When is a work injury also a motor accident?

It is not uncommon for an employee to sustain injury, in the course of employment, whilst involved in the use of a motor vehicle. So called "loading" cases have occupied the attention of Courts for many years. In Allianz Australia Limited v GSF Australia Pty Limited [2005] HCA 26 the High Court has examined the issues and provided a guide to determine when an injury will also create a liability in a CTP insurer.

The Facts 

The plaintiff, Oliver, sued his employer, GSF, after suffering injury whilst unloading a truck. A mechanism designed to push containers to the rear of the truck was broken and Oliver and a co-worker were required to use crowbars to manually manoeuvre the containers. There was no dispute that this was an unsafe system of work. Oliver sustained injury to his back. The case was settled by GSF with Oliver for $460,000.

In the course of the District Court proceedings Allianz, the CTP insurer of the truck, was added as a party to the proceedings. The District Court determined that Oliver’s injury arose in the use of a motor vehicle and therefore entitled GSF to indemnity by Allianz. On the principles of dual insurance Allianz was ordered to pay $230,000. It was also agreed that, if Allianz was not liable, damages assessed under the Workers Compensation Act (WCA) would only be $450,000. Allianz appealed. By a majority the NSW Court of Appeal agreed that the injury was an injury within the meaning of section 3(1) of the Motor Accidents Act (MAA) 1988.

Allianz appealed to the High Court. In a unanimous decision the full Court of the High Court found in favour of Allianz. It decided that Allianz was not required to indemnify GSF.

The Legislation

The relevant provision was section 3(1) of the MAA which defines "injury as:

(a) 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:

(iv) such use or operation by a defect in the vehicle.

An identical provision is found at section 3 of the Motor Accidents Compensation Act 1999.

The Decision

The focus of the High Court was on determining the cause of the accident. According to McHugh J, what was needed to bring the claim within the definition in the MAA was a close causal connection between the use of the motor vehicle and the injury. A mere connection "in some way to the use of a motor vehicle" is not enough.

In this case the defect in the vehicle (the broken mechanism) did not cause the accident. It was a system of work that permitted Oliver to work without that mechanism operating which caused the injury. As a matter of fact, and perhaps also of logic, an inoperable mechanism could not cause anything to occur.

The High Court found unanimously that the injury did not satisfy the definition in the MAA. As such, there was no obligation upon Allianz to indemnify GSF. The end result was a judgment in favour of Oliver for $450,000, assessed under the WCA, to be paid by the workers compensation insurer of GSF.

Implications of the Decision

In practical terms the implication of Allianz v GSF is to focus attention upon the real cause of the injury involving a motor vehicle. For a workers compensation insurer, or self-insurer, to recover contribution from a CTP insurer, there will need to be evidence that the defect in the vehicle was the real cause of the injury. A Court will examine the system of work and if it determines that system of work to be the cause of the injury, then recovery will not be available.

The Next Installment 

The High Court has recently granted special leave to hear further argument on these issues in Nominal Defendant v GLG Australia Pty Ltd & Ors. That is also an appeal from the NSW Court of Appeal (albeit decided before the High Court determined Allianz v GSF), but with slightly different fact circumstances in that it involved the actual driving of a motor accident, but also in circumstances where there was no evidence of negligence in the manner in which the vehicle was driven.

In Nominal Defendant v GLG the High Court will again look at the meaning of "injury" in the MAA, and whether a negligent system of work can be invoked as the basis of a claim for indemnity. We will follow the progress of this case and report the outcome in a future bulletin.