Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserve Trust v Thompson

[2013] HCATrans 82

[2013] HCATrans 082

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S330 of 2012

B e t w e e n -

BATHURST REGIONAL COUNCIL AS TRUSTEE FOR THE BATHURST CITY COUNCIL CROWN RESERVE TRUST

Applicant

and

GREGORY THOMPSON

Respondent

Application for special leave to appeal

FRENCH CJ
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 APRIL 2013, AT 10.19 AM

Copyright in the High Court of Australia

MR R.S. SHELDON, SC:   May it please the Court, I appear with my learned friend, MR H.S.Y. CHIU.  (instructed by DLA Piper Australia)

MR M.J. NEIL, QC:   May it please the Court, I appear with my learned friend, MR M.N. THOMPSON, for the respondent.  (instructed by Gerard Malouf & Partners)

FRENCH CJ:   Yes, Mr Sheldon.

MR SHELDON:   Thank you, your Honours.  Your Honours, the issues raised by this application concern the proper construction of two provisions of the Civil Liability Act 2002 (NSW) and its analogues elsewhere in the Commonwealth. Can I tell your Honours that the Northern Territory has no analogous provisions, and that South Australia has provisions which are analogous with section 5B of the New South Wales Act, but not with section 42 of the New South Wales Act. Section 5B(2) and its analogues say that when a court is determining:

whether a reasonable person would have taken precautions against a risk of harm –

and I emphasise the word “harm” – it is to consider the four matters which are listed in section 5B(2). It is submitted that this case raises the issue of the construction of the provisions of section 5B(2) and their practical application. In particular, the first point which the applicant says raises an issue warranting the grant of special leave concerns the issue of the probability of harm in section 5B(2)(a), and the second point arises from section 5B(2)(c). In relation to section 5B(2)(a), it is the applicant’s contention that the special leave question asks whether a plaintiff has an evidentiary onus under section 5B(2) of the Civil Liability Act.

FRENCH CJ:   Now this is a case, is it not, in which we know how the, if you like, risk of harm was created?  It was 10 to 15 years before there was modification for the steps by the applicant.

MR SHELDON:   Yes, your Honour.  There is relevantly for this Court no issue about how the harm came to be created.  But in that context, there are two issues that need consideration.  One is the admission made at trial by the respondent that many people used the rotunda, and the other is that the steps had been in the condition they were in at the time of the accident for somewhere in the order of 10 years or more.

What happened below was that the courts took the view that the absence of evidence as to any injury in those 10 years was at best neutral, and I will come back, your Honours, to explain why in my submission that gives rise to a problem with the approach taken below.  But before I do that, can I make the obvious point that section 5B(2) really echoes what Justice Mason had to say in Shirt in terms of evaluating what a reasonable person would have done in the circumstances.

What is different about section 5B(2) is, in our submission, that it makes consideration of the four elements in 5B(2) mandatory.  They are not exclusive because the chapeau to 5B(2) includes the words “amongst other relevant things”, but they are mandatory.  In some respects, that in any event reflects the common law.

As I have submitted, the first of the matters raised by 5B(2) is the probability of the harm occurring if care were not taken.  The reason why we say that it is mandatory for a court to consider this issue of the probability of harm arises from the terms “the court is to consider”.  It is not self‑evidently discretionary.  It has to be considered.  It applies, in our respectful submission, in every case to which the Civil Liability Act applies, and there are only limited exceptions in relation to its application.

The question which justifies the grant of special leave in this case is whether section 5B(2) requires there to be evidence to permit the court to discharge that mandatory requirement to consider the probability of the harm when determining what a reasonable person would have done.  In the case at trial – and your Honours will see this at application book 26 at about point 34 – the trial judge found in paragraph 139 that:

the probability of harm occurring in the absence of remedial action is at least substantial –

He made that finding in circumstances where, at paragraph 96 at page 18 of the application book at about line 11, his Honour had earlier made a finding:

The state of the evidence was really to take prior accident history and prior knowledge or absence of knowledge of accident history out of action for either side.

This was described in the way in which I put it earlier as being a neutral evidentiary position.  In our submission, there is an obvious tension between a finding that the probability of the harm occurring is substantial and the proposition that the absence of evidence concerning accidents is neutral, or is out of play, as his Honour effectively put it for both sides.

FRENCH CJ:   Now, as I understand it, the step itself was narrow, or narrower than the others, and the respondent’s foot, as it were, was only able to rest on part of it and the front half of his foot was, as it were, moving into empty space.

MR SHELDON:   Hanging in space, yes, your Honour.

FRENCH CJ:   Now, that is enough to generate a basis for inferences about risk of harm, is it not, the fact that that sort of situation can occur?

MR SHELDON:   Your Honour, the fact that it can occur is a circumstance, but to suggest that the absence of evidence of that circumstance having materialised as harm is ‑ ‑ ‑

FRENCH CJ:   Now, you are really feeding into probabilities here.

MR SHELDON:   I am, your Honour.

FRENCH CJ:   One can look at the physical situation.  There is this step so wide, whatever number of millimetres it was.  You have people with feet that are bigger than that, and it is the top step, I think, was it not?

MR SHELDON:   Yes, your Honour.

FRENCH CJ:   One could say there is a probability of harm arising out of that.  As I understand it, you are saying the absence of evidence of complaint is evidence – should have been able to have been treated as the evidence of absence of complaint, and therefore the evidence of absence of incidents over that period of 10 to 15 years feeding into the probability calculus.

MR SHELDON:   Can I come back to the opening part of what your Honour just put to me?  The fact that a foot would not fit completely on the step gives rise to a risk but it says, in my respectful submission, nothing about the probability of its occurrence.

FRENCH CJ:   Well, the word “risk” is just another term for probability of something bad happening.

MR SHELDON:   With respect, your Honour, that would not seem to be ‑ ‑ ‑

FRENCH CJ:   Well, it must be, must it not?  A risk is a probability – I am not saying a greater than even probability, but a probability of some magnitude.

MR SHELDON:   With respect, no, your Honour, because 5B in its totality rather than in its specific application in this case assumes, by the time it gets to 5B(2) at least, if not earlier, that there is a risk which is reasonably foreseeable.  Then what is to be taken into account, in our submission, under 5B(2) in relation to that risk which, it is accepted, must have been, as it were, found to have existed, what is the probability that that risk will come home and cause harm if it is not remedied, what is the likely seriousness of the harm that it will cause, what is the burden, et cetera?

So there is, in my respectful submission, a dichotomy between the risk as identified which, with respect, your Honour correctly identifies in the way your Honour puts it to me, and the probability of that risk coming home.  Now, we do not go quite so far as to say that we are entitled to a finding that there was no complaint or no injury, but what we say is that in evaluating the probability of the risk, the absence of evidence is a critical matter, and it is critical because, in our submission, the plaintiff bears the onus.  So the question which is actually begged by the decisions below is what is the evidence to support the proposition that the probability of the harm coming home in this case was substantial?

KIEFEL J:   Amongst the other relevant things that might be taken into account under 5B(2) might be the nature of the risk and the fact that the Council itself created it, would that not be right?

MR SHELDON:   Well, I would not suggest it is irrelevant, your Honour, but it would not relieve a court from then turning to the four matters that are mandatory.  It may influence those things.  If the risk has been created, the question still remains, in my respectful submission, what is the probability of it coming home, and the court has to make a decision about that based on evidence, in my respectful submission.

KIEFEL J:   But there is a distinction, is there not, between taking steps to avoid harm and doing something having created the very risk?

MR SHELDON:   There may be, your Honour, but if one steps back and looks at the facts of this case ‑ ‑ ‑

KIEFEL J:   You are talking about something more than reasonable foresight though, are you not?  You are saying that there has to be some knowledge?

MR SHELDON:   No, your Honour, I am not, because what I am saying is that the day after the step was put in the observation by somebody that it created a risk has a different potency than the proposition that 10 years later the plaintiff adduces no evidence of that risk having arisen.  Now, that is, in my respectful submission - the absence of that evidence is powerfully indicative of a state of affairs that is not consistent with a substantial risk.  One would have expected ‑ ‑ ‑

FRENCH CJ:   You mean no evidence of somebody having suffered harm as a result of that risk?

MR SHELDON:   Yes, your Honour.  I am sorry if I put that – so what is ultimately in issue is or perhaps I should not say ultimately in issue, but the controversy arises from the proposition that Justice Hoeben in the Court of Appeal identified at application book 61 at about line 15 in paragraph 59.  His Honour correctly concluded that a:

lack of evidence on the subject did not assist either party -

Now, the proposition we get from that is it may be true but the defendant did not have an onus, the plaintiff did.  So if the plaintiff was not assisted by this evidence, the question, to repeat it, is what was the evidence in support of the conclusion that the probability was substantial, or to put it in a more general way, what was the evidence that justified the conclusion that the probability of the harm warranted the responses for which the plaintiff below contended.

KIEFEL J:   We are talking about an evidentiary onus, not a legal onus.  The plaintiff retains that, but why would not the evidentiary onus have shifted to the Council upon proof of the nature of the risk - that the step was defective, it was too narrow and deceptively so?

MR SHELDON:   Because it remains an inchoate risk, in my respectful submission.  There are risks everywhere.  If this risk is to justify a response, then it needs to have a probability of giving rise to harm.  But the evidentiary question your Honour puts to me is perhaps better answered more directly this way.  What evidence would the evidence that your Honour’s question adverts to have addressed in the plaintiff’s case?  Nothing more than that there was a risk because the step was too narrow.  It would not have addressed and could not – if one takes this approach it would not matter that the Council did not know, or even if there had not been an injury, it would not matter because the risk was there ‑ ‑ ‑

FRENCH CJ:   I do not quite understand this.  Just going back to (2), we have a risk of harm.  So we say all right, there is a situation here where there is some probability.  We have not quantified it yet.  There is some probability of harm; that is a risk of harm.  Then it is necessary to ask under (a):

the probability that the harm would occur if care were not taken –

So that is where you get into what we might call loosely the quantification of the probability.  Now, maybe that it is expressed qualitatively as a vanishingly small probability or a not insignificant probability or a significant or a substantial or a high probability.  Then you feed that into the linkage with the next factor which is the likely seriousness of the harm.

Now, given that probabilities are always based, as it were, on prospective judgments, which are necessarily based on incomplete information, why cannot in principle a court, having no other evidence, look at the nature of the risk created, the fact that this is a rotunda used by people who are going to walk up and down the steps, a variety of people, and say there is a probability which is not insignificant that harm will occur?  It may be that they could come to a more precise quantification if they were told of 10 accidents that had occurred over the last five years, people falling down that step.

MR SHELDON:   Well, the difficulty is, your Honour, there is a lacuna in the evidence by which the court evaluates the proposition your Honour is putting to me.

FRENCH CJ:   You say the lacuna is the absence of information about the incidents of accidents.

MR SHELDON:   Yes, your Honour, and because the plaintiff bears the legal onus of showing that the probability was such as to justify response, if it does not call evidence to show when balanced out that the probability justified the response, then it is true it does not assist in a positive way the defendant but the defendant has no onus on the issue, in my respectful submission, and to come back to the question of whether the evidentiary onus shifted, even if evidence were called which said that there had been no injury, that would not deal with the probability in any way differently to the way in which it is presented on the evidence that was called below, in my respectful submission.

The second point arises out of 5B(2)(c) and I will not repeat the submissions going to the mandatory nature of this consideration, but the additional factor which arises in 5B(2)(c) is the issue of resources. Now, what the court below did was to say that the public authority was under an evidentiary obligation to call some material upon which section 42 could operate. It relied in that regard on a decision in the Court of Appeal of Roads and Traffic Authority of New South Wales v Refrigerated Roadways. 

That case was actually concerned with 42(b), not (a). Section 42(a) is in simple terms and, in our respectful submission, gives rise to a principle, as the section calls it, that the resources available to the authority are limited. What the court below says is unless you call evidence that they are limited you do not get the benefit of 42(a). That would be a remarkable proposition, in my respectful submission ‑ ‑ ‑

FRENCH CJ:   It is a bit odd to run this argument when you have actually created the risk of harm. 

MR SHELDON:   But I am talking about remediating it, your Honour, because if one accepts there is no evidence of injury, there is nothing to differentiate these steps from any other steps and therefore inspection of all of the steps would be required.  I see the light has come on.  May it please the Court.

FRENCH CJ:   Thank you.  Yes, Mr Neil.

MR NEIL:   Your Honours, we accept that there are similar provisions in the other jurisdictions.  There may be some slight variations, but not for the present purposes material, but we submit that there is no authority that we are aware of, nor that my learned friend points to, that comes in conflict with the present decision of the Court of Appeal of New South Wales, so it adds nothing to whether there should be special leave or not and, in any event, as we are submitting, the decision below was correct.

Your Honours, in terms of section 5B, as your Honours will note from our argument, this only applies to cases where one is dealing with the assessment of a case involving risk of harm, not creation of harm, and it is totally separate.  To the extent that in this case the applicant/defendant argued that later on after the creation of the risk somehow or another you could then start to develop an argument that they had not taken precautions against a risk of harm, we say it is rather illogical when they have created the risk.

But if one gets into section 5B, it is our submission that, in effect, the trial judge and the Court of Appeal endorsing him, really looked at the question of foreseeability, found in favour of the plaintiff, clearly found the risk was not insignificant, clearly found that the circumstances were such that a person could suffer harm, clearly found that the probability of harm could occur and on seriousness and burden of taking precautions, the trial judge went so far as is set out in application book 27 on that page to go through a number of matters on the basis that in the absence of direct evidence he said at 142:

I am forced to draw some inferences about the resources available -

In our submission, he carefully went through these matters.  They are principally matters of common sense but they were supported by the evidence of Mr Byrne and the Court of Appeal endorsed that.  At pages 62 and 63 of the application book in the judgment of Justice Hoeben where his Honour, in our submission, was quite correct to say that the matter of complaint or otherwise was neutral and did not involve the plaintiff having to come up with some onus of proof it had to discharge, but at page 62 of the application book, towards the end of the page at about line 50:

Although there may not have been a plan prepared in relation to the work, the overwhelming inference is that someone from the appellant’s organisation would have checked the work before payment was authorised.  It should have been obvious to that person that the alterations to the rotunda had narrowed the width of the top step creating a real and foreseeable risk of injury.

That was a finding open to his Honour which was based on the evidence and logical inferences –

At paragraph 68, his Honour refers to the evidence of Mr Byrne:

“On completion of this work and at regular intervals, risk assessment inspections ought to have been undertaken to reveal hazards caused by the work or due to wear and tear.  Had this procedure been undertaken, the hazard would have been identified and could have been remedied.

69It follows that his Honour correctly found that the risk created by the narrowness of the top step was a risk which the appellant knew about, or ought to have known about.  These grounds of appeal have not been made out.

In our submission, to the extent that one went further and looked at, in effect, what might have had to be done under section 5B, the task was adequately achieved and there was no failure in the evidence, even if the plaintiff carried some form of mandatory burden of proof which, in our submission, is not - these are general principles and once the plaintiff had brought sufficient evidence of what had occurred any evidentiary onus would have switched to the defendant, the applicant.

Your Honours, in terms of section 42, in our submission, both courts below were quite right in dealing with this matter. We have referred in our submissions to a case in this Court of Sydney Water Corporation v Turano and although it may be late I would ask if I could just hand up copies of that decision to your Honours just to refer to one particular paragraph.  At paragraph 27 on page 65, there is just a paragraph:

It should be added that at the trial Sydney Water did not lead any evidence of its financial or other resources, so as to raise the operation of s 42 of the CLA with respect to its liability to Mrs Turano. Section 42 lays out certain principles respecting resources and responsibilities of public authorities, which apply in determining the existence or breach of a duty of care.

Now, it lays out principles.  In our submission, it does not lay out these onerous provisions casting an onus of proof on ‑ ‑ ‑

FRENCH CJ: I do not think, in fact, there was much said about section 42 in the argument, in that case.

MR NEIL:   It may be, your Honour.

FRENCH CJ:   It came in at the heel ‑ ‑ ‑

MR NEIL:   If one looks at section 42, it must be remembered that, in our submission, it only applies to prevent, in effect – the main purpose is to prevent a plaintiff from pleading a general resources case and trying to pursue it. But if a plaintiff has a case on specific resources, in this case it was only some hundreds of dollars, up to a $1,000 to resolve the problem, section 42 does not come into it. But if it does, it is not for a plaintiff to bring evidence. For example, if I just take your Honours to (d):

the authority may rely on evidence of its compliance with the general procedures and applicable standards for the exercise of its functions –

In other words, the authority may bring this.  The cases say that 42 has to be pleaded.  They pleaded it in this case.  They had the right to bring some evidence, which they did not.  To turn it all around onto the plaintiff, in our submission, is illogical.  It is for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceedings relate and the remainders – (a), (b) and (c), in our submission, are matters that the Council should bring.  If it has a general allocation of resources, let it bring the evidence of it.  If it wants to say it could not do this $1,000 job, let it bring the evidence.  It brought no evidence of its resources, either as a Council or as a trustee, in its capacity as a trustee.

FRENCH CJ:   As to that, incidentally, the Court of Appeal expressed no view on whether 42 applied via 41 to the Council in its capacity as a trustee because it held 42 did not apply anyway. 

MR NEIL: Yes, but either way, your Honour, in our submission, the Court of Appeal was right to take the view that it was open to the Council to bring this evidence under section 42.

FRENCH CJ:   That is the basis on which they disposed of the 42 question.

MR NEIL:   Yes, and they were right.  How would a plaintiff know all this?  How do you do it?  It is a defence.  It has to be pleaded and they can bring evidence if they wish.  Your Honours, the point next that I would wish to rely on and I think the final main point is this that this would not be an appropriate vehicle, with respect, for special leave if for no other reason than the main case was creation of a danger.  The main case was, on our submission, clear.

FRENCH CJ:   Not non‑rectification?

MR NEIL:   Non‑rectification of the main creation – they created the danger, did not do anything about it.  Both the trial judge and the Court of Appeal dealt with that matter.  There are concurrent findings.  There is nothing, as we read it, in the applicant’s summary of argument and nothing in their draft notice of appeal which says how it is that the trial judge and the Court of Appeal were wrong to find that there was negligence in the creation of this serious danger which was foreseeable and which resulted in serious injury. 

They do not favour your Honours with any such matter and, in our respectful submission, the Court of Appeal and the trial judge were absolutely correct to find that and the absence of any argument or reasoning process in my learned friend’s summary or anything in the notice of appeal which goes to it is explained because they have not got any. 

So, even if the Court granted special leave and we went through all this, in my submission, at the end of it there is no way in which the applicant could show that the decisions of both the trial judge and the Court of Appeal on negligence in terms of creation of this danger should be set aside.  If it please the Court.

FRENCH CJ:   Thank you.  Yes, Mr Sheldon.

MR SHELDON:   Thank you, your Honour.  Your Honours, section 5B is headed “General principles” but perhaps more importantly it commences in subsection (1):

A person is not negligent ‑

So that the section is general in its application and would apply even in circumstances where the risk was created by, relevantly, the defendant.  Secondly, your Honours, could I deal with my learned friend’s reference to Justice Hoeben’s statements from application book 62 where in paragraph 66, at the conclusion of paragraph 66 his Honour says that:

the alterations to the rotunda had narrowed the width of the top step thereby creating a real and foreseeable risk of injury.

That is not, with respect, a question that arises under section 5B(2).  His Honour is not there dealing with probability, he is dealing with matters that arise in section 5B(1) and, indeed, that conclusion says nothing about the probability of the harm coming home.

FRENCH CJ:   A real risk of injury – it does suggest that it is not insignificant probability, does it not?

MR SHELDON:   The difficulty with putting that gloss on it, with respect, your Honour, is ‑ ‑ ‑

FRENCH CJ:   It is not a gloss, it is just a ‑ ‑ ‑

MR SHELDON:   I am sorry, that was impertinent of me and I am sorry, your Honour.  I meant to say that the difficulty with looking at it that way is the undemanding test of foreseeability.  So, that the fact that it is real and foreseeable addresses an issue, in my respectful submission, concerned really with subsection 1(b), that is that the risk was not insignificant.  Now, that is not again a matter concerned with probability of harm. 

In paragraph 69 on the same page of the application book, the same proposition can be advanced.  His Honour is there dealing with what the applicant knew or ought to have known.  Two matters which are specifically referred to in section 5B(1)(a), so his Honour is not there to be understood, in my respectful submission, with dealing with this issue of probability.

In relation to Turano, the point that we would make is that there is no discussion of the ins and outs, as it were, of section 42 in that case and on our research it was not really discussed in argument before the Court prior to the decision. Those are my submissions. May it please the Court.

FRENCH CJ:   I will ask Justice Kiefel to give the Court’s reasons for disposition. 

KIEFEL J:   In this matter the respondent received an award of damages against the applicant, the Bathurst Regional Council, for injuries he sustained after falling on stairs from a rotunda in a park.  The evidence adduced by the respondent showed that the step was too narrow and deceptively so.  It had been narrowed in the course of maintenance works carried out by the appellant.

The applicant contends that the courts below should have applied s 42 of the Civil Liability Act 2002 (NSW), which states principles which are to apply in determining whether a public or other authority has a duty of care or has breached it. They include the resources available to the authority. However, the applicant called no evidence on the matters to which s 42 refers.

The applicant also contends that the Court of Appeal failed to apply ss 5B(2)(c) and 5C(a) of the CivilLiability Act, which require the court to consider, inter alia, the burden of taking precautions to avoid the risk of harm when determining whether a reasonable person would have taken precautions.  However, the finding made by the trial judge was that the applicant itself created the risk.  If the applicant sought a finding that the risk of harm was unlikely or insufficient to warrant it being remedied, it should have adduced evidence to that effect. 

The applicant has insufficient prospects of success to warrant a grant of special leave.

FRENCH CJ:   The order of the Court is special leave will be refused with costs.

AT 10.55 AM THE MATTER WAS CONCLUDED