Supreme Court New South Wales Medium Neutral Citation: Turnbull v Kyogle Council [2024] NSWSC 1297 Hearing dates: 14 October 2024 Date of orders: 16 October 2024 Decision date: 16 October 2024 Jurisdiction: Common Law Before: Elkaim AJ Decision: 1. The defendant is not permitted to rely on the amended defence which is Annexure A to the affidavit of Matthew Gerathy dated 3 September 2024. 2. The parties have leave to make submissions on costs. Catchwords: CIVIL PROCEDURE — pleadings — amendment — application to rely on amended defence — where amended defence asserts that plaintiff's entitlement to common law damages is barred by his participation in the Motor Accidents (Lifetime Care and Support) Act 2006 (NSW) — plaintiff allowed to seek common law damages whilst at the same time being a lifetime participant of Motor Accidents (Lifetime Care and Support) Act 2006 (NSW) Legislation Cited: Civil Liability Act 2002 (NSW), s 15B(8) Motor Accident Injuries Act 2017 (NSW), Pt 4 Motor Accidents Compensation Act 1999 (NSW), Ch 5, ss 122, 130A, 131A, 141A Motor Accidents Compensation Amendment Bill Motor Accidents (Lifetime Care and Support) Act 2006 (NSW), ss 7, 8, 11B, 54 Motor Accidents (Lifetime Care and Support) Bill Cases Cited: Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364; [2006] HCA 32 Bitupave Ltd v Bollington (1998) 28 MVR 223 Daly v Thiering [2013] NSWCA 25 Daly v Thiering (2013) 249 CLR 381; [2013] HCA 45 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Roads and Traffic Authority v Ryan (2005) 62 NSWLR 609; [2005] NSWCA 34 Rouse v Shepherd (1994) 35 NSWLR 250 Thiering v Daly [2011] NSWSC 1345 Category: Procedural rulings Parties: Mr Simon Charles Turnbull (Plaintiff) Kyogle Council (Defendant) Representation: Counsel: Mr D Hooke SC (Plaintiff) Mr G Radburn (Plaintiff) Dr S Hartford Davis (Plaintiff) Mr John Tryon (Plaintiff) Mr Jeremy Morris SC (Defendant) Mr Reno Gambi (Defendant) Solicitors: Somerville Laundry Lomax (Plaintiff) Makinson & d'Apice Lawyers (Defendant) File Number(s): 2021/216575 Publication restriction: No JUDGMENT 1. The plaintiff, who is now 74 years of age, was catastrophically injured in an accident on 5 May 2019. 2. The accident occurred when the plaintiff, riding his motorcycle on Summerland Way, within the local council district of Kyogle, rode into loose gravel that had been left by the defendant on the roadway following completion of roadworks. When the motorcycle went into the gravel, it slid to the left of the roadway and the plaintiff was ejected from the motorcycle. 3. On 12 July 2019 the plaintiff was informed by the Lifetime Care and Support Authority of New South Wales that he had been accepted as an interim participant into the Lifetime Care and Support Scheme (the Scheme). On 20 July 2021 the plaintiff was accepted as a permanent lifetime participant in the Scheme. 4. The plaintiff commenced proceedings against the defendant with the filing of a statement of claim on 29 July 2021. The defendant filed a defence on 4 May 2022. The plaintiff's claim is for common law damages within the umbrella of the Civil Liability Act 2002 (NSW) (the CLA). 5. On 3 September 2024, the defendant filed a notice of motion seeking leave to rely upon an amended defence. 6. The parties, very recently, although I am not sure of the precise date, agreed that the quantum of the damages for the case was $15 million. They also agreed that should there be a verdict for the plaintiff, that the $15 million would be reduced by 10%. The plaintiff emphasised that the 10% was not an agreed percentage of contributory negligence but rather a reflection of a compromise for litigation purposes. The plaintiff added that even if the 10% was contributory negligence, it would make no material difference. 7. The proposed amended defence adds an extra paragraph to the defence. It states: "18. In further answer to the plaintiff's claim the defendant states that in respect of any claim for economic loss for treatment and care needs arising from the need for medical expenditure, domestic assistance (including gratuitous domestic assistance) and attendant care services (or alternatively damages for medical expenses, domestic assistance (including gratuitous domestic assistance) and commercial care) that: (a) The accident giving rise to the proceedings was a 'motor accident' within the meaning of the Motor Accidents (Lifetime Care and Support) Act, 2006 (NSW) (LCS Act); (b) The plaintiff's injury was a 'motor accident injury' within the meaning of the LCS Act; (c) The plaintiff was accepted as a lifetime participant in the lifetime Care and Support Scheme (LCS Scheme) pursuant to s. 9 of the LCS Act; (d) By reason of s 9(4) of the LCS Act, and as a matter of law, the plaintiff remains a lifetime participant of the LCS Scheme and is unable to leave the LCS Scheme and claim damages in the proceedings for those costs otherwise covered by the LCS Scheme; and (e) The plaintiff's participation in the LCS Scheme as a lifetime participant creates a bar to any entitlement he might otherwise have had to claim economic loss in respect of treatment and care needs arising from the need for medical expenditure, domestic assistance (including gratuitous domestic assistance) and attendant care services (or alternatively damages for medical expenses, domestic assistance (including gratuitous domestic assistance) and commercial care)." 1. The plaintiff opposed leave being granted to rely on the amended defence, submitting that it was futile. Because, as I understood the position of the parties, the defendant would not otherwise oppose the entry of judgment against it for $13.5 million ($15 million less 10%), I was asked to deal with the notice of motion at the outset of the proceedings. 2. The defendant submitted that the matter was one of public importance, suggesting that I give leave to rely on the amended defence and then deal with its merits as a separate issue. The plaintiff opposed this course. Both parties agreed that if I took the course recommended by the defendant, the arguments would be precisely the same. 3. I think the appropriate course is to proceed on the basis that I will decide the merits of the defence, the question of whether it is futile or not being an intrinsic part of this decision. In other words, I will simply decide whether or not to allow the defendant to rely on the amended defence. 4. The case was originally given an estimate of eight days, but then shortened because of the agreement on quantum. However, the parties told me that the matter would be greatly assisted by my decision on the defendant's motion being given before the matter proceeded any further. This was a reasonable and logical suggestion, and the matter was adjourned until the third hearing day to both give me an opportunity to reach a decision and also for the parties to confer about certain issues that might arise if I found in the defendant's favour on the motion. 5. I have been able to reach a decision before the matter proceeded further to the effect that I would not allow the defendant to rely on the amended defence. I intend to state my reasons concisely, but hopefully dealing appropriately with the defendant's arguments in favour of the defence being amended. 6. Looking at the new paragraph proposed by the defendant, the plaintiff accepted the assertions made in subparagraphs (a), (b) and (c). In respect of subparagraph (d), the plaintiff said that it was of no consequence, it being acknowledged that the plaintiff was a lifetime participant in the Scheme. 7. The principal argument arose from subparagraph (e) which asserts that the plaintiff's participation in the Scheme is a bar to any claim he might have for economic loss in respect of treatment and care expenses, including gratuitous domestic assistance and paid domestic assistance. 8. Because the plaintiff's claim is made up only of non-economic loss and treatment and care expenses it would follow, if the new defence was established, that the plaintiff would recover no more than the amount agreed for non-economic loss. 9. I note here that the amount agreed for non-economic loss was $761,000 which is the amount stipulated by the CLA as representing a 100% level of impairment. This is an indication of how catastrophic the plaintiff's injuries were. It is also an acknowledgement by the defendant that the applicable amount of non-economic loss was to be defined by the CLA and not by any alternative motor accident legislation. 10. At its most fundamental level the defendant's argument was that a participant in the scheme could not pursue a claim for common law damages. This notion was said to be a natural implication of the provisions of the Motor Accidents Compensation Act 1999 (NSW) (the MAC Act), the Motor Accident Injuries Act 2017 (NSW) (the MAI Act) and the Motor Accidents (Lifetime Care and Support) Act 2006 (NSW) (the LCS Act). 11. The defendant submitted that the legislative scheme encompassed by the above three Acts constituted a major revolution whereby people injured in motor vehicle accidents were equally entitled to benefits. Accordingly, the legislation should be looked at through a broader scope, or contemplation, because of the wide definition of a motor vehicle accident. 12. Before I refer to particular sections of the above legislation, I wish to note these concessions made by the defendant: 1. The Scheme is funded by third-party (i.e. motor vehicle) insurers. 2. A bar to recovery of common law damages must be expressed as a clear intention. 3. The damages claimed by the defendant did not fall within the specific bar to recovery of damages included in ss 130A and 141A of the MAC Act. This is because these bars to recovery of damages fell within Ch 5 of the MAC Act which only applied "in respect of an award of damages which relates to the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle." This was not the case here. 4. Part 4 of the MAI Act is the equivalent of Ch 5 of the MAC Act so that the same concession as in the previous sub-paragraph is applicable to the damages bars in Part 4. 1. The plaintiff submitted that the legislation should be interpreted according to its terms and in particular that none of the legislation, by their terms, constituted a bar to the recovery of common law damages. This was to be contrasted with ss 131A and 141A of the MAC Act which made the bar, in the circumstances to which the sections applied, explicit. In Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364, the High Court stated at [23]: "The approach of the courts has consistently been to require very clear legislative intent before treating a statutory provision as taking away common law rights of a plaintiff, where there is an alternative construction available." 1. I have already noted, that the defendant did not dispute this principle. The plaintiff then referred me to Daly v Thiering (2013) 249 CLR 381; [2013] HCA 45 to illustrate the existence of common law damages recoverable against the background of the Scheme being in place. The trial judge in Thiering v Daly [2011] NSWSC 1345, Garling J, found that the legislation establishing the Scheme had not extinguished the plaintiff's right to damages for gratuitous assistance. 2. An appeal from the decision of Garling J was dismissed (Daly v Thiering [2013] NSWCA 25), as was the appeal to the High Court. 3. The original decision in the matter of Thiering led to the introduction of s 141A to ensure that the right to obtain damages for gratuitous assistance was extinguished. 4. The second reading speech introducing the amendments, on 30 May 2012, by the Hon Greg Pearce, the Minister for Finance and Services, is also important to this case for the emphasis it places on the legislative intention to restrict and reduce premiums for third-party insurance. The same emphasis can be seen in the second reading speech made by the Deputy Premier, Mr John Watkins, on 9 March 2006 when introducing the Motor Accidents (Lifetime Care and Support) Bill and the Motor Accidents Compensation Amendment Bill. 5. The defendant did not dispute any of the above intentions or principles but said that because the Scheme was intended to be an all-encompassing system of compensation for motor accident victims then, almost by definition, any participant in the Scheme could not also recover common law damages. I asked learned senior counsel for the defendant if the submission had the effect of rendering the specific bars that were contained in the legislation (as in s 141A) as unnecessary surplus. He replied that that was the case. 6. The defendant made this submission: "… when you look at the scheme as a whole, it clearly was to be a binary scheme. You either took advantage of this no‑fault scheme, and participated in it, in which case your treatment and care needs would be funded by the authority. Or you elected to stay out of that system, you pay your treatment and care needs independently of the scheme, and you have an entitlement to recover damages against a tortfeasor. But what it doesn't permit, on its very face, is permanent participation in the scheme, then with a right to recover common law damages as, whether you call it an alternative, or in addition to. It doesn't permit having one foot in the scheme and one foot in common law damages. And that is regardless of provisions such as 130A and 141. And they are exactly the sort of provisions which one would have expected, had there been a contemplation by the legislature that you could both be a lifetime participant in the scheme, and also bring an action for common law damages." 1. In other words, the defendant asked me to place the effective message of the legislation over and above its precise terms. I think that is a step too far. I agree with the plaintiff's comment that this approach had the hallmarks of a 'vibe' submission. 2. In addition, the defendant's submission would give no weight to the sections, like s 141A which specifically impose a bar on common law damages. In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, at [71], McHugh J said this: "Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was 'a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent'." (Notations omitted) 1. Sections 130A and 141A of the MAC Act are clear in their terms. They describe a specific bar on the recovery of damages where the sections apply, namely within the scope of Ch 5, as described in s 122. To describe sections such as these as surplusage and then to give a similar meaning to recovery of damages as a whole because of the supposed broad intention and scope of the legislation, is to completely ignore the sections themselves. I reject such an approach. 2. Also, in support of its position the defendant pointed out that the LCS Act made no provision for recovery of past payments. In this matter $2,911,188.13 has already been paid by the Scheme. If this could not be recovered by the Scheme then there would be a double recovery, noting that the agreed $15 million, includes this sum. A double recovery was an indication that the Scheme could not coexist with an award of damages. 3. The plaintiff responded that it's case certainly did not include double recovery and to that end, an undertaking was given that if the Scheme requested repayment of the almost $3 million, the specific amount (less 10%) would be repaid. 4. If there is an element of double recovery in the plaintiff's case, it is to be contrasted with the windfall that would flow to the defendant should its approach be correct. I do not know if the defendant is a self-insurer (partly or completely) or has an insurer behind it. Whatever the case, neither the defendant nor the insurer is the third-party insurer to whom premiums are paid by New South Wales motorists. Imposing a bar upon the plaintiff from pursuing damages because of his participation in the Scheme would provide a significant windfall to the defendant or its insurer when, as has been observed above, one of the purposes behind the Scheme is the reduction of premiums payable by New South Wales motorists. 5. I note in this regard that s 54 of the LCS Act does provide a mechanism for recovery in s 54(3), although recovery of the type applicable here would be excluded by s 54(6). 6. Section 7(3) of the LCS Act was also put forward by the defendant in aid of its cause: "A person is not eligible to be a participant in the Scheme in relation to an injury if the person has been awarded damages, pursuant to a final judgment entered by a court or a binding settlement, for future economic loss in respect of the treatment and care needs of the participant that relate to the injury." 1. The plaintiff in this case has not been awarded damages so that the limitation on eligibility provided by the s 7(3) does not apply. That is my, and the plaintiff's, reading of the provision. The defendant however submitted that the subsection should be read in this way: "he's not eligible to be a participant if he's got damages, ergo if he's a participant, he's not entitled to damages." 1. I reject the defendant's interpretation. That is simply not what the section states. The defendant took the matter a step further in respect of s 8 of the LCS Act, submitting that a person could make a choice as to whether or not they wish to be a participant in the Scheme. They could either choose to be in the Scheme or choose to pursue common law damages. 2. Section 8 of the LCS Act, which deals with applications for participation in the Scheme, allows for an application to be made by persons besides the injured person. In addition, bearing in mind that persons entering the Scheme are likely to be severely injured, a participant may not have ever made a conscious decision to enter the scheme. To suggest that such a person needs to choose between damages and the Scheme is untenable. 3. Section 8 therefore contradicts the defendant's submission that the system was binary. I agree with this submission from the plaintiff: "What then follows is a submission that if one ends up in the scheme, it's really a matter of a binary election by the plaintiff. Because he has the option to either join the scheme, or elect to stay out and recover damages. But that's not what s 8 of the Lifetime Care Act says. What s 8 says is that an application for a person to become a participant is to be made by the authority, and can be made by or on behalf of the person, or by an insurer. Subsection B says an application by an insurer doesn't require the consent of the person, and subs 3 says that SIRA may direct the insurer to make an application for the person to become a participant, and the insurer must comply with such a direction. So there's no question of election in this scenario." 1. The defendant relied upon the guidelines of the Scheme to resist one of the arguments put forward by the plaintiff. This argument concerned the difference between the damages that were included in the $15 million and the benefits likely to emanate from the Scheme. The estimate of future expenses made by the Scheme (Exhibit A) is $4.9 million. Using very rounded off figures, if this is added to the $3 million in past expenses and the $761,000 in non-economic loss then there is still a substantial gap to the agreed figure of $15 million. 2. Much of the difference, submitted the plaintiff, was due to the non-availability under the Scheme of gratuitous care. The plaintiff's wife was providing very extensive gratuitous care. The defendant responded that cl 8 of the Scheme's guidelines allowed for the provision of such care. The difficulty with this guideline is that it is contrary to s 11B of the LCS Act which provides that gratuitous care can only be funded in "special circumstances". The plaintiff also pointed out that s 15B(8) of the CLA provides that: If a claimant is a participant in the Scheme under the Motor Accidents (Lifetime Care and Support) Act 2006, damages may not be awarded to the claimant under this section in respect of any loss of the claimant's capacity to provide gratuitous domestic services to the claimant's dependants while the claimant is a participant in the Scheme if (and to the extent that)— (a) the loss resulted from the motor accident injury (within the meaning of that Act) in respect of which the claimant is a participant in that Scheme, and (b) the treatment and care needs (within the meaning of that Act) of the claimant that are provided for or are to be provided under the Scheme include the provision of such domestic services to the claimant's dependants. 1. I have already observed that the defendant has acknowledged the applicability of the CLA to this plaintiff, by agreeing non-economic loss at 100% according to the CLA tables. A related inconsistency that flows from the defendant's submissions is that the proposed defence does not attack the award for non-economic loss. If the binary approach (choosing the Scheme or common law damages) was correct, then presumably the plaintiff would also not be entitled to non-economic loss. 2. A final matter I should at least note, is the plaintiff's acceptance of a 10% reduction from the agreed quantum of $15 million. The defendant did not submit otherwise, but I think it important to record that the plaintiff was adamant that the 10% was not a reflection of contributory negligence but rather a reflection of compromise for the general risks of litigation. 3. The plaintiff also submitted that even if the 10% did reflect contributory negligence it would have no effect on the matter before the court. To this end I was referred to the following authorities: Rouse v Shepherd (1994) 35 NSWLR 250, Bitupave Ltd v Bollington (1998) 28 MVR 223 and Roads and Traffic Authority v Ryan (2005) 62 NSWLR 609; [2005] NSWCA 34. 4. Because the defendant did not submit otherwise, I do not think I need to take this point any further, other than to note, that based on the authorities recorded in the previous paragraph, I agree that even if the 10% was contributory negligence, that would not have any consequence for the argument on the proposed amended defence. 5. I make the following orders on the Notice of Motion filed on 3 September 2024: 1. The defendant is not permitted to rely on the amended defence which is Annexure A to the affidavit of Matthew Gerathy dated 3 September 2024. 2. The parties have leave to make submissions on costs. ********** Amendments 16 October 2024 - Para 35 - "so" deleted DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 October 2024