Cheong bht the Protective Commissioner of NSW v Wong

[2001] NSWSC 881

CITATION:	Cheong bht The Protective Commissioner of NSW v Wong & Ors [2001] NSWSC 881
CURRENT JURISDICTION:	Common Law
FILE NUMBER(S):	SC 20295/95
HEARING DATE(S):	16 July 2001 - 30 July 2001 inclusive
JUDGMENT DATE:	10 October 2001
PARTIES :	Beverley Bikwan Cheong by her tutor The Protective Commissioner of New South Wales v King Leung Wong, Roads & Traffic Authority of NSW, Pabesu Pty Limited, Avedis Qasabian, David Worley, Vulcap Tyre Service Pty Limited, Jax Tyres Pty Limited (first cross defendant).
JUDGMENT OF:	Michael Grove J at 1

COUNSEL :	A.S. Morrison SC with R. Tonner (Plaintiff) G.M. Watson (First Defendant) P.R. Sternberg (Second Defendant) P.R. Arden (Third, Fourth, Fifth Defendants) A.C. Bridge SC with M. Fordham (Sixth Defendant) T.J. Clarke with A. Gruzman (First Cross Defendant)
SOLICITORS:	McBride Harle & Martin (Plaintiff) Henry Davis York (First Defendant) I.V. Knight (Second Defendant) Colin Biggers & Paisley (Third, Fourth, Fifth Defendants) McCabe Terrill (Sixth Defendant) Keddies (First Cross Defendant)
CATCHWORDS:	NEGLIGENCE - MOTOR VEHICLE - MAINTENANCE - DRIVING COMPETENCE - TYRE SEPARATION DEFECT - RETREAD - LIABILITY OF MANUFACTURER - TRADE PRACTICES ACT COMPLIANCE - INSPECTION FOR VEHICLE REGISTRATION - APPORTIONMENT
LEGISLATION CITED:	Trade Practices Act 1974
CASES CITED:	Graham Barclay Oysters Pty Ltd v Ryan 2000 177 ALR 18 Roncoli v Tolson 1993 Aust Tort Reports 81-201 Stegenda v J. Corp Pty Ltd 1999 ATPR 41-695
DECISION:	DRIVER AND MANUFACTURER OF TYRE HELD LIABLE TO PLAINTIFF PASSENGER

6

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

MICHAEL GROVE J

Wednesday 10 October 2001

20295/95 - BEVERLEY BIKWAN CHEONG by her tutor THE PROTECTIVE COMMISSIONER OF NEW SOUTH WALES v KING LEUNG WONG, ROADS & TRAFFIC AUTHORITY OF NSW, PABESU PTY LIMITED, AVEDIS QASABIAN, DAVID WORLEY, VULCAP TYRE SERVICE PTY LIMITED, JAX TYRES PTY LIMITED (First Cross Defendant)

1 HIS HONOUR: Beverley Bikwan Cheong is a young woman born on 25 October 1972. On 6 April 1994 she was riding as a passenger in a Falcon station sedan (the vehicle) which was travelling eastbound on the M4 Expressway near Pendle Hill. The applicable speed limit was 110 kph. The vehicle left its selected portion of the carriageway and ultimately collided with westbound traffic. The plaintiff suffered gross injuries including brain damage. It is common ground that she is incapable of giving testimony relating to the circumstances of the accident.

2 It is further agreed that the plaintiff’s damages be assessed at common law in the sum of $4,216,626 and, if they are restricted by the Motor Accidents Act, at $3,216,626; in each case the out of pocket expenses to date totalling $216,626. I foreshadow my approval to those amounts pursuant to the Damages (Infants and Persons of Unsound Mind) Act.

3 Police were called to the accident and investigation provoked interest in apparent damage to the rear nearside tyre (the tyre) on the vehicle. The condition of the tyre and the observability of any defect are central to the disputes which have been contested at trial.

4 At the commencement of the hearing the plaintiff, being uncertain as to from whom she was entitled to redress, had joined six defendants: Wong King Leung (Wong) the owner and driver of the vehicle, the Roads and Traffic Authority of New South Wales (RTA), Pabesu Pty Limited (Pabesu), Avedis Qasabian (Qasabian), David Worley (Worley) and Vulcap Tyre Service Pty Limited (Vulcap). With the exception of the RTA, all defendants instituted cross claims against Jax Tyre Service Pty Limited (Jax). The defendants (save Pabesu, Qasabian and Worley) in the action instituted cross claims against each other and Jax instituted cross claims against all defendants (including the RTA). In all there were twenty one pleaded cross claims including a composite claim (the twenty first cross claim) by Pabesu, Qasabian and Worley against Wong, the RTA, Vulcap and Jax. The cross claims sought indemnity or contribution in respect of any damages found payable to the plaintiff by the various cross claimants (or payable in respect of any cross claim against it in the case of Jax). In some instances there were included claims founded upon the Trade Practices Act 1974, but for the most part tort foundations were alleged.

5 In broad terms the basis of liability alleged against Wong was negligent maintenance and driving of the vehicle. It had been recently re-registered prior to the accident and the RTA promulgated requirements for the assessment of roadworthiness of vehicles including the condition of tyres.

6 Pabesu, Qasabian and Worley were sued as the owner, nominee (for certain regulatory purposes) and the examiner of vehicles at an authorized inspection station conducted at a Mobil service station on the Great Western Highway at Mays Hill. Certificates of fitness for registration (“pink slips”) were issued therefrom and on 16 March 1994 a pink slip issued in respect of the vehicle. The interests of these three defendants were such that they were represented by the same counsel.

7 Vulcap manufactured the tyre in the sense that it retreaded a “Goodyear Grand Rally S” carcase originally made in Australia by the company which markets tyres of that brand. Jax supplied the tyre to Jubilee Motors (Parramatta) shortly before the vehicle was sold by that dealer to Wong on 18 November 1993.

8 On the first day of hearing (16 July) by consent of the parties, judgment was entered for Qasabian (in reciting these matters I shall omit some of the various agreements as to costs). On 23 July, again by consent, I entered judgment for the RTA in the action. Consequently judgments were entered in favour of respective cross defendants in claims by the RTA against Wong, Pabesu, Qasabian, Worley and Vulcap (third, fourth, fifth, sixth and seventh cross claims), by Jax against the RTA and Qasabian (tenth and twelfth cross claims), by Wong against the RTA and Qasabian (fourteenth and fifteenth cross claims) and by Pabesu and Worley against the RTA (part of the twenty first cross claim in respect of which all four nominated cross defendants – Wong, the RTA, Vulcap and Jax should have judgment against Qasabian and, insofar as this had not been formally done, such judgments are directed without orders for costs in accordance with the agreement announced in connection with the judgment in favour of Qasabian in the action).

9 Finally in regard to matters of consent, counsel for Wong and Jax respectively agreed that I should enter judgment for the cross defendant in each of their cross claims against each other (the first and eighth cross claims). Counsel for Vulcap objected on the basis that – in a way in which pause was not taken to investigate – his clients right of recovery might be obstructed by such judgments. It was requested therefore by the parties to those cross claims that I make no findings in respect of them.

10 In summary there remains for determination:

(a) The plaintiff’s claims against:
(i) Wong,
(ii) Pabesu /Worley and
(iii) Vulcap.
(b) Cross claims by Wong against:
(i) Pabesu and Worley (second and sixteenth cross claims) and
(ii) Vulcap (seventeenth cross claim).

(c) Cross claims by Vulcap against:
(i) Wong (eighteenth cross claim) and
(ii) Pabesu (nineteenth cross claim) and
(iii) Jax (twentieth cross claim).

(d) Cross claims by Jax against:
(i) Vulcap (ninth cross claim) and
(ii) Pabesu /Worley (eleventh and thirteenth cross claims).

(e) The composite cross claim by Pabesu /Worley insofar as it remains against:
(i) Wong,
(ii) Vulcap,
(iii) Jax (twenty first cross claim).

11 The vast bulk of the hearing time was occupied in adducing expert evidence relating to the tyre and its impact upon driving performance. Save some observations by Mr Wingrove, an engineer to whose evidence I will later refer, no expert was able to examine the tyre, no trace of which could be found after it had been impounded by police. This is not an implied criticism as, for reasons which will appear, police interest in the incident lapsed. Not only was the handicap of absence of view common to the expert witnesses but their evidence was necessarily elaborated to deal with possible alternative findings of fact. Initial fact finding will considerably reduce the requisite reference to a large volume of evidence founded upon the hypotheses about facts not ultimately accepted as established.

12 I turn to the circumstances leading to the collision. Ms MacIntosh was driving her car on the left (slow) lane of the motorway at 110 kph. She heard a slapping noise which I am satisfied was the detaching tread of the rear nearside tyre of the vehicle at a time it was to the rear of hers and in the right (fast) lane. She contemplated that the noise may have been coming from her car until Wong brought the vehicle beside hers and proceeded to overtake it. Thereafter the vehicle was seen to fishtail with a slight left and then a right deviation after which it continued through the verge dividing the traffic flow and into impact with oncoming cars.

13 A Mr Richards was in the same lane as Wong about forty yards behind and therefore had an uninterrupted view of the rear of the vehicle. I do not accept his estimate of constant speeds of his and Wong’s vehicles at just under the speed limit and I prefer the evidence of Ms MacIntosh, however I do accept Mr Richards’ observation that the brake lights on the vehicle did not illuminate and I conclude that Wong made no attempt to slow the vehicle by the use of his brakes.

14 Police, including accident investigation specialists visited the scene. It was through them that Mr Wingrove’s services were retained but upon his preliminary report being orally given, a conclusion was reached by Constable Van der Hoek that that “tyre failure was the contributing factor to the collision and as such no further action is contemplated against Wong”. I infer that this is why no further police interest was taken about the whereabouts or disposal of the damaged tyre.

15 On 14 July 1994, prior to Constable Van Der Hoek’s decision, Wong had been interviewed with the assistance of an interpreter. In the course of that interview he said that he was in the fast lane and “all of a sudden I heard a loud noise from my car and there was a very vigorous vibration”. He claimed that he attempted to reduce the speed “to slow down by pressing on the brake”. He could not stop the car and lost control.

16 Questioned about this Wong said that he first looked in the mirror to see if he could move into the slow lane but there were too many cars coming and it was then he tried to slow down “without much success”.

17 He said he was travelling at between ninety five and a hundred kph. There were about five seconds between hearing the noise and feeling the vibrations and the commencement of the vehicle’s drawing to the right. His explanation for his claimed speed was ……….”because the tyre was a retread so I usually, I would always keep the speed below the speed limits so the speed limit on that freeway was 110 so I would have keep it at about 100”.

18 Specifically Wong estimated that about twenty seconds elapsed between first hearing the noise at the back of the vehicle and the collision.

19 As I have said, I accept the evidence of Ms MacIntosh. I note that no one suggested that I should not. Such acceptance leads to two possible conclusions concerning Wong’s driving conduct.

20 If Wong’s speed was only slightly more than that of Ms MacIntosh then, after the noise and vibration were detectable, time had to elapse during which Wong had to gain upon, draw alongside and pass Ms MacIntosh’s car. If that was the case, it is probable that Wong continued to advance for somewhat longer than twenty seconds and, even if he was travelling only mildly faster in comparison to Ms MacIntosh at 110 kilometres per hour, I am satisfied that the noise would have been accompanied by marked vibration and a reasonably prudent driver would have slowed either by allowing the vehicle to decelerate or by braking. Wong did neither. Mr Richards was some forty yards to the rear and presented no obstacle to slowing down. If that had been done it is probable that Wong would have maintained sufficient control of the vehicle so as not to cross the whole dividing verge and collide with oncoming traffic.

21 The alternative, in which events might have occurred in a shorter time span such as the twenty seconds estimated by Mr Wong, involved a greater excess in the speed of the vehicle over the upper mark of the limit at which Ms MacIntosh was proceeding. Again, ordinary prudence would contra indicate maintaining a high speed and accelerating past Ms MacIntosh’s vehicle when an unidentified noise and marked vibration were manifesting themselves.

22 It was submitted on behalf of Wong that I should find that he was not negligent. I accept that when he purchased the car the dealer agreed to supply new tyres but, given Wong’s answers to Constable Van Der Hoek I consider “new” was understood by Wong to mean replacement of those on the vehicle at the time and that he knew that the “new” tyres were retreads. Odometer readings were available as at the date of purchase (18 November 1993), the pink slip inspection (16 March 1994) and the accident (6 April 1994). The readings were respectively 168,615, 185,376 and 188,151 kilometres. It follows that from the date of purchase until accident the tyre had been used for 19,536 kilometres and 3,015 kilometres after the pink slip inspection when Worley had marked the result of inspection of tyres as “good”. I am unpersuaded that a prudent owner or driver should have been aware before the occurrence of symptoms of noise and vibration that the tyre was defective and capable of causing an accident. I will need to detail some matters about the defect later but for the purposes of assessing the conduct of Wong I express that conclusion now.

23 I find that Wong was negligent in his care and control of the vehicle on the occasion of the accident. I find that there was ample warning of imminent danger in terms of noise and vibration and that the reasonable response of a driver was to slow down and, if unable then to make adequate assessment, stop and investigate. The existence of other traffic would not prevent this and the option of stopping on the verge was available if the left lane was not clear. Any reduction in the time available for Wong to make decisions was relative to his speed which was in excess of the prescribed limit. I reject the opinions and the argument which proposed that it would take skill above the ordinary to safely cope with the situation. Given the high speed of Ms MacIntosh’s car, and Wong was probably accelerating to achieve overtake, I conclude that he drove at excessive speed regardless of the “symptoms” in ignorance of their cause and made no attempt to implement a reasonable course of slowing the vehicle.

24 Reference was made to Roncoli v Tolson 1993 Aust Tort Reports 81-201. This was a case essentially determined on its facts by a full court of the Supreme Court of South Australia. There was a form of defect manifested in what was described as “belt edge tread separation” diagnosed by engineers after a driver had applied the brake immediately after hearing a “bang” and lost control. In that case it was held there were insufficient facts from which to draw an inference of negligence. The present case is in marked contrast not the least in Wong’s “pressing on regardless” despite his ignorance of the source of symptoms which he had discerned.

25 My conclusion on these issues is in accord with opinions of experts which I accept. Mr Wingrove stated:

“The driver of the vehicle, shortly before the catastrophic tyre failure occurred, ought to have observed the ‘tell tale’ signs warning the driver that there was something wrong with the tyre and thereby placing the driver on alert to reduce speed and stop the vehicle to inspect the tyre and wheel.
Had the driver of the vehicle stopped the vehicle and inspected the tyre in question when either the vibration commenced or when the flapping noise commenced, the accident more than likely would have been avoided”.

26 There is added emphasis in the evidence of Mr Simpson whose subjective experience (as described) is instructive. He wrote:

“The writer is of the view that a competent driver should not have lost control of the vehicle in the manner that Mr Wong clearly did on this occasion and, indeed, the writer is of the opinion that had Mr Wong braked heavily, then the accident would not have occurred.
The writer has had an off-side rear tyre failure in a sedan version of the same vehicle (EA Ford Falcon) as that driven by Mr Wong and no serious forces were applied to the vehicle that would cause the control of the vehicle to be lost from the driver (the writer). In this particular instance, the actual off-side rear tyre was punctured at high speed and did, in fact, burst through overheating rather than a simple tread separation”.

27 There was debate about the expertise and the content of opinions on this aspect expressed by Mr Styles and for the purpose of this issue, as well as ignoring those parts of his reports rejected, it is apt to put his evidence to one side as it could not affect my conclusion. Mr Makepeace’s evidence is not germane, nor is that of Mr Veen.

28 It is a fair summary of the opinion of Mr Keramides that “under the circumstances the actions of the driver were within those expected of a ‘normal’ driver in his position”. I prefer other opinions which are in harmony with my own assessment above expressed.

29 The impression I gained was that Mr Gilmore had taken up Wong’s cause. I do not suggest that his adherence to the Expert Witness Code of Conduct was suspect but rather that, probably subconsciously, he had to an extent donned the mantle of advocacy. His reports are considerably expanded with commentary upon and debate about views expressed in other reports some of which were not, in the event, tendered. However, insofar, as he expressed disagreement or criticism, for example, of Mr Simpson’s views on controllability (p.11, Report of 4 July 2001, part of Exhibit W12) I am unprepared to act upon Mr Gilmore’s opinions.

30 I should interpolate that I do not accept Wong’s evidence that he applied his brakes. There were no road or skid marks to support this assertion and it is contradicted by the observed absence of brake lights testified by Mr Richards.

31 The alternative basis of liability alleged against Wong requires a finding that he was negligent in failing to observe the incipient defect in the tyre before proceeding on the fateful journey. Again, there is a variety of opinion among the experts but it is not necessary to engage in elaborate recitation. I am comfortably satisfied that Wong was negligent as above stated in failing to react appropriately to the occurrence of symptoms but I am unable to be satisfied that a reasonably prudent vehicle owner would have inspected and recognized emergent radial run out.

32 However, the plaintiff has succeeded in proving requisite negligence against Wong.

33 As mentioned Mr Wingrove was called in by police to examine the tyre and some notes of his preliminary inspection were produced (Exhibit D). He did not proceed to a full examination apparently because, once he had advised police that there genuinely had been a tyre failure, further investigation was not required. Part of the constituency of a steel belted radial tyre (such as the tyre) are two plies of steel of a mesh style which are locked to each other and within the outer rubber compound in which the tread is grooved. Damage to the tyre can be caused by the separation of the steel plies. It is a recognized defect. When it happens the movement of the steel, one ply against the other polishes the surfaces. Mr Wingrove saw this sign. At inspection there was also a significant part of the rubber compound tread missing, that is to say there was a gap in the remnant tread surface. I am satisfied that there was tyre failure culminating in damage to the tread observed by Mr Wingrove which was precipitated by separation of the steel plies. Mr Wingrove advanced further opinions but it is convenient to deal with them and pertinent expressions by other experts in the context of the situation of the various parties.

34 Both Worley and Wong gave evidence about the inspection approximately three weeks before the accident in respect of which the pink slip was issued. Neither impressed me as having any true recollection of the specific events of this routine occurrence and in the case of Worley his evidence derives from usual practice and in the case of Wong, reconstruction of what would have happened. In both cases, their evidence was manifestly slanted in favour of their respective adopted positions.

35 The critical question is what, if anything, untoward Worley ought to have discovered in carrying out his inspection. In performing his task Worley’s duty had specific requirements laid down by the RTA and they were that he visually inspect each road tyre and reject it if any tyre had less than 1.5 mm tread depth on the surfaces which normally contact the road or the tyre had deep cuts, bulges, exposed cords or other signs of carcase failure (Rule 104).

36 The liability of Worley was alleged to derive from negligent performance of the inspection.

37 The tyre travelled a further 3000 kilometres on road surface between the inspection and the calamity at Pendle Hill. It is not without significance that until that occasion, Wong had neither felt nor observed anything irregular about the tyre. I do not suggest that he made any specific inspection but at all times the vehicle was in his possession and used by him. I interpolate that there was evidence of tyre pressure on other tyres fitted to the car considerably above the recommended levels but I am unable to utilize this information to determine any issue. As I do not accept that either Worley or Wong presented credible evidence of what was seen on 16 March, I turn to consider the experts’ views as to what ought to have been observable at that time.

38 The specific material for deliberation upon by the experts consisted essentially of Mr Wingrove’s notations.

39 Mr Wingrove opined that the external sign of an internal problem of separation defect would in the course of time manifest itself in a “radial runout” that is, if one were to rotate a tyre there would be an observable unevenness in the tread between the shoulders of the tyre. The extent of polishing of the steel indicated that there was not a localized failure but a failure which had migrated around the tyre over an undetermined period of time. That observation would suggest that the sign of radial runout would have been provoked by running the defective tyre over whatever period that was. He conceded that it was possible that it might have occurred after Worley’s inspection and at any time between the inspection and about 500 kilometres before the accident. What requires proof is that the radial runout was probably there at the time of the inspection and capable of being seen. Mr Wingrove’s evidence falls short of establishing that probability.

40 Mr Simpson, a consulting engineer, considered the polish on the steel plies and explained the process whereby heat and centrifugal forces create a “bubble” under the tread causing that portion of the tread where there was contact with the road surface to wear more rapidly than tread unaffected by the separation. I note the debate about the accuracy of his interpretation of localized wear but his opinion that the telltale visual sign was capable of being produced within a road distance of 500 kilometres, and certainly within 3000 kilometres, travelled after inspection does not affix Worley with liability.

41 Mr Veen, an automotive engineer, expressed the probabilities as favouring separation in the carcase developing no earlier than between 1000 and 1500 kilometres prior to failure. The ultimate separation of tread was itself caused by the internal separation of metal plies and was, of course, evidenced in the noise heard by Wong. On the issue of observability of radial runout or observable sign (various labels were assigned by witnesses) he said that he would not rule out the possibility that uneven wear was present to some small extent as at the pink slip inspection date, but thought it improbable that this would have been observable on inspection or noticeable while driving or even readily detectable at that point, that is 3000 kilometres prior to failure. Specifically he testified that a sign of separation defect would not have been recognizable.

42 Mr Anderson was also a consulting engineer. His relevant testimony was that:

“…………..it is more probable than not …….. that 3000 kilometres before the failure there would be little, if any, evidence present for normal inspection. Possibly if someone took the tyre out and measured the tread depth very carefully three may well be some indication. But I consider it most unlikely for routine inspection that would be evident.”

43 Worley was conducting a routine inspection with particular reference to the requirements of RTA Rule 104. Contradictions in the testimony between him and Wong about the incidents of inspection, jacking up the car etc. lose any necessity for resolution if nothing untoward would have been seen on inspection in any event.

44 The issue was raised with Mr Makepeace, a businessman with a long association with and participation in the retreading industry, in cross examination. He thought a defect of the type under discussion would exhibit itself within 2000 to 3000 kilometres (before failure). He was not categorical and I mention this evidence for completeness to demonstrate that it does not sustain the case against Worley. It is convenient to add that Mr Makepeace offered a theory of penetration of the tyre with consequent upset of the steel ply bind by a foreign object. The examination of the inside lining of the tyre by Mr Wingrove persuades me to dismiss this theory and the opinions based upon it.

45 Mr Gilmore also an engineer, was reluctant to talk in terms of “specific numbers” that is distances travelled by the tyre and although he thought the separation defect may have existed at the time of Worley’s inspection, he thought that external signs may or may not have been present. Cross examined about variation in tread he agreed that observable difference in tread depth should “ring warning bells” to a trained mechanic but I do not find in his evidence an opinion that in terms of probability such variation was there to be seen at the relevant time.

46 Two further experts were called. Mr Keramides acknowledged this issue to be outside the scope of his expertise. Mr Style, who like the other experts had multiple facets of qualification and experience, impressed me as rather focussed upon motor sport and its peripheries and he gave no opinion in chief about the issue but, cross examined by counsel for the RTA, ventured the opinion that observable change from radial runout would exist for at least 4000 kilometres and added that he was going “to say five ….. maybe extending it”. I am unwilling to give weight to this virtually ad hoc opinion which is in contrast with the unanimity of other experts in the sense of their being “under or over the 3000 kilometres prior to failure” mark.

47 The evidence does not establish that Worley was negligent.

48 Pabesu was sued on the basis that it “was an authorized inspection station” and by its nominee Qasabian certified vehicles as roadworthy. Particulars were given common to Pabesu, Qasabian and Worley. There is also a claim against Pabesu which appears to be based upon misleading and deceptive conduct and false representation in terms of the Trade Practices Act 1974. The particulars focus upon the issue of the pink slip by Worley and there is an allegation that he issued it on behalf of Pabesu and Qasabian. The slip does contain an endorsement of the authorized inspection station number 57948 which is pleaded as belonging to Pabesu for identification purposes, but Worley’s evidence that he “occupied the workshop” and was “conducting registration inspections” did not establish any agency on his part for Pabesu.

49 In terms of the Trade Practices Act breach pleading, the particulars demonstrate that a liability in Pabesu would arise if there was established a liability of Worley. Such has not been established and there will be judgment in favour of Pabesu and Worley in the action with consequential effect upon relevant cross claims.

50 I turn to the claims against Vulcap. It is not disputed that, as pleaded by the plaintiff, Vulcap undertook the retreading of the tyre. Allegations of negligence were particularized as follows:

“i. Defective manufacture of the retread tyre;
ii. Manufacture of the tyre with a separation defect therein, whereby the rubber retread was not properly adhered to the original tyre carcase;
iii. Failing to have in place a proper manufacturing process so as to ensure that rubber retreads were properly fixed to original tyre carcases;
iv. Failing to check the tyre for separation defect;
v. Failing to have in place any or any adequate system for checking retread tyres for separation defect;
vi. Res ipsa loquitur. “

51 A further claim was advanced pursuant to s75AD of the Trade Practices Act which so far as is relevant provides:

“75AD Liability for defective goods causing injuries – loss by injured individual

If:

(a) a corporation, in trade or commerce, supplies goods manufactured by it; and


(b) they have a defect; and

(c) because of the defect, an individual suffers injuries;

then:

(d) the corporation is liable to compensate the individual for the amount of the individual’s loss suffered as a result of the injuries; and
(e) the individual may recover that amount by action against the corporation; and

……………………………. ”

52 I deal first with the issue of whether Vulcap was negligent. The evidence of manufacturing system emerged somewhat unconventionally in a copy letter by Vulcap’s solicitors to Mr Makepeace setting out “assumptions” for the purpose of seeking his opinion on certain matters. The letter was initially tendered by counsel for Wong. There is no necessity to reproduce from it the detail of the manufacturing process. Two pieces of information gleaned from the document (Exhibit W4) provided the bases of a considerable volume of submission. They included that, as at 1993, Vulcap was receiving 2,200 to 2,500 casings per day and that the “claim rate” was about 3 percent to 4 percent of production. Relating those facts to staff, shifts and machinery produced arithmetical contentions as to the amount of time available to identify defects and the numbers of faulty tyres produced. This led to expression of expert conclusions and submissions by counsel about “unacceptability”.

53 There is no evidence that what was done by Vulcap was different from any other manufacturer in terms of inspection and safety of product. The evidence (the letter) also reveals that separation was a common problem but usually obvious when the tyre was pumped up and placed on the rim, or (if not) it produced vibration and noise in the first 1000 kilometres. How much of the 3 percent to 4 percent of claim is represented in any of these categories, I do not know.

54 No critic among those experts who labelled the operations of Vulcap as unacceptable contradicted the evidence of Mr Makepeace that the processes employed by Vulcap in 1993 complied with the (relevant) Australian standard. I found arithmetical extrapolations by counsel concerning time available for various isolated aspects of the process unconvincing as were similar exercises conducted in relation to failure rate and the like. The purported particulars of negligence consist of statements of result and generalized assignments of negligence and, upon analysis, really said no more than that a tyre, subsequently manifesting separation defect, was supplied from the factory.

55 However, some attention was directed to the question whether an incipient defect was or should have been detectable during the manufacturing process. Collateral enquiry involved whether the defect may have been present in the carcase already when it was selected for retreading.

56 Mr Makepeace opined that carcase failure (by which I take him to have been referring to the separation defect) would have arisen after retreading. He based this broadly upon two propositions. First, that it is probable that inspection would have revealed defect if it existed prior to process and second that, if the defect was present when the tyre was fitted, failure would have occurred much sooner than after a travel of some 19,000 kilometres. As a tribunal of fact I was impressed by the second proposition. I am conscious, of course, that Mr Makepeace is propounder of the foreign object penetration theory which I have dismissed but this (second) proposition is not without other support.

57 Mr Simpson considered that whilst the tyre may have been faulty at the time of retread it could equally have been damaged through the use to which it was put after being fitted and driven on the road. He thought that there was no (scientific or other) way of determining whether the defect was there when the tyre was being processed by Vulcap or not.

58 Mr Wingrove opined that it was probable that the defect was present at the time of the retreading process and appeared to base this view upon his admittedly superficial examination which suggested inadequate adherence on either side of the section of the tyre where the steel binding had separated. He expressed the problem as a latent separation defect and, assuming this, his evidence does not persuade me that Vulcap was negligent in failing to detect such a defect.

59 Mr Veen paraphrased Mr Wingrove as believing that because of the size and extension of the separation around the tyre carcase it had begun prior to retreading. He disagreed. His experience was that once separation begins, the process is quite rapid. He pointed out that the tyre flexes with every rotation – over 19,000 kilometres, millions of rotations occur – and the heat which would be even more significant when the vehicle, as it was, is frequently driven at expressway speed. Heat can cause the bonding of the rubber to the steel belts to break down.

60 Mr Gilmore reported that whether the defect in the original tyre could be attributed to repairs or patches in the carcase prior to retreading could not be established. His attention was specifically drawn to whether separation could have been observed during the retread process particularly at the time of buffing, but he found it necessary to qualify his answers depending upon whether the defect was major or minor. I cannot determine this even as a probability and his evidence does not establish negligence by Vulcap.

61 The foregoing represents no more than what I gauged to be the essence of the experts’ views on this aspect and, of course, examined and cross examined by numerous counsel, there is a volume of elaboration. However, the totality of the evidence does not establish to the requisite standard either that the defect was in existence at the time of retread or that there was any indication of underlying defect which ought to have been seen and responded to in the reasonable conduct of Vulcap’s operations.

62 I have not overlooked that Mr Anderson referred to a report of Mr Wingrove that the retread rubber had commenced to lift from the tyre at the buffed interface between the carcase and the new application of retread compound and he concluded that “the retreading process was probably faulty”. I did not find that his evidence satisfactorily clarified what he meant by this in terms of specific default but it did not persuade me to the contrary of the view which I have formed on the evidence overall.

63 I find that the case in negligence against Vulcap fails. This brings me to the claim based upon s75AD of the Trade Practices Act.

64 I am satisfied that Vulcap was a corporation in trade or commerce which supplied goods manufactured by it. In the event, the tyre did manifest a defect in that the steel plies which ought to have remained in firm contact, did separate. In determining whether the tyre had a relevant defect the requirements of s75AC must be fulfilled in that the safety of the tyre is not such as persons generally are entitled to expect and in this regard particularly what might reasonably be expected to be done with or in relation to the tyre. Such a tyre might be expected to be used on a vehicle on roads. No one suggested that longer than 19,000 kilometres use should not be expected, indeed “tyre life” should be considerably longer, even though I accept that expectation of a retread would be less than that for a brand new tyre.

65 Obviously, the tyre was not safe as at 6 April 1994 when the rubber stripped as a consequence of underlying defect and there is an equally obvious causative link between those circumstances and the injuries sustained by the plaintiff. I share the position articulated by Mr Simpson that I am unable to determine whether the tyre was faulty at the time of retread and supply by Vulcap or not

66 However the statute provides that there is a relevant defect if the tyre is deficient as to safety in terms of the expectation abovementioned. The evidence does not demonstrate novus actus such as theorized by Mr Makepeace. Vulcap supplied a tyre which was inadequate to fulfil expected road use, that is, it was not safe for travel on roads beyond the 19,000 kilometres which it had traversed up to the point of failure. The tyre was “defective goods” within the ambit of the statutory prescription.

67 Submission on behalf of Vulcap concerning primary liability pursuant to s75AD was in somewhat non-specific terms and the principal thrust was directed to a proposition that the plaintiff’s claim was barred by a limitation provision (s75AO) and a special defence provided by s75AK. I shall deal first with the latter.

68 So far as is relevant it provides:

“s75AK(1) In a liability action, it is a defence if it is established that:
(a) the defect in the action goods that is alleged to have caused the loss did not exist at the supply time; or
……………………….
(c) the state of scientific or technical knowledge at the time when they were supplied by their actual manufacturer was not such as to enable that defect to be discovered.”

69 By definition a claim pursuant to s75AD is a liability action and the tyre was “action goods”.

70 The plaintiff has not established that the defect existed at the time of manufacture (the process of retread) but the defendant has not proved that it did not. As already noted, it may or may not have existed and that is my finding. My attention was drawn to remarks of Lindgren J in Graham Barclay Oysters Pty Limited v Ryan 2000 177 ALR 18 concerning the import of the notion of reasonableness or practicality in s75AK(1)(c). Mr Gilmore adverted to the possibility of x-ray or ultrasound finding a bigger percentage of separation defects at the retreading stage. In order to sustain the defence provided by the subsection it is the defendant which carries the onus of proving the negative. The evidence relating to this issue does not advance beyond Mr Gilmore’s ruminative observation. I am not satisfied that Vulcap has discharged the onus in this regard.

71 Section 75AO provides:

“75AO(1) …………. A person may commence a liability action at any time within 3 years after the time the person became aware or ought reasonably to have become aware, of the alleged loss, the defect and the identity of the person who manufactured the action goods.”

72 Vulcap’s argument postulated that the relevant loss was known immediately after the accident. For practical purposes this may be accepted. Next Exhibit D is relied upon as promoting knowledge of the nature of the defect and the identity of the manufacturer. Exhibit D includes the notes made by Mr Wingrove on 13 May 1994 when, at the request of police, he examined the tyre. In a general way he noted that it was a retread and the retreading had been done by Vulcap. Assuming that the plaintiff is affixed with knowledge possessed by her legal advisers for this purpose, the information to be gleaned from what became Exihbit D would be available proximately to the examination by Mr Wingrove, although the police would not be expected to release the content of their investigations until they had reached a decision, which in this case was not to prosecute Wong.

73 Be that as it may, all Mr Wingrove identified was Vulcap. Vulcap conducted its business through more than one corporate entity containing in its title the word Vulcap. There is evidence of non response, for example, to subpoenae whereby the plaintiff was seeking to identify which “Vulcap” corporation was the actual manufacturer. The time of awareness of the loss sustained and of the identity of the manufacturer includes a measure of reasonableness and where an operation is conducted within a complex of corporate identities it is in my view unreasonable to expect the outsider to penetrate the veils and find the right corporate defendant unless there is prompt, frank and adequate disclosure. On the evidence I am satisfied that relevant awareness dates from 22 July 1998 when Vulcap’s solicitors eventually confirmed by letter (Exhibit E):

“The Vulcap entity responsible for retreading the tyres is Vulcap Tyres Service Pty Limited.”

74 No point was taken about the plurality in that title (Vulcap Tyres Service) and the naming of the sixth defendant (Vulcap Tyre Service).

75 I am also not satisfied in the circumstances that the plaintiff ought to have reasonably been aware of the identity of the manufacturer prior to that communication.

76 The defences having failed, I find that the plaintiff is entitled to damages assessed as to quantum in accordance with common law pursuant to s75AD of the Trade Practices Act.

77 I turn to the cross claims. As above started Wong and Jax expressly sought that I make no finding in respect of the claims between them (the first and eighth cross claims) and this will necessarily eventually result in judgment in favour of them as respective cross defendants.

78 Jax was not sued by the plaintiff and the outstanding issues relate to cross claims between Jax and Vulcap (the ninth and twentieth cross claims) and Vulcap and Wong (the seventeenth and eighteenth cross claims).

79 In terms of the amended ninth cross claim (filed by leave on 16 July 2001) claim for contribution or indemnity from Vulcap and/or a corporation called Vulcap Tyre Services No 2 Pty Limited was conditional upon (as pleaded) Jax being found liable in respect of damage suffered by the plaintiff or Wong. The plaintiff has not sued Jax, and Wong and Jax have effectively abandoned the dispute between them. I was asked to note that, for the purposes of the cross claim by Jax, Vulcap admitted the manufacture and supply of the tyre. Also, in the course of address, leading counsel for Jax conceded that Jax could not rely upon s74B or s75H of the Trade Practices Act (in its claim against Vulcap).

80 The twentieth cross claim by Vulcap against Jax is expressed in terms of a claim for indemnity or contribution pursuant to s5 of the Law Reform (Miscellaneous Provisions) Act 1946 (the Law Reform Act). No particulars were proffered but the implicit allegation was that Jax was a tortfeasor which would, if sued, be liable in respect of the same damage for which Vulcap is liable to the plaintiff.

81 It is convenient to first consider the issue of the potential liability of Jax to the plaintiff. The evidence only discloses that Jax sold tyres (including, I find, the tyre) to Jubilee Ford (Parramatta). There is no evidence of representations by Jax to Jubilee Ford, Wong or the plaintiff. Vulcap in fact adduced no evidence against Jax and its submission was essentially conditional, that is, if Jax were to be found liable to “any other party” it should bear equal responsibility with Vulcap. It was said that Jax was an “expert” in the field of tyres and received the tyre from Vulcap and fitted it to the rim of the wheel of the vehicle.

82 Jax is not liable to any “other party”. The plaintiff did not sue Jax. The cross claims by Pabesu, Qasabian and Worley will result in judgment in favour of Jax as cross defendant and no findings are sought in relation to the cross claim by Wong against Jax.

83 The cross claim by Vulcap against Jax fails. The cross claim by Jax against Vulcap in the circumstances that I have just mentioned thereby becomes otiose and also fails.

84 The seventeenth and eighteenth cross claims were litigated between Wong and Vulcap, both of whom had been found liable to the plaintiff.

85 By the seventeenth cross claim Wong seeks contribution or indemnity from Vulcap in accordance with s5 of the Law Reform Act and also pursuant to a right asserted to arise pursuant to s75AE of the Trade Practices Act. By the eighteenth cross claim Vulcap seeks contribution or indemnity from Wong pursuant to s5 of the Law Reform Act. S75AE provides:

“75AE(1) if:
(a) a corporation, in trade or commerce, supplies goods manufactured by it; and


(b) they have a defect; and

(c) because of the defect, an individual suffers injuries; and

(d) a person, other than the individual, suffers loss because of:

(i) the injuries; or

(ii) if the individual dies because of the injuries – the individual’s death; and
(e) the loss does not come about because of a business relationship between the person and the individual;

then

(f) the corporation is liable to compensate the person for the amount of the person’s loss; and
(g) the person may recover that amount by action against the corporation.”

86 Wong’s argument in this regard involved assigning the facts of his liability to the plaintiff into the literal words of the provisions of s75AE with the consequence that the amount of Wong’s loss, specified as the damages which he is required to pay the plaintiff, would be recoverable from the manufacturer/supplier. In Stegenda v J Corp Pty Limited 1999 ATPR 41-695 Deane DCJ held that s75AE is intended to benefit dependants of a person, being a natural person, who is either injured or dies as a result of injuries sustained. A question arises as to whether upon the true construction of s75AE(1)(d), a person who suffers a loss because of injuries comprehends a liability to meet a judgment to be entered on account of that person’s wrongdoing. Counsel for Wong submitted that s75AE was “very like” s5 of the Law Reform Act but also that it was “close to” strict liability. I would observe that it provides (if the submissions be correct) for indemnity and not for contribution.

87 I reject the contention that the structure of s75AE enables its use as a vehicle for seeking indemnity between tortfeasors and I would construe it as available to those who have suffered loss derived from the injuries as distinct from a loss suffered by being required to meet a judgment entered by reason of that person being a cause of the injuries.

88 Both Vulcap and Wong are liable to the plaintiff and I am satisfied that there should be an apportionment of responsibility having regard to their respective responsibilities for causing the damage. No submission was made that I should approach this issue differently if I came to it on the basis that Vulcap’s liability was derived from a Trade Practices Act liability.

89 Vulcap manufactured an item which, by statutory edict and exposure to payment for damage caused, ought to have had a greater degree of inherent safety. Wong fell far short of the skill and prudence of an ordinary driver. I reiterate that the tyre did not blow out, its tread surface stripped (as a result of the steel belt separation) but an important factor in the resultant disaster was the high speed at which Wong drove and his failure to heed the warnings available from the noise emanating from the rear nearside of the vehicle.

90 I would apportion responsibility 75 percent to Wong and 25 percent to Vulcap.

91 It is convenient to summarize my findings on the principal issues.

(a) Wong was negligent in and about the control of the vehicle but not in what might be referred to as pre-journey maintenance;
(b) Worley was not negligent and Pabesu is not liable to the plaintiff;
(c) Vulcap was not negligent but is liable pursuant to Trade Practices breach;
(d) Jax is not liable on the cross claims; and
(e) As regards the plaintiff’s losses responsibility is apportioned: 75 percent to Wong; 25 percent to Vulcap.

92 I direct the plaintiff’s representatives to bring in short minutes of the various judgments and orders appropriate to the claims and cross claims in the light of the foregoing findings. Drafts of those minutes are to be served on the representatives of all other parties and the matter will now be fixed for a date upon which, in the event of dispute, submissions as to form of judgments and orders will be heard. I anticipate on that date any necessary orders pursuant to the Damages (Infants and Persons of Unsound Mind) Act can be made.

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Last Modified: 10/12/2001