the first point, counsel submitted that adequate means of recoupment in the case of a transport accident occurring outside Victoria were to be found in a combination of ss.42 and 107. If the victim recovered damages from the tortfeasor, compensation that had already been paid could be clawed back. If the victim had not recovered damages from the tortfeasor, the Commission could do so on his or her behalf pursuant to s.107 and then claw back any compensation paid.[4] It was therefore unnecessary for s.104 to apply to transport accidents outside Victoria. I do not consider that ss.42 and 107 afford an alternative to s.104. Their focus is different. Section 104 is directed to recouping the fund from the tortfeasor where compensation has been paid. Section 42 is directed to preventing double compensation. Section 107 is just an ancillary provision, use of which in relation to interstate proceedings could have draconian consequences for the victim, whose entitlement to compensation would cease while the action against the tortfeasor was pending.[5]

43. As to the second point, if s.104 is given its natural meaning, I do not consider that there is any prospect of double recovery against an interstate tortfeasor. One possibility is that the victim first recovers damages from the tortfeasor. In that case, by reason of s.42(2), the victim is not entitled to compensation under the Act and the condition precedent in s.104, that the Commission has made payments under the Act, will not be satisfied. A second possibility is that the Commission pays compensation under the Act and the victim then recovers damages from the tortfeasor. If the Commission claws back the whole of the compensation pursuant to s.42(3), there will be nothing in respect of which it is entitled to be indemnified pursuant to s.104. I shall return to the case where the Commission does not claw back the whole of the compensation.

46. A third possibility is that the Commission pays compensation under the Act and enforces its entitlement to be indemnified pursuant to s.104 and, after both those steps, the victim recovers damages from the tortfeasor. It was submitted that the damages payable by the tortfeasor to the victim would not be reduced to take account of the compensation, so that the tortfeasor would pay that amount twice, once to the Commission and once to the victim. That submission assumes that the Commission could claw back the compensation from the victim, so that it would be unjust to reduce the damages, but the assumption is not correct. A person who has enforced an indemnity in respect of a payment and later recovers the amount that was paid from the payee holds the proceeds of the recovery for the account of the indemnitor. If that rule applies, the Commission could not exercise its rights under s.42(3) for its own benefit after it had enforced its right to indemnity pursuant to s.104.

49. It might be argued that that rule does not apply, because of the status of the Commission or its responsibilities under the Act.[6] (It was common ground before us that the Commission "was the Crown for all relevant purposes", but that need not be decided. It is enough to recognize the possibility that the general rule may not apply to the Commission.) But the argument confronts a dilemma. Either the general rule does apply, in which case the proceeds of any theoretical claw-back would be held for the account of the tortfeasor, or s.42(3) falls to be construed mindful of the possibility of injustice. So construed, s.42(3) would not authorize the Commission to recover an amount from the victim that it had already recovered from the tortfeasor pursuant to s.104.

52. Indeed there is much to be said for the view that, in any event, s.42(3) should not be construed as enabling the Commission to recover from the victim an amount that it has already recovered from the tortfeasor.

55. There being no practical, and probably no legal, risk of claw-back, the amount of compensation paid would be deducted from the damages payable by the tortfeasor to the victim.[7] I did not understand Mr Hutley to contend that the compensation would not be deducted if it could not be clawed back.

58. That leaves the case where the Commission pays compensation under the Act and the victim then recovers damages from the tortfeasor but, for whatever reason, the Commission does not claw back the whole of the compensation. In that case, unlike the third possibility considered above, the damages would not have been reduced to take account of the compensation because, at the time they were assessed, the victim was at risk that the compensation would be clawed back pursuant to s.42(3). If the Commission is then able to enforce its entitlement to be indemnified pursuant to s.104, the tortfeasor may well have to pay the amount of the compensation or part thereof twice, once to the victim and once to the Commission. The answer, in my opinion, is that s.104 does not enable the same amount to be recovered twice, once as damages and once by way of indemnity. Section 104(2) is not just a monetary limit. It means that the tortfeasor cannot be made liable under s.104 for an amount greater than the damages which, but for the Act, he or she would be liable to pay to the victim.[8]

61. There is accordingly no reason to deny s.104 its natural meaning and intended operation. It is unnecessary to decide the other questions that were debated before us in connexion with this branch of the case, including the scope of s.93. They are significant only if one accepts that ss.42 and 107 do the work in relation to interstate transport accidents that is done, in relation to accidents of which Victorian law is the lex causae, by s.104 read together with other provisions of the Act.[9] It is worth emphasizing, nevertheless, that, since 1994, s.104 has spoken of a liability that would have been created "regardless of section 93", thereby severing any link with that section that may have been implied by the words "but for section 93" in s.104 as originally enacted.[10] Question A should be answered Yes.

65. The defendant's argument in relation to s.117 was put in two ways. The first, in the outline of submissions, was that, if the defendant had been a resident of Victoria, the vehicle would have been garaged at her place of residence and that, in turn, would have led to its being registered in this State and to the applicable transport accident charge being paid in respect of the relevant period.[11] On the second day of the hearing Mr Hutley conceded that that submission might face difficulty because, in relation to a special case stated pursuant to s.76 of the County Court Act, this Court has no rule equivalent to Order 35 Rule 1(4) of the High Court Rules. In the alternative, therefore, he submitted that it was sufficient to transpose the fact that the defendant was insured under the New South Wales scheme.[12]

68. There was another change too. On the first day of the hearing Mr Hutley said only that the prospect of double recovery against an interstate tortfeasor strengthened the s.117 argument. That reflected paragraph 70 of his outline of submissions. On the second day, in the light of a question from the Bench as to whether it was s.94 or s.104 that gave rise to the alleged disability or discrimination, he replied that it was s.104 that exposed the interstate tortfeasor to the risk of having to pay the same amount twice, once to the Commission and once to the victim, a risk not shared by a Victorian resident. I have already explained why, in my opinion, there is no prospect of double recovery.[13]

73. I said in [9] that it was only to be expected that the Commission would have recourse against a tortfeasor unless, of course, the tortfeasor were entitled to be indemnified by the Commission pursuant to s.94. The words in parentheses "other than a person who is entitled to be indemnified under section 94" in s.104 are no more than a corollary of the entitlement to indemnity given by s.94. Section 104 would operate in the same way if those words were omitted. The Commission could not recover under s.104 from a person whom it was obliged to indemnify. If s.117 is engaged at all, that must be because of the provisions of s.94, not because of the exception in parentheses in s.104.

76. At the relevant time s.94(1) and (2) provided:

(a) the owner or driver of a registered motor vehicle in respect of any liability in respect of an injury or death of a person caused by or arising out of the use of the motor vehicle in Victoria or in another State or in a Territory; ...

other than liability to pay compensation under the Accident Compensation Act 1985 or an Act or law referred to in section 37.

(a) in respect of any period in respect of which the transport accident charge applicable to the motor vehicle for that period has not been paid; or

(aa) in respect of the period commencing when the transport accident charge applicable to the motor vehicle was due to be paid and ending when that transport accident charge was paid; ...

The primary meanings of "registered motor vehicle" in s.3 were a motor vehicle registered in accordance with the Road Safety Act 1986 and a motor vehicle that was not so registered but was usually kept in Victoria and was not exempt from registration. Section 109 obliged the owner of a registered motor vehicle to pay the transport accident charge applicable to that vehicle to the Commission in respect of each prescribed period.

"The motor vehicle which Mrs Sweedman was driving at the time of the accident was a 1987 Ford Fairlane sedan, registered in New South Wales (registration number QIG-393). This vehicle was, at all material times, owned by and registered to Mrs Sweedman's son, Mr Everett Sweedman. Prior to the accident it had normally been garaged at Mrs Sweedman's residence at 6 Railway Parade, Gravesend. At no time prior to the accident had the vehicle been garaged in the State of Victoria."

95. Once the prospect of double recovery against an interstate tortfeasor is excluded, the key to the puzzle is to focus on s.94 and the facts stated in the special case. I am content to say that, on no plausible view of s.117 of the Constitution, could its protection extend to a subject of the Queen resident in New South Wales who was driving a car owned by her son, registered in New South Wales in her son's name and normally garaged at her place of residence in that State simply because she was not entitled to be indemnified under s.94 in respect of a transport accident involving that car in New South Wales. Question C(b) should be answered No.

100. This is a special case stated pursuant to s. 76 of the County Court Act 1958. The purpose of the exercise is to obtain a determination from the Court as to whether s. 104(1) of the Transport Accident Act 1986 applies outside Victoria in respect of a transport accident which occurred outside Victoria to a person who was not resident in Victoria and who was not driving or travelling in a motor car registered in Victoria.

104. For the purposes of the case the relevant provisions of the Transport Accident

Act[14], as they were at the relevant time, are set out in the Schedule to these reasons for judgment.

109. The facts stated in the Special Case are as follows:

"(1) On 20 July 1996 a motor vehicle driven by Mrs Helen Sweedman was involved in a collision on public roads with a motor vehicle driven by Mr John Sutton and in which Mrs Helen Sutton was a passenger ('the Accident'). (2) The Accident occurred in the town of Pallamallawa, in the Municipality of Moree, in the State of New South Wales. (3) Both John Sutton and Helen Sutton suffered injury as a result of the accident. (4) In respect of those injuries, the Transport Accident Commission ('the Commission') has made payments under the Transport Accident Act 1986 ('the Act') to, or on behalf of, both John Sutton and Helen Sutton. (5) At the time of the accident: (a) John Sutton was driving a motor vehicle registered in Victoria, registration number BDS-393; (b) Both John Sutton and Helen Sutton resided in Victoria. (6) The motor vehicle which Mrs Sweedman was driving at the time of the accident was a 1987 Ford Fairlane sedan, registered in New South Wales (registration number QIG-393). This vehicle was, at all material times, owned by and registered to Mrs Sweedman's son, Mr Everett Sweedman. Prior to the accident it had normally been garaged at Mrs Sweedman's residence at 6 Railway Parade, Gravesend. At no time prior to the accident had the vehicle been garaged in the State of Victoria. (7) Mrs Sweedman was born in the State of Victoria on 1 May 1933. She had moved from Victoria to reside in Queensland in or about March 1946, and moved from there to reside at her current address in New South Wales in or about 1961. Mrs Sweedman has resided at her current address of 6 Railway Parade, Gravesend, New South Wales, for approximately 42 years. Mrs Sweedman is thus a resident of New South Wales, as she was at the time of the Accident. (8) Mrs Sweedman is a citizen of Australia, and a subject of the Queen, by virtue of her birth in Australia. (9) The Commission is a body corporate established by the Act. (10) To the extent necessary to determine the questions reserved in the form of a special case (and for no other purpose), it can be assumed that the Accident occurred because of the negligence of Mrs Sweedman, in particular in failing to give way when obliged to do so."

113. The questions posed by the Special Case for determination by the Court are:

"A. Whether, given the facts stated, s. 104(1) of the Transport Accident Act 1986 is capable as a matter of construction of applying to Mrs Sweedman so as to give the Commission a right of indemnity against Mrs Sweedman. B. Whether, given the facts stated, this proceeding is a matter within federal jurisdiction and, if so, whether s. 104(1) of the Act is capable of applying as against Mr Sweedman in light of ss. 79 and 80 of the Judiciary Act 1903. C. Whether, given the facts stated, in its potential application to Mrs Sweedman in this proceeding s. 104(1) of the Act is invalid or inapplicable as being: (a) contrary to Chapter III and s. 118 of the Commonwealth of Australia Constitution Act; or (b) contrary to s. 117 of the Constitution; or (c) inconsistent with the operation of the provisions of the Motor Accidents Act 1988 (NSW), as it applied at the time of the Accident."

118. Section 104(1) of the Transport Accident Act 1986, like the comparable provisions of the Accident Compensation Act 1985 and of the workers' compensation legislation of other Australian jurisdictions, confers a statutory right of indemnity which is enforceable as a quasi-contractual cause of action in the nature of a quantum-meruit.[15]

121. As was pointed out by Winneke, P. in Esso Australia v. Victorian WorkCover that is so notwithstanding that it is a condition of the statutory right sought to be enforced that the obligor is liable to pay damages to the object of the compensation paid. A claim to enforce the entitlement to indemnity is not a claim in tort. It is a cause of action created by statute for indemnity against a person liable to pay damages to another.[16]

124. According to the plain and ordinary meaning of the terms of the section the right to indemnity applies whenever the Commission makes compensation payments in respect of an injury or death arising out of a transport accident and therefore to transport accidents both within and out of Victoria. That is the way in which the plaintiff says that it ought to be construed. The defendant, however, invokes the presumption against the extra-territorial operation of statutes cast in general terms[17] and argues on that basis that s. 104 of the Act should be construed as limited to transport accidents in Victoria (or as the defendant preferred to put the submission, as confined to causes of action of which the lex causae is the law of Victoria).

127. The first part of the defendant's argument is that "transport accident" as defined in s. 3 should be construed as limited to accidents in Victoria. It rests upon a comparison of the definition of "transport accident" (in which there is no express geographic delineation) with the definition of "accident" in s. 134[18] (which expressly refers to accidents anywhere in Australia). But as Brooking, J. demonstrated in Wilson v. Nattrass[19], s. 42 makes it difficult to contend and ss. 35(1), 36 and 39(1) make it impossible to contend that "transport accident" does not include accidents occurring in another State or in a Territory.

130. The second part of the defendant's argument is that, regardless of the meaning of "transport accident", s. 93 is confined to transport accidents occurring in Victoria, and that s. 104 should be construed as an adjunct to s. 93, with the result that s. 104 applies only to liability arising out of transport accidents in Victoria. That is more persuasive, because it results in the appearance of a degree of symmetry in the operation of the Act, but it does not persuade me that s. 104 is limited to circumstances which engage the operation of s. 93. The plain and ordinary meaning of the words of s. 104 and its legislative history[20] strongly imply that the section was intended to provide a right of indemnity in respect of all forms of liability of the Commission to pay compensation under the Act. That includes the cases of liability to pay compensation which are expressly provided for in ss. 35, 36 and 39.

133. I accept that s. 93 is confined to transport accidents in Victoria - indeed that was conceded by the plaintiff - although I notice that Brooking, J. reached a different conclusion in Wilson v. Natrass. The question there was whether s. 93 applied to a claim for damages brought in Victoria in respect of an accident in South Australia. At first instance O'Bryan, J. held that it did not. Consistently with the presumption against the extraterritorial operation of legislation his Honour concluded that the section was confined to actions for damages in respect of death or serious injury resulting from a transport accident occurring in Victoria. Brooking, J. took a different view on appeal. He considered that the words "transport accident" in s. 93 were to be read down no further than accidents occurring in one of the Australian States or Territories. But Brooking, J. was alone in that view. Although Ashley and Hedigan, JJ. agreed that the section applied to the facts of the case, they did not cast doubt upon O'Bryan, J.'s conclusion that s. 93 is directed only to accidents occurring in Victoria. The basis of Ashley, J.'s reasoning, with which Hedigan, J. agreed, was that s. 93 was picked up and applied to the proceeding by the first leg of the double actionability[21] choice of law rule which then applied to Australian torts with an interstate element.[22] None of that reasoning or the conclusion was opposed to the idea that s. 93 was directed only to Victorian accidents.

136. Brooking J. considered that the effect of s. 93 was to oust the operation of the common law choice of law rules and replace them with the municipal law of Victoria.[23] But with all respect I am unable to agree. As Hedigan, J. said:

"The Act was passed long before the pronouncements in Breavington, McKain and Stevens and it ought to be supposed that when it was enacted it was against the backdrop of the then prevailing private international law concepts. Those principles have undergone elucidation and re-statement by the High Court in the cases referred to. Moreover, the introduction into s 93 by Act No 84 of 1994 of subs (20) which declares that the provisions of s 93 deal with matters of substantive law, not procedural law, could only have been enacted with an eye to the applicability of the principles of private international law... and the subsection clearly adverts to the substantive law-procedural law dichotomy, considered in the recent cases. This seems to me to be inconsistent with any supposed exclusion by the Act of the intrusion of such principles. On the contrary, it seeks to regulate them... ...The Act is an Act with at least as one of its objects the protection of the revenue. There may be cases and circumstances in which proceedings might be commenced in this state by a Victorian resident which could not be thought to impact upon state revenue in any way and which could hardly be thought to have been intended to be place under the rigours of the Act. One need only change a few of the fact of the present case...assume that both vehicles were registered and insured in South Australia. A proceeding in Victoria in respect of it could pose no threat to the state revenue, as the South Australian insurer would be liable. Disposition of such a proceeding in accordance with ordinary principles of private international law would seem to be both sensible and in accordance with what might have been intended."[24]

140. Moreover, sub-s. (20) was inserted after O'Bryan, J.'s decision (and before the decision of the Appeal Division) in response to the High Court's decision in Stevens v. Head[25] that it was only the substantive law of the lex loci deliciti commissi which was picked up and applied under the second leg of the double actionability choice of law rule, and that the assessment of damages being a matter of procedure remained governed by the lex fori. Evidently the intent of sub-s. (20) was to ensure that courts of other States would pick up and apply s. 93 as part of the lex causae of claims arising out of accidents in Victoria. The fact that the sub-section was inserted into the Act at that time and in those circumstances makes it even more improbable that the section was intended to exclude common law choice of law rules.[26]

143. It is, however, one thing to be satisfied that s. 93 is confined to transport accidents occurring in Victoria and another to conclude that s. 104 is no more than an adjunct to s. 93 or, as the defendant put it, only capable of application in circumstances which engage the operation of s. 93. While the considerations identified by O'Bryan and Ashley and Hedigan, JJ. in Natrass provide strong reason to suppose that s. 93 was intended to be confined to Victorian transport accidents, the same reasons do not apply to s. 104.

146. The defendant argued that if s. 104 were not confined to Victorian accidents the section would be capable of producing the bizarre consequence that the Commission might choose to impose a greater or lesser degree of liability on a wrongdoer according to whether the Commission proceeded under s. 104 for indemnity or under s. 107 for recovery of the damages otherwise payable to the victim. But the answer to that is twofold. First, it is not surprising that the Commission should have the option of proceeding for indemnity or damages according to the circumstances of a given case. The regime established by the Act created statutory rights of compensation and it plainly made good sense to afford the Commission a statutory right of indemnity in respect of compensation paid, as well as preserving to the Commission rights of subrogation under s. 107 of the Act. Secondly, and to the extent that different results might flow under s. 104 and s. 107, it may be observed that the same could come about in a case involving a transport accident in Victoria. Granted that the damages recoverable under s. 107 in respect of a Victorian accident might be more or less, although probably less, than those recoverable in respect of an out-of-State accident, the probability is that there would be less discrepancy between amounts recoverable under s. 104 and s. 107 in respect of an out-of-State accident than between the amounts recoverable under those sections in respect of a Victorian accident.

149. The defendant then contended that unless s. 104 were confined to Victorian accidents, or at least to causes of action of which the lex causae is Victorian law, the section would have the potential to expose wrongdoers to double liability or double jeopardy in respect of out-of-State torts. That potential was said to inhere in the possibility that the victim of an out-of-State transport accident might recover compensation from the Commission under the Act and that the Commission might then recover indemnity from the wrongdoer under s. 104 of the Act and that the victim might then take common law proceedings for damages against the wrongdoer. It was submitted that because s. 93 does not apply to out-of-State torts, there would be no reduction in the amount of the damages recoverable to take account of the indemnity which the wrongdoer had already paid to the Commission, and hence that the wrongdoer would in effect be forced to pay twice: once by way of indemnity to the Commission and once by way of damages to the victim. I do not accept the argument. In my opinion the wrongdoer would be entitled to set off the amount that he or she had paid to the Commission against the amount of damages payable to the victim.

152. Counsel referred to a number of cases concerning insurance policies and social service pensions in which it has been held that the amount paid by an insurer or by government or other provider to a plaintiff cannot be taken into account in calculating damages for personal injury recoverable from a wrongdoer.[27] It was submitted that those authorities support the existence of a general principle that insurance policy proceeds and social security benefits cannot be deducted from the amount of damages otherwise payable in a claim for personal injuries. But plainly that is not so. As Windeyer, J. said in Espagne:

"...it is not ... possible to enunciate an exhaustive rule for all parts of this vexed topic. And the questions that arise can never be determined in the abstract. Each must depend on the terms of the particular contract, pension scheme, charitable benefaction or statute governing the benefit conferred."[28]

156. Broadly speaking it may be accepted that benefits like insurance which are paid pursuant to contract are not deductible from the amount of damages recoverable where the intention of the contract is that the beneficiary should have the benefits notwithstanding rights of action which he or she may have against the wrongdoer. It makes no difference that the insurer is entitled to be subrogated to the insured's rights of action against the wrongdoer because, as Windeyer, J. explained, if the wrongdoer were entitled to set off what the plaintiff was entitled to recoup or had recouped under his policy the wrongdoer would in effect be depriving the plaintiff of all benefit to himself.[29] In other words it is regarded as unjust that money spent by an injured man on premiums should inure to the benefit of the tortfeasor.[30] Equally it may be accepted as a general proposition that benefits given by way of bounty are not to be deducted if given on the basis that the beneficiary should enjoy them in addition to and not in diminution of any claim for damages. That is so because gifts of that kind are given for the benefit of the sufferer and not of the wrongdoer.[31] But contrastingly if a donor makes a gift to the victim of an accident out of sympathy for the man unfortunately responsible for the accident, making it plain that the gift is made in the interests of the tortfeasor so as to diminish the damages that the tortfeasor has to pay, effect will be given to the donor's intention and the damages recoverable will be reduced accordingly.[32]

159. The cases dealing with the deductibility of social service benefits and pensions largely accord with those general principles. So, in Espagne an invalid pension conferred under Pt III of the Social Services Act 1947 (Com) was held not to be deductible because it was granted in exercise of an administrative discretion as a benefit to the victim after consideration of his situation, entirely for his use and benefit and not in relief of any person antecedently liable to him to compensate him in any way for his disability.[33] But in Graham v. Barker[34], where for similar reasons a pension which accrued to the appellant as a result of his participation in a contributing superannuation scheme was held not to be deductible, "sick pay" was held deductible on the basis that it was the measure, no more and no less, of the employee's right to receive ordinary pay notwithstanding his absence on sick leave, and thus because it was impossible to say that pro tanto there had been any loss of wages.[35] In Parry v. Cleaver[36] it was held that a police pension was not deductible because it was payable in any event, not dependent on loss of earning capacity, and because it was the reward of pre-injury service and therefore not relevant to the loss of post injury wages.[37] Contrastingly, in Batchelor v. Burke[38] and Haines v. Bendall[39] it was held that workers' compensation was to be taken into account in calculating the interest payable on common law damages for loss of earnings. Most importantly, in Fox v. Wood[40] it was said that workers' compensation should be deducted from the damages recoverable for loss of earnings unless the legislation required the worker to repay the compensation out of the damages recovered. As Gibbs, CJ. explained, it was only where the worker was obligated to pay the net amount of compensation which he had received, so that he neither gained nor lost anything by the receipt and repayment, that the question of workers' compensation could be ignored in the assessment of damages.

162. It was submitted for the defendant that, because s. 42 of the Act requires repayment of an amount up to any compensation paid, the observations in Fox v. Wood foreclose the deductibility of compensation and thus of s. 104 indemnity. But in my view that represents a misconception of what was decided. The conclusions expressed about the significance of an obligation to repay the net amount of compensation built upon a proposition earlier expressed by Gibbs, CJ. in Batchelor v. Burke, as follows:

"... Clearly the advantage given to a workman by this legislation is not conferred upon him with the intention that he may retain the compensation even if he enforces his right to damages, and since the amount received as compensation is repayable to the extent to which damages are recovered the fact that the injured worker has received compensation will not relieve the tortfeasor who cause the injury of liability. That however does not mean that any advantage or disadvantage which results to the injured worker, and which is relevant in some other way to the assessment of damages, should be disregarded as collateral or remote."[41]

The logic of the proposition was that an amount of compensation cannot be deducted if the effect would be to leave the plaintiff with a net recovery less in amount than the damage he had suffered. It was not that compensation can never be deductible where compensation is repayable.

167. As it appears to me the real point of principle which emerges from Fox v. Wood and the cases earlier described is that the deductibility of the proceeds of insurance policies, other contracts of indemnity, social service benefits and gifts may be denied where the circumstances of the case make deduction unjust, and equally that deductability will be allowed where it is just to allow it. Deduction will most probably be seen as unjust if the effect would be to leave the victim less than fully compensated. It would also be regarded as unjust if the effect would be to relieve or lessen the responsibility of the wrongdoer for the consequences of his wrong[42]; and in making that assessment, it would ordinarily make no difference whether the relief or lessening of responsibility would come at the expense of the victim or of a third party volunteer such as an insurer or government that had engaged for consideration or upon some other basis to pay the victim the amount in question. It would be supposed that the arrangements which resulted in the payment in question were made for the benefit of the victim. But where the deduction would leave the victim fully compensated and the third party fully recouped, the deduction should be allowed. It would be contrary to the principles of compensatory damages and therefore unjust to do otherwise.

170. Accordingly, where as here the position is not only that the allowance of the deduction would leave the victim fully compensated and the wrongdoer fully responsible for her wrong, but also that refusal to allow the deduction would result in the victim or the third party profiting at the expense of the wrongdoer, and imposing upon the wrongdoer a commensurately more onerous burden than she should properly have to bear, I consider that there is every reason consistent with principle and the authorities that have been discussed for allowing a deduction of the compensation paid.

173. I add that even if that were not so, I would not regard the possibility of double liability as something that Parliament could have foreseen at the time of enacting s. 104 and therefore I would not accept that it is a basis for concluding that it was the intention of Parliament to confine the section to Victorian accidents.

176. No doubt it is correct to say that where a statutory provision permits of two interpretations of which one is productive of absurd irrational or capricious results the other should be preferred.[43] That is so of course because it is not to be supposed that Parliament intends to act irrationally. But where a section of an act is enacted against a background of common law that has altered since the time of enactment, and it is only because of the change that the first possible construction becomes productive of remarkable results, there is not the same reason to conclude that Parliament intended that the provision have the other meaning. And where the first possible construction would at the time of enactment have produced results more rational than the second, I see no basis at all in purposive construction for preference for the latter.

179. In my opinion that is the case here. As has already been remarked, the common law choice of rule law applicable to Australian torts at the time of enactment of s. 93 was the Breavington v. Godleman double actionability rule. So long as that was so, Parliament must be taken to have proceeded upon the assumption that s. 93 would be applied in Victoria as part of the law of the forum; not only to accidents occurring in Victoria but also under the first leg of the double actionability rule applicable to out-of-State torts. Thus if any action were instituted in Victoria for the recovery of damages the damages would be reduced by the amounts of compensation paid. There could be no risk of double jeopardy in respect of either Victorian accidents or out-of-State accidents. The same would have been true if action for damages were instituted in another State for the recovery of damages in respect of a Victorian accident. The forum would have applied the law of Victoria as part of the lex loci delicti, under the second leg of the prevailing choice of law rule.

182. It is true that a risk of double jeopardy might have arisen where compensation was paid and indemnity recovered under the Act in respect of an out-of-State accident and if the victim then instituted proceedings in another State or in a Territory for the recovery of damages. In such a case s. 93 would not have been applied either as the lex fori or as the lex loci delicti. Consequently, and assuming contrary to my view, that the wrongdoer would not have been entitled to a deduction for the indemnity paid to the Commission, the wrongdoer would have been at risk of double jeopardy. But I do not think that possibility is reason to conclude that Parliament must have intended to confine s. 104 to Victorian torts, contrary to the plain meaning of the words of the section. Parliament enacted s. 104 as a law in and for Victoria and presumably it did so with the intention that the section would operate in Victoria and be applied by the courts in Victoria. Assuming the possibility of double jeopardy (which, as I say, is a possibility I reject) a more probable conclusion would be that Parliament intended to confine the operation of s. 104 to proceedings in Victoria.

185. The defendant next argued that if s. 104(1) applied to accidents occurring outside Victoria it would have the effect of altering the liability of tortfeasors for damages in respect of torts committed outside Victoria, and it was submitted that the section should not be thought to have that effect because it does not evince a clear intention to alter the common law choice of law rule applicable to interstate Australian torts. I do not accept that submission.

188. Certainly, since the High Court's decision in Pfeiffer v. Rogerson the law governing all questions of substance in Australian torts involving an interstate element has been the lex loci delicti.[44] The single choice of law rule applies consistently in both federal and non-federal jurisdictions in all courts such that all questions of substance are governed by the lex loci delicti commissi, subject only to the possibility of amendment by the statute law of the forum or, in some cases, by the statute law of the Commonwealth. For the purpose of the rule, laws that bear upon the existence, extent or enforceability of remedies, rights and obligations are characterised as substantive and not as procedural laws.[45] Consequently, it is correct to say that if the defendant were sued in a Victorian court for damages for negligently causing the accident which gives rise to the Commission's claim for indemnity, the Court would be bound to apply the laws of New South Wales unless a Victorian statute compelled the Court to apply a different law.

191. But the cause of action for which s. 104(1) provides is not a cause of action in tort and the right of indemnity which the section creates is not a right to damages. As has already been noticed, s. 104(1) creates a statutory right and cause of action and, according to the common law choice of law rules applicable to statutory rights and causes of action, those created by s. 104(1) are governed by the laws of Victoria[46] as the law of the obligation thereby created. There is no conflict between s. 104(1) and the common law choice of law rules which apply within Australia.[47]

194. Finally, on the question of construction it was said that the legislative history of s. 104 traced by Phillips, J.A. in Lanson v. Transport Accident Commission[48] was an indication of close connection between s. 93 and s. 104 and thus a further indicator that the scope of operation of s. 104 is limited to the circumstances in which s. 93 is engaged. I am unable to discern in his Honour's judgment any recognition of the kind of connection for which the defendant contends. To the contrary, his Honour's analysis demonstrates that there was for a period in the history of the section a significant disconformity between the claims to which it applied and those in s. 93. True it is that the essence of the decision was that s. 93 extended to death benefits at a time when s. 104 did not - and so in a sense it was a decision that at that time s. 104 was of narrower range than s. 93 - but everything said in the judgment is consistent with s. 104 applying within that range to accidents wherever occurring.

198. The defendant next submitted that the proceeding is within federal jurisdiction in that it is a matter between a State[49] and a resident of another State falling within s. 75(iv) of the Constitution and also a matter arising under the Constitution or involving its interpretation, in that the question of interpretation of the Constitution having been now raised federal jurisdiction is attracted and the matter is converted into one that is within federal jurisdiction.[50] It follows that the applicable law is that which is applied by ss. 79 and 80 of the Judiciary Act[51].

201. It was then said to follow that the law which is picked up and applied by ss. 79 and 80 of the Judiciary Act is or includes the common law choice of law rule applicable to Australian torts (subject to any modification made by the statute law of Victoria) and accordingly that, subject to any change made by s. 104(1) of the Act, the common law choice of law rule provides that the laws in force in New South Wales are to be applied as the lex loci delicti. Further, in the defendant's submission, s. 104(1) does not purport to overturn common law choice of rules but on the contrary appears to have been enacted upon the assumption that they would continue to apply. Consequently, it was said, the effect of s. 80 of the Judiciary Act is to pick up or impose the laws of New South Wales unaffected by the Act. Alternatively, it was said that s. 80 of the Judiciary Act should be construed as presupposing and applying the common law choice of law rules regardless of any local attempt to override them. In the further alternative it was said that s. 104(1) is not picked up by s. 79 of the Judiciary Act because to do so would conflict with s. 64 of the Judiciary Act.

204. In my opinion these arguments do not take the matter any further than those already considered concerning the choice of law rule enunciated in Pfeiffer v. Rogerson. For as has already been seen, that rule applies consistently in both federal and non-federal jurisdiction in all courts such that all questions of substance are governed by the lex loci delicti commissi, subject only to the possibility of amendment by the statute law of the forum or, in some cases, by the statute law of the Commonwealth. Accordingly, the answer to the proposition now advanced, that the lex loci delicti must apply because the matter is one within federal jurisdiction, is the same as the answer to the proposition already considered, that the lex loci delicti must apply because of the common law choice of law rule applicable to Australian torts involving an interstate element. It is that the lex loci deliciti does not apply because the claim under s. 104(1) is not a claim in tort.

207. It follows in my opinion that this matter does not raise a question of whether s. 104(1) purports to alter the common law choice of law rule applicable to Australian torts involving an interstate element, or a question of whether that rule is so much constitutionally entrenched[52] that it is beyond the competence of the Victorian Parliament to alter the rule, or a question of whether the picking up and application of s. 104(1) would conflict with s. 64 of the Judiciary Act.

210. In case it matters, however, I should say that if this were a case to which the common law choice of law rule governing Australian torts with an interstate element were applicable, I would construe s. 104(1) as purporting to modify that rule by necessary implication, and thereby requiring a Victorian court to give effect to the rights of recovery for which s. 104(1) provides. It may be that the general rule is that a statute is not to be taken as having extra territorial operation unless that is required by the express terms of the statute or by its object, subject-matter or history.[53] But having regard to the terms of ss. 35, 36, 42, 93, 94 and 104 I consider that such an operation would be required. It is plain that s. 104(1) was intended to apply in cases where compensation is paid under s. 94 in respect of torts occurring outside Victoria.

213. The question of whether it would be within the competence of the Victorian Parliament to amend the common law choice of law rule laid down in Pfeiffer is more complex. The High Court referred in Pfeiffer to the possibility that the rule is so much the product of the Constitution that it could not be altered except by amendment to the Constitution. But until the High Court provides further guidance upon the point different views are open to be taken. There is some indication in the observations of Gaudron, J. in Mewett[54] that the rule would apply regardless of any local attempt to alter it. On the other hand some of the High Court's recent pronouncements in Blunden v. The Commonwealth[55] suggest the contrary. In Blunden, however, there was no possibility of conflict between the lex fori and the lex loci delicti. The relevant events occurred on the high seas and in the circumstances that obtained there was no body of law other that that in force in the forum that had a claim to be regarded as the body of law dispositive of the action.[56] The High Court stressed that the case did not present any issues that may appear in cases of tort actions arising on the high seas in which different systems of law may lay claim to be regarded as the body of law dispositive of the action.[57] The Court observed that:

"...the application of any rules of the common law will, in the terms of s 80, be subjected to any modification, in the present case, by the statute law in force in the (forum)."[58] (Emphasis added.)

Nevertheless the reference to the present case maintains the possibility that the ability of State and Territory legislatures to alter the common law choice of law rule laid down in Pfeiffer v. Rogerson is to some extent limited.

218. That leaves the contention that any picking up and application of s. 104(1) would conflict with s. 64 of the Judiciary Act. It is in effect a contention that s. 64 renders a State legislature incapable of creating any right or cause of action in favour of the State unless the same right or cause of action is also conferred upon the subjects of the Queen in that State. But whatever may be encompassed in the conclusion that s. 64 operates to apply substantive as well as procedural laws,[59] and allowing that s. 64 may create a cause of action which would not have existed if s. 64 had not equated the substantive rights of the parties to those in a suit between subject and subject,[60] there is in my opinion nothing in the authorities which supports the idea that a State may not in the exercise of its constitutional power to create laws for the peace order and good government of the State[61] confer upon itself a right or cause of action that is not available to its subjects. As indeed was conceded in argument, if s. 104 creates a cause of action which is sui generis, there is no room for the application of s. 64.

221. It was submitted for the defendant that the situation created by s. 104(1) is similar to that in British America Tobacco Australia Ltd v. Western Australia [62]. I do not agree. In British America Tobacco s. 6(1) of the Crown Suits Act 1947 (WA) provided that a claim would not lie against the Crown for the recovery of moneys paid unless the claimant first gave notice under that section within the time prescribed. The Hight Court held that the section was not picked up by the Constitution or by s. 79 of the Judiciary Act. But the reasoning which led to that conclusion was that the purported effect of s. 6(1) was to deny the requirement of s. 64 of the Judiciary Act that the rights of the appellant and the State in the action be as nearly as possible the same as those in a suit between subject and subject. That is not a consideration here. The effect of s. 6(1) of the Crown Proceedings Act was clearly enough to make the rights of a subject to pursue the Crown in debt different to the subject's rights to pursue another subject in debt. Consequently, the rights of the appellant and the State were not as nearly as possible the same as those in a suit between subject and subject. That suggests that if the State of Victoria were to pursue the cause of action conferred by s. 104(1) the rights of the defendant in the action would be as nearly as possible the same as they would be in an action brought by another subject upon a comparable cause of action. But it says nothing about the ability of the State to create in favour of itself a right or cause of action not available to its subjects.

225. The defendant's final argument was that s. 104 of the Act is invalid or inapplicable to the facts of the case because it is inconsistent with the legislation of New South Wales - in particular with the Motor Accidents Act 1988 (NSW) as it stood in October 1996; or because, in as much as it applies to persons and conduct in another State, it is incompatible with implied constitutional limitations of the legislative power of the Victorian Parliament; or because it is contrary to s. 117 of the Constitution.

229. According to the defendant the Motor Accidents Act 1988 (NSW) applied to regulate civil liability arising from motor accidents occurring in New South Wales and viewed as a whole its effect was to create, re-create and regulate the liability of alleged wrongdoers in relation to New South Wales accidents. That is reflected, it was said, by (among other provisions) s. 2A(1)(b), which states that a purpose of the Act is to "re-instate a common law scheme under which damages can only be awarded after a finding of negligence"; s. 6, which defines claims regulated by the Act to mean "a claim for damages in respect of the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle"; s. 69(1) which provides that Part 6 (dealing with the awarding of damages, and the limits thereon) "applies to and in respect of an award of damages which relates to the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle"; and s. 70 which provides in relation to Part 6 that "A court shall not award damages to a person in respect of a motor accident contrary to this Part".

232. It was then said that a claim by the Commission under s. 104(1) is a claim for damages in respect of the death of or injury to a person, either because it depends upon and exists only up to the amount of the injured party's claim for damages or because it depends upon proof of a wrongful act.

235. On that basis it was then said to follow that any extension of the operation of s. 104(1) to circumstances like those of this case would be beyond the legislative competence of the Victorian Parliament: either because the effect would be to overlap and interfere with the regulation by New South Wales of civil liability for motor accidents occurring within its boundaries; or because the effect would cut across the requirement imposed by s. 118 of the Constitution to afford full faith and credit to the laws of New South Wales, being that system of laws which has the closest connection with and overriding interest in regulating the legal consequences of driving motor vehicles within its own territory; or alternatively because, even if there be no conflict between s. 104(1) and the laws of New South Wales, the Constitution should be seen to require that the substantive law applicable to resolve a dispute is certain and ascertainable and is not dependent on the forum in which a proceeding happens to be commenced.

238. The obvious answer to these contentions is that they proceed upon the misconception that a claim by the Commission under s. 104(1) is a claim for damages within the meaning of the New South Wales legislation. It has already been concluded that the claim for indemnity is a statutory quasi-contractual remedy; it is not a claim for damages.

241. The defendant challenged that conclusion by invoking a number of authorities which were said to demonstrate that a claim under s. 104(1) is a claim for damages. But the reliance put upon those authorities was misplaced. The first authority mentioned was Crisp & Gun Co-op Ltd v. Hobart Corporation[63]. It was held there that an action to recover statutory compensation under the Public Authorities Land Acquisition Act 1949 (Tas) came within the meaning of the expression "an action recover a debt or damages" in Order XXIV, r.1 of the Rules of the Supreme Court 1958 (Tas). That case did not equate the claim for compensation to a claim for damages. The reasoning was that when one had regard to the history of the rule the compound expression "debt or damages" "was doubtless intended to cover any action in which a claim for money, as distinct from other specific forms of relief, was made". The second authority relied upon was Mario Piraino Pty Ltd v. Roads Corporation[64]. In that case Gobbo J held that a claim for compensation under s. 98 of the Planning and Environment Act 1987 was "a proceeding for the recovery of debt or damages" within the meaning of s. 60 of the Supreme Court Act 1986. Admittedly, his Honour did give an extended meaning to "damages" in s. 60. But it is apparent that his Honour was not referred to Crisp & Gun and it may be assumed that his Honour's reasoning would have followed a different course if he had been apprised of that decision. The last case relied upon demonstrates the point. In Victorian WorkCover Authority v. Esso[65] the reasoning in Crisp & Gun was expressly approved and applied to s. 60 of the Supreme Court Act and, as in Crisp & Gun, the essence of the reasoning was that the compound expression "claim for debt or damages" was intended to cover any action in which a claim for money is made. Hence it was held that the section covered a claim for indemnity even though such a claim was not a claim for damages.

244. So far therefore from those authorities supporting the idea that a claim under s. 104(1) is "a claim for damages" within the meaning of the Motor Accidents Act, they support the implication, already inherent in the use in the Motor Accidents Act of the expression "claim for damages" (in contradistinction to the compound expression "claim for debt or damages"), that the Motor Accidents Act was directed only to claims for damages strictly so called.[66]

248. The defendant contended that even if a claim under s. 104(1) is not a claim for damages in respect of death or injury the section still trespasses unconstitutionally upon an area which is the preserve of the New South Wales legislature. In the defendant's submission it is beyond the constitutional competence of the Victorian Parliament to provide for the civil liability of a non-resident arising out of that person's use out of Victoria of a motor car registered out of Victoria. Alternatively, it was said that in as much as s.104 provides in respect of a New South Wales accident for results different to those provided for in the Motor Accidents Act 1988 (NSW), s.104 infringes the imperative of full faith and credit embodied in s. 118 of the Constitution. I do not agree.

251. The authorities in which the extraterritorial reach of State legislatures has been considered have spoken in terms of the need for a constitutional nexus based only upon some fact, circumstance, occurrence or thing in or connected with the Territory of the State or of some relation between the enacting State and the person to whom the legislation is directed. They include presence, residence, domicile and the carrying on business in the Territory of the State. As Dixon J explained in Barcelo v. Electrolytic Zinc Co Ltd[67]:

"The rule of construction confining general words to an operation which accords with the principles adopted in our Courts for the exterritorial recognition of rights would, I think, be applied to a statute of the sovereign British Parliament containing provisions expressed as those of the Victorian enactment. There is no reason to consider it less applicable to the statute of a subordinate legislature. The circumstance that the power of the subordinate legislature is territorially restricted affords, if anything, rather more than less reason for applying the prima facie rule. The statute contains no express or implied indication of any fact, matter or thing, in, or connected with, the territory, which it adopts as a criterion of its operation. A statute discharging obligations might be considered a law in and for Victoria if its operation were expressly based upon any one of a great number of things which touch and concern Victoria. It might be enough if it were based upon some connection of the obligee or of the obligor with Victoria, such as domicil, residence, or presence there, or perhaps even upon a remoter connection, such as official employment in or out of the State under the Government, or liability to the State in respect of taxes or other Crown debts. The connection might suffice if the enactment were based upon some fact occurring in Victoria affecting the creation of the obligation, such as the delivery of an instrument, the communication of an offer or of an acceptance, or the presence of one of the parties there when any of these things took place anywhere; or upon some circumstance or event affecting the existence of the obligation considered as property, such as the local situation of a bond or negotiable instrument, or affecting its performance considered as a contract, such as payment in Victoria. Again, the Legislature might fasten upon the situation within the State of property over which the obligation is secured. But if any such enactment were considered a law in and for Victoria the reason would be that it is a law made with respect to the matter upon which its operation is based and that the matter is one of Victorian concern... acquired under foreign law."

255. More recent authorities have also stressed that the requirement for relevant connection should be applied liberally and that even a remote and general connection between subject matter and State will suffice.[68] Thus in Mobil Oil Australia v. State of Victoria[69] Gleeson, CJ. reasoned that it was sufficient to sustain the application of State legislation to acts or omissions outside the State that those acts or omission have had consequences within the State_,_ and his Honour rejected as too broad a contention that there is an implication from federalism prohibiting State legislation which affects the relationship between another State or a Territory and its residents or determines the legal consequences of an action in another State or Territory. His Honour said that:

"There is nothing either uncommon, or antithetical to the federal structure, about legislation of one State that has legal consequences for persons or conduct in another State or Territory. An example is to be found in the provisions of the Clean Waters Act 1970 (NSW) considered in Brownlie v. State Pollution Control Commission[70]. That legislation was held to apply to acts or omissions (in that case, trans-border pollution) outside New South Wales which had, or were likely to have, consequences within New South Wales. The idea that all transactions and relationships giving rise to legal consequences can be located "in" one particular State or Territory is unrealistic. Furthermore, the concept of the relationship between a State and its residents requires a much narrower focus if it is to be of assistance in the resolution of a problem such as arises in the present case. For the claim of a resident of New South Wales against a Victorian company which has manufactured, in Victoria, a defective product that was later supplied in New South Wales to be brought into representative proceedings in a Victorian court does not impinge on the relationship between the New South Wales resident and the New South Wales Government. Different considerations might arise, for example, if the New South Wales Parliament, adopting a policy hostile to group proceedings, or class actions, set out to prevent residents of New South Wales from participating in litigation of that kind. But no such problem arises here"

259. Judged according to those tests there appears to be little room for doubt about the constitutionality of the s. 104(1). The Victorian Parliament has constitutional power to enact laws in and for the State of Victoria[71] and, in as much as s. 104(1) would facilitate the recovery on behalf of Victoria of indemnity from tortfeasors for compensation paid to and on behalf of persons injured in or by road accidents in Victoria or while driving or travelling in a car registered in Victoria, it presents as a law of that kind. It is within the competence of a State to make things in or connected with the State the occasion for the imposition of liability, and evidently the occasion for imposition of liability under s. 104(1) is that the tort in question involves a Victorian resident or a Victorian registered motor car. Arguably it is also sufficient to sustain the section that it applies to acts or omissions outside Victoria that have had consequences within the State and it should not be regarded as a problem that the section is productive of consequences for persons or conduct in another State or Territory.

262. Needless to say, the sufficiency of any given constitutional nexus depends as much upon the nature of the legislation in question as upon the nature of the connection itself. It may also be that what presents as sufficient connection to one mind will not appeal to another.[72] So, while it is not in doubt that a State may have constitutional power to require that interstate residents carrying on business in the State register in that State - there being adequate nexus in the circumstance that business is carried on within the territory of the State - it was held by a majority in Millar that there was insufficient nexus in the circumstance that a company carried on business in a state to sustain a law purporting to impose death duty upon shares in the company held by a testator domiciled outside the state.[73] The conception of adequate connection does not permit of precise definition and that leaves room for doubt.[74]

265. It has also been said that the power of a State to make laws for the peace order and good government of the State does not extend to the imposition of liability upon a person unconnected with the State by reference to an act, matter or thing occurring outside the state[75]. In as much as s. 104(1) purports to impose liability on an interstate resident in respect of a tort occurring outside Victoria it could be said to have that effect.

268. But significant though those reservations may seem, it is tolerably clear that Victoria has power to impose civil liability upon the driver of a Victorian registered vehicle in respect of his or her driving of the vehicle wherever in Australia, and to impose upon a Victorian resident civil liability in respect of a traffic accident wherever occurring in Australia, and to impose civil liability upon a resident of another State in respect of a traffic accident occurring in Victoria. Therefore it is difficult to see why Victoria would not also have power sufficient to sustain the imposition of liability under s.104 upon a resident of another State in respect of a motor accident occurring in that other State where it results in injury to a victim ordinarily resident in Victoria (or to others to whom the Commission may be liable to pay compensation).

271. Even allowing that there is a relevant difference between imposing liability on a Victorian resident (or in respect of a Victorian registered car) and imposing liability on a non-resident driving an out-of-State registered car in respect of an out-of-State accident which harms a Victorian[76], Mobil shows that it is not necessarily inimical to a State law that is productive of consequences for persons or conduct in another State or Territory.[77]

274. Moreover, given that that the liability under s.104 of a non-resident in respect of an out-of-State accident can never exceed the liability of the tortfeasor under the laws of that State, it is difficult to see how or why s.104 would be capable of producing results in respect of a New South Wales accident any different to those for which the Motor Accidents Act provides. In terms, s.104 is calculated to produce identical results.

277. In Mobil Gleeson, CJ. spoke of the schemes in each State which have for a long time made provision for service outside the jurisdiction, joinder of parties, consolidation of actions and a variety of procedural devices aimed at avoiding multiplicity of actions and unnecessary and expensive inefficiency in resolving legal disputes. His Honour said that such schemes are not incompatible with federalism but help to make it work. Kirby J spoke to similar effect in concluding that Mobil had not demonstrated that the provisions of the legislation there in issue conferred on the Supreme Court of Victoria an impermissible extraterritorial operation that was "incompatible with the federal Constitution".

280. In my opinion, the same may be said of the scheme of recovery for which s. 104 of the Transport Accident Act provides. For the reasons earlier expressed, it is not inconsistent with the common law choice of law rule applicable to Australian torts involving an interstate element, or the provisions of the Motor Accidents Act, and I see nothing else in it sufficiently antithetical to the federal structure to deny it constitutional validity.

284. The defendant contended finally that s. 104 and the Victorian statutory scheme subjects her to disability or discrimination to which she would not be subject if she were resident in Victoria. That disability or discrimination was said to inhere in the facts that under the section the Commission may not recover indemnity from a person who is entitled to be indemnified under s. 94 and that the only persons entitled to indemnity under s. 94 are owners or drivers of a "a registered motor vehicle". It was submitted that since a vehicle cannot or at least should not be registered unless it is ordinarily garaged in Victoria, the section has the practical effect of discriminating in favour of Victorian residents and against persons who are not residents of Victoria.

287. The decision of the High Court in Street v. Queensland Bar Association[78] established that when a person alleges that he or she is subject to a disability or discrimination in a State other than his or her State of residence a comparison must be made between the disability or discrimination to which the person is purportedly subjected in the other State and the disability or discrimination, if any, to which he or she would be subjected if resident in the other State.[79] The section is not concerned with whether the requirements of the legislating State apply equally to residents in that State and a resident in another State but with whether any disability imposed upon, or discrimination against, a resident in another State would apply equally to him or her if resident in the legislating State.[80] It is also recognised that a provision which applies to residents and non-residents alike may still operate in a fashion according to the actual situation of the person to whom it applies so as to engage the operation of the section.[81] Consequently, the section is not concerned with the form in which the law in question subjects the individual to the disability or discrimination. It is enough that the practical effect of the law is to subject the individual to discrimination or disability, whatever the means by which that is brought about.[82] A governmental measure which is expressed to discriminate on a ground which is "a natural or ordinary concomitant of out-of-State residence" may single out protected persons for differential treatment as surely as if out-of State residence were the ground expressed.[83] In order, however, for s. 117 to apply it must appear that, were the non-resident person a resident of the legislating State, that different circumstance would of itself either effectively remove the disability or discrimination or, for practical purposes in all the circumstances, mitigate its effect to the point where it would be rendered illusory. A disability or discrimination is rendered illusory if the fact of residence would substantially deprive it of its onerous nature, and a disability or discrimination based upon grounds apart from residence is effectively removed if those grounds relate to characteristics which are in the circumstances concomitants of the individual's notionally changed residence.[84]

290. The defendant submits that judged according to the hypothetical comparison for which the section calls, it is plain that the ostensible effect of s. 104 is to subject her to disability or discrimination. She is resident in New South Wales and is the owner of a car which is garaged at her residence, and accordingly the car is registered, as it must be under New South Wales law, in New South Wales. Consequently, she is liable to suit under s. 104 in respect of traffic accidents involving her car. If she were resident in Victoria and her car were garaged at her home it would be registered in Victoria, as it would have to be under Victorian law, and hence she would not be liable to suit under s. 104 in respect of traffic accidents arising out of the use of her car. In the defendant's submission it is no answer that the criterion of discrimination is the place of registration as opposed to the place of residence. It is contended that the reality of car ownership is that a person must ordinarily garage his or her car at or near to the person's home and therefore that he or she must register the car in the State in which the person lives.[85] Consequently, it is said, the disability or discrimination is based upon grounds that relate to characteristics which are in the circumstances concomitants of residence.

293. I accept that contention up to a point. There is a degree of discrimination in s. 104 in that it protects owners and drivers of Victorian registered cars from liability to the Commission under s. 104 but does not protect owners and drivers of cars registered in other States. It is also no answer for the purposes of s. 117 that the section discriminates on the ground of the place of car registration - not the place of residence - or to that extent that s. 104 applies to resident and non-resident alike. For despite the fact that there will be cases where residents of one State garage and register their cars in other States and drive cars they do not own which are registered in other States, it is self evident that most people will garage their cars at or near to their homes and register them accordingly in their States of residence. Consequently, in most cases, the place of car registration is a "natural or ordinary concomitant" of the place of residence, and it follows that, if a non-resident owner of a registered car were to become resident in Victoria, "that different circumstance would of itself either effectively remove the disability or discrimination" which that person faces under s. 104 "or, for practical purposes in all the circumstances, mitigate its effect to the point where it would be rendered illusory".[86]

296. That said, however, not every disability or discrimination based upon grounds of residence is of a kind which falls within the proscription in s. 117[87]. To allow the section unlimited scope would give it a reach extending beyond the object which it was designed to serve and so the ambit of the section has been limited.[88] Furthermore, although each of the members of the High Court in Street spoke in different terms about the limits of the section, most of their Honours' observations suggest that the disability or discrimination in s. 104 would not fall within the proscription. Mason, CJ. considered that the basis of the correct approach to s. 117 is to be found in that which underlies the approach taken by the Supreme Court of the United States to the Privileges and Immunities clause of the United States Constitution.[89] That is to say (in a way akin to the first limb of the United States test) that the protection afforded by s. 117 should be seen as serving the object of nationhood and national unity and (in a way akin to the second limb of the United States test) that the preservation of the autonomy of the States demands that the exclusion of out-of-State residents from the enjoyment of rights naturally and exclusively associated with residence of a State must be recognised as standing outside the operation of s. 117.[90] His Honour continued:

"...Take, for example, the exclusion of out-of-State residents from the right to enjoy welfare benefits provided by a State under a scheme to assist the indigent, the aged or the ill. Generally speaking, I doubt that such an exclusion would amount to a disability or discrimination within the section. The exclusion would not seem to detract from the concept of Australian nationhood or national unity which it is the object of the section to ensure, because it would offend accepted notions of State autonomy and financial independence and a due sense of a State's responsibility to the people of the State to say that the Constitution required the State to extend the range of persons entitled under the scheme to out-of-State residents." [91]

300. Deane, J. reasoned with similar effect to Mason, CJ., although without direct reference to the United States approach to the Privileges and Immunities clause. His Honour said that the words of s. 117 must be construed in their context in a constitution which is founded upon the existence of the various States as distinct entities under the federation and, thus construed, they conveyed the notion of some superimposed incapacity or disadvantage in the sense that the incapacity or disadvantage, regardless of whether it be direct or indirect, does not flow naturally from the structure of the particular State, the limited scope of its legislative powers or the nature of the particular right, privilege, immunity or other advantage or power to which it relates.[92] His Honour gave as an example of discrimination which flowed naturally from the structure of the State a provision of a State constitution confining the right to vote in State elections to persons resident in the State. He said that the same could be said of a State rental subsidy scheme for disadvantaged tenants. The fact that it could only benefit residents flowed naturally from the nature of the subsidy and the scope of State powers and responsibility under the constitutional division of governmental authority.[93]

303. Dawson, J., like Mason, CJ., considered that it was instructive to turn to the experience of the United States in relation to the Privileges and Immunities clause and hence to the two-tiered approach of asking, first, whether the right in question is one to which the clause applies and, secondly, whether the clause is inapplicable under the "substantial reason" test.[94] With the benefit of that instruction it was to be concluded that s. 117 would not apply where the very nature of the subject matter which is being regulated in a case requires organisation upon the basis of State residence.[95] Further, his Honour said, it should be borne in mind that the purpose of s. 117 was not to deny the separate responsibilities of the State which, together with the Commonwealth, make up the Australian federation. It does not require the uniformity of laws and it is not directed to disability or discrimination the true purpose and differential effect of which is the ordinary and proper administration of the affairs of a State as opposed to the citizen's residence in another State. Hence, as his Honour concluded, differential treatment may escape s. 117 if the true purpose and effect of differential treatment is other than to impose a disability upon the resident of other States or to subject them to discrimination.[96] And his Honour gave as examples the right to vote at State elections and the right to participate in a State welfare scheme, particularly one financed by State taxes, where a residential qualification is reasonable and its imposition does nothing to impede the essential purpose of the section.[97]

306. Gaudron, J. was also of opinion that the approach of the United States Supreme Court to the Privileges and Immunities clause offers valuable guidance. Drawing upon the jurisprudence of domestic anti-discrimination law, her Honour concluded that "discrimination" for the purposes of s. 117 does not extend to different treatment appropriate to a relevant difference and the absence of a right or entitlement does not constitute a "disability" for the purposes of s. 117 if the right or entitlement is appropriate to a relevant difference.[98] Turning them to the question of how one determines whether, there being a relevant difference, the different treatment accorded to the difference is appropriate to it, her Honour said that the considerations thereby raised are similar to those which arise in application of the Privileges and Immunities clause, for the purposes of which the relevant inquiry is whether the reason for discrimination bears a close relation to the difference. By parity of reasoning her Honour concluded that for the purposes of s. 117 the question of appropriateness may be answered by reference to the constitutional test of whether the different treatment is appropriate and adapted to the relevant difference.[99]

309. Brennan, J. reasoned by a different path but to a similar conclusion. His Honour was of the view that the notion of discrimination in s. 117 had more conceptual affinity to the Fourteenth Amendment than to the Privileges and Immunities clause of the United States Constitution, and hence that the doctrine of fundamental rights developed in the United States could not safely be translated into Australian constitutional jurisprudence.[100] Nevertheless, in his Honour's opinion s. 117 was subject to an exception of necessity which flows from the necessity to preserve the institutions of government or their ability to function and operates when an out-of-State resident is in a position which is relevantly and necessarily different from the position she or he would be in if she or he were an in-State resident.[101] Thus, for example, the exception of necessity accommodates the need to give full effect to laws providing for a franchise based on residence in a State.[102] As his Honour explained it, it is precisely because the out-of-State resident is not an in-State resident that the Constitution requires that she or he be treated differently. Like Gaudron, J., his Honour invoked the jurisprudence of domestic anti-discrimination law. He concluded on that basis that a condition which affects a non-resident differently to the way in which it affects a resident does not discriminate against the non-resident if there is a rational and proportionate connection between the condition and some objective other than subjecting the non-resident to different treatment because he or she is an out-of-State resident.[103]

312. Toohey, J. was in agreement with Brennan, J. that the approach of the United States Supreme Court to the Privileges and Immunities clause does not offer a safe guide to the operation of s. 117. His Honour traced the origins of s. 117 to the Privileges and Immunities clause and the Fourteenth Amendment of the United States Constitution[104] and noted that there were substantial differences between those two provisions and the final form of s. 117. Nevertheless, like Mason, CJ., and Brennan, Deane and Dawson, JJ., Toohey, J. was of the view that the substratum of s. 117 is the notion that Australia is a commonwealth and that its laws are to apply equally to all its citizens. Thus his Honour concluded that the limits of the section are to be found in the implications to be drawn from the Constitution and in particular the capacity of the States to regulate their own affairs within a federal system. In a fashion which also appears consistent with what was said by Mason, CJ. and Brennan, Deane and Dawson, JJ., his Honour remarked that disability or discrimination does not fall within s. 117 if the difference is a natural consequence of legislation aimed at protecting the legitimate interests of the State community.[105]

315. McHugh, J. was alone in stating that the only limit upon the ambit of the section is that it does not reach to matters which by necessary implication are so exclusively the concern of the state and its people that an interstate resident in not entitled to equality of treatment in respect of them.[106] Consequently, in his Honour's opinion, the only sorts of discrimination likely to be excluded from s. 117 would be to do with matters in the nature of the franchise, the qualifications and conditions for holding public office in the State, and conduct which threatens the safety of the State or its people.[107] His Honour dismissed the current approach of the United States Supreme Court to the Privileges and Immunities clause as being of only limited assistance. His Honour stated that it may assist in understanding some of the classes of discrimination that fall within s. 117 but that it is not of use in identifying those which do not.[108]

318. The High Court returned to the subject of s. 117 in Goryl v. Greyhound Australia Pty Ltd[109]. The question there concerned s. 20 of the Queensland Motor Vehicles Insurance Act 1936. It provided that that the amount of damages recoverable by an out-of-State resident in Queensland could not exceed the damages that might have been recovered in that person's State of residence. The plaintiff was resident in New South Wales and it followed that the damages she could recover would be less than they would have been had she been resident in Queensland. It was held that the section subjected a non-resident to a disability or discrimination in Queensland which would not have been equally applicable to her if she were a subject of the Queen resident in Queensland and thus that s. 117 precluded s. 20 applying to the plaintiff's claim. The Court rejected and argument that the different treatment of residents and non-residents was justified because the insurance premiums which provided the funds from which insurers met their obligation came, in the main, from residents of Queensland and not from persons resident in other States and Territories.

321. Deane, and Gaudron, JJ. did so on the basis that the different treatment of residents and non-residents did not flow naturally from the structure of the State of Queensland, the limited scope of its legislative powers or the nature of the right or other advantage to which it related. Nor could it be said that there was some genuine difference between residents and non-residents which justified different treatment.[110] Dawson and Toohey, JJ., with whom Brennan, J. agreed, reiterated the observations of Dawson, J. in Street that a right confined to residents of the State to participate in a State welfare scheme may not offend s. 117 particularly if the scheme is financed by State taxes, a residential qualification is reasonable and its imposition does nothing to impede the essential purpose of s. 117. Their Honours said, however, that it was difficult to see how a scheme of compulsory insurance confined to Queensland had any bearing upon s. 20 which imposed a limit upon the amount of damages recoverable by a claimant upon the basis of residence whether or not the accident occurred in Queensland and whether or not the scheme of insurance was involved in any way.[111] McHugh, J. reiterated his conclusion in Street that apart from necessary exceptions to s. 117 which are derived from the assumption and structure of the Constitution itself, no reason exists for narrowing the scope of the section. In particular, his Honour said, there was no ground for reading into the section a requirement that the disability or discrimination must be "unjustifiable", "unreasonable" or "disproportionate to a legitimate State objective".[112]

324. The defendant submits that Goryl v. Greyhound adds strong support to its contention that the discrimination inherent in s. 104 is within the ambit of the proscription in s. 117. I am unable to see why that is so. As I have said, most of the Court in Street spoke in terms which suggest that the disability or discrimination in s. 104 would not fall within the proscription and I see little in Goryl v. Greyhound that suggests a change of mind.

327. Analogously to the legislation considered in Goryl v. Greyhound, the Transport Accident Act established a compulsory statutory insurance scheme for the payment of benefits to victims, wherever resident, of traffic accidents occurring in Victoria and to victims, if resident in Victoria or if the driver of or passenger in a Victorian registered vehicle, of traffic accidents occurring outside Victoria. Similarly to the Queensland scheme, it also provided in s. 94 for compulsory third party insurance benefits in the form of indemnity by the Commission of owners and drivers of Victorian registered vehicles.

330. The two schemes differ to the extent that Victorian scheme provides for the payment of statutory compensation as opposed to the payment of the sort of damages for which the Queensland scheme provides and to the extent that by s. 104 the Victorian scheme affords to the Commission a statutory right of recovery from wrongdoers in respect of compensation paid (as well as the usual rights to be subrogated to a victim's rights to recover damages from a wrongdoer). It appears to me to be plain, however, that it was not intended by the creation of that direct right of recovery to expose owners and drivers of Victorian registered cars to a liability against which they would not be indemnified under s. 94. That is why s. 104 excludes persons entitled to be indemnified by the Commission under s. 94. The object of the exclusion was not to discriminate against non-residents in the way that s. 20 of the Queensland act was held to discriminate against non-residents. It was to ensure that the scope of cover afforded to residents by s. 94 was not rendered nugatory.

333. That being the case, the question of whether s. 104 creates discrimination against non-Victorian residents of the kind proscribed by s. 117 of the Constitution is in truth a question of whether s. 117 proscribes discrimination constituted of the State of Victoria providing compulsory third party insurance benefits to owners and drivers of vehicles registered in Victoria without also providing the same or similar compulsory third party insurance benefits to owners and drivers of vehicles which are registered in other States and Territories.

336. According to test laid down by Mason, CJ. in Street it does not do so_._ It would offend against accepted notions of a State's responsibility to the people of the State to say that the Constitution requires Victoria to extend to the owners of cars registered in other States the same compulsory motor car insurance cover as Victoria affords to owners of cars registered in Victoria. Nor does it do so according to the test laid down by Deane, J. in Street. Like the rental subsidy scheme which his Honour gave as an example of discrimination standing outside the ambit of s. 117, the provision of compulsory motor car insurance benefits to owners of cars registered in the State and not to owners of cars registered outside the State flows naturally form the nature of the benefits and the scope of State powers and responsibility under the constitutional division of governmental authority.[113]

339. The result is the same according to the analysis undertaken by Dawson, J. in Street. The differential treatment inherent in s. 104 may be attributed to the ordinary and proper administration of the affairs of the State of Victoria as opposed to the residence out of State of owners of cars registered out of State. The compulsory motor car insurance cover which s. 94 together with s. 104 affords to the owners of Victorian registered cars is akin to the State welfare scheme which his Honour gave as an example of discrimination which is not proscribed by s. 117. It is financed by State taxes and transport charges paid by the owners who benefit, and the Victorian registration qualification is reasonable and its imposition does nothing to impede the essential purpose of the s. 117.

342. The result is the same according to the test laid down by Gaudron, J. in Street. There is a relevant difference between a vehicle registered in Victoria and one which is not, and the different treatment which s. 94 in conjunction with s. 104 accords to owners of Victorian registered vehicles and owners of vehicle registered out of State is appropriate to that relevant difference. The provision of insurance benefits to owners of cars registered in Victoria and not to owners of cars registered out of State bears a close relation to the difference between cars registered in Victoria and those which are not. The differential treatment which is accorded to them is appropriate and adapted to that difference.

345. The result is the same according to the analysis undertaken by Brennan, J. in Street. There is a rational and proportionate connection between the fact that a car is registered outside Victoria and the fact that s. 94 in conjunction with s. 104 does not provide to the owner of such a car the same compulsory third party insurance benefits as are provided to the owners of cars registered in Victoria. The differential treatment arises out of the objective of ensuring that third party liabilities arising out of the use of cars registered in Victoria are adequately covered and not because the owners of out of State registered vehicles may be or are resident out of State.

348. I also consider that the difference is properly to be regarded as a natural consequence of legislation aimed at protecting the legitimate interests of the Victorian community (in the sense in which Toohey, J. in Street spoke of the legitimate interests of a State community) and, in contradistinction to the position in Goryl v. Greyhound, it appears to me easy to see how the fact that the compulsory third party liability insurance scheme established by s. 94 of the Transport Accident Act is confined to Victoria registered vehicles which bears upon the exclusion only of owners of Victorian registered vehicles from liability to indemnify the Commission under s. 104.

351. It is perhaps problematical whether the differential operation of ss. 94 and 104 falls within the exceptions to s. 117 described by McHugh, J. in Street and Goryl v. Greyhound. But it is at least arguable that the provision of compulsory third party insurance benefits to the owners of cars registered in Victoria is a matter which is the concern only of the people of Victoria and thus from participation in which the residents of other States may be excluded in the exercise by Victoria of its independent powers and functions within its territory for the peace, order and good government of that territory.[114]

354. In the result, I conclude that the discrimination or disability constituted of the exclusion of owners of cars registered in Victoria from liability to indemnify the Commission under s. 104 is not within the proscription in s. 117 of the Constitution and therefore does not engage the operation of that provision.

358. For the reasons given, I would answer the questions stated in the special case as follows:

TRANSPORT ACCIDENT ACT 1986

S.3

"transport accident" means an incident directly caused by the driving of a motor car or motor vehicle, a railway train or a tram;

S.35

(1) A person who is injured as a result of a transport accident is entitled to compensation in accordance with this Act if -

(b) the accident occurred in another State or in a Territory and involved a registered motor vehicle and, at the time of the accident, the person was -

(ii) the driver of, or a passenger in, the registered motor vehicle.

(2) A dependent of a person who dies as a result of a transport accident is entitled to compensation in accordance with this Act if the person who dies was or would, but for the death, have been entitled to compensation in respect of the accident by reason of sub-section (1).

(3) The Commission is not liable to pay compensation to a person in accordance with this Act unless the person is entitled to compensation.

If the Commission is not liable to pay compensation in accordance with this Act in respect of a person who is injured or dies as a result of a transport accident that occurred in another State or in a Territory and involved a registered motor vehicle by reason only that -

(a) the person was not, on the date of the accident, resident in Victoria; and

(b) was not the driver of, or a passenger in the registered motor vehicle -

the Commission may pay compensation in accordance with this Act in respect of that person if the Commission is satisfied that that person was, on that date, likely to reside in Victoria for not less than six months immediately after that date.

(1) This section applies where a person is injured or dies as a result of a transport accident if -

(a) the person, a dependant of the person or the surviving spouse of the person is entitled to compensation in respect of the accident in accordance with this Act; and

(b) a person has a right to claim compensation or a right of action in respect of the accident under the law of a place outside Victoria.

(2) The person, or a dependant or a surviving spouse of the person, is not entitled to compensation in accordance with this Act if, under the law of a place outside Victoria -

(a) the person, dependant or surviving spouse has been paid or has recovered an amount of compensation or damages; or

(b) an award of compensation or judgment for damages has been made, given or entered; or

(d) there has been a compromise or settlement of a claim; or

(e) a claim for compensation or action for damages is pending.

(3) If the person, a dependant or a surviving spouse of the person -

(a) receives compensation under this Act in respect of a transport accident; and

(ii) obtains an award of compensation or judgment for damages; or

(iv) there has been a settlement or compromise of a claim -

the Commission may recover from that person, dependant or surviving spouse as a debt due to the Commission the amount of compensation paid under this Act or the amount to which paragraph (b) refers, whichever is the lesser.

(4) If a person claims compensation under this Act in respect of a transport accident, an amount recovered or to be recovered by that person under the law of a place outside Victoria as compensation or damages in respect of a transport accident shall be presumed to be compensation or damages in respect of the same transport accident unless the person proves to the contrary.

(5) If a person who claims or is entitled to claim compensation under this Act in respect of a transport accident claims compensation or commences proceedings outside Victoria for the recovery of damages in respect of that accident, the person must give notice in writing to the Commission.

(1) A person shall not recover any damages in any proceedings in respect of the injury or death of a person as a result of a transport accident occurring on or after the commencement of section 34 except in accordance with this section.

(2) A person who is injured as a result of a transport accident may recover damages in respect of the injury if -

(a) the Commission has determined the degree of impairment of the person under section 46A, 47(7) or 47(7A); and

(a) under section 46A, 47(7) or 47(7A), the Commission has determined the degree of impairment of a person who is injured as a result of a transport accident; and

(b) the degree so determined is 30 per centum or more -

the injury is deemed to be a serious injury within the meaning of this section.

(a) under section 46A, 47(7) or 47 (7A), the Commission has determined the degree of impairment of a person who is injured as a result of a transport accident; and

(b) the degree so determined is less than 30 per centum -

the person may not bring proceedings for the recovery of damages in respect of the injury unless -

(i) is satisfied that the injury is a serious injury; and

(ii) issues to the person a certificate in writing consenting to the bringing of the proceedings; or

(d) a court, on the application of the person, gives leave to bring the proceedings.

(5) A copy of an application under sub-section (4)(d) must be served on the Commission and on each person against whom the applicant claims to have a cause of action.

(6) A court must not give leave under sub-section (4)(d) unless it is satisfied that the injury is a serious injury.

(7) Damages of any kind in respect of an injury cannot be recovered in proceedings in accordance with sub-sections (2), (3) and (4) other than damages -

(i) the assessment of damages before any reduction in respect of the person's responsibility for the injury is more than $30,520 but less than $686,840, in which case the amount that can be recovered is that amount so assessed as reduced first under sub-section (11) and secondly in respect of the person's responsibility for the injury; or

(ii) the assessment of damages before any reduction in respect of the person's responsibility for the injury is more than $686,840, in which case the amount that can be recovered is $686,840 as reduced first under sub-section (11) and secondly in respect of the person's responsibility for the injury;

(i) the assessment of damages before any reduction in respect of the person's responsibility for the injury is more than $30,520 but less than $305,250, in which case the amount than can be recovered is that amount so assessed as reduced first under sub-section (11) and secondly in respect of the person's responsibility for the injury; or

(ii) the assessment of damages before any reduction in respect of the person's responsibility for the injury is more than $305,250, in which case the amount that can be recovered is $305,250 as reduced first under sub-section (11) and secondly in respect of the person's responsibility for the injury.

(8) A person may recover damages under Part III of the Wrongs Act 1958 in respect of the death of a person as a result of a transport accident.

(9) A court must not, in proceedings under Part III of the Wrongs Act 1958 award damages in accordance with sub-section (8) in respect of the death of a person in excess of $500,000.

(10) Damages awarded to a person under this section shall not include damages in respect of -

(a) in the case of an award of pecuniary loss damages under sub-section (7), any pecuniary loss suffered in the period of 18 months after the transport accident; or

(b) any loss suffered or that may be suffered as a result of the incurring of costs or expenses of a kind referred to in section 60; or

(c) the value of services of a domestic nature or services relating to nursing and attendance -

(i) which have been or are to be provided by another person to the person in whose favour the award is made; and

(ii) for which the person in whose favour the award is made has not paid and is not and will not be liable to pay.

(11) Damages under sub-section (7) are to be reduced -

(i) if the person was entitled to compensation under this Act, by the amount of compensation paid in respect of the injury under sections 49, 50 and 51; or

(ii) if the person was not entitled to compensation under this Act because of section 37, by the amount of any compensation paid in respect of lost earnings other than earnings lost in the first 18 months after the transport accident; and

(b) in the case of damages for pain and suffering -

(i) if the person was entitled to compensation under this Act, by the amount of compensation paid in respect of the injury under sections 47, 48 and 54; or

(ii) if the person was not entitled to compensation under this Act because of section 37, by the amount of any compensation paid otherwise than in respect of lost earnings or other pecuniary loss.

(11A) Damages under sub-section (8) are to be reduced -

(a) if compensation was payable in respect of the death under this Act, by the amount of compensation paid under sections 57, 58 and 59; or

(b) if compensation was not payable in respect of the death under this Act because of section 37, by the amount of any compensation paid in respect of the loss of expectation of financial support (other than of the kind to which section 60 applies) under any compensation scheme specified in section 37.

(a) in proceedings relating to an application for leave of the court under sub-section (4)(d) - costs are to be awarded against a party against whom a decision is made; and

(b) in proceedings for the recovery of damages in accordance with this section -

(i) if no liability to pay damages is established, costs are to be awarded against the claimant; and

(ii) if damages are assessed but cannot be awarded under this section, each party bears its own costs; and

(iii) if damages are awarded, costs are to be awarded against the defendant.

(12A) Damages awarded in accordance with sub-section (8) in respect of the death of a person must not include damages in respect of services in the nature of housekeeping or the care of a child which would have been provided by the deceased person.

(13) Where an award of damages in accordance with this section is to include compensation, assessed as a lump sum, in respect of damages for future loss which is referable to -

(a) deprivation or impairment of earning capacity; or

(b) loss of the expectation of financial support; or

(c) a liability to incur expenditure in the future -

the present value of the future loss must be qualified by adopting a discount rate of 6 per centum in order to make appropriate allowance for inflation, the income from investment of the sum awarded and the effect of taxation on that income.

(14) Except as provided by sub-section (13), nothing in that sub-section affects any other law relating to the discounting of sums awarded as damages.

(15) A court must not, in relation to an award of damages in accordance with this section, order the payment of interest, and no interest shall be payable, on an amount of damages, other than damages referable to loss actually suffered before the date of the award, in respect of the period from the date of the death of or injury to the person in respect of whom the award is made to date of the award.

(16) Except as provided by sub-section (15), nothing in that sub-section affects any other law relating to the payment of interest on an amount of damages, other than special damages.

"pain and suffering damages" means damages for pain and suffering, loss of amenities of life or loss of enjoyment of life;

"pecuniary loss damages" means damages for loss of earnings, loss of earning capacity, loss of value of services or any other pecuniary loss or damage;

(a) serious long-term impairment or loss of a body function; or

(c) severe long-term mental or severe long-term behavioural disturbance or disorder; or

(a) affects a right to compensation under this Act or any Act or enactment referred to in section 37 or 38; or

(b) applies to the recovery of damages in respect of a transport accident involving an organised motor vehicle race or speed trial or a test in preparation for such a race or trial by a person who, by reason of section 41, is not entitled to compensation in accordance with this Act in respect of that accident; or

(c) applies to the recovery or damages in respect of a transport accident to which 41A or 41B applies by a person who, by reason of that section, is not entitled to compensation in accordance with this Act in respect of that accident.

19. Notwithstanding anything to the contrary in this Act, for the purposes of the Limitation of Actions Act 1958, the cause of action in respect of an injury arises on the day of the transport accident or on the day on which the injury first manifests itself.

20. For the avoidance of doubt it is hereby declared that all the provisions of this section contain matters that are substantive law and are not procedural in nature.

(1) If any injury arising out of a transport accident in respect of which the Commission has made payments under this Act arose under circumstances which, regardless of section 93, would have created a legal liability in a person (other than a person who is entitled to be indemnified under section 94) to pay damages in respect of pecuniary loss suffered by reason of the injury, the Commission is entitled to be indemnified by the first-mentioned person for such proportion of the amount of the liability of the Commission to make payments under this Act in respect of the injury as is appropriate to the degree to which the injury was attributable to the act, default or negligence of the first-mentioned person.

(2) The liability of a person under sub-section (1) shall not exceed the amount of damages referred to in sub-section (1) which, but for this Act, the person would be liable to pay to the injured person in respect of the injury.

(3) Judgment against or settlement by a third party in an action in respect of an injury or death referred to in sub-section (1) does not eliminate or diminish the right of indemnity given by this section, except to the extent provided in this section.

(a) the Commission has paid an amount under this Act in respect of an injury or death; and

(b) a person (other than the Commission) who appears to be liable or who it appears would have been liable, but for section 93, to pay damages or an amount by way of indemnity in respect of the injury or death is not entitled to be indemnified against that liability under an indemnity to which section 94 applies; and

(c) proceedings against that person for the purpose of recovering such damages or amount have not been instituted or have been instituted but have been discontinued or have not been properly prosecuted -

the Commission may take over the conduct of the proceedings.

(2) The Commission is liable to pay all costs of or incidental to proceedings referred to in sub-section (1), being costs payable by the plaintiff in those proceedings but not including costs unreasonably incurred by the plaintiff.

(3) If, in accordance with this section, the Commission takes over the conduct of proceedings that have been instituted in the name of a person -

(i) settle the proceedings either with or without obtaining judgment in the proceedings; and

(ii) if a judgment is obtained in the proceedings in favour of the plaintiff - take such steps as are necessary to enforce the judgment; and

(b) that person shall sign any document relevant to the proceedings, including the settlement of the proceedings, that the Commission requires the person to sign and, if the person fails to sign any such document, the court or tribunal in which the proceedings are being taken may direct that that document be signed on behalf of the person by another person appointed by the Commission for that purpose.

[1] (1993) 32 N.S.W.L.R. 207 especially at 215-216 and 220.

[2] [1988] HCA 40; (1988) 169 C.L.R. 41.

[3] Defendant's outline of submissions, paragraphs 55-66.

[4] In either case the amount clawed back would be limited by the amount of the damages recovered: see s.42(3) and contrast s.104(1) and (2).

[7] Fox v. Wood [1981] HCA 41; (1981) 148 C.L.R. 438 at 441 lines 10-13.

[8] I admit that this is a debatable reading of sub-s.(2), but I think it better accords with the purpose of s.104 and the limitation of liability in sub-s.(1), as well as avoiding an unjust result.

[9] It was submitted, for example, that at least some of the work done by s.42(2) in relation to interstate transport accidents is done by ss.53(2), 57(5), 58(7) and 59(10) in relation to accidents of which Victorian law is the lex causae.

[10] It would have been better to repeal the words "would have" before "created" too. As amended, s.104 covers both the possibilities, liability and liability but for s.93, referred to separately in the first three lines of s.107(1)(b).

[12] Motor Accidents Act 1988 (N.S.W.), s.11.

[13] Above at [[]-[]].

[14] Sections 3, 35, 36, 42, 93, 104 and 107.

[15] Victorian WorkCover Authority v. Esso Australia Ltd (2001) 207 C.L.R. 520 at p. 527; Hodge v. Club Motor Ins Agency Pty Ltd (1974) 7 S.A.S.R. 86 at 102.

[16] Esso Australia Ltd v. Victorian Workcover Authority [2000] VSCA 74; (2000) 1 V.R. 246 at p. 257; which was approved at 207 C.L.R. 520 at p. 527.

[17] Barcelo v. Electrolytic Zinc Co Australasia Ltd [1932] HCA 52; (1932) 48 C.L.R. 391 at pp. 423-424; Jumbunna Coal Mine NL v. Victorian Coal Miners' Association (1908) 6 C.L.R. 309 at p. 363.

[18] In Part 10 of the Act (which deals with liability arising before the relevant provisions commenced).

[19] (1995) 21 M.V.R. 41 at 44.

[20] See Transport Accident Commission v. Lanson [2001] VSCA 84; (2001) 3 V.R. 250.

[21] Breavington v. Godleman [1988] HCA 40; (1989) 169 C.L.R. 41; McKain v. Miller and Co (S.A.) Pty Ltd [1991] HCA 56; (1991) 174 C.L.R. 1; Stevens v. Head ([1993] HCA 19; 1993) 176 C.L.R. 433; Goryl v. Greyhouond Australia Pty Ltd [1994] HCA 18; (1994) 179 C.L.R. 463.

[22] (1994) 21 M.V.R. 41 at pp. 54-55 per Ashley, J. and at pp. 58-9 per Hedigan, J.

[23] (1994) 21 M.V.R. 41 at p. 45.

[25] [1993] HCA 19; (1993) 176 C.L.R. 433.

[26] See Pearce & Geddes, Statutory Construction in Australia at [7.22]; Commissioner of Stamps v. Telegraph Investment Co Pty Ltd [1995] HCA 44; (1995) 184 C.L.R. 453 at pp. 463 and 479.

[27] See, for example Bradburn v. Great Western Railway Co [1854] EngR 538; (1874) L.R. 10 Ex 1; National Insurance Co of New Zealand Ltd v. Espagne [1961] HCA 15; (1961) 105 C.L.R. 569; Graham v. Baker [1961] HCA 48; (1961) 106 C.L.R. 340; Parry v. Cleaver [1969] UKHL 2; [1970] A.C. 1; Batchelor v. Burke [1981] HCA 30; (1981) 148 C.L.R. 448; Haines v. Bendall [1991] HCA 15; (1991) 172 C.L.R. 60.

[28] Above at p. 600, with which Dixon, CJ. agreed expressed agreement at p. 574.

[30] Parry v. Cleaver, supra at p. 14 D-E, per Lord Reid.

[33] Espagne supra at p. 574 per Dixon, CJ., at p. 582 per Menzies, J. and at p. 600 per Windeyer, J.

[37] [1970] A.C. at p. 42 G-H per Lord Wilberforce.

[41] (1981) 148 C.L.R. at p. 454, per Gibbs, CJ.

[42] Parry v. Cleaver , supra at 14 D-E, per Lord Reid.

[43] Cooper Brookes (Wollongong) Pty Ltd v. Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 C.L.R. 297 at pp. 320-321; Pearce & Geddes, Statutory Interpretation in Australia , 5th Ed. at [2.30].

[44] John Pfeiffer Pty Ltd v. Rogerson [2000] HCA 36; (2000) 203 C.L.R. 503.

[47] Cf. Wanganui-Rangitikei Electric Power Board v. Australian Mutual Provident Society [1934] HCA 3; (1934) 50 C.L.R. 581 at p. 601; Barcelo v. Eletrolytic Zinc [1932] HCA 52; (1932) 48 C.L.R. 391 at p. 424.

[48] [2001] VSCA 84; (2001) 3 V.R. 250 at [18]- [30], [48] and [49].

[49] ASIC v. Edensor Nominees Pty Ltd (2001) 204 C.L.R. 559 at [39]-[40].

[50] Felton v. Mulligan [1971] HCA 39; (1971) 124 C.L.R. 367 at p.373.

[51] Solomons v. District Court of N.S.W. [2002] HCA 47; (2002) 211 C.L.R. 119 at [21]- [74].

[53] Dicey & Morris, The Conflict of Laws 9th Ed, Rule 147.

[59] The Commonwealth v. Evans Deakin Industries Ltd [1986] HCA 51; (1986) 161 C.L.R. 254; (2003) 77 A.L.J.R. 1566 at p. 1781.

[60] Evans Deakin, ibid at 267; Pitcher v. Federal Capital Commission [1928] HCA 44; (1928) 41 C.L.R. 385.

[61] Australia Act 1986 s. 2; Constitution, s. 106.

[62] [2003] HCA 47; (2003) 77 A.L.J.R. 1566.

[63] [1963] HCA 55; (1963) 110 C.L.R. 538 at p. 539.

[64] [1991] VicRp 90; [1991] 2 V.R. 534 at pp. 536-8.

[66] Attorney-General (N.S.W.) v. Brewery Employees Union of NSW & Ors [1908] HCA 94; (1908) 6 C.L.R. 469 at p. 531; Pearce & Geddes, Statutory Construction in Australia 5th Ed at [4.11].

[67] [1932] HCA 52; (1932) 48 C.L.R. 391 at p. 427.

[68] Pearce v. Florenca [1976] HCA 26; (1976) 135 C.L.R. 507 at p. 518, per Gibbs CJ; Union Steamship Co of Australia Pty Ltd v. King [1988] HCA 55; (1988) 166 C.L.R. 1 at p. 14.

[69] [2002] HCA 27; (2002) 211 C.L.R. 1 at p. 26.

[70] (1992) 27 N.S.W.L.R. 78.

[71] Constitution, s. 106; Boath v. Wyvill (1989) 85 A.L.R. 621 at p. 634.

[72] See Commissioner of Stamp Duties (N.S.W.) v. Millar [1932] HCA 63; (1932) 48 C.L.R. 618 at p. 630 per Gavan Duffy, CJ. and Evatt, J.; cf at p. 632 per Rich, Dixon and McTiernan, JJ.

[73] See also Permanent Trustee Co (Canberra) Ltd v. Finlayson [1968] HCA 85; (1968) 122 C.L.R. 338 at p. 343 In the Will of Lambe [1972] 2 N.S.W.L.R. 273 at pp. 279-280.

[74] Mobil Oil Aust Pty Ltd v. Victoria [2002] HCA 27; (2002) 76 A.L.J.R. 926 at p. 950 [123] per Kirby, J.

[75] Lane, The Australian Constitution, at p. 819; Broken Hill South Ltd v. Commissioner of Taxation (1937) 56 C.L.R. 357 at p. 375.

[76] Cf Mobil, supra at p. 946 [106], per Kirby, J.

[77] Mobil at [2002] HCA 27; (2002) 76 A.L.J.R. 926 at p. 931 [17] per Gleeson, CJ.; at p. 936 [48]-[57] per Gaudron, Gummow and Hayne, JJ.; and at p. 946 [106] per Kirby, J.

[78] [1989] HCA 53; (1989) 168 C.L.R. 461.

[79] per Brennan, J. at p. 507, see also Mason, CJ. at pp. 484-487, Deane, J. at pp. 526-6, Dawson, J. at p. 545, McHugh, J. at p. 582.

[85] Cf Street, supra at p. 519, per Brennan, J.

[109] [1994] HCA 18; (1994) 179 C.L.R. 463.