Allianz Australia Insurance Ltd v Roads and Traffic Authority of New South Wales - [2010] NSWCA 328

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: Allianz Australia Insurance Ltd v Roads and Traffic Authority of New South Wales; Kelly v Roads and Traffic Authority of New South Wales [2010] NSWCA 328

HEARING DATE(S): 26 October 2010

JUDGMENT DATE:
9 December 2010

JUDGMENT OF: Giles JA at 1; McColl JA at 154; Sackville AJA at 155

DECISION: In each appeal the appeal is dismissed with costs. ***
[The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

CATCHWORDS: TORTS – negligence – motor accident – water over road sign placed 924 metres east of water hazard where accident occurred – finding of negligence because water over road sign should have been placed 150 to 300 metres away from hazard – small dip with some water near where water over road sign placed – car drove through water hazard at least 90kph – car aquaplaned – whether negligence in not placing reduce speed sign as well as water over road sign – on evidence negligence in not placing reduce speed sign not established – whether negligent placement of water over road sign was within s 43A of Civil Liability Act – consideration of “so unreasonable that no authority having the special statutory power could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power” – provision imposes a Wednesbury unreasonable standard – consideration of Wednesbury unreasonableness in negligence context – high threshold before Wednesbury unreasonableness found – substitution of “irrational” as test undesirable – test is objective and not focused on decision-maker’s subjective thought processes – placement of water over road sign near understandable – placement may not have been preferable course but not Wednesbury unreasonable – CAUSATION – whether failure to place water over road sign 150 to 300 metres east of hazard caused accident – sign placed 924 metres away must be taken into consideration – driving not changed by that sign – no admissible evidence of effect of sign on driving behaviour – effect of sign on driving a jury question – existing sign would have alerted driver even if hazard 30 seconds away – no inference that sign 150 to 300 metres would have changed driving – causation not found.

CATEGORY: Principal judgment

CASES CITED: Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420;
Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; (2005) 221 CLR 568;
Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 KB 223;
Attorney-General of New South Wales v Quin (1990) 170 CLR 1;
Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512;
Bromley London Borough Council v Greater London Council (1983) 1 AC 768;
CAL (No 14) Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; (2009) 239 CLR 390;
Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379;
Commonwealth of Australia v Pharmacy Guild of Australia (1989) 91 ALR 65;
Council of Civil Service Unions v Minister for the Civil Service (1985) AC 374;
General Electric Co (of USA) v General Electric Co Ltd (1972) 1 WLR 729;
Fares Rural Meat and Livestock Co Pty Ltd v
Australian Meat and Life-stock Corporation (1990) 96 ALR 153;
Firth v Latham [2007] NSWCA 40;
Friends of Hinchinbrook Society Inc v Minister for Environment (No 2) (1997) 69 FCR 28;
Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348;
Luxton v Vines (1952) 85 CLR 352;
March v E & M H Stramare Pty Ltd (1991) 171 CLR 506;
McVeigh v Willara Pty Ltd (1984) 6 FCR 587;
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24;
Minister for Immigration and Multicultural Affairs v Betkhoshabeh [1999] FCA 980;
Minister for Immigration and Cultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611;
Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611;
Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; (2008) 74 NSWLR 102;
Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd [2009] NSWCA 263; (2009) 168 LGERA 357;
Secretary of State for Education and Science v Tameside Municipal Borough Council (1977) AC 1014;
Transport Publishing Co Pty Ltd v The Literature Board of Review (1956) 99 CLR 111;
Wouters v Deputy Commissioner of Taxation (1988) 20 FCR 342;
Wyong Shire Council v Shirt (1980) 146 CLR 40.

PARTIES:
Mattter No 2008/289443:
Allianz Australia Insurance Ltd - First Appellant
Woolworths Limited - Second Appellant
Roads and Traffic Authority of NSW - First Respondent
Jack Rickard - Second Respondent
Andrew Gregory Wheeler - Third Respondent
Sharon Louise Dennison - Fourth and Fifth Respondent
In Matter No 2008/289556
Christine Kelly - Appellant
Roads and Traffic Authorityy of New South Wales - Respondent

FILE NUMBER(S): CA 2008/289443; 2008/289556

COUNSEL:
In Matter No 2008/289443 -
K Rewell SC & G Smith - Appellants
T G R Parker SC & W A D Edwards - First and Second Respondents
E E Welsh - Third Respondent
B M J Toomey QC & J J Ryan - Fourth & Fifth Respondent
In Matter No 2008/289556:
A Black SC & D Toomey - Appellant
T G R Parker SC & W A D Edwards - First Respondent

SOLICITORS:
In Matter No 2008/289443 -
McLachlan Chilton - Appellant
Sparke Helmore - First and Second Respondents
Brydens, Liverpool - Third Respondent
Phil Banister, Castlehill - Fourth and Fifth Respondent
In Matter No 2008/289556:
Stacks/Goudkamp - Appellant
Sparke Helmore - Respondents

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): SC 20300/08. 20452/08; 20459/08; 20460/08; 20466/08

LOWER COURT JUDICIAL OFFICER: Hoeben J

LOWER COURT DATE OF DECISION: 23 October 2009, 26 February 2010 (Costs)

LOWER COURT MEDIUM NEUTRAL CITATION: Rickard & Ors v Allianz Australia Insurance Ltd & Ors [2009] NSWSC 1115; Rickard & Ors v Allianz Australia Insurance Ltd & Ors (No 2) [2010] NSWSC 101

CA 2008/289443
CA 2008/289556
SC 20300/08
SC 20452/08
SC 20459/08
SC 20460/08
SC 20466/08

GILES JA
MCCOLL JA
SACKVILLE AJA
Thursday 9 December 2010

ALLIANZ AUSTRALIA INSURANCE LTD V ROADS AND TRAFFIC AUTHORITY OF NSW

KELLY V ROADS AND TRAFFIC AUTHORITY OF NSW

Judgment

: At about 6.25pm on 4 February 2005 a Holden sedan driven in a westerly direction along the Riverina Highway by Mr Mark Kelly collided with a Toyota truck driven by Mr Jack Rickard in an easterly direction. The collision took place near the entrance to the property “Lyntods”.

2 It was common ground at the trial that prior to and at the time of the accident water was flowing across the road at “Lyntods”. Mr Kelly’s vehicle was travelling at speed when it encountered the water, causing it to aquaplane so that he lost control and collided with Mr Rickard’s vehicle. Mr Kelly and a passenger in his car, Mr Matthew Dennison, were killed in the accident. Mr Rickard and Mr Andrew Wheeler, another passenger in Mr Kelly’s car, suffered serious injuries.

3 Prior to the accident the Roads and Traffic Authority of NSW (“the RTA”) had placed signs warning “Water Over Road” in the vicinity. One was placed on the southern side of the road 924 metres east of “Lyntods”. The other was placed on the northern side of the road to the west of the entrance to the property.

4 A number of claims and cross-claims were brought arising out of the accident. The claims and cross-claims and their disposition can be seen from the reasons of the trial judge, Hoeben J, found in Rickard v Allianz Australia Insurance Ltd [2009] NSWSC 1115.

5 The trial judge found that Mr Kelly had been negligent in failing to keep a proper lookout or in travelling at an excessive speed in the circumstances. Allianz Australia Insurance Ltd (“Allianz”) the third party insurer of Mr Kelly’s vehicle, or Woolworths Ltd (“Woolworths”) the owner of the vehicle, were held liable to Mr Rickard, to Ms Sharon Dennison, the widow of Mr Dennison, and to Mr Wheeler as claimants against them.

6 Allianz and Woolworths cross-claimed against the RTA for indemnity or contribution pursuant to s 5(1)(c) of the Law Reform (Miscellaneous Provisions) Act 1946. Ms Christine Kelly, the widow of Mr Kelly, claimed directly against the RTA. Mr Rickard, Ms Dennison and Mr Wheeler claimed directly against the RTA in addition to their claims against Allianz or Woolworths. The cross-claims and claims were on more than one basis, but these appeals are concerned only with liability of the RTA in relation to its placement of warning signs.

7 The trial judge found that the “Water Over Road” sign should have been placed 150 to 300 metres to the east of “Lyntods”, and that the RTA had breached its duty of care in not so placing it but placing it 924 metres east of “Lyntods”. He held that in placing warning signs the RTA was exercising a special statutory power, and found that its acts or omissions had the unreasonableness in the exercise of such a power required by s 43A of the Civil Liability Act 2002 (the “CL Act”). However, his Honour found that the accident was not caused by the RTA’s breach of its duty of care. Accordingly, the cross-claims by Allianz and Woolworths against the RTA, and the claims against it by Ms Kelly, Mr Rickard, Ms Dennison and Mr Wheeler, were dismissed.

8 Allianz and Woolworths appealed against the trial judge’s dismissal of their cross-claims against the RTA. Ms Kelly appealed against the dismissal of her claim against the RTA. Both complained that the trial judge erred on the issue of causation. The RTA filed notices of contention that the trial judge erred in finding that it had breached its duty of care, and also that his Honour ought to have found that its acts or omissions did not give rise to civil liability by reason of s 43A of the CL Act.

9 No doubt because they had succeeded in their claims against Allianz or Woolworths, Mr Rickard, Ms Dennison and Mr Wheeler did not appeal against the dismissal of their claims against the RTA. They entered submitting appearances save as to costs. Allianz and Woolworths were jointly represented. They were relevantly in the same interest as Ms Kelly, who was separately represented, although at one point the submissions diverged. Unless it is necessary to distinguish between them I will refer to these parties as the appellants, and will refer to the RTA by that acronym.

Legislative framework

10 It is convenient first to set out the provisions of the CL Act relevant to the issues of breach of duty, causation and the RTA’s exercise of a special statutory power in placing warning signs. There was no challenge to the trial judge’s holding that the RTA was exercising a special statutory power within s 43A.

11 The provisions relevant to breach of duty and causation are found in Pt 1A of the CL Act -

“Division 2 Duty of care

5B General principles

(1) A person is not negligent in failing to take precautions against a risk of harm unless:

(a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and

(c) in the circumstances, a reasonable person in the person’s position would have taken those precautions.

(a) the probability that the harm would occur if care were not taken,

(d) the social utility of the activity that creates the risk of harm.

5C Other principles

In proceedings relating to liability for negligence:

(a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and

(b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and

(c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.

Division 3 Causation
5D General principles

(1) A determination that negligence caused particular harm comprises the following elements:

(b) that it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (scope of liability).

(3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent:

(b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest.

(4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

5E Onus of proof

In determining liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.”

12 Section 43A is found in Pt 5, which by its heading deals with liability of public and other authorities -

43A Proceedings against public or other authorities for the exercise of special statutory powers

(1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority’s exercise of, or failure to exercise, a special statutory power conferred on the authority.

(2) A special statutory power is a power:

(a) that is conferred by or under a statute, and

(b) that is of a kind that persons generally are not authorised to exercise without specific statutory authority.

(4) In the case of a special statutory power of a public or other authority to prohibit or regulate an activity, this section applies in addition to section 44.”

The circumstances of the accident

13 A detailed account may be found in the trial judge’s reasons, from which the following is largely taken.

14 The Riverina Highway in the vicinity of “Lyntods” ran generally east-west, between Howlong to the east and Corowa to the west. In that vicinity, it traversed gently undulating country.

15 Travelling west towards “Lyntods”, the road was essentially a straight and flat road for a considerable distance before a sweeping left-hand bend. The entrance to “Lyntods” was on the northern side of the road (the outside of the bend) part-way through the bend. A little to the west of where the RTA sign was placed, 924 metres to the east of “Lyntods” there was a small dip in an otherwise flat road. The dip was about 100 to 125 metres east of the commencement of the bend. The road had a shallow uphill grade as the entrance to “Lyntods” was approached, but at the entrance was nearly flat. Beyond the entrance, after the end of the sweeping bend the road continued essentially straight and flat for a further distance.

16 Unusually heavy rains fell on 2, 3 and 4 February 2005. Both lanes of the Riverina Highway at “Lyntods” were covered with water flowing out of the entrance. Much of the water came from an overflowing dam on “Lyntods”, near the entrance. The dish drain on the northern side of the road was full, and the super-elevation of the bend caused water to flow over the road surface to the southern side and slightly to the east. The water flowing across the road extended in an east-west direction for about 20 metres. The water running across the road at the time of the accident and at its narrower and more forceful point was at least 5 cm (2 inches) in depth.

17 At the time of the accident and for some hours before the weather was overcast but not raining. It was daylight saving. There was very good visibility for a driver travelling west to the commencement of the left-hand bend. The judge found that the water flowing across the road would have been obvious to Mr Kelly “from a distance of 150 metres and certainly from a distance of 125 metres if he were keeping a proper lookout” (at [81]).

18 A Howlong resident who had driven along the road, Mr Bruce Shelley, contacted the Corowa Shire Council at about 4.15pm on 4 February to report seeing water over the road near “Lyntods”. The Shire Council had already used all of its road signs, and contacted the RTA for assistance. At some time between 4pm and 5pm Mr Geoffrey McLellan, the RTA Maintenance Works Supervisor responsible for the Holbrook/Albury areas, received a telephone call from the Shire Council reporting the presence of the water. Mr McLellan contacted Mr Andrew McGregor, the Acting Team Leader for the RTA based in Albury.

19 Mr McGregor and his assistant, Mr Alan Freyer had been out earlier in the day, and had returned to the Albury depot and finished work. Mr McGregor contacted Mr Freyer, and arranged to meet him at the Albury depot.

20 When Mr McGregor arrived at the depot at approximately 4.50pm, Mr Freyer had placed four “Water Over Road” signs on the RTA truck. Messrs McGregor and Freyer then drove towards “Lyntods”, which they reached at about 5.20pm.

21 After confirming the presence of the water over the road, Messrs McGregor and Freyer drove towards Howlong and placed a “Water Over Road” sign on the southern side of the road facing westbound traffic, 924 metres to the east of “Lyntods”. They then drove towards Corowa and placed another “Water Over Road” sign to the west of “Lyntods”, on the northern side of the road facing eastbound traffic.

22 Messrs McGregor and Freyer then drove further towards Corowa to investigate another report of water over the road, which they were unable to confirm. As they were heading back towards Albury, they came across the accident.

23 Mr McGregor contacted Mr McLellan and told him what had happened. He and Mr Freyer remained at the accident site and assisted in controlling traffic until the police arrived. Mr McLellan came to the scene, and was shown by Mr McGregor where the signs had been placed.

24 The Riverina Highway was not heavily trafficked, but a number of vehicles had passed along it and through the water at “Lyntods” since about 4.15 pm when the water had been reported. (The water may have been flowing over the road for a time before it was reported, but Messrs McGregor and Freyer had earlier driven along the road to check for water, returning to Albury at about 3.30 pm, and had not then seen it.) Mr Shelley drove regularly along the road. He said that on 4 February 2005 he encountered light traffic, maybe four to six vehicles each side of “Lyntods”, but that traffic increased later in the day and ordinarily he would expect to encounter 20 to 30 cars at about 6.20 pm.

25 A bus travelling east was passing through the water at the time of the accident. The bus driver saw the water when three or four hundred metres from the entrance to “Lyntods”, and slowed to negotiate it. He saw Mr Kelly’s vehicle approaching from the opposite direction. Before Mr Kelly’s vehicle reached the other side of the water it began to fishtail and head towards the bus. The bus driver had slowed right down, and he moved to the left to give the vehicle more room to get past. Mr Kelly’s car collided with Mr Rickard’s truck, travelling a little distance behind the bus. Passengers on the bus also described the approach of Mr Kelly’s vehicle and its loss of control.

26 Mr Dennison was Mr Kelly’s front seat passenger and Mr Wheeler was the rear seat passenger. Mr Wheeler had no real recollection of the accident. He “felt” a bend in the road, and heard a gush of water under the vehicle and felt the tug of the seat belt on his shoulder.

27 The trial judge found that Mr Kelly was driving at at least 90 kph when his vehicle first came in contact with the water, and (at [93]) that -

“ … either Mr Kelly did not see the water across the highway in time and reacted too slowly in reducing speed or having seen the water across the road, he did not consider that it presented a hazard and only slightly reduced his speed, if he reduced it at all.”

28 The trial judge accepted that a car which hit water at 90 kph could aquaplane, and recorded that it was common ground that Mr Kelly had lost control because of partial or full aquaplaning (a phenomenon when the tyre is separated from the road surface, or its contact area is reduced, by a film of water).

Mr Kelly’s negligence

29 Having found that the water flowing across the road would have been obvious to Mr Kelly from at least 125 metres to the east of “Lyntods” if he were keeping a proper lookout, the trial judge said -

“82 The traffic engineers agreed that the normal perception/reaction time in such circumstances was 1.5 seconds. A slow reaction time would be 2 seconds. Even with a slow reaction time, it followed that a driver travelling at 100 kph, who observed the water across the road from a distance of 125 metres, would have had ample time to slow his vehicle to below 60 kph which would have enabled it to safely negotiate the water. It is significant that many other drivers (some of whom gave evidence) who went past ‘Lyntods’ after 3pm on the afternoon of the accident, saw the water, slowed down and passed through it safely. The white Commodore [Mr Kelly’s vehicle] was the only vehicle to experience a problem.”

30 The trial judge was satisfied that negligence had been established on the part of Mr Kelly on the basis of the following analysis -

94 In relation to that second scenario, all of the witnesses who gave evidence about observing water flowing across the highway at ‘Lyntods’, said that they recognised it as a hazard and that they slowed down. I am of the opinion that a reasonable driver observing water flowing across the road, as has been described, would have recognised this as a hazard and reduced speed accordingly. Even if Mr Kelly did not recognise it as a hazard, it was clearly something unusual, the potential effects of which were unknown and again, the reasonable response for a driver in that position was to reduce speed.

95 Reduction in speed should have been to 60 kph or less. Even a reduction in speed from 100 kph to 80 kph would not, in my opinion, be an adequate response in the circumstances, i.e. wet conditions (although not raining at the time) when approaching a known hazard or if unrecognised as a hazard, approaching something which was unusual and unknown. It was accepted by the parties that if either scenario were established it was causally related to the accident.”

The RTA’s negligence – the trial judge

31 The trial judge found negligence in where the “Water Over Road” was placed east of “Lyntods”. There was dispute on appeal over negligence in failing also to place a “Reduce Speed” sign in conjunction with the “Water Over Road” sign.

32 The trial judge said at [100] that the traffic engineers called by the parties agreed that, on the principles applicable to the proper positioning of a warning sign of this kind, it had to be sufficiently far away from the hazard to enable an approaching driver appropriately to react, but close enough so that the driver would recognise the hazard when he or she came to it. He found that the distance to the east of “Lyntods” in the circumstances of this case was somewhere between 150 and 300 metres. The traffic engineers accepted by his Honour, Mr William Keramidas and Mr John Jamieson, agreed that a distance of 924 metres to the east of “Lyntods” was inappropriate. In relation to breach of duty, it was too far away.

33 On this latter issue, the trial judge rejected the evidence of the third traffic engineer, Mr Roger Stuart-Smith. He said at [101] -

“He was clearly partisan and doing the best he could to assist the RTA which was the party which had retained his services. His suggestion that this sign, so positioned, would still have been effective but less effective than a sign positioned between 150 and 300 metres to the east of ‘Lyntods’ should be rejected. Far from having a beneficial effect, such a sign was likely to mislead a motorist who would be looking for water across the road in proximity to the sign and when such a hazard was not seen, might well think that no such hazard existed.”

34 The trial judge then said -

“102 The explanation offered by Mr McGregor for why the ‘Water Over Road’ sign was positioned 924 metres to the east of ‘Lyntods’ verged on the incredible. He said that he had observed a dip in the road approximately 100-125 metres to the west of where the sign was positioned, which to his observation had some water accumulating on the northern side of the road. He accepted that this dip had not yet become a hazard but said that it had the potential, if further rain fell, to become a hazard. The suggestion seems to be that by placing the “Water Over Road” sign at that location, it would be achieving a dual purpose, i.e. warning of the potential danger of water accumulating in the dip and also warning of the hazard at ‘Lyntods’.

103 A surprising aspect of this explanation is that if there were a potential hazard developing in relation to that dip in the road, it would have first affected drivers travelling east on the highway, not those travelling west. Yet the sign was erected so as to face drivers travelling west and no sign was erected for drivers travelling east in respect of the dip. Another surprising aspect is that none of the witnesses who gave statements or oral evidence in the proceedings, who travelled west along the highway to the accident site, made any observation or comment about an actual or potential danger arising from water in the dip. Finally, one is left with the question as to why any RTA employee acting reasonably would erect a warning sign in respect of a potential hazard when there was a real and immediate hazard known to that employee further down the highway.

104 It is clear from the police statement of Mr McGregor that he was suggesting that there was a shortage of signs and that is why he decided to erect the sign where he did. That was also one of the assumptions given to Mr Stuart-Smith by those instructing him on behalf of the RTA and on which he was asked to prepare his report. The evidence at trial made it clear that such an assumption was false. The evidence of Mr Freyer (which I accept) was that he placed four signs on the truck. Two signs were placed either side of ‘Lyntods’, which left two signs on the truck available to be positioned where appropriate. If as he said, Mr McGregor was concerned that the dip in the road some 800 metres to the east of ‘Lyntods’ constituted a potential hazard for westbound drivers, he could have erected another ‘Water Over Road’ sign to deal with that possibility.

105 The false and misleading statements by Messrs McLellan, McGregor and Freyer as to the position of the ‘Water Over Road’ sign to the east of ‘Lyntods’ made to the police following the accident, satisfy me that each of them was aware at the time they made those statements that the sign had been placed in an inappropriate location if it were intended to warn about a hazard at ‘Lyntods’. The clear intention of those statements was to mislead the investigating police officers as to the true location of the “Water Over Road” sign to the east of ‘Lyntods’. The likely motivation for all three RTA employees for providing such misleading information is that they were well aware of the mistake which had been made in placing the sign and were seeking to either protect themselves personally or their employer.

106 I suspect, but it is not necessary to so find, that Mr McGregor placed the sign in that location because he did not know where such signs should properly be positioned and had not been given any training or instruction in that regard. His lack of knowledge and training on that subject was clear.

35 The trial judge had dealt at [68]-[76] with what he described at [105] as the false and misleading statements made to the police. I will return to this.

36 His Honour was satisfied of breach of the duty formulated in Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at 577, saying at [107] that “[p]ublic authorities such as the RTA which have statutory powers which enable and require them to erect warning signs are obliged to take reasonable care that their exercise or failure to exercise those powers does not create a foreseeable risk of harm to road users”. He concluded that the water flowing across the road at “Lyntods” was a hazard known to the RTA and placing the “Water Over Road” sign 924 metres to the east of the hazard was not an appropriate response in the sense set out in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48. His Honour also said that breach of duty had been established in accordance with s 5B of the CL Act by satisfaction of the three pre-conditions in s 5B(1), saying that it was clear that the factors in s 5B(2) pointed towards breach of duty.

37 The trial judge then turned to “defences” (at [110]) on which the RTA relied under s 43A and s 44 of the CL Act. His Honour found that only s 43A was relevant, and that the “defence” was not made out by the RTA.

38 The trial judge accepted, and the appellants did not challenge on appeal, that a special statutory power was involved (Roads Act 1993, s 87(1), “carry out traffic control work … ”, including “erection … of a traffic control facility”).

39 His Honour adopted a “two-step” (at [115]) approach to s 43A, understanding it to be the approach suggested by Campbell JA in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited [2009] NSWCA 263, (2009) 168 LGERA 357 at [359]. The first step involved a finding of negligence against the RTA, which his Honour had already made. The second step required him to determine whether -

“ … in the circumstances of this case the placing of the sign by the RTA employee 924 metres to the east of ‘Lyntods’ was so irrational that it could not be regarded objectively as a reasonable exercise of the RTA’s special statutory power to erect signs of that kind” (at [116]).

40 The trial judge recognised the difficulty, discussed in Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; (2008) 74 NSWLR 102 and Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited, that s 43A(3) was couched in administrative law terms but had to be applied in the context of common law negligence. He said that administrative law concepts were not appropriate matters for consideration, and said of the second step -

“121 ... The question posed by s 43A is whether Mr McGregor’s decision was so unreasonable that no authority having the necessary power could have properly considered it reasonable to so place the sign. Put another way, whether the decision to so place the sign was irrational.

41 The judge then came to his determination -

“123 The RTA submitted that the decision by Mr McGregor to place the ‘Water Over Road’ sign 924 metres to the east of ‘Lyntods’ was a “judgment call” and was not irrational or unreasonable in the sense required by s 43A. I do not agree.

124 Apart from the expressions of opinion by the traffic engineers (which I accept is not decisive), as to where such signs should be positioned in relation to the hazard, their conclusions are supported by simple common sense. A warning sign approximately a kilometre away from the specific hazard is unlikely to alert a driver to that hazard. Similarly, a warning sign positioned closer than 125 metres to a hazard on a highway with 100 kph speed limit is unlikely to provide an approaching driver with sufficient time to react to the hazard. These concepts are not rocket science, they involve basic common sense.

125 When there was no shortage of signs, the placement of a ‘Water Over Road’ sign within 125 metres of a possible hazard which might or might not eventuate in preference to a known hazard which already existed is incomprehensible. This is particularly so when the hazard had been inspected, was patently dangerous and constituted the very purpose for which Mr McGregor and Mr Freyer had been called out.

126 As previously indicated, the explanation by Mr McGregor strains credulity. His description of the accumulation of water on the northern side of the highway, approximately 125 metres to the west of the sign, is not supported by Mr Freyer, who describes it in somewhat dismissive terms as ‘just a little bit, just off the shoulder’ (Day 4, T.96.35). No one else identified this potential hazard or gave any evidence about it. In particular, Mr McLellan does not appear to have observed this potential hazard when he was driving to the accident scene, nor does he appear to have been told about it by Mr McGregor on the night of the accident.

127 Finally there is the web of deceit which is associated with the statements provided by Messrs McLellan, McGregor and Freyer to the police in respect of the position of the ‘Water Over Road’ sign to the east of ‘Lyntods’. On this issue and in relation to the number of signs on the truck, Mr McGregor had either no recollection or was evasive in his responses. I was left with the distinct impression that there was something about the positioning of the sign to the east of ‘Lyntods’ which the Court was not being told by the RTA employees.

Causation – the trial judge

42 The trial judge said that the cause of Mr Kelly losing control of his vehicle was that it came in contact with the water over the road at an excessive speed causing it to aquaplane. He said that why Mr Kelly had not reduced the speed of the vehicle was not established, and that the plaintiffs relied on the alternatives that he had not observed the water over the road in time, or having observed the water, he misjudged the situation and tried to drive through it at an excessive speed.

43 As to the first alternative, his Honour said that -

“133 … the failure to have a properly positioned warning sign may have contributed to the accident although even that is not clear. For example, if Mr Kelly were not keeping a proper lookout because of some distraction, the presence or otherwise of an appropriately positioned sign may not have made any difference.”

44 His Honour then referred to s 5E of the CL Act, by which in determining liability for negligence the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation. He said that while the failure appropriately to position the warning sign may have increased the risk of injury “there was no evidence that this risk came home in the relevant sense” (at [134]).

45 The trial judge then said -

“135 The question of causation in relation to the first alternative does not need to be further examined. This is because in relation to the other alternative, i.e. that Mr Kelly saw the water but misjudged the situation and failed to adequately reduce speed, the presence or otherwise of a warning sign was irrelevant. It would have made no difference to whether the accident occurred or not, since Mr Kelly on that scenario, was aware of the hazard but had not reacted appropriately to it.”

46 After referring to Luxton v Vines (1952) 85 CLR 352 at 358 and 360 and setting out the well-known passages speaking of need for more than conflicting inferences or conjectures of equal degree of probability, the trial judge said -

Luxton v Vines

The RTA’s negligence – on appeal

47 Although principally arising under the notice of contention, this is the logically prior issue and is conveniently considered first. Apart from the notice of contention, the appellants submitted that the RTA’s negligence lay also in failing to place a “Reduce Speed” sign, in addition to a “Water Over Road” sign, proximate to the water over the road at “Lyntods”. The trial judge did not address that matter, and I begin with it.

(a) A “Reduce Speed” sign

48 The appellants’ pleadings were not specific as to signage. The relevant particulars of negligence were –

In the cross-claims of Allianz and Woolworths -

“(d) Failing to erect any signs to warn motorists travelling along section 330 of State Highway 20 from east to west between Howlong and Corowa of danger caused by water running across the Highway.”

In Ms Kelly’s statement of claim -

“(d) Failing to erect any or adequate signs to warn motorists travelling along Section 330 of the Riverina Highway of the danger caused by water running across the highway and/or of the existence generally of a danger ahead which required motorists to proceed slowly with caution.”

49 None of the reports of the traffic engineers referred to placement of or failure to place a “Reduce Speed” sign.

50 A “Reduce Speed” sign was raised with Mr McLellan. In a police statement he had said that he had told a Mr Hallam to tell Mr McGregor to bring out “Water Over Road” and “Reduce Speed” signs. He agreed that one reason he did so was that “it might be that you needed to put both reduced speed signs up as well as ‘Water over the road signs’ [sic]”. Over a general objection to his ability to give opinions on such matters, he later agreed to the question, “You know that that signage had to include a reduction of speed [sic] specifically directed to that water at Lyntods?” The question followed a like question concerning a “Water over the road” sign, so described, and in context meant a “Reduce Speed” sign.

51 “Reduce Speed” signage was not raised with Mr McGregor, or with Mr Freyer save for evidence that he put “some reduced speed signs and some water over the road signs on the truck [sic]”; he thought one “Reduce Speed” sign. However, the appellants’ reliance on this evidence was misplaced. It related to loading signs when he and Mr McGregor went out earlier on the day, and Mr Freyer said that “we take the signs off every night” and he remembered doing it. There was no evidence that “Reduce Speed” signs were loaded when Mr McGregor and Mr Freyer went out later on 4 February 2005.

52 The matter was subsequently introduced by the trial judge during the concurrent evidence of the traffic engineers -

“HIS HONOUR: Can I ask you individually what your opinions are about this proposition. Would it have been preferable when positioning a sign, being a ‘water over road’ sign, to also add a ‘reduce speed’ sign? Mr Keramidas, what’s your opinion there?

WITNESS KERAMIDAS: In this particular circumstance, yes, your Honour, it would, purely to highlight the fact that there is something unusual about the flow of water at this particular location. So it provides an opportunity to do two things. One, to provide a sign of advance warning to the advanced warning sign and then, secondly, to provide reinforcement to the driver to indicate that there is something unusual about the water over the road and that it is not a pool of water which might cover part of the lane or that type of thing. So it would be preferable, certainly not mandatory. The key, in my opinion, is to have the ‘water over road’ sign so the driver can associate what he is seeing with the identification of water and that what the hazard is.

HIS HONOUR: Mr Jamieson?

WITNESS JAMIESON: I concur with Mr Keramidas.

HIS HONOUR: Mr Stuart-Smith, what’s your opinion on that?

WITNESS STUART-SMITH: Well, your Honour, what we are talking about, I mean you can’t disagree that when reducing speed that is necessary to go through the hazard that a reduce speed sign would be preferable in an ideal environment. The whole question hinges really, in my view, as to what is reasonable. Are we to assume that he had a reduce speed sign in the back of the truck and could have put one out, and what other instructions did this -

HIS HONOUR: Don’t worry about that. You will no doubt be asked to make various assumptions.

WITNESS STUART-SMITH: What I am saying is in an ideal world, yes, it would have been but in fact in an ideal world it would have been preferable to have bigger signs, one on each side of the road and multiple signs and “hazard ahead” signs, and in fact it would have been preferable not to have had the water on the road in the first place. What Mr Keramidas has pointed out about mandatory is quite correct. It is not mandatory, in fact it is not even mandatory to have a water on the road sign.”

53 This was taken up by counsel for Ms Kelly -

“Gentlemen can I suggest to you and I will ask you individually for your response, that if there were no resource considerations to be taken account of, the only proper response to the water over the road near Lyntods required both a water over the road sign and a reduced [sic] speed sign on either side, something like 150, 200, 250 metres from that driveway, do you agree?

WITNESS KERAMIDAS: If I can answer that first. As I indicated earlier, in my opinion it must have water over the road sign and if that could be complemented by any other additional sign to provide advanced warning to the driver there is something unusual, that would be beneficial.

WITNESS JAMIESON: This issue goes to AS 1742.12 and while it might be true that it is not mandatory to put the water over the road sign, it might not be mandatory to put a reduced speed sign up, if one reads the principles and guidelines associated with the standard it is desirable to put both signs up and, indeed, in the former case of the water on the road, essential.

WITNESS STUART-SMITH: Your question included the word ‘required’ and I would have to disagree with that. There is certainly no requirement for the reduced speed sign, there is in fact no requirement for the RTA to put any sign up for a transient hazard. I would agree that it would be best practice to put a water over the road sign. It would be unusual that they would put a reduced speed sign up based on precedent.”

54 The Australian Standard AS1742.12 stated as to a “Reduce Speed” sign -

“The REDUCE SPEED sign may be erected at sites where the approach speed of traffic is high and the majority of drivers must slow down and may be required to stop. Where used, it shall be erected in conjunction with the appropriate standard warning sign so that the reason for the reduction in speed is apparent to a driver.

REDUCE SPEED signs should not be erected instead of other standard warning devices and signs, and generally should not be erected unless the other devices have proved to be, or are likely to be ineffective. They should not be regarded as a cure for every high-speed traffic situation; indiscriminate and frequent use will destroy the impact which the sign, properly used, has on approaching drivers.

REDUCE SPEED signs shall be erected in the centre of a road which is closed to vehicular traffic. It should be erected in conjunction with a permanent barrier across the carriageways.”

55 From the Australian Standard, a “Reduce Speed” sign should not have been put in place unless a “Water Over Road” sign was likely to be ineffective. The traffic engineers were not asked to consider the Australian Standard in relation to a “Reduce Speed” sign.

56 Mr McLellan was an electrician by trade. His responsibilities as Maintenance Works Supervisor were maintenance of a stretch of the highway with a number of crews, reporting to the Traffic Operations Manager. The Traffic Operations Manager’s responsibilities included traffic incidents. There was no evidence of Mr McLellan’s training or experience underlying what he said about warning signs or their placement. I do not think the evidence in question was admissible, or if admitted of any weight.

57 The opinions of the traffic engineers did not rise above a “Reduce Speed” sign being preferable, beneficial or desirable. From the contrast drawn by Mr Keramidas with the “key” of a “Water Over Road” sign, a “Reduce Speed” sign was a possible adjunct to a “Water Over Road” sign, but according to Mr Stuart-Smith it would be “unusual .. based on precedent”. I do not think that, from this evidence, it should be concluded that the RTA was negligent in the Wyong Shire Council v Shirt sense now embodied in s 5B of the CL Act. There is certainly no proper basis for concluding that the unreasonableness in the exercise of a special statutory power required by s 43A of the CL Act, which is considered further below, was made out.

58 The RTA submitted that, for an alternative reason, negligence had not been established in this respect. It submitted that no “Reduce Speed” signs were taken from the depot by Messrs McGregor and Freyer, and so no such signs were available to them when they reached “Lyntods”. Thus, it was submitted, if there was negligence it had to be in failing to load “Reduce Speed” signs on the truck in the first place. The RTA submitted that negligence in that respect had been pleaded only by Mr Rickard, and that there was no relevant ground of appeal and the appellants’ written submissions on appeal did not contend for negligence in failing to have “Reduce Speed” signs on the truck. And it submitted that in any event the evidence did not support the negligence, since the RTA personnel were told only that there was water on the road at “Lyntods” and were not alerted to the need, if there was a need, for a warning beyond a “Water Over Road” sign.

59 It is not necessary to come to a conclusion on this matter. It could be said that, when it had been raised on the pleadings by Mr Rickard, the appellants could be permitted to take advantage of it although they had not pleaded it. A difficulty in doing so could be that failure to take “Reduce Speed” signs was not raised with Mr McGregor or Mr Freyer, even appreciating that Mr Freyer’s evidence was constrained by disability from a later accident. Mr McLellan, who said he had told Mr McGregor only to go to the depot and get the required signs, was asked whether he thought “it might be appropriate for you to tell him exactly what you meant by ‘the required signs’ when you spoke to him”, but failure to take appropriate signs was not further pursued.

(b) The “Water Over Road” sign

60 In Roads and Traffic Authority of New South Wales v Refrigerated Roadways Pty Ltd Campbell JA, with whom McColl JA and Sackville AJA agreed, said at [352] that the preferable reading of s 43A(3), considered as text, was that it “either replaces or supplements” the pre-existing standard for the existence of liability arising from exercise or failure to exercise a special statutory power. After further consideration, his Honour said at [359] that -

unless

61 No party questioned the “two-step” approach taken by the trial judge on the basis of his Honour’s analysis of s 43A, and I do not stay to consider whether it is a necessary approach. In the appeals it is sufficient to go directly to whether the RTA’s placement of a “Water Over Road’ sign 924 metres east of “Lyntods”, and not 150 to 300 metres east of “Lyntods”, was so unreasonable that no authority having its special statutory power to erect warning signs could properly consider its act to be a reasonable exercise of that power.

62 With respect, I have some difficulty with the trial judge’s treatment of this matter.

63 His Honour correctly identified at [122] an approach of objectively assessing the RTA’s conduct. An objective assessment was made at [124]-[125]. But then, at [126]-[127] read together with what had been said at [102]-[106], his Honour appears to reject on the grounds of credibility the explanation by Mr McGregor, and to come to his determination at [128] because, amongst other reasons, he rejected that explanation and as well considered that Messrs McLellan, McGregor and Freyer had engaged in a “web of deceit”; and further, because of an impression he had gained that there was something about the positioning of the sign to the east of “Lyntods” which the Court was not being told. From reference to the earlier paragraphs, the web of deceit was apparently that they had intended to mislead the investigating police as to the true location of the “Water Over Road” sign to the east of “Lyntods” because they were aware of a mistake which had been made in placing the sign and were seeking to protect themselves personally or their employer. The impression gained was not further explained.

64 In my view these last matters, and the credibility of Mr McGregor’s explanation, could have no part in the objective determination of whether an authority having the RTA’s special statutory power could properly consider the placement of the “Water Over Road” sign in the position it was placed to be a reasonable exercise of that power.

65 There is a danger in framing the relevant question as whether the “decision to so place the sign” was irrational; or as it was put in another way at [121] and is reflected also in the RTA’s submission as recorded at [123], whether “the decision by Mr McGregor” was irrational or unreasonable. The danger is that the question becomes one which focuses on the decision-maker’s subjective thought processes, when it should be objectively determined.

66 No doubt the decision-maker’s subjective processes can inform the objective determination required by s 43A(3) of the CL Act, although a trial should not become diverted to their examination. In the objective determination relevant facts can be found from the decision-maker’s evidence (such as the existence of the dip and the extent of water on the road in the dip in the present case), although a fact of which the decision-maker was not aware but should have been aware may also be a relevant fact for the objective determination. But the trial judge went much further. His determination expressed at [128] was influenced by matters which had no place at arriving at it.

67 Going then to the considerations upon which the trial judge concluded that the placement of the “Water Over Road” sign was “incomprehensible”, I respectfully do not find them persuasive. At their heart is the trial judge’s statement, at [124], that a warning sign approximately a kilometre away from the specific hazard is unlikely to alert a driver to that hazard, underlying the reasoning at [125] that the sign should have been placed to warn of the known hazard rather than to warn of a “possible hazard which might or might not eventuate”.

68 The strength of his Honour’s conclusion rests upon the validity of the underlying statement and the comparison of the hazards.

69 The likelihood of the “Water Over Road” sign 924 metres east of “Lyntods” alerting a driver to the water over the road at the entrance is considered later in these reasons in connection with causation. No expert evidence supported the trial judge’s statement. As has not infrequently been recognised or demonstrated, appeal to common sense does not always receive the same response. In Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; (2005) 221 CLR 568 at [97] Gummow, Hayne and Heydon JJ observed that in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 at 532 McHugh J “doubted whether there is any consistent commonsense notion of what constitutes a ‘cause’”. That was said in connection without causation in law, but different views of causation in fact are apparent in, for example Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420.

70 As appears from the later consideration of causation, in my opinion the “Water Over Road” sign as placed, with the obvious water over the road and the hazard it presented then apparent to and appreciable by an attentive and reasonable driver, would be likely to retain an effect on a driver’s conduct. I do not agree that it would not be likely to alert a driver to the hazard of the water over the road at “Lyntods”.

71 As to the comparative hazards, it is not entirely accurate to describe the situation at the dip as “a possible hazard which might or might not eventuate”. The trial judge referred to Mr McGregor’s evidence at [102]-[103]. Mr McGregor saw water from the table drain extending “to the passenger wheel side of the road”; water was “overflowing from the table drain onto the edge of the road”; it encroached past the fog line; it “was building up” and “was growing when we were there”. As assessed by Mr McGregor, and what he saw was an objective circumstance, there was a hazard in the making. That led him to put the sign where he did; as he put it at one point, “to warn traffic that would be coming from Howlong … that it could of [sic] gone over the road there as well”.

72 This may not objectively have been the preferable or correct course, but, with respect, it is comprehensible. Mr McGregor said that “with that sign on the Howlong side and the Corowa side I thought was covering that area”, perhaps meaning the “Lyntods” area but probably meaning the area of “Lyntods” and the dip. He appears to have thought that drivers travelling to the east would be warned of water in the dip by the sign to the west of “Lyntods”. He was not asked further to explain his thought processes, and, for the reasons given earlier, they do not matter. But the hypothetical authority could think the same.

73 The trial judge did not accept Mr McGregor’s explanation, as a subjective matter, for placing the sign where he did. It is unclear whether his Honour accepted Mr McGregor’s evidence of what he saw. The dip undoubtedly existed. Mr McGregor said that his recollection of where the water was in the dip was “average”, but he was not challenged about his evidence of what he saw. Mr John Nolan, who was familiar with the area, spoke of a depression to the east of “Lyntods” where water flowed through with large rainfall, at a culvert, which for reasons explained by counsel for the RTA and not controverted by counsel for the appellants, this was a reference to the dip. Mr Freyer saw water near where the sign was placed, “just a little bit, just off the shoulder” in a dip. He was not asked about it growing. In my opinion, what Mr McGregor said he saw can be attributed to the hypothetical authority. It could reasonably have been seen as a hazard in the making.

74 The origin and legislative history of s 43A, which was added to the CL Act in 2003 and took up the language of “no authority … could properly consider the act or omission to be a reasonable exercise … ” already found in s 43, are described in Precision Products (NSW) Pty Ltd v Hawkesbury City Council at [167]-[168]; Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd at [353]-[359]; see also Watson, “Section 43A of the Civil Liability Act 2002 (NSW): Public law styled immunity for the negligence of public and other authorities?” (2007) Torts LJ 153. It is plain that language modelled on that of Wednesbury unreasonableness was adopted, from Associated Provincial Picture Houses Ltd v WednesburyCorporation (1948) 1 KB 223, with the intention of raising the bar for plaintiffs in proof of breach of duty of care by an authority in the exercise of a special statutory power.

75 Since the parties did not question the trial judge’s “two-step” approach, there is no occasion to consider whether the bar is raised at the point of the duty of care or when considering breach of a duty of care owed under the general law. Nor is there occasion to consider whether s 43A should be seen as re-stating an authority’s liability or as providing a statutory defence.

76 As appears from the Ipp Report, particularly at [10.26], an authority’s allocation of scarce resources can arise in the application of s 43A, and in Firthv Latham [2007] NSWCA 40 at [60]-[63] s 43A was treated as providing a “defence” whereby the plaintiff had to establish the requisite unreasonableness, to which evidence of what councils normally did could have been material. It was not suggested that allocation of resources arose, or that evidence of that nature was necessary, in the present case. Nor was there evidence going to, or reliance placed on, the principles outlined in s 42 of the CL Act.

77 Transposing the public law concept of Wednesbury unreasonableness to the private law of reasonable response to foreseeable risk of injury requires appreciation of the former as a test for judicial review of an authority’s conduct. The issue in Associated Provincial Picture Houses Ltd v Wednesbury Corporation was whether the Corporation, in exercising a power to grant a licence for Sunday performances in a cinema, had validly imposed a condition that no children under the age of 15 years could be admitted. Lord Greene MR, with whom Somervell LJ and Singleton J agreed, responded to the argument that the Corporation’s decision was wrong because it was unreasonable that -

“ … in saying that [counsel] is really saying that the ultimate arbiter of what is and is not reasonable is the court and not the local authority. It is just there, it seems to me, that the argument breaks down. It is clear that the local authority are entrusted by Parliament with the decision on a matter which the knowledge and experience of that authority can best be trusted to deal with. The subject-matter with which the condition deals is one relevant for its consideration. They have considered it and come to a decision upon it. It is true to say that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is quite right; but to prove a case of that kind would require something quite overwhelming, and, in this case, the facts do not come anywhere near anything of that kind’. I think [counsel] in the end agreed that his proposition that the decision of the local authority can be upset if it is proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body could have come to. It is not what the court considers unreasonable, a different thing altogether. If it is what the court considers unreasonable, the court may very well have different views to that of a local authority on matters of high public policy of this kind. …

78 The problem of transposition is evident. Wednesbury unreasonableness is concerned with the scope of the powers of an administrative body and with the validity of a decision made by that body. By contrast, a reasonable response to a foreseeable risk of injury is concerned with the discharge of a duty of care on which turns compensation for injury. Wednesbury unreasonableness marks a boundary for intervention of a court in the decision-making of the administrative body, but a court deciding a claim in negligence must determine whether there was reasonable response to foreseeable risk of injury. There can be Wednesbury unreasonableness without negligence (in the sense of a breach of a duty of care), just as there can be negligence without Wednesbury unreasonableness.

79 Nonetheless, the language of Wednesbury unreasonableness has statutory force in ss 43 and 43A, and is applied to an authority’s act or omission. The words “could properly consider” require a determination to be made from the perspective of the authority, but with an objective element. The terms of s 43A do little to ease the complaint that Lord Greene’s formulation smacks of tautology. In Fares Rural Meat and Livestock Co Pty Ltd v Australian Meat and Life-stock Corporation (1990) 96 ALR 153, for example, Gummow J said that “there is force in the criticism by Dr Allars that both Lord Greene's formulation of unreasonableness and subsequent attempts to explain or amplify it have been ‘bedevilled by circularity and vagueness’: Allars, Introduction to Australian Administrative Law, 1990, para 5.52”, and in Airo-Farulla, “Rationality and Judicial Review of Administrative Action” (2000) 24 MULR 543 at 572 the formulation is described as “circular and therefore unhelpful”.

80 It is not surprising that much of the exposition or illustration from the cases of Wednesbury unreasonableness has been on facts and grounds for unreasonableness quite unlike those arising in the typical negligence claim.

81 Lord Greene observed that proof that a decision was so unreasonable that no reasonable authority could have come to it “would require something overwhelming”. In the area of judicial review of administrative decision-making, a quite demanding level of unreasonableness has beenrequired before a decision will be invalidated on the ground of Wednesbury unreasonableness. This reflects, among other things, the need to mark a separation between the exercise of executive and judicial power which, at federal level, has constitutional dimensions. In Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 42 Mason J found a close analogy with appellate review of a judicial discretion, and cautioned lest a court “exceed its supervisory role by reviewing the decision on its merits”. In Attorney-General of New South Wales v Quin (1990) 170 CLR 1 at 36 Brennan J said that Wednesbury unreasonableness “leaves the merits of a decision or action unaffected unless the decision or action is such as to amount to an abuse of power”, and said that this basis for judicial review “is extremely confined”.

82 Many explanations of Wednesbury unreasonableness can be found, with fluctuating stringency. In Bromley London Borough Council v Greater London Council (1983) 1 AC 768 at 721 Lord Diplock described a Wednesbury unreasonable decision as one “so devoid of plausible justification that no reasonable body of persons could have reached it”, and in Council of Civil Service Unions v Minister for the Civil Service (1985) AC 374 at 410 his Lordship spoke of a decision “which is so outrageous in its defiance of accepted moral standards that no sensible person who applied his mind to the question could have arrived at it”. More gently, in Secretary of State for Education and Science v Tameside Municipal Borough Council (1977) AC 1014 at 1064, he spoke of conduct “which no sensible authority acting with due appreciation of its responsibilities would have decided to adopt”.

83 The concept of Wednesbury unreasonableness has been substantially incorporated in s 5(2)(g) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“ADJR Act”), which permits the Federal Court (or the Federal Magistrates Court) to review an administrative decision on the ground that the making of the decision was an exercise of power “so unreasonable that no reasonable person could have so exercised the power”.

84 Lord Diplock’s description in Bromley London Borough Council v Greater London Council was adopted for the purposes of s 5(2)(g) of the ADJR Act in Wouters v Deputy Commissioner of Taxation (1988) 20 FCR 342 at 352 per Bowen CJ and Wilcox and Lee JJ. In Commonwealth of Australia v Pharmacy Guild of Australia (1989) 91 ALR 65 at 87 Sheppard J expressed disagreement with the “vehement and extreme” language used by Lord Diplock in Council of Civil Service Unions v Minister for the Civil Service, and in Friends of Hinchinbrook Society Inc v Minister for Environment (No 2) (1997) 69 FCR 28 at 60-61 Sackville J referred to this amongst other cases as “support [for] the suggestion that a more generous view has been taken” of the ground of review in the ADJR Act, although his Honour emphasised the warning given by Brennan J in Attorney-General of New South Wales vQuin at 38 that the courts must not place their own legitimacy “at risk”.

85 In Minister for Immigration and Multicultural Affairs v Betkhoshabeh [1999] FCA 980 the Court (O’Connor, Sundberg and North JJ) took an approach which could not be described as generous, referring extensively to Brennan J’s observations in Attorney-General of New South Wales v Quin and continuing -

“

The Minister v Eshetu

Minister for Immigration and Cultural Affairs v Eshetu

Puhlhofer v Hillingdon London Borough Council

Gleeson CJ and McHugh J then referred to the facts of Wednesbury, and noted Lord Greene MR's observation that what a court may consider unreasonable is a very different thing from "something overwhelming" such that it means that a decision was one that no reasonable body could have come to.

‘where the criterion of which the authority is required to be satisfied turns upon factual matters upon which reasonable minds could reasonably differ, it will be very difficult to show that no reasonable decision-maker could have arrived at the decision in question. It may be otherwise if the evidence which establishes or denies, or, with other matters, goes to establish or to deny, that the necessary criterion has been met was all one way.

...

86 That the exercise of power needs to be perverse is also said in McVeigh v Willara Pty Ltd (1984) 6 FCR 587 at 597 per Toohey, Wilcox and Spender JJ. Apart from Minister for Immigration and Cultural Affairs v Eshetu, see the description that the decision is so unreasonable as to amount to an improper exercise of the relevant power in Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR at 379 at 400 per Dawson J; see also the references to abuse of power in Attorney-General of New South Wales v Quin and in Minister for Immigration and Cultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611 at [124] per Gummow J.

87 Aronson sums it up in “Government Liability in Negligence” [2008] 32 MULR 44 at 80 that “[o]nly the grossest unreasonableness will invalidate the exercise of a statutory discretion”. The learned author suggests that instead of transplanting Wednesbury unreasonableness “[i]t might have been more straightforward to draft the new standard simply as ‘gross negligence’”. I say nothing of that; in seeking to give content to the language of s 43A, however, a constant is that Wednesbury unreasonableness must be at a high level. The force of s 43A, in its use of language modelled on that of Wednesbury unreasonableness, lies in “could properly consider”, with the restraint of “could” moderated by “properly”. Necessarily, questions of degree and judgment arise in both reasonableness and properness.

88 It would be preferable to avoid substituting for the language of s 43A the shorthand of whether the authority’s conduct was “irrational”, as the trial judge did (referring to Mr McGregor’s decision rather than the RTA’s conduct) at [121]. That his Honour made the substitution is understandable, since the Minister did so in the second reading speech in relation to s 43 of the CL Act (Second Reading Speech, Legislative Assembly, 23 October 2002, 5767 (Mr Carr)). Lord Diplock had much earlier equated irrationality with Wednesbury unreasonableness (Council of Civil Service Unions v Minister for the Civil Service at 410), and Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611 is a recent consideration of the place of irrationality or illogicality in judicial review. In Stovin v Wise (1996) AC 923 at 952-3 Lord Hoffman spoke of irrationality in connection with a road authority’s negligence.

89 However, that is not the language of s 43A. Irrationality is not necessarily an equivalent test in the private law of reasonable response to foreseeable risk of injury. For example, the response may objectively be one at which an authority acting reasonably could properly arrive, although arrived at irrationally. Conversely, as is pointed out by Airo-Farulla in the article previously mentioned at 573, a person might act rationally in the sense of having adopted the best means to his or her end, but still unreasonably because sufficiently inconsistently with common sense, moral values or the interests of others. Reference to irrationality may also lead to an incorrect focus on the decision-maker’s own thought processes.

90 Applying the terms of s 43A, I respectfully differ from the trial judge. Accepting the guiding principle that a warning sign should be close enough so that the driver would recognise the hazard when he or she came to it, and attributing to the RTA Mr McGregor’s observations of water in the dip, in my view the RTA could, and could properly consider placing the “Water Over Road” sign where it was placed a reasonable exercise of its special statutory power. Placing the “Water Over Road” sign east of the dip, to act as a warning for the dip and for the water over the road at “Lyntods”, was in the circumstances not an act so unreasonable that no authority having the RTA’s special statutory power to erect warning signs could properly consider it to be a reasonable exercise of that power.

91 While in the view I take it is not a relevant matter, I wish to say something of the trial judge’s opinion of false and misleading statements by Messrs McLellan, McGregor and Freyer to the police.

92 As earlier indicated, his Honour dealt with that at [68]-[76]; he said -

“68 In their oral evidence at trial Messrs McLellan, McGregor and Freyer agreed that the ‘Water Over Road’ sign was positioned approximately 924 metres to the east of the “Lyntods” driveway. That measurement was accurately made during the course of the trial (Day 4 – T.1.41). All three witnesses were challenged in cross-examination on the basis that no such sign had been placed in position before the accident and that the sign, which was photographed by Mr McLellan, had in fact been positioned by Mr McLellan and Mr McGregor after the accident.

69 There were a number of bases for this challenge to the evidence of Messrs McLellan, McGregor and Freyer. There was the suspicion expressed by Constable McMillan. In his statement he said that he believed that he was not being told the whole truth by RTA personnel. There was a discrepancy between what those persons had said in their police statements and their evidence at trial to the effect that the sign had been erected 924 metres to the east of ‘Lyntods’.

‘When I arrived at the scene of the accident I put Andrew in my car and got him to show me what signage he had put up and asked him what had happened. Andrew directed me to a “Water Over Road” sign which was approximately 200 metres east of the accident site. Andrew stated that when he and Alan Freyer arrived at the “Lyntods” property they found water over the road and they erected the sign that he had shown me.

‘We turned around and drove back towards Howlong as I saw water on the road further back towards Albury. I placed a sign on the road about 100-150 metres. I’m only roughly guessing. I can’t be exactly sure. The sign was put on the west bound traffic side … we did not put any signs further back towards Howlong.’

‘I saw the water was running across the road. It was about an inch or two deep and running out of a driveway. We drove through it and put a sign on the Corowa side of the water and then a sign on the Howlong side of the water … Andrew definitely put a “Water Over Road” sign on the side of the road on the Howlong side of the accident before the accident happened. We usually put them on a rise about two or three hundred metres back from the water so that traffic can see the sign …’.

73 The difference between their statements and their oral evidence was never adequately explained. I do not accept the explanation that the figures given in the statements were estimates only and that Messrs McLellan, McGregor and Freyer were simply mistaken in the estimates which they gave. I do not accept that such persons could confuse 924 metres with a distance of between 150 and 300 metres.

74 The issue was resolved in favour of the RTA on day seven of the hearing. Mr Parker, senior counsel for the RTA, advised the Court that as well as the photographs taken by Sergeant Callister and Mr McLellan, other photographs and a video had been taken by Acting Inspector Nugent, a police officer who attended the accident scene before Sergeant Callister. The RTA had only become aware of the existence of these photographs the day before. Those photographs, the circumstances leading to their creation and the reasons why they did not become available until late in the trial are contained in Exhibits 2D(14) and 2D(15).

75 In his affidavit, Acting Inspector Nugent said that he approached the accident site from the east and saw a “Water Over Road” sign to the east of ‘Lyntods’. He took a photograph of that sign at 7.08pm. He then drove to the accident site. This sign is the same as that photographed by Mr McLellan.

93 First, “the suspicion expressed by Constable McMillan” was not a proper basis for the trial judge to uphold a challenge to the evidence of Messrs McLellan, McGregor and Freyer. It is not clear whether his Honour accepted this basis, or was only recording a submission, although the former seems the better reading of the paragraphs. I do not think that reliance on the suspicion expressed by Constable McMillan, which rested upon the police statements, can be divorced from his Honour’s opinion of false and misleading statements as to the position of the “Water Over Road” sign.

94 Constable McMillan attended the accident. He subsequently obtained a number of statements, including from Mr McLellan and Mr McGregor (but at that time it seems not from Mr Freyer). He said in his own statement made for a coronial inquiry, as part of an account of his activities -

“21. I obtained a statement from Andrew McGregor, who was the RTA road worker at the scene of the accident setting up ‘water over the road’ signs. I also obtained statements from Geoff Osborne from Corowa Council and Geoffrey McLellan, the RTA Maintenance Works Supervisor. It appears Geoff Osborne and staff under him at the Corowa Shire Council received calls from members of the public in relation to the water over the road, which was causing a danger to vehicles. The messages were passed onto the RTA as the Riverina Hwy is managed by the RTA. Geoff McLellan was the person responsible for passing the information onto Andrew McGregor and McGregor was responsible for putting out the signs. After obtaining the statements and information regarding the process and responsibilities of each authority I formed the opinion there may have been a delay in getting the signs out onto the road or messages were not delivered or passed on regarding the reports of the water on the road. I obtained another statement from Andrew McGregor confirming he was only notified once by Geoff McLellan regarding water over the road in the vicinity of accident. Geoff Osborne states he was aware McLellan was informed more than once. In the statement obtained from McLellan he states he informed McGregor to attend the Riverina twice on the 4th February. On the 1st of April I contacted Geoff McLellan and left a message on his answering machine to confirm how many times he was informed of water on the road and how many times he informed McGregor to put signs out. On the 8th of April 2005 Senior Constable Morris obtained a statement from Geoff McLellan. This statement states Andrew McGregor was contacted twice regarding water over the road on the Riverina Hwy more than once on the 4th of February 2005 and he replies by stating he only received the one call from Geoff McLellan. It is clear to me, from the statements initially obtained and then again with clarifying statements, that the RTA workers I have spoken to are not divulging the full circumstances of who contacted each other, who put signs out on the road and how many times did they receive calls and attend the location.”

95 Until the last sentence, Constable McMillan’s concern appears to have been over messages and delay. The last sentence is the suspicion to which the trial judge referred. The occasion for the wider opinion in the last sentence, or any opinion that the RTA workers were not divulging the full circumstances, is far from evident.

96 As appears from [68] of the trial judge’s reasons, at the trial there was initially contest over whether a “Water Over Road” sign had been placed at all prior to the accident, but in the course of the trial a photograph was found and by the end of the trial there was no doubt that it had been. The trial judge made findings as to messages and times. Even if regard could be had to Constable McMillan’s opinion, it had to be evaluated on the evidence at trial, including being tested against the better information before the trial judge: and it had to be asked whether it was not soundly based and whether any impression he gained was the product of differing recollections which could now be resolved.

97 However, regard could not be had to Constable McMillan’s opinion. The trial judge had to decide for himself whether Messrs McLellan and McGregor gave reliable evidence, and so far as necessary for that purpose he had to decide for himself whether they had not divulged the full circumstances to Constable McMillan. His Honour could not properly act upon Constable McMillan’s opinion that they had not done so.

98 This appears to have been recognised when Constable McMillan’s statement was tendered. Objection was taken to a number of its paragraphs. His Honour said -

“HIS HONOUR: I can see why Mr Parker’s objecting, I would reject in any event, even if he was here, the various statements of his opinion, for example, the comment ‘I formed the opinion that the RTA workers were not divulging the full circumstances’, but his summary of the statements, if they are accurate summaries of the statements made to him, may not necessarily be objectionable, depending on the status of those statements.”

99 After some debate over the summary of the statements made to Constable McMillan, the trial judge rejected a number of paragraphs of his statement. They included para 31 set out above.

100 Thus three things can be said of the apparent reliance on the suspicion expressed by Constable McMillan. First, the expression of suspicion was not in evidence at all. Secondly, if it had been, the trial judge had to decide for himself, and could not properly act upon Constable McMillan’s state of suspicion. Thirdly, in any event whether there was a proper basis for Constable McMillan’s state of suspicion had to be evaluated on the evidence before the trial judge. So far as the trial judge considered that false and misleading statements had been made to the police because of Constable McMillan’s suspicion, there was error.

101 Secondly, the discrepancy seen by the trial judge between what Messrs McLellan, McGregor and Freyer said in their police statements and their evidence at trial was in my opinion far from compelling.

102 The placement of the “Water Over Road” sign 924 metres east of “Lyntods” was first accurately established well after the accident. The discrepancy was between that distance and Mr McLellan’s “approximately 200 metres east of the accident site”, Mr McGregor’s “about 100-150 metres”, a rough guess of which he could not be exactly sure, and Mr Freyer’s “usually … two or three hundred metres back”. With respect, it was not a case of confusion between 924 metres and the lesser distances, but of recollection and estimation after what must have been a difficult evening. And it had to be asked why the three persons would have fudged the distance in their police statements, when it would be expected that the placement of the “Water Over Road” sign 924 metres east of “Lyntods” would readily enough be established: indeed, Mr McLellan had photographed it.

103 That estimates were given to the police rather than any attempt at accuracy is clear; they were given expressly as an approximation, as a rough guess, and in Mr Freyer’s case not even as an estimate but as a usual distance. That they could be out by 700 metres or thereabouts, on a country road as earlier described, can in my view be accepted.

104 Discrepancy between his police statement and the fact was not raised with Mr McGregor (although it was put to him, and he agreed, that he was “not very good with distances”). His Honour’s inclination was apparent from an early intervention, when counsel for Allianz and Woolworths put to Mr McLellan that there could not be confusion in his mind between 200 or 300 metres “and, say, 900 metres”, that he would “draw an inference as to whether somebody would make a mistake between 300 metres and 900 metres”. The discouragement of counsel was not wholly successful, and there was some cross-examination on Mr McLellan’s estimate in the police statement in which he maintained that that was his belief at the time. It was not put to him that he intended to mislead the police, or that he was motivated to provide misleading information because he and Messrs McGregor and Freyer were aware of a mistake and seeking to protect themselves or their employer (cf [105] of the trial judge’s reasons). Discrepancy between his police statement and the fact was not directly put to Mr Freyer, although he was asked whether he knew the difference between 200 metres and 800 metres; he agreed, and nothing further was put to the effect that he had given a misleading estimate to the police.

105 I appreciate that the trial judge saw and heard Messrs McLellan, McGregor and Freyer give evidence. However, I have difficulty with the rather trenchant findings in relation to discrepancy between what they said in their police statements and their evidence at trial. The evidence at trial was against the knowledge, later ascertained, that the “Water Over Road” sign had in fact been placed 924 metres east of “Lyntods”. As I have said, the estimates given to the police did not purport to be accurate, and I do not exclude that they could be inaccurate to the extent of 700 metres or thereabouts.

106 In my opinion, the adverse view taken by his Honour in this respect was not well-founded. In fairness to Messrs McLellan, McGregor and Freyer, that should be stated.

Causation – on appeal

107 A plaintiff has the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation: CL Act, s 5E. As cross-claimants, Allianz and Woolworths were in the position of plaintiffs. It was necessary that the appellants prove the facts relevant to determining causation in accordance with s 5D of the CL Act.

108 At least on appeal, only factual causation (para (a) of s 5D(1)) was in issue. It was not contended that, if factual causation was established, scope of liability (para (b) in s 5D(1)) was not satisfied. Nor was it contended that, if factual causation was not established, this was “an exceptional case” within the meaning of s 5D(2).

109 “The harm” in factual causation in para (a) refers back to “particular harm” at the commencement of s 5D(1). Ordinarily the particular harm is the injury to the plaintiff, such as the injuries to Mr Rickard and Mr Wheeler. For present purposes the particular harm extended to the deaths of Mr Kelly and Mr Dennison; in practical terms, the happening of the accident.

110 The “necessary condition” test in s 5D(1)(a) takes up the “but for” test developed in the common law, there operating as a “negative criterion of causation” whereby if it could not be concluded on the balance of probabilities that the harm would not have happened but for the negligence, then it could not be concluded that the harm was caused by the negligence: March v E & M H Stramare Pty Ltd at 515-6; CAL (No 14) Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; (2009) 239 CLR 390 at [14]. As was said in Adeels Palace Pty Ltd v Moubarak at [55] -

necessary

111 Accordingly, the appellants had the onus of establishing that it was more probable than not that, but for the failure to place a “Water Over Road” sign 150 to 300 metres to the east of “Lyntods”, the accident would not have happened.

112 Allianz and Woolworths submitted the trial judge should have found that Mr Kelly had observed the water over the road in time appropriately to reduce speed, and should not have left as an alternative that he had not observed the water over the road in time. They submitted that this finding should have been made, on the probabilities, from the trial judge’s conclusions in relation to Mr Kelly’s negligence that visibility was good and the water flowing across the road at “Lyntods” would have been obvious to Mr Kelly from a distance of 150 metres and certainly from 125 metres if he were keeping a proper lookout.

113 From there, Allianz and Woolworths submitted that the accident came about because Mr Kelly failed to appreciate that the water across the road constituted a hazard requiring that he slow his vehicle. They submitted that, on the probabilities, a “Water Over Road” sign at a point 150 to 300 metres to the east of “Lyntods” would have alerted Mr Kelly to the fact that the water across the road was a hazard, since that was the purpose of putting such a sign at the roadside, and that he would have slowed his vehicle. That his driving would have been changed by a sign at that location was said to be supported by -

evidence of Mr Wheeler to the effect that, although he was ordinarily a nervous passenger, he felt “comfortable” with Mr Kelly’s driving, having experienced it for some time after they had first set out;

the fact that the accident occurred on the sweeping bend, from which it was suggested that Mr Kelly was alert because he took the bend; and

the fact that the bus was coming in the opposite directions, which it was said would have focussed Mr Kelly’s attention on the road ahead and the water.

114 It was at this point that the submissions of Allianz and Woolworths and the submissions of Ms Kelly diverged. Ms Kelly submitted that the two alternatives were open, and that Mr Kelly’s negligence could have been either in failing to see the water flowing across the road in time or in failing to appreciate that it constituted a hazard. She submitted that on either alternative a “Water Over Road” sign properly positioned would have alerted Mr Kelly, and would have changed his driving so that he slowed his vehicle at least to a speed at which aquaplaning would not have occurred. She adopted the suggested support for change in his driving.

115 While I do not think that it greatly affects what follows, I do not think that the trial judge should have found that Mr Kelly saw the water over the road in time appropriately to slow his vehicle. The submission of Allianz and Woolworths took up the trial judge’s finding of obviousness to Mr Kelly if he were keeping a proper lookout but, other than by the suggested support, ignored whether he was in fact keeping a proper lookout. Mr Wheeler’s comfort does not assist when Mr Kelly undoubtedly drove negligently at the particular time. Taking a sweeping bend is consistent with failure to see the water over the road, and the oncoming bus, if a focus of attention, may actually have diverted Mr Kelly’s attention from the water over the road.

116 The submission also passed over the trial judge’s finding (at [94]) that “a reasonable driver observing water flowing across the road, as has been described, would have recognised this as a hazard and reduced speed accordingly”. Mr Kelly did not appropriately reduce speed. There is no proper basis for finding that he saw the water but did not recognise it as a hazard, in preference to finding that he did not see the water at all.

117 The appellants referred to evidence supporting the traffic engineers’ agreement that a warning sign such as the “Water Over Road” sign had to be sufficiently far away from the hazard to enable an approaching driver appropriately to react, but close enough so that the driver would recognise the hazard when he or she came to it”. At that level of generality, there was no dispute from the RTA. However, it was necessary for the appellants to go further and challenge the trial judge’s view, expressed at [135] in relation to seeing the water but misjudging the situation, that a warning sign would not have made any difference. They submitted that it would have made a difference because it would have alerted Mr Kelly to the presence of the water over the road (Ms Kelly) or to the hazard it presented (all appellants), and he would have appropriately slowed his vehicle.

118 The RTA submitted that it was not known why Mr Kelly had failed appropriately to slow his vehicle. If he was attentive to the road, he must have seen the water and appreciated that it was a hazard; so either he was inattentive to the road, or he did see the water and appreciate the hazard but nonetheless drove at the speed he did. If he was inattentive to the road, he probably would not have seen a “Water Over Road” sign placed 150 to 300 metres from “Lyntods”, and his driving would not have been altered by the presence of a sign. If he was attentive to the road and did see the water and appreciate that it was a hazard, but drove nonetheless at the speed he did, again his driving would not have been altered by the presence of a sign which told him no more than what he already knew. In either event, the RTA submitted, causation was not established. It submitted that there could be many reasons why Mr Kelly had either not seen the water across the road or not appreciated that it was a hazard, such as his attention being distracted by momentary sleepiness, or diverted to something in the paddocks beside the road or to adjustment of the vehicle’s sound system.

119 The RTA’s submissions differed from the trial judge’s reasoning, and no appellant undertook a submission of increased risk and the risk coming home: it is not necessary to comment on the trial judge’s approach in this respect. The RTA’s submissions were not that there were conjectures of equal possibility, on one of which failure to have a properly positioned warning sign may have contributed to the accident (not seeing the water over the road in time: [133]) but on the other of which there was no causation (misjudging the situation: [135]). On the RTA’s submissions, a finding of causation could not be made when it was not known why Mr Kelly had failed appropriately to slow his vehicle, but on either of the speculative alternatives causation could not be found.

120 The RTA’s submissions are not persuasive, and the impediment to their acceptance seems also to present a difficulty for the trial judge’s reasoning. The submissions leave out of account that a “Water Over Road” sign 150 to 300 metres to the east of “Lyntods” may have caught the attention of Mr Kelly, when otherwise he was not attentive to what lay ahead, or may have alerted him to the water over the road being a hazard. That was the purpose of such a sign, and the RTA did not contend that placing a “Water Over Road” sign 150 to 300 metres east of “Lyntods” would have been an empty exercise. That is not to say that, on the facts of this case, causation should be found. But the submissions are not an answer to those of Allianz and Woolworths and Ms Kelly, which sought to carry the intended effect of placement of a warning sign to an actual effect, on the probabilities, had a “Water Over Road” sign been in place 150 to 300 metres east of “Lyntods”.

121 However, there is also an impediment to acceptance of the appellants’ submissions. They failed to take account of the “Water Over Road” sign further to the east, some 624 to 774 metres further from “Lyntods” than where the judge found the sign should have been placed. Whether Mr Kelly’s driving would have been changed by a sign 150 to 300 metres to the east of “Lyntods” called for regard to the fact that it was not changed by the sign 924 metres away. The water over the road at “Lyntods” was obvious to and recognisable as a hazard by a reasonable driver, who would reduce speed accordingly, and it was not a case of no warning sign at all.

122 At 100 kph it would have taken approximately 33 seconds for Mr Kelly to travel from where the sign was placed to where the water was over the road. It would have taken approximately 22 to 28 seconds to travel from where the sign was placed to where, on the judge’s finding, it should have been placed.

123 The RTA submitted that, when Mr Kelly had not slowed his vehicle despite the warning sign, it could not be found on the balance of probabilities that he would have slowed his vehicle had the sign been some 624 to 774 metres and 22 to 28 seconds travelling time closer to “Lyntods”. Rather, the RTA submitted, if Mr Kelly saw and took note of the “Water Over Road” sign 924 metres distant from “Lyntods”, and did not encounter significant water over the road immediately thereafter, he would have remained alert to water over the road and the hazard it presented at least until less than 30 seconds later, he saw the obvious water across the road. The reasoning in its submissions earlier described then applied. Either Mr Kelly did not see and take note of the “Water Over Road” sign, or he saw it but it did not change his driving. The correct inference was that the same would have occurred in relation to a “Water Over Road” sign placed 150 to 300 metres from “Lyntods”; at the least, it could not be inferred that the differently placed sign would have changed Mr Kelly’s driving.

124 The appellants sought to meet this by submitting that, beyond the proposition that a warning sign had to be close enough to the hazard that the driver would recognise the hazard when he or she came to it, expert evidence supported that 924 metres was too far away for that recognition. They referred to the trial judge’s observations at [124], part of coming to the conclusion that placing the “Water Over Road” sign 924 metres to the east of “Lyntods” was so unreasonable that no road authority could properly consider it to be a reasonable exercise of its power to do so, that “[a] warning sign approximately a kilometre away from the specific hazard is unlikely to alert a driver to that hazard”; and to the trial judge’s observation at [101], part of rejecting Mr Stuart-Smith’s evidence concerning placement of the sign that a sign 924 metres to the east of “Lyntods” that “[f]ar from having a beneficial effect, such a sign was likely to mislead a motorist who would be looking for water across the road in proximity to the sign and might well think that no such hazard existed”.

125 Before going to expert evidence, the appellants’ reliance on the trial judge’s observations last mentioned has difficulties. At those points in his reasons the trial judge was considering breach of duty. Likelihood or unlikelihood that a warning sign approximately a kilometre away from the specific hazard would alert a driver to that hazard went to reasonableness of placing the “Water Over Road” sign where it was placed. The question is different when addressing causation and taking account of the sign in fact in place. As was said in Adeels Palace Pty Ltd v Moubarak at [51], speaking of whether the presence of a security guard would have deterred a wrongdoer -

“[51] Nor was ‘but for’ causation established in these cases by observing that the relevant duty was to take reasonable care to prevent injury to patrons from the violent, quarrelsome or disorderly conduct of other persons. That is, the question of factual causation was not answered in these cases by pointing out that the relevant duty of care was to take reasonable steps to prevent violent assault, that each plaintiff was the victim of a violent assault, and that the damage sustained by the plaintiffs was “the very kind of thing” which the relevant duty obliged Adeels Palace to take reasonable steps to prevent. That observation may bear upon questions about scope of liability. Describing the injury as ‘the very kind of thing’ which was the subject of the duty must not be permitted to obscure the need to prove factual causation.”

126 The appellants submitted that expert evidence denied the effectiveness of a “Water Over Road” sign 924 metres distant from the water over the road. They referred to evidence of the traffic engineers and of Mr McLellan, although Mr McLellan could not be regarded as an expert.

127 According to the Australian Standard, a “Water Over Road” sign should be used “to indicate that the road is trafficable with care although there is water over the road”. The standard does not state where in relation to the water the sign should be placed. I have referred to the acceptance that it should be sufficiently close to the hazard that the driver would recognise the hazard when he or she came to it.

128 In a supplementary report Mr Keramidas said -

“The placement of hazard signs follows the general principles of traffic guidance, in that they should be placed far enough in advance of the hazard to allow for reaction by the driver, but not that far that the message is lost. In this particular case, given the road geometry and likely approach speeds a distance of 150 to 200 metres would be appropriate.”

129 Mr Keramidas did not amplify his reference to the risk that the message might be lost.

130 Mr Stuart-Smith said something of longevity of the message in his report. His opinions included (the culvert is the dip) -

Water Over Road

“Whilst the location at the culvert and the driveway were separated by a distance of about 700 m, the distance is only 25 seconds in travel time at the prevailing speed limit. It could be expected that a driver passing through water at the culvert would still have some alertness to the possibility of water on the road for the next 20 seconds, at which time the second flow would have been visible.”

Water Over Road

131 Mr Keramidas provided a further supplementary report in which, commenting on Mr Stuart-Smith’s opinions of proper location of a sign, he said -

“For westbound traffic however, the placement of an undersized hazard sign well in excess of 800 metres (probably closer to 900 metres) from the water flowing across the driveway would hardly fall within the principles of the Australian Standards, as the distance is up to five times the accepted distance for the placement of such hazard signs. In addition, it would be clear to a westbound driver that the hazard sign relates to water over the road at a point about 800 metres east of the driveway (which would not be visible from this location), and therefore having traversed the section of water 800 metres east of the driveway, there would be no indication that the sign actually is supposed to relate to a further hazard some 20 to 30 seconds down the road. In other words, if the second area of water flow over the roadway was visible from the point where the driver passes the hazard sign, then although not technically in accordance with the Standards, it could be accepted as a practical solution to placing multiple signs in close proximity. In this case however, given that the two water hazards across the roadway were not visible from the same point on the roadway, separate signs should be applied to each.”

132 These statements were in connection with where a sign should be placed, and involved some different assumptions of distance and water over the road at the dip. It may be noted that Mr Keramidas (who accepted as a practical solution one sign in relation to two hazards if both hazards were visible) assumed that the driver traversed a section of water 800 metres away from the further hazard.

133 In the joint expert evidence the trial judge drew attention to Mr Stuart-Smith’s opinion to the effect that the placement of the sign was reasonable in the circumstances, and the evidence continued -

“HIS HONOUR: As I understand the opinion of Mr Keramidas and Mr Jamieson, if a sign of that kind was to be effective it should have been positioned between about 150 to 200 metres away from the hazard identified, that is, “water over road”. Is that right, Mr Keramidas?

WITNESS KERAMIDAS: That’s correct, yes.

HIS HONOUR: Mr Jamieson?

WITNESS JAMIESON: Although I don’t disagree with your position --

HIS HONOUR: It is not in your report.

WITNESS JAMIESON: I thought about that but wasn’t briefed to cover it.

HIS HONOUR: While you are sitting there, do you disagree with that proposition?

WITNESS JAMIESON: No, I don’t disagree.

…

HIS HONOUR: Mr Stuart-Smith, what do you say about the criticism which has been directed at your assessment of the reasonableness of having a sign some 900 metres or so to the east of Lyntods, that it is too far away to appropriately alert a west travelling driver to a hazard at Lyntods?

134 In further questions from counsel on this answer by Mr Stuart-Smith, dealing with the position of choice for placement of a sign, Mr Stuart-Smith agreed that the “idea” for the position of warning signs was “so that they alert the person in time to avoid the hazard and not so early as to have them lose their edge of alertness by the time they get to the hazard”, but added that there were no distances mandated or specified for the “Water Over Road” sign.

135 The attention in this evidence was to where a warning sign should properly be placed, not when and in what circumstances its influence on driver behaviour would be lost. The traffic engineers could express views on minimum distances so far as dependent on matters such as braking distances and reaction times, but it is far from clear that they were qualified to speak of maximum distances so far as dependent on the impact of a warning sign and retention of the impact: see later in these reasons.

136 The evidence of Mr McLellan on which the appellants relied was elicited in cross-examination, over objection that he was not qualified to give evidence on the subject. No ruling was made, and the trial judge does not appear to have relied on Mr McLellan’s evidence in this respect.

137 Mr McLellan said that if he was going to the “Lyntods” site he would put whatever signs he was going to use 220 or 250 metres ahead of the hazard, although it might vary “[i]f there’s more water further back that they’re trying to cover”. He was later reminded of what he had said, and gave the further evidence -

“Q. Now the consideration that you have to have regard to is putting the sign in the right position so that the driver has sufficient time to comprehend and respond to the information you’re conveying to him or her, --
A. Yes.

Q. – that’s right isn’t it?
A. Yes.

138 Later again, in the context of questions about the “Water Over Road” sign actually placed to the east of “Lyntods” and with specific objection, he gave the evidence -

“Q. Now, we can agree with this, can’t we, that a sign around 900 metres away was inappropriately placed?

OBJECTION (PARKER). QUESTION ALLOWED

WITNESS: For the Lyntods driveway, yes.”

139 Still later, Mr McLellan was asked and answered -

140 Mr McLellan’s understanding of the “consideration” to which regard was to be had did not add to the evidence of the traffic engineers. The basis for his more specific answers as to placement of the sign where it was placed, which at best went to breach of duty, was not explored. I have earlier referred to the absence of any evidence of his training or experience. Again, I do not think the latter evidence was admissible, or if admissible of any weight.

141 The traffic engineers’ remarks on continued impact of the “Water Over Road” sign were not backed up by any evident study or experience. Some effect of a sign more distant from the water over the road at “Lyntods” as a warning of that hazard was accepted, opinions differed, and the opinions came down to the traffic engineer’s own view of the response of a driver to seeing the sign.

142 In Transport Publishing Co Pty Ltd v The Literature Board of Review (1956) 99 CLR 111, where the issue was tendency of a publication to deprave or corrupt, it was said by Dixon CJ and Kitto and Taylor JJ at 119 that “ordinary human nature, that of people at large, is not a subject of proof by evidence, whether supposedly expert or not”. Their Honours accepted that “particular descriptions of persons may conceivably form the subject of study and of special knowledge”, such as because of abnormal mentality or behaviour. That is not this case, but even if in this case expert evidence could have been given going to a driver’s response to a warning sign, it was not.

143 In my opinion, the evidence on which the appellants relied has no weight beyond indications of how the Court might see the matter. In former times the effect of the “Water Over Road” sign on Mr Kelly’s driving would have been a matter for the jury, drawing upon their experience of life. The observations of Lord Diplock in General Electric Co (of USA) v General Electric Co Ltd (1972) 1 WLR 729 at 738, in relation to likelihood of deception by use of a trademark, are apposite -

“The question does not cease to be a ‘jury question’ when the issue is tried by a judge alone or on appeal by a plurality of judges. The judge’s approach to the question should be the same as that of a jury. He, too, would be a potential buyer of the goods. He should, of course, be alert to the danger of allowing his own idiosyncratic knowledge or temperament to influence his decision, but the whole of his training in the practice of the law should have accustomed him to this, and this should provide the safety which in the case of a jury is provided by their number.”

144 This passage was adopted by Gummow J, with whom Black CJ and Lockhart J relevantly agreed, in Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 389-90.

145 Contrary to the appellants’ submission, the fact that Mr Kelly may ordinarily have been a careful driver, with whose driving Mr Wheeler came to be comfortable, is not of significance to causation. On this occasion, he was not a careful driver. He hit the water over the road at speed, notwithstanding that it was obvious if he had been paying attention and that the hazard it presented would have been recognised by a reasonable driver. If anything, ordinary carefulness would suggest that, on seeing the “Water Over Road” sign where it had in fact been placed, and not finding significant water in the dip, it is more likely that Mr Kelly would have been alert to the water at “Lyntods” and the hazard it presented when his vehicle came upon it some 30 seconds thereafter. But unfortunately he was not a careful driver on this occasion.

146 I recognise that, in connection with breach of duty, the trial judge observed that a warning sign a kilometre away was unlikely to alert a driver to the hazard and that it was more likely to mislead. In the path he took, these observations did not arise for his Honour in coming to his decision on causation. That is not how I see the matter, and so far as necessary I respectfully differ from his Honour.

147 A driver approaching from the east and seeing the “Water Over Road” sign where it was placed would have been alerted to look for water over the road. There was a shallow dip, with water encroaching as described by Mr McGregor, but this would not be likely to have been seen by the driver as the water of which he was being warned. Even if the driver considered that it might have been the water of which he was being warned, or that the sign had been placed at a time when there was water over the road which had since receded, in the absence of significant water in the dip a driver would be conscious that within a further distance he or she might encounter water over the road being the water of which he or she was being warned.

148 In relation to causation, as distinct from breach of duty, it is not the ideal distance between the sign and the hazard which must be considered, but the distance for which the sign would be likely to have its impact. In my view the “Water Over Road” sign where it was placed, if seen and taken in by Mr Kelly, would be likely to have caused him to be alert to the obvious water over the road at “Lyntods” and the hazard it presented. That would be so, in my view, for the 30 seconds or less travelling time on a short portion of straight road and then a sweeping bend; and it was not a case of an obscure hazard, but of a hazard readily visible and recognisable as such from at least 125 metres away.

149 If Mr Kelly did not see and take in the sign where it was in fact placed, in my opinion the probability is that he would not have seen a sign placed 150 to 300 metres east of “Lyntods”; at the least, it is speculative whether or not he would have done so. The appellants repeated the submission that attentiveness could be seen in his negotiation of the left hand bend, but it is difficult to find attentiveness when Mr Kelly did not see the water over the road, or did not react to the hazard it presented.

150 If Mr Kelly did see and take in the sign where it was in fact placed, it did not bring a material reduction in the speed of his vehicle as it approached the water over the road. I do not accept that, on the probabilities, that was because the distance from the water over the road was such that the impact of the sign was lost; again, at the least, it is speculative whether or not he would have reduced the speed of his vehicle had the sign been closer to the water over the road at “Lyntods”,

151 In my opinion, it should be concluded that a “Water Over Road” sign placed 150 to 300 metres to the east of “Lyntods” would not have changed Mr Kelly’s driving, or at least that it is speculative whether or not it would have done so. Causation was not established.

The result

152 The appeals in relation to causation fail, and it remains that the RTA is not liable to Allianz and Woolworths on the cross-claim or to Ms Kelly on her claim. Had it been necessary to go to the notices of contention, the RTA was not liable because the unreasonableness in the exercise of a special statutory power required by s 43A of the CL Act was not established.

Orders

153 I propose in each appeal that the appeal be dismissed with costs.

154 McCOLL JA: I agree with the orders Giles JA proposes and with his Honour’s reasons.

I agree with the orders proposed by Giles JA and with his Honour’s reasons.

**********

Citations

Allianz Australia Insurance Ltd v Roads and Traffic Authority of New South Wales [2010] NSWCA 328

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CITATION:	Allianz Australia Insurance Ltd v Roads and Traffic Authority of New South Wales; Kelly v Roads and Traffic Authority of New South Wales [2010] NSWCA 328
HEARING DATE(S):	26 October 2010
JUDGMENT DATE:	9 December 2010
JUDGMENT OF:	Giles JA at 1; McColl JA at 154; Sackville AJA at 155
DECISION:	In each appeal the appeal is dismissed with costs. *** [The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
CATCHWORDS:	TORTS – negligence – motor accident – water over road sign placed 924 metres east of water hazard where accident occurred – finding of negligence because water over road sign should have been placed 150 to 300 metres away from hazard – small dip with some water near where water over road sign placed – car drove through water hazard at least 90kph – car aquaplaned – whether negligence in not placing reduce speed sign as well as water over road sign – on evidence negligence in not placing reduce speed sign not established – whether negligent placement of water over road sign was within s 43A of Civil Liability Act – consideration of “so unreasonable that no authority having the special statutory power could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power” – provision imposes a Wednesbury unreasonable standard – consideration of Wednesbury unreasonableness in negligence context – high threshold before Wednesbury unreasonableness found – substitution of “irrational” as test undesirable – test is objective and not focused on decision-maker’s subjective thought processes – placement of water over road sign near understandable – placement may not have been preferable course but not Wednesbury unreasonable – CAUSATION – whether failure to place water over road sign 150 to 300 metres east of hazard caused accident – sign placed 924 metres away must be taken into consideration – driving not changed by that sign – no admissible evidence of effect of sign on driving behaviour – effect of sign on driving a jury question – existing sign would have alerted driver even if hazard 30 seconds away – no inference that sign 150 to 300 metres would have changed driving – causation not found.
CATEGORY:	Principal judgment
CASES CITED:	Adeels Palace Pty Ltd v Moubarak [2009] HCA 48; (2009) 239 CLR 420; Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; (2005) 221 CLR 568; Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 KB 223; Attorney-General of New South Wales v Quin (1990) 170 CLR 1; Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512; Bromley London Borough Council v Greater London Council (1983) 1 AC 768; CAL (No 14) Pty Ltd v Motor Accidents Insurance Board [2009] HCA 47; (2009) 239 CLR 390; Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379; Commonwealth of Australia v Pharmacy Guild of Australia (1989) 91 ALR 65; Council of Civil Service Unions v Minister for the Civil Service (1985) AC 374; General Electric Co (of USA) v General Electric Co Ltd (1972) 1 WLR 729; Fares Rural Meat and Livestock Co Pty Ltd v Australian Meat and Life-stock Corporation (1990) 96 ALR 153; Firth v Latham [2007] NSWCA 40; Friends of Hinchinbrook Society Inc v Minister for Environment (No 2) (1997) 69 FCR 28; Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348; Luxton v Vines (1952) 85 CLR 352; March v E & M H Stramare Pty Ltd (1991) 171 CLR 506; McVeigh v Willara Pty Ltd (1984) 6 FCR 587; Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; Minister for Immigration and Multicultural Affairs v Betkhoshabeh [1999] FCA 980; Minister for Immigration and Cultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611; Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; (2010) 240 CLR 611; Precision Products (NSW) Pty Ltd v Hawkesbury City Council [2008] NSWCA 278; (2008) 74 NSWLR 102; Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Ltd [2009] NSWCA 263; (2009) 168 LGERA 357; Secretary of State for Education and Science v Tameside Municipal Borough Council (1977) AC 1014; Transport Publishing Co Pty Ltd v The Literature Board of Review (1956) 99 CLR 111; Wouters v Deputy Commissioner of Taxation (1988) 20 FCR 342; Wyong Shire Council v Shirt (1980) 146 CLR 40.
PARTIES:	Mattter No 2008/289443: Allianz Australia Insurance Ltd - First Appellant Woolworths Limited - Second Appellant Roads and Traffic Authority of NSW - First Respondent Jack Rickard - Second Respondent Andrew Gregory Wheeler - Third Respondent Sharon Louise Dennison - Fourth and Fifth Respondent In Matter No 2008/289556 Christine Kelly - Appellant Roads and Traffic Authorityy of New South Wales - Respondent
FILE NUMBER(S):	CA 2008/289443; 2008/289556
COUNSEL:	In Matter No 2008/289443 - K Rewell SC & G Smith - Appellants T G R Parker SC & W A D Edwards - First and Second Respondents E E Welsh - Third Respondent B M J Toomey QC & J J Ryan - Fourth & Fifth Respondent In Matter No 2008/289556: A Black SC & D Toomey - Appellant T G R Parker SC & W A D Edwards - First Respondent
SOLICITORS:	In Matter No 2008/289443 - McLachlan Chilton - Appellant Sparke Helmore - First and Second Respondents Brydens, Liverpool - Third Respondent Phil Banister, Castlehill - Fourth and Fifth Respondent In Matter No 2008/289556: Stacks/Goudkamp - Appellant Sparke Helmore - Respondents

LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S):	SC 20300/08. 20452/08; 20459/08; 20460/08; 20466/08
LOWER COURT JUDICIAL OFFICER:	Hoeben J
LOWER COURT DATE OF DECISION:	23 October 2009, 26 February 2010 (Costs)
LOWER COURT MEDIUM NEUTRAL CITATION:	Rickard & Ors v Allianz Australia Insurance Ltd & Ors [2009] NSWSC 1115; Rickard & Ors v Allianz Australia Insurance Ltd & Ors (No 2) [2010] NSWSC 101