Judgment date: 30 November 2011
Nominal Defendant v Buchan  QSC 364
Supreme Court of Queensland1
- The Nominal Defendant can recover from an uninsured owner or driver (or both) any costs reasonably incurred in compromising the claim.
- In determining whether costs were reasonably incurred, the Court will consider whether the compromise was reasonable on the basis of the evidence available to the Nominal Defendant at the time of the compromise.
Ms Martin commenced dependency proceedings in the Supreme Court as a result of the death of her de facto husband in a motorcycle accident which occurred on 28 April 2002.
At about 10 pm on 20 April 2002, the deceased was thrown from an uninsured and unregistered motorcycle over the railings of Mission River Bridge, outside Weipa, into crocodile and shark infested waters. The deceased was never seen again.
Shortly after the accident, the defendant, John Buchan, who was the owner of the motorcycle, was found seriously injured at the scene of the accident. The defendant suffered serious head injuries and had no recollection of the events.
Ms Martin made a dependency claim for herself and her 2 children pursuant to s 37 of the Motor Accidents Insurance Act 1994 (the Act). The Nominal Defendant responded and proceedings were commenced in the Queensland Supreme Court in April 2005.
As the plaintiff was thrown over the bridge and the defendant could not recall the events of the accident, there was no direct evidence as to who was driving the motorcycle. Only indirect and circumstantial evidence could be relied upon.
The Nominal Defendant ultimately compromised the dependency claim in July 2006. Ms Martin settled for almost $770,000.
Supreme Court Proceedings
Proceedings were subsequently commenced against Mr Buchan for recovery of the damages paid out to Ms Martin.
Section 60(1) of the Act states:
In the original proceedings, the Nominal Defendant did not admit the fact that Mr Buchan was driving the motorcycle.
- There was no expert opinion on the matter.
- The police incident report had not nominated anyone as the driver.
- The Coroner was unable to make any findings as to who was the driver.
The defendant argued that in such circumstances it was not reasonable for the Nominal Defendant to have compromised the claim. As such, the damages were not "costs reasonably incurred".
The Nominal Defendant submitted that, based on the circumstantial evidence, it was probable that the Court would have found Mr Buchan to be the driver; that Mr Buchan would also be found to have been primarily negligent; and that the deceased would not have had his damages reduced for contributory negligence. Evidence from the claims manager and the Nominal Defendant's solicitor was tendered by way of affidavit. Determination
His Honour held that the Court had to approach the issue as to whether it was reasonable for the Nominal Defendant to have compromised the claim objectively.3
His Honour referred with approval to Nominal Defendant (Qld) v Langman4:
His Honour considered that the Nominal Defendant had acted reasonably in compromising the claim.
His Honour carefully reviewed the circumstantial evidence and ultimately held that the Nominal Defendant had acted reasonably in compromising the claim.
Specifically, he noted that:
- Mr Buchan owned the motorcycle, was seen riding the motorcycle at 2.30 pm on the day of the accident, and could not recall whether the deceased had ever ridden the motorcycle, or ever talked about riding the motorcycle, in the past.
- One witness described the passenger on the motorcycle as having "wavy hair".
- Another witness described the passenger as having "blond hair".
- The Nominal Defendant's loss assessor recorded that the defendant had "short dark hair".
- The passenger, sitting on the back of the motorcycle, would have been at a higher height than the defendant, and this would therefore increase the likelihood of the passenger, rather than the driver, being thrown over the railing of the bridge (although no expert evidence was tendered to this effect).
The case is important as it establishes the factors which necessarily have to be proved by the Nominal Defendant in order to recover "costs reasonably incurred" from an uninsured owner/driver.
Claims managers should be aware that courts will likely scrutinise the content of legal advice and instructions during a contested hearing for recovery. Careful file preparation, including consideration as to whether experts' reports are required, may prove decisive as to whether a compromise was reasonable.
1 Chief Justice Paul de Jersey AC
2 Costs are defined in s 4 of the Act and extend to amounts paid under compromises.
3 Paragraph 8 per Chief Justice Paul de Jersey AC
4  2 Qd R 569 per Thomas J at 572
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