On 4 April 2012 the NSW Court of Appeal delivered a leading decision on section 34 of the Motor Accidents Compensation Act 1999 (NSW). It is also the first major decision on the "due inquiry and search" test in Nominal Defendant cases since 1975.
The case also contains interesting findings on the contributory negligence of pedestrians, and on the proof required for sedentary professionals to achieve economic loss damages.
Due inquiry and search
Wallace Meakes (the plaintiff), a solicitor, was injured on 1 August 2008. He was a pedestrian who was attempting to cross Park Street, near the corner of Elizabeth Street in the Sydney CBD. It was 4pm and the traffic was congested. Being in a hurry to get to an appointment, he did not check the pedestrian signals before crossing.
Just before he completed his crossing he was hit by a car. Its driver stopped, got out of the car and spoke with him. He then left the accident scene. He did not take down the details of the car or driver before leaving. A few days later, he reported the accident to the police and returned to the scene to find witnesses. A couple of employees at a nearby cafe had seen the accident, but nobody had taken down the registration details of the car.
In the District Court trial, the Nominal Defendant, represented by Allianz, contested due inquiry and search on the basis that the plaintiff should have taken the driver's or vehicle's details before leaving the scene.
Judge Levy SC found that due inquiry and search had been established. He excused the failure to take down the car's details on the basis that the plaintiff did not think he was severely injured until sometime later. He also found the plaintiff to be justifiably unaware of the legal requirements of making a claim, despite both being a solicitor and having a prior motor accident claim in which he had obtained the other driver's details.
The appeal judgment of Sackville AJA(with whom McColl and Basten JAagreed) explored the history of the "due inquiry and search" test, dating back to Blandford v Fox (1944) SR (NSW) 241 and Harrison v Nominal Defendant (1975) 7 ALR 680. It affirmed the following principles:
- it is a plaintiff's duty to prove that due inquiry and search has been performed
- the level of search and inquiry required is what is "reasonable" in the circumstances of the accident, and in the situation of the plaintiff after the accident
- to be "reasonable" the effort must be "as prompt and thorough as the circumstances will permit... The inquiries must be set on foot before the scent is cold..."
- the concept of "due" search cannot be applied stringently - it does not mean that every single path must be followed
- the test can be satisfied if, in the circumstances, no search or inquiry is performed but no such efforts could be expected to reveal the information
- in any case
- a finding by a trial judge that the vehicle's identity cannot be established as required by the section should not easily be set aside on appeal.
At paragraph 56, Sackville AJA offered a succinct formulation of the applicable " statutory standard". The question is not whether it was "understandable and excusable" to fail to record details, or whether it was "unreasonable" to allow the driver to depart. The question is whether it would have been possible to identify the vehicle if due search and enquiry was adequately undertaken.
The Court went a little further. Paragraph 71 of Sackville AJA's judgment is critical:
"In assessing 'due inquiry and search' that should have been undertaken in this case it is appropriate to treat the respondent as a reasonably informed member of the community. Such a person could be expected to know that a victim injured in a motor vehicle accident, where another person is at fault, may be able to claim compensation from the person at fault. Where the victim is a pedestrian, a reasonably informed member of the community could be expected to appreciate that it is important to obtain the registration number of the vehicle and, if possible, the details of the driver in order to pursue any claim for compensation." [Emphasis added].
Applying those principles to the plaintiff, the Court of Appeal found that a reasonable person in his position would have taken down the offending vehicle's details. The factors they found telling were:
- he ease of which the plaintiff could have recorded the details. The driver approached him. He had a pen and paper in his briefcase. He agreed in evidence that it would have been a simple thing to record the number plate
- the plaintiff must have been aware that he was injured, despite his value judgments about the extent of his injury
- he was not so injured as to prevent him writing down registration details, which would have taken no more than a few seconds, and
- to find that the plaintiff had satisfied section 34 in this situation would come close to undermining the section, and depriving it of any real utility
In crossing a road full of traffic without checking to see the status of pedestrian signals, Judge Levy SC refused to deduct any amount for contributory negligence. The Court of Appeal criticised the Judge's apparent attitude that the Nominal Defendant "was required to adduce compelling evidence" in order to succeed.
In the appeal, the Nominal Defendant contested that a figure of 25% should have been deducted. Sackville AJAand McColl JA agreed with this. Basten JA believed that 50% would have been more appropriate but he acquiesced. Nothing turned on the issue because the verdict for the plaintiff was already overturned on the due search issue.
The plaintiff was a principal in an incorporated law practice. His earnings, before and after the accident, were very high. His claim for economic loss was that his reduced capacity to play sport (e.g. being limited by his injured shoulder to 6 holes of golf) reduced his ability to win prospective new clients while carrying out those activities.
Although no loss could be demonstrated on the financial evidence, Judge Levy SC accepted the allegations, awarding buffers for lost earning capacity of $60,000 for the past and $250,000 for the future. The judgment was careful to mention section 126 and the tests to be applied for future losses.
The Court of Appeal unanimously rejected these awards, reducing the amount to $10,000 for past loss only (the amount conceded by the Nominal Defendant). The financial records disclosed no actual loss and the Court of Appeal was persuaded that the records spoke adequately to before and after capacity. The original findings were dismissed as being based on "conjecture rather than on evidence".
A verdict that originally totalled $433,565 plus costs was overturned and replaced with a verdict for the defendant, with the plaintiff/respondent to pay the costs in both the lower court and appeal proceedings.
This case should become a benchmark for the 'due inquiry and search' provisions of the Motor Accidents Compensation Act 1999 (NSW), and similar provisions in other statutory schemes. The findings about what a "reasonably informed member of the community " should know about a right to claim break new ground.
We recommend that practitioners and claims staff who handle claims for or against the Nominal Defendant familiarise themselves with this decision.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.