McTye v Chang: NSW Bus Accident Compensation Law Change

On 4 February 2025, the NSW Court of Appeal handed down its decision in McTye v Chang [2025] NSWCA 3. The case arose from an accident that occurred on 21 October 2019, when a four-year-old child was a passenger on a bicycle ridden by his mother along Liverpool Street in Sydney, and a State Transit Authority (STA) bus collided with them. The child sustained a severe injury to his right foot, resulting in amputation. Liability was admitted; the dispute was entirely about which damages regime applied.

The central question before the Court was one of statutory construction: did section 121 of the Transport Administration Act 1988 mean that damages arising from a public bus accident should be assessed pursuant to Chapter 5 of MACA, even though the accident occurred after the MAI Act commenced in November 2017?

The NSW Court of Appeal held that it did. The Court identified that State Authority buses – operated by the State Transit Authority as part of the state’s metropolitan bus network – fell within the category of ‘state-operated transport services’ under the TAA, which denotes transport services that are treated separately from the general motor vehicle accident regime. Even though a public bus constituted a motor vehicle in the ordinary sense, the specific operation of the TAA meant that public transport accidents were governed by a distinct statutory framework rather than the prevailing motor accidents legislative scheme.

The practical consequence of this decision was that a claimant’s damages from a public transport accident involving a bus were to be assessed under Chapter 5 of MACA 1999, regardless of whether the accident occurred before or after the commencement of the MAI Act. Importantly, claimants retained their entitlement to recover statutory benefits under Part 3 of the MAI Act, including income support and medical expenses, but their lump-sum damages claim was assessed under the older, more generous framework.

However, the Court of Appeal was not required to determine a question that has significant practical consequences for many claimants: whether accidents on the public bus network involving privately operated bus services – private bus companies contracted to deliver services on behalf of Transport for NSW – would be treated in the same way as state-operated buses. That question was left unresolved.

The Problem the Decision Created

The McTye v Chang decision led to a situation in which people injured in public transport bus accidents were subject to a different, more favourable damages regime than those injured in other motor vehicle accidents. A person severely injured by a State Transit Authority bus could access lump sum damages without needing to satisfy a threshold injury test, while a person injured by a privately owned vehicle in otherwise identical circumstances could not.

The NSW Court of Appeal itself acknowledged the complexity and called upon Parliament to consider legislative reform. It was clear that the existing framework, built up across the Transport Administration Act 1988, the Motor Accidents Compensation Act 1999 and the Motor Accident Injuries Act 2017, contemplated transport services in a way that produced uneven outcomes.