THE ESTATE OF DARRYL ARTHUR HERBERT C/- THE PUBLIC TRUSTEE

Practice - Western Australia - Practice under the Rules of the Supreme Court of Western Australia - Application by the defendant for summary judgment - Section 51 of the Insurance Contracts Act 1984 (Cth)

Insurance Contracts Act 1984 (Cth)

Law Reform (Miscellaneous Provisions) Act 1941

Lend Lease Employer Systems Ltd v Lydon, unreported; FCt SCt of WA; Library No 98088C; 27 February 1998

Bayswater Car Rental Pty Ltd v Hannell [1999] WASCA 34; (1999) 29 MVR 35

Dey v Victorian Railway Commission [1949] HCA 1; (1949) 78 CLR 62

Forsayth NL v Northern Gold NL, unreported; SCt of WA; Library No 940012; 20 January 1994

Webb v The Estate of Darryl Arthur Herbert C/- The Public Trustee & Anor [2003] WADC 193

1 DEPUTY REGISTRAR HARMAN: The plaintiff commenced the action for damages for personal injury against the first defendant and under s 51 of the Insurance Contracts Act 1984 (Cth) against the first defendant's insurer. The first defendant is not properly constituted and in effect has never been a party to the action. The plaintiff is now precluded from joining any party against whom liability could be assessed independently of s 51.

2 The insurer, the only defendant has filed a defence and now seeks summary judgment. In the application the onus is on the defendant to satisfy the Court that the plaintiff cannot succeed in the action.

3 The relevant parts of s51 are as follows:

"51(1) Where:

(a) the insured under a contract of liability insurance is liable in damages to a person (in this section called the "third party");

(b) the insured has died or cannot, after reasonable enquiry, be found; and

(c) the contract provides insurance cover in respect of the liability;

the third party may recover from the insurer an amount equal to the insurer's liability under the contract in respect of the insured's liability in damages.

4 It is common ground that par (b) is satisfied and that in the event of a finding under par (a), (c) would be satisfied. It is a matter of considering whether par (a) could be met in circumstances where no judgment could be entered for the plaintiff against the insured.

5 Whatever analysis is brought to bear ultimately it is a matter of considering whether in the event of the death of an insured person the legislature intended to provide a benefit for victims in circumstances where the insured had made contractual provision to cover the particular risk. In my opinion it is conceivable that the appropriate interpretation given to the language would allow for recovery in a case other than where the insured dies after liability in damages has been found.

6 It is not as though such a result would be outside the realm of probability. In Lend Lease Employer Systems Ltd v Lydon, unreported; FCt SCt of WA; Library No 98088C; 27 February 1998, the Full Court of the Supreme Court was prepared to read a statutory provision that was expressed in terms of "loss" as being a reference to "damages" despite the provision in the Law Reform (Miscellaneous Provisions) Act 1941 that expressly distinguished the concepts.

7 The remedy provided by s 51(1) imposes no greater scope of liability on the insurer than had been established under the policy. Accordingly, it is appropriate to consider the entitlement of the insured under the policy.

8 The relevant provision is as follows:

"The Insurer will pay to or on behalf of the Insured all sums which the Insured shall become legally liable to pay for compensation ..."

9 It is a matter of considering whether prior to the condition for payment being satisfied, that provision could impose any obligation on the insurer. There is no basis to contend that the provision was intended to express an entitlement on the part of the insured at any point prior to the determination of "all sums, which the insured shall become legally liable to pay". There is no reason to consider that the insurer would be obliged to do anything at any time prior to the condition being satisfied.

10 As I see the case s 51 is simply not available as a mechanism for recovery. The case is bound to fail. Accordingly, the defendant should be successful in the application.