Queensland drivers relax – you’re covered

In the case of Suncorp Metway Insurance Ltd v Wickham Freight Lines [2012] QSC 237, the Queensland Supreme Court was asked to consider the scope of Queensland’s Motor Accident Insurance Act 1994 (Qld) (MAIA) and statutory CTP policy of insurance.

Suncorp argued cover was not extended under the CTP policy to accidents arising in New South Wales in special circumstances where a driver of a vehicle was ‘deemed’ to be at fault under a New South Wales legislative provision enacted in 2006.

This test case is the first time a Queensland CTP insurer has challenged the scope of the Queensland policy and its interaction with the specific provision in the NSW legislation. The outcome, if decided in favour of the insurer, would have impacted on every driver of a Queensland registered vehicle who drove across the border into NSW and injured a child in circumstances where they were not negligent.

Facts

A child sustained horrific injuries when hit by a truck owned by Wickham Freight Lines in 2008 and sued for damages in NSW.

The truck was covered by a CTP policy of insurance issued by Suncorp.

A special provision enacted under the Motor Accidents Compensation Act 1999 (NSW) (MACA) meant that, where the child was injured, but the truck driver was not negligent, the MACA will ‘deem’ the driver to be at fault. This enables the injured child to recover some damages such as hospital, medical, pharmaceutical, rehabilitation and certain other expenses.

Suncorp’s position was that it could not indemnify Wickham Freight Lines for these special entitlement damages if the driver was found not negligent.

Issues

The key issue was the meaning of ‘wrongful act or omission’ contained in MAIA and whether the statutory policy contained in the Queensland Act responds to a case of ‘deemed fault’ under the NSW legislation.

Court’s decision and reasoning

Suncorp submitted that liability must be real, not fictional. ‘Deemed fault’ does not amount to a ‘wrongful act or omission’.

The competing argument was that the NSW Act deemed a driver to be at ‘fault’. ‘Fault’ as defined in the NSW Act means ‘negligence or any other tort’. Therefore the liability created by the NSW provision deems the injury to have been caused by the ‘fault’ of the owner or driver and this definition satisfies a ‘wrongful act or omission’ within the meaning of MAIA.

His Honour was not prepared to find that the liability to pay damages pursuant to the NSW Act was not real. The statute created the category of legal liability and it fell within the ordinary meaning of ‘wrongful act or omission’ in the Queensland MAIA.

The definition of ‘wrongful act or omission’ was not exhaustive so as to limit it to negligence or deliberate wrongdoing.

His Honour stated the objectives of the Queensland Act would not be advanced by interpreting the language of ‘wrongful act or omission’ as being limited to civil wrong in the character of a common law cause of action. This would have the effect of depriving parties of insurance cover for civil liabilities created and defined by statute.

This decision means Queensland drivers can be assured there is no gap in their CTP cover when driving in New South Wales.

For further information on this topic, please contact Leah Vida on +61 7 3231 2444.