In an insurance test case, the High Court ruled a licensed driver supervising a learner driver is not ‘in charge’ of the vehicle if asleep in the passenger seat.
Motorists holding a learner licence must be supervised by a fully-licensed driver when driving. IAG refused to pay out on a motor vehicle policy after a serious crash near Milton in 2018. Charlene Day fell asleep at the wheel, crossing to the wrong side of the road and colliding with a campervan. Occupants of both vehicles were seriously injured. Ms Day was charged with careless use of a motor vehicle.
The High Court was told Ms Day was driving a vehicle owned by her fiancée, Bryan Forde. She held a learner licence; Mr Forde was fully-licensed. At the time of the crash, he was in the passenger seat. The IAG policy denied liability if the driver was ‘not driving according to the conditions of his or her licence.’ IAG alleged Mr Forde was asleep in the passenger seat at the time of the accident. There was no-one ‘in charge’ it said.
Mr Forde complained to the Insurance and Financial Services Ombudsman about AIG’s refusal to pay for damage to both vehicles. She recommended IAG pay. IAG made an ex gratia payment, then took a test case to the High Court. It paid Mr Forde’s legal expenses. The Insurance and Financial Services Ombudsman Scheme requires providers to meet complainant’s legal expenses of they wish to challenge an Ombudsman’s decision in court. For the purposes of the test case, it was presumed Mr Forde also had fallen asleep.
Justice Dunningham ruled the Land Transport Act requirement for a fully-licensed driver to be ‘in charge’ when a driver on a learner licence is driving means the fully-licensed driver must be actually in charge, in the sense of supervising the driver and being able to give instructions and to take corrective action when required.
IAG New Zealand Ltd v. Forde – High Court (8.12.20)
21.011