Compensation Actions in Australia - Assignment Example

Name Course Lecture Date Facts Joe Brown is a contracted driver by XYZ Company and makes deliveries for the company with his own van. As a requirement for the contract, Contracted driver have to take deliveries exclusively for the XYZ Company. The vans also have to be branded with the XYZ logo. XYZ has a worker compensation package with Menzies Insurance Company. On the other hand, Joe has insured his van with a Third Party Insurance cover with Purple Insurance. Joe has his own Australian Business Number and invoices his deliveries done for XYZ on a monthly basis. Joe’s wife Jill sometimes assists Joe in making deliveries during busy periods; she travels in the vehicle and helps in navigating and operating the in-vehicle computer system. One fateful morning, Joe was making day long deliveries assisted by Jill. After making early morning deliveries he took a trip to Wodonga to visit a sick relative. While returning from Wodonga to resume his deliveries in Albury, his van was struck head-on by a Range River driving in the opposite direction. Ronald Green was the driver of the Range Rover and his vehicle was unregistered. Ronald’s blood also had a blood alcohol reading over twice the legal limit. Jill and Joe sustained serious injuries; Jill and Joe had serious injuries that would incapacitate them for months. The couple would also require expensive rehabilitation and medical treatment to recover their working ability. Advice to Joe and Jill In this case, Joe can be able to recover damages for the damage to his vehicle and the injuries he suffered in the accident as Ronald was at fault for the accident1. However, there is a possibility that Joe cannot recover any Worker compensation from XYZ Company as he is a contracted worker and he was not working on XYZ deliveries in the scenario2. Determining Joe’s liabilities and rights in this case involves an exploration of several legal issues that touch on Motor compensation and workers compensation laws in New South Wales. Legal issues 1 Does Joe have a right to recover compensation from an at fault driver in a motor accident collision? The law Motor accident compensation in New South Wales is regulated by the Motor Accidents Compensation Act 2009 (NSW). A number of provisions in this Act can be used to resolve the question over Joe’s and Jill’s right to compensation in the motor accident. Section 33 of the Motor Accidents Compensation Act allows Joe to recover compensation against Ronald as the nominal defendant in the cases3. Section 33(1) allows victims of motor accidents to recover damages against nominal defendant4. The section asserts that parties that suffer damages or injury as a result of an accident caused by an at fault driver have a right to compensation against the at-fault drive. Part 5 further provides for prosecution of drivers, who operate motor vehicles exempt from registration, those capable of being registered to enable their lawful use, those incapable of registration because of a state of repair5. However for a compensation claim to succeed against an at fault driver, the plaintiff must prove the at fault driver acted negligently in causing the accident. Under the law of negligence, road users owe a duty of care to other road users. In Donoghue v Stevenson [1932] AC 562 every person is required to take reasonable care to ensure his acts of omission do not result to foreseeable injuries to others6. This duty of care means that a road user ought to ensure that his actions on the road do not endanger those of other road users and motorists. A compensation claim against the nominal defendant will only succeed if the plaintiff shows the defendant was not taking reasonable care in his driving7. Once the defendant is found guilty of negligence, the court can order for damages to be paid to the plaintiff8. It is easier for the plaintiff to recover damages against the nominal defendant if he has committed an offence in relation to the accident. Driving under the influence of alcohol is an offence under the Road Transport (Safety and Traffic Management) Act 1999 (NSW)9. Section 9 of the Act states that driving or attempting to drive with a prescribed Alcohol concentration is an offence10. Proving that the at fault driver committed a traffic offense makes it easier for a plaintiff to recover damages in a motor accident compensation case. Application Under section 33 (1) of the Motor Accident Compensation Act 1999 (NSW), Jill and Joe can recover damages for the injuries caused by the collision with Ronald11. Ronald caused the accident by striking Jill’s truck head on while they were driving in the opposite direction. Section 33(5) also provides for recovery of damages for drivers of unregistered motor vehicles12. The Range Rover Ronald was driving is capable of registration at manufacture and it’s lawful use in New South Wales regstration. In Kiaya Uele by her next friend Roxanne Hallcroft v Nominal Defendant (Unreported), District Court of New South Wales, the defendant drove an unregistered motorcycle that struck a pedestrian13. The district court ruled that plaintiffs are able to recover damages in accidents involving unregistered motor vehicles. Joe and Jill can get compensation for the treatment of injuries and for the period of incapacitation14. Under Section 83 of the Act, insurers and in this case Nominal defendants have a duty to make hospital, medical and other payments15. Section 84 requires insurers to pay for the rehabilitation of injured parties in an accident16. On the other hand, Section 125 will enable Jill and Joe, to recover for the impairment of earning capacity during the period of incapacitation17. Jill and Joe can also easily prove that Ronald’s negligent driving was the cause of the accident. Ronald was in breach of his duty of care to other road users by driving his vehicle with an alcohol /blood level twice above the New South Wales legal limit. The fact that he struck the oncoming van head-on is evidence of his negligent driving. As seen in Donoghue v Stevenson, Ronald could have reasonably foreseen his act of driving while drank could cause accidents on the road18. Ronald was endangering other motorists by driving at an alcohol/blood level above the legal limit. Jill’s and Joe’s ability to recover damages for their injuries and the resulting incapacitation is enhanced by the fact that Ronald committed an offence in relation to the accident. Under section 9 of the Road Transport (Safety and Traffic Management) Act 1999 (NSW), Ronald was guilty of driving with a prescribed alcohol concentration19. Conclusion Jill and Joe can recover compensation for the injuries suffered as a result of the motor vehicle accident against Ronald. Ronald is the nominal defendant as his vehicle was uninsured and unregistered. Under the Motor Accident Compensation Act (2009), the couple can recover compensation for hospital and rehabilitation and for the lost capacity to earn in the period they are incapacitated20. Issue 2 Can Joe lodge a successful worker compensation claim for the injuries and incapacitation caused by the accident? Law Section 9 of the Worker Compensation Act 1987 (NSW) allows for worker to receive compensation for injuries or death in accordance to the Act21. Under section 9(2), recovery of compensation is only possible if the worker job is a significant contributing factor to the injury of the worker22. In determining whether an injury is work related the following factors are taken into consideration; a) time and place where injury occurred. b) Nature of work or tasks performed by worker. c) Duration of employment. d) Probability that the same or similar injury would have occurred at the same stage of the worker’s life if he had not been at work or employed. e) Workers state of health prior to the injury. f) Worker’s lifestyle and activities outside the workplace. Application Jill claim for compensation under the Workers compensation Act will be easily dismissed. While the accident took place during working hours, the location of the accident was not on Jill ordinary delivery route. In addition, Jill was not undertaking deliveries for XYZ at the time of the collision. Secondly, Jill nature of work is contractual and he has his own Australian business number meaning he cannot claim compensation from XYZ’s insurer. Advice to Ronald What is the liability of Ronald as regard the collision with Jill? Law The Road Transport (Safety and Traffic Management) Act 1999 (NSW) in section 9 makes it illegal to drive a motor vehicle with an alcohol/blood level above the prescribed limit23. Section 8, of the Motor Accident Compensation Act makes it an offense to drive an uninsured vehicle on the roads of New South Wales24. Under the common law of negligence, motor vehicle drivers are required to take reasonable care to ensure they do not cause harm or cause damage to other road users25. Finally, Section 33(1) Motor Accidents Compensation Act 2009 (NSW) allows victims of motor accidents to recover damages against nominal defendant26. Application Ronald committed two offenses prior to his vehicle’s collision with Jill’s van. Ronald was in a state of intoxication as his blood/alcohol level was at twice the prescribed limit. He was also driving an unregistered and thus an insured motor vehicle. The intoxication means that negligence on his part as the Nominal defendant in the case can be proved. Therefore, Ronald is liable for the injuries, medical payment, rehabilitation costs and loss of earning capacity suffered by Jill and Joe in the case. Since Ronald was uninsured his personal assets will be attached to compensate the couple. Question 2 Mr Tony Ruud operates a small business of ferrying passengers on cruises along the Hawkesbury River aboard the 20 metre Duchess of Hawkesbury (a carefully restored traditional timber vessel). Tony has a Master Class 5 marine License that authorises him to operate the vessel up to 200 nautical miles from the coast of Australia His son Tony assists him to operate the vessel and is experienced in operating and driving the vessel The vessel is insured by XYZ insurance by a policy that runs from 1 June 2014 to 1 June 2015. Clause 5 of the insurance contract states that XYZ will indemnify Tony in case he incurs liability for a claim, demand, damages and/or expenses for liabilities to third parties. The cover is limited to the amount stated in the schedule. Clause 7 asserts that Tony must inform the Insurer immediately of any occurrence that may give rise to a claim, and provide details of the event in writing within 14 days of the occurrence. Clause 15 says that XYZ will only provide cover to the vessel if it remains in survey with relevant government authorities. It also states that it must be skippered, manned, crewed, operated and licensed “in accordance with the applicable laws of the appropriate governmental authorities of the State of registration at all times during the currency of the policy.” The certificate of survey limits the scope of operation of the vessel to “smooth waters”. Schedule 1C of the Marine Safety (General) Regulation 2009 (NSW) regulations prescribes “smooth waters” to include waters within the following limits: “On the Hawkesbury River upstream of a line drawn from the southern extremity of Juno Point in an easterly direction to the northern extremity of Flint and Steel Point”27. On 21 July the vessel is booked for a half day cruise by an Interstate professional football team. Since Tony is sick he request Julian to sail the vessel on his behalf. After sailing along the Hawkesbury River two of the passenger asks Julian to sail the vessel near the Lion Island at the entrance of Broken Bay. Julian obliges as the water is calm and proceeds to sail to the entrance of Broken Bay. However, as he finishes rounding Lion Island he is forced to take sudden evasive action to avoid a collision against a speed boat moving head-on towards Duchess at high speed. The sudden turn and jolt of speed causes Mr. Paul Howard to slip on deck and he lands awkwardly on his knees suffering an injury. Julian provides an icepack and a physiotherapist on deck checks Howard’s knee and indicates there is no serious injury. When the vessel docks on Brooklyn Marina Julian is able to disembark without assistance. Julian informs Tony about the incident but Tony thinks of it as insignificant. On August 2 2014, Tony receives a letter from Howard’s solicitors demanding he pays the Medical expenses of $200,000 and lost earnings from playing professional football. The letter claims that X-rays and specialist medical examination indicate that Paul suffered a serious knee fracture. Tony ignores this letter and two subsequent letters. On 5 December 2014, the NSW District Court orders Rudd’s River Cruises Pty Ltd to pay $150,000.00 to Mr Howard. On 6 December 2014, Tony lodges a claim asking XYZ to indemnify him for the $150,000.00 judgment sum. Legal issue What is the liability of XYZ insurance to indemnify Rudd’s River Cruises Pty Ltd in the above scenario? Law The Insurance Contracts Act 1984 (cth) section 54 sets conditions where the insurer may not refuse to pay or indemnify the insured for a claim28. The Act states the insurer may only reduce his liability to the extent that the insured acts prejudice the insurer’s interests. Section 54 (2) of the act states, in circumstance where the insured acts are capable of causing or contributing to the loss then the Insurer may refuse to pay29. However, the subsection is subject to the succeeding provisions which state that the insurer may not refuse to pay if the insured proves his acts did not contribute to the loss. In circumstances where the insured proves that part of the loss was not caused by his action, the insurer is obligated to pay part of the claim that doesn’t result from the insured actions. In addition, Section 54 (5) further obligates the insurance to pay where the insured act was done to protect the safety of a person or protect property30. Application Under the provisions of the Insurance Contracts Act 1984 (cth), section 54, XYZ insurance may have sufficient grounds to refuse to indemnify Rudd’s River Cruises Pty31. Tony’s conduct in the case breaches many of the conditions of the contract of insurance with XYZ Insurance. However, the Insurance Contracts Act 1984 (cth) section 54 (1) asserts that mere breach of a clause in the Insurance contract is not enough to excuse the insurer from paying out claims32. The insurer can only refuse to pay claims where the insured action wholly contributes to the loss resulting in the claim33. In this situation it can be reasoned that a combination of Tony’s and Julian’s acts and omissions contributed to the loss attributed in the claim. Tony authorization of Julian to skipper the boat on the day of the accident was a clear breach of Clause 15 of the Insurance contract with XYZ. Julian action to sail beyond the vessels beyond its survey scope also a breach of Clause 15 which requires the Ship to stay in survey at all times. When he sailed past Juno point into the entrance of Broken Bay the breach occurred. However, Section 54 (1) requires the XYZ to prove that these two breaches were the main factors that contributed to Howard’s injury on the deck of the Duchess of Hawkesbury34. XYZ insurance may argue the cause of the accident was the fact that the boat was being operated by a non-licensed skipper. However, Julian had sailed the boat for hours on the Hawkesbury river before the accident occurred. Regardless, his decision to sail past Juno point and out towards the open sea had prejudiced the insurer’s interest but this was not the main cause of the accident. In addition, Rudd’s River Cruises may rely on Section 54 of the Insurance contracts act that obligates insurers to indemnify the insured, if the act that resulted in the loss was done to protect the safety of a person or protect property. Julian swerved the vessel suddenly and accelerated to avoid an almost certain collision with the speed boat that was approaching them head-on at high speed. Therefore, Julian act was done to protect the safety of the passengers aboard his vessel and the speedboat. Conclusion XYZ Company is obligated by section 54 of the Insurance Contract Act 1984(cth) to indemnify Rudd’s River Cruises for Howard’s claim. As stated in clause 5 of the insurance contract, XYZ is required to pay claims of liability to third parties lodged against Tony’s business. While Tony acted in breach of Insurance contract his action and those of Julian did not prejudice XYZ interest in regard to Paul Howard’s claim. Bibliography A. Articles/Books/Reports A. Tarr, J. Tarr and M. Clarke, Insurance: The Laws of Australia (Lawbook Co, 2010). G. Pynt, Australian Insurance Law: A First Reference, (LexisNexis Butterworths, 3rd ed, 2016) P. Mann, Mann's Annotated Insurance Contracts Act, (Law Book Co, 6th ed, 2014) B. Cases Donoghue v Stevenson [1932] AC 562 Kiaya Uele by her next friend Roxanne Hallcroft v Nominal Defendant (Unreported), District Court of New South Wales C. Legislation Insurance Contracts Act 1984(cth) Marine Safety (General) Regulation 2009 (NSW), Schedule Marine Safety (General) Regulation 2009 (NSW), Schedule 1C Motor Accidents Compensation Act 1999 (NSW) Road Transport (Safety and Traffic Management) Act 1999 (NSW) Worker Compensation Act 1987 (NSW), s. 9 Worker Compensation Act 1987 (NSW), s. 9(2) Read More