Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Nominal Defendant v Uele [2012] NSWCA 271
• Hearing dates: 17 August 2012
• Decision date: 31 August 2012
• Before: Macfarlan JA at [1]; Meagher JA at [2]; Sackville AJA at [49].

Decision

(1) Leave to appeal be granted.

(2) Appeal be dismissed.

(3) Applicant/appellant to pay the respondent's costs of the application for leave and the appeal.

[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: MOTOR VEHICLE ACCIDENT - unregistered vehicle (motorbike) - claim against Nominal Defendant - whether, for vehicle to be "capable of registration" within s 33(5)(b)(i) of Motor Accidents Compensation Act 1999 (by issue of an unregistered vehicle permit) it is necessary that was at time of manufacture or subsequently an actual use proposed which would have justified issue of permit.
• Legislation Cited: District Court Act 1973; Interpretation Act 1987; Motor Accidents Act 1988; Motor Accidents Amendment Act 1995; Motor Accidents Compensation Act 1999; Motor Accidents Compensation Amendment Act 2006; Road Transport (General) Act 2005; Road Transport (Vehicle Registration) Act 1997; Road Transport (Vehicle Registration) Regulation 1998
• Cases Cited: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27; Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568; Applin v The Nominal Defendant [2004] NSWCA 217; 41 MVR 56.; Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767; Equuscorp Pty Ltd v Haxton [2012] HCA 7; 86 ALJR 296; Harrington v Lowe [1996] HCA 8; 190 CLR 311; Harrison v Melhem [2008] NSWCA 67; 72 NSWLR 380; Mills v Meeking [1990] HCA 6; 169 CLR 214; Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; 228 CLR 529; Nominal Defendant v Lane [2004] NSWCA 405; Northern Territory of Australia v Collins [2008] HCA 49; 235 CLR 619; Saeed v Minister for Immigration & Citizenship [2010] HCA 23; 241 CLR 252
• Category: Principal judgment
• Parties: Nominal Defendant (Applicant/Appellant); Kiaya Uele by her next friend Roxanne Hallcroft (Respondent)
• Representation: Counsel: Mr K P Rewell SC (Applicant/Appellant); Mr A J Stone; Ms M L Holz (Respondent); Solicitors: TL Lawyers, Newcastle (Applicant/ Appellant); White Barnes (Respondent)
• File Number(s): 2010/336945; 2012/58665

Decision under appeal

• Date of Decision: 2011-08-09 00:00:00
• Before: Sorby DCJ
• File Number(s): 2010/336945

Judgment

1 MACFARLAN JA: I agree with Meagher JA.

2 MEAGHER JA: On 19 January 2008 an unregistered Yamaha YZ 250 motocross motorbike driven by Mr Sam Sellick on the Cobar Reserve, northeast of Cobar, collided with the respondent, causing her serious leg injuries.

3 The respondent brought an action for damages in the District Court against the Nominal Defendant under s 33(1) of the Motor Accidents Compensation Act 1999 (the MAC Act). That section permits such a claim where the injury is caused by the fault of the driver of a "motor vehicle that is not an insured motor vehicle in the use or operation of the vehicle on a road in New South Wales".

4 The Nominal Defendant admitted that the injury was caused by the fault of the driver in the use or operation of the motorbike. It is also admitted that Cobar Reserve, where the accident happened, was open to and used by the public for the driving of vehicles and therefore a "road related area" within s 4 of the Road Transport (Vehicle Registration) Act 1997 (the VR Act), and accordingly a "road" for the purposes of s 33(1) of the MAC Act. The only issue on liability was whether the motorbike satisfied the definition of "motor vehicle" in s 33(5).

5 Section 33(5) provides:

"motor vehicle means a motor vehicle:

(a) that is exempt from registration, or

(b) that is not exempt from registration, is required to be registered to enable its lawful use or operation on a road in New South Wales and:

(i) was at the time of manufacture capable of registration, or

(ii) was at the time of manufacture, with minor adjustments, capable of registration, or

(iii) was previously capable of registration but is no longer capable of registration because it has fallen into disrepair."

6 It was agreed that the motorbike was not exempt from registration within paragraph (a) of that definition. The respondent's case in relation to paragraph (b), the motorbike not being exempt from registration, was that it was "required to be registered to enable its lawful use or operation on a road in New South Wales" and "(i) was at the time of manufacture capable of registration".

7 There was no dispute that the motorbike was required to be registered to enable its lawful use or operation on a road in New South Wales. Section 18(1) of the VR Act prohibited the use of an "unregistered registrable vehicle" on a road or on a road related area. The motorbike was a "registrable vehicle" as defined in s 4 of the VR Act.

8 As to the remaining requirement, the respondent's case was that at the time of its manufacture in 2000 the motorbike was "capable of registration", because it could have been the subject of an unregistered vehicle permit issued by the Road and Traffic Authority (RTA) under s 8(1)(d) of the VR Act and cl 44 of the Road Transport (Vehicle Registration) Regulation 1998 (the VR Regulation) which was in force in 2000. The respondent relied on the definition of "registration" in s 3 of the MAC Act, which includes the issue of an unregistered vehicle permit under the VR Act for an unregistered vehicle.

9 It was agreed that in 2000 the RTA issued unregistered vehicle permits for motocross motorcycles, such as the motorbike, for agricultural use or for use as recreational vehicles. In the case of agricultural use, the applicant was required to produce evidence as to the user being a primary producer or rural contractor. In the case of recreational use, the application had to be for use on a Designated Recreation Vehicle Area. In 2000 Stockton Beach, north of Newcastle, was such an area. It was also agreed that in 2000 and in 2008 the RTA would not have issued a permit that enabled the lawful use of the motorbike on Cobar Reserve.

10 Before the primary judge the respondent argued that it was sufficient to satisfy paragraph (b)(i) of the definition that the motorbike in its physical condition when manufactured was able to be the subject of an unregistered vehicle permit. It was irrelevant whether such a permit would have enabled the lawful use of the motorbike on the road or road related area where the motor accident happened (Cobar Reserve) or for the recreational purpose for which it was being used at that time.

11 The Nominal Defendant emphasised that the RTA's practice was to issue unregistered vehicle permits only for particular kinds of use of the vehicle or for use of the vehicle in specified areas. Accordingly, it was submitted that for the motorbike to be capable of registration by the issue of such a permit at the time of manufacture, or subsequently, it was also necessary that there have been such a proposed use in respect of that motorbike at any such time.

12 The issue of liability in relation to the respondent's claim was heard by Sorby DCJ. By his judgment of 9 August 2011, the primary judge concluded that the motorbike was "capable of registration" at the time of manufacture. On 23 November 2011 judgment was entered for the respondent on liability with damages to be assessed.

13 The appellant filed a notice of appeal from that judgment. It subsequently filed a summons seeking leave to appeal. Leave was required because the judgment only determined liability issues. For that reason it was interlocutory: s. 127(2)(a) of the District Court Act 1973; Computer Edge Pty Ltd v Apple Computer Inc [1984] HCA 47; 54 ALR 767; Harrington v Lowe [1996] HCA 8; 190 CLR 311 at 320, fn 19; Equuscorp Pty Ltd v Haxton [2012] HCA 7; 86 ALJR 296.

14 The Nominal Defendant's argument raises an issue as to the construction of s 33(5) which has significance for claimants and potential claimants other than the respondent. For that reason, and notwithstanding that in my view the argument must be rejected, leave to appeal should be granted.

The issue on appeal

15 The issue on appeal is whether, as the Nominal Defendant argues, for paragraph (b)(i) of the definition of "motor vehicle" in s 33(5) to be satisfied in respect of a vehicle which may be the subject of an unregistered vehicle permit, it is also necessary that there be an actual use proposed in respect of the vehicle, either at the time of its manufacture or at any time subsequent to its manufacture, which would have justified the issue of such a permit for a particular use or use in a specified area.

16 The Nominal Defendant does not contend that such a permit also had to be with respect to the road or road related area where the motor accident, which is the subject of the claim under s 33(1), occurred.

Relevant principles

17 The task of construction must commence with consideration of the relevant text and have regard to its context including the general purpose and policy of the provision: Northern Territory of Australia v Collins [2008] HCA 49; 235 CLR 619 at [99]; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; 239 CLR 27 at [47].

18 Section 6(1) of the MAC Act (which is in the same terms as s 33 of the Interpretation Act 1987) provides that in the interpretation of any provision of the Act, a construction that would promote its objects is to be preferred to one that would not. That provision requires that the objects of the Act be taken into account not only when its provisions are capable of more than one construction but also in determining whether more than one construction is open: Mills v Meeking [1990] HCA 6; 169 CLR 214 at 235.

The legislative scheme

19 The MAC Act established a new scheme of compulsory third party insurance and payment of compensation relating to the death of or injury to persons as a consequence of motor accidents. That scheme replaced the scheme contained in Part 3 of the Motor Accidents Act 1988. Like that earlier Act, the MAC Act was not intended to provide a universal, comprehensive scheme to award damages to every person who sustains an injury that was in some way connected to a motor vehicle: Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568 at [43], [90], [91].

20 The stated objects of the MAC Act include by s 5(1)(b) to provide compensation for compensable injuries sustained in motor accidents.

21 It seeks to do so by requiring that compulsory third party insurance be available to provide compensation to any person who suffers a compensable injury as a result of the use or operation of a motor vehicle on a road or road related area and establishing a fund to provide compensation in the event that compulsory third party insurance is not available.

22 Section 33(1) addresses the event that a motor vehicle used on a public road or a road related area is not insured. It permits a claim to be brought against the Nominal Defendant. Such a claim is not available if the accident happened on a road related area and the person who died or was injured was a trespasser on that area or if certain other circumstances apply: ss 33(3A) and (4). The claim, if successful, is to be paid from the Nominal Defendant's Fund which is established by s 40. Section 39 permits the Nominal Defendant to recover from the owner and/or driver of the vehicle, for the benefit of that fund, amounts paid in satisfaction of such a claim.

23 The objective that compulsory third party insurance be available is achieved by requiring that all motor vehicles used on any road or road related area be registered or have a permit enabling lawful use and that a vehicle may only be registered or the subject of a permit if there is a third party policy in force in respect of the vehicle.

24 To that end, s 18(1) of the VR Act prohibits the use of an unregistered registrable vehicle on a road or on a road related area except where that use is otherwise permitted by that Act or under the VR Regulation. Such permits may be issued under s 8(1)(d) of the Act and cl 44 of the VR Regulation. The effect of cll 7(1)(b), 11(1)(c), 13(1)(a) and (b) and 44(2)(b) of the latter is that motor vehicles may only be registered or the subject of a permit if the requirements of any applicable third party insurance legislation are complied with in respect of the vehicle. In 2000 those requirements (by the relevant definitions in Schedule 6 to the VR Regulation) were in Ch 2 of the MAC Act and required any such vehicle to have a third party policy in the terms specified by s 10 of that Act.

25 Such a policy provides insurance to the owner and driver against liability in respect of death or injury caused by fault in the use or operation of the vehicle. In the case of vehicles subject to an unregistered vehicle permit, that insurance extends to use on any road or road related area in any part of the Commonwealth. In all other cases that insurance extends to the use or operation of the vehicle in any part of the Commonwealth.

26 This has the consequence that notwithstanding that an unregistered vehicle permit may only enable lawful use on a specific road or road related area, the issue of the permit requires that a third party policy be obtained which provides insurance in respect of the use or operation of the vehicle on any road or road related area in any part of the Commonwealth. Thus, as was observed by Hodgson JA in Applin v The Nominal Defendant [2004] NSWCA 217; 41 MVR 56 at [25], the third party policy will respond even if the vehicle is being used on a road or for a purpose which is not permitted.

The construction of s 33(5)(b)

27 The vehicle with which the definition is concerned is an uninsured vehicle the use or operation of which on a road has resulted in death or injury. For that vehicle to fall within the definition in paragraph (b) of s 33(5) it must be exempt from registration and satisfy two other descriptions. The first, concerning the position at the time of the motor accident, is that the vehicle at that time was required to be registered to enable its lawful use or operation. That condition was satisfied because the motorbike was an unregistered registrable vehicle being used on a road in breach of the prohibition in s 18 of the VR Act.

28 The second is satisfied if the vehicle answers one of the three further descriptions in paragraph (b)(i), (ii) or (iii). Each concerns whether at a time or times the vehicle was "capable of registration". The ordinary meaning of that expression is able to be or fit to be registered. Section 3 of the MAC Act extends the meaning of registration to include the issue of an unregistered vehicle permit. Paragraphs (b)(i) and (ii) require an inquiry as to whether the vehicle was able to be registered "at the time of manufacture". That expression directs attention to the characteristics and specifications of the vehicle when manufactured. Paragraph (b)(iii) requires an inquiry as to whether the vehicle was unable to be registered at the time of the accident because it had fallen into disrepair but was "previously" able to be registered.

29 Each of paragraphs (b)(i), (ii) and (iii) is concerned with the physical characteristics of the vehicle as distinct from the identity or purposes of the owner or operator of the vehicle at any relevant point in time. The reference to "minor adjustments" in paragraph (b)(ii) is to minor adaptations or alterations to the physical condition of the vehicle when manufactured. The description in paragraph (b)(iii) is satisfied if the current impaired condition of the vehicle has the consequence that it is not able to be registered whereas in an earlier unimpaired condition the vehicle was able to be registered.

30 Applying that construction, paragraph (b)(i) is satisfied if the motorbike in its condition when manufactured could have been registered or the subject of a permit. That is the construction of the provision contended for by the respondent and adopted by the primary judge. There was no issue that if that was all that paragraph (b)(i) required, it was satisfied in this case.

31 That construction does not give rise to any obviously absurd or unlikely outcomes. If a vehicle is able to be registered for full road use or be the subject of a permit and it is registered or the subject of a permit, there will be compulsory third party insurance covering the use or operation of the vehicle on any road or road related area in the Commonwealth. If such a vehicle is not registered or the subject of a permit and is involved in a motor accident, there may be a right to claim against the Nominal Defendant in relation to the use or operation of the vehicle on any road or road related area in New South Wales. Whether such a claim may be made is to be determined by reference to criteria which depend upon the objectively ascertainable physical characteristics of the vehicle at particular times. The application of those criteria should yield the same answers for all vehicles which have the same physical characteristics, irrespective of their use or proposed use by any owner or driver at any time before the motor accident.

32 The Nominal Defendant argues that the expression "capable of registration" in its application to the issue of unregistered vehicle permits, requires attention to the proposed use of the vehicle at the relevant time to determine whether that use would have enabled the issue of such a permit. It says that if reference is made only to the physical characteristics of the vehicle at the time of its manufacture, almost every vehicle was able to be the subject of a permit and the intended limitation provided by the definition in relation to vehicles which are not exempt from registration would have no practical effect. If there is another available meaning which does not produce that outcome, that meaning is to be preferred.

33 The Nominal Defendant points out that in 2000, applicants for the issue of a permit for recreational use were asked in what area it was intended to use the vehicle and that applicants for a permit for agricultural use were asked how and where it was intended to use the relevant vehicle. On that basis it was said that for a vehicle to have been "capable of registration" by the issue of a permit at a particular time, it had to be shown that a use which justified the issue of a permit was intended or proposed for the vehicle at that time. In support of this argument the Nominal Defendant also refers to the legislative history of s 33(5) and its predecessor, s 27(5) of the Motor Accidents Act 1988 as indicating that the definition was intended to limit the meaning of "motor vehicle" to some extent.

34 The construction for which the Nominal Defendant contends has a number of difficulties which are fatal to it being adopted as correct. First, it does not give effect to the words of paragraph (b)(i) which call for an inquiry as to whether the motorbike was at the time of manufacture able to be the subject of a permit. Those words make no reference to the capacity of the owner of the vehicle at that time to apply for or obtain such a permit. On their face, they are only concerned with the motorbike and its ability or fitness to be registered. Secondly, that construction would require a factual inquiry as to the identity of the owner of the vehicle at the time of its manufacture and as to whether that owner's intended use of the vehicle would have justified the issue of a permit. That owner or those owners are likely to include, in many cases, foreign corporations who could never be supposed to have any intention to use the vehicle in New South Wales for an agricultural or recreational purpose. In recognition of that being the case, the Nominal Defendant argued that the expression "capable of registration" was satisfied if at some time subsequent to its manufacture an owner of the vehicle had the requisite intention or purpose. That argument also has insurmountable difficulties. It does not take account of the words "at the time of manufacture". It has the consequence that whether a vehicle satisfies paragraph (b)(i) depends on whether at some point in time an owner of the vehicle intended to use it for a purpose which would have justified the issue of a permit. It also depends on the ability of the person bringing the action against the Nominal Defendant to prove that fact. Construed in this way, the provision would produce capricious and inconsistent outcomes in respect of identical vehicles.

35 It is a sufficient reason to reject these proposed constructions that neither accords with any available meaning of the words used. For that reason alone, it is not possible to prefer one or other of them to the meaning found by the primary judge on the basis that the latter would result in paragraph (b) having no practical effect or operation. Nor for the reasons which follow would the Court be justified in proceeding on that basis.

36 Section 8(1) of the VR Act and cl 44 of the VR Regulation enable the RTA to issue an unregistered vehicle permit for a "registrable vehicle" which is a heavy vehicle or other "motor vehicle" which in turn is defined as a "vehicle that is built to be propelled by a motor that forms part of the vehicle". That definition is broad enough to include almost everything that would fall within the definition of "motor vehicle" in the MAC Act which adopts the definition of motor vehicle in the Road Transport (General) Act 2005. As at 2000 the vehicles in respect of which the RTA could issue an unregistered vehicle permit did not include every "registrable vehicle". For example, an RTA manual used in 2000 indicated that some vehicles may not be the subject of permits. One example was lawnmowers which weigh less than 250kg which were used on a golf course. The position appears to be, as maintained by the respondent in argument, that whilst the registrability threshold excludes only a small number of vehicles so that it has limited practical effect, it is not correct to say that it has no practical effect at all.

37 Finally, reference to the legislative history of the provision, and to two decisions of this Court which have considered its operation, does not lead to the conclusion that through some oversight or inadvertence the intention of the Parliament has not been translated into the text of the law. Even if that were the position, such considerations could not displace the clear meaning of the text: Nominal Defendant v GLG Australia Pty Ltd [2006] HCA 11; 228 CLR 529 at [22]; Saeed v Minister for Immigration & Citizenship [2010] HCA 23; 241 CLR 252 at [31]-[34]; Harrison v Melhem [2008] NSWCA 67; 72 NSWLR 380 at [12], [172], [191], [192].

38 The definition of "motor vehicle" as originally enacted in the MAC Act provided by paragraph (b) that a motor vehicle means a vehicle:

"(b) that is not exempt from registration and that:

(i) is required to be registered to enable its lawful use or operation on a road in New South Wales, and

(ii) immediately before the motor accident occurred, was capable, or would, following the repair of minor defects, have been capable, of being so registered."

Section 27(5) of the Motor Accidents Act 1988 was in the same terms except that it referred to "a road or road related area".

39 That "registrability" qualification was first introduced into s 27(5) by the Motor Accidents Amendment Act 1995. The Second Reading Speech for that Bill indicates that it was intended to relieve the Nominal Defendant from liability in circumstances where a vehicle (the example given was a go-kart) was not capable of registration for road use. That form of the definition has been the subject of two decisions of this Court.

40 The first, Applin v Nominal Defendant, was also concerned with an unregistered motorcycle for which full road registration could not have been obtained. The motorcycle was being used purely for recreation on a road passing between two agricultural properties. An unregistered vehicle permit could have been obtained for use of the motorcycle on the road but not for recreation. The claimant argued that "immediately before" the accident the motorcycle was able to be the subject of a permit because it had been used for farming purposes and was "physically adequate". It did not matter that the permit would not have extended to use of the road for a purely recreational purpose. The Nominal Defendant argued that the expression "was capable ... of being so registered" should be construed as requiring that the permit extend to the purpose for which the vehicle was being used at the time of the motor accident.

41 Hodgson JA (Tobias JA and Cripps AJA agreeing) rejected that argument, concluding (at [30]) that "immediately before the motor accident, [the motorcycle] was capable of being registered to enable its lawful use or operation on that road" and that the circumstance that the use or operation at the time of the accident would not have been authorised by such a permit did not prevent the application of s 33.

42 Applin was concerned with an inquiry directed to the position "immediately before" the motor accident. It raised for consideration whether it was sufficient that the vehicle was at that time able to be the subject of a permit enabling its use or operation on any road in New South Wales and not just the use or operation on the road on which the accident occurred.

43 In support of his conclusion on this issue, Hodgson JA noted (at [26]) that s 33(5)(b)(i) was apt in its expression to refer to any use or operation on any road in New South Wales. Applin did not raise for decision whether that issue was to be addressed by reference only to the physical condition or characteristics of the motorcycle at the relevant time.

44 The second decision, Nominal Defendant v Lane [2004] NSWCA 405, addressed the meaning of the expression "following the repair of minor defects" in paragraph (b)(ii) and particularly whether in characterising a defect as "minor" regard should be had not solely or principally to the cost of repairing the defects but to their significance for the safe operation of the vehicle. That argument was rejected. It was held (at [31]) that the primary judge did not err in having regard to the ease and relatively little cost of repairs in determining whether defects were "minor defects".

45 Following that decision, s 33(5) was amended to its current form by the Motor Accidents Compensation Amendment Act 2006. In the Second Reading Speech to the Legislative Assembly on 9 March 2006 the Minister for Transport, Mr Watkins, said:

"This amendment is necessary because the existing legislation is being interpreted by the courts in a manner inconsistent, I believe, with the intention of the legislation that the Nominal Defendant Scheme should cover injuries caused by uninsured vehicles on public roads that, aside from their state of repair, would otherwise be part of the registration system."

46 There is nothing in that Second Reading Speech which could or does justify the construction argued by the Nominal Defendant.

Conclusion

47 For these reasons, in my opinion, the primary judge was correct to conclude that the motorbike was "at the time of manufacture capable of registration" within paragraph (b)(i) of s 33(5).

48 The following orders should be made:

(1) Leave to appeal be granted.

(2) Appeal be dismissed.

(3) Applicant/appellant to pay the respondent's costs of the application for leave and the appeal.

49 SACKVILLE AJA: I agree with Meagher JA.

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Decision last updated: 31 August 2012