Baseless damages claim does not extend entitlement to weekly payments: QBE Insurance (Australia) Limited v Lay [2023] NSWSC 1433

In Brief

• Weekly payments can only be extended beyond 104 weeks if the pending claim for damages has a lawful basis.
• No-fault provisions deem fault, not liability, and do not change the fact that a driver cannot make a claim in negligence against him or herself.

Facts

In QBE Insurance (Australia) Limited v Lay [2023] NSWSC 1433, the matter before the Supreme Court was the insurer’s application for judicial review of the Merit Reviewer’s decision and the President’s Delegate’s decision regarding the claimant’s entitlement to extended weekly payments under s 3.12 of the Motor Accident Injuries Act 2017 (NSW) (MAIA).

The claimant was the driver and owner of a car in a single motor vehicle accident – a tree fell on his car as he was driving. He brought a claim for statutory benefits.

Section 3.12 of the MAIA provides that the maximum weekly payment period is 104 weeks, unless the person’s injury is the subject of a pending claim for damages (whether or not the insurer has accepted liability).

The claimant sought to extend his weekly payment period beyond 104 weeks by making a claim for damages.

The insurer refused his damages claim and refused to extend his weekly payment period on the basis that the circumstances of his accident preclude him from making a claim for damages.

The claimant referred the dispute to the Personal Injury Commission for merit review. The claimant argued that he did have a pending claim for damages because there was a lawful basis for lodging the application for damages. The insurer disputed that the claimant had a lawful basis for making a damages claim.

The Merit Reviewer found in favour of the claimant, citing two reasons:

• a claim for damages is pending irrespective of whether the insurer has accepted liability; and
• a claim for damages is pending irrespective of the insurer’s assertion that it is doomed to fail.

The insurer’s application to refer the dispute to the Merit Review Panel was dismissed by the President’s Delegate.

The insurer sought judicial review of the Merit Reviewer’s decision and the President’s Delegate’s decision.

The insurer argued that the Merit Reviewer erred in the following ways:

1. Finding that the driver had a pending claim for damages, when at law there was no such claim.
2. Regarding extended weekly payments – asking himself whether liability had been denied, when the relevant question was whether there was a lawful basis for the claim in the first place.
3. Failing to respond to the substance of the insurer’s submissions before the Merit Reviewer.

The Insurer argued that the President’s Delegate’s erred in:

1. Failing to be satisfied of reasonable cause to suspect that the Merit Reviewer’s decision was incorrect in a material respect on the basis of the insurer’s submissions; and
2. Determining the substance of the merit review matter for himself, rather than considering whether there was reasonable cause to suspect that the Merit Reviewer’s decision was incorrect in a material respect as required by s 7.15(3) of the MAIA.

Harrison AsJ’s Reasons

Harrison AsJ confirmed that the no-fault provisions deem one element of negligence (fault) on the part of the owner or driver, but the claimant still must prove the other elements of negligence, including a relevant duty of care.

Further, per s 4.1 of the MAIA, the entitlement to claim damages requires fault to be established in the causative use or operation of the vehicle by the owner or driver of the vehicle.

In the present case, the only causative use of the motor vehicle was the claimant’s own driving. As he cannot make a claim against himself, there is no common law claim available to the claimant.

Harrison AsJ accepted each of the insurer’s grounds of review regarding the Merit Reviewer’s decision and the President’s Delegate – or alternatively, any of, or any combination of the grounds.

Key Learnings

• Under the common law, a driver cannot make a claim in negligence against him or herself. This is not changed by the no-fault provisions under the MAIA.
• For the purpose of extending weekly payments beyond 104 weeks, there is no pending claim for damages when there is no lawful basis for such a claim.

If you have a query relating to any of the information in this case note, or would like to discuss a similar matter of your own, please don’t hesitate to get in touch with CTP Insurance Senior Associate Qiming Zhou today.