Wood v AAI Limited ACN 005 297 807 Trading as GIO (Motor Accident Injuries) [2022] ACAT 7 The recent ACT Civil and Administration Tribunal (‘the Tribunal) judgment in Wood v AAI Limited ACN 005 297 807 Trading as GIO (Motor Accident Injuries) [2022] ACAT 7 (‘the judgment) provides important clarity in interpreting a key provision in the Motor Accident Injuries Act 2019 (‘the Act’). The Tribunal considered whether injury arising from being involved ‘in’ a motor accident was interchangeable with injury arising ‘as a result of’ a motor accident in the context of nervous shock claims.
Factual Background Six applicants applied to the insurer for defined benefits under the Act following the death of a family member in a motor accident. The applicants claimed nervous shock as a result of the motor accident, though none of the applicants were present at, or involved in, the motor accident. The insurer rejected the applicants’ claim for defined benefits on the basis that the Applicants were not involved ‘in’ the motor accident. The proceedings before the tribunal were instituted after an internal review affirmed the rejection, and reversed the decision. Relevant Provisions 6 Objects of Act The main objects of this Act are to – (a) ensure benefits are available to support all people injured in motor accidents on a no-fault basis, subject to some exclusions and limitations; and (b) encourage early and appropriate treatment and care of people injured in motor accidents to achieve optimum recovery and return to pre-accident levels of activity and work; and (c) support people injured in motor accidents to access defined benefits; and (d) promote and encourage the early, quick, cost-effective and just resolution of disputes; and…...... ……………………………………………………………………………………………………. 8 Meaning of person injured in a motor accident In this Act: Person injured in a motor accident means an individual who sustains a personal injury as a result of a motor accident. Note Injured person means a person injured in a motor accident (see dict). ……………………………………………………………………………………………………. 38 Person injured in motor accident entitled to defined benefits If a person sustains a personal injury as a result of a motor accident in the Territory, defined benefits are payable in relation to the personal injury ……………………………………………………………………………………………………. 55 Who may apply for defined benefits? (1) Any of the following people may make an application for defined benefits to the relevant insurer for a motor accident: (a) a person injured in the motor accident; (b) the dependent of a person who died as a result of the motor accident; (c) the person who has paid, or is liable to pay, the funeral expenses of a person who died as a result of the motor accident. The Decision The insurer submitted that the words ‘person injured in a motor accident’ should be given their ordinary meaning. That is, that unless a person is physically present in a motor accident, the legislation does require an insurer to pay defined benefits. Inter alia, the respondents relied on the following arguments: The different wording of subsections of section 55 evinced an intention of the legislature to have a particular, narrow category of persons covered bysection 55(1)(a); and To interpret ‘in’ a motor accident as synonymous with ‘as a result of’ a motor accident would give no effect to the former. In contrast, to interpret ‘in’ a motor accident in its ordinary meaning would have the effect of limiting the class of persons to which the provision applies. The Tribunal found against the respondent in light of: The terms of the definition: The Tribunal found that, in substance, the subsections in section 55 did not use different words; The presumption that the definitions should apply, unless there is a contrary intention; Section 38: The Tribunal found that section 55 was supported by section 38 insofar as both sections used ‘in’ a motor accident and ‘as a result of’ a motor accident interchangeably; and The purpose and objects of the Act: Where two possible interpretations of legislation are available, the interpretation that best achieves the objects of the Act should be preferred. In that context, the Tribunal considered that denying benefits to applicants who suffer nervous shock, but are not present at an accident, would be a significant public policy development. Such a development was not supported by the objects of the Act. The decision confirms that a broader category of claimants than contended for by the insurer can bring nervous shock claims under the Act. Whilst the decision is not binding on the Tribunal, it is likely to have persuasive authority in future disputes. For insurers the decision means that those responding to claims for defined benefits under the Act will now have greater exposure to indemnify a larger class of persons for benefits claimed as a result of motor accidents. Further information / assistance regarding the issues raised in this article is available from the author, John Solomon, Managing Partner, and Izaac Molenkamp, Paralegal, or your usual contact at Moray & Agnew.
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