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NSW Crest

Court of Appeal
Supreme Court
New South Wales

Medium Neutral Citation:
Insurance Australia Ltd t/as NRMA Insurance v Adam Zizovski bnf Selim Zizovski [2012] NSWCA 246
Hearing dates:
30 July 2012
Decision date:
09 August 2012
Before:
Beazley JA;
Basten JA
Decision:

(1) Dismiss as incompetent the notice of appeal filed on 23 February 2012.

(2) Order the applicant to pay the costs of the first respondent in this Court (the plaintiff), being costs of the appeal and of the application for leave to appeal, such costs to be payable forthwith.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
APPEAL - Summons seeking leave to appeal - Motor vehicle accident - Interlocutory judgment - District Court judge refused to dismiss proceeding against third party insurer- Whether judge erred by failing to determine a separate question - Hearing before judge only concerned with notice of motion seeking order of dismissal - Separate question not formulated - No appropriate factual basis for separate question determination - Uniform Civil Procedure Rules 2005, rr 13.4, 28.2.

PRACTICE AND PROCEDURE - Whether appeal from interlocutory judgment or order from District Court lay as of right to Supreme Court - Leave to appeal required from an interlocutory order or judgment of District Court - District Court Act 1973, s 127(2).
Legislation Cited:
District Court Act 1973 (NSW), s 127
Motor Accidents Compensation Act 1999 (NSW), ss 3, 10, 79
Supreme Court Act 1970 (NSW), s 103
Uniform Civil Procedure Rules 2005, rr 28.2, 13.4
Cases Cited:
Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334
General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125
Category:
Principal judgment
Parties:
Insurance Australia Ltd t/as NRMA Insurance (Applicant)
Adam Zizovski bnf Selim Zizovski (First Respondent)
Matthew Thomas Gilmore (Second Respondent)
Representation:
RR Stitt QC; JM Morris (Applicant)
JP Gormley SC (First Respondent)
Hunt & Hunt (Applicant)
Koutzoumis Lawyers (First Respondent)
File Number(s):
2012/59770
Decision under appeal
Citation:
Adam Zizovski bnf Selim Zizovski v Matthew Thomas Gilmore and Insurance Australia Ltd t/as NRMA Insurance
Date of Decision:
2011-11-29 00:00:00
Before:
Curtis DCJ
File Number(s):
319895/2008

Judgment

1THE COURT: Mr Adam Zizovski (the plaintiff) was severely injured in a motor vehicle accident in September 2005. At the time of the accident he had taken over control of the vehicle from Mr Matthew Gilmore (the second respondent), who was not in the vehicle at the time of the accident. The vehicle was owned by Matthew Gilmore's mother; NRMA Insurance (the applicant) was the third party insurer of the vehicle.

2In March 2008 the applicant advised the plaintiff's solicitors that, at the relevant time, the plaintiff himself was the driver of the vehicle and that the policy therefore did not respond to the claim. In October 2008 the plaintiff commenced proceedings against the second respondent and, in June 2009, sought to join the applicant in those proceedings. The purpose of joining the applicant was presumably to allow the dispute as to the scope of the indemnity to be addressed, a course which could have been taken by the applicant itself, pursuant to the Motor Accidents Compensation Act 1999, s 79.

3Following some procedural steps, which it will be necessary to recount below, on 29 November 2011 Curtis DCJ refused to dismiss the proceedings against the applicant. The applicant sought leave to appeal (or, in the alternative, to appeal as of right) from that judgment.

4At the conclusion of the hearing of the application for leave to appeal, the Court ordered that the summons be dismissed and reserved its reasons. The Court also reserved its order as to costs. The Court's reasons for dismissing the summons follow. The Court's order as to costs is set out below. It is further necessary to make orders disposing of the appeal, which was incompetent.

Procedural background

5The applicant sought leave to appeal from the judgment of Curtis DCJ dismissing its motion of 3 June 2011, in which it sought the following orders:

"1. The plaintiff's claim against [the applicant] be dismissed pursuant to Part 13 Rule 4 of the Uniform Civil Procedure Rules 2005.
2. Each party to bear their own costs.
3. Such other orders as the court deems fit."

6The Uniform Civil Procedure Rules 2005 (UCPR), r 13.4 provides, relevantly, that the court may dismiss proceedings if no reasonable cause of action is disclosed.

7On the hearing of the summons for leave to appeal, the applicant contended that notwithstanding the orders sought in its notice of motion, the matter was before Curtis DCJ for the determination of a separate question. That contention was based upon an order made by Truss DCJ on 6 July 2011, when, as the Court understands it, the matter was before her Honour for directions. The orders and notations made by her Honour on that day were as follows:

"1. Mr J Gormly SC (plaintiff) and Mr Walker SC ([applicant]) are briefed.
2. Make orders 1(a) to 1(f) set out in the notice of motion filed in court today.
3. List [the applicant's] notice of motion filed 3 June 2011 for hearing on Tuesday, 15 November 2011 at 10am (1 day plus).
4. Vacate the hearing date of [the applicant's] notice of motion on 9 August 2011.
5. Vacate hearing date of 12 September 2011.
6. Plaintiff was unlicensed, instructed/allowed by [the second respondent] to drive. Lost control.
7. Issue to be determined in [the applicant's] notice of motion is whether the claim brought by the plaintiff falls within the Third Party scheme established by the Motor Accidents Compensation Act 1999.
8. Order that this be determined as a separate question under r 28.2 Uniform Civil Procedure Rules 2005 and direct parties to formulate precisely the question for determination.
9. Note: parties say likely to go to the Court of Appeal irrespective of decision."

8On 27 October 2011, the applicant's solicitors wrote to the plaintiff's solicitors in the following terms:

"You will recall that when the matter was last before the court on 6 July 2011, Her Honour Judge Truss indicated that the parties should agree prior to the preliminary hearing as to the precise issue which is to be determined.
We consider that the issue in dispute is as follows:
'Does the Plaintiff's claim fall within the third party scheme established by the Motor Accidents Compensation Act?' "

The applicant's solicitors did not refer to UCPR, r 28.2, although, presumably, the reference to "the preliminary hearing" was a shorthand, albeit inaccurate, reference to Truss DCJ's order 8.

9The plaintiff's solicitors responded on 1 November 2011 stating that there appeared to be a misconception, as it understood the upcoming hearing was in respect of the orders sought in the applicant's notice of motion seeking an order for dismissal under UCPR, r 13.4. The letter drew attention to the factual issues that would be involved in the determination of an order for dismissal under that provision. In that regard, the plaintiff's solicitors stated that they understood the matter in issue was whether the second respondent could be a driver within the meaning of the Motor Accidents Compensation Act notwithstanding that the plaintiff was driving the vehicle and the second respondent was neither inside the vehicle nor in close proximity when the accident occurred.

10The plaintiff's solicitors accordingly formulated the question they understood was to be determined by the trial judge on hearing of the notice of motion in the following terms:

"Does the Plaintiff plead an arguable cause of action in that [the second respondent] could be a 'driver' within the meaning of the Motor Accidents Compensation Act 1999."

11This letter elicited the following response from the applicant's solicitors on 4 November 2011:

"Certainly on the part of our client there is no misconception as to the forthcoming hearing of [the applicant's] notice of motion.
The terms of the orders sought are set forth in the notice of motion and confirmed in the affidavit of John Edelman sworn 2 June 2011. Even a quick glance at those documents will confirm this.
The factual basis for the orders as sought is contained in the notice to admit facts and authenticity of documents dated 25 January 2011 served on the plaintiff and [the second respondent] and the contents of which have not been denied.
Indeed, from the terms of the pleaded facts in both the plaintiff's statement of claim and amended statement of claim, it seems difficult, if not impossible, for the plaintiff to deny the relevant facts as set forth in that document. There is simply no basis for dispute."

12Curtis DCJ gave judgment on the notice of motion on 29 November 2011. His Honour noted, at [2], that the applicant sought an order that the claim be dismissed pursuant to UCPR, r 13.4 "because the pleadings and admitted facts disclose no reasonable cause of action against the insurer". His Honour then stated at [3]:

"The question for determination is whether a Third-Party Policy issued by [the applicant] responds to the liability if the plaintiff succeeds in his claim against [the second respondent]."

13His Honour noted, at [55], that the test to be applied was that formulated in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; 112 CLR 125, namely "that a claim should only be struck out if it is 'so obviously untenable that it cannot possibly succeed'".

Application for leave to appeal

14The applicant contended that his Honour erred in dismissing its notice of motion in that he failed to determine the question for separate determination pursuant to UCPR, r 28.2. In other words, the applicant submitted that his Honour failed to determine the matter that was before him. The applicant sought to explain the terms in which its notice of motion was framed on the basis that had the separate question been determined in its favour, the court would then have proceeded to dismiss the plaintiff's claim against it pursuant to UCPR, r 13.4.

15The matter proceeded before this Court in a somewhat unsatisfactory manner. There was no evidence or transcript to clarify what had occurred before Curtis DCJ. Senior counsel for the applicant and for the plaintiff in this Court both appeared before Curtis DCJ. Senior counsel for the applicant contended that the matter was referred to Curtis DCJ for the determination of a separate question pursuant to UCPR, r 28.2. He further submitted that the "question" before his Honour for separate determination was that identified at [3] of his reasons.

16Senior counsel for the plaintiff informed the Court that when the notice of motion was referred to Curtis DCJ on 15 November 2011, there was reference to the determination of a separate question, but that the applicant's counsel handed to his Honour written submissions which referred only to UCPR, r 13.4. Senior counsel stated that the question of a separate determination pursuant to UCPR, r 28.2 in effect fell away and it was his understanding that the matter proceeded before Curtis DCJ only on the basis of the order sought pursuant to UCPR, r 13.4.

17It is apparent from his Honour's reasons that his understanding was that he was determining a notice of motion seeking an order pursuant to UCPR, r 13.4. His Honour's identification, at [3], of the "question for determination" was an appropriate identification of the question whether a reasonable cause of action was disclosed in the plaintiff's amended statement of claim.

18For the plaintiff to succeed against the applicant, the second respondent must have a liability to the plaintiff in respect of an "injury" caused by the fault of the driver of the vehicle, that is, relevantly for present purposes, the second respondent: Motor Accidents Compensation Act, s 10. The negligence or "fault" of the second respondent must have been "in the use or operation of the vehicle": s 3, as in force at the time of the accident in September 2005.

19The primary judge was invited to proceed on the basis of a notice to admit facts, which were not disputed, and included the following paragraphs:

"5. After driving the vehicle to the side of Vereker Street and stopping the vehicle, [the second respondent] alighted from the vehicle.
...
7. Shortly thereafter, [the second respondent] departed from the place where the vehicle was stopped....
...
9. Sometime shortly after [the second respondent] left the area ... the plaintiff assumed a position in the driver's seat of the vehicle.
...
11. The plaintiff drove the vehicle onto Vereker Street."

20Thus, there was no dispute that the second respondent was not in physical control of the vehicle at the time of the accident, nor was he in the vehicle at the time of the accident in which the plaintiff was injured. However, the negligence alleged in the statement of claim was that the second respondent was involved in "[d]irecting, allowing and/or encouraging" the plaintiff to attempt to drive the motor vehicle. The facts placed before Curtis DCJ in the notice to admit facts were silent as to each of the allegations of negligence in the amended statement of claim. In particular, they were silent as to any form of communication between the plaintiff and the second respondent before the plaintiff entered the driver's seat. This was an entirely inadequate basis for purporting to decide a "separate question" pursuant to UCPR, r 28.2.

21Further, order 8 made by Truss DCJ on 6 July 2011 merely referred to the "issue" identified in order 7 and directed the parties "to formulate precisely the question for determination". That never happened. In Bass v Permanent Trustee Co Ltd [1999] HCA 9; 198 CLR 334 at [49]-[50], the High Court said:

"As the answers given by the Full Court and the declaration it made were not based on facts, found or agreed, they were purely hypothetical. At best, the answers do no more than declare that the law dictates a particular result when certain facts in the material or pleadings are established. What those facts are is not stated, nor can they be identified with any precision. They may be all or some only of the facts. What facts are determinative of the legal issue involved in the question asked is left open. Such a result cannot assist the efficient administration of justice ...
The procedure adopted in the present case is far removed from that concerned with demurrers, a form of procedure which assumes the truth of a particular set of facts. If the 'facts' which are the basis of an answer to a legal question are identified, that answer will have utility for the parties provided that no other evidence could add to or qualify those 'facts'. In such a case, the parties' rights will be determined when the evidence finally determines the existence or non-existence of those 'facts'. Because that is so, demurrers have been much used in determining the rights of parties to litigation."

22Because the question was not formulated and because the necessary facts were neither agreed nor found, it was not appropriate that the matter proceed by way of a purported determination of a separate question. Nor did Curtis DCJ proceed on that basis. His Honour was right to take the course he did.

23In the circumstances, his Honour was correct to dismiss the application to strike out the proceedings so far as they were brought against the applicant. Whether the second respondent was a "driver" within the meaning of the Motor Accidents Compensation Act at the time of the alleged negligent conduct was a matter to be determined on the facts.

24The injuries suffered by the plaintiff were extremely serious. The assessment of damages may well be a complex and difficult process. There may also be a large question as to the extent to which his injuries were the result of his own contributory negligence. The applicant's responsibility could well have been determined (and could still properly be determined) on a trial as to liability alone. Such a trial would resolve any factual disputes as to the precise conduct of the second respondent, upon which the plaintiff sued.

25Whether or not that approach is adopted is a matter for the parties in the further proceedings in the District Court. There should be no attempt to identify a separate question in the manner proposed (though never effected) in July 2011 without an appropriate factual basis being established.

Proposed appeal as of right

26The applicant had originally filed a notice of appeal contending that his Honour's determination was of a separate question in respect of which an appeal lay as of right. It maintained that position before this Court. On any view, the appeal was against an interlocutory judgment and required leave: District Court Act 1973, s 127(2). Even had the matter proceeded by way of determination of a separate question, leave to appeal would still probably have been required as it would have been an interlocutory judgment or order of the District Court. The applicant's reliance upon the Supreme Court Act 1970, s 103 was misconceived. That section deals only with questions decide separately in the Supreme Court.

Conclusions

27For these reasons the Court dismissed the summons for leave to appeal. The applicant must pay the costs in this Court of the plaintiff including any costs relating to the notice of appeal that was filed. Such costs should be payable forthwith in circumstances where the applicant in its summons for leave to appeal misconceived the nature of the matter that was determined by Curtis DCJ.

28In addition to the orders made on 30 July 2012, the Court makes the following further orders:

(1) Dismiss as incompetent the notice of appeal filed on 23 February 2012.

(2) Order the applicant to pay the costs of the first respondent in this Court (the plaintiff), being costs of the appeal and of the application for leave to appeal, such costs to be payable forthwith.

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Decision last updated: 09 August 2012