Nominal Defendant v Mabury [1962] HCA 12; (1962) 108 CLR 598 (28 February 1962)

HIGH COURT OF AUSTRALIA

NOMINAL DEFENDANT v. MABURY [1962] HCA 12; (1962) 108 CLR 598

Insurance

High Court of Australia
Dixon C.J.(1), Kitto(2), Taylor(1), Menzies(1) and Windeyer(3) JJ.

CATCHWORDS

Insurance - Third party - Death of insured tortfeasor - Survival of cause of action - Third party policy issued outside New South Wales - Whether action lies against nominal defendant - Law Reform (Miscellaneous Provisions) Act, 1944 (N.S.W.), Pt II - Motor Vehicles (Third Party Insurance) Act, 1942-1951 (N.S.W.), s. 15 (2) (a)*.

HEARING

Sydney, 1961, November 27, 28;
Melbourne, 1962, February 28. 28:2:1962
APPEAL from the Supreme Court of New South Wales.

DECISION

1962, February 28.
The following written judgments were delivered: -
DIXON C.J., TAYLOR AND MENZIES JJ. Section 15 (2) of the Motor Vehicles circumstances there stated against an authorized insurer or the nominal defendant by a person who could have recovered judgment against a person insured under a third party policy in respect of death from bodily injury arising out of the use of a motor vehicle in cases where the insured person who incurred liability is dead or cannot be served with process. (at p601)

2. In Genders v. Government Insurance Office of N.S.W. [1959] HCA 30; (1959) 102 CLR 363 it was decided that this sub-section did not apply where the insured person was not when he died under any liability to the plaintiff. The majority of the Court decided that appeal on the broad ground, inter alia, that it having been provided by the Law Reform (Miscellaneous Provisions) Act, 1944 (N.S.W.) that liability for tort continues notwithstanding the death of the tortfeasor there is no longer any room for the application of s. 15 (2) in cases where the insured tortfeasor is dead. Their Honours said that as the purpose of that provision "is to fix upon an insurer a direct liability where the death of the insured makes recovery impossible" (1959) 102 CLR, at p 383 , the enactment of the Law Reform (Miscellaneous Provisions) Act, 1944 (N.S.W.) providing that the liability of the tortfeasor survives his death has removed "the hypothesis upon which a right of direct recourse to the insurer is based" (1959) 102 CLR, at p 383 with the consequence that "so far as it concerns the consequence of the death of the insured the provision is spent" (1959) 102 CLR, at p 383 . What was there said has since been acted upon: e.g. Turner v. Government Insurance Office of N.S.W. (1961) SR (NSW) 1; (1960) 77 WN 571 . (at p601)

3. In the case now under consideration the Full Court distinguished Genders' Case [1959] HCA 30; (1959) 102 CLR 363 on the ground that because in that case the proceedings were against an authorized insurer by virtue of the issue of a New South Wales third-party policy, what was decided has no application to a case where the nominal defendant is sued in the circumstances that the deceased person had been insured under a policy complying with the provisions of a statute in force in any prescribed part of the Commonwealth other than New South Wales requiring third-party insurance there. As in this case the deceased tortfeasor Webster had been insured under a policy issued in accordance with the requirements of the Motor Traffic Ordinance 1936-1955 of the Australian Capital Territory it was decided that the plaintiff who suffered bodily injury through the negligence of the deceased Webster could recover from the nominal defendant. (at p601)

4. It seems to us, however, that the very basis upon which the majority of the Court decided Genders' Case [1959] HCA 30; (1959) 102 CLR 363 (viz., that once the cause of action in tort survives the death of the tortfeasor, s.15 (2) is spent) renders impossible any attempt to distinguish that decision. In Genders' Case [1959] HCA 30; (1959) 102 CLR 363 the action against an authorized insurer failed because the estate of Baxter, the deceased insured person, remained liable by virtue of the Law Reform (Miscellaneous Provisions) Act, 1944 (N.S.W.); in this case, by parity of reasoning the action against the nominal defendant must fail because the estate of Webster, the deceased insured person, remains liable by reason of the Law Reform (Miscellaneous Provisions) Ordinance 1955 of the Australian Capital Territory. (at p602)

5. In support of the attempt to distinguish Genders' Case [1959] HCA 30; (1959) 102 CLR 363 reference was made to the circumstances, first, that the protection afforded to a person insured under enactments of the other parts of the Commonwealth is in some cases less than that afforded by a third party policy in accordance with the Motor Vehicles (Third Party Insurance) Act of New South Wales and, secondly, that it would be of procedural advantage to a plaintiff to be able to sue the nominal defendant in New South Wales rather than the personal representative of a deceased tortfeasor outside New South Wales. These things are true but they do not seem to us to afford any ground for distinguishing the earlier decision that s.15 (2) has no application once an action can be brought against the estate of a deceased tortfeasor. We can find no justification for giving a set of words one meaning when applicable in one contingency, i.e. when a deceased person was insured under a New South Wales third party policy, and a different meaning when applicable in another contingency, i.e. when a deceased person was insured under a third party policy of some part of Australia other than New South Wales. (at p602)

6. We consider the appeal ought to be allowed. (at p602)

KITTO J. In the joint judgment delivered by four members of this Court in the case of Genders v. Government Insurance Office of N.S.W. [1959] HCA 30; (1959) 102 CLR 363 , a construction was given to s. 15 (2) of the Motor Vehicles (Third Party Insurance) Act, 1942-1951 (N.S.W.) which we ought now to accept as correct. It means that the words "where the insured person is dead" refer only to the situation in which the death of the insured person has left the person to whom the liability has been incurred without any right of recovery. In Genders' Case [1959] HCA 30; (1959) 102 CLR 363 the insurance was under a policy belonging to the first of the two classes of policies which the sub-section mentions. In the present case the insurance was under a policy within the second of those classes. But it is, I think, impossible, while reading the words in the sense abovementioned for the purposes of a case in which the policy is of the one class, to read them in a different sense for the purposes of a case in which the policy is of the other class. (at p603)

2. I am unable to support the judgment of the Supreme Court, and I would therefore allow the appeal. (at p603)

WINDEYER J. In Genders' Case [1959] HCA 30; (1959) 102 CLR 363 it was said that s. 15 (2) (a) of the Motor Vehicles (Third Party Insurance) Act, 1942-1951 (N.S.W.) was - in its presently relevant aspect - directed to the legal situation existing in New South Wales when that Act was passed. The common law rule then prevailed: causes of action in tort did not survive the death of the tortfeasor. Section 15 (2) proceeded on the assumption that this was so. In the circumstances in which it applied it provided a remedy for that situation. As the majority judgment in Genders' Case [1959] HCA 30; (1959) 102 CLR 363 , says, "the very condition expressed by the provision involves the cesser of liability on death" (1959) 102 CLR, at p 383 . Therefore, when in 1944 the common law rule was displaced by the provisions of the Law Reform (Miscellaneous Provisions) Act, 1944, s.2 (1), and all causes of action were made to survive against the estate of a deceased person, the condition necessary for the operation of s.15 (2) of the earlier Act no longer existed. As that section could no longer apply, it was described by this Court as spent. This reasoning has been criticized. It has been suggested that the Court mistook the intention of the Legislature as expressed in the two Acts referred to: that, in particular, it did not give due weight to s.2 (6) of the later Act, which it is suggested has the effect, not merely of preserving rights created by the earlier Act, but of continuing the operation of s.15 (2) notwithstanding that the conditions of its operation implied in its words had ceased to exist - an effect, that is to say, of giving the section a new application. If this Court did mistake the meaning that the New South Wales Parliament intended its legislation to have, the Parliament could set the matter right. But despite some urgent suggestions by New South Wales Courts that it do so, it has left the law as it was laid down by this Court in Genders' Case (1959) 102 CLR 363 . I entirely agree that there is no sound ground for saying that this case is distinguishable and not governed by the same principles. The policy of insurance here answered the description set out under (ii) of s. 15 (2) (a) of the 1942 Act. In Genders' Case [1959] HCA 30; (1959) 102 CLR 363 it was a third-party policy within the meaning of (i) of the same provision. But the critical words, which it was held determined the scope of s.15 (2), apply in both cases. The Full Court emphasized that the facts of Genders' Case [1959] HCA 30; (1959) 102 CLR 363 were very different from those of this case. That, of course, is so. This case does not have the complexities of that case. But the question turns not on particular facts, but on the effect that a law making causes of action in tort survive death has on an enactment which assumes that they do not. In those respects this case is exactly the same as Genders' Case [1959] HCA 30; (1959) 102 CLR 363 . I agree that the appeal should be allowed. (at p604)

ORDER

Appeal allowed. Order of the supreme Court discharged.

In lieu thereof order that there be judgment on demurrer for the defendant.

Pursuant to the condition contained in the order dated 10th August 1961 granting special leave to appeal the appellant is to pay the respondent's costs of this appeal.