Collins v Insurance Australia Ltd ("Collins")1 is a NSW Court of Appeal decision where a prior motor accident caused a "dangerous situation" for the purposes of ss 3 and 3A of the Motor Accidents Compensation Act 1999 (NSW) ("the MAC Act")2 and ss 1.4 and 1.9 of the Motor Accident Injuries Act 2017 (NSW) ("the MAI Act").3
The key issue before the Court of Appeal was whether the insurer of the vehicle involved in the prior accident owed a duty of care to the appellant who was the driver of a subsequent vehicle confronted with a traffic jam caused by the first accident.
II. SECTION 3A MOTOR ACCIDENTS COMPENSATION ACT 1999 (NSW)
Critical to the reasoning of the Court of Appeal was that the Motor Accidents Compensation Amendment Act 2006 (NSW) ("2006 Amending Act") inserted a new s 3A which commenced on 1 October 2006.4 Relevantly, s 3A(1)(d) states:
This Act (including any third-party policy under this Act) applies only in respect of the death of or injury to a person that is caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle and only if the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during—
. . .
(d) a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle's running out of control.5
The trigger for the amendment was the decision of Zotti v Australian Associated Motor Insurers Ltd ("Zotti")6 which involved a patch of oil that had been left on the road from a previous motor accident, causing Mr Zotti to lose control of his bicycle on the oil patch and suffer injuries. The question for the Court was whether he was entitled to recover from the insurer of the negligent driver in the previous motor accident. Section 3 of the MAC Act then contained the relevant definition of "injury" which included conditions equivalent to ss (a), (b) and (c) of the current s 3A. The question was whether the injury to Mr Zotti was "caused during a collision". The Court held that it was not.
The main problem for the plaintiff/appellant in Zotti7 was the narrow definition of "injury" in the previous s 3 which stated:
(a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:
(i) the driving of the vehicle, or
(j) a collision, or action taken to avoid a collision, with the vehicle, or
(k) the vehicle's running out of control, or
(l) such use or operation by a defect in the vehicle...
Fortunately for the plaintiff/appellant in Collins8, she was able to avail herself of the more advantageous provisions of s 3A(1)(d)9 quoted above which were passed after the Zotti10 decision.
III. BACKGROUND OF THE CASE
On 17 August 2014, the driver of a motor vehicle crossed onto the wrong side of the road on the Kings Highway near Monga NSW, south-east of Canberra, and collided with another vehicle. Subsequently, the appellant, Lisa Collins, was driving northwest on the Kings Highway, approximately 1km to 2km from the site of the original accident. Ms Collins drove around a bend in the road and was suddenly confronted with a line of stationary vehicles that extended from the original accident. To avoid a collision with the rear-most vehicle which was about 60 metres ahead of her, Ms Collins swerved her vehicle up an embankment on the left side of the road, causing it to overturn. She suffered injuries.
Ms Collins decided to file a claim in the District Court of NSW against the third-party insurer of the vehicle at fault for the earlier collision.11 The insurer argued that the insured driver did not owe a duty of care. The insurer further argued that, even had such a duty been owed, the duty had not been breached because the risk of harm was "insignificant".12
The District Court Judge agreed. On 2 August 2021, Abadee DCJ held that the insurer was not liable for Ms Collins' injuries and that the insurance policy did not cover the claim because her injuries were not the result of a "dangerous situation caused by the driving of the vehicle" under s 3A(1)(d) of the MAC Act.13
Ms Collins appealed.
IV. DECISION OF THE NSW COURT OF APPEAL
On 2 August 2022, the Court of Appeal ("the COA") unanimously upheld the appeal. The five key issues are discussed in detail below.
1. Distance of the vehicle
The COA unanimously agreed that the District Court judge did not err in finding that the appellant was 50 to 65 metres away from the rear most vehicle when she first saw the queue of stationary vehicles.14 The District Court judge took into account the likely speed, the perception-response time, and the braking distance on a wet road and a dry road.15
2. "Dangerous situation"
The COA unanimously agreed that there was a "dangerous situation"16 because the queue of stationary vehicles was not visible, the existence of the queue could not be anticipated, it was not necessary to drive less then 60km/h, and a car driving at 60km/h could not stop in time.17
As to whether there was a "situation" within s 3A(1)(d) of the MAC Act, the COA held that the heavy traffic resulting from the original collision was a "situation" caused by the insured driver colliding with another vehicle.18
As to whether the situation was "dangerous"19, the COA held that the following conditions established "dangerousness" in the circumstances of the case and thus engaged the MAC Act, the MAI Act and the third-party policy:
(106) First, the queue of stationary vehicles was not visible to an approaching vehicle until that vehicle was within 50 or 60 metres of the end of the queue...20
(107) Secondly, the existence of the queue was entirely unexpected...21
(108) Thirdly...it was not a necessary precaution in the exercise of taking care for his or her safety for a road user to reduce his or her speed below 60km/h in circumstances where the permitted speed limit was 90km/h and there was no advisory sign indicating a lower speed should be adopted.22
(109) Fourthly, the situation was dangerous because a vehicle navigating the curve at about 60km/h and driven by a person keeping a proper lookout, would not be able to stop in less than about 54 metres, which was almost exactly the point at which the end of the queue became visible...23
3. Duty of care
The COA held that the insured driver owed a duty of care to the appellant because a negligent driver who causes a collision on a regional highway creates a risk of injury to other road users who were not involved in the initial collision.24 The COA held that the "dangerousness"25 of the situation was not a function of time or geography.26 Instead, the insured driver created a "dangerous situation"27 by putting an obstacle in the path of subsequent vehicles so that motorists in the position of the appellant were vulnerable.28
In relation to the nature of the duty owed by motorists, Kirk JA reiterated that:
(14) ...the duty owed by motorists to other users of the highway, for example, is expressed in terms of the duty to take reasonable care for the safety of other users of the highway having regard to all the circumstances of the case. The duty is not subdivided into categories such as a duty to keep a proper lookout or sound a warning or to keep a safe distance away from the car in front. In the particular circumstances of the case, failure to do one or more of these things may constitute a breach of the duty to take reasonable care. But they are not themselves legal duties for the purpose of the law of negligence.29
4. Breach of duty
Basten AJA, with Meagher JA agreeing, held that the foreseeability and materiality of the risk must be assessed from the time of the original collision, not by reference to the precise circumstances in which it materialised.30 The seriousness of the possible consequences is relevant to determining whether a reasonable person would have taken precautions.31 The consequential risks arising from a collision on a two-lane highway were foreseeable and not insignificant.32 Thus, it followed that a reasonable person in the insured driver's position would have taken precautions to avoid the collision.33
Kirk JA reasoned that breach (in contrast to causation) should be assessed prospectively, and the inquiry into breach "must attempt to answer what response a reasonable person, confronted with a foreseeable risk of injury, would have made to that risk".34 Thus, the trial judge had erroneously focused on the precise mechanism by which harm in fact occurred. Whether there was a geographic connection between the two accidents was irrelevant to the likelihood of the foreseeable risk of harm eventuating.35 A risk may be characterised as "not insignificant" even where it has a "low" chance of occurring.36 A reasonable person in the insured driver's position would have taken precautions to avoid causing the not insignificant risk of physical harm to other road users.37
5. Contributorily negligence
The COA unanimously agreed that the appellant was 20% contributorily negligent because the last driver in the line of stationary vehicles, who had a similar time to respond as the appellant, was able to avoid a collision.38 Basten AJA, with Meagher and Kirk JJA agreeing, explained:
(145) ...although it is not possible to say precisely why the appellant got into trouble and had to swerve up the embankment, it may properly be inferred that there was some element of insufficiency in her immediate response.39
In upholding the appeal, the COA held that the insured driver who caused the collision created a risk of injury to other road users not involved in the original collision. The distance in time and space between the insured driver's collision and the appellants accident was not so great as to put her beyond the class of road users to whom such duty was owed. The risks to other road users were in this instance not significant and were foreseeable. The COA also ruled that the appellants' accident had indeed arisen from a "dangerous situation"40 created by the line of stationary vehicles. The COA assessed the appellant as 20% contributorily negligent as compared to the District Court judge's prior apportionment of 65%.
V. A COMMENT ON THE IMPACT OF THE DECISION
This case serves as a reminder that in order to be covered by third party insurance, your accident does not necessarily need to be caused directly by the actions of an at fault driver. If a prior accident has caused a "dangerous situation"41 to develop then the driver responsible for the prior accident may be held responsible if it is reasonably foreseeable that, by their negligent actions, subsequent drivers may be placed at not insignificant risk.
1  NSWCA 135.
2 Motor Accidents Compensation Act 1999 (NSW).
3 Motor Accident Injuries Act 2017 (NSW).
4 Motor Accidents Compensation Amendment Act 2006 (NSW).
5 s 3A(1)(d) MAC.
6  NSWCA 323.
7 Above n 4.
8 Above n 1.
9 Above n 3.
10 Above n 4.
11 Collins v Insurance Australia Ltd  NSWDC 371.
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