Motor Accident Commission v Ani Corp Ltd & Richard John Garrett No. Scgrg-97-325 Judgment No. 6416 Number of Pages 26 Insurance

[1997] SASC 6416

IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA

COX, LANDER AND BLEBY JJ

CATCHWORDS:

Insurance - third-party liability insurance - motor vehicles - compulsory insurance legislation - risk insured - relationship with workers' compensation claims - Motor Vehicles Acts99(3) and Schedule 4 - what is meant by the 'driving' of a vehicle - forklift truck being used to load a semi-trailer - whether injury caused by fall of load was a consequence of the driving of the forklift - where the onus of proof lies on an issue arising under s99(3).

HEARING:

ADELAIDE, 1-2 September 1997 (hearing), 27 November 1997 (decision)

#DATE 27:11:1997

#ADD 8:12:1997

Appearances:

Appellant:

Counsel: Mr M G Steele

Solicitors: Ward & Partners

Respondent A.N.I. Corporation Ltd:

Counsel: Mr S Walsh QC

Solicitors: Piper Alderman

Respondent:

Counsel: Mr R C Halliday

Solicitors: Andersons

ORDER: appeal allowed.

COX J

The plaintiff was a manual worker in the employment of the ANI Corporation Limited ("the employer") when on 12 November 1990 he was injured in an accident at work. He fell from the back of a stationary semi-trailer motor lorry while acting as an assistant to a forklift driver whose task it was to move a quantity of steel frames, called stillages, from a stack in the employer's depot and load them onto the tray of the semi-trailer, a short distance away. The plaintiff sued the employer for common law damages for the injuries he suffered in the accident. He said that the accident was caused by the negligence or breach of contract or breach of duty of the employer or its servants including the forklift driver, one Hughes. The Motor Accident Commission ("the insurer") had written a compulsory third party motor vehicle policy for the forklift that conformed with Schedule 4 of the Motor VehiclesAct 1959 and the employer issued third party proceedings against the insurer claiming indemnity with respect to any liability it might have to meet the plaintiff's claim. The District Court Judge decided to try first the issue of liability as between the plaintiff and the employer. The insurer took part in those proceedings. The learned Judge heard the evidence and held that Hughes was negligent in the manner in which he carried out his duties and that the employer's work practice was unsafe. He rejected the employer's plea of contributory negligence. He thereupon entered judgment for the plaintiff against the employer for the whole of his damages to be assessed. Subsequently the learned Judge tried the third party claim. The parties did not call any additional evidence. They relied on the evidence that was called in the first trial. There was a dispute as to the precise activity in which the forklift driver was engaged when the accident happened. That was an important matter because it was the insurer's case that Hughes was not driving the forklift at the time but using it simply to load the semi-trailer, so that the injury to the plaintiff was not covered by the compulsory insurance provisions of the Motor Vehicles Act. See s99(3). The learned Judge considered that the evidence did not enable him to make a finding on the factual issue. He held that it was for the insurer to satisfy the Court that the plaintiff's injury was not a consequence of the driving of the forklift and it had failed to discharge the onus it bore. He therefore found that the employer was entitled to be indemnified by the insurer against the plaintiff's damages. He proceeded to assess those damages at common law subject only to the restrictions imposed by s36a of the Wrongs Act 1936. He assessed them at $253 092. He entered judgment for the plaintiff in that sum against the employer, with costs, and made an order that the employer be indemnified by the insurer against its liability in damages and costs to the plaintiff. He gave the employer its costs against the insurer. The insurer has appealed to this Court. It claims that the learned Judge should have found that the plaintiff's accident did not fall within the third party insurance provisions of the Motor Vehicles Act so that the employer was not entitled to an indemnity. If that is right, the plaintiff's damages should have been assessed in accordance with s54 of the WorkersRehabilitation and Compensation Act 1986. The employer, however, has not appealed. The plaintiff had cross-appealed on the ground that the damages assessed by the learned Judge were inadequate.

A consideration of the third party proceedings must start with the Schedule 4 policy issued by the insurer to the employer under the Motor Vehicles Act. Clause 1 of Schedule 4 of the policy reads -

"The insurer insures the owner of the motor vehicle and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth."

It was not disputed on the appeal that the bodily injury to the plaintiff in this accident arose out of the "use" of the forklift. However, the liability created by a Schedule 4 policy is qualified or defined by subs(3) of s99 of the Motor Vehicles Act which reads - "For the purposes of this Part and schedule 4, death or bodily injury will not be regarded as being caused by or as arising out of the use of a motor vehicle if it is not a consequence of-

(a) the driving of the vehicle; or

(b) a collision, or action taken to avoid a collision, with the vehicle whether in motion or stationary; or

(c) the vehicle running out of control."

It was the insurer's case that, even if the forklift had anything at all to do with the plaintiff's accident, his injuries were not the consequence of Hughes's driving of the vehicle but of his using it as a means of loading the semi-trailer. That is the way the insurer sought to escape the employer's claim for an indemnity.

That brings me to the evidence.

There were three witnesses to the facts who were called at the trial - the plaintiff, Hughes, and another employee named Johnston who, as soon as the accident was reported to the employer's management, was directed to investigate it. Unfortunately the only one of these witnesses whom the learned Judge considered to be generally reliable was Johnston and he was not an eye witness. The plaintiff's memory was unreliable and the Judge considered Hughes to be vague and defensive in much of his evidence and on some points clearly wrong. It is relevant at this point to explain that the learned trial Judge published his reasons for judgment on the issue of liability between the plaintiff and the employer, and later, after he had heard further argument on the issues thrown up by the third party claim, he published additional reasons explaining the orders that he made with respect to that claim and to the assessment of the plaintiff's damages. A good deal was made on the hearing of the appeal of what was said to be an inconsistency between the treatment of the witnesses and the findings of fact in the two judgments, a matter of no small importance if, as the learned Judge evidently considered and counsel for the insurer on the appeal accepted, the forklift was being "driven", within the meaning of the Motor Vehicles Act, if it was moving in a horizontal plane, even momentarily, when the accident happened. However, on the view that I have taken of the matter the question of any alleged inconsistency between the judgments is not of great importance.

While there is plenty of room for argument between the parties about the precise stage that had been reached in Hughes' transporting or loading operation when the plaintiff fell from the semi-trailer, the general nature of the task on which Hughes was engaged was not in dispute. The stillages that he was shifting were mostly large three-dimensional metal framed rectangles, five and a half metres in length and weighing about 250 kilograms. There was also at least one smaller stillage which was three and a half metres long and weighed about 200 kilograms. There was a stack of stillages in the yard of the employer's premises and it was Hughes' task to pick them up on the tines of the forklift and load them on to the semi-trailer. The plaintiff was standing on the tray of the semi-trailer to direct Hughes where he should deposit the stillages on the tray. When the accident happened most of the stillages had been loaded. Hughes's method was to load a number of stillages onto the forklift and drive over to the semi-trailer. There he would raise the tines by using the forklift's hydraulic lifting device so that the load would clear the tray of the semi-trailer which was about five and half feet off the ground. Indeed, he might have to lift the load higher than that because there were a number of retaining pins, about thirty centimetres high, at irregular intervals along the edge of the tray of the semi-trailer. The pins could be removed, and it would be normal practice to remove a pin beforehand if it was going to impede the loading operation. The accident happened when Hughes was transporting the last four stillages to the semi-trailer. He carried them in a single load, with three large stillages stacked on top of one another and a fourth smaller stillage balancing on top of the other three. The design of the larger stillages created a degree of interlocking and therefore some general stability in the load, but there seems to be no reason to question the learned Judge's finding that it was negligent of Hughes to have carried the smaller fourth stillage balanced on top of the other three because that made the load potentially hazardous. Hughes drove the forklift "at a snail's pace" to the southern edge of the tray and with the tines close to the ground. The plaintiff was then standing in the middle of the tray waiting for the load to arrive. The learned Judge's first judgment then continued -

"When he got to the southern edge of the tray Hughes stopped the forward movement of the forklift and by using its lifting device raised the tines so that the load would clear the tray which was about five and a half feet off the ground. Whether he raised it whatever further distance was needed to clear the pin, which I have found was in position in the vicinity of where the load was to cross over the edge of the tray, is unclear. When the tines had moved at least up to the height of the tray the plaintiff called out words to the effect, "Hold it, Taff" (referring to Hughes). Upon hearing this call Hughes immediately stopped the lifting mechanism of the forklift. What then happened is unclear, but it is undisputed that momentarily thereafter the plaintiff fell backwards over the northern (i.e. the opposite edge) of the tray and onto the ground below and the smaller stillage, which had been on the top of the load on the forklift, fell on top of him."

The Judge said it was not easy on the evidence to decide why the plaintiff called out or why he came to fall from the tray or what actually caused the smaller stillage to topple or, most important, precisely what function Hughes was performing with his forklift - raising or lowering the tines or driving forwards or backwards - when the stillage fell. However, his Honour was satisfied that the evidence proved the negligence of Hughes, and also the unsafe work practice, and that ensured that the plaintiff got a judgment against the employer. The finding of negligence was not challenged on the appeal.

In the second judgment the learned Judge had to deal specifically with the insurance question. He expressly adhered to his previous findings but he found it necessary to amplify them to some extent to deal with the third party issues. There could be no objection to that in principle. He affirmed his rejection of Hughes and the plaintiff as reliable witnesses. He noted the two Full Court decisions about "driving" a vehicle within the meaning of s99 of the Motor Vehicles Act - State Government Insurance Commissioner v Wagner
(1993) 62 SASR 175 and Heath v Corporation of City of Tea Tree Gully (1996) 66 SASR 548 - and said that, on the law as laid down in those cases, s99(3) of the Motor Vehicles Act:

"will exclude the application of the Fourth Schedule where the forklift was being used to unload the stillages from its tines by moving those tines in a vertical plane as distinct from the forklift being driven in any way in the horizontal plane or through anything which was ancillary to driving it in that horizontal plane. What was intended immediately prior to the accident was that the forklift would carry the stillages on its tines to the edge of the tray of the semitrailer, raise its tines to lift the stillages above the level of the tray, and quite possibly above the height of the vertical pin so that the stillages could clear it, drive closer to the edge of the tray so that the stillages on the tines were over the tray, lower the tines so that the stillages were deposited onto the tray, reverse backwards so that the tines were extracted from under the stillages and in some unexplained way manoeuvre the stillages so that they were pushed into their desired positions on the tray relative to the other stillages which had previously been deposited there. It is possible that some of these activities in the horizontal plane occurred concurrently with other activities in the vertical plane. In these functions in which the forklift was being used to move the stillages only in a vertical plane it was not then being driven for the purposes of s99(3), but in other activities involving any movement in the horizontal plane which were interspersed with movements in the vertical plane, it was being driven as a vehicle within s99(3). On the view which I have taken of the evidence it is impossible to make any finding on the balance of probabilities as to the stage in the unloading process which had been reached when the top stillage on the load either fell or became unstable so as to cause the plaintiff to fall in an effort to avoid it, and so to be able to say whether the forklift was then being driven within the meaning of s99(3) or not."

The learned Judge then considered the onus of proof on the question whether s99(3) operated in this case to the benefit of the insurer. He followed a dictum of Olsson J in SGIC v Wagner and found that it was for the insurer to show that the plaintiff's injury was not a consequence of the driving of the forklift. He held that the insurer had not discharged that onus, with the result that the Schedule policy applied without qualification and the employer was entitled to its indemnity.

I adhere to the opinion I expressed in Heath v Tea Tree Gully about the proper approach to the question whether a particular death or bodily injury is "a consequence of the driving" of a vehicle within the meaning of that expression in subs(3) of s99. It is plain that Parliament intended to limit significantly the expansive interpretation that had previously been given to the Fourth Schedule, where the debate centred on the "use" of the vehicle, and sometimes it will be necessary to distinguish the different activities of driving and loading even if that means identifying different aspects of a vehicle's use within a single overall activity. Whether death or bodily injury was a consequence of the driving of a vehicle will be a question of fact and judgment in every case.

However unsatisfactory the eye witnesses may have been, it is clear, even from the circumstantial evidence, that Hughes had brought the forklift alongside the semi-trailer and come to a stop, and had then lifted the load vertically in order to clear the tray, before the plaintiff fell, either because he overbalanced on seeing the stillage falling towards him or because the falling stillage knocked him over. That, indeed, is what the learned Judge found in his first judgment, and clearly his Honour had no intention of resiling from that finding for the purpose of the third party judgment. In his second judgment the Judge looked at what the participants intended immediately prior to the accident and he described the manoeuvring of the forklift that may have been necessary in order to get the stillages into their correct positions on the tray. I infer that the purpose of this more detailed examination of Hughes' possible manoeuvres, while alongside the semi-trailer, was to show that they may well have included small driving movements, forwards or backwards, as Hughes was unloading the stillages and putting them in their correct positions. In the absence of reliable eye-witness evidence, it thus appeared quite possible that the small stillage capsized just when the driving wheels of the forklift were moving in the course of one of these minute forward or backward movements; if so, in his Honour's view, Hughes was then "driving" the forklift within the meaning of that term in s99. As the evidence did not establish one mode of use of the forklift rather than the other when the accident happened, his Honour considered that he could not make any positive finding on the "driving" issue, even on the balance of probabilities.

I do not think, with respect, that s99 requires that kind of factual microanalysis in a situation such as this. It is not just a question whether the forklift's driving wheels were turning at a critical time. No-one suggested that Hughes was not "driving" the forklift, as s99 understands that expression, before he stopped it alongside the semi-trailer. However, once he was there and had started to raise the tines in order to place the stillages onto the tray, he was no longer driving the forklift, in my opinion, but was simply using the vehicle as a loading device. His use of it did not cease to have an exclusive non-driving character simply because (if it was the case) there were interspersed between the raising and lowering of the tines, in the dominant activity of loading and at the same place, small shuffling movements of the forklift, backwards and forwards, as the driver deposited the stillages in their different positions on the tray. The top stillage fell only because of the way the forklift was operated in the course of loading the semi-trailer. In my opinion, the learned Judge should have found on the evidence that the plaintiff's injuries were not a consequence of the driving of the forklift.

I do not regard the view that I have expressed as being inconsistent with the earlier Full Court decisions. They recognize the need to distinguish between a vehicle's different functions, so that it may be driven on one occasion and used in a different mode immediately afterwards although possibly all within a single overall activity. However, the Full Court has not held that whether a vehicle happens to be moving backwards or forwards at a given time will necessarily be the sole determinant of whether it is being "driven" within the meaning of s99, and there will be cases in which a meticulous fragmentation of a vehicle's operations will be unrealistic. Here the overall activity in which the forklift was engaged concluded with a single loading operation alongside the stationary lorry in which any use of the forklift's driving wheels was merely incidental. It is not relevant in that situation to enquire whether the accident happened at one stage of the actual loading operation rather than another. If that explanation of the apparently similar but, in my view, essentially different situations in Heath's Case and this appears to be over-subtle or even arbitrary, so be it. The alternative is a rule of thumb - If the driving wheels are turning, the vehicle is being driven - which, though convenient, would be at odds, I think, with what s99 requires. It would mean in this case that the s99 aspect of the vehicle's extremely localized operation was changing all the time as Hughes manoeuvred his load onto the trailer. I think any observer would cut through all that and say that when the accident happened the driving was over.

I should say that Mr Walsh QC, for the employer, argued that the load of stillages that Hughes carried on this last occasion was always unstable and that the hazard would have been increased by the driving of the forklift from the stack to the semi-trailer, so that the fall of the topmost stillage, even after the forklift became stationary, could reasonably be attributed to the driving. Certainly a vehicle may be involved in a non-driving operation at the time a person is injured yet the injury be properly held to be the consequence of a prior act of driving. In my opinion, however, the physical conditions of the employer's submission with respect to the plaintiff's injury are merely conjectural. The fact is that the stillage did not fall as the forklift was being driven from the stack to the semi-trailer and the probabilities are, as the learned Judge in effect found in his judgment, that one or more of the loading manoeuvres that occurred after the forklift became stationary caused the stillage to fall. As I have held, those manoeuvres and the injury which followed were not relevantly related to the prior act of driving.

For these reasons I consider that the learned Judge should have rejected the employer's claim to be indemnified by the insurer under the Schedule 4 policy. I would therefore allow the insurer's appeal and set aside the indemnity order.

The other matter before us is the plaintiff's cross appeal on damages. That raises a practical difficulty. If I am right on the insurance issue it follows, by virtue of s54 of the Workers Rehabilitation and Compensation Act, that the only liability for which the employer was liable to the plaintiff by reason of this accident at work was its liability under that Act. In fact, the plaintiff's damages were assessed in accordance with s35A of the Wrongs Act and included a substantial allowance for economic loss. However, the employer did not appeal, even on a contingency basis, against the plaintiff's judgment. There was some inconclusive discussion of the matter on the hearing of the appeal, with Mr Walsh forecasting that, if the issue had not been or could not be agreed between the parties, his client would possibly attempt to appeal out of time. So far as I am aware, no application for an extension of time has been made. The plaintiff's judgment in the District Court is good and enforceable until it is set aside, and we cannot take it for granted that it will be set aside. However, if there is any real possibility of an application being made to that end, then there are probably good reasons for not considering the plaintiff's cross-appeal while the major question remains unresolved. In the circumstances I would make the order on the insurer's appeal and invite submissions from the parties as to the proper course to follow with respect to the cross appeal.

Since preparing these reasons I have had the advantage of reading the reasons for judgment of Lander J. One of the insurer's grounds of appeal to this Court was that the learned trial Judge was in error when he held that the insurer bore the onus of proving in the third party proceedings that the injury suffered by the plaintiff was not a consequence of the driving of the forklift within the meaning of subs(3) of s99 of the Motor Vehicles Act. This turned out to be decisive, because on the view that his Honour took of the evidence he found it impossible to reach a conclusion as to whether or not the forklift was being driven when the top stillage fell on the plaintiff or became so unstable as to cause him to fall in an effort to avoid it. For this reason he felt unable to say whether the plaintiff's injury was a consequence of the driving of the vehicle. As I have said, the learned Judge applied that view of the operation of subs(3) in accordance with the opinion of Olsson J as expressed in SGIC v Wagner (at 180). In the same case King CJ (at 176) simply noted the onus question but expressed no opinion about it, and Millhouse J did not mention it at all. It is clear, I think, that Olsson J's expression of opinion in SGIC v Wagner was obiter. The point was fully argued in the present appeal by Mr Steele, for the plaintiff, and by Mr Walsh, but on the view that I took of the facts and of the denotation of the word "driving" in subs(3) it was not necessary for me to express an opinion about it. However, Lander J has dealt with the matter in his reasons and has made it plain that it is part of the ratio of his judgment on the appeal. I think in the circumstances that I should express my own view on the subject.

In my opinion subs(3) does not express a qualification or condition or exception to a general obligation or undertaking or liability created by clause 1 of the policy of insurance set out in Schedule 4. Rather, it limits the scope or meaning that would otherwise be given to the expression "caused by or arising out of the use of" (with respect to a motor vehicle) in clause 1. What Parliament has done in substance is to define in s99(3) a term or expression used in the Schedule. It follows, in my opinion, that the onus of proving that a particular injury was a consequence of one of the happenings or activities specified in pars (a), (b) and (c) of subs(3) will rest on the person who relies on the policy - here, the employer.

Mr Walsh submitted that, if Parliament was simply defining or explaining an aspect of "use" in the Schedule, it would have done so by way of amendment to the Schedule itself. Obviously that is one way in which the policy modification could have been achieved. The amendment of s99 itself was another. It is hardly surprising that the latter course should have been adopted because it was already a purpose of s99 to define terms used in Schedule 4. The section, including subs(3), is quite explicit about that. Furthermore, the modification had to apply as well to other provisions in Part 4 of the Act in which the extended "use" formula is used, such as subs(4) of s99 itself and s104. I dare say the draftsman would have dealt with the subject in subs(1) of s99 had it simply been a matter of defining the word "use", but it was necessary to apply the words of limitation to the larger formula and so no doubt it was convenient to deal with the matter in a separate subsection. In substance, however, the reader is being told that the "use" formula in clause 1 (and elsewhere) is no longer to be taken at face value but is to be interpreted in the limited manner explained in subs(3).

Mr Walsh put to us the case of a plaintiff who may, for one reason or another, be unable to say precisely how he came to be injured and so lose his case by reason of an inability to prove an act of driving. From this it was argued that Parliament cannot have intended that the legislation be interpreted in the way I have proposed. The cases in which it will ever be necessary for a plaintiff to deal with the point will be relatively few, and when they do occur such a plaintiff is likely in practice be able to cope with the problem satisfactorily, just as injured and amnesiac passenger plaintiffs do. There will always be cases at the factual border of liability; compare the innumerable disputes about the denotation of the "use" formula in clause 1. As Lander J's judgment shows, there would be many more onus anomalies arising under the Motor Vehicles Act and the Workers Rehabilitation and CompensationAct if the point should be decided the other way.

For these reasons I would hold that the learned trial Judge was in error when he decided that it was for the insurer to prove that the plaintiff's bodily injury was not a consequence of the driving of the forklift. The employer was relying on the policy, and so it was the employer who had to prove a relevant act of driving. As he did not do so, he failed on that ground also.

LANDER J

I have had the advantage of reading in draft the reasons of Cox J. I agree for the reasons given by Cox J that the employer's (first respondent's) claim to be indemnified by the appellant should be rejected. Cox J has concluded that the learned Trial Judge erred in failing to find that the plaintiff's injuries were not a consequence of the driving of the forklift. I agree entirely with that analysis and that would be enough to allow the appeal and set aside the order for indemnity. However I desire to add some reasons of my own.

This is an appeal by a third party (appellant) and a cross appeal by a plaintiff (second respondent) in relation to a judgment given in the District Court in a claim by the second respondent for damages for personal injuries arising out of an accident which occurred at his work place on 12 November 1990. The second respondent was employed by the defendant (the first respondent) as a storeman/driver at the business premises of the first respondent at Port Road, Albert Park.

The second respondent claimed that he suffered personal injuries as a result of the negligence of the first respondent on 12 November 1990. Specifically he claimed that whilst employed by the first respondent and whilst engaged in the loading of a truck on the premises of the first respondent and, as a result of the negligence of an employee of the first respondent, Mr Hughes, he fell from the truck and struck his head on the concrete pavement and suffered personal injuries. He claimed that the employee, Mr Hughes, at the time was driving a forklift truck which was transporting a stillage weighing approximately 200 kilograms and that the stillage overbalanced, fell from the forklift dislodging the second respondent from the tray of the truck to the ground.

In his Statement of Claim, he claimed that the first respondent failed to provide a safe system of work and was guilty of other breaches of the contract of employment between the first respondent and himself and that Mr Hughes was guilty of various acts of negligence.

He further pleaded that the forklift ought to have been insured pursuant to Part 4 of the Motor Vehicles Act 1959.

The first respondent denied the specific allegations made against it and denied that it was negligent and/or in breach of the contract of employment then existing between itself and the second respondent. It did admit, however, that the forklift was insured pursuant to Part 4 of the Motor Vehicles Act1959. The appellant is an approved insurer under s101 of the Motor VehiclesAct 1959, and in fact the only approved insurer in this State pursuant to that section.

The first respondent issued third party proceedings directed to the appellant, The Motor Accident Commission claiming to be entitled to be indemnified against the second respondent's claim against itself. The claim for indemnity was in curious terms, the third party notice providing:

"The defendant claims against you to be indemnified against the plaintiff's claim and the cost of the action to the extent of one half of the plaintiff's claim or to the extent of such an amount as may be found by the Court to be just and equitable on the grounds that you are liable to indemnify the defendant in respect of such claim by virtue of a certain contract or (sic) insurance between the defendant and you or, alternatively, the defendant claims contribution towards the same as the grounds as detailed herein."

I cannot think why the first respondent sought indemnity and costs to the extent of one half of the plaintiff's claim and I assume that the document contains a mistake. There is no further mention of the limited claim for indemnity.

The matter proceeded before a District Court Judge in two stages. In November 1995 the learned District Court Judge heard the second respondent's claim against the first respondent in relation to liability only. He recorded in his reasons:

"At the commencement of the trial on liability I made a direction by consent that it be confined to the issue of liability as between the plaintiff and the defendant, albeit binding upon the third party, but that it not extend to the liability of the third party to indemnify the defendant."

The appellant was represented at that trial and took part in the proceedings by cross examining the second respondent and witnesses called on behalf of the second respondent and addressing the learned trial Judge. The first respondent called no evidence in that trial. The learned trial Judge found that Mr Hughes, the employee of the first respondent, was negligent and found that it was an unsafe and negligent work practice of the first respondent which had caused the second respondent's injuries. A claim by the first respondent that the second respondent had been guilty of contributory negligence was at the same time dismissed.

The learned trial Judge then entered judgment for the second respondent against the first respondent for the whole of his damages to be assessed. At the same time he adjourned the third party proceedings to a date to be fixed.

In January 1997 the learned trial Judge gave the first respondent leave to amend its third party Statement of Claim against the appellant. In accordance with the leave given the Statement of Claim was amended to recite the judgment of the learned trial Judge given on 15 November 1995 and to include the following claim:

"By reason of the findings of fact made by Judge Lunn and set forth in the said reasons (and in paragraphs 6 - 16 inclusive hereof), and by reason of the contract of insurance which existed between the Third Party and the Defendant, in terms of the Fourth Schedule of the Motor Vehicles Act 1959, the third party (sic) is liable to indemnify the defendant (sic) in relation to Garrett's claim as Garrett's injuries were caused by or arose out of the use of a motor vehicle being the Hyster Forklift."

The first respondent's claim for indemnity against the appellant and the second respondent's assessment of damages came on before the learned trial Judge on 6 February 1997.

The learned trial Judge assessed the second respondent's damages as follows: Past Economic Loss $45,200.00

Future Economic Loss $110,000.00

Non Economic Loss $13,640.00

Past Special Damages $78,252.00

Future Special Damages $5,000.00

Gratuitous Services $1,000.00

TOTAL $253,092.00

As well His Honour found that the appellant was liable to indemnify the first respondent in respect of the first respondent's liability to the second respondent.

As I have said the third party appellant appeals against the finding and order that it is liable to indemnify the first respondent. Moreover, the second respondent cross appealed upon the grounds that the assessment of damages for non economic loss and the assessment of damages for future economic loss was manifestly inadequate. On the second day of the hearing the second respondent abandoned his claim that the assessment of damages for future economic loss was manifestly inadequate. For the reasons that follow it would be appropriate to first consider the appeal and the question as to whether or not the appellant ought to have been found liable to indemnify the first respondent then to consider the cross appeal.

At the time that the second respondent suffered injuries his claim for damages for personal injuries against his employer was governed by s54 of the Workers Rehabilitation and Compensation Act.

That section then provided: "54(1) Subject to subsection (2), no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except

(a) a liability under this Act or (b) a liability at common law for non economic loss or solatium.

(2) Subsection (1) does not affect a liability arising out of the use of a motor vehicle, being a liability against which the employer was or ought to have been insured under the law of compulsory third party motor vehicle insurance."

(3) ...

(4) Where an action is brought at common law against an employer for damages for non-economic loss arising from a compensable disability (not being a disability that arises out of the use of a motor vehicle and gives rise to a liability of a kind referred to in subsection (2)), the damages awarded in respect of that loss must not exceed 1.4 times the prescribed sum."

It can therefore be seen that unless the second respondent suffered injuries arising out of the use of a motor vehicle against which the employer was or ought to have been insured under the law of compulsory third party motor vehicle insurance then the second respondent was not entitled to recover as against his employer except under the Workers Rehabilitation and Compensation Act 1986 (the Act) itself or, if at common law, other than for non economic loss. Solatium, of course, is not a relevant concept in this case.

There is no doubt that the second respondent suffered a compensable disability for which he was entitled to receive compensation under the Act. Unless the first respondent is an exempt employer any liability that the first respondent has to make payments of compensation under the Act must be met by Workcover Corporation [s46]. There is no evidence as to whether the first respondent is an exempt employer or whether it was entitled to call upon the Workcover Corporation to make payments under s46.

Two questions needed to be decided in that first hearing. The first was whether the defendant (second respondent) had been guilty of negligence which caused the plaintiff (first respondent) to suffer injury loss and damage. The second question that had to be determined was whether the negligent act gave rise to a liability arising out of the use of a motor vehicle being a liability against which the employer was or ought to have been insured under the law of compulsory third party motor vehicle insurance. Relevantly the law of compulsory third party motor vehicle insurance means Part IV of the MotorVehicles Act 1959 including a policy under that Part [(s54(8)].

The learned Trial Judge made a finding that Mr Hughes an employee of the first respondent was guilty of negligence. He dismissed a claim by the first respondent that the second respondent had been guilty of contributory negligence. It is implicit in his findings that the negligence of the employee of the first respondent caused the second respondent injury, loss and damage. Those express findings and the further implicit finding answered the first question which needed to be addressed in that first hearing. The learned Trial Judge found that the matter could be resolved by a finding, which he made, that it was an unsafe and negligent work practice of the first respondent which had precipitated the second respondent's fall. He said that finding was "sufficient for the plaintiff to succeed in the action."

That is so but only to the extent that the second respondent was therefore entitled to succeed in an action against the first respondent. However although the first respondent had admitted in its pleading that the forklift was and ought to have been insured pursuant to Part IV of the Motor VehiclesAct, and in fact it was, the learned Trial Judge was still obliged to determine whether a liability attached to the first respondent in addition to a liability at common law for non economic loss. Any further liability would only attach if the first respondent was or ought to have been insured under the law of compulsory third party motor vehicle insurance.

It is clear that the first respondent made that admission in its pleading and conducted its defence in the way that it did because of its liability to the second respondent under the Act. Whether it has done so for itself or because of direction of Workcover Corporation cannot be determined without knowing whether the first respondent is an exempt employer, but there is no doubt that the first respondent has taken that position because of obligations under the Act.

If the first respondent was defending the action for itself it would no doubt attempt to minimise its liability to the second respondent and claim that the second respondent was entitled to damages only for non economic loss. However in this case the first respondent has purported to accept that it has a liability to the second respondent for all damages consequent upon the personal injuries suffered by the second respondent including damages for economic loss as well as non economic loss. It has accepted a common law liability for damages which ordinarily no defendant would accept.

It suits the first respondent to adopt that position because the first respondent claims to be entitled to be indemnified by its insurer being the appellant, which insures it pursuant to the compulsory scheme under the MotorVehicles Act. The respondent is in effect seeking to recover the compensation paid to the second respondent either by itself or by the Workcover Corporation under the Act to the detriment and indeed to the exclusion of the appellant. No doubt the first respondent and the Workcover Corporation, if it is the body discharging the liability for compensation under s46 of the Act, consider that the first respondent is safe to adopt such a position, because the appellant is not entitled to avoid the statutory policy under the Motor Vehicles Act upon the ground that this respondent has acted in a way detrimental to the appellant.

The lengths to which the first respondent has gone in support of the second respondent's claim for damages to personal injuries were demonstrated at the hearing of this appeal. The first respondent supported the second respondent's claim in the cross appeal that the award of damages made against the first respondent was in respect of non economic loss manifestly inadequate. It therefore not only did not oppose the second respondent's claim that the damages awarded in his favour were manifestly inadequate but actively supported that claim.

The second example is that the first respondent did not appeal against a finding that the second respondent's injuries were caused in circumstances arising out of the use of a motor vehicle being a liability against which it was or ought to have been insured under the law of compulsory third party motor vehicle insurance.

In summary the first respondent accepted that it had a liability to the second respondent for all damages at common law both non economic and economic and agreed that the award made in respect of these common law damages was in the respect mentioned manifestly inadequate.

The first respondent's failure to appeal against a finding that it was liable for common law damages in circumstances where the appellant was asserting that it was not liable to indemnify the first respondent for common law damages, because the first respondent was not liable to the second respondent for such damages, meant that a situation might arise whereby the third party appellant persuaded this Court that it was not obliged to indemnify the first respondent because this was not a liability arising out of the use of a motor vehicle, but that absent an appeal by the first respondent against such a finding, the second respondent was entitled to recover against the first respondent upon the basis that it was a liability arising out of the use of a motor vehicle being a liability against which the employer was or ought to have been insured under the law of compulsory third party motor vehicle insurance.

The failure to appeal against that finding raised a further problem in the event that the third party appellant was successful in persuading this Court that it has no liability to indemnify the first respondent. That is because the second respondent's cross appeal claiming that the damages awarded were inadequate would have to be considered in circumstances where this Court was of the opinion that the first respondent had no liability in damages to the second respondent, except a liability for damages for non-economic loss. Not only did the first respondent not claim that in the event that the appellant's appeal is successful that the second respondent's claim for damages ought to be assessed upon the more restricted basis set out in s54(2) of the WorkersRehabilitation and Compensation Act, it accepted that the second respondent's damages which had been assessed at common law were in respect of a head of damage manifestly inadequate. However it would be odd, in my opinion, if this Court on the one hand acceded to the appellant's argument that this was not a liability arising out of the use of a motor vehicle but on the other hand recognised implicitly that the second respondent was entitled to be compensated upon the basis that it was such a liability.

There are obvious reasons why the first respondent took the position that it did. I do not mean by that that the reasons are proper but they are obvious. Either the first respondent itself or the Workcover Corporation are obliged to pay the second respondent all of his entitlements under the Act. Those entitlements include a very substantial amount for economic loss. No doubt the first respondent or Workcover Corporation will have to meet a substantial liability under the Act. It is therefore in the first respondent's or Workcover Corporation's interest that the second respondent obtain a large award by way of damages. If it is the first respondent which has paid compensation in respect of the compensable disabilities suffered by the second respondent it would be entitled to seek indemnity from the Motor Accident Commission, which would allow the first respondent to recoup, as it were, the economic loss it had paid under the Act. If on the other hand the Corporation had paid the second respondent compensation in respect of the compensable disabilities suffered by the second respondent it would be entitled by reason of s54(6) and (7) of the Act to recover from the second respondent or the first respondent the amount of compensation paid or payable, under the Act, subject to the limitations in s54(7).

The effect of the Act therefore is that if the first respondent can satisfy the Court that the appellant is obliged to indemnify the first respondent then the first respondent or Workcover Corporation will in effect recoup the amount of compensation paid or payable under the Act from the Motor Accident Commission.

For those reasons the first respondent has taken a position apparently adverse to its own interests although in truth the position it adopts is in its own interests or that of Workcover Corporation, whichever is meeting the liability to pay compensation under the Act.

In that first hearing the learned Trial Judge found that the first respondent had been negligent and that the second respondent had suffered personal injuries as a result of that negligence and as a consequence "there will be judgment for the plaintiff against the defendant for the whole of the damages to be assessed."

As I have said that order could not have been made without first determining that those personal injuries gave rise to a liability upon the first respondent arising out of the use of a motor vehicle, being a liability against which the employer was or ought to have been insured under the law of compulsory third party motor vehicle insurance.

The learned Trial Judge simply did not address his mind to that issue in that hearing and no such finding was made.

When the matter came on for hearing on the second occasion the first respondent claimed that the second respondent's injuries occurred in circumstances arising out of the use of a motor vehicle against which it was insured by the appellant under the law of compulsory third party motor vehicle insurance. Further it was contended by the first respondent, and accepted by the learned trial Judge, that there was no onus upon the first respondent to establish that the bodily injury in this case occurred in the circumstances mentioned in s99(3) of the Motor Vehicles Act. Instead it was contended that the onus lay upon the appellant to establish that the bodily injury to the second respondent did not occur in any of the circumstances provided for in s99(3) and therefore no right to indemnity arose under the policy.

Section 99(3) provides: "(3) For the purposes of this Part and schedule 4, death or bodily injury will not be regarded as being caused by or arising out of the use of a motor vehicle if it is not a consequence of -

(a) the driving of the vehicle; or

(b) a collision, or action taken to avoid a collision, with the vehicle whether in motion or stationery; or

(c) the vehicle running out of control."

In support of the contention that the onus lay upon the appellant the learned Trial Judge relied upon the dictum of Olsson J in SGIC v Wagner (1993) 62 SASR 175 at 180 where His Honour said:

"Although the question of onus does not loom large as a critical, practical feature of the instant case, it seems to me that, on well settled principle, the party who positively asserts the application of ss(3) of s99 of the MVA to a particular fact situation - once an affirmative response is given to the first question - necessarily accepts the onus of establishing that contention. The subsection is essentially an exclusionary provision."

As the passage itself acknowledges the remarks of Olsson J were obiter.

In that same case King C J said at 176:

"A question may arise in the future as to whether s99(3) of the Motor Vehicles Act 1959 is an interpretation clause which limits the meaning of the expression, caused by or arising out of the use of a motor vehicle, in clause 1 of the Schedule policy or whether it effectually writes an exclusion clause into the policy. The characterisation of the subsection may have an impact on the onus of proof. No question of onus arises or was argued in these proceedings as the relevant facts are clearly established. Questions of onus can therefore be left for another occasion."

The learned Trial Judge said in his reasons following upon the second hearing:

"On the view which I have taken of the evidence it is impossible to make any finding on the balance of probabilities as to the stage in the unloading process which had been reached when the top stillage on the load either fell or became unstable so as to cause the plaintiff to fall in an effort to avoid it, and so to be able to say whether the forklift was then being driven within the meaning of s99(3) ........."

In other words he was unable to say that the bodily injury suffered by the second respondent was a consequence of the driving of the vehicle.

In this case the learned trial Judge adopted the reasoning of Olsson J. He found that the appellant had failed to discharge the onus upon it. He said:

"As Olsson J made a pronouncement upon it I consider that I should follow what he said. Thus as the third party has not shown that the injury was not a consequence of the driving of the forklift within s99(3), the Fourth Schedule operates to give the defendant an indemnity from the third party against the plaintiff's damages."

A curious result was thereby achieved. First the first respondent admitted in its pleading that the second respondent's injuries arose out of the use of a motor vehicle, a risk against which it was insured by the appellant. Secondly, no finding was ever made to that effect in the hearing of the proceedings by the second respondent against the first respondent. Thirdly, notwithstanding the absence of such a finding the learned Trial Judge ordered that the second respondent's damages be assessed in those proceedings against the first respondent as if such a finding had been made. Fourthly notwithstanding the absence of such a finding against the first respondent the learned Trial Judge found that the onus lay upon the appellant to prove that the second respondent's injuries did not arise out of the use of a motor vehicle giving rise to a liability against which the first respondent was or ought to have been insured under the law of compulsory third party motor vehicle insurance. Fifthly, the first respondent was entitled to indemnity from the appellant because the learned Trial Judge could not find that the personal injuries did not arise out of the use of a motor vehicle. Sixthly, notwithstanding the second respondent was entitled to damages at common law because the injuries arose out of the use of a motor vehicle, the appellant was obliged to indemnify the first respondent because the appellant had not proved that the injuries did not arise out of the use of a motor vehicle.

The reasoning, in my opinion, is inherently flawed beginning with the failure to make a finding in the first hearing that the injuries arose out of the use of a motor vehicle and concluding with a reversal of the onus of proof in the second hearing.

If the learned Trial Judge was unable to determine whether the personal injuries suffered by the second respondent arose out of the use of a motor vehicle, how is it so that the second respondent was ever entitled to judgment against the first respondent? The second respondent had an obligation to prove that matter in his claim for damages against the first respondent.

If the onus was, as I believe it to be, on the first respondent in the proceedings against the appellant to establish that it was entitled to indemnity because the injuries arose out of the use of a motor vehicle and no such finding could be made, as in fact the learned Trial Judge determined, then logically that finding should have been made in the first proceedings which would have led to the result that the second respondent was only entitled to damages for non economic loss. The conclusions in the two proceedings are simply inconsistent.

Because the point of the onus of proof is important and will arise again I think it desirable to give my reasons as to why I disagree with the decision of Olsson J in SGIC v Wagner (supra) and why therefore I would have found for the appellant upon the learned Trial Judge's finding in the second proceedings that it was not possible to conclude whether the injuries arose out of the use of a motor vehicle.

Section 101 of the Motor Vehicles Act provides for the approval by the Minister of a person or body of persons, corporate or unincorporate, who carry on the business of insurance to be approved as an insurer under Part 4 of the Motor Vehicles Act. In fact the appellant is the only body of any kind which has been approved as an insurer under that Part.

Section 102 provides that a person must not drive a motor vehicle on a road or wharf unless a policy of insurance complying with Part 4 of the MotorVehicles Act is in force in relation to the vehicle.

A motor vehicle is defined in the Motor Vehicles Act as meaning: "(a) a vehicle, tractor or mobile machine driven or propelled or ordinarily capable of being driven or propelled by a steam engine, internal combustion engine, electricity or any other power, not being human or animal power; and

(b) a caravan or a trailer, but does not include a mobile machine controlled and guided by a person walking, or a vehicle run upon a railway or tramway." [s5]

There can be no doubt that a forklift truck would qualify as a motor vehicle within the definition of motor vehicle under the Motor Vehicles Act. In any event this forklift truck was insured under Part 4 of the MotorVehicles Act.

Section 104 provides:

"In order to comply with this Part a policy of insurance must insure the owner of the motor vehicle to which the policy relates, and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth."

A policy of insurance under the Motor Vehicles Act must comply with Schedule 4.

That provides: "1. The insurer insures the owner of the motor vehicle and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth.

2. A person so insured warrants that he or she will not--

(a) drive the vehicle, or do or omit to do anything in relation to the vehicle, with the intention of causing the death of, or bodily injury to, a person or damage to another's property or with reckless indifference as to whether such death, bodily injury or damage results; or

(b) drive the vehicle while so much under the influence of intoxicating liquor or a drug as to be incapable of exercising effective control of the vehicle; or

(c) drive the vehicle while there is present in his or her blood a concentration of .15 grams or more of alcohol in 100 millilitres of blood; or

(d) drive the vehicle while not duly licensed or otherwise permitted by law to drive the motor vehicle; or

(e) drive the vehicle while the vehicle is overloaded, or in an unsafe, unroadworthy or damaged condition; or

(f) use the vehicle otherwise than for purposes--

(i) stated in the application for registration, renewal of registration, exemption from registration, or permit, in respect of the motor vehicle; or

(ii) agreed upon by the insurer and the registered owner of the vehicle.

3. The owner of the vehicle warrants that no other person will, with his or her knowledge or consent (which will be presumed in any proceedings in the absence of proof to the contrary), drive or use the vehicle, or do or omit to do anything in relation to the vehicle, contrary to any of the paragraphs of clause 2."

Paragraph 1 of Schedule 4 provides for the extent of the cover including the class of persons who are covered by the insurance and the circumstances in which the indemnity will arise namely in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth.

The statutory policy is not subject to any conditions whatsoever. The statutory policy provides that a person will warrant the various matters provided for in paragraphs 2 and 3 but there are no conditions provided for in the policy which would exclude the operation of the policy. Indeed so much is made clear by the fact that the insurer must indemnify a driver, who without lawful excuse drives a motor vehicle without first obtaining the consent of the owner, although the insurer may recover from that driver any moneys paid by the insurer in respect of a claim for death or bodily injury caused by his or her driving [s123].

There are terms of the policy but not conditions [s124A].

The reason for that is clear enough. It is the intention of Parliament that all persons who suffer personal injuries by reason of the negligence of another person in the driving and management of a motor vehicle should to be entitled to recover damages without fear that the insurer of that negligent party is entitled to avoid indemnity upon a breach of a condition of the policy. The scheme is a universal scheme to provide protection through insurance for all persons who suffer personal injuries arising out of the negligence of another party in the driving and management of a motor vehicle. That is made quite clear by s109 which provides that the validity or operation of the policy of insurance is not affected by the insured failing to pay the correct premium. The Motor Vehicles Act provides for the insurer to be directly liable where the person insured under the policy of insurance is dead or cannot be served with process [s113]. The Motor Vehicles Act provides for the insurer to contribute sufficient funds to meet claims against the nominal defendant where the identity of the person insured under the policy cannot be ascertained or when a vehicle is uninsured [ss115 and 116].

An insurer can only cancel a policy of insurance if it has first obtained from the Registrar a written notice that no registration, exemption from registration or permit is in force in respect of the vehicle.

The purpose of the legislation is to impose upon an approved insurer a statutory policy of insurance without conditions and for which the approved insurer must indemnify the insured even where the insured person would otherwise be in breach of the contract of insurance. The remedy for the insurer if called upon to indemnify in those circumstances is to seek to recover moneys from the insured after payment by the insurer to the injured party. [s124A]

In my opinion s99(3) is simply a definition section. It does not purport to include any condition for indemnity under the policy but merely provides for the scope of the indemnity under the policy. That is consistent with the whole scheme of the Act which provides for the policy to operate in all circumstances for the protection of the person who suffers death or bodily injury. In my opinion s99(3) merely provides the circumstances in which indemnity will arise.

I therefore respectfully disagree with the remarks of Olsson J in SGIC v Wagner (supra). In my opinion, s99(3) is, to use the words of King C J, an interpretation clause which limits the meaning of the expression caused by or arising out of the use of a motor vehicle. That is so, in my opinion, on the ordinary meaning of the words. Moreover, that is consistent with the whole scheme of the Act. Schedule 4 provides for an unconditional policy of insurance to avoid, in the interests of those who have suffered death or bodily injury, any arguments between the approved insurer and the insured person or the driver or owner in relation to the scope of the cover. It would be wrong to assume that Parliament intended, in amending s99(3), to include for the first time, a condition of the policy in Schedule 4.

Section 99(3) is in its form to aid in the interpretation of the words 'caused by or arising out of the use of a motor vehicle'.

In those circumstances, in my opinion, the onus of proof when a person claims to be entitled to indemnity under the policy of insurance provided for in Schedule 4 of the Act is the same as any other claim for indemnity by an insured person against that person's underwriter. The person must prove the contract of insurance (which in this case is statutory), the terms of the contract of insurance (Schedule 4), that the risk insured against has occurred and that the person is entitled to indemnity. The last mentioned matter requires the person seeking indemnity to prove that the death or bodily injury was a consequence of one of the matters in s99(3).

In my opinion, if there is any argument as to whether or not death or bodily injury was caused by or arising out of the use of a motor vehicle the person who claims the benefit of the policy must establish, on the balance of probabilities, that the risk insured against comes within the terms of the policy.

It follows that the learned Trial Judge erred and in this case it was incumbent upon the first respondent to establish that the second respondent's injuries were caused by, or arose out of the use of a motor vehicle within the meaning of those words as defined by s99(3) of the Motor Vehicles Act.

The finding made by the learned Trial Judge, that is that he was not able to conclude that the forklift was being driven within the meaning of s99(3), meant that the first respondent's claim to indemnity under the policy failed because it did not establish that the first respondent was entitled to indemnity under the policy.

The construction at which I have arrived, that it is upon the party who asserts that a liability arises out of the use of a motor vehicle to establish that matter, would be consistent with the obligation of a worker who claims the benefit under s54(2) and the Corporation in seeking recovery under s54(7) having to prove that fact.

A worker can suffer personal injuries either as a result of the negligence of the worker's employer or as a result of the negligence of a third party tortfeasor (wrongdoer).

As I have already said, where the worker suffers personal injuries as a result of the negligence of the employer that worker is limited in a claim for damages to damages for non-economic loss unless the worker can establish that the liability for damages arose out of the use of a motor vehicle being a liability against which the employer was or ought to have been insured under the law of compulsory third party motor vehicle insurance.

In the case of an exempt employer where the worker's personal injuries have been caused by the employer and in circumstances arising out of the use of a motor vehicle being a liability against which the employer was insured the employer is entitled to indemnity from the Motor Accident Commission. The employer would then be relieved of its liability to pay compensation to the extent that the plaintiff would recover common law damages. In other words the employer would offset the compensation payments made under the Act against its liability to pay common law damages for which it is entitled to be indemnified.

Where a compensable disability arises out of the use of a motor vehicle against which the employer ought to have been insured against liability for damages for personal injuries under the law of compulsory third party motor vehicle insurance and where compensation is paid or payable by the Corporation under the Act in respect of that disability the Corporation is then entitled to recover the amount of compensation under s54(7) of the Act. In those circumstances the Corporation is entitled to recover the amount of compensation paid or payable under the Act from the wrongdoer subject to the qualifications set out in s54(7)(d).

In the circumstances where the Corporation is seeking to make a recovery under s54(7) of the Act in relation to a compensable disability arising out of the use of a motor vehicle it seems to me that there can be no doubt that the Corporation would be obliged to establish that the employer was or ought to have been insured against liability for the disability under the law of compulsory third party motor vehicle insurance. That is because proof of that is a prerequisite to an action being brought under s54(7).

In my opinion both the scheme of the Motor Vehicles Act and the scheme of the Act are to the same effect, that is, that the party asserting that the personal injuries arose out of the use of a motor vehicle must establish it.

In my opinion, both for the reasons given by Cox J and for these reasons, the appellant's appeal against the finding that it was liable to indemnify the first respondent must succeed and the order that the appellant indemnify the first respondent should be set aside.

That leaves the question of the cross appeal. As already mentioned the first respondent has not appealed against the decision whereby the second respondent obtained damages including damages in addition to non economic loss.

Consistent with the decision at which I have arrived in the appeal, s54(2) of the Workers Rehabilitation and Compensation Act would not arise because the liability of the employer, (first respondent), to the second respondent did not arise out of the use of a motor vehicle being a liability against which the employer was or ought to have been insured under the law of compulsory third party motor vehicle insurance.

In those circumstances the second respondent's claim for damages would be limited to a liability at common law for non economic loss and have to be assessed in accordance with s54(4) of the Workers Rehabilitation and Compensation Act.

Of course, it follows that the award of damages in favour of the second respondent in the amount that His Honour arrived at is overstated to the extent of that part award of damages relating to economic loss. The award of damages should have been for non-economic loss only.

It follows that whilst the first respondent is entitled to rely upon the statutory provisions in s54(1) of the Workers Rehabilitation and CompensationAct it has not. That leaves the question as to whether or not it is entitled to claim the benefit of the appellant's success against itself in relation to the claim by the second respondent against itself.

Unless it appeals, I think not.

However, the second respondent has claimed that the damages awarded were manifestly inadequate. That has been argued and that gives rise to an examination of the damages awarded. The second respondent claims, in his cross appeal, that the assessment of damages for non economic loss was manifestly inadequate. He also claimed, but later abandoned the claim, that the assessment of damages for future economic loss was manifestly inadequate. The first respondent has supported the submission that the assessment of damages for non-economic loss is manifestly inadequate.

As to that claim the second respondent's damages were assessed in accordance with the Motor Vehicles Act and the Wrongs Act. Having regard to the decision arrived at, that assessment is wrong. A Court would only assess damages in accordance with these Acts if the personal injuries suffered occurred in an incident caused by or arising out of the use of a motor vehicle (s35A(6) Wrongs Act). That is not the case here. The assessment must be limited to non economic loss and should have been assessed in accordance with s54(4) of the Workers Rehabilitation and Compensation Act.

This Court decided in Broken Hill Pty Co Ltd v Lorenz (1990) 53 SASR 244 that the proper approach to the assessment of damages under s54(4) is simply to assess the damages in accordance with common law principles but if the amount of damage assessed exceeds 1.4 times the prescribed amount to limit the damages to that amount. That would mean that the damages for non-economic loss which had been assessed in accordance with the Wrongs Act, are manifestly inadequate.

The Court raised with counsel for both respondents the difficulties which would arise if the Court accepted the appellant's argument. It was pointed out to both counsel the illogical consequences to which I have referred.

Counsel for the second respondent suggested that if the appellant's argument succeeded the matter would need to be sent back to the Trial Judge. I cannot agree with that. If the first respondent appealed this Court would be in as good a position as the Trial Judge to assess damages for non-economic loss on ordinary common law principles. Counsel for the first respondent said that if the parties could not agree his client would seek to appeal out of time. He did not make clear what it was that the parties would need to agree upon.

The matter was left in an unsatisfactory state. It may be that the respondents had an agreement between themselves on damages and that agreement would continue to operate whatever this Court's decision on the appeal. For example it might be the case that the second respondent's entitlement to compensation under the Act is greater than the assessment of common law damages and that therefore the issues between the respondents are academic. It may be that upon the appellant succeeding neither respondent will seek further relief from the Court.

If that is the case I would say two things. First this Court should have been told of those matters. Secondly I would question in those circumstances whether the concession made by the first respondent that the second respondent's damages were too low should have been made.

In my opinion the appellant's appeal should be allowed and the order made by the learned Trial Judge that the first respondent be indemnified by the appellant be set aside. In lieu thereof there should be judgment for the appellant against the first respondent.

I would hear both respondents on the course to be adopted on the cross appeal.

BLEBY J

The relevant facts and the course of proceedings in the District Court have both been adequately described in the reasons for judgment of other members of the Court, and I will not repeat them.

At the time the second respondent ("the plaintiff") sustained his injury s54 of the Workers Rehabilitation and Compensation Act 1986 relevantly provided as follows: "54. (1) Subject to subsection (2), no liability attaches to an employer in respect of a compensable disability arising from employment by that employer except -

(a) a liability under this Act;

or

(b) a liability at common law for non-economic loss or solatium.

(2) Subsection (1) does not affect a liability arising out of the use of a motor vehicle, being a liability against which the employer was or ought to have been insured under the law of compulsory third-party motor vehicle insurance."

Sub-section (4) of s54 limited the amount which could be recovered by way of non-economic loss for a claim brought under s54(1)(b).

It was common ground that the fork-lift owned by the first respondent ("the employer") was a motor vehicle in relation to which there was in force a policy of insurance complying with the provisions of Part 4 of the MotorVehicles Act 1959. Clause 1 of the statutory policy as contained in Schedule 4 of the Motor Vehicles Act provides: "1. The insurer insures the owner of the motor vehicle and any other person who at any time drives or is a passenger in or on the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth."

However, that clause must be construed in accordance with the requirements of s99(3) of the Motor Vehicles Act which reads as follows: "(3) For the purposes of this Part and schedule 4, death or bodily injury will not be regarded as being caused by or as arising out of the use of a motor vehicle if it is not a consequence of -

(a) the driving of the vehicle; or

(b) a collision, or action taken to avoid a collision, with the vehicle whether in motion or stationary; or

(c) the vehicle running out of control."

The question was therefore whether, on the facts found by the learned trial judge, the injuries to the plaintiff were "a consequence of" the driving of the fork-lift.

A fork-lift of the type involved in this incident and as described in the evidence is a highly specialised vehicle. Its sole purpose is to load or stack goods. Those goods are either packed onto pallets or are goods which have been manufactured or packed in such a way that the tines of the fork-lift can be inserted under the load. The tines, after being inserted into the pallet or under the load, are then mechanically or hydraulically raised to lift the pallet or goods from their resting place so that they can then be carried by the fork-lift from one location to another. This will include loading from the ground or a stack onto another vehicle for transport by road or rail. By reversing the process, such goods can be unloaded from transport vehicles into a store or stack. Fork-lifts are designed to be highly manoeuvrable, but only to carry goods short distances for the purpose of loading, unloading or stacking the goods. The horizontal speed and direction of the vehicle and the raising and lowering of the tines are all controlled by the one operator from the same position, and raising and lowering of the tines can occur simultaneously with forward or backward movement of the vehicle. The usual method of loading goods onto the tines is by adjusting the level of the tines to the level of the space underneath the load to be lifted, by driving the vehicle slowly forward so that the tines enter that space, and then by raising the tines so that the load is lifted. In order to unload goods from the fork-lift the same process occurs in reverse.

The learned trial judge found on the first hearing that the driver of the fork-lift, Mr Hughes, having loaded the stack of stillages onto the fork-lift, had brought the fork-lift alongside the semi-trailer preparatory to raising the tines of the fork-lift, with a view to placing the stillages on the tray of the semi-trailer, He found that the fork-lift had come to a stop, that Hughes had lifted the load by raising the tines in order to clear the tray of the semi-trailer. Whilst the fork-lift was in that position, the plaintiff lost his balance either because he saw the stillage falling towards him or because the stillage knocked him over. The finding was that there was no forward or backward movement of the fork-lift at the time when the stillage fell.

In my opinion, the injury to the plaintiff, being caused in one way or another by the falling stillage, was "a consequence of" the driving of the fork-lift, and accordingly the restriction contained in s54(1) of the WorkersRehabilitation and Compensation Act did not affect the employer's liability arising out of the use of a motor vehicle, being a liability against which the employer was insured under the law of compulsory third party motor vehicle insurance, namely the Motor Vehicles Act 1959.

Similar questions arose for determination in State Government Insurance Commission v Wagner (1993) 62 SASR 175 and Heath v Corporation of The City of Tea Tree Gully (1996) 66 SASR 548. Both those cases involved the use of a combination backhoe and front-end loader. That, too, is a specialised vehicle but having a number of different uses. When in its stationary position the rear wheels can be jacked off the ground and the vehicle used as a backhoe, to which can be fitted a variety of different sized buckets. When mobile, and with the backhoe mechanism retracted, it can be used as a front-end loader by driving it forward, with the bucket lowered, into a heap or stack of loose bulk material and by transferring the contents of the bucket to (usually) a stationary truck or trailer. As in Heath's Case, it can also be used as a simple lifting device whereby material (in that case, concrete slabs) are manually loaded into the bucket, the bucket raised and the contents transferred to some other location.

In Wagner's Case the injury occurred to the driver of the backhoe after he had driven it to its location to commence operations, after he had raised the vehicle on its hydraulic jacks and whilst he was undertaking preparations within the cabin for operating it as a backhoe. In unanimously holding that the injury was not a consequence of the driving of the vehicle, the members of the Full Court recognised that for that particular vehicle there was "a distinct separation between the activity of driving, which had been completed, and the activity of preparation for the operation of the backhoe, which was in progress when the injury occurred". (per King CJ at 176)

Heath's Case involved the use of the front-end loader bucket of a similar vehicle where the difference in function was perhaps less marked. The vehicle was not moving. The plaintiff had trouble manually loading a heavy slab into the bucket and, with a view to assisting him, the driver tilted and curled the bucket to adjust the balance of the load, causing the plaintiff to injure himself. At all material times the vehicle was stationary, and the Full Court, by a majority, held that the injury was not a consequence of the driving of the vehicle. The majority recognised that it was a question of fact and degree, that it required more than a mere temporal connection between the driving and the non-driving use to come within s99(3), and that in that case the actions which caused the injury were properly characterised as the loading of the vehicle rather than its driving.

Whilst a distinction between loading and driving is appropriate and, indeed, probably necessary in the case of characterising the various activities of a backhoe and front-end loader, different considerations apply to a fork-lift.

There is no doubt that at the time the stillage fell a loading process was being undertaken, namely the loading of the semi-trailer. If the question in this case related to the driving of the semi-trailer upon which the plaintiff was standing at the time when he fell, there could be no doubt that his injury arose in consequence of the loading of the semi-trailer and not as a consequence of its being driven. However, that question does not arise in this case. The question in this case is whether the injury suffered was a consequence of the driving of the fork-lift, not the semi-trailer.

If the same distinction between loading and driving that was applied in Heath's Case were applied in this case, the loading of the fork-lift occurred when the tines were inserted under the stillages and were raised to take the weight of the stillages. The unloading of the stillages from the fork-lift had not yet begun. The fork-lift was still being driven, laden, when the stillage fell. The fork-lift could not be unloaded until the load was in position over the tray of the semi-trailer, the weight transferred from the tines to the tray and the tines withdrawn. Anything occurring before that process constituted the driving of the vehicle, albeit in its rather specialised mode, including the raising and lowering of the tines.

However, in the case of a fork-lift, I consider that the distinction between loading goods onto the fork-lift and the driving of the fork-lift is an artificial one. The very process of loading and unloading the fork-lift involves driving the fork-lift forward or in reverse as the case may require, and the raising and lowering of the tines. These movements are a necessary part of the operation or driving of the fork-lift with the load in place. It is not unusual to consider the whole operation of the fork-lift as the driving of the fork-lift. It is, after all, an alternative method of loading and transferring goods from one point to another sometimes undertaken by a crane, and a crane is driven by a person commonly known as a crane driver, even though the crane may not be a mobile crane.

Just because a fork-lift is a specialised vehicle required to be insured under the Motor Vehicles Act does not mean that it is only being driven when the wheels are turning. I agree with Cox J that a meticulous fragmentation of a vehicle's operation is unrealistic, and it cannot depend solely on whether the wheels are turning. On the other hand, I cannot accept that a distinction between driving and loading, or driving and operating a backhoe - appropriate for that type of vehicle - is appropriate to the operation of a fork-lift. The distinction between the loading and driving of that vehicle therefore becomes rather artificial.

The sole activity in which the fork-lift was engaged on the occasion in question was the loading of stillages from the ground onto the semi-trailer. That process of loading involved the insertion of the tines under the stillages, the elevation of the tines to take their weight, the manoeuvring of the fork-lift to an appropriate position beside the semi-trailer, the raising of the tines, the moving of the fork-lift forward so that the tines were over the semi-trailer, the lowering of the tines, perhaps some further backward and forward manoeuvring of the fork-lift to ensure that the stillages were in the correct position in relation to the semi-trailer, and eventually the placement of the stillages on the tray of the semi-trailer and the withdrawal of the tines by reversing the fork-lift. In other words, the whole process was one of loading, but it also involved, at the same time, the driving of the fork-lift in its various modes of vertical and horizontal movement either together or separately.

As Cox J has pointed out, no-one has suggested that Hughes was not driving the fork-lift before it stopped adjacent to the semi-trailer. That driving was but part of the loading of the semi-trailer. There was not a separate loading process commenced with the raising of the tines after the fork-lift became stationary. The whole process was one of loading the semi-trailer by the driving of a highly specialised vehicle designed solely for that purpose, and it is inappropriate to attempt to separate the constituent parts of that activity and to describe one movement as loading and another as driving.

It follows that in my opinion the fork-lift was being driven at least from the moment that the tines took the weight of the stillages, and during the whole time that the stillages were being elevated and moved to the position where the top stillage fell. Although it is not necessary to decide the question, it was probably being driven whilst the tines were being inserted below the stillages and whilst the stillages were being engaged by the tines. As the stillages in the stack were apparently in a stable condition before they were lifted, and the top one obviously became unstable at the point where it fell, the falling of the stillage must have been a consequence of the driving of the fork-lift. Accordingly, in my opinion the plaintiff was entitled to damages unrestricted by the operation of s54(1) of the WorkersRehabilitation and Compensation Act, and the employer was entitled to be indemnified under the policy by the appellant. I would therefore dismiss the appellant's appeal against the order for indemnity.

Because of the view I have taken as to what constitutes the driving of the fork-lift, it is not necessary for me to determine the question of who bears the onus of proof that the injury happened in consequence of the driving of a motor vehicle. However, on this aspect I would wish to express agreement with both Cox J and Lander J that subs(3) of s99 of the Motor Vehicles Act is not in the form of a qualification or condition or exception to the general obligation created by clause 1 of the statutory policy. In that respect I respectfully disagree with the view expressed obiter by Olsson J in State Government Insurance Commission v Wagner (supra) at p180. I have little to add to the reasons expressed by Cox J and Lander J on this aspect. One might be pardoned for thinking, at first glance, that the use of the negative in s99(3) ("will not be regarded as being caused by...") constitutes an exception or exclusion, proof of which rests on the party seeking to take advantage of the exclusion. However, the drafting technique adopted involves the use of a double negative, with the result that subs(3) in effect becomes a definition of the circumstances in which bodily injury will be regarded as being caused by or arising out of the use of a motor vehicle. In those circumstances, there is nothing to displace the requirement that the onus of proof that the injuries so arise rests on the person asserting the proposition.

It follows, as Lander J has pointed out, that the plaintiff bore an onus in this case to prove that the injury was a consequence of the driving of the fork-lift, in order to establish his entitlement to damages unrestricted by s54(1) of the Workers Rehabilitation and Compensation Act. The fact that the plaintiff bore such an onus appears to have been overlooked by the learned trial judge, and his finding as to the plaintiff's entitlement to damages seems to rest on the failure of the third party to discharge what he regarded as its onus of proof to show that the injury was not a consequence of the driving of the vehicle.

This error, coupled with the manner in which the trial was split, had some unfortunate and potentially embarrassing results. The learned trial judge, at the commencement of the trial, directed by consent that at that stage the third party issues not be dealt with at the trial and that consideration of the third party notice be adjourned sine die. There is no doubt that by virtue of s38 of the District Court Act 1991 the Court was able to give a declaratory judgment finally determining the question of liability between the plaintiff and the employer, leaving the quantum of damages to be determined subsequently, which is how the trial was conducted. However, in a case involving the operation of s54 of the Workers Rehabilitation and CompensationAct, the determination of the employer's liability does not necessarily resolve the dispute as to the heads of damage to which the plaintiff may be entitled, and whether the plaintiff's damages are limited to non-economic loss or solatium (s54(1)(b)) or whether they extend to other heads of damage which would be included if the injury was a consequence of the driving of a motor vehicle.

However, as happened on this occasion, the determination of liability as a preliminary question inevitably gave rise to the need to resolve, at the second hearing, factual questions as to whether the injury was caused by or arose out of the use of the motor vehicle, and whether the injuries were a consequence of the driving of the vehicle. As it happened in this case, the appellant was represented at the first hearing on the liability issue, and on the second hearing no further evidence was led. But the process even then gave rise to difficulty. The learned trial judge noted, in the course of his reasons following the second hearing:

"There was no further evidence adduced on the subsequent trial of the third party issues and they fall to be determined on the same evidence and findings as the issues between the plaintiff and the defendant. While I adhere to my previous findings they need to be amplified to some extent to deal with the third party issues. Some of the submissions made on the third party trial assumed that no further findings could be made on the evidence, but the findings made previously were only those necessary for the determination of the somewhat different issues between the plaintiff and the defendant."

However, the second hearing involved both the third party proceedings and the assessment of the plaintiff's damages. There was nothing to prevent either the defendant or the third party, or indeed the plaintiff, from calling further evidence which touched upon the use and driving of the fork-lift or in respect of any other aspect of the events which might have touched on whether the injuries were in consequence of the driving of the fork-lift. Any such evidence, if accepted, might well have called in question the previous findings on liability and the trial judge's findings relating to the use of the fork-lift. That is a highly undesirable situation and is potentially fraught with difficulty. If there was any justification for the splitting of proceedings, it could only have been for the purpose of resolving the employer's liability to the plaintiff and the liability (if any) of the third party to indemnify the employer, as constituting the first stage, with the second stage relating solely to the assessment of the plaintiff's damages upon whatever basis had been properly determined at the first hearing.

Although I would dismiss the appellant's appeal, the decision of the majority is to allow the appeal. I agree that in those circumstances, and because there is no appeal by the employer against the assessment of the damages, the plaintiff's cross-appeal on damages should await further submissions depending on what course the employer may now seek to follow.