AAI Limited t/as GIO v Evic

1. [1]

   The primary issue in these proceedings is the application of ss 3.11 and 3.28 of the Motor Accident Injuries Act 2017 (NSW) (the MAI Act) to an owner driver who is injured in a single vehicle accident. The plaintiff, AAI Limited t/as GIO, contended that the second defendant, a member of the Personal Injury Commission (PIC), adopted an incorrect construction of those provisions in determining the first defendant’s claim under the MAI Act. The decision in issue was delivered on 22 November 2023.

2. [2]

   The second issue, which arises if I accept the plaintiff’s allegation of error, is whether I should make the declaration sought in circumstances where the plaintiff did not seek to quash the decision of the PIC and accepted that there was a separate and independent basis on which the member made the decision, which it has not challenged.

3. [3]

   The active parties are the plaintiff and the fourth defendant, the Attorney General for New South Wales, who was joined in the absence of an active contradictor. The first defendant, John Evic (the injured person), the second defendant and the third defendant, the President of the PIC, have filed submitting appearances.

Background to the member’s decision

1. [4]

   The background is set out in the decision of the member and may be shortly stated. The plaintiff is the compulsory third-party insurer of Mr Evic’s vehicle, a motorcycle. On 20 November 2022, Mr Evic was involved in an accident involving his motorcycle, which he described in his Application for Personal Injury Benefits dated 29 March 2023 (extracted by the member in her reasons at [5]):

2. [5]

   There was no dispute that the accident occurred in the course of the driving of the motorcycle. It thus met the definition of a “motor accident” in s 1.4 of the MAI Act, which provides:

3. [6]

   Mr Evic sustained an injury as defined in s 1.4 of the MAI Act (relevantly, a “personal or bodily injury”), being a spiral fracture to his left leg as a result of the accident. The plaintiff accepted that it was a non-minor or non-threshold injury.

4. [7]

   Mr Evic made a claim under the MAI Act in relation to his injury. The term “claim” is defined in s 1.4 of the Act to mean “a claim for statutory benefits or a claim for damages”. Mr Evic’s claim was for statutory benefits, under Part 3 of the MAI Act. Part 3 of the Act makes provision for statutory benefits including weekly payments in lieu of income (Div 3.3) and benefits for treatment and care (Div 3.4).

5. [8]

   On 20 April 2023, the plaintiff issued a notice denying liability for statutory benefits after 26 weeks, contending that Mr Evic was wholly at fault for the motor accident because he failed to maintain control of his vehicle so as to avoid an accident. The plaintiff relied in this regard on ss 3.11 and 3.28 of the MAI Act. Section 3.11, in Div 3.3, applies to statutory benefits for weekly payments. As at the date of Mr Evic’s accident, s 3.11 provided:

6. [9]

   Section 3.28, in Div 3.4, applies to statutory benefits for treatment and care expenses and is formulated in similar terms to s 3.11. It provided at the relevant time:

7. [10]

   Amendments made to the MAI Act pursuant to the Motor Accident Injuries Amendment Act 2022 (NSW) included extending the period specified in ss 3.11 and 3.28 from 26 to 52 weeks: Sch 1, items 16, 18 (s 3.11) and 21 (s 3.28) (s 3.28(3) was also repealed: Sch 1, item 23). However, the extension of the periods in ss 3.11 and 3.28 did not apply to a motor accident occurring before the commencement of the amendments, being 1 April 2023: see Sch 4, Pt 7, cl 15 of the MAI Act.

8. [11]

   On 7 July 2023, following an unsuccessful internal review, Mr Evic applied to the PIC for a miscellaneous claims assessment under Part 7 of the MAI Act (see Sch 2, cl 3(d) and (e) of the Act). The issue for determination was whether, for the purposes of ss 3.11 and 3.28 of the Act, the motor accident concerned was caused wholly or mostly by the fault of Mr Evic, as the injured person.

The decision of the PIC

1. [12]

   On 22 November 2023, the PIC, constituted by the second defendant, made the following findings on the assessment of the dispute pursuant to s 7.36 of the Act:

2. [13]

   In light of the transitional provisions to which I have referred at [10], the member’s references to the current headings of ss 3.11 and 3.28, which refer to the cessation of statutory benefits after 52 weeks (rather than 26 weeks), was wrong. Nothing ultimately turns on that for the purposes of these proceedings.

3. [14]

   The member stated that her reasons in this case should be read in conjunction with her reasons in the matter of Fatoula v GIO trading as AAMI, matter no M10559214/23, which was delivered on the same day (“Fatoula”). A copy of Fatoula was annexed to the reasons. In Fatoula, the member concluded that as a matter of construction, an owner driver injured in a single motor vehicle accident could not be “at fault”, as that term is used in ss 3.11 and 3.28 of the MAI Act, and therefore could not be wholly or mostly at fault.

4. [15]

   Before addressing the particular issue of statutory construction, the member made a number of observations which she described as relevant to the analysis. First, the member referred to the definition of “fault” in s 1.4 of the MAI Act, which “means negligence or any other tort”. The member described the words “or any other tort” in the definition as limiting the concept of negligence to its tortious sense. The member considered that this definition was inapt to include the definition of negligence in s 5 of the Civil Liability Act 2002 (NSW) (“negligence means failure to exercise reasonable care and skill”) (at [34]).

5. [16]

   Second, the member considered that the use of the term “fault” in ss 3.11 and 3.28 worked to confer power on the insurer to avoid statutory benefits in circumstances where an injured person was wholly or mostly at fault. The member considered that the principle that statutory definitions are not a source of substantive power but an aid to construction was not absolute and could be departed from where there was “a clear contrary legislative intent”, citing Moreton Bay Regional Council v Mekpine Pty Ltd (2016) 256 CLR 437; [2016] HCA 7 (at [35]).

6. [17]

   Third, the member referred to Part 3 of the MAI Act as new and not known at the time that Axiak v Ingram (2012) 82 NSWLR 36; [2012] NSWCA 311 (“Axiak”) was decided, in which the Court of Appeal construed the “blameless accident” provisions of the Motor Accidents Compensation Act 1999 (NSW) (the MAC Act). The member cautioned against appropriating the meaning ascribed to the expression “fault” as it appeared “in an incongruent statutory context”, such as pursuant to the previous legislation. The member referred in this context to McHugh J’s description of the scheme for which the MAC Act had made provision, in Allianz Australia Insurance Limited v GSF Australia Pty Limited (2005) 221 CLR 568; [2005] HCA 26 at [43], as not providing “a universal, comprehensive scheme to award damages to every person who sustains an injury that was in some way connected to a motor vehicle” (at [36]).

7. [18]

   Fourth, the member noted that as originally framed, “the equivalence of the ‘blameless’ accident provisions about which [Axiak] speaks, called ‘no-fault motor accidents’ housed in Part 5 to the Act, applied in respect of statutory benefits”. However, the application of “the Part” (presumably, Part 5) to a claim for statutory benefits was removed by the Motor Accidents and Workers Compensation Legislation Amendment Act 2022 (NSW), “which amended Part 5 to make it clear the Part does not apply to the recovery of statutory benefits” (at [37]). The member referred in this context to the second reading speech in which the then Minister stated (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 9 June 2021 at 6927):

8. [19]

   The member said of this extract (at [39]-[40]):

9. [20]

   The case to which the member referred at the end of this extract was Whitfield v Melenewycz (2016) 92 NSWLR 624; [2016] NSWCA 235 (“Whitfield”). The member noted that Whitfield involved a motorcycle rider claiming under the blameless accident provisions under the MAC Act, when a kangaroo collided with his motorcycle, which he had no time to avoid. The member described the decision as holding that where a driver in a single vehicle accident is also the owner of the vehicle, the driver could not rely on the blameless accident provisions to deem fault on his or her part and then rely on that deemed fault to attribute liability to his or her compulsory third party insurer (at [41]). The member inferred, from the “express incorporation of the Whitfield example” in the second reading speech, that the Parliament “intended that a single motor vehicle accident involving the owner of that motor vehicle, although not liable to himself or herself and thereby, not at fault, can by reason of these amendments, nonetheless qualify for statutory benefits” (at [42]). Parliament would, in the member’s view, have contemplated decisions such as Whitfield and would have addressed the statutory incongruities to which it gave rise.

10. [21]

    Fifth, the member understood the insurer’s submissions in the case before her as appropriating a different meaning to the expression “fault” as it appeared within s 3.11 or s 3.28 depending on the circumstances of a subject accident (at [44]):

11. [22]

    The member considered this to be “a unique approach to statutory construction” for which the insurer cited no authority, and that “fault” should not be given different meanings depending on the circumstances of the case (at [45]). Finally, and relatedly, the member stated that it was “not the role of the [PIC] or indeed the court to emancipate the statutory language from its contextual constraints so that it is apt to grapple with a perceived unfairness”. Nor was it the role of the PIC to “presuppose that there is sitting behind the legislation no actuarial choice to extend statutory benefits in a manner seemingly inconsistent to the perceived safety net to which the insurer relies in its submissions” (at [48]).

12. [23]

    Turning, then, to the construction of the particular provisions in issue, the member referred to s 1.9 of the MAI Act, which is titled “General restrictions on application of Act”, subsection (1) of which provides (in terms that reflect the definition of “motor accident” in s 1.4):

13. [24]

    The statutory intention of Part 3 was clearly articulated in s 3.1 and s 3.2, with s 3.2 making it clear that the Part applied even if the motor accident involved only one motor vehicle (at [53]). The member contrasted the scheme of Part 3 in this regard with Part 4, which deals with damages, and which was predicated on an insurer’s liability in accordance with the common law of negligence (at [54]). The member stated (at [55]):

14. [25]

    The member considered that the scheme of statutory benefits in fact contained “multiple incongruities with the traditional common law scheme of personal injury damages”. She referred, by way of example, to ss 3.11 and 3.28 of the MAI Act, in which the exception to the requirement to pay statutory benefits to those considered mostly at fault is defined as 61% contributory negligence, when a determination of 61% contributory negligence does not preclude a claim for damages. The member noted that ss 3.44(1)(a) and (b) drew a distinction between fault and contributory negligence, which lent constructional force to the proposition that fault denoted liability (at [56]-[57]).

15. [26]

    The member concluded:

The application for review

1. [27]

   After a number of iterations, the plaintiff’s further amended summons, filed on 5 August 2024, advanced a single ground of review:

2. [28]

   In the event that this ground was made out, the plaintiff sought a declaration in the following terms:

3. [29]

   The plaintiff did not seek to quash the decision of the PIC; and it informed the claimant in writing that it would continue to abide by the decision with respect to his claim for statutory benefits. The plaintiff was in fact required to abide by the decision, in circumstances where the member had determined that even if she were wrong as to the construction of ss 3.11 and 3.28, she was not satisfied that the claimant failed to exercise reasonable care and skill in his operation of the motorcycle (at [14]). The plaintiff did not challenge that aspect of the decision; and Senior Counsel for the plaintiff accepted that in the absence of such a challenge it was not invalid and could not be quashed.

4. [30]

   The plaintiff submitted that it was sufficient to establish its case, and the Court’s power to issue the remedy sought would be enlivened, if the Court found an error of law on the face of the record. Alternatively, the plaintiff submitted that the identified error constituted a constructive failure to exercise jurisdiction: Roger v De Gelder [2015] NSWCA 211; 71 MVR 514. In that case, Gleeson JA (Macfarlan and Leeming JJA agreeing) described a constructive failure to exercise jurisdiction as arising “when a decision-maker misunderstands the nature of its jurisdiction and, in consequence, applies a wrong test, misconceives its duty, fails to apply itself to the real question to be decided, or misunderstands the nature of the opinion it is to form”, citing Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323; [2001] HCA 30 at [41] (Gaudron J).

5. [31]

   The Attorney General agreed with the plaintiff’s submissions that the member had made an error of law, and submitted that a declaration could be made to that effect: see Commissioner of Taxation of the Commonwealth of Australia v Futuris Corporation Limited (2008) 237 CLR 146; [2008] HCA 32 at [47] (Gummow, Hayne, Heydon and Crennan JJ). However, the Attorney General submitted that while there was power to make the declaration sought pursuant to s 75 of the Supreme Court Act 1970 (NSW), I should not exercise the discretion conferred by that section and make a declaration. The Attorney General submitted that the declaration lacked utility in circumstances where the plaintiff did not seek relief in the nature of certiorari and had agreed to continue to pay statutory benefits to the claimant.

The construction of ss 3.11 and 3.28 of the Motor Accident Injuries Act

1. [32]

   The plaintiff and the Attorney General were agreed as to the applicable principles of construction, which are well settled and were summarised by Gordon, Edelman, Steward and Gleeson JJ in ENT19 v Minister for Home Affairs [2023] HCA 18; 97 ALJR 509 at [86]-[87]. Their Honours stated at [87]:

2. [33]

   The MAI Act establishes “a new scheme of compulsory third-party insurance and provision of benefits and support relating to the death of or injury to persons as a consequence of motor accidents”: s 1.3(1). The objects of the Act, in s 1.3(2), reflect what Griffiths AJA recently described as “a range of conflicting or competing purposes”: Allianz Australia Insurance Limited v The Estate of the Late Summer Abawi [2024] NSWSC 1245 (“Abawi”) at [16]. They include: encouraging early and appropriate treatment and care to achieve a person’s optimum recovery from injuries sustained in motor accidents and to maximise their return to work or other activities (s 1.3(2)(a)); providing early and ongoing financial support for persons injured in motor accidents (s 1.3(2)(b)); and encouraging the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes (s 1.3(2)(g)). Section 1.3(4) contains the Act’s own “purposive interpretation provision” (Abawi at [18]), providing that in interpreting a provision of the Act or regulations “a construction that would promote the objects of this Act or the provision is to be preferred to a construction that would not promote those objects”.

3. [34]

   I have set out s 1.9(1) of the MAI Act above, which imposes a general restriction on the application of the Act by reference to the definition of “motor accident”. Section 1.10 imposes further restrictions on the application of the Act, relevantly, that the motor accident be one for which the vehicle has motor accident insurance cover:

4. [35]

   Part 2 of the MAI Act deals with third-party insurance. The terms of a third-party policy under the Act are prescribed in s 2.3. By that provision, the insurer must indemnify the owner and any driver of the insured vehicle against “liability in respect of the death of or injury to a person caused by the fault of the owner or driver of the vehicle” in the “use or operation of the vehicle”.

5. [36]

   I have set out above the definition of “fault” in s 1.4 but it bears repeating: “negligence or any other tort”. In Axiak, Tobias JA said of the identical definition in the MAC Act that the words “any other tort”, “can only refer to any tort other than the tort of negligence”: at [59]. His Honour noted that phrase “fault of the… driver” was used in numerous sections of the MAC Act, emphasising “the continuation of the fault-based scheme whereby a person injured in a motor vehicle accident can claim damages where the accident is caused by the tortious conduct of, relevantly, the driver of the relevant vehicle”: at [60].

6. [37]

   That fault-based scheme is continued in the MAI Act. Part 4 of the Act deals with awards of damages and applies “to and in respect of an award of damages that 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”: s 4.1(1). It includes, in s 4.17(1), provision for the application of the common law and enacted law as to contributory negligence to an award of damages in respect of a motor accident, except as provided by that section.

7. [38]

   The “blameless accident” provisions under the MAC Act, which were the subject of the Court’s decision in Axiak, are also continued in the MAI Act, in Part 5. Section 5.1 defines a no-fault motor accident as one that is “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 deems such accidents to be caused by the fault of the owner or driver of the vehicle in use or operation of the vehicle. As the plaintiff submitted in this case, the provisions of Part 5 create a right for a claimant to make a fault-based claim for damages in cases where there is no fault on the part of the defendant (subject to meeting the other definitional requirements of a motor accident, including the causative use or operation of a vehicle by the owner or driver of the vehicle). Section 5.5 provides that the Part does not prevent the reduction of damages by reason of the contributory negligence of the deceased or injured person.

8. [39]

   Part 3 of the MAI Act, which deals with statutory benefits, did not form part of the motor accident scheme in earlier legislation; and, significantly, the entitlement to statutory benefits is not fault-based. In the second reading speech to the Motor Accident Injuries Bill 2017 (NSW), the then Minister described Part 3 as “[o]ne of the landmark changes” from the previous statutory regime, which would see “all injured people receive support soon after they lodge a claim”. The Minister stated (New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 9 March 2017 at 1-2):

9. [40]

   The general entitlement to statutory benefits is conferred in s 3.1:

10. [41]

    Pursuant to s 3.1, statutory benefits are payable provided the death or injury results from a motor accident as defined in s 1.4, and “except as otherwise provided by this Part”. As the member noted in her reasons, reproduced at [24], no distinction is drawn in the section as to the type of motor accident from which the death or injury results, including the number of vehicles involved.

11. [42]

    Section 3.2(1) provides that the statutory benefits are payable by the “relevant insurer”: s 3.2(1). The term “relevant insurer” is defined in s 3.2(2):

12. [43]

    The terms of s 3.2(2)(a) confirm that the statutory benefits scheme is available to a person who is injured in a single motor vehicle accident. If more than one motor vehicle is involved, s 3.3(4) deals with determining “the insurer of the at‑fault motor vehicle”:

13. [44]

    As with s 3.1, s 3.2(4) as it presently stands is not concerned with “fault” for a motor accident as that term is defined. As originally enacted, however, the provision was framed in that manner, providing:

14. [45]

    The Explanatory Note to the Motor Accidents and Workers Compensation Legislation Amendment Bill 2022 (NSW), pursuant to which s 3.2(4) was repealed and replaced, stated that the amendment was to clarify that “the insurer of an at-fault motor vehicle is the insurer who provides motor accident insurance cover for the motor vehicle concerned rather than the owner or driver”. The determination of the relevant insurer now rests on which of the motor vehicles, in its use or operation, caused (or contributed most to) the death or injury for which the statutory benefits are payable.

15. [46]

    As Fagan J explained in AAI Limited v Singh [2019] NSWSC 1300; 90 MVR 1 (“Singh”) at [10], ss 3.1 and 3.2 operate to “widen the insurer’s obligation” in s 3.2 by requiring it to pay statutory benefits in respect of injury regardless of whether that injury was caused by the fault of the owner or driver of a motor vehicle in the use or operation of the insured vehicle. Section 3.2(5) provides in this respect:

16. [47]

    Fagan J described the effect of s 3.2(5) as deeming “that the additional statutory obligation is within the insuring clause, and no more”: at [13]. Divisions 3.3 and 3.4 of Part 3 then make provision for a person who is injured in a motor vehicle accident to receive, from the relevant insurer, weekly payments for loss of earnings, and payments for treatment and medical expenses.

17. [48]

    As to the former, pursuant to s 3.6(1) of the MAI Act, “[a]n earner who is injured as a result of a motor accident and suffers a total or partial loss of earnings as a result of the injury is entitled to weekly payments of statutory benefits” during the first entitlement period (13 weeks after the motor accident), with the balance of the section making provision as to how that amount is calculated. Provision is made in s 3.7 for the entitlement to weekly payments to be extended to the second entitlement period (14 to 78 weeks after the motor accident) and, in s 3.8, beyond the second entitlement period. Section 3.9 prescribes the maximum weekly statutory benefits amount, and s 3.10 the minimum weekly statutory benefits amount.

18. [49]

    Section 3.11 applies in relation to the period after 52 weeks (26 weeks at the time of Mr Evic’s accident). It is drafted in prohibitive terms, with subs (1) providing that “[a]n injured person is not entitled to weekly payments of statutory benefits under this Division” if one of the two conditions in the subsection is satisfied. Section 3.12(1) also imposes a prohibition upon an injured person’s entitlement to weekly payments of statutory benefits “that occurs more than the maximum weekly payment period after the motor accident concerned”, with that period being prescribed in s 3.12(2). Section 3.13 imposes restrictions on the weekly payment of statutory benefits one year after the injured person reaches the retiring age (as defined in s 3.13(3)). Provision is also made in Div 3.3 for a claimant to refund to an insurer any amount of weekly payments paid in circumstances where, because of a claimant’s return to or commencement of employment, or a change in employment, the claimant is not entitled to any weekly payments under the Division, or the amount of weekly payments the claimant has received exceeds the amount to which the claimant is entitled: s 3.20.

19. [50]

    As to benefits for treatment and care, in Div 3.4, s 3.24(1) provides that an injured person “is entitled to statutory benefits” for a range of expenses (defined as “treatment and care expenses”) which are “incurred in connection with providing treatment and care for the injured person”. The Motor Accident Guidelines may make provision for a range of matters in connection with the benefits payable under Div 3.4, including limiting the amount of statutory benefits that are payable for any particular treatment and care: s 3.31.

20. [51]

    Section 3.28 is formulated in equivalent terms to s 3.11, as summarised in [49], but applied to treatment and care expenses. Section 3.29 provides that statutory benefits are not payable under Div 3.4 to the extent that they are paid for by an insurer under a claim for damages, or are paid or recovered pursuant to bulk billing arrangements. The Division also does not apply in respect of any treatment and care needs of a person who is participating in the scheme under the Motor Accidents (Lifetime Care and Support) Act 2006 (NSW): s 3.32.

21. [52]

    Division 3.5 of the MAI Act is titled “Restrictions and limitations on statutory benefits”. Consistently with its title, it includes a range of restrictions and limitations on an injured person’s entitlement to statutory benefits under Part 3. Section 3.38, to which each of ss 3.11 and 3.28 refer, is in the following terms:

22. [53]

    Pursuant to s 3.40(1) of the Act, if a person (referred to in the section as the claimant) recovers damages in respect of the injury pursuant to Part 4, the claimant ceases to be entitled to any further statutory benefits under Div 3.3 and the amount of benefits paid is to be deducted from the award of damages and paid to the person who paid the benefits. Section 3.44 provides as follows:

23. [54]

    As I have noted above, the member emphasised the reference in s 3.44(1)(a) to fault, and the reference to contributory negligence in s 3.44(1)(b) (see [25] above). However, in Part 3, the formulation in s 3.44(1)(a), which is reminiscent of the provisions of Part 4, appears only in s 3.36, which provides:

24. [55]

    It is apparent from this overview of Part 3 that the payment of statutory benefits for which the Part makes provision does not depend on establishing the fault of any person in causing the death or injury. The injured person does not need to prove anyone was at fault for the motor accident, or for his or her injury, in order to obtain benefits under Part 3. The general entitlement in s 3.1 rests on death or injury resulting from a motor accident as defined, subject to the respective limitations and restrictions in Divs 3.3 and 3.4 and the general limitations and restrictions in Div 3.5. Save for s 3.2 of the Act, which makes provision as to how the relevant insurer is to be determined, neither the entitlement nor the limitations and restrictions, draw any distinction by reference to the number of motor vehicles involved in a motor accident resulting in (relevantly) injury to the person making the claim.

25. [56]

    Sections 3.11 and 3.28 operate to cease the payment of statutory benefits to a person under Divs 3.3 and 3.4, respectively, if one of the two conditions in subs (1) is satisfied. The focus of the condition, and the relevant enquiry, in paragraph (a) is whether the motor accident, as defined in s 1.4, was caused “wholly or mostly by the fault of the person”, being the injured person who is in receipt of the relevant benefits. The qualifiers “wholly or mostly” inform each other and are intended to address the same mischief, namely, contributory negligence. That is made clear in subs (2) of both s 3.11 and 3.28, which sets out when a motor accident is caused “mostly by the fault of a person”, namely, “if the contributory negligence of the person in relation to the motor accident (as referred to in section 3.38) was greater than 61%”.

26. [57]

    Considered in the particular statutory context for which Part 3 makes provision, ss 3.11 and 3.28 are directed at the extent to which the injured person’s failure to take reasonable care contributed to the motor accident. The sections (and s 3.36) use the word “fault” accompanied by a qualifying phrase (“wholly or mostly”) which clearly invokes contributory negligence. That is confirmed by the express reference, in subs (2), both to contributory negligence and s 3.38. Consistently with the balance of Part 3, the provisions are concerned with contributory negligence not for the injury, but for the motor accident, in a manner that accommodates all types of motor accidents, including single vehicle accidents where the injured person is the owner driver.

27. [58]

    The focus on contributory negligence with respect to the motor accident may be contrasted with the provisions of Part 4, where a claim for damages 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”: s 4.1. As Fagan J observed in Singh at [24]:

28. [59]

    Whereas ss 3.11 and 3.28 are concerned with the cessation of statutory benefits, the focus of s 3.38, to which those sections refer, is the reduction of an injured person’s weekly statutory benefits after 6 months (now 12 months), for contributory negligence. Section 3.38(1) applies the common law and enacted law as to contributory negligence that applies to an award of damages in respect of a motor accident to weekly payments of statutory benefits occurring more than 26 weeks (now 52 weeks) after the time of the motor accident. It operates to reduce those payments “on account of contributory negligence”, adopting the applicable mechanism in pars (a) to (c) of subs (3).

29. [60]

    The enacted law of contributory negligence includes Div 8 of Pt 1A of the Civil Liability Act. Section 5R(1) provides that the principles that apply in determining whether a person has been negligent also apply in determining whether the person who suffered harm has been contributorily negligent in failing to take precautions against the risk of that harm. Section 5R(2)(a) provides that, for that purpose, “the standard of care required of the person who suffered harm is that of a reasonable person in the position of that person”.

30. [61]

    Where there is more than one motor vehicle involved in a motor accident, or where a motor accident involves a pedestrian, s 3.11 accommodates an assessment of the contributory negligence of the claimant. In Allianz Australia Insurance Limited v Shuk [2023] NSWSC 788; 104 MVR 405, Basten AJ described this as requiring an apportionment of culpability: at [22]. The question in the present proceeding, which his Honour was not considering, is whether s 3.11 (or s 3.28) apply where there is only one person injured as a result of a single vehicle motor accident in which that person was the owner driver. The effect of the construction of ss 3.11 and 3.28 adopted by the member in the present case is that neither provision can apply to an owner driver who is injured in a motor accident involving his or her single vehicle, because the motor accident cannot be their “fault”, in a tortious sense (the owner driver not having an actionable claim for damages against himself or herself); and contributory negligence requiring a comparative exercise that cannot be applied when the motor accident involved his or her vehicle alone.

31. [62]

    In my view, that construction does not give sufficient weight to the particular statutory context of Part 3. Viewed in that context, ss 3.11 and 3.28 are directed at the extent to which the injured person’s failure to take reasonable care contributed to the motor accident. The sections (and s 3.36) use the word “fault” accompanied by a qualifying phrase (“wholly or mostly”) which clearly invokes contributory negligence. That is confirmed by the express reference, in subs (2), both to contributory negligence and s 3.38. Consistently with the balance of Part 3, the provisions are concerned with contributory negligence not for the injury, but for the motor accident, in a manner that can accommodate consideration of persons who are injured in single vehicle motor accidents where the injured person is the owner driver.

32. [63]

    That construction of ss 3.11 and 3.28, for which the plaintiff contended and which the Attorney General supported, was assisted by parity of reasoning with the Court of Appeal’s approach to s 7K of the MAC Act in Axiak. The first appellant in that case was 14 years old when she ran from behind a bus into the path of the respondent’s vehicle, sustaining “horrific injuries”: at [6]. The first appellant relied on the accident being a “blameless motor accident” within the meaning of s 7A of the MAC Act, which provided that such an accident was one “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”. The respondent alleged that the motor accident was caused by the first appellant, as an “other person”, by her conduct in running across the road and in doing so not taking reasonable care for her own safety: “in other words, she was guilty of contributory negligence and was, therefore, at fault in that her conduct not only caused the accident but also was its sole cause”: at [10].

33. [64]

    Noting that “fault” was defined in the MAC Act in the same terms as in the MAI Act, a critical issue was “whether the reference in that definition to ‘negligence’ is a reference to tortious negligence, or whether it includes non-tortious negligence such as contributory negligence as that expression is commonly understood, namely, a failure to take reasonable care for one’s own safety”: at [16]. In supporting the contention that “fault” included non-tortious negligence, the respondent relied on s 7K of the MAC Act, which provided that the Division applied “even if the …injury to the child was caused by the fault of the child”. The respondent submitted that the fault to which s 7K referred could only be to contributory negligence, being the failure of the child to take reasonable care for his or her own safety: at [37]-[38].

34. [65]

    Tobias JA concluded that notwithstanding the introduction of the blameless accident provisions, the definition of “fault” and a number of other provisions of the Act ”were and still are concerned with a driver’s liability to a person injured in a motor accident” at [59]. However, adopting that construction of “fault” was productive of inconsistency with s 7K, in which the use of the word “fault” could “only refer to a child’s contributory negligence in the conventional sense”. His Honour stated at [64]:

35. [66]

    The member in the present case was critical of the plaintiff’s approach of relying on anomalies from a previous legislative regime in support of the construction of a new legislative regime. In my view, that criticism was misplaced. As the Attorney General submitted, it was the logic of Tobias JA’s reasoning on which plaintiff relied for the purposes of ss 3.11 and 3.28, having regard to the breadth of the definition of “motor accident” in the MAI Act.

36. [67]

    As the Attorney General also submitted, the words “wholly or mostly” do not require comparison of the acts of at least two parties (absent the assumption made by the member about the nature of contributory negligence, the foundation for which is not apparent from the text of Part 3). So construed, the concept of contributory negligence could apply to owner driver single vehicle accidents.

37. [68]

    Axiak provided an example of how contributory negligence can be applied in the absence of a tortious defendant. Section 7F of the MAC Act provided that the Division in which the section is found “does not prevent the reduction of damages by reason of the contributory negligence of the…injured person”. The respondent in Axiak submitted that in the context of a blameless accident there was no conduct on his part which could be subjected to a comparative exercise of culpability as addressed in Prodrebersek v Australian Iron and Steel Pty Ltd [1985] HCA 34; 59 ALJR 492 at 494: at [82]. Gibbs CJ, Mason, Wilson, Brennan and Deane JJ there concluded that, in a normal case, contributory negligence requires an apportionment as between the plaintiff and defendant of their respective shares in the responsibility for the damage, and which involves the comparison both of culpability and of the relevant importance of the acts of the parties in causing that damage. In response to that submission, Tobias JA stated (at [85]):

38. [69]

    As the Attorney General submitted, in Davis v Swift [2014] NSWCA 458; 69 MVR 375, Meagher JA (Leeming JA agreeing) expressed doubt about the universal application of the approach to contributory negligence in Axiak in assessing any reduction in damages for an injured person’s contributory negligence. Nonetheless, both cases illustrated the broader point, that the inability to balance relative culpability and causal responsibility does not preclude an assessment of contributory negligence (in cases involving what is now known as a “no fault accident”).

39. [70]

    The construction for which the plaintiff and Attorney General contended was consistent with the stated purpose of Part 3 as set out in the Minister’s second reading speech. It also leaves room for a finding that an injured person may be “wholly at fault”, consistently with the enacted law that permits a finding of 100% contributory negligence: see s 5S of the Civil Liability Act. The alternative construction produces a logically inconsistent outcome whereby an owner driver who failed to take reasonable care and thereby contributed to a single vehicle accident would receive the maximum statutory benefit, whereas if another vehicle was involved, the owner driver’s failure to take reasonable care would be measured against the 61% threshold.

40. [71]

    The member’s construction conflated the concept of contributory negligence for a tortious purpose in Parts 4 and 5, and a scheme not in Part 3. As the Attorney General submitted, the extrinsic materials in relation to the introduction of Part 3 did not differentiate in respect of the effect of contributory negligence on reduction of statutory benefits, between drivers injured in single vehicle accidents and those injured in multiple vehicle accidents. By contrast, the member’s approach rendered ss 3.11 and 3.28 otiose in relation to motor accidents involving a single vehicle resulting in injury to the owner driver, in circumstances where Part 3 disclosed no intention to exclude such persons from consideration in the context of contributory negligence.

41. [72]

    The preliminary observations that the member made do not, of themselves, lead to a contrary result. By way of example, the member relied on the second reading speech to the Motor Accidents and Workers Compensation Legislation Amendment Act, which, among other things, amended Part 5 following the decision of Fagan J in Singh. I have set this out at [18] above. As counsel for the Attorney General submitted, neither the amendments, which related to Part 5, nor the example given addressed the question of construction that was before the member in the present case. The specific example involved a person who was injured in single vehicle accident for which, the Minister emphasised, the driver was not “at fault”. If, to take a different example, there was evidence that the motorcyclist was intoxicated at the time of the collision with the kangaroo, on the member’s construction of s 3.11 (for example) it would not be open to an insurer even to consider whether, by reason of that intoxication, the motor accident was “wholly or mostly by the fault of the person”.

42. [73]

    The member considered that accepting the construction of ss 3.11 and 3.28 for which the plaintiff contended involved giving a different meaning to the word “fault” in those provisions depending upon the circumstances of the case. That is not the result of the construction for which the plaintiff contended. Rather, the focus was on the composite phrase “caused wholly or mostly by the fault of the person”, which can be read, consistently, as directed at an enquiry as to the injured person’s contributory negligence for the motor accident, irrespective of the number of motor vehicles involved and how the claimant came to be injured. The point of difference lies in the nature of that enquiry where the injured person is an owner driver and only a single motor vehicle is involved. Both the plaintiff and the Attorney General submitted that the exercise to which s 3.38(3)(c) is directed, namely, assessing what is just and equitable in the circumstances of the case, is one that could be carried out in respect of the conduct of an owner driver in the context of a single vehicle accident. I accept that submission.

43. [74]

    The construction for which the plaintiff and the Attorney General contended was consistent with the text of ss 3.11 and 3.28 of the MAI Act, informed by context and purpose. It follows that the member made an error of law.

Relief

1. [75]

   I have set out the terms of the declaration that the plaintiff sought above. It was common ground that declaratory relief is available pursuant to s 75 of the Supreme Court Act. The issue between the plaintiff and the Attorney General was whether relief should be refused in the exercise of the Court’s discretion. The focus of the submissions was the utility or otherwise of making the declaration in circumstances where the plaintiff had agreed to continue paying Mr Evic the statutory benefits for which he had made a claim.

2. [76]

   As the Attorney General submitted, there is well settled authority for the proposition that declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions; and will not be granted where the declaration will produce no foreseeable consequences for the parties: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 583; [1992] HCA 10 (“Ainsworth”); Commonwealth of Australia v BIS Cleanaway Ltd [2007] NSWSC 1075; 214 FLR 271.

3. [77]

   It was common ground that the present case involved a concrete and established factual situation, raising a question of law as to the construction of ss 3.11 and 3.28 of the MAI Act. For the reasons I have set out above, I consider that the member’s construction of those provisions was incorrect. However, there was, and remains, a freestanding basis on which the member made her decision, with the member proceeding to make a finding that the circumstances did not, in any event, satisfy the condition in s 3.11(1)(a) or s 3.28(1)(a). There is thus force in the Attorney General’s submission that the circumstances weigh against the exercise of discretion to make a declaration in the terms sought. There are no foreseeable consequences as between the plaintiff and Mr Evic, whose motor accident led to the proceedings in the PIC.

4. [78]

   The plaintiff contended that the provisions are significant to the operation of Part 3, and so much may be accepted. What it sought was a declaration on a question of law that would ensure, in its submission, that other members of the PIC did not all into the error of which the plaintiff complained. In support of the public interest in this approach: the plaintiff relied on the affidavit of Huu Quoc (Peter) Tran sworn 13 August 2024, which highlighted 21 decisions of the PIC and the Dispute Resolution Service, and five matters affecting the plaintiff relating to this issue. However, the material on which the plaintiff relied was double-edged, in the sense that it highlighted, as counsel for the Attorney General submitted, that the consequences on which the plaintiff relied would primarily arise in future disputes as between it and other claimants, and, potentially, in the PIC. By contrast, it would produce no foreseeable consequences for the parties in the present proceedings, with a finding having been made on the issue of Mr Evic’s contributory negligence which the plaintiff did not seek to challenge.

5. [79]

   The plaintiff submitted that making a declaration in the present case would be, in effect, a test case, in which it had a real interest, and submitted that by reason of its interest (and the public interest in the operation of the scheme for which the Part 3 of the MAI Act makes provision), a declaration in the present case had foreseeable consequences in the sense used in Ainsworth and by contrast, for example, with Gardner v The Dairy Industry Authority (NSW) (1977) 18 ALR 55. As to its interest, the plaintiff relied on Buttrose v Attorney General of New South Wales [2015] NSWCA 221; 324 ALR 562 (“Buttrose”) in which Macfarlan JA stated that “a declaration may be made where, as here, it would effectively determine a legal controversy in which the plaintiff has a real interest” (at [39], citing Plaintiff M61/2010E v The Commonwealth of Australia (2010) 243 CLR 319; [2010] HCA 41 (“Plaintiff M61”) at [103]). Both Buttrose and Plaintiff M61, however, involved the determination of an existing legal controversy between the parties to the proceedings. The present proceedings do not.

6. [80]

   Accordingly, the proceedings should be dismissed. I make no order as to costs in circumstances where the Attorney General was joined to the proceedings on the basis that he bears his own costs and bear no liability for costs of the proceedings.