Best v I & G Selke Pty. Ltd.[2003] QDC 559

[2003] QDC 559

DISTRICT COURT

CIVIL JURISDICTION

JUDGE McGILL SC

No D4163 of 2003

BRISBANE

DATE 19/12/2003

ORDER

HIS HONOUR:  This is an application for an extension, under section 57(2)(b) of the Motor Accident Insurance Act, of the period within which a proceeding is to be commenced in circumstances where a notice of a motor vehicle accident claim was given prior to the expiration of the period of limitation applying to the claim but some additional time is required to commence the proceeding.  The applicant claims to have been injured on the 4th of October 2000.  The notice of claim under the Act was given on the 2nd of July 2003 and therefore if the Act applies to the claim, a proceeding may be commenced under section 57(2)(a) within six months of 2 July 2003 and that is by 2 January 2004. 

However, there has not been the compulsory conference or exchange of mandatory final offers and so on, and that is obviously not going to occur before the 2nd of January, and therefore, if it is necessary for the applicant to comply with the pre-litigation procedures required under the Motor Accident Insurance Act, an extension of time will have to be given;  otherwise, there will not be time available to comply with those procedures before the six-month period expires.  Indeed, there were difficulties in complying with the timetable contemplated by section 57(2)(a) in circumstances where ordinarily a compulsory conference cannot be held until six months after the notice of claim has been given.  But anyway, the matter might have been relatively straightforward on the basis of those facts, but for the fact that the second respondent to the application, the insurer, has appeared and submitted that it is not appropriate to make the order on the basis that the applicant's claim is not properly within the Motor Accident Insurance Act at all.

The applicant is proposing to take proceedings against his employer at the time, which was also the owner of the motor vehicle involved, which the applicant was driving.  What happened was that the applicant injured his back following an incident when he drove over a contour bump on a road running through a property, Emu Valley Station, in the course of his employment while driving a motor vehicle supplied by his employer, or at least that is the allegation which the applicant is proposing to make.  At the moment it can only be what the applicant is alleging and proposing to be the basis of a proceeding because at this stage, when one is dealing with the pre-litigation procedures, one is dealing with claims by people rather than facts which have been determined.

There is probably no admissible evidence before me as to what actually happened but it will obviously not be appropriate, for the purpose of this proceeding, to make any determination about what actually happened, and so, I suppose, strictly speaking, what actually happened is irrelevant.  What matters, I think, for the purpose of this proceeding, is what the applicant is claiming happened, and there is evidence in various forms about what the applicant's claims or allegations are about what happened.  The applicant claims that he injured his back in circumstances where he says his employer was at fault and is seeking compensation, indeed seeking damages in respect of that injury.

The difficulty which has arisen is because of the inter‑relationship between the WorkCover legislation and the Motor Accident Insurance Act.  For practical purposes, that comes down to the question of whether, at the time of the alleged injury, there was a particular exclusion in the statutory insurance policy under the Motor Accident Insurance Act such that the policy did not apply to the injury which the applicant says he suffered in these circumstances.  If the policy did not apply, then it follows, for reasons which are set out in the written submissions on behalf of the second respondent, and which I do not understand have been challenged in any detail, the incident in question is not a motor vehicle accident for the purposes of the Act and therefore the prelitigation procedures do not apply to it.

If that is the situation, then there can be no question of any inability of the applicant to sue the first respondent arising because of the operation of any provision of the Motor Accident Insurance Act, and indeed it would probably be inappropriate to be making any orders for extending time for commencement of the action.  If the Act does not apply to the incident, an order under section 57 would be ineffective to overcome a Limitation of Actions Act defence, or at least I suspect that will be the case.  The second respondent has opposed the order, therefore, on the basis that the Act does not apply to the applicant's claim. 

It occurred to me that WorkCover ought to be heard in relation to that issue, because the question of whether WorkCover is liable to indemnify the first respondent in respect of any liability of damages to the applicant, may depend on whether the Motor Accident Insurance Act applies because of the provisions of the two Acts designed to prevent both of them applying to the same circumstances, and accordingly when the matter originally came before me I ordered that WorkCover Queensland be joined as a respondent, and adjourned the application until WorkCover could be heard, and today I have had the benefit of submissions on behalf of WorkCover Queensland.

The submissions that were made were, essentially, that this was not a matter which should be decided at this stage because it was not possible to determine conclusively at this stage what had actually occurred and what the true basis of liability was.  The matter, it was submitted, should be left and should only be decided after there had been a trial where the facts could be found in a conclusive way and the liability of either WorkCover or the second respondent to indemnify the first respondent could be definitely determined.  I can see the attraction of that, although the difficulty with that is that it does leave up in the air the question of what prelitigation procedures have to be followed by the applicant because, of course, any prelitigation procedures have to be followed prior to the time when there is a trial, and indeed usually prior to the time when any proceeding has even commenced.  There are plenty of authorities that proceedings which are commenced without complying with whatever prove to be the applicable prelitigation procedures are incurably bad and will be struck out.  Indeed, some of the cases go so far as to describe it as a nullity but I think that is not strictly correct.

So, at the moment it is a bit of a lottery for a plaintiff who is in a position like this, or a potential plaintiff in a position like this, where there is some doubt as to which Act applies, and understandably, a potential plaintiff such as the present applicant is trying to comply with both Acts.  There are some other potential plaintiffs who are in the unfortunate position of having to attempt to comply with all three of the Acts, which currently impose prelitigation procedures in respect of different categories of claims for damages for personal injuries. 

It is, of course, a ridiculous situation the legislature has created where there are these different streams which were essentially designed to achieve exactly the same result.  There ought to be a system where there is one set of prelitigation procedures which could be followed by everybody who wants to bring any sort of a claim, whether it is covered by the WorkCover legislation or whether it is covered by the compulsory insurance scheme for motor vehicles or whether it is covered by something else, so that as long as those procedures are followed, whichever is the appropriate scheme, the appropriate action can be taken.  In that situation it would then be possible to determine, on the basis of the findings of fact at the trial, where liability lay and what was the true basis of liability, and on that basis to determine who had to indemnify the defendant if there was a dispute about that and which statutory scheme applied at that point.  The trial Judge could, at that stage, apply the appropriate statutory scheme if there were to be differences between the scheme in relation to matters such as assessment of damages and so on, on the basis of conclusive findings as to what had actually happened. 

At the present stage it is really an appalling situation that there are these conflicting systems with the poor injured plaintiff having to suffer if the wrong scheme is followed. 

The matter is complicated even more, I suppose, by technical questions about who is entitled to appear for the company that happens to be both the employer and the owner of the vehicle in an action if there is potential liability on behalf of both WorkCover and the motor vehicle insurer, where both statutes say in effect that that insurer is entitled to conduct the action on behalf of the employer.

I should say that counsel for WorkCover had suggested a practical solution to that in the form of making both the motor vehicle insurer and WorkCover defendants in the proposed action.

The motor vehicle insurer is required to be joined under the Motor Accident Insurance Act, but WorkCover is not required to be joined under its legislation, and commonly is not joined, but an order could be made so that they were necessary parties to the trial if the matter had to be determined at a trial.

However, if a situation arises where, on the appropriate facts, it is possible to determine that on no view of the facts alleged are they capable of giving rise to an entitlement to indemnity from the motor vehicle insurer because they necessarily fall within a statutory exclusion to the policy, then it would seem to follow from the approach adopted by the Court of Appeal in Palmer v Harker Transport Services Proprietary Limited [2003] QCA 513, at para 11, that it is appropriate to decide these issues in a summary way.

The practical issue turns on the correct interpretation of exclusion 2, which is in clause 2 of the statutory policy, which is a part of the Motor Accident Insurance Act, and which was amended by legislation passed in the year 2000.

The exclusion, clause 2(3) of the policy, provides:

"This policy does not insure an employer against a liability to pay damages for injury to an employee if - (a), the injury arises from the employer's failure to provide a safe system of work for the employee, or the employer's breach of some other duty of care to the employee; and (b), neither the employer or another employee of the employer was the driver of the motor vehicle at the time of the motor vehicle accident out of which the injury arose."

It is accepted by all parties and it seems clear that, subject to that exclusion, the liability of the first respondent to the applicant in respect of the claim the applicant is seeking to pursue against the first respondent would be within the scope of the statutory policy of insurance.

With regard to this exclusion, the first respondent was the employer of the applicant, and the applicant is seeking to assert a liability to pay damages for an injury on the part of the first respondent.  The applicant was an employee.

It is not disputed that paragraph (b) applies in the present case because, at the present time, it was the applicant who was the driver of the motor vehicle.  The issue, then, is whether paragraph (a) applies.

If the injury arose from the employer's failure to provide a safe system of work for the employee, that is the applicant, or the employer's breach of some other duty of care to the applicant, then the injury is one which falls within paragraph (a) and therefore it is an injury in respect of which the policy does not ensure the first respondent against the liability to pay damages for that injury to the applicant.

So in relation to that, given the nature of these proceedings, of course there is not a pleading or findings which determine the nature of the claim, but some details as set out can be gleaned from the notice of claim.

There are certainly allegations of a breach of the duty to provide a safe system of work on the part of the employer.  And it seems clear that the applicant is seeking to assert that there was a failure to provide a safe system of work on the part of the first respondent which was a cause of the injury suffered by the applicant.

There may also be a claim for breach of duty to provide safe plant and equipment in the form of a safe motor vehicle if there was something wrong with the motor vehicle.

The reference in the latter part of paragraph (a) to "some other duty of care to the employee" suggests on ordinary principles of construction that the earlier reference to a failure to provide a safe system of work was intended to be a reference to part of the duty of care.  That is, to take reasonable care to provide a safe system of work for the employee.

The legislature in that way seems to me to be attempting to describe the employer's duty of care to the employee in a general way.  It was submitted that might only apply to the duty of care in tort.  An employer's duty arises in tort and in contract subject to any express term of the contract to the contrary, and there can also be a duty arising under a statute, for example the Workplace Health and Safety legislation.

There may well be some question about whether that is properly described as a duty of care, but the duty under the Workplace Health and Safety legislation, if it is not in the strict sense a duty of care, is something very close to it, and in  circumstances where there is, it seems to me, no logical reason why a distinction should be drawn between the duty in tort and in contract on the one hand and the duty under the Workplace Health and Safety legislation on the other, it seems to me inevitably to follow that the correct construction of paragraph (a) is that it applies whether the cause of action is in tort, in contract or for breach of statutory duty, and that is, I think, supported by the various comments in the second reading speech and in the explanatory circulated in respect of the Bill to which reference has been made in the course of the argument.

So, I would reject the suggestion that there is any distinction between liability in tort and contract or in breach of statutory duty for the purpose of paragraph (a).

It seems to me clear that whatever the ultimate scope of the applicant's claim and whatever the ultimate position may be found to be, in view of the determination at the trial of the relevant facts, that the applicant is claiming something which falls within paragraph (a) of clause 3(2) of the policy, and that since paragraph (b) is uncontroversial it follows that the injury the applicant claims to have suffered would be one which, if it really occurred, was an injury to which paragraph (a) applied and therefore there was no indemnity provided under the policy to the first respondent in respect of any liability of the first respondent to pay damages to the applicant for that injury.

It follows that the policy would not indemnify the first respondent in respect of the liability for which the applicant seeks to claim, and therefore for the reasons that I need not enlarge upon for present purposes but are set out in the written submissions on behalf of the second respondent, the applicant's claim does not fall within the scope of the Motor Accidents Insurance Act, and there is no obligation to comply with it.  I propose to make a declaration to that effect.

If I make that declaration, the applicant, having obtained the appropriate leave under the WorkCover legislation will be able to commence a proceeding against the first respondent because there will be nothing in either the WorkCover legislation or the Motor Accident Insurance Act which would prevent that course from being followed.

I am concerned however about the situation that may follow if there is an appeal brought from this order and it is ultimately determined by the Court of Appeal that my conclusion was in error, and that the Motor Accident Insurance Act does in fact apply to the applicant's claim.  In those circumstances, if the applicant simply commences a proceeding and the Act is ultimately found to apply to the claim then, because the proceeding was commenced without first holding a compulsory conference and exchanging mandatory final offers, the proceeding will apparently be incurably bad and liable to be struck out.

There would appear to be nothing that the Court of Appeal at that stage could do to overcome that difficulty.  Accordingly, on a precautionary basis and in case it is necessary to do so in order to protect the position of the applicant, I will make orders dispensing with the compulsory conference under section 51A of the Act and also dispensing with the obligation to exchange mandatory final offers, and I will also formally fix the time in which the proceeding must be commenced as on or before the 2nd of January 2004.

That will mean that if I am wrong in my first order and the proceeding is in fact commenced before the 2nd of January 2004 there will not be any provision in the Motor Accident Insurance Act which would render that proceeding incurably bad.

A notice of claim, which on my view of the Act in the circumstance of this matter is irrelevant, has been given.  If the Act does apply, there has been a notice of claim.  If the Act does apply I have dispensed with the obligation to have a compulsory conference and the obligation to exchange mandatory final offers.

I should say that I was invited, I think it is probably fair to say, encouraged, by counsel for the second respondent to take this course, who also indicated their client's express instructions that if ultimately the Court of Appeal finds that I am wrong in all this and that the proceeding, which will by then have then commenced, should have joined the second respondent as a defendant, the second respondent will not object to its then being joined as a defendant in that proceeding.

So, on that basis, if it turns out that I am wrong, the applicant will be properly protected. 

It is most unfortunately that the legislature created this appalling situation and it is necessary to go to such extreme lengths to protect in his position.  The legislature really ought to address this as a matter of urgency, and either combine the litigation procedures into one system which is to be followed by everybody, or at least provide that as long as a plaintiff has complied with the pre-litigation procedures under one of the sets of legislation, one of the Acts, that is enough and will not be prevented from litigating in the appropriate way because the plaintiff has had the misfortune to proceed under the wrong Act.

Whatever the purpose of the pre-litigation procedures may have been, it cannot have been to cause these difficulties and enormous additional legal expense which achieves no real useful purpose.  For the legal costs that have been involved in resolving this dispute, I suspect the parties could have had a trial to determine what the applicant is entitled to be paid by way of compensation for his injuries.

So, these difficulties are productive of a great deal of unnecessary expense and they ought to be addressed and addressed quickly.  But I think that doing the best I can to overcome them in the present case, I will make these orders.

I declare that the Motor Accident Insurance Act does not apply to the applicant's claim against the first respondent in respect of injuries alleged to have been suffered by him on 4th of October 2000.

I dispense with the obligation to hold a compulsory conference under the Act and the obligation of the parties to make mandatory final offers under the Act.

I determine that the proceeding is for the purposes of the Act as to be commenced by the 2nd of January 2004.

It occurs to me that, in the light of the declaration, those orders are really internally inconsistent.  I know that they are valid unless they are set aside, and presumably the Court of Appeal will ultimately set aside the ones that are wrong but until that such time as the Court of Appeal works out which bit is wrong they will remain effective.

...

HIS HONOUR:  Yes, yes one would think that the costs of doing all this is really an additional part of the costs of the substantive dispute made necessary by the enactment of this legislation and so it's probably best to make them the applicant's costs in the proceeding to be commenced and I think in all the circumstances, and bearing in mind that I gather this is a novel point, that the respondents, including the third respondent, can bear their own costs.