Le v Brown, Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown (No.2)

[2019] NSWSC 88

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Le v Brown, Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown (No.2) [2019] NSWSC 88

Hearing dates:

8 - 11 May 2017

Date of orders:

14 February 2019

Decision date:

14 February 2019

Jurisdiction:

Common Law

Before:

Garling J

Decision:

(1)      Direct counsel for all parties to confer and agree upon the Orders necessary to give effect to these reasons including any order for costs.

(2)      Direct the parties to provide to the Court on or before 4pm Monday 25 February 2019, those agreed short minutes of order, or else the short minutes for which each party contends where agreement is not reached.

(3)      List the proceedings for further directions at 9.30am on 1 March 2019 for the determination of all outstanding issues, including costs, which are not agreed.

Catchwords:

TORTS - Personal injury damages – negligent breach of duty to exercise reasonable care - apportionment of liability – contribution between joint tort-feasors where there are multiple tort-feasors and cross claimants – provision of indemnity by compulsory third party insurance policy – whether public liability insurance policy provides indemnity – no point of general principle

Legislation Cited:

Civil Liability Act 2002
Civil Liability (Third Party Claims against Insurers) Act 2017
Employees Liability Act 1991
Evidence Act 1995
Law Reform (Miscellaneous Provisions) Act 1946
Motor Accidents Compensation Act 1999
Road Transport (General) Act 2005
Road Transport (Mass, Loading and Access) Regulation 2005
Road Transport Act 2013
Uniform Civil Procedure Rules 2005

Cases Cited:

Boateng v Dharamdas [2016] NSWCA 183; (2016) 77 MVR 151
Egan v Mangarelli [2013] NSWCA 413; (2013) 65 MVR 480
Elbourne v Gibbs [2006] NSWCA 127
James Hardie & Co Pty Ltd v Seltsam Pty Ltd [1998] HCA 78; (1998) 196 CLR 53
Kondis v State Transport Authority [1984] HCA 61; (1984) 154 CLR 672
Le v Brown [2017] NSWSC 162
Le v Brown; Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown [2017] NSWSC 632
Mahony v J Kruschich (Demolitions) Pty Ltd (1985) 156 CLR 522
Manley v Alexander [2005] HCA 79, (2005) 80 ALJR 413
McCarthy v St Pauls International Insurance Co Ltd [2007] FCAFC 28; (2007) 157 FCR 402
New South Wales v Lepore [2003] HCA 4; (2003) 212 CLR 511
Scott v Davis [2000] HCA 52; (2000) 204 CLR 333
Sibley v Kais [1967] HCA 43; (1967) 118 CLR 424
Soblusky v Egan [1960] HCA 9; (1960) 103 CLR 215
Strong v Woolworths Ltd [2012] HCA 5, (2012) 246 CLR 182
The Owners – Strata Plan No.68372 v Allianz Australia Insurance Ltd [2014] NSWSC 1807
Wallaby Group Ltd v QBE Insurance (Australia) Ltd [2010] HCA 9; (2010) 240 CLR 444
Wayne Tank and Pump Co Ltd v Employers Liability Assurance Corporation [1974] QB 57

Texts Cited:

Heavy Vehicle Driver Handbook, Roads and Maritime Services

Category:

Principal judgment

Parties:

Thi Le Le (P1)
Cindy Xuan Vy Nguyen (P2)
Van Diep Tran (P3)
Rachel Monica (P4)
Stephen Huggett (P5)
Edwin Christopher Brown (D1)
Zurich Australian Insurance Limited (D2)
Futurewood Pty Ltd (D3)
QBE Insurance (Australia) Limited (X-D)

Representation:

Counsel:
R O’Keefe (D1, Substituted D2)
B Hull (D3)
M McCulloch SC and R Perla (X-D)

Solicitors:
Vardanega Roberts Solicitors (D1, D2)
Holman Webb Lawyers (D3)
Gillis Delaney Lawyers (X-D)

File Number(s):

2014/271370; 2014/347492; 2014/358521; 2015/172536; 2015/263637

Publication restriction:

Not applicable

Judgment

Introduction

1. The claims of the plaintiffs arise out of a collision which took place at 10:40am on 28 June 2012 between a Freightliner motor truck registration number BE33XV (“the Freightliner”) and several other vehicles. The collision occurred at the intersection of the Cumberland and Hume Highways at Liverpool, New South Wales.

2. The Freightliner comprised a Prime Mover with registration number BK79QI (“the Prime Mover”), and a Steelbro side-loading trailer, registration number U12531 (“the Trailer”), upon which was secured a shipping container with an International Shipping Number (“ISO”) HJCU8368820 (“the Container”). The Container was packed with wood and plastic products (“the payload”) which were stacked inside the Container on a trolley mechanism, with the addition of three dunnage bags as load restraint at the rear of the Container. As the Freightliner was negotiating a left-hand turn from the Hume Highway into the Cumberland Highway, it rolled on to its right-hand side, crushing the occupant of a nearby vehicle and colliding with several others (“the Rollover”).

Parties

3. The fourth plaintiff, Ms Rachel Monica (“Monica”), is the wife of Mr Manoj Kumar Masih (“Masih”), who was the occupant of the vehicle which was crushed by the Freightliner. Masih died as a result of his injuries, and Ms Monica brings her action as a close family member of Masih pursuant to s 30 of the Civil Liability Act 2002 (NSW) (“Civil Liability Act”).

4. Ms Thi Le Le (“Le”), Ms Cindy Xuan Vy Nguyen (“Nguyen”) and Mr Van Diep Tran (“Tran”) (the first, second and third plaintiffs) were travelling in a vehicle behind the Freightliner when the Freightliner rolled over. They sustained injuries when their vehicle collided with the Freightliner. Mr Stephen Huggett (“Huggett”), the fifth plaintiff, was injured when the Freightliner collided with his vehicle.

5. The driver of the Freightliner at the time of the Rollover was the first defendant, Mr Edwin Brown (“Brown”). The second defendant, Shark Group Pty Ltd (“Shark Group”), was the owner of the Prime Mover. Since Shark Group had been placed into voluntary administration by the time that proceedings were commenced in 2014, Zurich Australian Insurance Limited (“Zurich”), was substituted for Shark Group as a defendant, and is sued in its place as the compulsory third party insurer.

6. The third defendant, Futurewood Pty Ltd (”Futurewood”) was the proprietor of the payload which was loaded into the Container. The payload originated in China, where Futurewood contracted with a Chinese company, Huangshan Huasu International Co (“Huangshan”), to manufacture the products and then to pack the Container with them. Another associated company in fact carried out that work. It is unnecessary to differentiate between them in this judgment.

7. Once the Container was packed in China, it was loaded onto a shipping vessel and transported to Australia, where it arrived at premises known as “DP World” at Port Botany on 22 June 2012. The Container was to be transported by road by ENG Haulage Contracting Pty Ltd (“ENG”) from Port Botany to premises in Moorebank and subsequently to Wetherill Park. The first defendant, Brown, was an employee of ENG, and ENG was the registered owner of the Trailer.

8. During the period 17 June 2012 to 17 June 2013, ENG held a policy of public liability insurance (“the Policy”) with the second cross-defendant, QBE Insurance (Australia) Limited (“QBE”). Since ENG is a company under external administration, Futurewood applied for, and was granted leave by the Court pursuant to section 6(4) of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) (“1946 Law Reform Act”) to pursue QBE as the public liability insurer of ENG.

9. In these proceedings, the issue of granting Brown leave to proceed against QBE pursuant to section 6(4) of the 1946 Law Reform Act in order to pursue QBE as the public liability insurer of ENG, in circumstances where Brown had failed to obtain the necessary leave of the Court prior to the commencement of the hearing, was considered and reserved, to be dealt with in this judgment.

10. Although s 6(4) of the 1946 Law Reform Act was repealed with effect from 1 June 2017, it remains the applicable section in these proceedings because they had been commenced before that date: see s 12 Civil Liability (Third Party Claims against Insurers) Act 2017.

Separate Questions for Determination

11. On 10 May 2017, I ordered, with the consent of the parties pursuant to rule 28.2 of the Uniform Civil Procedure Rules 2005, that the following issues be heard and determined prior to all other remaining issues, if any, in the proceedings:

1. is Edward Brown a tort-feasor liable to the plaintiff in respect of personal injury damages which the plaintiff suffered as a result of a tort on 28 June 2012?

2. is Futurewood Pty Ltd a tort-feasor liable to the plaintiff in respect of personal injury damages the plaintiff suffered as a result of a tort on 28 June 2012?

3. is ENG Haulage Contracting Pty Limited (ENG) a tort-feasor which if sued by the plaintiff would have been liable to the plaintiff in respect of the same damage that Mr Brown and/or Futurewood are liable for?

4. what is the just and equitable amount of contribution for which ENG is liable, having regard to the extent of ENG's responsibility for the personal injury damage suffered by the plaintiff as a result of the tort?

5. can Mr Brown and/or Futurewood enforce a charge on insurance moneys against QBE Insurance Australia Limited pursuant to s 6 of the 1944 Law Reform Act insofar as ENG is determined to be responsible for the personal injury damages suffered by the plaintiff as a result of the tort?

12. The key factual issue which falls for determination is why the Freightliner rolled, and how liability for that Rollover, if established, is to be apportioned between Brown, Zurich (standing in the shoes of the Shark Group), Futurewood and ENG.

13. The answer to this question is inextricably linked to three factors: first, the speed of the Freightliner as it approached and negotiated the left-hand curve between the Hume and Cumberland Highways; second, the manner in which the payload in the Container (the wood and plastic products) was secured and behaved; and third, the impact of those first two factors on the static rollover threshold (“SRT”) of the Freightliner, where a vehicle with a low SRT is more likely to roll over than a vehicle with a higher SRT.

14. On 10 May 2017, the first day of the hearing, counsel for the first defendant indicated that the proceedings in relation to the fifth plaintiff, Huggett, had completely settled. Consent judgment was filed in Court on 10 May 2017, with the proviso that the consent judgment would not be entered until further order.

15. Counsel for the first defendant also indicated that the first and third defendants, together with Zurich, had reached an agreement with the remaining plaintiffs, whereby liability was admitted by those defendants with the damages in respect of each of the plaintiff’s claims to be assessed. Consent orders to that effect were also filed in Court on 10 May 2017 with the proviso that the consent orders or any consent judgment would not be entered until further order.

16. Lastly, counsel indicated that Brown, Zurich and Futurewood had reached agreement whereby the cross-claims between them were to be dismissed with no order as to costs.

17. As a result, this judgment deals with the separate questions which relate to the apportionment of liability, if any, between the defendants and the remaining cross-defendant, and to whether QBE is liable under the Policy for any claim against ENG. To elucidate these issues, it is convenient to examine the pleadings filed in these matters.

Evidence

18. Surprisingly little oral evidence was called at the hearing. The first defendant, Brown, was not called either in his capacity as the first defendant, or by ENG in his capacity as their employee. Brown would have known a great deal about the factual matrix surrounding and leading up to the Rollover. No explanation was proffered for his absence.

19. Evidence relating to the receipt and despatch of the Container from Port Botany, including the systems in place, was called from Mr William Hanley, by counsel for Brown. As well, Mr Joe Notaro (“Notaro”), an RMS investigator, was called to give evidence about facts identified during his investigations. Mr Dandecke (“Dandecke”), an employee of Zurich, was also called to give formal evidence.

20. Counsel for Futurewood called its principal, Mr Elms (“Elms”).

21. QBE, insofar as it sought to resist ENG’s liability as a tort-feasor, called no witnesses at all. In particular, Mr Chris Generakis (“Generakis”) who had knowledge of the range of factual matters canvassed in the evidence and, as well, the way ENG’s operations worked, was not called.

22. Although ENG was not in business at the time of the proceedings, no reason was proffered by QBE as to why he was not called to give evidence. No reason was proffered as to why any other principal or senior employee at ENG in 2012 was not called. I infer that no evidence which could have been given by Generakis would have assisted the case being put forward on behalf of ENG by QBE insofar as QBE sought to argue about matters of fact, and inferences to be drawn from the evidence, relating to the conduct of ENG, and the conclusion urged on the Court that ENG was a joint tort-feasor.

Statements of Claim and Defences

23. Broadly speaking, the plaintiffs pleaded that the defendants owed the plaintiffs a duty of care, that this duty was breached, and that the defendants were therefore negligent. This is admitted by the defendants, as is the entitlement of the plaintiffs to recover damages.

24. In a Further Amended Defence filed in Court on 10 May 2017, Brown admits that:

1. he owed other road users a duty to exercise reasonable care while driving the Freightliner along the Cumberland Highway;

2. the injury and death occurred as a result of his breach of its duty (his negligence) to the plaintiffs by:

1. driving too fast in the circumstances;

2. failing to take into consideration the fact that a load may move whilst in transit and drive accordingly; and

3. failing to brake or slow his vehicle sufficiently before entering the intersection.

25. Zurich, as the insurer of the Shark Group, is in an identical position on those issues as is Brown. They were both represented before the Court by the same counsel, and advanced identical submissions. No doubt this is because of the provision of the third party policy of insurance contained in s 10 of the Motor Accidents Compensation Act 1999 which provides insurance for the owner of a motor vehicle and also the driver of the vehicle.

26. In an Amended Defence filed in Court on 10 May 2017, Futurewood admitted that:

“(1)   It owed a duty of care to the plaintiffs and Mr Masih to:

(a)   take all reasonable steps to ensure the Container was properly loaded;

(b)   take all reasonable steps to ensure the Container could be safely transported upon the Trailer;

(c)   take all reasonable steps to ensure that the importation of timber by it was undertaken in a safe manner;

(d)   ensure that the systems of work designed, specified and/or supervised by it for the importation of timber to Australia did not expose persons such as the plaintiffs to an unnecessary risk of injury;

(2)   Mr Masih’s death occurred, and the plaintiffs were injured, as a result of Futurewood’s breach of its duty by:

(a)   failing to ensure the timber was properly loaded within the shipping container;

(b)   failing to devise, supervise and maintain a safe system for the loading of timber in the shipping container;

(c)   failing to take any or any adequate steps to properly secure the timber within the shipping container to prevent movement of the timber within the shipping container whilst in transit;

(d)   failing to use sufficient air bags within the shipping container to prevent the timber from moving within the shipping container;

(e)   failing to use any or any proper means of restraint to ensure the loaded timber did not move during transit;

(f)   failing to inspect the shipping container once it had been loaded to ensure:

(i)   it was correctly loaded;

(ii)   the load would not move whist the shipping container was being transported.

(g)   failing to take any or any adequate steps to ensure the loading of the shipping container complied with International and Australian standards applicable to the loading of shipping containers for importation to Australia;

(h)   permitting the transport of the shipping container when it was unsafe to do so;

(i)   failing to inspect the loading of the shipping container before it was loaded onto the trailer connected to the motor vehicle.”

Cross-Claims

27. A number of cross-claims were filed between the defendants. However, as has been noted, the cross-claims as between Brown, Zurich and Futurewood have been settled by consent with no order as to costs.

28. The remaining cross-claims are the first and second cross-claims brought by Futurewood and by Brown against QBE based upon a charge said to exist pursuant to s 6 of the 1946 Law Reform Act in respect of ENG’s liability for the injury caused to the plaintiffs by the Freightliner rolling over.

29. By a Further Amended First Cross-Claim dated 8 May 2017 and filed by Futurewood in Court on 10 May 2017, Futurewood pleaded that, if the method of loading the container is held to be a cause of the rollover, ENG knew or ought to have known that the container was not loaded satisfactorily, and that this circumstance gave rise to a risk of harm which was not insignificant.

30. In these circumstances, Futurewood pleads that a reasonable person in the position of ENG would have:

1. told Futurewood that its method of loading the containers had that risk of harm;

2. refused to transport Futurewood’s containers unless the contents were securely loaded; and

3. instructed drivers to drive at a very low speed of less than 35kmh, around corners.

31. The Further Amended First Cross-Claim filed by Brown against QBE is, for all intents and purposes, the same as the further Amended Second Cross-Claim filed by Futurewood against QBE.

32. In its defence, QBE admits that it provided insurance to ENG but points to an exclusion contained in clause 5.20 of the Policy, which reads:

“5.   When you are not covered

The following Exclusions will apply to this policy.

This policy does not cover liability in respect of:

…

5.20   Vehicle:

Personal Injury or Property Damage arising out of the ownership, possession, or use by You of any Vehicle:

(a)   which is registered or which is required under any legislation to be registered, or

(b)   in respect of which compulsory liability insurance or statutory indemnity is required by virtue of any legislation (whether or not that insurance is effected).

Exclusions 5.20(a) and 5.20(b) above do not apply to claims:

(c)   for Personal Injury where:

(i)    that compulsory liability insurance or statutory indemnity does not provide indemnity; and

(ii)    the reason or reasons why that compulsory liability insurance or statutory indemnity does not provide indemnity do not involve a breach by You of legislation relating to Vehicles; [or]

(d)   ….”

33. In reply to this defence, Futurewood and Brown seek to argue that the exclusion in clause 5.20 of the Policy does not apply to ENG due to the operation of the exception contained in clause 5.20(c) of the Policy. In this judgment, it will be convenient to refer to clause 5.20 of the Policy as “the exclusion clause” or as “the exclusion”. Clause 5.20(c) will be referred to as the “exception” or the “carve out”. Such an argument requires Futurewood and Brown to demonstrate that the compulsory third party insurance policy established by s 10 of the Motor Accidents Compensation Act does not provide indemnity to ENG because ENG is neither an owner or driver of the Freightliner, as required by that section.

34. In the alternative, Futurewood and Brown submit that ENG is vicariously liable for Brown’s conduct, and that ENG’s liability is not covered by the compulsory third party insurance policy because ENG was not the owner of the Freightliner. Therefore, the exception to the exclusion arises and QBE is obliged to indemnify ENG for any damage caused by its negligence.

Interlocutory Decisions

35. On 22 February 2017, McCallum J refused leave to Futurewood to serve an expert report prepared for it by mechanical engineer, Mr William Bailey: see Le v Brown [2017] NSWSC 162.

35. On the day the judgment was delivered, there was a brief exchange between counsel for Futurewood and McCallum J, where counsel for Futurewood indicated that he would be applying to amend his client’s cross-claim, but that the amendment would not be significant. Her Honour granted leave to amend the cross-claim and reserved to any party affected by it, the right to object to its filing.

36. On 8 May 2017, QBE objected to the filing of the Further Amended First Cross-Claim by Notice of Motion filed 2 May 2017, and sought orders striking out various paragraphs of the Amended First and Second Cross Claims filed by Futurewood and Brown.

37. In an ex tempore judgment that I delivered on that day, I held that the interests of justice required me to permit the amendment which was sought. Accordingly, I granted leave nunc pro tunc to Futurewood to file its Amended Statement of Cross-Claim in the form in which it was filed on 23 February 2017: see Le v Brown; Nguyen v Brown; Tran v Brown; Monica v Brown; Huggett v Brown [2017] NSWSC 632.

Relevant Facts

39. As has been outlined above, the key issues are the speed at which Brown was driving the Freightliner, the way the load in the Container was packed, and whether either one or both of these factors can be said to have caused the rollover. It is therefore necessary to set out the evidence which was called in relation to the packing of the Container, including each party’s knowledge of how the Container was packed on the relevant occasion, the Container’s journey from China to the site of the rollover, and evidence which was lead about the nature and weight of the Freightliner and its compliance with the regulations made under s 67 of the Road Transport (General) Act 2005 (NSW).

Key Players

40. Generakis and Mr Nick Fountoulis (“Fountoulis”) were directors of ENG in June 2012. Generakis is featured in all of the relevant correspondence between ENG, Futurewood and Huangshan. To the extent that Generakis was informed about or had knowledge of any matters, I am satisfied that ENG also knew of those matters. He was, in all relevant respects, one of the directing minds of ENG.

41. Mr David Elms (“Elms”) is the director of Futurewood and a founding principal of the business along with his associate, Mr Gilbert Major (“Major”). Elms gave evidence that he and Major “travelled as a team” and that he relied upon Major’s advice, but not exclusively. Any information known to Elms amounted to knowledge held by Futurewood, having regard to the role performed by Elms.

42. Mr Jacky Xue (“Xue”) was engaged either as an employee or agent by Futurewood to provide overseas marketing and product development services. A document entitled “Engagement Letter” written by Elms, dated 1 July 2010, signed by Xue and bearing the Futurewood logo, reads:

“Xue will be responsible for the entire process of order placement through to manufacture and shipment. Xue will oversee the business in China and;

• Assist Futurewood in determining Company's overseas marketing objectives, Company's points of differentiation and the appropriate marketing call to action.

• Handle all overseas client escalations from local office in Australia.

• Assist Futurewood in developing their customized products including recommendations and assistance with production, quality & packaging.

• Visit overseas clients to demonstrate use of products, show samples and take orders

• Arrange a schedule of visits to major potential overseas buyers by contacting people and making appointments

• Establish customers' needs and explain and demonstrate products to them, which may involve providing technical descriptions of products and how they may be used

• Quote and negotiate prices and credit terms

• Schedule conferences & trade fairs for Directors/Australian company representatives for exhibiting and marketing current & new products overseas.”

43. The Futurewood products were manufactured for Futurewood, and packed into containers by a Chinese company associated with Huangshun: Huangshun Huasu New Material Science and Technology Co Ltd. It referred to itself as “Hohecotech”. The employee who principally communicated with Futurewood was Ms Lili Zhang, who referred to herself in her emails as “Ally”.

44. The practice of packing containers with Futurewood’s product was overseen by Xue in China. The relationship between Xue, and Hohecotech was not explored in the evidence.

45. As I have just noted, the company which in fact manufactured Futurewood’s product was Hohecotech. It was also responsible for loading Futurewood’s product into shipping containers in Shanghai, China, for transportation to various ports in Australia. Once loaded with Futurewood’s products, the containers were locked and seals were applied to them. Those seals were intact on the Container at the time of the Rollover.

46. A company by the name of Cargo and Logistics Management Pty Ltd (“CALM”) performed the function of freight forwarder for Futurewood in China. CALM was responsible for procuring empty shipping containers in China, and supervising the customs clearance of that container through China to be placed on a ship for carriage to a nominated port in Australia. CALM also contracted with ENG. It was through this contracting relationship that Futurewood was introduced to ENG and thereby contracted with ENG for ENG’s services in Australia.

47. Futurewood also used an international freight forwarder and customs broker, namely, Bell Toll Logistics (“BTL”). BTL was contracted by Futurewood to book space on shipping lines to move loaded containers (containing Futurewood’s products) from the port in Shanghai to ports across Australia. BTL was also responsible for preparing and lodging customs declarations relevant to the containers containing Futurewood’s products and thereby enabling the release of the relevant container from customs in Australia.

48. BTL paid the wharf charges to the stevedore and customs fees, which were then billed to Futurewood. Mr Salvo Salanitri (“Salanitri”), manager of the Victorian branch of BTL, gave the following evidence in a statement which was admitted without objection:

“When the container is ready to be collected from the wharf, we send the shipping lines release (called a delivery order) to Futurewood's nominated road transport company and that carrier arranges collection of the container from the wharf and delivery as per Futurewood's requirements. The carrier bills Futurewood for the services they perform.

With respect to [the Container] Futurewood selected BTL to book space on a shipping line to move the container by sea from China to Australia. When the container arrived, BTL sent the relevant docs and information regarding pickup to Futurewood's nominated transport company to deliver the goods by road, namely ENG Haulage Contacting Pty Ltd. BTL had no involvement with the transportation of the container for Futurewood.”

49. ENG were engaged by Futurewood to transport the containers containing Futurewood’s product from Port Botany to ENG’s warehouse at Moorebank from 2011 up until 23 March 2012. At that warehouse, the containers would be unpacked and the packs of Futurewood products organised for local distribution. However, after that date, Futurewood changed the provider of its warehousing from ENG to Hilbon Transport Pty Ltd (“Hilbon”). The effect of this change was that ENG continued to pick up Futurewood’s containers from Port Botany, but would transport the containers to the warehouse of Hilbon at Wetherill Park for unpacking and local distribution. Occasionally, as in the circumstances here, the Container was held overnight or temporarily at ENG’s warehouse at Moorebank. It was not opened or unpacked.

50. In cross-examination, Elms accepted that the contents of an email sent by Generakis on 20 February 2012 to himself and Major with the subject line “schedule of rates”, set out all of the relevant terms of the contract between Futurewood and ENG:

“AS REQUESTED

TRANSPORT-WHARF-YARD~DEHIRE=$400.00+10%FUEL+GST

UNPACK 20FT-S250.00+GST

TIMSLOT-$20.00+GST

PICK FEE $35,00+GST

STRAPPING FEE$20.00 +GST

RENTAL FOR 150m2=$350.00 per week+GST”

51. Hilbon was a small transport company contracted by Futurewood to transport Futurewood’s product to Futurewood’s customers in Australia. Hilbon possessed a warehouse in Wetherill Park. After, containers filled with Futurewood’s product were transported to Hilbon warehouse in Wetherill Park from Port Botany by ENG, Hilbon would then locally distribute Futurewood’s product.

Definitions

52. It is appropriate to include some definitions of terminology specific to the transport industry which will be used in these reasons:

• gross weight: the total weight of the vehicle and its payload including the container;

• payload: the load that is being transported by the vehicle within the Container;

• dunnage: loose wood or matting used to keep cargo in position and without moving within containers. Sometimes bags filled with soft filling, or else air are used, and are known as dunnage bags;

• SRT or Static Rollover Threshold: The imaginary resistance of a vehicle to having a wheel lift off the ground. It is calculated on the basis that the Container and the payload in it is centred on the trailer and is secured. Factors taken into account in that calculation are the speed or forward momentum of the vehicle, the camber of the curve which the vehicle is navigating, and the radius of the curve;

• tare weight: the weight of the vehicle without any load on it.

• gluts: sacrificial timber used to support packages of products, thereby preventing the package resting directly on other packages of timber products or on the floor.

Practice of Loading Containers Generally with Futurewood’s Product

53. Elms gave evidence that there was a “standard procedure” for the packing of the containers which he, Major and Xue put in place following three events: first, observations which they made about factories which did not pack containers well; secondly, advice which Major gave Elms about which factories he believed did or did not pack containers well; and thirdly, meetings between Major, Elms, Xue and employees of the factory which manufactured Futurewood’s product.

54. In short, the containers would be loaded with Futurewood’s product by the agents of Futurewood, relevantly in this case, Hohecotech and its employees. This was to be overseen by Xue. Elms gave evidence that he did not know whether Xue had any formal qualifications, such as that of a civil engineer, or any training in relation to the system of, or the use of load restraints within a shipping container. Elms did not provide any such training to Xue, and such training was not a minimum qualification for his job. Elms also gave evidence that he himself did not have any training in packing or transporting containers. I am satisfied that Xue did not have any study, training or experience on the topic of load restraint systems, except that which he learnt from practical observation as an employee or agent of Futurewood.

55. I also pause here to note that it was Elms’ evidence that as at June 2012, he did not appreciate that consignors of freight within shipping containers were obliged to follow load restraint guides published by the National Transport Commission, nor did he have any understanding of Futurewood’s obligations under the Road Transport (General) Act in relation to providing safe load restraint.

56. Elms confirmed in evidence that Futurewood was prosecuted and convicted for failing to provide adequate load restraints for its products within containers following the Rollover. A Court Attendance Notice issued to Futurewood and dated 19 June 2014, illustrates that Futurewood was prosecuted by Notaro on 21 July 2014 for breaching a load restraint requirement under s 53(1) of the Road Transport (General) Act.

57. Elms gave evidence concerning the method of packing the containers with Futurewood’s products. He described that packs of the product would be stacked on top of each other to form the one column or tower of product. Each pack would be separated by wooden slats “to stop the gluts from the packs above marking the boards … in the pack below”. This is confirmed by photographs referred to below. The packs were not tied or in any way secured to each other but simply rested on the pack below, although separated by gluts and the wooden slats.

58. Dunnage bags would then be placed in all accessible places (if there were any) in the containers and inflated. If it was not possible to insert dunnage bags into the gaps, cardboard boxes would be placed into those gaps, particularly between the container doors and the payload.

59. During or after the packing, Ally, or her fellow employees, would take pictures of the packed container and send them via email to Elms and Generakis, to confirm that Futurewood’s product had been properly loaded into the container. Other pictures of the floor of the container (to show that it was undamaged) and the container number would also be included in that correspondence.

60. This standard procedure is confirmed in the correspondence between Elms, Generakis, Xue, Ally and Major, to some of which I will now refer.

61. In an email from Ally to Elms, Major and Xue sent on 29 April 2012, Ally wrote:

“Hi,David,

We loaded your #Container 101,102,103 yesterday, please kindly refer to the attached loading pictures…”

62. Attached to that email were 13 images. The first image depicts five packs of Futurewood product stacked upon a trolley-like structure with red wheels. The fifth image depicts a container with its back doors open. One column of stacked product has already been loaded into the container. The second column is in the process of being loaded into the container. Further images indicate that the stacks of product are approximately five stacks deep and six stacks high, and they are being loaded into the container with the assistance of a forklift.

63. In this example container, the thirteenth picture shows that empty but constructed cardboard boxes have been placed between the stacks of product and the back door of the container.

64. Further images also portray the loading of a container with stacks of Futurewood’s product. The photos demonstrate that individual packs of product were separated by wooden planks. The tower of product depicted is clearly not straight in one image. The final image shows the back of a container with the doors open. Two columns of product can be seen, with one dunnage bag between them. There are also numerous cardboard boxes which appear to have been or are intended to be placed between the two columns of product and the back doors of the container.

65. The use of cardboard boxes as a means of preventing movement of the load in the container can also be seen in images date stamped 4 February 2012 which are attached to an email dated 6 February 2012, sent from Ally to Elms, Major and Xue.

66. Additional images of the loading process attached to an email sent by Xue on 27 August 2011 to Elms, with Major and Ally copied in, attached images of the container-loading process. Apart from what has already been described, these images indicate that once the stacks of product were loaded into the containers, the (deflated) dunnage bags were inserted into gaps between the edges of the towers of Futurewood product and the inside walls of the container, or between the two stacks. Then the dunnage bags were inflated manually by employees or agents of Hohechotech. No images showed dunnage bags being put in place at the end of the container away from the doors, and (necessarily) prior to the loading of the stacks of product.

67. The process of manual inflation of dunnage bags is also depicted in images attached to Ally’s email dated 27 February 2012 to Elms, Major and Xue. More photographs attached to this email appear to depict an employee or agent of Hohecotech welding the metal wheels of the trolleys upon which the parcels of Futurewood product were stacked to the floor of the container.

68. The general practice which I have described from the tendered photos was confirmed by Elms, whose evidence was that “the practice was that the factory would fit air bags where practical between any gaps that were in the load”. He also gave evidence that, since the air bags were added after the load was packed, some areas where there were gaps could not be blocked by air bags because they could not be reached, e.g. if the load was too high or if there was no room to physically get inside the container. In those circumstances, Elms stated that the air bags would be put “at the door end” of the container, which was easily accessible.

69. I note here that all of the photographs which are in evidence demonstrate that all of the containers were tightly packed. If there had been any gaps, they would have been extremely difficult to reach. This explains the presence of cardboard boxes blocking the space between the load and the container door in several images.

70. The practice of welding the chocks upon which the product was stacked into place on the floor of the container was also confirmed by Elms in his oral evidence. In cross-examination, Elms gave evidence that the methodology of welding the metal chocks to the floor of the containers was the product of a meeting between himself, Major and several members of Hohecotech, including Mr Hong, who Elms understood to be an engineer.

71. The agenda of that particular meeting was to:

“improve the method of loading and unloading the container” and to “assist in keeping the load secure during transit”.

72. Correspondence between Generakis, Elms and Ally demonstrates that the general loading practice occasionally caused damage to the contents of the containers and the loading mechanisms.

73. For example, in an email from Generakis sent on Tuesday 15 March 2012, Elms wrote:

“Chris,

You should receive a delivery of 10 pallets from Ubeeco today. Can you please check these and make sure that they are all OK, not falling apart or with broke timbers etc. and let me know that they have been received and are all good? …” (sic)

74. A further example is contained in an email sent by Ally from Hohecotech on 29 April 2012 to Elms, Major and Xue. Ally wrote:

“By the way, we inform you that the container of #102 is not good, the flooring have already damaged (please check the attached picture named by #Container 102(1), we have already put one square steel to cover the hole, so when you pull them out of this container, please pay more attention. Another thing is that when we pushed left stacks, the package of the top 70S15 was broken (the end pack) due the the left stacks were very high, when you received this container, please kindly check if they are OK? If not, please let us know.” (sic)

75. Emails sent between Elms, Generakis and Major on 14 December 2011 also indicate that some of Futurewood’s product had been damaged while in the container.

76. Finally, in an email to Elms sent on 14 February 2012, Generakis wrote:

“THE FLEX IN THE PACKS WITH ALL THAT WEIGHT SITTING ON TOP OF EACH OTHER WOULDN’T BE GOOD.” (sic)

77. Elms gave evidence that it was in Futurewood’s interest to pack the containers so that the product was not damaged:

“These goods are pretty much finished goods, so basically when they're being sold they're not being in any way worked or sanded, or painted afterwards, so if they move around inside the container and get damaged, then they commercially lose their value … so obviously the primary aim of the packing of the container was to make sure that the goods could be … placed into the container easily, removed from the container easily and obviously not move around whilst they were inside the container.”

Loading and Transport of the Container from Shanghai to Port Botany and Collection from Port Botany

78. On Monday 4 June 2012, Shannah Wang (“Wang”) sent an email to Elms, copying Major, Xue and Ally, attaching pictures of “Container 106”. The attached picture depicted a blue container with its back doors open. Inside the container are two columns of product, each column stacked upon a metal trolley with red wheels on its base. Each column contains five bundles of product, which are separated by a brown material.

78. Three dunnage bags are visible: one between the left side wall of the container and the first column of product; one between the two columns of product; and one between the second column of product and the right side wall of the container.

79. An email sent by Xue on 12 June 2012 to Ms Kristie Johnson (“Johnson”), an employee of BTL, which was also sent to Elms, contains the subject line “Container – 106 – Sydney: HJCU8368820”. The body of the email contained a request for Johnson to check the clearance documents for the container, which are attached to the email. The clearance documents refer to the Container by its container number.

80. This email permits an inference to be drawn, which I do, that the photographs attached to Wang’s email to Elms on 4 June 2012 of “Container 106” were photographs of the Container (“the Container”) which was involved in the Rollover.

81. Generakis of ENG was not copied into this email. As a result, Elms’ evidence was that the documents attached to that email (being the clearance documents from On Time Shipping Line Limited, Huangshan’s Commercial Invoice addressed to Futurewood, Huangshan’s packing list, and Huangshan’s Packing Declaration and Container Weight Declaration) would not have been sent to ENG, at that time.

82. Xue’s email of 12 June 2012, attaching the clearance documents for the Container indicated that Huangshan was the shipper of the Container, which contained 48 “packages” with a gross weight of 19.753 tonnes. The “packages” are described as “plastic composites profiles; aluminium alloy profiles”. Futurewood is recorded as the “Consignee” and ENG is nominated under the category “Notify Party”.

83. On Time Shipping Line Limited is noted as the carrier, and the clearance document lists the YM Antwerp as the vessel transporting the Container, which was due to depart Shanghai for Sydney on 5 June 2012.

84. A Commercial Invoice and Packing List issued to Futurewood from Huangshan dated 25 May 2012 relating to “Container #106” shows that the Container was packed with several different varieties of plastic composites and aluminium alloy profiles, and also contained several plastic and stainless clips.

85. The Packing List records the total gross weight of the contents of the Container as 19.753 tonnes, and the total net weight of the contents of the Container as 19.196 tonnes.

86. A Container Weight Declaration with the Huangshan company name at the top of the document included the following table, signed and dated 5 June 2012:

CONTAINER NO.	HJCU8368820
CARGO WEIGHT (KGS)	19753.00
CONTAINER TARE WEIGHT (KGS)	2000
TOTAL PAYLOAD WEIGHT (KGS)	21753.00
TOTAL NO. OF PACKAGES	48

88. On Wednesday 20 June 2012, Robert Santamaria (“Santamaria”), Import Cartage Coordinator of BTL, sent an email to Generakis, Elms, and Major. In that email, Santamaria attached a document entitled “FCL FCL Sea Arrival Time Slot Request” for Generakis’ consideration. That document was dated 20 June 2012 at 10:12am.

89. The “Slot Request” refers to the Container by its container number, and confirms that the Container is filled with “plastic composites profiles & alumi” (sic), that the container was loaded in Shanghai, China, that the consignor is Huangshan and that the consignee is Futurewood.

90. The document further records the following information:

CONTAINER	SEAL	TYPE	WEIGHT (KG)	GROSS W.(KG)	VOLUME (M3)
HJCU8368820	150857	20GP FCL	19753	22053.000	20

91. Through the receipt by Generakis of this email, it is clear that ENG was made aware of the contents of the Container, its weight, and the other matters recorded in the “FCL FCL Sea Arrival Time Slot Request”

92. The estimated time of arrival of the Container to the port of discharge in Sydney was Saturday 23 June 2012.

93. Santamaria then sent a further email to Generakis, Elms and Major on the morning of Friday 22 June 2012 informing Generakis:

“Please find attached EDO for container HJCU8368820, container is now CLEAR and ok to deliver.”

94. Attached to that email was a document headed “HANJIN SHIPPING: IMPORT DELIVERY ORDER” and dated 21 June 2012 at 11:04am. The document was addressed to “The Import Manager, Bell Total Logistics (FF-SYD)” and identified the Container by its number HJCU8368820.

95. The document indicated that the goods would be available for collection at DP World Port Botany and that the weight of the Container was 19753kgs. Again, through this email, ENG had knowledge of the weight and volume of the Container.

96. A further email from Elms to Michael Bonaccorso (“Bonaccorso”), an employee of Hilbon, with copies to Generakis, Major and Suzi Cannistraro (“Cannistraro”) dated Friday, 22 June 2012 at 9:19am, read:

“Michael,

Chris from ENG will be delivering the next container #106 of stock early next week. He will confirm the delivery with you based on the time slot etc.

I have attached the PO showing the stock that is in the container. …”

97. Attached to that email was a document entitled “Purchase Order” and dated 17 February 2012. Futurewood’s logo is present in the top left hand corner of the document. The Purchase Order indicates that the supplier is “EcohTech” and “Container #106”, and the address to which the Container is to be shipped is provided as:

“Hilbon Transport Pty Ltd

C/- 7 Frank Street

Wetherill Park

NSW…”

98. The document then lists the products packed into the Container, including a description of each item and the quantity of the item included in the Container.

99. On Tuesday 26 June 2012 at 10:00am, in response to a query from Elms, Santamaria sent him an email, copying in Generakis. The subject line of the email was “RE: Container #106”. In his email, Santamaria said:

“Container is available from wharf.

Last free day is tomorrow 27/6.

EDO was sent Friday 22/6 and container is clear, ok to deliver (email attached)”

100. On the same day at 10:14am, Generakis sent an email to Elms, in which he said:

“OK WILL GET BOX TOMORROW AND DELIVER”

101. The word “box” is a common term used to refer to a shipping container.

102. It seems clear from this exchange, and the absence of any suggestion that a fee was paid to DP World for extended storage at the dock, that the Container was collected by ENG from Port Botany on or before Wednesday 27 June 2017, the day before the Rollover occurred. The records of DP World show that, in fact, the Container was collected and left Port Botany on 26 June 2012: see [112].

103. However, the evidence did not address the identity of the driver, employed by ENG, who actually collected the Container from Port Botany and drove the loaded Freightliner to Moorebank. Brown, who was driving the Freightliner at the time of the Rollover, was not called to give evidence. It is not possible to conclude that he was the driver at the time the Freightliner left Port Botany.

Loading of the Container onto the Prime Mover at DP World, Port Botany

104. Mr William Hanley (“Hanley”), the operations supervisor at DP World at Port Botany, gave evidence that DP World ran a stevedoring operation for shipping containers at that premises, whereby containers would be removed from ships onto the dock at Port Botany and then loaded onto road transport to be delivered to various places across New South Wales.

105. Hanley gave evidence about the processes in place at DP World regarding the weighing of the road transport combinations (including their containers) before the combinations left DP World, and the means by which a driver would be informed of the weight of their combination.

106. DP World utilised “Weigh In Motion Technology” in connection with the road transportation of containers. This is a system which gives an indicative weight for axle groupings on a road transport combination once it has driven over and been detected by the technology.

107. Once the measurement has been taken, the measurement appears on a static screen which is visible to the driver of the vehicle. If the driver is not content with the nature, including the overall weight, of their load, the driver has the option to return to DP World loading area and to correct the load. If not, the driver can elect to proceed to the exit gate.

108. At the exit gate, the driver is provided automatically with a paper docket from a console. The docket contains the terminal identifier for the vehicle, known as the “BAT” number, being the Maritime Security Industry Card Number which identifies the driver of the vehicle, the container unit identified as having been loaded onto the combination, the ISO identifier, the indicative weights of the combination by axle group and the gross weight of the combination.

109. At the gatehouse of the premises at DP World, the data from the Weigh In Motion Technology is collected by DP World to determine whether any of the combinations which had been measured by the technology were grossly overweight. If this did occur, DP World would bring the fact of the grossly excessive weight of the combination to the attention of the driver a second time, the driver having already been notified by the docket system.

110. I am satisfied that this system was in operation at the time the Container was collected by ENG from Port Botany. ENG’s driver was provided with information regarding of the weight of the Freightliner and Container and its distribution across the Freightliner’s axles.

111. In relation to the Container loaded onto the Prime Mover, Hanley gave evidence that a search of DP World’s records which he conducted revealed that the Container was not noted as grossly overweight by DP World’s exit gate log. This means that there would not have been a second notification to the driver before he drove out from the port area at Port Botany.

112. Hanley also noted the date of departure of the Container to be 26 June 2012, the BAT of the Freightliner was 83X, and the registration number of the Prime Mover as BE33XV.

113. The text messages to which reference is made at [115] below, indicates that it was ENG’s practice to inform its drivers, via text message, of the relevant characteristics of the load being transported by the driver, namely, the container number, the location to which the load is to be delivered, the weight of the load, and the relevant contact person at the destination. That information was available to ENG from its receipt of various copy shipping documents, and the docket given to its driver when the Container left DP World at Port Botany.

Movement of the Container after Leaving Port Botany

114. The evidence about what happened to the Container between when the Freightliner left Port Botany and the Rollover is minimal.

115. However, from the available evidence including Hanley’s oral evidence, the dates concerned, the location of ENG’s warehouse at 366 Newbridge Road, Moorebank, the histories which expert witnesses were asked to assume (in respect of which no limitation of use was sought or applied for pursuant to s 136 of the Evidence Act 1995), and the contents of the Court Attendance Notice issued by the RMS to Futurewood, I am well satisfied, including by inference, of the following facts:

1. when the Freightliner left Port Botany, nothing of the identity of the driver, the nature, type or registration of the trailer attached to the prime mover was revealed by the evidence;

2. the Freightliner and the Container left Port Botany at an unidentified time on 26 June 2012, and was driven to the ENG warehouse at Newbridge Road, Moorebank;

3. the Container remained at the ENG warehouse until shortly before the Rollover on 28 June 2012;

4. whether this Container was offloaded whilst at ENG’s warehouse from the trailer used to transport it from Port Botany is unknown. However, it is clear that the transport allocator at ENG’s warehouse allocated the task to drive the loaded Freightliner to Brown on the morning of 28 June 2012. That allocation was notified (or else confirmed) to Brown by a text message at 10.12am which read:

“ENG: LOAD 20’ HJCU8368820 TAKE TO HILBON TRANSPORT 21 FRANKS ST WETHERILL PARK (ENTER VIA KELLOWAY PL)

5. ENG had not by that time either opened or inspected the Container. At the time the Container left ENG’s warehouse, the seals attached in China remained intact;

6. Brown was not informed until after the Rollover what the weight of the Container was. The first information he received was a text message at 11.32am (which was after the Rollover) which said:

“ENG: CWD: HJCU8368820 WGT: 21.6t DATE: 26/06/2012. SHIPPER: FUTURE WOOD 21 FRANK ST WETHERILL PARK ATTN DAVID ELMS PH: [PHONE NUMBER]

7. Brown did not receive any information about the Container, including the nature of the payload and how it was packed, , other than its identification number prior to leaving the ENG warehouse;

8. Brown was driving the loaded Freightliner from ENG’s warehouse at Moorebank to the warehouse of Hilbon Transport at 21 Franks Street, Wetherill Park when the Rollover occurred;

9. during that journey and the Rollover, the Container was not dislodged from the trailer to which it was affixed, rather the whole of the Trailer, Container and Prime Mover rolled over;

10. the distance travelled along the Hume Highway after joining it, and prior to making the left-hand turn onto the Cumberland Highway, was not specified in the evidence but general geographical knowledge of the principal roads in Sydney suggest that after joining the Hume Highway and before the start of the curve the distance was likely to be in the order of 1km, along the generally straight multi-lane Hume Highway; and

11. Brown received no instructions as to the manner of driving the Freightliner.

Crash Investigation: Agreed Facts

116. It should be noted at the outset that an Agreed Statement of Facts which was tendered by Futurewood, Brown and Zurich during the hearing, accepted the following:

1. that the tare weight of the Freightliner was 8.82 tonnes;

2. that the tare weight of the Trailer was 12.180 tonnes;

3. that the unladen tare weight of the combination vehicle was 8.82 tonnes + 12.180 tonnes = 21 tonnes. This weight was confirmed as correct by Roads and Maritime Services (“RMS”) officers on 28 June 2012;

4. the maximum permitted (general limit) on NSW roads for this combination was 42.5 tonnes so that the heaviest laden container that could be legally carried by the Freightliner was 42.5 tonnes – 21.0 tonnes = 21.5 tonnes;

5. the declared weight of the payload (according to the packing slip) was 19.753 tonnes, and the tare weight of the Container was marked on the outside of the Container as 2.24 tonnes, giving a declared laden container weight of 21.993 tonnes;

6. the combined weight of the Freightliner and the Container was therefore 21.993 tonnes + 21.000 tonnes = 42.993 tonnes;

7. the actual weight of Container and its payload was calculated by officers of the RMS on 28 June 2012 to be 22.990 tonnes (that is, 997kg heavier than the declared weight of the payload and the tare weight of the Container outlined at point (5) above); and

8. the actual weight of the Container and its payload, together with the actual weight of the Prime Mover and the Trailer, was calculated by RMS officers on 29 June 2012 to be 43.9 tonnes, which exceeded the maximum permitted general limit of 42.5 tonnes by 1.4 tonnes.

117. QBE, by its counsel, agreed with these facts.

The Scene of the Rollover

118. The unchallenged evidence of Barrie Scott, an investigator with the Investigation and Accreditation Unit of RMS, was put before the Court by his statement.

119. Mr Barrie Scott attended the site of the Rollover on 28 June 2012. He took a number of photographs of the crash scene, including some which depict a blue container with white lettering on its side depicting the identifier “HJCU 836882 0”. This is the Container.

120. One photograph records the Trailer and the Prime Mover being returned to an upright position. Scott observes in the description of that photograph that the Container has separated from the Trailer. A second photograph depicts an unbroken seal, number SIPGZCT150857, securing the doors of the Container prior to being opened by police. This evidence established that the Container had not been opened prior to or during the Rollover. This seal number is identical to that recorded on the Slot Request document referred to at [90].

121. Notaro, an investigator with RMS who attended the scene of the Rollover and was involved in subsequent investigations into the accident, confirmed that a seal attached to the doors of the Container had to be broken before the Container could be opened. Present at the time the seal was broken were police, two of Notaro’s colleagues from RMS, and a representative of ENG.

122. During his subsequent investigations, Notaro interviewed Fountoulis, an employee of ENG responsible for running ENG’s warehouse and supervising the drivers. Fountoulis indicated to Notaro that he was empowered to “take care of things” in the absence of Generakis, the principal of ENG.

Inspection of the Container after the Rollover

123. Several photographs taken by Scott illustrate the state of the load once the container had been opened after being removed from the site of the Rollover and transported to RMS premises.

124. The photographs show that, when viewed from the back of the Container with the Container doors open, the load was separated into packs which were wrapped in a dark-coloured material. Those packs were then stacked into two columns, with a material which seems to be timber serving as a horizontal barrier between each bundle.

125. In the photographs, the two columns of bundles are leaning to the left hand side of the container as viewed from the back. Scott said:

“I noticed that the lower portion of the load was displaced and against the wall on the right side while the upper portion of the load was against the left side of the container wall. The load consisted of 11 packages of a timber type product tagged as Future Wood, Clever Deck, Wood Composite Decking plus a small amount of steel box tube and some sundry items.

…

None of the load was secured within the container. The load was placed on a frame that was on wheels. There were no straps holding the load to the framework or the framework to the container. There was a series of steel ‘U’ sections welded to the floor of the container that appeared to be where the wheels were supposed to sit. Some of these “U” sections were bent over.”

126. Scott also observed a series of load securing points along the side of the floor, which had not been used.

127. Giving evidence on the loading mechanism used in the Container, Notaro said that:

“there was a metal contraption that had wheels and it … should have been contained with a chocking system, but the metal frame had moved out of that chocking system”.

128. Notaro confirmed that a similar metal contraption was present beneath both stacks of product in the container, and that in both instances the frame had moved out of the chocks.

129. When taken to Barrie Scott’s photographs depicting the state of the Container once opened, Notaro identified the presence of several dunnage bags inside the Container. Notaro gave evidence that the purpose of a dunnage bag is to prevent movement of the load within a container by filling up any empty space within the container. Notaro observed that there were three dunnage bags within the Container. He did not observe any more dunnage bags when the contents of the Container were unloaded at a later time.

Ownership of the Prime Mover and Trailer

130. A certificate issued in accordance with section 257 of the Road Transport Act 2013 established that the Prime Mover was operated by Shark Group and was registered to that company as the owner as at the date of the issuing of the certificate, on 16 October 2013.

131. Investigations conducted by Notaro revealed that the registered owner of the Trailer was ENG. These matters are not in dispute.

Testing of the Prime Mover

132. Mr Graeme Lawrie (“Lawrie”), a crime scene officer with the Engineering Investigation Section of the New South Wales Police and a licensed Motor Mechanic, examined the Prime Mover and the Trailer after the Rollover. Lawrie concluded that the accelerator system of the Prime Mover was operating correctly prior to the collision. He found that, while the steering, suspension and braking systems of the Prime Mover and Trailer required repair, their present state did not contribute to the collision. He also concluded that, although the tyres fitted to the nearside rear axle of the Trailer were due for replacement, their state did not contribute to the collision.

132. Lawrie concluded that there was no mechanical defect or failure with the Freightliner that may have been a contributing factor to the collision. This conclusion was not challenged.

Weight of the Freightliner

134. Although the weight of the combination was agreed between all of the parties, it is necessary to examine the evidence of the weight, although briefly.

135. The clearance documents attached to Xue’s email to Johnson of 12 June 2012 indicated that the Container contained 48 “packages” with a gross weight of 19.753 tonnes.

136. A weighbridge docket dated 19 June 2012 from the Southern Cross Truck Terminal in Chipping Norton, indicated that on that date, the tare weight of the Prime Mover and the Trailer was 20.96 tonnes, with their gross mass being 28.42 tonnes.

137. Mr Domenick Gerace (“Gerace”), an authorised officer pursuant to s 121 of the Road Transport (General) Act, weighed the Freightliner on 28 June 2012. The total gross mass of the Freightliner was calculated to be 43.00 tonnes. The total gross mass of the Freightliner without the Container was calculated to be 20.10 tonnes. Hence, the weight of the Container was determined to be 22.90 tonnes.

138. The Freightliner was then weighed, and its weight was determined to be 21.00 tonnes. Therefore, the gross vehicle mass for the Freightliner was calculated to be 43.90 tonnes.

139. Mr Greg Muirsmith (“Muirsmith”), the Engineering Manager for Steelbro NZ Ltd in July 2012, the manufacturer of the Trailer, was requested by RMS to provide information about that trailer. Steelbro NZ Ltd’s records indicated that the tare mass of the Trailer as weighed at the date of manufacture in July 2007 was 12.18 tonnes.

140. Documents from Mercedes Benz Australia Pacific Pty Ltd recorded that the Prime Mover, as produced by Mercedes Benz, had a total weight of 8.374 tonnes including factory supplied fuel, when weighed at the Mercedes plant at the time of manufacture.

141. Whilst the parties agreed on these issues, this evidence is relevant to show that all of the information about the weight of the Prime Mover, the Trailer, the Container and the payload was readily available if any company or individual sought to inform themselves of those facts. .

Expert Opinion

142. Five experts were engaged by the parties to provide expert reports on the Rollover. Each expert was a qualified engineer with a relevant specialisation. I am in no doubt that each expert had specialised knowledge based on their training, study or experience which entitled them to express the opinions which they did: s 79 Evidence Act. No submissions to the contrary were received. The experts were:

• Mr Michael Robertson: Managing Director and Engineering Manager of Engistics Pty Ltd., produced five reports, dated 28 June 2012, 20 August 2012, 30 November 2012, 27 April 2015, and 22 July 2016 (“Robertson”);

• Mr Trevor Wilkinson: Director and Principal Engineer of Engistics Pty Ltd., , prepared a report dated 28 June 2012 (“Wilkinson”);

• Mr Richard Larsen: Principal of Loadsafe Australia Pty Ltd; prepared a report dated 23 February 2015 (“Larsen”);

• Mr John Jamieson: Principal of Jamieson Foley & Associates Pty Ltd, Consulting Engineers; prepared two reports, dated 14 November 2015 and 10 February 2017 (“Jamieson”); and

• Dr Tim White: Employee of T.R. White Forensic Mechanical Engineers Pty Ltd; provided a report into the rollover dated 24 February 2015 (“White”).

Conclave Report

143. White, together with Messrs Robertson, Wilkinson, Larsen and Jamieson participated in an expert conclave on 17 March 2017, in which they were asked to provide responses to questions posed by the parties. A Joint Report which responded to those questions was prepared on that day.

144. Much was agreed by the experts in the Joint Report. Relevantly, the contents of the Joint Report are as follows:

QUESTIONS PROPOSED BY DEFENDANT BROWN FOR EXPERT CONCLAVE

Question 1 and 2:

1. What matters can you agree on regarding this accident and the factors that contributed to its occurrence?

2. What matters do you disagree on regarding this accident and the factors that contributed to its occurrence?

Answer: The experts concurred that the load was inadequately secured and may have been in breach of the regulations. In Mr Robertson’s opinion, the load was in breach of the regulations. In Mr Wilkinson's opinion, the load adversely affected the prime mover's stability

Question 3: Was the container packed and secured in compliance with national and internationally recognised guides or requirements for packing a container safely for transportation?

Answer: In Dr White's opinion, the container was not packed and secured in compliance with nationally recognised guides.

In Mr Robertson's opinion, it did not meet the requirements of either the Australian Guide or the Container Transport Union Guidelines for Marine Transport.

Mr Wilkinson agreed that it didn't meet Australian and international guides

Question 4: When is it likely (more probable than not) that the load of plastic products within the container shifted within the container?

Answer: In Mr Robertson's opinion, it was impossible to say with any surety when the load moved and where it moved, but judging by the lack of damage to the packaging, it was unlikely to have shifted at sea. Mr Robertson's further opined that it was very unlikely the movement occurred in the marine environment because it would be a repetitive movement.

Mr Jamieson and Mr Larsen did not agree with Mr Robertson’s opinion. In Mr Jamieson and Dr White's opinion, it could not be known when the load of plastic products within the container shifted. In Mr Robertson's opinion, had the load shifted before the corner there was a high probability that the truck driver, or others, would have noticed an imbalance in the load when first loading it on to the truck.

Mr Wilkinson did not know exactly when it happened, but that it either moved to or was actually on the right-hand side at that point.

Mr Larsen agreed with Mr Wilkinson except that in Mr Larsen's opinion, only the front of the load would have moved to the right-hand side and not the rear of the load which was restrained by inflatable dunnage bags.

Question 5: If the load of plastic products within the container shifted when the prime mover and the trailer was travelling through the corner just prior to the accident scene, is it probable that load shift had a "battering ram" effect? Is this quantifiable?

Answer: There was no consensus amongst the experts that the battering ram effect was probable.

Mr Robertson considered it probable that the dynamic movement of the freight would have been a significant destabilising factor. Mr Wilkinson concurred.

Mr Larsen did not consider it possible that the battering ram effect took place as a dynamic impact. There was no evidence to show that the load impacted on the container wall.

Dr White opined that the duration of application of any possible 'battering ram” forces would have been so short as to make the effect of such forces negligible

Question 6: What were the likely speed(s) of the prime mover and trailer as it approached the scene of the accident and at the time that the container began to fall from the trailer?

Answer: There was consensus among the experts that the point of initiation of the rollover was approximately 45 kilometres an hour.

In Dr White's opinion, assuming it took between two to three seconds for the trailer to roll and then pull the prime mover over, counting back two or three seconds from this (and taking into account the 'resolution' of the DDEC data), the speed was somewhere between 45.1 and 53.9 kilometres an hour.

Question 7: During the period that the prime mover was in motion along the Hume Highway and turned on to the Cumberland Highway, was Edwin Brown travelling at a reasonable speed, assuming that he was unaware of the contents of the trailer and the means by which they had been secured, and that he believed that the contents of the container were not likely to shift during normal operating conditions of the prime mover.

Answer: There was consensus that the driver wasn't travelling at a reasonable speed.

Question 8: Please consider each of the expert reports provided to date and consider whether the prime mover and the side-loader rolled due to inadequate load restraint leading to load shift or due to the speed at which the driver was travelling or a combination of the two?

Answer: There was no consensus amongst the experts.

In Dr White's opinion, load restraint was not a material consideration when compared to speed.

In Mr Robertson's opinion, it was a combination of inappropriate speed and a lower than normal margin for error because of the load shift in the vehicle and inappropriate loading and/or load shifting in the vehicle, and that there was a substantial drop in stability because of poor loading practices which did not comply with the NTC Guidelines.

In Mr Wilkinson's opinion, according to the evidence presented, the speed was close to a rollover speed and the poor load restraint was the tipping point.

In Mr Larsen's opinion, the vehicle was going too fast for the way the combination was loaded.

In Mr Jamieson's opinion, the driver entered the corner perilously close to the rollover threshold, irrespective of the configuration of the load.

Question 9: Was there any other factor arising from a breach of road rules or regulations (in addition to speed and load shift) that also contributed to the rollover such as the use of a side-loading trailer Instead of a skel trailer or the overloading of the prime mover and trailer?

Answer: The experts agreed that overloading was a definite breach and would have contributed to a small extent and that over-mass was a breach.

The experts agreed that if the driver wasn't informed of the actual mass, that was another breach of the chain of responsibility. The use of the side-loading trailer contributed to the crash and it was a breach of duty not to have checked that a side-loader could legally and safely carry that weight.

Question 10: What is the lowest speed at which a rollover of the prime mover, side-loading trailer and shipping container was likely to occur at the corner where the accident occurred?

Answer: Mr Robertson conducted a whiteboard presentation for the expert panel and Dr White prepared the following table:

Static Rollover Threshold of the combination of trailer:    0.35

Crossfall of the road:               5 per cent

The speed is 49.0 km/h for a turn radius of 47m

(the apparent radius of the tyre mark).

The speed is 46.2 km/h for a turn radius of 42m

(the radius if the driver "cut" the corner somewhat).

The speed is 43.4 km/h for a turn radius of 37m

(the radius of a centre line of Lane 2).

145. The experts concurred that it was not appropriate to answer most of the following questions without being given more time and the ability to technically investigate the facts further on the basis of the evidence.

FUTUREWOOD QUESTIONS FOR EXPERT CONCLAVE IN RELATION TO THE DRIVER, MR EDWIN BROWN:

Question 1: Do you agree with Mr Robertson's calculation that in the absence of the load shifting and assuming the centre of gravity of the load was not displaced laterally, the Static Rollover Threshold (“SRT”) of the subject vehicle would not have exceeded 0.35g? If not, why not?

Answer: The experts agreed that the numbers seemed reasonable but that they had not been mathematically checked individually.

Question 2: What was the probability that the trailer commenced to roll over before the drive tyres on the prime mover lifted from the pavement?

Answer: There was consensus amongst the experts that it was almost certain the trailer wheels commenced to lift before the wheels of the prime mover lifted off the pavement.

Question 3 (a), (b), (c): Look at the police survey plan prepared by SC Kyrlakopolous, made on 28 June 2012, titled “Cumberland Highway, Liverpool.

Answer: The experts were unable to answer these questions 3(a) to 3(c) as answering them would require a detailed engineering assessment.

Question 3(d): Look at Table 1 below (which sets out the speed of the prime mover at 1 second intervals per the DDEC record in Dr White's report). The speeds have been converted to metres per second and the cumulative distance travelled has been calculated in 1 second intervals prior to the first tyre of the prime mover lifting from the roadway. What was the speed of the semi-trailer at the start of the curve?

Answer: In Dr White’s opinion, the speed of the semi-trailer … at the start of the curve was between 45.9 and 53.9km an hour.

In Mr Robertson’s opinion, the speed of the semi-trailer at the start of the curve was between 45.9 to 49.9kmh

Questions 4, 5, 6 …

Answer: Not answered by the experts.

Question 7: The DDEC records analysed by Dr White show that the prime mover had gear “7th low” selected when approaching the curve, when rounding the curve and when it rolled over. Look at Figure 3 of Dr White's report. At what speed would the semi-trailer be travelling in gear “7th Low” assuming the driver was maintaining appropriate engine speed?

Answer: In Dr White's opinion, a reasonable minimum engine speed would be 1500 RPM and that that could translate to a road speed of approximately 56 kmh. The experts deferred to Dr White's opinion.

In Relation to the Freight Forwarder in this case: ENG Haulage Contractors Pty Limited

Questions 8, 9 , 10:

Answer: Not answered by the experts.

Question 11:  If so:

Question 11.1: Do you agree that the total weight of the load, the container, the side-loader trailer and the prime mover was approximately 42.993 tonnes?

Answer: The experts concurred, based on the Information supplied by the RMS, that the total weight of the load, the container, the side-loader trailer and the prime mover was approximately 42.993 tonnes

Question 11.2: Was it appropriate for ENG to allow this loaded container to be carried on NSW public roads on this combination of side-loader and prime mover? If not, why not?

Answer: The experts agreed that it was not appropriate for ENG to allow this loaded container to be carried on NSW public roads on this combination of side-loader and prime mover.

Question 11.3: Was there a more appropriate combination for this container and load to have been carried?

Answer: Mr Wilkinson indicated that the experts were not privy to knowledge of the overload.

Questions 12, 13, 14, 15, 16, 17…

Answer: Not answered by the experts.

Evidence in Joint Session

146. It is now convenient here to note the relevant opinions expressed in the course of the joint session.

147. Dr White did not participate in the evidence given by the experts in the joint evidence session due to other commitments. He was not required for separate cross-examination by any party

The Trailer

148. In relation to the Trailer, Larsen gave evidence that if he could choose between loading the Container onto a higher trailer or a lower trailer, the lower trailer would be more suitable, because the Container would have a lower centre of gravity and would therefore be more stable. All the other experts agreed with this opinion. Jamieson opined, succinctly, “the lower the better”.

149. Robertson gave evidence that a skeleton or “skel” trailer is normally used to transport heavier loads, since skel trailers are typically lighter in weight than other types of trailer, including the side loading trailer in use during the Rollover.

150. In contrast, he said that the Trailer used to transport the Container which was involved in the rollover on 28 June 2012 was a side-loader trailer fitted with two lifting devices at the front and back, which is a heavier type of trailer more commonly used so that the trailer can be unloaded without a crane or forklift.

151. All of the experts agreed that the side loader trailer which was used to transport the Container was commonly used in the haulage business in Australia.

Packing of the Container

152. Robertson gave evidence that, in preparing for his report, he examined the Container, the Prime Mover, and the Trailer, and visited the scene of the accident.

153. Wilkinson was also in attendance with RMS officers to observe the unloading of the Container. Wilkinson said that the only load restraint which was found in the Container were three dunnage bags.

154. He agreed that there were two side-by-side ”towers” or stacks of packages, each of which was on a metal trolley, that were placed into the Container. Those loads consisted of wrapped bundles of Futurewood’s product placed vertically on each trolley and separated from each other by layers of timber and plastic packing material.

155. Robertson added that the metal trolleys were then wheeled into a U‑shaped channel across the width of the Container which had been welded to the floor of the Container. The wheel was not welded to that channel, but simply relied upon being in the channel to prevent movement forwards and back. The channel, however, did not prevent movement from side-to-side.

156. As a result, the only forces preventing the load moving within the Container were the dunnage bags and friction between the packages themselves and also the trolley and the channel. Robertson also added that, longitudinally, the wheels of the trolleys would stop the base piece of product from moving in and out, however:

“… every layer above that was free to slide longitudinally … depending upon friction only, and for sideways movement it was purely friction only outside of the end with the airbags, So the other end was free to slide side to side depending on the friction.”

157. In answer to a question about the appropriate action where a professional in the transport industry (ENG) knew or ought to have known that a load was unrestrained (or inadequately restrained) within a container, Robertson nominated the following as the appropriate course of action:

“His action would be to fix the problem by wedging it [the load] and also he has a responsibility under the chain of responsibility, to notify the offending party that he knew or thought that the way how he had done it was inappropriate and fix it for future trips.”

Knowledge of the Weight of the Freightliner

158. Robertson agreed that the total weight of a freightliner is the aggregate of the tare weight of the prime mover, the tare weight of the trailer, the weight of the empty container and the weight of the payload, subject to variations in the weight of the Freightliner caused by the volume of fuel in the fuel tank. He agreed that the first three of those matters were readily observable on the vehicle component parts, and that the declared weight of the container was normally set out in the relevant shipping documents.

159. Jamieson added that the only “missing link” (or unknown) in the knowledge of the driver of the Freightliner, is the weight distribution of the payload of the container.

160. Larsen added that the declared weight of the container is something that is put on by the consignor of the goods, and is not the subject of weighing. Therefore, the declared weight is not always correct, although of course that conclusion depended upon each individual case.

Transportation of the Container by the Freightliner

161. During the evidence, the Court asked the experts what a transport company in the position of ENG (that is, knowing the weight of the Container, and making the decision as to the appropriate trailer on which the container would be loaded) could do about a container the contents of which were incorrectly packed.

162. Robertson opined that if the transport company had a suspicion that the container was not correctly packed, the company should advise the consignor (in this case, Futurewood) that the practice needed to change, and that, for the time being, the payload would need to be unloaded from the Container and delivered, perhaps in individual packs, on a flatbed truck, with appropriate load securing. Robertson described this as the “common industry first line of defence”. The other experts did not disagree. In light of the unanimity of the experts on this aspect, I accept this evidence.

276. Generally speaking, QBE submits that ENG was not responsible for checking the manner in which the payload in the Container was secured – that this was the responsibility of Xue and the agents and employees of Hohechotec, and that such a role was not provided for in its contract with Futurewood – and, in any case, that it could not have done so in June 2012, because it did not have authority to open the Container. It further submitted that ENG’s previous experience with unpacking Futurewood’s containers could not have alerted ENG to the risk of rollover posed by inadequate load restraint.

277. I am not convinced by these submissions. While I accept that ENG was not responsible for the packing of the Futurewood’s containers, ENG’s prior experience with several containers of Futurewood’s product (all of which were packed in the same way) meant that a reasonable person in ENG’s position would have assumed that the Container which was involved in the Rollover was likely to be packed in that same (possibly inadequate) manner.

278. Regardless of whether a reasonable person in ENG’s position would have made such an assumption, at the very least, a reasonable person would have made contact with Futurewood to find out how the Container’s load had been restrained, and to obtain an assurance that it was properly packed and secured. In the circumstances of this case, a mere assumption on the part of in ENG that the Container was adequately secured was insufficient to discharge its duty.

279. Moreover, it is not sufficient for ENG to submit that it did not know of the risk created by insufficient load restraint in circumstances where, the stability of the payload depended upon gravity and the friction between the packages represented a potential risk. The question is one of objective reasonableness, namely what were the precautions which a reasonable person would have taken in the circumstances. The circumstances demonstrate that ENG was well aware that Futurewood’s products had a history of being inadequately packed in their containers. A reasonable person in ENG’s position, as an experienced transporter of heavy vehicles, ought to have known that a poorly secured load within a container brought about a foreseeable risk of load shift within the container, which could cause a vehicle such as a Freightliner to become unstable and to roll over when rounding a curve.

280. I am satisfied that a reasonable person in ENG’ position, in circumstances where it was unsure as to how the Container was packed, and in light of the significant weight of the Container, would have at least inquired of Futurewood as to the manner of packing of the Container. This enquiry would have been easily made and easily responded to: all Elms had to do was to forward the email sent to him by Ally to which was attached the pictures of the packing of the Container to Generakis.

281. Finally, QBE did not submit that the risk of the Rollover was not insignificant. It clearly was. As a result, I am satisfied that the provisions of s 5B have been made out in relation to ENG.

282. I also add that I accept Brown and Futurewood’s submissions that the expert evidence and the temporal connection between the load shift and the Rollover allows me to draw the inference that ENG’s failure to take reasonable precautions (either by informing itself as to the restraint used in the Container and taking action to correct any inadequacies, or by instructing Brown to drive more cautiously and at a slower speed around corners) was a necessary condition of the Rollover. In addition, I am persuaded by Brown and Futurewood’s submissions, that ENG’s negligence was necessary to complete the set of conditions which were jointly sufficient to account for the occurrence of the harm, namely, the combination of Brown driving the Freightliner at an excessive speed and the unsecured load in the Container.

283. QBE’s second submission resisting a finding that ENG be characterised as a tort-feasor was that ENG’s failure to take the relevant precautions, such as inquiring as to how the Container was packed, and adjusting its manner of transporting it accordingly, or, having made such inquiries, instructing Brown in the manner that he should have driven the Freightliner, could be causally related to the Rollover.

284. I have found at [259]-[263] above that the payload in the Container shifted as the Freightliner began to navigate the curve in the highway. This shift reduced the SRT of the Freightliner, which, when combined with the excessive speed at which Brown was navigating the curve, caused or materially contributed to the Rollover. The background to this finding is that the expert evidence was that, if the load had been secured and in the middle of the Container, the Freightliner would have been on the edge of rolling over. The result of my finding is that the fact that the payload was inadequately secured was causally related to the Rollover.

285. My conclusion, therefore, is that had ENG not been negligent, the Rollover would not have happened.

286. For example, if ENG had made the relevant enquiry, and had found out that the payload was inadequately secured, a reasonable person in ENG’s position would have requested permission to open the Container and to secure the payload properly or else, refused to transport the Container. Or, a reasonable person in ENG’s position would have, as was suggested by Robertson, unloaded the payload from the Container and transported it on a flatbed truck, with appropriate load securing. In such circumstances, the load would not have shifted. Robertson described this as the “common industry first line of defence”.

287. A further example of this is that if ENG did not know how the payload was secured in the Container, and it did not make such an enquiry of Futurewood, a reasonable person in ENG’s position would have instructed Brown to drive the Freightliner cautiously around corners at a lesser speed, to reduce the risk of rollover.

288. The expert evidence was that Brown was driving the Freightliner too fast (45kmh), and that even if the load was restrained, it would have been at the point of tipping over at that speed. Larsen nominated a speed of 30kmh which included a safety factor of two, which he considered was necessary to eliminate the risk of rollover. Larsen also opined that the payload would have started to shift as soon as the Freightliner travelled at a speed above 30kmh on the curve, reducing the safe driving speed down to 42 or 43kmh.

289. Based upon these calculations, if ENG had instructed Brown to drive carefully around corners at a low speed of, for example, 30kmh, the unrestrained load would not have shifted and the SRT of the Freightliner would not have been reached. In those circumstances, the Freightliner would not have rolled over. Therefore, I am satisfied that ENG’s failure to take the relevant precautions was causally related to the Rollover, and hence in that way s 5D(1)(a) of the Civil Liability Act is satisfied.

290. QBE’s third and final submission was that, given ENG’s contractual relationship with Futurewood, it would not be appropriate to extend ENG’s scope of liability to the extent that ENG was responsible for the harm caused by the negligent packing of the Container by another party.

291. This submission fails on several grounds. First, while I accept that ENG’s contractual obligations did not extend to requiring it to check that the payload in the Container was adequately secured, ENG cannot point to those circumstances as exonerating it from taking the precautions that a reasonable person in its position would have taken. This is especially in light of ENG’s previous experience, which indicated that Futurewood had not adequately secured its product in the containers which it required ENG to transport.

292. Second, it is in the public interest that freight transporters such as ENG take responsibility for the loads which they are required to transport. Such wilful blindness, or such a failure to inform itself about the characteristics of the load that it is transporting, demonstrates a complete disregard for the responsibilities imposed upon drivers and controllers of heavy vehicles under the Road Transport (General) Act. Such action also fails to consider the safety of other road users. In that sense, a freight transporter’s duty to take responsibility for the securing of the load which it is transporting falls squarely within the common law duty of one road user to take reasonable care for other road users.

293. As a result, I am satisfied that it is not inappropriate for the scope of ENG’s duty to include taking reasonable steps to secure the load which it is transporting, or to instruct its drivers to drive in a manner which reduces the risk of rollover in light of an absence of knowledge concerning whether the load is adequately secured.

294. Therefore, I am satisfied that ENG can be characterised as a “tort‑feasor who is, or would if sued have been, liable”. What follows is that Brown, Zurich and Futurewood are entitled to recover a contribution from QBE pursuant to s 5(2) of the 1946 Law Reform Act, subject to the issues raised by QBE in respect of the Policy and the operation of the Employees Liability Act 1991.

Can Brown Claim Contribution from ENG?

295. QBE submits that s 3(1)(b) of the Employees Liability Act operates to preclude Brown’s cross-claim succeeding. That section is in the following form:

“3 Employee not liable where employer also liable

(1)   If an employee commits a tort for which his or her employer is also liable:

(a)   the employee is not liable to indemnify, or to pay any contribution to, the employer in respect of the liability incurred by the employer, and

(b)   the employer is liable to indemnify the employee in respect of liability incurred by the employee for the tort (unless the employee is otherwise entitled to an indemnity in respect of that liability).

(2)   Contribution under this section includes contribution as joint tort-feasor or otherwise.”

296. For the purposes of its submissions, QBE accepts that the relevant tort referred to in s 3(1) is Brown’s negligence in driving the Freightliner at an excessive speed. Brown’s cross-claim seeks contribution from ENG as a joint tort-feasor pursuant to the 1946 Law Reform Act, but does not seek indemnity by reference to the employment relationship.

297. Evidence was given by Alexandra Dendeade (“Dendeade”), a senior claims adviser with Zurich. Dendeade gave relevant evidence that a Compulsory Third Party (“CTP”) policy number 059019984 was issued to “Shark Group Pty Ltd” with an inception date of 6 April 2011, and which was cancelled on 17 September 2012. This evidence establishes that Shark Group was the holder of a CTP insurance policy with Zurich at the time of the Rollover in June 2012.

298. The statutory form of CTP insurance in operation at the time of the Rollover is provided for by s 10 of the Motor Accidents Compensation Act, in force as at 28 June 2012 which is in the following terms:

“10 Third-party policies

A third-party policy under this Act is a policy that is in the following terms:

Third-party Policy

The insurer insures the owner of the motor vehicle and any other person who at any time drives the vehicle (whether or not with the consent of the owner) against liability in respect of the death of or injury to a person caused by the fault of the owner or driver of the vehicle:

(a)   if the motor vehicle is not one to which paragraph (b) applies—in the use or operation of the vehicle in any part of the Commonwealth (whether or not on a road), or

(b)   if the motor vehicle is subject to an unregistered vehicle permit under the Road Transport (Vehicle Registration) Act 1997—in the use or operation of the vehicle on any road in any part of the Commonwealth.

In this policy, words and expressions have the same meanings as in the Motor Accidents Compensation Act 1999.”

299. By virtue of that statutory CTP policy, namely the words “[t]he insurer insures the owner of the motor vehicle and any other person who at any time drives the vehicle”, QBE argued that Brown was indemnified under that CTP policy. That he was fully indemnified is clear and is not in issue between the parties.

300. By recourse to the principles of vicarious liability, QBE submits that ENG would be liable for any tort committed by Brown in the course of his employment: New South Wales v Lepore [2003] HCA 4; (2003) 212 CLR 511 at [40]. Again, it is clear, and there is no issue between the parties, that at the time of the Rollover, Brown was engaged in driving the Freightliner in the course of his employment with ENG. Therefore, Brown would have been entitled to seek an indemnity from ENG in respect of any liability to the plaintiffs.

301. However, Brown did not make a claim upon ENG. Rather, as the driver of a registered motor vehicle, Brown sought and was fully indemnified by Shark Group’s CTP policy with Zurich. QBE submitted that pursuant to s 3(1)(b) of the Employees Liability Act, Brown is not now permitted to seek indemnity (or contribution) from ENG pursuant to s 5(1)(c) of the 1946 Law Reform Act. QBE argued that this construction of s 3(1)(b) was supported by the legislative intention to ensure that an employee is always indemnified by his employer except where the employee is otherwise entitled to an indemnity in respect of that liability.

302. QBE drew attention to s 7 of the Employees Liability Act which provides that that Act has effect “… despite … any other Act or law …”.

303. One textual feature of s 3(1)(b) is that it makes no reference to contribution – it merely uses the term “indemnity”. This is different from s 3(1)(a) which directs attention to the position of an employee being excused from indemnifying or paying contribution (as a joint tortfeasor or otherwise) to an employer.

304. By its plain text, s 3(1)(b) excuses an employer from indemnifying any employee in only one circumstance, namely, if the employee is otherwise entitled to an indemnity for that liability.

305. In other words, the section deals with a circumstance where an employee has the benefit of two (or perhaps more) indemnities. In those circumstances, since an employee would have no outstanding liability once provided with an indemnity, the employer is excused by legislation from providing a second indemnity.

306. Section 3(1)(b) says nothing about precluding an employer from being liable to contribute (as opposed to indemnify) as a joint tort-feasor to any liability of an employee to a third party for their negligent conduct. QBE however submitted that, nevertheless, by reason of the words of the section when interpreted in accordance with the legislative intention, there is an inconsistency between s 5(1)(c) of the 1946 Law Reform Act and this legislation such that by reason of s 7 of this legislation, it prevails, and contribution cannot be obtained by Brown from ENG as his employee. Accordingly, QBE submits that the cross-claim by Brown against it (as it stands in the shoes of ENG) should be dismissed.

307. I cannot accept QBE’s submissions that there is any inconsistency of the kind identified, insofar as Brown makes a claim for contribution under s 5(1)(c) of the 1946 Law Reform Act. First, the claim articulated by Brown is in substance one for contribution and not complete indemnity. Secondly, the text of the Employee Liability Act does not support the submissions. Particularly is this so because of the terms of s 3(2), which indicate that the legislature considered contribution to be separate from and not included within the term “indemnity”. Thirdly, acting upon the proper principles of statutory interpretation, there is no warrant for, in effect, inserting the words “… and contribution …” to accompany “indemnity” in s 3(1)(b). The section has effect and meaning without these words.

308. There is a further reason not to accept QBE’s submissions. The introductory words of s 3 require a coincidence of the tort for which, here, Brown and ENG would both be liable. The only tort here which fits that description is Brown’s negligence in driving the Freightliner at an excessive speed in the circumstances. But, the claim for contribution by Brown relates not to any conduct by him but to ENG’s liability in negligence for its own conduct in failing to act reasonably with respect to, putting it generally, the securing of the payload, and in allowing the Freightliner, in its then configuration and at its then excessive weight, to leave ENG’s yard. There is, and can be, no suggestion that Brown was concerned in either forms of this negligent conduct by ENG. Accordingly, properly understood and analysed, s 3 has no application to the claim for contribution being made because that claim relates only to a tort for which ENG is liable which is not a tort committed by Brown, its employee. That is so regardless of the fact that the tort of Brown and that of ENG jointly contributed to the loss and damage suffered by the plaintiffs.

309. There is no reason arising from the Employee Liability Act to preclude Brown’s cross-claim. Of course, that Act says nothing about the cross-claim brought by Zurich (in lieu of Shark Group) or Futurewood.

Apportionment

310. The position has now been reached in this judgment where it is appropriate to consider the question of apportionment between each of the tort-feasors of whose causal negligence I have been satisfied.

311. Section 5(2) of the 1946 Law Reform Act requires a court to fix an amount of contribution which is:

“… just and equitable having regard to the extent of that person’s responsibility for the damage …”

312. The Court is engaged on an evaluative exercise in which it considers the conduct of each tort-feasor and makes an assessment of the relative fault of each tort-feasor.

313. I have previously described at some length the negligence which has been found with respect to Brown and the Shark Group, who were the driver and owner of the Freightliner and Prime Mover respectively. The Shark Group were not said to be negligent in any way which differed from Brown’s conduct. Any contribution which these parties made is the same. Accordingly, in apportioning contribution, it is appropriate to regard Brown and Zurich (in lieu of the Shark Group) as the one tort-feasor. In short, their fault in respect of the accident was driving at an excessive speed in all the circumstances.

314. Futurewood is held as a tort-feasor because the payload was inadequately secured, thereby permitting the load to move and materially contribute to the Rollover.

315. ENG is liable as a tort-feasor for not satisfying itself that the load was secured, and for allowing an overweight combination to be driven on the road.

316. Clearly Brown’s fault contributed the most significantly to the Rollover. Futurewood, being primarily responsible for securing the payload, should bear a greater responsibility than ENG whose responsibility consisted essentially of failing to check on Futurewood’s provision for securing the load.

317. Taking this into account, I would apportion the respective fault of the tort‑feasors in this way:

1. Brown and Zurich:   70%

2. Futurewood:      20%

3. ENG:         10%

Is QBE Liable to Indemnify ENG?

318. QBE pleaded in its Defence to the First and Second Cross-Claims that it has no liability to indemnify ENG by reason of clause 5.20 of the Policy, which reads:

“5.   When you are not covered

The following Exclusions will apply to this policy.

This policy does not cover liability in respect of:

…

5.20   Vehicle:

Personal Injury or Property Damage arising out of the ownership, possession, or use by You of any Vehicle:

(a)   which is registered or which is required under any legislation to be registered, or

(b)   in respect of which compulsory liability insurance or statutory indemnity is required by virtue of any legislation (whether or not that insurance is effected).

Exclusions 5.20(a) and 5.20(b) above do not apply to claims:

(c)   for Personal Injury where:

(i)    that compulsory liability insurance or statutory indemnity does not provide indemnity; and

(ii)    the reason or reasons why that compulsory liability insurance or statutory indemnity does not provide indemnity do not involve a breach by You of legislation relating to Vehicles;

(d)    …”

319. “You” is defined in clauses 4.28(a) and (c) as:

“(a)   the person(s), companies or firms named on the current Policy Schedule as the Insured;

(c)   every director, executive officer, Employee, partner, shareholder or voluntary worker or parties shown in paragraph 4.28(a) and 4.28(b) above, but only while acting within the scope of their duties in such capacity; …”

320. “Employee” is defined in clause 4.7 as:

“… any person engaged under a contract of service or apprenticeship with You, but does not include any person employed under such contract who is excluded from the definition of ‘worker’ under any workers’ compensation legislation while working for you in connection with the Business.”

321. The “Business” identified in the Policy Schedule is described as “Freight Forwarding Service”. The “Insured” is described in the Policy Schedule as “ENG Haulage Contractors P/L”.

322. Clause 1.1 of the Policy states that:

“We will cover You for Your legal liability to pay all sums by way of compensation, and all costs awarded against you in respect of … Personal Injury … happening during the Period of Insurance and caused by an Occurrence within the Territorial Limits in connection with Your Business or Products”.

323. Personal Injury is defined in clause 4.16(a) as:

“bodily injury (and this expression includes death, disease and illness), disability, shock, fright, mental anguish or mental injury…”

324. There is no dispute that the rollover of the Freightliner occurred during the Period of Insurance, nor is there any dispute that the harm suffered by the plaintiffs falls within the meaning of Personal Injury (as defined by the Policy), nor is there a dispute that the harm was caused by an Occurrence in connection with ENG’s Business (as defined in the Policy).

325. Argument therefore proceeded upon the basis that clause 5.20 of the Policy applied to ENG.

326. QBE submitted that the first part of the exclusion (clause 5.20(a)) clearly applied, because both the Trailer and the Prime Mover were registered. It also submitted that the exemption (clause 5.20(c)) also applied, because the CTP insurance could not and did not provide indemnity to ENG because ENG was neither an owner nor a driver of the Freightliner.

327. QBE submitted that the words of the exclusion clause are sufficient to exclude indemnity under its policy. It accepts that it bears the onus of establishing that any claim brought by ENG is caught within the exclusion: Wallaby Group Ltd v QBE Insurance (Australia) Ltd [2010] HCA 9; (2010) 240 CLR 444 at [7].

328. QBE submitted that the exclusion is clear in grammar and expression and means that cover for any liability which arises from the use, ownership or operation of a motor vehicle which is registered or required to be registered is excluded: clause 5.20(a).

329. It is to be recalled that ENG, the insured, owned the Trailer which was registered and which was being used to transport the loaded Container.

330. I accept that clause 5.20(a) excludes any claim of the kind made upon QBE by ENG, subject to the exception articulated in clause 5.20(c) of the Policy. It is necessary to consider the terms and meaning of that exception clause which may operate to limit the exclusion in clause 5.20(a) of the Policy.

331. It can be readily seen that the words in clause 5.20(c)(ii) have no relevance upon the facts to the present issue. The sole question is that posed in clause 5.20(c)(i), namely that exclusion does not apply to:

1. claims for personal injury; and

2. the CTP policy does not indemnify ENG with respect to the claims.

332. The claims made by ENG upon QBE are for indemnity with respect to the personal injury suffered by the plaintiff. This was not challenged. QBE submitted that the claims against ENG did not fall within the “exception” in clause 5.20(c)(i), and therefore the exclusion applied because the Prime Mover and Brown or its driver were indemnified under Zurich’s CTP policy.

333. To the extent that ENG’s claim for indemnity arose out of its own negligence, which did not include the negligent conduct of Brown, QBE submitted that if one of two causes of liability (here Brown’s negligence) is subject to the exclusion clause in an insurance policy, then normally a policy will be interpreted as excluding liability even if the second cause (here ENG’s negligence with respect to ensuring that the load was secured) falls within the insuring clause: see The Owners – Strata Plan No.68372 v Allianz Australia Insurance Ltd [2014] NSWSC 1807; Wayne Tank and Pump Co Ltd v Employers Liability Assurance Corporation [1974] QB 57 at 69; McCarthy v St Pauls International Insurance Co Ltd [2007] FCAFC 28; (2007) 157 FCR 402 at [80]-[81] per Allsop J (as the Chief Justice then was).

334. In his most comprehensive review of the Wayne Tank principle, Allsop J concluded:

“114.   Once one concludes that, as a matter of construction of the contract, the insurer and insured have agreed that the cover does not extend to any loss caused by a particular cause, and that the loss was caused by that cause, the policy’s lack of response can be seen as evident.  It is only if one concludes that the parties have agreed that the policy will not respond if the excluded cause must be the sole cause, for the existence of a concurrent and not excluded cause to be relevant. Again this is a question of construction of the policy.”

335. It is therefore necessary to pay careful attention to the wording of the Policy and, in particular, to clause 5.20. The Policy is described as a “Broadform Liability” policy. It commonly falls within the rubric of a public liability policy. The coverage clause (clause 1.1) indicates that QBE provides cover for ENG’s legal liability to pay verdicts and legal costs in respect of personal injury (and other matters) which happen during the period of insurance. QBE also undertakes to defend ENG against claims which are brought against it. There is a maximum sum for QBE’s liability to ENG.

336. As against this very wide coverage, there are a significant number of exclusions, some of which are conditional. By way of example, clause 5.4 excludes coverage for any contractual liability unless such liability would have arisen notwithstanding the contract. Clause 5.7 excludes claims for personal injury to any employee which arises out of, or in the course of, the insured’s business and any claim in respect of which the insured is indemnified by a compulsory workers compensation policy. There is no “carve out” in this exclusion.

337. Clause 5.14 provides an exclusion for the rendering (or failure to render) professional advice and services. This exclusion is limited by exceptions in a number of ways.

338. One issue is whether the exclusion relates to losses, or perhaps claims, of a particular kind, or else the manner in which liability has arisen. An examination of the Policy relevant here leads to a conclusion that the coverage clause refers to the losses confronting ENG - “… liability to pay all sums …”. That liability may arise from more than one form of conduct. In other words, it may arise through more than one cause. So much is recognised by the “carve outs” to the exclusions in clauses 5.4 and 5.20.

339. The coverage clause and the exclusions are expressed in very similar terms to those considered in Wayne Tank, and also the McCarthy case. It is not without significance that the first basis for an exclusion in this case is expressed in quite wide terms – “… liability in respect of personal injury …” arising out of the ownership by ENG of a vehicle which is registered or required to be registered. The carve-out in its terms does not refer to registered vehicles, but rather to the compulsory liability policy described in clause 5.20(b). The use of the word “that” in conjunction with “compulsory liability policy …” in clause 5.20(c)(i) seems apt to refer only to clause 5.20(b) and not clause 5.20(a). Other carve outs refer to the clause 5.20(a) exclusion: see clause 5.20(e) for example.

340. It follows from this textual analysis of the Policy that each of the exclusions in clauses 5.20(a) and 5.20(b) are to be treated separately. That conclusion derives from the use of the word “or” between these two clauses. Only one of those clauses refers to compulsory insurance policies – clause 5.2(b). Clause 5.20(a) refers only to the fact of registration or obligation to register a vehicle.

341. The Trailer here owned by ENG was required to be registered, and it was. However, it is accepted by the parties that it was not required to be separately insured under the CTP policy contained within the MAC Act. The parties accepted that a trailer which is only capable of being towed is, whilst being towed on a public street, covered for indemnity under the CTP policy issued in respect of the prime mover. This extended coverage does not constitute a policy of the kind described in the exclusion in clause 5.20(b).

342. It follows from this that the exception clause 5.20(c)(i) does not operate, as discussed above, on the exemption in clause 5.20(a). The result of this analysis is that the Policy does not provide any coverage to ENG for the clause with which it is confronted in these proceedings.

343. This conclusion has the effect that since the claims arise from the conduct of both Brown and ENG as tort-feasors, and that each caused the Rollover giving rise to the claim, that application of the Wayne Tank principle has the result that QBE cannot be required to provide indemnity for these particular claims where one cause has been excluded from damages.

344. In those circumstances, the QBE policy does not respond so as to require QBE to indemnify ENG for its negligence in the occurrence of the Rollover and the claims of the plaintiffs arising from that event. Since the Policy does not respond, all of the cross-claims brought against QBE must fail. Leave ought not be granted to Brown to commence or continue proceedings against QBE.

Costs

345. I see no reason why costs should not follow the event. No other submissions were made. The effect of this is that Brown and Zurich ought pay QBE’s costs of their unsuccessful cross-claim. The same order ought to be made with respect to Futurewood’s cross-claim against QBE. However, the parties ought have an opportunity to address the Court on this issue.

Deferred Orders

346. There is no reason why various judgments, the entry of which the Court was asked to defer, cannot now be entered, including those affecting the plaintiffs and the cross-claim between Brown, Zurich and Futurewood.

347. It is appropriate in all the circumstances that the parties have an opportunity to consider these reasons and formulate orders which reflect them.

Orders

348. I make the following interim orders:

1. Direct counsel for all parties to confer and agree upon the Orders necessary to give effect to these reasons including any order for costs.

2. Direct the parties to provide to the Court on or before 4pm Monday 25 February 2019, those agreed short minutes of order, or else the short minutes for which each party contends where agreement is not reached.

3. List the proceedings for further directions at 9.30am on 1 March 2019 for the determination of all outstanding issues, including costs, which are not agreed.

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Amendments

18 February 2019 - Typographical error - cover sheet

Decision last updated: 18 February 2019