'No-fault' means no-one's fault

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Last updated: 25 Jun, 2021
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Originally Published by Andrew Gorman on Monday, September 30, 2019 12:53:33 PM

Are all not‑at‑fault drivers who have sustained non‑minor injuries entitled to statutory benefits after 26 weeks, or do the deeming provisions contained in Parts 3 and 5 of the Motor Accident Injuries Act 2017 produce a different outcome for some? The Supreme Court of NSW provided eagerly‑awaited answers in AAI Limited v Singh.



Author: Andrew Gorman
Judgment date: 27 September 2019
Citation: AAI Limited v Singh [2019] NSWSC 1300
Jurisdiction: Supreme Court of New South Wales, Fagan J.

Principles


  • Section 3.2(5) of the Motor Accident Injuries Act 2017 (the MAIA) is concerned with deeming where liability lies, not with deeming that any person is at fault in any situation.

  • The words "not caused by the fault of any other person" in s 5.1 mean just what they say. If the evidence establishes that someone was at fault, the no‑fault provisions of the MAIA have no application.

  • The legislative framework requires amendment to bring certainty to the interpretation of Parts 3 and 5 of the MAIA.

Background


Mr Singh was injured when a truck he was driving overturned shortly after he left the docks. The truck was carrying a shipping container that had been loaded by others. The vehicle rolled because the container had not been properly secured. There was no fault on the part of Mr Singh or the owner of the vehicle. The insurer stopped paying Mr Singh's statutory benefits after 26 weeks, contending that by force of s 3.2(5) of the MAIA the accident was deemed to have been caused wholly by his fault. Pursuant to s 3.11(1)(a) and s 3.28(1)(a), benefits are not payable after 26 weeks when the accident was caused wholly or mostly by the fault of the injured person. Section 3.2(5) provides:

"For the purposes of this Act (including any motor accident insurance cover in respect of a motor vehicle) a liability that the relevant insurer has to pay statutory benefits under this Part in respect of death or injury is deemed to be a liability in respect of death or injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle (being a motor vehicle for which the insurer is the relevant insurer)."

Mr Singh disputed the insurer's decision. A Claims Assessor determined that as the motor accident was not by Mr Singh's fault, he was entitled to statutory benefits beyond 26 weeks. The insurer challenged that determination by summons filed with the Supreme Court.


Supreme Court

Does s 3.2(5) deem Mr Singh wholly at fault?


The insurer argued that, because Mr Singh was the driver of the vehicle whose insurer was bound under s 3.2 to pay statutory benefits, sub‑section (5) deemed him to have been wholly at fault, despite the fact that he was actually blameless.

In rejecting the insurer's argument, Fagan J held that s 3.2(5) is concerned with deeming where financial liability lies, not with deeming that any person is at fault, in any situation. Observing that it is unclear why the legislature should have considered it necessary to deem the liability for statutory benefits created under ss 3.1 and 3.2 to be a liability falling within the statutory insuring clause at s 2.3, he explained, at [13]:

"Whatever the reason for enacting s 3.2(5), its effect is to deem that the additional statutory obligation is within the insuring clause, and no more. It does not, either in express terms or by implication or necessary intendment, have the effect of deeming any person to have been at fault in any situation to which s 3.2 may apply.'

Does s 5.2 deem Mr Singh wholly at fault?


In the Supreme Court proceedings, the insurer contended that Part 5 of the MAIA governs the claim and has the effect of attributing fault to Mr Singh.

Section 5.1 provides:

"No‑fault motor accident means a motor accident in the State not caused by the fault of the owner or driver of any motor vehicle involved in the accident in the use or operation of the vehicle and not caused by the fault of any other person."

Section 5.2 provides:

"(1) the death of or injury to a person that results from a no‑fault motor accident involving a motor vehicle that has motor accident insurance cover for the accident (within the meaning of s 1.10) is, for the purposes of and in connection with any claim for damage or statutory benefits in respect of the death or injury, deemed to have been caused by the owner or driver of the motor vehicle in the use or operation of the vehicle."

Section 5.6 provides:

"a person whose liability for damages or statutory benefits in respect of the death of or injury to a person results from the person being deemed under this Part to be a person whose fault caused the death or injury is entitled to recover contribution in respect of that liability from a person (whether or not the driver of a motor vehicle) whose fault actually caused the death or injury."


Mr Singh argued that this was not a 'no fault motor accident' because it was caused by the fault of another person, namely the person or persons who negligently loaded the container.

The insurer submitted that the words "any other person" in s 5.1 should be read down to leave open that a motor accident could still attract the definition of 'no fault' if it was to some degree caused or contributed outside the class of 'any other person'. However, the Court held that such an interpretation is impossible, even if the effect is that s 5.6 is rendered redundant. The Court concluded at [23]:

"As the words "not caused by the fault of any other person" in s 5.1 mean just what they say, it follows that the accident in the present case was not "no fault" and therefore s 5.2(1) does not apply."


The Court went on to determine that even if s 5.2(1) applied, that provision distinguishes between fault in the causation of injury and fault in the causation of the accident. His Honour explained, at [24]:


"It does so in order to deem fault in the causation of injury (and hence to create a path of liability) in the case of "no‑fault motor accidents", where there is by statutory definition no fault in the causation of the accident and where the legislature has apparently deliberately chosen not to deem fault in the causation of the accident. An aspect of the scheme of Part 3 is that fault in causing the accident is the criterion for terminating statutory benefits at 26 weeks. That scheme would be subverted if a section located in Part 5 (dealing with accidents not caused by anyone's fault) should operate to deem fault in the causation of the accident for the purposes of the limit on statutory benefits. In my view s 5.2(1) does not so operate."


Because s 3.2(5) did not deem Mr Singh at fault and as this was not a no‑fault accident otherwise invoking Part 5, the Claims Assessor's decision was upheld, and the summons was dismissed.

Why this case is important

The Supreme Court has questioned why the legislature considered it necessary to enact s 3.2(5). According to Fagan J, the only rational interpretation is that its purpose is to deem that the additional statutory obligation is within the insuring clause, and no more.

Similarly, the Supreme Court has highlighted the contradiction between s 5.1 and s 5.6, urging Parliament to give them "careful and detailed reconsideration", if a "spate of litigation generated by the obscurities of those provisions" is to be avoided.

However, this case establishes that Part 5 does not apply to accidents where someone – anyone at all – is at fault.

This determination is equally applicable to claims brought under the Motor Accident Compensation Act 1999. Whilst the relevant definition of a no-fault (or blameless) accident, s 7A, is in largely identical terms, the issue had not been determined in a superior jurisdiction.

This case also supports the proposition that in single‑vehicle accidents where no other person is at fault, such as those involving bee stings or kangaroos on the road, s 5.2(1) does not operate to deem fault in the injured person. As Fagan J observed, to conclude otherwise would be to subvert a scheme where fault in the causation of the accident is the criterion for terminating statutory benefits at 26 weeks. Legislative amendment to Part 5 will be necessary to give certainty to this interpretation.

Given the obscurities identified by the Supreme Court, it is difficult to know for sure whether its interpretation accords with what the Parliament had intended. The outcome potentially broadens the insurance risk, with possible implications for scheme costs.