District Court New South Wales Medium Neutral Citation: Morgan v Nominal Defendant [2016] NSWDC 441 Hearing dates: 11 November 2016 Decision date: 11 November 2016 Jurisdiction: Civil Before: C O'Connor ADCJ Decision: Verdict for the plaintiff Catchwords: Civil, motor vehicle accident, unregistered motor cycles, s33 Motor Accidents Compensation Act. Legislation Cited: Motor Accidents Compensation Act 1999 Motor Accidents Compensation Amendment Act 2006 Cases Cited: Nominal Defendant v Uele (2012) NSWCA 271 Nominal Defendant v Lane (2004) NSWCA 405 Category: Principal judgment Parties: Hank Morgan – Plaintiff Nominal defendant - Defendant Representation: Counsel: Mr Stone SC – Plaintiff Mr Cleary - Defendant Solicitors: Slater & Gordon Ltd – Plaintiff Curwoods Lawyers - Defendant File Number(s): 2015/240318 Publication restriction: N/A Judgment 1. On 4 August 2012, the Plaintiff, Hank Morgan, then aged 15 sustained severe personal injuries in a motorcycle accident. 2. He was riding what is described as a Yamaha WR 450 motorcycle when he collided with a Pit Pro 140cc motorcycle being ridden by Nathan Cain. 3. The accident occurred on a dirt track on the Willyama Common outside of Broken Hill. Sadly, Nathan Cain died as a consequence of injuries he sustained in that collision. Both motorcycles were unregistered. 4. The Plaintiff claims damages from the Nominal Defendant as a consequence of the negligence of Nathan Cain. The Nominal Defendant admits breach of duty of care by the late Nathan Cain. Agreement has also been reached between the parties of a 20% allowance for contributory negligence. 5. It is further agreed that if the plaintiff is successful in his claim against the Nominal Defendant any discount for contributory negligence does not apply to any damages for the past and future treatment or past and future care. This is because the plaintiff was under the age of 16 at the time of the accident and is entitled to the Special Benefit under s 7J of the Motor Accidents Compensation Act 1999. 6. The issue of liability has been severed from the assessment of damages. The only liability issue for determination is whether the plaintiff's accident falls within the scope of the Nominal Defendant scheme. 7. In that regard the more discreet issue for determination is whether the motor cycle being ridden by the deceased was a motor vehicle within the meaning of the Motor Accidents Compensation Act (MACA). If so, there is no dispute the Nominal defendant is liable to compensate the plaintiff. If not there will be a verdict for the Nominal Defendant. 8. Mr Stone SC provided helpful written submissions (MFI 5). I have extracted a good deal of the material which follows from those submissions much of which is not in contention. The following matters have been admitted on the pleadings 1. At about 2.00 pm on 4 August 2012 the plaintiff was riding his Yamaha WR450 motorcycle on a dirt track on Willyama Common at Broken Hill ("the track"). 2. The plaintiff was born on xx June 1997 3. Willyama Common is Crown Land. 4. At the time of the accident, the track was open to and used by the public for the driving of vehicles. 5. At the time of the accident, the plaintiff was lawfully entitled to be on the track. 6. At the time of the accident, the plaintiff was not trespassing on the track. 7. There were no signs prohibiting use of the track for motorcycle riding. 8. There were no gates limiting access to the track. 9. At about 2.00 pm on 4 August 2012, Nathan Cain was the rider of a Pitpro 140 cc motorbike ("the motorbike"). 10. The motorbike was unregistered. 11. At about 2.00 pm on 4 August 2012, Nathan Cain was riding the motorbike on the track. 12. The plaintiff's motorcycle and the motorbike collided. The following facts have been agreed between the parties: 1. That the Pitpro motorcycle ridden by the late Nathan Cain at time of accident was a 2012 140cc Pitpro LE. 2. That if purchased new in 2012, the PitPro would have cost (including stamp duty and GST) approximately $1,500. 3. That in 2012 the RTA/RMS offered conditional registration for recreational riding of motorcycles on Stockton Beach. 4. That to be eligible for conditional registration for recreational riding on Stockton Beach the RTA/RMS would have required some modifications of the PitPro as manufactured. 5. The modifications required comprised installation of: 1. Brake and turn lights. 2. Rear reflectors. 3. Rear vision mirror(s). 4. A horn. 5. Generating equipment, switches and wiring to power (i) and (iv) above. 1. That the cost in 2016 of the new parts necessary to modify the PitPro for conditional registration is approximately $635. 2. That upon installation of the parts identified above, the PitPro would be eligible for conditional registration for recreational purposes on Stockton Beach. 3. That the cost of parts may be less if parts could be sourced off the internet or second-hand. 4. That the cost of a qualified mechanic installing the parts on the PitPro in 2016 is in the range of $65 to $100 per hour, with the plaintiff's expert (Mr. Russell) a practising mechanic, currently charging $90 per hour. 5. That the time taken to install the parts, wire them up and test the bike is in the range of 3-4 hours. 6. That in doing the work to prepare a motorbike in Victoria for recreational riding, Mr Russell takes up to 3 hours, but charges for 2 hours, due to market pressures from other mechanics. 7. That Mr Russell's quote to perform the NSW work (with parts and 2 hours labour) is $815. 8. That if the work was done by Mr Russell charging 3 hours labour it would cost $905. 9. That attachment and wiring of the parts requires screwdrivers, a drill, crimping pliers and wire strippers. It does not require specialist equipment. 10. That with parts and tools the work does not require a mechanic's workshop - it could be done in a home garage or driveway. 11. That performing the wiring work requires removal of the petrol tank (5 screws) and seat (2 screws) to access relevant parts of the bike. The time taken to do this is incorporated in the agreed time for the total work. 12. That in performing the work there is no interference with the engine or braking systems (noting the need to disconnect the brake hose and fit stop light switches to the front and rear brakes). To make the alterations new parts are attached and wired in. 13. That PitPro motorcycles are made in China and imported. 14. That a new top of the range brand name off-road motocross motorbike costs in excess of $10,000. 15. That the cost of work (parts and labour) to repair the defects identified in the Scout vehicle in Nominal Defendant v Lane would likely have been at least $1,000. 16. That Victoria has a system of recreational registration which allows more widespread recreational use of modified motorbikes than NSW (where such recreational use is limited to Stockton Beach north of Newcastle). 17. That in Victoria, motocross style motorbikes, including pit-bikes and the PitPro brand of pit-bike are regularly modified to make them eligible for recreational registration. 18. That the only differences between the recreational registration requirements in NSW and Victoria are that NSW requires brake and turn lights, whereas Victoria does not require those lights, but does require a headlight. 1. S 33 of the Motor Accidents Compensation Act sets out the conditions for eligibility for the Nominal Defendant scheme: 2. In respect of unregistered vehicles there are 3 conditions imposed by s 33 of the Motor Accidents Compensation Act 1999 (MAC Act) 1. the accident must occur on a road or road related area (s33(1)) and 2. the plaintiff must not be a trespasser (s 33(3A)) and 3. the accident must involve a type of vehicle covered by the Nominal Defendant Scheme 1. It is common ground that the accident occurred on a road related area, and that the plaintiff was not a trespasser. 2. The only issue for determination is whether the motor vehicle being ridden by Nathan Cain fell within the definition provided in s 33(5) of the Act which came into force in 2006. 3. In so far as relevant the section provides as follows: 4. S 33(5) for the purposes of this section, and any regulations made for the purposes of this section: "Motor vehicle" means a motor vehicle: 1. that is exempt from registration, or 2. 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: 1. was at the time of manufacture capable of registration, or 2. was at the time of manufacture, with minor adjustments, capable of registration, or 3. was previously capable of registration but is no longer capable of registration because it has fallen into disrepair. 1. It is further not in dispute that the reference to "capable of registration" has the same meaning as "conditional registration" with "minor adjustments". 2. In Nominal Defendant v Uele [2012] NSWCA 271, the issue of conditional registration (in that case Unregistered Vehicle Permit or UVP) for recreational riding, constitute registration. 3. It is the plaintiff's case that the motorcycle being ridden by Nathan Cain was at the time of manufacture, with minor adjustments, capable of registration and accordingly, a motor vehicle, within the meaning of the Act (s 33(5)(B)(ii)) and accordingly, within the Nominal Defendant scheme. 4. Mr Cleary, who appeared on behalf of the Nominal Defendant, submitted that the adjustments required to render it capable of registration could not be described as minor. 5. It was his submission that when one assessed the nature of the adjustments together with the relativity of the costs of such adjustments to the value of the motorcycle they could not be described as minor. 6. It was his submission, as I understand it, that even if the adjustment was indeed trivial in nature and not time-consuming if its cost, relative to the value of the vehicle at the time of manufacture, was disproportionately expensive, then it could not be described as minor adjustment. 7. He submitted that the cost of adjustments being $815 against a value at the time of manufacture of $1500 was so disproportionate, that it could not be regarded as a "minor adjustment". 8. It was not the plaintiff's case that the Pit Pro motorcycle could be modified for full and regular on road registration with minor adjustment, but rather, could, at the time of manufacture, have obtained conditional registration, for recreational use, on Stockton Beach, with only "minor adjustments". 9. Mr Stone, in his written submissions, sets out the legislative history and the relevant ministers 2nd reading speeches when the legislation was introduced. 10. Legislation introduced in 1995 was plainly directed to limiting claims against the Nominal Defendant. 11. The relevant definition of "motor vehicle" was a motor vehicle: 1. that is exempt from registration, or 2. that is not exempt from registration and that; 1. is required to be registered to enable its lawful use or operation on a road in New South Wales; and 2. Immediately before the motor accident occurred was capable, or would, following the repair of minor defects, have been capable, of being so registered 1. The motivation for the change in legislation was disclosed in the ministers 2nd reading speech. There was concern about the wide definition of "motor vehicle" which covered go-karts and other vehicles such as fork lifts. It was considered that accidents involving such vehicles would be covered by public liability policies and not by the Nominal Defendant. 2. On 16 September 1995 the Attorney General said: "It is therefore proposed to limit the type of motor vehicles that can give rise to claims against the Nominal Defendant. Claims will only be able to be made in respect of vehicles which are capable of and are required to be registered for use on a public road or are exempt from registration under the Traffic Act and Regulations. Vehicles not capable of registration only because of minor defects may still be capable of giving rise to a claim against the Nominal Defendant. By means of that provision, Nominal Defendant claims arising from accidents and the use of go-karts and other vehicles not capable of registration will not be maintainable." 1. The legislation, as it then was, introduced a subjective test in that attention was directed to the specific vehicle involved in the accident rather, as in the present case, the vehicle at the time of manufacture. 2. The 2006 amendment introduced an objective test directing attention the vehicle being assessed as at the date of manufacture rather than the date of accident. 3. The amendment overcame what otherwise was an unjust outcome. As submitted by Mr Stone "The victim of a motor accident usually had no control over the nature of, let alone the state of repair of the vehicle which caused their injury. It left the accident victim at the mercy of competing expert evidence as to the cost of making repairs to the subject vehicle such that it was fit for registration. The onus was placed on the victim to establish that a vehicle which they did not own and over which they exercised no control required only minor repair to make it registrable. If the subject vehicle was extensively damaged or destroyed in the accident, the plaintiff's onus may prove to be incapable of discharge." [1] 1. On the introduction of the amending legislation contained in the Motor Accidents Compensation Amendment Act 2006 in the 2nd Reading Speech the minister said: "The second amendment to the Nominal Defendant provisions seeks to clarify that for the purposes of making a claim, an uninsured motor vehicle includes a vehicle that was at the time of its manufacture capable of registration or was at the time of manufacture, with minor adjustments, capable of registration or a vehicle that was previously capable of registration but is no longer capable of registration because it has fallen into disrepair. 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, beside from their state of repair, would otherwise be part of the registration system." 1. Uele, also makes clear any intent on the part of the manufacturer or owner as to any intended use of the motorcycle at the time of manufacture is irrelevant. Rather, an objective test is applied to the class of motorcycles to determine whether it was objectively capable of conditional registration had a hypothetical user applied to the RTA/RMS at the time of manufacture. 2. It is further common ground that the fact that Stockton Beach is on the opposite side of NSW to Willyama Common is irrelevant. The accident being considered in Uele occurred in Cobar. 3. The evidence comprised a number of photographs of the deceased's motorcycle (exhibit C, D and E). Apart from some obvious scuff marks it would appear to be a motorcycle in reasonable condition. 4. Exhibits (O-P) are photographs of the various component parts needed to be added to the deceased's motorcycle to make it registrable within the meaning of the Act. The photographs also have a notation on them indicating the cost of the item. 5. By way of explanation, during the course of the hearing, the actual items depicted in the photographs were handed to the court and returned so as to have a good understanding of the nature of the items involved. 6. The report of Mr Russell exhibit F sets out the items depicted in the photographs: Rear reflector (exhibit P) $5 Turn lights switch (exhibit N) $39 Wiring kit and self-generating supply box (exhibit G) $220 Indicator wiring loom (exhibit L) $49 4 LED indicators (exhibit M) $69 Flasher relay (exhibit O) $22 Mirrors and mounts x 2 (exhibit H) $36 Horn (exhibit J) $18 Horn button (exhibit K) $20 1. The only adjustment, as I understand it, requiring some time was the installation of the wiring kit. That apparatus provides the electricity to provide current to such things as the horn, the indicator switches and the brake lights. The seat of the motorcycle is removed to install that item. There is otherwise no battery to activate those features. . 2. As can be seen from the nature of the additional items they are directed to the safety of the motorcycle. There is no work done in relation to its chassis its engine, brakes or other items which might be described as major components. All those items are left intact without alteration or adjustment. The work performed was not structural nor did it alter the shape or operation of the motorcycle. The parts required to be attached could readily be removed. 3. As mentioned the focus of the submissions from both counsel focused on whether the work that would have been required at the time of manufacturer, to enable the motorcycle to be capable of registration, could be described as "minor adjustments". 4. Both counsel agreed that there had been no prior decision dealing with the amended legislation as to what may or may not amount to "minor adjustments" 5. Both counsel referred to the decision of Nominal Defendant v Lane (2004) NSWCA 405 as providing some guidance. The Court of Appeal in that case dealt with the previous s 35(5)(b)(ii) of MAC. The issued to be determined was whether immediately before the accident the vehicle was capable of being registered "following the repair of minor defects". 6. The judge at first instance in the District Court accepted that fixing the wiring to the lights, fixing the door locks and replacing seat belts in a 1961 International Scout 4 WD constituted repairing "minor defects". 7. There was no evidence as to the value of the vehicle. It was some 38 years old at the time of the accident. It had not been registered for the last 5 years. The owner purchased it from a wrecking yard in 1999 [2] . 8. There was no evidence as to the cost of the repairs, however, the parties agreed, that the cost of repairs for the vehicle in Lane would be $1000 for parts and labour. 9. Having regard to the age of the vehicle and its history I agree with the submission of Mr Stone that it would be unlikely to be worth any more than the cost of repairs. There was no submission to the contrary. 10. In Lane evidence was given by an expert mechanic Mr Gillies. He contrasted minor repairs with major repairs by way of example. He said major repairs would include when an engine was blowing so much smoke or dropping so much oil that it had to be replaced or if the vehicle was so affected by rust that major repairs were required. 11. In relation to the work required in that case he said the parts were relatively easy to access and easy to replace if one was mechanically minded. 12. Justice Giles (with whom Ipp JA and Tobias JA concurred) rejected an argument by the Nominal Defendant that the defects in the vehicle were "major" because they affected vehicle safety. 13. Mr Stone, in his written submissions, extracted the following relevant findings of the Court of Appeal in Lane [3] : "The word 'minor' calls for an assessment of degree, without indication of the scale according to which the degree is to be assessed beyond the word 'repair'. 'Repair' directs attention to difficulty and cost. Although this is not conclusive as to the scale, no words direct attention to a scale of safe operation of the motor vehicle. Further, the simple word 'minor' used in the context of defects, which may or may not have significance for the safe operation of the motor vehicle. The defects are those which prevent registration, and not all defects which prevent registration affect the safe operation of the motor vehicle. Mr. Gillies referred to an engine blowing so much smoke that it must be replaced. Blowing excessive smoke is a defect preventing registration. Only in a very extended sense is its safety related. Replacing the engine is, however, in ordinary speech a major repair, and if the condition of the engine is a defect, it is aptly described as a repair of a major defect. Numerous other examples can be given of defects which prevent registration, but are not safety-related. In determining that the defects found by him are minor defects, the judge was plainly influenced by the economics of their repair. Moderate ease of repair no doubt goes with moderate cost. Mr. Gillies referred also to acceptability of function and obtaining an acceptable vehicle condition. In my opinion, the judge did not err in the regard he had to the ease and relative little cost of the repairs to the vehicle in determining whether the defects were minor defects or, in his determination that the defects he found were minor defects for the purposes of s.33(5)(b)(ii) of the Act." [4] 1. I observe that the legislation is silent as to the way in which one goes about assessing what amounts to a "minor adjustment". If it was intended that such is to be determined by a comparison of the cost of the adjustment with the value of the vehicle at time of manufacture than such could have been made plain by the legislature. 2. The intention of the amending legislation is as stated by the Minister: "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". 1. As pointed out by Mr Stone in his submissions if one was dependent upon a comparison of the relativity of the cost of repairs to the value of the vehicle to determine whether the adjustment was minor or major it would lead to unjust and anomalous outcomes. 2. By way of illustration it is agreed that the cost of a brand-new top of the range off road motor cross motorbike is in excess of $10,000. There is no dispute that such a motorcycle would require the same adjustments and costs as in the current matter to render it capable of registration within the meaning of the Act. 3. It would be difficult to understand that a condition of qualification for cover, pursuant to the Nominal Defendant scheme, was dependent upon the price paid by the negligent party for his motorcycle. 4. There are of course, as submitted, a range of models of the type being ridden by the deceased which vary upwards in price. If the relativity of the cost of adjustments to the value of vehicle is determinative it would then be a matter of pure luck, in one respect, to be injured by a vehicle having whatever might be the appropriate relativity. 5. Meagher JA in Uele when considering s 35(5)(b)(ii) said: "the reference to "minor adjustments" in paragraph (b) (ii) is to minor adaptions or alterations to the physical condition of the vehicle when manufactured" 1. The work to be carried out, as was submitted, did not involve any interference with the control parts or functions of the motorbike's steering, engine, suspension, gears, wheels, brakes, petrol flow or seating. 2. Further, as was submitted, the tools required to carry out the work were relatively straightforward found in many household toolboxes. It could be carried out by an amateur mechanic without being a professional. 3. Mr Stone provided examples to test the relativity of the cost of adjustments to the value of the vehicle as being a determinative indicator of whether the adjustments were minor. 4. Reference was made to a tailor charging $20 to take up the hem on the trousers of a man's suit, irrespective of whether the suit is purchased second-hand for $40 or as a $5000 tuxedo. Notwithstanding that the alteration was 50% of the cost it would still be regarded as a minor alteration. 5. I accept that the cost of repairs is a relevant matter to be considered when determining whether adjustments or alterations are minor or major but do not accept such costs are to be measured against the value of the motorcycle as determinative of such decision. 6. Having regard to the nature of the work as described the relative ease with which the work can be performed the lack of any structural alterations to the motorcycle, as referred to, and the cost of the alterations, I am satisfied that the work required to render the deceased's motorcycle capable of modification for recreational riding on Stockton Beach in 2012 involve nothing more than "minor alterations" to the bike. 7. It follows that the plaintiff's claim fits within the scope of the Nominal Defendant Scheme and there will be a verdict for the plaintiff. 8. The matter is remitted to the Broken Hill District Court for the assessment of damages. ********** Endnotes 1. Plaintiffs submissions MFI 5 p8 par 26 2. Nominal Defendant v Lane at [7] & [8] 3. Plaintiff's submissions p12 para 53 4. Nominal Defendant v Lane at [29] 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: 30 April 2018