Zardo v Ivancic [2001] ACTSC 4 (2 February 2001)

Last Updated: 11 June 2002

Nick Zardo v Mate Ivancic [2001] ACTSC 4 (2 February 2001)

CATCHWORDS

STATUTORY INTERPRETATION - Extraterritorial effect of NSW legislation - Presumption against extraterritorial effect.

Australia Act 1986 (Cth) s2

Interpretation Act 1987 (NSW)

Motor Accidents Act 1988 (NSW) s 66

Brownlie v State Pollution Control Commission (1992) 61 A Crim R 400

Goldring v National Mutual Life Association of Australasia Ltd [1916] HCA 71; (1916) 22 CLR 336

Le Mesurier v Connor [1929] HCA 41; (1929) 42 CLR 481

Lipohar v R [1999] HCA 65, (1999) 168 CLR 8

Jumbunna Coal Mine No Liability v Victorian Coal Miner's Association (1908) 6 CLR 363

John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36, (2000) 172 ALR

Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691

Union Steamship Co of Australasia Pty Ltd v King [1988] HCA 55; (1988) 166 CLR 1

CCH New South Wales Motor Accidents Practitioners Handbook para 21-460, Goudkamp & Morrison, Personal Injury Law Manual NSW 2.7010

No. SC 772 of 2000

Coram: Master T. Connolly

Supreme Court of the ACT

Date: 2 February 2001

IN THE SUPREME COURT OF THE )

) No. SC 772 of 2000

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: NICK ZARDO

Plaintiff

AND: MATE IVANCIC

Defendant

ORDER

Coram: Master T. Connolly

Date: 2 February 2001

Place: Canberra

THE COURT ORDERS THAT:

1. The plaintiff's originating application dated 10 November 2000 be struck out.

2. The plaintiff pay the defendant's costs.

1. This matter involves an application by Mr Ivancic to strike out a statement of claim issued by the plaintiff Mr Zardo, or in effect his insurer, on the basis that it is an abuse of process, and a declaration or order to the effect that s 66 of the Motor Accidents Act 1988(NSW) has no application to the circumstances of this case. The applicant argues that the relevant provision of the New South Wales legislation does not give rise to a statutory cause of action in this court, and so seeks relief pursuant to Order 29 rule 4 whereby the Court may order any pleading to be struck out, on the ground that it discloses no reasonable cause of action. This is a matter properly within my jurisdiction. It is necessary to set out some background in order to understand the issues before the court.

2. Mr Ivancic, who resides in the Australian Capital Territory, issued proceedings in this court on 29 August 1997 being matter SC 619 of 1997 claiming damages for personal injuries arising from a motor vehicle accident which is said to have occurred in Queanbeyan in New South Wales on 3 July 1997. Mr Ivancic alleged in his pleading that Mr Zardo negligently collided with him at the intersection of two streets in Queanbeyan, and that as a consequence of that negligence he suffered injuries and disabilities by way of head and lumbar and cervical spine injuries, leading to incapacity for employment. A defence was filed by Mr Zardo on 15 January 1998 admitting that the collision occurred, but denying negligence or loss or damage. In his statement of particulars filed on 19 June 2000 Mr Ivancic set out the particulars of his claim, alleging that as a result of the accident he was permanently unfit for his former employment as a concreter, or for any employment.

3. Following the filing of the statement of particulars the parties entered into settlement negotiations. The insurers for Mr Zardo had required Mr Ivancic to undertake certain medical examinations, as is normally the case in motor vehicle personal injuries claims. The settlement negotiations were successful, and terms of settlement were drafted, apparently by the solicitors for Mr Zardo, in which the matter was to be settled on the basis of a judgment for the plaintiff Mr Ivancic in the sum of $425,000 plus costs agreed at $30,000 inclusive of disbursements. This was put into effect by way of a consent judgment lodged in this court on 15 August 2000 and entered on 16 August 2000 whereby the judgment of the court in matter SC619 of 1997 is that the plaintiff recover against the defendant the sum of $425,000 plus costs agreed at $30,000 inclusive of disbursements.

4. By originating application dated 10 November 2000 the present plaintiff, being the defendant in matter SC619 of 1997 seeks relief in the following terms;

"That the judgment ordered on 15 August 2000 and entered on 16 August 2000 in proceedings number SC 619 of 1997 be set aside pursuant to section 66 of the Motor Accidents Act (NSW) 1988."

5. Section 66 of the Motor Accidents Act (NSW) 1988 provides as follows:

Section 66 REMEDY AVAILABLE WHERE CLAIM FRAUDULENT

66(1) [Financial Benefit obtained] This section applies to a claimant if it is established that, for the purpose of obtaining a financial benefit, the claimant did or omitted to do any thing (including the making of a statement) concerning a motor accident or any claim relating to a motor accident with knowledge that the doing of the thing or the omission to do the thing was false or misleading.

66(2) [Relief or recovery of financial benefit] If this section applies to a claimant:

(a) a person who has a liability in respect of a payment, settlement, compromise or judgment relating to the claim is relieved from that liability to the extent of the financial benefit so obtained; and

(b) a person who has paid an amount to the claimant in connection with the claim (whether under a settlement, compromise, or judgment, or otherwise) is entitled to recover from the claimant the amount of the financial benefit so obtained by the claimant and any costs incurred in connection with the claims.

6. The present plaintiff alleges in the statement of claim that Mr Ivancic made certain statements to medical examiners in relation to his claim in matter SC 619 of 1997 which were false or misleading and were done for the purpose of obtaining a financial benefit, and accordingly claims relief from the consequences of the judgment obtained in that matter.

7. The issue for decision in this matter is whether section 66 of the Motor Accidents Act 1988 of New South Wales can allow a defendant who is subject to a judgment of this court to in effect set that judgment aside on the statutory cause of action.

8. It is undoubtedly the law, since John Pfeiffer Pty Ltd v Rogerson [2000] HCA 36, (2000) 172 ALR that the law to be applied in determining the personal injuries claim SC 619 of 1997 was the law of New South Wales, because the accident occurred in the State of New South Wales. This decision was handed down in June of 2000, and I can thus assume that this was in the minds of the parties as they undertook the settlement negotiations which gave rise to the consent judgment entered on 16 August 2000. The present plaintiff argues that, as the law to be applied to the substantive claim arising from the New South Wales accident is the Motor Accidents Act 1988, section 66 of that Act, which creates a statutory cause of action to impugn a judgment obtained by fraud, also applies.

9. Section 66 is broad in its terms and counsel were unable to assist me with examples of its application in the courts of New South Wales. There is little assistance to be gained by reference to the practice books dealing with motor accident claims in that state (see CCH New South Wales Motor Accidents Practitioners Handbook para 21-460, Goudkamp & Morrison, Personal Injury Law Manual NSW 2.7010). It is the common experience in motor accident claims that there will be a degree of exaggeration in respect of the degree of disability experienced by a plaintiff, and on its face s66 seems to apply wherever a claimant makes a statement that is false or misleading, this potentially catching many, if not most, plaintiffs.

10. Section 66(2) operates to relieve a party of an obligation to comply with a judgment. This is a significant power, and, on the present plaintiff's argument, it amounts to a power, conferred by the Parliament of New South Wales, to get in and set aside a judgment obtained in a superior court in any other Australian jurisdiction where the circumstances of section 66(1) are established.

11. Undoubtedly the parliament of New South Wales has power to legislate in respect of its own courts in this way. Moreover, it is established that, at least since the enactment of the Australia Act 1986 (Cth) s2, state parliaments have plenary power to legislate with extraterritorial effect (Union Steamship Co of Australasia Pty Ltd v King [1988] HCA 55; (1988) 166 CLR 1). There is a presumption, however, that legislation is not to have extraterritorial effect. This was stated by O'Connor J in Jumbunna Coal Mine No Liability v Victorian Coal Miner's Association (1908) 6 CLR 363 as follows:

"In the interpretation of general words in a statute there is always a presumption that the legislature does not intend to exceed its jurisdiction. Most statutes, if their general words were taken literally in their widest sense, would apply to the whole world, but they are always read as being prima facie restricted in their operation within territorial limits."

12. This presumption has been given statutory effect in New South Wales by s12 of the Interpretation Act 1987 (NSW) which provides that references to matters are taken to be within New South Wales.

13. It was the primary argument of the applicant defendant that the present action should be struck out on the basis that section 66 of the Motor Accidents Act 1988 (NSW) does not give rise to a statutory cause of action within this jurisdiction to set aside a judgment of this court, on the basis that the provision should be read down, pursuant to s 12 of the Interpretation Act 1987 (NSW) and, it seems to me, the common law presumption, to operate only within New South Wales. I am satisfied that this reasoning is sound. As O'Conner J observed in Jumbunna, this is a statute which, on its face, applies to the whole world. There is no express limitation in the Motor Accidents Act 1988 (NSW) that it applies to motor accidents within New South Wales, yet this is, due to the reading down provisions is s 12 of the Interpretation Act 1987 (NSW) and the general common law presumption, the effect of the Act. No one would contend that the law governing a motor car accident occurring in Perth would be the Motor Accidents Act 1988 (NSW), even if the accident involved two holidaying New South Wales motorists.

14. The New South Wales parliament could, presumably, give express extraterritorial effect to their legislation. As one of the policy goals of the Act, as set out in s2A(1)(c)(I) is to reduce the cost of the common law scheme, it would be open perhaps for a state to legislate that its statutory motor accident scheme will apply wherever a driver from that state is involved in a motor vehicle accident anywhere in Australia. If this was the case then the New South Wales law would on its face purport to apply to a motor vehicle accident in Perth if one of the vehicles involved in the accident was registered and insured in New South Wales. Subject to the possible reservation in relation to territorial limitations of state legislative powers inter se referred to bythe High Court in Union Steamship at p 14, this would be a valid law.

15. In the absence of an express reference to the intended extraterritorial effect of a legislative provision a court may still find that, despite the common law presumption and the provisions of the Interpretation Act, the parliament intended the provision to have extraterritorial effect. This was the conclusion reached by Gleeson CJ, Carruthers and Lee JJ in Brownlie v State Pollution Control Commission (1992) 61 A Crim R 400, where they were considering whether a New South Wales statute creating certain pollution offences should be construed as applying to a person who sprayed chemicals in Queensland which flowed down a watercourse and into New South Wales. Their Honours accepted that as a general matter criminal laws are to be considered as applying only to matters within the jurisdiction, but accepted that trans boundary pollution was a special case, and that the parliament could be considered to have intended to apply the law in the circumstances of that case. The general principles concerning the extraterritorial application of state criminal laws within Australia has recently been considered by the High Court in Lipohar v R [1999] HCA 65, (1999) 168 CLR 8.

16. There is no indication in the Act that section 66 of the Motor Accidents Act 1988 is intended to operate so as to create a statutory cause of action to set aside a judgment of a superior court outside of New South Wales. At the time of its enactment the settled law in Australia was that New South Wales law, both common law and statutory, would only apply in motor vehicle accident compensation cases brought within the courts of New South Wales. Applying the law pre Pfeiffer v Rogerson, a civil claim brought in another Australian state or territory would be governed by the law of the forum. It could hardly be said that the New South Wales Parliament thus intended by s 66 to create a new statutory cause of action that would permit a party against whom a judgment of a superior court of another jurisdiction has properly been entered to set that judgment aside.

17. For one state to assert extraterritorial jurisdiction to set aside judgments of a superior court in another state or territory is a robust power. As the High Court has observed,

"But the Courts of a state are the judicial organs of another government. They are created by state law; their existence depends on state law; that law at least determines the constitution of the court itself and the organisation through which its powers and jurisdictions are exercised" (Le Mesurier v Connor [1929] HCA 41; (1929) 42 CLR 481 at 495 per Knox CJ, Riche Dixon JJ).

18. It seems to me that if a state parliament intended to assert a power to create a cause of action to set aside a judgment of a superior court of another state or territory, it would need to do so expressly, or the relevant provision would be such that the necessary implication would be found that its intention was to operate extraterritorially.

19. Applying the settled principles of construction, I am satisfied that this is not the effect of s 66. Accordingly, I am satisfied that the originating application, which relies on s66 of the New South Wales statute to attack the consent judgment, does not disclose a reasonable cause of action, and I strike it out pursuant to Order 29 rule 4.

20. This is not to say, of course, that the insurer has no remedy if it can show that the consent judgment in matter SC 619 of 1987 was obtained by fraud. A superior court has the inherent jurisdiction to set aside a judgment duly entered if it is established that it was obtained by fraud Goldring v National Mutual Life Association of Australasia Ltd [1916] HCA 71; (1916) 22 CLR 336 at 339. The proper way to do this is by fresh application, but the application relies on the inherent jurisdiction of the Court (Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691). It was common ground that the common law power to set aside a judgment obtained by fraud imposes a more onerous test on an applicant then the statutory action created by s 66 of the Act. The present application relies solely on the New South Wales statutory provision, which I have held does not form the basis of an action in this court to set aside the effect of a consent judgment formally entered in this court, and so must be struck out.

21. I should add that, if I be in error in the foregoing analysis, it seems to me that statutory action is still misconceived. The statutory cause of action created by s 66 of the NSW Act applies where there has been misrepresentation or fraud in obtaining a judgment. The facts giving rise to this, being medical examinations and assertions made by Mr Ivancic, occurred in the course of proceedings brought by an ACT resident in this Court, and, I am entitled to assume, predominantly in this Territory. Applying the Pfeiffer v Rogerson test, the place of the wrong, being the misrepresentation fraud, and so the law to be applied would thus be this Territory and the appropriate cause of action an application under the inherent power to set aside the judgment for fraud.

22. Costs should follow the event in the ordinary way.

I certify that the preceding twenty two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of Master T. Connolly.

Associate:

Date: 2 February 2001

Counsel for the Plaintiff: P Garling SC with W. Fitzsimmons

Solicitor for the Plaintiff: Phillips Fox

Counsel for the Defendant: D. Campbell

Solicitor for the Defendant: Watling Roche

Date of hearing: 14 December 2000

Date of judgment: 2 February 2001