GLG Australia Pty Ltd v the Nominal Defendant - [2004] NSWCA 166

NEW SOUTH WALES COURT OF APPEAL

CITATION: GLG Australia Pty. Ltd. v. The Nominal Defendant & Ors. [2004] NSWCA 166

FILE NUMBER(S):
40446/03

HEARING DATE(S): 8 April 2004

JUDGMENT DATE: 01/06/2004

PARTIES:
GLG Australia Pty. Ltd. - appellant
The Nominal Defendant - first respondent
Salim Fahd Tleyji - second respondent
Ready Workforce Pty. Limited - third respondent

JUDGMENT OF: Hodgson JA Tobias JA McColl JA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 788/01

LOWER COURT JUDICIAL OFFICER: Delaney DCJ

COUNSEL:
Mr. J. Maconachie QC with Mr. N. Polin for appellant
Mr. P. Deakin QC with Mr. P. Nolan for the first respondent
Mr. P. Neil SC for the second respondent

SOLICITORS:

CATCHWORDS:
TORTS
NEGLIGENCE - Motor accidents legislation - Workplace injury involving forklift truck - Whether injury within motor accidents legislation - Whether caused by the fault of the owner - Whether result of and caused during the driving of the vehicle - Whether motor accident insurer liable.

LEGISLATION CITED:
Motor Accidents Act 1988 s.3, 47A.

DECISION:
Appeal allowed. Parties to bring in Short Minutes of Order.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40446/03
DC 788/01
HODGSON JA
TOBIAS JA
McCOLL JA
Tuesday 1 June 2004

GLG AUSTRALIA PTY. LTD. V. NOMINAL DEFENDANT & ORS.

Judgment

HODGSON JA: On 24 August 1999, the second respondent (the plaintiff) suffered an injury at the premises of the appellant (GLG). At the time, the plaintiff was employed by the third respondent (Ready Workforce), a labour hire organisation. The plaintiff sued Ready Workforce and GLG in the District Court, claiming damages for personal injury. In his Statement of Claim, the plaintiff alleged inter alia that the injury was caused by the negligence of GLG in connection with the operation of a forklift truck, which it owned and which was driven by GLG’s employee. In its Defence, GLG alleged, inter alia, that the plaintiff’s damages should be assessed in accordance with the Motor Accidents Act 1988.
Each defendant put on a cross-claim against the other, claiming contribution or indemnity. On the first day of the hearing before Delaney DCJ in the District Court, the first respondent (the Nominal Defendant) applied pursuant to s.47A of the Motor Accidents Act 1988 to be joined as a party to the proceedings, as being in the position of the insurer of the forklift truck, in order to argue that it had no obligation under the relevant insurance policy to indemnify GLG; and the primary judge made an order to that effect.
On 2 May 2003, the primary judge disposed of the proceedings by making orders to the following effect: verdict and judgment for the plaintiff against Ready Workforce in the sum of $72,541.98; verdict and judgment for the plaintiff against GLG in the sum of $264,740.69; that GLG was not entitled to indemnity from the Nominal Defendant; Ready Workforce and GLG to pay the plaintiff’s costs; GLG to pay the Nominal Defendant’s costs; and cross-claims dismissed.
GLG appealed from the orders made against it, claiming that the judgment for the plaintiff should be such sum as assessed under the Motor Accidents Act 1988, and that it should have indemnity from the Nominal Defendant.
CIRCUMSTANCES
On the day of the accident, the plaintiff was working at a warehouse of GLG. There was a container in the yard of the warehouse, access to which was gained by a ramp and landing. In order to unload the container, the plaintiff was inside the container, placing boxes from the container onto a pallet on the landing. A forklift truck would go up the ramp to the landing, collect a loaded pallet, and then reverse down the ramp. As the forklift truck went up the ramp, it would cause the ramp, the landing and the container to vibrate.
On the occasion when the plaintiff was injured, the plaintiff was facing the forklift truck as it came up the ramp, the ramp and the container vibrated, and boxes in the container were dislodged and struck the plaintiff, causing the injury for which the plaintiff claimed damages.
The primary judge held that this occurred as a result of the system of work that required the forklift truck to ascend the ramp. The primary judge held that Ready Workforce had breached its duty of care to the plaintiff, as its employee, because it failed to ensure a safe system of work. He also held that GLG had a duty to the plaintiff to provide a safe system of work, and that it failed to do so, in particular in that it did not avoid the risk of injury by eliminating the vibration. He held that, by reason of its control of the operations, GLG had the greater responsibility for the accident, and he apportioned responsibility at 75% to GLG and 25% to Ready Workforce.
There is no challenge to any of these findings.
As regards the issue whether the Nominal Defendant was under an obligation to indemnify GLG, the primary judge noted that GLG’s claim was that the accident was caused by fault of the owner or driver of the forklift truck; and he rejected this claim, on the basis that the accident “was not caused by the driving of the forklift in any negligent manner, but the pursuit of the system of work which was implemented by” GLG.
MOTOR ACCIDENTS ACT 1988
The terms of the relevant insurance policy were in accordance with Schedule 1 to this Act, which relevantly provided that the policy should give cover:
against liability in respect of … injury to a person caused by the fault of the owner or driver of the vehicle in the use or operation of the vehicle in any part of the Commonwealth (whether or not on a public street).
“Injury” was relevantly defined in s.3 of the Act as follows:
injury:
(a)means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:
(i)the driving of the vehicle, or
(ii)a collision, or action taken to avoid a collision, with the vehicle, or
(iii)the vehicle’s running out of control, or
(iv)such use or operation by a defect in the vehicle, and
(b) includes:
(i)pre-natal injury, and
(ii)psychological or psychiatric injury, and
(iii)damage to artificial members, eyes or teeth, crutches or other aids or spectacle glasses.
Since the accident occurred on 24 August 1999, these were the relevant provisions of motor accidents legislation that could possibly apply to this accident.
CONTENTIONS ON APPEAL
It was submitted for GLG that the findings of the primary judge meant that the injury to the plaintiff was indeed caused by the fault of the owner of the motor vehicle (that is, GLG itself) “in the use or operation of the vehicle”, and that it was a result of and was caused during the driving of the vehicle; so that GLG was entitled to an indemnity under the policy.
It was also submitted for GLG that the primary judge was in error in finding that the accident was not caused by the negligence of the driver.
It was submitted for the Nominal Defendant that it was no part of GLG’s case at the trial that they were entitled to an indemnity because of their own fault, and that this would have been inconsistent with their defence to the plaintiff’s proceedings in which they denied negligence; and that accordingly, GLG should not be permitted to raise this new argument on appeal: University of Wollongong v. Metwally (No.2) (1985) 59 ALJR 481 at 483, Coulton v. Holcombe (1986) 162 CLR 1 at 8.
It was also submitted for the Nominal Defendant that there was in any event no fault “in the use or operation of the motor vehicle”, because the use of the motor vehicle was not a direct or proximate cause of the accident: see AMP General Insurance v. Brett (1999) 27 MVR 492; Prospect County Council v. Foster (2001) 33 MVR 228; and Emad Trolley Pty. Ltd. v. Shigar [2003] NSWCA 231 at [51]. We were also referred to NRMA Insurance Ltd. v. NSW Grain Corporation (1995) 22 MVR 317, and Allianz Australia Insurance Ltd. v. GSF Australia Ltd. (2003) 57 NSWLR 321.
As regards the negligence of the driver, it was submitted for the Nominal Defendant that the driver had no responsibility for the system of work, and the reality of the situation in the workplace was that neither the plaintiff nor the driver had any real choice as to the system of work. There could be no negligence in the driver in doing what had been done without injury hundreds of times.
The plaintiff adopted the Nominal Defendant’s submissions, and submitted also that, if the appeal were to succeed, there should not be a re-trial; or, if there were to be a re-trial, it should be on terms that the plaintiff suffered no disadvantage.
During the hearing of the appeal, Mr. Deakin QC for the Nominal Defendant sought an opportunity to lead evidence from the barrister and solicitor acting for the Nominal Defendant at the trial to support the contention that the point now argued concerning fault of GLG as owner, otherwise than through the driver of the vehicle, was not raised below. Leave was given to put on such evidence and to make supplementary submissions, and this occurred.
I will proceed by looking in some detail at whether the point was raised below, and then I will consider the point on its merits. I would say at once that there is in my opinion no substance whatever in the challenge to the primary judge’s finding as to the negligence of the driver. To my mind, it is fanciful to suggest that the driver bears some responsibility for the system of work that he was required by his employer to follow.
WAS THE POINT RELIED ON BELOW?
Prior to the issue of the Statement of Claim on 3 July 2001, there had been a number of cases in which an action by an employee against an employer for damages on the basis of an unsafe system of work had been characterised as a claim in respect of a motor accident and accordingly had been found to be subject to the Motor Accidents Act 1988.
One such case was NRMA Insurance Ltd. v. NSW Grain Corporation (1995) 22 MVR 317. In that case, the plaintiff was injured in the course of his employment during the unloading of a grain elevator from a truck and trailer, as a result of the grain elevator falling and pinning the plaintiff by the legs. The employer was found liable in negligence, and sought indemnity from the insurer of the truck and trailer under the terms of the policy in Schedule 1 of the Motor Accidents Act 1988. The trial judge held that the employer was entitled to be indemnified under the policy, because the injury had been caused by the fault of the employer, being the owner of the vehicle, in the use or operation of the vehicle. The insurer’s appeal was dismissed by the Court of Appeal, on the basis that the employer’s negligence in failing to providing a safe system of work in unloading the vehicle could be categorised as the fault of the employer in the use of the vehicle; this negligence caused the injuries to the plaintiff; and the act of unloading was a use of the vehicle at the time the plaintiff was injured.
Next, in AMP General Insurance v. Brett (1999) 27 MVR 492, it was submitted that an accident which occurred when a delivery boy jumped off the back of a milk truck into the path of a motor cyclist, causing an accident, should be regarded as independent of the use or operation of the milk truck so as to take it outside the ambit of the insurance cover required by the Motor Accidents Act. In the Court of Appeal, Cole JA (at 495) said it was “an integral part of the use of a milk delivery truck that someone delivers milk from it”. Accordingly, the injury to the plaintiff was “in a direct and proximate way” a result of the use or operation of the vehicle. Beazley and Stein JJA agreed with Cole JA.
The opposite result was reached in Prospect County Council v. Foster (2001) 33 MVR 228. In that case, the plaintiff had been electrocuted while working in a cherry-picker repairing electricity wires. The primary cause of the accident was the failure of a test instrument to detect that the conductors were alive, and the cherry-picker played no role in the accident, apart from bringing the plaintiff and his assistant into proximity to the live conductors where they had to carry out the necessary work. It was argued that this fell under the Motor Accidents Act 1988, on the basis that there was fault in the use or operation of the cherry-picker, because the plaintiff could only be brought into proximity to the live conductors by use of the cherry-picker. This argument was rejected by the Court of Appeal.
It is to be noted in relation to those cases that, although the relevant insurance policy was in the same terms as that under consideration here, the relevant definition of “injury” in the Act was not. The definition relevant to the present case was introduced by the Motor Accidents (Amendment) Act 1995, commencing 1 January 1996. As indicated by the second reading speech, its purpose was to exclude at least some workplace accidents from the operation of the Motor Accidents Act, and the comment was made in this speech that it largely excluded loading and unloading cases.
We were not referred to any case dealing with this definition decided prior to the commencement of these proceedings; but shortly after the commencement of the proceedings, namely on 13 August 2001, the Court of Appeal gave its decision in Zurich Australian Insurance Ltd. v. CSR Ltd. (2001) 52 NSWLR 193. In that case, an employee was injured in the course of his employment while he was raising a ramp onto the trailer of a truck. The trailer had been custom-built to the requirements of the employer to carry such ramps. Each ramp weighed 79 kilograms, and it appears that the force required to lift the ramp to an upright position involved the equivalent of lifting 160 kilograms. It was agreed that generally no person should be required to lift loads above 55 kilograms, unless mechanical assistance or team-lifting arrangements were provided. The employer’s contention was that the absence from the trailer of any form of hydraulic or mechanical assistance for lifting was a defect within sub-paragraph (iv) of paragraph (a) in the definition of “injury”; and this contention was upheld by the Court of Appeal. The Court of Appeal also held that the injury was caused by the fault of the employer, being the owner of the trailer, in the use or operation of the trailer, and was a result of and caused during such use or operation. Accordingly the case fell within the Motor Accidents Act 1988, notwithstanding the introduction of the new definition of injury.
The Statement of Claim in this case included allegations against GLG to the effect that it was the owner of the forklift truck, and that it was negligent in operating the forklift truck in such a manner as to place the plaintiff at high risk of injury; as well as an allegation that the forklift truck was driven negligently by an employee of GLG.
GLG’s Defence dated 25 September 2002 denied negligence, and also asserted as follows in paragraph 5:
Further or in the alternative, if the plaintiff is entitled to damages and interest, such damages and interest is to be assessed in accordance with the Motor Accidents Act 1988 as amended.
On the following day, 26 September 2002, judgment was delivered by Wood CJ at CL in the case of Pender v. Power Coal [2002] NSWSC 925. That case dealt with a question arising under the Motor Accidents Compensation Act 1999, which contains a similar definition of “injury” to that introduced into the Motor Accidents Act 1988 by the 1995 amendment. Wood CJ at CL was dealing with an application to strike out proceedings, on the basis that the requirements of the Motor Accidents Compensation Act had not been complied with. The allegation in the Statement of Claim was to the effect that the plaintiff had been injured as a result of the operation of a forklift truck, in an attempt to unwind a reinforced water hose from a 750 kilogram metal drum. There were various allegations of negligence, some of which could be considered as relating to the manner of driving of the forklift truck, and others of which could be considered as relating to the job it was given to do in relation to the drum and the failure to properly secure the drum. Wood CJ at CL held that, in whatever way the case was put, the plaintiff’s case came down to fault in the use or operation of a motor vehicle, for which the owner of the motor vehicle was responsible. He did not directly address the definition of “injury”, but it may be taken that he proceeded on the assumption that, whether or not the driving itself was negligent, the injury was a result of and caused during the driving of the vehicle.
Prior to September 2002, Sparke Helmore had commenced acting as solicitors for the Nominal Defendant; and on 31 May 2002, they wrote to GLG denying indemnity on the motor accidents policy on the basis that the accident “occurred in circumstances which do not fall within the ambit” of the relevant policy.
By letter dated 19 June 2002, Henry Davis York, solicitors for GLG, advised Sparke Helmore that instructions had been obtained to join the motor accidents insurer in the proceedings, and asked whether they were instructed to accept service. Despite follow-up letters, Sparke Helmore did not advise that they had such instructions, and on 1 October 2002, Henry Davis York advised Sparke Helmore that the matter had been listed for hearing in a list commencing 25 November 2002. On 17 October 2002, Henry Davis York sent Sparke Helmore a draft cross-claim.
This draft cross-claim repeated the sub-paragraphs of negligence alleged against GLG that specifically alleged negligence in the driving of the forklift, and in the operation of the forklift, but not those otherwise relating to provision of a safe system of work and/or a safe place of work. I note that Mr. Deakin submitted that this was inconsistent with an intention of GLG to rely on broader allegations of negligence on its part going beyond the actions of the forklift driver. This submission is plainly wrong: the particulars concerning the operation as opposed to the driving of the forklift plainly do not rely on negligence of the driver, but on negligence of GLG in its system of work.
On 2 December 2002, Henry Davis York advised Sparke Helmore that the case was listed for hearing on the following day.
On 3 December 2002, the Nominal Defendant applied to be joined in the proceedings pursuant to s.47A of the Motor Accidents Act 1988, which is as follows:
47A Power of insurer to intervene in legal proceedings
An insurer may apply to the court to be joined as a party to legal proceedings brought against a defendant who is insured under a third-party policy with the insurer in order to argue that in the circumstances of the case it has no obligation under the policy to indemnify the defendant.
In the affidavit in support of that application, the solicitor for the Nominal Defendant asserted that the Nominal Defendant was ready to proceed. That order was in fact made, by the consent of all parties.
There was then the following exchange between Mr. Dooley for the Nominal Defendant, Mr. Polin for GLG, and the primary judge:
DOOLEY: No, we've been joined to argue as to whether in the circumstances of the case, the insurer, that is the nominal defendant has no obligation under the policy to indemnify the defendant. Now that's the status of the nominal defendant, purely under 47A for that circumstance to be dealt with.
HIS HONOUR: When is that application to be dealt with, that's the question that I'm not clear on.
DOOLEY: That would be dealt with your Honour in my submission, at the conclusion of the evidence?
HIS HONOUR: That's your submission?
DOOLEY: That would be my submission.
HIS HONOUR: Mr Polin?
POLIN: If your Honour found that it did fall within the act, the insurer would indemnify my client.

I note that no particulars had been sought by anyone of paragraph 5 of GLG’s Defence; and no particulars were sought at the stage of that exchange on the basis of which GLG claimed that the Motor Accidents Act applied. However, it was not unreasonable for the Nominal Defendant to assume that GLG relied on the allegations in its draft cross-claim.
At the end of the evidence in the case, the primary judge made the following comment about the issue:
HIS HONOUR: Yes that's right. So the position then would be whether or not this incident arose out of the use of a motor vehicle. The forklift seems to have been registered. It was being used at the time. The question is, the real issue is it seems to me whether or not the movement of the forklift and the way it was driven caused whatever it was to fall, the boxes to fall on, or the crates to fall on the plaintiff or Mr Tleyji or whether or not it was the driving of it which caused the major problem. I'm inclined to think that there is an element of the driving in this matter and therefore my impression is that if not in whole, then in part, the motor accident insurer would bear some significant proportion. That is just a very general overview of the matter.
In his final submissions, Mr. Polin referred to the decision in Pender, and continued:
And his Honour had to determine whether it fell within the Motor Accidents Act and which is really what my case in essence is. He didn't go on to liability but if you look at a system of work as opposed to a motor vehicle accident the system of work described there is nothing short of chaotic. Now what we have here is a system, and ultimately your Honour what I say is that this is a matter that falls under the Motor Accidents Act, it's not a case for apportioning liability in terms of what my clients--
…
Why does it fall? There can only be one reason why it fell and it fits in with the plaintiff's evidence, he is standing there on his phone just hanging up, he watches as the forklift comes up the ramp, there is vibration, the container vibrates, the box falls. The only inference your Honour could draw from that evidence and indeed from any of the evidence and where the expert says that is that that box fell because of the impact of the driving, the moving forklift on either the ramp or up the top and that's what caused the vibration and caused it to fall.
HIS HONOUR: And how does that--
POLIN: I'm not saying there is negligence in that.
HIS HONOUR: No.
POLIN: What I'm saying is, and that's why I sent a letter to Mr Dooley that in terms of my client's policy of insurance under the Motor Accidents Act. Your Honour, the relevant sections are actually in Pender v Power Coal but a motor accident is described and if you delete the full parts, that obviously takes the liability, you're looking at a motor accident being effectively the use or operation of the vehicle which causes death or injury and then injury is defined which is the more important one meaning personal injury caused by - and then it's the fault. If the injury is a result and is caused during the driving of the vehicle, there is no doubt that the only inference you can draw in this case is that the injury was caused during or by the driving in the vehicle, in the circumstances it was a registered and insured forklift.
That means that this incident falls within my client's policy and therefore the CTP insurer should indemnify and I thought I would leave Mr Dooley to deal with the actual liability because it is a particularly difficult one. Because we say in line with decisions, I think is Mercantile Mutual v Molding, once the CTP policy kicks in to cover the incident that is it, that's what covers it. That may have problems with the plaintiff as well.
…
If you look at and Pender's case is a great example because you could probably run up a 20 page statement of claim with the particulars of negligence in that Laurel and Hardy event and Wood J said it falls within the Motor Accidents Act, they should have got the certificate and dismissed the statement of claim, that was the end of the matter. We would say it's the same here. But in any event even if it wasn't the box fell, where's the negligence on the part of the occupier in any event. But I think we say that the effect of that is that Mr O'Connor we get him off the hook as well. Because of that it becomes a Motor Accidents matter in line with Pender and it's then a case of whether there was negligence on the part of the owner or the driver of the forklift in doing what he did. That then becomes really an issue between the plaintiff and the CTP insurance, probably best I don't waste time going through all that, your Honour.
Mr. Dooley made the following submissions, inter alia:
So that what the Motor Accident insurer would say, your Honour, is any negligence here is really in relation to the way in which the procedure had been brought about it would seem by the second defendant for the attaching of the ramp to the trailer on which the container was placed
…
Your Honour, under the Motor Accidents Act the fact that there is a motor vehicle nearby doesn't mean that the motor vehicle insurer is one who is responsible for some injury that should arise. My friend has referred to injury and the definitions that are in Pender v Power Coal under the Motor Accidents Compensation Act, your Honour, but essentially they're the same that are under the Motor Accidents Act. And it says `Injury means personal bodily injury caused by the fault of the owner or driver of the motor vehicle.' It doesn't say injury means personal bodily injury caused by the owner or driver of a motor vehicle and the use or operation of the vehicle, it's got to be fault. And if only if the injury is a result of and is caused during the driving, collision, running out of control, use or operation by defect and the vehicle.
Now it's quite clearly that there is no collision, it's not running out of control and there is no defect in the vehicle. And I think as my friend rightly points out the only area, if there was an area that a court could find, would be in relation to the driving. But where is there any fault in the owner or driver in the driving of the vehicle. This is a use of a particular vehicle that had been used on hundreds of occasions that the plaintiff himself knew of. It was used on a ramp that the plaintiff himself knew and one would presume the second defendant also knew resulted in vibrations, both to the ramp and also to the trailer on which the container had been placed.
…
So your Honour where can it be shown that there is any fault. I mean all he has done is he driven up a ramp at a responsible speed, and the plaintiff concedes that, with the times (sic) with the pallets on them for the purpose of unloading this container. And all we know, your Honour, is that whilst it has been driven up and almost to the top of the ramp the box has unfortunately fallen down and struck the plaintiff. The conclusion that has been asked to be drawn is that as a result of the vibration which is a result of the fault of the owner or driver. The reasons I have already put to your there can-be no finding of any fault by the owner or driver because there is just nothing there. The motor accident gives a definition very similar, means an accident caused by the fault, it all comes back to fault your Honour.
So where there can be shown to any fault at all by the owner or driver when the plaintiff himself has said that he has been involved in this procedure on hundreds of occasions, never felt any concern whatsoever before.
…
We don't know whether a box had been left in a position that was somewhat precarious and it just happened to fall at the time that the forklift got to the top of the ramp. All we know is that the box fell. But is that sufficient, your Honour, to be able to establish that that is as a result of the fault by the owner or driver, in my respectful submission it does not. I mean Pender v Power Coal is a totally different case in which there had been a deliberate use of the motor vehicles for this procedure which unfortunately created a very serious and dangerous situation, but that was a deliberate act of the use of the motor vehicle, if (sic) this case if one could see where there would be fault by the owner or driver in just this dangerous procedure.
But in the position that this Court finds itself in, your Honour, a forklift has been driven in a way in the way in which it's driven every day, up a ramp, nothing to indicate that it's going fast or slow or haphazard or whatever and in my respectful submission the Court would not be able to find on the evidence before you that there was any fault, in fact that's essentially what the plaintiff was saying today and if there's no fault it doesn't fall within those definitions. On that basis, your Honour, the motor accident insurer should get the benefit of 47A and the Court should make the finding that the Court has been asked to find that is that in the circumstances of the case the motor accident insurer has no obligation under policy to indemnify the defendant and that's what we would ask the Court to make, the finding under 47A.
Mr. Williams for the plaintiff made the following submission on this matter:
In relation to the MAA aspect it's my respectful submission that whilst the driver wasn't at fault because all he was doing was driving this forklift in the way that he was directed to do presumably but where the owner was at fault was using it in this system of work, that had it being (sic) driven up and down a ramp and it was known because this was going on and on hundreds and hundreds of times, for months we know from the--
HIS HONOUR: With a bump.
WILLIAMS: With bump and vibrations and the container vibrating and also the unchallenged evidence of the plaintiff that it was often the case that cartons in the containers will loosen the stacking. So my friend Mr O'Connor rhetorically asked what was different this day and with respect to that I would say nothing, this was an accident waiting to happen and it was foreseeable and preventable. And your Honour I don't propose to dwell any further on those aspects than that and it's a matter for your Honour entirely. But the part the forklift played in the operation in my submission is what brings the policy into play.
In his judgment, the primary judge did not consider whether the case could fall within the policy and the Motor Accidents Act on the basis that the failure of GLG to provide a safe system of work was, in the circumstances, fault of the owner of the forklift truck in the use or operation of that truck, and that the injury was a result of and caused during the driving of the vehicle. The primary judge simply held that the injury was not caused by the driving of the motor vehicle in any negligent manner, and that the motor accident insurer was accordingly not liable.
In Mr. Dooley’s affidavit, sworn 16 April 2004, he states as follows:
5.As I understand the appellant's position it now seeks to rely upon an unsafe system of work causing injury to the plaintiff rather than the fault of the owner or driver of the forklift caused during and as a result of the driving of the vehicle. I did not understand that to be the case relied upon by the appellant as Second Defendant before Delaney DCJ.
6.It was my understanding of the case against the Nominal Defendant that it was limited to the manner in which the forklift was being driven falling within Paragraph 3(a)(i) of the definition of injury.
7.The submissions I made to His Honour (as I read it now) and as I recall it, were limited to a case based upon the driving of the forklift. The argument I advanced on behalf of the first respondent was that there was firstly no evidence to support any of the particulars of negligence (p), (q), (r) and (s) as set out in the plaintiff's Statement of Claim and, secondly, there was no negligence in the driving of the motor vehicle that would have brought it within the definition of injury under s.3(a)(i)-(iv).
8.My submission on page 11 paragraph 45-55 sets out my criticisms of the procedure that had been carried out by the second defendant in the system of work. This is reinforced on page 12 line 25-35 where it is recorded I said:
"It was used on a ramp that the plaintiff himself knew and one would presume the second defendant also knew resulted in vibrations, both to the ramp and also to the trailer on which the contained had been placed."
9.If I had been aware that the second defendant intended to rely upon its own defective system of work as a basis for claiming indemnity against my client, it is unlikely that I would have advanced submissions in support of a finding that the system of work was defective.
10.At page 13, line 35-40, my submission related to the forklift being driven every day on the ramp and there was nothing to indicate that it was going fast, slow or haphazard. On that basis, the Court would not be able to find there was any fault within the definition.
11.The way in which I endeavoured to run the case on behalf of the Nominal Defendant was purely on the basis that there had been no fault in the driving of the vehicle with reference to s.3(a)(i) of the Motor Accidents Act.
Those paragraphs were objected to, on the basis that Mr. Dooley’s subjective thought processes are not relevant. In my opinion, they do have some relevance, and I would admit them. It is true that the central question is the objective question of what were made issues by the conduct of the parties, but the subjective understanding of one participant may bear indirectly on that question as being some evidence of matters not captured by the transcript, and it is certainly relevant to the question whether the case might have been conducted differently if the issues had been understood differently. There is no reason to doubt the veracity of Mr. Dooley’s evidence.
However, in my opinion the submissions to which I have referred, particularly having regard to the reference to Pender, show that GLG did rely below on the contention that (1) the failure of GLG to provide a safe system of work was, in the circumstances, fault of the owner of the forklift truck in the use and operation of that forklift truck; and (2) the injury to the plaintiff was a result of and caused during the driving of the forklift truck. Further, there were submissions of Mr. Williams for the plaintiff to similar effect. It was submitted by Mr. Deakin that Mr. Polin for GLG only once referred to the phrase “use or operation of the vehicle”, and that he did not identify any fault in GLG in the use or operation of the vehicle (apart from its driving) as the basis of GLG’s claim; but in my opinion, having regard to the wording of the section and cases such as Pender, as well as the circumstances of this case, Mr. Polin’s submissions sufficiently indicated reliance on contentions (1) and (2) above.
Mr. Dooley’s understanding appears to have been that, for the second of these two elements to be made good, the driving itself had to involve fault. However, in my opinion that is an erroneous view, as shown inter alia by the subsequently decided case of Emad Trolley Pty. Ltd. v. Shigar [2003] NSWCA 231. The circumstance that this was Mr. Dooley’s understanding does not, in my opinion, mean that the contention that I outlined was not put below.
Accordingly, in my opinion it is open to the appellant to rely on that contention before this Court.
WAS GLG’S LIABILITY WITHIN ITS MOTOR ACCIDENTS POLICY?
As noted above, the basis sought to be argued before this Court was not considered by the primary judge; and it is in my opinion appropriate for this Court to consider it. In my opinion, particularly having regard to the position of the plaintiff, it is appropriate for this Court to determine it if at all possible, rather than send the matter back for a new trial.
There is no doubt that the plaintiff’s injury was caused by the fault of the owner of the forklift truck. That was the whole basis of the primary judge’s decision to award damages to the plaintiff. Thus, there are just two questions: (1) was this fault “in the use or operation of the vehicle”? and (2) was the plaintiff’s injury “a result of and caused during the driving of the vehicle”?
On the first question, Mr. Deakin QC submitted that there was no fault in the use or operation of the motor vehicle, as such, but only in the system of work; and the motor vehicle was no more than a necessary condition for the arising of the dangerous situation, as was the case with the cherry-picker in Foster.
Next, Mr. Deakin submitted that, at least until the decision in Allianz Australia Insurance Ltd. v. GSF Australia Pty. Ltd. (2003) 57 NSWLR 321, it had never been suggested that the fault of the owner or driver did not have to be associated with one or other of the sub-paragraphs (i)-(iv) of paragraph (a) of the definition of “injury”. In particular, in Zurich, the fault of the owner in the use or operation of the vehicle lay in the operation of the vehicle with the defect referred to in paragraph (iv). Allianz was another case in which it was paragraph (iv) that was relevant, and in so far as the majority held that paragraph (iv) could be satisfied by a defect even if this defect was not the result of the relevant fault of the owner, that case was incorrectly decided; and the dissenting judgment of Santow JA should be followed.
Should that submission be rejected, then in relation to the second question Mr. Deakin submitted that it was necessary, in order that the matter fall within sub-paragraph (i) of paragraph (a) of the definition of “injury”, that the fault of the owner, and the driving of the vehicle, be a direct and/or proximate cause of the injury: see Brett per Cole JA, and Foster at [31] per Ipp AJA. In this case, it was at best an indirect and remote cause, in that the driving of the forklift vibrated the ramp, which in turn vibrated the landing, which in turn vibrated the container, which in turn caused boxes to fall on the plaintiff.
Mr. Deakin expanded on his submissions in a written submission provided after the hearing, as follows:
If, contrary to the above submissions, the Court concludes that the Appellant is entitled to invoke its own failure to provide a safe system of work, as the basis for its claim against the Nominal Defendant, the First Respondent nevertheless submits that the injury fell outside the definition because:-
1) The "fault" on the part of the Appellant was identified by the trial judge as:-
a)Failing to ensure that the ramp leading up to the container (within which the worker was standing) was stabilised to prevent it moving against the container [Red 30C].
b)Removing the forklift from the operation altogether [Red 30E] or alternatively having a different system which did not connect the forklift to the container [Red 30D].
c)Failing to eliminate vibration on the ramp [Red 33W]; and
d)In failing to use other means to unload the container [Red 37W].
2) It was in those identified respects, that the system of work laid down by the Appellant was held to be unsafe [Red 29U, 32M and 36S-37F].
The "fault" was not in the "use or operation" of the vehicle, but in the overall system of work as found by the trial judge [Red 36T and 36X].
It is further submitted that although it may be said that the injury was caused "during" the driving of the vehicle, it was not a "result of” the driving as required by the definition.
In my opinion, the way the vehicle was used was a necessary and important element in the fault of the owner of the vehicle. The system of work was held to be unsafe because it was such that the container, in which boxes were stacked, was caused to vibrate; and it was the forklift truck itself that caused the vibration. In Foster, there was absolutely nothing wrong with the way the cherry-picker itself was used. Accordingly, there was in this case fault of the owner of the vehicle in the use or operation of the vehicle.

Turning to the second question, the view of the majority in Allianz that one of the sub-paragraphs (i)-(iv) of paragraph (a) of the definition of “injury” can be satisfied, even though the fault of the owner of the vehicle lies elsewhere, was adopted also in Emad. Leave has not been sought to re-argue these cases, and in my opinion they should be followed. Since it was the vibration of the container that caused the box to fall on the plaintiff, and since the vibration of the container was caused by the driving of the motor vehicle and occurred during the driving of the motor vehicle, there is no doubt that the requirements of sub-paragraph (i) are satisfied, unless it can be said that the causal relationship is not close enough, for some reason. The dissenting judgment of Santow JA in Allianz was essentially on the basis that the injury was not caused by the defect in the vehicle in that case, because the defect would have been quite harmless but for an extraordinary direction given by the plaintiff’s employer, the owner of the vehicle, to manually carry out a task that should never have been carried out manually. The majority judges disagreed with this view in that case; but I note in any event that in the current case there is nothing of that nature that could be considered as making it inappropriate to treat the injury as truly caused by the driving of the forklift truck. Accordingly, in this case the injury was a result of and caused during the driving of the vehicle.
For those reasons, in my opinion the appeal succeeds on this point.
CONCLUSION
In my opinion, the appeal should be allowed, and a declaration made that GLG is entitled to an indemnity from the Nominal Defendant. The result of a finding that the Motor Accidents Act is applicable will also be an overall reduction in the verdict in favour of the plaintiff, in an amount I understand to be $51,409.77. There will need to be a re-calculation of the apportionment as between GLG and Ready Workforce. The Nominal Defendant should pay GLG’s costs of the appeal. At present, I am of the view that the plaintiff should bear his own costs of the appeal, but have a Suitors Fund certification in respect of those costs if otherwise qualified.
I would direct the parties to bring in agreed short minutes within 7 days. If agreement cannot be reached, then I direct that GLG submit short minutes and submissions in support thereof within 7 days, and that any opposing submissions be provided within a further 7 days.
TOBIAS JA: I agree with Hodgson JA
McCOLL JA: I agree with Hodgson JA.

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LAST UPDATED: 01/06/2004