Maxwell v GTI International Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2010 0067

MATTHEW MAXWELL

Appellant

v

GTI INTERNATIONAL PTY LTD

(ACN 050 030 585)

Respondent

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JUDGES	ASHLEY, MANDIE and HANSEN JJA
WHERE HELD	MELBOURNE
DATE OF HEARING	8 November 2011
DATE OF JUDGMENT	22 December 2011
MEDIUM NEUTRAL CITATION	[2011] VSCA 448
JUDGMENT APPEALED FROM	GTI International Pty Ltd v Maxwell (Unreported, County Court of Victoria, Judge Kennedy, 7 May 2010)

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INSURANCE – Commercial motor vehicle policy – Exclusion clause – Applicable where vehicle operated in unroadworthy or unsafe condition which would normally and reasonably be detected by insured and condition contributed to event – Truck and trailer crashed into embankment following brake failure on steep descent – Trailer had one missing brake – Remaining five trailer brakes poorly adjusted – Whether missing brake contributed to event – Respondent knew brake missing – Uncontradicted expert evidence that missing brake contributed to event – Relationship to other contributing matters – Judgment for insurer.

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Appearances:	Counsel	Solicitors
For the Appellant	Mr R P Gorton QC with Mr D McWilliams	CLS Lawyers
For the Respondent	Mr I W Upjohn	GK Law

ASHLEY JA:

I agree with Hansen JA, whose reasons I have had the advantage of reading in draft, that the appeal should be allowed, and that there should be judgment for the appellant.

The unit comprising the prime mover and the trailer was operated in an unroadworthy condition at the time of ‘the event’ because the left brake on the front axle of the trailer had been removed. It was also, in my view, operated in an unsafe condition, because it was laden at the time of the catastrophe, whereas Mr O’Loughlin had given advice that, after removal of the brake assembly, it was safe for unladen travel. His advice implied that it would be unsafe to travel with it laden.

Clause 3.23 refers to the unroadworthy or unsafe condition being ‘normally or reasonably detected by’ the insured. It would not be sensible to read that provision as excluding an insured’s actual knowledge that the vehicle was in such a condition. Here, although the judge made no finding whether the respondent knew about the missing brake, it is inconceivable that the driver brought the removed parts back to Melbourne in the tool box of the trailer, and yet that the respondent – by its principal, Mr Pang, and its manager, Mr Cooney – remained ignorant that there was a missing brake assembly for more than two months after its removal.

The only question which remains is whether the appellant established that the ‘event giving rise to the loss, damage or liability’ was ‘contributed to’ by the vehicle being operated in the unroadworthy (and, I would say, unsafe) condition constituted by the brake assembly having been removed. I say ‘the only question’ assuming, for purposes of argument, that the want of safety constituted by the other brakes being in a poor state of repair was not ‘normally and reasonably’ detectable by the insured.

On that assumption – (1) the contribution, if any, made by the missing brake to ‘the event’ must take account of the fact that the other brakes were in a poor state of repair; but (2), the unsafe condition created by the poor state of the other brakes is not to be treated as a circumstance which could independently trigger the operation of clause 3.23.

In cases of alleged multiple conjunctive causal factors, application of the ‘but for’ test is apt to create difficulties.[1] In such cases, the concept of material contribution to an event is important in the analysis of cause and effect.
[1]March v E & MH Stramare (1991) 171 CLR 506, 516-517 (Mason CJ), Amaca Pty Ltd (Under NSW Administered Winding Up)v Booth and Anor [2011] HCA 53, [70] (Gummow, Hayne and Crennan JJ).

In this case, the ‘event giving rise to the loss, damage or liability’ was, I think, the incapacity of the mechanical braking system of the prime mover and trailer to stop or sufficiently slow the unit so as to avoid the collisions which occurred, the last of which was the unit striking the embankment of the arrestor bay. There was a body of expert evidence that the missing brake assembly contributed to that event, in circumstances where the other brakes were in poor repair. That opinion was understandable. It would be illogical to treat the missing assembly as just one of twelve – that is, six on the prime mover and six on the trailer – and so of minimal account. The other eleven brakes were present, and most of them had some capacity to arrest the unit’s travel. Obviously, that could not be said of the missing assembly.

Next, it is not to the point that, if the other brakes had been in good repair, the event would not, or might not, have occurred. Nor is it to the point that, it might be speculated, had the missing brake assembly been in situ, it would, or might, also have been in poor repair. The concrete circumstances were that the mechanical braking system was incapable of stopping or sufficiently slowing the truck because one brake assembly was missing and the others were in poor repair.

If one was to begin by excluding the missing brake as a contributor to the event, it would be possible, no doubt, to sequentially consider and exclude as a contributor each brake which was in poor repair – and thus demonstrate that neither the missing assembly nor any of the defective brakes contributed to the event. I could not accept that the application of causation principles would permit such

an outcome.

In my opinion, the evidence compelled a conclusion that the event was contributed to by the missing assembly.

MANDIE JA:

I have had the benefit of reading in draft the judgment of Hansen JA. It is uncontestable that, because of the missing brake on the trailer, the respondent’s vehicle was operated while in an unroadworthy condition. Further, the uncontradicted evidence was that the respondent knew of the missing brake and hence of the unroadworthy condition. The only question is whether this unroadworthy condition ‘contributed to the event giving rise to the loss, damage or liability’. I agree that, for the reasons stated by Hansen JA, the evidence at trial clearly proved that the missing brake did contribute to the event giving rise to the relevant loss, damage and liability. Accordingly, I agree that the appeal should be allowed.

HANSEN JA:

The question in this appeal is whether a judge in the County Court was correct in deciding that an exclusion clause in a commercial motor vehicle insurance policy did not apply to exclude a claim by the insured for indemnity in respect of loss or damage sustained to a prime mover and associated trailer insured under the policy.

The appellant, who was the defendant below, was sued as representing underwriters who agreed by the policy to indemnify the respondent, who was the plaintiff below, against any loss, damage or liability to a prime mover registered number UAN 093 (formerly TFC 056) and a trailer registered number VT 76 FP, the property of the respondent, arising from accidental causes in the period 30 September 2005 to 30 September 2006. Section 3 of the policy provided that the

insurers would not pay for any loss, damage or liability if:
3.23 Un-roadworthy vehicles
Your vehicle was operated while in an unroadworthy or unsafe condition which would be normally and reasonably detected by You and this condition contributed to the event giving rise to the loss, damage or liability.

On 17 April 2006 the prime mover with the trailer attached was being driven in the course of the respondent’s business by a contractor, David Norman Bates, on a steep descent on the South Eastern Freeway in the Adelaide Hills, heading towards Adelaide, when it collided with three cars and finally entered an arrestor bay where it struck the embankment at the end thereby bringing the vehicle to a stop.

The respondent made a claim under the policy for the amount of the loss and damage sustained to the prime mover and trailer plus towing costs, and damage to the three third party cars. The appellant having refused indemnity, the respondent sued to recover the claimed loss and damage.

The case was conducted on the basis that the appellant admitted the amount of the respondent’s claim in respect of the prime mover and trailer but contended that in the circumstances the exclusion clause was engaged and applied so as to preclude the appellant’s liability to pay the claim. Hence, the appellant had the conduct of the case and, as was conceded at trial and in this Court, bore the onus of establishing that the exclusion clause so applied.[2]
[2]Trickett v Queensland Insurance Co [1936] AC 159, 164; Bashtannyk v New India Assurance Co Ltd [1968] VR 573, 575.

In alleging, in its Further Amended Defence, that the respondent’s claim was excluded by cl 3.23, the appellant alleged that the trailer was in an unroadworthy and unsafe condition on or about 17 April 2006, that that condition was known to the respondent, and caused or contributed to the claimed loss, damage and liability.[3] Two matters should be noted. First, notwithstanding the plea of knowledge, the case was conducted on the basis of what the respondent knew or ought to have known. Secondly, the unroadworthy and unsafe condition lay in the trailer but affected the overall vehicle constituted by the prime mover and trailer.
[3]Paragraph 4(d).

It was further alleged that the respondent had failed to advise the appellant that the prime mover and trailer were being driven while in an unroadworthy condition, that the respondent had failed to properly maintain the prime mover and/or trailer, and that the respondent was or ought to have been aware that the prime mover and/or trailer were unroadworthy and not fit for use on the road.[4]
[4]Paragraph 4(f).

The appellant’s case focussed and relied on the following two matters pertaining to the braking system on the trailer. First, that there was no brake on the left front axle, the brake having been removed due to it having been found to be in a defective condition. Secondly, that the other brakes on the trailer were in a state of poor adjustment. These matters, separately or in combination, contributed to or caused the event. In considering whether they did contribute to the event, the judge stated that she was:

… guided by the general statements of principle in March v E & MH Stramare Pty Ltd[5] bearing in mind that the court is concerned with the concept of ‘contribution’ in this case. This approach suggests that the relevant question is whether the [appellant] has shown that the disconnection of the brake was so connected with the accident that, as a matter of ordinary common sense, it should be regarded as contributing to it.[6]

In this Court it was conceded that the judge was correct to have approached the matter of ‘contribution to the event’ in that way.

[5](1991) 171 CLR 506.

[6]Reasons, [39].

The judge concluded that the appellant had failed to establish that the above matters had ‘contributed to the event’ and, in consequence, ordered the appellant to pay the respondent’s damages of $117,258.98 with interest of $40,000, and costs. No order was made in respect of the loss and damage sustained in respect of the three third party cars, that aspect being left to be dealt with by the parties in accordance with the judgment.

For the reasons that follow, the appeal should be allowed, the judgment and orders below set aside and in place thereof there should be judgment for the appellant with costs.

Evidence

The appellant called two witnesses to give evidence of an expert opinion nature concerning the operating condition of the prime mover and trailer at the time and, as to any relevant condition found, the contribution thereof to the event. Those witnesses were Christopher Andrew Graham and Shane Andrew Richardson. Mr Graham had been a qualified motor mechanic since 1977 and was employed as a vehicle examiner attached to the Technical Support Group, Major Crash Investigation Unit in the South Australian Police Force. In that capacity, on 17 April 2006 he attended at the arrestor bay where he viewed the prime mover and trailer where they had come to a stop having struck the embankment, and on the following day, following its removal to a location where it could be safely examined, he conducted an examination of the vehicle. He prepared a written report of what he found; those findings were not challenged and the case was conducted on the footing they were correct. In his report he also set out his conclusions and opinion as to the contribution to the event of the matters he found.

Dr Richardson was a mechanical engineer with expertise in accident reconstruction and vehicle structural engineering, and had conducted in excess of 450 collision, incident and failure investigations for vehicles and equipment of a wide variety. He had not inspected the prime mover and trailer but had prepared a report in which he expressed his opinion as to the cause of the collision based on his review of the material provided to him. That material included Mr Graham’s report, the findings and opinions of several investigators, and opinions of a Mr Bruce Field[7] an expert retained by the respondent (but who the respondent did not call). Dr Richardson’s report, with the references to the views and opinions of others was tendered on the basis that facts stated were admissible but not the opinions of the other persons referred to in the report.
[7]Also referred to as Professor Field in the judge’s reasons.

There was no challenge to the qualification of Mr Graham or Dr Richardson to give their evidence as an expert, nor was any challenge made to their credit.

The appellant called two other witnesses, as follows. Salvatore Dennis O’Loughlin and Barry Gordon Souter. Mr O’Loughlin was the director and owner/operator of Sal’s Mechanical Repairs Pty Ltd (‘Sal’s’) which conducts business at Browns Plains in Queensland. Mr Souter worked for the respondent as a contractor performing interstate driving work between 2004 and around February 2007. In summary their evidence amounted to this. In February 2006 Mr Souter drove a prime mover with the subject trailer attached to Brisbane. En route he became aware of a problem with the left front wheel on the trailer and on inspection noted that one of the slack adjusters had moved from the pin and gone inside the drum. He called Christopher Gerard Cooney, an employee of the respondent with administrative functions, who advised that he take the trailer to Sal’s and get it fixed. He did that and Sal’s performed work on the brakes. He could not recall if Sal’s gave instructions about driving back to Melbourne or anything he should do, but he did return to Melbourne with the trailer which he dropped off at TopStart Trailers.

Mr O’Loughlin deposed that on 10 February 2006 Mr Souter brought in the subject trailer stating that the left front brake was locking up and overheating. On inspection the brake was found to be totally damaged and unrepairable. Mr Souter then contacted the respondent and advised Mr O’Loughlin to make the truck safe and put all the parts in the toolbox so the trailer could be taken to Melbourne because it was under warranty. Mr O’Loughlin did as requested and removed the affected parts, with the consequence that the brake was not operational, and the wheel was safe to get back to Melbourne. He advised Mr Souter that the trailer was safe to be driven back to Melbourne provided it was unladen.

Mr O’Loughlin further deposed that in the week prior to 10 February he had adjusted the brakes on the trailer. An invoice dated 3 February 2006 to the respondent refers to that work.

Prior to the events on 17 April 2006 a brake was not fitted to the front left wheel of the trailer.

Three witnesses gave evidence for the respondent, Richard Chun Pang who was the director of the respondent, Mr Cooney and Mr Bates. Mr Cooney continued to work for the respondent.

In view of the more limited issues on this appeal it is not necessary to set out the evidence of Mr Pang and Mr Cooney. Much of it concerned the question whether the condition of the poorly adjusted brakes should have been normally and reasonably detected by the respondent. The judge’s decision on that issue does not arise for determination on the appeal.

Mr Bates deposed that he had held a licence to drive a prime mover and trailer for around 30 years but had not driven such a vehicle for six or seven years when he commenced working for the respondent as a contractor in February 2006. That employment ended with the collision on 17 April 2006.

Mr Bates deposed that he left Melbourne for Adelaide on 16 April 2006, the trailer being loaded with 19.5 tons of car parts. The night before he left Melbourne he connected the prime mover to the trailer and performed a tug test to see if the brakes were all working. His evidence indicated that he performed a ‘rolling’ tug test.

It is to be noted that Mr Graham and Dr Richardson gave evidence as to the matter of tug tests, the purpose of which is to ensure that the trailer is properly attached to the prime mover and that the trailer brakes are operating effectively. There are two types of tug test, the rolling tug test being one of them. It was not Dr Richardson’s preferred method. Mr Souter and Mr Cooney also gave evidence on the matter. It is to be noted that Mr Bates’ description of what he did in purportedly performing a tug test was not put to Mr Graham or Dr Richardson for their comment or opinion as to whether it constituted due performance of such a test. Nor was Mr Bates cross-examined as to the detail of what he did in performing the tug test with a view to comparing it to the requirements of proper practice deposed to by Mr Graham and Dr Richardson.

Anyway, on 16 April Mr Bates set out on the trip to Adelaide, stopping for the night at Ararat. He did not disconnect the prime mover from the trailer. The next morning he resumed his journey without undertaking a tug test.

He deposed that when he reached the top of the Adelaide Hills, and saw the flashing sign with the suggestion to adopt a lower gear he slowed down and changed gears, he thought to about gear 13 (out of 18) (which meant the engine brake was on). Proceeding down the hill, he started to gain speed so he tapped the foot brakes which slowed the truck down a little bit. He then started to gain speed, so he slightly pushed on the brake pedal again and it slowed down a little bit more, and changed down to a lower gear. He did not know to which gear; it was about a gear lower than 13. He again gained further speed and attempted to apply the brakes which did not slow the truck down. He tried to change down gears but could only get into neutral. He continued down the descent, weaving in and out of cars unaware of striking any and going ‘faster and faster’, and drove into the last run off before the intersection at the bottom of the hill, stopping when the prime mover hit the cliff face at the end of it.

Mr Bates said that prior to commencing the descent he did not believe that the brakes were not working, and he did not know that the left front trailer brake was missing. Further, the brakes had operated satisfactorily ‘all the way’.

The judge found that Mr Bates was an honest witness. If Mr Bates’ credit, or the reliability of his evidence, was in issue, it seemed to be as to his awareness of the operating condition of the brakes and the frequency and manner of performing a tug test. But he was not strenuously tested in cross-examination, and the appellant did not challenge the judge’s finding that he gave evidence honestly.

Expert evidence

At this point it is convenient to refer to Mr Graham’s and then Dr Richardson’s reports, leaving reference to their oral evidence until later.

In his report Mr Graham dealt separately with the prime mover and the trailer, as to each setting out his findings concerning the condition of the brakes in particular but also as to some other matters, and concluding with his opinion as to whether any mechanical defect or condition would have contributed to or caused the collision. The answer was ‘no’ in relation to the prime mover but ‘yes’ in relation to the trailer. That explains why the appellant’s pleaded case was confined to the trailer, and that the case was conducted on that basis.

Nevertheless it is useful to understand the braking system on both the prime mover and the trailer. A full air mechanical brake system was fitted to each. The judge described the brake system as follows:

17.Briefly the vehicle operated with two types of brakes; the engine brakes and the service brakes.
18.The engine brakes retarded the progress of the vehicle by turning the engine into a compressor. The [appellant] did not rely on any defect in this system although the evidence suggested that it was essential for this system to work that a driver select an appropriate gear prior to commencing any descent.
19.The service brake consisted of a number of different components: an actuator rod, slack adjustor arm, ‘S-cam’, brake shoes and drum. As explained by Mr Graham, in order for the service brake to be effective, the actuator rod needs to move out and push the slack adjustor arm which then rotates a shaft and turns the S-cam where brake shoes are resting. The brake shoes then expand against the brake drum which creates friction in the brake drum and retards the progress of the wheel.
20.Because the brake components wear there needs to be adjustments to the linkages to ensure that, as the actuator rod is operated, the brake material still engages onto the brake drum so that it can work effectively. In this case Mr Graham described a ‘maximum working stroke’ of 51 millimetres as the distance the actuator rod should travel. Beyond this amount, brake efficiency is decreased and once the ‘maximum stroke’ is reached of 64 millimetres there is in fact no braking at all. He also explained the importance of the brake actuator rod to slack adjustor arm being correctly adjusted at 90 degrees. Thus, the further the actuator rod travels past the 90 degrees point the more application force is required by the brake actuator to apply the brake shoes.

Mr Graham recorded that the prime mover had three axles, a steer axle with two tyres and brakes, and two drive axles (front and rear) each axle having four tyres (two on each side) and brakes. That is a total of six brakes. Mr Graham found that the brake components were correctly fitted but that the actuator push rods to both drive axle groups were past the maximum working stroke of 51 mm, but not to the maximum stroke of 64 mm. Therefore, Mr Graham concluded:

I formed the opinion that the prime mover was in poor condition prior to the collision, however I could find nothing mechanically wrong that would have contributed towards or caused the collision.

Mr Graham then turned to consider the trailer. The trailer had three axles, front, centre and rear, each axle having four tyres (two on each side) and brakes. Again, that is six brakes, making a total of 12 on the vehicle overall. Mr Graham commenced with observations concerning the brake system, then recorded his findings on each axle and stated his conclusions.

Commencing with the brake system, he noted that on examination at the scene he observed that all brake actuators were in the fully applied position. He pressurized the air tank, but found he could rotate the left front wheel assembly of the front axle and all wheels of the centre axle. He noticed that most brake components were missing from the left side of the front axle.

Mr Graham then recorded his findings as to each axle. It is useful to set this out as it aids in more fully understanding the judge’s description quoted above, and Mr Graham’s ultimate opinion. He noted that each axle brake group was fitted with type 24/30 actuators. That type of actuator contained two chambers, the front chamber being part of the main brake system and the rear chamber being part of the park/emergency/maxi brake system. After noting the mechanics of operation of these systems, he noted that the front chamber operated independently from the rear chamber; it operated when the footbrake treadle valve was pushed and system air pressure entered the actuator chamber via other controlling service valves. On the 24/30 actuators the maximum working stroke was up to 51 mm, however the maximum stroke was 64 mm.

On a static brake test of the front axle Mr Graham measured the brake actuator rods in the fully applied and released position by using the auxiliary handbrake valve. He noted that the right brake actuator push rod moved out in total length by 55 mm, and that the brake shoes on the right side were fully engaged against the brake drum, however the slack adjustor angle was beyond the 90 degrees to the actuator push rod. As to this, the further the actuator rod travels past the 90 degree point the more application force is required by the brake actuator to apply the brake shoes. He noted that the air system to the front axle group was operating correctly, however the right actuator rod exceeded the effective brake push rod stroke of 51 mm. And, while the brake shoe material was missing on the left side, 14 mm of brake material was measured for the right side. In his opinion there ‘was not sufficient brake material to the front axle and both brake actuator push rods when applied travelled past the maximum working stroke. The front axle was in poor condition.’

As to the centre axle, on the static brake test the brake actuator rods were measured in the fully applied and released position. Mr Graham noted the left brake actuator push rod moved out in total length by 58 mm and the right brake actuator rod by 60 mm. He noted that the brake shoes on both sides appeared to be engaged against the brake drums, however the wheel could be rotated. Both slack adjuster angles were pushed beyond the 90 degrees to the actuator push rod. The axle group was functioning and operating correctly, however both actuator rods exceeded the effective brake push rods stroke of 51 mm. Mr Graham concluded that there was sufficient brake material to the centre axle, however the brake actuator push rods when applied travelled past the maximum working stroke. The centre axle was in poor condition.

Mr Graham then recorded his findings concerning the rear axle. Again he measured the brake actuator rods on the static brake test and found the left brake actuator push rod moved out in total length by 55 mm and the right brake actuator rod by 58 mm. He noted that the brake shoes on both sides were engaged against the brake drums, however the slack adjustor angles were pushed past the 90 degrees to the actuator push rod. Again, the axle group was functioning and operating correctly but both actuator rods exceeded the effective brake push rod stroke of 51 mm. As with the centre axle, Mr Graham concluded that the rear axle had sufficient brake material, however the brake actuator push rods when applied travelled past the maximum working stroke. The rear axle was in poor condition.

Mr Graham then concluded as follows:

The trailer brake system was in extremely poor condition. The front axle left side brake components were missing and the centre axle wheels could be rotated when the brake system was fully applied. The rear axle right brake actuator rod was to the maximum stroke and the left side was 3 mm off.
The brake efficiency for the trailer would be very low and the prime movers brake system required to be adjusted therefore I formed the opinion that the trailer was in poor condition prior to the collision and I did find a mechanical fault that would have contributed towards or caused the collision.

In her judgment her Honour recorded that Mr Graham’s explanation of the braking system of a truck, and of the conditions he found on inspection, were not contested. So much is evident from the transcript.

In his report Dr Richardson expressed the following opinions. First, as to the trailer, it was:
·Not in a roadworthy condition, due to the missing brake on the front left axle.
and
·The slack adjusters on the first, second and third axles were past the maximum working stroke (refer to Mr Graham’s report). This poor status of the trailer brake adjustment was seen in the lack of effective braking when air was disconnected whilst the trailer was being towed away (refer to Mr Harber’s interim report). The maintenance of the trailer was poor, such that, in the author’s opinion, the trailer was unsafe as it was not effectively braking prior to the collision.
Then, as to the matters that caused or contributed to the collision:
11.3 Cause of the Collision
It is the author’s opinion that the collision was caused and/or contributed to, by:
1.Mr Bates descending the decline in an inappropriate gear. As such, the exhaust brake on the prime mover was ineffective in retarding the truck.
2.The service brakes on the truck (prime mover and trailer), if adjusted and maintained correctly, should have been sufficient to allow the driver to control the vehicle, especially given that the vehicle was not fully loaded.
3.The truck being unroadworthy due to the removed brake on the front left axle of the trailer.
4.The truck being unsafe due to the poor adjustment of the slack adjustors on the drive axles of the prime mover and all the axles (front, middle and rear) of the trailer.
It is the author’s opinion that:
·The poor maintenance status of the slack adjustors on the truck (prime mover and trailer) directly contributed to the driver’s inability to control the speed on the truck upon selecting too high a gear to descend the decline.
·If the truck (prime mover and trailer) had correctly adjusted brakes the driver would have been able to control the speed of the truck such that the collision should have been avoided.
·It was identified that one brake of twelve was removed on this truck (prime mover and trailer). It has been presented that the absence of one brake, in itself, would not cause and/or contribute to this type of collision (refer to Mr Field’s report). The author would agree with Mr Field’s premise, if the remaining eleven brakes were correctly adjusted prior to the collision. Mr Graham’s analysis, however, demonstrates that:
oThe brakes on the prime mover were beyond the maximum working stroke on the drive axles;
oAll of the brakes on the axles (front, middle and rear) of the trailer were past the maximum working stroke.
The evidence collected by Mr Graham does not support the premise by Mr Field that the remaining eleven brakes were correctly adjusted.
It is the author’s opinion, that the eleven brakes on this truck (prime mover and trailer) were not adjusted correctly prior to the collision. Therefore, the driver was unable to use the service brakes to stop the truck. Hence, the condition of the brakes caused and/or directly contributed to the collision.
The case at trial

As mentioned earlier, the appellant relied on the two matters of the missing front left brake and the poorly adjusted condition of the other brakes on the trailer, either alone or in combination, to engage the exclusion clause. As to each matter, the appellant submitted to the judge that cl 3.23 was satisfied because:

1.Missing brake: the removal of the front left brake on the trailer rendered the vehicle (meaning the prime mover and trailer combined) unroadworthy and/or unsafe, the respondent knew that the brake had been removed, and its absence contributed to the occurrence of the event.
2.Poorly adjusted brakes: this condition rendered the vehicle unroadworthy and/or unsafe due to the poor adjustment of the trailer brakes. The respondent could reasonably and normally have detected that condition, which condition contributed to the event.

The respondent submitted that cl 3.23 was not engaged because:

1.Missing brake: while conceding that this rendered the vehicle unroadworthy, the respondent denied that it rendered it unsafe, and ‘strongly disputed’ that the condition contributed to the event. The respondent also ‘contested’ that the condition would be ‘normally and reasonably detected’ by it, relying in this respect on evidence of Mr Pang and Mr Cooney.
2.Poorly adjusted brakes: while conceding that the poorly adjusted brakes rendered the trailer unsafe, the respondent denied that that condition contributed to the event. The respondent further denied that the lack of adjustment would have been ‘normally and reasonably detected’ by it.

The judge’s decision

The judge decided the case along the lines submitted by the respondent. She first considered the case based on the missing brake, then considered the case based on the poorly adjusted brakes, and then considered the case based on a combination of those matters. Accordingly, reference to her Honour’s reasons commences with the matter of the missing brake.

Missing brake

The judge commenced the discussion of this matter by noting that the respondent accepted that the disconnection of the front left brake rendered the trailer unroadworthy although not that it also rendered it unsafe. While noting that it was therefore necessary to consider the other limbs of cl 3.23, her Honour turned to consider whether the missing brake contributed to the accident without first considering whether the missing brake was a condition which would be normally and reasonably detected by the respondent. Proceeding in that way her Honour concluded that the appellant had not established that the missing brake contributed to the accident and it was therefore unnecessary to consider the element of normal and reasonable detection. Hence, her Honour neither discussed nor made any finding upon that latter element.

Her Honour approached the matter by discussing in turn evidence of Dr Richardson, Mr Graham and Mr O’Loughlin and then concluding upon the matter. Commencing with Dr Richardson, her Honour noted that in his report he opined that the absence of the brake meant the trailer was ‘not in a roadworthy condition’ whereas the lack of adjustment to the brakes meant the trailer was ‘unsafe’, and that he confirmed this distinction in cross-examination. Her Honour then referred to certain evidence of Dr Richardson given in his examination in chief in which he explained why the missing brake on the front left axle meant the trailer was not in a roadworthy condition. He explained that there was a requirement not only that there are brakes, but that the brakes operate evenly so that the vehicle will pull up in a straight line. By removing one brake from one side you can be out of balance so that instead of braking in a straight line, the vehicle starts to swerve because one side is more retarded than the other. Her Honour noted that Dr Richardson later described the problem as not providing a ‘longitudinally balanced effect on the trailer’. Her Honour then said:

44.Significantly then the effect of the removal of a brake was on the manner in which the truck stopped and not whether it stopped at all. Consistently with this, Dr Richardson said that one option was that the brakes could have been removed altogether from both the left and right side of that front axle. In that case, as long as the truck was able to be retarded effectively it would have been in a roadworthy condition.
45.Despite this, at one point in his written report, he opined that the collision was caused and/or contributed to, by a number of causes, which included the fact that Mr Bates descended in an inappropriate gear and also the maladjustment of the service brakes. He also makes mention of the removed brake on the front left axle of the trailer. However, he then went on to agree with the opinion which he ascribed to Professor Field, that the absence of one brake, in itself, would not cause and/or contribute to this type of collision ‘if the remaining eleven brakes were correctly adjusted prior to the collision’ (emphasis added).
46.He ultimately concluded (at page 33);
‘It is the author’s opinion, that the eleven brakes on this truck (prime mover and trailer) were not adjusted correctly prior to the collision. Therefore, the driver was unable to use the service brakes to stop the truck. Hence, the condition of the brakes caused and/or directly contributed to the collision.’ (emphasis added).

47.Under cross-examination Dr Richardson accepted that it is likely that the front left brake, had it been connected, would have been equally out of adjustment as the other brakes. He also agreed that if one brake in 12 is missing ‘the difference between 11 properly adjusted brakes and 12 properly adjusted brakes is pretty insignificant and the difference between 11 badly adjusted brakes and 12 badly adjusted brakes is again pretty insignificant’.
48.Although the evidence of Dr Richardson may suggest some contribution (albeit ‘pretty insignificant’) his answer was not tied to the particular accident which concerns the court. Moreover, when regard is given to his evidence as to the actual effect of a missing brake no contribution effect is established. Thus there is nothing to suggest that the driver braked ‘non-longitudinally’. Rather the problem was that the vehicle did not stop at all.

Her Honour then referred to evidence of Mr Graham as follows:

49.In his (undated) report, Mr Graham concluded that the brake efficiency for the trailer would be very low and the prime movers brake system required to be adjusted therefore he ‘formed the opinion that the trailer was in poor condition prior to the collision and I did find a mechanical fault that would have contributed towards or caused the collision’ (emphasis added).
50.Although the paragraph above this extract cites the missing components on the front left axle, the report does not clearly isolate the ‘mechanical fault’ which contributed to the collision as being the missing brake.
51.Further, notwithstanding that he appeared to disagree that one or two brakes was not ‘of huge significance’ in oral evidence, Mr Graham did not say precisely how the missing brake would have actually contributed to the accident on the facts before this court.
52.Mr Graham also agreed that there was no reason why, if the left front trailer brake was connected, it would not have worn itself out similarly. Such evidence was consistent with the evidence of Dr Richardson, above.
53.Overall, the evidence of Mr Graham was more about what he found and observed and did not establish that the missing brake of itself contributed to the accident.

Finally, her Honour referred to evidence of Mr O’Loughlin stating that he agreed that if one brake was not working the rest of the brakes on the trailer and prime mover should provide adequate braking force.

The judge then decided the issue as to whether the missing brake contributed to the event, on the following reasoning:

Resolution
55.The ‘but for’ test does not of itself establish causation but may be used as a negative test. The evidence does not establish that the accident would not have happened if the single brake was connected. No-one suggested that this heavy vehicle would have been able to stop in such circumstances. Indeed, there was positive evidence that the extra brake would not be effective since it was likely to be in similar condition to the other brakes.

56.Moreover, on the evidence before the court, the accident occurred because the truck was unable to stop which meant that it ultimately ran into an embankment at the end of the arrester bay. There was no suggestion that the missing brake ‘contributed’ to this event given Dr Richardson’s evidence as to the effect of the missing brake. Thus there was nothing to suggest that the truck did not ‘brake in a straight line’ or that it swerved to one side. To the contrary, there is some suggestion in Mr Bates’ evidence that he was able to weave ‘in and out’. The basic problem, though, was that the truck did not stop at all.
57.When regard then is given to the nature of the accident and the effect of having a missing brake, the evidence does not establish that the missing brake, as a matter of common sense, contributed to the accident. There is simply no nexus established between the missing brake and the truck’s failure to arrest.
58.Even when the broader concepts cited by the defendant are employed, I am also not satisfied, on the balance of probabilities, that the missing brake ‘added its measure’ so that it was ‘part of the cause’ nor even that the accident has ‘its foundation’ in the missing brake or ‘springs’ from it. Again, the evidence does not suggest that the truck failed to ‘brake in a straight line’ rather that, after working twice, the service brakes simply failed altogether.
59.It follows that the defendant has not established that the ‘contribution’ element required by the exclusion clause applies in relation to the missing brake. It is therefore unnecessary to consider whether or not the missing brake condition would be normally and reasonably detected by the plaintiff.

Poorly adjusted brakes

As mentioned earlier, on this aspect the judge limited her consideration to the normally and reasonably detected element of cl 3.23. The appellant’s case was that such detection would or ought have occurred if the respondent had had in place an effective preventative maintenance programme for its vehicles, as well as driver awareness and reporting, and if a proper tug test or tests had been performed. All this rested, of course, on the evidence.

On the first matter of a maintenance programme, her Honour referred to evidence of Dr Richardson and Mr Graham, and concluded that it did ‘not clearly establish’ that the poor adjustment would have been normally and reasonably detected prior to the collision. It should immediately be noted that this conclusion was not challenged on appeal.

The judge then turned to the tug test and to the evidence of the experts that the problems with the brakes should have been identified by a tug test properly performed. As against that, however, was the evidence of Mr Bates as to having performed a tug test. The judge noted that the appellant submitted that Mr Bates’ evidence should be rejected and/or it should be found that Mr Bates had not conducted the test properly. As to that, her Honour stated that she:

76.… generally found Mr Bates to be an honest witness and [was] not prepared to reject his evidence as to the undertaking of the tug test. Although there were some gaps in his recollection relating to the traumatic events surrounding the actual accident, this is perfectly understandable given the high stress he must have been under at this time. Moreover, he was forthcoming in conceding that he did not do the test again on departing from Ararat.
77.There was also no reason to find that the did not conduct the test properly. Although he had not been driving for some time (as emphasized by the defendant) he had worked as a driver (albeit ‘on and off’) for some 30 years. There was no reason to reject his evidence that he conducted the test properly particularly given it was in his interests to do so. The viability of the brakes during the tug test is also corroborated by the initial operation of the brakes (twice) at the start of the Adelaide Hills descent.
78.The evidence of the experts must thereby be considered in the light of what actually happened which is that a tug test was conducted shortly prior to the accident which did not identify the relevant condition.

Her Honour then found and concluded as follows:

79.Although Dr Richardson and Mr Cooney suggested that the test be performed daily, there was also conflict in the evidence as to whether this was really so. Thus, Mr Souter suggested it was only necessary when the trailer was first hooked up. Even Mr Graham appeared to suggest that it only should be done every time the driver connects to a new trailer. He then described the ‘good working practice’ of doing it after a period of rest but this only appeared to be directed at circumstances wherein vehicles have been tampered with. Mr Richardson also fairly conceded that he was not aware of any requirements/recommendations given to drivers when they go for a heavy vehicle licence.
80.The evidence did not clearly establish that the ‘tug test’ should have been utilised ‘normally and reasonably’ to detect the defect in this case.
81.Moreover, the evidence does not even establish that an extra tug test at Ararat would have detected the defect in any event. As indicated already, the evidence does not establish when the brakes actually went out of adjustment.
82.Accordingly, I am unable to find that a tug test was one of the ways the defect would have been normally and reasonably detected as required by the clause.

Later in her reasons, and by way of summary, the judge stated that the evidence did not establish that an extra tug test (that is, performed at Ararat before setting out to Adelaide) would be ‘normal or reasonable’, or would have detected the condition of the poorly adjusted brakes.

It is to be noted that the appellant attacks these findings as to Mr Bates’ performance of the tug test.

The judge then dealt with a submission of the appellant that a programmed brake inspection regularly conducted would, if the respondent had had such a programme, have resulted in the poor adjustment or other defect being rectified prior to the occurrence of the event. On this matter the judge recorded that the evidence as to use of the vehicle since the last adjustment of brakes on 3 February 2006 was unsatisfactory, and she was not satisfied that the use was such that a service was overdue. More particularly, the evidence did not establish that any service was ‘normally and reasonably’ due such as might have detected the defect. This conclusion is not challenged.

In the light of these conclusions the judge considered it unnecessary to consider whether the poor adjustment of the brakes contributed to the accident.

Combination

The judge then considered, and ruled on, the appellant’s submission that the two matters be considered together, as follows:

101.The clause speaks of a ‘condition’ in singular terms. It is inappropriate in such circumstances to consider the conditions in this case on a collective basis. This is particularly so given if there is any ambiguity, the clause should be strictly construed against the insurer contra proferentem.
102.In any event, on my findings above, there is no suggestion that the two conditions worked together to contribute to this accident. Rather, it is only the singular condition of the poorly adjusted brakes which could have contributed to the accident since the evidence does not establish that the missing brake actually made any contribution to the accident at all. It follows that it can only be the (singular) condition of the poorly adjusted brakes which GTI should have normally and reasonably detected on the presumption (but without so finding) that this condition contributed to the accident. On my findings already, I am not satisfied that this is the case.
103.In these circumstances, the defendant gains no assistance from combining the two conditions.

Submissions on appeal

In his oral submissions the appellant’s counsel narrowed the scope of the grounds of appeal by reducing his attack to the conclusions mentioned above. The appellant’s submissions essentially attack the reasoning as not being open on the evidence or as being simply unsound. On the other hand, the respondent’s counsel submitted that the findings and conclusions of the judge were open and correct. It is unnecessary to elaborate further upon the submissions as they are referred to below to the extent necessary.

Decision

The first thing to note about the judge’s reasons is that they do not deal with the whole case. On the matter of the missing brake the judge bypassed considering whether that condition would be normally and reasonably detected by the respondent. This was a significant matter to pass over, for it was clear on Mr O’Loughlin’s evidence that he informed Mr Souter that until the missing brake was replaced the trailer should not be driven laden. It was to go to Melbourne for repair. A consequence of bypassing the issue was that the judge avoided making findings as to the respondent’s knowledge of the defect and its failure to have the brake replaced. Consideration of this issue would have given rise to considerations relevant to the wider issues of servicing and maintenance programmes and the standard or manner of approach to such matters, which in turn would have related to the issue of ‘detection’ of the poorly adjusted brakes.

Further, the appellant had submitted below that the judge should find that the missing brake rendered the vehicle unsafe. The judge did not consider that issue; all that she did was refer to Dr Richardson’s evidence who distinguished between unroadworthy and unsafe as between the missing brake on the one hand and the poorly adjusted brakes on the other, but without otherwise considering or ruling on the issue.

Counsel for the appellant stated in this Court that there was no issue that the respondent knew that the brake was missing. That may readily be understood in light of Mr O’Loughlin’s evidence and the evident probability that his warning was advised to Mr Cooney or Mr Pang, whose evidence on this aspect was unsatisfactory. It was variously vague, imprecise and incomplete in recollection perhaps due to a lack of record keeping. Again, this matter was not dealt with by the judge as she bypassed the issue of whether the missing brake would normally and reasonably be detected by the respondent. Having considered the evidence, I find that the respondent did know, and had known since February, that the brake was missing.

Then, the issue of the poorly adjusted brakes was dealt with in the converse. The danger in approaching the determination of the case in this way is that sight may be lost of the overall factual context in which to assess satisfaction of the several elements in cl 3.23. I have mentioned the inter-relationship with the second element. The same is true of the third element of contribution. For, by considering that element in relation to the missing brake without also doing so in relation to the poorly adjusted brakes, that is to say how the two factors operated, if at all, as contributions to the event, the judge avoided considering that matter. Yet this was the appellant’s case. It was also how the experts approached the case; they both opined as to multiple contributions, the two respects in which the brakes were defective being two parts of a whole. It is not to the point that one or other of those conditions might not have been normally and reasonably detected. Rather, the point is that the judge did not rule on important aspects of the appellant’s case. This became apparent in the course of argument when questions were raised as to whether and how the poorly adjusted brakes were to be considered in combination with the missing brake. That is, what was the effect of the latter in the context of the other brakes not being properly adjusted? Put shortly, did those other five brakes on the trailer contribute to the event? To that question, counsel for the respondent stated that he made no submission; that was because the judge had not dealt with the issue. As her Honour had not dealt with the issue it was not for counsel to speculate upon it. He submitted that if the court reached the stage of considering that the condition of those brakes contributed to the event, the proceeding should be remitted for re-hearing.

As to that, it is pertinent to note that the notice of appeal seeks that if the appeal is allowed, the proceeding should either be dismissed or remitted for re-hearing by a different judge.

It is, of course, obvious that the judge’s explanation of the event, that the vehicle failed to stop, was hardly a satisfactory response to the case of either party. It was obvious that the vehicle did not stop, the question was whether the matters relied upon by the appellant contributed to the event.

At one point in his submissions counsel for the appellant suggested that the tenor of her Honour’s reasons, exemplified by the expression ‘clearly establish’ in the context of the overall analysis, reflected the imposition of a higher burden of proof than the mere balance of probabilities. Obviously her Honour did not apply the criminal standard and she did not say that she approached the case on a Briginshaw v Briginshaw basis. All that can be said is that the reasons reflect that her Honour set the bar very high as to the establishment of the appellant’s case.

In proof of the appellant’s case the evidence of the experts was critical. As I have said, their credit was not in issue. Mr Graham’s findings were accepted and no contrary expert evidence was led. Furthermore, their evidence could not have been regarded as improbable or suffering from an inherent deficiency such as to affect its reliability. So, how then, was the judge able to reject their evidence that the missing brake contributed to the event? Of course, as mentioned, by the way in which the judge decided the case, she avoided considering whether the poorly adjusted brakes had any interplay in that respect.

Before turning to the judge’s reasons, and the evidence, concerning the missing brake it is convenient to deal with the attack on the judge’s finding about the tug test. While this ruling was reached in dealing with the matter of the poorly adjusted brakes it can be conveniently dealt with now.

In my view the appeal on this aspect must fail. This conclusion is based on the judge’s findings concerning Mr Bates on this issue,[8] and the fact that in cross-examination he was asked whether and when he had performed a tug test but was not pressed or tested as to the detail of what he did to see whether that fell short of that described by Mr Graham and Dr Richardson. That is, he was not cross-examined to establish that he failed to do something which meant that he had not properly performed a tug test. Nevertheless, the appellant submitted that what Mr Bates described was not a tug test, and would not have revealed a defect in the brakes. It was further noted that the precise nature of the tug test performed by Mr Bates had not been put to the experts in cross-examination.
[8]Reasons, [76]-[77].

Understood in this light, the judge’s decision to accept Mr Bates’ evidence, and in particular to conclude that there was no reason to find that he did not conduct the test properly, was not merely open but fair.

I return then to the matter of the missing brake and the judge’s reasons for concluding that the absence of the brake did not contribute to the event. In my view, those reasons did not provide a sound basis for that conclusion, or on which to have rejected, or not acted upon, the opinions of Mr Graham and Dr Richardson.

The first matter relied on by the judge was that the effect of the removal of the brake was on the manner in which the truck stopped and not whether it stopped at all.[9] This finding did not reflect the evidence, properly understood, and was wrong. In his evidence-in-chief, Dr Richardson was asked why the missing brake led to the trailer being unroadworthy. In answer, Dr Richardson stated that there was not only a requirement that there be brakes, but that the brakes operate evenly so that the truck or trailer will pull up in a straight line. It was in that sense – that is, to preserve balance between the brakes – that he referred to removing the brake from the other side of the axle. But this evidence did not constitute a withdrawal by Dr Richardson from his opinion that the missing brake contributed to the event. He made no such statement and was not asked whether he made such a concession. And his evidence was general as to trucks and brakes, and not specific as to what in his opinion happened here. Nor, it might be added, was there evidence that the vehicle swerved when the brakes were applied on the descent. In truth, and on any fair understanding of his evidence as a whole, what Dr Richardson stated in relation to the need for a balanced braking system did not detract from, but was an observation additional to, the fact that the missing brake contributed to the occurrence of the event, obviously because – and as he deposed – it diminished the effectiveness of the braking system. This must be taken as consistent with Mr O’Loughlin’s view that, having removed the brake, the trailer was not to be driven laden. And that was when the other five brakes had been adjusted one week before.
[9]Reasons, [44].

The next matter referred to by the judge was Dr Richardson’s evidence referred to at [47] of the judge’s reasons. This part of the cross-examination commenced with reference to the opinion of Mr Field (referred to in Dr Richardson’s report) that the absence of one brake, in itself, would not cause and/or contribute to this type of collision if the remaining 11 brakes were correctly adjusted prior to the collision. As mentioned, Dr Richardson’s evidence was that he accepted Mr Field’s opinion on the qualification that the remaining 11 brakes were correctly adjusted. The judge stated at [48] of her reasons that although Dr Richardson’s evidence suggested that the missing brake made some contribution, ‘his answer was not tied to the particular accident which concerns the Court’.

With respect, the questions themselves were not tied to the accident. The facts were that there was one missing and five poorly adjusted brakes (or 11 if one wished to include the prime mover). What might have been the state of adjustment of a brake, if one had been fitted to the front left wheel, let alone as to any equality of maladjustment of all the brakes or as between them, was speculative and irrelevant. So also was the question as to the hypothetical 11 or 12 properly adjusted or badly adjusted brakes. Neither question addressed the case at hand, and her Honour should not have acted on the answers given to them. In truth, they served to divert attention from the real issue as to whether the missing brake contributed to the event, as Mr Graham and Dr Richardson considered it had. As to that, in his evidence in chief, Dr Richardson deposed that on its descent the truck would have been able to stop if all of the brakes had been correctly adjusted. In that case, missing one brake the truck would still have been able to stop. But here the brakes were not adjusted correctly:

… and that’s the reason why just losing one brake in itself hasn’t been able to – or hasn’t enabled the driver to control the vehicle in this descent. The truck, if it had’ve had its brakes adjusted correctly, should have been able to stop in descending down this ramp, just on its service brakes alone.’[10]

So there in that passage was a clear identification – if more were required – of how and why the missing brake contributed to the event. Indeed, in my view her Honour’s discussion of Dr Richardson’s evidence was unbalanced, and did not represent a fair and considered appraisal of it, this ultimately being seen in the conclusionary [48]. In short, her Honour’s reasons provide no cogent reason against acceptance of Dr Richardson’s evidence.

[10]Transcript 211-2.

I turn then to consider the judge’s reasons for not accepting and acting upon Mr Graham’s evidence that the missing brake contributed to the event. Four reasons were identified.[11] I refer to each in turn.
[11]Reasons, [49]-[53].

The first reason concerned the statement in the conclusions in his report (see [48] above) that he had ‘found a mechanical fault’ that would have contributed towards or caused the collision. The judge noted that although in a preceding paragraph Mr Graham had referred to the missing components on the front axle (that is, the missing brake), the report did not ‘clearly isolate’ the ‘mechanical fault’ which contributed to the collision. With respect, the judge has read Mr Graham’s report, and comprehended his oral evidence, in a narrow and incorrect way. It was surely obvious that the reference to a ‘mechanical fault’ was part of a final overall conclusionary statement that encompassed the missing components on the left-front axle that constituted the missing brake. It is obvious beyond a doubt that ‘the poor condition’ of the trailer was constituted by the ‘very low’ brake efficiency which was the consequence of the matters referred to in the previous sentence, which was itself a summary of the previously described condition of the trailer brake system. One element of that was the missing brake. With respect, this must be regarded as being too obvious for words. Moreover, Mr Graham made the matter clear in his oral evidence in chief[12] where he deposed as to the ‘mechanical fault’ he found which in his opinion caused (or contributed) to the collision. As against this, the judge identified and relied on a supposed – but non-existent – omission in the report to ‘clearly isolate’ the ‘mechanical fault’ as ‘being’ the missing brake, as a basis for concluding that it was not established that the missing brake contributed to the event.
[12]Transcript 106-7.

This statement reflected a failure by the judge to properly appreciate that the appellant’s case, and the experts’ evidence, was that the occurrence of the event was contributed to by a number of factors, one of which was the missing brake. The extent or degree of that contribution was not to be, and was not required to be, assessed in a mathematical or proportional sense. The identified factors, assuming that they, or some of them, were accepted as having contributed to the event, operated as a complex of matters operating at a time or times or as a continuum in the occurrence of the event as the vehicle descended the hill. Mr Graham (and Dr Richardson) clearly and firmly opined that the missing brake was a contributing matter. It is unclear what standard of proof the judge had in mind when she stated that the appellant’s evidence did not ‘clearly isolate’ the missing brake as a contributory factor. The phrase may be no more than the consequence of the judge’s mistaken view of the evidence. But, however that may be, Mr Graham’s evidence was sufficient to identify that the missing brake contributed to the event.

The judge’s second reason was that Mr Graham did not say ‘precisely’ how the missing brake would actually have contributed to the accident.[13] In a narrow sense that is correct, but what Mr Graham did was to identify that there was no brake on the front-left axle which, as a matter of common sense, meant that the braking efficiency of the vehicle was thereby diminished. And, of course, that operated in conjunction with the fact that the other five brakes on the trailer were poorly adjusted. Surely it was a matter of practical common sense that the trailer being without one brake, the efficiency of the braking system – poorly adjusted as it was - must have been reduced, and to the point that the brakes were unable to stop the vehicle. That was the effect of Mr Graham’s evidence. Beyond that, it is unclear what the judge was searching for or requiring. What I have said in dealing with her Honour’s first reason also applies here. The second reason did not constitute reason not to accept Mr Graham’s evidence.
[13]Reasons, [51].

The judge’s third reason was that if a brake had been fitted to the left-front axle, there was no reason why it would not have worn itself out similarly to the other five.[14] With respect, this was no reason at all. This evidence was hypothetical being based on an assumption that a brake was fitted to the left-front axle. But that was not the fact. The fact was that there was no such brake and the other five brakes were poorly adjusted. The consideration of whether those matters, in combination with the other matters of the wrong gear and excessive speed, contributed to the event, was not to be determined on a hypothesis based on an assumption not existing in fact.
[14]Reasons, [52].

The judge’s fourth reason was that overall Mr Graham’s evidence was about what he found and observed, and did not establish that the missing brake of itself contributed to the collision.[15] I disagree. It is true (as the judge stated) that Mr Graham set out at length what he found and observed, but that was the necessary foundation for his clearly stated opinions. And his evidence, if accepted, did establish that the missing brake contributed to the event.
[15]Reasons, [53].

Considered overall, in my view, her Honour’s reasons are without substance. They do not meet the central point of Mr Graham’s evidence, or reflect an appropriate understanding of that evidence or the issue.

Next, the judge referred to evidence of Mr O’Loughlin. According to the judge, he agreed in evidence that if one brake was not working, the rest of the brakes on the trailer and prime mover should provide adequate braking force.[16]
[16]Reasons, [54].

Unfortunately, this was an incomplete account of Mr O’Loughlin’s evidence. It is therefore necessary to refer to the evidence. It commenced in cross-examination as follows:

To have one brake not operating out of 12 permits eleven–twelfths of the brake system to function appropriately?---Correct.
And if that one brake is not working, the rest of the brakes on both the trailer and the prime mover should provide adequate braking force?---Yes.

And was followed up in re-examination as follows:
Mr O’Loughlin, you were asked questions about if one braking system was removed in a 12 brake system you’d still have eleven-twelfths of the braking system?---That’s correct.
To pick up the slack?---Yeah, it’d compensate.
However, that assumes does it not that the remaining 11 are functioning properly, doesn’t it?---Yes.

It is apparent that the premise upon which Mr O’Loughlin gave the evidence which the judge referred to, was that the other 11 brakes were functioning properly. Regrettably, but most significantly, her Honour did not acknowledge that premise. Moreover, the premise was in fact false. In other words, the question and answer were hypothetical and irrelevant and could not have assisted determination of the issue. It would, of course, have been erroneous to approach determination of the case on the basis that if the appellant could not establish that the poorly adjusted brakes engaged cl 3.23, that meant that those five brakes on the trailer were to be taken as properly adjusted at the time of the event.

Furthermore, the manner of reference to Mr O’Loughlin’s evidence indicates that the judge had put his factual premise to one side. If she did not do so, it is impossible to understand why she did not refer to it. Indeed, it is impossible to understand why her Honour thought this evidence assisted her in deciding not to accept or to reject the expert evidence concerning the effect of the missing brake.

Having dealt as she did with the evidence of Dr Richardson, Mr Graham and Mr O’Loughlin, the judge turned to the resolution of the case based on the missing brake.[17] The judge erred in then concluding that the appellant had not established that the missing brake contributed to the event. My reasons can be shortly stated.
[17]Reasons, [55]-[59].

In the first place, for the reasons discussed above, the conclusion is not supported by her preceding analysis and findings as to the evidence. In the second place, the conclusion is not otherwise supported by her concluding reasons.

In these reasons, the judge first referred to and applied a ‘but for’ test, considering that the evidence did not establish that the accident would not have happened if the single brake was connected. This approach and conclusion was speculative and not supported by evidence. Indeed, there was ample contrary evidence to the effect that the missing brake contributed to the event. Further, I consider that the ‘but for’ test was not appropriate for the determination of the question of contribution under cl 3.23.

Next, the judge said that the accident occurred because the truck was unable to stop.[18] With respect, that is plainly so but it begs the question, why did the truck not stop? According to her Honour, there was no suggestion ‘that the missing brake contributed to the event’ given Dr Richardson’s evidence as to the effect of the missing brake. By this, her Honour made clear, she was referring to Dr Richardson’s evidence as to braking in a straight line. This was apparently, (in her Honour’s view), supported by Mr Bates’ evidence, that he was able to swerve ‘in and out’.
[18]Reasons, [56].

I have already dealt with the judge’s erroneous understanding of Dr Richardson’s evidence, and do not repeat that part of the discussion. Contrary to what the judge said, the fact is that Dr Richardson did suggest, indeed expressly stated, that the missing brake contributed to the event. Then, the reference to Mr Bates’ evidence provides no support for her Honour’s conclusion. Being unable, for several reasons, to stop or otherwise to control the vehicle, he wove, ‘in and out’ of other vehicles on his descent. He did this by steering the vehicle, not as a consequence of the missing brake causing the vehicle to swerve.

The judge concluded[19] that when regard is had to ‘the nature of the accident and the effect of having a missing brake, the evidence does not establish that the missing brake, as a matter of common sense, contributed to the accident’. This finding was based on a combination of her Honour’s erroneous understanding of the evidence and erroneous findings. Removing these matters from consideration, the evidence of Mr Graham and Dr Richardson that the missing brake contributed to the event stands as credible, uncontradicted expert evidence. Their evidence is to be considered as part of and in the light of all of the evidence. In my view, there was and is no cogent reason on the evidence not to accept the expert opinion evidence, and to find – as I do – that the missing brake contributed to the event within the meaning of cl 3.23.
[19]Reasons, [57].

Given that the missing brake made the vehicle unroadworthy, and that the respondent knew about the missing brake at the relevant time, it follows that cl 3.23 was engaged and the appellant is not liable under the policy.

This conclusion renders it unnecessary to say anything about the judge’s reasons[20] on the ‘combination’ of matters.
[20]Reasons, [101]-[102].

I would allow the appeal, set aside the orders below and in place thereof order that there be judgment for the appellant with costs of the appeal and of the proceeding in the County Court. I would further order that the amount of $45,000 paid into court as security for costs be paid out to the appellant.

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Maxwell v GTI International Pty Ltd [2011] VSCA 448

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Amaca Pty Ltd v Booth [2011] HCA 53

Mount Isa Mines Ltd v Pusey [1970] HCA 60

[2011] VSCA 448

22 December 2011