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Karklins v QBE Insurance (Australia) Limited
 NSWPICMR 47
Moray & Agnew’s team, led by Michelle Landers, Partner, acted for the insurer in this dispute and successfully defended the insurer’s decision to cease payment of weekly statutory benefits after 104 weeks under Section 3.12 of the Motor Accident Injuries Act 2017 (‘the Act’) on the basis that the motor vehicle accident was a no-fault accident that was caused by the act or omission of the driver for the purposes of Section 5.4 of the Act. Given the driver is not able to sue himself in negligence, it was determined that there cannot be a ‘pending claim for damages’ for the purposes of Section 3.12(2)(a), which limits the maximum weekly payment period to 104 weeks unless there is a pending claim for damages.
The claimant, Mr Karklins, was injured in a motor vehicle accident that occurred on 1 August 2021 when he swerved his motorbike onto the other side of the road to avoid 2 deer running into his path of travel, after which he collided with a vehicle travelling in the opposite direction.
The insurer accepted liability for statutory benefits post-26 weeks and there was no dispute between the parties that the motor vehicle accident was a ‘no-fault motor accident’ for the purposes of Section 5.1 of the Act.
A ‘no-fault accident’ under the Act means a motor accident in NSW 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 no-fault provisions were introduced to expand the CTP scheme to cover injuries sustained in accidents where there was no negligence as defined by the common law (i.e. sudden weather events or an unforeseeable medical episode causing a driver to crash their vehicle).
The claimant lodged an application for damages under common law, which was rejected by the insurer on the basis that the claimant was not entitled to recover damages pursuant to Section 5.4 of the Act. The insurer also indicated that the claimant’s entitlement to weekly statutory benefits would cease at 104 weeks on the basis that there was no pending claim for damages pursuant to Section 3.12(2)(a) of the Act. After the insurer’s decision was upheld by internal review, the claimant lodged a merit review application with the Commission.
Section 3.12(2)(a) of the Act states that the maximum period for entitlement for weekly statutory benefits is 104 weeks unless the person’s injury is the subject of a pending claim for damages.
Section 5.4 of the Act states that there is no entitlement to recover damages in a no-fault motor vehicle accident if the motor accident concerned was caused by an act or omission of that driver.
The issue for determination was whether, for the purposes of Section 3.12 of the Act, the claimant’s injury was ‘the subject of a pending claim for damages’.
The dispute was referred to Member Terence O’Riain.
The Member stated that in order to argue that there was a pending claim for damages, the claimant would need to establish that he was owed an existing tortious duty which was breached. The Member did not accept that such a duty existed in this matter. In particular, the Member determined that the claimant’s injuries were suffered when he took evasive action to avoid a collision with a deer. The Member considered that there was 'no-one to sue and therefore no damages liability to be resolved’.
The Member noted the decision of the NSW Court of Appeal in Whitfield v Melenewycz  NSWCA 235, where the Court stated (with regard to the analogous provisions under the 1999 Act) that, under the common law, a driver cannot have a claim in negligence against him or herself. Further, the Court held that deeming a driver to be negligent does not entitle the driver to sue himself or to claim damages from a third party.
The Member also made reference to the recent decision in ACV v The Nominal Defendant (No 2)  NSWPIC 634 wherein Member Cassidy agreed that there was no authority for the proposition that a person could owe a tortious duty of care to themselves and then sue themselves for breach of that duty. In particular, Member Cassidy observed:
 As the Court said in Melenewycz, the blameless accident and no-fault provisions deem fault where there is no fault, but they do not deem liability. Liability for damages in a motor accident requires three elements to be proven only one of which is fault.
 I agree with the insurer’s submissions that the claimant does not have an available claim because he cannot have an action in negligence or on any other basis against himself. Negligence, fault or breach of duty of care cannot be deemed in a situation where no duty of care exists’.
Finally, Member O’Riain noted the insurer’s submission that its decision to cease benefits at 104 weeks was consistent with the legislative intent of the NSW Parliament. In particular, former Minister for Customer Service, Mr Victor Dominello’s Second Reading Speech when discussing the Motor Accidents and Workers Compensation Legislation Amendment Bill 2021 which stated:
‘… Fourthly, Schedule 1 amends provisions in Part 5 of the Motor Accident Injuries Act 2017 to clarify that all individuals injured in a motor vehicle accident who are not wholly or mostly at fault and who have more than one minor injury are entitled to receive statutory benefits past 26 weeks. This includes drivers injured in no-fault accidents.
Members may know that some ambiguities of the no-fault accident provisions were highlighted in a Supreme Court decision in AAI Limited v Singh. The Motor Accident Injuries Act 2017 currently contains several deeming provisions in Part 5 that appear to deem fault on a person in circumstances where no driver is actually at fault for the motor accident. The proposed amendment addresses this potential injustice and ensures that a driver who, for example, swerved to avoid a kangaroo that suddenly jumped on the road and caused an accident is entitled to statutory benefits for loss of income up to two years, and treatment and care benefits for life if needed…’ (Emphasis added).
The Member agreed that to continue payment of weekly statutory benefits beyond 104 weeks in this matter would be ‘against the NSW Parliament’s intent, which was to set up a scheme for statutory payments under Division 3.3 which provided entitlements which would expire after a certain time, or when a damages claim was resolved’.
It was determined that the claimant’s injuries were suffered in a no-fault accident as defined by the Act and, accordingly, the claimant was not able to establish a claim for negligence against himself as per Section 5.4 of the Act. In other words, the claimant was not able to have a ‘pending claim for damages’ for the purposes of Section 3.12 of the Act, and the insurer’s decision was affirmed.
This decision confirms that the Act only compels payment of weekly statutory benefits for loss of income up to 104 weeks for injuries sustained in no-fault accidents where the accident was caused by the act or omission of the driver. Critically, there cannot be a ‘pending claim for damages’ for the purposes of Section 3.12 of the Act in a no-fault accident (even if the claimant lodged an application for common law damages) as a driver is not able to sue themselves under the common law.
When faced with a no-fault motor vehicle accident caused by the act or omission of the claimant, insurers should consider this determination if a claim for damages is nevertheless made.
This determination is in contrast to the decision made in Lay v QBE Insurance (Australia) Limited  NSWPICMR19 where it was determined that a damages claim in a no-fault motor accident was ‘pending’, notwithstanding there was no prospect of success due to the operation of Section 5.4 of the Act.
This decision suggests that Lay was decided incorrectly and that the correct interpretation, consistent with the Act and the intention of the NSW Parliament, is that the maximum weekly payment period is 104 weeks for a no-fault accident caused by the act or omission of that driver.
Further information / assistance regarding the
issues raised in this article is available from the authors, Michelle Landers,
Partner and Jackson Clarence, Associate, or your usual contact at Moray &
Further information / assistance regarding the issues raised in this article is available from the authors, Michelle Landers, Partner and Jackson Clarence, Associate, or your usual contact at Moray & Agnew.
The content of this publication is intended to provide a summary and commentary only. It is not intended to be comprehensive nor does it constitute legal advice, and has been prepared based on applicable legislation at the date of publication. You should seek legal advice on specific circumstances before taking any action.
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