Insurance Commission WA v Container Handlers Pty Ltd & Ors

[2003] HCATrans 413

[2003] HCATrans 413

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P37 of 2003

B e t w e e n -

INSURANCE COMMISSION OF WESTERN AUSTRALIA

Appellant

and

CONTAINER HANDLERS PTY LTD

First Respondent

UNION DES ASSURANCES DE PARIS

Second Respondent

ASHLEY ROBERT SUTTON

Third Respondent

McHUGH J
GUMMOW J

KIRBY J
CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON MONDAY, 20 OCTOBER 2003, AT 3.18 PM

Copyright in the High Court of Australia

__________________

MR B.W. WALKER, SC:   May it please your Honours, I appear with my learned friend, MR P.J. BRERETON, for the appellant.  (instructed by Phillips Fox)

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR G.R. HANCY, for the first respondent.  There are no other respondents now.  The title keeps on recurring but we are the only respondent.  (instructed by Mullins Handcock)

McHUGH J:   The parties apparently filed a consent order dismissing the so‑called cross‑appeal with costs, is that so?

MR WALKER:   Yes.

McHUGH J:   In those circumstances, before we begin it is perhaps proper to dispose of that.  The Deputy Registrar certifies that he holds a letter from the solicitor for the second respondent indicating that its client undertakes to be bound by the decision of the Court save as to costs, and the solicitor for the third respondent indicates that its client will abide by the decision of the Court.  The Deputy Registrar also certifies that he holds a consent duly signed by the solicitors for the first and second respondents to the appeal consenting to the making of orders in the following terms:

1.  The first respondent’s cross-appeal against the second respondent be dismissed;

2.  There be no order as to costs.

Yes, Mr Walker.

MR WALKER:   Your Honours, the question in this case depends upon the interpretation of a statutory expression used three times in the Act.

GUMMOW J:   Do you agree that these other respondents have disappeared or should never have been here?

MR WALKER:   I agree they have nothing to do with the issues upon which I contend.

GUMMOW J:   We have to worry about our record, Mr Walker.

MR WALKER:   Yes.  Your Honour, so far as I know they are gone.  I fear your Honour may be about to ask me how did they go.

GUMMOW J:   Yes.

MR WALKER:   I am sorry, I will get some instructions on that.

GUMMOW J:   All right.  Yes, you were getting into full flight.

MR WALKER: Yes. The statutory expression is used relevantly three times. Your Honours have seen the relevant provisions set out in paragraphs 37 and following of our written submissions, but the Motor Vehicle (Third Party Insurance) Act 1943, amended of course more than once, contained from 1987 provisions in section 4(1), section 6(1) and critically in the Schedule the expression which is at the heart of the dispute before your Honours. That expression would limit the scope of the indemnity granted by the insurance policy which itself is created in the terms of the Schedule to the Act, by reference to the death or bodily injury being one which is “directly caused by, or by the driving of, the vehicle”.

A couple of matters can be swept aside as not apparently of any moment in the dispute between the parties today.  The first is that notwithstanding there are two registered vehicles in this case, the prime mover and the low‑loader trailer, it is common ground, and has been throughout this litigation, that the low‑loader, part of which caused this horrific injury to the plaintiff, is a relevant motor vehicle.  It is also common ground that it is one which is capable of being driven and had been on the day in question driven by being propelled, drawn along by the prime mover.  There is therefore nothing in this case between the parties distinguishing the whole assemblage – what might be called the truck by the layman – into two pieces; it does not matter.

In our submission, the fallacy which informs the decision in the Full Court below and certainly the fallacy which, in our submission, modified in a significant fashion but still appearing in the respondent’s submissions in this Court is one which is best illustrated by describing its result.  It takes the statutory word “directly”, which is at the beginning of the verbal formula which I have just quoted to your Honours, and applies it or interprets it in such a fashion as can be seen clearly to render it thus “directly or indirectly”.

The best way perhaps of illustrating the mere approach to an explicit concession to that effect by the respondent is by going to their written submissions and starting with paragraph 13.  In paragraph 13 of the written submissions for the respondent, the two limbs of the statutory indemnity, that which describes and prescribes the scope of the liability potentially of my client to the respondent, is dealt with in two sentences.  The first sentence deals with the second limb:

The driving of the prime mover or low loader did not directly cause Mr Sutton’s injury.

Quite so.  The second one:

It was directly caused by the low loader –

and to remind your Honours, the low‑loader is the trailer where there was an attempt to jack it up where part of it located near the axle caused the horrific injury when the accident occurred.  Then my friends continue.  The injury:

was directly caused by the low loader and was a consequence of the driving of the prime mover and the low loader.

Those words, cunningly if I may say so with respect, pick up what is said to be the result of reading in the definition in section 3(7) of the Act to the notion of an injury being caused by a motor vehicle.

It is critical at the outset to note that in that opening paragraph of the two limbs, the second limb is discarded.  It can only be the first limb, according to the respondent.  We of course agree with half of the proposition.  It cannot be the second limb.  The question is:  could it be the first limb?  Paragraph 31 in the written submissions by the respondent continues the theme and, though it might be said they sidle up to the proposition, there is not a direct embrace of the matter at hand but it is pretty clear where they are tending.

Driving and consequent injury –

again, “consequent” is designed to bring up the words of section 3(7) to which I will be coming –

comprehend a relationship of cause and subsequent effect –

and that is both true and a truism and common ground –

that need not be immediate.

That of course is an argument which has not dealt with the way in which the adverb “directly” remains in the substantive provisions both of sections 4 and 6 and most importantly in the Schedule.  Then my friends continue:

The sequence leading from one to the other may be indirect.

In our submission, that is not some merely otiose point being put by my learned friends; it is, and for good cause, something upon which they depend for success.

We then have in paragraph 33 a reference to the actual facts in the case upon which one might then apply, according to the respondent’s argument, the assertions or contentions of interpretation to which I have just gone.  It is said that the “injury was a consequence of the driving of the low loader.”  Again, the language is intended to capture section 3(7) words.  Then there is a reference to there being “an unbroken sequence of causally connected events”, about which one can immediately say that if it were broken, it would scarcely be causally connected.  Next they go on to say, “commencing with the driving and leading to the injury.”

Of the references to the leading judgment in the Full Court, may I take your Honours to appeal book 189, being the last passage cited by my learned friends in their paragraph 33.  In paragraph 51, by way of his Honour Justice Roberts‑Smith’s conclusion on the point, your Honours will see other language also taken from textual sources, not statutory but near statutory, which have been used to describe the, we submit, surprising result in this case.  His Honour says:

In my view there was here a sufficient –

and then come the magic words –

proximate or direct connection between the driving and Sutton’s injuries for them to have been regarded as directly caused by the driving.

Your Honours will immediately note that that is the very conclusion which has been disavowed by the respondent’s argument in this Court – see paragraph 13.

The way in which his Honour got to that can be seen, for example, in the first of the references relied upon by my learned friends at page 184 of the appeal book, paragraph 35 of his Honour’s reasons.  There there is language which we submit would plainly satisfy the description of indirect rather than direct causation.  In particular, may I draw to your Honours’ attention the way in which his Honour describes it:

it is arguable that it was the manner of control of the rig –

his Honour is here concentrating on the driving question –

which –

and then the important expression follows –

commenced the chain of causation which culminated in the bodily injury to Sutton.

True it is in that paragraph 35 his Honour was dealing with the question of driving, but it is clear from what his Honour describes that the outcome putatively of that driving was that it commenced the chain of causation which culminates.  In our submission, if the word “directly” is to mean anything, it is a word which would eschew long chains, however unbroken.

We then come back to the matter upon which everything depends, namely the statute which has been the subject of this, we submit, wrongful transformation by the decision below sought to be continued in modified form by the argument from the respondent in writing in this case.  There is no doubt that it appears, and as a matter of substance must be, that there are two limbs to the statutory scope of indemnity required by the statute and given by the policy in schedule form.  That is, the language clearly says that the injury has to be directly caused by the motor vehicle or directly caused by the driving of the motor vehicle.  I have there expanded the language by repeating the outside parts of the expression which, as your Honours will recall, verbatim is “directly caused by, or by the driving of, the vehicle”.

If there had been no interpretative paraphrase by way of restricting the first of those limbs, namely directly caused by the motor vehicle, it would have appeared both as a matter of ordinary English and as a matter of the particular context where you have the alternatives offered that something other than the driving of the motor vehicle may have been the activity which was the effective cause of the injury.  That would appear naturally.  It is for those reasons obviously enough that section 3(7) of the Act assumed the vital role it does in this argument.  In this Court it is common ground that section 3(7) has to be resorted to by reason of the link between the statutory provisions 4 and 6 and the Schedule policy.

The relevant terms of section 3(7) your Honours have already seen in the written submissions.  The first thing to be noted is that the word “directly” does not appear in it but, before any comfort can be gained by the respondent from that absence, it is important to note that neither is the defined term or concept, one which is described as direct causation as opposed to causation simpliciter, let alone indirect causation.

GUMMOW J:   What is the relationship between 3(7) and 6(1)?  Is it qualifying, expanding, contracting?

MR WALKER:   Contracting.  When your Honour says 6(1), the same verbal formula appears in 4(1), 6(1) and in the Schedule.

GUMMOW J:   Yes, that is right.

MR WALKER:   Yes, “directly caused by, or by the driving of, the vehicle”.  The relation for which we contend is that 3(7) is very clearly a restriction of what might otherwise have been the literal or ordinary English meaning of the first limb set out in that verbal formula.  For clarity of reference, the first limb is “directly caused by the motor vehicle”; the second limb is “directly caused by the driving of the motor vehicle”.  The second limb should not be, contra the Full Court, in issue in this Court.

The respondent seems to concede that the second limb could not be made out and, with respect, correctly on the facts.  It is the first limb upon which they rely, “directly caused by the motor vehicle”.  In answer to Justice Gummow, section 3(7) bears this relation to that part of the statutory formula.  First ‑ ‑ ‑

GUMMOW J:   It qualifies “caused”.

MR WALKER:   Yes.  First, it is directed at a word which is critical to both limbs, “caused”.  Second, it is directed to that word when it is used in the first limb of the formula.  Your Honours will see in section 3(7) that there is a prohibition on according a certain meaning to the term “caused by a vehicle” in certain circumstances.  It is framed as a prohibition, that death or injury “shall not be taken to have been caused by a vehicle if”.  It is that syntax that immediately triggers at least the textual suggestion, this is a cutting back restriction confinement or perhaps merely the exclusion of one of the possible literal meanings of potentially ambiguous expressions.  In any event, it is not a provision which on the face of it as a matter of language reads as if it is expanding the meaning of words beyond what they would otherwise have borne.

McHUGH J:   But it does seem to assume that but for 3(7), injury could be directly caused by the driving of a vehicle.

MR WALKER:   No, your Honour, it is not about the driving.

McHUGH J:   No, it assumes that bodily injury could be directly caused by the driving of a vehicle, even though it was just a mere consequence of the driving.

MR WALKER:   No, with respect, your Honour.  There are two possible views.  One I will not stay long on.  That is, it is in for more abundant caution.  Your Honours may reach that conclusion but it is not a plank upon which I wish to depend for long.  The second is that it was there sensibly to exclude from the first limb in the formula being that which is naturally more general than the second limb; “caused by a vehicle” is more general than “caused by the driving of a vehicle”.  It was to exclude from that first limb things which as a matter of English – and to pick up, with respect, your Honour Justice McHugh’s question – as a matter of assumption from the way it is drawn that otherwise things could be caused by a motor vehicle by methods which did not require driving.

Of course, a motor vehicle can directly cause injury otherwise than as a consequence of it being driven or being run out of control.  It can be, for example, an illicit place of play for children who might cause themselves terrible injury by playing on a large truck, for example.  That would be directly caused by the vehicle, but section 3(7) makes it clear that there will not be - it “shall not be taken to have been caused by a vehicle”, a deeming provision perhaps, depending upon how broadly one would have read those words otherwise, if it is not a consequence of the driving of that vehicle or of the vehicle running out of control.

Now, the description of the circumstances which are intended, in our submission, as a matter of scheme in the statute – and all parts of that scheme have now been referred to this afternoon – as well as the particular content as a matter of ordinary English of the word “driving” and “running out of control”, certainly emphasises that the relevant nexus, which is the essential reference point for the scope of indemnity decision, the relevant nexus is with movement of the vehicle.  That is the common element of driving and running out of control.

Your Honours will all be aware that this is but one of the statutory provisions evolved by a form of dialectic between this Court and various Parliaments which have run a number of changes including “arising out of” or “caused by” ‑ being a formula to which I will come in just one moment ‑ including as well not the specific driving or running out of control, but the very general use that is for most of the 20^th century the provision which has dominated these provisions, “arising out of” or “caused by the use of a motor vehicle”, leading to questions of the kind that your Honours will be familiar with such as whether one is using a motor vehicle when one has parked it and left one’s children in it with alas a box of matches to be found by them while you are away, whether that is using the vehicle or not.

In our submission, read in that fashion, it is clear that section 3(7) was designed to eliminate, at the outset, an enhanced scope of cover which would sever the nexus with driving even for the general first limb.  My learned friends, with respect, understandably draw to attention by way of emphasis, that it is the indefinite article “a” consequence, rather than the definite article “the” consequence.  We will deal with that briefly as follows:  all that does is deal with the obvious proposition that there can be more than one consequence of the driving or running out of control of a vehicle.  It sheds no light whatever on the directness question, which is at the heart of the matter before this Court.

The next thing, in terms of the relationship between section 3(7) and the verbal formula found in sections 4(1), 6(1) and the Schedule is this, that it says nothing about the adverb “directly” which is the first word of that formula and which governs both limbs.  In our submission, the fallacy committed below, and continued in modified fashion in this Court, is to bring about a result by which the word “directly” does no work.  Indeed, as your Honours have seen from the written submission, as near as a whisker to an assertion in this Court by the respondent, that “directly” means directly or indirectly.

If I could take your Honours then to the essential background against which, whether one is talking purposiveness or the identification of mischief, these statutory provisions fall to be interpreted.  This is one of those statutes ‑ that is, the 1987 amendments – which was a direct overt explicit response by a parliament to the interpretation of one of its statutes by this Court.

Could I take your Honours to Dickinson v The Motor Vehicle Insurance Trust (1987) 163 CLR 500. Your Honours know the case and the facts. It is referred to in the written submissions. I am not going to dwell on it except for one passage at page 505. At the top of that page, conveniently line 3, the question in that case was stated to be:

whether the appellant’s injuries were caused by or arose out of the use of the motor car -

a former formula.  In the next paragraph appear words which, in our submission, your Honours would be very satisfied were to the forefront of those who drafted and debated, and as Chambers took part in, enacting the legislation which falls to be interpreted in this case.  Their Honours say, third line of that paragraph:

The test posited by the words “arising out of” is wider than that posited by the words “caused by” and the former, although it involves some causal or consequential relationship between the use of the vehicle and the injuries, does not require the direct or proximate relationship which would be necessary to conclude that the injuries were caused by the use of the vehicle.

The citation, your Honours, to State Government Insurance Commission v Stevens Bros. Pty Ltd 154 CLR, really, with great respect, could have been more directly made to the GIO v R.J. Green & Lloyd decision that you will find cited further down on that page, and at the top of the next page, namely, 114 CLR, because it is in that case that the proposition for which Stevens Bros was cited was in fact discussed.  Stevens Bros in fact simply cites R.J. Green & Lloyd for that point.

Now, it was in R.J. Green & Lloyd that Sir Victor Windeyer, of course, referred to the “wordy jungle” when lawyers embark upon the concept of causation.  In our submission, the temptation to be avoided in this case is to substitute the paraphrase “by a collection of near synonyms” for the words of the statute understood in the context beyond any doubt well‑known in this case in which the statutory text came to be selected, leaving only this question, has the evident purpose miscarried by the words being intractable.

McHUGH J:   Why do you say that?  Your opponent’s case is a very simple case.  He says look at section 6.  This is a plain case of the vehicle directly causing the accident because the axle on the low‑loader fell on the plaintiff’s hand and therefore it was directly caused by the motor vehicle, and then he says, when you go to 3(7), the injury, which is deemed with a different universe of discourse, he says it was “a consequence of the driving”.

MR WALKER:   Your Honour, I would understand that the other side’s case at least approaches that straightforward statement of it, though one does not find it quite so neatly put, with respect.  The second stage in that argument cannot be permitted to displace the substantive words of the first limb of the formula which is ‑ ‑ ‑

McHUGH J:   Why not?  Why cannot you just simply read 6(1) as the controlling provision, and then 3(7) saying, well notwithstanding that you come within 6, for the purposes of this Act:

bodily injury to any person shall not be taken to have been caused by a vehicle if it is not a consequence of the driving – 

and in this case, it was a consequence of the driving.  You are the one that seems to want to put the gloss on it.

MR WALKER:   No, but I do want to put the words in their proper order.  Their proper order is the word “directly” comes first and governs everything that follows.  Talking about proper order, perhaps, your Honours, if I may gingerly suggest, it is the Schedule that is the primary location of the words in terms of the controversy between the parties in this case because this is an action upon the policy.  The policy is in schedule terms.  Section 6(1)(b) and (c) is that which stipulates what the policy must be, and section 4 compels the entry into of that contract of insurance, which is why I have referred to sections 4 and 6 as well as to the Schedule, but it is really the Schedule which is the source of the claim in the action between the parties.

GUMMOW J:   So how does 3(7) fit into the Schedule?

MR WALKER:   Section 3(7) fits into the Schedule because – there is a passage in the Full Court, your Honour, to which ‑ ‑ ‑

GUMMOW J:   I was just looking at 6(1), that is all.  Why do we have 6(1)(b) when we have 6(1)(c), and we have the policy, there we are.  Why do they need to ‑ ‑ ‑

MR WALKER:   I do not know.  Section 4 could have been redrawn so as to conflate everything, 4, 6 and the Schedule.

GUMMOW J:   Yes.

MR WALKER:   It may well be the same thing is true about the two limbs of the formula.  Why are there two limbs to the formula?  However, we do know that the formula came in with 3(7) which is why I offered tentatively that maybe there is more than a flavour of more abundant caution in this drafting, and perhaps none the surprising for that, bearing in mind, that as your Honours have seen from the parliamentary material, the second reading speeches and the debates to which we have drawn attention in our written submissions, it was an explicit intention of those promoting the Bill that this would reverse the decision in Dickinson which was understood to have enlarged the scope of the statutory indemnity beyond what, and then it depends on how tendentious one is, either had been intended, or was for budgetary reasons thought appropriate, or for social reasons thought appropriate.  It does not matter which.

Certainly, there was disapproval by the Parliament, evinced in debate.  Certainly a rejection by Parliament, demonstrated by the statute, of the law remaining as it was in Dickinson and the departure from the statute law which had been interpreted in Dickinson by the statutory text, and which this Court is now called on to construe, was very considerable.  The general word “use” was ditched, and not only was the general phrase, the wider phrase, “arising out of” thrown out, but following that paragraph, of which they are quite evidently aware, not only was the “caused by”, that is, the less wide connection, inserted, but as it were, by way of emphasis or further restriction – we respectfully submit the latter, further restriction ‑ the word “directly” was put in.

Now, it may be that that comes from the phrase in the paragraph I have quoted from Dickinson, “direct or proximate”.  In Dickinson there was no need to discuss that to which we have drawn attention in our written submissions, is there any relevant distinction in such a context between direct or proximate, but that is why, in our approach, we respectfully suggest to the Court, one would avoid paraphrase by collecting synonyms in any event, and simply asked whether when cause is understood, as 3(7) commands it must be understood, and then obeying that restriction on cause, you observe the adverb “directly” also has to be observed, then can one expand to include within the scope of this indemnity something which was not directly a consequence of the driving.

The difference between the parties, thrown up by the paraphrase of the respondent’s argument put forward by Justice McHugh, is whether or not “directly” a consequence is an appropriate reading and, in our submission, if one is to use 3(7) in the fashion in which it is to be used as a definition section rather than as a substituted substantive section, then you come up with the conclusion that this is an injury which in order to be within the scope of the indemnity must have been directly caused, that is, must have been “a consequence of the driving” or “running out of control” of the vehicle. 

McHUGH J:   It comes to this, does not it, you want to read back into 3(7) the word “directly” ‑ ‑ ‑

MR WALKER:   No, no.

McHUGH J:    ‑ ‑ ‑ from the Schedule and from section 6?

MR WALKER:   Perish the thought, your Honour.  I want to make sure that 3(7), a definition section ‑ ‑ ‑

McHUGH J:   No, you keep saying it is a definition section.

MR WALKER:   An interpretation section.

McHUGH J:   It may be unfortunate that it is drafted this way, but it does not strike me as a definition section.  It strikes me as a section which operates on something that is already there, and cuts it back.

MR WALKER:   Your Honour, may I backtrack?  I would not offer as the beginning of an argument characterising a section before obviously I have established what the character is.  Sections 4, 6 and the Schedule stipulate, as Justice Gummow has pointed out, perhaps in a supererogatory fashion, that the obligation to enter a contract of insurance, that mandatory provisions of that contract of insurance and the mandatory form of that contract of insurance, three times, at the heart of it, to define – I hope a neutral word – to define the scope of the indemnity offered, appears the expression “directly caused by, or by the driving of” the motor vehicle.  The word “directly” simply cannot be evaded.

One then goes to section 3(7) which as a section imposes no obligation on anyone, does not make entering a contract of insurance mandatory, does not mandate what the terms shall be, and does not mandate the form.  Rather, it is addressed to what I will call a conceptual or interpretative exercise, hence the expression “shall not be taken to have been”.  That is describing the mental exercise of evaluating particular circumstances against the statutory description of the scope of indemnity, and that is the hallmark of a provision, which whether one calls it interpretative or not, is a provision not substantive in the sense of creating rights and obligations, but is designed to direct the way in which the words creating those rights and obligations are to be taken to apply.

I do not wish to suggest that they are lesser creatures as statutory provisions because they are conveniently called interpretative.  Far from it.  They drive – I should not use that expression – they are mandatory, they are all embracing “for the purposes of this Act” and they cut back what might otherwise have been the reading of the first limb of the test.

McHUGH J:   If you read it the way Mr Jackson wants to read it, 3(7) overcomes the Dickinson problem very easily because it is very difficult to say that lighting a match was “a consequence of the driving”, but in this particular case he says that he falls within the indemnity in 6 and the Schedule because “the axle fell on my hand” and that was a consequence of the driving because it was the driving of the vehicle that caused the wear and tear which required work to be done on it and ultimately ‑ ‑ ‑

MR WALKER:   So all repair work, on my friend’s argument ‑ all repairs, of course, being a result of the vehicle being used rather than being kept in mint condition, unused – would fall within the scope of the indemnity.

McHUGH J:   Well, that may be the case so long as the vehicle itself causes the accident, as in this particular case.

MR WALKER:   The first thing that can be said that a vehicle causing not an accident but here an injury, that is the statutory question, a vehicle causing an injury will always be the case literally when the injury was produced by impact with part of the substance of the vehicle.  Whether that is because as a pedestrian you walked past it, did not watch where you were going and hit your head on the extended mirrors; whether you are a pedestrian keeping a watch out but someone in the cab does not look out and opens the door on you; whether something falls off the truck as it is being driven along and you are on a motorbike beside and you get hit; whether the truck brakes suddenly, you are in it and your head hits the windscreen, all the multifarious ways in which soft human tissue comes into contact one way or the other with whole or part of a motor vehicle still or moving.

That will answer the description as a matter of literal English of “caused by a vehicle”, which really only means the agent of impact is the solid substance of the vehicle.  It would almost certainly exclude, for example, cases where the injury was caused by, for example, a fright, no actual physical impact; the sounding of a horn, for example, causes you to jump and fall into a gutter and break your leg.

McHUGH J:   But does not your argument come to this, that it would mean reading the indemnity and section 6 as saying that there is an indemnity in respect of bodily injury directly caused by a vehicle if it was a consequence of the driving of the vehicle or the vehicle running out of control.  Now, you seek to take section 3(7), which is in negative form, and use it as the criterion of indemnity.

MR WALKER:   No, not at all.  It is the other side that does that, with respect.  The criterion of liability relevantly is directly caused by motor vehicle.  It never moves away from that in terms of the statutory formula.  So it is either directly caused by a motor vehicle or not.  Your Honour, with respect, correctly observes if that is where the matter lay, if that is all we had, “directly caused by a motor vehicle” would be fairly readily fulfilled on one view of the physical universe whenever the injury was because there had been a forceful impact between steel and bone, for example, on one view.

However, this is a provision to do with a statutory indemnity against liabilities.  We are not in the universe of deodand here.  We are not talking about blameworthy objects.  So when we are talking about “caused by a vehicle” there are going to be some human actors somewhere in order to be a defendant in order for there to be a liability against which the statutory indemnity is available.

So the notion of “caused by a vehicle” understandably did not halt for the legislators seeking to wind back Dickinson - simply that expression, much terser than had been used in previous statutes, “caused by a vehicle”.  First of all, they did put in the word “directly”, notwithstanding the paragraph in Dickinson to which I have drawn attention, would suggest that the word “caused” conveyed directness or proximateness in any event.  Now, that is either by way of emphasis or by way of further restriction.

Second, they then said in 3(7) of this new introduction, namely the simple phrase “caused by a vehicle” that it was not to be taken to be the case ‑ so that is why I stress it is a negative, it is a prohibition on doing what might otherwise be done - “if it is not” and then the words upon which in particular the respondent relies, “a consequence of the driving of that vehicle or of the vehicle running out of control.”  That is not a restriction which abolishes the meaning of the word “directly”.  Indeed, it does not abolish the independent operation of the word “caused”.  It simply says that of the possible causes which may be direct or otherwise, the only ones that count for this indemnity are those which are a consequence of the driving or running out of control of the vehicle.

McHUGH J:   Have you any explanation as to why the legislature limited the word “directly” in 3(7)?

MR WALKER:   Yes, they were simply talking about a subset of consequences which would be candidates for consideration of direct causation.  So whether they are direct or indirect, anything that is not a consequence of the driving of the vehicle or the vehicle running out of control is counted out.

CALLINAN J:   Wear and tear is a consequence of the driving of the vehicle.

MR WALKER:   Ownership of a vehicle may lead to wear and tear, but in the main, for all practical purposes ‑ ‑ ‑

CALLINAN J:   It was driving.

MR WALKER:   Driving.

CALLINAN J:   So you could have wear and tear causing something to happen to a vehicle being driven with the most meticulous care.

MR WALKER:   That is right.  In this case, for example, there are three phases of human activity involved.  Your Honours have seen the facts, and they can be summarised as follows.  So far as the trucking company, the respondent here is concerned, there was the phase at which they have been held to have been negligent by reason of their training of the driver and the provisioning of the truck.

Now, interestingly, that really must depend of course upon the proposition that the way in which this truck was going to be used in particular exposed it to the kind of wear which might mean that from time to time you have to change a wheel.  Even those of us who do not drive in blistering heat, such vehicles in the desert, will have had to change wheels from time to time.  So that was human activity way back at a point where the act or omission is completed either at head office or at the depot before a wheel has turned.

On one view of it, the absurd result of the holding in this case is that a consequence of the driving is a consequence of the negligent preparation for the truck to be driven, that is putting the right equipment in it, making sure the driver knows where the jacking points are and how to use the jack.  That of course highlights how the driving in this case, if one concentrates on that first phase of human activity, making liable the respondent, the driving is simply the occasion for that negligence to operate; not a consequence of the driving at all, no more a consequence of that than a consequence of the fact that there was an arrangement by which the unfortunate plaintiff had to accompany his crane on the truck.  It was not a consequence of that either.

The second phase was the actual driving.  That is described in colourful terms in the judgments below, but nowhere is there an allegation which is upheld - indeed I do not think there is any allegation - to the effect that the driving was in any respect negligent.

The third phase is, so far as ordinary use is concerned, is when the driving had stopped, and not as the Full Court would suggest by reason of some emergency, stopped for a routine check.  Now, a check made routine because of extreme conditions, but that is not unusual, and upon that routine check being made, something being found which was obviously not unexpected:  see the negligence found in the first phase of activities.  In that third phase of activity, for which the respondent is vicariously liable, the driver does a number of things which might be thought to be egregiously negligent including of course manipulating the jack without appropriate anchoring on an inappropriate part of the truck with the poor plaintiff in the place, awkward with, as it happens, his hand in just the location to suffer the terrible injury he did.

Now, in our submission, it is a distortion of language to say that as to the third phase of activity that that was driving or the vehicle running out of control.  That is to trivialise the careful selection by Parliament of words designed to cut back on the notion of use of a vehicle and injury arising out of or caused by the use of a vehicle, which this Court had pronounced upon in Dickinson.

McHUGH J:   Remind me.  Your opponents abandoned the Full Court’s reasoning.

MR WALKER:   That one aspect of it, yes.  The characterisation in the Full Court of this being directly caused by the driving of the vehicle is abandoned in paragraph 13 of the written submission.  There is a problem with ‑ ‑ ‑

McHUGH J:   It might have been in your favour.  You might not have got special leave if the Full Court had put the case on the ground it now puts it that it may not have been so clearly erroneous.

MR WALKER:   Your Honour, even now it is the Full Court’s reasoning against which we contend.  It is not just a contest at the Bar table.  I have to show there was error below.  My present concern, however, in argument is to point out that the word “directly” is used in such a way that 3(7) cannot eliminate it from the operative provisions which are 4(6) in the Schedule.  To put it another way, it would be odd if the word “directly” were used or to be taken to have been overcome by a formula which simply talks about things being consequences, because as your Honours appreciate consequence is a near synonym of “effect” in the expression “cause and effect”, and if one were simply to say that it has to be a consequence of driving or the vehicle running out of control, you would have abandoned the requirement that the causation be direct.  It is for those reasons that 3(7) is to be read as a gloss or restriction upon part of the verbal formula which drives - in the scope of the indemnity, rather than a usurpation of the whole.

Now, your Honours, as to the facts, the reason why this was not directly caused in the sense of being a ‑ ‑ ‑

GUMMOW J:   Just looking at 3(7).  It is terribly back to front drafting ‑ ‑ ‑

MR WALKER:   Yes.

GUMMOW J:   Is it “shall not be taken to have been caused unless it is”, is that what it is saying?

MR WALKER:   “If it is not”, yes.

GUMMOW J:   It has two negatives in it.

MR WALKER:   Yes.  Could I try and put it in onus terms, if one were pleading this and seeking to prove it?

GUMMOW J:   Yes.

MR WALKER:   If you are suing on the statutory policy you sue on terms which are found in the Schedule.  They are not found in 3(7), they are found in the Schedule, that is “directly caused by relevantly a vehicle”.

GUMMOW J:   That is what I was trying to get from it.  Now, the purposes of the Act include construing the Schedule, do they not?

MR WALKER:   Yes.

GUMMOW J:   In other words, the opening words of 3(7) include construing the Schedule.  That has to be so, does it not?

MR WALKER:   Yes, your Honour.  The passage I had in mind earlier, paragraph 36 on appeal book 185 where his Honour draws attention to condition 4 in the Schedule policy:

namely “this contract of insurance is subject to the provisions of the Act” ‑ ‑ ‑

McHUGH J:   But going to your pleading point, if your argument is right, 3(7) is part of the statement of the title to the right, in which case the person suing on the indemnity would have to plead in terms of 3(7), the negative.

MR WALKER:   I was about to say no, you do not have to plead the negative.  To return to what I was saying earlier about the phrase “shall not be taken to have been caused”, the notion of something not being taken, the “taken” refers to what is ultimately an activity in a court or by people agreeing on the outcome of the application of the policy.  So that if you are pleading, first of all you plead the term of the policy, namely my liability is for my negligence causing an injury itself caused by a motor vehicle - directly caused by a motor vehicle.  So that is how you would first plead the term and the fact.

You would then, at least to the advice on evidence stage, and perhaps at the pleading stage plead as well because you would bear the onus that it was a consequence of the driving of the vehicle or of the vehicle running out of control.

McHUGH J:   Well, you are in effect saying 3(7) is a condition precedent in the terms discussed by Justice Windeyer in Australian Iron & Steel v Hoogland and earlier in The Crown v McNeil.

MR WALKER:   Without which you cannot succeed.  If you do not make it good you cannot succeed.  The command is, although not in terms, in its nature the command in 3(7), that is the command by the word “shall not” is really addressed to courts.  It is referring to what shall or shall not suffice to make out this causation which is in 4(6) in the Schedule.  It is for those reasons that somebody who wishes to make that out has an onus to show that the negative condition is not fulfilled.  That is not elegant in the pleading.  You would simply unravel it.  You would have the onus to show the converse of the negative condition.  So you have to show that it is a consequence of the driving of that vehicle or of the vehicle running out of control.  You cannot win if it is merely left up in the air.  Is that a convenient time, your Honour?

McHUGH J:   Yes, it is a quarter past four.  The Court will adjourn until 10.15 tomorrow.

AT 4.15 PM THE MATTER WAS ADJOURNED
UNTIL TUESDAY, 21 OCTOBER 2003