Can an e-bike be a motor vehicle?

By Tanya Smart

Hyunjung Lee v AAI Limited t/as AAMI on behalf of the Nominal Defendant

In this recent Personal Injury Commission (PIC) decision, Senior Member Williams relevantly determined that he could not be satisfied that the e-bike involved in the subject accident was a motor vehicle as defined in section 1.4 of the Motor Accident Injuries Act 2017 (NSW) (MAI Act), and for that reason the Claimant had not established that the incident fell within the general restrictions on the application of the MAI Act set out in section 1.9, or that it was a motor accident within the meaning of the MAI Act, and therefore no entitlement to claim statutory benefits under the MAI Act was established.

Although the decision was not concerned with damages, it is notable that section 1.9 applies equally as a gateway to entitlement to damages under the MAI Act, so no entitlement to damages under the MAI Act could be established either, given the same circumstances.

The Nominal Defendant sought an order under s 8.3(4) of the MAI Act permitting it to pay its lawyers’ costs in connection with the proceedings. The Senior Member was satisfied that, given the issues in dispute and the conduct of the proceedings, it was appropriate for the Commission to permit the Nominal Defendant to pay its lawyers’ reasonable and necessary legal costs incurred in connection with the proceedings, including counsel’s fees. The decision is an example of the application of the construction of section 8.3(4) in AAI Ltd trading as GIO v Moon [2020] NSWSC 714 (Moon), where the Court found that the Commission has power to permit fees for legal services provided to a party to a claim for statutory benefits to be paid to the party’s lawyers, not limited to the maximum allowed by the Motor Accident Injuries Regulation 2017 (NSW) (Regulation).

Facts

The Claimant was riding an e-bike through Prince Alfred Park, Surry Hills, in the early hours of 29 July 2022.

Senior Member Williams found that the Claimant was deliberately pushed, as a result of which she lost her balance, hit a street light and fell to the ground, suffering injury.

The Claimant lodged a claim for statutory benefits under the MAI Act against the Nominal Defendant.

Under section 3.1 of the MAI Act, statutory benefits can be paid in respect of a motor accident.

Motor accident is defined in section 1.4 to mean:

an incident or accident involving the use or operation of a motor vehicle that causes the death of or injury to a person where the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during-

1. 1. the driving of the vehicle, or
   2. a collision, or action taken to avoid a collision, with the vehicle, or
   3. the vehicle’s running out of control, or
   4. a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle’s running out of control.

The Nominal Defendant had given notice to the effect that that the e-bike which the Claimant was riding was not a motor vehicle, that the incident was therefore not a motor accident, and it was therefore not liable to pay statutory benefits.

Another determination to the same effect was made by the Nominal Defendant on internal review.

The Claimant ultimately lodged a miscellaneous assessment matter dispute with the PIC for determination.

What is a motor vehicle under the MAI Act?

At paragraphs 14 – 19 the Senior Member sets out the following statutory framework.

Section 1.4 of the MAI Act states that motor vehicle means a motor vehicle or trailer within the meaning of the Road Transport Act 2013 (NSW) (Road Transport Act).

Section 4 of the Road Transport Act defines motor vehicle as:

a vehicle that is built to be propelled by a motor that forms part of the vehicle.

(The above definition was the one which was pivotal in the determination of this dispute.)

The definition of vehicle is also found in section 4 of the Road Transport Act:

vehicle means–

1. any description of vehicle on wheels (including a light rail vehicle) but not including any other vehicle used on a railway or tramway, or
2. any description of tracked vehicle (such as a bulldozer), or any description of vehicle that moves on revolving runners inside endless tracks, that is not used exclusively on a railway or tramway, or
3. any other description of vehicle prescribed by the statutory rules.

The statutory rules are the regulations and rules made under the Road Transport Act.

Rule 15 of the Road Rules states:

’15 What is a vehicle

A vehicle includes-

1. 1. a motor vehicle, trailer and tram, and
   2. a bicycle, and
   3. an animal-drawn vehicle, and an animal that is being ridden or drawing a vehicle, and
   4. a combination, and
   5. a motorised wheelchair that can travel at over 10 kilometres per hour (on level ground), and
   6. an electric skateboard, unless a person is driving the electric skateboard in the circumstances set out in rule 228-1,

but does not include another kind of wheelchair, a train, or a wheeled recreational device or wheeled toy.

Note 1-

Various terms mentioned in this rule are defined in the Dictionary.

Note 2-

This rule is not uniform with the corresponding rule 15 of the Australian Road Rules.’

Schedule 1, Part 2 cl 15 of the Road Transport (Vehicle Registration) Regulation 2017 is in the following terms:

’15 Power-assisted pedal cycles and electrically power-assisted bicycles

The registration provisions do not apply to a registrable vehicle that is-

1. 1. a power-assisted pedal cycle within the meaning of vehicle standards, as amended from time to time, determined under the Road Vehicle Standards Act, section 12 other than one that has an internal combustion engine or engines, or

Note- Power-assisted pedal cycle is defined in the Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005 determined under the Road Vehicle Standards Act, section 12. The definition of power-assisted pedal cycle includes electrically power-assisted cycles, within the meaning of that Standard.

1. an electrically power-assisted bicycle that has a maximum continued rated power of 500 watts, if the power output-
   1. progressively reduces as the bicycle’s speed increases above 6 kilometres per hour, and
   2. is cut off when-
      1. the bicycle reaches a speed of 25 kilometres per hour, or
      2. the rider of the bicycle stops pedalling and the speed is more than 6 kilometres per hour.’

Power-assisted pedal cycle is defined in The Vehicle Standard (Australian Design Rule – Definitions and Vehicle Categories) 2005 (Cth) (Standard) as follows:

‘POWER-ASSISTED PEDAL CYCLE – means a vehicle, designed to be propelled through a mechanism primarily using human power, that:

1. meets the following criteria:
   1. is equipped with one or more auxiliary propulsion electric motors with a combined maximum power output not exceeding 200 watts;
   2. cannot be propelled exclusively by the motor or motors;
   3. has a tare mass (including batteries) of less than 50 kg;
   4. has a height-adjustable seat; or
2. is an electrically power-assisted cycle;

but does not include a vehicle that has an internal combustion engine.’

Electrically power-assisted cycle (EPAC) is defined in the Standard as

‘ELECTRICALLY POWER-ASSISTED CYCLE (EPAC) – means an electrically-powered pedal cycle with a maximum continuous rated power of 250W, of which the output is:

1. 1. progressively reduced as the cycle’s travel speed increases above 6 km/h; and
   2. cut off, where:
      1. the cycle reaches a speed of 25 km/h; or
      2. the cyclist is not pedalling and the travel speed exceeds 6km/h.’

Determination

Senior Member Williams disposed of the matter by making the following determination (our emphasis):

1. The definition of ‘motor vehicle’ focuses attention on the intended operation of the vehicle in question at the time it was built. In this case, the question is: was the bike built to be propelled by a motor that forms part of the bike? The definition is not concerned with the operation of the vehicle after modifications have subsequently been made to it by someone other than the manufacturer, where those modifications alter the manner in which the vehicle operates, and where the manufacturer neither intended nor anticipated that such modifications would be made when the vehicle was built.
2. I have found that at the time the incident occurred, a motor was attached to the rear wheel of the bike near the axle, that there was a battery under the seat, and that the motor was engaged by a throttle located on the right handle of the bike. However, as previously recorded, I am not satisfied that the evidence supports a finding about when the motor, throttle, and battery were attached to the bike, whether at the time it was built or subsequently, or whether modifications were made to the bike after it was sold by the manufacturer. In the absence of evidence about these matters, I am not persuaded, on balance, that the bike was built to be propelled by a motor that forms part of the bike.

1. I am not satisfied, on the balance of probabilities, that the bike is a ‘motor vehicle’ as defined by and for the purposes of the MAI Act. ….

Senior Member Williams also gave the following further reasons why statutory benefits would not be payable [at 88-90]:

1. …. The push was the dominant cause or that which was proximate in efficiency and the real effective cause of her injuries [citing Leach v The Nominal Defendant (QBE Insurance (Australia) Ltd) [2014] NSWCA 257 per McColl JA at [73]].
2. I find that Ms Lee’s injuries did not result from the use or operation of a motor vehicle. Nor were her injuries a result of one of the four specified circumstances referred to in s 1.9(1) of the MAI Act. Ms Lee’s riding of the bike was neither a proximate nor direct cause of her injuries. Her injuries were not a result of her riding of the bike. Likewise, her injuries were not the result of a dangerous situation caused by the riding of the bike.
3. For the same reasons, I find that the injuries suffered by Ms Lee were not caused by the use or operation of a vehicle. Nor were her injuries a result of one of the four specified circumstances referred to in the definition of ‘motor accident’. The definition of ‘motor accident’ is not satisfied. As Ms Lee’s injuries did not result from a ‘motor accident’, s 3.1 of the MAI Act cannot be engaged.

Costs

The Nominal Defendant sought an order under section 8.3(4) of the MAI Act permitting it to pay its lawyers’ costs in connection with the proceedings.

Section 8.3(4) of the MAI Act provides that:

An Australian legal practitioner is not entitled to be paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits (whether the claimant or the insurer) in connection with the claim unless payment of those legal costs is permitted by the regulations or the Commission.

The Claimant was given an opportunity to respond to the Nominal Defendant’s costs application and did not wish to do so.

The Senior Member was satisfied that, given the issues in dispute and the conduct of the proceedings, it was appropriate for the Commission to permit the Nominal Defendant to pay its lawyers’ reasonable and necessary legal costs incurred in connection with the proceedings, including counsel’s fees.

This would be consistent with the decision in AAI Ltd trading as GIO v Moon [2020] NSWSC 714 (Moon), where the Court found [at 141] that in order to ensure that the words ‘or the Dispute Resolution Service [now the Commission]’ in s 8.3(4) are useful and pertinent, s 8.3(3) should not be construed as preventing the DRS [now the Commission] from permitting payment under s 8.3(4) of legal costs in amounts exceeding the maximum costs fixed by regulations made under s 8.3(1), in appropriate cases.

It is also notable that the Senior Member indicated that should the Claimant (who was unrepresented) have been able to secure legal representation in the proceedings, he proposed to make a costs order under section 8.10(4)(b) of the MAI Act.

Section 8.10 deals generally with recovery of costs and expenses in relation to claims for statutory benefits.

Section 8.10(3) provides that:

A claimant for statutory benefits is only entitled to recover from the insurer against whom the claim is made reasonable and necessary legal costs incurred by the claimant if payment of those costs is permitted by the regulations or the Commission.

Section 8.10(4) provides that:

The Commission can permit payment of legal costs incurred by a claimant but only if satisfied that-

1. the claimant is a person under legal incapacity, or
2. exceptional circumstances exist that justify payment of legal costs incurred by the claimant.

In Moon, at [84], the Court found that the references in section 8.10(3) and (4) to payment of legal costs refer to a payment made, or to be made, by an insurer to satisfy a claimant’s entitlement to recover costs from an insurer under s 8.10(1).

The indication of the Senior Member is in line with the finding by the Court in Moon that while 8.10(3) permits the payment of legal costs allowed by regulations made under 8.10(2) up the maximum fixed by those regulations (if there are any), the second category of costs recoverable by a Claimant under s 8.10(1) and (3), those that are permitted by the Commission, are not limited to any maximum fixed by such regulations.

Implications

This decision makes it clear there can be no blanket determination that an e-bike is or is not a motor vehicle.

This decision was arrived at in circumstances where the Claimant did not have enough evidence available to establish the relevant properties of the bike in question at the time of manufacture.

The decision sets out a useful summary of the complicated statutory framework for determination of the issue, which involves a number of different pieces of legislation and delegated legislation.

It is clear that in any given case a great deal of technical evidence as to bike specifications, and proof as to the absence of relevant modifications since date of manufacture, may be required to be gathered.

This may be a very onerous task, even more so where the Claimant does not own the bike.

This complex statutory framework would also apply in determining whether any particular e-bike would be exempt from registration, required to be registered, or capable of registration under section 2.29(6) of the MAI Act, which deals with the gateway test for claims against the Nominal Defendant where a ‘motor vehicle’ as further defined in that section is uninsured.

The permission granted by the PIC for the Nominal Defendant to pay its lawyers’ reasonable and necessary legal costs incurred in connection with the proceedings, including counsel’s fees, is an example of when the PIC will exercise discretion under section 8.3(4), and as a result permit the Nominal Defendant and insurers to pay their lawyers’ costs in excess of those specified under the Regulations. This permission does not disturb the provision in section 8.10(5) of the MAI Act that an Insurer is not entitled to recover from a Claimant for statutory benefits any legal costs, or other costs and expenses, of the Insurer in relation to the claim.