XERRI v KINGMILL PTY LTD (T/as THRIFTY CAR RENTALS) SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SHELLER and STEIN JJA 24 February 1998 [1998] NSWCA 269 Sheller and Stein JJA Pursuant to s102 (2) (h) of the Supreme Court Act 1970 the claimant, John Xerri, applies by summons to extend the time to apply for leave to appeal by fourteen days and for leave to appeal from a decision of Sully J of 24 October 1997. Sully J had before him an appeal by way of stated case from a decision of a Local Court Magistrate brought pursuant to the provisions of Division | Pt5 of the Justices Act 1902. In those proceedings the claimant was the appellant and the opponent, Kingmill Pty Ltd (trading as Thrifty Car Rentals), the respondent. His Honour dismissed the appeal with costs. The proceedings arose out of a collision which occurred on 13 August 1992 between a motor vehicle owned and driven by the claimant and a Mitsubishi motor vehicle owned by the opponent and driven by Charles Azzi, who died as a result of the collision. The claimant sued the opponent to recover $39,800, the cost of repairing his motor vehicle, relying upon s51(1) of the Insurance Contracts Act 1984 (C'th). He alleged that the deceased was the insured under a contract of liability insurance with the opponent, whereunder the opponent had agreed to indemnify the deceased against liability to pay damages to the claimant for damage caused to his property during the term of the contract of insurance by use of the Mitsubishi. The Magistrate found that the deceased "caused the motor vehicle collision which occurred between the Mitsubishi and the Plaintiff's vehicle in that the deceased breached provisions of the Motor Traffic Act and/or Motor Traffic Regulations." A question for consideration by Sully J was whether the Magistrate had erred in law in failing to hold that the Insurance Contracts Act imposed a liability upon the opponent to pay damages to the claimant as a result of the collision. C119 of the Car Rental Agreement provided that the lessor's insurance would relieve the customer of all liability for loss or damage "subject to the excess provision provided below, and unless excluded by one or more of the following: "(a) Where Vehicle is used or driven in violation of any of the terms of the Agreement, including authorised area of use. (i) Vehicle used or driven in breach of Term 4." Sully J was satisfied that this clause, properly construed, provided insurance cover in respect of the deceased's liability in damages to the plaintiff as a result of the collision. He also held that the exclusion clauses in the Car Rental Agreement, cl19(a) - cl19(k), on their proper construction applied to a negligent or inadvertent breach of the Motor Traffic Act or regulations per force of the operation of condition 4(f) of the agreement and s4(1) of the Traffic Act 1909. The claimant contended that the commercial purpose of the damage insurance contract was to indemnify the deceased against liability for his own negligence. The claimant submitted that the construction sought to be imposed on the exclusion clauses would be repugnant to the commercial purpose of the contract. The exclusion clauses should be read down in so far as they relate to breaches of 2 UNREPORTED JUDGMENTS the Motor Traffic Act or regulations so as not to include inadvertent or negligent acts or omissions. Sully J was not prepared so to read down the exclusion clauses. In this respect the claimant contends that Sully J erred and accordingly seeks leave to appeal. In our opinion the case is one of some general importance. An aspect of the case, if not the fundamental matter in the way that the claimant wishes to argue it, is whether the collision was caused by the deceased's negligence or inadvertence. The Magistrate, according to the stated case, made no finding of negligence. He stated that he did not consider it necessary to make any determination as to whether the collision was caused by the negligence of the deceased. Ground 3 in the stated case was a contention that the Magistrate's determination was erroneous in point of law upon the ground that he had erred in failing to hold that the collision between the Mitsubishi and the plaintiff's motor vehicle was caused by the negligence of the deceased. Prima facie, it seems to us, that this is a case in which leave to appeal should be granted. However, the claimant wishes to pursue the appeal on the basis that the deceased was negligent. This the claimant cannot do in the absence of a finding by a Magistrate. $106 (1) of the Justices Act enables the Court to cause the case to be sent back for amendment. Counsel drew our attention to American Airlines Inc v Georgeopoulos & Anor (unreported), Court of Appeal, 26 September 1996. In that case the Court was of the view that the Local Court had erred in deciding a question without first hearing evidence and making certain findings of fact. On this basis the stated case was sent back to the Magistrate to hear evidence and make findings of fact and then to amend the stated case to incorporate the findings of fact and return them to the Court. It is suggested that in the present case it would be appropriate for the Court to send the stated case back to the Magistrate to hear such evidence and submissions as are appropriate and to make a finding about whether or not the collision was caused by the deceased's negligence. The parties were agreed that the Court constituted by two members I to hear the application for leave to appeal should make this order if it was considered proper. We propose to make the following orders: 1. Extend the time for filing an application for leave to appeal up to and to include the day upon which the summons for leave to appeal was filed; 2. Grant the claimant leave to appeal; 3. Send the stated case back to the Local Court Magistrate in order that he may list the proceedings for further hearing, hear such evidence and submissions as are appropriate, decide whether the collision was shown to have been caused by the deceased's negligence, making findings accordingly and amend the stated case as appropriate to include and take account of these findings of fact; 4. The hearing of the appeal not be fixed until the stated case has been so amended or further order; Stand the appeal into the Registrar's list for mention; The costs of the application for leave to appeal to be costs on the appeal; Liberty to either party to apply to Sheller JA in Chambers on forty-eight hours' notice to the other. od