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Thursday, 19 November 1959

Sir GARFIELD BARWICK (Parramatta) (Attorney-General) . - by leave - I move -

That the bill be now read a second time.

The object of this bill is to accept on behalf of the Commonwealth the same liability for personal injuries caused by people who from time to time drive Commonwealth motor vehicles without proper authority, as the Commonwealth has accepted since 1903 under Part IX. of the Judiciary Act in respect of injuries caused by the negligence of drivers properly authorized and driving in the course of their duty.

At the present time, the Commonwealth is not liable for injury caused by the negligent driving of one of its vehicles if the driver at the time of the accident was nol acting in the course of employment by the Commonwealth. The attempt to alter this position might seem so simple an exercise that honorable members may wonder why it is necessary to introduce for the purpose a separate, and obviously complex, bill of the kind now before the House. Before I sit down, the reason will, I think, be quite clear. In the community generally the liability for personal injury caused by the negligent use of privately owned vehicles is provided for nowadays in all States by compulsory third party insurance under individual State laws. The task which this bill has to accomplish is to adjust that system of liability, on an Australia-wide basis, to the position of the Commonwealth as the owner of motor vehicles which for good and sufficient reasons are not brought under an insurance system. This task could not be accomplished by a simple amendment of the Judiciary Act.

Under the common law, the Crown was not liable in law for damage caused by the negligence of its employees, negligence being a tort and the maxim being that the Crown could do no wrong. As long ago as 1903, the Commonwealth made itself liable to suit in contract or in tort by section 56 of the Judiciary Act, and section 64 of that act provided that the rights of the parties in such a suit should be as nearly as possible the same as in a suit between subject and subject. The Judiciary Act, therefore, made the Commonwealth liable for damage caused by the negligence of its drivers committed in the course of their employment.

However, it sometimes happens, to the Commonwealth as to other employers, that one of its employees, to use the picturesque vernacular phrase, uses the vehicle " on a frolic of his own ", and is involved in an accident in so doing; or maybe a vehicle is taken by some person who has no authority whatsoever to use it. Neither the common law nor the Judiciary Act made the Commonwealth liable in those circumstances. The purpose of this bill is thus, in the words of the Prime Minister, "to make the Commonwealth liable to be sued for damages for death or injury caused to any person by a Commonwealth vehicle by whomsoever driven and whether with or without the authority of the Commonwealth ".

Like the third party insurance provisions in the States, the bill will not alter the common law position in respect of claims for damage to property, but will cover liability in respect of death or personal injury.

As honorable members are aware, a policy of third party insurance is taken out by the owner of a motor vehicle so that, in the event of some other person being injured or killed through the negligent use of that vehicle, money will be available under the policy to meet any judgment for damages that may be awarded in favour of the person injured or the representatives of the person killed. The purpose of making third party insurance compulsory, of course, was to ensure that this cover would be available in al! cases. There are two kinds of cases in which, apart from such a system, the person injured might go without effective remedy. The first is that the owner of the vehicle might have no funds available to satisfy a judgment. The second is that in any event the owner might not be liable in law. Let me explain in a little more detail.

With the increase in the number of persons owning or buying motor cars, it became clear that there would be many cases where a person was injured by the negligence of the owner of the vehicle, or of the agent of the owner, and where the owner was liable to the injured party in damages at common law, but where the legal claim might not avail the injured party because the owner of the vehicle did not have the means to satisfy the judgment. In this respect, the aim of the State third-party legislation was not to alter the common law as to liability, but was to ensure that the lack of means of the owner would not defeat the legal claim of the injured party.

There was, however, also a secondary purpose in the State legislation. Where a vehicle was being driven by an unauthorized person - by a thief or by a servant of the owner who was not using the vehicle in the course of his employment - a person injured by the vehicle would, at common law, have no right of action against the owner, and it was necessary to ensure either that the unauthorized driver should be deemed to be the authorized agent of the owner, thus rendering the owner and his insurer answerable, or that the liability of the unauthorized driver himself, in an action against him for damages, would be met by third-party insurance.

Mr Bryant - What about damage to property?

Sir GARFIELD BARWICK - It is not concerned in this at all. The legislation of some States adopts both the courses I have mentioned. That of other States merely requires the policy of third-party insurance issued in respect of a motor vehicle to cover the liability of unauthorized drivers, in addition to that of the owner or his agent.

In the case of vehicles owned by a government, the first problem could scarcely arise. There would always be funds available once liability was established. The second problem, however, is real enough - that is, the need to create liability in the event of unauthorized use. So far as all the States are concerned, that liability has either been imposed by law or accepted by the government in various ways.

For constitutional reasons, the States cannot impose their legislation on the Commonwealth. The Government of the Commonwealth is, in fact, not legally obliged to insure its vehicles against third party risks, and as a matter of policy does not do so. It simply acts as its own insurer, and meets judgments for damages in respect of its vehicles out of general revenue. This practice has worked satisfactorily where the Commonwealth has been liable, through its authorized driver, for the injury caused. But, as honorable members will realize, there are from time to time cases where the Commonwealth is not at present legally liable - owing to the fact that, at the time of the accident, the vehicle was being driven without the Commonwealth's permission, either by a person employed by the Commonwealth but acting outside the course of his employment, or by some other person who has taken a Commonwealth vehicle without authority. Under the ordinary rules of vicarious liability in tort, the Commonwealth has no legal responsibility for an accident caused in these circumstances, and the injured person can only hope to succeed in an action against the unauthorized driver, who may be a person of limited means, possibly quite unable to meet the damages awarded against him.

Except in the Australian Capital Territory and the Northern Territory, where legislation similar to that of the States has been introduced, it is therefore usually not worth-while to sue the unauthorized driver of a Commonwealth vehicle, and if the injured person sues the Commonwealth, he may properly be met by the defence that the Commonwealth is not responsible for the driver's unauthorized acts. The Commonwealth has, however, for some time done something to alleviate this position. In cases where the Commonwealth has had this defence open to it, the procedure has been for the Treasurer to examine the case and, if he thought fit, to offer the injured person an ex gratia payment equal to the amount that would have been payable had the Commonwealth been liable under the Commonwealth Employees' Compensation Act for the injury sustained.

The number of cases of injury caused by unauthorized drivers of Commonwealth vehicles is small, of course, compared with the number of cases arising from the use of vehicles driven in the ordinary course of employment, but the Commonwealth takes the view that a person injured by a Commonwealth vehicle, whether its use was authorized or not, should not be in a worse position than a person injured by a privately owned vehicle.

This bill is designed, therefore, to give a person injured by a Commonwealth vehicle being driven without authority the same right of action against the Commonwealth as he would have had if the vehicle had been driven by an agent of the Common wealth acting within the scope of his authority. To this end, clause 5 provides, in effect, that in any proceedings against the Commonwealth for damages in respect of death or personal injury caused by a Commonwealth vehicle, the driver of the vehicle, whatever the circumstances under which he comes to be driving it, is conclusively presumed to be driving as the authorized agent of the Commonwealth. The Commonwealth will thus be liable to meet the damages awarded in any case of death or injury caused by its vehicle, by whomsoever driven, and a gap in the law relating to compensation for road injun will be closed.

The bill makes various incidental provisions. There is one important incidental provision, the reasons for which I desire to make quite clear. I refer to paragraph (b) of sub-clause (1.) of clause 5. It will be seen that the paragraph speaks of a claim " made by or against the Commonwealth or a Commonwealth authority for contribution . . .". The inclusion of this paragraph has two important consequences. In the first place, if a Commonwealth vehicle driven by an unauthorized driver comes, for example, into collision with another vehicle and a third party is injured partly as a result of the negligence of the unauthorized driver of the Commonwealth vehicle and partly as a result of the negligence of the other driver, the paragraph makes clear that the ordinary State laws relating to contribution between tortfeasors will apply. This will mean that the Commonwealth will be able to claim contribution from the other negligent party, and on the other hand it will equally mean that that party, if he is the one sued, may claim contribution from the Commonwealth in respect of the negligent use of the Commonwealth vehicle.

In the second place, although the Commonwealth will be accepting the liability to pay damages to a person injured by the negligent use of a Commonwealth vehicle by an unauthorized driver, the paragraph makes clear that the Commonwealth will have the right to recover from the unauthorized driver the damages paid by it. In other words, the bill will give the injured person a ready means of redress against the Commonwealth, but the Commonwealth in its turn will have the right to try to recover from the driver who was driving without authority what it has paid to the injured party. Of course, whether or not the Commonwealth exercised the right would depend on the circumstances. If the Commonwealth vehicle is, for any reason, covered by a policy of third party insurance at the time of the accident - for example, if it is in the hands of a trader or repairer who holds a third party policy in respect of a vehicle while it is in his care - the bill will not apply, and the policy will be left to operate.

In submitting itself to the same liability with regard to injury caused by negligent driving of one of its vehicles as that to which other owners of motor vehicles are subjected, the Commonwealth will, under the bill, have that liability, whether for authorized or unauthorized use, assessed by a court in the same manner as the liability of any other litigant in a motor accident case would be assessed - that is to say, with or without a jury, depending on the requirements of the law of the particular State in which the liability arises. This is in accordance with the policy of the Commonwealth, embodied in the Judiciary Act since 1903, that in regard to its liability to be sued in contract or in tort the Commonwealth is to be as nearly as possible in the same position, before the court, as the litigant would be in a suit between subject and subject.

Dr Evatt - There would be no change in the practice?

Sir GARFIELD BARWICK - No. The provisions of the bill apply to Commonwealth authorities and their vehicles in the same way that they apply to the Commonwealth and its vehicles. In a case in which a Commonwealth authority is not covered by the State compulsory third-party insurance system, it will be covered by this bill. The act will apply throughout the Commonwealth and the Territories of the Commonwealth.

Honorable members will see that clause 5 is designed to apply in respect of deaths and injuries caused by occurrences that took place after 9th September, 1958. The effect will be that the clause will apply to proceedings in respect of occurrences that took place on or after the date of the statement by the Prime Minister from which I quoted earlier - the statement which was made on 9th September, 1958. 1 commend the bill to the House.

Debate (on motion by Dr. Evatt) adjourned.

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