Associate Justice Harrison has provided some welcome clarity about the proper interpretation of the no fault accident provisions in single vehicle accidents, where the claimant is also the owner and driver of the vehicle.

Her Honour has confirmed that a common law claim brought in such circumstances is futile, and because it cannot succeed, it is not properly considered a ‘pending common law claim’ which would otherwise require the CTP insurer to continue to make income support payments more than 2 years after the accident. 

Background

The claimant was injured on 6 September 2019 when he was driving his car, and a tree fell onto it. No other vehicle was involved. His vehicle was covered by a CTP policy issued by QBE. He applied for statutory benefits under that policy, and QBE commenced making payments.

Section 3.12 of the Motor Accident Injuries Act (the Act) provides that entitlement to weekly payments of statutory benefits ceases at 104 weeks after the accident, unless there is a pending claim for common law damages (whether or not the insurer has accepted liability for the common law claim).

In August 2021, as no common law damages claim had been lodged, QBE advised the claimant it intended to cease paying weekly payments on the 2^nd anniversary of the accident. When so advising the claimant, QBE indicated the claimant was precluded from making a common law damages claim, because the injury arose in single vehicle accident for which there was no legally available common law claim for damages.

The claimant disputed that decision, unsuccessfully, via internal review and via a merit review application in the Personal Injury Commission (the Commission).

The claimant then purported to lodge a common law claim on 31 May 2022, on the basis that he had a ‘no fault’ claim for damages. QBE denied liability for the common law claim, and also for any ongoing obligation to pay weekly payments, in the latter case, because QBE contended the driver had no valid cause of action for damages (relying on the Court of Appeal’s decision in Whitfield v Melenewycz [2016] NSWCA 235).

The claimant again challenged the decision to deny him access to statutory benefits by internal review, and in the Commission, asserting that he had a pending claim for damages, and so section 3.12 obliged QBE to keep paying him weekly payments until that claim had been determined. On this occasion, the Commission agreed with the claimant. QBE sought judicial review of the Member’s decision on a number of bases.

The legal issue at the heart of the ongoing entitlement to weekly payments after 2 years was whether the claimant’s common law claim was a ‘pending claim for damages’. If it was, then he was entitled to ongoing weekly payments until the common law claim was determined.

The claimant submitted that he did have a pending claim as the claim he’d lodged with QBE had not been finally determined. It didn’t matter that QBE had denied liability for it (and indeed section 3.12 specifically envisages an ongoing obligation to pay where liability has been denied, so long as the common law damages claim has not been finally determined).

QBE submitted that the common law damages claim could not be sustained, because the claimant could not sue himself (he would be both the claimant and the putative defendant). If he has no valid damages claim, then he did not have a ‘pending claim for damages’ and therefore no entitlement to ongoing weekly payments after 104 weeks. To find that the claimant has a pending claim for damages merely because he has lodged a claim form in circumstances where that claim cannot succeed would be contrary to the objects of the Act.

Determination

Harrison AJ referred to a passage in the joint judgment in Melewycz to fortify her Honour’s conclusion that QBE was correct, and because the common law claim could not be sustained, there was no valid common law claim pending.

The three elements of the tort of negligence are that there is a duty of care owed, there has been a breach of that duty, and the breach has caused damage.

The No Fault accident provisions do not operate to create a new tort, and nor do they operate to deem liability. What they do is to deem just one of the three elements of negligence necessary to establish an entitlement to recover damages. The deem that there has been a breach of duty (ie fault). But there has to be a duty owed in order for there to be a deemed breach.

Here, the claimant fell at the first hurdle (the requirement that there be a duty of care), because he could never establish that as driver, he owed himself (as a claimant) a duty of care, because he has no legal right to claim in negligence against himself. As there is no available common law claim for damages, the asserted common law claim was a legal nullity.

Therefore, there was no ‘pending claim for damages’ within the proper meaning of that expression in s3.12, and therefore there was no right to ongoing weekly payments beyond 104 weeks.

The Commission’s decision to the contrary was in error, and was set aside. The Court was also critical of aspects of the decision making process (finding, amongst other things, that there had been a failure to afford QBE procedural fairness, a constructive failure to exercise jurisdiction, and a jurisdictional error during the Review process which preceded the Supreme Court Proceedings).

Because no other conclusion could be reached on the issue, her Honour held there was no utility in remitting the proceedings back to the Commission. The claimant’s entitlement to weekly payments ceased at 104 weeks.

Conclusion

This decision is of great value to the industry, as it makes clear that a tactic employed by some claimants to extend their access to weekly income support payments is legally flawed.

Insurers are entitled to decline to pay weekly payments after 104 weeks in single vehicle accidents, where the claimant was also the driver, whether or not at that stage the claimant has made a common law damages claim against their own CTP policy.

Unless the claimant has threshold (minor) injuries, they will still be entitled to statutory benefits for treatment and care beyond 104 weeks (pursuant to section 3.28).

Further information / assistance regarding the issues raised in this article is available from the author, Judith Waldock, Partner or your usual contact at Moray & Agnew.