McClure v Commonwealth of Australia

[1999] NSWCA 392

CITATION:	McClure & Ors v Commonwealth of Australia [1999] NSWCA 392 revised - 22/11/99
FILE NUMBER(S):	CA 40801/96; 40815/96; 40816/96; 40817/96
HEARING DATE(S):	9 March 1999
JUDGMENT DATE:	26 October 1999
PARTIES :	Robert John McClure v The Commonwealth of Australia Tania Van der Horn v The Commonwealth of Australia Adrian Gregory Watson v The Commonwealth of Australia David Norman Green v The Commonwealth of Australia
JUDGMENT OF:	Priestley JA at 1; Beazley JA at 28; Fitzgerald JA at 29

LOWER COURT JURISDICTION:	Supreme Court - Common Law Division
LOWER COURT FILE NUMBER(S) :	CLD 14779/91; 14786/91; 14780/91; 14788/91
LOWER COURT JUDICIAL OFFICER:	Dowd J

COUNSEL:	Appellant (Van der Horn) - B.J. Gross QC/ D. Figgis Appellants (McClure, Watson, Green) - B.J. Gross QC/T. Boyd Respondent - C.T. Barry QC/B.J. Skinner
SOLICITORS:	Appellant (Van der Horn) - Burridge Harris & Flynn Appellants (McClure, Watson, Green) - McIntosh, McPhillamy & Co Respondent - The Australian Government Solicitor
CATCHWORDS:	Negligence; Vicarious Liability
CASES CITED:	Bugge v Brown (1919) 26 CLR 110, 118 Canterbury Bankstown Rugby League Football Club Ltd v Rogers; Bugden v Rogers [1993] Aust Torts Reports 81-246 (CA) Commonwealth of Australia v Connell (1986) 5 NSWLR 218 Coulthard & Ors v South Australia (Unreported) SA Full Court, 19/1/95 Deatons Pty Ltd v Flew (1949) 79 CLR 370 Joel v Morrison [1834] 6 C&P 501,503 Kooragang Investments Pty Ltd v Richardson & Wrench Ltd (1981) 2 NSWLR 1 (PC) March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 Prior v State of New South Wales (Unreported) NSWCA, [1988] 633, 23/10/98 Tiger Nominees Pty Ltd v State Pollution Control Commission (1992) 25 NSWLR 715 (CA)
DECISION:	Appeals dismissed with costs.

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40801/96 CLD 14779/91
CA 40815/96 CLD 14786/91
CA 40816/96 CLD 14780/91
CA 40817/96 CLD 14788/91

PRIESTLEY JA
BEAZLEY JA
FITZGERALD JA

Tuesday, 26 October 1999

McCLURE & ORS v COMMONWEALTH OF AUSTRALIA

NEGLIGENCE - VICARIOUS LIABLILITY.

A and B, two infantrymen, found an apparently spent shell on an army firing range and, in breach of army regulations took it to A’s home, where B was staying. As A moved house from time to time the shell was moved also in a box of B’s belongings. Eventually the shell was left behind in the garage of a house occupied by A and his family when the tenancy of the house was given up. The shell was found by subsequent occupants of the house and used in it as an ornament until one day it was dropped and exploded, injuring them. The persons injured brought proceedings against the Commonwealth and A. They failed and appealed against the judgment in favour of the Commonwealth. The appeal was confined to an allegation that the Commonwealth was vicariously liable for the actions of A and B.

Held: (1) that for the Commonwealth to be vicariously liable the actions of one or both of A and B in taking the shell from the firing range and resulting in its ultimately being left in the garage of the house must have been authorised expressly or impliedly by the Commonwealth or have been incidental to what A and/or B were authorised to do even though done in an unauthorised way and (2) that none of these conditions was fulfilled in the circumstances of the case. The relevant conduct was therefore outside the scope of the duties of both A and B and the appeal could not succeed.
ORDERS

1. Appeals to be dismissed with costs.

2. The parties are to bring in short minutes of the orders to be made by the court in accordance with the reasons of the court.
3. If the appellants wish to proceed with the motion to add Mr Burns as a respondent in the appeals:
(a) the orders referred to in 2 are to include orders for the addition of Mr Burns as a respondent in the appeals if all parties can agree upon those orders, and
(b) if all parties cannot agree on orders relevant to the addition of Mr Burns, then,
(i) written submissions should be filed by the appellants within seven days of the delivery of these reasons in support of the orders they seek and
(ii) within three days after that, any party opposing the making of the orders should lodge written submissions supporting that party’s position.

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40801/96 CLD 14779/91
CA 40815/96 CLD 14786/91
CA 40816/96 CLD 14780/91
CA 40817/96 CLD 14788/91

PRIESTLEY JA
BEAZLEY JA
FITZGERALD JA

Tuesday, 26 October 1999

McCLURE & ORS v COMMONWEALTH OF AUSTRALIA

1    PRIESTLEY JA: On Sunday, 6 March 1983, the four persons bringing this appeal were blown up while watching television in a tenanted house at Mitchell Street, Wentworth Falls. A 37 mm high explosive anti tank shell, not thought to be dangerous and which was used as an ornament in the house, fell from the hand of the appellant Mr McClure, hit the floor point first and exploded. All four appellants were seriously injured, Mr McClure very seriously. They claimed damages from the Commonwealth of Australia (“the Commonwealth”) and Mr Burns, the former soldier who had allegedly souvenired the shell. Their cases were heard by Dowd J who dismissed their claims.

2    Sadly, from the point of view of the appellants, despite the importance of the case to them, I think their appeal must fail. It was brought only against the Commonwealth. The other defendant was not made a respondent to the appeal.

3    Although the trial before Dowd J was a long one and a great deal of evidence both oral and documentary was put before him, the questions left for this court to decide were narrowed down to two, which do not require particularly lengthy discussion. In my opinion one of them must be decided against the appellants with the result that their appeals fail.

4    Before coming to these two questions, I will summarise the findings of the trial judge about how the shell came to be in the house in Mitchell Street on 6 March 1983. These findings were not disputed in the appeals. I will also briefly describe what happened at the trial.

5    Mr M. Burns and Mr M. Halliday were infantrymen in the Australian Army and were friends, when they were both stationed at Holsworthy, some time before 1981. Mr Halliday and his wife were then living as tenants in a house at Warwick Farm, provided by the Army. Mr Burns and a friend of his lived with the Hallidays for two months or so. During this time, Mrs Halliday (now called Mrs Warren, having divorced and remarried) on one occasion saw Mr Burns and Mr Halliday in the house after they had returned from Army manoeuvres. Her evidence was that they were holding an object which the trial judge found to be the shell which later exploded; that she asked them questions about it; and that they both told her that it was safe.

6    It was established by other evidence that the shell was an Australian Army shell, that it had been fired, that before firing it had been partly encased in a cartridge, that it contained high explosive and that upon being fired it had not exploded.

7    There were contests at the trial about how the shell had come into the house at Warwick Farm. Shortly after the explosion Mr Burns had given a lengthy statement to police officers in which he said that he had picked up the shell while doing a map reading exercise when stationed at Canungra. He had not thought it was live and had taken it as a souvenir. It was after he was transferred from Canungra to Holsworthy that he moved in with the Hallidays. He then had it in a box with some other gear. When he went back to the Army camp to live he left behind the box with the shell in it. Amongst other admissions to the police, he agreed that he should not have removed the shell from the scrub at Canungra. On 2 May 1983, represented by a duty solicitor, he pleaded guilty in the Katoomba Court of Petty Sessions to a charge of possession of a prohibited article. The facts in his statement to the police were put before the court and were adopted by his solicitor. (There is a good deal more in his statement than I have mentioned.) One thing said by his solicitor in addressing the court was:

“ There is no doubt that he had possession of this item in 1979. There is no doubt that he ought not to have had possession of it at that time, and he certainly ought to have placed this item in the care of the proper authorities. ”

However, at the trial before Dowd J Mr Burns repudiated his admissions of 1983 and said he had no knowledge of the shell. Mr Halliday also denied any knowledge of it. The evidence of Mr Burns’s admissions was admitted by Dowd J against him, but not against the Commonwealth.

8    So far as the appellants’ case against the Commonwealth was concerned, assuming there was no evidence against the Commonwealth of how the shell came to be in the house at Warwick Farm when Mrs Warren said she saw it in the hands of one of Mr Burns and Mr Halliday, nevertheless the trial judge accepted her evidence on that matter, despite the denials of both men. It was common ground in the argument of the appeal that whichever of Mr Burns and Mr Halliday was responsible for bringing the shell to the house at Warwick Farm was in breach of his duty as a member of the Army, whose regulations and training obliged an Army member who came upon a piece of ammunition such as the shell, in whatever circumstances, to leave it in, or return it to, the possession of the Army and not to take it away from proper custody. Thus it was proved against the Commonwealth that the shell was in the house at Warwick Farm in the possession of a member of the Australian Army in a way in which it should not have been.

9    The Hallidays moved from Warwick Farm to Rosehill. They took Mr Burns’s box of possessions to their new dwelling. Later, the Hallidays moved to the premises at Mitchell Street, Wentworth Falls. Again, they took Mr Burns’s box with them. Not long after they went to Wentworth Falls Mr Halliday separated from his wife and moved out of the house. His wife and children stayed on for about another twelve months and then packed up and moved, in December 1982. Mr Burns’s box was left behind. While getting ready to leave, Mrs Warren took the shell from the box and put it on a high window sill in the garage, above adult height.

10    Three of the appellants, Messrs McClure, Green and Watson, moved into the house from 24 December 1982. The shell was noticed in the garage, and Mr Green took it inside the house. It was used as an ornament. One day it fell from the top of the refrigerator to the kitchen floor. Nothing happened. No doubt everyone in the house was assuming it was harmless both before, and with reinforcement, after this incident. There was then the fall on 6 March 1983 and the explosion.

11    The appellants’ claim against the Commonwealth was that Mr Burns while a member of the Army in the service of the Commonwealth took the shell from Commonwealth premises being a firing range either at Canungra in Queensland, or Holsworthy or Engadine in New South Wales, and that the Commonwealth was negligent in failing to ensure the shell was not removed from its premises, in failing in its control of the location, disposal and counting of such devices, failing to prevent the removal of the device by service personnel and in failing to warn service personnel of the danger of the shell and to discipline service personnel adequately for any removal. Mr Burns was alleged to be negligent in failing to report the finding of the shell, failing to return it to proper custody and failing to warn of the risk of injury from it and in taking and retaining possession of the shell. It was also claimed that the Commonwealth was vicariously liable for negligence alleged against both Mr Burns and Mr Halliday.

12    Dowd J held that the Commonwealth was not itself in breach of any duty, nor vicariously liable for any breach of duty by either Mr Burns or Mr Halliday. There is no need to give any detail of his reasons for finding the Commonwealth itself not in breach of duty because this aspect of the claim was not taken up in the appeal. Matters argued in the appeal related only to the appellants’ claim that the Commonwealth was vicariously liable for the negligence of Mr Burns and/or Mr Halliday.

13    In regard to the Commonwealth’s alleged direct liability, Dowd J held there had been no breach of duty by the Commonwealth on the basis, putting it broadly, that the system proved by the Commonwealth by which it controlled the use and disposal of ammunition and the training given to members of the Army in regard to the use of ammunition and the treatment of it when found on Army property were adequate to the circumstances. He found that by its systems and training the Commonwealth took reasonable care to avoid reasonably foreseeable risk of injury or damage to the person or property of another. As already indicated, this finding was not contested in the appeal.

14    The two questions argued in the appeal earlier referred to were both aspects of the vicarious liability alleged against the Commonwealth. One was the basic question whether the Commonwealth could be vicariously liable in the circumstances; the other whether the trial judge was right to find that even if either Mr Burns or Mr Halliday had been in breach of duty in so acting that the shell was left to be found by some person to whom it might cause harm, there was no causal connection between such breach of duty and the damage caused by the explosion.

15    I will deal first with the question whether, on the assumption that either Mr Burns or Mr Halliday was negligent, that is, in breach of duty which caused damage, the Commonwealth was vicariously liable. The submission about Mr Burns was that he was responsible for the shell being negligently introduced to the Halliday household, with the consequences alleged to be causally connected to that negligent act. The submission about Mr Halliday was that he negligently allowed the shell into his household, with the same consequences.

16    For the appellants it was submitted that at the time when Mrs Warren saw both Mr Burns and Mr Halliday handling the shell in the house at Warwick Farm, both men were in Army service and were bound by their instructions to hand in the shell to higher authority. In not doing so, it was submitted that although they were acting improperly, their improper action was in the course of their duties, that is, what they were doing was a way of performing their duties which involved misperformance but was nevertheless within the scope of their activities for which the Commonwealth was liable.

17    The submissions from both parties implicitly adopted the rules relating to vicarious liability stated in Commonwealth of Australia v Connell (1986) 5 NSWLR 218, which was cited and relied on by Dowd J. Adapting the way those rules were expressed by Glass JA in that case (at 221) to the facts of the present case, they state the test as being that the conduct by whichever it was of Mr Burns and Mr Halliday who had possession of the shell on the day when Mrs Warren saw them both handling it in the Warwick Farm house, would have been within the scope of his service if that conduct was authorised expressly or impliedly or was incidental to what he was authorised to do even though performed in an unauthorised way; but if it was not authorised expressly or impliedly or not so connected with authorised conduct as to be an improper mode of performing it, it would have been independent unauthorised conduct and outside the scope of his service.

18    My understanding is that Glass JA’s statement of the rules was orthodox when Connell was decided and remains so: see Fleming on Torts, 9th ed (1998) at 421-2 and 426-8 and Law of Torts, Balkin and Davis, 2nd ed (1996) at 761 and following.

19    Using these rules it seems to me that both when the matter is looked at in light of the evidence admitted against the Commonwealth and in light of the evidence admitted against Mr Burns, the answer must be the same, that the relevant conduct of the person in the service of the Commonwealth was outside the scope of his duties.

20    Looking at the matter in light of the evidence admitted against the Commonwealth, the relevant fact is that the shell was in the possession of either Mr Burns or Mr Halliday in the house at Warwick Farm. It seems to me to be too difficult to fit this possession into the idea of its being an improper mode of performing any Army duty or service. It seems to me to be quite outside any such concept. A sustained effort, in both written and oral submissions, was made on behalf of the appellants to show the circumstances were within the idea that what was happening was an improper mode of carrying out the obligations which the evidence proved lay upon Army members in regard to ammunition, but it seems to me that to accept such submissions would stretch the concept embodied in the accepted rules beyond its breaking point.

21    Similar submissions were made in regard to the situation disclosed by the evidence admitted against Mr Burns. I think the answer is the same in those circumstances also. On the story he gave to the police and which his solicitor gave to the Magistrate’s Court in 1983 he had, to put it in its most neutral form, appropriated to his own use property of the Commonwealth. I do not see how this action can be fitted into the concept of improper performance of something he was authorised to do, or as being incidental to his Army service.

22    My conclusion therefore is that there was no error made by Dowd J in his decision, adverse to the appellants, on the vicarious liability question. This means that the appeals must fail, even if the appellants were to succeed on the second of the two issues argued in the appeal.

23    That second issue was the question whether there was a causal link between the actions of either Mr Burns or Mr Halliday and the damage caused to the appellants by the explosion of the shell. On this issue, if it were necessary to decide it, I would be in favour of the appellants. Putting it shortly, and adopting the approach held to be appropriate by the High Court in March v E & M H Stramare Pty Limited (1991) 171 CLR 506, I would be of opinion that the connection between the actions of Messrs Burns and/or Halliday and the explosion was such as to justify the conclusion that those actions contributed materially in the sense relevant in this area of the law to the explosion.

24    My conclusion is that the appeals should be dismissed with costs.

25    In the course of the argument in these proceedings a question arose whether the appellants, who had not appealed against the dismissal of the proceedings against Mr Burns, could contend that the Commonwealth was vicariously liable for his negligence when there was a judgment in his favour against the appellant’s claimed cause of action of negligence against him. The court raised the question whether even if the appellants might otherwise succeed against the Commonwealth, any effect could be given to that success in the absence at the very least of Mr Burns being a party to the appeals. Following the conclusion of the argument and the reservation by the court of its decision a motion was brought by the appellants seeking leave to add Mr Burns as a party to the appeals. At the time the motion was brought the appellants had been unable to find Mr Burns. The court was doubtful whether in such circumstances it would be right to grant the appellants’ motion. The matter was not finally decided but left on the basis that the appellants would seek to carry the matter further if they could either find Mr Burns or show that some form of substituted service might actually bring the proceedings to his notice. Since then the court has heard from the representatives of the appellants that Mr Burns has been found, is prepared to consent to orders joining him as a respondent to the appeals and does not wish to be heard before delivery of judgment. The court does not know however whether the Commonwealth is prepared to consent to the proposed orders.

26    In view of the conclusions I have arrived at, and even if Mr Burns were to be held himself to be liable, that liability could not be attributed to the Commonwealth, there is no need to postpone delivery of judgment until the motion is finalised. This is because the appellants made it clear that in bringing their motion, even if liability were established against Mr Burns, they would not be seeking to enforce that liability by judgment or enforcement of judgment.

27    In the circumstances it seems appropriate for the court to deliver reasons for judgment and to direct the parties to bring in short minutes of the orders to be made by the court in accordance with the reasons of the court, including orders for the addition of Mr Burns as a respondent in the appeals if all parties can agree upon those orders. If all parties cannot agree on those orders and the appellants wish to proceed with the motion, then written submissions should be filed by the appellants within seven days of the delivery of these reasons in support of the orders they seek and within three days after that, any party opposing the making of the orders should lodge written submissions supporting that party’s position.

28    BEAZLEY JA: I agree with Priestley JA and with the additional comments of Fitzgerald JA.

29    FITZGERALD JA: The circumstances giving rise this appeal are set out in the reasons for judgment of Priestley JA.

30    As his Honour explains, the only liability which the appellants now seek to attribute to the respondent Commonwealth of Australia is vicarious liability for the alleged negligence of the former soldier or soldiers who removed the shell from Commonwealth premises and/or failed to return it. There is no allegation that the Commonwealth was negligent because, for example, it failed to prevent the removal and/or obtain the return of the shell.

31    I will assume in the appellants’ favour that, notwithstanding the absence of the former soldiers from the proceeding, the appellants would be entitled to succeed in their action against the Commonwealth if it was found that negligence by one or both of the former soldiers caused the appellants’ injuries, and that the Commonwealth was vicariously liable for that negligence.

32    The appellants’ assertion of vicarious liability against the Commonwealth was based on the common law principles applicable to the vicarious liability of an employer for the conduct of an employee. Contrast Prior v State of New South Wales (Unreported), NSWCA, [1998] 633, 23 October 1998. This is an area of the law which has been stable for at least 50 years, since the decision of the High Court in Deatons Pty Ltd v Flew, (1949) 79 CLR 370. although, not surprisingly, there are some differences in the language used in various cases. See, for example, Kooragang Investments Pty Ltd v Richardson & Wrench Ltd (1981) 2 NSWLR 1 (PC); Commonwealth of Australia v Connell (1986) 5 NSWLR 218 (CA); Tiger Nominees Pty Ltd v State Pollution Control Commission (1992) 25 NSWLR 715 (CA); Canterbury Bankstown Rugby League Football Club Ltd v Rogers; Bugden v Rogers [1993] Aust Torts Reports 81-246 (CA); Coulthard & Ors v South Australia (Unreported), South Australian Full Court, 19 January 1995.

33    The appellants argue that, because the former soldier or soldiers’ misconduct, which included both removing and failing to return the shell, was a breach of their duty to the Commonwealth, it is vicariously liable to a person in the position of the appellants who was injured by that misconduct. That argument is an ingenious attempt to turn the doctrine of vicarious liability on its head. An employer might not necessarily escape liability because of a breach by an employee of his or her duty to the employer. However, an employee’s breach of duty to his or her employer is not sufficient in itself to make the employer vicariously liable for any breach of duty to another person involved in the same conduct. Not surprisingly, the appellants were unable to refer to any authority which supported their proposition.

34    At least from and including the act of removal of the shell from Commonwealth premises, the former soldier (or solders) who did so was on a “frolic of his own”, Joel v Morrison [1834] 6 C&P 501, 503. which was totally outside and unrelated to the performance of his duties, and was acting as “… in effect a stranger in relation to his employer…”. Bugge v Brown (1919) 26 CLR 110, 118.

35    I agree with Priestley JA that the appeals should be dismissed, with costs.

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