ANNUAL INSURANCE LAW REVIEW COMMITTEE

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2 PARTNERS ANNUAL INSURANCE LAW REVIEW COMMITTEE Rhett Kennedy Fiona Sennett Peter Murdoch Melanie Niotakis John Sharman Elsbeth Reynolds Robert Samut Paul Birkett Richard Leahy Anna Clarke Fiona Sennett Bree Lyell Sharon Templeton No person should rely on the contents contained herein without first obtaining adice from a qualified person. Barry & Nilsson are not responsible for the results of any action taken on the basis of the information contained herein nor for any error or omission therein. Barry & Nilsson expressly disclaim all and any liability and responsibility to any person in respect of anything and in consequence of anything done or omitted to be done by any person in reliance (wholly or partially) upon the whole or part of the contents contained herein. Coer image: Lighting Strikes Brisbane Photograph supplied by: Flemming Bo Jensen Photography

3 The Insurance and Health Team at Barry & Nilsson are proud to present our Annual Insurance Law Reiew for This year the topic of our reiew is Weathering the Storm. Oer the last year the global financial crisis (GFC) has dominated the news. When the GFC struck in 2008, there was a sense that Australia would weather the financial storm. Whilst the impact in Australia has not been as seere as that in other countries, Australia has not been immune to the GFC and its effects. The insurance industry as an integral part of the wider financial sector has ineitably been affected. In the USA, the American International Group (AIG) suffered a seere liquidity crisis. Its credit rating was downgraded below AA status in September 2008, resulting in share alues dropping more than 95% and the AIG receiing billions of dollars in goernment loans to aoid bankruptcy. In Australia, the general insurance industry has been less affected, largely due to the high leel of regulation. It has howeer still been affected with: 1. APRA becoming een more igilant in superising the general insurance market, particularly in relation to solency issues; 2. Access to capital being more costly, resulting in underwriters relying on their existing books for income rather than looking for new business; 3. A decrease in returns from inestment income ordinarily relied upon to supplement underwriting results; 4. The potential of rising premiums; and 5. A downturn in the number of insurance policies taken out in certain areas. With central banks and goernments around the world trying to stimulate their economies to recoer from the GFC, it is important to consider the reasons we are in this position and what strategies can be put in place to aoid or minimise its effects in the future. In that context, Barry & Nilsson Lawyers welcomes our guest speaker, Dr Andries Terblanché, Chairman of Financial Serices at KPMG Australia. Dr Terblanché will discuss contributory factors to the GFC and initiaties to aoid those in the future. We are honoured to hae Dr Terblanché as our key note speaker at this years reiew. He is impeccably credentialed to present on this topic and is in huge demand as a speaker in Australia and beyond. We are sure that you will find his presentation to be both enjoyable and informatie. For Barry & Nilsson, this year has been one of continued growth and actiity. Consistent with the economic enironment that Dr Terblanché will speak of, a by product we hae noted is an increase in claims particularly in relation to economic loss. Not only are instructions from both the local and London markets increasing but files that hae preiously been closed due to lack of actiity, hae reopened with, in some cases, the presentation of statements of claim worth millions of dollars. There hae been a number of promotions this year, the most notable of which is Sharon Templeton to partner. Sharon has been at the firm since March 2001 and is an integral part of the insurance team. Likewise we were pleased to announce a number of promotions to senior associates namely Jo Atherinos, Paul Birkett, Anna Clarke, Megan Daniel, Alison Hunt and Dan McCormack. We hae added our health diision and hae continued to be inoled in proiding eduction to the industry. This year has seen the release by Robert Samut of our newsletters, Health Check and Liability by Design which deal with issues affecting health care proiders and building design professionals respectiely. Robert has also headed up our Professional Edge workshops, which are designed to proide a fresh alternatie for insurance professionals looking for up to date practical information. To date these workshops hae included the Insurance Contracts Act, contractual liability and quantum.

4 We hae also been inited to complete our project with the PNG Goernment to assist in drafting an Insurance Contracts Act to be introduced in parliamentary sittings in We remain heaily inoled with arious industry associations. Peter Murdoch has been inoled with putting together the Queensland held national AILA conference at Hamilton Island this financial year and Rhett Kennedy, as always, has been inoled in the program committee for the local AILA branch intensie. Richard Leahy is a Queensland committee member of ANZIIF and is on the organising committee for ANZIIF s signature Queensland eent, The Sunshine Seminar. We are also actiely inoled in the Australian Professional Indemnity Group (Qld) with Elsbeth Reynolds being a committee member, Women in Insurance and the Risk Management Institute of Australia which is a particular focus for John Sharman. Our inolement with these associations is consistent with our commitment to being part of the insurance industry. Internally we hae focused on finding efficiencies in what we do eeryday and how we can do better. We hae established a number of focus groups including the Innoation Committee, Green Committee, Charity/Pro Bono Committee and the Mentor/Graduate Program. On the recommendation of the Innoation and Green Committee, this years casebook has been deliered solely in an electronic form in recognition of its increased portability and our desire to be green. This years casebook illustrates how the courts hae continued to produce some extraordinary and often unexpected decisions. Examples extend to the serice of documents by posting them online on facebook and the successful plaintiff who threw his teleision into a local dump site only to be hit in the eye with the cord. Our casebook contains major decisions handed down by Australian superior courts for the financial year ending 30 June The judgments deliered and included in this years casebook highlight some trends in the law, including: (a) (b) (c) a rising number of applications regarding disclosure and priilege; a focus on causation; and the remoal of a plaintiff s right to claim damages for loss of chance in medical negligence cases (although this is now the subject of an appeal to the High Court). We trust that you continue to find the casebook a useful resource. The name of the solicitor responsible for drafting each note appears at the end of the casenote. Please contact the solicitor responsible should you require any further information about a particular case. Their professional profiles can be found on our website at Finally I would like to thank the committee members responsible for assisting me in compiling the casebook and organising this eent. They are Paul Birkett, Anna Clarke, Bree Lyell, Melanie Niotakis and Elsbeth Reynolds. They hae all deoted an enormous amount of time and their efforts are highly appreciated. Fiona Sennett Partner

5 CONTENTS PUBLIC LIABILITY Local & State Authorities Anderson Gold Coast City Council [2008] QDC Liability of Council for trip and fall on serice pit Blacktown City Council Hocking [2008] NSWCA Footpath Telstra pit lid defectie immunity of Council for non-feasance under s45 of the Ciil Liability Act 2004 (NSW) Angel Hawkesbury City Council [2008] NSWCA Footpath injury obious risk s45 of Ciil Liability Act 2002 (NSW) Campaspe Shire Council De Young [2008] VSCA Injury to user of Council waste facility failure to adopt recommended practice Western Districts Deelopments Baulkam Hills Shire Council [2008] NSWSC Liability of Council to compensate property owner for pure economic loss Council issued subdiision certificate despite non-compliance with water requirements Woods The Nominal Defendant & Anor [2008] NSWSC Child struck by car unidentified drier claim against nominal defendant and local authority Precision Products (NSW) Pty Ltd Hawkesbury City Council [2008] NSWCA Council issued inalid clean-up notice duty of Council to aoid economic loss and afford procedural fairness Council of the City of Lierpool Turano & Anor [2008] NSWCA Plaintiff killed by falling tree Ciil Liability Act (NSW) - strength of eidence required to proe Causation Jackson Lithgow City Council [2008] NSWCA Duty to intoxicated pedestrian in respect of unfenced wall of a concrete drain in a park plaintiff with no recollection of incident and no witnesses inference of fact from all surrounding Circumstances Adams by her next friend O Grady State of New South Wales [2008] NSWSC Duty of care owed by the State to preent loss of liberty arising out of criminal act Shire of Leonora Cooper [2008] WASCA Duty of local authority in respect of grael road knowledge of risk when road was wet contributory negligence Colbran trading as Tablelands Coffee State of Queensland; Hatmill Pty Ltd & Ors 17 State of Queensland; Maloberti & Ors State of Queensland [2008] QSC 132 Whether public authority owed a duty of care when acting in public interest Shire of Gingin Coombe [2009] WASCA Injury whilst off-road motorbike riding in sand dunes obious risk warning Central Goldfields Shire Haley & Ors [2009] VSCA Council s liability to a pedestrian on a footpath highway authority

6 Workplace Claims Fremantle Ports P&O Ports Ltd [2008] WASCA Liability between joint tortfeasors for accident on jetty Eastside Scaffolding & Rigging Pty Ltd Kazic [2008] NSWCA Apportionment of liability amongst multiple defendants on construction site Bourk Power Sere Pty Ltd & Anor [2008] QCA Liability of employer breach of statutory duty Hoad Peel Valley Exporters Pty Ltd [2008] NSWSC Liability of host employer/occupier consideration of whether pre-existing asymptomatic condition would hae become symptomatic Leeder The State of Western Australia [2008] WASCA Assault of prison officer by prisoner failure by employer to warn plaintiff of prisoner s preious aggressie conduct causation Thomson Twin Towns Employment Enterprises Limited [2008] NSWSC Failure to proide safe place and system of work failure to superise and failure to proide proper equipment Knight Tabcorp Holdings Limited [2008] QSC Plaintiff employed as security officer at defendant s casino plaintiff injured whilst remoing a patron from the casino Austen East Coast Yacht Finishing Pty Ltd & Anor [2008] QDC Plaintiff slipped on a staircase on a luxury yacht under construction Tamerji Rhee [2008] NSWCA Right of workers compensation insurer to recoer payments made to worker where worker receied damages from a third party s151z(1)(b) of the Workers Compensation Act 1987 (NSW) Parsons J.J. Richards & Sons Pty Limited [2008] NSWCA Employee garbage collector injured while dragging bin he knew to be heay duty to warn Seage State of New South Wales [2008] NSWCA Police officer injured when attempting to moe a heay desk unassisted at the police station whether employer breached non-delegable duty of care George Surery [2009] NSWSC 5 39 Whether defendant liable to indemnify employer for compensation paid to plaintiff. Kuhl Zurich Financial Serices Australia Ltd on behalf of WOMA (Australia) Pty Ltd 40 (deregistered company) & Anor [2009] WADC 4 Liability of contractors for worker s liability existence and scope of duty of care J-Corp Pty Ltd Coastal Hire Pty Ltd [2009] WACA Whether retainer to supply scaffolding included an implied term to maintain it in safe condition after erected duty to proide system to detect and remedy interference with erected scaffolding Bon Appetit Family Restaurant Pty Ltd Mongey [2009] NSWCA Warning to insurers and legal counsel regarding untenable appeals where no factual or legal error Macey Macquarie Generation & Anor [2009] NSWCA Duty of occupier to gie instructions for safe access to manhole whether task was simple and obious

7 Papadopoulos MC Labour Hire Serices Pty Ltd & Anor [2009] VSC Implied terms in labour hire contracts s74 Trade Practices Act 1974 (implied warranties) Bostik Australia Pty Ltd Liddiard & Anor [2009] NSWCA Labour hire like arrangement between defendant and employer whether usual labour hire principles could be applied Occupier s Liability The Uniting Church Takacs [2008] NSWCA Liability of commercial property owner to tradesman when requesting a quotation Benton Scott s Refrigerated Freightways [2008] NSWCA Liability of owner of a ehicle truck drier injured while alighting from ehicle Varela Harris Farm Markets Pennant Hills Pty Ltd [2008] NSWDC Plaintiff slipped on crushed grapes at fruit market whether adequate systems of cleaning and inspection in operation BI (Contracting) Pty Limited Uniersity of Adelaide [2008] NSWCA Duty of care to a bystander exposed to asbestos spray at a building site for a short period of time acceptance of expert opinion Valeondis Permanent Trustee Aust Limited & Ors [2008] SADC Ceiling in lift collapsed system to control maintenance to ceiling in lift Ruaro Holcomm Marine Pty Ltd [2008] FCAFC Implied warranties pursuant to s74 of the Trade Practices Act 1974 (TPA) - operations of s68 of TPA Alam Rail Corporation NSW [2008] NSWDC Discrepancy between plaintiff s eidence and CCTV footage contributory negligence under the Ciil Liability Act (NSW) Ellis Uniting Church in Australia Property Trust (Q) [2008] QCA Trip and fall on drieway uneen paer scope of duty of care owed by commercial occupier to members of the public Bunning Hurley s Arkaba Hotel [2008] SADC Plaintiff s chair in gaming room of defendant hotel remoed from behind her by employee assessment of damages Beillesta Pty Ltd Liberty International Insurance Co [2009] NSWCA Plaintiff slipped on squashed orange at shopping centre whether shopping centre owner entitled to contribution from cleaning contractor Parry Woolworths Limited [2009] QCA Multiple back injuries while lifting tub of meat breach of statutory duty estoppel Coles Supermarkets Australia Pty Ltd Tormey [2009] NSWCA Occupier s duty to protect entrants against acts of third parties when a Jones Dunkel inference may be drawn Licensed Premises Anastasiou Chubb Security (Australia) Pty Ltd [2008] VSC Liability of employer for security guard injured while eicting intoxicated patron system of work adequate training

8 Scott C.A.L No 14 Pty Ltd (No 2) [2009] TASSC 2 65 Duty of hotel licensee to preent intoxicated patron from driing Rooty Hill RSL Club Ltd Karimi [2009] NSWCA 2 67 Plaintiff assaulted in car park of licensed premises following altercation inside premises whether reasonable precautions taken to preent assault Portelli Tabriska Pty Ltd & Ors [2009] NSWCA Plaintiff assaulted in a public street following an altercation inside licensed premises whether hotelier owed plaintiff a duty of care Adeels Palace Pty Ltd Moubarak; Adeels Palace Pty Ltd Bou Najem [2009] NSWCA Respondents shot inside a restaurant/nightclub whether duty of care owed and breached by proprietor Brilley Presidential Security Serices of Australia Pty Ltd [2009] NSWDC Plaintiff shot while committing robbery damages for unlawful conduct Residential Premises D Vorak Hiscox [2008] WADC Trespass to person oluntary assumption of risk intoxication Thomas Shaw [2009] NSWSC year old child fell from a bunk bed whether accident was foreseeable and preentable whether owners of premises were negligent Causation Nguyen Cosmopolitan Homes [2008] NSWCA Cause of fire damage standard of proof expert eidence Middleton Erwin & Anor [2009] NSWSC Motor ehicle accident where the steering in one ehicle failed without warning failure to maintain, inspect and design causation Educational Authorities Fitzgerald Hill & Ors [2008] QCA Non-delegable duty of care owed by tae kwon do operator application to withdraw admission Gregory State of New South Wales [2009] NSWSC Duty owed by school to student bullying psychiatric harm causation Animals Elliott & Anor Andrew [2009] SASC Liability of dog owner injury to motorcycle rider loss of consortium and nerous shock PRODUCT LIABILITY State of South Australia Ellis [2008] WASCA Death due to progressie lung cancer asbestos causation contributory negligence where deceased formerly a smoker

9 Thirlway Parnell LP Gas Systems Pty Ltd [2009] WADC LP gas operated car exploded when the plaintiff lit cigarette failure to warn PROFESSIONAL NEGLIGENCE Solicitors & Barristers Holdaway Arcuri Lawyers (a firm) [2008] QCA Failing to sere application under Part 4 of the Succession Act 1981 cause of loss Jawatts Bakery Supplies Pty Ltd Parer & Ors [2008] QSC Alleged failure of solicitor to ensure restraint of trade clause was included in contract for sale of business extent of instructions Daid Daid [2009] NSWCA 8 90 Conflict of interest duty to decline to act when aware of destination of inestment funds Beerley Rawleigh Derek Maxwell Tait [2009] NZSC Liability of solicitor for breach of fiduciary duty acting for husband and wife Medical Negligence The Crown Pegios [2008] NSWSC Dental negligence manslaughter by gross negligence standard of care Elayoubi bhnf Kolled Zipser & Ors [2008] NSWCA Liability of specialist obstetrician/gynaecologist and hospital appellant born with birth defects caused by uterine rupture Queen Elizabeth Hospital Curtis [2008] SASC Delayed diagnosis causation hearing loss hospital treated plaintiff for migraine plaintiff later diagnosed with meningitis Kerr Minister for Health [2009] WASCA Whether appellant s seizure caused by pethidine dose whether doctor breached his duty of failing to warn appellant of the risk of seizure icarious liability of hospital MD Sydney South West Area Health Serice (3) [2009] NSWDC Failure to order pregnancy test prior to surgery Hookey Paterno [2009] VSCA Whether a treatment plan recommended by maxillofacial surgeon was appropriate duty to warn of risks of proposed surgery Gett Tabet [2009] NSWCA Whether irreersible brain damage caused by misdiagnosis by paediatrician loss of chance of better clinical outcome G&M Armellin [2009] ACTCA IVF two embryos implanted when only one was requested Sydney South West Area Health Serice Stamoulis [2009] NSWCA Failure to diagnose breast cancer where the failure led to an increased risk of metastisation by 10% - admissibility of expert witnesses who hae an interest in the proceedings

10 Engineers BHP Coal Pty Ltd O&K Orenstein & Koppel AG [2008] QSC Collapse of a bucketwheel excaator where collapse was caused by design deficiencies and/or inadequate inspection contraention of Trade Practices Act 1974 (Cth) Building Consultants Brown Dream Homes SA Pty Ltd [2008] SASC Liability of building consultant pre-purchase inspection assessment of damages for lost opportunity Street & 7 Ors Luna Park Sydney Pty Ltd & 3 Ors [2009] NSWSC Negligent misrepresentation whether deeloper owes purchasers of adjoining land a duty of care whether deelopment application form a representation to adjoining land owners Financial Planners Eans & Ors Brannelly & Ors [2008] QDC Liability of financial planner for economic loss false statements about inestment misleading and deceptie conduct Wealthcare Financial Planning Pty Ltd Financial Industry Complaints Serice Ltd 118 & Ors [2009] VSC 7 Whether proportionate liability proisions of the Wrongs Act 1958 (VIC) applied to a decision of the Financial Complaints Serice that a financial adisor breached certain proisions of the Corporations Act 2001 (Cth) Real Estate Whittaker Paxad Pty Ltd [2009] WASC Sale of house to plaintiffs misleading or deceptie conduct pursuant to s52 and s84 of the Trades Practices Act 1974 (Cth) by real estate agent Mark Moncrief Steens & Ors Premium Real Estate Ltd [2009] NZSC Breach of fiduciary duty by real estate agent misleading and deceptie conduct Architect Drummond & Rosen Pty Ltd Easey & Ors [2009] NSWCA Scope of duty owed by architect failure of tiles to meet coefficient of friction in wet THE POLICY GIO General Limited Insurance Australia Limited t/as NRMA Insurance [2008] 126 ACTSC 38 Dual insurance proportion of contribution by each insurer Zhang Minox Securities Pty Ltd; Liu Minox Securities Pty Ltd [2008] NSWSC Defendant company wound up application for leae to join insurer as defendant construction of exclusion clauses

11 The Owners Strata Plan Majestic Constructions Pty Ltd & Ors [2008] 128 NSWSC 735 Insurer denied indemnity but sought orders that insured join a third party to the litigation insurer not permitted to require joinder until it accepted liability for insured s claim CGU Insurance Limited Porthouse [2008] HCA Professional indemnity insurance barrister s liability policy known circumstances exclusion Quintano B W Rose Pty Ltd & Ors [2008] NSWSC Professional indemnity policy construction of exclusion clause arising from insolency of insurer Baulderstone Hornibrook Pty Limited Paul Segaert Pty Limited [2008] NSWSC Interpretation of manufacturing, construction, installation exclusion in a professional indemnity insurance policy Ferryboat Pty Ltd & Red Gecko Pty Limited JUA Underwriting Agency Pty Limited & 136 Ors [2008] NSWDC 209 Non-disclosure of business history of restaurant Williamson Suncorp Metway Insurance Ltd & Anor [2008] QSC Plaintiff inured whilst undertaking work for a company controlled by his son whether employee exclusion applied Baulderstone Hornibrook Engineering Pty Ltd Gordian Runoff Ltd & Ors [2008] 139 NSWCA 243 Construction risks exclusion CGU Insurance Limited Corrections Corporation of Australia Staff Superannuation 141 Pty Ltd [2008] FCAFC 173 Professional indemnity policy claims made policy quality of degree of awareness of fact situation or circumstances giing rise to claim Done Financial Wisdom Limited [2008] FCA Leae to proceed against insolent company and bankrupt joinder of insurer inestments exclusion Middleton AON Risks Serices Australia Ltd [2008] WASCA Fraudulent or negligent misrepresentation reliance by a third party on false information proided by a broker s representatie in an affidait McConnell Dowell Middle East LCC Royal & Sun Alliance Insurance Plc [2008] VSC Plant and equipment disappears whether an occurrence for the purposes of the policy whether loss can be attributed to theft Towry Law Chubb Insurance [2008] NSWSC Interpretation of retroactie date in policy equitable estoppel Speno Rail Maintenance Australia Pty Ltd Metals & Minerals Insurance Pty Ltd [2009] 150 WASCA 31 Equitable right of contribution between co-insurers double insurance s45 and s13 of the Insurance Contracts Act 1984 (Cth) Insurance Australia Ltd t/as NRMA Insurance GIO General Ltd [2009] ACTCA WorkCoer claim upon motor accident policy injury occurred whilst unloading a truck Strategic Property Holdings No 3 Pty Ltd Suncorp Metway Insurance Limited [2009] 153 ACTSC 8 Interpretation of limit of liability clause meaning of accidental damage

12 Selected Seeds Pty Ltd QBEMM Pty Ltd & Anor [2009] QSC Broadform policy efficacy exclusion occurrence Barbour Black & Elders Insurance Ltd [2009] QDC Assault causing personal injuries entitlement to rely on the intentional or criminal acts exclusion whether s54 of the Insurance Contracts Act 1984 preented insurer from refusing claim Limit (No 3) Limited ACE Insurance Limited [2009] NSWSC Recoery by one insurer from another consideration of professional liability exclusion and Wayne Tank principle QBE Insurance (Aust) Limited Lumley General Insurance Ltd [2009] VSCA Dual insurance consideration of principles relating to contribution between insurers MOTOR VEHICLE Damm Damm [2008] NSWDC Apportionment of liability where cows strayed onto highway Wheeler Macdonald [2008] NSWSC Intoxicated learner drier intoxicated passenger Nominal Defendant Duntroon Holdings [2008] QCA Application of Motor Accident Insurance Act 1994 (Qld) uninsured crane whether accident happened on road Imbree McNeilly & Anor [2008] HCA Standard of care owed by a learner drier Pretzel Queensland Paulownia Forests Ltd & Anor [2008] QCA Whether a licensed CTP insurer who mistakenly acknowledges a claim as a motor ehicle claim accident is later estopped from resisting the claim on this basis Askew Kidd [2008] WADC Duty owed by drier affected by alcohol/drugs defence of oluntary assumption of risk whether sufficient eidence to proe plaintiff not wearing seatbelt Lyle Soc [2009] WASCA Whether death as a consequence of oerdose of prescription medication a reasonably foreseeable consequence of minor motor ehicle accident Athanassiou Hanekamp [2009] WADC Two motor ehicle accidents whether injuries sustained in first accident caused second to occur causation Dunleay Peak [2009] NSWCA Motor ehicle accident failure to anticipate plaintiff s attempt to execute illegal u-turn not negligent Dominello Dominello & Anor; Dominello The Nominal Defendant & Anor [2009] 173 NSWCA 95 Oil spill on road from unidentified ehicle driing at excessie speed PRIVILEGE Fay Moramba Serices Pty Ltd (No. 2) [2008] NSWSC Waier of priilege whether notice to produce counsel s adice and associated documents referred to in solicitors correspondence knowing and oluntary disclosure

13 Kennedy Nine Network Australia Pty Ltd [2008] QSC Disclosure of letters referring to legal adice pleaded in statement of claim Sharjade Pty Ltd Darwinia Estate Pty Ltd [2008] NSWSC Priilege agreement that access to documents limited to legal representaties Fig Tree Deelopments Ltd Australian Property Custodian Holdings Ltd [2008] 179 FCA 1041 Disclosure of confidential and priileged documents Hill Kirsten Bay Pty Ltd [2009] QDC Disclosure under the Personal Injuries Proceedings Act 2002 request for information prior incidents Australian Competition & Consumer Commission Cadbury Schweppes Pty Ltd 181 [2009] FCAFC 32 Whether priilege attached to finalised proof of eidence Spalding Radio Canberra Pty Ltd [2009] ACTSC Legal professional priilege waier of priilege refreshing or reiewing memory producing proof of eidence/statements DAMAGES Rockdale City Council Micro Deelopments Pty Ltd [2008] NSWCA Loss of opportunity property bought in reliance on incorrect zoning Lee Richards & Transport Accident Commission [2008] QDC Economic loss soft tissue neck injury student at hairdresser college Xu Thurgood & Anor [2008] QSC Damages under the Ciil Liability Act 2003 application for leae to adduce further eidence Bonny Glen Pty Ltd Country Energy [2009] NSWCA Recoerability of economic loss considerations of reasonableness and foreseeability Amaca Pty Ltd Noek [2009] NSWCA Damages for loss of capacity to proide domestic serices meaning of dependent Ehlefedlt Rowan-Kelly [2009] NSWSC Plaintiff suffered brain injury unable to care for children ability to recoer for care proided to her children by others pursuant tociil Liability Act 2002 (NSW) De Beer The State of New South Wales & Anor [2009] NSWSC Electric shock neurocognitie and psychological injuries conflicting medical eidence Clifton Dunn [2009] NSWSC Whether plaintiff s ongoing problems were caused by his injuries or subsequent prescription drug addiction Waller McGrath & Anor [2009] QSC Assessment of damages 12 year old plaintiff traumatic brain injury and 95% whole person impairment

14 PROCEDURE Balnaes Smith & Anor [2008] QSC Leae to withdraw admission Boyd State of Queensland & Anor [2008] QDC Application for leae to proceed no step taken for 3 years claim dismissed for want of prosecution McAskell Caendish Properties Limited & Ors [2008] VSC Disclosure of terms of confidential settlement by one party consideration of releance Stewart Fehlberg & Anor [2008] QSC Expert eidence rules UCPR multiple or joint expert witnesses Hyland Hack [2008] QDC Medical negligence application to extend limitation period material facts of decisie character Wood & Anor Tots Professional Serices Pty Ltd & Anor [2008] QDC Application by plaintiff to join own insurer pursuant to rule 69 of UCPR Roland Ofria Robert William Cameron [No 2] NSWCA Award of indemnity costs where plaintiff unsuccessful in debt recoery action Godfrey Spowers (Victoria) Pty Ltd Lincolne Scott Australia Pty Ltd & Ors 209 [2008] VSCA 208 (appeal of the decision of Surrowee Pty Ltd Hansen Yunken Pty Ltd [2008] VSC 90) Proportionate liability ability of defendant to pursue third parties for contribution where defendant settled with plaintiffs Puttick Tenon Ltd (formerly called Fletcher Challenge Forests Limited) [2008] HCA Whether goerning law is law of the place of the tort Simpson Brett & Suncorp General Insurance Limited [2008] QSC Expert eidence rules multiple experts in personal injury case Brady Woolworths Limited [2009] QDC Whether compulsory conference took place whether strongly held iews in liability proide good reason to dispense with compulsory conference Jessup Pope & Ors [2009] QDC Application to set aside decision to renew statement of claim deliberate delay by plaintiff Johnson Laing O Rourke (BMC) Pty Ltd [2009] QDC Plaintiff injured outside of Australia whether PIPA and/or WCRA applied Grech Sutton [2009] NSWCA Eidence Act 1936 (NSW) limiting orders weight at trial Hickson Goodman Fielder Limited [2009] HCA Motor ehicle accident recoery of workers compensation payments paid Collett Robina Projects Australia Pty Ltd t/as Easy T Retail Centre & Ors [2009] 219 QDC 53 Whether a party is bound to the terms of settlement deed Certain Lloyds Underwriters Kathy Giannopoulos; Certain Lloyds Underwriters 221 Marlene Giannopoulos [2009] NSWCA 56 Application to extend limitation period death of a defendant prejudice

15 WorkCoer Queensland AMACA Pty Ltd & Seltsam Pty Ltd [2009] QCA WorkCoer s right of recoery and indemnity from third party under s272 of the Workers Compensation and Rehabilitation Act 2003 (WCRA) - whether proportionate liability applies Wolski ALH Group Pty Ltd [2009] QDC Scope of respondent s duty to proide information under the Personal Injuries Proceedings Act 2002 The Beach Retreat Pty Ltd Mooloolaba Marina Ltd & Ors [2009] QSC Application for fixed costs cost order against a non-party indemnity costs Hare Mt Isa Mines Ltd & Ors [2009] QCA Remedying non-compliance of notice of claim under Personal Injuries Proceedings Act 2002 JA & BM Bowden & Sons Pty Ltd Doughty [2009] NSWCA Tractor rolloer whether Motor Accidents Compensation Act 1999 (NSW) Workers Compensation Act 1987 (Cth) applies Spring Sydney South West Area Health Serice [2009] NSWSC Defendant s offer of compromise accepted by the plaintiff whether the offer can be withdrawn based on changes in law materially altering the defendant s risk Luck Lusty EMS Pty Ltd [2008] QSC Obtaining medical opinion obtained in litigated proceedings notwithstanding execution of certificate of readiness signed under the PIP Limitations of Actions Act Lee Omni Leisure Operations Pty Ltd [2008] VSC Proceedings not commenced in limitation period application for extension of time inordinate delay due to conduct of lawyer Kambarakis G & L Scaffold Contracting Pty Ltd [2008] QCA Extension of limitation period knowledge of material facts whether medical adice should hae been sought Windsurf Holdings Pty Ltd Leonard: Carlson; Wyill Leonard [2009] NSWCA Limitation of actions choice between jurisdiction prejudice Walters Cross Country Fuels Pty Ltd [2009] NSWCA Leae to extend limitation period denied because of prejudice Gillespie Swift Australia Pty Ltd [2009] QSC What was a material fact of a decisie character extent of injury Jackson Redcliffe City Council & Anor [2009] QCA When time commences in causes of action that relate to recurring damage Palmer & Anor Finnigan & Ors [2009] QSC Application to extend limitation period plaintiff unsuccessful in joining third party as defendant McLaughlin Electrolux Home Products Pty Ltd [2009] QDC New cause of action after expiration of limitation period transfer of proceedings MISCELLANEOUS Erect Safe Scaffolding (Australia) Pty Ltd Sutton [2008] NSWCA Contractual indemnity insurance clause

16 Sarah Nickolls Noakes Rigging Pty Ltd; Peter Bush Noakes Rigging Pty Ltd [2008] 244 NSWDC 299 Duty of bailee for a reward defendant bailee discharged onus by establishing damage not due to its negligence Macquarie Bank Ltd & Ors Nationwide News Pty Ltd & Anor [2009] ACTSC Defamation newspaper article imputations of illegal conduct defence of truth Stuart Kirkland-Veenstra [2009] HCA Police officer s duty to apprehend under the Mental Health Act 1986 (VIC)

17 PUBLIC LIABILITY

18 Anderson THE FACTS On 14 October 2000, the plaintiff tripped and fell on the protruding lid of a serice pit located next to a concrete footpath. The fall occurred on a bright sunny day. The plaintiff would hae been able to see the ground in front of her if she had been keeping a proper lookout. Gold Coast City Council [2008] QDC 126 The plaintiff commenced Liability of Council for trip and fall on serice pit proceedings against Council as occupier of the footpath alleging, amongst other things, that Council was negligent in failing to ensure that the serice pit coers were aligned with the surface leel of the footpath. THE DECISION AT TRIAL The Magistrate dismissed the plaintiff s claim. Whilst finding that the plaintiff s eidence was, in many respects, unsatisfactory and unreliable, he did accept that the protruding serice pit lid was the sole cause of her fall. The Magistrate concluded that there was no duty to eliminate the protrusion and, een if there had been, no breach had been established. The Magistrate considered it releant that the plaintiff was a local who was familiar with the area and knew of the presence of the serice pit coer. THE DECISION ON APPEAL On appeal, the plaintiff argued that the Magistrate had erred in focusing on the plaintiff s indiidual characteristics as any duty owed was owed to the plaintiff as a member of a class, that is, a pedestrian using the footpath. The court accepted that the Magistrate erred in taking into account the personal characteristics of the plaintiff but agreed with the conclusion on liability. The court could not accept that a 1 inch protrusion would pose a risk of injury to pedestrians exercising reasonable care for their own safety. The coer was isible and obious. No special igilance was required. To the extent that there was any risk, the court held that it was ordinary, minor and obious. The court went on to consider whether, in the eent that there was a duty owed by Council, that duty had been breached. Council had a system of regular inspections in place. The footpath in question had been inspected some 11 months prior to the incident. No releant defects were noted at the time. The plaintiff contended that the footpath should hae been inspected more regularly. Council gae priority to areas within the CBD, and, while the subject footpath was close to a shopping centre and would hae reasonably high pedestrian traffic, it was not classified as part of the CBD area. The court accepted that Council s system was reasonable. Eidence had been raised at first instance that a letter had been sent to a Councillor a couple of weeks prior to the incident, complaining of the state of the footpath. There was no eidence as to when the letter was passed on to Council. The court held that there was no eidence to suggest that there was sufficient time for Council to take steps to rectify the footpath between communication of the letter and the plaintiff s fall. The court specifically rejected the plaintiff s argument that the work should hae been carried out within 3 days of receipt of the letter. The plaintiff sought leae to appeal to the Court of Appeal. The application was refused with the Court of Appeal finding that there was no basis upon which the decision of the District Court could be said to be in error. Queensland District Court: 13 June 2008 Mary Schroeder PUBLIC LIABILITY Local & State Authorities 2

19 THE FACTS On 19 January 2002, the plaintiff, Ms Hocking, was walking along the footpath in Reston Aenue, Blacktown City Council Hocking [2008] NSWCA 144 Footpath Telstra pit lid defectie immunity of Council for non-feasance under s45 of the Ciil Liability Act 2002 (NSW) Hebersham within the local goernm ent ar ea of Blacktown City Council (Council). The footpath was of concrete construction with a grass erge between the footpath and a layback kerb to the roadway. Set partly within the footpath and partly within the grass erge was a Telstra communications pit. As the plaintiff walked along the footpath she obsered the lid of the pit in front of her but saw nothing to alert her to the fact that it was defectie. She placed her foot on the middle of the lid which then rotated causing her left leg to enter the pit whilst her right leg splayed out in front of her. She was seriously injured. The Telstra pit had been installed between 1975 and NCI (a contractor to Council) installed the footpath in 1994 or 1995 and it had been inspected by Council employees upon completion. Subsequently, the pit was damaged and the lip of the pit obliterated. At the time of the plaintiff s fall, the lid of the pit was broken and irregular around almost all the edges. The most probable cause of the damage was the passage of a car onto and oer the erge and the pit lid. Council employed a maintenance inspector, Mr Shackleton, at the time of the plaintiff s fall. Mr Shackleton was not called by the Council to gie eidence, howeer, according to a statement gien by him, his duties included the inspection of roads, footpaths, kerbs and gutters for defects which he would then refer to maintenance. Mr Shackleton also stated that, if the condition of the pits or the lids of any utility were to present as an obious hazard and risk to public safety by either being missing or broken, then it was past practice for maintenance inspectors of Council to request a Council barricade to be placed at the site immediately in order to make the area safe. There was no eidence as to the frequency of inspections made by Mr Shackleton or when he last inspected the pit prior to the plaintiff s fall. The plaintiff sued both Telstra and Council in negligence. THE DECISION AT TRIAL The trial judge found that any inspection, had it been properly conducted, would hae reealed that the lip of the pit had been obliterated, creating a danger of instability. In the absence of any eidence as to the frequency of inspections, a regime of regular and properly conducted inspections by Council would hae reealed the damaged state of the pit lid. Council was found to be negligent for its failure, despite haing a regime of inspections in place, to detect that the lid was unsupported at both ends, that it was unstable and a hazard to any pedestrian who might place his or her weight upon it. Further the trial judge found that Council was negligent in failing to adequately inspect the footpath when it was created in a manner that would hae reealed that Council s contractor had failed to create a lip on all four sides of the pit on which the lid could be properly supported. No reference was made by the trial judge to s45 of the Ciil Liability Act 2002 (NSW). The plaintiff s claim against Telstra was dismissed. THE DECISION ON APPEAL Spigelman CJ (with whom Beazley JA and Campbell JA agreed) gae the primary judgment in the matter on the issue of whether Council was negligent by reason of the negligent inspections subsequent to the construction of the footpath. Spigelman CJ stated that a finding of negligent inspection was open, howeer, the appeal should be determined on the basis of Council s reliance on s45 of the Ciil Liability Act 2002 (NSW). He considered that the trial judge had made a finding that the Council did not hae actual knowledge for the purpose of s45(1) and allowed the appeal because: (a) (b) Based on Mr Shackleton s eidence, if he thought that a Telstra pit appeared to constitute a risk he would arrange for a barricade and notify Telstra. This did not occur and that is, of itself, indicatie of the fact that he did not hae actual knowledge of the risk; The trial judge said that if there had been PUBLIC LIABILITY Local & State Authorities 3

20 properly conducted inspections the council would hae been alerted to the absence of a lip and referred to the inspections resulting in a failure to detect that the lid was unsupported at both ends. These two references indicate a positie finding that there was no actual knowledge, i.e. the Council was not alerted and that it did fail to detect. Giles JA, although also allowing Council s appeal, gae a separate judgment. In relation to the issue of negligent inspection following the construction of the footpath by NCI, he found that there was an absence of any eidence to support a finding that there had not been any attempt to make a lip on the grass side when the footpath was laid. Further, such a finding was at odds with the trial judge s finding that the most likely cause of the damage was the passage of cars oer the pit lid. Therefore, there was no negligent inspection by Council at the time of construction of the footpath and this ground of the appeal was allowed. In relation to the issue of actual knowledge, Giles JA found for Council on the grounds that he did not think it was established that inspection should hae alerted Council to the pit being defectie and issues concerned with Council s actual knowledge of the risk did not arise. Tobias JA, in line with the decision of Giles JA, found that there was no eidence capable of supporting the trial judge s finding that the work carried out to the pit at the time the footpath was constructed left the pit without adequate support for its lid and therefore Council was not negligent in this regard. THE DISSENTING APPEAL JUDGMENT Tobias JA gae a dissenting judgment on the issue of whether Council was negligent for its subsequent inspections. Tobias JA found that the findings of the trial judge were tantamount to a finding that Mr Shackleton had actual knowledge of the damaged pit, or an inference could be drawn to that effect by Mr Shackleton s failure to gie eidence. Tobias JA accepted that Mr Shackleton did not hae the authority to either carry out the necessary roadwork or to consider carrying it out and so his knowledge would not be that of Council for the purposes of s45 Howeer, Mr Shackleton was designated by Council as one of its maintenance inspectors whose specific responsibility was to inspect the condition of the footpaths for the purpose of ascertaining whether they or any pits presented an obious hazard by being broken or otherwise defectie, in which eent it was his duty to refer the defectie area to maintenance. Mr Shackleton s knowledge would be that of Council so that the actual knowledge exception to its immunity under s45 would be engaged. As Mr Shackleton was part of the Council s organisation in inspecting its roads for the purpose of ascertaining hazards which required repair by Council s maintenance department, s45 does not protect Council from its failure to carry out repairs or erect a barrier around the hazard and Council s defence based on s45 fails. An application for special leae to appeal to the High Court was refused. New South Wales Court of Appeal: 25 June 2008 Melanie Niotakis PUBLIC LIABILITY Local & State Authorities 4

21 Angel THE FACTS The appellant tripped on the raised lip of a concrete slab within a footpath on 29 July 2005 at 10.30am. She fell and sustained injuries. The appellant sued the Hawkesbury City Council (Council) for damages in negligence. Hawkesbury City Council [2008] NSWCA 130 Footpath injury obious risk s45 of Ciil Liability Act 2002 (NSW) Tree roots had caused the moement of the concrete slabs. The appellant tripped at a point of the footpath where the raised lip was approximately 5cms. It was oershadowed by trees and was quite dark. Witnesses confirmed that the shade from a tree trunk went directly oer the slab join. THE DECISION AT TRIAL In relation to Council s defence pursuant to s45 of the Ciil Liability Act 2002 NSW (the Act) the trial judge relied on details of a conersation the appellant had with a Council employee after the incident in finding that Council had actual knowledge of the risk. The employee had admitted that works were scheduled for the footpath. Howeer, the trial judge ultimately found in faour of Council and said the appellant knew that trees were casting shadows oer the footpath and that footpaths were sometimes uneen. On this basis, the appellant was aware of the type or kind of risk and the risk was obious pursuant to s5f(1) of the Act. The trial judge found that een though the appellant was unaware of the precise nature of the risk, she was presumed to hae been aware of it pursuant to s5g(1) of the Act and therefore her claim failed. THE DECISION ON APPEAL The appellant appealed the trial judge s liability findings and Council filed an appeal in relation to a number of liability issues including contributory negligence as well as the damages awarded. Council relied upon the majority judgments in North Sydney Council Roman [2007] NSWCA 27 in support of a defence under s45 of the Act. The appellant argued that the Court of Appeal should adopt Roman s dissenting judgment. The Court of Appeal found it unnecessary to confirm or reject the Roman majority judgments on the basis that Council had actual knowledge of the risk and the section 45(1) exception was engaged. In upholding the appellant s appeal, the Court of Appeal found that the trial judge erred in finding that the releant risk was an obious risk within the meaning of s5f(1) of the Act. In this case, the hazard was obscured due to tree shadows and therefore not obious. The Court of Appeal reiterated that the presumption at s5g(1) of the Act does not automatically lead to a finding of no breach of duty and that these proisions hae no releance to the question of breach of duty. The Court of Appeal rejected Council s contributory negligence arguments and said that the appellant took all reasonable precautions in the circumstances. New South Wales Court of Appeal: 25 June 2008 Megan Daniel PUBLIC LIABILITY Local & State Authorities 5

22 THE FACTS On 24 Noember 2002, the plaintiff attended a waste transfer station occupied by the defendant. There was a 1.9m high steel Campaspe Shire Council De Young [2008] VSCA 129 Injury to user of Council waste facility failure to adopt recommended practice bin located at the premises with a ramp leading up to the side of the bin. The top of the bin was approximately 1.2m aboe the leel of the ramp at the point where it intersected with the bin. There was a sign at the premises stating that All waste is to be deposited in the bin only dumping of waste on the ground is prohibited infringement $100 in court $2000. The plaintiff stepped onto the ramp to deposit a teleision set into the bin. The plaintiff lifted the teleision up to the edge of the bin and dropped it in. As the teleision fell into the bin the electric plug attached to the electric cord of the teleision struck him in the eye. The plaintiff was 1.67m tall. THE DECISION AT TRIAL The jury found that the defendant was negligent in failing to construct its transfer station in accordance with recommended practice. Eidence had been led at trial from a consulting engineer. He gae eidence that a risk assessment should hae been undertaken prior to the construction of the waste station. A document entitled Guide to Best Practice At Transfer Stations was put into eidence. Photographs of other waste transfer stations in Victoria were proided showing depositing platforms aboe or leel with the top of the bins in accordance with the Guide. The defendant s waste transfer station differed substantially from that proposed by the Guide and from the construction at the other stations. The defendant argued that the eent was not reasonably foreseeable; it was a freak accident that could not hae been predicted by a risk assessment. The defendant also argued that if the station had been constructed in accordance with the Guide it would hae been necessary to hae a safety rail 1m aboe ground leel in place. The risk of the plaintiff being injured as he was, would not hae been reduced because the plug could hae caught on the safety rail. THE DECISION ON APPEAL The defendant appealed. In dismissing the appeal the Court of Appeal held that it was open to a jury to find that the risk of a plug striking the plaintiff s eye would hae been reduced if the plaintiff dropped the teleision oer a 1m rail rather than into a bin 1.2m in height. The jury was also entitled to take into account the fact that the set up exposed users to a risk of injury to their face and the fact that alternatie construction methods inoled no obious difficulty or great expense. For completeness, the Court of Appeal noted that it was also open to the jury to find that the defendant s failure to construct the facility in accordance with recommended practice was, in fact, causatie of the plaintiff s injury. Victoria Court of Appeal: 25 July 2008 Mary Schroeder PUBLIC LIABILITY Local & State Authorities 6

23 THE FACTS Western District Deelopments (Western) purchased land at Rouse Hill from Wati Pty Ltd (Wati). Wati obtained a Western Districts Deelopments Baulkam Hills Shire Council [2008] NSWSC 770 Liability of Council to compensate property owner for pure economic loss Council issued subdiision certificate despite noncompliance with water requirements subdiision consent from Baulkam Hills Shire Council (Council) in August The subdiision consent included a condition that no final plan of subdiision would be accepted unless a certificate of compliance was obtained under s73 of the Sydney Water Act 1994 (water certificate). In October 2003, Council approed the subdiision deelopment, despite Wati not haing obtained a water certificate. In so doing, Council wrongly relied on a water certificate obtained in 2001 in respect of other land. In August 2004, Western obtained deelopment consent to construct a commercial building on the land. This consent included a condition that Western present a water certificate confirming arrangements had been made for the proision of water and sewerage facilities. Western had to pay $47,511 to obtain this water certificate. Western sued Council for this amount in the New South Wales Local Court, arguing that Council had breached its duty of care to Western in issuing the original subdiision certificate to Wati in circumstances where a water certificate had not been obtained. THE DECISION AT TRIAL Council succeeded at trial. The Magistrate s decision turned on the issue of ulnerability. The Magistrate stated that in claims for pure economic loss it is not sufficient to show negligence and causation. The foreseeable ulnerability of the plaintiff also needs to be proed. The Magistrate said Council (a statutory authority) would not be liable for any economic loss to Western unless Western could demonstrate it was ulnerable, such that it was unable to protect itself from Council s want of reasonable care (see Woolcock Street Inestments Pty Ltd CDG Pty Ltd (2004) 216 CLR 515 at [23] per Gleeson CJ, Gummow, Hayne and Hayden JJ). The Magistrate considered that corporations would generally be unable to establish ulnerability, as corporations act through agents, who ought to be appropriately qualified and skilled. Here, Western was a property deeloper. A company operating in that field should hae a substantial understanding of the legal requirements of deelopment. The Magistrate said his decision would be the same if the plaintiff were not a corporation, as any person conducting property deelopments should know what they were doing. Western could hae taken relatiely straightforward steps to check the accuracy of the information it receied from Council. THE DECISION ON APPEAL The Magistrate s decision was upheld on appeal and Western s claim was dismissed. The court said that Western bore the onus of establishing that it was ulnerable. It was not releant that Western was a corporation. Howeer, the Magistrate s decision was supported by the other reasons gien by the Magistrate. The court referred to Woolcock Street Inestments and confirmed that in cases inoling negligence and pure economic loss, courts are mindful of aoiding the potential for indeterminate liability. Imposing liability for merely causing foreseeable pure economic loss is at odds with the realities of commercial competition. For this reason, a plaintiff must show it was ulnerable, ie unable to protect itself from suffering loss from a defendant s actions. The court concluded that it was open to the Magistrate to find Western was not ulnerable to loss as a result of the actions of Council, as it could hae engaged suitably qualified adisers and could hae readily taken steps to check the accuracy of the information supplied by Council. The appeal was dismissed. New South Wales Supreme Court: 31 July 2008 Sue Myers PUBLIC LIABILITY Local & State Authorities 7

24 Woods THE FACTS The 8 year old plaintiff was playing near a war memorial (the memorial) maintained by the The Nominal Defendant & Anor [2008] NSWSC 985 Child struck by car unidentified drier claim against nominal defendant and local authority Canterbury City Council (Council), when she ran out onto the road and was hit by a car. The drier of the ehicle did not stop and was neer identified. The plaintiff suffered serious injuries and was unable to gie eidence at trial as to the circumstances of the incident. The plaintiff sought damages from the nominal defendant and the Council. Against the Council she argued that the shrubbery around the memorial obscured the presence of pedestrians from motorists iew and Council had failed to maintain the area. THE ISSUES The plaintiff resoled her claim against the nominal defendant on the fourth day of the trial. She discontinued her claim against the Council. The nominal defendant maintained its cross claim against the Council brought pursuant to s5 of the Law Reform (Miscellaneous Proisions) Act 1946 and the judgment relates solely to this issue. The nominal defendant alleged that as the Council occupied and managed the memorial, it owed a duty to the plaintiff to exercise reasonable care for her safety, including properly maintaining the memorial. THE DECISION The court found in faour of the Council. Council had accepted that, as the entity with care and control of the memorial and neighbouring roads, it owed a duty of care to persons such as the plaintiff. At trial, Council argued that determining the scope or content of its duty was critical. Council argued that it was obliged to exercise reasonable care so that the memorial and neighbouring roads were safe for users exercising reasonable care for their own safety. Council submitted that it was not obliged to ensure that the road and memorial were safe in all circumstances. In this regard, Council argued that reasonable care did not require it to trim the shrubbery, as the memorial was not a designated road crossing point. Further, Council argued that the memorial was not a known playground area for local children. The court said that there was a low probability of the occurrence of this type of incident. It found that while there was always the possibility that an unaccompanied child might walk out onto to the road from the memorial, it was difficult to see why a Council acting reasonably would hae contemplated this and taken steps to trim back the shrubbery to such a low height that any child could be isible. New South Wales Supreme Court: 30 September 2008 Megan Daniel PUBLIC LIABILITY Local & State Authorities 8

25 THE FACTS Precision Products (NSW) Pty Ltd (the plaintiff) carried on a chemical warehousing and blending business from premises located in South Windsor. The Hawkesbury City Council (Council) granted deelopment approal for this purpose in December Precision Products (NSW) Pty Ltd Hawkesbury City Council [2008] NSWCA On 30 April 2002, Council 278 officers inspected the Council issued inalid premises. They were clean-up notice duty of concerned that chemicals Council to aoid economic were being stored without loss and afford procedural appropriate bunding to fairness preent pollution in case of a spill. They also mistakenly belieed that Council had only gien deelopment approal for the premises to be used as a candle-making factory. Three weeks after the inspection, and without any further contact with the plaintiff, Council issued the plaintiff with a clean-up notice. The notice required the plaintiff to cease storing chemicals on the premises and to remoe all of the chemicals within 14 days. THE ISSUES AT TRIAL The plaintiff claimed to hae suffered economic loss in complying with the notice and claimed damages from Council, alleging that the clean-up notice was inalid and had been negligently issued. It also alleged that Council was negligent for failing to afford the plaintiff procedural fairness. At first instance, the trial judge dismissed the plaintiff s claim on the basis that Council did not owe the plaintiff a duty of care. The plaintiff appealed against that decision. THE DECISION ON APPEAL The plaintiff relied upon the majority judgment in Caledonian Collieries Limited Speirs (1957) 97 CLR 202: when statutory powers are conferred they must be exercised with reasonable care, so that if those who exercise them could by reasonable precaution hae preented an injury which has been occasioned and was likely to be occasioned by their exercise, damages for negligence may be recoered. The Court of Appeal held that this principle was not of itself determinatie of the existence or scope of a duty of care. It did not justify a conclusion that wheneer a public authority exercises a statutory power it owes a duty of care to any person who could foreseeably be detrimentally affected by the exercise of the power. The Court of Appeal examined the circumstances in which a duty of care to aoid pure economic loss will be imposed. It found that in the present case, it was foreseeable that the exercise of the power may cause economic detriment to the plaintiff. Indeed, it was ineitable that the plaintiff would incur costs in complying with the clean-up notice. This, howeer, was not enough to form the basis of a duty of care. Importantly, the plaintiff was not ulnerable in the sense described in Woolcock Street Inestments Pty Ltd CDG Pty Ltd (2004) 216 CLR 515. Although the plaintiff could not hae preented the clean-up notice being issued, there were steps it could hae taken to aoid haing to comply with the inalid notice. It could hae sought legal adice, or applied to the Land and Enironment Court to hae the notice set aside. The Court of Appeal found that to impose the duty contended by the plaintiff would require the Council to balance two competing duties: a duty to the plaintiff to aoid causing economic loss and a duty to the general public to protect the enironment. In the circumstances, it was not satisfied that the Council owed the plaintiff a duty to aoid pure economic loss. The Court of Appeal went on to consider whether, had there been a duty of care, that duty would hae been breached. Although satisfied that the plaintiff had not been afforded procedural fairness, the Court of Appeal could not see any breach of duty in failing to gie the plaintiff an opportunity to respond before the notice was issued. It also found that een if the basis for the issuing of the notice turned out to be factually incorrect, the circumstances obsered during the inspection of the premises were enough for the officers to hae a reasonable suspicion that pollution had or would occur. This was sufficient to justify the issuing of the clean-up notice. PUBLIC LIABILITY Local & State Authorities 9

26 Council also relied on s43a of the Ciil Liability Act 2002 (NSW): any act or omission inoling an exercise of, or failure to exercise, a special statutory power does not gie rise to ciil liability unless the act or omission was in the circumstances so unreasonable that no authority haing the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power. The Court of Appeal reluctantly found that the decision to issue the clean-up notice was not so unreasonable that no public authority could consider it to be a reasonable exercise of its power. This was despite its concerns as to the scope of the notice and the lack of proportionality between the clean-up action required by the notice and the perceied risk to the enironment. Although the steps required by the notice were drastic, the Council officers felt that the steps were necessary to preent future incidents. The Court of Appeal therefore held that s43a would protect Council from ciil liability. New South Wales Court of Appeal: 31 October 2008 Leah McStay PUBLIC LIABILITY Local & State Authorities 10

27 THE FACTS Mr Turano was critically injured when a tree fell onto his car during a wind storm on 18 Noember He died the following day. Mr Turano s wife and 2 children were in the car with him. His wife and children sued for their own injuries and for loss of dependency. Council of the City of Lierpool Turano and Anor [2008] An issue in the case was the NSWCA 270 cause of the tree falling. The Plaintiff killed by falling tree immediate cause was the Ciil Liability Act (NSW) - strong wind. Howeer, the strength of eidence required root system showed signs of to proe causation haing been affected by a pathogen. Sometime in the 1960s, Council had built a drain under the road which took water onto nearby pasture land. In 1981, Sydney Water installed a water main which ran through the culert drain. Sydney Water had neer checked the condition of the water main after its installation. There was also a Telstra line running parallel to the water main. The tree which fell onto Mr Turano s car was located about 4 metres from the exit of the culert drain. It was alleged that the condition of the culert drain led to the soil near the tree being waterlogged oer an extended period of time, which was a cause of the pathogen affecting the tree. THE DECISION AT TRIAL The trial judge concluded that Council was liable in negligence but that Sydney Water was not liable. Council had relied upon s42 and 45 of the Ciil Liability Act 2002 (NSW) (the Act) (which essentially equate to s35 and s37 of the Ciil Liability Act (2003) (Qld)). The trial judge did not consider either section of the Act in making his findings. The trial judge dismissed the cross claims by Council and Sydney Water against each other. THE ISSUES ON APPEAL Council appealed from the trial judge s decision both in relation to primary liability and its cross claim against Sydney Water. THE DECISION ON APPEAL The Court of Appeal upheld Council s appeal, but each of the 3 appellate judges gae slightly different reasons for their decision. Two of the judges found that Council owed no duty of care to maintain the culert drainage system. It was held that gien the construction of the drainage system, it was not foreseeable that it would require maintenance. It was held that een though Council inspected the adjacent road at 3 yearly interals, this did not mean that Council had a duty to also inspect the culert. All 3 judges found that s42 of the Ciil Liability Act 2002 (NSW) (equialent to s35 of the Ciil Liability Act (Qld)) had been inadequately considered by the trial judge. Council had adduced eidence of its budget allocations, the state of its assets and the predicted cost of bringing its drainage assets to a proper condition. The Court of Appeal held that this section had to be considered at both the duty and breach stages of the consideration. All 3 judges also found that Council, if it owed a duty of care, had not breached it. All 3 judges found that the expert eidence was insufficient to establish that the injury sustained by the tree falling was caused by any breach of duty by Council. The Court of Appeal unanimously held that s45 of the Act applied, as there was no eidence that Council had the requisite knowledge for the purposes of that section. It was accepted by all parties that drainage work fell within the description of road works as releantly defined for the Act. (Nb the situation may be different in Queensland gien the different definition used.) A majority of 2 judges held that the cross appeal against Sydney Water should be upheld. The majority thought that it was foreseeable that, by laying the water main in sand which acted as a conduit for water, in circumstances where the water main was installed in a position that both breached the existing drainage system and obstructed the drainage of water from the culert, there could be an effect on the surrounding area that might cause harm. The fact that the particular risk (of a tree suffering from a pathogen) could not necessarily be foreseen, was not releant. The Court of Appeal was satisfied that Sydney Water had breached its duty of care in laying the water main, and that breach was a cause of the accident. PUBLIC LIABILITY Local & State Authorities 11

28 The claim against Sydney Water was remitted back to the District Court for an assessment of damages. New South Wales Court of Appeal: 31 October 2008 Sharon Templeton PUBLIC LIABILITY Local & State Authorities 12

29 Jackson THE FACTS The plaintiff was found unconscious lying in a concrete drain in a park with serious head injuries, a Lithgow City Council [2008] NSWCA 312 Duty to intoxicated pedestrian in respect of unfenced wall of a concrete drain in a park plaintiff with no recollection of incident and no witnesses inference of fact from all surrounding circumstances probable fracture of his T11 ertebrae, a fractured wrist and cuts and abrasions. He had no memory of the eents in question or of any eents from the middle of the day before. There were no witnesses. His girlfriend gae eidence that he had taken his dogs for a walk at about 3:30am that morning whilst intoxicated. THE ISSUES AT TRIAL The plaintiff sued the local council which had the care and management of the park, alleging that he had fallen oer a low unfenced retaining wall and down approximately 1.5m onto the concrete drain. THE DECISION AT TRIAL The trial judge found in faour of the local council. Although the trial judge found that the local authority breached its duty of care by failing to take steps to aoid the risk of a foreseeable injury to someone falling oer the low unfenced wall at night, she concluded that the plaintiff had not proen that this was the cause of his injuries as the eidence did not permit a conclusion that he fell in the way alleged. THE ISSUES ON APPEAL The plaintiff appealed the decision on the basis that the eidence as a whole did permit an inference to be drawn that the incident occurred as alleged (een though the plaintiff had no recollection of the incident and there were no witnesses). THE DECISION ON APPEAL The New South Wales Court of Appeal allowed the appeal, finding that an inference could be drawn from the eidence that the plaintiff fell oer the low unfenced retaining wall of the drain and down approximately 1.5m to the concrete drain. The Court of Appeal noted that as there was no direct eidence, it was necessary to reconstruct the eents from the objectie circumstantial eidence. The Court of Appeal held that the inference could only be made if it was aailable on the eidence and more probable than other possibilities. The Court of Appeal held that if a person approached the drain coming down the hill towards it (as alleged by the plaintiff), the low wall concealed the significant fall behind it. The presence of the drain wall was apparent during daylight but was not readily apparent during the night. The Court of Appeal accepted a number of factors supported the plaintiff s allegations and held the inference that he fell oer the wall whilst walking down the hill was more likely than any other explanation for the incident (e.g. assault). These factors included that the drop was obscured at night from that approach to the drain (but from all other sides was isible), the direction of the plaintiff s nearby home and the lie of the land (i.e. the hill that naturally led him to come down the hill at that point), the place of blood and urine at the bottom of the drain being consistent with falling off the wall and moing forward rather than simply falling ertically off the wall and the seriousness of the plaintiff s injuries. These suggested that there was a significant fall from a height as opposed to simply stumbling on a gentle slope and falling forward. Neertheless, the Court of Appeal noted that these factors did not lead themseles to an inference that he fell in the way alleged but were at least indicatie of that possibility. The Court of Appeal pointed to the report completed by the attending ambulance officers (after the plaintiff was found by passers by at 7:00am that morning). The ambulance report noted fall from 1.5m onto concrete. The Court of Appeal held that this could be taken to be the conclusion drawn by the ambulance officers as to what had happened, haing the plaintiff s unconscious body in front of them and the adantage of being able to assess the position of the body and its relationship with the wall and drain. The Court of Appeal held that this was key eidence supporting the inference that the plaintiff fell from the wall. On this basis, the Court of Appeal held that it was prepared to draw the inference that the plaintiff fell in the manner alleged. The Court of Appeal said that critical to that finding was the understanding of the place of the body, its configuration and its relationship to the surrounding structures. The Court of Appeal held that the ambulance officers had that adantage and their report was a recording of their iews. PUBLIC LIABILITY Local & State Authorities 13

30 In respect of contributory negligence, the Court of Appeal held that it could not conclude that the intoxication contributed to the fall. The Court of Appeal rejected the submission of the council that contributory negligence should be 50% as the eidence suggested that the wall aboe the 1.5m drop was unlikely to hae been seen een by a sober person at night and applied a 25% discount for contributory negligence. Accordingly, the Court of Appeal entered judgment for the plaintiff for an amount of $203,475 plus costs. APPLICATION FOR SPECIAL LEAVE TO APPEAL TO THE HIGH COURT The council made an application for special leae to appeal to the High Court, contending that the key piece of eidence relied upon by the Court of Appeal was imperfectly reproduced in the appeal book before the Court of Appeal. A question mark was cut off on the copy of the attending ambulance officers report, such that the entry should hae read? fall from 1.5m onto concrete. The High Court held that in circumstances where eidence crucial to the resolution of the appeal was not accurately before the Court of Appeal, it is in the interests of justice that there be a grant of special leae to appeal, and in addition, further orders be made to the effect that the appeal be treated as instituted, heard instanter and allowed and that the judgment and orders of the Court of Appeal be set aside and the matter be remitted for further hearing before the Court of Appeal. PUBLIC LIABILITY Local & State Authorities New South Wales Court of Appeal: 24 Noember 2008 Daniel McCormack 14

31 THE FACTS The plaintiff suffered significant sexual and other abuse from a ery young age. At 5 years of age Adams by her next friend O Grady State of New South Wales [2008] NSWSC 1257 Duty of care owed by the State to preent loss of liberty arising out of criminal act a consultant psychiatrist described her as exhibiting aggressie and iolent tendencies. At age 6 she was made a ward of the State of New South Wales (the State), and at age 8 she was placed in an institution for children. As she got older the plaintiff deeloped a history of abusie behaiour which included threatening people with knies. In January 1999 at age 17 the plaintiff stabbed her mother. She was arrested for attempted murder, assault on police and carrying a concealed knife. She was then remanded in a youth detention facility (the facility) operated by the State. The plaintiff subsequently assaulted a number of other people including her doctor, solicitor and teachers. The facility deeloped a behaiour management plan for the plaintiff in order to deal with her problems, but the plaintiff failed to comply with the plan and was suspended from the facility. A dedicated staff member was then hired to superise the plaintiff and she was permitted to return to the facility. In July 1999 the plaintiff attended a cooking class at the facility with her superisor, 3 other students and a teacher. During the class the plaintiff was gien access to a large cooking knife and she subsequently stabbed the teacher who died as a result of the wound. The plaintiff was charged with murder. The New South Wales Court of Criminal Appeal imposed a limiting term of 10 years on the plaintiff which was a custodial term pursuant to the then Mental Health (Criminal Procedure) Act 1990 (NSW) (the Act). That court also found that the plaintiff was not insane, but had diminished capacity to control her actions. The plaintiff was subsequently held in a detention centre, a women s prison, a secure facility and finally as a high security inmate at Mulawa prison. The plaintiff alleged that the State owed her a duty of care similar to the duty a school authority owes to a student. By allowing her access to a knife in circumstances where the State had knowledge of her iolent history, the plaintiff alleged that the State had breached that duty. The plaintiff claimed damages from the State for denial of liberty as a result of the imposition of the limiting term. THE DECISION The court held that a relationship giing rise to a duty of care between the State and the plaintiff would exist for certain purposes, such as physical damage suffered to the plaintiff by a staff member on the basis of an occupier s liability. Howeer, the State did not owe the plaintiff a duty to take steps to preent her loss of liberty on the grounds that the plaintiff had been held responsible (although on a diminished basis) for the death of the teacher as a result of her own criminal conduct. The court s reasoning for this decision was that if such a duty did exist, then the State would hae been required to preent access to any instrument that could be used to stab a person. This duty would be impossible to fulfil, and would be largely inconsistent with the duty imposed on the State in conducting the facility, namely to assist with and to prepare persons for a return to community life. The court also held that the Ciil Liability Act 2002 (NSW) would exclude the claim because the claim for damages was too remote from the plaintiff s criminal conduct. Further, the court held that the damage suffered by the plaintiff was the result of a lawful order issued pursuant to the Act, and was not damage that was compensable under the ciil law. Notwithstanding the aboe finding the court went on to consider the plaintiff s contributory negligence which it assessed at at least 75%. New South Wales Supreme Court: 28 Noember 2008 Bree Lyell PUBLIC LIABILITY Local & State Authorities 15

32 THE FACTS The plaintiff was inoled in a single ehicle accident in regional Western Australia on 18 January He was a Shire of Leonora Cooper [2008] WASCA 247 Duty of local authority in respect of grael road knowledge of risk when road was wet contributory negligence sales representatie working in the gold fields and was driing along a grael road in order to isit a mining site. It had been raining the night before and although there were no isible puddles, it seemed to hae been clear that the road was damp. The plaintiff was traelling at approximately 80 90kph. The plaintiff alleged that as he was coming out of a left hand corner, the back of the ehicle lost traction. After 3 unsuccessful attempts to correct the ehicle, it rolled. The defendant Council had control of approximately 1,500 1,600 kilometres of road in its Shire, which were mainly unsealed. This particular road was graded at least 4 times a year and sometimes more often. Importantly, there was a large lake system which crossed many of the roads within the Shire (including the road on which the incident occurred). As a result, the defendant knew that this section of road was prone to being slippery when wet. After the incident, the defendant installed a slippery when wet sign on the approach to the location of the incident. The sign cost about $50. THE ISSUES AT TRIAL The issue at trial was whether the defendant had breached its duty of care and if so, whether the plaintiff had been contributory negligent (particularly with respect to the speed at which he was traelling). THE DECISION AT TRIAL The trial judge found in faour of the plaintiff on the basis that the defendant knew of the risk of the road being slippery when wet but did nothing to warn road users of same. The trial judge rejected the claim for contributory negligence, finding that the plaintiff was driing at a reasonable speed (80 90kph) in circumstances where the maximum road speed was 110kph. THE ISSUES ON APPEAL The defendant appealed the decision on the basis that the finding of negligence against it was in error. It also appealed the decision with respect to contributory negligence. THE DECISION ON APPEAL The Court of Appeal dismissed the appeal finding that the releant duty of the defendant was to warn of risks which were permanent, in the sense that they stemmed from the location of portions of the roads in the lake system, which were known to the defendant and which would not hae been isible or obious to a drier taking reasonable care for their own safety. The Court of Appeal held that the defendant breached its duty of care in this regard, particularly considering that the expense, difficulty and inconenience of taking alleiating action (such as installing the warning sign) was negligible. The majority of the Court of Appeal upheld the decision regarding contributory negligence, finding that the plaintiff s reduced speed of 80 90kph was reasonable in the circumstances. The Court of Appeal pointed to the fact that the unusual slipperiness of the road surface was apparently undetectable. The dissenting judge found that traelling at a speed of 80 90kph into the bend in the road was dangerous and apportioned liability 20% to the plaintiff for his contributory negligence. Western Australia Supreme Court: 2 December 2008 Daniel McCormack PUBLIC LIABILITY Local & State Authorities 16

33 THE FACTS The plaintiffs were commercial coffee growers in the Atherton Tableland. Between September and December 1996, the defendant through the Department of Primary Industries (DPI) applied a protein bait spray to coffee plants grown by the plaintiffs. The defendant did so as part of its program to eradicate the Papaya Fruit Fly (PFF) from northern Queensland. Colbran trading as Tablelands Coffee State of Queensland; Hatmill Pty Ltd & Ors State of Queensland; Maloberti & Ors State of Queensland [2008] QCA 418 The PFF is recognised worldwide as a major quarantine pest. It was not disputed that the DPI s response once PFF was first discoered on a pawpaw farm in Cairns in October 1995 needed to be urgent. Whether public authority On 19 October 1995 a PFF owed a duty of care when o u t b r e a k c o m m i t t e e, acting in public interest consisting of officers of the DPI, was formed. An emergency campaign, including the declaring of a quarantine area, the setting up of laboratories to identify PFF and other such steps lasted until mid-december A two-pronged eradication program that included both male annihilation technique (MAT) and protein bait spraying was also implemented. The protein bait spray used was Maldison 500. It was only registered for use on certain crops against PFF and had not preiously been registered for use on coffee. It was also used in a concentration that had not preiously been tested. This initial eradication phase was an outstanding success and by early 1996 the PFF population had been reduced by 96% but there was a general understanding that eradication of the remaining population would be both difficult and time consuming. In February 1996, a mango grower complained to the DPI that his fruit was stained after spraying with Maldison 500. As a result, a manager within the DPI instructed that orchards such as the mango growers were not to be sprayed in the future. The only commercial plantations subsequently sprayed were the plaintiffs coffee plantations. By May 1996, the scientific opinion aailable to the DPI, and in particular to the managers of the eradication program, was that MAT was an effectie eradication technique but could be supplemented by protein bait spraying of breeding hotspots, being a plant or location where there is ripening fruit. Howeer, protein bait spraying should only to be used where there was a breeding source and was pointless elsewhere. Samples of coffee fruit taken from the plaintiffs properties prior to September 1996 showed that although the fruit had been stung by PFF, there was no eidence of any infestation on any of the properties. THE ISSUES The plaintiffs alleged that the DPI was negligent in spraying their properties, causing damage to their coffee plants resulting in substantial and continuing losses to each of them. The plaintiffs alleged that the DPI owed them a duty of care to properly inestigate the suitability of Maldison 500 on coffee plants, to properly apply Maldison 500 to their plants and to ensure that the spray would not cause any damage to their plants. The DPI contended that it owed no duty of care to the plaintiffs because the decision to spray the coffee plantations was a policy decision made in response to a public emergency. The DPI further contended that if it had an obligation to preent collateral damage to the plaintiffs coffee plants, then it irreconcilably conflicted with the primary public duty to eradicate PFF. THE DECISION AT TRIAL The trial judge considered all the circumstances of the case, particularly that the initial PFF emergency had passed and the ready aailability of expert scientific adice, and held that the DPI owed the plaintiffs a duty to take reasonable care to aoid damage to their plants. The trial judge held that taking steps consistent with the fulfillment of that duty was not inconsistent with the DPI s duty to eradicate PFF in the public interest. The trial judge held that that the DPI s decision to spray the plaintiffs coffee plantations was made PUBLIC LIABILITY Local & State Authorities 17

34 recourse to expert opinion, and in fact was against adice which had preiously been proided to the DPI. The spraying was undertaken when the plants could not possibly be regarded as a breeding hotspot. The court also held that the method of spraying was inappropriate, as it inoled imprecise coer spraying of the entire plant, rather than application of a measured dose to each plant. Further, the trial judge held that een a rudimentary literature search would hae reealed the risk of damage to coffee plants sprayed with Maldison 500. For these reasons, the DPI was in breach of its duty of care to each of the plaintiffs. THE DECISION ON APPEAL The DPI appealed against the decision of the trial judge. The DPI s submission that it had not breached its duty to exercise reasonable care not to harm the plaintiff s property as it was engaged in responding to a serious emergency and there was no reason why the DPI should hae known that the use of Maldison 500 posed a risk of harm to coffee plants, was dismissed. Queensland Court of Appeal: 23 December 2008 Nathan Rehbock PUBLIC LIABILITY Local & State Authorities 18

35 THE FACTS On 19 April 2003, the 24-year-old plaintiff traelled to the Lancelin Off Road Vehicle Area (the area), Shire of Gingin Coombe [2009] WASCA 92 Injury whilst off-road motorbike riding in sand dunes obious risk warning which was under the control and management of the Shire of Gingin (the Shire) specifically for the purpose of riding his motorbike on the area s sand dunes. The plaintiff had not ridden in sand dunes prior to the accident date or preiously traelled to the area. Vehicular access to the area was proided by an unsealed road which led to a car park immediately adjacent to the sand dunes. On the side of the road, the Shire erected a ery large sign which (amongst other things) included the following warning: THE OFF ROAD AREA IS A HAZARDOUS ENVIRONMENT MANY SERIOUS INJURIES OCCUR EACH YEAR. BEWARE [SHOWN IN RED] SUDDEN STEEP DESCENT, C O L L I S I O N S W I T H V E H I C L E S / PEDESTRIANS The width of the road adjacent to the sign was adequate to accommodate a ehicle pausing to iew the sign. Seenty thousand people isit the area eery year, with many incidents occurring. An hour prior to the subject incident, another incident had occurred, killing the rider. The plaintiff had no memory of the subject incident. Based on witness eidence, the plaintiff s motorbike was traelling at speed when he reached the top of a sand dune. It was not possible for the plaintiff to stop his motorbike when the steep descent on the other side of the dune became apparent. The dune in question had a gentle slope on one side rising to a crest from which there was a steep decent. The plaintiff sustained personal injuries as a result. THE DECISION AT TRIAL The trial judge found that the nature of the terrain and the actiities carried out in the area created a significant risk of injury to those engaging in recreational off-road actiities and the Shire owed a duty of care to the class of persons engaging in those actiities. The plaintiff alleged that the Shire breached its duty of care due to its failure to inspect the dunes to ealuate their state; place signs or cordon off areas of particular risk; and exclude people from the dunes altogether. The trial judge held that the dunes were eer changing and concluded it was impractical to implement a system of inspection, or to cordon off areas, especially due to the nature and type of ehicles inoled. The trial judge concluded that the Shire breached its duty of care for failing to proide a sign which adequately warned entrants of the dangers faced because in the circumstances: (a) The placement of the sign was not reasonable or satisfactory; (b) (c) (d) There was no requirement for people to stop and read the sign; It was more appropriate to put the sign in the car park; and The signs should be more specific about the dangers posed. In relation to causation, the trial judge concluded that if presented with an adequate warning sign, the plaintiff s injuries would hae been aerted, not because he would hae reduced his speed, but because he would hae first traelled slowly oer the dune to look oer the area. THE DECISION ON APPEAL The Court of Appeal allowed the Shire s appeal. It agreed that the Shire owed a duty of care to the plaintiff but said the issue in question was defining the scope and content of that duty. It did so by: (a) (b) (c) (d) looking prospectiely at the area under control by the Shire with reference to the class of entrants, not the characteristics of an indiidual; considering the character and any special promotion of the area; assuming users will exercise reasonable care for their own safety; looking at the risk exposure of the area and acknowledging that the content of the duty will be different for those undertaking a PUBLIC LIABILITY Local & State Authorities 19

36 (d) hazardous actiity compared to someone who has little or no practical choice to accept the risk; and identifying the source of the risk. With reference to these issues, the Court of Appeal said that the class of persons the Shire owed a duty to was a user taking reasonable care but oluntarily undertaking obiously hazardous recreational actiities. It noted the content of the duty was to be assessed by reference to the Shire s obligations as a public authority and the practicality of addressing the particular risks. It considered that the Shire s actie promotion of the area would expand the content of the duty as would the Shire s knowledge of other similar accidents, but it was not determinatie. Finally, when assessing the duty, the Court of Appeal said the Shire was not the source of the risk as it was not responsible for the creation of the dune or the plaintiff being at the area. As the Shire had no control oer the dunes, this diminished its duty. The Court of Appeal concluded that the trial judge was wrong to say the Shire breached its duty to warn the plaintiff of the particular dangers inoled in the actiity. It said that the trial judge had used hindsight bias in reaching the finding of breach and causation against the Shire and said there were a number of reasons why it would hae been obious to eery motorbike rider in the plaintiff s position that they should approach the crest of a dune at a speed which enabled them to stop. Further, the Court of Appeal said that the Shire s placement of warning signs (in a location where eery entrant would see them) was entirely appropriate. The content of the signs was also reasonable haing regard to the specific warning about steep slopes. PUBLIC LIABILITY Local & State Authorities Western Australia Court of Appeal: 25 May 2009 Megan Daniel 20

37 THE FACTS In May 2002 extensie works were being undertaken at the Flagstaff Hotel in Maryborough. Central Goldfields Shire Haley & Ors [2009] VSCA 101 Council s liability to a pedestrian on a footpath highway authority The hotel obtained a permit from Council to erect a temporary footpath to preent the public from inadertently entering the building site. The hotel erected the footpath in accordance with Council s directions and with the materials supplied in part by the Council. The hotel inspected the footpath daily and the Council inspected it 2-3 times per week. While walking on the footpath with her husband the plaintiff, Margaret Fay Haley, slipped and fell on plastic mesh netting which had fallen from a hoarding onto the temporary footpath. The plaintiff subsequently brought proceedings against Council and the hoteliers claiming they were liable for her injuries because they occupied and controlled the temporary footpath, and were responsible for the management, maintenance, inspection and superision of the temporary footpath. The plaintiff s claim against Council was that it was negligent due to its failure to inspect the footpath at regular interals to ensure that it was reasonably safe for pedestrians. Council denied negligence and asserted that it did not occupy or control the temporary footpath. It asserted that it was a highway authority rather than an occupier, and also alleged contributory negligence on the part of the plaintiff. THE DECISION AT TRIAL This matter was heard by a jury, which ultimately found that both Council and the hoteliers were liable for the incident. Howeer, it is important to note that the trial judge directed the jury that Council was not acting as a highway authority and that the duty of care it owed was a general one, unaffected by and independent of the principle in Brodie Singleton Shire Council and the case of Ghantous Hawkesbury Shire Council. The trial judge formed this decision because she considered that the definition of highway within s37a of the Transport Act 1983 (Vic) (the Act) excluded from immunity a structure that did not form part of the highway such as the one in this case. THE DECISION ON APPEAL Council subsequently appealed the decision on the basis that the trial judge was wrong to conclude that Council was not acting as a highway authority such that the immunity conferred by s37a of the Act did not apply. Council further submitted that the duty of care it owed the plaintiff was that in accordance with Brodie such that its duty was to ensure that the roadway or footpath was safe for pedestrians exercising reasonable care for their own safety. The Court of Appeal held that it was unnecessary to determine whether inspections or each of the other acts or omissions pleaded fell within the functions of s37a of the Act, and if so, whether they should be characterised as nonfeasance. This was because it considered there was a more compelling reason as to why the immunity did not apply, that being that the mesh netting did not comprise part of the highway. The Court of Appeal considered that the netting did not comprise part of the highway as it was placed there to protect people from tripping oer the 4 x 2 wooden props, which held up the hoarding on the boundary of the footpath and the temporary footpath. The hoarding was placed there to preent the public from entering the abutting building site and to protect the public walking on the temporary footpath. The mesh fell onto the highway from its pinned position on the hoarding. It did not form part of the highway. It was a structure and was excluded from the definition of highway under s37a (2) of the Act. No immunity could arise. The Court of Appeal also considered that the plaintiff failed to establish that the Council occupied the temporary footpath and hoarding and held that the trial judge was wrong to hae so ruled. The plaintiff failed to demonstrate that the Council was not exercising highway authority functions in exercising these powers. The Court of Appeal noted that a permit for occupancy of the temporary footpath (being part of the highway) could only hae been issued by the Council in discharge of powers that conferred upon Council, responsible for the care and management of the highway. Council was inested with that responsibility by irtue of its powers as a highway authority. The plaintiff did not PUBLIC LIABILITY Local & State Authorities 21

38 refer to any statutory powers aailable to the Council under its planning or building functions that conferred such a responsibility. The Court of Appeal noted that at best, in controlling the construction of the temporary footpath and hoarding, Council may hae exercised powers in its capacity as the building or planning authority or as the highway authority or both. Een if the control of the construction of the temporary footpath and hoarding and the subsequent inspections were conducted by the Council in discharge of building functions, no examination of any statutory powers was undertaken by the plaintiff to demonstrate that the Council had the degree of control sufficient to make it an occupier. If the Council were exercising non-highway authority powers which ested it with management and control of the temporary footpath, it would be inconsistent with the reasoning in Brodie to treat the Council s position as analogous to an occupier of land, so as to equate its liability with that of an occupier. The Court of Appeal held that the formulated duty in Brodie would apply to the Council, despite the origin of the statutory powers that gae Council the care and management of that part of the highway comprising the footpath and hoarding. Accordingly, the Court of Appeal held that the trial judge had wrongly applied s14b of the Wrongs Act 1958 (Vic), which refers to the standard of care that an occupier was required to discharge towards persons entering on his premises. As the Council did not occupy the temporary footpath or hoarding the Court of Appeal ordered judgment in its faour. PUBLIC LIABILITY Local & State Authorities Victoria Court of Appeal: 24 June 2009 Bianca Horn 22

39 THE FACTS Fremantle owned and had exclusie control of a jetty. On the jetty were two cranes owned by Fremantle Ports P&O Ports Ltd [2008] WASCA 126 Liability between joint tortfeasors for accident on jetty Fremantle, each weighing around 400 tonnes. The cranes were stationed on rail tracks to enable their moement along the jetty. When not in use the cranes were secured by pins that were placed into holes in the jetty. P&O proided steedoring serices to a third party at the jetty under a subcontracting arrangement. Under that arrangement, P&O used the cranes to unload fertilizer from ships. Although the responsibility for cleaning the jetty and the cranes fell to Fremantle, moement of the cranes was a task undertaken by P&O. It was a task which employees of Fremantle were neither authorised nor appropriately skilled to perform. One morning that cleaning of the jetty and cranes was to occur, two employees of P&O attempted to moe the cranes to enable the cleaning to take place. P&O s employees experienced difficulty in attempting to moe the cranes due to the presence of fertilizer on the rail tracks and strong wind resistance. Unbeknownst to P&O s employees, a strong wind warning had been issued for that day. The two P&O employees decided to leae the cranes unsecured until the rail tracks had been cleaned. No representatie of Fremantle was present at the jetty at this time. The team leader of Fremantle s cleaning team arried at the jetty and was told by P&O s employees that the cranes could not be secured due to fertilizer on the rail tracks. One of P&O s employees suggested that if the wheels and rail tracks were cleaned, the cranes could be moed and pinned. Fremantle s team leader suggested, instead, that the cranes be cleaned where they were. He specifically asked one of P&O s employees whether this posed a problem for him, and P&O s employee stated that it did not. When the contract cleaner plaintiff (who was not a party to the appeal) arried at the jetty around midday, Fremantle s team leader instructed him to drie a sweeper up and down the wharf. By this time Fremantle s cleaning team had commenced cleaning the first crane where it stood and one of P&O s employees had cleaned around the wheels of that crane. P&O s employees subsequently managed to moe and secure the first crane. Fremantle s cleaning team and P&O s employees went to lunch. The second crane was neither moed nor secured by P&O s employees. The plaintiff continued sweeping the jetty. The strong winds that had been experienced earlier in the day then changed direction, causing the unsecured crane to moe along the rail tracks. The crane picked up speed along the rails, ultimately crashing into the sweeper and injuring the plaintiff. THE DECISION AT TRIAL Under s7(2) of the Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1974 (WA), the contribution recoerable from any person shall be such as may be found by the Court to be just and equitable. In applying these principles, the trial judge found that Fremantle was 80% responsible for the accident with P&O liable for 20%. This apportionment of liability was calculated on the basis that the cleaning operation was the responsibility of Fremantle. Fremantle s team leader had not accepted the suggestion of P&O s employee that the wheels of the cranes and the rail tracks be cleaned so that the cranes could be moed and secured; and because Fremantle s employees took lunch and allowed the cleaning contractor to work on the jetty knowing that one crane was unsecured. THE DECISION ON APPEAL Fremantle appealed the apportionment, alleging that in the circumstances P&O should bear a greater proportion of liability. By a majority of 2:1, the Court of Appeal allowed the appeal. The majority of the Court of Appeal considered that because the principal responsibility for the operation of the cranes fell to P&O and it was foreseeable that the wind could moe the unsecured crane, P&O s employees should hae insisted that each crane be moed and secured before cleaning operations took place. The majority of the Court of Appeal held that their failure to do so created a responsibility in P&O much greater than PUBLIC LIABILITY Workplace Claims 23

40 20% and the Court of Appeal doubled P&O s liability to 40%. The dissenting Court of Appeal Justice refused to disturb the trial judge s finding largely on the basis that the employees of P&O had no power to direct the actions of Fremantle s employees and had in fact suggested that the cranes be moed and secured before cleaning. Western Australia Court of Appeal: 17 June 2008 Nathan Rehbock PUBLIC LIABILITY Workplace Claims 24

41 THE FACTS The plaintiff, Mesud Kazic, was injured on a construction site in Sydney on 23 February The plaintiff was present at the site in the course of his employment as a gyprock fixer with Capital Construction. Eastside Scaffolding & Rigging Pty Ltd Kazic [2008] NSWCA 146 Apportionment of liability amongst multiple defendants on construction site At the time of the incident, s om e worke r s we r e dismantling scaffolding on site. The scaffolding was being stacked in the icinity of where the plaintiff was working. The plaintiff was struck in the head by a piece of scaffolding that had been thrown into the stack by one of the workers. The plaintiff sustained soft tissue injuries to his neck, back and right shoulder, and subsequently deeloped a psychological condition. The plaintiff commenced proceedings against his employer (Capital Construction), the head contractor (John Holland), the subcontractor who supplied the scaffolding to the site (Waco Kwikform) and the contractor who proided the labour to Waco Kwikform, Eastside Scaffolding and Rigging Pty Ltd (Eastside). Howeer, there was another scaffolding contractor on site, and not all the scaffolders were employed by Eastside. THE DECISION AT TRIAL The trial judge analysed the system for dismantling the scaffolding. The process inoled scaffolders on the outside of the building passing the components through an open window to another scaffolder, who then stacked them inside the building in preparation for their remoal. The incident occurred as a result of a scaffolder working inside throwing the scaffold components against the wall where the remaining scaffolding was stacked. A length of piping bounced off the wall and struck the plaintiff. The trial judge found Eastside liable on the basis that the method employed to moe and stack the scaffolding was unsafe. The trial judge also found Eastside icariously liable for the negligence of its employee. In relation to apportionment, the trial judge found Eastside 75% responsible for the incident. The trial judge found that the head contractor (John Holland) and the plaintiff s employer (Capital Construction) bore minimal responsibility for the incident and found each of them 5% liable. Waco Kwikform s share was 15% because it was more directly inoled in the dismantling of the scaffolding. ISSUES ON APPEAL Eastside appealed the decision in the first instance on 21 grounds. In particular, Eastside argued that the trial judge had erred in the apportionment of liability and in finding that it was the employer of the negligent scaffolder. Eastside, together with John Holland and Waco Kwikform, also challenged the assessment of damages. THE DECISION ON APPEAL The Court of Appeal dismissed all the grounds of appeal. Eastside challenged the factual basis on which the trial judge concluded that it employed the negligent scaffolder. In circumstances where another contractor had been engaged to remoe part of the scaffolding, Eastside sought to argue that there was insufficient eidence to support a finding that Eastside employed the negligent scaffolder. This argument was dismissed by the Court of Appeal. In order for the Court of Appeal to interfere with the finding at first instance, a patent error must be eident. No such error was apparent in the present case. It was uncontentious that Eastside had workers on site and it was open for the trial judge to accept that they could be identified by the colour of their t-shirts. The trial judge also drew a Jones Dunkle inference from the fact that Eastside did not call its workers to gie positie eidence that they were not inoled in the incident. The inference was challenged by Eastside, but this argument was also dismissed by the Court of Appeal. Eastside also appealed the trial judge s finding that it was 75% liable for the incident. Eastside argued that the other defendants contributed substantially to the incident. It argued that:- (a) (b) John Holland, as the head contractor, failed to adequately direct the actiities of the arious trades and sought to speed up the process of remoing the scaffold; Waco Kwikform, as the scaffolding contractor, PUBLIC LIABILITY Workplace Claims 25

42 (c) failed to gie adequate directions with respect to safety measures; Capital Constructions, the plaintiff s employer, permitted the plaintiff to carry out his duties in the same area as workers engaged in the dismantling of scaffolding The Court of Appeal reiewed the law on how the issue of apportionment should be approached. The Court of Appeal obsered that the question of apportionment is a discretionary determination about which reasonable minds may differ. The Court of Appeal agreed with the trial judge s obseration that is it is a matter of proportion, of weighing considerations, of balance and relatie emphasis. Further, an appellant court is only authorised to interene in circumstances where the trial judge has exercised his or her discretion in a way that is unreasonable or plainly unjust. In the present situation, the Court of Appeal concluded that it was open for the trial judge to conclude that the scaffolder s causal act of negligence supported a finding that Eastside was 75% responsible for the plaintiff s injury and dismissed the appeal. New South Wales Court of Appeal: 25 June 2008 PUBLIC LIABILITY Workplace Claims Nick Robson 26

43 Bourk THE FACTS Mr Bourk ( Bourk ) was an experienced and competent electrical linesman employed by Power Sere Pty Ltd & Anor [2008] QCA 225 Liability of employer breach of statutory duty Power Sere Ptd Ltd (Power Sere). On commencing employment, Bourk was supplied with a new safety harness and pole strap. There was no eidence this safety equipment did not comply with the releant Australian standards. On 26 August 1999 (6 weeks after commencing employment), Bourk fell nearly 11 metres while securing a new cross arm to a power pole. A clip on the end of the pole strap was not attached to the safety harness. After the fall, Bourk s superisor inspected the pole strap clips and found that one of the clips sometimes remained open instead of springing back to a closed position as it would normally do. This occurred only intermittently. The superisor thought the clip was otherwise undamaged. An officer from the Department of Workplace Health & Safety also inspected the pole strap and found one of the clips did not always spring back to the closed position. She thought the clip looked worn with minor indentation and a clay contaminant throughout. The pole strap was subsequently lost while in the custody of the Department. Power Sere had no system for inspecting or maintaining the safety equipment. THE DECISION AT TRIAL The claim by Bourk was dismissed. The trial judge found that Bourk fell because the clip on his pole strap became detached from his safety harness due to some defect in its structural mechanism. The trial judge rejected the claim in negligence due to lack of eidence. The trial judge did find that Power Sere had breached its obligations under s28 of the Workplace Health & Safety Act 1995, but dismissed the claim on the basis Bourk had failed to establish that the breach of s28 caused his injuries as there was no eidence that had a system of inspection been in place the defect would hae been detected. THE DECISION ON APPEAL The finding by the trial judge that Power Sere breached its obligation under s28 of the Workplace Health & Safety Act 1995 was not challenged on appeal. The Court of Appeal confirmed the trial judge was correct in saying that a plaintiff must proe the breach of the Act was causatie of the injury. The Court of Appeal found that if an employee is injured through the failure of a necessary piece of safety equipment proided by the employer, there is a breach of s28 as the employer had failed to ensure the employee s safety. In these circumstances, causation is established. The Court of Appeal found that there was no requirement in s28 for a plaintiff to proe that a system of inspection would hae detected any defect. Any defences aailable to the employer under the Act then become releant. As it was unchallenged on appeal that the employer did not hae the benefit of any defence under the Act, the question of what may or may not hae been detected by a system of inspection was irreleant. Bourk s appeal was successful and he was awarded damages of $694, An application for special leae to appeal to the High Court was refused. Queensland Court of Appeal: 8 August 2008 Paul Birkett PUBLIC LIABILITY Workplace Claims 27

44 Hoad THE FACTS The plaintiff alleges that on 29 January 2004 she suffered a back injury as a result of lifting a box containing meat products. She was required to pack boxes and place them onto a coneyor belt in the course of her work as a packer. The boxes weighed around 25 [2008] NSWSC 30kg each. Peel Valley Exporters Pty Ltd [2008] NSWSC 981 The plaintiff was employed Liability of host employer/ by Meat Industry Serices occupier consideration of Pty Ltd and was working whether pre-existing at Peel Valley Exporters asymptomatic condition premises (an abattoir) at the would hae become time of the incident. The symptomatic plaintiff proceeded against Peel Valley Exporters (the host employer) only. Her employer was not a party to the proceedings. There was lengthy eidence gien at trial about the system of work employed at the abattoir, the relationship between the plaintiff s employer and host employer, the precise nature and mechanism of the plaintiff s injury and the impact of her preiously asymptomatic lumbar spine degeneration upon her condition. THE DECISION The court accepted that the plaintiff adopted a system of work whereby she repetitiely retrieed meat from a coneyor belt and turned 180º to place the meat into a box sitting on a table behind her. The plaintiff then lifted the full boxes of meat, and was required to bend whilst carrying the boxes, in order to place them onto another coneyor belt at below waist height. This was found to be an unsafe system of work. The host employer had neer adised the plaintiff not to perform the work in the manner she did, and as such it permitted or tolerated the unsafe system of work employed by the plaintiff. All of the plaintiff s co-workers, managers and superisors were employees of the plaintiff s employer, not the host employer. Howeer, the plant at the abattoir was purpose-built for the host employer. As such, the plaintiff s employer had a limited ability to implement changes or influence the system of work the host employer had in place. Although the plaintiff s employer had a non-delegable duty to the plaintiff and was responsible for the unsafe system of work, the actual and ultimate control of that system and the premises, was the responsibility of the host employer. It was only a matter of corporate choice and conenience that the work was carried out by indiiduals whose group certificates were furnished by a different entity. The court found that the host employer was in a better position than the plaintiff s employer to require the workers to adhere to a system of work. A notional apportionment of 75% was made against the host employer and 25% as against the employer. Section 151Z(2)(c) of the (NSW) Workers Compensation Act 1987 (WCA) required an assessment of the damages which the host employer would be able to recoer from the employer (in excess of the amount of statutory compensation paid by the employer). Section 151Z (2)(c) of the WCA enabled the court to discount the award of damages payable by the host employer to the plaintiff by the amount the host employer would hae been entitled to recoer from the employer, had the plaintiff proceeded against the employer. In accordance with s151g of the WCA had the plaintiff sued her employer, she would only hae been entitled to recoer damages for economic loss. Applying s151g and the apportionment of 75/25 to the figures awarded by the trial judge, the plaintiff s damages were reduced by 25% of her award for economic loss. The plaintiff had a degeneratie lumbar spine condition (which was preiously asymptomatic) at the time of commencing work for the host employer. As a result of the incident on 29 January 2004, the plaintiff sustained herniation of a thoracic disc, requiring surgery. The court accepted that the plaintiff also sustained a disruption to her spinal mechanics as a result of that surgery which caused or materially contributed to a deterioration in her lumbar spine, resulting in further surgery. The court concluded that all of the plaintiff s injuries were attributable to the work incident. Howeer, the court noted that the plaintiff may hae become disabled as a result of the natural PUBLIC LIABILITY Workplace Claims 28

45 progression of her pre-existing lumbar spine condition, een if the work incident had not occurred. The court determined that it was appropriate to discount the award of damages for the chance that this would hae occurred. The court applied an increased discount for icissitudes of 25% to reflect this prospect. New South Wales Supreme Court: 19 September 2008 Hannah Sains PUBLIC LIABILITY Workplace Claims 29

46 Leeder THE FACTS The plaintiff was employed by the defendant as a prison officer at the Hakea Prison in Western Australia. The State of Western Australia [2008] WASCA 192 Assault of prison officer by prisoner failure by employer to warn plaintiff of prisoner s preious aggressie conduct causation On 1 February 2000, the plaintiff escorted a mental health nurse to one of the medical obseration cells to facilitate the assessment of a prisoner, Mr Willett. The plaintiff opened the cell door and let the nurse in. A moment later, Mr Willett jumped up and struck the plaintiff causing him to injure his back. On the day before the incident, Mr Willett made threats of iolence against another prison officer, and engaged in aggressie behaiour. It was as a result of this behaiour that Mr Willett was placed in a cell in C wing. The prisoner was moed from cell C5 to C3 as a result of the window in cell C5 being broken. While there was no direct eidence on the point, it was inferred that the window was broken by Mr Willett. Significant force would hae been needed to break the window. The plaintiff commenced proceedings alleging that his injuries were caused by the negligence of the defendant as the occupier of the prison. THE DECISION AT TRIAL The trial judge accepted that the defendant owed the plaintiff a duty to take reasonable care to aoid exposing him to an unnecessary risk of injury. While it was reasonably foreseeable that the plaintiff and other prison officers might be assaulted by prisoners, the trial judge found no breach of duty in the present situation. The trial judge accepted eidence gien by the defendant s expert witness that Mr Willett s conduct on the day before the incident was a pretty low leel eent. The trial judge did not accept that the window in cell C5 was broken by Mr Willett. Further, the defendant was entitled to assume that Mr Willett had settled down, and was under no duty to warn the plaintiff about Mr Willett s behaiour the preious day. The defendant raised a causation issue. One of the plaintiff s arguments was that had he been properly warned about Mr Willett s behaiour, he would hae requested a 3 officer unlock procedure (where 3 officers are present with pepper spray, restraints and a baton). The defendant argued that een if such a procedure had been implemented, it would not hae changed the outcome of the assault due to the fact that the cell was not large enough to permit 3 prison officers to enter at the same time. The trial judge accepted this argument and concluded that the assault would hae taken place een if the defendant had implemented the measures that would hae been requested by the plaintiff. THE ISSUES ON APPEAL The plaintiff appealed the decision. The plaintiff contended that the trial judge had erred in respect of a number of factual matters such as finding that Mr Willett did not break the cell window and had calmed down prior to the incident. As a consequence of these factual errors, the plaintiff also argued that the trial judge erred in finding that there had been no breach of duty by the defendant. THE DECISION ON APPEAL The Court of Appeal allowed the appeal and was quite critical of the trial judge s findings. The Court of Appeal found the trial judge s reasoning unclear and that he failed to properly identify the eidence that supported a number of factual findings. The Court of Appeal held that the only rational explanation for the damage to the window in cell C5 was that it had been broken by Mr Willett. It was also apparent that the trial judge seriously underestimated the significance of the matters that occurred on the day before the incident. The Court of Appeal agreed that the duty owed by the defendant was to take reasonable care to aoid exposing the plaintiff to an unnecessary risk of being assaulted by a prisoner. The Court of Appeal held that the trial judge erred in concluding that there had not been a breach of this duty. By failing to inform the plaintiff of the prisoner s prior behaiour, the plaintiff was preented from making a proper assessment of the situation before opening the cell door. This constituted a breach of the defendant s duty to take reasonable care for the plaintiff s safety. PUBLIC LIABILITY Workplace Claims 30

47 The Court of Appeal then turned its mind to the issue of causation. It first looked at the eidentiary burden. It held that once a plaintiff had demonstrated that an injury had occurred following a breach of duty a prima facie causal connection will be established and the defendant has an eidential burden to produce eidence that the breach had no effect or that the injury would hae occurred een if the duty had been performed. In light of the Court of Appeal s findings, the eidential burden was on the defendant to demonstrate that the assault would hae occurred een if alternate measures had been adopted. The Court of Appeal obsered that the defendant did not adduce any eidence regarding measures that the plaintiff might hae reasonably adopted in order to preent the assault. The Court of Appeal concluded that the only finding open to it was that the defendant s breach of duty caused the plaintiff s injury. Western Australia Court of Appeal: 19 September 2008 Nick Robson PUBLIC LIABILITY Workplace Claims 31

48 Thomson THE FACTS On 22 September 2003 the plaintiff was injured whilst working on a farm as part of the Commonwealth Goernment Work for the Dole scheme. The defendant administered the scheme and had contractual obligations to proide and organise labour to work on arious sites. Twin Towns Employment Enterprises Limited [2008] NSWSC 213 Failure to proide safe place and system of work failure to superise and failure to proide proper equipment The plaintiff was directed to erect a cyclone wire mesh fence onto existing fencing wire. A trench ran adjacent to the fence. Both the fence and the trench were on a downhill slope. Whilst the plaintiff was using both hands aboe his head to attach the wire mesh, he slipped on soil from the recently dug trench and fell into the trench, shattering his left tibia and fibula. THE DECISION The court firstly considered what, if any, was the nature and extent of the duty owed by the defendant to the plaintiff. And secondly, if there was a duty, was the duty breached and what damages had the plaintiff suffered. The court found that the relationship of the defendant and the plaintiff was akin to that of an employer and employee. The court found the circumstances of this case fell within the description referred to by the Court of Appeal in Rockdale Beef Pty Ltd Carey [2003] NSWCA 132 that if a controlling undertaking occupies the site (and) fails to select competent co-workers or to adopt a safe oerall system it should be liable as would be an employer in respect of such failing. Therefore, the defendant owed a duty to take reasonable care to aoid exposing the plaintiff to unnecessary risks of injury. The court determined that the defendant failed to proide the plaintiff with a safe place and system of work, superise the plaintiff and proide the plaintiff with proper equipment, which caused the plaintiff to slip and injure himself. The court held that should it be incorrect in finding the relationship was akin to an employment relationship, the defendant had an oerriding responsibility to take precautions for the safety of the plaintiff because of the clear proximity between the plaintiff and the defendant, as set out by Mason J in Steens Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 at 31. The court found that the risk to the plaintiff was foreseeable and rejected the notion that the plaintiff had contributed to his injuries. The plaintiff was awarded $199, in damages. New South Wales Supreme Court: 24 September 2008 Sophie Robinson PUBLIC LIABILITY Workplace Claims 32

49 Knight THE FACTS The plaintiff was employed by the defendant as a security guard at the defendant s casino at Townsille. He had been employed for a period of 8 years prior to the subject incident. The plaintiff claims that on Tabcorp Holdings 22 Noember 2003 he and Limited [2008] QSC fellow security officers 282 eicted a patron from the Plaintiff employed as security defendant s casino. They officer at defendant s casino took the patron by the arm plaintiff injured whilst and commenced to walk him remoing a patron from the towards the door. Initially casino the patron offered little resistance, but as he was moed towards the foyer, the patron became increasingly resistant. The plaintiff, his co-worker and the patron were required to pass down two sets of stairs, and as they approached the first set of stairs, the patron lifted his feet off the ground, causing his weight to be thrown onto the plaintiff and another security officer. He did this again at the commencement of the second set of stairs. The plaintiff felt pain in his back as they were descending the first set of stairs and as he was bearing part of the patron s weight. The plaintiff sued the defendant in its capacity as his employer for negligence and breach of statutory duty. He claimed that he sustained a serious injury to his back because he had not been properly instructed as to a safe and effectie manner to moe a patron who was resisting being eicted. THE DECISION The plaintiff succeeded in proing that the defendant breached its duty of care and its statutory duty, and that this led to his injury. The court held that there was an absence of adequate training of security officers in appropriate pain constraint holds. Such holds inole a risk of injury to the persons to whom they are applied, and require a system of training and ongoing monitoring to ensure that security officers are aware of the safe method of performing these holds. The plaintiff successfully proed that he had not been adequately instructed in the use of such a hold, and therefore had neither the competence nor the confidence to attempt to apply such a hold, which could hae preented him from being in a situation where he was required to bear the patron s weight. The court further held that a properly instructed security officer would hae applied a pain constraint hold before arriing at the first leel of stairs, and that if such a hold had been applied, the patron would not hae lifted his feet from the ground causing the plaintiff to bear his weight. Queensland Supreme Court: 13 Noember 2008 Sue Myers PUBLIC LIABILITY Workplace Claims 33

50 Austen THE FACTS The plaintiff was employed by the defendant and was part of a team constructing a large luxury yacht East Coast Yacht Finishing Pty Ltd & Anor [2008] QDC 268 Plaintiff slipped on a staircase on a luxury yacht under construction for the third party. On 23 April 2003 the plaintiff fell down a set of stairs within the yacht that allowed moement between the arious decks, allegedly injuring his back. The stairs were a metre or slightly more in width and bounded by walls on both sides. The goings and risers were quite steep, but were not the ladder like stairs often encountered on boats that should be negotiated by descending backwards. There were no temporary handrails erected in the area, and there was a layer of dust oer the horizontal surfaces. The plaintiff sought damages from the defendant in its capacity as his employer for its breach of duty and/or breach of the Workplace Health and Safety Act The defendant in turn brought a third party claim against the owner of the yacht. THE DECISION The court held in faour of the defendant and dismissed the plaintiff s claim. It was held that the installation and remoal of temporary tread coers and handrails would be inconenient, impractical and unreasonable. It was held that temporary handrails would pose problems of their own. It was further held that it was an essential part of the work being performed in the area that there would be sanding back of coat after coat of resinous material applied oer the aluminium essel, which created considerable amounts of dust. It was ineitable that dust would settle on horizontal surfaces, and it was not practical to hae cleaners constantly acuuming up that dust. The court held that persons such as the plaintiff with experience on such essels could be trusted to hae sufficient experience to understand the nature of the workplace and the predictable presence of dust that may sere to reduce friction. It was held that just as stairs are hazardous, some jobs necessarily inole hazardous aspects, such as the existence of dust on essels under construction. Queensland District Court: 19 Noember 2008 Sue Myers PUBLIC LIABILITY Workplace Claims 34

51 Tamerji THE FACTS The worker was employed as a taxi drier. In October 2000, the worker was injured when a motor ehicle collided with the taxi he was driing. Rhee [2008] NSWCA 314 Right of workers compensation insurer to recoer payments made to worker where worker receied damages from a third party s151z(1)(b) of the Workers Compensation Act 1987 (NSW) negligence. The worker commenced proceedings against the drier of the motor ehicle and was successful. Damages were assessed in accordance with the Motor Accident Compensation Act 1999 (NSW) (the MACA). Damages were assessed at $265,827. The worker s damages were reduced by 5% to $252,536 on account of contributory Prior to the worker commencing proceedings against the drier, he had receied workers compensation payments totalling $192, which was comprised of weekly payments ($109,752.90), medical expenses ($33,050.29) and a lump sum payment of $50,000. After the worker had receied the drier s settlement cheque, the employer claimed an entitlement to be repaid the full amount of its payments of workers compensation, that is, $192, THE DECISION AT TRIAL The employer claims that the worker s liability to repay the compensation arose pursuant to s151z(1) (b) of the Workers Compensation Act 1987 (NSW) (the WCA) which releantly proides that: (1) if the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker s employer to pay damages in respect of the injury, the following proisions hae effect: (a). If the worker recoers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker s injury under this Act, and the worker is not entitled to any further compensation (4) if a worker is liable under sub-section (1) (b) to repay any money out of damages recoered by the worker, the worker is not liable to repay the money out of any damages payable after the date of recoery by way of periodic or other payments for loss of future earnings or earning capacity or for future expenses. The employer argued that it was entitled to a payment of $100,555 which comprised the full amounts assessed for past economic loss ($35,700), past medical expenses ($54,271) and past domestic assistance ($10,584). The trial judge held that the employer was entitled to the amount of money it claimed, together with costs and interest. THE DECISION ON APPEAL The worker appealed. The worker submitted that the employer was not entitled to recoer the amount of damages in relation to past medical expenses which were incurred after the workers compensation insurer declined indemnity, and in relation to past domestic assistance. The worker argued that s151z(1)(b) should be applied in relation to indiidual heads of damage such that if an employer has not paid compensation concerning a particular head of damage that the worker suffers, the worker has no obligation to make any payment to the employer out of the amount of damages that has been awarded to the worker under that head of damage. The Court of Appeal disagreed and stated that the only place in s151z where particular heads of damage are mentioned is in s151z(4). In the Court of Appeal s iew s151z(1)(b) operates wheneer a worker recoers any amount of compensation under the WCA for an injury, and later recoers damages in respect of that injury from some person other than the employer. In that circumstance, subject to s151z(4) the total amount of damages that the worker recoers is a fund from which the worker is liable to repay the total amount of compensation that a person has paid in respect of the injury. PUBLIC LIABILITY Workplace Claims 35

52 The Court of Appeal considered that the practical operation of s151z(1)(b) is that the amount of money that a worker ultimately receies is whicheer is the greater of the amount of compensation paid, and the amount of damages awarded. This is consistent with ensuring that the amount of money that the worker ultimately recoers by reason of the injury is no greater than the amount of damages awarded. Accordingly, the Court of Appeal dismissed the worker s appeal. New South Wales Court of Appeal: 26 Noember 2008 Alison Hunt PUBLIC LIABILITY Workplace Claims 36

53 Parsons THE FACTS The plaintiff was employed as a garbage collector by the defendant. The defendant contracted with Baulkham Hills Shire Council to collect garbage from homes within the Shire. J.J. Richards & Sons Pty Limited [2008] NSWCA 331 Employee garbage collector injured while dragging bin he knew to be heay duty to warn The plaintiff was injured while attempting to drag a fallen bin away from a residential drieway. The plaintiff had drien his truck up to the bin and attempted to lift the bin using the pincers on the truck. The truck tilted and the bin fell from the pincers, landing on its side. The plaintiff knew from the fact that the truck had tilted that the bin was heay. The plaintiff got out of the truck and attempted to assess the weight of the bin. He kicked the bin, which felt solid all the way down. He then knelt down and grabbed the handle. He was unable to lift the bin at all, which led him to conclude that the bin weighed at least 200 kilograms. The plaintiff was one of 8 garbage collectors working within the area. The garbage collectors worked alone, but were in constant communication ia the trucks two-way radios. It was not uncommon for garbage collectors to seek adice or ask for help ia the radios. The plaintiff conceded that he could hae asked one of the other nearby garbage collectors for assistance. The plaintiff was concerned that if he left the bin on the drieway a car could run into it. He therefore decided to drag the bin away from the drieway. In his experience, dragging bins was much easier than lifting them. He dragged the bin approximately 1m across the drieway. In doing so, he seerely injured his lower back. THE DECISION AT TRIAL The plaintiff sued a number of parties, including his employer and the occupant of the residential premises. The claim against the occupant was dismissed, as was the claim against the plaintiff s employer. This was based on the trial judge s finding that it would hae been unreasonable to instruct garbage collectors not to attempt to moe fallen bins. It was satisfied that the procedures in place, including instructing garbage collectors not to attempt to lift extremely heay items and proiding a means by which they could seek assistance if necessary, were reasonable. THE DECISION ON APPEAL The plaintiff appealed only against the dismissal of the claim against his employer. The Court of Appeal agreed that a blanket ban on moing dropped bins was not realistic. There were many factors which could affect whether or not a dropped bin should be moed, including its weight, the material on which it fell and its location. It was completely possible that there would be circumstances where it would be relatiely easy to moe a fallen bin. It was reasonable for the defendant to leae its employees to use their discretion in deciding whether to moe fallen bins, particularly where they had been instructed not to attempt to lift extremely heay objects. The appeal was dismissed with costs. New South Wales Court of Appeal: 2 December 2008 Leah McStay PUBLIC LIABILITY Workplace Claims 37

54 Seage THE FACTS On 22 September 2003 the appellant, a detectie sergeant in the police serice, injured his back while attempting to lift a heay desk in the detecties room at the Wollongong police station. The injuries he sustained led to his medical discharge from the police [2008] NSWCA serice on 2 September State of New South Wales [2008] NSWCA 328 Police officer injured when C o n c e r n e d t h a t t h e attempting to moe a heay detecties room at the desk unassisted at the station was not large enough police station whether to house the increasing employer breached number of detecties, the non-delegable duty of care appellant had preiously approached the commander of the station, Mr Trott, and suggested that a strike force room be created. Mr Trott had agreed, and the appellant arranged for the troops to hae the strike force room up and running by the time he returned from leae. Upon his return the appellant noticed that the room remained relatiely unchanged, and so proceeded to moe the desk and sustained his back injury in the process. The appellant commenced proceedings against his employer, the State of New South Wales, claiming damages for his injuries which he alleged had been caused by breaches of a common law duty of care owed to him by his employer. THE DECISION AT TRIAL Although satisfied that reorganising the strike force room fell within the scope of the appellant s duties as a police officer, the trial judge found that it was not reasonably foreseeable that the appellant would attempt to moe the desk by himself without warning or requesting assistance. Accordingly, the trial judge held that the appellant s employer was not negligent for failing to take precautions against the risk of harm, because that risk of harm was not foreseeable and an ordinary person in the employer s position would not hae taken those precautions. THE DECISION ON APPEAL The appellant appealed the trial judge s decision. The Court of Appeal confirmed that the duty owed by an employer to its employees as described by the High Court in Czatyrko Edith Cowan Uniersity [2005] HCA 14 is a non-delegable duty to take reasonable care to aoid exposing them to unnecessary risks of injury. The Ciil Liability Act 2002 (NSW) (CLA) applied in this instance as the appellant did not fall within the definition of a worker under the Workers Compensation Act A worker, for the purposes of the Workers Compensation Act only, includes a police officer if he or she joined the police serice after 1 April The appellant joined the serice in The Court of Appeal then applied s5b of the CLA, concerning negligence, to determine whether the risk of the appellant taking upon himself the task of moing a heay desk without assistance from others and sustaining an injury in the process was foreseeable, not insignificant, and whether a reasonable person in the employer s position would hae taken precautions against that risk of injury. The Court of Appeal held that the risk was not reasonably foreseeable and was not not insignificant (i.e. the risk was insignificant). The appellant was in a senior superisory position and had some 27 detecties under his control. This, in the Court of Appeal s iew, increased the unlikelihood that the appellant would undertake the relatiely menial task of moing an obiously heay desk unassisted. The Court of Appeal went further and noted that een if the risk was considered not insignificant (using the language of s5b of the CLA), a reasonable person in the employer s position would not hae taken steps to reduce or eliminate that risk as the probability of the risk materialising was ery low. In the Court of Appeal s opinion, just as employers are not obliged to warn employees of the risks of cutting themseles on the knies in the kitchen, scalding themseles when preparing a cup of tea, or falling when ascending or descending stairs, the employer in this case was not obliged to warn the appellant of the risks inoled with moing furniture. The appellant s appeal was dismissed. New South Wales Court of Appeal: 5 December 2008 Jenni Mole PUBLIC LIABILITY Workplace Claims 38

55 George THE FACTS The plaintiff was a truck drier. On 12 June 2003 he consulted the defendant, a general practitioner, Surery [2009] NSWSC 5 Whether defendant liable to indemnify employer for compensation paid to plaintiff complaining of a sudden onset of chest pain that day while pulling a pallet onto the tailgate of his truck during the course of his employment. The plaintiff a t t e n d e d 4 f u r t h e r consultations with the defendant between 17 June 2003 and 14 July 2003, complaining on each occasion of continuing chest pain. The defendant ordered a chest x-ray and prescribed arious medications but did not adise the plaintiff to stop working until the chest pain ceased. On 22 July 2003, the plaintiff suffered a heart attack during the course of carrying out his duties for his employer. He was subsequently diagnosed as suffering from left entricular (heart) failure and underwent a heart transplant. The defendant admitted that he owed a duty of care to the plaintiff and that he breached that duty on seeral occasions between 12 June 2003 and 14 July The defendant also admitted that his negligence caused the plaintiff s heart attack, associated complications and subsequent heart transplant. The plaintiff subsequently made a claim against his employer for workers compensation pursuant to the Workers Compensation Act 1987 (NSW) (the Act), in respect of the onset of chest pain and subsequent heart attack. The employer s workers compensation insurer accepted liability for the plaintiff s claim and paid weekly compensation to the plaintiff, in addition to medical expenses and lump sums pursuant to the Act. After the plaintiff commenced proceedings against the defendant, the employer filed separate proceedings seeking, releantly, the following declarations: 1. That the employer was entitled to an indemnity pursuant to s151z(1)(d) of the Act from the defendant in respect of the compensation paid by the employer to the plaintiff; and 2. That the plaintiff was liable to repay the compensation paid to the plaintiff by the employer out of any damages payable by the defendant to the plaintiff. THE ISSUES Section 151Z(1)(d) of the Act proides that where a worker has receied compensation pursuant to the Act, and the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker s employer to pay damages in respect of that injury, the compensation payer is entitled to be indemnified by the person liable to pay those damages. The defendant argued that s151z(1)(d) did not apply because the injury for which the employer paid compensation was caused under different circumstances to those that created a liability in the defendant to pay damages. The defendant argued that the circumstances that created the liability of the defendant were the plaintiff s attendances with the defendant and his failure to properly treat him. By contrast, the plaintiff argued that the circumstance causing the injury for which compensation was paid was the plaintiff undertaking heay work during the course of his employment. THE DECISION The court considered that the defendant s failure to treat the plaintiff did not create any liability for him to pay damages to the plaintiff until the plaintiff suffered damage in the form of the heart attack on 22 July Accordingly, when the cause of action against the defendant accrued, it did so as a result of an injury for which compensation was payable under the Act. Accordingly, s151z(1)(d) applied. New South Wales Supreme Court: 12 January 2009 Belinda Thatcher PUBLIC LIABILITY Workplace Claims 39

56 Kuhl THE FACTS The plaintiff receied injuries during the course of his employment as a trades assistant Zurich Financial Serices Australia Ltd on behalf of WOMA (Australia) Pty Ltd (deregistered company) & Anor [2009] WADC 4 Liability of contractors for worker s liability existence and scope of duty of care with Transfield Construction Pty Ltd (Transfield) on or about 19 Noember The plaintiff s job inoled cleaning floors at a plant by remoing iron fines and metalised material using a acuum hose. A power unit created the suction for the acuum hose which was mounted on a truck owned by WOMA (Australia) Pty Ltd (WOMA), a deregistered company. WOMA s insurer stood in its place as second defendant. The plaintiff alleged that at the time of the incident, the unit was under the control of an employee of Hydrosweep Pty Ltd (Hydrosweep), also a deregistered company. Hydrosweep s insurer stood in its place as the third defendant to the claim. On the day of the incident, the plaintiff was using the acuum hose in actie suction mode when it became blocked. The plaintiff alleged that as he was attempting to free the blockage in the hose, a Hydrosweep employee approached, took the hose, unblocked it and passed it back it to the plaintiff. The plaintiff alleged that as he attempted to take the hose from the Hydrosweep employee, his left arm was drawn into the suction inlet opening of the hose, causing him to sustain personal injuries. THE ISSUES The plaintiff issued proceedings against WOMA and Hydrosweep, alleging that they were negligent for failing to superise the plaintiff and for failing to instruct and train him in proper operation of the acuum hose. The plaintiff also alleged that they had failed to warn him of the hazard posed by the hose. The plaintiff also alleged that there should hae been a protectie mesh guard oer the suction inlet of the hose, a capacity to terminate the suction of the hose, and that the hose should hae had an appropriate grip handle. As against Hydrosweep, the plaintiff alleged that it was negligent for failing to instruct its employee not to pass the hose to co-workers. The plaintiff also made allegations of negligence against Transfield, but it transpired that the claim was statute barred pursuant to releant workers compensation legislation. THE DECISION The court considered the role of each of the parties. It found that Hydrosweep had simply contracted to proide a truck and operators to the second defendant. In these circumstances, it had no duty to train, warn or instruct the plaintiff as to the manner in which he should carry out the work he was performing for Transfield. It was Transfield s responsibility to proide a system of work for the plaintiff. The court also found that as there was no eidence that Hydrosweep owned or controlled the hose, it was not negligent for failing to instruct its employee not to pass the hose to another person. In relation to the claim against WOMA, the court found that it was reasonably foreseeable that the acuum facility WOMA proided to Transfield would be used by Transfield s employees when cleaning the plant, and that negligence on its part may cause injury or damage to the employees. The court found that WOMA had a duty to proide a acuum facility suitable for its purpose, which did not constitute risk of injury to those exercising proper care. Howeer, the court considered that WOMA was entitled to expect that people using the hose would be instructed on how to use it and would be properly superised. The court found that the hose was suitable for its purpose under these conditions. In these circumstances, the possibility of injury occurring was not reasonably foreseeable. The court stated that in any eent, it was not possible to identify a releant breach and to causally relate the incident to it because the plaintiff had been reticent in his account of precisely how the incident occurred. Western Australia District Court: 22 January 2009 Belinda Thatcher PUBLIC LIABILITY Workplace Claims 40

57 THE FACTS Mr Ewers, the proprietor of a brick cleaning business, fell 4 metres to the ground when J-Corp Pty Ltd Coastal Hire Pty Ltd [2009] WACA 36 Whether retainer to supply scaffolding included an implied term to maintain it in safe condition after erected duty to proide system to detect and remedy interference with erected scaffolding scaffolding he was standing on gae way. He brought an action for damages against J-Corp Pty Ltd (J-Corp), the principal builder, Coastal Hire Pty Ltd (Coastal Hire) who supplied the scaffolding and the scaffolder who erected the scaffolding, Mr Gaynor. Prior to the incident, Mr Gaynor had been contacted by J-Corp to rectify a problem with the scaffolding as a result of it being tampered with. Mr Gaynor was unable to attend and agreed with J-Corp that an employee of Coastal Hire, Mr Briggs, should fix the scaffolding. Mr Briggs adised Mr Gaynor that he felt confident about fixing the scaffolding. Mr Briggs had worked for Coastal Hire as a truck drier and had no experience in the building industry. Mr Briggs inspected the scaffolding and moed some planks back into place. He then adised Mr Gaynor what he had done and Coastal Hire was also informed. Mr Gaynor and a representatie of Coastal Hire attended the site late that afternoon to ensure the scaffolding had been rectified. THE DECISION AT TRIAL Mr Ewers was successful at trial against all defendants and liability was apportioned equally. The trial judge held that it was the duty of Coastal Hire to proide and erect scaffolding and to ensure that it remained safe and secure. This would inole the proision of a system for the prompt discoery of interference to erected scaffolding, as eidence had been gien that tampering with scaffolding was a common problem on building sites. Accordingly, the trial judge concluded that Coastal Hire had breached its duty to Mr Ewers. The trial judge also found the other defendants had breached their duty to Mr Ewers by delegating the responsibility of checking the scaffolding to an unqualified person. J-Corp pleaded that it was an implied term of its contract with Coastal Hire that their serices would be rendered with due care and skill and that they had breached this term. The trial judge held that no such implied term in the contract existed by which Coastal Hire undertook to be soley responsible for dealing with problems relating to scaffolding. J-Corp and Coastal Hire appealed the trial judge s decision. THE DECISION ON APPEAL The Court of Appeal held that Coastal Hire had agreed to hire the scaffolding to J-Corp. Coastal Hire s contractual obligations were limited to erecting the scaffolding and dismantling and remoing it at the end of the hire period. Eidence was gien from the building industry that once scaffolding is erected it is regarded as being under the control of the main contractor of the site. Accordingly, the Court of Appeal held that it was J-Corp s responsibilty to ensure that the scaffolding remained in an as-constructed state. The Court of Appeal also held that although a representatie of Coastal Hire had taken it upon himself to inspect the scaffolding after Mr Briggs repaired it, this did not gie rise to a duty of care on the part of Coastal Hire. There was also nothing to suggest that Mr Briggs work did in fact hae any effect on Mr Gaynor s inspection. The judgment against Coastal Hire was set aside. In relation to its appeal, J-Corp argued that Coastal Hire had agreed to erect the scaffolding, and pursuant to s74 of the Trade Practices Act 1974 (Cth) it was an implied term of the contract that the serice of erecting scaffolding would be rendered by Coastal Hire with due skill. The trial judge had found that there was no implied term by which Coastal Hire would be responsible for dealing with the problem of interference with the scaffolding from time to time. The Court of Appeal found that on the eidence the contract was only one for hire and erection of the scaffolding and there was no obligation to maintain it after it was erected. The Court of Appeal found that by the implied term, Coastal Hire agreed that it would erect the scaffolding with due care and skill but that this did PUBLIC LIABILITY Workplace Claims 41

58 not extend to maintaining the scaffolding after it was erected. The appeal by J-Corp was dismissed. Western Australia Court of Appeal: 6 February 2009 Amanda Cann PUBLIC LIABILITY Workplace Claims 42

59 THE FACTS The plaintiff suffered an injury when she slipped on a wet and greasy patch on the floor adjacent to the kitchen at the Mount Pritchard & District Community Club Ltd (the club). She was employed by the club as a bar attendant. Bon Appetit Family Restaurant Pty Ltd Mongey [2009] NSWCA 14 Warning to insurers and legal counsel regarding untenable appeals where no factual or legal error THE DECISION AT TRIAL The kitchen and adjacent area were used by the appellant to proide catering serices at the club. The appellant was found to be the party primarily responsible for keeping that area clean. The plaintiff brought proceedings against the appellant only. She did not pursue the club as her employer. The proportionate responsibility of the club was still releant to the assessment of damages recoerable against the appellant. The trial judge assessed the proportionate responsibility of the club at 20%. The plaintiff did not satisfy the trial judge that she had sustained a degree of permanent impairment of at least 15%. In the circumstances, she was precluded from pursuing a claim against the club pursuant to the Workers Compensation Act 1987 (NSW). The plaintiff s award of damages against the appellant was therefore reduced by the whole amount of the club s potential liability, or 20%, and the plaintiff was awarded 80% of the total assessment of damages of $345,622. THE ISSUES ON APPEAL The appellant appealed on the following 2 grounds: The apportionment between the club and the appellant. The appellant argued that the proportionate responsibility of each party was 50%; and The trial judge s assessment of economic loss. THE DECISION ON APPEAL The Court of Appeal was unable to find any significant or demonstrable error of fact or law. In relation to apportionment, the Court of Appeal noted authority that questions of apportionment gie rise not only to ealuatie judgments, but to a finding that cannot readily be characterised as right or wrong. The Court of Appeal rejected both grounds of appeal and upheld the trial judge s findings. The Court of Appeal was highly critical of the appellant for haing brought the appeal, which it considered untenable. The Court of Appeal warned that such appeals were a waste of the parties resources and the court s time, and may in future be isited with an order for indemnity costs in faour of the respondent and/or sanctions for the solicitors inoled. The appeal was dismissed with standard costs. New South Wales Court of Appeal: 17 February 2009 Hannah Sains PUBLIC LIABILITY Workplace Claims 43

60 Macey THE FACTS The plaintiff injured his shoulder as he was climbing through a manhole at the Bayswater Power Station (the station) which was operated by Macquarie Generation (Macquarie). Macquarie Generation & Anor [2009] NSWCA 79 Duty of occupier to gie instructions for safe access to manhole whether task was simple and obious At the time of the incident, the plaintiff was employed by HIS Engineering Serices Pty Limited (HIS) which was undertaking contract maintenance work at the station. The plaintiff commenced a claim against Macquarie for breaching its duty pursuant to the Occupational Health & Safety Act 2000 (NSW) (the Act), including its duties to instruct the plaintiff on a safe way to enter a manhole. Macquarie cross claimed against HIS on the basis that the employer owed a non-delegable duty of care as well as duties under the Act. Macquarie also claimed that HIS had breached certain contractual obligations to Macquarie. THE DECISION AT TRIAL The central issue to the case was the way in which the plaintiff had entered the manhole. The plaintiff alleged that as he entered the manhole he twisted and turned to face the wall, and as he did so his foot slipped on the step of the ladder inside the manhole causing him to jerk his shoulder. Macquarie argued that the usual way of entering the manhole was to do so in a forward direction which did not inole turning or twisting the body so as to face towards the wall. Macquarie s mechanical engineer gae eidence that in his 25 years of employment at the power station he had not seen anyone enter the manhole in any other way, nor had he heard of an injury occurring as a person entered a manhole. This eidence was contradicted by an HIS employee who was the hole watcher at the time of the incident. He was responsible for ensuring that all personnel who had entered the manhole also exited. He gae eidence that eery single person goes into a hole differently. The trial judge rejected the plaintiff s eidence that he slipped on the foot rest and that he had done so as he was turning to face the wall. The trial judge held that the injury occurred when the plaintiff twisted his body as he entered the manhole in a forward direction. The trial judge made this finding on the basis of the ersions of eents contained in the plaintiff s medical reports and the plaintiff s expert engineering report, and on the basis that there had been no prior incidents of slipping on the manhole ladder. Gien that the plaintiff had argued that Macquarie was negligent for failing to instruct him to enter the manhole in a forward direction, and gien the trial judge s finding that the plaintiff did in fact enter the manhole in a forward direction, the trial judge dismissed the plaintiff s claim and found in faour of Macquarie. THE DECISION ON APPEAL The main issue on appeal was whether the trial judge s finding as to the way the plaintiff entered the manhole was correct. The Court of Appeal held that the trial judge s findings and inferences were open to her on the eidence particularly haing regard to the description of the incident in the plaintiff s engineering report, the eidence gien by the plaintiff in cross-examination and the history of the incident as described by the plaintiff to his doctors. The Court of Appeal further held that the finding that the incident occurred when the plaintiff twisted his body as he entered the manhole in a forward direction (as opposed to slipping on the ladder) was fatal to the appeal. The Court of Appeal noted that the only ground of negligence relied on by the plaintiff in the appeal was that Macquarie had failed to instruct the plaintiff as to a safe manner to enter the manhole, ie. in a forward direction. On the basis of the trial judge s finding that the plaintiff was entering the manhole in a manner in which the plaintiff suggested on appeal he ought to hae been instructed, the plaintiff had not established that the failure to gie any instruction caused his injury. The Court of Appeal considered that the appeal should be dismissed for this reason only. The Court of Appeal also held, howeer, that in any eent no warning or special instruction was required to be gien in relation to the manhole. The Court of Appeal referred to the case of O Connor Commissioner for Goernment Transport [1954] HCA 11 which proides that special instructions are not required where the task was so simple and PUBLIC LIABILITY Workplace Claims 44

61 obious a matter requiring neither special skill [nor] knowledge to decide and ordinarily treated it as a matter for the man doing the job. The Court of Appeal noted that in circumstances where there was nothing particularly unusual about this manhole and where people using the manhole on a regular basis regarded the task of accessing it as an ordinary matter for which no warning was required, instructions were not reasonably required to be gien. The Court of Appeal therefore found that Macquarie s duty of care did not require it to proide instructions and the plaintiff s appeal was dismissed. As the Court of Appeal did not find Macquarie liable to the plaintiff, contribution issues between it and the employer were not considered. New South Wales Court of Appeal: 9 April 2009 Alison Hunt PUBLIC LIABILITY Workplace Claims 45

62 THE FACTS The plaintiff was employed by the first defendant as a labourer. Whilst working for the first defendant he sustained a knee injury. At the suggestion of the first defendant, the matter was Papadopoulos MC Labour Hire Serices Pty Ltd & Anor [2009] VSC 193 Implied terms in labour hire contracts s74 Trade Practices Act (implied warranties) not referred to the first defendant s WorkCoer insurer. The first defendant paid for the plaintiff s treatment which included an arthroscopy. Had a WorkCoer claim been made the plaintiff would hae had the benefit of an occupational rehabilitation program, a return to work plan and a return to work co-ordinator. After returning to work the plaintiff was hired out to work for the second defendant to perform labouring duties. The plaintiff was injured whilst moing rolls of material which weighed between 25 and 50kg. No mechanical assistance was proided. A jury returned a erdict against both defendants. The question of what relief either defendant was entitled to against the other was separated out for judicial determination. THE ISSUES The second defendant made claims against the first defendant for breach of contract, including breach of the warranties implied by s74 of the Trade Practices Act (TPA). Specifically, that s74(1) implied into the agreement a warranty by the first defendant that it would exercise due care and skill in selecting and assigning a labourer to the second defendant. It also sought contribution pursuant to the Wrongs Act. The first defendant sought contribution from the second defendant pursuant to the Wrongs Act. THE DECISION The court held that in respect of each term the second defendant alleged was implied into the contract, it had to establish that the term was necessary for the reasonable or effectie operation of a contract of the nature entered into between the parties. The court held that terms such as workers being proided by the first defendant being reasonably fit to engage in labouring work were not necessary for the reasonable or effectie operation of the contract. The court relied upon eidence that if a labourer was not suitable for the tasks they were required to perform the second defendant would adise the first defendant at the end of the day and a replacement labourer would be proided the next day. The court held that there was no breach of the warranties implied by the TPA. The second defendant contracted for a qualified and reasonably competent builder s labourer. It receied what it contracted for. Accordingly, the second defendant s claims for damages against the first defendant were dismissed. In relation to the contribution claims between the parties, the court held that the causal potency of the second defendant s act was much greater than that of the first defendant. Howeer, the departure from the standard of care of the first defendant in failing to refer the plaintiff s initial injuries to its WorkCoer insurer, (haing occurred oer a long period of time), was greater than that of the second defendant. The court weighed those factors up and apportioned liability equally between the defendants. Victoria Supreme Court: 21 May 2009 Mary Schroeder THE POLICY 46

63 THE FACTS The plaintiff was injured on premises owned and occupied by Bostik Australia Pty Ltd (Bostik) Bostik Australia Pty Ltd Liddiard & Anor [2009] NSWCA 167 Labour hire like arrangement between defendant and employer whether usual labour hire principles could be applied when he lifted a 45 gallon drum that was used as a rubbish bin. Bostik operated a packaging business on site. The plaintiff s employer, Brolton Industries Pty Ltd (Brolton), operated an engineering business on part of the site. In addition Brolton supplied both production and non-production labour to Bostik. There was no written agreement between Bostik and Brolton in respect of these arrangements, howeer Brolton inoiced Bostik for the supply of both the production and non-production labour. The plaintiff was a general hand on site and his serices were proided to Bostik. Part of his duties inoled emptying 44 gallon drums used as rubbish bins. He had been carrying out the task approximately twice a week oer 6 8 months prior to the incident and had not preiously encountered a bin of any substantial weight. He had neer receied any instruction on how to perform the task. He was also unaware of the terms of the arrangement between Bostik and Brolton. THE ISSUES There was no issue regarding the premises themseles (ie. Bostik s duty as occupier). Rather, the plaintiff sued Brolton and Bostik claiming both had breached their duty of care to him in respect of the system of work. THE DECISION AT TRIAL The trial judge held that both defendants were liable in negligence and apportioned responsibility 40% to Brolton and 60% to Bostik. THE ISSUES ON APPEAL Bostik appealed against the finding that it was liable in negligence and also appealed against the apportionment of liability contending that if it was liable, then its proportion of liability should be no more than 20%. Bostik acknowledged that the system of work was defectie but contended that it did not owe a releant duty of care to the plaintiff. THE DECISION ON APPEAL The Court of Appeal by majority held that whether an occupier of premises owed a duty of care to an employee of an independent contractor depended upon the relationship between the occupier and the contractor. The Court of Appeal held that neither the legal arrangement nor the practical circumstances in which the work was undertaken imposed a duty on Bostik with respect to taking steps to ensure that a safe system of work for the plaintiff was in place, as an employee of an independent contractor. The Court of Appeal pointed to the fact that the plaintiff was not employed by Bostik and receied no instruction or direction from Bostik s manager. Bostik did not look after the training, superision or instruction of Brolton employees nor was there any reason for Bostik to deise a safe system of work for the plaintiff. Accordingly, Bostik did not seek to control the actiities of the plaintiff nor to direct him how to perform those actiities. Unlike the typical labour hire cases, there was not a transfer of control from Brolton to Bostik and therefore, Bostik did not owe a duty to the plaintiff regarding the system of work. The appeal was upheld. New South Wales Court of Appeal: 26 June 2009 Daniel McCormack PUBLIC LIABILITY Workplace Claims 47

64 THE FACTS On 4 May 1999, Mr Bagnara, the buildings maintenance manager of the Northaen The Uniting Church Takacs [2008] NSWCA 141 Liability of commercial property owner to tradesman when requesting a quotation Retirement Village (owned by the Uniting Church in Australia Property Trust) (the defendant), inited Mr Takacs (the plaintiff), to inspect the roof of the retirement illage and proide a quote for painting it. Whilst measuring the roof, the plaintiff stumbled and fell 9 metres from the roof, sustaining multiple injuries. The plaintiff claimed damages for breach of statutory duty under Regulations 73 and 74 of the Construction Safety Regulations 1950 (NSW), and in negligence. THE DECISION AT TRIAL The first issue was whether the defendant was carrying out construction work for the purposes of Regulation 73. The trial judge found that een though the defendant predominately proided aged care residential facilities, the employment of a building maintenance manager, whose duties were confined to building maintenance and the organisation of contractors, meant that the defendant was engaged in the building industry, and therefore within the term construction work. The trial judge concluded that the defendant had breached Regulation 73. The second issue was whether the defendant was in charge of construction work for the purposes of Regulation 74. The trial judge said that the request for a quote, the method of gaining access, and the requirement to measure the roof were all directed by Mr Bagnara, the building maintenance manager. He drew the inference that Mr Bagnara remained in charge of the building work and failed to comply with Regulation 74. The trial judge also concluded that the defendant breached its duty of care to the plaintiff in that it did not fence the area requiring work, and did not proide a safe platform, a safety harness, hand-holds and foot-holds. The trial judge found in faour of the plaintiff. The plaintiff was awarded $913,390 in damages plus costs. The trial judge found that the plaintiff departed from the standard of care of a reasonable person and determined contributory negligence at 20%. THE DECISION ON APPEAL The Court of Appeal held that a person who is carrying out building work is obliged to comply with Regulation 73. There was no eidence that Mr Bagnara or the defendant were carrying out building work of which the painting work was a part. It was not possible to identify any building work that the defendant was carrying out, aside from the particular painting job for which the plaintiff was asked to quote. The Court of Appeal agreed that the defendant was not in any different position from a householder engaging a contractor to do a particular piece of work on the householder s property. Accordingly, the Court of Appeal held that the trial judge was in error in finding that Regulation 73 applied. The Court of Appeal also held that the question of who was in charge of the construction work for the purposes of Regulation 74 should be one of oerall responsibility for the conduct of the building work. The person in charge of the work is not merely who was in charge of or occupying the property on which the work was being done. Mr Bagnara asked for a quote to be gien, proided access, proided a ladder and requested that the plaintiff measure the roof. This did not mean, howeer, that he or the defendant had oerall responsibility of the building work. Accordingly, the trial judge was in error in finding that Regulation 74 applied. The defendant owed a duty of care to the plaintiff, arising from its occupation of the property and its initation to the plaintiff to come on to the property and proide a quote. When determining the issue of breach, the Court of Appeal held that the risk of falling from the roof was ery small, and as the plaintiff was an experienced painter, the risks inoled in going onto the roof were obious. Gien the small risk inoled, the Court of Appeal held that it was reasonable for the defendant to inite a tradesman to go on to the roof. It was unreasonable for the defendant to hae to gie a warning, or to proide safeguards such as walking planks, a safety harness, hand-holds and foot-holds PUBLIC LIABILITY Occupier s Liability 48

65 or a fence. It was concluded that the defendant did not breach its duty of care. The appeal was allowed. An application for special leae to appeal to the High Court was refused. New South Wales Court of Appeal: 20 June 2008 Sarah Haigh PUBLIC LIABILITY Occupier s Liability 49

66 Benton THE FACTS On 27 October 2003 the plaintiff was stepping down from the cabin of a prime moer he had been Scott s Refrigerated Freightways [2008] NSWCA 143 Liability of owner of a ehicle truck drier injured while alighting from ehicle driing when he slipped on the top step, causing him to fall backwards onto the ground. The prime moer he was exiting was not the ehicle he usually droe in the course of his employment as a truck drier. The steps were affixed to the side of a fuel tank located under the ehicle and had slip resistant features running along the length of the steps. The plaintiff brought a claim for damages for personal injuries against the defendant, as the owner of the prime moer (the defendant was not his employer). THE DECISION AT TRIAL The trial judge found in faour of the defendant. The trial judge did not find that any higher duty was owed to the plaintiff in circumstances where the owner of the ehicle was not an employer. Further, the trial judge did not find that the steps were in any way dangerous due to defect. THE ISSUES ON APPEAL The issue on appeal was whether the trial judge gae sufficient weight to eidence that the defendant had in place a defectie system of maintenance. The plaintiff alleged that the condition of the steps was such that the top step was worn and the bottom step had been pushed in towards the fuel tank located under the ehicle. The plaintiff further alleged that he had slipped in the past on 2 or 3 occasions when using the steps. The plaintiff alleged that the insufficient slip resistance and reduced distance between the step and the fuel tank caused him to fall and suffer injury. THE DECISION ON APPEAL The appeal was dismissed. The Court of Appeal did not accept that the top step had been worn to an extent that called for it to be repaired or replaced, or that the damaged step was in any way dangerous to one gaining access to and from the ehicle. The Court of Appeal was satisfied that the steps were not defectie at the time of the incident, considering the plaintiff had used the steps 3 times on the morning of the incident without injury. Had the steps been defectie and required maintenance or replacing, then the plaintiff would hae notified the defendant by completing a formal report. In considering the releant duty of care, the Court of Appeal was satisfied that there was no difference between the duty of care owed by the defendant, as the owner of the prime moer being hired to the plaintiff, and the duty of care owed in the eent that the employer owned the prime moer. The Court of Appeal stated in obiter that an owner s delegable duty to a drier to take reasonable care that the ehicle is safe for use could be discharged in circumstances where the ehicle s defect was the direct result of a professional third party s incompetent repair or maintenance works. While these circumstances did not arise here, the Court of Appal held that an owner would hae satisfied its duty to exercise reasonable care by entrusting such repairs and maintenance to a professional third party. New South Wales Court of Appeal: 24 June 2008 Alison Hunt PUBLIC LIABILITY Occupier s Liability 50

67 Varela THE FACTS The plaintiff was shopping at the defendant s Pennant Hills fruit and egetable market on the afternoon of Friday 8 April She slipped and fell on crushed grapes and sustained personal injuries. Harris Farm Markets Pennant Hills Pty Ltd [2008] NSWDC 116 Plaintiff slipped on crushed grapes at fruit market whether adequate systems of cleaning and inspection in operation The plaintiff alleged that the defendant failed to clean the aisle, failed to establish an adequate system of cleaning and inspection, and/or failed to ensure that the non-slip mats placed on the floor were unable to moe. The defendant denied it had been negligent, and alternatiely argued that the plaintiff had been contributorily negligent by failing to exercise due care for her own safety against what it said was an obious risk. THE DECISION The court considered liability according to the Ciil Liability Act 2002 (NSW). The defendant owed a duty of care to implement a system of cleaning and inspection to ensure spillages would be promptly identified and remoed. The store had high leels of customer traffic and a high potential for spillages. The defendant therefore owed a duty to establish a system of almost constant inspection to ensure the aisles remained clean and that the non-slip mats it proided remained appropriately positioned. According to the defendant, a cleaner was employed to patrol the store and keep it neat and tidy. Stackers moed around the releant area keeping it clean. Sweep and mop checks were to be completed eery 15 minutes, with the releant employee signing off to confirm the job had been completed. The court found that the fall occurred approximately metres from the fruit stand and that there were a few crushed grapes on the floor. This suggested the grapes had been on the floor for some little time at least, and had been trodden on by customers. In addition, the floor mats were not positioned where the claimant fell. Rather, they were under the fruit stand, protruding about 20cm. Again, the court found the mats were likely to hae been out of position for some little time at least, after haing been displaced by customers. The court placed considerable emphasis on the failure of the defendant to call releant witnesses, such as the releant cleaners and superisor who worked on the day of the incident. The court inferred that eidence from these witnesses would not hae assisted the defendant s case. As a result, the court was not satisfied that the system of cleaning and inspection described by the defendant was in fact operating properly when the incident occurred. It found the defendant negligent and liable to compensate the plaintiff for her injuries. This decision highlights the importance for occupiers of public premises to establish and document appropriate systems of cleaning and inspection. The mere presence of a spillage is not conclusie proof that an occupier has breached its duty of care. Howeer, in highly patronised public premises with a high risk of spillages, the mere presence of a spillage may gie rise to an inference of such a breach. An occupier will then need to proide complete and compelling eidence that an appropriate system of cleaning of inspection was in fact operating at the releant time in order to demonstrate the discharge of its duty of care. New South Wales District Court: 18 July 2008 Sue Myers PUBLIC LIABILITY Occupier s Liability 51

68 THE FACTS The plaintiff, an employee of the Uniersity of Adelaide (the respondent), inspected construction BI (Contracting) Pty Limited Uniersity of Adelaide [2008] NSWCA 210 Duty of care to a bystander exposed to asbestos spray at a building site for a short period of time acceptance of expert opinion work being carried out on the Medical School on or about This inspection was of a short duration and at a time when BI Contracting Pty Ltd (the appellant) was fireproofing structural steel beams by spraying asbestos factors into the atmosphere. As a result, the plaintiff deeloped mesothelioma many years later and eentually succumbed to the disease. The plaintiff commenced principal proceedings against the respondent alleging that he had contracted the condition as a result of his exposure to asbestos dust at the time of inspection of the respondent s premises. He succeeded and was awarded damages. The respondent cross-claimed against the appellant for contribution towards the damages awarded to the plaintiff. THE DECISION AT TRIAL The trial judge accepted that the appellant was aware of the risk to the plaintiff of being exposed to asbestos fibres, een for a ery short period of time. The trial judge outlined steps that the appellant should hae taken to guard against this risk, which included preenting access by sealing off the site during times when asbestos fibres were being sprayed into the atmosphere and erecting a sign to the effect that potentially lethal asbestos fibres were being sprayed into the atmosphere at that time. The trial judge apportioned 35% of the liability against the appellant. THE ISSUES ON APPEAL The central issue was whether there was eidence to support the finding of a foreseeability of risk of injury to the plaintiff back in The Court of Appeal had to decide whether to admit opinion eidence, relating to the leel of medical knowledge concerning asbestos and its effects back in 1961, in circumstances where the witnesses proffering the eidence were not practicing in the field at that time. The appellant alleged that it did not owe the plaintiff a duty of care at the time of spraying asbestos fibres into the atmosphere in 1961, as it was not reasonably foreseeable that a person standing nearby for a short period of time namely, 5 to 10 minutes, would be at risk of its effects. THE DECISION ON APPEAL The appeal and cross-appeal were dismissed. Eidence put forward relating to the leel of medical knowledge concerning asbestos and its effects at the time of the incident was accepted, despite experts only haing medical literature to rely on when proiding eidence of this nature. The Court of Appeal held that the appellant ought to hae adopted one or all of the steps outlined at trial, as the known, established, scientific learning as to the dangers of asbestos was that exposure at a sufficient leel oer a sufficient period could lead to the deelopment of asbestosis, lung cancer or mesothelioma. The appellant s failure to preent access onto the construction site and failure to proide any warning of its operations, which included spraying asbestos fibres into the atmosphere, constituted a breach of its duty owed to the plaintiff. New South Wales Court of Appeal: 19 September 2008 Alison Hunt PUBLIC LIABILITY Occupier s Liability 52

69 THE FACTS The plaintiff was a courier drier. On 22 August 2000 he was required to collect a parcel from AAP Communications Serices, which was located on leel 2 of a 17 storey commercial building in Adelaide. The Valeondis Permanent Trustee Aust Limited & Ors [2008] SADC 143 Ceiling in lift collapsed system to control maintenance to ceiling in lift plaintiff used the goods lift to trael to and from the second floor. On the way down, the lift shuddered slightly, causing the ceiling to collapse and strike the plaintiff on the face. There was a major fit-out of the building taking place around the time of the incident. The ceiling in the goods lift was remoable. It consisted of 4 square tiles fitted into seeral interlocking bars. The court accepted the plaintiff s eidence that when he entered the lift to trael up to the second floor, 2 of the ceiling tiles were sitting on top of the others. The first, second and third defendants all owned the building at some time. Colliers International Pty Ltd (Colliers), the fourth defendant, was the managing agent for the building. Kennedy Consolidated Pty Ltd (Kennedy), the fifth defendant, was contracted by Colliers to inspect and maintain the building (including the lifts) on a monthly basis. THE DECISION Expert eidence was tendered in relation to the design and construction of the ceiling of the lift. The court accepted that the design of the lift was adequate, and did not contribute to the occurrence. Eidence was gien that Kennedy had performed work on the lift on 2 August 2000 and 17 August The first serice inoled supplying and installing a T-bar grid and stainless steel tiles to the ceiling. The second serice inoled repair work on the ceiling of the lift. The court held that there was no eidence that Kennedy s worker had not reinstated the ceiling tiles appropriately. The court examined the system that Colliers had in place for allowing contractors to access the goods lift. This consisted of general conditions being gien to all contractors using the lift. The conditions proided that the ceiling was only to be remoed by Otis Eleators or by consultation with the building manager. Colliers also performed regular inspections of the lift, which were followed up by reports to the owner. Howeer, there was eidence that Colliers manager had, without Colliers knowledge or authority, allowed building contractors to remoe and reinstate the ceiling in the goods lift at their discretion, in contraention of the system. The manager simply asked that the contractors exercise care when using the goods lift. The court held that the ceiling had been replaced or interfered with by an unknown person prior to 22 August This was most likely a contractor who failed to reinstate the ceiling properly. The court held that Colliers did not hae a good system in place to ensure that contractors had replaced the ceiling in the lift in a competent manner. It had also not remoed the ceiling of the lift for the duration of the fit-out work, which would hae been a sensible measure. The fact that Kennedy was required to serice the lift twice during the fit-out period should hae put Colliers on notice that the ceiling was not being treated properly. As such, Colliers was negligent in allowing contractors to remoe and replace the ceiling without any superision, as well as failing to remoe the ceiling until the fit-out work was complete. The court examined the contract between the building owners and Colliers as a whole and held that Colliers was the owners agent and not an independent contractor. It followed that the owners of the building were liable for Colliers negligence (although there was a dispute as to which of the first, second or third defendants owned the building at the releant time). District Court of South Australia: 31 October 2008 Kylie Powell PUBLIC LIABILITY Occupier s Liability 53

70 Ruaro THE FACTS On 24 August 2003, the appellant s yacht (the yacht) was destroyed during a seere storm on Sydney Harbour. Another essel (the Paana) dragged its moorings and collided with the yacht. The yacht was then drien by strong winds across Rose Bay, [2008] FCAFC where it collided with a jetty and a seawall. Holcomm Marine Pty Limited [2008] FCAFC 174 Implied warranties pursuant The appellant brought to s74 of the Trade p r o c e e d i n g s a g a i n s t Practices Act 1974 (TPA) - Holcomm Marina Pty operations of s68 of TPA Limited (the respondent), the operator of Piper Marina (the marina) where both the yacht and the Paana were moored. Fie months before this incident, the respondent receied adice from a contractor who recommended that a number of moorings, including the Paana s moorings, be upgraded from 1 tonne blocks, to 2 tonne blocks, at a cost of $400 per mooring. The respondent did not action that recommendation. The appellant alleged breaches of the respondent s tortious duty of care and breaches of implied warranties pursuant to the Trade Practices Act 1974 (TPA) in respect of a licence agreement entered into between the appellant and the respondent in 1996 (the mooring agreement). THE DECISION AT TRIAL The trial judge found that the risk of the Paana dragging its moorings and colliding with the yacht was foreseeable. Howeer, the terms of the mooring agreement were such that the appellant was required to indemnify the respondent for loss or damage to the yacht, howsoeer caused. In other words, the respondent had contracted out of its tortious duty of care to the appellant. In any eent, the trial judge was not persuaded that there was any want of care by the respondent, as: The weather conditions on the day of the incident were extraordinary ( the perfect storm ); The moorings themseles were adequate and reasonably fit for their purpose; and The recommendation to upgrade the 1 tonne moorings was not eidence that 1 tonne moorings were inadequate for a essel such as the Paana. Section 74 implies warranties that serices will be rendered with due care and skill and will be fit for their purpose. The trial judge found that s68 of the TPA (which oids contractual proisions that offend against s74 of the TPA), did not operate to oid the contractual indemnity contained in the mooring agreement. Furthermore, the trial judge concluded that the respondent had not breached s74(1) of the TPA, on the grounds that there was nothing wrong with the yacht s mooring per se (i.e. despite the rope which attached the yacht to the mooring haing been seered, there was nothing wrong with the mooring itself). The trial judge also found that the appellant did not rely on the respondent s skill or judgment in obtaining a licence to use the mooring. The implied warranty conferred by s74(2) of the TPA was therefore excluded. The appellant s claim was dismissed. THE DECISION ON APPEAL On appeal, the court accepted that the terms of the mooring agreement required the appellant to indemnify the respondent for any loss and damage to the yacht. Accordingly, the respondents could not be found liable in negligence and the calculus in Wyong Shire Council Shirt regarding the magnitude of risk did not arise for consideration. Furthermore, the court relied on the trial judge s finding of fact that, een had there been a duty, the respondent did not breach that duty, as the moorings were adequate in the circumstances. The court noted that it was not contended that the proisions of the mooring agreement purported to exclude, restrict or modify the operation of s74 of the TPA, or otherwise offended against any consumer warranties conferred by the TPA. In the circumstances, there was no necessity for the court to reisit the operation of s68 of the TPA. Furthermore, as there was no negligence by the respondent, the court determined that the claim PUBLIC LIABILITY Occupier s Liability 54

71 pursuant to ss74(1) and 74(2) of the TPA, must also fail. The appeal was dismissed with costs. Full Court of the Federal Court of Australia: 31 October 2008 Hannah Sains PUBLIC LIABILITY Occupier s Liability 55

72 Alam THE FACTS On 27 October 2006 the plaintiff suffered injuries at Pendle Hill Railway Station when she attempted to Rail Corporation NSW [2008] NSWDC 265 Discrepancy between plaintiff s eidence and CCTV footage contributory negligence under the Ciil Liability Act (NSW) board a train. The plaintiff alleges that she arried at the station and was going down the stairs when the train arried on the platform. She says that she waed to the train guard to tell him she had to get a ticket. The train guard allegedly told her he would wait for her. The plaintiff bought her ticket then came back to the train. As she put her right foot on the train, the doors closed. One of her legs was caught between the train and the platform. The train was stopped and the guard assisted the plaintiff. The plaintiff alleged that the guard apologised after the accident for his mistake. The guard allegedly told her that he had been talking on his mobile phone to his wife who had just had a baby. The defendant proided CCTV footage of the incident which aried markedly to the incident as described by the plaintiff. THE DECISION The court had to decide what use it could make of the CCTV footage. The court reiewed arious authorities concerning the use judges may make of photographs and other pictorial representations. Those cases did indicate that this type of eidence could not be relied upon by a judge without further witness eidence. Nor could it be used as a basis for conjecture by the court. Howeer, the court in this case found that the CCTV footage (and similarly, ideotape eidence) occupied a special position because of the ability of those mediums to capture in an objectie and independent way, eidence in a case. The court considered that the CCTV footage in this case was highly persuasie. The plaintiff had submitted that boarding a train is one of the most dangerous acts that a person does in our society. The court found that the fact that a person may be seriously injured or killed in undertaking a task does not lead to a non-delegable or higher duty on a defendant. The court found, based largely on the CCTV footage, that in the circumstances the defendant had not breached its duty of care to the plaintiff. The court noted that the plaintiff had ignored warning noises and whistles and attempted to board a train which was about to leae a platform. In the eent of an appeal oerturning the decision on primary liability, the court considered the Ciil Liability Act 2002 (NSW) proisions concerning contributory negligence. The court considered that an apportionment of 70% would be appropriate to take account of the plaintiff s objectie foolishness. New South Wales District Court: 26 Noember 2008 Sharon Templeton PUBLIC LIABILITY Occupier s Liability 56

73 Ellis THE FACTS The plaintiff sustained personal injuries when he tripped on a protruding brick paer on the drieway outside the defendant s commercial premises at the Gold Coast. The brick was located at a point where the drieway crossed the public footpath. Uniting Church in Australia Property Trust (Q) [2008] QCA 388 Trip and fall on drieway uneen paer scope of duty of care owed by commercial occupier to members of the public It was raining at the time of the incident. Night had fallen and the nearest streetlight was not working. THE DECISION AT TRIAL The plaintiff argued that the defendant had breached the duty of care it owed him, in its capacity as a commercial occupier. The defendant admitted that it was the occupier of the premises. Howeer, the plaintiff did not allege, and the defendant did not admit, that it was the occupier of the drieway where it crossed and formed part of the public footpath. The defendant argued that its duty of care was not analogous to that owed by a commercial occupier to members of the public. The plaintiff admitted that he was aware of the existence of protruding paers on the drieway outside the defendant s premises. In fact, he admitted haing preiously been aware of the specific paer on which he tripped. The trial judge concluded that the risk posed by the protruding paer was foreseeable and that the defendant knew or ought to hae known of the hazard posed by it. Furthermore, the trial judge determined that it would hae been simple to correct the defectie paer, simply by re-laying it. Howeer, despite those findings, the trial judge concluded that the uneenness in the paing was of a kind and of an extent that pedestrians on roads and footpaths encounter daily and was a normal hazard of daily life. In his reasons, the trial judge referred to the decisions of Ghantous Hawkesbury City Council (2001) 206 CLR 512 (a public authority case) and Neindorf Junkoic (2005) 222 ALR 631 (a residential occupier case). The trial judge held that, in all the circumstances, reasonableness required no response to the risk by the defendant. The trial judge further determined that the accident was caused by the plaintiff s own carelessness in failing to keep a proper lookout. Judgment was gien for the defendant. The plaintiff appealed. THE DECISION ON APPEAL The plaintiff submitted that the trial judge erred by deciding the matter on the basis of the duty of care owed by occupiers of ordinary residential premises or a local authority, which it submitted were less onerous and of lesser scope than the duty owed by commercial occupiers to members of the public. The Court of Appeal obsered that the defendant had not been found to be the occupier of the particular part of the drieway where the incident occurred. Whilst the defendant had constructed, inspected and maintained the drieway, the local authority was prima facie responsible for its upkeep, and there was no eidence suggesting otherwise. The Court of Appeal concluded that it was not necessary for it to determine the existence or extent of difference between the duty owed by commercial occupiers, local authorities and residential occupiers. The trial judge had concluded that the magnitude of the risk and the probability of its occurrence was so low that reasonableness did not require the defendant to ameliorate the risk in any eent. The Court of Appeal found no error with that conclusion, and further held that, because the risk posed by the paer was so slight, the protrusion may reasonably hae been oerlooked during the defendant s regular inspections. The appeal was dismissed with costs. Queensland Court of Appeal: 4 December 2008 Hannah Sains PUBLIC LIABILITY Occupier s Liability 57

74 Bunning THE FACTS The gaming room in the defendant s hotel (the hotel) contained a number of poker machines, Hurley s Arkaba Hotel [2008] SADC 175 Plaintiff s chair in gaming room of defendant hotel remoed from behind her by employee assessment of damages each with heay stools. Upon closing of the room on Saturdays at 2.00am, staff would pull back the stools to open the collection boxes and collect the coins. On this occasion, the plaintiff, the last patron, had just won oer $100 in a free spin, and was collecting her winnings. The plaintiff fractured her sacrum when she fell to the floor in the gaming room at the hotel. She continued to suffer pain in the years after the fall and receied a number of surgical procedures to attempt to reliee the pain, but was consequently unsuited to manual work, including her preious employment as a picture framer. THE ISSUES The plaintiff alleged that her injuries were caused by the defendant and that it was liable for damages. The defendant alleged that the claim was fraudulent and that the plaintiff was a liar. THE DECISION The court accepted the plaintiff s eidence that one of the defendant s employees, in order to assist the plaintiff, moed the chair back from behind the plaintiff when she was trying to retriee her winnings. When she went to sit back on the chair, the plaintiff fell to the floor not knowing that the chair had been moed. The court held that the defendant s employee had breached the duty owed by the hotel when she moed the chair without the plaintiff s knowledge. The defendant was wholly liable for the accident. No reduction was made for contributory negligence. The court accepted that the plaintiff s medical eidence was uncontroersial and that her symptoms were caused by the fall. Despite eidence led by the defendant about the plaintiff s credibility, the court concluded that she was credible and that her eidence ought to be accepted. As there was nothing that doctors could do to reliee the plaintiff s pain, the court awarded the plaintiff $60,000 for pain and suffering, comprising $35,000 for past pain and suffering and $25,000 for future pain and suffering. The court noted that the plaintiff was 52 years old and stated that although she had been a busy, fit and actie woman up to the time of the accident, her physical actiities would hae been curtailed by age. The court stated the assessment of the plaintiff s future loss of amenity reflected this. The figures awarded for economic loss also reflected the amount that the plaintiff had to pay contractors to complete the manual tasks inoled in making picture frames. South Australia District Court: 19 December 2008 Nathan Rehbock PUBLIC LIABILITY Occupier s Liability 58

75 THE FACTS The plaintiff injured herself on 23 July 2001 when she slipped on a squashed orange at premises owned by the appellant. The plaintiff sued the appellant, who in turn made a cross claim against the respondent, being the insurer of its cleaning [2009] contractor (which was by then in liquidation). Beillesta Pty Ltd Liberty International Insurance Co [2009] NSWCA 16 Plaintiff slipped on squashed orange at shopping centre whether shopping centre owner entitled to contribution from cleaning contractor THE DECISION AT TRIAL The trial judge held the appellant liable for the plaintiff s injuries on the basis that it had haled the number of cleaners required under its contract with the cleaning contractor from 4 to 2 prior to the alleged incident. The trial judge, who found that there had not been any inspections between 5.00pm and 5.40pm on the day of the alleged incident, held that the reduction in cleaning staff exposed entrants to a greater risk of injury and that risk materialised, causing the plaintiff s fall. The trial judge found that a reasonable inspection schedule was eery 15 minutes. The trial judge dismissed the appellant s cross claim against the cleaning contractor on the basis that there was not sufficient manpower to eliminate the risk of food stuffs falling and remaining on the floor for longer periods. THE DECISION ON APPEAL In dismissing the appeal, the Court of Appeal held that following the change of contractual requirements, the cleaning contract still included an obligation to exercise reasonable care and skill, but not an obligation as to any particular frequency of inspection. In the absence of any eidence establishing the cleaning contractor s obligations as regards inspections following the change of contractual requirements, the Court of Appeal held that the appellant had failed to establish that the cleaning contractor had breached its duty of care to the plaintiff or its contractual obligation to exercise reasonable skill and care. New South Wales Court of Appeal: 17 February 2009 Nathan Rehbock PUBLIC LIABILITY Occupier s Liability 59

76 Parry THE FACTS On 19 Noember 2003 the appellant, a butcher employed by Woolworths Limited, the respondent, sustained a prolapsed disc in his lumbar spine whilst assisting his superisor to lift a 40kg tub of meat from a shelf at knee height and tipping it into a bin. Woolworths Limited [2009] QCA 26 The appellant had suffered Multiple back injuries while from a back condition for lifting tub of meat breach oer 8 years prior to the of statutory duty estoppel incident. He had also injured his back at work on 27 August 2003 and 17 September WorkCoer Queensland issued Notices of Assessment in accordance with the Workers Compensation and Rehabilitation Act 2003 (Qld) (WCRA) to the claimant for all 3 back injuries. THE ISSUES The appellant argued that the respondent was liable to him in negligence, for breach of the employment contract and for breach of its statutory duty under the Workplace Health and Safety Act 1995 (Qld) (the Act). The appellant also pleaded that the respondent was estopped from alleging, as it had, that the appellant s back injury had not occurred on 19 Noember 2003, but was a result of the incidents that occurred on either 27 August 2003 or 17 September This issue was releant because the appellant had already accepted WorkCoer Queensland s offers for those injuries contained within its Notices of Assessment. This precluded the appellant from pursuing a common law claim against the respondent for the injuries sustained on those dates. THE DECISION AT TRIAL The trial judge rejected the findings of the appellant s expert ergonomist and safety consultant on the basis that the assumptions in the expert s report were not based on fact. As there was insufficient eidence to support any finding of a breach of duty, the trial judge found in faour of the respondent. The trial judge also held that the Notices of Assessment did not amount to a representation that the respondent would not assert that the prolapsed disc occurred on another date. In any eent, there was no eidence that the appellant had relied on the alleged representation. THE ISSUES ON APPEAL On appeal the appellant asserted that the trial judge had erred in finding that: (a) (b) (c) The respondent was not negligent, was not liable to the appellant for breach of contract and had not breached its obligation under s28 of the Act; The prolapsed disc injury was not sustained on 19 Noember 2003; and The respondent was not estopped from denying that the appellant suffered the prolapsed disc injury on 19 Noember THE DECISION ON APPEAL The Court of Appeal held that the nature of the obligation imposed by s28(1) of the Act was absolute. As such, the appellant was not required to proe that he was exposed to more than a triial risk of injury in lifting the tub of meat. The triiality of the risk was only releant to the respondent s attempt to rebut the prima facie case of liability established by proof of an apparent contraention of s28. The appellant s peculiar ulnerability to back injuries was also not releant under s28, although it might hae been material in deciding whether the appellant s injury was reasonably foreseeable. The respondent s argument that it had not breached its statutory duty because the task that the appellant undertook was straightforward and ordinary was also rejected. The Court of Appeal considered that despite the criticism made by the trial judge of the appellant s expert s report, it did support a finding that the respondent failed to ensure the appellant s safety in lifting the tub of meat. The appellant s failure to proe all of the assumptions in the expert s report justified the conclusion that the appellant failed to establish that there was a reasonably foreseeable risk of injury, but that is not the test for a prima facie case of breach of s28. The Court of Appeal held that while the expert s report was in some respects ague and inconclusie, it did support a iew that the lift PUBLIC LIABILITY Occupier s Liability 60

77 inoled a risk of injury. As such, the onus shifted to the respondent to proe that it had discharged its duty of care or established a defence under the Act. The Court of Appeal stated that the respondent had made no attempt to discharge that onus. Its eidence that the lift took only a few seconds, the tub was lifted only a short distance and that the appellant did not hae to carry the tub any distance, were not sufficient. The Court of Appeal held that the respondent had breached its statutory duty to the appellant under the Act. The Court of Appeal also held that the trial judge s obseration that there was deterioration in the appellant s condition after 19 Noember 2003 was not inconsistent with his conclusion that the prolapsed disc did not occur on that date. The appellant made no contemporaneous report about the 19 Noember 2003 incident, did not complain of leg pain and was able to continue work after that date. Although the medical eidence initially faoured the appellant s case, when the medical experts were briefed with the appellant s GP s and chiropractor s notes, they concluded that it was unlikely the appellant sustained the disc protrusion in the 19 Noember 2003 incident. The appellant argued that in light of WorkCoer s Notices of Assessment, which related to earlier soft tissue injuries to his lower back, he was entitled to assume that the respondent would contend at trial that the prolapsed disc injury occurred on 19 Noember The Court of Appeal examined the WCRA and held that the notices of assessment concerned only the regulation of the payment of statutory compensation for workplace injuries. It had no bearing on whether the appellant was entitled in subsequent proceedings to recoer damages. As such, the appellant failed to proe that the respondent had made any representation. PUBLIC LIABILITY Occupier s Liability The appeal was upheld and the appellant was awarded damages in the amount of $82, Queensland Court of Appeal: 20 February 2009 Kylie Powell 61

78 THE FACTS Ms Tormey (the respondent) was injured on 8 February 2005 at Coles Supermarket (the appellant) at Gladesille. Coles Supermarkets Australia Pty Ltd Tormey [2009] NSWCA 135 The respondent was crouched down to pick up an item she wished to purchase when she was hit in the back by a shopping trolley. The trolley was being pushed at the time by 2 Occupier s duty to protect young men, who had been entrants against acts of third skylarking in the store for parties when a Jones some time. One of the men Dunkel inference may be drawn was pushing the trolley whilst another rode on the front of it, with the front wheels off the ground. The respondent alleged that she sustained significant back injuries as a result of the incident. THE DECISION AT TRIAL The appellant was found liable at first instance. The trial judge accepted the respondent s eidence that the 2 men were loud and boisterous and that the respondent had encountered the men on 3 occasions in the 15 to 20 minutes preceding the incident. The trial judge found that the appellant must hae been aware of the behaiour of the 2 men. Specifically, the trial judge found that the appellant s employees must hae heard the noise the men were making and must hae seen the men misbehaing with the trolley. The trial judge found that the appellant had a duty to take reasonable steps to preent injury to people in its store from the misbehaiour of other people in its store, and found the appellant liable for failing to ask the men to cease misbehaing. The need to interene arose because of the appellant s actual knowledge and because of the foreseeability of the risk of injury. THE ISSUES ON APPEAL The critical issue on appeal was whether the trial judge s finding that the appellant s employees had actual knowledge of the 2 men s unruly behaiour was open on the eidence. THE DECISION ON APPEAL The Court of Appeal accepted that the men were ery noisy and boisterous. Howeer, the Court of Appeal found that they were not aggressie and that their olume on its own did not indicate that they might occasion harm to others in the store. In order to find that the appellant should hae foreseen the harm, the court must be satisfied that the appellant s employees knew or ought to hae known that the men were misbehaing with the trolley. The respondent had obsered 2 incidents inoling the men in the period immediately before she was injured, and the Court of Appeal went on to consider them separately. The first incident occurred in the fresh produce section of the supermarket. At least 2 of the appellant s employees were working in that icinity. The Court of Appeal accepted that the appellant s employees would hae known of that incident. The Court of Appeal further accepted the respondent s submission that the absence of eidence from the appellant s employees allowed a Jones Dunkel inference (an inference against a party who elects not to adduce eidence, that the eidence would not hae assisted that party s case) to be drawn. Howeer, based on the respondent s eidence, there was no suggestion that at that time the men were handling the trolley in a way that may pose a risk to others. In particular, the men were not pushing it at speed, or allowing it to trael far. On the respondent s eidence, the Court of Appeal found that it would hae been reasonable for the appellant s employees to regard the mens behaiour at that time as isolated occurrences of high spirits that did not inole risk to others. The second incident inoled the trolley being pulled at greater speeds oer a longer distance. The Court of Appeal accepted that the second incident was riskier than the first. Howeer, it was not established that the appellant knew of the second incident. None of the appellant s employees were present in the aisle in which that incident occurred, and the respondent s eidence did not establish that the appellant s employees knew of that incident and a Jones Dunkel inference could not be drawn. In allowing the appeal, the Court of Appeal held PUBLIC LIABILITY Occupier s Liability 62

79 that, as the respondent did not proe that the appellant knew of the second incident, the appellants knowledge of the releant circumstances was insufficient to gie rise to a duty to take reasonable care to aoid a risk of injury arising from the behaiour of the 2 men. As the respondent did not proe that the appellant knew of the second incident, she also failed to demonstrate that the appellant failed to exercise reasonable precautions to respond to a risk of harm. New South Wales Court of Appeal: 9 June 2009 Hannah Sains PUBLIC LIABILITY Occupier s Liability 63

80 THE FACTS The plaintiff was injured whilst employed as a security guard for Chubb Security (Chubb) at the Southgate Shopping Centre (the centre). A PJ O Brien s Irish Pub (the hotel) was located on the ground leel of the centre. Anastasiou Chubb Security A erbal understanding was (Australia) Pty Ltd in place whereby hotel [2008] VSC 211 employees would remoe Liability of employer for any eicted intoxicated security guard injured while eicting intoxicated patron patrons not just from the hotel, but also from the system of work adequate centre complex. In reality training hotel employees would remoe patrons from the hotel premises only necessitating the inolement of Chubb employees to remoe these patrons from the centre complex. The plaintiff was called to assist hotel staff at approximately 1:30am on 7 April He was the senior Chubb security guard on duty. Mr Nicholas had been eicted for intoxication and was haing a heated argument with hotel employees outside the hotel when the plaintiff arried. When Mr Nicholas attempted to enter the hotel again, the plaintiff interened. The plaintiff and another guard escorted Mr Nicholas down a walkway towards the corridor that led to a loading dock. The plaintiff gae eidence that it was difficult to walk 3 abreast down the corridor because it was narrow. The other guard let go of Mr Nicholas and walked behind them. Just before they finished their walk through the corridor, there was a scuffle between Mr Nicholas and the plaintiff and they fell to the ground. The plaintiff sustained personal injuries in the fall. THE ISSUES AT TRIAL The plaintiff alleged that Chubb had failed to proide proper training as well as conduct an adequate risk assessment associated with the physical eiction of patrons. The plaintiff also alleged that Chubb had failed to design and implement an adequate system of work, including an appropriate system by which patrons of the hotel would be remoed from the centre. Chubb s submissions related to issues of causation and in particular, how the plaintiff sustained the back injury. It was submitted that at the time the plaintiff fell in the corridor, Mr Nicholas had already been placated and that the stumble or fall in which the plaintiff was injured was not related to any lack of care on behalf of Chubb. THE DECISION AT TRIAL The court found in faour of the plaintiff and said that there were a number of breaches by Chubb of its duty of care. The plaintiff had not been properly trained to do the work that was required of him and, in particular, he had neer undergone any practical physical training in relation to restraining or handling patrons. The court said that Chubb had failed to ascertain the leel of any training its employees had receied in relation to physically handling patrons. The court noted that the plaintiff s fellow employees also lacked the necessary training and skills to support the plaintiff in eicting Mr Nicholas. The court found that the work performed by the plaintiff and his fellow employees in eicting intoxicated patrons from the centre was work that necessarily inoled a real risk of injury. In these circumstances, the court said there was also a breach of duty by Chubb for a lack of any properly documented protocol or arrangement with the hotel in relation to security issues. Victoria Supreme Court: 20 June 2008 Megan Daniel PUBLIC LIABILITY Licensed Premises 64

81 Scott THE FACTS On 24 January 2002, the plaintiff s husband (Mr Scott) was killed when his motorcycle ran C.A.L No 14 Pty Ltd (No 2) [2009] TASSC 2 Duty of hotel licensee to preent intoxicated patron from driing (the licensee). off the Tasman Highway and collided with the guardrail of a bridge. He was traelling home from the Tandara Motor Inn (the hotel) when the accident occurred and had a blood alcohol concentration of The plaintiff commenced proceedings under the Fatal Accidents Act 1934 against the hotel and its licensee On the day of the accident Mr Scott finished work at approximately 5:00pm. Prior to leaing work he consumed a stubby of beer. He then went to the hotel s public bar with some of his workmates where he drank cans of pre-mixed Jack Daniels and cola. There was talk about a breathalyser unit being in the area, so Mr Scott s workmates suggested that his motorcycle be stored in the hotel s storeroom. The licensee unlocked the storeroom and Mr Scott and one of his workmates put the motorcycle in there. The storeroom was locked and the keys to the motorcycle were gien to the licensee who put them in the petty cash tin, where patrons keys were normally kept. Mr Scott consumed no more than 8 cans of drink while at the hotel. There were no more than 6 to 8 patrons in the bar and the licensee had sered Mr Scott for most of the night. At approximately 8:20pm Mr Scott asked for the keys from the licensee and was gien them. The licensee unlocked the storeroom door and Mr Scott took the motorcycle. The licensee gae eidence that he had asked Mr Scott seeral times whether he was right to drie and Mr Scott said that he was fine. A patron of the hotel gae eidence that: (a) (b) At one stage Mr Scott had his forearms and head on the bar; The licensee told Mr Scott that he had had enough to drink and it was time for him to leae. Mr Scott then became agitated; and (c) The licensee had asked Mr Scott for the plaintiff s phone number so that she could come and get him, but Mr Scott became ery angry and refused. THE ISSUES ON APPEAL The court was required to decide whether the trial judge had erred in finding that: (a) (b) (c) The hotel and licensee did not owe a duty of care to influence or control the conduct of Mr Scott; The scope of the duty of care owed by the hotel and licensee did not extend to the taking of reasonable care for the protection of Mr Scott; and The licensee, by assuming control of the motorcycle and its keys, did not hae the power to influence and control Mr Scott and did not assume a duty of care. THE DECISION ON APPEAL The court held that the extent of Mr Scott s intoxication only became releant when the licensee refused him further serice and Mr Scott changed his mind about how he would trael home and asked the licensee for the motorcycle. The court stated that at that time the licensee must hae known that Mr Scott would be at risk if he left on the motorcycle. The licensee knew that Mr Scott was so drunk that further serice should be refused, that Mr Scott had at one point been sitting with his head on his hands on the bar and that he had become argumentatie and irresponsibly changed his mind about how he would trael home. The court held that the scope of the duty that arises from the relationship between a hotelier who proides alcohol and a patron, may be extended by the particular circumstances of the case. The court examined the closeness of the relationship between the parties. Here, a key aspect of the relationship included the licensee s inolement in the arrangements Mr Scott made to get home. By locking Mr Scott s motorcycle in the storeroom, the licensee took on a role that went far beyond the normal relationship between a hotelier selling alcohol and a patron. In the circumstances, the duty of care imposed on the licensee and hotel was to take reasonable care to aoid Mr Scott riding the motorcycle from the PUBLIC LIABILITY Licensed Premises 65

82 hotel, whilst so affected by alcohol as to hae reduced his capacity to drie safely. Further, a reasonable person in the position of the licensee should hae foreseen that if they failed to take action to preent Mr Scott from riding the motorcycle from the hotel, there was more than a fanciful risk that he would suffer injury. The licensee had decided that Mr Scott had had too much to drink een though he was to be collected by his wife. A reasonable person in the position of the licensee would hae done what he reasonably could hae to preent Mr Scott from riding the motorcycle home. The court found that the licensee could hae again offered to telephone the plaintiff and could easily hae obtained her phone number if Mr Scott refused. The licensee s failure to telephone the plaintiff breached the duty of care owed to Mr Scott. The court also considered whether a reasonable person could hae refused to proide Mr Scott with access to his motorcycle. Instead, he made a conscious decision to hand oer both the bike and the keys knowing that Mr Scott was inebriated and haing initially stored his bike to protect him from driing in that condition. The court held that the licensee could hae refused to release the motorcycle until he had contacted the plaintiff. Had the licensee done no more than was reasonable in resisting Mr Scott s request for the motorcycle, the accident would hae been aoided. The court held that this failure also breached the duty of care owed to Mr Scott. PUBLIC LIABILITY Licensed Premises An application for special leae to appeal to the High Court was refused. Full Court of Tasmania Supreme Court: 19 January 2009 Kylie Powell 66

83 THE FACTS The plaintiff, Tarique Karimi, suffered serious injuries when he was assaulted by Michael Smith in the car park of the Rooty Hill RSL Club. The plaintiff had earlier been the ictim of an unprooked assault by Mr Smith while inside the [2009] NSWCA premises. As a result of that Rooty Hill RSL Club Ltd Karimi [2009] NSWCA 2 Plaintiff assaulted in car park of licensed premises following altercation inside premises whether reasonable precautions taken to preent assault incident, both parties were eicted. It was the club s policy to eict both parties to an incident, without enquiring as to its cause. Both parties were led to separate entrances. The plaintiff waited with security guards at the western entrance until guards at the eastern entrance confirmed that Mr Smith had been drien out of the car park. The plaintiff waited with the guards for a further 4 minutes before being inited to leae. While walking to his car in the company of 3 male friends, the plaintiff was king hit by Mr Smith, who had re-entered the car park. THE DECISION AT TRIAL The trial judge found that it was reasonably foreseeable that Mr Smith would attempt to re-enter the car park. It found that the club and its security proider breached their duty of care by failing to monitor the entrance to the western car park to preent Mr Smith re-entering, failing to stagger the interal between the parties departure and failing to proide a security guard to accompany the plaintiff to his car. THE DECISION ON APPEAL The Court of Appeal agreed that it was reasonably foreseeable that Mr Smith could seek to re-enter the car park. Howeer, it had regard to the security guard s eidence that they had no preious experience with eicted patrons traelling from one car park to another in determining what precautions were reasonable. It was held that the measures identified by the trial judge were coloured by hindsight. The Court of Appeal emphasised that in the 10 minutes that the security guards spent with Mr Smith at the eastern entrance he appeared to hae calmed down. His girlfriend said that she would take him home straight away. He shook hands with the security guards and left the premises. The security guards formed the opinion that he no longer posed a threat to the plaintiff or any other club patron. The security guards at the western entrance confirmed that Mr Smith had left before initing the plaintiff to leae in the company of 3 men. The initial incident was not of a character to warrant greater measures than those taken by the club and the security proiders. The Court of Appeal was also critical of the trial judge s findings on causation. It doubted whether, een had the entrance to the western car park been monitored, it would hae been possible to preent Mr Smith from re-entering. With respect to the finding that a security guard should hae accompanied the plaintiff to his car, the Court of Appeal noted that he was traelling in a group and had moed no further than 10 metres from the security guards at the entrance when he was assaulted. The Court of Appeal was not coninced that the measures proposed by the trial judge would hae preented the assault. The appeal was allowed and the plaintiff was ordered to pay the defendants costs. New South Wales Court of Appeal: 30 January 2009 Leah McStay PUBLIC LIABILITY Licensed Premises 67

84 Portelli THE FACTS Mr Portelli, the plaintiff, was injured on 1 August 1998 when he and his companion were set upon by a group of men Tabriska Pty Ltd & Ors [2009] NSWCA 17 Plaintiff assaulted in a public street following an altercation inside licensed premises whether hotelier owed plaintiff a duty of care outside the Aspen Hotel (the hotel) in a public street in Jindabyne. Mr Portelli and his companion had been inoled in a brief altercation with the same group inside the hotel shortly before closing time. Subsequently both parties were eicted from the premises. The assailants were eicted first and left through the front door. Mr Portelli and his companion were allowed to finish their drinks and game of pool after which they were eicted through the back door. As Mr Portelli and his companion were walking home they intersected at a junction with the assailants and a fight broke out. Mr Portelli sustained personal injuries after he was punched and kicked to the ground. THE DECISION AT TRIAL Mr Portelli issued proceedings against the owner and occupier of the hotel, the licensee, his assailants and the security company engaged by the hotel. By the time of trial, Mr Portelli was no longer proceeding against his assailants. The proceedings were unsuccessful at trial. The trial judge held that the hotelier s duty to Mr Portelli extended only to preenting injury on the premises under its control. The hotelier did not owe the plaintiff a duty to protect him from harm caused by the deliberate wrongdoing of third parties in a public street. If a duty existed, the trial judge found that the hotelier acted appropriately in eicting the group and then haing Mr Portelli and his companion exit later by a different door. The trial judge also noted that the security company had been engaged to gie effect to the hoteliers obligations. Consequently, as the hotelier owed no releant duty to the plaintiff, it followed that the security company also owed no duty to Mr Portelli. THE DECISION ON APPEAL Mr Portelli s appeal was dismissed. The Court of Appeal noted that any duty of care that may hae existed could only arise from a conclusion that the circumstances at the time reealed to the hotelier that unless steps were taken in the furtherance of Mr Portelli s safety, he may be subject to foreseeable harm. In the present case, there was a slight scuffle oer a pool game near closing time. In accordance with industry standards, the parties to the fight were eicted through opposite exit points in a staggered fashion. The Court of Appeal considered that the harm was not reasonably foreseeable. The Court of Appeal did, howeer, express reserations about whether the duty of a hotelier cannot extend to any circumstances where the wrongdoing causing injury occurs in a public street. The fact that an aggressor has been put out of the hotel may not discharge the obligations of the hotelier where there is an apprehended risk outside the premises, although the obligations do not go so far as to place a positie obligation on the hotelier to become the protector and guardian of the patron. It may be sufficient to simply say something to the patron to make the patron aware of the danger and allow the patron to make a decision about how to deal with the situation. New South Wales Court of Appeal: 17 February 2009 Bianca Horn PUBLIC LIABILITY Licensed Premises 68

85 THE FACTS The appellant conducted a business under the name Adeels Palace in Punchbowl, New South Adeels Palace Pty Ltd Moubarak; Adeels Palace Pty Ltd Bou Najem [2009] NSWCA 29 Respondents shot inside a restaurant/nightclub whether duty of care owed and breached by proprietor Wales. Adeels Palace was described as a restaurant/ nightclub. The respondents, Anthony Moubarak and Antoin Fayez Bou Najem, attended a New Years Ee function at the appellants premises on 31 December Approximately 400 people attended the eent and 2 security guards were retained. There was also eidence that the proprietors of the business participated in the performance of security work on the premises. At about 2:30am on 1 January 2003, a fight broke out on the dance floor and came to inole Mr Moubarak and another patron, Danny Abbas. Mr Abbas left the premises after the fight and returned with a gun and shot the respondents. Mr Moubarak and Mr Najem brought proceedings against the appellant claiming damages for negligence and breach of contract. THE DECISION AT TRIAL The trial judge found the appellant liable in negligence. It was found that the appellant owed the respondents a general and wide duty to take care to aoid injuries caused by the unlawful actions of patrons (or initees) on the premises during the course of the eening. The trial judge also found that the duty of care was breached because the appellant s security arrangements at the time of the function were far short of what reasonable care and skill required in the circumstances. The trial judge held that the inadequate security measures contributed to, and so caused, the injuries suffered by the respondents. The trial judge did not deal with the alternatie basis of liability in contract and rejected the contention that Mr Moubarak was liable for contributory negligence by engaging in a fight. THE DECISION ON APPEAL The appellant challenged the trial judge s findings in relation to duty of care, breach and causation. The Court of Appeal ultimately upheld the trial judge s initial ruling and dismissed the appeal. Howeer, in doing so it disagreed with the trial judge s basis for the existence of a duty of care. The Court of Appeal noted that a duty of care in a hotel case arises from the combined position that the manager or licensee knew or ought to hae known facts requiring interention to protect patrons and had the capacity to control conduct on the licensed premises. In this case the court noted that the new years ee function should hae been seen beforehand as haing a potential for drunken or iolent behaiour. It supported this belief by reference to the facts that the premises were filled to capacity and the appellant was sering alcohol for a long period of time. There had been prior incidents of iolence at the premises and resort to weapons was not unfamiliar to some patrons. The Court of Appeal noted that the appellant had the capacity to control behaiour within the premises and the ability to control who entered and remained in the premises. It found the duty of care owed by the appellant extended to taking reasonable care to guard against injury to the respondents by the unlawful conduct of another patron or patrons. Special leae to appeal to the High Court was granted on 31 July Leae was granted on the questions of whether the appellant should hae foreseen an incident as extreme as a shooting, and whether the presence of security guards would hae preented the incident in any eent. New South Wales Court of Appeal: 26 February 2009 Bianca Horn PUBLIC LIABILITY Licensed Premises 69

86 Brilley THE FACTS The plaintiff suffered a gunshot wound inflicted upon him by a security guard whilst the plaintiff was in the Presidential Security Serices of Australia Pty Ltd [2009] NSWDC 14 Plaintiff shot while committing robbery damages for unlawful conduct course of committing a robbery at a sports club. As the plaintiff fled the scene, the security guard fired further shots at the escaping ehicle. The security guard was employed by the defendant. The plaintiff claimed damages for the torts of battery and assault. THE ISSUES As the plaintiff s claim inoled the intentional tort of battery and assault (as opposed to negligence), damages fell within common law principles and not within the regime imposed by the Ciil Liability Act 2002 (NSW) ( the Act ). Notwithstanding, Part 7 of the Act Self Defence & Recoery by Criminals, continued to apply. The defendant claimed the plaintiff was not entitled to damages because of s52 which essentially states that liability does not arise where the injury arises out of self-defence to an unlawful act. The court found that the plaintiff first receied a gunshot wound from the security guard upon breaking and entering into the premises with 2 accomplices and failing to heed 2 erbal warnings by the security guard to cease adancing. The plaintiff alleged that this constituted an offence by the security guard under seeral proisions of the Crimes Act 1900 (NSW), namely s59 which relates to assault occasioning actual bodily harm, s61 common assault, s33(a) discharging a firearm with intent to cause grieous bodily harm and s93 (G) dangers concerning the possession and use of a firearm. The security guard also fired on the ehicle as the plaintiff and his accomplices fled the scene. The plaintiff alleged that a round smashed the back window of the car and that at that time he feared for his life. The plaintiff alleged this incident comprised an unlawful assault on his person and should be characterised as offences under the Crimes Act 1900 (NSW) including s61 common assault and s93 (G)(A) which relates to firing at a dwelling house or building with reckless disregard for the safety of any person. The plaintiff argued that the restrictions imposed on his right to recoer damages in tort were lifted because the tortfeasor had committed a releant offence in accordance with s54(2) and s53 of the Act. THE DECISION The court concluded that when the security guard fired on the plaintiff inside the premises he was acting in self-defence because: (a) (b) (c) (d) (e) (f) The plaintiff and his accomplices were acting unlawfully, namely, breaking and entering with an intent to steal, thereby satisfying s52 (1)(a) of the Act; The security guard was aware of a history of preious robberies at the premises, including one robbery in which his own gun had been stolen from him by assailants; The security guard had a reasonable basis for assuming that the plaintiff and his accomplices were in someway armed; The security guard was reasonably entitled to consider the possibility that the weapon that had been taken from him during the earlier break and enter could hae been in the possession of one of the robbers on this occasion, notwithstanding that this was not borne out by eents. In the circumstances, the court stated it was reasonable for the security guard to think and behae defensiely and he was also outnumbered by the intruders; He had issued the intruders with 2 erbal challenges to halt, had identified himself on those occasions as a security guard and notwithstanding these warnings, the intruders continued to adance towards him. In the circumstances, it was reasonable that the security guard felt he might be in immediate danger of harm and, indeed, killed; and These eents occurred in the early hours of the morning in poor lighting conditions which enhanced the perception that the security guard beliees that he was at risk of harm from the intruders. Accordingly, the court concluded that the security guard discharged his firearm in self-defence with the intention of stopping the intruders and that this PUBLIC LIABILITY Licensed Premises 70

87 was a reasonable response to the circumstances he perceied confronted him at the time pursuant to s52(2) of the Act. When the security guard fired on the fleeing ehicle, howeer, neither the ehicle nor its occupants posed any immediate threat to the security guard and therefore the restriction on recoery for injuries arising out of self-defence to unlawful acts contained in s52 did not apply. The court then considered s54(1) which states that a court is not to award damages to a plaintiff if the injuries occurred during conduct of a serious offence, howeer s54(2) contains an exception. It states that s54(1) does not apply where the conduct of the defendant (in this case the security guard) constitutes an offence, whether or not a serious offence. (A serious offence is defined as an offence punishable by imprisonment for 6 months or more.) The plaintiff claimed this exception applied and as such he was entitled to damages. The court held that the security guard, who had actiated his personal distress alarm earlier during the course of eents, had a reasonable belief that the police would be on their way and that the security guard intended to stop the ehicle so that criminals could be apprehended. The court stated that this was a alid reason to fire at the ehicle. PUBLIC LIABILITY Licensed Premises Finally, the court then considered whether the shot at the departing ehicle was discharged recklessly pursuant to s93(g)(a) of the Crimes Act 1900 (NSW). The court concluded the security guard was in fact intending to stop the ehicle and did not constitute a breach of any proisions of this Act. Accordingly, the plaintiff s claim for damages in respect of the shots fired at the ehicle also failed. New South Wales District Court: 27 March 2009 Sarah Haigh 71

88 D Vorak THE FACTS At approximately 3:00am on 6 January 2007, the plaintiff was standing beside a trampoline during the Hiscox [2008] WADC 152 Trespass to person oluntary assumption of risk intoxication course of a party, when the defendant gae him a bear hug and propelled him towards the trampoline. The trampoline was in use by the plaintiff s cousin at the time. The plaintiff collided with his cousin s legs, causing his cousin to fall and land on the plaintiff s neck. The plaintiff was rendered a quadriplegic. There was no suggestion that the defendant meant the plaintiff to suffer any physical harm or that there was any ill will shown by the defendant. The plaintiff sued the defendant in negligence and for trespass to his person. THE ISSUES Damages were agreed prior to the trial. The defendant did not contest the allegation that he owed the plaintiff a duty of care and that his conduct in pushing the plaintiff towards the trampoline was dangerous. The issues for the trial judge, being mixed questions of fact and law, were: the plaintiff and the defendant. He found that they were nothing more than slight acquaintances and there was nothing in the relationship prior to the party, or during the party in the form of conersation or friendly play, which could hae led any reasonable person to think that any rough or close physical contact by the defendant would hae been welcomed by the plaintiff. Nor could it be said that the plaintiff exercised any free will or choice with respect to physical contact with the defendant. The eidence did not establish either consent or oluntary assumption of risk. It was found that, although the plaintiff s injuries were not caused by the defendant s bear hug itself, they were a direct consequence of the defendant flinging the plaintiff during release. The defendant s submission that there should be a significant finding of contributory negligence against the plaintiff in relation to the plaintiff s own conduct, including his alcohol consumption leading up to the bear hug, was rejected. The trial judge found that the plaintiff, on the balance of probabilities, was not intoxicated within the meaning of the section and, in any eent, the defendant was unable to establish that anything in the plaintiff s conduct, including the amount of alcohol he had consumed, contributed in any way to the cause of the harm. There was nothing in the conduct of the plaintiff that could be said to amount to some releant failure to exercise care for his own personal safety. PUBLIC LIABILITY Residential Premises (a) (b) (c) Did the conduct of the defendant amount to a trespass to the plaintiff s person or did the plaintiff consent to the physical contact (implied from the circumstances of the eents and/or their relationship), exempting the defendant from liability for negligence? If there was trespass to the plaintiff s person, were the injuries suffered by the plaintiff a direct consequence of that? Should s5l of the Ciil Liability Act 2003 be applied, such that contributory negligence of the plaintiff should be presumed if it is established that the plaintiff was intoxicated? Western Australia District Court: 15 October 2008 Natalee Barr THE DECISION The plaintiff succeeded in his claim for negligence and trespass. The trial judge examined the relationship between 72

89 Thomas THE FACTS On 22 April 2004 the plaintiff, who was then aged 10, was inited to a sleep oer at the Shaw [2009] NSWSC year old child fell from a bunk bed whether accident was foreseeable and preentable whether owners of premises were negligent defendants house. The plaintiff was a friend of one of the defendants sons. When the plaintiff woke up the following morning, he climbed up onto the top bunk of a set of bunk beds, where his friend (the defendants son) was sleeping. When the defendants had originally purchased the bunk bed, it had a ladder and a guardrail attached. Prior to this incident, the defendants had remoed the ladder and the guardrail from the bunk bed. Eidence was gien at trial that the usual method by which the defendants sons and other users of the bunk bed would access the top bunk, would be for them to climb up the end of the bunk bed that was not placed up against the wall. There was also a chest of drawers located adjacent to the bunk bed. There was an eidentiary dispute between the plaintiff and the defendants son as to how the plaintiff came to fall from the top bunk onto the floor, sustaining injuries. According to the plaintiff, he had been sitting on the side of the bunk bed, and put his right foot down onto the chest of drawers to enable him to moe slowly down on to the ground. He claims that as he tried to put his left foot down onto the lower bunk, he fell and struck his head on the floor. According to the defendants son, the plaintiff stood on the chest of drawers said Geronimo, as he jumped down onto the floor. Eidence was also gien by the plaintiff s parents as to the ersion of eents that they were gien by the defendants son immediately after the incident occurred which was in line with the plaintiff s ersion. THE ISSUES The court was required to determine which ersion of eents was to be accepted, and whether the defendants breached their duty of care to the plaintiff in the circumstances. The court was also required to address issues of causation and contributory negligence. THE DECISION The court preferred the eidence of the plaintiff, and held that he slipped and fell to the ground after attempting to use the chest of drawers as an intermediate foothold whilst descending from the top bunk to the floor. The court had regard to s5(b) of the Ciil Liability Act 2002 (NSW) (the Act). The court found that it was foreseeable that a child of the plaintiff s age would climb onto the top bunk and improise a way of getting down in the absence of a ladder and guardrail, and that such risk was not insignificant. The court also held that a reasonable person in the defendants position would hae taken precautions against that risk of harm by either proiding a ladder, proiding a guardrail, or warning the plaintiff of the danger that he must not climb onto the bed, or if he did, he must descend oer the back of the bunk. The court also rejected the defendants argument that the absence of a secured ladder was not causatie of the plaintiff s fall, and held that had there been a ladder in place, the plaintiff would hae used it. The court also rejected the defendants submission that the risk faced by the plaintiff was an obious risk pursuant to s5(f) of the Act. The court held that the risk of descending the bunk bed in the manner described by the plaintiff was not an obious risk to a 10 year old child. The defendants also failed to conince the court to make a finding of contributory negligence in the circumstances. The court therefore held that the defendants had breached their duty of care to the plaintiff, and the plaintiff was awarded damages to compensate him for the losses sustained as a result of his head injury. New South Wales Supreme Court: 26 June 2009 Sue Myers PUBLIC LIABILITY Residential Premises 73

90 Nguyen THE FACTS The plaintiffs purchased a home built by Cosmopolitan Homes. They brought an action in negligence against Cosmopolitan Homes and against the electrical contractor who had installed wiring in the building following a fire in the home on 22 July Cosmopolitan Homes [2008] NSWCA 246 Cause of fire damage standard of proof expert eidence The seat of the fire was in the caity of the exterior wall to the building at the junction of a brick tie and some electrical cabling running through the wall caity. A brick tie is a slender length of steel, about 0.5mm thick with holes in either end. It is inserted into the mortar between the bricks at one end, then nailed to the timber frame at the other. It has a twist in it such that the length of steel is turned 90 degrees half way through. The fire experts who inspected the scene reported they saw a bundle of 4 cables lying on the narrow edge of the brick tie. Photos of the scene, howeer, did not support this conclusion. This inconsistency was not explored at trial. One of these cables (which supplied power to the hot water system) was damaged. Two wires in the cable were broken and there was eidence of arcing. There were 2 fire experts, Mr Munday and Mr Gardner. Both hypothesised that the insulating sheath protecting the wires in the subject cable must hae been damaged, which would hae allowed for the wires to heat up and cause smouldering. They had differing hypotheses as to what may hae caused this material damage to the insulating sheath. Mr Munday s theory was that creep (which is thinning of the insulation layer caused by weight of cable pressing down on surface oer time) had occurred. Mr Munday conceded that for this theory to work, he had to assume that the damaged cable was at the bottom of the bundle of 4 cables. Mr Gardner disagreed and said the weight of the cables was insufficient to cause creep oer the 3 years since they had been installed. Mr Gardner s theory was that as the electrician pulled the cable through the caity, the narrow edge of the subject brick tie caused damage to the exterior of the insulating sheath. Mr Gardner conceded, howeer, that there was no scraping damage to the rest of the cable. THE ISSUES AT TRIAL The plaintiffs argued that it did not matter which of the experts hypotheses were accepted in either case the negligence arose from laying the cable oer the narrow edge of the brick tie. The issue was whether the competing hypotheses of the 2 fire experts, combined with the circumstantial eidence of the cable on the brick tie were sufficient eidence of negligence on the balance of probabilities. THE DECISION AT TRIAL The trial judge disagreed with the plaintiffs, and stated that laying the cable on the narrow part of the brick tie might be eidence of breach of duty of care but not causation. The trial judge stated that proof that the fire occurred after the electrical cables were laid on the brick tie does not comprise eidence of a causal relationship between the 2 eents. The fact that A follows B is not proof that A was caused by B. The trial judge stated that the experts hypotheses did no more than raise possible causes of the fire but did not proe, on the balance of probabilities, what was the cause of the fire. She was not satisfied that the fire had started in a way which indicated negligence. In the trial judge s iew, the eidence of Mr Munder that creep had occurred was speculatie and Mr Gardner s theory was marred by the fact there were no signs of damage elsewhere on the cable. Both experts in substance stated that their hypotheses were something that could not be said to be impossible (paraphrasing) and the trial judge stated that to say that a hypothesis is a scenario which is not impossible is not proof on the balance of probabilities and, further, that proof on the balance of probabilities demands that the person determining the facts must feel an actual persuasion of the existence of the particular fact. This is particularly so where the resolution of a disputed question of fact must be drawn from circumstantial eidence. THE ISSUES ON APPEAL It was submitted by the plaintiffs that the trial judge PUBLIC LIABILITY Causation 74

91 erred in finding there was insufficient eidence to draw a conclusion on the balance of probabilities that the fire was caused by negligent installation of the cables. THE DECISION ON APPEAL The Court of Appeal agreed with the trial judge s conclusions and stated that although a finding on the balance of probabilities can be made based on circumstantial eidence, this was not such a case. The Court of Appeal considered there was an alternatie explanation for degradation of the insulation that did not indicate negligence. It had been noted at trial that there was a hot water thermostat which operated irregularly (the cable in question powered the hot water system) and could hae oerloaded the cable causing it to oerheat when in use. Both experts had agreed that if the cable were oerheated, this could cause the insulation to oerheat and degrade. Accordingly, the appeal failed. The plaintiffs failed to establish that the fire was caused by the defendants negligence. PUBLIC LIABILITY Causation New South Wales Court of Appeal: 16 October 2008 Sarah Haigh 75

92 Middleton THE FACTS On 21 Noember 2002 the plaintiff was seerely injured when a prime moer and semi-trailer ("the Erwin & Anor [2009] NSWSC 108 Motor ehicle accident where the steering in one ehicle failed without warning failure to maintain, inspect and design causation truck") drien by the first defendant collided with his car. It was agreed that the collision was caused by a failure of the steering mechanism in the truck, which was manufactured by the second defendant, Ieco Trucks Australia Limited. The first defendant admitted that he had not properly maintained the steering mechanism so as to keep it in a sericeable condition. Damages were agreed on the first day of the hearing. The issues remaining for determination were limited to the question of the defendants' liability (if any) to the plaintiff for causing the accident and to the resolution of cross claims filed by each of the defendants against the other. THE ISSUES The first issue was whether any system of maintenance and inspection on the part of the first defendant would hae reealed the problem with the steering mechanism that was identified as the cause of the failure. The second issue was whether the manufacturer was responsible for a faulty design, which ultimately led to failure of the steering mechanism. THE DECISION The plaintiff was successful in establishing negligence on the part of the first defendant. The first defendant breached his duty to the plaintiff in failing to adequately maintain the steering mechanism of the truck. Proper inspection would hae reealed, at a point before it failed, that there was a problem with the steering mechanism. It was held that the first defendant s failure to inspect and maintain the steering mechanism was the cause of the collision that injured the plaintiff. The plaintiff was not successful in establishing negligence on the part of the second defendant. It held that the second defendant complied with what was ordinary practice for a manufacturer of a ehicle such as the subject truck. The failure that led to the collision did not take place in the course of what a reasonable manufacturer might hae anticipated would be the normal use of the ehicle. The cross claim by the first defendant against the second defendant was unsuccessful for the same reasons. New South Wales Supreme Court: 5 March 2009 Charley Ferguson PUBLIC LIABILITY Causation 76

93 Fitzgerald THE FACTS The plaintiff, an 8-year-old boy, was participating in a Rhee Tae Kwon Do class in Townsille at 7.30pm Hill & Ors [2008] QCA 283 Non-delegable duty of care owed by tae kwon do operator application to withdraw admission on 30 October 1989 when he was hit by a car. The instructor of the class, Wayne Dobie, had taken the members for a run along the side of the road when a car being drien by the first defendant, Glen Hill, struck the plaintiff. Mr Hill was insured by the second defendant, Suncorp Metway Insurance Limited (Suncorp). The plaintiff alleged that the sixth defendant, John Iano, was the owner and operator of the Rhee Tae Kwon Do academy. Mr Iano admitted the allegation and the claim at trial proceeded against Mr Hill, Suncorp and Mr Iano. On 13 December 2006, prior to the trial, Mr Iano applied to the Supreme Court to withdraw the admission. On the hearing of the application, Mr Iano argued that the admission was made by his solicitors without his instructions or knowledge. While he conducted a Rhee Tae Kwon Do branch under an arrangement with Mr Rhee, he said that he had no control oer the branch, did not derie any financial benefit from it and did not employ Mr Dobie. Mr Iano s solicitor gae eidence that he did not seek specific instructions regarding whether Mr Iano was the owner and operator of the academy because Mr Iano had preiously confirmed, in an earlier matter, that he was the owner and operator of the academy. The trial judge, in dismissing the application, held that the plaintiff had proceeded for the last seeral years on the basis that Mr Iano was the owner and operator of the academy. To allow the admission to be withdrawn was likely to prejudice the plaintiff, as no steps had been taken against Mr Rhee or Mr Dobie. THE DECISION AT TRIAL The trial judge held that: (a) Mr Hill was negligent for failing to sufficiently (b) (c) slow down as he approached the class. He should hae at least sounded his horn; Mr Iano was ultimately responsible for the plaintiff s class and owed the plaintiff a non-delegable duty of care; and Mr Iano breached his duty, as he failed to ensure that reasonable care was taken in the act performed by the class. The trial judge awarded the plaintiff damages in the amount of $730, Liability was apportioned 50/50 between Mr Hill and Mr Iano. THE ISSUES ON APPEAL Mr Iano appealed the trial judge s decision on the basis that: (a) (b) (c) He was not the owner and operator of the academy; He did not owe a non-delegable duty of care to the plaintiff; and The fact that a non-delegable duty was owed was not open on the pleadings. Mr Iano also applied for an extension of time to appeal the court s decision of 13 December 2006 dismissing his application to withdraw the admission. THE DECISION ON APPEAL The Court of Appeal held that Mr Iano was required to file an appeal from the trial judge s decision within 28 days. He should hae done this so the issues in dispute were clarified before trial. If Mr Iano were allowed to withdraw the admission now, a re-trial would be required. The Court of Appeal refused the application for an extension of time and held that, een if an extension were granted, Mr Iano s eidence did not show that the admission was factually wrong. The plaintiff would also be prejudiced if the admission were withdrawn. Mr Iano argued that as the plaintiff s pleadings did not specifically allege that he owed a non-delegable duty of care to the plaintiff, the trial judge should not hae found for the plaintiff on this issue. The plaintiff s pleadings claimed that Mr Iano, as the owner and operator of the academy, was required to take reasonable care to ensure the plaintiff s safety while participating in actiities. The PUBLIC LIABILITY Educational Authorities 77

94 Court of Appeal stated that where a defendant owes a plaintiff a non-delegable duty of care, the duty is to ensure that reasonable care is taken. The facts pleaded by the plaintiff were sufficient to raise the issue of breach of non-delegable duty of care and this was understood by Mr Iano. The Court of Appeal stated that whether a non-delegable duty of care is found to exist in a specific relationship will depend on the circumstances of the case. The Court of Appeal reiewed the case law concerning non-delegable duties of care and noted the following: (a) (b) (c) (d) The non-delegable duty of care is a special duty to ensure that reasonable care is taken for the safety of those to whom it is owed; The duty is not icarious, it is personal, the breach of which requires fault; It is an onerous duty, as a defendant who owes the duty cannot aoid liability by engaging another person to carry out the defendant s responsibilities; and Factors which support the existence of the duty include the degree of control in the relationship and the ulnerability or special dependence, of the plaintiff. The Court of Appeal held that an analogous relationship where a non-delegable duty of care has been found to exist is that of school authority and student. In this case, the factors supporting the existence of a non-delegable duty of care included the plaintiff s young age, the academy s adertisement that its instructors were highly qualified and highly skilled, the plaintiff being in a position of special dependence and ulnerability and the high degree of control that Mr Iano had oer the plaintiff. The Court of Appeal held that it was clearly foreseeable that taking an 8-year-old boy running along a road at dusk inoled a risk requiring special superision. Mr Iano did owe the plaintiff a non-delegable duty of care to ensure that reasonable care was taken while he attended the academy. Mr Iano led no eidence at trial to show that he had discharged this duty and, as such, the trial judge was entitled to find that he breached the non-delegable duty of care owed to the plaintiff. The appeal was dismissed with costs. Queensland Court of Appeal: 16 September 2008 Kylie Powell PUBLIC LIABILITY Educational Authorities 78

95 Gregory THE FACTS In 1991, the plaintiff was enrolled as a boarder at Farrer Memorial Agricultural High School (the school) at Tamworth. He commenced at the school in year 7, and completed year 12 there in State of New South Wales [2009] NSWSC 559 Duty owed by school to student bullying psychiatric harm causation While at the school, the plaintiff was subjected to a prolonged period of bullying. The plaintiff gae eidence of a sustained campaign of daily abuse, humiliation and ilification. He described entrenched feelings of fear, isolation, hopelessness and sadness after being forced to endure mistreatment from the other students without the assistance or interention of teaching staff. In response to the constant taunting, the plaintiff deeloped dysfunctional responses such as obsessie washing with hospital grade disinfectant in an effort to rid himself of perceied contamination resulting from contact with his oppressors. In addition, in his senior years, he cut his forearms and legs with razor blades. THE DECISION The claim was regulated by the Ciil Liability Act 2002 (NSW) (the Act). It was uncontentious that s32 of the Act operated to impose a duty of care on the school to protect the plaintiff from the foreseeable risk of mental harm. The plaintiff reported numerous instances of erbal and physical intimidation to teachers without any action being taken. The school operated a SACK system of discipline whereby younger students were required to obey the directions of more senior students. This system failed to protect the plaintiff, and the plaintiff gae eidence that he was abused by some of the senior students. The plaintiff went so far as writing a letter to the school counsellor. While the plaintiff receied counselling in response to the letter, the bullying continued. By failing to adequately respond to the bullying and mistreatment, the court concluded that the school had breached its duty of care. After leaing the school in 1996, the plaintiff s psychiatric condition lay mostly dormant until The plaintiff s decompensation was triggered by 2 eents. The first occurred in late 2001 when he read an old copy of his school magazine. The second occurred in June 2002 when, while working as a teacher, he assisted a student who was suffering a panic attack. As a result of these trigger eents, the plaintiff s psychiatric condition deteriorated and old symptoms, such as compulsie cleaning with disinfectant, re-emerged. Although there was some disagreement amongst the experts regarding the nature of his psychiatric condition, the court accepted that the plaintiff had deeloped a post-traumatic stress disorder. The eidence indicated the plaintiff s personality and temperament pre-disposed him to conflict with others and rendered him more susceptible to the risk of being marginalised and bullied. Howeer, applying the eggshell skull principle, the court found the school fully responsible for the plaintiff s condition. Damages were calculated in accordance with the Act. General damages were calculated in accordance with 45% of the most extreme case, or $247,500. The calculation of economic loss was more complicated. The school s solicitors had obtained sureillance eidence of the plaintiff working at his parents café with little apparent signs of anxiety or restriction. Nonetheless, the court accepted that the plaintiff was likely to experience episodic periods of depression and anxiety in the future, and these matters were likely to result in a diminution of his earning capacity particularly in the short to medium term. Oerall, the plaintiff s qualifications and employment history indicated that he had good prospects of securing full-time work in his chosen profession as a teacher. Consequently, future economic loss was calculated on the basis of the notional future earnings of a school teacher discounted by 80% to take into account the plaintiff s substantial residual earning capacity. This resulted in a figure of $196,378, and the court awarded total damages of $468,736. New South Wales Supreme Court: 19 June 2009 Nick Robson PUBLIC LIABILITY Educational Authorities 79

96 THE FACTS The first plaintiff sustained serious injuries, including paraplegia, in a motorcycle accident that occurred Elliott & Anor Andrew [2009] SASC 31 Liability of dog owner injury to motorcycle rider loss of consortium and nerous shock adjacent to the property of the defendant in Waikerie. The first plaintiff alleged that the defendant s border collie dog had run across the road he was traelling, causing him to lose control of his motorcycle. The second plaintiff, the wife of the first plaintiff, also filed a claim of her own for nerous shock as a result of being present at the scene of the accident and loss of consortium. The plaintiffs sued the defendant on the basis that the plaintiffs injuries were caused by the defendant s dog. The plaintiffs relied upon s66(1) of the Dog and Cat Management Act 1995 (the Act) that proides that the keeper of a dog is liable in tort for injury, damage or loss caused by the dog. The defendant denied that its border collie was inoled in the incident as it had been in the icinity of the defendant at all times. The defendant also relied on s66(4) of the Act, which proides that if the plaintiff's negligence contributed to the injury, the damages will be reduced to the extent the court thinks just and equitable haing regard to the plaintiff's share of responsibility for the injury. THE DECISION Initially, the plaintiffs also commenced a claim against the owner of another border collie dog in the Waikerie district as an alternatie to the defendant s dog. That claim was discontinued prior to the commencement of the trial but the court noted that this preious claim indicated that the plaintiffs were uncertain as to the identity of the dog inoled. In relation to the incident, the first plaintiff, an inexperienced motorcycle rider, admitted he was traelling approximately 80km per hour before he rounded a bend that contained an adisory sign indicating a speed of 45km per hour. He submitted that he was in the process of slowing down before the bend when he noticed the dog in front of him on the roadway. The first plaintiff submitted that if he had continued on his intended path, he would hae collided with it. In an attempt to aoid the collision, he applied the brakes and skidded for 16 metres before being forced off the bitumen and subsequently bucked off the motorcycle landing on his head and shoulders. The defendant argued that the first plaintiff s speed was manifestly excessie at the time he first noticed the dog on the roadway. Experts for both parties had differing conclusions as to the speed the first plaintiff was traelling at the point he first reacted and skidded. The plaintiff s expert suggested the first plaintiff was traelling between 66 and 77km per hour. The defendant s expert contended that it was more likely 90 to 95km per hour. The court rejected the first plaintiff's submissions that his actions and injuries were caused by the defendant s dog being on the road and that he did nothing to contribute to his injuries. The court reasoned that there was no eidence that the defendant s dog caused or materially contributed to the first plaintiff's injuries. The court did not dispute that a dog may hae been inoled in the incident, howeer it accepted that the defendant s dog was at all times in its owner s immediate icinity when the accident occurred. As the first plaintiff failed to identify the dog from photographs and had joined another dog owner for oer 4 years, this indicated to the court that the first plaintiff was uncertain as to the accuracy of his identification of the defendant s dog. The court found that the primary cause of the first plaintiff coming off the motorcycle was due to him negotiating a progressiely tightening left-hand bend too quickly, resulting in him running out of road. Accordingly, the court gae judgment for the defendant. The second plaintiff s claim was pursuant to s33(1) of the Wrongs Act 1936 for the loss of consortium of her husband and for nerous shock and mental injury suffered as a result of obsering her injured husband at the scene of the accident. If the defendant was liable, the court would hae awarded the second plaintiff $100,000 for loss of consortium for the deterioration in what was once a loing relationship and the cessation of the sexual relationship for the remainder of the marriage. The award also included an allowance for serices preiously proided by the first plaintiff in relation to care of the couple s children. The court also found that the second plaintiff would hae been entitled to damages for nerous shock PUBLIC LIABILITY Animals 80

97 on the basis that she suffered from depression and an adjustment disorder as a result of finding the first plaintiff at the scene. The court noted, howeer, that the second plaintiff had recoered and that the risk of relapse was slight. Accordingly, had the second plaintiff been successful against the defendant, the court would hae awarded her $54, for her loss sustained oer a 12 month period only. No allowance was made for future loss of earnings. South Australia District Court: 27 March 2009 Paul Scagliotti PUBLIC LIABILITY Animals 81

98 PRODUCT LIABILITY

99 THE FACTS Mr Cotton was diagnosed with lung cancer in May 2000 when he was 43 years of age. Mr Cotton died on 6 January It was State of South Australia Ellis [2008] WASCA 200 Death due to progressie lung cancer asbestos causation contributory negligence where deceased formerly a smoker alleged that the cancer was caused as a consequence of his exposure to asbestos during the course of his employment with the Engineering & Water Supply Department of South A u s t r a l i a ( E W S D ) (represented by the State of South Australia) and M i l l e n n i u m I n o r g a n i c Chemicals (Millennium). Amaca Pty Ltd (Amaca) manufactured the asbestos materials. On 4 September 1975 Mr Cotton commenced employment with EWSD. From March 1976 he worked as a member of a gang engaged in the laying of pipes made of asbestos cement manufactured by Amaca. Mr Cotton worked in this capacity for a period of approximately 2.5 years. On 19 April 1990, Mr Cotton commenced work with Millennium, where he worked until 19 February He worked for Millennium again from 14 October 1991 until 28 January He resumed work with them again on 11 February 1993 and remained in their employ until his death. At the age of 17, Mr Cotton took up smoking cigarettes and smoked continuously for 26 years until his death. He smoked 15 to 20 cigarettes per day. THE ISSUES AT TRIAL The trial judge considered the expert eidence before it to determine factual disputes concerning the type and quantity of asbestos Mr Cotton was exposed to during each period of employment and whether those leels of asbestos were sufficient to materially contribute to Mr Cotton s lung cancer. The trial judge also considered whether Mr Cotton s long term heay smoking amounted to either contributory negligence or a superening act that broke the chain of causation. THE DECISION AT TRIAL EWSD was found liable in negligence and for breach of contract for failure to proide a safe system of work. Amaca, the manufacturer of the pipes used by EWSD was found liable in negligence. Millennium was found liable in negligence for breach of statutory duty and for breach of contract for failure to take precautions to reduce asbestos exposure. A finding of 10% for contributory negligence was made against Mr Cotton for failing to take adequate care for his own safety by continuing to smoke after being warned by a medical practitioner not to do so in THE ISSUES ON APPEAL The appellants sought to establish that the trial judge erred in his treatment of the expert eidence and on seeral findings of fact relating to Mr Cotton s leel and period of exposure to asbestos. The appellants argued that the trial judge had made legal and factual errors in his assessment of whether the appellants breaches of duty had caused or materially contributed to Mr Cotton s lung cancer. Of particular significance was the failure of the trial judge to separately identify and ealuate the contribution made by the exposures for which each of the appellants was separately responsible. The heart of the appeal rested on the fact that the periods of employment where Mr Cotton was exposed to asbestos were relatiely short, contrasted to his prolonged heay smoking. The appellants pleaded this issue as both contributory negligence and/or an interening act breaking the chain of causation. THE DECISION ON APPEAL The appeal was allowed in part. On the issue of breach, the Court of Appeal unanimously held that the trial judge did not err in finding each appellant breached its duties owed to Mr Cotton and that each should hae known that injury would likely result from such breaches. The majority held that based on the expert eidence at hand, the trial judge was entitled to find that as a result of the appellants breaches of duty, Mr Cotton s exposure to asbestos materially contributed to his lung cancer. In regards to Mr Cotton s smoking, the majority considered that it was open for the trial judge to find that the plaintiff s smoking was not an interening PRODUCT LIABILITY 83

100 act. An interening act which breaks the chain of causation must be a separate and independent act which interenes after the negligent conduct complained of. Howeer, the majority did find that in starting and continuing to smoke, Mr Cotton failed to take reasonable care for his own safety. The trial judge s finding that reasonable care for his own safety required Mr Cotton to gie up smoking when warned by his doctor in 1992 was flawed. The majority considered that the acts constituting contributory negligence began when Mr Cotton first began to smoke. In all the circumstances, the appropriate apportionment was 50%. PRODUCT LIABILITY Martin CJ in dissent found that Mr Cotton s heay smoking meant that it was more likely than not that he would hae contracted lung cancer without being exposed to asbestos. It could not be said that the appellants breaches had materially contributed to Mr Cotton s cancer. This matter was granted special leae to appeal by the High Court on 1 May Western Australia Court of Appeal: 26 September 2008 Genoiee Lajeunesse 84

101 Thirlway THE FACTS The plaintiff sustained personal injury when his LP gas operated car exploded when he lit a cigarette whilst inside it. This ignited a mixture of olatile LP gas inside the car. The plaintiff had purchased the 8 year old, second hand car 3 years earlier. At that Parnell LP Gas Systems time, he was gien a white Pty Ltd [2009] WADC plastic folder marked LP 36 Gas Systems. The folder contained a document LP gas operated car stating that the certificate exploded when plaintiff lit had to be kept with the cigarette failure to warn ehicle at all times whilst it was operating on LP gas. The certificate in turn carried a warning that the ehicle had to be presented to an authorised LP gas serice centre for inspection and testing eery 12 months. The folder also contained an LP gas ehicle instruction book and terms and conditions of the installer s product warranty. The plaintiff neer opened the folder. THE ISSUE The precise origin and source of the LP gas leak could not be established. The defendant admitted that it had installed the LP gas system into the car. The plaintiff alleged that the defendant was negligent in failing to proide any or any adequate warning of the risk of an explosion in the eent that the car was not inspected and tested at an authorised LP gas serice centre eery 12 months. The defendant pleaded that the LP gas system was constructed and installed in compliance with the requirements of the releant Australian Standard and that een if the precaution suggested by the plaintiff had been taken, the plaintiff would not hae acted on the precaution. THE DECISION The court found that in the 3 years that the plaintiff owned the car, it was not mechanically sericed on any occasion. The court found that this indicated a total disregard for the plaintiff s own safety and other users on the road. The court held that een if the plaintiff had been aware of the need to hae the LP gas system tested and inspected annually, he would not had done so. The court also held that the certificate (which carried the warning about inspections) proided by the defendant went oer and beyond the requirements of the releant Australian Standard. Although this was not necessarily a defence to the plaintiff s claim, it was a persuasie factor for the court to consider. Western Australia District Court: 17 March 2009 Nathan Rehbock PRODUCT LIABILITY 85

102 PROFESSIONAL NEGLIGENCE

103 THE FACTS Margaret Holdaway (the plaintiff) engaged Arcuri Lawyers (the defendant) to act as her solicitors in a claim under Part 4 of the Succession Act 1981 (the Act) for proision out of the estate of her deceased de facto spouse (the deceased). Holdaway Arcuri Lawyers (a firm) The defendant briefed [2008] QCA 218 counsel to settle a Failing to sere application draft originating application under Part 4 of the for family proision. The Succession Act 1981 d e f e n d a n t f i l e d t h e cause of loss application but failed to sere it on the deceased s executor or inform the executor of the application prior to the executor transferring the principal assets of the deceased s estate to himself. The plaintiff subsequently instructed other solicitors and ultimately entered into a deed of compromise with the executor. Pursuant to the deed the plaintiff agreed to discontinue her claim against the executor in return for the benefits originally offered by the executor. THE ISSUES AT TRIAL The plaintiff alleged that as a result of the defendant s negligence, the assets of the estate were distributed prior to the application being sered on the executor and accordingly, she lost any prospect of being awarded further proision from the deceased s estate. The defendant argued that in not sering the application on the executor or informing the executor about the application, it had relied on counsel s adice that the application did not need to be sered. Additionally, the defendant argued that the assets of the estate had not been distributed at the time the plaintiff entered into the deed of compromise with the executor. Therefore, the defendant s failure to sere the application earlier had not been causatie of any loss to the plaintiff. THE DECISION AT TRIAL The trial judge found that the defendant was negligent for failing to sere the application and that the defendant could not aoid a finding of negligence on the basis of reliance on adice from counsel. The trial judge found that counsel s adice was in response to a specific and narrow question and it did not contemplate whether serice within a particular timeframe was desirable for other reasons. The trial judge considered that the defendant had failed to exercise its own professional judgment about whether serice was either necessary or desirable. The trial judge found that there were, in fact, still assets in the estate at the time the plaintiff abandoned her claim against the executor, and that any loss suffered by the plaintiff was as a result of her entering into the deed of compromise, not a result of the defendant s negligence. Howeer, the trial judge went on to find that as the defendant had impliedly admitted in its defence that the major assets in the estate had been distributed at the time the plaintiff discontinued her claim against the executor the defendant was liable to the plaintiff and awarded the plaintiff $233,000 in damages, together with interest. THE ISSUES ON APPEAL The defendant appealed on the following grounds: (a) (b) that any negligence on its part was excused by its reliance on counsel; and the trial judge s decision did not gie effect to the court s conclusion in respect of causation. THE DECISION ON APPEAL The Court of Appeal found that there was no eidence that the defendant sought adice from counsel about how to protect the plaintiff s interests, or that counsel had gien any adice in this regard. Therefore, the risk counsel was asked to adise on was a particular risk, and his adice about this risk was correct. The defendant was not entitled to rely on this adice to address the risk that the executor might defeat the plaintiff s claim by distributing the estate if the application was not sered. The Court of Appeal found that the trial judge erred in considering that the admission in the pleading was decisie when making the finding that the estate should be treated as haing been distributed, een though it had not. The Court of Appeal accepted that it would be an affront to the administration of justice to find that a court should PROFESSIONAL NEGLIGENCE Solicitors & Barristers 87

104 not gie effect to the true position established by the eidence. In making this decision the Court of Appeal found: (a) (b) at trial, the plaintiff led eidence without objection indicating that certain parts of the estate had been distributed. The Court of Appeal considered that if eidence tendered without objection reeals that an admission of mixed fact and law made in the pleading is incorrect, then the admission will not be conclusie against the party making the admission; and once the eidence about distribution of the estate was tendered without objection, then notwithstanding that the issue should hae been irreleant because of the defendant s admission, the issue for the trial judge was not whether the eidence was releant, but whether the estate had been distributed or not. The Court of Appeal held that the admission was releant to determining this issue, but not decisie. While at the time the deed of compromise was entered into, parts of the estate had been distributed, including 2 pieces of real property, the Court of Appeal found that the terms of the deed and the executor s recourse to the real property to meet the debts of the estate amply supported the conclusion of the trial judge that the transfer of the real estate to the executor was not a final distribution. Rather, it was a transfer proisional on and subject to the completion of the administration of the estate. Accordingly, the defendant s negligence was not causatie of any loss suffered by the plaintiff. An application for special leae to appeal to the High Court was refused. Queensland Court of Appeal: 1 August 2008 PROFESSIONAL NEGLIGENCE Solicitors & Barristers Belinda Thatcher 88

105 THE FACTS In early 2001, the plaintiff company negotiated to purchase a bakery supplies company of which Mr Norman Watts was the director. Jawatts Bakery Supplies Pty Ltd Parer & Ors [2008] QSC 314 Alleged failure of solicitor to ensure restraint of trade clause was included in contract for sale of business extent of instructions The plaintiff s directors, Mr and Mrs Weston-Webb, gae eidence that they had instructed the person responsible for preparing the contract, that they were not prepared to buy the business without a signout clause being in place. It was apparent that they intended this to mean a restraint of trade clause. Mr Weston-Webb apparently told Mr Mitchell that he wanted the clause to preent Mr Watts from operating a bakery supplies business for ten years and to coer Australia, as well as Papua New Guinea and other neighbouring islands. The contract was in the REIQ standard form for the sale of a business. The schedule showed that the contract was subject to finance. Mr and Mrs Weston-Webb signed the contract without obtaining legal adice. It did not contain the restraint of trade clause they had insisted upon. After the contract had been executed, the plaintiff engaged Mr Ingwerson, a solicitor employed by the defendant, to act on its behalf in the transaction. The contract was completed without a restraint of trade clause being included. The business later failed, for reasons unrelated to the restraint of trade clause. THE DECISION The plaintiff alleged that Mr Ingwerson failed to carry out his instructions to do whateer necessary to achiee a ariation of the contract so as to include a restraint of trade clause. The plaintiff s directors insisted that during their first meeting with Mr Ingwerson they had instructed him to obtain a ariation so as to include a restraint of trade clause. Mr Ingwerson recalled adising Mr and Mrs Weston Webb that there was no restraint of trade clause, but did not recall Mr Weston-Webb being concerned about this or saying that he wanted a restraint of trade clause for Australia and neighbouring islands. Mr Ingwerson conceded that there was a lack of adequate file notes to record his instructions. Howeer, the general course of the transaction was consistent with his being engaged to adise on the contract that had been signed, not with instructions to obtain a ariation. The court was not coninced by Mr Weston-Webb s eidence about the number of times he claimed to hae raised the restraint of trade clause with Mr Ingwerson. Mr Ingwerson conceded that he had failed to properly adise the plaintiff of the consequences of not including a restraint of trade clause. He also conceded that he had not informed the plaintiff s directors that they could terminate the contract and renegotiate if finance was not obtained by the due date. Howeer, the plaintiff could not show that it would not hae completed the contract if it had been properly adised. This was because of the amount of control Mr Weston-Webb exercised oer the transaction and the fact that the directors had knowingly signed the contract without a restraint of trade clause being included. The court noted that Mr Weston-Webb had played an actie role in the purchase. He had made it clear that he only wanted certain searches carried out. He had also negotiated a finance extension without Mr Ingwerson s input. It was not consistent with his other conduct for him not to personally pursue the restraint of trade clause directly with Mr Watts, if he had truly required it at the time of purchase. Queensland Supreme Court: 5 December 2008 Leah McStay PROFESSIONAL NEGLIGENCE Solicitors & Barristers 89

106 Daid THE FACTS Mr and Mrs Daid (the appellants), a husband and wife, became interested in inesting in a trolley Daid [2009] NSWCA 8 Conflict of interest duty to decline to act when aware of destination of inestment funds business operated by Mr Karl Suleman. Mr Daid consulted a company called Quick Loan Serices (QLS) and that company arranged finance, raised against the appellants home, to pay out the existing mortgage and to inest a sum of money in the trolley business. The appellants approached a firm of solicitors, Dominic Daid Sandford (DDS), to act for the plaintiffs in the refinancing transaction. Their solicitor, Ms Jajoo, was married to one of the DDS partners. The appellants had an initial face to face meeting with Ms Jajoo and later had a further meeting when some of the refinancing documentation was aailable and at which time the contents of the loan documentation were explained to the appellants. The destination of the funds was not identified to Ms Jajoo at either of the meetings. At the conclusion of the second meeting, the appellants completed a declaration regarding the effect of the security arrangement, confirming that they were aware that they were giing their house as security for the borrowings and that Ms Jajoo had explained to them the effect of the mortgage. Ms Jajoo made the appellants aware that she was not adising them in relation to the inestment or the size of the loan they were obtaining. Some 10 days later, Ms Jajoo had a telephone conersation with the first appellant to confirm some details of the intended settlement of the finance transaction. When asked for details of the direction of the funds, the first appellant told Ms Jajoo that a portion of the funds were to be drawn in faour of Mr Suleman. Ms Jajoo at this time queried whether or not the appellants had obtained independent adice on the inestment they were proposing to make, indicating that the firm was not aware of the status of Mr Suleman s business structure and was not in a position to recommend or disapproe. Ms Jajoo told the first appellant that one of the DDS partners had referred Mr Suleman to another firm of lawyers for adice on restructuring aspects of Mr Suleman s inestment companies. At trial it was established that while the precise nature of that relationship with Mr Suleman was not known to Ms Jajoo, she was aware that 2 of the DDS partners (one of whom was her husband) were inoled personally in a business transaction with Mr Suleman for a scooter business and a music store business. She was also aware that there were questions regarding the structure of the inestment scheme and that DDS, acting on Mr Suleman s behalf, briefed another firm for adice on the business structure. At the conclusion of the telephone conersation with Ms Jajoo the first appellant said that he wanted to proceed and wanted the mortgage documentation finalised, and that his cousin was a financial adisor. The inestment went ahead. Approximately 6 months later an administrator was appointed to companies operated by Mr Suleman, and ultimately ASIC wound up the inestment operation. The appellants then sued DDS as well as their mortgage broker and the lender. The claims against the broker and lender did not proceed to trial. The appellants also sued Mr Isho, the solicitor acting for Mr Suleman and his companies (where the money was ultimately inested). Mr Isho proided the inestment documentation to the appellants. The case against Mr Isho was framed around Mr Isho s suspicions at around the time that the loan transaction was entered into that Mr Suleman s inestments schemes ran foul of ASIC s requirements. Mr Isho later (after the transaction was completed) became aware that the inestment scheme did not hae ASIC s approal and he ceased to act for Mr Suleman at that time. THE DECISION AT TRIAL At trial, the appellants alleged that DDS were retained to adise on the prudence of the inestment and not only in relation to the refinancing arrangements but were unsuccessful. It was held that the retainer was not as wide as alleged by the appellants and was limited to the refinancing transaction. This finding at trial was based on the credibility of eidence gien by the appellants on the one hand and the solicitors from DDS on the other hand. PROFESSIONAL NEGLIGENCE Solicitors & Barristers 90

107 In relation to Mr Isho, it was held that no special considerations applied and there was no reason for the solicitor to beliee that the appellants were relying on him. It was found that there was no duty relationship, and the solicitor only carried out his instructions and did so without negligence. THE ISSUES ON APPEAL In relation to DDS, the issues for consideration on appeal were whether there was a duty to cease to act and whether the need for the appellants to obtain independent adice was adequately expressed to them by DDS. In relation to Mr Isho, the issues were whether there was a breach of duty of care gien that Mr Isho suspected potential iolations in relation to the inestment scheme, and whether he engaged in misleading and deceptie conduct by proiding the contract for a scheme which was later found to be in iolation of the law. THE DECISION ON APPEAL The appeal against DDS was dismissed. The key issue was whether DDS should hae declined to act for the appellants at the point of becoming aware of the destination of the funds. It was submitted by the appellants that DDS declining to act would also hae sered to make the appellants fully aware of the seriousness of the need to obtain independent adice. At trial, and on appeal, it was accepted that at that point there might hae been a new obligation to speak up beyond an ordinarily existing obligation, but it was found that the clear direction to the appellants that they should obtain financial adice about the inestment, which was repeated at the time that Ms Jajoo became aware of the destination of funds, satisfied any such obligation. In dealing with the adequacy of the adice gien to the appellants to seek independent legal adice, the Court of Appeal deferred to the conclusions of the trial judge that the adice was appropriate, reasonable and clear. Howeer, the Court of Appeal did note that Ms Jajoo possibly went too far in disclosing the relationship between DDS and Mr Suleman to the appellants. On appeal it was found that by appropriately construing the retainer there was no real conflict. The retainer was in relation to the refinancing transaction, the retainer was almost complete when the destination of the funds was identified, and when that information became known, it was not a conflict to continue with the retainer. It was pointed out that the funds to be inested were to be made aailable by the refinancing transaction which preceded the inestment. The funds could hae been made aailable and between the funds being made aailable and the inestment going ahead, there was opportunity for the plaintiffs to act on the adice that they had been gien to obtain independent adice regarding the inestment transaction (as distinct from the refinancing transaction). The appeal against Mr Isho was also dismissed. It had been alleged that by presenting the inestment documentation to the plaintiffs, Mr Isho was representing that the inestment was legitimate. The Court of Appeal held that there was no duty owed and it would be an extraordinary deelopment of the law to impose upon the solicitor (Mr Isho) a duty to take some step or gie some adice to a third party that was inconsistent with the interest of his primary client. New South Wales Court of Appeal: 12 February 2009 Joanna Burton PROFESSIONAL NEGLIGENCE Solicitors & Barristers 91

108 THE FACTS The plaintiff (the wife) and her husband (the husband) consulted a solicitor (the defendant) Beerley Rawleigh Derek Maxwell Tait [2009] NZSC 11 Liability of solicitor for breach of fiduciary duty acting for husband and wife about a proposed guarantee relating to a borrowing by a company of which the husband was a director and shareholder. Neither the husband nor wife had consulted the defendant preiously. The husband and the wife had marital difficulties and the wife was subject to repeated physical abuse by the husband. It became apparent that the guarantee and borrowing was an exercise by the husband to attempt to deprie the wife of matrimonial property. As a consequence of entering into the guarantee, summary judgment was obtained against the wife for $1,155, plus interest. THE DECISION The wife alleged that the husband had forcibly made her attend at the defendant s office and that the defendant knew that: - 1. The plaintiff did not want to sign the guarantee; 2. It was in the interests of the husband only that the plaintiff sign the guarantee; 3. The husband had on numerous occasions beaten the plaintiff due to her refusal to sign the guarantee; 4. The husband was outside the defendant s door waiting for her to sign the guarantee. He physically intimidated her and the defendant knew that the husband would act iolently towards her if she did not sign the guarantee; and 5. The plaintiff s free will to refuse to sign the guarantee was oerborne by pressure from the husband and the imminent continuance of physical iolence if she refused. The wife gae further eidence that the defendant had seen the husband act angrily towards her including pushing her into a chair and that he knew that she did not want to sign the guarantee. She alleged that she had wanted to write signed under duress on the document but the defendant would not allow her to do so. The court accepted the eidence of the defendant as to what transpired at the consultation with him on 1 October The court found that the husband and wife presented as a couple who wished to sign a guarantee in a business enture in which they were both inoled, that they gae no outward indication of anything untoward, and there was no physical or erbal abuse or threats in the defendant s presence. The court accepted that the defendant adised them not to sign the guarantee because of its unlimited nature. The defendant saw the plaintiff and the husband together and then indiidually with the door closed while the other waited in the reception area. The defendant adised the plaintiff that she should not sign the guarantee both in the presence of the husband and when she was alone. Notwithstanding this adice, both parties signed the document. The defendant prepared and had executed by both the husband and the wife a document recording his adice that included the following: - I confirm that you hae adised me not to sign the document as you hae adised it is not in my interest to do so and that the obligations imposed there under will be detrimental to me. The defendant accepted, howeer, that he had breached his fiduciary duty to the wife in failing to adise her that a conflict of interest existed in him adising both her and the husband. The defendant agreed that he should hae explained to the plaintiff the nature, effect and implications of the conflict of interest. That conflict included that the defendant was also adising the husband, who would benefit from the guarantee, in circumstances where the wife would not. The defendant argued, howeer, that the breach of fiduciary duty did not cause the plaintiff to suffer loss because she would hae signed the guarantee in any eent. The court referred to the authorities dealing with the situation where a solicitor is adising a person who may be subject to undue influence. The authorities proide that all that is necessary is that some independent person, free from any taint of the relationship, should clearly explain the nature and consequences of the act and it is for adult persons PROFESSIONAL NEGLIGENCE Solicitors & Barristers 92

109 of competent mind to decide whether they will do an act and I do not think that independent and competent adice means independent and competent approal. It simply means that adice should be gien in such a language that the person knows precisely what it is that they are doing. It was submitted that the defendant owed a fiduciary duty to make such enquiries as would hae reealed to him that the wife was being forced to sign the guarantee. It was submitted that since the phenomenon of undue influence of a husband on a wife is well known, the defendant should hae taken greater care to inestigate whether that was the wife s position. The court held that no such obligation existed particularly in circumstances where there was nothing from either the wife s demeanour, the eents at the defendant s office or the transaction itself to gie rise to suspicion. There was no reason for the defendant to apprehend that he should take more than the simple precaution of seeing the plaintiff alone. The court held that when a client in full command of their faculties and apparently aware of what they are doing seeks the assistance of a solicitor in the carrying out of a particular transaction, the solicitor is under no duty whether before or after accepting instructions to go beyond those instructions by offering unsought adice on the wisdom of the transaction. To hold otherwise would impose intolerable burdens on solicitors. Notwithstanding the breach of fiduciary duty, the court held that the plaintiff would hae signed the guarantee in any eent. At the time the wife had no means of knowing that the purpose of the guarantee was for the husband to presumptiely remoe matrimonial property from New Zealand. New Zealand Supreme Court: 17 February 2009 PROFESSIONAL NEGLIGENCE Solicitors & Barristers Gillian Sheppard 93

110 THE FACTS On 6 Noember 2002, a general dentist (the accused), performed a lengthy dental implant The Crown Pegios [2008] NSWDC 105 Dental negligence manslaughter by gross negligence standard of care procedure upon SC. To allay SC s anxiety about this the accused used intraenous sedation. To sedate SC the accused administered midazolam (17mg) and propofal (total amount 150mg). The accused also administered nitro oxide through a nasal mask. The leel of sedation required for the procedure was conscious sedation whereby the patient is capable of continuous rational communication. Any sedation beyond conscious sedation ran the risk of oxygen desaturation (hypoxia) because the patient cannot oluntarily ensure that the airway is clear. Prolonged hypoxia can cause damage to the brain and heart. In 1999 the accused completed the Uniersity of Sydney s diploma course in intraenous sedation for dentists. In the course it was taught that midazolam may be administered in a total dose of up to 15mg, and that propofol is a ery useful drug to help dentists through the last part of treatment. Howeer propofol was not recommended if a total dose of midazolam had been administered. The accused had also undertaken the implant manufacturer s training course and had completed 27 similar procedures without incident. He had placed oer 1,000 dental implants. By Noember 2002 he had used intraenous sedation during more than 680 procedures. He was assisted by a ery experienced registered nurse and 2 dental assistants. Generally, in addition to maintaining consciousness, the patient s oxygen saturation leels should be continuously monitored by an oximeter which sounds an alarm if saturation falls to 90% or below. The safe operating zone is when oxygen saturation is oer 95%. Below 90% the oxygen saturation leel is likely to fall sharply. There is a high risk of damage if oxygen saturation leels fall below 75% - 80%. A saturation leel of 65% constitutes a critical emergency that would almost certainly hae an aderse outcome if it continues for more than 3 4 minutes. SC was 67 years old and in apparently reasonable health for his age. He had a stocky build and a short thick neck. He gae a history of alcohol abuse which he claimed had terminated relatiely recently. He also said he had smoked heaily earlier in his life. He did not inform the accused about recent cardiac inestigations nor that he was taking Voltaren (also known as diclofenac and used to treat pain or inflammation caused by arthritis) and a high daily dose of aspirin. Both drugs increase bleeding. 1mg of midazolam was administered at 8:02am followed by a similar dose 8 minutes later at 8:10am. Surgery commenced shortly afterwards. SC gae bitewings at 9.30am indicating he was conscious at that point. During the procedure the oximeter reading fell below 90 on seeral occasions, the first being at 8.35 (84%) and the last being at 9:45 (63%). Each time the oximeter sounded an alarm the accused halted the procedure and extended SC s neck to open the airway in a procedure called a chin lift. The accused did not recommence the procedure until the oximeter showed that SC s oxygen saturation leel had risen to aboe 90%. The procedure was terminated after 9:45am when the oxygen saturation reading fell to 63. Emergency procedures were instituted. Howeer SC sustained hypoxic brain damage from which he later died. The accused was charged with unlawfully killing the deceased (manslaughter by gross negligence). THE DECISION The court stated that in order to establish the offence, the Crown must proe beyond reasonable doubt that: The accused owed a duty of care to the deceased; (a) (b) By his act or omission, the accused negligently breached that duty of care; The accused s negligent act/omission caused the deceased s death; and (c) Considering the extent by which the accused s conduct fell short of a reasonable standard of care and the associated leel of risk of death, the degree of the accused s PROFESSIONAL NEGLIGENCE Medical Negligence 94

111 negligence was so gross that it amounted to a crime. It was not in issue that a duty of care was owed and that the accused s acts/omissions caused the death of SC from hypoxic brain damage. The contentious issues were: (a) (b) (c) The substance of the releant duty of care; Whether the court is satisfied beyond reasonable doubt that the accused negligently breached that duty by administering excessie sedatie drugs and/or by failing to take appropriate action when SC experienced oxygen desaturation; and Whether the degree of any such negligence was so gross that the accused s conduct amounted to a crime against the State. The court was assisted by 7 experts. The eidence of one of the experts Dr Byrne was described by the court as mistaken and was disregarded. STANDARD OF CARE The court described the standard of care required of the accused as being that of a reasonable person in his position, ie a general dentist undertaking intraenous sedation in his/her surgery in 2002, who is exercising a fair and reasonable standard of care and competence to aoid foreseeable injury (This is similar or analogous to the Bolam test). All the experts agreed with the guideline at page 21 of the Australia and New Zealand College of Anaesthetist/ Royal Australasian College of Dental Surgeons Guideline on Sedation for Dental Procedures (1996) which stated as follows: Sedation for dental procedures includes the administration by any root or technique of all forms of drugs which resulted in depression of the central nerous system. The objectie of these techniques is to produce a degree of sedation whereby rational communication with the patient is continuously possible, so that uncomfortable and/or stressful procedures may be facilitated. The drugs and techniques used should proide a margin of safety which is wide enough to render unintended loss of consciousness unlikely. It is important to understand that oer sedation or airway obstruction may occur at any time.if at any time such rational communication is lost, then the operator must cease the procedure and deote his/her entire attention to monitoring and treating the patient until such time as a patient recoers consciousness. In considering whether the drugs were administered negligently the court noted the ambiguous guideline in the Uniersity of Sydney diploma course studied by the accused which on the one hand said it was acceptable to gie up to 17mg s of midazolam and normal to administer both midazolam and propofol. The court was also swayed by the iew of Associate Professor Woods (a dental practitioner who authored Guide to the Use of Drugs in Dentistry ) who said that the doses of midazolam and propofol were high but not excessie. This was consistent with the ambiguous Uniersity of Sydney document before the trial judge. The court was not satisfied beyond reasonable doubt that the accused sedatie drug regime breached the releant standard of care haing regard to the deceased s known medical history. The court then considered the question whether the accused had been negligent in failing to terminate the procedure earlier. There was a consensus amongst all the experts (apart from Dr Byrne) that the procedure went on for too long and the judge held that it should hae been terminated at 9:00am, some 45 minutes earlier than was the case. He obsered that of the 14 recorded oximeter readings, 10 were 90% or lower. In this regard he was satisfied the accused had been negligent. DEGREE OF NEGLIGENCE/GROSS NEGLIGENCE It was held that the offence of manslaughter requires gross negligence in circumstances where what is at risk is the life of the indiidual to whom the accused owes a duty of care: R Misra [2004] EWCA Crim 2375, applying R Adomako [1995] 1 AC 171. In describing the degree of negligence required to establish manslaughter, the court quoted the Lord Chief Justice in R Bateman (1925) 19 Cr App R 8 at 11: the negligence of the accused went beyond a mere matter of compensation between subjects and showed such disregard for the life and safety of others as to amount to a crime against the State and conduct desering a punishment. PROFESSIONAL NEGLIGENCE Medical Negligence 95

112 Finding the iew of Dr Vickers (an oral and maxillofacial surgeon experienced in working with patients under intraenous sedation) to be helpful, the court judge said that any areas of judgment in sedation must be assessed in light of the accused s lack of medical (as opposed to dental) training and knowledge that caused him to be unable to manage the many medical crises that deeloped. Whilst finding that the accused had negligently failed to terminate the procedure earlier, the failure was one in training and knowledge that caused him to be unable to manage the many medical crises that deeloped. Whilst finding that the accused had negligently failed to terminate the procedure earlier, the failure was one in training and accreditation and consequently the negligent conduct fell well short of that which would amount to a crime against the State and conduct desering a punishment. The accused was found not guilty. New South Wales District Court: 23 June 2008 Robert Samut PROFESSIONAL NEGLIGENCE Medical Negligence 96

113 THE FACTS The plaintiff was born on 13 October 1984 at the Bankstown Hospital in New South Wales. He Elayoubi bhnf Kolled Zipser & Ors [2008] NSWCA 335 Liability of specialist obstetrician/gynaecologist and hospital appellant born with birth defects caused by uterine rupture was the fifth child born to his mother (TK). The appellant suffers from spastic quadriplegia and an intellectual disability as a result of depriation of oxygen during his birth relating to a uterine rupture. TK s first 3 children were deliered aginally without complications. On 31 October 1978 TK gae birth to her fourth child at the Preston and Northcote Community Hospital (Preston Hospital) in Victoria. There were complications with this pregnancy and birth, and it was necessary for TK to delier that child by caesarean. TK was left with an obious and permanent ertical scar on her abdomen. The plaintiff alleged that the way the caesarean section had been performed, by a ertical incision which inoled the upper segment of the uterus, created an increased risk of uterine rupture in the eent of a subsequent pregnancy, and that the risk became a reality shortly before the appellant s birth. The first defendant, Dr Zipser, was sued in his capacity as a specialist obstetrician/gynaecologist for not proiding reasonable care to TK when she attended on him on 31 July 1984 for antenatal care at the Bankstown Hospital. The second defendant, the South Western Sydney Area Health Serice (the Health Serice), was sued as the organisation liable for the control and management of the Bankstown Hospital. The plaintiff alleged that the Bankstown Hospital was negligent in relation to the antenatal treatment it proided to TK. The third defendant (Northern Health) was sued as the body responsible for the operation, control and management of the Preston Hospital. The plaintiff alleged that the Preston Hospital was negligent in failing to adise and warn TK of the high risk implications of the caesarean section she had undergone in Each of the defendants accepted that they owed the plaintiff a duty of care. Howeer, each denied that they had breached those duties, and in the alternatie argued if they had breached those duties, such breaches were not causatie of the plaintiff s condition. THE DECISION AT TRIAL The trial judge found that the conduct of each of the defendants amounted to negligence, but that their conduct had not caused the plaintiff s condition. The trial judge found that the exercise by the defendants of their respectie duties of care would not hae achieed, or would not hae improed the chance of achieing, a better outcome for the plaintiff. THE ISSUES ON APPEAL The issues on appeal were: (a) (b) (c) (d) (e) whether Northern Health had warned TK that she had undergone and the consequences of haing undergone a caesarean which encroached on the upper segment of the uterus at Preston Hospital; whether the plaintiff s position would hae been different if TK s treating doctors at Preston Hospital had adised her of the risks consequent upon a caesarean section that encroached into the upper segment of the uterus; whether TK s treating doctors at Preston Hospital had correctly recorded the details of the 1978 caesarean; whether the trial judge was correct in finding that neither Dr Zipser nor Northern Health were responsible for any damage which may hae flowed from their failure to make inquiries with Preston Hospital because the critical information would not hae been supplied in answer to such an inquiry; and whether a different course would hae been taken at the Bankstown Hospital on the eening of the plaintiff s birth that would hae resulted in a different outcome if the defendants had not been negligent. THE DECISION ON APPEAL The Court of Appeal upheld the trial judge s findings that Northern Health had not proided TK with PROFESSIONAL NEGLIGENCE Medical Negligence 97

114 appropriate warnings. If TK had been adised of the nature and extent of the risks arising from an upper uterine segment incision, particularly not to subject herself and any future child to the risk of labour, she would hae passed that information on to future obstetricians such as Dr Zipser. The Court of Appeal also found that had Dr Zipser been adised of this information, he would hae adised TK that under no circumstances should a aginal deliery be considered for the plaintiff s birth. Northern Health s negligence, howeer, in failing to warn TK was held not to break the chain of causation with respect to Dr Zipser s negligence in failing to make inquiries with Preston Hospital regarding TK s preious obstetric history. The Court of Appeal also held that the weight of the medical eidence established that a caesarean including an encroachment into the upper uterine segment should hae been recorded in Preston Hospital s records because it had high medical significance for the management of any future pregnancy. Although the records had been destroyed prior to trial and the doctor who performed the caesarean at Preston Hospital in 1978 was not called to gie eidence, the Court of Appeal upheld the trial judge s finding that the doctor was aware that his intrusion encroached into the upper segment of the uterus, and that such critical information would hae been recorded in the hospital records. Further, had records been appropriately prepared, then a response from Preston Hospital in 1984 to an enquiry from another hospital would hae included a reference to the upper uterine incision that occurred in The Court of Appeal also held that if TK had been properly adised by Preston Hospital about the risks associated with future pregnancies, she would hae arried at Bankstown Hospital prior to 11:00pm on the night of the plaintiff s birth. Further, if Bankstown Hospital had been aware of the critical information relating to TK s obstetric history, appropriately experienced staff would hae been immediately aailable to perform a caesarean and would hae treated the situation with a degree of urgency. This would hae resulted in the plaintiff being born approximately 40 minutes earlier and probably aoiding his irreersible brain damage. Finally, the Court of Appeal found that the releant causal connection was established with respect to each element of negligence found to exist and the harm suffered by the plaintiff. The appeal was upheld. Liability was apportioned two thirds to the Health Serice as the entity responsible for the Bankstown Hospital and one third to Northern Health as the entity responsible for the Preston Hospital. An application for special leae to appeal to the High Court was refused. New South Wales Court of Appeal: 3 December 2008 Bree Lyell PROFESSIONAL NEGLIGENCE Medical Negligence 98

115 THE FACTS At 2am on 29 December 1999 the plaintiff, Dayna Curtis, awoke with a serious headache, nausea and Queen Elizabeth Hospital Curtis [2008] SASC 344 Delayed diagnosis causation hearing loss hospital treated plaintiff for migraine plaintiff later diagnosed with meningitis dizziness. She was seen by a locum at her general practitioner s rooms at 8am and was diagnosed as suffering from a migraine and treated accordingly. Her condition continued to deteriorate, and her mother took her to the emergency department at the Queen Elizabeth Hospital, (the defendant) at 2:15pm on 29 December She was again diagnosed as suffering from a migraine and treated accordingly. She was discharged into her mother s care. The plaintiff s condition did not improe, so her mother took her back to the Queen Elizabeth Hospital where she was again examined at around midnight. At 1am on 30 December, the plaintiff was diagnosed with meningitis. This diagnosis was confirmed at 4:20am following a lumbar puncture, and antibiotics were administered. The plaintiff was treated as an in-patient until 3 January The plaintiff underwent a hearing test on 24 February She was then referred to an ear, nose and throat surgeon, who recorded profound unilateral deafness in the right ear. Two ear, nose and throat specialists gae expert eidence at the trial. Both agreed that the plaintiff s hearing loss was causally linked to her meningitis. At trial the defendant admitted that it had breached the duty of care it owed to the plaintiff in making the late diagnosis of meningitis, and the consequent delay in implementing appropriate treatment. THE ISSUES AT TRIAL The key issue at trial was causation. In particular, whether the failure to administer antibiotics when the plaintiff first isited the emergency department caused or contributed to her hearing loss. With regard to quantum, the trial judge was required to consider: 1. Whether any discount should be made for the possibility that the plaintiff would hae suffered hearing loss in any eent; and 2. Whether the plaintiff failed to take appropriate steps to mitigate her loss, particularly by refusing to wear a hearing aid. THE DECISION AT TRIAL The trial judge found that: 1. As a result of the defendant s negligence in failing to make a timely diagnosis of meningitis, the treatment of the plaintiff with antibiotics was delayed for more than 10 hours; and 2. The defendant s breach of the duty of care it owed the plaintiff was a material cause of the plaintiff s permanent hearing damage. The trial judge rejected the defendant s submission that a reduction should be made for the possibility that the plaintiff would hae suffered hearing loss in any eent, and did not beliee that the plaintiff was being unreasonable in refusing to wear the hearing aid deice. There was insufficient eidence that the use of the hearing deice would hae made a significant difference in any eent. THE ISSUES ON APPEAL The defendant appealed on the issue of causation. The defendant alleged that the plaintiff had not proed that the breach of duty of care was a material cause of her hearing loss. Further, the defendant submitted that, een if causation could be established, the plaintiff s damages should be reduced on account of the fact that she probably would hae suffered hearing loss in any eent. The defendant also argued that the damages awarded to the plaintiff for pain and suffering and loss of amenities, and for loss of earning capacity were manifestly excessie. THE DECISION ON APPEAL The full court noted that the scope of the defendant s duty of care was: to meet the standard of care obsered by a competent medical practitioner in the area of emergency medicine, to make a differential diagnosis of meningitis, and to proide treatment to aoid or minimise the risk of mortality or permanent disability. The full court held that that the defendant had acted negligently in failing to diagnose and appropriately PROFESSIONAL NEGLIGENCE Medical Negligence 99

116 treat the plaintiff at the time of her first attendance at the emergency room. The plaintiff s unchallenged medical eidence established that the delay in diagnosis and appropriate treatment was, on the balance of probabilities, responsible for her hearing loss. This eidence also established that it was more probable than not that early interention would hae preented, or at the ery least lessened the seerity, of the plaintiff s hearing loss. As a result, the full court found that it was open to the trial judge to conclude that the failure to administer antibiotics at the time of the plaintiff s first attendance at the emergency centre materially contributed to her hearing loss. The full court made no allowance to account for the possibility that the plaintiff would hae suffered hearing loss in any eent. The full court dismissed the defendant s appeal. South Australia Supreme Court: 9 December 2008 Jenni Mole PROFESSIONAL NEGLIGENCE Medical Negligence 100

117 THE FACTS On 6 August 2003 the appellant underwent sinus surgery at the Osborne Park Hospital (the hospital). Dr Beahan, an Kerr anaesthetist engaged by the hospital, managed and superised the appellant s post-operatie pain relief. Minister for Health In accordance with Dr [2009] WASCA 32 Beahan s instructions, the appellant was gien 6, Whether appellant s seizure 100mg doses of pethidine caused by pethidine dose during the 24 hours following whether doctor breached his duty by failing to warn her surgery. The appellant appellant of the risk of subsequently suffered a seizure icarious liability of seizure and sustained hospital injuries to her sternum and spine as a result of the cardiac compressions that were performed by hospital staff. The appellant instituted proceedings against the operator of the hospital (the respondent) alleging that the seizure and her subsequent injuries occurred as a result of Dr Beahan breaching the duty of care he owed to her for which the respondent was icariously liable. The bases for the appellant s allegations were that Dr Beahan:- 1. had prescribed doses of pethidine that were in excess of recommended doses; 2. had prescribed and administered pethidine in doses which were known to cause, or ought to hae been known to cause, the appellant to suffer seizures and arious other medical conditions; and 3. failed to warn the appellant of the risks of complication associated with the prescription and administration of pethidine in the dose proposed to be prescribed and administered, and to seek the appellant s consent to such medication. THE DECISION AT TRIAL The trial judge found that Dr Beahan s failure to warn the appellant of the risk of complications resulting from the dosage of pethidine administered was not negligent. Further, it was held that the dosage gien was not in excess of the recommended dose and that, in any eent, the respondent would not hae been negligent for prescribing pethidine in dosages that were known to cause seizures and the other conditions pleaded. Finally, the trial judge held that it was not satisfied that the dosage of pethidine the appellant had been prescribed by Dr Beahan materially contributed to her seizure. The appellant s claim was dismissed. THE DECISION ON APPEAL The issues on appeal were:- 1. whether the trial judge had erred in finding that the respondent had not been negligent for failing to warn the appellant of the risk of complications; and 2. whether the trial judge erred in finding that the appellant s seizure and consequent injuries were not caused by the dosage of pethidine she was gien by the respondent. The Court of Appeal considered the principles set down by the High Court in Rogers Whitaker [1992] HCA 58 regarding a material risk that is inherent in proposed medical treatment. It was found that there was a material risk inherent in the administering of pethidine to the appellant because of the risk of seizure and other complications. Accordingly, the Court of Appeal considered that a reasonable person in the appellant s position, if warned of the risk, would likely attach significance to it. Therefore, the Court of Appeal held that Dr Beahan had a duty to warn the appellant of that material risk, and that his failure to proide the appellant with an appropriate warning warranted a finding that he had breached his duty of care, for which the respondent was icariously liable. In relation to the second issue on appeal, the Court of Appeal concluded that the weight of the medical eidence supported the trial judge s finding that the pethidine dose the appellant receied did not materially contribute to her seizure. Gien that the dosage was not found to hae caused the seizure and subsequent injury, the appeal was dismissed. Western Australia Court of Appeal: 5 February 2009 Bree Lyell PROFESSIONAL NEGLIGENCE Medical Negligence 101

118 MD THE FACTS The plaintiff sought surgery to repair a prolapsed uterus plus tubal ligation from Dr Fulcher, the second defendant. Sydney South West Area Health Serice (3) [2009] NSWDC 22 Failure to order pregnancy test prior to surgery The plaintiff, who was 29 at the time of trial, had 5 children, the oldest of which was 14. None of her pregnancies were planned. After the birth of her fourth child, she noticed there was a protrusion from her agina and that it was painful for her to hae intercourse. She consulted her GP and was referred to the second defendant who first reiewed the plaintiff in August Treatment of the prolapsed uterus, as well as tubal ligation, was discussed. Arrangements were made for the procedures to be performed at Lierpool Hospital on 8 December On 8 December 2003, due to an emergency arising elsewhere in the hospital, the second defendant was not able to perform the procedures and the plaintiff was told her surgery had to be postponed. The surgery was subsequently arranged for 2 February After the surgical procedure, the plaintiff felt extreme pain which continued until May 2004 when she consulted her general practitioner. A pregnancy test was performed at this time followed by an ultrasound which found that the plaintiff was pregnant at the time of the surgery on 2 February The plaintiff had not been pregnant in December 2003 when the surgery was initially due to proceed. The plaintiff alleges that she was not warned at any time of the need to hae a pregnancy test prior to undergoing the tubal ligation procedure. THE DECISION The court held that on no occasion did the second defendant say anything to the plaintiff about the importance of not being pregnant at the time she had surgery. In his defence, the second defendant relied on the fact that at his first consultation with the plaintiff in August 2003 she stated that she used condoms for contraception and, in any eent, had coneyed to him that since the prolapsed uterus occurred, sexual intercourse was too painful and for that reason he assumed she was not haing sex. He specifically asked her are you sexually actie? Her response to this was not really by which she meant she only had intercourse eery now and then. The court noted the differences in education, experience and communications styles between the second defendant, a qualified medical specialist, and the plaintiff who left school to hae her first child at the age of 15. The court stated that sexually actie is not an expression the plaintiff would normally use and may not hae understood completely, and although the second defendant may hae intended the question to mean are you haing sexual intercourse at present?, the plaintiff s understanding of the question was are you haing sexual intercourse frequently?. When the procedure was carried out on 2 February 2004, the plaintiff was pregnant although not aware of it at that time. Prior to the procedure the anaesthetist approached the second defendant and adised him that the plaintiff had not had a pregnancy test. The second defendant did not order any tests. The second defendant stated that he proceeded with the surgery because the plaintiff, who had preiously suffered a pulmonary embolus and was taking Clexane, had to stop taking that medication for the procedure, and in his iew, stopping and starting the medication might be detrimental to her health. Further, he stated that the only pregnancy test which could be carried out before the procedure was due to commence was a urine test which might proe to be inaccurate. Once the procedure was underway, the plaintiff was found to hae a bulky uterus which can be a symptom of pregnancy but may also be consistent with other conditions. The second defendant said the reason he continued with the procedure was because he was satisfied that the plaintiff could not be pregnant because she had told him that she had not been sexually actie. The court held that the bulky uterus should hae put the second defendant on notice of the possibility that the plaintiff was pregnant, howeer, this alone did not oblige him to cease operating. The additional factor which rendered the second defendant in breach of his duty of care was the failure to discuss the need for a pregnancy test at any stage. PROFESSIONAL NEGLIGENCE Medical Negligence 102

119 The court applied s5 of the Ciil Liability Act 2002 (NSW) (CLA) and held that the risk of harm was not insignificant and that a reasonable person in the second defendant s position would hae adised the plaintiff to hae a pregnancy test a day or 2 before the surgical procedure and would also hae referred the plaintiff to a pathologist for the releant blood test or adised the referring general practitioner to ensure such a test was carried out. Further, a reasonable medical practitioner should hae reminded the plaintiff of this prior to the rescheduled surgery in December when the first surgery was postponed. The plaintiff s claim against the first defendant failed because the plaintiff did not adduce any eidence of the relationship between the second defendant, who was a isiting medical officer at the first defendant s hospital, and the first defendant itself. Accordingly, the claim that the first defendant was icariously liable for any act or omission of the second defendant could not be sustained. The plaintiff claimed only general damages and out of pocket expenses and was awarded $103,500, being 30% of the most extreme case pursuant to s16 of the CLA. New South Wales District Court: 6 March 2009 Sarah Haigh PROFESSIONAL NEGLIGENCE Medical Negligence 103

120 Hookey THE FACTS Dr Steen Hookey, a dentist with qualifications in oral and maxillofacial surgery, operated on the lower jaw of the plaintiff. The surgery was Paterno [2009] VSCA 48 Whether a treatment plan recommended by maxillofacial surgeon was appropriate duty to warn of risks of proposed surgery the third stage of a course of orthodontic and surgical treatment intended to oercome symptoms caused by the plaintiff s jaw malocclusion. Jaw malocclusion is a condition which occurs when the lower jaw fails to grow forward to match the upper jaw. The treatment was unsuccessful. The plaintiff s lower jaw did not unite and she required further surgery. Despite 5 remedial operations as well as hyperbaric and other treatment, the plaintiff complained of continuing to suffer from burning pain in her face, numbness in parts of her lip and chin, difficulty eating and speaking and her appearance has been seriously affected. The plaintiff alleged that the defendant had adised her to undergo inappropriate treatment, failed to warn her of the risks associated with the treatment, and carried out the surgical procedure without due skill and care. THE DECISION AT TRIAL The trial judge found the defendant negligent and awarded the plaintiff damages of $1,057,833. The trial judge held that the defendant s treatment plan was inadequate gien the plaintiff s condition, age (she was 47 at the time) and the fact that she was a smoker. It was also found that the defendant negligently failed to warn the plaintiff of the risks of surgery. THE DECISION ON APPEAL The Court of Appeal (by majority) disagreed with the decision of the trial judge that the treatment plan proposed by the defendant was inappropriate. In considering this issue the court referred with approal to the comments made by the trial judge that the question of whether an appropriate standard of care has been met does not depend solely on whether the treatment offered or recommended was in accordance with what a respectable body of professional opinion said was appropriate. The trial judge said that it was necessary to weigh the nature of the treatment, including its intrusieness and risk factors, against the nature and seerity of the presenting problems which the treatment was aimed to resole, and the prospects of doing so. The Court of Appeal made reference to the decision of Rogers Whitaker [1992] HCA 58 in which the High Court held that the standard of care to be obsered is the reasonable skill and care of an ordinarily skilled practitioner within that profession. In accordance with that authority, while eidence of acceptable professional practice is a useful guide, it is for the court to adjudicate on what the appropriate standard of care is, after giing weight to the paramount consideration that a person is entitled to make their own decisions about their life. In a case where something unforseen has gone wrong, the Court of Appeal stated that it is important to aoid the temptation of looking back from the patient s present condition and finding that, because of what has occurred, there must hae been a significant risk of its occurrence that should hae been aoided. The defendant led eidence which established that there was a strong body of professional opinion which considered that the treatment plan was appropriate to the plaintiff s needs, established that the risks of what subsequently transpired were low, and indicated the shortcomings of alternatie treatment options. On that basis, the Court of Appeal did not consider that the recommended treatment plan fell short of the standard of adice to be expected of an ordinarily skilled person exercising and professing to hae the special skill of an oral maxillofacial surgery. All 3 members of the Court of Appeal, howeer, agreed that in failing to adequately warn the plaintiff of the risks, the defendant had been negligent. In relation to this issue, the Court of Appeal referred to the comments made by Justice Kirby in Rosenberg Percial (2001) 205 CLR 434, that it is the patient who ultimately carries the burden of the risks of medical procedures. In that case Kirby J stated that, Therefore, unless such risks may be classified as immaterial, in the sense of being unimportant or PROFESSIONAL NEGLIGENCE Medical Negligence 104

121 so rare that they can be safely ignored, they should be drawn to the notice of the patient. Only then can an informed choice be made by the person who alone, in law, may make that choice, namely the patient. The Court of Appeal found that the defendant only warned the plaintiff that she might feel numbness or similar sensations and did not mention other more remote neurological consequences such as the risk of nere damage, from which she now suffers or risk of non-union of bone, which also occurred. The Court of Appeal held, on the basis of the plaintiff s eidence and her actions both prior and subsequent to the surgery, that she would not hae gone ahead with the surgery if a proper warning had been gien. Victoria Court of Appeal: 19 March 2009 Gillian Sheppard PROFESSIONAL NEGLIGENCE Medical Negligence 105

122 Gett THE FACTS The respondent, at age 6, was admitted to hospital on 11 January 1991, complaining of headaches Tabet [2009] NSWCA 76 Whether irreersible brain damage caused by misdiagnosis by paediatrician loss of chance of better clinical outcome and omiting. The appellant, a paediatrician, considered the claimant to be suffering symptoms of resoling chicken pox and, possibly, meningitis. By 13 January 1991, the respondent was exhibiting abnormal neurological signs and on 14 January 1991 her condition worsened to the point where she suffered a seizure. On that day, following a CT scan the respondent was diagnosed with a brain tumour. Surgery consequent to the brain tumour left her with irreersible brain damage. THE ISSUES The issues at trial were primarily whether the appellant was negligent in failing to arrange a CT scan on 13 January 1991; and whether the appellant was negligent in diagnosing chickenpox encephalitis or meningitis, particularly haing regard to the respondent s history of headaches. THE DECISION AT TRIAL The trial judge found that, although the appellant breached his duty of care to the respondent by failing to arrange a CT scan on 13 January 1991, there was no eidence on the balance of probabilities that the appellant s breach of duty caused or contributed to the brain damage suffered by the respondent. Howeer, the trial judge found that the respondent was entitled to damages for loss of chance on the basis that: (a) (b) (c) had the tumour been detected by CT scan on 13 January 1991, treatment would hae commenced earlier; that treatment would hae taken the form of reducing intercranial pressure by either the prescription of steroids or the insertion of a drain; although the earlier treatment would not hae preented her brain damage, it would hae gien her the chance of a better clinical outcome; (d) the delay in the respondent s treatment was 1 of 4 separate causes of her brain damage, the other causes being the surgery itself, chemotherapy and radiotherapy (that is, the delay represented 25% of the injuries ultimately sustained by her); (e) (f) there was a 40% chance that earlier treatment would hae afforded her a better medical outcome; she was therefore entitled to 40% of 25% of the agreed quantum award. THE ISSUES ON APPEAL It was alleged by the appellant that the trial judge erred in: (a) (b) (c) finding the appellant had breached his duty of care to the respondent by failing to consider other possible diagnoses and to hae ordered a CT scan on 13 January 1991; awarding damages on the basis that the respondent had lost the chance of a better medical outcome, rather than concluding that the appellant s breach of duty was not causatie of the respondent s loss; and assuming the decision relating to claims for loss of chance in Rufo Hosking [2004] NSWCA 391 (Rufo) to be correct. The respondent cross-appealed, primarily on the basis that the trial judge was mistaken in assessing the respondent s claim on the basis of a loss of chance, rather than finding that, on the balance of probabilities, the appellant s negligence caused the whole of the respondent s brain damage. THE DECISION ON APPEAL The Court of Appeal found no damages for loss of chance could be awarded to the respondent for the reasons that: (a) the concept of loss of chance departs from the ordinary principles of the law of tort where a claimant must show, on the balance of probabilities, that a breach of duty of care either caused, or materially contributed to, their harm; PROFESSIONAL NEGLIGENCE Medical Negligence 106

123 (b) (c) (d) (e) (f) awarding damages for loss of a chance of a better medical outcome alters the principle of causation, as a claimant does not need to proe on the balance of probabilities that the damage was caused by the breach of duty; the decision in Rufo was plainly wrong. That case did not properly consider the concept of loss of chance, no limitations were applied to the concept in that decision and the decision forms no recognisable stream of authority; the concept of a loss of chance is inconsistent with tort reform legislation (particularly matters implicit in the Ciil Liability Act in arious states); matters concerning a new path of proof of causation is an issue of public policy, not able to be determined by an intermediate court; in this case, the appellant s negligence had not been shown to be causatie of any loss. New South Wales Court of Appeal: 9 April 2009 Natalee Barr PROFESSIONAL NEGLIGENCE Medical Negligence 107

124 G&M THE FACTS The defendant obstetrician administered in itro fertilisation treatment (IVF) to the plaintiffs. Armellin [2009] ACTCA 6 IVF Two embryos implanted when only one was requested D u r i n g t h e i r i n i t i a l consultations with the defendant the plaintiffs adised that they did not want more than one child. The defendant adised that there was an increased likelihood of multiple pregnancies through IVF, that the plaintiffs chances of falling pregnant would be significantly less if only one embryo was implanted, but that they would be able to decide prior to the procedure how many embryos they wanted implanted. The procedure was undertaken at the John James Memorial Hospital Fertility Centre (the Centre), at which the defendant was a consultant. Ms G (the female plaintiff) filled out a consent form authorising the implantation of one or two embryos. On the morning of the procedure, she informed the defendant that she only wanted one embryo implanted. The defendant assumed that Ms G had told the Centre s staff of this decision, howeer, she had not and the Centre s embryologist prepared two embryos, which were implanted. In July 2004, the female plaintiff gae birth to non-identical twins. The plaintiffs issued proceedings against the defendant for negligence, alleging that the defendant was aware that they only wanted one child and accordingly, he had breached his duty of care by implanting two embryos instead of one. The plaintiffs claimed the cost of raising the second child. THE DECISION AT TRIAL The trial judge considered that it was the Centre staff who were responsible for ascertaining how many embryos a patient wanted implanted, communicating this to the embryologist and ensuring that the correct number were implanted. The trial judge accepted that the defendant acted reasonably in relying upon the Centre staff to carry out their appointed responsibilities and accordingly, had not breached his duty of care. The trial judge found that there was nothing in the defendant s conersation with the female plaintiff on the day the embryos were implanted that should hae alerted him to the fact that she was changing her instructions, and it was reasonable for him to assume that the Centre was aware of the plaintiffs instructions. THE DECISION ON APPEAL The Court of Appeal unanimously oerturned the trial judge s decision and found that the defendant was negligent. The female plaintiff was the defendant s patient and, as such, he was ultimately responsible for the implantation procedure. The female plaintiff was told that she could let the defendant know on the morning of the procedure how many embryos she wanted transferred. The system by which the Centre would normally ascertain how many embryos were to be implanted was not an established system but simply a practice normally adhered to. In these circumstances, the defendant should hae checked with the embryologist about how many embryos were being transferred before allowing the procedure to go ahead. It was negligent for him to assume that the embryologist was complying with the female plaintiff s instructions about the number of embryos to be transferred. Australian Capital Territory Court of Appeal: 1 May 2009 Belinda Thatcher PROFESSIONAL NEGLIGENCE Medical Negligence 108

125 THE FACTS The Sydney South West Area Health Serice (the defendant) implemented a breast screen serice operated by Breastscreen NSW (Breastscreen). The plaintiff, Mrs O Gorman, attended BreastScreen on 23 February 2006 for a mammogram. She had [2009] p r e i o u s l y a t t e n d e d Sydney South West Area Health Serices Stamoulis [2009] NSWCA 153 Failure to diagnose breast cancer where the failure led to an increased risk of metastisation by 10% - admissibility of expert witnesses who hae an interest in the proceedings cancer. BreastScreen in 1996, 1998, 2002 and Dr Van Rooijen and Dr Varnaa (the radiologists) performed the mammogram. Following her 2006 attendance, the radiologists informed Mrs O Gorman that there was no isible eidence of breast On 1 January 2007 the plaintiff discoered a hard lump in her left breast. On 17 January 2007 she underwent an ultrasound and a mammogram, which confirmed that the lump was cancer. Pre-surgery scans in 2008 showed the cancer had metastesised in the plaintiff s lungs and brain. The expert eidence was such that had the tumour been detected in 2006, there was a 38% chance of it metastising elsewhere in the plaintiff s body. In 2007, when the tumour was detected, there was a 42% chance. This resulted in a 10% increase in risk. The plaintiff commenced proceedings in July 2008 against the defendant on the basis it was icariously liable for the conduct of the radiologists. The trial proceeded in October The plaintiff died later that year. Ms Stamoulis was the representatie of the plaintiff s estate. THE ISSUES AT TRIAL The plaintiff contended, in reliance on the eidence of Dr Kitchener, that the 2006 mammogram showed a significant increase in the size of the mass and that the two radiologists were negligent in failing to recall her for further inestigation. Howeer, the eidence proided by Associate Professor Osborne was that the mass just appeared denser, and that the marginal increase did not warrant further inestigation at the time. During the hearing, the radiologists sought to tender eidence in the form of written statements, submitting opinions that justified their conduct. The defendants sought to argue that the plaintiff should only recoer 10% of her damages on the basis that the medical eidence assessed a 10% increase in the risk of metastasisation of her tumours. THE DECISION AT TRIAL Based on his assessment of the relatie expertise of the experts, the trial judge preferred the eidence of Dr Kitchner, the plaintiff s expert, oer that of Dr Osborne. The trial judge concluded that there was no scope to apply Rufo Hosking (allowing a reduction to represent the percentage of chance lost) and that the plaintiff had established that the defendant s conduct caused her tumours and she was allowed to recoer the full amount of the assessed damages. The plaintiff was awarded $405, in damages. THE ISSUES ON APPEAL The defendant challenged the trial judge s findings as to negligence and causation. Specifically whether the trial judge made factual errors, based on his acceptance of the plaintiff s expert eidence, that the mass in 2006 had significantly increased in size. It was eident that the trial judge had considered, based on his own isual inspections of the mammogram films, that the mass had doubled in size. The Court of Appeal also had to consider whether the trial judge wrongly disallowed expert eidence by the defendant radiologists. The basis upon which the eidence was disallowed was not clear from the trial judge s findings. The plaintiff also cross-appealed on the assessment of damages. THE DECISION ON APPEAL The appeal was allowed in part. The Court of Appeal considered that the trial judge was entitled to determine the weight of the expert eidence based on their expertise, qualification and experience. The Court of Appeal held that the trial judge did not impermissibly take into account his own opinions. There was sufficient medical eidence to support the trial judge s conclusions PROFESSIONAL NEGLIGENCE Medical Negligence 109

126 that the mass had increased in size and he had not based his findings upon his own interpretation. On the question of causation, the appeal was dismissed. In addition to proing that the defendant s conduct resulted in a material increase in the risk of injury, the plaintiff must establish that it was probable that the risk increased by the defendant came home. It is not enough to establish that there was an increase in risk and an injury. That is to say, the injury suffered by the plaintiff must hae been caused because of the increased risk. The Court of Appeal distinguished Mrs O Gorman s increased risk of 10% to that eidenced in the most recent authority on loss of chance in Gett Tabet [2009] NSWCA76. The plaintiff in Gett had failed to show on the balance of probabilities that the risk was brought home. In contrast, Mrs O Gorman could satisfy this test. On the issue of whether statistics alone can be relied on to establish causation on the balance of probabilities, the court stated that it is a question of degree. Statistics alone will neer amount to an absolute proposition, the question is always whether the eidence as a whole establishes causation on the balance of probabilities. It was the opinion of the Court of Appeal that the eidence of the 10% increase was not epidemiological eidence but was eidence applied singularly to Mrs O Gorman. In applying the commonsense test of causation, there was sufficient eidence to support a finding that on the balance of probabilities the failure to detect the initial mass was the actual cause of the tumours that metastasised. Turning to the issue of the admissibility of the radiologists eidence, the Court of Appeal held that the rules did not render inadmissible expert eidence of witnesses who hae an interest in the proceedings. The trial judge had erred in deciding that the eidence of the radiologists was inadmissible on this basis. Howeer, the radiologists interest in the proceedings was a factor to be considered when determining the weight to be gien to their eidence. Considering the nature of that eidence, which had the capacity to bring about a different result in the case, the Court of Appeal ordered a retrial on the issue of negligence. The court dismissed the plaintiff s cross appeal on the assessment of damages. New South Wales Court of Appeal: 24 July 2009 Genoiee Lajeunesse PROFESSIONAL NEGLIGENCE Medical Negligence 110

127 THE FACTS The plaintiffs owned and operated a coal mine in central Queensland pursuant to a joint BHP Coal Pty Ltd O&K Orenstein & Koppel AG [2008] QSC 141 Collapse of a bucketwheel excaator where collapse was caused by design deficiencies and/or inadequate inspection contraention of Trade Practices Act 1974 (Cth) enture agreement. A bucket wheel excaator machine (the machine) had been operating continuously at the mine from 1982 until 2000 when it suddenly collapsed. The collapse was caused by a crack in the central mast of the machine that resulted from fatigue. The first defendant was the designer and manufacturer of the machine. In late 1984 the machine required some repairs and Dr Fleischhaker, an engineer and employee of the first defendant, was sent to the mine to assist. Dr Fleischhaker adised the plaintiffs to weld 8 lengths of steel known as stiffeners to the machine. This work was carried out a few weeks later under the superision of a second employee of the first defendant. The crack which led to the collapse was located at the end of one of the stiffeners. The machine was inspected by the second defendant, an engineering company, eery 2 or 3 years. The third defendant, a registered engineer, was a former employee of the second defendant. In March 1999 the second defendant sent the third defendant to the mine to inspect the machine and to prepare an inspection report. The crack was not mentioned in the report. Following the machine s collapse it was replaced by a different sort of machine. The plaintiffs claimed approximately $50,000,000 for the cost of the new machine plus arious other alleged losses sustained. The defendants alleged that the plaintiffs had been contributory negligent. THE ISSUES The plaintiffs alleged that the first defendant: 1. had negligently designed the stiffeners; 2. did not properly inspect the affixation of the stiffeners; 3. failed to warn the plaintiffs of the risk that a crack could deelop at the top of a stiffener; and 4. was in breach of s52 of the Trade Practices Act 1974 (Cth) (TPA) by misrepresenting to the plaintiffs that its design of the stiffeners was the result of reasonable skill and care. The plaintiffs alleged that the second and third defendants: 1. were in breach of contract by failing to inspect the entire machine in March 1999; 2. failed to take reasonable care during the inspection in breach of its duty of care to the plaintiffs; and 3. were in breach of s52 of the TPA because the third defendant s report was misleading and deceptie gien that it did not mention that the third defendant had not inspected the entire machine. THE DECISION The court held that the first defendant owed 5 of the 7 plaintiffs a duty of care in relation to the design of the 1984 repairs to the machine. The court considered extensie expert eidence regarding which legislatie and industry codes a reasonably careful and competent engineer in Dr Fleischhaker s position would hae relied on in 1984 to assess the fatigue strength of the weld details of the stiffeners. Dr Fleischhaker had relied on a code published in the Federal Republic of Germany called BG 60 which was being officially reiewed in In these circumstances, the court held that Dr Fleischhaker should not hae relied on BG 60 but, rather, should hae implemented the use of a stronger E1 type weld and/or should hae extended the stiffeners to the top of the mast. As Dr Fleischhaker had not required or recommended these steps in his design, the court held that the first defendant had breached its duty of care, and that the negligent design was a cause of the failure of the machine and the losses that had occurred as a result. The court also commented that the plaintiffs allegations that the first defendant failed to warn the plaintiffs of the prospect of fatigue cracking or to superise the welding of the stiffeners did little to adance their case. The court considered that the TPA case against the first defendant closely followed the negligence case, as the first defendant had misrepresented that it had exercised appropriate care and skill in the repairs PROFESSIONAL NEGLIGENCE Engineers 111

128 that it had recommended to the plaintiffs. The court also considered that common law concepts of causation applied to the TPA cause of action, and that it was clear that the plaintiffs had relied on Dr Fleischhaker s representation that he had exercised appropriate care and skill in his design. In accordance with those findings the court held that the first defendant was liable to 6 out of the 7 plaintiffs for breach of the TPA. In relation to the plaintiffs allegations of breach of contract against the second defendant, the court rejected the second defendant s submission that the third defendant was not obliged to leae the walkways, access ways or ladders that were affixed to the machine during the inspection. The court focused on the fact that the contract required the second defendant to conduct a isual inspection of the entire machine. Therefore, the court held that the third defendant (for whom the second defendant was icariously liable) had an obligation to request, at the ery least, that the plaintiffs proide him with a harness and a cherry picker or manboat to allow him to inspect the parts of the machine that were not easily isible. As the third defendant did not request such equipment and failed to inspect the machine in its entirety, including the place where the crack had appeared, the second defendant was in breach of contract. The fact that the third defendant s report failed to mention that the entire machine had not been inspected confirmed this breach. The court also found that for these reasons the second defendant had been negligent and had breached the TPA. In relation to causation the court held that, on the balance of probabilities, if the area where the crack was located had been inspected it would hae been detected and repaired which would hae aoided the collapse. Therefore, the second defendant s conduct was a cause of the plaintiffs losses. The court then considered the third defendant s conduct separately, and found that he had breached his duty of care to the plaintiffs by failing to inspect the entire machine and in proiding a report that failed to mention that fact. This conduct was also considered to be misleading and deceptie in breach of the TPA, and a cause of the plaintiffs losses. The court rejected each of the defendants allegations of contributory negligence. The court gae judgment for the 6 successful plaintiffs in the sum of slightly more than $37 million, together with interest of more than $16 million. The judgment is significant for the sheer size of the litigation, the length of the trial, the amount claimed and the amount of the judgment. It is also significant for considering the duties owed by mechanical engineers, when the majority of recent judgments reported in Australia relate to engineers inoled in building fields, such as geotechnical and structural engineers. Queensland Supreme Court: 1 July 2008 Bree Lyell PROFESSIONAL NEGLIGENCE Engineers 112

129 THE FACTS On 26 May 2003 the plaintiff entered into a contract of sale to purchase a property (the property). The contract was Brown subject to a cooling off period which expired on 28 May The plaintiff retained the defendant, a Dream Homes SA Pty building consultant, to Ltd [2008] SASC 295 prepare a pre-purchase inspection. Following an Liability of building inspection the defendant consultant pre-purchase produced a report which inspection assessment of damages for lost opportunity stated that the house was structurally sound. Based upon that report the plaintiff adised the endor that she did not wish to exercise her cooling off rights and settlement took place on 26 June After entering into possession the plaintiff noted that windows jammed, some windows did not lock and there was cracking in a number of areas including a repaired crack to the exterior of the western wall of the master bedroom near the front door of the property (the patched crack). The plaintiff engaged an architect who, following inspection, concluded that the damage was caused by inadequate site drainage resulting in footage moement. Recommendations as to repair were proided. The plaintiff subsequently sought legal adice and her solicitors retained a building inspector to simulate a pre-purchase building inspection. That report stated that the building was in poor condition and required maintenance, that the cause of the seere cracking would need to be assessed by a structural engineer and a rectification specification prepared. At trial, the Magistrate found the defendant liable but dismissed the plaintiff s claim for damages on the basis of causation. On appeal, a single judge of the Supreme Court found that the defendant was not liable. THE DECISION ON APPEAL The plaintiff appealed to the Full Court. The court found that the defendant should hae realised that the patched crack indicated repair of significant cracking that might hae been the result of moement of the footings, and which an engineer should inestigate. The court found that the crack was precisely the sort of defect that may affect a prospectie purchaser s decision to cool off and should hae been reported to the plaintiff. As a consequence of that failure, the defendant breached his contractual duty and duty of care to the plaintiff. The plaintiff admitted in eidence that she had only read the final page of the defendant s report which contained the summary indicating that the property was structurally sound. The court found that the plaintiff was reasonably entitled to expect that the possibility that the patched crack would hae been referred in the summary page of the report, particularly in light of the finding that the defendant should hae recommended to the plaintiff that an engineer s adice be obtained. The court found that it was open for the Magistrate to find, on the basis of the plaintiff s eidence, that had the defendant gien the plaintiff the appropriate information about the potential cause of the patched crack, then she would hae exercised her right to cool off and would not hae proceeded with the purchase. This finding was made despite expert eidence from a ciil engineer that the house was structurally sound and the cause of the cracking was trees planted around the house and, in particular, a large tree that had since been cut down. In the initial statement of claim the plaintiff sought $30,000 in damages for loss on re-sale of the property together with the costs of the purchase, re-sale and moing in. Her claim was based upon a diminution in alue of the property in accordance with a aluation report. Subsequent to instituting proceedings but before trial the plaintiff sold the property. She amended her statement of claim to seek damages of $29, for consequential costs. The plaintiff sold the house for $225,000 in circumstances where it had been purchased for $195,000. In considering damages, the court referred to the decision of the Queensland Supreme Court of Manwelland Dames & Moore Pty Ltd [2001] QCA 436. In that case it was held that rather than awarding the difference between the price paid by the plaintiff and the true market alue of the land as at the date it was acquired, compensation should be assessed by taking into account the benefit from the PROFESSIONAL NEGLIGENCE Building Consultants 113

130 proceeds of the resale less the expense of bringing the property to a saleable condition. In other words, any benefits associated with the purchase need to be taken into account. The court stated that there was a significant difference between the case of Manwelland and the claim made by the plaintiff and further, that there is considerable tension between that decision and English and Western Australian court authorities. In this case, the plaintiff was not seeking the difference between the price paid for the property and the true alue. Her claim was for the costs incurred in buying and then selling the house. The court agreed that the amount receied on the sale of the house was to be brought into account. The court did not consider that this was a case in which the benefits flowing from an act done pursuant to a duty to mitigate loss were required to be brought into account. Rather, the principle was that the plaintiff should not be placed in a superior position to that which she would hae been in had the contract not been performed. Assessing damages on that basis meant that the plaintiff had suffered no loss due to the capital appreciation realised on the sale. The plaintiff sought leae to lead further eidence that there had been a general increase in the housing market between the time of purchase and the time of resale and accordingly, the court should find that because of the commitment inoled in acquiring the property, she was not in a position to acquire a replacement home until she had sold the property. By then, she alleged, she was at a disadantage because the price and alue of an equialent home had risen with the general rise in market prices for housing. The plaintiff argued that the amount credited against her claim on account of the proceeds of sale ($35,000) should be reduced by the amount by which the market price of an equialent house had risen oer the releant period. The court held that this argument should hae been identified and adanced by the plaintiff from the outset, but nonetheless ordered that the matter be remitted to a single judge for further consideration of the application by the plaintiff to reopen her case on damages. PROFESSIONAL NEGLIGENCE Building Consultants South Australia Supreme Court: 4 Noember 2008 Gillian Sheppard 114

131 THE FACTS The matter related to the Luna Park Amusement Park (the park) at Milsons Point in Sydney. Operations at the park had ceased in February 1996 when the park became commercially uniable. Street & 7 Ors Luna Park Sydney Pty Ltd & 3 Ors [2009] NSWSC 1 Negligent misrepresentation whether deeloper owes purchasers of adjoining land a duty of care whether deelopment application form a representation to adjoining land owners Metro Edgley Limited (the second defendant) was engaged to redeelop the park. The second defendant then embarked on obtaining deelopment approal for the redeelopment. Luna Park Sydney Limited (the first defendant) occupied and operated the site pursuant to its arrangement with the second defendant. The third and fourth defendants were directors of the first and second defendants. The plaintiffs were owners and occupiers of properties in the icinity of the park who claimed they suffered loss by purchasing properties in the belief that there would be no adult thrill rides in the northern extension area of the park (the northern extension). THE ISSUES The plaintiffs claimed damages for the following: 1. Misleading and deceptie conduct pursuant to s52 of the Trade Practices Act 1975 (Cth) (TPA) by the first defendant in relation to the first defendant's deelopment applications which were silent as to any intention to locate and operate adult thrill rides in the northern extension; and 2. In the alternatie, negligent misrepresentation by the first defendant that only children s rides would be located in the northern extension. The plaintiffs said that this factor was relied upon by them in their decision to purchase/deelop the properties. The plaintiffs argued that they paid more than the properties were worth based on this misrepresentation. THE DECISION The first defendant argued that the conduct of making a statement in the deelopment applications was not in trade and commerce and thus could not be in breach of the TPA. The court found the touchstone of trade and commerce was that the corporation s conduct be in the course of carrying on its trading or commercial actiities. The court found that the lodgement of a deelopment application was not a trading or commercial actiity as it was directed to a consent authority for permission to deelop only. There was also no potential or actual trading or commercial transactions or relationship between the first defendant and the plaintiffs. The deelopment application was not made to, or receied by, members of the public as potential purchasers or deelopers of the property in the area of the park, but only in their capacity as adjoining landowners who may wish to object to the park s deelopment. As such the court found that the conduct of the first defendant was not in trade or commerce and the TPA claim was dismissed. In relation to the misrepresentation claim, the court held that the first defendant did not owe a duty of care to aoid economic loss by persons who may rely on statements made in deelopment approals, including prospectie purchasers and other deelopers of the area. The obligation to exhibit a deelopment application is for the purpose of allowing neighbours to object to the application only, not for the purpose of informing potential purchasers to make commercial decisions. Further, een if there had been a duty, there was no breach as the first defendant did not make a representation that only children s rides would be located in the northern extension The court held that the deelopment applications did not exclude the possibility of locating adult rides in the northern extension and there was no eidence that when the applications were lodged, the first defendant had any intention of locating adult rides in the area. The court also held that the lodging of a deelopment application is not a representation that the applicant will undertake that deelopment if consent is granted. It is simply a request for permission. The claim for misrepresentation was dismissed. New South Wales Supreme Court: 6 February 2009 Amanda Cann PROFESSIONAL NEGLIGENCE Building Consultants 115

132 THE FACTS This case inoled 6 plaintiffs. All 6 plaintiffs separately and independently inested money in Eans & Ors Brannelly & Ors [2008] QDC 269 Liability of financial planner for economic loss false statements about inestment misleading and deceptie conduct Bayshore Mezzanine Pty Ltd (Bayshore). Bayshore was part of the West Point Group of Companies. The money inested by all 6 plaintiffs was lost when Bayshore went into liquidation with the collapse of the West Point Group of Companies. The first defendant engaged in the proision of financial and inestment adice. He was a director and agent of the second defendant. The second defendant was an authorised agent of the third defendant. The third defendant, a company, was in the business of proiding financial and inestment adice. The third defendant was the holder of an Australian Financial Serices (AFS) licence issued by ASIC and conducted business ia an adisory network. The first and second defendants were authorised to proide inestment adice under the third defendant s AFS licence. At trial the causes of action led by the arious plaintiffs were in negligence and for misleading and deceptie conduct under the Australian Securities and Inestment Commission Act 2001 (Cth). Although they appeared on the pleadings, the plaintiffs did not adance their cases for breach of the Corporations Act 2001 (Cth) and for misleading and deceptie conduct in breach of the Trade Practices Act 1974 (Cth). THE DECISION The judgment was lengthy, and all 6 actions were heard together. Although the pleadings in all 6 cases were similar, the court found that this was unjustified in light of the eidence led at trial. The court was critical of this. Although common issues arose, what was in issue were the indiidual circumstances of the plaintiffs and their inolement with the defendants, primarily the first defendant. As a consequence, it is not a joint decision but, rather, 6 separate judgments (although some of the findings are the same). In relation to the first plaintiff, Mr Eans, the court described the pleading as being unsatisfactory for the reasons discussed aboe and also because it was, unduly repetitious and complicated, a matter which has, along with the necessity for me, because of the way in which the defendants conducted the defence, to focus on the plaintiff s pleading in preparing these reasons for judgment, produced a set of reasons which will be undoubtedly incomprehensible without immediate access to a copy of the pleadings, and more than usually unreadable. At times the pleading was too wide, and at other times curiously narrow. Oerall, it was far too complex, and much of the pleading has not been made out, although sufficient facts were admitted or proed to entitle the plaintiff to judgment. The same applied to all the actions. The judgment needs to be read in conjunction with the pleadings in order to obtain a proper understanding of the reasons for judgment. Throughout the judgment reference is made to paragraph numbers of the releant statements of claim and defences only, and not what is alleged therein. The court found that oerall it felt that the plaintiffs were being truthful, although some of them had difficulty in recalling details. The court made reference to the fact that it appeared that many of the plaintiffs did not really understand the questions being asked in cross examination which the court referred to as being conducted, in a badgering, pressured way, attempting to force the witnesses to say particular things. The questions were often difficult to follow, and put the witnesses under considerable pressure. It is clear from the judgment that this did not assist the defendants in their defence of the claim. None of the plaintiffs were found to be clients of the first defendant but nonetheless the first defendant was found to hae owed the plaintiffs a duty of care to exercise reasonable care and skill in the proision of adice and the making of representations. The court held that if a financial adisor purporting to act as a financial adisor said to a person, You should inest in X, that adisor is giing adice to that person and it is adice about the suitability of that inestment for that person. If an inestment adisor purporting to act as such says to a person, People should inest in X or X is a good inestment, then that is adice as to the PROFESSIONAL NEGLIGENCE Financial Planners 116

133 suitability of that inestment as a general proposition, although it is not necessarily adice as to the suitability of that inestment for the particular person in question. Howeer, where such adice is gien in circumstances where there is nothing to suggest that it is not suitable to the particular person addressed, and where the inestment adisor knows that that person is contemplating making an inestment, this constitutes adice that, You should inest in X. The court found that a financial adisor exercising reasonable care and skill would hae ensured that risks associated with an inestment were clearly explained and understood. Such a duty arose because where the inestment was otherwise described as an excellent opportunity to inest, there was an obligation to draw attention to the releant risks. In other words, it was negligent to describe the inestment in Bayshore as an excellent opportunity without drawing attention to the particular risks inoled. Indeed, the court referred to the inestment as an obious lemon. The court found that what the defendants were really doing was selling an inestment product regardless of its qualities as a product, or whether it was suitable for the proposed inestors (the plaintiffs). The defendants did so, howeer, in the guise of inestment adisors who were purportedly giing adice in the interests of the plaintiffs. If people who call themseles inestment adisors are really going to act as financial product salesmen, then they need to make that quite clear otherwise they will be found to owe a duty of care as inestment adisors. Each of the 6 plaintiffs were successful on the basis of breach of duty of care, and misleading and deceptie conduct in breach of the Australian Securities and Inestment Commission Act 2001 (Cth). The defendants sought to rely upon the proportionate liability proisions of the Ciil Liability Act 2003 (Qld). The court went through a somewhat detailed analysis of s28 and 32. In relation to s32, which deals with a concurrent wrongdoer, the court referred to that proision as being unsatisfactory and an illustration of the extent to which there has been a failure to properly think through the practical application of, this radical change from the common law. Queensland District Court: 21 Noember 2008 Gillian Sheppard PROFESSIONAL NEGLIGENCE Financial Planners 117

134 THE FACTS Wealthcare Financial Planning Pty Ltd (Wealthcare) gae adice to a retired couple (inestors) that led to them making a loan to a mezzanine finance company in the Westpoint Group. The finance company went into administration and the inestment was lost as a consequence of the collapse of the group. Wealthcare Financial Planning Pty Ltd Financial Industry Complaints Serice Ltd & Ors [2009] VSC 7 The inestors made a Whether proportionate liability complaint to the Financial proisions of the Wrongs Act Industry Complaints Serice 1958 (Vic) applied to a (FICS). The FICS found that decision of the Financial Wealthcare had breached Complaints Serice that a s851(2) of the Corporations financial adisor breached certain proisions of the Act 2001 (Cth) and its Corporations Act 2001 (Cth) successor proision s945a. Those sections make it an offence for a financial adisor to gie adice to a retail client unless the adisor has considered the client s personal circumstances, has made reasonable inestigations into the proposed inestment which is the subject of the adice, and considered whether what is being recommended is appropriate for the client in question. The FICS ordered that Wealthcare pay the inestors the total amount lost, plus interest, on certain conditions. Wealthcare filed an originating motion in the Supreme Court seeking a declaration that the FICS determination had been made in breach of the Constitution and Rules of the FICS, and that it failed to apply principles of proportionate liability. THE DECISION The purpose of the FICS is to hear complaints with the aim of resoling consumer disputes oer the proision of financial serices. It does so under certain published rules which, pursuant to the contract between it and its members, are binding on members. The rule which was of particular releance was Rule 5 which proided: - What principles must the Serice hae regard to? In dealing with complaints, the Serice must deal with the complaint on its merits and do what, in its opinion, is fair in all the circumstances, haing regard to each of the following: - Any applicable legal rule or judicial authority.. Wealthcare argued that the proportionate liability proisions contained in Part IVAA of the Wrongs Act 1958 (Vic), were of direct application to the inestors claim and had to be applied by the FICS. The court found that the task of the FICS was to deal with the complaint on its merits and do what it considered was just in all the circumstances. The court was of the iew that the FICS had a broad discretion in determining complaints notwithstanding that Rule 5 required the FICS to hae regard to any statutory and common law rules, or principles that were capable of being applied. In relation to the operation of Part VIAA the court found that: - 1. The proisions of Part VIAA only apply in a proceeding inoling an apportionable claim. An apportionable claim is defined as a claim for economic loss or damage to property in an action for damages arising from a failure to take reasonable care, or from a breach of s9 of the Fair Trading Act 1999 (Vic). 2. To the extent that Part IVAA relates to a claim arising from a failure to take reasonable care, the claim must be made in an action. An action is defined to mean a legal proceeding conducted in a court or tribunal. 3. Part IVAA requires all potential concurrent wrongdoers to be parties to the proceeding. That is only possible in a forum that has jurisdiction oer all potential defendants. FICS only has the power to deal with its members. The court then went on to consider the proisions of the Corporations Act which Wealthcare was found to hae breached. The court discussed the decision of Dartberg Pty Ltd Wealthcare Financial Planning Limited [2007] FCA The Commonwealth introduced proportionate liability proisions into the Corporations Act in 2004, but only made them applicable to conduct which PROFESSIONAL NEGLIGENCE Financial Planners 118

135 constituted a contraention of section 1041H (which prohibits misleading and deceptie conduct in relation to a financial product or a financial serice). In accordance with the decision in Dartberg, Part IVAA would not hae applied if the inestors had commenced proceedings against Wealthcare in the Federal Court in reliance upon the same proisions of the Corporations Act as relied upon in the FICS complaint. In Dartberg, the court found that if the proportionate liability proisions were to apply in those circumstances, then it would detract from the purpose of the Commonwealth legislation, namely, to make each alleged transgressor liable for the entirety of the claimant s loss. That being the case, Part IVAA was irreconcilable with ss851(2), 945A and 953B of the Corporations Act and therefore inapplicable to claims inoling those proisions. In addition to breaches of the Corporations Act, the FICS also found that Wealthcare was negligent on the basis that it had failed to take reasonable care. Had the case been brought in a court of competent jurisdiction and negligence alone been found, then Part IVAA might hae applied. In accordance with the decision of Dartberg, howeer, the court could not reduce an award under ss851(2), 945A or 953B of the Corporations Act by reference to proportionate liability merely because in the same proceeding it also found negligence, or some statutory breach other than a breach of those proisions. Gien that the wording of the proportionate liability proisions in the Ciil Liability Acts of New South Wales and Queensland are similar to the wording of the proisions in Part IVAA, it is possible that this decision may apply in New South Wales and Queensland. PROFESSIONAL NEGLIGENCE Financial Planners Victoria Supreme Court: 22 January 2009 Gillian Sheppard 119

136 Whittaker THE FACTS The plaintiffs purchased a house from the second defendant s mother. The second defendant was a real estate agent and a director and shareholder of the first defendant. Paxad Pty Ltd [2009] WASC 47 Sale of house to plaintiffs misleading or deceptie conduct pursuant to s52 and s84 of the Trades Practices Act 1974 (Cth) by real estate agent The house consisted of 2 leels and was constructed on sloping ground. The lower leel included a room which the second defendant presented to the plaintiffs as a fourth bedroom, as well as a garage which the plaintiffs indicated they would use as an office. Howeer, it transpired that the plaintiffs were unable to use the lower leel room and garage for those purposes because of ground water flooding and rising damp. The plaintiffs subsequently sold the property because of these problems. THE ISSUES The plaintiffs claimed that the second defendant was aware that the lower leel of the house was susceptible to seasonal ground water flooding and rising damp and was personally liable under s10 of the Fair Trading Act 1987 (WA) for misleading and deceptie conduct and, further, that the first defendant was liable pursuant to s52 and s84(2) of the Trade Practices Act 1974 (Cth) (TPA). The house had been constructed by the second defendant s father during the 1960 s and 1970 s and included an underground drainage system which ceased to be effectie by 1991, and problems with water and rising damp began on the lower leel. In 1991, the second defendant s mother arranged for installation of a new subsoil drainage system. The second defendant alleged he had no reason to beliee there were ongoing problems with water and rising damp after installation of the system. The second defendant s eidence was that he continued to isit his mother s house regularly and also used the nominated fourth bedroom and garage for storage. Eidence, howeer, was gien by neighbours who regularly isited the house that they had obsered problems with water in the lower leel each winter since THE DECISION The court rejected the second defendant s denial of knowledge that there were ongoing water problems. Further, the court held that the second defendant deliberately refrained from informing the plaintiffs that the fourth bedroom, garage and lower leel generally were subject to seasonal (winter) ground water flooding and rising damp and that the plaintiffs had no reasonable opportunity of discoering these problems for themseles gien that they were inspecting the property at the height of summer and there had been recent plastering and/or painting of the lower leel walls which had concealed the signs of water damage. The presentation of the room on the lower leel as the fourth bedroom was clearly a misrepresentation within s52 of the TPA. The second alleged misrepresentation was made by way of omission, namely, when the plaintiffs stated that they would use the garage as an office, the second defendant remained silent. The court stated that silence can also constitute a breach of s52 proided, in all of the circumstances, constituted by acts, omissions, statements or silence, there has been conduct which is, or is likely, to mislead or deceie. In the present circumstances, gien the second defendant s intimate knowledge of the property, it should hae been obious to him that each room was unsuitable for the plaintiffs intended uses and his conduct was misleading or deceptie within the meaning of s52. Liability was also found personally against the second defendant under s10 of the Fair Trading Act 1987 (WA) notwithstanding that he was acting in a representatie capacity. Accordingly, both the first and second defendants were held liable. Western Australia Supreme Court: 27 February 2009 Sarah Haigh PROFESSIONAL NEGLIGENCE Real Estate 120

137 THE FACTS The defendant, Premium Real Estate Ltd, (Premium) acted as real estate agent for the plaintiffs in the sale Mark Moncrief Steens of their home. Premium & Ors adised the property was worth around $2.7m. The plaintiffs considered it was worth $3m. On listing the Premium Real Estate property as for sale by Ltd [2009] NZSC 15 negotiation, the plaintiffs receied an initial offer of Breach of fiduciary duty by $2.2m. They counter-offered real estate agent misleading at $2.8m, but the prospectie and deceptie conduct buyer then withdrew. In the meantime, the plaintiffs agreed to buy another home, conditional on selling their own for $3m or such lesser sum as they might accept. Premium, through its agent Ms Riley, then introduced the plaintiffs to Mr Larsen (Larsen). Larsen was a property speculator, well known to Premium and Ms Riley. Larsen offered to purchase the plaintiff s home for $2.525m. Whilst the plaintiffs wanted to counter-offer at $2.8m, Ms Riley adised them that $2.575m was all Larsen would pay. She also led the plaintiffs to beliee he was buying the premises as a family home, een though she knew this was not the case. The plaintiffs signed a contract for $2.575m. Within 3 days of signing the agreement, Larsen had the property alued at $3.57m. After completing a small amount of work on the home, Larsen resold it a few months later through Premium for $3.55m. THE ISSUES The plaintiffs claimed Premium acted in breach of its fiduciary obligations and was guilty of misleading and deceptie conduct, contrary to the proisions of the Fair Trading Act THE DECISION AT TRIAL The trial judge found that 2 critical pieces of information were withheld from the plaintiffs by Premium: (a) (b) that Larsen was a trader in residential properties, in the business of buying and reselling them quickly for profit; and that Premium and its salesperson Ms Riley had acted on numerous occasions for Larsen, and expected to act for him in the future. The trial judge also found (based on aluation eidence) that the current market alue of the plaintiff s property at the date of sale to Larsen was $3.25m. Whilst there had been no negligence or breach of the Fair Trading Act by Premium in its assessment of the alue of the home, its marketing campaign or its conduct of the negotiations with Larsen, the trial judge found that its failure to disclose its relationship with Larsen was both misleading and deceptie and a breach of its fiduciary duty as agent to the plaintiffs. Quantum was assessed at $675,000, being the market alue of $3.25m less the actual sale price of $2.575m. The return of the commission paid by the plaintiffs of $67,050 was also ordered. The Court of Appeal later reduced damages to $225,000, being the difference between $2.8m (the price at which it considered the plaintiffs would hae sold, based on their prior counter-offers) and the sale price of $2.575m. It also disallowed the finding that the commission was forfeited. THE ISSUES ON APPEAL The defendants appealed the findings of breach of fiduciary duty and misleading and deceptie conduct. The plaintiffs appealed the reduced award of damages and payment of the commission. THE DECISION ON APPEAL The plaintiffs appeal was allowed. The defendant s appeal was dismissed. A majority of the court found that Ms Riley committed a breach of fiduciary duty when she failed to inform the plaintiffs that Larsen was a person who frequently bought residential properties and shortly resold them at a profit. It found this information was ery likely to hae affected their attitude towards his offer and the response they would make. A principal is entitled to the single-minded loyalty of their fiduciary. Ms Riley had good reason to beliee Larsen intended to resell the property, and not only concealed her knowledge that he was a property dealer but deliberately misled them when she spoke of Larsen s wish to purchase the house as his home. This was a sufficient basis for a finding that a PROFESSIONAL NEGLIGENCE Real Estate 121

138 breach of fiduciary duty and misleading and deceptie conduct had occurred. Premium argued Larsen s business of property speculator was confidential information it could not disclose. Howeer the court found his dealings were a matter of public record and not confidential. The court noted that een if it was, Premium (which was in a position of conflict between its duty of loyalty to the plaintiffs and its duty of confidentiality to Larsen) could hae sought the informed consent of its principal to act in those circumstances. The fact that Premium had put itself in a position of haing two irreconcilable duties was its own fault, and it could not prefer one principal to another. In relation to quantum, the court found that the proper measure of damages once a breach has been established is the difference between the sale price (that would hae likely been achieed in the absence of any breach) and the market alue of the property net of commission. The onus is then reersed so that it is for the fiduciary agent to demonstrate the plaintiff s loss was less or non-existent. Any doubt with respect to quantum eidence should be resoled against the fiduciary. Accordingly, the court considered the lower court was wrong to conclude the plaintiffs would hae sold their home at $2.8m. The eidence showed the plaintiffs still considered their property to be worth $3m, they were not in a rush to sell their home and were not especially concerned to acquire the other property. The plaintiffs would hae reappraised the situation if they had known Larsen was a property speculator and may een hae sought independent aluation adice. The court found it was probable the plaintiffs would hae extended the sale period and achieed a sale at the then current market alue of $3.25m. To allow Premium to successfully argue that they would hae been likely to sell at $2.8m allows an errant fiduciary to too easily find the narrow escape route and it did not discharge its reerse onus of proof in this regard. Quantum was assessed at $659,813, calculated as the difference between $3.25m (the likely sale price) net of commission ($82,237) and $2.575m net of commission ($67,050). It was also ordered that Premium forfeit the commission paid of $67,050. The court emphasised that an agent guilty of a breach of fiduciary duty (in the absence of limited circumstances, such as an agent s honest breach ) must forfeit any right to remuneration. This rule is designed to be a deterrent to such betrayals of trust and its application in this case was not inconsistent with the award of damages. New Zealand Supreme Court: 6 March 2009 Megan O Rourke PROFESSIONAL NEGLIGENCE Real Estate 122

139 THE FACTS On 9 March 2002 the plaintiff, Berry Easey, was injured when he fell on a tiled ramp at an entry to the Drummond and Rosen Pty Ltd Easey & Ors [2009] NSWCA 74 Scope of duty owed by architect failure of tiles to meet coefficient of friction in wet Miller Shopping Centre in Miller, New South Wales (the Centre). It was raining at the time and the tiles were wet. The Centre had only recently undergone a refurbishment. Drummond and Rosen Pty Ltd (the architects), prepared the plans and had a defined role during the construction phase which was limited to:- Preparation of colour board, schedule of finishes and proision of releant samples to illustrate concept. Preparation of building specification in conjunction with the working drawings. Final selection of finishes and colours. Inspection of the works for erification that the works are executed in general accordance with the documents prepared by us. Verification and quality control will be based only on a isual inspection of the works and our responsibility will exclude any matters not readily apparent on a isual inspection. The architects proided specifications to the builder for the tiling work which included a requirement that manufacturers data, product warranties and technical specifications (including confirmation that the minimum co-efficient of friction of the tiles exceeded alues set in AS 3661 Part 1) be obtained prior to installation. Samples of tiles for the entry to the Centre and other areas were chosen by the architects and proided to the project manager with no accompanying documents. Minutes of site meetings inoling the project manager and builder indicated that manufacturers data, product warranties and material dealing with coefficient of friction alues for the tiles used in the refurbishment were not obtained prior to installation. THE ISSUES The plaintiff sued the owners of the Centre, the builder and the architects. Cross claims were made between the defendants. The main allegation against the architects was that they had selected tiles which were not fit for the purpose of being laid on an access ramp exposed to the weather, and had failed to check and ensure that the tiles complied with the requirements of the releant Australian Standard. Expert eidence established that the tiles in question had a coefficient of friction in the wet well below that required by AS 3661 Part 1. THE DECISION ON APPEAL The architects successfully appealed and had the judgment against them oerturned. The Court of Appeal held that the architects proided the tile samples pursuant to their duty to make a final selection of finishes and colours. There was no basis for a finding that they intended to step outside their limited role, without additional remuneration, and undertake responsibilities which the specifications imposed on the builder. The architects were entitled to assume that the builder would, amongst other things, ensure that the product complied with the specifications. His Honour, Handley AJA, said:- In my judgment therefore the architects, by deliering these samples to the project manager, and by their associated conduct at the time, did not represent to the project manager or the owners or the builder that those tiles complied with the technical requirements of the specification or assume any responsibility to them for such compliance. In proiding the samples the architects made no representation that they met the technical requirements of the specification. There was no eidence that the architects had sought to select tiles which complied with the technical requirements of the specification. The architects did not therefore breach the duty of care which they owed to their client. They also did not breach the duty of care owed to persons in the position of the plaintiff using the ramp. They owed no separate duty to users of the Centre to ensure that the tiles complied with the specifications, and otherwise it was neer suggested that they were negligent in the design of the ramp or in framing the technical specifications. PROFESSIONAL NEGLIGENCE Architect 123

140 The Court of Appeal substituted an apportionment of liability of 50% to the owners and 50% to the builder (the owners had notice of problems with the ramp shortly after it had been opened). New South Wales Court of Appeal: 16 April 2009 Robert Samut PROFESSIONAL NEGLIGENCE Architect 124

141 THE POLICY

142 THE FACTS GIO was the worker s compensation insurer of Andre Herzog Pty Ltd (employer). GIO s policy proided indemnity to the employer if during the period of insurance the employer was liable to pay compensation under the Workers Compensation Act 1951 to a worker or liable to [2008] pay other compensation for an injury to a worker. GIO General Limited Insurance Australia Limited t/as NRMA Insurance [2008] ACTSC 38 Dual insurance proportion of contribution by each NRMA was the motor ehicle insurer of a truck owned by insurer the employer (employer s truck). The NRMA policy insured the employer as owner of the truck against liability in relation to bodily injury of a person caused by or arising out of the use of the truck. Proceedings were instituted against the employer by an employee (employee s claim) alleging failure to proide a safe system of work which resulted in:- (a) (b) (c) pain in hands and difficulty moing fingers, the result of regular heay lifting on the job by the employee; back injury, the result of the employee unloading steel from the employer s truck without the use of a crane; and knee injury, the result of the employee twisting his knee when he experienced sharp back pain from his back injury (this occurred in the employee s home). GIO settled the employee s claim prior to a hearing for $192, plus $40,000 costs (settlement monies). GIO claimed dual insurance and sought a 50% contribution from NRMA for the settlement monies. THE ISSUES Was there dual insurance? The releant issue for consideration was whether the employer s liability for the employee s claim arose out of the use of the employer s truck in circumstances where the employee only pleaded an unsafe system of work and did not plead a negligence claim in relation to the truck. The truck was only referred to in particulars of the unsafe system of work in not proiding a crane or other mechanical assistance for unloading the truck. If there was dual insurance, what proportion of the settlement would each insurer bear? THE DECISION The court considered issues of dual insurance. Dual insurance applies when two or more insurers coer the same interest against the same risk, although liability need not arise from the same type of policy. The court was satisfied that the NRMA policy applied to compensation for the back injury because it found that the back injury arose out of the use of the truck. How the employee framed his claim was not determinatie as to whether the insurance policy responded. There was authority that an injury arising during the loading or unloading of a truck is an injury which arises out of the use of a truck. It did not matter that the employer had not pleaded a negligence claim in relation to the truck specifically. In finding that the back injury was coered, the court had to determine how much of the settlement related to that component of the claim. The settlement did not include an apportionment between the alleged hand pain and the back injury. The court accepted that the employer s insurer and lawyers may hae included an allowance in the settlement for the possibility that the employee might succeed in relation to the hand injury but that did not affect his assessment of apportionment. The court considered the best approach was to apportion the settlement on the basis of its assessment of what the likely outcome would hae been if the employee s claim proceeded to a hearing. The court considered, based on medical eidence put before it, that it was more likely than not that the employee would not hae been able to satisfy the court that the hand injury was a result of his employment. GIO was entitled to recoer half of the amount of the settlement from NRMA and interest would run from the date GIO paid the settlement monies or became liable to pay the amount to the employee. Australian Capital Territory Supreme Court: 24 April 2008 Elsbeth Reynolds THE POLICY 126

143 Zhang THE FACTS The plaintiffs sued Minox Securities Pty Ltd (Minox) in respect of alleged breaches of the Corporations Act 2001 (Cth), by its authorised representatie, Mr Chen. The alleged breaches related to financial adice Minox Securities Pty Ltd; Liu Minox Securities Pty Ltd [2008] NSWSC 689 Defendant company wound up application for leae to join insurer as defendant construction of exclusion clauses proided by Mr Chen about inestment in promissory notes issued by companies associated with t he Westpoint Group. It was alleged that Mr Chen gae financial planning adice without haing a sound basis for it and that he failed to proide a statement of adice and product disclosure statement to the plaintiffs. QBE insured Minox under a professional indemnity policy and a financial institutions policy. Minox went into oluntary administration and was subsequently wound up. The plaintiffs sought leae to add QBE as a defendant to the proceedings. THE ISSUES QBE contended that there was no arguable case that either of its policies would respond to the plaintiffs claims. The professional indemnity policy excluded liability for: any Claim against the Insured arising directly or indirectly based upon, attributable to, or in consequence of an actual or alleged act, error or omission in respect of any financial or inestment product that at the time the actual or alleged act, error or omission occurred is not listed on the approed product list of the entity which has issued the Insured with a proper authority to deal in financial products (the product list exclusion) It was beyond doubt that the promissory notes promoted by Mr Chen were not included on the approed products list. Howeer, the plaintiffs argued that as Mr Chen was not a named insured, the product list exclusion could not apply to Minox s liability for his actiities. The financial institutions policy excluded liability for any Claim against the Insured directly or indirectly based upon, attributable to, or in consequence of the proision by or on behalf of the Insured of any adice usually proided by a Financial Planner (the financial planning exclusion). The plaintiffs argued that the financial planning exclusion could not apply to the allegations relating to Mr Chen s failure to proide the Product Disclosure Statement, as this did not inole the proision of adice usually proided by a financial planner. THE DECISION Without deciding whether Mr Chen was in fact a named insured, the court found that the product list exclusion would apply to his conduct. The focus of the exclusion clause was upon the person upon whom the claim was brought, being Minox, not upon the person whose act or omission gae rise to the claim. On this basis, the exclusion clause was clearly triggered. With respect to the financial planning exclusion, the court accepted QBE s argument that the underlying cause of all of the claims against Minox was Mr Chen s proision of adice usually proided by a financial planner. Een if the proision of a Product Disclosure Statement did not inole the proision of financial adice, any claim based on the failure to proide that document was still a claim indirectly based upon, attributable to, or in consequence of proision of financial planning adice. The claims would not hae been sustainable if Mr Chen had not gien financial planning adice. Accordingly, the financial planning exclusion applied. As there were applicable exclusion clauses in each policy, there was no basis upon which it could be said that either policy would respond to the plaintiffs claims. The court therefore declined to grant leae to add QBE as a defendant to the proceedings. The Court of Appeal recently granted the plaintiffs leae to appeal with respect to the decision regarding the financial planning exclusion. New South Wales Supreme Court: 9 July 2008 Leah McStay THE POLICY 127

144 THE FACTS The plaintiff was the owner of a building with alleged defectie building work. The Owners Strata Plan Majestic Constructions Pty Ltd & Ors [2008] NSWSC 735 Insurer denied indemnity but sought orders that insured join a third party to the litigation insurer not permitted to require joinder until it accepted liability for insured s claim The plaintiff had a building owner s warranty policy with Allianz. The plaintiff lodged a claim for defectie building work under the policy in The alleged rectification of the defectie building work amounted to $2 million. The plaintiff commenced proceedings in 2005 against the builder and deeloper of the building and Allianz (the proceedings). Allianz disputed the alleged defects were defects within the policy and that the rectification costs amounted to $2 million. Allianz s lawyers wrote to the plaintiff in March 2008 admitting liability under the policy to the alue of $50,000. The letter was stated to be without prejudice to Allianz s rights under the policy and without prejudice to the response filed in the proceedings (March letter). The builder and deeloper brought a cross claim against the engineer of the building. Howeer, the plaintiff did not join the engineer as a defendant. The builder and deeloper went into liquidation. Allianz was concerned that any claim the plaintiff may hae against the engineer might be lost by expiry of the releant limitation, so it requested that the plaintiff commence proceedings against the engineer. It offered to indemnify the plaintiff against any cost orders which might be made against the plaintiff, if the plaintiff failed in the claim against the engineer. The plaintiff refused to join the engineer. Allianz brought an application seeking joinder of the engineer under the proisions of the NSW UCPR which proided: If the court considers that a person ought to hae been joined as a party or is a person whose joinder as a party is necessary to the determination of all matters in dispute in any proceedings, the court may order that the person be joined as a party. Allianz alternatiely sought leae to issue a cross claim against the engineer seeking a declaration that the engineer was liable to compensate the plaintiff in damages. The engineer and plaintiff opposed Allianz s joinder application. THE ISSUES The plaintiff submitted the following which were the issues considered by the court: (a) (b) The UCPR proision had no application; and Allianz had no rights against the engineer until it had indemnified the plaintiff to the full extent of the plaintiff s claim under the policy and could not commence proceedings in the plaintiff s name or its own name against the engineer (subrogation argument). THE DECISION The court held that the UCPR proision did not apply because: (a) (b) (c) The question of whether the engineer is liable to the plaintiff is not a matter which has to be determined in litigation between the plaintiff and Allianz; Either the policy responds or it does not, either the plaintiff s claim as to the amount of damage it has suffered and falling within the policy will be upheld or it will not; and The issues between an insurer and insured are not the same as those between an insured and a third party whose conduct is alleged to hae been negligent. With respect to the subrogation argument, the court considered the common law principle of subrogation which is that subrogation cannot be exercised until the insurer has made payment under the policy and that until the insured has been compensated for all its loss caused by the third party, it is entitled to retain conduct of the litigation against the third party. The common law right can be modified by contract. In this instance, the court found that the subrogation clause in the policy modified the common law in that it allowed subrogation before payment, but it also THE POLICY 128

145 required that Allianz was to hae accepted liability in respect of the claim before exercising subrogation rights. The court found that Allianz had not accepted liability in respect of the claim. At most it had accepted liability to pay a portion of the claim and if Allianz was to exercise only its rights of subrogation then the maximum claim it could bring against the engineer would be $50,000. THE POLICY In the circumstances, the court held that the plaintiff could not be compelled to hand conduct of the litigation to Allianz where Allianz had no interest beyond $50,000 which was the amount offered in the March letter and where the litigation could be settled without regard for the interest of the plaintiff as insured. The court opined that Allianz could not on the one hand argue the extent of coer of the claim but on the other hand assert that it had accepted liability for the insured s claim. The court considered there was no discretion to be applied in this matter but if that was wrong, then the court would not exercise discretion in faour of Allianz. Allianz s application was refused and it was ordered to pay the costs of the plaintiff and the engineer. New South Wales Supreme Court: 18 July 2008 Elsbeth Reynolds 129

146 THE FACTS Porthouse was a barrister briefed to adise on the prospects of a successful workers c o m p e n s a t i o n c l a i m CGU Insurance Limited Porthouse [2008] HCA 30 Professional indemnity insurance barrister s liability policy known circumstances exclusion for damages by James Bahmad (Bahmad) for injuries sustained while performing a community serice order under the superision of the Probation and Parole Serice in December In June 2001 Porthouse was briefed to adise whether Bahmad had a claim under the Workers Compensation Act 1987 (NSW) (WCA) or a claim in negligence against the Department of Correctie Serices. Porthouse wrongly adised that the claim was not goerned by the WCA. A successful claim could hae been brought under the WCA if it had been commenced prior to tort reform changes that occurred in New South Wales, but not after, due to the implementation of a 15% WPI threshold to be entitled to damages. Porthouse became aware on at least 15 May 2003 that the State was of the iew that the WCA applied and Bahmad s claim could not succeed. On 20 May 2004 Porthouse completed a proposal for professional indemnity insurance with CGU Insurance Limited (CGU), indicating he was not aware of any circumstances which could result in any claim or disciplinary proceedings being made against him. Bahmad s claim against the State was subsequently unsuccessful. A later claim against Porthouse and his solicitors was successful. THE DECISION AT TRIAL CGU denied indemnity and relied on a known circumstance exclusion which contained the following definition: Any fact, situation or circumstance which: (a) (b) an insured knew before this policy began; or a reasonable person in the insured s professional position would hae thought, before this policy began, might result in someone making an allegation against the insured in respect of a liability, that might be coered by this policy. The trial judge found that the second limb of the definition did not necessarily impose an entirely objectie test and inoled a consideration of whether the insured s actual state of mind was unreasonable. The trial judge concluded that a reasonable person in the position of Porthouse would not hae thought other than he did. CGU was ordered to indemnify Porthouse. THE DECISION ON APPEAL CGU appealed the decision. In a 2:1 decision the appeal was dismissed. Hodgson JA considered the trial judge s approach was correct. Young CJ in Eq rejected the approach taken by the trial judge. The approach required was an objectie one but een on that basis the finding would hae been the same. Hunt AJA, in dissent, thought the test was a solely objectie one. THE HIGH COURT DECISION The High Court found that the reasonable person in the insured s professional position sets out an objectie standard to which the insured s state of mind is not releant. All facts and circumstances known to the insured are to be imputed to the reasonable person in the insured s professional position. The High Court found that the words would hae thought refers to the conclusion reached by the hypothetical reasonable person. Together with the words might result in means the hypothetical reasonable person concludes there was a real (not fanciful or remote) possibility of an allegation being made. The High Court found there was no real doubt that a reasonable barrister would hae thought there was a real possibility that an allegation might be made in THE POLICY 130

147 respect of a liability which might be coered by the policy. The appeal was allowed. High Court of Australia: 30 July 2008 THE POLICY Paul Birkett 131

148 Quintano THE FACTS In December 2002, the plaintiff was shot in the head at a nightclub owned by B W Rose Pty Ltd (the first defendant), and suffered a traumatic brain injury. In January 2002, the first defendant retained Prestige B W Rose Pty Ltd & Ors Insurance Brokers (Aust) [2008] NSWSC 793 Pty Ltd (Prestige) as its Professional indemnity broker to obtain public policy construction of liability insurance on its exclusion clause arising behalf. Prestige placed from insolency of insurer the insurance through a Queensland-based broker, Cameron Group, with International Unity Insurance Co Limited (International Unity) for the period 27 March 2002 to 20 February International Unity was incorporated in the Solomon Islands. On 27 April 2004, the plaintiff commenced proceedings for personal injuries against the first defendant. International Unity was wound up by order of the Federal Court of Australia on 2 June This resulted in the first defendant being irtually uninsured for the plaintiff s claim. The first defendant subsequently commenced proceedings against Prestige, alleging that it had acted negligently in placing coer with an unregistered oerseas insurer, and in failing to adise the first defendant of the associated risks. Prestige made a claim on its professional indemnity insurance policy, which was underwritten by Lloyds Syndicates 3245 and 1218 (the Underwriters). The Underwriters declined indemnity on the basis of the following exclusion: The Underwriters shall not proide indemnity in respect of any Claim:... arising from: (a) (b) the insolency of any insurer or reinsurer; or any breach of the Assured s duty to adise on the suitability (which expression shall, without prejudice to the generality of such term, including financial standing) of any insurer or reinsurer utilised;.... The first defendant went into oluntary administration in July 2008 and later discontinued proceedings against Prestige. Prestige maintained its claim against the Underwriters for the purposes of recoering the costs and expenses inoled in inestigating and defending the first defendant s claim. THE ISSUES In determining whether the insolency exclusion operated the court considered whether the first defendant s claim against Prestige arose from the insolency of International Unity. The court also considered whether the claim arose from any breach of duty on the part of Prestige that would fall within the second exclusion listed aboe. THE DECISION In relation to the insolency exclusion, the court considered that the claim would arise from insolency if it could be established that it originates in, springs from, or has foundation in insolency. The court acknowledged that the first defendant s claim against Prestige did not expressly refer to insolency, but noted that the effect of preious authorities was that the claim was to be characterised by its underlying facts, rather than by the formulation of the claim by the first defendant. The court noted that damage is the gist of a negligence action and that the first defendant alleged that it had suffered damage by being left with an indemnity of no alue. The court found that the reason the first defendant had suffered that damage was because International Unity was insolent. Accordingly, the court concluded that the claim arose from the insolency of International Unity and the exclusion therefore operated to exclude coer. The court considered the second exclusion, but noted that it was not strictly necessary to do so gien its conclusion that the first limb of the exclusion applied. Prestige argued that the claim by the first defendant could not be said to arise from a breach of Prestige s duty to adise on the suitability of International Unity, because the first defendant had discontinued its claim against Prestige and a breach of duty would therefore neer be established. THE POLICY 132

149 In determining this issue, the court looked at the purpose and structure of the policy as a whole. It noted that the insuring clause was expressed to insure against liability and defence costs for claims for ciil liability incurred or alleged and that the exclusions were expressed to take outside of coer, claims that had certain characteristics. The court considered that the word claim in this context referred to an undetermined allegation of liability, not an established liability, and that the exclusion therefore operated in respect of allegations that Prestige had breached its duty to adise on the suitability of an insurer. THE POLICY The court therefore considered that the second exclusion could apply een if a breach of duty had not been objectiely established. New South Wales Supreme Court: 5 August 2008 Belinda Thatcher 133

150 THE FACTS Baulderstone Hornibrook Pty Limited (BHPL) contracted with a Sydney uniersity to carry out works on a high rise building, which included substantial glazing. BHPL in turn contracted with a company called Lidco to carry out the design, procurement and installation [2008] NSWSC of the glazing. Baulderstone Hornibrook Pty Limited Paul Segaert Pty Limited [2008] NSWSC 972 Some of the glazing installed Interpretation of by Lidco was defectie, manufacturing, construction, and prone to spontaneous installation exclusion in a fractures. The uniersity professional indemnity required BHPL to replace all insurance policy glazing, which it did. BHPL sought recoery from Lidco, but by that time it had entered liquidation. In a claim form lodged with its professional indemnity insurer, QBE, Lidco stated: We hae not complied with the architects specification requiring that all toughened glass be heat soaked. This requirement was oerlooked (not considered) by the Lidco design, drawings and procurement personnel when completing workshop drawings and subsequent purchase orders for the toughened glass procured for this project. BHPL sought leae to commence proceedings against QBE pursuant to s6 of the Law Reform (Miscellaneous Proisions) Act 1946 (NSW) arguing that: (a) (b) Lidco was liable to BHPL by not complying with a requirement that the glazing be heat soaked glass; and Lidco was entitled to an indemnity under a professional indemnity policy issued by QBE. Under the policy: (a) QBE agreed to indemnify Lidco against legal liability for any claim for compensation first made and notified during the period of coer for breach of professional duty in the conduct of the professional business practice carried on by or behalf of [Lidco] by reason of any act, error or omission or alleged to hae committed on the part of [Lidco] ; (b) The policy schedule defined Lidco s professional business practice as structural engineers, drafting project managers and designers of curtain walls ; and (c) There was a manufacturing, construction, installation exclusion which proided that QBE was not liable to proide indemnity in respect of any claim against [Lidco] in respect of any manufacturing, erection, construction, installation, maintenance or demolition actiities and taken by [Lidco] unless such claims are directly based upon, or directly attributable to, an act, error or omission in design completed by [Lidco]. THE ISSUES QBE argued that leae to join it to the proceedings should be refused as: (a) (b) The proximate cause of the loss was the failure to supply and install heat soaked glass, and not the failure to specify in the workshop drawings and detailed design drawings that heat soaked glass was to be procured and installed; and On this basis BHPL s claim against Lidco did not fall within the insuring clause of the policy or, alternatiely, was excluded by the manufacturing, construction, installation exclusion. THE DECISION In dismissing QBE s submissions the court held that there was an aailable case, fit to be argued on a final hearing, that the design failure alleged by BHPL was the proximate cause of the alleged loss. In coming to that conclusion: (a) (b) The court noted the approach of Ryan J in Vosten The Commonwealth [1989] 1 Qd R 693 at 708, which drew a distinction between situations inoling the negligent performance of an appropriate design on the one hand and the non-negligent performance of a defectie design on the other; and The claim against Lidco may indeed hae been a case of non-negligent performance of a defectie design bearing in mind that: THE POLICY 134

151 (i) (ii) (iii) By clause 8.1 of the subcontract between BHPL and Lidco, Lidco was obliged to carry out and complete the design of the whole or such part of the project referred to in Schedule 1 and, further, that the design was required to be fully and professionally completed without error or omission or defect so that it complies with the proisions of the subcontract and is fit for construction ; It was at least an aailable reading of what was said in Lidco s claim form that it was the failure to incorporate the requirement for heat soaked glass in the workshop drawings that caused the procurement personnel to oerlook it at the stage of the procurement; and The procurement personnel can hardly be blamed for not procuring heat soaked glass when there was nothing in the workshop drawings to indicate that heat soaked glass was required. THE POLICY The court therefore granted BHPL s request for leae to commence proceedings against QBE. New South Wales Supreme Court: 26 August 2008 Adrian Lewis 135

152 THE FACTS Ferryboat Pty Limited (Ferryboat) was the registered proprietor of a restaurant at Bundeena (the restaurant), haing purchased the restaurant on 22 May 2001 for $1.25m. Red Gecko Pty Limited (Red Gecko) conducted a café business from the restaurant. Ferryboat Pty Ltd & Red Gecko Pty Limited JUA Underwriting Agency Pty Limited & Ferryboat had initially Ors [2008] NSWDC procured insurance coer 209 through QBE on 9 July Non-disclosure of business Red Gecko subsequently history of restaurant filled in a proposal and obtained coer from JUA Underwriting Pty Limited (JUA) from 26 September From 16 May 2002, the broker instructed JUA to endorse Ferryboat as an insured under Red Gecko s policy. JUA confirmed the coer on 16 May The policy was renewed for the periods 26 September 2001 to 26 September 2002 and 26 September 2002 to 26 September Ferryboat neer completed a proposal for JUA. Prior to renewal on 26 September 2002, the broker instructed Ferryboat to fence a acant lot at the restaurant. Ferryboat did as it was told, and receied a number of complaints from angry neighbours and residents, who complained that it blocked their iew and preented them from picnicking on the lot. Ferryboat also at this stage requested coer for burglary, as there had been a number of petty burglaries at the restaurant. This extension to coer was granted without any questions being asked or a proposal being completed. Ferryboat and Red Gecko held a policy with JUA for damage arising out of fire during the period 26 September 2002 to 26 September On 23 June 2003, Ferryboat requested increased coer of $350,00 for buildings and $125,000 for contents to which JUA agreed. On 7 August 2003, the buildings, plant, machinery and stock at the restaurant were destroyed or badly damaged by fire. JUA refused to indemnify Ferryboat and Red Gecko (the plaintiffs) under the policy and claimed that the plaintiffs had not disclosed information material to the decision of whether to insure. The releant information was alleged to be as follows: (a) (b) (c) (d) (e) The restaurant had been broken into and damaged on a number of occasions; The plaintiffs had receied correspondence threatening to boycott the restaurant; The restaurant was the subject of a Heritage Protection Order; The plaintiffs were in negotiations with the local Council to deelop the premises; The plaintiffs were operating at a financial loss. JUA claimed that the plaintiffs, in breach of s21 of the Insurance Contracts Act 1984 (Cth) (the Act), failed to disclose matters, which a reasonable person in the position of the plaintiffs knew to be releant to JUA s decision of whether or not to accept the risk. The plaintiffs commenced proceedings against JUA claiming damages. THE ISSUES As a result of JUA s refusal to indemnify the plaintiffs, the plaintiffs alleged that they were unable to secure finance or to proceed with deeloping the restaurant. The plaintiffs were forced to sell the restaurant in June 2005 for $3.1m. JUA maintained that the plaintiffs had failed to disclose releant matters and/or in the alternatie that the plaintiffs had not suffered damage as a result of the fire. THE DECISION Non disclosure The court found that JUA had complied with its obligation under s22 of the Act to inform the plaintiffs of their duty of disclosure. This was because the director of Ferryboat had arranged coer on behalf of both Ferryboat and Red Gecko and notice to him of the obligation to disclose ia Red Gecko was deemed notice to Ferryboat. JUA s underwriter gae inconsistent eidence that, had he known about the thefts he may hae offered to insure but at a higher premium and excess and THE POLICY 136

153 that if he had been informed of the matters at renewal in September 2002, or at inception in September 2001, he would not hae offered to insure the plaintiffs on any terms. The court accepted the plaintiffs eidence that they did not know the matters to be releant to the decision of whether to insure. The court held that the onus was therefore on the defendants to proe that a reasonable person in the position of the plaintiffs should hae known the materiality of the matters. The court held that the underwriter s eidence was unconincing, and that the defendants failed to make out the materiality of the matters. Further, the court accepted the broker s eidence that the underwriter was really only interested in hearing about matters which would result in a claim under the policy, and therefore would not hae been interested in hearing about the petty burglaries that were not coered by the policy. The court held that the underwriter s eidence was tainted by his desire to support JUA s non disclosure defence and by his personal pride, as he had underwritten the risk. The court held that the underwriter was prepared to go on risk knowing nothing more than the name and address of Red Gecko. The underwriter had neer bothered to obtain a proposal from Ferryboat. JUA therefore failed in its defence of material non disclosure. No damage JUA alternatiely alleged that the plaintiffs suffered no damage as a result of the fire. This was on the basis that, as a result of the fire and the loss of the heritage protected restaurant, the alue of the premises increased from $1.9m to $2.8m. The plaintiffs claimed that they were entitled to rely on the reinstatement proision of the policy. The court accepted that the plaintiffs intended to deelop the restaurant, and that they only sold it because they did not hae sufficient funds to proceed with reinstatement. The court held that JUA s failure to comply with its obligation to accept the claim effectiely operated as a repudiation of the policy, which entitled the plaintiffs to claim damages on a reinstatement basis. Accordingly, the court awarded damages assessed on this basis. New South Wales District Court: 22 September 2008 Brooke Jacobs THE POLICY 137

154 THE FACTS On 17 December 2003 the plaintiff was assisting in the remoal of an awning attached to the Williamson Suncorp Metway Insurance Ltd & Anor [2008] QSC 244 Plaintiff injured whilst undertaking work for a company controlled by his son whether employee exclusion applied roof of the premises at which Kerredan No 28 Pty Ltd (Kerredan), a company owned by the plaintiff s son, conducted its business. The plaintiff was injured when he fell through the roof sheeting approximately three metres to the ground. Kerredan had a public liability insurance policy with the first defendant, Suncorp Metway Insurance Ltd (Suncorp). The plaintiff lodged a notice of claim pursuant to the Personal Injuries Proceedings Act 2002 (Qld) on 19 August Following an inestigation of the claim, Suncorp notified Kerredan that it would indemnify it in respect of the plaintiff s claim. By letter dated 25 February 2005 to the plaintiff s solicitors, Suncorp denied liability for the plaintiff s accident on behalf of Kerredan as the occupier of the land. By letter dated 25 July 2007 to Kerredan, Suncorp withdrew indemnity for the plaintiff s claim on the basis that the plaintiff was an employee of Kerredan on the date of the accident. The plaintiff alleged that while he assisted his son with the running of Kerredan, he could not be classified as an employee because he did not receie a regular wage and did not work regular hours. THE ISSUES An interlocutory application was brought by the plaintiff in order to determine whether or not his claim was excluded from coer under the public liability insurance policy between Suncorp and Kerredan or, whether he was able to claim for damages against the second defendant, Workcoer Queensland, under the Workers Compensation and Rehabilitation Act 2003 (WCRA). The key issues for determination were: (b) Was the plaintiff a worker pursuant to the WCRA when he sustained the alleged injuries? THE DECISION The court held that the plaintiff was not an employee of Kerredan within the meaning of that expression in the policy. The court took into consideration that the plaintiff did not receie set wages each week, the wages were not dependent on the number of hours worked by the plaintiff, and that no taxation instalments were deducted by Kerredan. Further, it was determined that the arrangement between Kerredan and the plaintiff aried from that which applied to the other employees of Kerredan, who were recorded as employees in the wages book for the business. The court also held that the plaintiff and Kerredan had no intention to create legal relations and that there was no contract of serice between Kerredan and the plaintiff. The court took into consideration the flexibility of the attendance of the plaintiff, the continuation of his assistance at weekends and the lack of consistency in weekly payments made by Kerredan to the plaintiff. It was held that the plaintiff s motiation for wanting to help his son at a time of financial and personal difficulty was not irreleant. Accordingly, Suncorp could not rely on the exclusion and the claim did not fall within the WCRA. Queensland Supreme Court: 9 October 2008 Charley Ferguson THE POLICY (a) Was the plaintiff employed by Kerredan in terms of the policy when he sustained the alleged injuries? 138

155 THE FACTS Baulderstone Hornibrook Engineering Pty Ltd (BHE) was head contractor for the construction o f r e i n f o r c e d e a r t h Baulderstone walls forming the perimeter Hornibrook Engineering of the third runway at Pty Ltd Sydney Airport. Work commenced in early Subcontractors included Reinforced Earth Pty Ltd, Gordian Runoff Ltd & Ors [2008] NSWCA 243 who was responsible for the design of the walls, and Connell Wagner NSW Pty Ltd, who was responsible for Construction risks exclusion engineering serices. Federal Airports Corporation, later Sydney Airports Corporation Ltd (SACL), the principal under the building contract, put in place an insurance program for the project which comprised: 1. HIH Casualty and General Insurance Ltd (In liquidation) (HIH) - bottom layer to $20 million; 2. Gordian Runoff Ltd (Gordian) - next $10 million; and 3. 3 further layers, including $5 million of coer from CGU Insurance Ltd (CGU) (the insurance program). The policies in the insurance program coered professional indemnity risks but not construction risks. Practical completion was reached in August 1994, howeer, by late 1996 subsidence of backfill behind the facing panels of the walls was discoered (the defects). In June 2002 SACL sued BHE in the Supreme Court of New South Wales. The proceedings ultimately settled on the basis that BHE undertook to rectify the defects for a cost likely to exceed the leels at which both the Gordian and CGU policies would fully respond. BHE unsuccessfully sought coer under the insurance program with respect to those costs, and in December 2003 commenced proceedings against, inter alia, Gordian and CGU. THE ISSUES The main issue at trial was whether BHE was entitled to indemnity under the policies issued by Gordian and/or CGU and in particular whether the defects were within the ambit of construction risks or professional indemnity risks. THE DECISION The trial judge found that the defects were caused by a combination of two mechanisms and that it was not possible to apportion the loss between the mechanisms. The first mechanism was conceded by BHE to arise out of construction work. The trial judge found that with respect to the second mechanism, Reinforced Earth and Connell Wagner had committed an act, error or omission of a design character but that BHE s liability did not arise out of that act, error or omission. The act, error or omission referred to was the failure to specify the method of compaction required by the design (design deficiency). The trial judge held, inter alia, that neither the Gordian nor the CGU policies responded because BHE s liability to SACL s claim under the design and construction contract arose out of uninsured construction risks and not out of insured professional indemnity risks. BHE appealed. THE DECISION ON APPEAL The decision that the defects were caused by a combination of the two mechanisms was not challenged. BHE did howeer challenge the finding that the design deficiency was central to the defects arising. The Court of Appeal opined that, for the appeal to succeed, BHE needed to establish that its workers adopted a backfill and compaction method that was dictated by the design documents. It found, howeer, that none of the contractual documents told BHE how to compact. The eidence was that the proper compaction technique was a matter of experimentation and testing for the constructor. The Court of Appeal held that BHE failed to satisfy this issue. The Court of Appeal found that een if the claim arose out of design deficiency, it also arose out of defectie construction work which would fall within the exclusion. Where there are two or more causes and one falling within an insuring clause and one THE POLICY 139

156 falling within the exclusion, the policy does not respond (Wayne Tank Pump Co Ltd The Employer s Liability Assurance Corp Ltd [1974] QB 57). New South Wales Court of Appeal: 9 October 2008 THE POLICY Adrian Lewis 140

157 THE FACTS Australian Integration Management Serices Pty Ltd (AIMS) operated a number of prisons under contract arrangements w i t h a g o e r n m e n t department. Employees of AIMS participated in a superannuation fund r u n b y C o r r e c t i o n s Corporation of Australia Staff Superannuation Pty Ltd (CCAS). CGU Insurance Limited Corrections Corporation of Australia Staff Superannuation Pty Ltd [2008] FCAFC 173 Professional indemnity In July 2000 AIMS was told policy claims made policy that a contract it held for one quality of degree of prison facility which was due awareness of fact situation to lapse in December 2000 or circumstances giing rise would not be renewed. As a to claim consequence, a number of staff at that facility were expected to be made redundant and would at that time be entitled to access money in the fund run by CCAS. CCAS identified that there would be problems in liquidating property assets in order to satisfy the expected demands to be made on the fund. The situation was further complicated when another AIMS contract which was due to end in 2001 was cancelled in late Ultimately, a number of redundant workers sued AIMS and CCAS and two of the CCAS directors. CCAS, the directors, and AIMS settled the claims made by the workers for the sum of $275,000, plus costs (which were assessed at close to $540,000). Recoery was then sought from CGU, the professional indemnity insurer. CGU denied coer on the basis that CCAS was not releantly aware and did not gie appropriate notification so as to trigger an entitlement to indemnity. CGU contended that at the releant time, CCAS was not aware that the cash flow issues expected to be experienced by the fund were likely to gie rise to claims based on alleged breaches of duty in relation to inestment decisions undertaken in the course of managing the fund. In the alternatie, CGU also objected to the amount of the settlement that represented the costs of the redundant workers for suing their employer, AIMS, as AIMS was releantly not an insured under the CGU policy. CGU was required to indemnify CCAS, but not for the costs of the redundant workers for suing AIMS. THE ISSUES AT TRIAL The trial judge considered: 1. Whether CCAS was aware during the policy period of any fact, situation or circumstance that might gie rise to the claim; 2. Whether the claims ultimately made by the redundant workers arose out of that fact, situation or circumstance; and 3. Whether CCAS gae notice to CGU during the policy period (and if such notice was not gien, whether it should be excused pursuant to s54(1) of the Insurance Contracts Act, 1984 (ICA). THE DECISION AT TRIAL At trial it was found that the requisite awareness existed and further that the claims were of the type that a reasonable person, knowing all the releant facts, would conclude might be brought [and] that those claims were the same as those that [CCAS] thought might be so brought. It found that notification was made within the policy period, howeer, in the alternatie, s54 operated so that CGU could not deny the claim on the basis that there had been late notification. THE ISSUES ON APPEAL The key issue for determination on appeal was whether the claims ultimately made by the redundant workers arose out of the fact, situation or circumstance of which CCAS was aware. CGU contended that while CCAS may hae been aware of certain matters, the matters of which they were aware did not correspond to the precise matters from which the claim sprung. There was also a cross appeal by CCAS in relation to the finding at trial which excluded from coer the portion of the settlement which related to the costs of the claims of the redundant workers to sue AIMS, the employer (as distinct from the costs of suing CCAS and its directors which were reasonable). THE DECISION ON APPEAL The Full Court of the Federal Court dismissed CGU s appeal. THE POLICY 141

158 The court found that there was sufficient awareness on the part of CCAS and there was no need for CCAS to be conscious of the legal basis of the yet to be made claim at the time when circumstances were notified. The purpose of a notification clause would be defeated if an insured was required to be aware not only of releant facts or circumstances but also the legal footing of any subsequent claim. THE POLICY CGU contended that its refusal to indemnify was not by reason of the late notification but rather because of CGU s iew that the insured was not releantly aware to trigger the operatie proisions of the policy. Gien the findings on appeal that CCAS was sufficiently aware, the court did not consider the operation of s54 (1) of the ICA. As to the cross appeal, the Full Court of the Federal Court agreed that the releant component of the settlement which related to the costs of pursuing AIMS was not reasonable. It was noted that the insured, CCAS, bore the onus of proof to establish the reasonableness of the settlement. It was not sufficient for CCAS to simply contend that the entire settlement should be seen as reasonable on the basis that if CCAS did not agree to pay all costs of the redundant workers, there may well hae been no settlement at all. No eidence was led on this issue. That, combined with the finding that CCAS and AIMS had not been conducting the litigation as separate distinct parties at arms length from each other, was determinatie in the upholding of the trial decision that CCAS did not discharge its onus to show that the entire settlement was reasonable. CGU was required to indemnify CCAS, but not to the extent that that settlement included the costs of the redundant workers pursuing AIMS. Full Court of the Federal Court of Australia: 21 October 2008 Joanna Burton 142

159 Done THE FACTS The plaintiffs commenced proceedings against Financial Wisdom Limited (a financial adisory company), Mr Chen (an authorised representatie of Financial Wisdom), Bentley Barton (a firm of accountants) and Mr Taylor (an accountant at Bentley [2008] FCA Barton). The plaintiffs case was, in summary, that: Financial Wisdom Limited [2008] FCA 1706 Leae to proceed against insolent company and bankrupt joinder of insurer inestments exclusion 1. They retained Financial Wisdom and Bentley Barton to proide adice on management of their assets; 2. Financial Wisdom and Bentley Barton executed a number of financial transactions which were not authorised; 3. The unauthorised transactions caused the plaintiffs to sustain losses in excess of $53 million; and 4. They were entitled to compensation on the basis of breach of fiduciary duty, negligence and misleading and/or deceptie conduct. Bentley Barton was placed in liquidation on 14 October 2005, and Mr Taylor was made bankrupt on 27 September The effect of s471b of the Corporations Act 2001 (Cth) and s58(3)(b) of the Bankruptcy Act 1996 (Cth) was that the plaintiffs needed to obtain the court s leae to proceed further against those parties. THE ISSUES Bentley Barton and Mr Taylor had in place a professional indemnity policy with Allianz from 16 January 2005 to 16 January 2006, with coer of $7 million. In this context the plaintiffs applied to the Federal Court for orders that: 1. They be gien leae to proceed against Bentley Barton and Mr Taylor; and 2. Allianz be joined as a respondent to the proceedings pursuant to s562 of the Corporations Act and s6(4) of the Law Reform (Miscellaneous Proisions) Act 1946 (Cth). THE DECISION The court first dealt with the application to join Allianz. Allianz opposed the joinder on the following grounds: 1. The policy contained an Inestment Performance Exclusion (IP exclusion) which proided: We are not liable to indemnify you in respect of any claim directly or indirectly based upon, attributable to, or in consequence of: (a) (b) depreciation (or failure to appreciate) in alue of any inestments, including but not limited to securities, commodities, currencies, options and futures transactions; or any actual or alleged representation, adice or guarantee proided by or on your behalf as to the performance of any such inestments. For the sake of clarity, we agree that this exclusion does not apply to any claim arising directly out of your failure to effect a specific inestment transaction pursuant to a specific instruction from a client of yours. 2. The exclusion applied to the losses claimed by the plaintiffs, as they were connected with a depreciation of inestments ; and 3. As it followed that Bentley Barton and Mr Taylor were not entitled to indemnity under the policy, any claim against Allianz must fail. Haing considered that argument, the court ultimately gae the plaintiffs leae to join Allianz. In reaching its decision the court reasoned that, in summary: 1. The plaintiffs allegations were properly characterised as allegations that Bentley Barton and Mr Taylor carried out unauthorised inestments; 2. The IP exclusion did not apply to losses flowing from such unauthorised inestments as the term inestments used in the exclusion should be construed to mean authorised inestments. This was because: (a) Such a construction was consistent with the final sentence of the exclusion, ie: THE POLICY 143

160 (i) (ii) That sentence showed that the exclusion was not intended to coer the situation where, contrary to instructions, the insured had failed to effect a particular inestment; The exclusion instead made it clear that the policy did not coer the insured s inestment adice business; and THE POLICY (b) In those circumstances, and where the exclusion was silent about situations where the liability of the insured arose from the expenditure of client funds contrary to instructions, an interpretation should be adopted which faoured the insured. Such an approach was consistent with the statement of principle in Darlington Futures Ltd Delco Australia Pty Ltd (1986) 161 CLR 500 at 510, adopted unanimously by the High Court in Nissho Iwai Australia Ltd Malaysian International Shipping Corporation, Berhad (1989) 167 CLR 219 at 227 that: The interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giing due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentem in case of ambiguity. 3. The exclusion therefore proided no basis upon which Allianz could aoid joinder to the proceedings. In light of the court s findings with respect to Allianz, leae was also granted for the plaintiffs to proceed against Bentley Barton and Mr Taylor. Federal Court of Australia: 14 Noember 2008 Adrian Lewis 144

161 Middleton THE FACTS The appellant was the beneficiary of a trust that carried out motor ehicle serices and repairs. In AON Risk Serices Australia Ltd [2008] WASCA 239 Fraudulent or negligent misrepresentation reliance by a third party on false information proided by a broker s representatie in an affidait damage to it. May 1993 an 1899 Renault Voiturette motor ehicle that was being restored by Mr Rodney Anderson on behalf of the trust, was damaged. The owners of the ehicle commenced an action against Mr Anderson for, amongst other things, deliery up of the ehicle. The appellant agreed that she would pay for Mr Anderson to reinstate the ehicle proided there was no insurance coering the AON was the insurance broker for the ehicle owner. The ehicle was the subject of an SGIO motor fleet policy at the time of the damage. The second respondent, Mr Verryt, handled the ehicle owner s account with AON. Mr Verryt swore an affidait stating that the SGIO policy did not coer the ehicle whilst outside the museum. After seeing the affidait the appellant instructed Mr Anderson to commence reinstating the ehicle at her expense. THE ISSUES The appellant commenced proceedings against AON and Mr Verryt alleging fraudulent and negligent misrepresentation and breach of s52 of the Trade Practices Act 1974 (Cth) arising from statements made by Mr Verryt in his affidait. The respondents claimed that the SGIO policy did not respond because the damage was caused by theft and the damage occurred beyond the limits of the museum. They also argued that there had been an unnotified alteration of risk contrary to a general condition of the policy and a general exclusion was triggered because the damage occurred as a result of the lawful seizure, confiscation, nationalisation or requisition of the ehicle. THE DECISION AT TRIAL The trial judge concluded that the SGIO policy did coer the damage to the ehicle. Howeer, he considered that the statements made by Mr Verryt, although made in trade or commerce, were his honestly held opinion and were not misleading or deceptie. He also concluded that the respondents did not owe the appellant a duty of care. The trial judge dismissed the action and entered judgment for the respondents. THE ISSUES ON APPEAL The appellant claimed that the trial judge erred in finding that the representation made by Mr Verryt was a statement of opinion rather than a statement of fact, that he had reasonable grounds for making the representation and that he did not act dishonestly or recklessly in making the representation. She also claimed that the trial judge erred in finding that the respondents did not owe her a duty of care. AON contended that the representation was not misleading, deceptie or negligent because SGIO would not hae paid the claim. They also contended that the representation did not cause the appellant s loss. AON also cross-appealed arguing that the trial judge erred in finding that the theft exclusion, the general exclusion and the general condition did not apply, and that the representation was in trade or commerce. THE DECISION ON APPEAL The Court of Appeal held that, gien Mr Verryt s claimed familiarity with the insurance policy, his representation was a finding of fact. The representation was false on the basis of the trial judge s finding that the policy was not confined to the limits of the museum and that it coered the damage to the ehicle. The Court of Appeal also held that, in the circumstances, Mr Verryt s opinion was unreasonable, and did not consider that the eidence established that he acted dishonestly. The Court of Appeal held that the respondents owed the appellant a duty of care. This was based upon the appellant s reasonable reliance on the affidait and the respondents knowledge that someone other than their client wanted to know if the policy coered the damage to the ehicle. The Court of Appeal allowed the appellant s claims. Western Australia Court of Appeal: 24 Noember 2008 Mary Schroeder THE POLICY 145

162 THE FACTS On 12 June 1999, the plaintiff, McConnell Dowell, entered into a contract with Societe Miniere Aoudou Pacco (SMAP). Pursuant to the contract the plaintiff was to proide SMAP with the equipment and personnel to run a diamond mine in the Central African Republic (CAR). Title in the equipment [2008] was to be retained by the plaintiff. McConnell Dowell Middle East LCC Royal & Sun Alliance Insurance Plc [2008] VSC 501 Plant and equipment A further contract was disappears whether an signed on 11 October occurrence for the purposes This contract proided that of the policy whether loss SMAP would purchase the can be attributed to theft equipment from the plaintiff. Title was to remain with the plaintiff until SMAP paid the entire purchase price of 1.3 million US dollars. The contract also proided that, until title passed, SMAP was obliged to account for the whereabouts of the equipment upon request and to take all necessary steps to allow the plaintiff to withdraw its equipment from the CAR, should it decide to do so. On 13 October 2000 a representatie from the plaintiff attended the mining site to check on the condition of the equipment. Twenty items were not located at the mine site. SMAP s employees were unable to assist the plaintiff in locating those items. In December 2000 the plaintiff decided to stop mining operations in the CAR. Its employees did not return to the CAR after the Christmas break. Throughout 2001 the plaintiff pressed SMAP to either pay the total purchase price for the equipment or assist it to remoe the equipment from the CAR. In August 2001, the plaintiff informed SMAP that if it did not adise of the whereabouts of the equipment, it would consider the equipment stolen. SMAP did not respond. The equipment was neer recoered. In about March 2001 the plaintiff informed its insurance broker that it intended to make a claim for the lost equipment. The defendant insurer eentually refused the claim. THE DECISION The main issue was whether the loss of the equipment was an occurrence for the purpose of the policies. The plaintiff held two policies with the defendant, both in essentially the same terms. Occurrence was defined in the policies as: An eent or continuous or repeated exposure to conditions, which, during the period of insurance causes or contributes to physical loss or damage to the insured property. The court defined physical loss as including a loss of physical possession of the property. It then had to decide whether there had been an eent causing the plaintiff to suffer a physical loss of the first 20 items. It was satisfied that, as at 13 October 2000, the plaintiff did not know the whereabouts of the first 20 items. It also held that by Noember 2001 it was clear that SMAP did not intend to allow the plaintiff to recoer the balance of the items. The court found that SMAP s failure to respond to the request for information and its continual retention of the items after the plaintiff s request were eents causing or contributing to the physical loss of possession of the items. There was therefore an occurrence for the purpose of the policies. Both policies proided that they did not coer loss due to disappearance unless such loss can be attributed to burglary and/or theft and/or any attempt thereat. As the loss of the items was, on its face, a loss due to disappearance, the court had to consider whether the exclusion would apply. The court felt that the term theft should be interpreted by reference to the parties objectie intentions and haing regard to the commercial purpose of the policy. It held that giing theft its technical, legal meaning would be contrary to the commercial purposes of the policy. The appropriate question was whether, applying the ciil standard of proof, it could be reasonably inferred that there had been a dishonest appropriation of the property with no intention of returning it to its true owner. The court held that the whole sequence of eents, particularly SMAP s failure to respond when informed that the plaintiff would regard the equipment as stolen if no information was proided, led to an inference that SMAP, or someone acting with SMAP s knowledge and consent, dishonestly appropriated the items. THE POLICY 146

163 The exclusion therefore did not apply and the losses were coered by the policies. Victoria Supreme Court: 25 Noember 2008 Leah McStay THE POLICY 147

164 THE FACTS At all material times, AMP Limited held a composite Lloyds policy of insurance. The policy proided coer of $200 million, and was underwritten by 27 underwriters. The named Assured on the policy was AMP Limited. Towry Law Chubb Insurance [2008] NSWSC 1352 Interpretation of retroactie date in policy equitable estoppel AMP acquired Towry Law during the period of insurance. Towry Law sought indemnity under the policy in respect of claims that arose out of matters that occurred prior to it being acquired by AMP. The claims were made after the date of acquisition. Indemnity was declined with the result that Towry Law commenced proceedings against the 27 underwriters (the defendants). THE ISSUES The policy proided that subsidiaries acquired by AMP during the period of insurance would be coered by the policy. Howeer, the policy also proided that the retroactie date in respect of the acquisition to be the date of acquisition or to be agreed by underwriters. The central issue for determination was the definition of retroactie date. In simple terms, the defendants contended that the phrase should be read so that coer was not aailable for claims arising out of circumstances that occurred before the date of acquisition unless the underwriters specifically agreed otherwise. The defendants also sought alternatie relief including rectification of the policy and estoppel. THE DECISION The court found in faour of the defendants in relation to each of the major issues in contention. While the arious arguments were far ranging, the key issues were construction, rectification and estoppel. Construction of the phrase Retroactie date The court set out some guidelines for the construction of a policy of insurance. It was emphasised that: The court is concerned to ascertain the objectie intention of the parties insofar as that intention appears from the terms in which the parties expressed their contract and other matters to which the court may hae regard. Those matters include the purpose and object of the transaction what, in a commercial sense, the parties were seeking to achiee by it. The court should hae regard to all of the terms of the contract, and should seek to construe them consistently, and so far as is possible, harmoniously. As a starting point, the court analysed the language of the policy. Howeer, it was acknowledged that the issue was not one that could be resoled merely by the application of detailed linguistic and semantic analysis. Consequently, in the course of interpreting the policy, the court took into account the commercial context of the policy and the market in which it was made. A number of underwriters from the London insurance market gae eidence regarding the market understanding of the phrase retroactie date. Such eidence was releant because the construction of the policy is goerned by the objectie intention of the parties. The underwriters gae eidence that a retroactie date limitation did not extend coer to claims arising out of circumstances that occurred before the specified retroactie date. In assessing the commercial context of the policy, the court obsered that underwriters had had the opportunity to assess AMP s systems of management and internal controls and were satisfied that they were robust enough to minimise the risk of certain claims. As a consequence, underwriters were prepared to offer insurance to AMP without any retroactie date limitation. Howeer, underwriters did not hae the opportunity to assess the strength of internal controls of subsidiaries acquired by AMP during the period of insurance. This led the court to conclude that it was unlikely that underwriters would intend to extend coer to claims that arose out of matters that pre-dated the date of acquisition. This conclusion was reached on the basis that it was unlikely that underwriters would risk extending coer to parties and circumstances of which they had no knowledge. THE POLICY 148

165 Consequently, the court interpreted retroactie date as restricting coer to claims arising out of eents that occurred after the date of acquisition unless the underwriters expressly agreed otherwise. It is important to note that the court reached this conclusion despite the fact that certain linguistic considerations (such as consistency of use) tended to support a contrary interpretation. Rectification The defendants raised an argument based on rectification in the defence. Although the court s construction of the policy rendered the argument irreleant, the court considered the argument in case the decision was appealed. Rectification of a document may be granted where the document, on its proper construction, does not gie effect to the parties agreement. This requires the court to determine the common intention of the parties. The court seeks to determine the subjectie intentions of the parties (as opposed to their objectie intentions which are used to assist in the construction of the document). The court heard eidence from the personnel inoled in the negotiation of the policy. In particular, one of AMP s internal counsel conceded in an that it was her understanding that the intention of the policy was that the retroactie date would apply to acquisitions. The court accepted that her eidence bound AMP. Therefore, in the eent of it being necessary, the court ordered that the policy be rectified to proide that a company acquired by AMP during the period of insurance is not entitled to be indemnified in respect of claims arising out of eents that occurred before the date acquisition unless the underwriters expressly agreed otherwise. Estoppel The defendants also raised an estoppel argument. Although the court s construction of the policy made the argument irreleant, it still took time to address it. The trial judge cited with approal the judgment of Brereton J in Moratic Gordon regarding the requirements to establish a conentional estoppel. It is necessary to show that: 1. The plaintiff has adopted an assumption as to the terms of its legal relationship with the defendant; 2. The defendant has adopted the same assumption; 3. Both parties hae conducted their relationship on the basis of that mutual assumption; 4. Each party knew or intended that the other would act on that basis; and 5. Departure from the assumption would cause detriment to the plaintiff. The defendant argued that both parties had dealt with each other on the assumption that acquisitions made since the inception of the releant policy would not hae retroactie coer unless the underwriters specifically agreed to gie such coer. The court agreed that an estoppel of the type contended for by the defendants arose in the present situation. The eidence showed that both AMP and its underwriters had the same understanding of the condition. The parties understood that the policy would be goerned by that assumption. Finally, the defendants would suffer prejudice if AMP or the plaintiffs were permitted to depart from that assumption. New South Wales Supreme Court: 19 December 2008 Nick Robson THE POLICY 149

166 THE FACTS Speno entered into a contract with Hamersley to do certain works (the Contract). Under the Contract Speno agreed to: - Speno Rail Maintenance Australia Pty Ltd Metals & Minerals Insurance Pty Ltd [2009] WASCA 31 Equitable right of contribution between co-insurers double insurance s45 and s13 of the Insurance Contracts Act 1984 (Cth) 1. Arrange public liability insurance to coer Hamersley as a principal; and 2. Be liable for, indemnify and to hold harmless Hamersley against common law liability for injury to Speno s employees arising from the performance of the works. Speno took out insurance with Zurich, and Hamersley had direct coer with MMI. Nolan and Oatway, employees of Speno, were injured at the workplace on 24 May The injuries were caused by the negligence of Hamersley. Separate proceedings were instituted in the District Court against Hamersley. Hamersley admitted liability and then sought indemnity under the Contract. Speno then claimed against Zurich under the Speno policy. Nolan went to trial and appeal and it was ordered that: - 1. Hamersley pay Nolan the sum of $1,110,186.35; and 2. Speno and Zurich indemnify Hamersley in respect of the sum. Zurich had paid $25,000 in damages to Oatway in settlement of his claim. The total paid by Zurich including interest and legal costs was $1,259, THE DECISION After paying the indemnified amounts Zurich commenced an action claiming contribution from MMI under the Hamersley policy pursuant to the general equitable right of contribution between co-insurers of the same risk. MMI commenced a recoery action against Speno. MMI claimed that it was entitled, by subrogation, to the rights held by its insured (Hamersley) against Speno to the extent of MMI s obligation to contribute. Other insurance proision In Zurich s action against MMI, Zurich claimed against MMI for contribution on the basis that Hamersley was dual insured: - 1. By Zurich under the Speno policy as required by the Contract; and 2. By MMI under the Hamersley policy. In its defence MMI relied upon the underlying insurance clause in its policy which purported to transform the Hamersley policy to an excess policy in the case of double insurance. This in turn purported to preclude the equitable right of Zurich to claim contribution. The Court of Appeal held that an insurer should be permitted to limit liability on the grounds of double insurance only where a policy is a genuine excess policy. To be a genuine excess policy it must: - 1. State that it coers the insured s liability oer and aboe that coered by another policy specifically identified in the excess policy; and 2. Hae an appropriately reduced premium. Seerability of other insurance proision The trial judge found, and it was not challenged on appeal, that the underlying insurance clause operated as follows: - 1. Where Hamersley itself had effected another policy coering the same risk; and 2. Where Hamersley was entitled to indemnity for the same risk, under a policy effected by a third party. At trial s45(1) of the Insurance Contracts Act 1984 (Cth) (ICA) was held to be triggered by the first of these circumstances but not the second. That finding was not challenged on appeal. Speno and MMI appealed on the grounds that the trial judge was incorrect in declining to seer the underlying insurance proision so that it could continue to operate in the second circumstances. In other words, to limit MMI s liability under the Hamersley policy to the extent Hamersley was also indemnified under the Speno policy pursuant to the Contract. THE POLICY 150

167 The Court of Appeal upheld this ground of appeal and said that the insurance clause was capable of being seered. The Court of Appeal held that s45(1) only operates where the other insurance is a policy entered into by the insured. This does not extend to circumstances where the other insurance is a policy entered into by a third party, to which the insured happens to be a beneficiary. When the underlying insurance clause is seered in that way, the result of its operation is that there is no double insurance. This was sufficient to dispose of the appeal but the Court of Appeal went on to deal with the other grounds of appeal. Duty of good faith Speno argued on MMI s behalf that equity precluded Zurich from being entitled to a contribution. If Zurich was able to obtain a contribution from MMI, then MMI would subrogate to Hamersley s rights against Speno (pursuant to the Contract) and enforce the judgment against Speno. Speno argued that this would be the ery outcome that Zurich had not been able to achiee itself because Zurich had waied its rights of subrogation against Speno. Speno argued that Zurich s claim for contribution from MMI, by indirectly exposing Speno to a claim, was in breach of section 13 of the ICA. The Court of Appeal rejected this assertion. The Court of Appeal held that the duty of good faith in s13 does not extend to an obligation on the insurer to sacrifice its own interests from the interests of the insured. Zurich s duty of good faith only required Zurich to act honestly and fairly when considering Speno s interests. It did not require Zurich to subjugate its own interests to those of Speno. Right of subrogation between co-insurers In the MMI subrogation action MMI sought to assert rights against Speno by subrogation of the rights held by Hamersley against Speno. MMI s right to do so was upheld by the trial judge. Speno appealed on the grounds that the trial judge should hae found that subrogation was not aailable to MMI. In upholding the appeal, the Court of Appeal considered whether, in the case of double insurance, the contributing co-insurer is entitled to assert the rights of the insured against the third party by subrogation. The Court of Appeal held that where there is double insurance and one insurer indemnifies the insured and insurer two subsequently pays contribution to insurer one, insurer two is not entitled to be subrogated to the insured s rights against a third party. The injured worker successfully sued Hamersley. Speno s insurer then indemnified Hamersley. This had the effect of merging Speno s primary contractual liability to indemnify Hamersley with the insurer s secondary liability to indemnify Hamersley in respect of the same liability to the worker, in the judgment. As a result, there was nothing left for Hamersley s insurer to be subrogated to. Special leae to appeal to the High Court was granted on 31 July It appears from the High Court transcript that leae was granted in relation to the seerability of s45 of the ICA, and subrogation issues. Western Australia Court of Appeal: 6 February 2009 Gillian Sheppard THE POLICY 151

168 THE FACTS Gary Gray, a truck drier, injured his back during the course of his employment whilst unloading steel beams from his employer s truck. Mr Gray was employed by Andre Herzog Pty Ltd (the employer). Insurance Australia Ltd t/as NRMA Insurance GIO General Ltd [2009] ACTCA 4 Workcoer claim upon motor accident policy injury occurred whilst unloading a truck (b) (c) M r G r a y b r o u g h t proceedings against his employer alleging a failure to proide a safe system of work. Mr Gray s claim related to three injuries: (a) a hand injury (carpal tunnel) allegedly arising from regular heay lifting which Mr Gray engaged in at work; a back injury sustained whilst unloading a truck; and a knee injury sustained after falling down stairs at home due to sharp pain experienced from his back injury. The employer held a workers compensation insurance policy with GIO General Limited (GIO) and a third party motor ehicle (CTP) insurance policy with NRMA. GIO settled the claim made by Mr Gray prior to hearing for $192, plus $40,000 in costs. Subsequently, GIO claimed dual insurance and sought a 50% contribution from NRMA for the settlement monies. THE DECISION AT TRIAL GIO s claim for dual insurance was based on the allegation that the indemnity under the CTP policy extended to the employer. Releantly, the CTP policy insured the employer, as owner of the truck, against liability in relation to bodily injury of a person caused by or arising out of the use of the truck. NRMA defended the claim for contribution. NRMA submitted that any liability on its part could not arise. This was due to the fact that Mr Gray s claim had been framed purely on the basis of the employer s failure to proide a safe system of work. The trial judge rejected NRMA s submissions and noted that the way in which the claim was framed was not determinatie as to whether the insurance policy responded. The trial judge noted that there was ample authority for the proposition that an injury sustained whilst loading or unloading a truck, was an injury arising out of the use of a truck. Accordingly, it held that Mr Gray s injury was one that arose out of the use of the truck and therefore NRMA was liable to contribute 50%. In deciding the issue of apportionment, the trial judge opined that the damages recoered by Mr Gray related solely to his back injury (the cause of action subject to dual insurance). It expressed this iew on the basis that: (a) (b) Mr Gray would likely be unable to satisfy the court that his hand injury was causally related to his employment; and Mr Gray s knee injury was releant only to the assessment of damages for his back injury as it was not a separate cause of action. THE DECISION ON APPEAL NRMA appealed the decision and submitted that the court had no business differentiating between the causes of action for the purposes of apportioning liability. Essentially, NRMA argued that it should not hae to contribute at all because it was impossible to identify the amount paid to Mr Gray for the cause of action the subject of the dual insurance (the back injury). The Court of Appeal rejected NRMA s submissions. It noted that the issue on appeal related to how the court should determine the alue of each cause of action where there is a settlement. The Court of Appeal stated that it is necessary to undertake a process of reasoning in order to make a determination. It noted that the trial judge did so and that its reasoning was reasonable in the circumstances. Therefore, because the trial judge considered that 100% of the settlement paid to Mr Gray related to his back injury, NRMA was liable to contribute 50% to that amount in accordance with the principles of dual insurance. Australian Capital Territory Court of Appeal: 11 February 2009 Bianca Horn THE POLICY 152

169 THE FACTS In January 2006, the plaintiff made a claim on an industrial special risks insurance policy it held with Suncorp. The policy concerned property and buildings comprising the Australian Defence Academy at Weston Creek, ACT. The claim was the consequence of a major collapse of a roof on one of the Australian D e f e n c e A c a d e m y s Strategic Property Holdings No 3 Pty Ltd Suncorp Metway Insurance Limited [2009] ACTSC 8 Interpretation of limit of liability clause meaning of accidental damage buildings, due to the failure of roof trusses. It was undisputed that the roof trusses had failed due to a builder s faulty workmanship. The policy contained a perils exclusion. It noted that Suncorp was not liable in respect of specific perils identified in paragraphs 4(a) to 4(e) of that exclusion (one of which was faulty workmanship), proided that this exclusion 4(a) to 4(e) shall not apply to subsequent loss, destruction of or damage to the Property Insured occasioned by a peril (not otherwise excluded) resulting from any eent or peril referred to in this exclusion. It was undisputed at trial that the damage to the buildings caused by the collapse of the trusses (which was, itself, a peril) was subsequent damage occasioned by the original peril (the risk that faulty workmanship would allow the trusses to collapse). It was also accepted that the second peril was not otherwise excluded under the policy and that the subsequent damage caused by the building s collapse resulted from an eent referred to in the perils exclusion (faulty workmanship). THE ISSUES The plaintiff sought a declaration by the court that an accidental damage limit of liability in the policy of $200,000 did not apply to the consequential damage caused by the collapse of the roof trusses. The plaintiff argued that the concluding words of the definition of accidental damage in the policy, being that excluded from accidental damage was any peril excluded by this policy, meant that the limit of liability did not apply. THE DECISION The court found that the limit did apply. Applying the same reasoning as in interpretation of the exception to the perils exclusion, the damage sustained by the builder s faulty workmanship was to the roof trusses and adjoining supports. That damage amounted to a peril, which caused a subsequent loss. That (second) peril was not otherwise excluded and was not included in the eents defined as accidental damage. Adopting the definition of accident used by the court in Australian Casualty Co Ltd Frederico (1986) 160 CLR 513, the peril (caused by the failing trusses) was an unlooked-for mishap or an untoward eent which is not expected or designed. The subsequent damage was not an ineitable consequence of the faulty workmanship. That being so, the damage was accidental damage to which the limit of liability of $200,000 applied. The plaintiff s claim was dismissed with costs. Australian Capital Territory Supreme Court: 13 February 2009 Natalee Barr THE POLICY 153

170 THE FACTS The plaintiff was a seed and grain merchant. It purchased seed identified as being jarra grass Selected Seeds Pty Ltd QBEMM Pty Ltd & Anor [2009] QSC 70 Broadform policy efficacy exclusion occurrence seed, and in February 2003 on sold it as such. The seed was grown and harested by the purchaser, who on sold it. The seed was grown and re-grown on seeral occasions, until it was sold to S&K Shrimp ( the Shrimps ) in The Shrimps planted the seed and produced a crop, which was later identified as being summer grass (a weed). The Shrimps instituted Federal Court proceedings and the litigation passed up the line to the plaintiff. The plaintiff sought indemnity in relation to the Federal Court proceedings from its insurer, the defendant. Indemnity was declined on the basis that there had not been an occurrence under the policy and due to the operation of an efficacy endorsement. The defendant argued that there had been no occurrence, as the property damage did not result from an eent (in that the eent of planting the seeds was both the occurrence and the damage). The endorsement stated that the policy did not coer liability arising directly or indirectly from or caused by, contributed to by or arising from: the failure of any Product to correctly fulfil its intended use or function and/or meet the leel of performance, quality, fitness or durability warranted or represented by the Insured. The defendant argued that the seed had not fulfilled its intended use as it was summer grass seed, rather than jarra seed. The fact that summer grass was a weed, whereas jarra grass was used in commercial hay crops, meant that the seed did not meet the leel of quality warranted. The plaintiff instituted proceedings seeking indemnity under the policy. THE DECISION The court held that the plaintiff was entitled to indemnity. In relation to the defendant s argument that there had not been an occurrence, the court found that there was a distinction between the act of planting the seed, and the subsequent damage to the Shrimps property by irtue of the seeds being summer grass, sufficient for there to hae been an occurrence. In terms of the efficacy endorsement, the court found that the damage was not caused by the failure of the seeds to meet the leel of performance, quality, fitness or durability that had been warranted. Rather, the damage arose as the seeds were of a different kind than had been warranted. This did not enlien the operation of the endorsement. The defendant has appealed the decision. Queensland Supreme Court: 8 April 2009 Anna Clarke THE POLICY 154

171 Barbour THE FACTS Mr Black resided in a house at Kingaroy. His wife was preiously married to Mr Barbour, and she had custody of Mr Barbour s children. Black & Elders Insurance Ltd [2009] QDC 109 Assault causing personal injuries entitlement to rely on the intentional or criminal acts exclusion whether s54 of the Insurance Contracts Act preented insurer from refusing claim On 31 May 2005, Mr Barbour returned one of the children to their mother at Mr Black s residence. After dropping off the child, Mr Black approached Mr Barbour while he was still in the car. Following a conersation between the two men, Mr Black punched Mr Barbour in the face and bashed his head into the car door frame. Mr Barbour made a complaint to the police about the incident. The police charged Mr Black with assault occasioning bodily harm. Mr Black subsequently pleaded guilty to the charge. In May 2008, Mr Barbour commenced ciil proceedings against Mr Black claiming damages for wrongful assault and battery. Mr Black filed a defence denying the allegations. He also sought indemnity in respect of the claim under the liability section of his building and contents policy with Elders Insurance Limited. Elders declined to indemnify Mr Black on two grounds. Firstly, Elders argued that the assault was not an occurrence within the meaning of the policy. The policy defined occurrence to mean an eent which results in personal injury or property damage which you neither expected nor intended to happen. Howeer, the assault was a deliberate act by Mr Black, and Mr Barbour s injuries were an expected and intended consequence. Secondly, Elders sought to rely on the criminal and intentional acts exclusion that proided that Elders will not pay for any liability, personal injury caused directly or indirectly by any intentional, dishonest or criminal act committed by Mr Black. In response to Elders declinature, Mr Black joined Elders as a third party to the proceedings. Elders filed a defence and proceeded to apply for summary judgment to hae the third party claim struck out. THE ISSUES In order to succeed on a summary basis, Elders had to demonstrate that the third party claim had no prospect of success, meaning that there was no real need for a trial. THE DECISION Consistent with its defence, Elders argued that the assault was not an occurrence, and, in any eent, the claim was specifically excluded from coer pursuant to the criminal and intentional acts exclusion. In order to rely on the presumption contained in s79 of the Eidence Act 1977, Elders exhibited a certified copy of the certificate of coniction to its affidait material. Section 79 proides that, unless the contrary is proed, a person conicted of a criminal offence is taken to hae not only committed the act but also to hae possessed the state of mind which constitutes the offence. As Mr Black did not seek to contest the grounds of the coniction, the court was able to conclude that he intended to assault Mr Barbour. The only basis on which Mr Black sought to resist the application was on the basis of s54 of the Insurance Contracts Act Mr Black s defence contained an allegation that Mr Black only used reasonable force to repel a trespasser. On this basis, Mr Black argued that the combined effect of s54(1) and 54(5)(a) meant that Elders could not rely on the act (the assault) being intentional as justification for refusing the claim because the act was necessary to protect the safety of a person or to presere property. Elders argued that s54 could not be used in the manner contended by Mr Black. It was argued that in order to rely on s54, a party must first demonstrate that there was an insured eent under the policy. Only then can an insured seek to rely on s54. In this case it was argued that as there was no occurrence, there was no insured eent. While the court accepted that there was some authority for the arguments promoted by Elders, the court was not required to rule on the point. Rather, the court identified an inherent contradiction in Mr Black s case. If Mr Black was able to successfully defend Mr Barbour s claim on the basis that he used reasonable force to repel a trespasser, there would be no liability for Elders to indemnify. If his defence THE POLICY 155

172 failed, the court would conclude that the assault was intentional and would be excluded from coer. Either way, Elders would not be required to indemnify him. In order to escape this conundrum, Mr Black tried to raise a potential third path: that after trial, the court could make findings of fact which might result in Mr Black being liable to Mr Barbour but still entitling him to rely on s54(5)(a). While the court accepted that a third path could hypothetically exist, there was no eidence to gie it form and substance. THE POLICY The court concluded that Mr Black s third party claim against Elders had no real prospects of success and consequently entered judgment in faour of Elders. Queensland District Court: 7 May 2009 Nick Robson 156

173 THE FACTS The plaintiff, Limit (No 3) Limited (Limit) insured a joint enture consisting of Obayashi Corporation and McDonnell Dowell South East Asia Pty Limited (the Joint Venture) under a property damage and liability policy. Limit (No 3) Limited ACE Insurance Limited [2009] NSWSC 514 Recoery by one insurer from another consideration of professional liability exclusion and Wayne Tank principle The defendant, ACE Insurance Limited (ACE), also insured the Joint Venture pursuant to a liability policy. In August 2001, PowerGrid S i n g a p o r e L i m i t e d (Powergrid) engaged the Joint Venture to construct 2 power transmission cables from the Senokas Power Station to Gambas Aenue along Woodlands Aenue in Singapore. The work inoled the creation of shafts with diaphragm walls and extensie tunnelling. As a result of the work, damage was caused to the property of third parties, including PowerGrid, whose power cables already ran underneath the area adjacent to Woodlands Aenue. The Joint Venture sought indemnity under the ACE policy at first instance. When ACE declined, the Joint Venture sought indemnity under the policy with Limit. Limit indemnified the Joint Venture and made payments totalling $13m. It sought recoupment indemnity or contribution from ACE on the basis that payment made under the Limit policy operated to reliee ACE of its liability to the Joint Venture. THE ISSUES ACE disputed its liability to indemnify the Joint Venture. ACE disputed that the damage was in respect of a legal liability or that it occurred within the period of insurance. ACE referred to expert eidence to the effect that the Joint Venture s design did not adequately proide for groundwater and soil conditions. ACE maintained that the claim under its policy was excluded on the basis that the claim was for professional rather than public liability. ACE further maintained that the claim did not fall within an endorsement which obliged it to indemnify the Joint Venture from claims arising from loss of or damage to any property or land caused by the remoal or weakening of support or loss or damage caused by any negligent act of the insured. ACE argued that the endorsement did not oerride the professional indemnity exclusion. Limit argued that ACE was obliged to indemnify the Joint Venture and contribute to the payments made to PowerGrid and other third parties pursuant to the principles of contribution. THE DECISION The court accepted that: 1. The Joint Venture incurred a legal liability within the meaning of the insuring clause. Although ACE argued that the phrase legal liability was limited to a liability to pay a judgment awarded by a court, the court accepted that the Joint Venture was legally required to compensate the third parties and that repair work carried out was in lieu of compensation; 2. Some but not all of the damage was sustained during the period of insurance of 17 April 2001 to 27 May 2003; 3. PowerGrid contractually required the inclusion of an endorsement for its own interest and the endorsement expressly required ACE to indemnify for the Joint Venture s liability as a result of loss of or weakening of support (irrespectie of negligence) and liability for negligence; 4. The eents were properly characterised as a remoal or weakening of support and therefore it was not necessary to consider whether the Joint Venture had been negligent; 5. The professional liability exclusion did not apply to the claims by the third parties. ACE had insured a design and construct contract. The professional serices enumerated in the exclusion did not include design and were quite specific; 6. Howeer, the liability to PowerGird was excluded by the professional liability exclusion, as PowerGrid was a professional client of the Joint Venture whilst the remaining third parties were not; THE POLICY 157

174 7. The Wayne Tank principle (which excludes any liability under a professional liability exclusion where the cause of damage was the result of both professional and non professional serices) applied and therefore any liability to PowerGrid for any damage arising in part from an excluded cause was excluded; THE POLICY 8. The Limit policy responded to the claim by the Joint Venture and in particular there was no breach of the reasonable precautions condition. The court ultimately accepted that ACE was required to indemnify the Joint Venture under the ACE policy and that Limit was required to indemnify the Joint Venture under the Limit policy for at least some portion of the liability incurred by the Joint Venture. The court referred to the 2 base principles of contribution set out in Albion Goernment Insurance Office (NSW) CLR 342: 1. That persons who are under coordinate liabilities to make good the one loss must share the burden pro rata; and 2. An insured although insured under more than one policy and able to seek indemnity from any one of the insurers may not recoer more, in total, than a single reparation for the loss so the position between insurers is analogous to that between sureties. Limit was an excess insurer. It argued that it would be just and equitable to require ACE to reimburse Limit all the amounts paid because Limit s liability to pay the Joint Venture only arose because ACE did not meet its obligations. The court accepted that in this case both ACE and Limit became liable to indemnify the Joint Venture, ACE primarily so and Limit only because ACE would not meet its liabilities. The court found that it was just and equitable to order recoupment of any liability of which ACE was relieed by Limit s payments. New South Wales Supreme Court: 4 June 2009 Brooke Jacobs 158

175 THE FACTS The appellant, QBE Insurance (Aust) Ltd (QBE), insured Commercial Interiors Australia Pty Limit (CI) and CI s principals. The respondent, Lumley General Insurance Limited (Lumley), insured Probuild Constructions (Aust) Pty Ltd (Probuild) and Probuild s subcontractors. QBE Insurance (Aust) Limited Lumley General Insurance Ltd [2009] VSCA 124 Dual insurance consideration of principles relating to contribution between insurers the fit out. Probuild was the principal contractor appointed to fit out the premises of Dabser Pty Ltd (Dabser) at 600 Bourke Street, Melbourne (the premises). Probuild subcontracted CI to perform The premises achieed practical completion on 24 January 2005, at which point in time Dabser and Mallesons commenced occupation of the premises. On 31 March 2005, an employee of CI was working at the premises when he accidentally caused a flush sprinkler to actiate and discharge water, causing significant damage to the fit out of the premises. In April 2005, Probuild notified Lumley of the claim and CI notified QBE of the claim. In August 2005, Lumley confirmed in writing to QBE that CI was insured under its policy as a subcontractor. The damage to the fit out was made good by Probuild. The cost of rectification totalling $565, (rectification costs) was paid by Lumley to Probuild under its policy, sae for the $20,000 deductible. Probuild deducted this from monies due to CI. Upon payment of the rectification costs, Lumley obtained a release from Probuild. It did not obtain a release from CI. Dabser also claimed in respect of 6 damaged chairs at a alue of $8,940. This was not coered by the Lumley policy. QBE paid out the claim in respect of the chairs. Lumley requested a contribution from QBE in respect of the sum it paid to Probuild. QBE refused to contribute and Lumley commenced proceedings seeking contribution in the sum of $272,525.75, being half of the rectification costs paid to Probuild. THE ISSUES QBE disputed that Lumley was liable to indemnify CI under the Lumley policy. QBE maintained that it was not liable to contribute to the rectification costs Lumley paid to Probuild under the Lumley policy. THE DECISION AT TRIAL The trial judge obsered that a right of contribution between insurers exists when 2 or more insurers are liable in respect of the same loss. The trial judge rejected QBE s submission that CI had to ratify the Lumley policy or make a claim under it before it would be entitled to indemnity under the Lumley policy. The trial judge accepted that the Lumley policy responded and coered CI in respect of its liability to Dabser arising out of the incident. He accepted that Lumley had made a payment under its policy in respect of CI s liability to Dabser. The trial judge found that QBE was required to pay Lumley the amount of $268, by way of contribution. THE DECISION ON APPEAL QBE appealed the trial judge s decision. The Court of Appeal found that: CI was insured under both the QBE and Lumley policies; CI was not obliged to make a claim under the Lumley policy in order for dual insurance to arise; Lumley indemnified CI for its liability to Dabser; Both Lumley and QBE proceeded on the implicit understanding that Lumley would pay for the rectification costs and then seek contribution from QBE; By paying rectification costs, Lumley discharged CI s liability to Dabser; The fact that Probuild passed the deductible of $20,000 on to CI was strong support for the fact that Lumley paid the rectification costs on behalf of CI; and THE POLICY 159

176 Lumley s payment of the rectification costs was made on behalf of CI to discharge its liability in tort to Dabser. The Court of Appeal rejected QBE s submission that Lumley, in proceeding without authority from CI or QBE, acted as an officious interener and was not entitled to assistance from the court after the fact. THE POLICY The Court of Appeal held that it would be unjust for Lumley not to be able to obtain contribution from QBE and dismissed the appeal. Victoria Court of Appeal: 4 June 2009 Brooke Jacobs 160

177 MOTOR VEHICLE

178 Damm THE FACTS The plaintiff was in a truck with his parents at about 6am on 24 September 2000 when the truck struck a cow. It was dark at the time of the accident. Damm [2008] NSWDC 64 Apportionment of liability where cows strayed onto highway Prior to the accident, the plaintiff s father, Mr Damm had seen a ehicle flash its lights at him and he had slowed his ehicle to 70 km/ hour. Prior to passing this ehicle, Mr Damm had been driing with his high beam lights on. He thought the ehicle was flashing its lights at him for this reason. Almost immediately after passing the car, Mr Damm saw 2 cows on the road, one of which was immediately in front of his car. Mr Damm braked and put his foot on the clutch, but collided with the cow. The car became airborne and landed with some force. The plaintiff brought a claim against his father, Mr Damm (the first defendant), L H Wilson & Co Pty Ltd, the owner of the cow (the second defendant) and the Hume Rural Lands Protection Board which controlled and managed the Moorefield traelling stock resere on crown lands (the third defendant). The second defendant s cows had been moed onto the third defendant s property and escaped through the third defendant s gate which had been left open. There was nothing in place (such as a cattle grid) to preent the cows escaping through the open gate. THE ISSUES The issues were: (a) whether any of the defendants were negligent; (b) (c) the apportionment of liability amongst the defendants; the extent to which the plaintiff suffered injuries from the accident, considering his pre-accident medical history; and (d) the extent to which he should be compensated. THE DECISION The court found that the first defendant had been negligent because he was aware of a potential upcoming hazard as a result of the oncoming car flashing its lights. Howeer, the first defendant continued to drie at 70 km/hour which the court considered put him in a position where he was unable to deal with the hazard, particularly as it was dark and as he had switched to low beam, he could only see metres in front of him. The first defendant admitted he could not stop his truck in 30 metres while traelling at 70km/hour. The second defendant was also found to be negligent because it did not do all that was reasonable in the circumstances. In particular, the second defendant could hae inexpensiely installed a sign telling people to close the gate to the third defendant s property when its cattle were moed there and it could hae raised with the third defendant the need for a self-closing gate to be installed. The second defendant was also aware of an earlier incident of cattle escaping out of the same gate approximately two decades preiously. Further, the second defendant ought to hae been aware that because the speed limit was 100km/hr on the highway and there were no street lights, that there was the potential for a serious high speed crash if stock escaped onto the road. The court found that the third defendant owed a duty of care to the plaintiff and had breached this duty. The trial judge considered s9 and s81 of the Rural Lands Protection Act 1998 (NSW) and found that s9 conferred a duty on the third defendant to take reasonable care to protect the road users of the highway from the risk presented by cattle that escaped. The court considered the third defendant had breached its duty because, inter alia, the cost of installing a cattle grid was within the financial capacity of the third defendant, the third defendant was aware that the gate to its property was not always closed and was also aware of the significant risk to road users if stock escaped onto the road. Liability was apportioned on the basis of 30% to the first defendant, 20% to the second defendant and 50% to the third defendant. The plaintiff claimed to suffer brain damage, a sore neck and headaches from the accident. Howeer, the plaintiff s medical history was such that he had suffered some brain damage as a 3 week old baby. MOTOR VEHICLE 162

179 He had suffered from epileptic fits from then until the age of 4 and then again at 17. He was medicated for this, but in 1991 ceased medication and continued to be free of seizures. The seizures returned following the truck accident and were determined to require lifelong medication. Following the accident, the plaintiff also suffered episodes of disorientation and was terminated from his employment, for reasons he could not explain. The court considered the eidence gien by numerous medical experts and determined that the accident aggraated the plaintiff s pre-existing epileptic condition as well as his pre-existing psychological condition and left the plaintiff feeling robbed of the independent lifestyle he had worked hard to achiee (in light of his preious medical condition). MOTOR VEHICLE Judgment was awarded for the plaintiff in the amount of $597, New South Wales District Court: 11 April 2008 Fiona Kamst 163

180 Wheeler THE FACTS On 23 September 2005 the plaintiff was seriously injured in a motor ehicle accident. He was 19 years of age at the time and held a proisional licence. He was the passenger in his own ehicle, being drien Macdonald [2008] NSWSC 567 Intoxicated learner drier intoxicated passenger by the defendant. She was 16 years of age at the time and held a learner licence. The plaintiff and the defendant, who were preiously unknown to each other, had been at a friend s house drinking before going for a short drie. Both were intoxicated at the time of the accident. The plaintiff had no recollection of the incident and the defendant had a poor recollection. In related criminal proceedings, the defendant pleaded guilty to an offence of dangerous driing occasioning grieous bodily harm. As a result of the accident the plaintiff was left with considerable physical restrictions and mental problems. THE ISSUES The plaintiff instituted ciil proceedings against the defendant claiming damages arising from her negligence. The defendant denied the claim for negligence and alleged contributory negligence. Agreement was reached between the parties as to quantum and the trial proceeded on the issue of liability only. THE DECISION The court found that in the circumstances of the case, a finding of negligence on the part of the defendant was ineitable and the plaintiff was guilty of contributory negligence. Therefore the only real issue was that of apportionment. The court found that the plaintiff had witnessed the defendant consume alcohol and should hae obsered the resulting impairment of her capacity. He should hae also made himself aware of her age and driing status. The court further found that the plaintiff allowed the defendant to drie his ehicle and exposed himself to a foreseen risk of injury. Whilst both parties were young, the plaintiff was older and a more experienced drier and drinker. The court found that the plaintiff, as the owner of the ehicle, had ultimate control oer the situation and could hae brought the drie to an end at any time. Ultimately, the court entered judgment for the plaintiff but found that the culpability of the plaintiff should be 65%. New South Wales Supreme Court: 12 June 2008 Sophie Robinson MOTOR VEHICLE 164

181 THE FACTS On 14 June 2000, the plaintiff was injured when the front right wheel of a mobile crane owned by his employer (the defendant) ran Nominal Defendant oer his leg and crushed it. At the time of the incident, the defendant s crane was straddling the boundary Duntroon Holdings between a road and priate [2008] QCA 183 property owned and occupied by the defendant. Application of Motor Accident The location where the right Insurance Act 1994 (Qld) - front wheel came into uninsured crane whether accident happened on road contact with the plaintiff s leg was on the priate property. The crane was being used to transport a load of steel from the defendant s storage property on one side of the road to its main property on the other side of the road. There was no CTP insurance coer for the crane and it was not registered. Therefore, the plaintiff sued the Nominal Defendant for damages for personal injuries as well as the defendant. The Nominal Defendant settled the claim for $407, (inclusie of costs). The defendant agreed that the settlement sum was reasonable. The Nominal Defendant sought to recoer the amount of the settlement from the defendant (as the owner of the crane) pursuant to s60 of the Motor Accident Insurance Act 1994 (Qld) (MAIA). THE ISSUES AT TRIAL The issue was whether the accident happened on a road or in a public place. The MAIA only applies with respect to an uninsured motor ehicle if the accident happens on a road or in a public place (s5(2) MAA). THE DECISION AT TRIAL The trial judge held that the Nominal Defendant s liability pursuant to s5(2) of the MAIA turned on whether the incident happened on a road. The ordinary meaning of the word happened was adopted, such that the incident was required to hae taken place or occurred on the road. The trial judge held that the location of the incident could not be diorced from the location of the ehicle as a whole. The impact with the crane occurred when it was partly on the road, meaning that the incident happened on the road. Accordingly, the Nominal Defendant was deemed to be the CTP insurer and it was able to recoer the amount it expended on the claim from the defendant, as the owner of the ehicle, pursuant to s60 of the MAIA. Judgment was entered for the Nominal Defendant in the amount of $407, together with interest and costs. THE ISSUES ON APPEAL The defendant appealed arguing that the releant consideration was the particular location of the collision, or more particularly, the location where the crane came into contact with the plaintiff s leg. The defendant argued that as the precise location of the collision occurred on priate land, it did not happen on a road. THE DECISION ON APPEAL The majority of the Court of Appeal agreed with the trial judge, finding that if the legislature had intended s5 of the MAIA to hae that result, it could hae easily achieed this by simply excluding altogether from the scope of the MAIA personal injuries resulting from collisions which did not occur on a road. The Court of Appeal upheld the trial judge s decision that a collision between a person and a motor ehicle which happens whilst the motor ehicle is being drien partly on and partly off a road must be an accident which has happened on a road. The Court of Appeal found that the restrictie interpretation put forth by the defendant was not supported by the language of the MAIA and would hae increased the uncertainty as to whether the MAIA applies in certain circumstances (a result not intended by the legislature nor preferred by the courts). Holmes J dissented, finding that as the precise location of the incident was on priate property and not on a road, the trial judge had erred in making her findings. Queensland Court of Appeal: 11 July 2008 Daniel McCormack MOTOR VEHICLE 165

182 Imbree THE FACTS Paul Imbree was rendered a tetraplegic when a 4WD drien by Jesse McNeilly rolled on a McNeilly & Anor [2008] HCA 40 Standard of care owed by a learner drier dirt road in the Northern Territory. At the time of the accident Jesse McNeilly was 16 years old and unlicensed. Mr Imbree knew that he was unlicensed but allowed him to drie the ehicle under his superision. The accident occurred when Mr McNeilly encountered a piece of debris on the road. Instead of straddling the debris Mr McNeilly steered the ehicle to the right. Mr Imbree yelled at him to brake but he did not. When the ehicle was on the far right-hand side of the road Mr McNeilly turned sharply to the left and accelerated causing the ehicle to roll. The plaintiff sued both Mr McNeilly as the drier, and his employer, Qantas, as the owner of the ehicle. THE DECISION AT TRIAL The court applied the principles from Cook Cook (1986) 162 CLR 376, noting that the standard of care that arose from the relationship of pupil and driing instructor was that which is reasonably to be expected of an unqualified and inexperienced drier in the circumstances in which the pupil is placed. Neertheless, the court gae judgment for the plaintiff as it held that Mr McNeilly had behaed with carelessness beyond mere inexperience. Damages were assessed at more than $9.5 million but were reduced by 30% on account of contributory negligence. THE DECISION ON APPEAL Mr McNeilly and Qantas appealed to the Court of Appeal. The Court of Appeal upheld the decision but increased the reduction for contributory negligence to two thirds. THE HIGH COURT DECISION By special leae Mr Imbree appealed to the High Court, arguing that Mr McNeilly should be held to hae owed him the same objectie standard of care as a licensed drier and that Cook should be oerruled. Mr McNeilly and Qantas sought leae to cross-appeal arguing that although the approach to the standard of care owed by a learner drier in Cook was correct, it required re-statement in contemporary terms, without reference to the notion of proximity. The High Court unanimously allowed Mr Imbree s appeal and restored the 30% reduction of damages for contributory negligence. Six of the judges held that Cook should no longer be followed although Kirby J gae different reasons for this conclusion. The High Court held that the care that the learner drier should take is that of the reasonable drier. The plaintiff s knowledge of the drier s inexperience and need for instruction may go towards contributory negligence but does not alter the standard of care of the learner drier. Kirby J s conclusion concerning the duty of care owed by the learner drier was heaily influenced by the existence of compulsory third party insurance. He stated that it cannot be denied that the existence of such insurance has profoundly affected court decisions in motor ehicle negligence cases. It has affected the issue of when a duty of care attaches, what the duty requires and what damages may be recoerable in circumstances that would otherwise be ruinous or futile. High Court of Australia: 28 August 2008 Mary Schroeder MOTOR VEHICLE 166

183 Pretzel THE FACTS The plaintiff was injured in a motor ehicle accident on 2 April 2001, in the course of his employment. His employer (the first defendant) owned the ehicle. Queensland Paulownia Forests Ltd & Anor [2008] QCA 287 Whether a licensed CTP insurer who mistakenly acknowledges a claim as a motor ehicle claim accident is later estopped from resisting the claim on this basis MAIA. The plaintiff brought a claim pursuant to the WorkCoer Queensland Act 1996 against the first defendant, and a claim pursuant to the Motor Accident Insurance Act 1994 (MAIA), against the CTP insurer (the second defendant). The second defendant confirmed the notice of claim was compliant with s37 of the The claims failed to resole in the pre-litigation proceedings, and in due course litigation ensued. The plaintiff made allegations against the first defendant as to its breach of duty to proide a safe system of work and safety equipment. The second defendant subrogated itself to the rights of the first defendant and entered a defence. Howeer, it failed to raise in its defence that the CTP policy excluded liability to indemnify the first defendant in respect of its liability for the plaintiff s injury. This point was not raised until some 17 months later, when the second defendant filed and sered an amended defence. The plaintiff filed a reply contending that the second defendant was estopped from doing so, or had waied its rights to do so. The parties applied to the court for interlocutory orders, as a result of which the court determined that: (a) (b) The plaintiff s claim was not a motor ehicle accident claim as defined by s4 of the MAIA; By reason of its conduct, the second defendant was estopped from contending that the plaintiff s claim was not a motor ehicle accident claim (as defined) and that its insurance policy did not respond to the claim; and (c) The second defendant had contraened s52 of the TPA, but no damages flowed from that contraention pursuant to s82 of the TPA. THE ISSUES ON APPEAL The appeal was brought by the second defendant in respect of 3 issues:- (a) (b) (c) Whether the liability proisions of the MAIA had been misinterpreted at first instance; Whether the trial judge had erred in concluding that the second defendant s dealings with the plaintiff constituted conduct in trade or commerce ; and Whether the trial judge erred in concluding that the second defendant had engaged in misleading and deceptie conduct. THE DECISION ON APPEAL The court accepted that s41 of the MAIA (which requires an insurer to proide a liability response to a claimant) indicated an intention on the part of the legislature to ensure that the second defendant state a position in relation to its liability at a specified time in the proceedings, from which it may not later resile. The court determined that an admission of liability in accordance with s41 necessarily inoles an admission that the statutory policy responds to the claim, and concluded that whilst the precise extent of the second defendant s liability was a matter for negotiation or litigation, it was open to the plaintiff to proceed on the basis that there would be no dispute as to the response of the CTP policy. In respect of the second question on appeal, the court accepted that the second defendant was not acting in trade or commerce is-a-is the plaintiff. The court stated that the commercial nature of the second defendant s business actiities (proiding insurance) did not mean that proceedings pursuant to the MAIA were an actiity in trade or commerce. The appeal was dismissed in respect of the first question on appeal, and was otherwise allowed. Queensland Court of Appeal: 19 September 2008 Hannah Sains MOTOR VEHICLE 167

184 Askew THE FACTS The plaintiff, Ms Askew, was injured in a car accident which occurred in April She was a Kidd [2008] WADC 142 Duty owed by drier affected by alcohol/drugs defence of oluntary assumption of risk whether sufficient eidence to proe plaintiff not wearing seatbelt passenger in a ehicle drien by her partner, and now husband, Mr Kidd, the defendant to the claim. The ehicle went off the road only 2km from their home and collided with a tree, causing seere injuries to the plaintiff. The plaintiff was legally blind and suffered from complete night blindness. She was unable to drie and was dependent on the defendant to help her naigate her way around. At the time of the incident the defendant had a blood alcohol reading of 0.140%. On the night of the accident, the plaintiff and defendant had been at a local taern celebrating the defendant s birthday. The plaintiff recalled the defendant haing a few glasses of champagne although she had not been with him the whole night and could not be absolutely sure as to what he had consumed. The defendant had no recollection of what he had consumed that night but admitted to haing smoked cannabis the night before and a couple of times in the preceding month. THE ISSUES The defendant argued that he was not liable for the accident, as he did not owe a duty of care to the plaintiff. He also raised the defence of olenti non fit injuria and contributory negligence. THE DECISION Whether duty of care owed The defendant alleged that at the time of the incident, the plaintiff knew or ought to hae known that the defendant was under the influence of alcohol or drugs to such an extent that he was rendered incapable of haing proper control of his ehicle. On that basis, the defendant argued that he did not owe a duty of care to the plaintiff. The court held that for the defendant not to owe a duty of care to the plaintiff, the defendant must establish, on the balance of probabilities, that the plaintiff knew or had actual knowledge of the defendant s impaired capacity to properly control the ehicle and that he was incapable of haing proper control of his motor ehicle. It was also held that in addition to knowledge, the plaintiff must know and also accept, that she is to be drien by an impaired drier. There was little eidence in this matter as to the impairment of the defendant. On the night in question, the plaintiff was aware that the defendant had a few glasses of champagne with her but noticed no change in the defendant s behaiour. The plaintiff did admit that the defendant had gone to mingle in the taern while she remained at the table so she could not be sure of exactly what he had consumed that night. The defendant s eidence was that he typically did not drink and drie, and if he did drink before driing it would be only one light beer. He claimed to hae no recollection regarding what he drank that night at the taern but admitted to smoking cannabis the night before. He claimed that the plaintiff had no knowledge of his drug use and she had told him at the start of their relationship that he was not to do this in front of her. He had taken a drie down to Hamlin Bay the night before without the plaintiff and had smoked the cannabis in her absence. The court found that it had no reason not to accept the plaintiff s eidence as to her knowledge of the defendant s condition when they had departed the taern, as she appeared to hae a clear recollection. As such, the defendant was found to owe a duty of care to the plaintiff. Volenti non fit injuria Based on the reasons gien for dismissing the argument that no duty was owed, the court held that there was no eidence that the plaintiff had the requisite knowledge of the defendant s incapacity to drie to support the defence of olenti non fit injuria. Contributory negligence The defendant also alleged that the plaintiff was guilty of contributory negligence on two counts. The first being that she entered into the car knowing that the defendant had been drinking. It was held that the plaintiff did not hae the requisite knowledge and the plea for contributory negligence failed on this count. MOTOR VEHICLE 168

185 Secondly, it was argued that the plaintiff failed to wear a seatbelt. As to whether the plaintiff was wearing a seatbelt, she had gien eidence that she recalled getting into the ehicle, putting her handbag on the floor and automatically putting on her seatbelt. The defendant argued the plaintiff was not wearing a seatbelt as: (a) The ambulance officer who attended the scene gae eidence that she found the plaintiff without a seatbelt on; MOTOR VEHICLE (b) (c) She had no injuries consistent with wearing one; and The defendant was wearing his seatbelt and incurred fewer injuries than the plaintiff. The court held it would be pure speculation for it to conclude that she was not wearing a seatbelt during the journey based on the reasons aboe. Further, there was eidence gien that damage to the car was worse on the plaintiff s side which might explain her greater injuries. The court declined to draw the inference, on the balance of probabilities, that the plaintiff was not wearing a seatbelt and, in any eent, held that een if she was not, there was no eidence that she would hae receied fewer injuries than she had. The plea of contributory negligence for the plaintiff not wearing a seatbelt failed. Western Australia District Court: 19 September 2008 Amanda Cann 169

186 Lyle THE FACTS The plaintiff s wife (the deceased) was inoled in a minor motor ehicle accident on 24 Soc [2009] WASCA 3 Whether death as a consequence of oerdose of prescription medication a reasonably foreseeable consequence of minor motor ehicle accident September 1999, when the defendant s car nudged her car at an intersection. At the time of impact, the defendant s car was traelling at approximately 5 to 10 kilometres per hour. T h e d e c e a s e d w a s diagnosed with a flexion extension injury to the neck and prescribed painkillers and anti-inflammatory medication. She had a history of chronic headaches, mental health issues and suspected abuse of prescription medication. Her medical records showed that from 1998 onwards she frequently sought repeat prescriptions of analgesics. The deceased continued to take prescription medication in the time following the incident. On the morning of 29 October 2001 she was found dead. Forensic analysis showed that she had taken a significant oerdose of Oxycontin, in conjunction with Amitriptyline and Diazepam. The plaintiff sued the defendant, arguing that the motor ehicle accident had caused the need for prescription medicine and therefore caused the deceased s death by oerdose. THE DECISION AT TRIAL The trial judge accepted that the Oxycontin was prescribed for treatment of the injuries sustained in the motor ehicle accident. It was found that the prescription of the drugs was a material cause of the deceased s death and entered judgment for the plaintiff. THE DECISION ON APPEAL On appeal, the Court of Appeal was unable to accept that death by oerdose of prescription drugs was a reasonably foreseeable consequence of a minor motor ehicle accident. Although it accepted the fact that a person inoled in een a minor accident might require medical attention, it could not accept that it was reasonably foreseeable that a minor accident could result in the fatal abuse of prescription medications. Taking a common sense approach, the Court of Appeal found that the accidental oerdose on prescription drugs, some 2 years after the motor ehicle accident, could not be said to hae been materially caused by the accident. The appeal was allowed on this basis and judgment for the plaintiff set aside. Although it was not strictly necessary to decide the point, the Court of Appeal went on to say that there could be no doubt that the deceased was contributorily negligent in taking a substantial oerdose, particularly when the dose was taken in combination with other medications. Western Australia Court of Appeal: 12 January 2009 Leah McStay MOTOR VEHICLE 170

187 THE FACTS On 6 September 2002 the plaintiff was a passenger in a ehicle that was struck in the rear by Athanassiou Hanekamp [2009] WADC 8 Two motor ehicle accidents whether injuries sustained in first accident caused second to occur causation a ehicle drien by the defendant. As a result of the collision the plaintiff alleged she sustained a number of injuries to her back and neck, as well as post-traumatic stress d i s o r d e r a n d m a j o r depressie disorder. On 28 March 2003 the plaintiff parked her ehicle at the top of an incline of the She failed to put the drieway at her home. handbrake on or place the ehicle in park. She proceeded to walk around the back of the parked ehicle towards the front door of her home, when the ehicle rolled backwards down the drieway and oer the top of her. The plaintiff sustained additional (and quite significant) injuries. The plaintiff alleged that the pain she continued to suffer as a result of the injuries sustained in the first accident seerely adersely affected her concentration and cognitie skills, and therefore caused the second accident. THE DECISION The court confirmed the test of legal causation as expressed by the High Court in Medlin State Goernment Insurance Commission [1995] HCA 5: For the purposes of negligence, the question whether the requisite causal connection exists between a particular breach of duty and particular loss or damage is essentially one of fact to be resoled, on the probabilities, as a matter of common sense and experience. The court held that the defendant s liability for the first accident did not cause or contribute to the second accident and its consequences. The court was not satisfied that the plaintiff continued to suffer pain as a result of the injuries sustained in the first accident which was a material, contributing cause of the second accident and the injuries sustained. The court held that it was not reasonably foreseeable that the first accident, which was relatiely minor, would result in the plaintiff suffering a leel of pain that distracted her to the extent that it caused or contributed to cognitie impairment which affected her normal cognitie functioning to such a degree that she forgot to put her ehicle in park and apply the handbrake. The court concluded that the injuries the plaintiff sustained in the second accident were not causally attributable to the injuries she sustained in the first accident. The question of causation was far too remote in law. Western Australian District Court: 30 January 2009 Jenni Mole MOTOR VEHICLE 171

188 Dunleay THE FACTS The plaintiff was injured in a motor ehicle accident on the eening of 10 June Her injuries were Peak [2009] NSWCA 72 Motor ehicle accident failure to anticipate plaintiff s attempt to execute illegal u-turn not negligent so seere that she was unable to gie eidence at trial. The only eyewitnesses to the incident were the defendant and her passenger. Another drier, Mrs Ginnbert, was able to gie eidence of her obserations shortly before and after the incident. It was uncontroersial that shortly before the incident the plaintiff s car was stationary in a breakdown lane. Immediately before the accident, the plaintiff attempted to moe from the breakdown lane and perform a U-turn across double unbroken lines. It was accepted at trial that this was against the road rules and potentially dangerous. The accident occurred when the plaintiff s car turned into the path of the defendant s car. THE DECISION AT TRIAL The trial judge accepted the defendant s eidence that she had seen the plaintiff s car in the breakdown lane as she approached and that she had obsered the plaintiff s taillights. He also accepted the defendant s eidence that, haing obsered the plaintiff s car, she moed her own car closer towards the double lines in case a drier exited the plaintiff s ehicle. The defendant was adamant that the plaintiff s right indicator was not showing as she approached. The defendant s passenger supported this. Howeer, the trial judge accepted Mrs Ginnbert s eidence that she had seen the right indicator flashing and found that the defendant had not been paying proper attention. The trial judge also found that, upon sighting the plaintiff s ehicle in the breakdown lane, the defendant should hae anticipated the possibility of the plaintiff making a turn against her path of trael and applied her brakes, flashed her headlights and sounded her horn. The trial judge found that the defendant should hae taken these precautions whether or not the plaintiff s indicator was flashing. THE DECISION ON APPEAL The Court of Appeal found that the trial judge s reasoning with respect to the indicator was flawed. The trial judge failed to explain how the defendant could hae seen the plaintiff s taillights, but not noticed the right indicator. The Court of Appeal thought it inappropriate to resole the issue on the basis of the transcript alone and remitted the matter for retrial. The Court of Appeal also found that the trial judge s finding that, een if the right indicator had not been flashing, the defendant had been negligent in not sounding her horn and flashing her headlights was insufficiently supported by reasons. The trial judge had failed to explain the risk that the plaintiff s ehicle should hae been seen to pose and why sounding the horn and flashing the headlights were a reasonable response to that risk. Nor did the trial judge consider whether the failure to take those steps caused the incident (as opposed to simply increasing the risk of it occurring). New South Wales Court of Appeal: 8 April 2009 Leah McStay MOTOR VEHICLE 172

189 Dominello THE FACTS Mrs Dominello (the plaintiff) was injured when the Toyota Hiace Van (an) being drien by Dominello & Anor; Dominello The Nominal Defendant & Anor [2009] NSWCA 95 Oil spill on road from unidentified ehicle driing at excessie speed accident. THE ISSUES Mr Dominello (the first defendant) ran off the Pacific Highway 16km south of Grafton and hit a tree. The plaintiff was the front seat passenger. The speed limit was 100kph but there was an 85kph adisory speed sign. There had been light rain throughout the night and the road was wet but it was not raining at the time of the accident. The first defendant lost control of the an in the south-bound lane on the left-hand cure. It was established that diesel fuel had been spilt on the south-bound lane prior to the The plaintiff s case against the first defendant was that he failed to exercise reasonable care. The plaintiff s case against the Nominal Defendant was that the diesel fuel had spilled from an unidentified truck as it droe down the left hand cure because a cap on its fuel tank had not been replaced after the drier refuelled his ehicle at Grafton. Also in issue was whether the plaintiff s injuries were within the scope of the Motor Accidents Compensation Act 1999 (the Act), should the Nominal Defendant be found liable. THE DECISION AT TRIAL The trial judge awarded the plaintiff $2,775,035 against the first defendant but found for the Nominal Defendant. The trial judge found that diesel fuel had been spilt on the south-bound lane and that this contributed to the first defendant losing control of the an. Howeer, if the defendant had been traelling at a reduced speed he would hae been able to regain control of the an. The trial judge found a causal relationship between the speed of the an, which increased the risk of injury to the plaintiff, and the accident and held that the first defendant had breached his duty of care to the plaintiff. In relation to the Nominal Defendant, the trial judge concluded that diesel could escape from ehicles in a number of ways without the negligence of the drier. The trial judge found that it could not be said on the balance of probabilities that the spillage had resulted from an act of the owner or drier as the ehicle could hae been filled by the preious drier, or in a priate depot by an employee and therefore the plaintiff s injuries did not fall within the scope of the Act. THE ISSUES ON APPEAL The first defendant appealed from the finding of liability on the basis that the trial judge erred in her findings. The plaintiff appealed from the judgment in faour of the Nominal Defendant. THE DECISION ON APPEAL The Court of Appeal found in faour of the first defendant. Handley AJA and Beazley JA held that although driing at a higher speed increases the risk of injury, on its own this could not constitute a failure to take reasonable care, or be found to hae caused a loss of control. The first defendant could not foresee the presence of diesel on the left-hand cure and was not required to drie at a speed that would enable him to meet such conditions with safety. Macfarlan JA also found in faour of the first defendant though his reasons differed from that of Handley AJA and Beazley JA. Macfarlan JA found that both the first defendant s excessie speed and the diesel on the road were necessary conditions for the accident to occur. Macfarlan JA found that the trial judge was entitled to find, on the eidence, that the first defendant was traelling substantially faster than 75-80kph, and that a reasonable drier would not hae drien aboe 75-80kph in the circumstances. Howeer, Macfarlan JA found that the trial judge erred in finding that the first defendant would hae been able to regain control if he had been driing at 75-80kph when the an slipped on the diesel. The Court of Appeal found against the Nominal Defendant. Handley AJA (Macfarlan JA and Beazley JA concurring on this point) found that the plaintiff s hypothesis, that the spillage came from the failure of a refueller to replace or properly replace the cap on the diesel tank of a heay MOTOR VEHICLE 173

190 ehicle, was more probable than the other hypotheses. The Court Appeal found that the trial judge was incorrect in restricting the drier to the drier at the time of the accident, as a preious drier who failed to replace the fuel cap would still fall within the definition. It was held that it was highly likely that the drier in Grafton committed the negligent act and that the fuel escaped on the first slope driing out of Grafton. The Court of Appeal held that the injury was caused by the drier of the unidentified ehicle, refuelling the ehicle was use or operation of the ehicle, the plaintiff s injury was the result of driing of the unidentified ehicle and was caused when the driing of the ehicle caused the diesel spill. It was not necessary for the fault (not replacing the fuel cap properly) and the injury (fuel spilling from driing) to be manifested by the same act. As a result, the injuries resulting from the diesel spill fell within the definition of injury and were compensable under the Act. MOTOR VEHICLE New South Wales Court of Appeal: 8 May 2009 Charley Ferguson 174

191 PRIVILEGE

192 Fay THE FACTS The plaintiffs brought a claim against the defendant alleging that a cohabitation agreement between the defendant and Ms Tripp was oid and unenforceable. During the course of the proceedings, the plaintiffs applied to set aside a notice Moramba Serices Pty to produce which had been Ltd (No. 2) [2008] sered on them by the NSWSC 571 defendant. The notice to Waier of priilege whether produce required production notice to produce counsel s of documents related to legal adice and associated adice proided by counsel documents referred to in and had been referred to in solicitors correspondence a letter from the plaintiffs knowing and oluntary disclosure solicitors to the defendant dated 9 January Specifically, the letter stated that the plaintiffs had retained counsel to adise them and that counsel was of the opinion that the cohabitation agreement was unenforceable. The notice to produce called for production of the counsel s adice as well as instructions to counsel, documents proided to counsel for the purposes of the adice, draft adices, file notes in relation to discussions with counsel, and so on. THE ISSUES Did the notice to produce require production of priileged material? THE DECISION The Eidence Act 1995 (NSW) (the Act) applied to this application. Client legal priilege is lost, under s122(2) of the Act, if a client or party knowingly and oluntarily discloses the substance of the eidence to another person. The court found that it was plain that the letter dated 9 January 2006 was a knowing and oluntary disclosure of the substance of counsel s adice, and found that there was a waier of priilege in respect of that adice. Howeer, the notice to produce went further than just requiring counsel s adice, and required documents related to the adice. Those documents could only hae lost their priilege if, for the purposes of s126 of the Act, they were related communications reasonably necessary to enable a proper understanding of counsel s adice, the document oer which priilege had been waied. The court did not accept that eery document bearing some connection or relationship with the adice was "necessary to enable a proper understanding" of the principal document as Sackille J explained in Towney Minister for Land and Conseration (NSW) and others (1997) 76 FCR 401 at The court found it impossible to say that the documents called for were in that category, although conceded it was conceiable that upon production of the adice it may hae become apparent that they were. The notice to produce was not set aside. Access was granted to counsel s adice and to file notes recording, relating or referring to discussions with counsel in respect of the adice. Access to all other documents listed in the notice to produce was refused. New South Wales Supreme Court: 21 May 2008 Sarah Haigh PRIVILEGE 176

193 Kennedy THE FACTS Mr Kennedy (the plaintiff) sought damages for defamation proceedings against Channel Nine (the Nine Network Australia Pty Ltd [2008] QSC 134 Disclosure of letters referring to legal adice pleaded in statement of claim defendant). The defendant broadcast three stories on the teleision show, A Current Affair, in relation to the plaintiff s internet-based casino, known as World Games Incorporated (WGI) which alleged, among other things, that WGI operated a pyramid scheme. An application was made by the defendant s solicitors seeking disclosure of legal adices referred to in the plaintiff s further amended statement of claim. The application was made pursuant to Rule 222 of the Uniform Ciil Procedure Rules 1999 (Qld) (UCPR) which entitles a party to request disclosure of a document mentioned in a pleading. On 19 March 2004, the plaintiff sent a letter to the defendant to discourage the broadcast of the first story. In that letter, the plaintiff responded to the defendant s enquiries asserting that to its knowledge, there had been no finding at all that WGI was a pyramid scheme. The plaintiff referred to legal adices that had been obtained in the arious jurisdictions in which WGI operated which concluded that the WGI system was not a pyramid scheme. The substance of the letter was subsequently pleaded in the plaintiff s further amended statement of claim as the basis of a claim for aggraated or exemplary damages. THE ISSUES Did the reference to the undisclosed legal adices in the pleadings require them to be produced pursuant to Rule 222 of the UCPR? Did the reference to the undisclosed legal adices constitute waier of priilege? THE DECISION The court considered that the document relied on by the plaintiff was the letter of 19 March 2004 and the reference to the legal adices in the pleading was only to set out the contents of the letter which formed the basis of the claim for aggraated or exemplary damages. Whether or not such legal adices existed was irreleant to the allegations, so the existence or content of the adices was not in issue. The court acknowledged that in the circumstances, the power to order production was discretionary and that the discretion should not be exercised with respect to the legal adices if legal professional priilege had not been waied. In this context the court considered whether the reference to the undisclosed legal opinions in the letter and subsequent pleadings constituted a waier of priilege. The court did not consider that the plaintiff in his pleading was relying on the legal adices as justification for his position, so the mere reference to the adices was not sufficient to constitute a waier of priilege. It was decided that the legal adices did not hae to be disclosed. Queensland Supreme Court: 5 June 2008 Sarah Haigh PRIVILEGE 177

194 THE FACTS A claim was made against the Commonwealth of Australia (the second defendant) alleging that it induced Darwinia Estate Sharjade Pty Ltd Pty Ltd (the first defendant) to breach a contract with Sharjade Pty Ltd (the plaintiff). On 21 April 2006, Darwinia Estate Pty Ltd the plaintiff sered a notice [2008] NSWSC 569 to produce on the second defendant. Gien that there Priilege agreement that were a large number of access to documents limited documents to be produced to legal representaties in a short timeframe, the court directed that the parties were to engage in an inspection on a confidential basis limited to legal representaties. On 27 April 2006, the second defendant s solicitor wrote to the plaintiff s solicitors stating that they had remoed any priileged documents, but if they had mistakenly left in some priileged material, priilege was not waied in light of the confidentiality order made by the court on 21 April On 4 May 2006, the parties requested that the court release the order of 21 April The court made that order, and access to the documents disclosed for the notice to produce were no longer limited to legal representaties. The second defendant accidentally disclosed priileged documents to the plaintiff, and it sought to restrict the plaintiff from using the documents at trial. THE ISSUES Could the defendant maintain a claim of priilege oer the priileged documents once the confidentiality order was released? THE DECISION The court found that een if the second defendant was able to protect itself against a claim of waier of priilege because of the existence of the confidentiality order, that protection was expressly remoed when the parties requested that the court make the order on 4 May 2006 to remoe the confidentiality order. Accordingly, the court was satisfied that the second defendant s consent to that order constituted a waier of priilege oer the documents. The second defendant should hae ensured it was satisfied that it had not mistakenly disclosed priileged documents before it agreed to lift the confidentiality order which had restricted access to legal representaties only. The plaintiff could use the documents in the trial. New South Wales Supreme Court: 11 June 2008 Sarah Haigh PRIVILEGE 178

195 THE FACTS The applicant (Fig Tree) and respondent (APCH) had entered into management serice agreements Fig Tree Deelopments Ltd Australian Property Custodian Holdings Ltd [2008] FCA 1041 Disclosure of confidential and priileged documents for the management by Fig Tree of retirement illages owned by APCH. A dispute had arisen as to whether those agreements had been alidly terminated by APCH following an alleged repudiation by Fig Tree. The alleged repudiation by Fig Tree was its act of assigning its rights under the management agreements to SCV Group Ltd (SCV). Prior to the trial of the substantie proceeding, both Fig Tree and APCH had made applications relating to discoery and inspection of documents. THE ISSUES The court had to decide under Federal Court order 15 rule 8, whether there were grounds for a belief that certain documents the subject of the application for disclosure, may be or may hae been in the possession of the parties, and if so whether an affidait of disclosure ought to be filed. The most controersial of those documents were adices from senior counsel. These had been referred to in a media release to the Australian Stock Exchange in this way: Following adice from senior counsel, [APCH] had adised Fig Tree that it does not hae the power to assign its rights and responsibilities in each [agreement] without [APCH s] consent. The court also had to consider whether the terms of a consent order identifying certain documents as confidential ought to be aried and whether one party had the right to mask out portions of disclosed documents without the consent of the other party or the court. THE DECISION The court found that based on the words in the media release, there were grounds for a belief that some document recording adice gien by senior counsel may be, or may hae been, in existence. The court said that it would not be inclined to order a further affidait of documents be filed in relation to these adices though, if the contents were clearly priileged. The court thought, howeer, that haing regard to the terms of the announcement, any priilege in so much of any adice from senior counsel as is referred to in that announcement had been waied by APCH. The court saw no waier of any wider ranging adice proided by senior counsel. The court declined to ary the terms of the consent order in relation to confidential documents, and held the parties to their bargain, as eidenced by the terms of the consent order made. The court did not consider it was appropriate for Fig Tree to mask out portions of the disclosed documents, when it had not sought the consent of APCH or the court. The court ordered that the masked out documents, except those which were subject to a claim for priilege, be produced for inspection. Federal Court of Australia: 27 June 2008 Sharon Templeton PRIVILEGE 179

196 Hill THE FACTS The applicant alleged that he was iciously assaulted at the Eagleby Taern, a licensed premises operated by the respondent on Wednesday 6 July 2006 at approximately 6:30pm (the incident). Kirsten Bay Pty Ltd [2009] QDC 68 Disclosure under the Personal Injuries Proceedings Act 2002 request for information prior incidents The applicant issued a request for information pursuant to s27 of the P e r s o n a l I n j u r i e s Proceedings Act 2002 (the Act) which included a request for the following information: 11. During the 12 months preceding the assault upon the claimant were there incidents of physical iolence or physical altercations between patrons at the Eagle (sic) Taern? 12. If the answer to the preceding question is yes, please specify: incidents of physical iolence or physical altercations, the extent of any such iolence and when such incidents occurred, went directly to the question of the duty owed by the respondent and therefore must be proided. Queensland District Court: 20 March 2009 Sarah Haigh PRIVILEGE (a) The date of each such incident; and (b) The nature of each such incident. The respondent refused to proide the information requested on the basis that it was not releant to the circumstances of, or reasons for the incident. THE DECISION The court referred to s27 of the Act which states: (1) A respondent must gie a claimant (b) If asked by the complainant - (i) Information that is in the respondent s possession about the circumstances of, or reasons for the incident. The court held that the allegations of negligence made by the applicant broadly alleged shortcomings in the security arrangements which the respondent put in place at the Taern, making the safety of the establishment ery much an issue releant to the reasons for the incident. The court stated that 180

197 THE FACTS This matter inoled an appeal by the Australian Competition and Consumer Commission (ACCC) concerning an interlocutory decision by Justice Gordon of the Federal Court during the course of proceedings i n o l i n g C a d b u r y Schweppes, Amcor and Visy (the Cadbury proceeding). Australian Competition & Consumer Commission Cadbury Schweppes Pty Approximately one year prior Ltd [2009] FCAFC 32 to the Cadbury proceeding, Whether priilege attached to the ACCC had commenced finalised proof of eidence proceedings against Visy (the ACCC proceeding). In the course of that proceeding, the ACCC was ordered by the court to file and sere all proofs of eidence of lay witnesses upon which it proposed to rely at trial. This disclosure was made pursuant to a confidentiality regime which stated that specified parts of some of the finalised proofs of eidence were to remain confidential. In accordance with the order, the ACCC filed and sered 111 proofs of eidence on Visy. The ACCC proceeding was ultimately resoled before trial. The interlocutory decision made by Justice Gordon in the Cadbury proceeding required Visy to file and sere a list of witness statements, including proofs, sered on it by the ACCC in the earlier and separate ACCC proceeding. The ACCC disputed this decision, and made a non-party claim that legal professional priilege attached to all 111 finalised proofs of eidence in Visy s possession. Justice Gordon held that any priilege was lost when the ACCC filed and sered the witness proofs on Visy in the ACCC proceeding. Justice Gordon did not address the question of whether the finalised proofs of eidence were priileged upon their creation and immediately prior to their serice on Visy, or whether the serice of each finalised proof of eidence was itself a separate communication which attracted legal professional priilege. THE ISSUES ON APPEAL The ACCC sought leae to appeal Justice Gordon s decision. The Full Court of the Federal Court (the court) granted leae to appeal and identified two issues that were required to be addressed: (a) (b) Whether the finalised proofs of eidence prepared, filed and sered by the ACCC in the ACCC proceeding were subject to legal professional priilege, and more specifically litigation priilege; and Whether or not the filing and serice of the finalised proofs of eidence constituted a waier of legal professional priilege and if so, to what extent. THE DECISION ON APPEAL As a preliminary issue, in the primary proceeding before Justice Gordon, Cadbury had accepted that legal professional priilege attached to each of the 111 finalised proofs of eidence prior to those proofs being sered on Visy in the ACCC proceedings. Howeer, during the appeal, Cadbury argued that the proofs were not confidential or capable of attracting legal professional priilege. The court allowed Cadbury to retract its preious concession. The court found that litigation priilege did not attach to the ACCC s proofs of eidence because they had been created for the purpose of sering, and were in fact sered on Visy in the ACCC proceeding. Therefore the documents lacked the essential element of confidentiality. Taking this point further, the court acknowledged that legal representaties and their clients generally hae control oer what eidence they will adduce in a trial. Een if (as occurred in the ACCC proceeding) the court interenes and accelerates the timeframe for disclosing eidence, there remains no element of compulsion as to the nature and content of the eidence to be adduced. Therefore, whateer the ACCC chose to put in its proofs of eidence was left to its absolute discretion, with the knowledge that it was being gien to the opposing party. The issue of the confidentiality regime in place when the ACCC disclosed the proofs to Visy was not in contention in this appeal. The court simply noted that the confidentiality regime was a legal obligation which arises by operation of law and that it is an obligation which the court has the right to control and can modify or release a party to the litigation or third party therefrom. Whilst the issue of waier did not arise in this matter, it was still considered by the court. It was PRIVILEGE 181

198 found that the filing and sering of the finalised proofs of eidence constituted a complete waier of litigation priilege as the ACCC was content for the information in the proofs to be made known to Visy. The court dismissed the ACCC s appeal. PRIVILEGE Full Court of the Federal Court of Australia: 20 March 2009 Fiona Kamst 182

199 Spalding THE FACTS Proceedings were commenced by Margaret Spalding (the plaintiff) against Radio Canberra Pty Ltd (the defendant) for defamation alleged to hae occurred on 11 and 12 May 2006 during 3 radio broadcasts. Radio Canberra Pty Ltd At trial the plaintiff was [2009] ACTSC 26 cross-examined by the Legal professional priilege defendant s counsel who waier of priilege asked if, in the course refreshing or reiewing of preparing to gie eidence memory producing proof of at trial, a statement was eidence/statements prepared for her. The plaintiff said that there was, and the defendant s counsel subsequently asked if that document was made in consultation with her, if she had access to it, read oer it from time to time and in particular, if the purpose of her reading it was to prepare for giing eidence in court. The plaintiff answered in the affirmatie to all these questions and counsel for the defendant then called for access to the statement. THE ISSUES The court had to consider whether the plaintiff s proof of eidence, which was a priileged document, ought to be proided to the defendant. THE DECISION The court determined that the Eidence Act 1995 (Cth) did not apply because the calling for the proof of eidence was in the nature of an interlocutory application. Instead, the common law applied. It was not contentious that the proof of eidence was ordinarily a priileged document. Therefore, the focus of the decision was whether there had been a loss of priilege through waier. The court held that based on the decision in Mann Carnell (1999) 201 CLR 1 to determine whether there has been a waier of priilege, the conduct of the holder of the priilege must be examined to determine whether there has been inconsistency between the priilege holder s conduct and the entitlement to maintain priilege. The court noted that at common law, where a witness uses a document out of court to refresh their recollection, the opposing party to the witness is entitled to hae that document produced. At this point, the court took the opportunity to clarify that refresh memory (a common law term) and reie recollection (an Eidence Act term) are substantially the same and do not require different tests to determine whether priilege has been waied. Accordingly, the question was then whether the priilege attached to the proof of eidence was waied because the plaintiff had used it to refresh or reie her recollection. The court conducted an extensie reiew of the case law concerning the production of documents despite their priileged nature. From this reiew the court obsered that any witness (party/non-party, expert/lay) who reiews a document for the purpose of refreshing his/her memory for giing eidence in court must disclose that document after the witness has gien their eidence, een if that document would ordinarily be considered to be priileged. The court found that it was not to the point to argue that the document was not prepared in order to refresh the plaintiff s memory, and also did not accept that the absence of cross-examination on the component of the eidence where memory was refreshed is the releant criterion. Rather, the court emphasised that it is the attempt and the use to which the document is put that is releant, not the reason the document was created. Therefore, if the plaintiff had read the proof to check that it was accurate, to see that it was complete, to add additional material of instruction to her lawyer or to excise inaccuracies or irreleancies, the proof of eidence would not be required to be produced. Howeer, the court determined that the eidence did not support this. The court then gae consideration to whether the whole proof of eidence document ought to be produced. The court obsered that there was authority that if part of a priileged document is to be produced, then the whole document ought to be produced, howeer, he obsered that in Queensland this line of thinking has been subject to criticism. The court noted that there was a body of case law faouring disclosure of only the part of the document that was used to refresh the memory. In this matter the plaintiff had admitted to reading the proof of eidence to refresh her recollection for PRIVILEGE 183

200 the purpose of giing eidence in court, and as such the court ordered that the entire proof of eidence should be produced to the defendant. Australian Capital Territory Supreme Court: 24 March 2009 PRIVILEGE Fiona Kamst 184

201 DAMAGES

202 THE FACTS In Noember 1997, Micro Deelopments Pty Ltd (Micro) purchased a property for deelopment in Rockdale City Council Micro Deelopments Pty Ltd [2008] NSWCA 128 Loss of opportunity - property bought in reliance on incorrect zoning reliance upon the zoning of the property in a certificate issued by the Rockdale City Council. The zoning in the certificate permitted, with consent, deelopment for residential flats. The zoning in the certificate was incorrect. The property was in fact zoned to permit dwelling-houses or, with consent, medium density deelopment such as illas and townhouses but did not permit deelopment for residential flats. Micro had dealings with Council, in which Council continued to treat the property as the incorrect zoning, until July Council then told Micro of the correct zoning. Micro retained the property. In early 2005, the property was rezoned to the desired zoning. Micro then undertook a deelopment on the property together with the neighbouring property which Micro had purchased in July THE ISSUES AT TRIAL Micro issued proceedings in September 2002 against Council for loss suffered as a result of the certificate containing the incorrect zoning. Micro claimed that it suffered loss as its money was tied up in the property and it was unable to undertake other deelopments as a result. Quantum was in issue. Council admitted negligence. THE DECISION AT TRIAL The trial judge assessed Micro s damages at $2,668,652, which comprised of its inability to carry out one hypothetical deelopment ($1,061,280) plus an additional figure considered necessary to proide adequate compensation ($400,000), to which tax and interest was awarded. THE ISSUES ON APPEAL Council appealed on the basis that the damages were excessie. Micro cross-appealed on the basis that the damages were inadequate. Council contended, inter alia, that: (a) (b) (c) (d) The trial judge erred in finding that Micro acted reasonably in retaining the property when it learnt that Council had proided to it an incorrect zoning certificate; The trial judge erred in finding that Council failed to proe Micro had not mitigated its loss because it was tainted by and dependent upon an erroneous factual finding that Micro was led by Council to beliee from July 1999 to January 2004 that the property would be rezoned. Whereas, in fact, up until January 2004, Micro understood and belieed Council did not want to rezone the property; There was no basis for, and the trial judge did not gie adequate reasons for, the award of a sum of $400,000 to represent a loss to Micro of a portion of a second hypothetical deelopment ; and The trial judge failed to allow a credit in faour of Council, of a sum representing the likely profit on the proposed deelopment of the property. Council submitted that, if its contentions were upheld, Micro s loss was the holding costs for the property until notional resale and the loss on the notional resale, plus compensation for delay in the hypothetical deelopment as calculated by its expert. With tax and interest, Council said that the damages would be $665,774. Micro contended, inter alia, that: (a) (b) (c) The trial judge erred in finding that if Micro had not bought the property, two of Micro s three actie directors would hae dierted their energies away from Micro s business in order to deelop priate properties; The trial judge erred in finding that Micro willingly slowed down the progress of its deelopments after 1997; and The trial judge erred in holding that it was reasonable to assume that there would be a DAMAGES 186

203 relatiely modest profit of $400,000, or any profit, arising from the future deelopment of the property by Micro. THE DECISION ON APPEAL The Court of Appeal dismissed both the appeal and cross-appeal. declaration, but that was not a finding. The finding was that a combination of factors slowed [Micro s] progress, including importantly the priate projects of [two of the three directors]. From the reasons as a whole, other factors included the upward trend in the property market and a decision not to use aailable funds in the deelopment of other properties; and DAMAGES In relation to Council s contentions, the Court of Appeal held that: (a) (b) (c) Micro s business included holding land for opportune deelopment and not just rolling deelopment; Although faourable discussion might not hae been borne out of the discussions between Council and Micro, Council failed to establish that Micro unreasonably retained the property; The $400,000 which represented a loss to Micro of a portion of a second hypothetical deelopment was undoubtedly an estimation, but so in truth was the $1,061,280. The trial judge s estimation was of lost profits from deelopment actiities in the order of $1,860,000 against which credit for the $400,000 estimated profit on the deelopment was gien. The estimation was not by way of a buffer, such as in personal injuries cases, and was open to the trial judge. It was non-specific compensation for the effect on Micro s deelopment actiities of the purchase of the property, which it would not otherwise hae purchased. The complaint of lack of reasons should not be accepted, because by its nature, further reasons could not be gien for the addition of the $400,000. In relation to Micro s contentions, the Court of Appeal held that: (c) Whilst a deelopment project may be carried out at a loss, there was some incongruity in Micro contending that the deelopment into which it entered would suffer a loss; its deelopment history did not show a preious loss, it plainly had considerable expertise and no doubt it would do its best to bring in a profit. New South Wales Court of Appeal: 5 June 2008 Nathan Rehbock (a) (b) The trial judge s findings of fact in relation to the intentions of Micro s directors were open to her and should not be disturbed; The trial judge did not find that Micro willingly slowed down the progress of its deelopments after In relation to whether it was reasonable not to sell the property she said that reasonably retaining the property does not mean that the plaintiff was entitled to willingly slow down the progress of its deelopments and then look to the defendant to compensate it for that 187

204 Lee THE FACTS The plaintiff sustained a neck injury in a motor ehicle accident on 23 June 2003 when the defendant s ehicle droe through a stop sign and collided with her ehicle. Richards and Transport Accident Commission [2008] QDC 257 Economic loss soft tissue neck injury student at hairdresser college The defendant admitted liability. THE ISSUES The main issue at trial was the plaintiff s claim for economic loss. THE DECISION The plaintiff was 19 years old when the accident occurred. She had not done well at school and had preiously trained as a dancer until she deeloped a knee problem. At the time of the accident she was enrolled in a 15 month course hairdressing college. She was behind in the course due to other medical problems and had passed only 1 of the course s 32 units. Upon completing the course the plaintiff would hae been able to work as a third year apprentice hairdresser, earning 75% of the wage of a qualified hairdresser. Following the accident, the plaintiff withdrew from the hairdressing course. The court noted that on 22 Noember 2004, the plaintiff began working at Kmart as a casual retail assistant. She left this position in December 2005 to take up work as a small appliance sales person at an electrical retailer. This lasted for approximately 1 month, when her employment was terminated due to poor sales performance. In June 2006 the plaintiff worked at a takeaway food shop before obtaining employment as a casual sales assistant in a mobile phone shop. Her hours increased to full time on 3 September The plaintiff obtained a report from Dr Pentis, orthopaedic surgeon. It was Dr Pentis opinion that the plaintiff had suffered a soft tissue musculo-ligamentous injury to her cerical spine, causing her pain and inconenience. He assessed the plaintiff with a 5% to 7.5% whole person impairment and considered that working as a hairdresser would exacerbate her symptoms, although she was not incapable of work. Dr Gillett, the defendant s orthopaedic surgeon, agreed that the plaintiff had sustained a musculo-ligamentous injury of the cerical spine. He considered that, while the plaintiff could work as a hairdresser, this would likely cause her pain and discomfort for which she would require some time off work. He assigned a 0% whole person impairment, despite her apparent disability, due to the application of the AMA scales. The court heaily criticised the AMA scales as being seriously deficient and of little or no use. Lesley Stephenson, occupational therapist, led uncontested eidence at trial that because of the plaintiff s difficulties with working with her arms eleated, hairdressing would not be a suitable occupation for her. At commencement of trial, the defendant sought leae to amend its defence to allege that by pulling out of hairdressing school, the plaintiff had failed to mitigate her loss. The court refused to make the amendment and held it reasonable for the plaintiff to hae withdrawn from the course, gien her ongoing symptoms and the adice of her general practitioner that she should not continue with it. The court found that, had the accident not occurred, the plaintiff would hae completed the hairdressing course (although later than mid 2004), worked as a hairdresser and may hae owned her own salon. There was no eidence to indicate otherwise. The plaintiff would likely hae obtained work as an apprentice hairdresser in late 2004 and continued until she became fully qualified. Based on the award rate, the plaintiff would hae earned $93, to the time of trial. This was slightly discounted for contingencies to $90,000. The court then subtracted actual earnings of $82, and awarded her $7,355 for past economic loss. At the time of trial, the plaintiff was actually earning more than she would hae as a leel 3 hairdresser. The court considered that this was as much as she was likely to eer earn, and she was only able to work full time due to her sympathetic employer. The plaintiff s economic loss deried from her loss of opportunity to pursue hairdressing to a managerial leel and the risk that, in the future, she would be unable to find suitable employment without a sympathetic employer. The court awarded the plaintiff a global sum of $50,000 for loss of opportunity. A further allowance DAMAGES 188

205 of $80,000 was also made for the plaintiff s risk in the open labour market. This amount was based on either a loss of $27,500 (what the plaintiff would hae earned as a hairdresser) for 3 years of unemployment, or a net loss of $100 per week for the remainder of her working life, discounted by 5%. The court discounted the total of the 2 amounts by $10,000, for contingencies, giing a total award of $120,000 for future economic loss. DAMAGES Queensland District Court: 31 October 2008 Kylie Powell 189

206 Xu THE FACTS On 13 December 2005, the plaintiff s ehicle was stopped at a red traffic light at an intersection. The defendant s ehicle collided with the rear of the plaintiff s stationary ehicle. The plaintiff suffered soft Thurgood & Anor [2008] QSC 288 Damages under the Ciil Liability Act 2003 application for leae to adduce further eidence tissue injuries to her cerical and lumbar spine as a result of the incident. The defendant admitted liability. THE ISSUES The trial concerned the assessment of damages under the Ciil Liability Act 2003 (Qld) (CLA). The plaintiff argued that she suffered continuing pain, discomfort and headaches, which seriously compromised her ability to work as a real estate salesperson. The defendant argued that the plaintiff had embellished her eidence about headaches and had sustained little loss of income. THE DECISION Dr Campbell (neurosurgeon) considered that the plaintiff had sustained a 9% whole person impairment (7% cerical spine and 2% lumbar spine) as a result of the incident. He said the plaintiff s prognosis for performing light duties was satisfactory but that her prognosis for returning to normal duties was guarded to poor. Dr Weidmann (neurosurgeon) considered the plaintiff had sustained a 5% whole person impairment. He said the plaintiff was medically fit to continue working as a real estate agent. The court said that eidence gien by the plaintiff s employer about her time away from work was consistent with the prognosis of Dr Weidmann. The court found that the plaintiff s eidence was inconsistent. The court accepted that the plaintiff suffered headaches, but not to the extent she claimed. The court preferred Dr Weidmann s assessment of the plaintiff s whole person impairment at 5%. The plaintiff was 35 when the incident occurred. The court found that the plaintiff had missed 4 hours work per week on aerage as a result of the incident. The court assessed global past economic loss of $18,000 gross, or $9,945 net (after expenses and tax), including superannuation. The court assessed future economic loss on the same basis, making a global award of $50,000, or $3,315 per year. The court assessed general damages based on the injury scale alue (ISV) for the plaintiff s dominant injury under the Ciil Liability Regulation 2003 (Qld). The dominant injury was an Item 88 moderate cerical spine injury (ISV 5 to 10). The plaintiff s lumbar spine injury was an Item 94 minor lumbar spine injury (ISV 0 to 4). The court considered that an ISV of 9 adequately reflected the impact of the plaintiff s injuries and awarded $9,800 for general damages. The court rejected the plaintiff s claims for gratuitous care, future paid care and future physiotherapy expenses. After the conclusion of eidence and submissions the plaintiff sought to re-open her case to call further eidence about whether the existing economic loss award adequately accounted for superannuation. The court referred to Finborough Inestments Pty Ltd Airlie Beach Pty Ltd [1995] 1 Qd R 12, noting that the guiding principle was whether the interests of justice would be sered by admitting the further eidence. The court also said that further eidence would not be allowed unless it was fresh or new, and could not hae been discoered earlier through reasonable diligence. The eidence the plaintiff sought to lead did not satisfy the aboe tests. The court dismissed the plaintiff s application to lead further eidence. Queensland Supreme Court: 21 Noember 2008 Sue Myers DAMAGES 190

207 THE FACTS On 10 Noember 2002, a fire occurred in a row of pine trees on a property at Orange in New South Bonny Glen Pty Ltd Country Energy [2009] NSWCA 26 Recoerability of economic loss considerations of reasonableness and foreseeability Wales. The fire was caused by the trees coming into contact with electricity wires owned by the respondent, Country Energy. The fire caused damage to the adjoining property which was owned by the appellant, Bonny Glen. It also damaged the row of 161 pine trees which constituted a wind break between Bonny Glen s property and the neighbouring property allowing Bonny Glen to use poisonous sprays when growing its apples. In August 2006, after seeking adice from 2 experts, Bonny Glen decided to cut down the remaining apple trees, because it was necessary to use poisonous sprays to successfully grow apples, and, in the absence of the windbreak, the spray drift could not be contained. Bonny Glen issued proceedings against Country Energy claiming:- (a) (b) damages for the cost of Bonny Glen s property damaged by the fire; and economic loss resulting from Bonny Glen s decision to cut down the remaining apple trees. THE DECISION AT TRIAL The trial judge allowed the first aspect of Bonny Glen s claim. In relation to the economic loss claim, the trial judge considered the relationship between the occupier of the neighbouring property and the occupiers of Bonny Glen as well as the use to which the neighbouring property was being put at the releant time. The trial judge heard eidence from the experts consulted by Bonny Glen, but concluded that there was nothing in this eidence to support the contention that it was reasonably foreseeable that, as a result of the fire, all of the trees in the field would hae to be remoed. Bonny Glen s claim for economic loss accordingly failed at first instance. THE DECISION ON APPEAL Bonny Glen appealed the decision, and was successful. The Court of Appeal said that the correct approach in a case like this was to consider: (a) (b) (c) Whether the but for causation at test is satisfied. This was clearly the case here. Whether, as a matter of common sense, the breach of duty was a material cause of the loss. This inoled a consideration of the reasonableness of Bonny Glen s conduct. In assessing reasonableness, it was necessary to hae regard to the interests of Country Energy as well as the interests of Bonny Glen. It was not necessary to find, on the balance of probabilities, that the expert adice was correct simply that it was not shown to be plainly unreasonable. The Court of Appeal found that, in all the circumstances, Bonny Glen s conduct was reasonable. Whether the loss was of a kind that was foreseeable. It is now well established that a specific loss itself does not hae to be foreseeable, rather, it is sufficient that loss of the same general character is foreseeable. The Court of Appeal considered that damage to an orchard business due to the loss of a wind break was foreseeable and, thus, it was not necessary to find that the precise manner in which that damage occurred was foreseeable. The Court of Appeal upheld the appeal and found that Country Energy was liable for the economic loss in question. Howeer, the amount of the economic loss was reduced as Country Energy successfully cross-appealed some of the heads of damage. New South Wales Court of Appeal: 24 February 2009 Samantha Daey DAMAGES 191

208 THE FACTS Margaret Dawson, who had contracted mesothelioma, commenced an application against the appellant, Amaca Pty Ltd (Amaca), for Amaca Pty Ltd Noek [2009] NSWCA 50 Damages for loss of capacity to proide domestic serices meaning of dependent negligence in the Dust Diseases Tribunal (DDT). Mrs Dawson died before the proceedings were decided. Her daughter, Carina Noek (the respondent in the proceedings), continued the action as the representatie of Mrs Dawson s estate. Prior to her death Mrs Dawson lied in the same house as Mrs Noek, and her husband Neale Noek. Mr and Mrs Noek were full-time workers and Mrs Dawson cared for their two young children. THE DECISION AT TRIAL The matter before the DDT was resoled in faour of Mrs Dawson s estate. The DDT awarded damages in the amount of $547,137, of which $193,307 was compensation for Mrs Dawson s loss of capacity to proide gratuitous domestic serices to her grandchildren. The DDT found that but for Mrs Dawson s illness, she would hae continued to look after her grandchildren, and considered the grandchildren to be dependents of Mrs Dawson. THE ISSUES ON APPEAL Amaca only disputed the DDT s award of damages for gratuitous domestic serices to the grandchildren. Amaca argued that the DDT erred in construing s15b of the Ciil Liability Act 2002 (NSW) (CLA), and that had it been construed correctly, it would hae been found that the grandchildren were not dependents of Mrs Dawson, that Mrs Dawson s serices were not proided to the grandchildren, but to their parents, and that the proision of the serices was not reasonable. THE DECISION ON APPEAL The appeal centred on the interpretation of s15b of the CLA. The releant parts considered in the judgment proide as follows: 15B Damages for loss of capacity to proide domestic serices (1) Definitions In this section: dependants, in relation to a claimant, means: (a) such of the following persons as are wholly or partly dependent on the claimant at the time that the liability in respect of which the claim is made arises: (iii) a child, grandchild, sibling, uncle, aunt, niece, nephew, parent or grandparent of the claimant (whether deried through subparagraph (i) or (ii), adoption or otherwise), (2) When damages may be awarded Damages may be awarded to a claimant for any loss of the claimant s capacity to proide gratuitous domestic serices to the claimant s dependants, but only if the court is satisfied that: (d) there will be a need for the serices to be proided for those hours per week and that consecutie period of time and that need is reasonable in all the circumstances. (11) Determining alue of gratuitous domestic serices In determining the alue of any gratuitous domestic serices that a claimant has lost the capacity to proide, the court must take into account; (b) the extent to which proision of the serices would, but for the injury sustained by the claimant, hae also benefited persons in respect of whom damages could not be awarded under subsection (2). The Court of Appeal determined that the fact that Mr and Mrs Noek had a legal obligation and duty to DAMAGES 192

209 care for their children did not mean that the children could not also be dependent on Mrs Dawson. The Court of Appeal confirmed that dependency is a complex question of fact, and considered that the period of time oer which Mrs Dawson proided care to her grandchildren, as well as the frequency and extent of that care proided an eidentiary basis upon which the DDT could find that the grandchildren were dependent on Mrs Dawson. Accordingly, the Court of Appeal determined that the DDT had made no error of law by determining that the children were dependents of Mrs Dawson. Amaca submitted that Mrs Dawson had proided serices to Mr and Mrs Noek by assisting them with their obligation to care for their children, and that she did not proide serices to her grandchildren. The Court of Appeal held that Amaca had not identified any specific error of law that the DDT made in concluding that Mrs Dawson had proided serices to her grandchildren. The Court of Appeal found no legal reason why a particular action could not be considered to proide serices to more than one person and reasoned that most domestic tasks conferred a benefit on all members of a household. There was no legal error in the DDT s conclusion that Mrs Dawson proided serices to the grandchildren by looking after them. The Court of Appeal also determined that the DDT s decision that the need for Mrs Dawson s serices to be proided for the threshold periods of time was reasonable and did not inole a question of law. Further, this finding was not an erroneous construction of s15b(2)(d) of the CLA, and that it was a finding that was open to be made on the eidence. Amaca submitted that the DDT failed to take account of the benefits that Mr and Mrs Noek had receied from Mrs Dawson s childminding serices. The Court of Appeal found that the decision of the DDT, that the benefit of being freed to go out to work is not one that needs to be taken into account, is not erroneous in law. Further, it found that the DDT was not required by s15b(11)(b) to take into account the incidental performance of housework tasks which benefited Mr and Mrs Noek. Therefore, all grounds of appeal failed. Although indemnity costs were awarded when the DDT found in faour of Mrs Dawson s estate, the Court of Appeal determined that no reason was demonstrated to depart from the ordinary basis for payment of costs and awarded Mrs Noek s costs of the appeal on the ordinary basis. New South Wales Court of Appeal: 17 March 2009 Fiona Kamst DAMAGES 193

210 Ehlefeldt THE FACTS The plaintiff sued her GP (the defendant) after she became addicted to the medication, Xanax, a benzodiazepine. Her GP Rowan-Kelly [2009] NSWSC 331 Plaintiff suffered brain injury unable to care for children ability to recoer for care proided to her children by others pursuant to Ciil Liability Act 2002 (NSW) placed her on a home detox program in August 2002 in order to oercome her addiction to the substance. The plaintiff alleged that the GP failed to adise her of the risk accompanying withdrawal from the drug and in particular the risk of seizures. On 14 Noember 2002 the plaintiff suffered a seizure resulting in hypoxic brain damage. At the time of her seizure, the plaintiff was on a methadone program. She had a history of depression, drug use (including heroin), hepatitis C, anxiety attacks and alcohol abuse problems. The defendant was sered with proceedings before he departed oerseas and his present whereabouts are unknown. Judgment on liability was entered in faour of the plaintiff on 2 March These proceedings relate to the assessment of damages. There was no appearance by the defendant. THE DECISION The court assessed the plaintiff s total damages pursuant to the Ciil Liability Act (the CLA) as follows: (a) non-economic loss $ 450,000 (b) past out of pocket expenses $ Nil (c) future out of pocket expenses $ 17,000 (d) past oluntary care $ 529,620 (e) future care and equipment $3,857,942 (f) future loss of earning capacity $ 175,000 sub-total $5,029,562 (g) plus fund management fees of the next 50 years $1,017,000 total $6,046,562 There was no allowance for past out of pocket expenses as the plaintiff s representaties had not been able to obtain this information and other expenses had been paid by goernment agencies. The court did not make any award for past economic loss as it was not satisfied that had the incident not occurred the plaintiff would hae obtained and maintained regular employment, haing regard to her drug use history and inability to maintain employment for the 7 years prior to the incident. In relation to future economic loss, the court awarded the plaintiff $175,000 (rather than the $215,000 submitted on her behalf) on the basis that the plaintiff s earning capacity had been totally destroyed. The court took into account howeer that the plaintiff s chaotic lifestyle may hae led to an early death and the court noted that her partner took his own life in The substantie issue for consideration was whether the plaintiff was entitled to an award for gratuitous care proided by the plaintiff s mother and mother-in-law to her 2 children. The court noted that since the decision of Sullian Gordon (1999) 47 NSWLR 319 was oerruled by CSR Limited Eddy [2005] HCA 64, the only source of damages for this type of care is s15b of the CLA. The court was satisfied that the pre-conditions for awarding damages under s15b(2) were made out on the basis that: (a) (b) (c) (d) before the plaintiff suffered her injury she had been proiding childcare serices to her 2 children; the children were not capable of performing the releant serices themseles; had the plaintiff not suffered her injury there was a reasonable expectation that she would hae spent at least 6 hours per week for at least 6 consecutie months proiding childcare serices for the children; and there would be a continuing need for the proision of such serices to her children and those serices were reasonable. The court noted that the award for damages under this head of damage was made on the basis of the amount of time the plaintiff would herself hae spent looking after the children as opposed to the amount of time which had actually been spent by the plaintiff s mother and mother-in-law in looking after DAMAGES 194

211 the children. Accordingly, an award of 50 hours per week was made pursuant to section 15B of the CLA from the date of the incident until the date of trial. There was no allowance made for the future care of the children haing regard to the plaintiff s chaotic lifestyle and history of drug use. DAMAGES New South Wales Supreme Court: 1 May 2009 Alison Hunt 195

212 De Beer THE FACTS On 29 May 2001 the plaintiff, a Year 11 high school student, suffered an electric shock whilst on a school camp. The first defendant, the State of New South Wales, ran the plaintiff s school and the second defendant, Outdoor Education Australia Pty Ltd, [2009] conducted the camp. The State of New South Wales & Anor [2009] NSWSC 364 Electric shock neurocognitie and psychological injuries conflicting medical eidence The plaintiff was editing a ideo using equipment proided by the second defendant when he receied an electric shock as a result of picking up an electrical power board. The court was satisfied that the power board was faulty with exposed wires at the back and that this was the cause of the electric shock. Following the incident the plaintiff, who had preiously been an academically gifted and socially actie student, reported ongoing headaches, shaking, tingling in his arms and feet and difficulty sleeping. In addition, he reported memory problems, concentration difficulties and symptoms of a significant depression, which was diagnosed as dysthymic disorder. THE ISSUES Although it was in issue in the pleadings, during the course of the hearing the first defendant accepted that it owed a non-delegable duty of care to the plaintiff in respect of his safety whilst at the camp. It also accepted that, together with second defendant, it was an occupier of the camp and faced liability in respect of the faulty equipment. Howeer, the first defendant claimed to be entitled to contribution from the second defendant in the order of 50-75%. The court was also asked to determine, in the face of conflicting medical eidence, what physical and/ or psychological injuries the plaintiff receied as a result of the shock and whether the plaintiff s dysthymic disorder was caused by or contributed to by the electric shock. The court was also required to assess the plaintiff s likely prognosis and future work prospects as compared with what his work prospects would hae been but for the injury. THE DECISION The court accepted the plaintiff s submission that, where reliance is placed on pre and post accident conditions in support of causation, the eidentiary burden rests with a defendant to adduce eidence capable of displacing the prima facie inference that the incident caused the injuries. In this case, the court was satisfied that the plaintiff had made out a prima facie case, and the defendants accordingly bore the onus of establishing that his condition would hae occurred in any eent, had the incident not occurred. The defendants failed to discharge that onus. The court gae detailed consideration to eidence of the plaintiff s life before and after the incident. It commented that the effects of electric shock are still mostly unknown, and found that a lack of physical eidence, such as entry and exit wounds, does not preent a conclusion that the shock was of sufficient magnitude to cause psychological damage. The court was not satisfied that there was any eidence of malingering by the plaintiff and considered him generally to be a truthful witness. The court accepted the plaintiff s eidence that he would hae gone on to uniersity and pursued a career as a school teacher but for the injury. It considered that his prospects would hae included an eentual promotion to the position of principal. The court found that the plaintiff was now unlikely to return to full-time work, and assessed the plaintiff s past economic loss at $43, and his future economic loss at $664,137 less 15%. The court ordered non-economic loss calculated at 40% of a most extreme case, amounting to $180,000, and past and future out of pocket expenses were assessed at $13, and $47, respectiely. In respect of the claim for contribution from the second defendant, the court ordered that the first and second defendant each bear 50% of the damages. New South Wales Supreme Court, 11 May 2009 Samantha Daey DAMAGES 196

213 Clifton THE FACTS Corey Clifton, the plaintiff, claimed damages in respect of injuries he sustained in a motor ehicle Dunn [2009] NSWSC 187 Whether plaintiff s ongoing problems were caused by his injuries or subsequent prescription drug addiction accident at Cessnock on 20 May The accident occurred when Janice Dunn s ehicle collided with the rear of the plaintiff s ehicle. The defendant in the proceedings had already admitted liability, howeer quantum was in dispute. THE ISSUES The plaintiff argued that he sustained injuries to his head, neck and back that were to such a degree that they had been diagnosed as continuing and permanently disabling. The plaintiff claimed that he had ceased working since the accident, and would not be able to be employed for the remainder of his life. The plaintiff also argued that his injuries required future medical assistance, pharmaceuticals and ongoing domestic care. The defendant denied that the plaintiff suffered permanent or major injuries as a result of the accident. Alternatiely, the defendant argued that any injuries the plaintiff sustained were merely temporary. The defendant also argued that the plaintiff s continuing pain and incapacity was caused by a regime of haphazard and excessie use of opiate analgesia (painkillers) on which the plaintiff had become dependant and had deeloped a psychological condition from this dependency. The plaintiff s general practitioner, Dr Matthews, prescribed this medical treatment after the plaintiff failed to successfully respond to surgery that was targeted to remedy the continuing pain. THE DECISION The court determined that in light of the consistent medical opinions that had been submitted, the plaintiff suffered from a combination of ongoing permanent physiological and psychiatric symptoms. The court held that these injuries were productie of impairment that adersely affected the plaintiff s domestic capabilities, capacity to work and his family life. Howeer, the court also noted that the plaintiff was dependent on narcotic medication that had been iewed by some of the expert medical witnesses as a less than optimal treatment to counteract the plaintiff s lack of response to surgery. The court ultimately held that there was no interening cause that broke the chain of causation when determining the cause of the plaintiff s injuries. The court noted that the treatment prescribed by Dr Matthews was not so obiously unnecessary or improper it is in the nature of a gratuitous aggraation of the injury. The court concluded that the plaintiff s use of the addictie opiate medication, which resulted in dependency, was a ery likely consequence of the injuries caused by the defendant s negligence. Ultimately, the court awarded the plaintiff damages in the amount of $1,430, This assessment included an award for future economic loss which was reduced by 25% to account for the possibility that a detoxification program may allow the plaintiff to recoer some residual earning capacity. New South Wales District Court: 29 May 2009 Daid Couper DAMAGES 197

214 Waller THE FACTS On 2 June 2001 the plaintiff was a passenger in a ehicle that was inoled in a single ehicle accident. At the time of the accident the plaintiff was 12 years of age. On the date of judgment he was 20 years of age. McGrath & Anor [2009] The plaintiff sustained a QSC 158 number of substantial Assessment of damages 12 injuries as a result of the year old plaintiff traumatic accident including a brain injury and 95% whole traumatic brain injury. person impairment Additionally, he deeloped a number of significant complications, including a condition of diabetes insipidus. The plaintiff endured lengthy hospitalisation and treatment and was assessed as haing a 95% whole person impairment. The defendant admitted liability for the accident. THE ISSUES The trial concerned the assessment of damages under the Motor Accident Insurance Act 1994 (Qld). The Ciil Liability Act 2003 (Qld) did not apply as the incident occurred prior to its inception. The major issues in dispute were the plaintiff s awareness or insight into his condition, his future loss of income and future accommodation and care. THE DECISION The plaintiff was awarded total damages of $5,764,584. In assessing general damages the court noted that the extent of the plaintiff s insight into his condition was an important factor to consider. The court acknowledged the expert medical opinions presented by the parties and noted that the expert (Dr Powell) relied upon by the defendant considered that the plaintiff had poor insight rather than no insight. The court referred to the case of Goode Thompson [2002] 2 Qd R 572 in which $150,000 in general damages was awarded to a male person who was injured at the age of 12, sustained grae intellectual impairment, and was described as haing, little insight into his pitiable condition. Accordingly, in the present case the court made an award of $200,000 for general damages to the plaintiff (the increase reflecting the diminution in the alue of money since 2001). In calculating future economic loss, the court considered that if the incident had not occurred the plaintiff would hae engaged in an occupation with a similar leel of income as a forestry worker, and would hae earned $695 net per week until the age of 65. The court formed this iew on the basis of eidence gien by an occupational therapist (that the plaintiff would hae succeeded in finding work as an intermediate production and transport worker, or intermediate clerical, sales and serice worker). Accordingly, the court allowed an award of $585,000, which included a 12% reduction for contingencies. Future care comprised the largest portion of the plaintiff s claim. The court noted that the test for determining the extent and type of care required by the plaintiff was whether it was reasonable, not whether it was ideal. This amount was calculated on the basis that the plaintiff would remain in his current care arrangement for a further 20 years (3 paid carers supplemented by the plaintiff s mother) and after that time would require around-the-clock professional care. The court rejected the defendant s argument that the plaintiff would be an ideal candidate for shared care and noted that such an arrangement would essentially require the plaintiff to moe away from his family in Gympie and relocate to Brisbane. The court allowed $3,037 per week for future commercial care and $670 per week for future gratuitous care for the next 20 years, and then for the following 40 years an amount of $5,468 per week for commercial care. To account for changes in the plaintiff s future care arrangements the court applied a discount of 15%, the ultimate award for future accommodation and care being $3,780,000. Queensland Supreme Court: 19 June 2009 Bianca Horn DAMAGES 198

215 PROCEDURE

216 Balnaes THE FACTS In February 2002 the plaintiff and defendants were each naigating a essel moing in opposite directions on the Coomera Rier. The 2 essels collided. In February 2005 the plaintiff commenced proceedings Smith and Anor [2008] QSC 150 Leae to withdraw admissions against the defendants alleging negligence. In September 2006 the plaintiff by his reply admitted that he had pleaded guilty to a charge for breach of s43(3) of the Transport Operations (Marine Safety) Act 1994 and admitted that he was contributorily negligent to the extent of not more than 25%. In March 2008 the plaintiff sought to withdraw those admissions. The defendants solicitors immediately notified the plaintiff s solicitors that the admissions could only be withdrawn with the court s leae. THE ISSUES Pursuant to Rule 188 of the Uniform Ciil Procedure Rules 1999 the plaintiff applied to the court for leae to withdraw the admissions made in his pleadings. THE DECISION The plaintiff s solicitor admitted that the withdrawal in relation to the contributory negligence admission was not due to any discoery of new and releant facts, but rather a reconsideration of the facts. Mr Lieberman, a loss adjuster, had subsequently undertaken an assessment of the aailable eidence. Whilst Mr Lieberman s report was not an expert report and therefore not admissible at trial, the court accepted that it sufficiently explained why there had been a change of attitude on the part of the plaintiff. Although there was no direct explanation as to why the plaintiff made the admission in relation to the contributory negligence, the court inferred it had been thought appropriate, gien the plaintiff s guilty plea, but that iew was the plaintiff s solicitor s error or mistake. The court found that its discretion must be guided by the principles enunciated in the High Court s decision of State of Queensland J L Holdings Pty Ltd (1997) 189 CLR 146. In J L Holdings, the court reinforced that the object of the court is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights. The court found that the withdrawal of the admission would not be a substantial departure from the pleaded case. There was no indication that the defendant would be satisfied with an admission of only 25% contributory negligence and the defendant had not argued that they would be prejudiced by the withdrawal. The court granted leae for the plaintiff to withdraw his admission in relation to his contributory negligence. Queensland Supreme Court 15 July 2008 Sophie Robinson PROCEDURE 200

217 Boyd THE FACTS The plaintiff was injured on 9 Noember 2001, when she stepped into a depression on a footpath and fell. She commenced State of Queensland & Anor [2008] QDC 208 Application for leae to proceed no step taken for 3 years claim dismissed for want of prosecution proceedings against the first defendant, the State of Queensland, and the second defendant, the Gold Coast City Council, on 27 October Both defendants entered defences and the matter progressed to the stage where the defendants sered statements of expert and economic eidence on the plaintiff. The last statement was sered on 29 July The plaintiff took no further action to progress her claim until 30 May 2007, when she proposed that a mediation occur. On 6 August 2007 the first defendant adised the plaintiff s solicitor that it would not participate in a mediation until it receied the outstanding further and better particulars that it had requested on 23 Noember The plaintiff filed an application for leae to proceed on 1 August Her solicitor swore an affidait stating that he intended to resole the plaintiff s claim by mediation and had not taken a further step in the proceeding for that reason. He also stated that it was an administratie oersight that he had not gien more attention to the plaintiff s case due to his busy practice and managing oer 700 files. THE ISSUES The defendants argued that: (b) The litigation was well adanced and the defendants would suffer no prejudice if leae was granted. THE DECISION The court accepted that: (a) (b) (c) The plaintiff s prospects of success were not unreasonable; The plaintiff s case was well progressed, although it was not ready for trial; and The defendants would not be unfairly prejudiced if leae to proceed was granted. Howeer, it ultimately held that the plaintiff had not proided a sufficient reason for leae to be granted. The plaintiff s solicitor s explanation that he had been too busy to attend to the plaintiff s claim was not enough. The plaintiff also failed to proide any eidence of the steps she herself had taken to progress her claim, despite her solicitor s delay. The court held that she had taken no action to prompt her solicitor to adance her claim. The plaintiff s application was dismissed and the defendants applications that the proceedings be dismissed for want of prosecution were granted. Queensland District Court: 28 August 2008 Kylie Powell PROCEDURE (a) (b) (c) The plaintiff had not satisfactorily explained the reason for her delay; The delay was solely due to the plaintiff s solicitor s inattention to the file; and The plaintiff proided no explanation of the steps she took to monitor her solicitor s handling of the matter. She also took no action to progress the claim herself. The plaintiff submitted that: (a) She had reasonable prospects of succeeding against the defendants; and 201

218 McAskell THE FACTS In 1999 the plaintiffs jointly purchased a townhouse at Patterson Lakes. The building subsequently suffered subsidence of the foundations, cracking of the walls and other deterioration to the extent that it required demolition and reconstruction. Caendish Properties Limited & Ors [2008] VSC 328 Disclosure of terms of confidential settlement by one party consideration of releance The plaintiffs issued proceedings against seeral parties alleging: 1. In respect of the first to f i f t h d ef e n d a n t s, negligent design and/ or construction of a circulation drain running adjacent to the property; and 2. In respect of the sixth and seenth defendants (the builders), negligence and breach of implied warranties in their preparation of the site and construction of the property. There were claims for contribution and indemnity between the first to fifth defendants, and third party notices were issued to engineers, the building sureyor and the slab subcontractor. It was alleged that the proceedings constituted an apportionable claim within the meaning of Part IVAA of the Wrongs Act 1958 (the Act). In June 2008, the plaintiffs reached a settlement with the first to fifth defendants. The first to fifth defendants adised the court that they would remain parties to the proceedings solely for the purposes of apportionment of the plaintiffs claims against the other defendants pursuant to any applicable proportionate liability rating. The sixth and seenth defendants (the builders) brought an application for discoery of the settlement agreement. THE DECISION Counsel for the plaintiffs submitted that the terms of settlement were irreleant to the proportionate responsibility of the builders for the plaintiffs loss and damage. Alternatiely, if they were releant, they would only eer become so after issues of damages and proportionate liability had been determined. If the defendants were found not to be liable, or the plaintiffs recoered less than the total amount of proed loss and damage, no questions of double recoery would arise, and the terms of settlement would be irreleant. Counsel for the builders argued that the terms of settlement were releant to the issue of double recoery, in that the builders needed to know the amounts recoered by the plaintiffs from the other defendants in order to determine whether or not the plaintiffs had recoered more than their proed loss and damage. The court considered the releant proportionate liability proisions in the Wrongs Act 1958 (Vic). It said that the real question was whether the terms of the settlement were releant to an issue in the proceeding. The court referred to the decision of Boncristiano Lohmann [1998] 4 VR 82 and obsered that the rule against double recoery (embodied in s24ak of the Act) may come into play to bring about some adjustment as between the wrongdoers. The court noted, howeer, that s24ak was not releant to this situation as it only applied where a party had recoered judgment, not settlement. The court approed the obiter comments of Justice Byrne in Gunston Lawley [2008] VSC 97 that, in a proceeding inoling an apportionable claim, a settlement by the plaintiff against one concurrent wrongdoer does not affect the liability of any of the other concurrent wrongdoers, at least insofar as the plaintiff does not recoer an amount in excess of his or her total loss or damage. Accordingly, the court found that, while the principle in Boncristiano is applicable, it only arises if and when the builders are held liable. If that occurs, any amount recoered by the plaintiffs in the settlement may need to be taken into account when entering judgment against the builders. Howeer, at present, there was no issue between the parties as to double recoery, so the terms of the settlement were irreleant and not discoerable. The application by the builders was dismissed. Victoria Supreme Court: 29 August 2008 Samantha Daey PROCEDURE 202

219 Stewart THE FACTS The plaintiff made a claim for personal injuries as a result of an electric shock injury suffered on 5 February 2000 during her employment with the second d ef e n d a n t, while a t the premises of the first defendant. Fehlberg & Anor [2008] Both the plaintiff and the QSC 203 defendants had obtained Expert eidence rules their own expert reports as UCPR multiple or joint to what injuries, if any, were expert witnesses sustained by the plaintiff as a result of any electric shock. The reports did not comply with the expert eidence proisions in part 5, chapter 11 of the Uniform Ciil Procedure Rules 1999 (UCPR) or practice direction 2 of Three weeks prior to the trial, the parties made application to the court seeking directions in relation to the calling of expert witnesses at the trial. THE ISSUES The plaintiff submitted that: (a) the court did not hae the power to force a party to call only 1 expert unless the court has itself appointed an expert; (b) rule 429G(2) of the UCPR was not mandatory; and (c) practice direction 2 of 2005 does not compel either party to make an application to the court in circumstances where: (i) (ii) THE DECISION the employer was a party to the claim and the proisions of the WorkCoer Queensland Act 1996 goerned the plaintiff s claim against the employer, and the practice direction came into effect only after the proceedings had commenced. The court rejected these submissions and held that the court retains control oer the proceedings and that there is express power in the UCPR to limit the number of witnesses that a party may call on a particular issue pursuant to rule 367(3)(d)[Note: this appears to be a typographical error in the judgment as the correct rule is 367(3)(e)]. The court further noted that the expert eidence rules were introduced in July 2004 prior to the retention of any of the experts in the proceedings and that the plaintiff s submissions hae little regard to the purpose of part 5, chapter 11 of the UCPR which proides that where practicable, expert eidence is to be gien by a single expert so as to aoid the unnecessary costs of each party retaining different experts. The court rejected the plaintiff s submission that rule 429G(2) was not mandatory. The court considered that rule 429G would hae irtually no purpose if all it did was to remind litigants and the profession that they were entitled to seek directions from the court about the calling of eidence. The court approached the parties applications on the basis that there ought ordinarily be only one expert in any gien field and (the court) should permit multiple experts only if the justice of the case so requires. Haing said this, the court noted that the trial was only 3 weeks away and that the parties had substantially prepared for it. In these circumstances, the court thought that the interests of justice would be best sered by permitting the parties to call the experts that they had already engaged. The exception to this howeer was in relation to 2 experts that the plaintiff intended to call who were alleged experts in electric shock injuries. The first expert was an engineer as well as a general practitioner with a specialist interest in electrical shock injuries. The second expert was a research professor in bio-engineering in the United States. It was not demonstrated that the second expert had any greater expertise, or different expertise. The court did not permit the plaintiff to call the second expert as the plaintiff did not discharge his onus of demonstrating that it was in the interest of justice that multiple experts be called to gie eidence on an issue. The plaintiff also sought leae to call an occupational therapist to gie eidence on the plaintiff s Parkinson s disease. No report had been obtained and rule 429I had not been complied with. PROCEDURE 203

220 For these reasons and in circumstances where the expert did not hae any particular expertise in distinguishing between the effect of an electrical shock injury and the effects of Parkinson s disease, the court was not prepared to permit the expert to be called. PROCEDURE Queensland Supreme Court: 2 September 2008 Alison Hunt 204

221 Hyland THE FACTS On 4 March 2002 the applicant underwent surgery performed by the respondent, which left her Hack [2008] QDC 229 Medical negligence application to extend limitation period material facts decisie character with injuries. In 2004 the applicant instructed solicitors. In 2005 the claimant obtained two medical opinions and a medical report, all of which were negatie about her chances of success against the surgeon. In March 2005 the applicant s solicitors successfully made a s43 PIPA application for leae to commence proceeding despite non-compliance with PIPA but due to an administratie error, neer filed her claim. In January 2006, one month after receiing the negatie report, the applicant s solicitors wrote to her informing that they were no longer prepared to act on her behalf. The applicant was adised that if she wished to continue her claim she should obtain legal adice. Ten months later the applicant receied a letter from the respondent s solicitors confirming that as no proceedings had been commenced, her limitation period had expired. Two months later the applicant approached her current solicitors and 6 weeks later receied another medical report, which was supportie of her claim against the respondent. In August 2008, the applicant sought leae to commence proceedings against the respondent pursuant to s59(2) of PIPA or to extend her limitation period to 28 January 2009 pursuant to s31 of the Limitations of Action Act 1974 (the LAA). THE DECISION Under s31 of the LAA, the court can extend the limitation period where it is satisfied that a material fact of a decisie character relating to the right of action was not within the means of knowledge of the applicant until after the commencement of the year last preceding the expiration of the limitation period. The applicant argued that she did not know she had any prospects of success until 13 February 2008 when she receied a faourable report and that this was the releant date for determining when she knew of a material fact of decisie character. The court held that it is common ground that learning that one has a cause of action is a material fact of a decisie nature. The question was whether this factor was within her means of knowledge prior to receiing the report in February The court questioned whether she had taken all reasonable steps to determine if the respondent had been negligent. There was a period of 21 months where the claim had not been pursued. The applicant claimed she had not pursued the claim due to family illness, a belief that her position was protected and that she did not want to embarrass Dr Hack. It was held that the applicant s actions were a conscious decision not to progress the matter and she had not acted reasonably. Her delay since instructing solicitors had not been satisfactorily explained and she appeared to hae put the matter on hold whilst she dealt with other priorities. The court held it was not consistent with the philosophy of PIPA to sit by and let time lapse as it had here. The court also had to consider whether the applicant had reasonable prospects of success, and further, whether the respondent had suffered prejudice by reason of the delay. Despite the faourable report, the court found the applicant s case would hae difficulties gien that the defence had the original negatie reports to rely on. The respondent claimed to hae suffered general prejudice as the respondent knew little of the quantum of the matter and the respondent would be asked about the surgery for the first time after a delay of six years. This would be grossly unfair due to fading recollections of the incident. The applicant argued there was no prejudice as the aboe had been sufficiently outlined in the applicant s statement of claim. The court held that while the respondent had general details of the applicant s case, there was not sufficient detail. The court found it would be unjust to allow the applicant s limitation period to be extended. The court found that the factors releant to s59(2) (b) of PIPA had already been considered when looking at the applicant s application under the LAA. Despite this, as it was an alternate application, the court looked at it separately. The court held that the releant factors to take into account were the length of delay, whether there had been a general lack of diligence in prosecution of PROCEDURE 205

222 the claim, compliance with PIPA, whether the prospects of a fair trial had diminished and the circumstance that the exercise of the discretion is to deny the respondent a complete defence to the claim. The court looked at the applicant s former solicitors failure to file her claim after the s43 PIPA application and noted that a refusal to extend time in the present case would not extinguish her rights against her former solicitors. The court found that een despite this error, the applicant had delayed the progress of her claim and this was a conscious decision to let the action lie without progress. PROCEDURE The court held that it is important that the applicant explain the extent that attempting to comply with PIPA preented her from commencing proceedings within the limitation period. It was held that the applicant did not act reasonably by failing to progress the action. It was also not in the public interest that this type of action be allowed to proceed at such a leisurely pace and that PIPA requires the applicant to proceed in a timely manner to aoid such consequences. Queensland District Court: 9 September 2008 Amanda Cann 206

223 THE FACTS The first and second plaintiffs were a natural person and the newsagency he directed, respectiely. Both alleged that they suffered losses resulting from the first plaintiff s injuries, sustained when he was struck by a runaway industrial bin in the defendant s rubbish enclosure. Wood & Anor Tots Professional Serices Pty Ltd & Anor [2008] QDC 241 There was a lease between Application by plaintiff to join the second plaintiff and the own insurer pursuant to rule defendant that contained a 69 of UCPR clause pursuant to which the defendant was entitled to indemnity for personal injury occurring as a result of the second plaintiff s negligence. The second plaintiff held a policy of insurance including public liability coer with GIO General Limited (GIO). In certain circumstances, that policy also extended indemnity to insured parties named in the schedule and to the lessor (the defendant) for personal injury occurring as a result of the second plaintiff s negligence ( Additional Benefits 2 ). The defendant claimed indemnity from the second plaintiff in relation to the first plaintiff s claims for damages. The second plaintiff claimed a right to indemnity in relation to the defendant s claim under GIO s policy. The defendant claimed a right to indemnity for the first and second plaintiffs claims as an insured party under the policy. GIO declined indemnity to both the second plaintiff and the defendant. In arguing for joinder of GIO as a party to the litigated proceedings, the first and second plaintiffs submitted that GIO wrongfully denied its liability under the policy. THE ISSUES An application for joinder pursuant to rule 69 of the Uniform Ciil Procedure Rules 1999 (UCPR) requires the exercise of discretion by the court. As such, the merits of the case against GIO were a releant consideration. Howeer, it was not necessary for the plaintiffs to demonstrate a good cause of action or een a prima facie case. THE DECISION The court stated that the threshold is ery low. It is sufficient if it is desirable, just and conenient to enable the court to adjudicate on all matters that are in dispute, not only in the proceedings but connected with it. The court accepted that the second plaintiff was not seeking an indemnity for itself for the defendant s claim for economic loss, but rather was seeking an indemnity for the defendant against the plaintiffs claim for personal injury. The court held that it was at least arguable that GIO s policy responded to the defendant s claim. The application for joinder was allowed pursuant to rule 69(1)(b)(ii) of the UCPR. That is, the court determined that it was desirable, just and conenient for GIO to be joined as a defendant to the litigated proceedings. GIO was ordered to pay the plaintiffs costs on a standard basis. Queensland District Court: 26 September 2008 Hannah Sains PROCEDURE 207

224 THE FACTS The plaintiff (a former barrister) sued the defendant for unpaid fees. The plaintiff s claim against the Roland Ofria Robert William Cameron [No 2] NSWCA 242 Award of indemnity costs where plaintiff unsuccessful in debt recoery action defendant initially took the form of a cross-claim in proceedings by the Deputy Commissioner of Taxation against the plaintiff. The cross-claim was dismissed on 12 December 2005, and the plaintiff was ordered to pay the defendant s costs. On 16 December 2005, the plaintiff filed separate proceedings to recoer the unpaid fees from the defendant. The plaintiff succeeded at the trial of those proceedings, and the defendant was ordered to pay him $39, The defendant appealed. The court found in the defendant s faour on the basis that there was no contract between the plaintiff and the defendant. The plaintiff had been retained by a solicitor on the defendant s behalf pursuant to a costs agreement. The court held that the costs agreement, properly constructed, was between the plaintiff and the solicitor. The plaintiff was ordered to pay the defendant s costs. This decision concerned an application by the defendant for an order that the plaintiff pay these costs on an indemnity basis. THE DECISION The defendant argued that the plaintiff s case was fundamentally weak, and that he had preiously made a number of Calderbank offers that were not accepted. The offers made by the defendant had asserted that there was no contractual relationship between the plaintiff and the defendant, the basis upon which the plaintiff was ultimately unsuccessful. In July 2005, the defendant wrote to the plaintiff s barrister on a without prejudice except as to costs basis, offering to pay the plaintiff $20,000 to settle the claim. In August 2005 the defendant offered to pay the plaintiff $30,000 to settle the matter. In January 2006, the defendant wrote to the plaintiff offering to forgo payment of a $12,000 balance he claimed the plaintiff owed him (when taking into account costs orders in the other proceedings) if each party would walk away. The defendant made a further walk away offer in March The plaintiff argued none of the aboe letters were Calderbank offers. The court held that they were. The court said the offers of July and August 2005 were releant. Although they were made in relation to different court proceedings, acceptance of either would hae resoled the current proceedings. The court referred to Jones Bradley (No 2) [2003] NSWCA 258, and the established principle that a Calderbank offer will not result in an award of indemnity costs unless it is unreasonably rejected. The court said the plaintiff was substantially worse off as a result of the ultimate decision than he would hae been had he accepted any of the aboe offers. Instead, the plaintiff had incurred considerable legal costs in pursuing the action against the defendant. Further, the difference between the original judgment sum of $39, and the $30,000 was out of all proportion to the amount of judicial and other time inested in the matter. The plaintiff acted wholly unreasonably in rejecting the cash offers made in The court said the alue of the plaintiff s claim was relatiely modest. The Ciil Procedure Act 2002 (NSW) aims to facilitate the just, quick, and cheap resolution of the real issues in dispute. That Act also proides that the practice and procedure of the court should aim to resole the issues in a manner where the cost to the parties is proportionate to the subject matter in dispute. For that reason, the size of a claim should be treated as a releant factor when considering whether the rejection of a Calderbank offer was unreasonable. The court ordered the plaintiff to pay the defendant s costs on an indemnity basis. New South Wales Court of Appeal: 7 October 2008 Sue Myers PROCEDURE 208

225 THE FACTS The primary proceedings concerned the construction of an office building project in Carlton, Melbourne. Godfrey Spowers (Victoria) Pty Ltd Lincolne Scott Australia Pty Ltd & Ors [2008] The plaintiffs, the principals of the building project, sued the building contractor and architect for alleged defects in the building. The architect (the defendant) VSCA 208 (appeal of commenced third party the decision of proceedings against a Surrowee Pty Ltd consulting engineer and Hansen Yunken Pty Ltd sureyor, which the plaintiffs [2008] VSC 90) had retained to proide serices with respect to the Proportionate liability ability project. That claim was of defendant to pursue third based on s23b of the parties for contribution where defendant settled with Wrongs Act 1958 (Vic) (the plaintiffs Act) which proides that a person liable in respect of any damage suffered by another person may recoer contribution from any other person liable in respect of the same damage. The defendant ultimately settled the plaintiffs claim against it in exchange for payment of $3.9 million. A salient aspect of the settlement achieed by the defendant with the plaintiffs was that the plaintiffs released the third parties from further action by the plaintiffs. The settlement agreement also proided that the settlement was for the entire claim and not just the defendant s proportionate liability. The defendant then proceeded with the third party proceedings to recoer some share towards the settlement amount. In response, the third parties applied for summary judgment on the basis, inter alia, that: (a) section 24AI(1) of the Act proides: In any proceeding inoling an apportionable claim (a) the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just haing regard to the extent of the defendant s responsibility for the loss and damage; and (b) (b) judgment must not be gien against the defendant for more than that amount in relation to that claim. the amount for which the defendant had settled with the plaintiffs could only hae related to the defendant s potential liability pursuant to an assessment by the court under s24ai(1) of the amount reflecting that proportion of the loss or damage claimed, that is, the amount for which the defendant was likely to be held liable exclusie of any responsibility of any other defendant or third party. Accordingly, no part of that sum could be the subject of an order for contribution by the third parties as it was an amount reflecting the responsibility of the defendant to the exclusion of the third parties. THE DECISION AT TRIAL The trial judge accepted the third parties arguments and granted their application for summary judgment. In doing so the court commented that: It seems to me that [the third parties ] submission is logical. If the amount of any good faith settlement by [the defendant] can only reflect the amount for which it, exclusie of other defendants and third parties, was responsible, then such amount cannot be the subject of a contribution claim against such other defendant or third party by [the defendant]. In my opinion, it is a necessary consequence of s 24AI(1) of the Act that a defendant against whom judgment is entered in faour of the plaintiff for an amount for which that defendant is responsible, exclusie of the responsibility of other defendants or third parties, cannot then seek contribution against such other defendants and third parties. For the reasons already stated, I do not think that a defendant who makes a bona fide settlement with the plaintiff can be in any better position than a defendant against whom judgment has been gien. PROCEDURE 209

226 The defendant appealed the trial judge s decision. THE DECISION ON APPEAL The issue on appeal was whether s24ai of the Act prohibited the defendant from claiming contribution in relation to the settlement sum in circumstances where there had been no judgment. The third parties argued that as the plaintiffs claim was an apportionable claim, the defendant was only liable for the extent of its proportionate liability. The settlement sum therefore represented the defendant s liability and the defendant was precluded from claiming contribution from the third parties to this amount. The defendant argued that the settlement sum accepted by the plaintiffs was for the entirety of their loss and damage and that the plaintiffs had not pleaded that the defendant was a concurrent wrongdoer or that the claim was apportionable. The defendant argued that the settlement sum did not represent only the defendant s proportionate liability and this was supported by the fact that the settlement terms contained a condition that the plaintiffs release the third parties from the action. In these circumstances it could not be said that it was not just and equitable for the defendant to pursue contribution to the settlement sum from the third parties. The Court of Appeal oerturned the decision of the trial judge and held that the defendant could pursue the third parties for contribution to the settlement money it had paid to the plaintiffs. The Court of Appeal noted that the proportionate liability legislation was designed to aoid a situation where there are a number of wrongdoers liable for the same damage but the plaintiff seeks to recoer the whole of their loss or damage from only the solent or insured defendant. The legislation seeks to restrict the plaintiff to only obtaining judgment against a concurrent wrongdoer to an amount reflecting its proportion of the plaintiff s loss or damage and once judgment is gien against the concurrent wrongdoer, it cannot be required to contribute to the damages recoerable from another concurrent wrongdoer in the same proceeding. The Court of Appeal distinguished between a judgment (as referred to in the legislation) and the settlement which was achieed in this case by the defendant. The Court of Appeal considered that the operation of the proportionate liability legislation is dependent upon a judgment by a plaintiff against a defendant. In the defendant s situation, the legislation therefore does not make it obligatory to approach consideration of [the defendant s] contribution claims on the footing that its payment of $3.9 million to the plaintiffs represented no more than quantification of its sectioned-off liability to the plaintiffs as a concurrent wrongdoer The Court of Appeal noted that the plaintiffs claim against the defendant was not an apportionable one on the basis that: (a) (b) the settlement of the claim was expressed as being a settlement of the entirety of the plaintiffs loss and damage, and the payment of the settlement sum entitled the defendant to request the release of the third parties from their prospectie liability to the plaintiffs. In these circumstances, the defendant was entitled to seek contribution from the third parties. Victorian Court of Appeal: 22 October 2008 Paul Scagliotti and Alison Hunt PROCEDURE 210

227 Puttick THE FACTS The plaintiff s late husband, Mr Puttick, allegedly contracted malignant mesothelioma from exposure Tenon Ltd (formerly called Fletcher Challenge Forests Limited) [2008] HCA 54 Whether goerning law is law of the place of the tort to asbestos during isits to factories in Belgium and Malaysia from 1981 to At the time he was employed by Tasman Pulp and Paper Company in New Zealand (Tasman). He was a New Zealand citizen who moed to Melbourne and died in 2005, just after commencing proceedings for damages in the Victorian Supreme Court. Tasman was a subsidiary of the defendant. The plaintiff claimed that the defendant had breached a duty of care owed to Mr Puttick through the control it had oer Tasman. The defendant was incorporated in New Zealand and sought an order to permanently stay the proceedings, or dismiss them summarily, on the basis that the alleged negligence occurred in New Zealand, and that the law to be applied to determine the claim was New Zealand law. The New Zealand statutory compensation scheme barred a common law claim. THE DECISION AT TRIAL The trial judge held that the proceedings should be stayed permanently on the grounds that Victoria was an inappropriate forum. It was held that New Zealand was a more appropriate forum because many witnesses and documents were located in New Zealand. It was also held that the law goerning substantie issues was the law of the place where the tort occurred which the trial judge held was New Zealand. THE DECISION ON APPEAL The plaintiff appealed on the basis that the trial judge had made an error of law. The defendant cross-appealed submitting that the plaintiff s action should be dismissed on the basis that it was destined to fail because law of New Zealand was the goerning law. By majority the Court of Appeal dismissed the plaintiff s appeal and held that the releant law was the law of New Zealand. THE HIGH COURT DECISION The plaintiff appealed to the High Court and the High Court unanimously allowed the appeal. It held that the trial judge and the Court of Appeal erroneously decided that the material aailable was sufficient to decide what law goerned the rights and duties of the parties, and held that it was not yet possible to decide whether New Zealand law was the applicable law to decide the case. The High Court was unable to make a proisional finding about where the alleged tort occurred. The High Court held that details about Mr Puttick s factory isits and the arious releant relationships between the defendant, Tasman and Mr Puttick were ambiguous and were not resoled by determining the defendant s application for a permanent stay. It was not possible on the material aailable to decide which legal system was applicable. The High Court said that if the dispute was goerned by New Zealand law, the defendant had not established that Victoria was an inappropriate forum. It was noted that similarities between the legal systems and geographical proximity meant that Victoria was potentially an appropriate forum. The High Court ordered that the trial judge s order be set aside and that the defendant s original summons be dismissed with costs. High Court of Australia: 12 Noember 2008 Sue Myers PROCEDURE 211

228 Simpson THE FACTS The plaintiff suffered personal injuries as a result of a motor ehicle accident, which occurred on 15 October An application was made by the plaintiff for leae to call expert eidence in order to comply with practice Brett & Suncorp General direction 2 of This Insurance Limited practice direction notes that [2008] QSC 467 early consideration should Expert eidence rules be gien to the expert multiple experts in personal eidence rules contained in injury cases the Uniform Ciil Procedure Rules 1999 and that litigants should gie consideration to the appointment of an expert to be the only expert witness on a particular substantial issue. The defendants had preiously obtained the leae of the court to call an orthopaedic surgeon, neurosurgeon and psychiatrist. As such the defendants did not object to the plaintiff calling their own experts in the same areas. Howeer, in the application the plaintiff sought leae to call 2 orthopaedic surgeons, as well as a neurosurgeon and psychiatrist, and in addition, a clinical anatomist and an occupational therapist. The defendants objected to the plaintiff calling the additional experts (extra orthopaedic surgeon, clinical anatomist and occupational therapist). THE ISSUES The issue for the court was whether making such an order would further the purpose of the expert eidence rules. That purpose is to limit the number of experts called on any gien issue, proiding that can be done without compromising the interests of justice and without affecting the prospects of a fair trial of that proceeding (rule 423). THE DECISION The court noted that there were no authorities to guide it in determining the application. As a result it pointed out that it was a clear object of the rules to limit the number of expert witnesses, and indeed, where possible, to impose a limit of a single expert witness, let alone one on each side. In this regard, the court noted that the onus fell on the plaintiff to demonstrate why the court needed to hear the opinions of the listed experts. The plaintiff failed to demonstrate why it was in the interests of justice that any of the three contested witnesses be called. The court indicated that such a need could be shown where the expert possessed special knowledge outside of the general area of expertise. In this case the court noted that the true issue turned on whether the plaintiff suffered a significant back injury, or whether his problems were due to the pre-existing state of his spine, and so were likely to be ineitable. The court noted that none of the additional experts proposed by the plaintiff could offer any further eidence. It saw no benefit in obtaining eidence from 2 orthopaedic surgeons with the same expertise and found that the eidence of the clinical anatomist and occupational therapist did not extend upon the eidence aailable from the other experts. As such the court noted that it was unnecessary to repeat eidence as it simply made the case more confusing. Accordingly, the court allowed the application to the extent that the plaintiff was gien leae to call an orthopaedic surgeon, neurosurgeon and psychiatrist. Howeer, the court refused the application to the extent that the plaintiff sought leae to call an additional orthopaedic surgeon, a clinical anatomist and occupational therapist. Queensland Supreme Court: 8 December 2008 Bianca Horn PROCEDURE 212

229 Brady THE FACTS The claimant sought damages from Woolworths Limited (Woolworths) in respect of injuries allegedly sustained at one of its stores on 29 December Woolworths Limited [2009] QDC 1 Whether compulsory conference took place whether strongly held iews in liability proide good reason to dispense with compulsory conference The claim progressed through the Personal Injuries Proceedings Act 2002 (PIPA) process. On a date and time agreed between the parties, the parties and their legal representaties conened at the claimant s barrister s chambers. Both parties were in separate rooms. Before the conference began, Woolworths coneyed to the claimant, through her representaties, that it considered her prospects of success were ery poor. She became upset and the parties separated on poor terms. The parties were neer in the same room and there was no discussion about possible settlement of the claim. Woolworths sought an order that the parties participate in a compulsory conference. By cross-application, the claimant sought a declaration that the compulsory conference had been held or, alternatiely, an order dispensing with the compulsory conference. THE DECISION The claimant eentually conceded that the compulsory conference had not occurred. The court noted that although the parties were in each other s icinity, they did not actiely participate in an attempt to settle the claim. The court ordered that the parties attend and actiely participate in a compulsory conference. The claimant argued that Woolworths strong position on liability was a good reason for dispensing with the compulsory conference. This argument was dismissed by the court, which noted that it is not uncommon for parties to hae strong iews on liability prior to a compulsory conference. The strength of any iews on liability does not alter the obligation of the parties to discuss the claim and exchange iews on liability. The claimant s cross-application was dismissed. Queensland District Court: 13 January 2009 Leah McStay PROCEDURE 213

230 Jessup THE FACTS The plaintiff accountant issued proceedings against arious parties in relation to work he performed Pope & Ors [2009] QDC 44 Application to set aside decision to renew statement of claim deliberate delay by plaintiff as the administrator of a bankrupt estate (the first proceeding). The plaintiff joined a solicitor as the seenth defendant to the first proceeding, who in turn joined a barrister, Mr Pope, as a fourth party. The plaintiff did not join Mr Pope as a defendant to the first proceeding. At the hearing the plaintiff stated that he had been reluctant to issue proceedings against Mr Pope because they had a personal relationship. Instead, the plaintiff brought fresh proceedings (the second proceeding) against Mr Pope. Thereafter, the plaintiff elected not to progress the second proceeding because he hoped that a settlement would be achieed in the first proceeding. On the last day for serice of the claim and statement of claim in the second proceeding pursuant to rule 24(1) of the Uniform Ciil Procedure Rules 1999 (UCPR), the plaintiff purportedly sered the proceedings on Mr Pope by faxing a copy to his chambers and proiding a copy to the solicitors who represented him in the first proceeding. Those solicitors did not hae instructions to accept serice. Mr Pope disputed that the claim and statement of claim had been alidly sered on him. At the request of the plaintiff, the Registrar renewed the claim pursuant to r24(2) of the UCPR. Mr Pope applied to hae that decision set aside. THE ISSUES The court considered whether the Registrar s decision to renew the claim had been appropriate, haing regard to the proisions of r24(2) of the UCPR. Pursuant to that rule, the Registrar may renew the claim if the Registrar is satisfied that reasonable efforts hae been made to sere the defendant or that there is another good reason to renew the claim. THE DECISION The court acknowledged that precedent faoured the iew that a party who deliberately delays in sering proceedings will hae difficulty in establishing a good reason to renew the claim. Howeer, the court found that although there had been aspects of deliberate delay by the plaintiff in choosing not to sere the claim in the hope that the first proceeding would settle, that delay was not compelling enough to justify allowing Mr Pope s application. The court considered, howeer, that the circumstances were close to the borderline. The court found that while some efforts had been made to sere Mr Pope, it would be difficult to describe them as reasonable, occurring, as they did, at the death and being, as they were, of the nature of informal notification of the claim, rather than conentional personal serice. Howeer, the court considered that the attempts to sere Mr Pope were another good reason to renew the claim. The court therefore refused Mr Pope s application and declined to set aside the Registrar s decision to reiew the statement of claim. Queensland District Court: 30 January 2009 Belinda Thatcher PROCEDURE 214

231 THE FACTS The plaintiff was an employee of the respondent company, which carried on business in Queensland and elsewhere. The plaintiff Johnson worked for the respondent in Vietnam from early 2004 until September 2004, during which time he suffered Laing O Rourke (BMC) workplace stress and made Pty Ltd [2009] QDC 10 a claim for compensation on WorkCoer. He remained Plaintiff injured outside of employed in Brisbane for the Australia whether PIPA respondent until 15 August and/or WCRA applied 2005, when he went to work in Indonesia for a period, but when he returned on 24 December for a Christmas break, his break was extended as a result of a diagnosis of work related anxiety and depression. The plaintiff returned to Indonesia on 16 March 2006 but came home on 11 August 2006 and has not returned to employment since that date. THE ISSUES The plaintiff sought the court s leae pursuant to s59 of the Personal Injuries Proceedings Act 2002 (Qld) (PIPA) to commence proceedings after the expiration of the limitation period in relation to a claim for damages against the respondent for psychiatric injury. The key issue was whether the claim fell within the ambit of the Workers Compensation and Rehabilitation Act 2003 (Qld) (WCRA), meaning that the claim would be excluded from the operation of PIPA by irtue of s6(2)(c) of PIPA. THE DECISION The court held that the first requirement of s6(2)(c) of PIPA was satisfied in that the plaintiff claimed he had suffered personal injury which arose out of and in the course of his employment to which the employment was a significant contributing factor. The court pointed to the fact that the plaintiff was claiming against the respondent in Queensland in respect of employment which was at least commenced within Queensland and in circumstances where the defendant could be sued because it was resident in Queensland. The second requirement to be satisfied under s6(2) (c) of PIPA was that there was an entitlement to seek damages under the WCRA for an injury regulated by chapter 5 of that Act. Section 237 of chapter 5 of the WRCA lists the persons being the only persons entitled to seek damages for an injury sustained by a worker. The court held that the plaintiff satisfied this requirement as he had not lodged an application for compensation for the injury allegedly sustained whilst he was in Indonesia and therefore fell within s237(d). This contrasted to the situation considered by the Queensland Court of Appeal in Watkin GRN International Pty Ltd [2006] QCA 382 in which the plaintiff, whilst employed by the respondent to work in the Solomon Islands applied for workers compensation and was rejected on the basis that the plaintiff did not fall within the listed categories of persons in s237 of the WCRA. In the current case, as the claim fell within s6(2)(c) of PIPA, it was excluded from the operation of PIPA and therefore the court was unable to make an order under s59 of PIPA for leae to commence proceedings after the expiration of the limitation period. Queensland District Court: 30 January 2009 Daniel McCormack PROCEDURE 215

232 Grech THE FACTS The plaintiff was a passenger in the defendant s ehicle. Sutton [2009] NSWCA 23 The ehicle collided with a wall, as a result of which the plaintiff sustained a significant injury to his left arm, which was crushed between the ehicle and the wall upon impact. Eidence Act 1936 (NSW) - The plaintiff sought damages limiting orders weight at from the defendant pursuant trial to the Motor Accident Compensation Act 1999 (NSW). There was a factual dispute as to whether the plaintiff had been holding the interior grab-handle in the ehicle immediately prior to the accident, or whether his arm was resting on the window ledge with his elbow protruding out the window. THE DECISION AT TRIAL In light of the factual dispute between the parties, the defendant s counsel sought and obtained limiting orders pursuant to section 136 of the Eidence Act 1995 (NSW), with respect to the histories gien to doctors by the plaintiff. The purpose of limiting orders is to limit the use that may be made of eidence that might be unfairly prejudicial or misleading. The defendant s counsel later sought to hae some of the limiting orders reoked, as the plaintiff denied haing gien certain histories to his treating doctors in cross-examination. The trial judge was not satisfied that the defendant ought to be allowed to use the medical eidence to counter the plaintiff s eidence, as the reliability of the histories in the medical eidence had not been properly tested (the doctors were not called to gie eidence as to the history gien to them, nor the medical significance of that history). The trial judge was not minded to exercise his discretion reoke the limiting orders. The defendant sought to tender a report and notes from a Dr Raju, the general practitioner who treated the plaintiff immediately following the incident. Howeer, neither the report nor the notes had been sered on the plaintiff, and after hearing opposing submissions from the parties, the trial judge rejected the tender of Dr Raju s file. The trial judge accepted the plaintiff s eidence that he was holding the grab-handle immediately prior to the incident, and that his arm had not been protruding from the ehicle. The trial judge further accepted that the plaintiff s arm had been thrown out of the window during the accident. The court ordered that the plaintiff be awarded $907, in damages. There was no reduction for contributory negligence. THE ISSUES ON APPEAL The defendant appealed on the following grounds: The trial judge failed to appropriately exercise his discretion to reoke the limiting orders; The trial judge erred in the exercise of his discretion not to allow the report and notes of Dr Raju to be admitted into eidence; and Against the finding that there was no contributory negligence. THE DECISION ON APPEAL The court exercised its discretion and determined not to reoke any of the limiting orders, on the grounds that the defendant s application was made late in the trial, after the conclusion of the eidence. To change the purpose to which the medical eidence could be put at that point in the trial, without calling the doctors who made the notes/ reports, would be unfair to the plaintiff. Further, no error could be demonstrated in the trial judge s exercise of discretion to reject Dr Raju s report and notes, and the court upheld the decision to reject the tender of those documents. The court noted that Dr Raju s report had not been included in the defendant s tender of medical reports, and had not be sered on the plaintiff, as required by the Uniform Ciil Procedure Rules 2005 (NSW). Furthermore, the author of the notes was not known until after judgement, and at the time of trial the defendant sought tender of those medical notes despite the fact that they had not been sered, and in circumstances where their authorship was unknown. The court considered the rejection of those notes at first instance was clearly correct. With respect to contributory negligence, the court stated that as the trial judge s decision depended upon his findings as to the credibility of the plaintiff, PROCEDURE 216

233 that decision must stand absent a glaring improbability or palpable misuse of the trial judge s adantage in haing heard all of the eidence. The defendant could not point to any incontroertible eidence to displace the trial judge s findings as to credit, and thus the appeal with respect to contributory negligence failed also. PROCEDURE In any eent, the court stated that een if the plaintiff had his arm resting on the window ledge, this did not necessarily amount to contributory negligence. The appeal was dismissed with indemnity costs awarded by consent. New South Wales Court of Appeal: 26 February 2009 Hannah Sains 217

234 Hickson THE FACTS On 12 March 2003 Mr Hickson, the appellant, was seriously injured while riding his pushbike to work when he collided with a motor ehicle drien by Mr Ala. Mr Hickson was employed by Goodman Fielder Lim ited, the respondent, at the time. Goodman Fielder Limited [2009] HCA 11 Motor ehicle accident recoery of workers compensation payments paid costs. Mr Hickson commenced proceedings against Mr Ala in New South Wales and on 6 June 2006 settled his claim for $2.8 million, plus On 7 June 2006 Goodman Fielder commenced proceedings against Mr Hickson seeking repayment of the $607, it had paid him pursuant to s151z(1)(b) of the Workers Compensation Act 1987 (NSW). Section 151Z(1)(b) proides for the repayment of workers compensation payments paid by employers in circumstances where the employee later receies an award of damages in relation to the injury the subject of their workers compensation claim. Howeer, s10(2) of the Law Reform (Miscellaneous Proisions) Act 1965 (NSW) reduces the liability of the employee to repay workers compensation in circumstances where the award of damages was reduced on account of contributory negligence. THE DECISION AT TRIAL The court held that section 10(2) of the Law Reform (Miscellaneous Proisions) Act 1965 (NSW) reduced the amount of workers compensation benefits repayable to Goodman Fielder een though the action against Mr Ala was determined without any conclusions being drawn regarding contributory negligence, as this had been a lie issue throughout the proceedings. THE DECISION ON APPEAL Goodman Fielder appealed the trial judge s decision to the New South Wales Court of Appeal and was successful in haing that decision oerturned. The Court of Appeal held that section 10(2) of the Law Reform (Miscellaneous Proisions) Act 1965 (NSW) did not reduce the amount of workers compensation repayable by Mr Hickson, een though his damages awarded were reduced on account of his contributory negligence. Mr Hickson appealed to the High Court of Australia, seeking reinstatement of the initial decision. THE DECISION OF THE HIGH COURT Goodman Fielder submitted that an employer who brings proceedings pursuant to s151z of the Workers Compensation Act 1987 (NSW) is entitled to recoer the full amount of workers compensation paid. The High Court found, howeer, that this submission oerlooked s10(2) and could not be accepted. s151z(2) of the Workers Compensation Act 1987 (NSW) requires a court to determine the amount of damages the worker could hae recoered from the employer, in arriing at a decision in relation to the reduction in the worker s damages. s10(2) of the Law Reform (Miscellaneous Proisions) Act 1965 (NSW) is not limited to cases in which a court determines the extent of the worker s contributory negligence before awarding damages against a tortfeasor. The High Court allowed Mr Hickson s appeal and set aside the orders of the Court of Appeal. High Court of Australia: 12 March 2009 Jenni Mole PROCEDURE 218

235 Collett THE FACTS The claimant/applicant, Diane Collett commenced proceedings against the 8 defendant/respondent parties pursuant to the P e r s o n a l I n j u r i e s Proceedings Act 2002 and, against her employer, pursuant to the Workers C o m p e n s a t i o n a n d Rehabilitation Act Robina Projects Australia Pty Ltd t/as Easy T Retail Centre & An (Terms of Ors [2009] QDC 53 Settlement) was sent on Whether a party is bound to behalf of all respondents to the terms of settlement deed Ms Collett s solicitors on 16 October 2008 making an offer to the claimant of $115,000 inclusie of statutory refunds and costs. Releantly, the also stated [f]rom the aforesaid settlement amount, WorkCoer Queensland agrees to waie its statutory refund to the extent of $18,500 leaing a sum of $12, to be refunded by your client from the settlement sum. It was confirmed in the that a release, discharge and indemnity was being prepared which Ms Collett would need to sign. The claimant s solicitors were asked to sign a copy of the to indicate Ms Collett s acceptance of the joint offer, which the claimant s solicitors did. The Deed of release (the Deed) was eentually signed by Ms Collett and witnessed by her solicitor, Mr Percial. Paragraph 2.4 of the Deed identified the amount to be paid by each respondent to Ms Collett altogether totalling $115,000. In particular, paragraph 2.4(8) stated that WorkCoer acknowledges that it is not entitled to the first $18,500 of the statutory benefits paid and refundable under the releant WorkCoer claim number. Paragraph 8 of the Deed confirmed that the Deed superseded any prior agreement or understanding. Refunds were paid to WorkCoer and Medicare in the amounts of $12, and $ respectiely. The respondents (with the exception of WorkCoer) forwarded cheques to Ms Collett s solicitors, together totalling $83, Ms Collett s solicitors belieed the applicant should hae receied $102,144.62, arguing that there was a shortfall of $18,500. Ms Collett made an application seeking a declaration be made that the true construction of the Terms of Settlement were that the respondents pay $115,000 to Ms Collett, the respondents refund to WorkCoer from the said sum of $115,000 the sum of $12,615.88, and the respondents pay to Ms Collett s solicitors the amount of $102, THE ISSUES The first issue to be considered was the true construction of the Terms of Settlement entered into on 16 October The second issue was whether (on the basis that the Deed did not reflect the agreement between the parties as contained in the Terms of Settlement dated 16 October 2008) an order should be made for rectification of the Deed. THE DECISION The respondents submitted that it was at all times their intention to settle the matter for $115,000, and that WorkCoer s contribution to this was to waie the first $18,500 of its charge. The applicant s solicitor (Mr Percial) and the solicitor who negotiated the initial settlement by on behalf of the respondents on 16 October 2008 (Mr Shannon) produced affidaits regarding the intention of each party regarding settlement. The judge confirmed that a settlement is not binding on the parties until the parties sign a discharge/ deed. In this respect, the Terms of Settlement contained words to the effect that a release was being prepared and would be submitted for Ms Collett s signature, the effect of this being that the Terms of Settlement would be subject to and conditional upon Ms Collett signing the subsequent settlement documentation. By reason of the clear terms of paragraph 8 of the Deed, the court formed the iew that the Deed entirely superseded the Terms of Settlement entered into on 16 October 2008, making it the operatie settlement agreement between the parties. It was therefore held that the application for making a declaration as to the true construction of the Terms of Settlement was without merit because, pursuant to paragraph 8 of the Deed, the Deed must be construed without reference to any earlier Terms of Settlement. PROCEDURE 219

236 With respect to the second issue for determination, the applicant needed to persuade the court on the balance of probabilities by conincing proof that there was an antecedent concluded agreement or at least a disclosed common intention that continued unaltered to the time of the execution of the Deed, and that the Deed did not embody the final intention of the parties. Further, it must be shown by clear and conincing proof what that common intention was, and in particular as is submitted by the applicant, that it was inconsistent with paragraphs 2.4(1) to (8) of the Deed. application was dismissed. Queensland District Court: 13 March 2009 Fiona Kamst PROCEDURE In determining this issue, the court had regard to the negotiations and subjectie intentions of the parties, including the Terms of Settlement ed on 16 October The court found that it seemed that the respondents intention was at all times to coney that WorkCoer s contribution to the settlement sum of $115,000 was the waier of $18,500 of the statutory refund to which it was entitled. The judge noted that the intention of the claimant s solicitor, Mr Percial, was different to the intention of Mr Shannon who negotiated on behalf of the defendant/respondent parties, and that this demonstrates the applicant failed to show by conincing proof that there was a shared common intention that the Deed did not embody so as to affect the operation of the Deed. The judge considered that the fact that all respondents denied the Deed as construed was contrary to their intention was entitled to be gien considerable weight. Further, if there was a mistake made in the present case, it was a unilateral one by Mr Percial on behalf of the applicant and this was not a sufficient basis for the court to make an order for rectification of the Deed. The judge considered that the parties were negotiating and that the applicant s solicitor would hae been aware that claimants are not to be compensated twice for the same injury, as would be the case if the applicant was entitled to an actual payment of $18,500 by WorkCoer as part of the settlement sum. As the applicant failed to establish the Terms of Settlement were a concluded antecedent agreement, the fundamental basis for the grant of rectification had not been established. The 220

237 THE FACTS On 25 April 1999 George Giannopoulos (the deceased) was stabbed and killed by another patron at the Knossos Nightclub. Certain Lloyds Underwriters On 26 June 2003 the plaintiffs, being the deceased s wife and mother, each filed a statement of Kathy Giannopoulos; claim naming as defendants Jim Skouloudis (Skouloudis) Certain Lloyds and Knossos Nightclub Pty Underwriters Ltd (the company). They alleged that either defendant was the occupier of the premises and that the Marlene Giannopoulos deceased s death arose due [2009] NSWCA 56 to the negligence of one Application to extend or other of them. The limitation period death of a deceased s wife s claim was defendant prejudice for damages nerous shock and compensation for her and her 2 children pursuant to the Compensation to Relaties Act The deceased s mother s claim was for damages for nerous shock. Skouloudis passed away on 5 August The company was deregistered on 20 March The company had taken out a policy of public liability insurance with the defendant. The defendant was joined to the proceedings. THE ISSUE The defendant filed a defence asserting that each of the actions was statute barred. The plaintiffs in turn filed a summons seeking an extension of the limitation period to 26 June THE DECISION AT TRIAL The trial judge granted each application for an extension. THE DECISION ON APPEAL The Court of Appeal held that the trial judge was in error in placing weight upon the fact that the defendant had been informed about the incident before the filing of the statement of claim. An accident report form signed by Skouloudis on 10 May 1999 would reasonably be understood by the defendant as not inoling the making of a claim, but merely the notification of circumstances that might possibly lead to a claim. Further, it was a notification by an insured of the possibility of a claim being made on the insured it was not a notification by an intending plaintiff of a possible claim on the insured. The Court of Appeal also held that the trial judge was mistaken in declining to find that the plaintiffs delay had caused prejudice to the defendant arising from Skouloudis death. The statement that Skoudoulis gae to police shortly following the incident did not deal with all the matters that would be releant to the plaintiffs claims. There was no occasion to take a statement from Skouloudis on the strength of the notification that he gae in The Court of Appeal held that if proceedings had been commenced within the limitation period, it is likely that a statement would hae been taken from Skouloudis prior to his death. The Court of Appeal held that the death of Skouloudis had resulted in substantial prejudice to the defendant and that was sufficient to conclude that it would not be just and reasonable to extend the limitation period. Accordingly, the appeal was upheld. New South Wales Court of Appeal: 20 March 2009 Nathan Rehbock PROCEDURE 221

238 THE FACTS WorkCoer made statutory payments in the amount $340,000 to an injured worker who contracted mesothelioma as a result of exposure to asbestos manufactured and supplied by Amaca Pty Ltd and Seltsam Pty Ltd (the respondents). WorkCoer Queensland AMACA Pty Ltd & Seltsam Pty Ltd [2009] QCA 72 WorkCoer s right of recoery and indemnity from third party under s272 of the Workers Compensation and Rehabilitation Act 2003 (WCRA) - whether proportionate liability applies The worker later died. No claim was eer brought by him or his estate against the respondents. Howeer, WorkCoer sought recoery of the full amount of the benefits it had paid to the injured worker from the respondents, pursuant to the (then) s272(7) of the WCRA. Section 272(7) proided that: If a person who has receied compensation has not recoered, or taken proceedings to recoer, damages for the injury from another person, other than the worker s employer (a) (b) the insurer is entitled to be indemnified for the amount of the compensation by the other person to the extent of that person s liability for the damages, so far as the amount of damages payable for the injury by that person extends; and to that end, the insurer is subrogated to the rights of the person for the injury. The court was required to consider the proper interpretation of s272(7) (now 272B(7)) of the WCRA. THE ISSUES The court considered 5 questions: 1. What is the appropriate date at which to assess the damages recoerable by WorkCoer (at trial, judgment or some other date); 2. Whether WorkCoer s entitlement to damages ought be reduced by operation of s66 of the Succession Act 1981; 3. Whether, on the proper construction of s272 (7) of the WCRA, the indemnity to which WorkCoer is entitled is limited to the proportion which the respondents (if liable to the worker) would be required to contribute to an assessment of damages in faour of the worker; 4. Alternatiely to 3 aboe, what is the proper construction of the expression to the extent of that person s liability of the damages, so far as the amount of damages payable for the injury by that person extends in s272(7)(a) of the WCRA; 5. Who should be liable for costs of the case stated. THE DECISION AT TRIAL The majority determined that damages ought to be assessed as at the date of trial of the proceedings to enforce the indemnity (the time of the trial in the recoery action). Section 66 of the Succession Act 1981 applied, and therefore WorkCoer s recoery is limited to that which the worker would hae been entitled to recoer at trial. WorkCoer was not entitled to recoer damages in respect of pain and suffering, curtailment of life expectancy or future economic loss. Section 272(7) of the WCRA required that the words to the extent of that person s liability for the damages, so far as the amount of damages payable for the injury by that person extends be construed so as to mean the extent of the respectie respondents liability for the whole of the damages. Accordingly, the extent of WorkCoer s right to recoer from another party is not limited to that party s proportionate liability. WorkCoer was ordered to pay 75% of the respondents costs of the case stated on the standard basis (to be agreed or assessed) in iew of the respondents relatie success in the outcome of the case stated. Queensland Court of Appeal: 27 March 2009 Hannah Sains PROCEDURE 222

239 Wolski THE FACTS The claimant claimed to hae sustained personal injuries at the Redbank Plains Taern when he was ALH Group Pty Ltd [2009[ QDC 202 Scope of respondent s duty to proide information under the Personal Injuries Proceedings Act 2002 shoulder barged by a security guard while running through the premises to confront another patron who had assaulted his friend. He alleged that the security guard was known to be aggressie and that the respondent was negligent for allowing him to work on the premises. The claimant made a request for information and documentation pursuant to s27 of the Personal Injuries Proceedings Act 2002 (PIPA). The information sought broadly related to preious incidents inoling the security guard and the taern s response to those incidents. The taern argued that the terms of s27(1)(b) of PIPA did not require it to proide the requested information. By the time of the hearing, the claimant conceded that he was not entitled to receie the documentation and had abandoned that aspect of his request. THE DECISION Section 27(1)(b) required the taern, if asked, to proide the claimant with information about the circumstances of, or the reasons for, the incident. The court emphasised that the duty to proide information was much broader than the respondent s obligation under s27(1)(a) to proide copies of documents. It applied the Supreme Court decision of RACQ-GIO Insurance Limited Ogilie [2001] QSC 36 and held that the circumstances of the incident included all eents which appertain to or are causes of the incident. Applying this reasoning, the court found that the requests for information about preious incidents inoling the security guard fell within s27(1)(b). This was on the basis that any inappropriate behaiour on the guard s part could be regarded as a reason for the incident. The court distinguished the Supreme Court s decision in Haug Jupiters Limited Trading as Conrad Treasury Brisbane [2007] QSC 068 (Haug). In Haug, the claimant sought information about all preious incidents inoling any security guard employed at the premises. The Supreme Court held that this was not a request for information about the claimant s alleged remoal from the premises with excessie force. In contrast, the claimant in this case only sought information relating to the specific security guard alleged to hae shoulder barged him. The court therefore found that information about preious incidents could constitute information about the reasons for the claimant s incident. The court also found that the request for information about the taern s response to those incidents fell within s27(1)(b). This was because any failure to appropriately deal with inappropriate behaiour on the part of the security guard would lead to the behaiour going unchecked. It could therefore be a cause of the incident. The court ordered that all of the information be proided by way of statutory declaration. Queensland District Court: 15 April 2009 Leah McStay PROCEDURE 223

240 THE FACTS This matter inoled an application by the defendants, Mooloolaba Marina Limited (MML) and Sunshine Coast Aquatic Centre Pty Ltd (SCAC), for orders that: The Beach Retreat Pty Ltd Mooloolaba Marina Ltd & Ors [2009] QSC 84 Application for fixed costs costs order against a non-party indemnity costs 1. The costs of the proceedings be fixed under Rule 687(2) of the Uniform Ciil Procedure Rules 1999 (Qld) (UCPR); 2. The costs be paid by a non-party, Robert Noble; and 3. The costs be paid on an indemnity basis. The original proceedings inoled a claim by the 2 plaintiff companies, The Beach Retreat Pty Ltd (TBR) and the Mooloolaba Yacht Club Limited (MYC), against the 2 defendant companies alleging a wrongful transfer of shares, breaches of obligations under a shareholders agreement and sublease and breach of fiduciary duty. The plaintiffs sought arious remedies including specific performance of the sublease, a declaration that the share transfer was oid and an order to retransfer the shares and reinstate MYC s nominees to the board of SCAC. The plaintiffs allegations against the defendants included serious allegations of dishonesty. When the matter came to trial on 25 March 2008, the plaintiffs informed the court that they would not call any eidence nor would they resist an order that their claims be dismissed. This approach had not been foreshadowed nor was it explained. As a result, judgment was entered for the defendants on the claim and for SCAC on its counter claim in the sum of $41,000. THE ISSUES The issues before the court related to the considerable costs incurred by the defendants in respect of the original proceedings. In particular, the court had to decide who would pay, how much and whether there would be a costs assessment. The court had regard to the purpose of rule 687, which allows the court to fix costs, and the circumstances in which an order for fixed costs will be appropriate. It also conducted a thorough reiew of the law regarding awards for indemnity costs, as well as the case law in relation to costs orders against non-parties. The court was also called upon to consider the recoerability of particular costs, including expert reports and the costs associated with the defendants change in solicitors 5 days before trial. THE DECISION The court was satisfied that an order for fixed costs was appropriate in circumstances where a joint report had been proided by expert costs assessors who agreed on most issues, and, in particular, gien that a more detailed assessment of costs was likely to cost between $50,000 and $60,000 and take 4 to 5 months. It was also noted that the plaintiffs were impecunious and the court considered it unjust to require the defendants to spend more money which was ultimately unlikely to be recoered from the plaintiffs. The plaintiffs raised no objection to the costs being fixed. Costs were awarded on an indemnity basis. The court had regard to the irresponsible action of the plaintiffs in prosecuting serious allegations, including allegations of dishonesty, then failing to support those allegations with eidence. The court also considered that the plaintiffs case appeared to hae been without merit, gien that they abandoned the case before trial without any explanation. Haing regard to the test for indemnity costs in rule 702 of the UCPR, the court allowed the costs of expert reports despite the reports haing been obtained outside the timetable set by the court. It also allowed the costs resulting from the defendants change in solicitors in circumstances where it was necessitated by the plaintiffs indication that they would call the defendants former solicitor as a witness. In relation to the fact that costs were sought against an indiidual who was not a party to the proceedings, the court emphasised that such orders will only be made in exceptional circumstances. The court reiewed prior decisions where non-party costs orders had been considered, and had regard to the judgment of Balcomb LJ in the United Kingdom case of Sympathy Group PLC Hodson (1994) QB 179 setting out arious categories of cases in which such an order had been deemed appropriate. PROCEDURE 224

241 In this matter, the court noted that both plaintiff companies were insolent, Mr Noble and his wife stood behind both plaintiff companies and financed the litigation and Mr Noble directly managed the plaintiffs conduct of litigation. Mr Noble stood to benefit if the plaintiffs were successful and was the real party in the circumstances. The court also considered that if Mr Noble was not liable for the defendants costs they would be irrecoerable, and this would be a gross injustice in the circumstances. Mr Noble had been instrumental in commencing the litigation and took it upon himself to exert pressure on the defendants. He had caused the plaintiffs to make aggressie allegations against the defendants, including dishonesty, but declined to put any eidence before the court. PROCEDURE The court commented that an order for the payment of costs by a non-party will be een more exceptional where the applicant has a cause of action against the non-party and could hae joined it as a party to the original proceedings. Een if the applicant can gie good reason for not joining the non-party, he should warn the non-party at the earliest opportunity of the possibility that he may seek to apply for costs to gie the non-party the opportunity to apply to be joined as a party. The court highlighted that it is not generally the case that a non-party such as a company director is susceptible to such an order simply because he or she has acted with promotion of the company s interests before and during the litigation. Something more is required. Haing regard to the aboe, the court ordered that the costs of the defendants in defending the proceedings, and SCAC s costs in respect of the counter-claim, be paid on an indemnity basis by Mr Noble. The total of the costs ordered against Mr Noble were fixed at $756,500. Queensland Supreme Court: 16 April 2009 Samantha Daey 225

242 Hare THE FACTS Stella Hare (the respondent) by her litigation guardian sered a Personal Injuries Proceedings Mt Isa Mines Ltd & Ors [2009] QCA 91 Remedying non-compliance of notice of claim under Personal Injuries Proceedings Act 2002 Act 2002 (PIPA) notice of claim (NOC) upon the appellants. She allegedly sustained personal injuries due to an incident (as described in question 9 of the NOC) from 2002 until present when she was exposed at 3 locations to certain toxins, including lead. The NOC (at question 18) stated that the appellants caused the incident because they: oer at least the past 20 years, wilfully and negligently caused the contamination of large parts of Mount Isa brought about by the discharge of tailings remoal of contaminated soil ehicles leaing the lease without being washed oerburden laden with lead and other toxic elements being used to stabilise properties The appellants maintained that the respondent s NOC was non-compliant in that it failed to: (a) Properly explain how the incident happened (required by s3(3)(b) of the Personal Injuries Proceedings Regulation 2002 (PIPR); THE DECISION ON APPEAL The appeal was allowed with costs. The Court of Appeal agreed that the trial judge failed to proide adequate reasoning supporting the declaration. In setting aside the trial judge s decision, the Court of Appeal accepted that the NOC did not comply with s3(3)(b) of the PIPR as it did not gie details of how the toxins were absorbed by the respondent at each location. In addition, there was no described link between the alleged contamination and the respondent s lead absorption as required by s3(3) (h) of the PIPR. Taking an objectie iew, the Court of Appeal also agreed that the respondent s answer to question 24 was not correct. The Court of Appeal dismissed the respondent s contention that the non-compliance had been remedied by the serice of further material. The Court of Appeal also refused to make an order pursuant to s18(1)(c)(ii) of PIPA allowing the respondent to proceed despite the non-compliance because there was no suggestion the non-compliance could not be remedied. Queensland Court of Appeal: 17 April 2009 Megan Daniel PROCEDURE (b) (c) Identify a connection between the appellants conduct listed at question 18 and the incident description at question 9 (required by s3(3)(h) of the PIPR); and List any prior medical conditions in question 24, as required by s3(6)(d) of the PIPR. The appellants argued the respondent s premature birth was releant and the answer to question 24 should hae been answered in the affirmatie. The respondent sought a declaration that the NOC was compliant with PIPA. THE DECISION AT TRIAL The trial judge declared the NOC compliant as it proided sufficient information and held that the alleged deficiencies were not compliance issues. 226

243 THE FACTS The respondent was employed by the appellant as an orchard hand. The respondent s duties included JA & BM Bowden & Sons Pty Ltd Doughty [2009] NSWCA 82 Tractor rolloer whether Motor Accidents Compensation Act 1999 (NSW)/Workers Compensation Act 1987 (Cth) applies driing a tractor on and between 2 properties on which the appellant had its orchards. The tractor was equipped with a rollbar that, when raised, would offer protection for the drier if the t r a c t o r r o l l e d. T h e respondent was instructed that the rollbar was to be kept lowered at all times when driing on the property to preent fruit being knocked off the trees. The respondent was injured when driing the tractor between blocks on one of the appellant s properties. The tractor rolled oer, partly on the respondent, when moing up a steep slope in the paddock. The rollbar was not raised, and there was no suggestion that the respondent was at fault in handling the tractor. The respondent subsequently sued the appellant for compensation for injuries suffered in the incident. THE DECISION AT TRIAL The trial judge found for the respondent at first instance, and assessed damages under Chapter 5 of the Motor Accidents Compensation Act 1999 (NSW) (MAC Act) at $535,198. The appellant subsequently appealed the trial judge s finding that the MAC Act applied to the respondent s injury, arguing instead that the Workers Compensation Act 1987 (Cth) applied. THE ISSUES The central issue in the appeal was whether the respondent s injury was caused by the fault of the appellant in the use or operation of the tractor, as was required by s122 and the definition of injury in the MAC Act. THE DECISION ON APPEAL Haing considered the proisions of the MAC Act, and releant authorities, the Court of Appeal ultimately allowed the appeal. The Court of Appeal stated that the essential issue was characterisation of the fault of the tractor owner (the appellant), and to determine whether that fault was in the use or operation of the ehicle as required by the MAC Act or was instead in the system of work put in place by the employer who was also the ehicle s owner. In the circumstances, the appellant s fault was not one properly characterised as in the use or operation of the ehicle. The appellant s fault was instead properly characterised as implementing an unsafe system of work. The Court of Appeal stated that the actual use or operation of the tractor at the time and place of the respondent s injury was driing. It was being drien with the rollbar lowered, but that was not an element in the way it was being drien (eg its speed, on a slope turning uphill). Nor was it anything to do with the rollbar lowered it was not like defectie brakes causing the tractor to run out of control and roll oer. The instruction to drie within the properties with the rollbar lowered was gien when the respondent began his employment with the appellant, and by the appellant as his employer. That was the essential fault of the appellant, a fault in implementing a system of work which in that respect put in place for the commercial consideration that fruit should not be knocked from the trees. The fault continued as the system of work was continued, but that did not affect its nature. In characterisation for the purposes of in the use or operation of the ehicle, the fault was distant from the occasion of driing the tractor, and was a breach of the appellant s duty of care owed to the respondent as its employee through negligently instructing how he was to carry out his duties. It followed the MAC Act did not apply. The Court of Appeal instead assessed damages under the Workers Compensation Act 1987 (Cth), and accordingly reduced the respondent s award of damages to $278, 628. New South Wales Court of Appeal: 20 April 2009 Daid Couper PROCEDURE 227

244 Spring THE FACTS This matter inoled an application under the Uniform Ciil Procedure Rules 2005 (NSW) seeking an order that an offer made by the defendant in the principal proceedings be permitted to be withdrawn pursuant to rule Sydney South West Area Health Serice [2009] NSWCA 420 Defendant s offer of compromise accepted by the plaintiff whether the offer can be withdrawn based on changes in law materially altering the defendant s risk The plaintiff s late husband, Mr Spring passed away after undergoing emergency surgery for a pericardial cyst. The scan which identified the presence of the cyst was taken on 2 December 2004, howeer, it was oerlooked by the hospital and the scan was not actually reiewed until 17 December 2004 by Mr Spring s general practitioner. The crucial issue in the principal proceedings related to causation and whether Mr Spring would hae died from the intensie treatment he would hae receied if the cyst had been identified earlier. This in turn led to the issue of whether the plaintiff would receie damages for loss of chance representing the increased risk of the delay in surgery. Authority for the proposition that damages for loss of chance in a medical negligence case are aailable was Rufo Hosking (2004) NSWLR 678. The defendant made the offer of compromise to the plaintiff on 9 April 2009 which was coincidently the same day as the judgment in Gett Tabet [2009] NSWCA 7 was handed down. The Court of Appeal held in Gett that Rufo was wrongly decided as a matter of important legal principle and they declined to follow it. The defendant became aware of the decision in Gett on 1 May The defendant told the plaintiff that it had applied for leae to withdraw the offer of compromise. The plaintiff then accepted the offer of compromise on 4 May THE ISSUE Whether an order permitting withdrawal of the offer should be made. THE DECISION The defendant s offer of compromise (which the plaintiff accepted) was for an amount significantly less then the best case assessment of damages. It was accepted by the court that the small offer from the defendant was made on the basis that the defendant considered they had a ery strong case and that at best (based on the decision of Rufo), the plaintiff would receie damages for loss of chance. It was also accepted that the plaintiff accepted the offer on the basis that she was of the iew that she would get no more than the loss of chance if the matter were to proceed to trial. The court agreed that the decision in Gett reersed the law as expressed in Rufo. They also formed the iew that the question of the loss of chance was the major risk faced by the defendant and that following the decision in Gett the defendant s risk had been materially altered. As a result, the court allowed the order permitting the defendant s offer of compromise be withdrawn. New South Wales Supreme Court: 18 May 2009 Joanna Atherinos PROCEDURE 228

245 Luck THE FACTS The plaintiff made a claim upon the defendant pursuant to the Personal Injuries Proceedings Act 2002 (PIPA). The defendant s solicitor considered it likely that the matter would be settled at the compulsory conference, Lusty EMS Pty Ltd so decided not to arrange a [2008] QSC 146 check medical examination. Obtaining medical opinion in Prior to the compulsory litigated proceedings conference he signed a notwithstanding execution of certificate of readiness certificate of readiness pursuant to s37 of PIPA. signed under the PIPA The matter did not settle. After litigation commenced, the defendant s solicitor sought to hae the plaintiff examined. The plaintiff would not consent. The defendant made an application to the court for orders requiring the medical examination of the plaintiff by a specialist to be chosen from a panel of 3 nominated by the defendant. The plaintiff resisted the application contending that the court has no power to make an order requiring the plaintiff to be examined by a medical practitioner after a certificate of readiness had been signed. THE ISSUES The plaintiff resisted the application on the basis that the obligation to submit to an examination under s25 of PIPA had ceased because the defendant s solicitors had signed a certificate of readiness. The plaintiff raised a similar objection in regards to rule 429 of the Uniform Ciil Procedure Rules 1999 (UCPR). The plaintiff s contention was that s25 of PIPA and rule 429 of the UCPR were to be read restrictiely, such that the sections did not apply where a respondent has signed a certificate of readiness. The plaintiff also submitted that prejudice would be suffered if examination by a medical practitioner was required, as the plaintiff had already incurred the costs of litigation which may hae been aoided if the examination had been undertaken prior to the compulsory conference. THE DECISION The court considered that the restrictie interpretation constraining the court s jurisdiction under the UCPR and PIPA argued by the plaintiff, would perpetuate injustices in some cases. This is an outcome parliament would hae been unlikely to hae intended. The court noted that the interpretation argued by the plaintiff would hae the effect of ensuring that decisions made by parties about offers of settlement were fully informed, and would reduce a risk of prejudice by rejecting an offer that subsequently proed to be good after further eidence was obtained. Howeer, the court considered the prejudice inoled outweighed the benefits of such an interpretation. The court was of the iew that there could arise situations where there was an innocent but mistaken certification of readiness for trial. Despite all reasonable diligence, it might only emerge afterwards that the certificate of readiness was inaccurate. The court dismissed the plaintiff s submission in regards to prejudice, stating that the issue had been addressed by an undertaking relating to costs and ordered the plaintiff undergo a further medical examination. Queensland Supreme Court: 7 July 2008 Daniel McCormack PROCEDURE 229

246 Lee THE FACTS The plaintiff, Adrian Francis Lee, was injured while holidaying in Queensland on 19 Noember When isiting Dreamworld Theme Park, operated by the defendant, Omni Leisure Operations Pty Ltd ( Omni ), Omni Leisure Operations Pty Ltd [2008] VSC 272 Proceedings not commenced in limitation period application for extension of time inordinate delay due to conduct of lawyer the plaintiff took a ride on the mine ride. He was standing in a stationary rail car when it was struck by another rail car. The plaintiff suffered serious spinal injuries as a result. The plaintiff attended the first aid centre at Omni and remained in contact with them afterwards. Omni arranged for him to see an orthopaedic surgeon in April 2002 and made what were called liability payments to the plaintiff for salary and medical expenses until August The plaintiff returned to Victoria and on 24 June 2002 retained lawyers, Beck Sheahan Quinn & Kirkham. The file was handled by an employee of the firm, Ms Henby D Wynn from 22 Noember 2002 until 30 June After 30 June 2005 she managed the file as a solicitor acting as a principal under the firm name Wynn Legal. A notice of claim was gien to Omni on 13 or 20 December 2002 pursuant to the Personal Injuries Proceedings Act 2002 (PIPA) and was accepted as a compliant notice. On 18 May 2004 Omni responded to the claim by not admitting liability and made an offer of $nil on 22 July Little progress of the claim was made in the following 2 years, after which time the limitation period expired. No conference was held and no application was made for an extension of time. The plaintiff was neer adised by his solicitors that the time to commence proceedings would expire and during this time, his solicitors failed to progress the claim, despite his insistence. The plaintiff did not commence proceedings until 27 June 2007, nearly 6 years after the cause of action accrued. THE ISSUES The claim was goerned by the laws of Queensland, including the Limitation of Actions Act 1974 ( the Act ). Under s11 of the Act, the plaintiff s cause of action expired after 3 years, being 19 Noember Under s31 of the Act there is a limited power to extend the limitation period. The plaintiff s solicitors neer pursued an application to extend the limitation period The plaintiff s matter was subject to PIPA. Under s59 of PIPA, a court is permitted to make orders enabling a plaintiff to commence proceedings out of time where the proceeding is based on a claim in respect of which the notice of claim has been gien. Howeer s59(2) states proceedings may only be started after the end of the limitation period if it is started within 6 months after a complying part 1 notice of claim is gien s59(2)(a) or a longer period allowed by the court s59(2)(b). The plaintiff sought an extension of time under s59 (2) (b) of PIPA. THE DECISION It was found, based on preious judicial consideration of s59 of PIPA, that s59(2)(b) was introduced to deal with cases where the claimant failed to commence proceedings within the limitation period because of the requirements that the claim pass through the arious processes under PIPA. Howeer, the power conferred by s59(2)(b) was not limited to such situations and conferred a general power to the court to extend time. The power was to be exercised discretionally, haing regard to the objects of PIPA and the Act. Factors which the court must pay regard to included length of delay, the explanation for delay, whether there was prejudice to the respondent and whether the exercise of power was consistent with the obligation of the court to do justice between the parties. Omni argued that the plaintiff should hae terminated his retainer with his solicitors and retained a firm ready and willing to act. Eidence showed that the plaintiff has been persistent with enquires about the progress of the claim and insisting that it should be expedited, howeer his solicitors failed to act. The court held this was not a realistic expectation in any eent gien the plaintiff had no experience with litigation. The court found that the defendants had not suffered PROCEDURE Limitations of Actions Act 230

247 any prejudice and it was in the interest of justice to grant the extension. Victoria Supreme Court: 16 July 2008 Amanda Cann PROCEDURE Limitations of Actions Act 231

248 THE FACTS Luke Kambarbakis (the plaintiff) was injured on 12 December 2003 whilst working as a self-employed plasterer. He fell approximately 2 storeys from the respondent s Kambarakis G & L Scaffold Contracting Pty Ltd [2008] QCA 262 Extension of limitation period knowledge of material facts whether medical adice should hae been sought scaffolding when a portion of it gae way. He injured his neck, lower back and ribs in the incident. He sporadically sought medical adice in regards to his injuries between 2003 and In 2007, the plaintiff discussed his ongoing problems with his girlfriend. She informed him that she thought there was a time limit when making a claim for personal injuries. He saw his general practitioner soon after to discuss the possibility of a personal injuries claim. Tests done as a result of this isit reealed that the plaintiff had fractures consistent with the injuries he had receied. After receiing this information, the plaintiff contacted his solicitors on 21 May 2007 to pursue a claim due to his worsening symptoms and loss to his business. A notice pursuant to the Personal Injuries Proceeding Act 2002 on the respondent. Proceedings were subsequently commenced outside the 3 year time limit pursuant to s11 of the Limitation of Actions Act The respondent conceded at trial that there was prima facie eidence to establish the plaintiff s right of action in negligence (apart from the defence founded on the expiration of the period of limitation). THE ISSUES The plaintiff sought an order under s31(2) of the Limitation of Actions Act 1974 extending the limitation period. In order to obtain such an extension, the plaintiff had to satisfy the court that: a material fact of a decisie character relating to [his] right of action was not within [his] means of knowledge until a date after the commencement of the year last preceding the expiration of the period of limitation THE DECISION AT TRIAL The trial judge noted that, unlike the plaintiff in Byers Capricorn Coal Management Pty Ltd [1992] Qd R 306 who gae eidence relying on medical opinion that his condition was a mere muscle strain which would improe with time, the plaintiff had failed to disclose the content of his medical adice up until May The trial judge also determined that unlike the plaintiff in Hordyk Carruthers Contracting (unreported, Muir J, Queensland, SC No of 2006, 16 January 2007), the plaintiff clearly attributed his continuing symptoms to the incident prior to the expiration of the limitation period. Lastly, the trial judge determined that the plaintiff suffered from his symptoms on a continual basis (unlike the plaintiff in Healy Femdale Pty Ltd [1993] QCA 210). The trial judge found that the plaintiff was aware that as a consequence of his injuries, his capacity to work had been reduced, and as such, the impact of his symptoms had raised the prospect of future economic loss, prior to the limitation period expiring. The trial judge concluded that a reasonable person haing knowledge of the facts known to the plaintiff, would hae taken appropriate adice on those facts prior to 18 May 2007 (the date upon which he sought further tests for his condition). THE ISSUES ON APPEAL The issue on appeal was whether, a reasonable person knowing the facts known to the plaintiff about his symptoms, their cause and effect on his capacity for work, would hae taken appropriate medical adice on those facts before 18 May THE DECISION ON APPEAL The Court of Appeal upheld the trial judge s decision and dismissed the appeal. The Court of Appeal considered that the plaintiff had not taken all reasonable steps, within the limitation period, to find out a fact he could hae discoered (that the injury would adersely effect his capacity to remain as a plasterer), and such a conclusion was open to the trial judge based on the eidence presented at trial. The dissenting judge was satisfied that the plaintiff had shown that a material fact of a decisie character PROCEDURE Limitations of Actions Act 232

249 relating to his right of action against the respondent was not within his means of knowledge until 18 May Queensland Court of Appeal: 5 September 2008 Daniel McCormack PROCEDURE Limitations of Actions Act 233

250 THE FACTS The plaintiff, Ms Leonard, suffered personal injuries in an accident that occurred on an 18m catamaran known as Diersity (the essel) while it was moored in Queensland waters on 31 December Windsurf Holdings Pty Ltd Leonard: Carlson; Wyill Leonard [2009] NSWCA 6 Limitation of Actions choice between jurisdictions prejudice December The injuries occurred when the plaintiff fell down an internal staircase. Ms Leonard alleged that her injuries were caused by the lack of a handrail and poor lighting in the icinity of the staircase. The plaintiff initially commenced proceedings against the owner of the essel, Mr Eckersley and his company Gaincrew Pty Ltd (the defendants) on 17 Windsurf, Mr Wyill and Mr Carlson were the designer/builder, marine sureyor and marine engineer of the essel respectiely. On 17 May 2005, the defendants filed a cross-claim against Windsurf and Mr Wyill, claiming that the design of staircase did not comply with releant standards. On 4 September 2005, the plaintiff filed an application seeking to join Windsurf and Mr Wyill as defendants to the proceedings. The application was resisted by Windsurf on the basis that it was out of time and the court declined to make the orders sought. Howeer, the court stood the matter oer allowing the plaintiff to file an application to extend the limitation period. On 9 Noember 2005, the plaintiff filed an amended application seeking leae to join Windsurf and Mr Wyill as defendants and leae to proceed pursuant to the Limitation of Actions Act (NSW). On 22 June 2006, the plaintiff filed yet another application seeking leae to join Mr Carlson as a defendant to the proceedings. On 27 October 2006, the plaintiff filed a further application to join Windsurf, Mr Wyill and Mr Carlson as defendants in the proceedings and sought leae to proceed under the Limitation of Actions Act (NSW) or other releant Queensland Statute. On 22 February 2007, the plaintiff filed a second amended statement of claim claiming for damages. When the applications were made Mr Wyill and Mr Carlson did not hae any insurance coer that would respond to the proceedings because both were retired and insurance coer they preiously had in place (including runoff coer) had expired. Had the proceedings been instituted against Mr Wyill and Mr Carlson earlier, their insurance may hae responded. THE ISSUES At first instance, the trial judge considered: (a) (b) the applicable limitations law; whether leae to proceed should be granted under the applicable limitations law. THE DECISION AT TRIAL The applicable law The trial judge obsered that it was common ground amongst the parties that the applicable legislation was the Limitation of Actions Act (Qld). There was High Court authority on the issue in John Pfeiffer Pty Ltd Rogerson [2000] HCA 36 that where an alleged tort occurs in one forum but is litigated in another, the applicable law is that of the forum in which the tort occurred. Leae to proceed The trial judge held that, according to the High Court decision in Queensland Stephenson [2006] HCA 20, s31 of the Limitation of Actions Act (Qld) enables a court to grant an extension after proceedings hae been filed. Howeer, it is limited to a period ending one year after the date that a material fact of a decisie character comes within the means of knowledge of the plaintiff. The trial judge found that the plaintiff became aware of Windsurf and Mr Wyills inolement (a material fact of a decisie character) when the defendants filed their cross claim in May 2005, and that the plaintiff had filed the application to join them in Noember 2005, which was within one year. The trial judge further found that the plaintiff became aware of Mr Carlson s inolement when her solicitor obtained a compliance certificate PROCEDURE Limitations of Actions Act 234

251 issued by him in June The application to join him was filed on 27 October 2006, which was within one year. The trial judge therefore granted an extension of the limitation period and leae to the plaintiff to commence proceedings. THE ISSUES ON APPEAL The decision granting the plaintiff an extension of the limitation period to issue proceedings was appealed. THE DECISION ON APPEAL The applicable law The Court of Appeal confirmed that the applicable law was the Limitation of Actions Act (Qld). Leae to proceed The Court of Appeal considered at length the principles regarding prejudice. In relation to Mr Carlson, the Court of Appeal noted that his insurance expired in May 2003, some 17 months after the expiration of the limitation period. Mr Carlson was also able to demonstrate that, despite his best efforts, he had been unable to renew his policy after May 2003 due to a hard insurance market. The Court of Appeal held that it would be seriously prejudicial to allow the plaintiff to bring a major damages claim against him. In relation to Mr Wyill, the Court of Appeal noted that if the plaintiff had made the claim against him at any time prior to 15 January 2004, he would hae been coered by insurance. The Court of Appeal held that it would be seriously prejudicial to Mr Wyill to allow the plaintiff to proceed against him. The Court of Appeal held that the fact that Mr Wyill had preiously been joined in the proceedings as a third party did not alter this conclusion. This was because Mr Wyill s role in that litigation as third party would be lesser and in any eent, he pleaded what appeared to be a plausible limitations defence in that action. In the circumstances, to allow the plaintiff to proceed against him would expose him to a liability that he otherwise did not hae. Windsurf did not allege any prejudice. Howeer, Windsurf argued that the plaintiff had not brought an action for damages within 1 year of discoering a material fact of a decisie character which was required for the limitation period to be extended by the court. The Court of Appeal held that bringing the application to join Windsurf on 5 September 2005 did not constitute an action because, an action is brought when the writ is issued or more specifically, when it is sealed which in this case occurred outside one year of discoery of the material fact. New South Wales Court of Appeal: 30 January 2009 Brooke Jacobs PROCEDURE Limitations of Actions Act 235

252 Walters THE FACTS On 29 March 2001, the applicant was on her way to work when she slipped and fell on a raised section of concrete in the forecourt of the respondent s serice station. She sustained personal injuries to her right hand, which were yet to resole as at the date of [2009] NSWCA 10 trial. Cross Country Fuels Pty Ltd [2009] NSWCA 10 Leae to extend limitation T h e a p p l ic a n t t o ok period denied because of photographs of the concrete prejudice soon after the incident. Mr Fuller was identified as the only independent witness. He proided a statement indicating that the applicant was in a hurry when she fell oer flat cement and he could see nothing that would hae caused her to trip. The statement included a diagram demonstrating roughly where the applicant fell. The applicant returned to the serice station later on the date of the incident and spoke to employees, Ms Campbell and Ms McGrath about the incident. Ms Campbell had not witnessed the incident, but had seen the applicant on the ground after it had occurred. The applicant consulted solicitors on 6 April 2001, who wrote to the serice station that day about the incident. The serice station failed to respond to that letter and the applicant s solicitors failed to follow up a response. The applicant receied workers compensation benefits in respect of her injuries and that insurer wrote to the applicant s solicitors in March and May 2003 indicating its intention to pursue a recoery claim against the serice station. In May 2003, the applicant s solicitors allegedly adised the insurer that the applicant had decided not to pursue the claim against the serice station. The applicant s limitation period expired on 29 March She consulted new solicitors in July 2006, who wrote a further letter of demand to the serice station, which by that time, had ceased to operate. The applicant filed a statement of claim against the respondent on 6 February On 23 April 2007, the applicant filed a summons seeking to hae her limitation period extended to 7 February THE DECISION AT TRIAL The trial judge refused to extend the limitation period under s60c of the Limitation Act 1969 finding that the respondent was significantly prejudiced by the applicant s delay. The trial judge said the finding was based on presumptie prejudice that occurs in the case of extensie delay as well as actual prejudice because of the respondent s inability to locate Mr Fuller and the agueness of Ms McGrath s memory. THE DECISION ON APPEAL The application for leae to appeal was dismissed with costs. The Court of Appeal agreed that the respondent had taken reasonable steps to locate Mr Fuller, and found that the applicant had not discharged her onus demonstrating that the taking of further steps would hae located him. The Court of Appeal found that eidence identifying where the applicant fell would be a central issue at any trial. The Court of Appeal said that the trial judge would be depried of the opportunity to consider the credibility of the applicant and Mr Fuller, if Mr Fuller s statement was tendered as eidence. In relation to the applicant s former solicitors letter in May 2003, the Court of Appeal found that the trial judge had erred in finding that the applicant had written to the respondent saying that a claim would not be pursued because the correspondence was not actually sent to the respondent. In any eent, the Court of Appeal held that the error had no effect on the correctness of the trial judge s decision not to extend the limitation period. New South Wales Court of Appeal: 2 February 2009 Megan Daniel PROCEDURE Limitations of Actions Act 236

253 Gillespie THE FACTS The applicant, Anthony Gillespie, sought an order under s31(2) of the Limitation of Actions Act 1974 Swift Australia Pty Ltd [2009] QSC 010 What was a material fact of a decisie character extent of injury (the Act) that the limitation period for a claim for damages in respect of personal injuries sustained in 12 July 2001 be extended. The injury was sustained whilst he was employed as a slaughterman at the respondent s meatworks. THE ISSUES The applicant needed to show that a material fact of a decisie character relating to the right of action was not within his means of knowledge before 11 Noember 2007 (the releant date for the Act in this case) in order for the court to exercise its discretion under s31 of the Act. THE DECISION Inestigation following the initial injury in July 2001 suggested that the applicant had sustained an aggraation to a pre-existing knee condition. The applicant had undergone arthroscopic surgery in The applicant was certified fit to return to work about fie weeks post surgery and Dr Morgan adised that no further treatment was required. The applicant then resumed his pre-accident duties and remained free of any significant symptoms. He did attend the first-aid station nurse at work complaining of knee pain 20 or so times between 2001 and Howeer, these complaints were quite minor. In early 2008 he suffered a flare up of his knee pain which did not subside as prior instances had. It was at this point only that he sought further medical and legal adice. Despite the ongoing symptoms, the court thought that the applicant did not hae knowledge of a material fact of a decisie character prior to the releant date. The court considered that the applicant had suffered infrequent, transient pain with no aderse effect upon performance of relatiely demanding, physical work which was relieed by non-prescription medication. His failure to consult a medical practitioner until after Noember 2007 was not an unreasonable response. An extension of time was granted. Queensland Supreme Court: 18 February 2009 Sharon Templeton PROCEDURE Limitations of Actions Act 237

254 Jackson THE FACTS In December 2007, the self-represented plaintiff issued proceedings against the first defendant, Redcliffe City Council & Anor [2009] QCA 38 When time commences in causes of action that relate to recurring damage Redcliffe City Council, and the second defendant, Gwenda Lancefield, in relation to damage allegedly sustained to her property by stormwater run off. The claim was based in alleged nuisance, negligence and breach of statutory duty. The plaintiff filed an amended statement of claim in May On 11 July 2008, the plaintiff filed an application for summary judgment. On 14 July 2008, the first defendant filed an application seeking that the statement of claim be struck out on the basis that it disclosed no reasonable cause of action and also seeking summary judgment. The second defendant filed a similar application on 4 August THE DECISION AT TRIAL The trial judge gae judgment to the defendants on the basis that the claim had no prospect of success because it was time barred. In assessing whether the plaintiff s claims were time-barred, the trial judge considered when the plaintiff s property first sustained damage, and when she first became aware of the cause of the damage. The trial judge concluded that the damage was sustained by June or July 1999 at the latest, and that the plaintiff had known as early as 1994 that her property was sustaining damage caused by storm water drainage from adjoining properties. In these circumstances, the proceedings were commenced after the 6 year limitation period had lapsed. The trial judge also found that there was no discernible prospect that the plaintiff would succeed in the action. The trial judge ordered that the amended statement of claim be struck out both on the basis that it was time barred and in light of its serious deficiencies. Summary judgment was awarded to the defendants. THE ISSUES ON APPEAL The plaintiff appealed against the trial judge s decision on a number of grounds. Most significantly, the plaintiff argued that the damage sustained was recurring in nature, so that fresh causes of action had arisen since 1999 that were not time barred when the plaintiff issued proceedings in December THE DECISION ON APPEAL The Court of Appeal found that in circumstances where damage occurred to the plaintiff s property eery time it rained, a new cause of action arose each time there was fresh damage. Therefore, although the plaintiff was time barred from recoering damages in relation to losses sustained prior to December 2001 (6 years prior to the issue of proceedings), she was entitled to claim for causes of action arising after this time. The Court of Appeal found that although the trial judge was correct to strike out the amended statement of claim in light of its manifest deficiencies, it was inappropriate to award summary judgment to the defendants and the plaintiff should be gien an opportunity to replead, desirably with assistance from a solicitor. The Court of Appeal allowed the appeal and set aside the orders of the trial judge. The Court of Appeal ordered that the amended statement of claim be struck out, and granted leae to the plaintiff to file and sere a further amended statement of claim within 45 days. Queensland Court of Appeal: 27 February 2009 Belinda Thatcher PROCEDURE Limitations of Actions Act 238

255 THE FACTS The first plaintiff was injured in July 2001 when during the course of performing carpet dyeing at the first and second defendants (the defendants) property, he fell from the first floor balcony of the premises when the [2009] railing gae way. Palmer & Anor Finnigan & Ors [2009] QSC 42 In Noember 2002 the first Application to extend limitation period plaintiff plaintiff sered a notice of claim under the Personal unsuccessful in joining third Injuries Proceedings Act party as defendant 2002 (Qld) (PIPA) on the defendants who were the registered proprietors of the property, for failing to properly maintain and inspect the railing to ensure that it was safe. In July 2004 the second plaintiff, the first plaintiff s wife, sered a notice of claim on the defendants pursuant to PIPA. Later in July 2004 the plaintiffs obtained leae to commence proceedings against the defendants pursuant to s43 of PIPA prior to the expiration of the limitation period. In Noember 2004 the defendants solicitors adised the plaintiffs solicitors that they were joining the current 3 third parties as contributors. This decision was based on reports from Wyatt Gallagher Bassett that identified building defects in the balcony railing, which were proided to the plaintiffs solicitors. The defendants sought to join the owner of the property at the time the railing was installed, the builder who installed the railing, and the local authority which inspected the railing. In August 2008 (after the PIPA compulsory conference had been held and proceedings had been on foot for sometime), the second third party obtained a report from Dr Justin Ludke, an engineer, who again found that there were building defects in the balcony railing. The report was proided to the plaintiffs. Following receipt of Dr Ludke s report, the plaintiffs brought an application seeking to join the first, second and third parties as defendants to the proceedings. THE DECISION The plaintiffs application was made pursuant to Rule 69 of the UCPR. This Rule proides that a court may at any stage of the proceedings order that a person, whose presence before the court would be desirable, just and conenient to enable the court to adjudicate effectiely and completely in all matters and disputes connected with the proceeding, be joined as a party. The court held that Rule 69 was not an appropriate ehicle for granting the relief sought by the plaintiffs. The Rule is intended to be used where, in error, the action is wrongly constituted. The plaintiffs had made a deliberate decision to sue the present defendants and the joining of additional defendants was not releant to that relief. The plaintiffs had become aware of the problems with the design of the railings (for which the third parties were allegedly liable) within a few months of the expiration of the limitation period. The court held that had the plaintiffs made an application under s31 of the Limitation of Actions Act 1974 (Qld) ( LAA ) at that time to extend the limitation period on the basis of new facts they would probably hae been successful. The expiration of the limitation period was 4 years prior to the present application. The court found it was then too late to simply extend the limitation period by an application under s31 of the LAA due to the delay. The court also held that 20 years (the time that had elapsed since the railing was installed, which installation formed the basis of the allegations against the third parties) was too long a period after which to sue the third parties. Further, the prejudice to those parties was not negated by the fact that they were third parties already, as there was a real chance that the plaintiffs case may fail against the defendants. The application was dismissed and the plaintiffs were ordered to pay the third parties costs. Queensland Supreme Court: 6 March 2009 Amanda Cann PROCEDURE Limitations of Actions Act 239

256 THE FACTS This matter inoled an application seeking orders to include a party and add a new cause of action after the limitation period had expired. Orders were also sought to transfer the proceedings to the Supreme Court. McLaughlin Electrolux Home Products Pty Ltd [2009] QDC 120 New cause of action after expiration of limitation period transfer of proceedings On 1 December 2003 the plaintiff s (Mr McLaughlin) house caught fire and was extensiely damaged. He commenced proceedings against the defendant the manufacturer and supplier of a Hooer clothes dryer which Mr McLaughlin claimed was defectie. The limitation period haing expired, Mr McLaughlin applied to hae his wife joined as a plaintiff and to increase the quantum of his claim to an amount beyond the District Court s jurisdiction. Mr McLaughlin also sought to hae the matter transferred to the Supreme Court. Some of the furniture and personal items damaged in the fire included some items Mrs McLaughlin purchased with her husband and some she owned outright. Mr McLaughlin argued that his wife had to be joined so he could maintain his claim for damage to jointly owned property. The effect of amending the claim and statement of claim on that basis meant that the proposed amendments would include a new cause of action for the further claim for damage to property owned by Mrs McLaughlin. THE ISSUES The issues that the court needed to consider included whether Mrs McLaughlin should be joined as plaintiff, whether leae should be granted to amend the claim and statement of claim to add a new cause of action by Mrs McLaughlin alone and whether the proceedings should be transferred to the Supreme Court. THE DECISION The court ruled that Mr McLaughlin could join his wife pursuant to rule 69 of the UCPR despite the limitation period haing expired. The court reached this decision based on that fact that Mr McLaughlin could not maintain certain aspects of his claim unless Mrs McLaughlin was joined and that his claim had been commenced prior to the expiration of the limitation period. The court considered separately, howeer, whether Mr McLaughlin should be granted leae pursuant to rule 376(4) to amend the claim and statement of claim to add a new cause of action in relation to property damage suffered to property owned only by Mrs McLaughlin. That rule allows the court to amend a claim to add a new cause of action only if it considers it appropriate to do so and if the new cause of action arises out of the same facts or substantially the same facts as a claim already made within the limitation period. The court found that the new cause of action arose out of the same facts, or substantially the same facts (i.e the property was damaged in the same fire) and therefore granted leae to amend the claim and statement of claim to include a cause of action by Mrs McLaughlin relating to property owned by her alone. As the new cause of action would increase the amount of damages being claimed, leae was also granted to transfer the matter to the Supreme Court. Queensland District Court: 15 May 2009 Joanna Atherinos PROCEDURE Limitations of Actions Act 240

257 MISCELLANEOUS

258 THE FACTS The plaintiff was injured in the course of his employment for Dalma when he collided with scaffolding erected by Erect Safe at the construction site. The principal contractor of the construction site was Australand. Erect Safe Scaffolding (Australia) Pty Ltd Sutton [2008] NSWCA 114 Contractual indemnity insurance clause The plaintiff alleged that the working platform of the scaffolding consisted of uneen planks and that a metal pole extended across the platform at head height. The defectie scaffolding had been raised at a safety committee meeting at the construction site but was yet to be appropriately addressed. The plaintiff suffered injuries when he collided with the metal pole across the platform. The plaintiff commenced proceedings against Dalma, Erect Safe and Australand. THE ISSUES The principal issues at trial concerned the liability of the defendants and the appropriate apportionment of liability between the defendants in tort and contract. THE DECISION AT TRIAL The trial judge found that Dalma (the employer) was not liable, as it was entitled to rely upon the safety committee at the construction site to remedy the identified defect with the scaffolding. The trial judge apportioned liability two thirds to Erect Safe and one third to Australand. Howeer, the trial judge was then obliged to consider the terms of the contract between the subcontractor (Erect Safe) and Australand as follows: Clause 11: The Subcontractor must indemnify Australand Constructions against all damage, expense (including lawyers fees and expenses on a solicitor/client basis), loss (including financial loss) or liability of any nature suffered or incurred by Australand Constructions arising out of the performance of the Subcontract Works and its other obligations under the Subcontract. Clause 12.1: Public Liability Before commencing work, the Subcontractor must effect and maintain during the currency of the Subcontract, Public Liability insurance in the joint names of Australand and the Subcontractor to coer them for their respectie rights and interests against liability to third parties for loss of or damage to property and the death of or injury to any person. Erect Safe had not effected insurance on behalf of Australand as required by clause 12. The trial judge ordered that Erect Safe indemnify Australand in respect of the plaintiff s claim. THE ISSUES ON APPEAL Erect Safe and Australand appealed the award of damages to the plaintiff, and Erect Safe appealed the order that it indemnify Australand pursuant to the contract. THE DECISION ON APPEAL The Court of Appeal did not disturb the trial judge s assessment of damages. Howeer, the majority apportioned liability 60% to Erect Safe, 25% to Australand and 15% to Dalma. It was accepted that Erect Safe was responsible for creating the risk and therefore should bear the higher responsibility for the harm that eentuated. In relation to the contractual indemnity, the majority found that it did not operate and that Erect Safe was only liable to indemnify Australand to the extent that Australand s exposure arose out of Erect Safe s breach of duty. In this case, the basis for Australand s liability was its own breach of duty owed to the plaintiff. The majority further found that clause 12 (the requirement to insure) which followed clause 11 (the indemnity clause), should be construed in a similar manner such that the requirement to take out insurance was only to the extent of the indemnity clause, namely, to the extent of Erect Safe s own breach of duty. In his dissenting judgment, Justice Basten had regard to numerous cases concerning contractual MISCELLANEOUS 242

259 indemnities and attempted to resole the inconsistencies between them. He held that, haing regard to the contract as a whole (including the contractual obligation on Erect Safe to insure) the indemnity operated. He considered that an implied limitation that required the liability of the contractor to be entirely deriatie from that of the sub-contractor would deprie the indemnity of any obious operation and should be rejected. Erect Safe s appeal against the order that it indemnify Australand was successful. MISCELLANEOUS New South Wales Court of Appeal: 6 June 2008 Brooke Jacobs 243

260 THE FACTS The plaintiffs were the owners of 2 yachts that were resting on hard stands within the defendant s boatyard in order for maintenance work to be carried out. A seere storm inoling gale force winds occurred in the early hours of 23 March 2005, and the plaintiffs yachts were blown oer and damaged. Sarah Nickolls Noakes Rigging Pty Ltd Peter Bush Noakes Rigging Pty Ltd [2008] NSWDC 299 Duty of bailee for a reward defendant bailee discharged onus by establishing damage not due to its negligence T h e c a s e i n o l e d subrogated claims for liquidated damages by the plaintiffs insurer against the defendant s insurer in relation to the damage sustained to the yachts. THE ISSUES The defendant discharged the onus upon it by proing that damage to the yachts was caused by natural forces that could not hae been predicted, and the court determined that there was no lack of reasonable care on the part of the defendant. The court also held that marine surey fees would not hae been recoerable as part of the plaintiffs damages (had they succeeded) as such fees are a litigation cost that would hae been part of the plaintiffs solicitor/own client costs, which must be borne by the insurer. New South Wales District Court: 23 December 2008 Sue Myers MISCELLANEOUS by the court: Three issues were dealt with 1. Was there a relationship of bailment for reward? 2. Was the damage to the yachts caused by the defendant s negligence? 3. Do marine surey fees incurred by the plaintiffs insurer form part of the plaintiffs damages? THE DECISION The court found that there was a relationship of bailor and bailee. The court noted that the fact that goods are damaged whilst in a bailee s custody gies rise to a rebuttable inference of failure to exercise due care and skill. That onus for rebutting the inference rests with the bailee, and the court dealt with this issue at the same time as looking at whether the defendant had been negligent. The court determined that the defendant had taken reasonable care in the circumstances, and that it was not possible or practicable to shelter yachts from gale force winds that could not hae been predicted. The defendant s conduct was reasonable in checking that the boats were held securely in their hard stands, and there was nothing further the defendant could hae done in the circumstances. 244

261 THE FACTS The plaintiffs, Macquarie Bank and two of its senior executies, sued the publishers of the Weekend Australian newspaper (the first defendant) and its internet publisher (the second defendant), in respect of a business article t h e y c l a i m e d w a s defamatory. Macquarie Bank Ltd & Ors Nationwide News Pty Ltd & Anor [2009] ACTSC 9 Defamation newspaper article imputations of illegal conduct defence of truth The article was entitled The Mine Shaft, and dealt with Macquarie Bank s i n o l e m e n t i n t h e Beaconsfield Mine in T asm a n i a. P u b l i s h e d nationwide, the article detailed Macquarie s inolement in Allstate Exploration ( Allstate ) which was a joint enture partner with Beaconsfield Gold in the Beaconsfield Mine. Allstate had been placed into administration and entered into a deed of company arrangement. The article dealt with a meeting of creditors which had been held to ary that deed to take account of Macquarie s proposal that it purchase debts due to Allstate by Allstate s wholly owned subsidiary companies. Those debts exceeded $77 million. In return, Macquarie made an amount of $300,000 aailable, which could be distributed to the unsecured creditors of Allstate. What happened at the creditors meeting was the centrepiece of the article. In particular, the article focused on the negatie implications and suspicions that might be said to arise from the contrast between the payment of $300,000 by Macquarie to acquire $77 million owing to Allstate. The plaintiffs claimed that a number of imputations arose from the published story (which were defamatory) including that: 1. Macquarie misled Allstate creditors, directors and shareholders as to the financial position of Allstate in order to pursue its own commercial objecties; 2. Macquarie used its position to keep Allstate in administration; 3. Macquarie breached its legal obligations as regulated by ASIC and APRA; 4. Macquarie withheld crucial information from Allstate creditors to further its own objecties; 5. The executies made improper threats to creditors and shareholders to encourage acceptance of Macquarie s proposal; and 6. The executies lied to the meeting, wrongly withheld information critical to the proposal and participated in illegal conduct. THE DECISION As a preliminary matter the claim against the second defendant (the internet publisher) was dismissed by consent with no order as to costs. As to the claim that proceeded to trial, the plaintiffs claim against the first defendant was dismissed with costs on the basis that none of the alleged imputations had been proed to the releant standard of proof. The court was at pains to examine the eidence as a whole, which included a detailed analysis of the article itself and the financial and transactional history of the corporate players inoled. In particular, the court found: (a) (b) (c) The standard to be applied (to proe a defamatory imputation) accords with what the words would coney to the ordinary man. The ordinary man does not lie in an iory tower he can and does read between the lines in the light of his general knowledge and experience of worldly affairs ; Taking the article as a whole, none of the imputations alleged by the plaintiffs had been made out according to this standard. The court did not regard the reader as one haing some special background in the gold mining industry or een in the finance industry. It looked at the article in the same way as a reasonable reader would hae understood without assigning any special characteristics or knowledge to that reader; and The court s task was particularly difficult gien the article appeared in a specialist section of a weekend newspaper rather than the general news or features part. The defence of truth was a predominant issue at the trial. The first defendant sought to establish that Macquarie had been a party to not properly proiding material to the creditors meeting and, through its executies, manipulated the meeting to deceie creditors into oting for its proposal. After a MISCELLANEOUS 245

262 careful analysis of the eidence, the court found the first defendant failed to make out its case. Particular mention is made of the ery testing cross examination undergone by the second plaintiff regarding what he said at the creditors meeting and that his answers at times appeared to be quite calculated. Howeer, the defendant s difficulty in seeking to make a case for a sinister plot on Macquarie s behalf to manipulate the creditors ote was that the objectie facts did not support that proposition. The oral eidence of the plaintiffs along with the recorded minutes of the meeting did not go far enough to establish a defence of truth. MISCELLANEOUS Despite the defendants being successful, the court recognised that the oerall thrust and theme of the article was to gie the reader a strong sense that Macquarie was adantaging itself at the expense of others in a way that desered condemnation. In particular, the court took it upon itself to comment at the end of the judgment that (in its iew) there was no justification for the tone of the article or what could only be described as cheap shots that the article took at Macquarie s expense. In particular, the court said: I can only express my disappointment at the approach taken by the authors of the article published in a newspaper that I thought prided itself on accurate and responsible reporting Australian Capital Territory Supreme Court: 16 February 2009 Megan O Rourke 246

263 Stuart THE FACTS The plaintiff was the widow of Mr Veenstra, who committed suicide at his home. Earlier that same Kirkland-Veenstra [2009] HCA 15 Police officer s duty to apprehend under the Mental Health Act 1986 (VIC) day he had been obsered by 2 police officers to be sitting in his ehicle in a carpark on the Mornington Peninsula with a hose leading from the exhaust pipe to the interior of the car. The police questioned Mr Veenstra but noted that there was no alcohol and medication in the car nor was the engine hot or een running. Mr Veenstra persuaded the officers that he had been about to do something stupid but had changed his mind. He declined the police officers assistance to see a doctor and appeared otherwise rational and co-operatie. He returned home and, after his wife later left the house, committed suicide. THE ISSUES The plaintiff alleged that the police officers and the State of Victoria were negligent in that the officers had breached their duty of care of failing to apprehend Mr Veenstra under s10 of the Mental Health Act 1986 (Vic) (the Act). THE DECISION AT TRIAL The trial judge found that the police officers had formed the opinion that Mr Veenstra showed no signs of mental illness and, while they were aware they had a power under section 10 of the Act to apprehend a person who appeared to hae a mental illness and to hae attempted or to be likely to attempt suicide, they did not exercise that power. The trial judge found that the objectie eidence was consistent with the oluntary withdrawal by Mr Veenstra from his plan. THE DECISION ON APPEAL The plaintiff appealed to the Court of Appeal, which held by a 2:1 majority that the officers were aware of the danger faced by Mr Veenstra and accordingly had a power to apprehend him and owed a duty of care at common law to Mr Veenstra. The duty required the officers to exercise their statutory power reasonably to protect those whom the Act sought to protect. The class of persons to whom the duty was owed consisted of those in clear and obious contemplation of suicide. It was reasonably foreseeable that a failure to apprehend Mr Veenstra might result in his suicide. THE DECISION OF THE HIGH COURT The officers appealed to the High Court. All 6 Judges allowed the appeal, oerturning the decision of the Court of Appeal. The High Court held that the Act was designed to protect those who had a mental illness, but rejected the assertion that suicide or attempted suicide equates to mental illness. The High Court found that no duty arose out of section 10 of the Act, as alleged by the plaintiff. This section gae the police a power to apprehend but not an obligation to do so. It was held that the existence of a power, coupled with a discretion, may not suffice for a breach of statutory duty. It was also held that the common law may not interfere with the existence of a discretion under the statute. The High Court found that the exercise of the power by a police officer under section 10 required firstly, that the person appeared to be mentally ill and secondly, that the officer had reasonable grounds for belieing the person was likely to attempt to commit suicide. The High Court found that it was reasonable for the police officers to form the opinion that Mr Veenstra was not mentally ill, and also that what had occurred prior to the interention of the officers did not indicate an attempt had been undertaken. Therefore neither of the conditions necessary for the exercise of the power of apprehension were satisfied. The appeal of the police officers was allowed and the orders of the Court of Appeal were set aside except insofar as they dealt with the costs of that appeal, and in that regard each party was to bear its own costs of the proceedings at first instance and the officers were to pay the plaintiff s costs of the appeal to the High Court. High Court of Australia: 22 April 2009 Shelley Clark MISCELLANEOUS 247

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