Nominal Defendant v GLG Australia Pty Ltd & Ors

[2005] HCATrans 992

[2005] HCATrans 992

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S329 of 2005

B e t w e e n -

NOMINAL DEFENDANT

Appellant

and

GLG AUSTRALIA PTY LTD

First Respondent

SALIM FAHD TLEYJI

Second Respondent

READY WORKFORCE PTY LIMITED

Third Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 8 DECEMBER 2005, AT 12.19 PM

Copyright in the High Court of Australia

__________________

MR P.J. DEAKIN, QC:   If the Court pleases, I appear for the appellant with MR P.J. NOLAN.  (instructed by Sparke Helmore)

MR J.E. MACONACHIE, QC:   I appear with MR N.J. POLIN for the respondent, if your Honours please.  (instructed by Curwood & Partners)

GLEESON CJ:   Yes, Mr Deakin.

MR DEAKIN:   A couple of housekeeping matters, your Honours.  The other two respondents are not involved in this appeal and I think have filed documents to the effect that they do not wish to be heard on any of the issues.  We therefore propose ‑ ‑ ‑

KIRBY J:   Is not the plaintiff in some way contingently affected by the outcome ‑ ‑ ‑

MR DEAKIN:   To the extent of $50,000, your Honour is perfectly correct.  The outcome of our ‑ ‑ ‑

KIRBY J:   Anyway, he is on notice of the proceedings and he does not want to be here. 

MR DEAKIN:   He has chosen not to, your Honour.  He has supported our position, at least in the Court of Appeal, and the outcome of our success in the appeal would be that he is about $50,000 better off, your Honour, but I think they have taken the view that they do not need to be here and so they have chosen not to.  We therefore propose to address the ‑ ‑ ‑

KIRBY J:   They have great faith in your advocacy, Mr Deakin.

MR DEAKIN:   I am not sure about that at all, your Honour.  The other housekeeping matter is that within the book at 407 there is a foreshadowed amended notice of appeal.  My learned friend, as I understand it, does not oppose us being allowed to amend our notice of appeal.

GLEESON CJ:   Yes, you have that leave.

MR DEAKIN:   Could I just do it slightly differently, your Honours, because there were some unfortunate words in the document in the book.  Could we seek leave to file now a document that reflects what is in the book with one exception that I should draw to your Honours’ attention?  My friends have copies of them.  The only differences between what is in the book and what your Honours have been handed is that in 2.6 the unfortunate reference to “Applicant” has been deleted and the word “appellant” substituted and the only matter of substance is that in the orders sought we have made specific reference to the amount of money which we have paid to the respondent and we would seek an order that be repaid to us if we are successful in the appeal.  Your Honours –I am sorry, my friend does want to be heard on one aspect of that.

MR MACONACHIE:   I only want to be heard, your Honours.  I have no objection to the filing of the amended notice of appeal.  However, the restitutionary order that is sought in 3.5 involves questions of rate, time and perhaps discretionary considerations.  We got this document last night.  I have not had time, nor has my solicitor had time, to look at the detail of it.  We would ask that if that matter arises, it should be remitted to the Court of Appeal who, more probably than not, refer the matter to a single judge or to a master.  It is a matter of detail but it is not a straightforward matter at all given the rather tortuous course that this case has taken between trial and this place.

KIRBY J:   There are not any masters any more, are there?

MR MACONACHIE:   I am sorry, associate judges, or there may even be a registrar who would have power to deal with these kinds of things.

KIRBY J:   But is not all that is being amended to the document that is in the book minor typos?

MR MACONACHIE:   No.  At 3.5 a restitutionary order is sought in respect of $132,370.34, together with interest calculated at a particular money sum from a particular date.  We have not had time to deal with the minutiae of the rate, the date, and it seems to us, having regard to the tortuous course this case has taken, that there may be discretionary considerations with respect to the order for interest.  We would ask that it accordingly be either remitted to the Court of Appeal or to the trial judge.  We would submit it should not be dealt with by this Court.  In any event, there are aspects of it we have not had time to come to terms with.

GLEESON CJ:   Yes, Mr Deakin.

MR DEAKIN:   Your Honours, this is, in our submission, an industrial accident case that the Court of Appeal has erroneously categorised as a motor accident as a result of the remote and indirect involvement of a registered forklift.  The only finding of fault in the case by the trial judge, and confirmed by the Court of Appeal, was negligence on the part of the respondent in failing to provide a safe system of work at its factory, and yet the Court of Appeal concluded that the case satisfied the definition of “injury” in the Motor Accidents Act.  Our principal criticism of the Court of Appeal is the court ‑ ‑ ‑

GUMMOW J:   What is the correct reprint of the Motor Accidents Act?  I have No 6.

MR DEAKIN:   The one attached to our submissions ‑ ‑ ‑

GUMMOW J:   That is bits and pieces, I do not look at that.  I look at the whole Act.  What is the correct reprint number?

MR DEAKIN:   No 6.

GUMMOW J:   Thank you.

MR DEAKIN:   The reprint is at the time of the accident.

GUMMOW J:   Thank you.

MR DEAKIN:   That was the purpose of putting it in that form, your Honour.  Our principal criticism of the Court of Appeal is the court failed to correctly construe and apply the fundamental changes to the law governing motor accidents in New South Wales, particularly those introduced in 1995.  Similar criticisms of the Court of Appeal were unanimously upheld by this Court in May of this year in the Allianz Case, the reference to which is Allianz Australia Limited v GSF Australia Pty Ltd [2005] 215 ALR 385.

KIRBY J:   That was a slightly different case though on the fact, was it not?

MR DEAKIN:   It was.  It was a defect case, firstly – an important difference because it did not involve the driving of the vehicle.  It was a case falling within (iv), not (i).  Relevantly, none of the Judges of the Court were called upon to deal with the first limb of the definition, that being fault in the “use or operation” of a vehicle, because that point was conceded by the appellant, so it did not arise for direct consideration.

But nevertheless, we will be relying upon principally the joint judgment of three of your Honours, namely Justices Gummow, Hayne and Heydon in that case, as the starting point for our submissions before your Honours in this case.

KIRBY J:   At some stage if you – I did not participate in that decision – would indicate what are the differences between the Judges in the case.  There was unanimity on the result and apparently Justice Callinan did not think that the three participants went far enough and thought it was an outrageous case and Justice McHugh was a bit softer and ‑ ‑ ‑

MR DEAKIN:   I think that fairly summarises it, your Honour.  There are some differences that we will perhaps need to deal with but we will endeavour to assist your Honour on those issues in the course of argument if we may.  But the finding was ‑ ‑ ‑

KIRBY J:   I got quite excited reading Justice Callinan’s reasons.

GUMMOW J:   But the real point is at paragraph [101], is it not?

MR DEAKIN:   Yes indeed, your Honour, that is the key passage in the joint judgment that we directly adapt and seek to have applied in this case.

GUMMOW J:   This is a piece of law reform that is harsh ‑ ‑ ‑

MR DEAKIN:   It is, there is no doubt about that and ‑ ‑ ‑

GUMMOW J:   But that is the intention.

MR DEAKIN:   That is what it was intended to do.  It redressed perhaps over‑generous provisions of earlier times gone by and ‑ ‑ ‑

KIRBY J:   But it is not as harsh as it could have been.  I think Justice McHugh suggests that why do they not just say where there is an employer’s liability case policy applicable and a motor accidents liability, the former applies and the latter does not but they have not done it that way.

MR DEAKIN:   They did do it in the explanatory note which is one thing that this Court did not refer to.

KIRBY J:   Yes, but you also refer to the Minister’s statement about crashes and so on, well that is not in the statute.  Our duty is to the Act of Parliament.  All these people say all sorts of things but ‑ ‑ ‑

MR DEAKIN:   We understand that point, your Honour, but there is indication in the explanatory note that they did intend to differentiate between motor accident claims and workers compensation claims, but your Honour’s point is completely valid; it did not come into the Act.

KIRBY J:   They did it in a particular way.  It is harsh but it does not have to be more harsh than the words of the statute of Parliament provide.

MR DEAKIN:   Your Honours should also bear in mind that the legislation followed from an abolition of common law rights altogether, so that, whilst it was still a long way from what had previously been enjoyed, that Parliament did move from a situation where there were no common law rights arising to a position of restoring those rights, admittedly, as your Honour says, to a limited extent and under strict gateways and procedural requirements.  So that also is a matter that we would be asking your Honours to bear in mind.

It should be conceded that one of the points that we rely upon the Court was not called upon to determine in the Allianz Case, as we have already mentioned.  Nevertheless, the Allianz decision was expressly adopted and applied by the Court of Appeal in this case and that is to be found at 354 of the appeal book at the foot of the page going over to 355.

GUMMOW J:   This is the Court of Appeal in Allianz ‑ ‑ ‑

MR DEAKIN:   Yes.  The facts can be simply stated and, except for the notice of contention, there is no controversy about any either factual conclusions or inferences to be drawn.  On 24 August 1999 the second respondent, who we might refer to as the plaintiff, was working in the yard of the respondent’s factory premises engaged in the work of unloading a container of boxed barbecues.  He was standing inside a container that was located on a platform and accessed by a ramp when one of the cartons dislodged and struck him on the neck and back, sustaining injury.  The trial judge accepted that the carton dislodged as a result of vibration caused by the movement of a registered forklift owned by the respondent which was ascending the access ramp leading up to the landing on which the container was located.

If your Honours need to have a better grasp of those fairly fundamental facts there are some photographs in the book at 137 that may provide some understanding to your Honours.  They are not particularly satisfactory reproductions but your Honours can see through the gate, leading into the respondent’s premises, a ramp going up to what is described in the evidence as a platform and the X, the evidence established, was the spot where the pallet was located on the platform with the plaintiff working inside the container.  He gave a measurement of about half a metre – although there is a little bit of uncertainty in the evidence – inside the container when the carton actually fell onto him as a result of the vibrations.

KIRBY J:   Just so that I understand it, are the vibrations caused in the process of the traction or movement of the forklift truck?

MR DEAKIN:   That is what was held by the trial judge and we accept that as a conclusion, yes, your Honour.

KIRBY J:   And there was no bumping of the boxes, it was simply as the forklift truck was being driven and was in locomotion, it was going up - was it a corrugated surface or something of that kind?  What caused the vibrations?

MR DEAKIN:   I am not sure the evidence really assists us on that, your Honour, as to what the nature of it.  I had the impression, and I might be wrong, that it might have been metal because there was a sound described by the plaintiff in his evidence but I am not sure about that, to be honest, your Honours.  But, as described in the evidence, he used the word “boomph” or “boomp” when the forklift first entered the ramp and then vibration as it proceeded up the ramp.  So, for the purpose of the definition that we need to look at, we concede that this incident occurred during the use of the forklift so the temporal aspect of the matter is established and there is no dispute about that.

KIRBY J:   And the forklift truck is required under the relevant law to be an insured vehicle.

MR DEAKIN:   No, it is not, your Honours.  That is one of the points that we made in our submissions in reply.  There is no requirement to register a forklift operating within factory premises such as this.  The only requirement is if the vehicle is used on a roadway or a road related area and I do not think it suggests that this ramp certainly could be anywhere within that definition.  So there is no requirement for the respondent to register it but, equally, there is no dispute that in this case it was a registered forklift.  It might be, for instance, suggested that it had to work outside on the road or in other areas but ‑ ‑ ‑

KIRBY J:   No question but that the policy under the motor vehicles legislation responds to the claim for indemnity save for the argument that you are raising in this Court?

MR DEAKIN:   Yes, save for the definition not being satisfied.  Yes, your Honour.

KIRBY J:   It is not said that it does not respond because you did not have to have insurance?

MR DEAKIN:   No, your Honour, there is no argument about character at all.  The principal issue in the appeal, as it was in the Allianz Case, is whether the Court of Appeal was correct in concluding that the circumstances of the plaintiff’s injuries ‑ ‑ ‑

GUMMOW J:   What is the statutory text we have to construe, Mr Deakin?

MR DEAKIN:   Yes, I am sorry, your Honour.  We were going to take your Honours to it.

GUMMOW J:   …..a short point.

MR DEAKIN:   We had annexed them into our authorities because we thought there were a number of aspects of it that needed to be addressed.  The statutory definition is in section 3(1)(a) which is reproduced in the bundle and in the judgments.  That is the key provision ‑ ‑ ‑

GUMMOW J:   Of “injury”?

MR DEAKIN:   Definition of “injury”, yes.  The other aspects of the matter that we wanted to take your Honours briefly to, it does not bear on the construction directly but I think it should be noted.  The third party policy is referred to in section 9 of the Act where it is:

A third‑party policy under this Act is a policy that –

Identical wording is used.

GLEESON CJ:   The wording of the policy is in Schedule 1, is it not?

MR DEAKIN:   Yes.  Then when one looks at section 9(b) a reference is then made to Schedule 1 in which the wording of the policy actually appears, but relevantly, so we are not troubled with things that are not going to concern your Honours, the wording of the policy and the wording of section 9 is still substantially, for relevant purposes, the same as the definition of “injury”, so we still come back to the same test.

GLEESON CJ:   And are we concerned here with the fault of the owner or the fault of the driver?

MR DEAKIN:   Well, for our part we are only concerned with the fault of the owner.  My learned friend in his notice of contention seeks to bring in, contrary to the findings of the Court of Appeal, the fault of the driver as well.  He seeks to say that there is negligence on the part of the driver.  That was rejected by the trial judge and robustly rejected by the Court of Appeal.

GLEESON CJ:   So the question is whether here there was fault of the owner in the use or operation of the vehicle.

MR DEAKIN:   That is the first question, indeed, your Honour.

KIRBY J:   The interesting word is “during”.  They do not use the preposition “by”.  It is not ‑ ‑ ‑

MR DEAKIN:   But, your Honour, can we just be clear?  There are two limbs to this definition.  The one that the Chief Justice referred to is the first limb ‑ ‑ ‑

GLEESON CJ:   Using the word “by”.

MR DEAKIN:   Yes.  The one that your Honour has just referred to is the second limb, following after the words “if and only if”.

GLEESON CJ:   The second limb is a qualification of the first limb.

MR DEAKIN:   It is.

GLEESON CJ:   Your primary argument, as I would understand it, is that Mr Maconachie cannot get past the first limb.

MR DEAKIN:   Indeed, your Honour, yes.  The only other material that we wanted to take your Honours to, some of which your Honours already looked at because they have been reproduced in the judgments, is the second reading speech.  There is an additional passage in the second reading speech that we wanted to take your Honours to.  Could we invite your Honours to turn to that.  It is annexed to our written submissions, that would be the most convenient for your Honours to find it.  We have reproduced the whole of the speech, but your Honours will be relieved to know it is only a few paragraphs that are relevant.  It is page 2 of the full text of the second reading speech in the Legislative Council.

The page number is page 2 of the reprint but it is numbered 3322 in the reproduction.  The passage that was quoted ‑ ‑ ‑

GLEESON CJ:   I have never previously read section 2A(2), a fairly chastening provision. 

MR DEAKIN:   Yes.  Is your Honour talking about the schedule?

GLEESON CJ:   No, subsection (2), what:

must be acknowledged in the application and administration of this Act ‑ ‑ ‑

MR DEAKIN:   Yes.

GLEESON CJ:   Is that the “stability and predictability” sought requires “consistent and stable application of the law”.

MR DEAKIN:   Yes, that is a matter that was referred to in Justice McHugh’s judgment as a ‑ ‑ ‑

GLEESON CJ:   I hope nobody around here has ever done anything to cause problems of that kind.

MR DEAKIN:   No, it would not be this Court, your Honour, no.  No one would be so impertinent, your Honour.  It may have been directed in a slightly lower level of the judicial hierarchy.  Yes, that is a matter that we do place some reliance on, particularly later.  The second reading speech, if I may return to it, the paragraph commenced:

In order to reduce cost pressures within the scheme –

Do your Honours have that?  It is about four paragraphs down the page.  The point that we wish to emphasise in there in the second reading speech is really commencing at the words about halfway through that paragraph:

At the present time, the legislation provides little guidance in the interpretation of various provisions in the Act.  It has become critical to unambiguously impart the underlying aims and objectives of the Motor Accidents Act to the judiciary, lawyers and insurers.  It is therefore proposed to introduce objects clauses covering the Act as a whole –

which were emphasised by this Court in Allianz –

parts 4, 5 and 6 of the Act, as well as certain key provisions in the legislation.  In addition, new provisions will provide that the Act is to be construed having regard to these clauses.

The CTP policy and the motor accidents scheme simply are not, and were never intended to be, a comprehensive accident compensation scheme providing substantial damages in all cases of injuries connected in some way to the use of a motor vehicle.  Common sense and community expectations generally demand that the CTP policy provide coverage in respect of injuries which arise from crashes and collisions on the roads or from vehicles running out of control.

KIRBY J:   Where is “crashes and collisions on the roads” in the statute?

MR DEAKIN:   We understand your Honour’s point.  It is not.

GLEESON CJ:   Collisions on the road is in the statute.  It is in paragraph (a)(ii) of the definition of “injury”.

MR DEAKIN:   Yes, I am sorry, in the other paragraphs not dealing with driving.  Your Honour is absolutely correct.

KIRBY J:   It does not talk about “on the roads”.

MR DEAKIN:   I apologise, your Honour.

KIRBY J:   There is no reference to “on the roads” in subparagraph (ii), just “collision”.  That is why you have to be a little bit careful in reading these things.  These are aspirational and political.  We are legal.

MR DEAKIN:   Yes.  Could I resume the reading:

Over the years the courts have interpreted the CTP policy as providing for a wide range of injuries often unrelated to motor accidents.  For example, the CTP policy has been held to cover injuries sustained during the loading and unloading of vehicles –

particularly relevant –

and injuries sustained while standing on the back of a stationary trailer, and injuries involved in the use of a firearm in a vehicle.

Could we just pause there.  My learned friends and we are in agreement that those last two references, namely injuries “while standing on the back of a stationary trailer, and injuries involved in the use of a firearm”, are almost certainly references to the Grain Corp Case and the Moulding Case which date very closely to this period in time.  It should be noted, and it is a little curious, that this second reading speech on 16 November precedes the handing down of the judgment in those cases but followed the conclusion of submissions in the cases.  The outcome, as my learned friend and I for different reasons would vividly remember, was well known at the time they reserved.  But it is true to point out that the judgments had not been handed down in those matters as at the date of this second reading speech. 

The portion that we have not brought into our submissions follows the first sentence of the next paragraph, which we had already quoted from, namely the change in the definition of “injury” qualified in terms of its cause.  The additional portion that we had not previously referred to is the next passage in the balance of that paragraph:

Similarly, the expression “motor vehicle” is widely defined in the Act and covers go-karts and other vehicles, such as forklifts, not normally associated with use on the dedicated public road network.  Accidents involving such vehicles have given rise to claims against the Nominal Defendant under the Motor Accidents Act.  Under the Construction Safety Act the WorkCover Authority licenses go‑kart facilities and public liability insurance is compulsory.  It is considered that claims for injury arising from the use of such vehicles should properly be made under such public liability policies and not against the Nominal Defendant.

The point is obvious; that it ought to be understood that the Attorney is primarily referring to unregistered forklifts and not registered forklifts, which is perhaps the thrust of what he is saying, but at the same time he is talking about such vehicles, and it is another matter that we would ask your Honours to take into account in construing the statute when we come to it.

GLEESON CJ:   Why is the plaintiff better off by $50,000 in this case if you succeed?

MR DEAKIN:   Because the provisions of the Motor Accidents Act are less generous than the provisions at common law.

GLEESON CJ:   So it is better to have a claim against an employer, as it were, than against a driver or owner?

MR DEAKIN:   A quasi employer in this case because there is another direct employer.  The third respondent is the direct employer, but there is no dispute as to the duty that was owed as a duty of a quasi employer in the Stevens v Brodribb sense.  Your Honours, if one looks at the present situation the difference is even more marked.  There is a very substantial hurdle to be overcome now for anyone to receive any benefits under the motor accidents legislation.  In fact, more often than not the plaintiff is even more often now in agreement with the motor accident insurer that it is not a motor accident because it avoids their missing out altogether.  So if anything the pendulum is still swinging against these claims.

KIRBY J:   The ardent desires of the plaintiff, whilst they must be noted, cannot really control the interpretation because we have to give an interpretation that we will deal with cases where the question is one of whether there is any indemnity at all as, for example, if there is no workers compensation cover or something of that kind so neutral interpretation is the rule.

MR DEAKIN:   No, with respect, your Honour, not.  Interpretation of the wording of the statute in the light of its objects, purposes and declared aims, that is what this Court has established in the Allianz Case, so not completely neutral.

KIRBY J:   By reference to the statute, not by reference to political observations by a minister because there are things in that statement that are just not reflected in the Act, crashes on the roads and some of the generalities about forklift trucks, too.

MR DEAKIN:   We do not seek to persuade your Honour that they are determinative of the meaning.  Those words are to be taken into account when assessing the meaning.  We do not put it any higher than that.

KIRBY J:   Your point of raising this is to paint the picture which was accepted by the Court in the Allianz Case that you endeavour to accommodate these two policies by not overreaching the policy for motor vehicles.

MR DEAKIN:   Yes, and that the policy was to limit its scope and operation and that was accepted by this Court in Allianz particularly following cases such as Grain Corp and Moulding.

KIRBY J:   What is the second case?

MR DEAKIN:   Moulding.  Moulding is the case in which the motor vehicle policy was held to respond to a 22 that discharged in the front of a vehicle.  So that is the second case cited by the Attorney.  The last extraneous material, your Honours will be pleased to know, that we wanted to give your Honours a reference to, is the explanatory note which also is of greater relevance perhaps to this case.  It is annexure B to our submissions in reply, if your Honours can turn that up, which reconfirms what is stated elsewhere, namely:

generally to limit increases in the costs of the scheme and, consequently, to limit the amount of premiums paid –

That is (b).  But over the page there is specific reference to the objects of the Act and specific reference to 2B that your Honours have already looked at requiring:

the Act to be interpreted, and discretions conferred under the Act to be exercised, in a way that promotes its objects.

It is the definition of “injury” that we wish to draw to your Honours’ attention.

The definition of injury in the Motor Accidents Act 1988 is substituted by Schedule 1[4] in order to remove an overlap that exists between motor accident claims and workers compensation claims.

Now, your Honour Justice Kirby’s point is that is not what the Act says but that is what the explanatory note says.

KIRBY J:   In the end our duty is to the Act.

MR DEAKIN:   Yes.  Justice McHugh in the Allianz Case in paragraph [8] does make the same point that your Honour makes, that it does not expressly not apply in the cases of Workers Compensation Act but his Honour does say inferentially also that explanatory note was not drawn to his Honour’s attention.  So perhaps his Honour’s comment could be qualified by reference to the explanatory note.

Can we then deal with what the case is obviously about, namely the wording of the statute and particularly the wording of the definition, in the light of the objects that we have looked at.  It is to be noted at the outset that this Court, as far as we and my learned friends are aware, has never been previously called upon to consider the key phrase “fault in the use or operation of a motor vehicle” because, as we have already pointed out, the point was conceded in the Allianz Case.

Can we defer the “caused by” part of the definition because it is more convenient to deal with that under causation, if that is a course agreeable to your Honours.  The starting point for our purposes is to infer what was only alluded to in passing by your Honours in the joint judgment in the Allianz Case, namely that it is appropriate to infer, in our submission, that the use of the new expression “caused by fault of the owner in the use or operation of a vehicle” was intended to narrow the scope of the definition.

In paragraph [86] of the joint judgment in the Allianz Case, your Honours had already earlier referred to the banishing out of the legislation of the more expansive phrase “arising out of”.  Five lines from the top of paragraph [86] your Honours in the joint judgment say:

It might have been thought that the new expression, “in the use or operation” narrowed the scope of the legislation.

That is as far as your Honours took it because, as we have already pointed out, the point was conceded and your Honours repeat that observation in the next paragraph.

But we submit that is a starting point, that the words were intended to narrow the scope of the definition and we respectfully adopt what Justice McHugh described as the “two basic requirements” that are needed to be established in order for the first limb to be satisfied and there would not be any controversy about that.  He spells those out as “two basic requirements” in paragraph [10] of his judgment, namely, the “two basic requirements” are:

the injury must be caused “by the fault of the owner” of the vehicle and the injury must be caused by the fault of the owner “in the use or operation of the vehicle”.

Can we focus firstly on fault as found in this case and there is no dispute about what has been found to date.  The fault has been found limited to fault on the part of the respondent in failing to have in place a safe system of work for the plaintiff.  Could we just trouble your Honours to turn briefly to the factual findings that deal with that, they are repetitive unfortunately to an extent but they are relevant in categorising the fault.  Within the book there are a number of findings but could we principally turn your Honours’ attention to 146.  There are some earlier findings but we invite your Honours to turn to 146.  It starts out under a heading “The liability of the first defendant” which is not this defendant, but this is the trial judge’s conclusions, paragraph 24, line 30:

The accident occurred as a result of the system of work which was established and maintained by the second defendant.  This system caused the foreseeable risk of injury due to the vibration of the forklift as it ascended the ramp to the container.

His Honour then goes on to deal with principally the first defendant.  Then, over the page, on 147 ‑ ‑ ‑

KIRBY J:   Who is the first again?  Let us call them by their ‑ ‑ ‑

MR DEAKIN:   I am sorry, your Honour.  The first defendant was the direct employer, now the third respondent.

KIRBY J:   That is the party which in law has the obligation to establish the system of work.

MR DEAKIN:   It has the non-delegable duty but the “in law” might suggest that there is no such duty incumbent on the second defendant, the present respondent.  There is no dispute that it has such a duty and that it breached it in this case because it had control of the premises, it was the source of directions to the persons working within its premises and controlled the work that was being carried out.  So, as I have already referred to your Honours, Stevens v Brodribb extends the duty to a person in the position of the present respondent.

GLEESON CJ:   The second-last sentence in that paragraph is of some significance, is it not?

MR DEAKIN:   Yes.

This could easily have been done by using a sturdier ramp or providing another system of removing boxes from the container.

I am grateful to your Honour’s drawing that to our attention.  Neither of these would have been expensive.

KIRBY J:   What would be the other system, what sort of system?

MR DEAKIN:   It is dealt with, your Honour.  They could have removed the forklift from the operation altogether, the ramp could have been stabilised to prevent its movement against the container.  That was the opinion of one of the experts called in the case, Mr Tretheway.  That is referred to earlier at 144.  Can we just deal with the other finding specifically against the present respondent on 147 commencing at line 14:

The second defendant owed a duty as occupier of premises, but in addition it instructed the plaintiff on the manner in which his duties were to be performed each day.  Indeed, it provided everything for the performance of the plaintiff’s daily tasks.  In this regard, it had greater control over the activities of the plaintiff than did the first defendant.  In my opinion, it had a duty which was analogous to that of the first defendant to provide a safe system of work and failed to do so whereby the plaintiff was injured.

GLEESON CJ:   There was not anything intrinsically wrong in using a forklift for this operation.

MR DEAKIN:   No.

GLEESON CJ:   You could have done it safely using a forklift.

MR DEAKIN:   That is what the trial judge found.

GLEESON CJ:   And using a forklift in the same way, provided you had a better ramp.

MR DEAKIN:   Yes, or had a system which removed the vibrations from the ramp.

KIRBY J:   But the actual system that was provided involved using the forklift which had this vibratory effect on the ramp.

MR DEAKIN:   Yes, your Honour, as implemented by the persons working in the area, and it had been done, I think the evidence established, hundreds of times without an accident but this, of course, was the occasion when it did produce an accident.  There is reference to the nature of the duty of an employer in paragraph 27.  We do not need to trouble your Honours with that.  It is the findings at 28 at line 45 on 147 that we are leading to:

The second defendant –

that being the present respondent –

failed to provide a safe system of unloading the containers.  The likelihood that boxes in containers could be dislodged by vibration of the ramp was reasonably foreseeable if the second defendant had considered what was occurring daily at the warehouse.  The reasonable response required would have avoided the risk by eliminating vibration on the ramp.  This would not have been onerous in the context of the operation of the second defendant’s business.  In my opinion the second defendant by reason of its control of the day to day operations and the directions given to perform the work within its system has the greater responsibility –

and, accordingly, his Honour apportioned liability 75 per cent against the then second defendant and 25 per cent to the first defendant.  That then is a convenient summary of the characterisation of the fault in the present case.  Accompanying those findings were equally explicit findings by the trial judge which we also rely upon that there was no fault by the driver and no negligence on the part of the driver.  Could we just take your Honours to – again, there are some repetitive findings but to try to avoid repetition could we draw your Honours’ attention to 150 of the book, lines 44 and thereafter:

From this evidence I conclude that more likely than not the accident was not caused by the manner of driving of the forklift driver but by the way the work was organised.

37.      It was argued that the bang or boomp was a negligent driving of the forklift but I do not agree.  The vibration occurred as the forklift ascended the ramp.  In my opinion, there was nothing which the driver did or omitted to do which contributed to the vibration.

Then over the page, skipping a few lines, down to lines 10 and 11:

In my opinion this was not caused by the driving of the forklift in any negligent manner but the pursuit of the system of work which was implemented by the second defendant.

Then another finding to similar effect at the foot of the page:

The system made it necessary for the bang or boomp to occur on almost every occasion the forklift ascended the ramp; this was a product of the system of work and could have been avoided by the use of other means of unloading the container.

So the findings of the trial judge are clear and explicit and they were in the first instance not challenged in any way in respect of the finding of fault in the system of work and in the second instance, whilst challenged, firmly rebuffed by the Court of Appeal.  Could we just take your Honours to one passage in the judgment of the Court of Appeal that we respectfully adopt, at 342 of the book.  The judgment of course, as your Honours will have observed, is the judgment of Justice Hodgson, with whom the other two members of the court agreed.  At 342, paragraph 21, line 26, his Honour says:

I would say at once that there is in my opinion no substance whatever in the challenge to the primary judge’s findings as to the negligence of the driver.  To my mind, it is fanciful to suggest that the driver bears some responsibility for the system of work that he was required by his employer to follow.

True, it is not a strict employer, but making that allowance for what his Honour said we would submit that that finding, confirmatory of the trial judge’s findings, is manifestly correct.  So the category of fault that we are dealing with is clearly established on the evidence and on the findings.

Turning then to the second requirement that Justice McHugh has referred to, namely, fault in the use or operation of the vehicle, it is our submission that the meaning of “use or operation” is ascertained by, to adopt the wording that your Honours used in the joint judgment, identifying the activity during which the injury is sustained.  That was the language that your Honours used when dealing with “use or operation” as it appeared in (iv) in paragraph [89] in this Court’s decision in Allianz.

If we could just invite your Honours to turn to that, your Honours were not considering the opening words “use or operation” but we do submit they must have the same meaning.  In paragraph [89] of the joint judgment your Honours say that – the sentence commences about four lines into the paragraph:

the text during “during … by a defect in the vehicle” would have no sensible meaning were not the words “such use or operation” added to identify that activity during which the injury is sustained.

KIRBY J:   Is that not the point, that this was a case where the facts were different and called in the second part, whereas for this case we are in the first part of the definition of “injury” ‑ ‑ ‑

MR DEAKIN:   We are.  The only ‑ ‑ ‑

KIRBY J:   ‑ ‑ ‑ and that seems to be addressing attention not to what might have been done but what was the cause of the bodily injury to the plaintiff in what was in fact done.

MR DEAKIN:   It is true their Honours were dealing with the second limb of the definition and the only reason we invoke it is because their Honours were dealing with the meaning of “use or operation” and we seek to adopt that or adapt it to where the same words appear at the beginning of the section, which their Honours did not have to deal with because it was conceded in that case, and it is a convenient ‑ ‑ ‑

KIRBY J:   I understood you to tell the Chief Justice earlier that you put all your cards in that first limb, “caused by the fault of the owner”.

MR DEAKIN:   No, I am sorry, your Honour, I hope I did not say that.  That is our primary argument, but if we are wrong on that we are going to address causation as well.  So we have both limbs, your Honour, and if we succeed on either, we succeed. 

KIRBY J:   What is your answer, just so that I take it away during lunch, to the point about the first limb, which is the one that worries me in the case, “caused by the fault of the owner”?  Let it be it is the owner’s fault for a bad system of work but that bad system of work itself was bad because it involved the use of the forklift truck in an unsecured ramp and you focus on the actual thing that happened, not on what ought to have happened or might have happened.

MR DEAKIN:   We are focusing just at the moment on the words “use or operation” and what we say those words mean and what one needs to ascertain when one is construing those words is one needs to identify the activity during which the injury is sustained and the activity during which this injury was sustained was the driving of the vehicle.  There is no dispute about that.

KIRBY J:   Yes, on an unsecured ramp.

MR DEAKIN:   But that activity was without negligence.  That is what the trial judge found.  There was no negligence in the driving of the forklift.  The fault is elsewhere, namely, in failing to implement a safe system of work.

KIRBY J:   Yes, but you cannot just say safe system of work divorced from what we are talking about.  We are talking about a safe system of work and using a forklift truck to drive up a ramp which is going to cause vibrations which are going to cause the box to fall.  So that little preposition “by” is doing an awful lot of work there, but it is “the fault of the owner” – safe system of work – “in the use or operation of the vehicle” driving up the unsecured ramp.

MR DEAKIN:   Our submission to your Honours on the point of construction, which is what we are dealing with, is that the correct interpretation of those words should be injury caused by a tortious use or operation of the vehicle.  That is the submission that we will be inviting your Honours to adopt because “fault . . . in the use or operation” should properly be construed, in our submission, to mean relevantly negligent but because fault includes other torts it should be construed to mean injury caused by a tortious use or operation of the vehicle.

Now, my learned friend’s submission in opposition to that is it has to be any category of fault at all and it can include occupier’s fault, it can include fault on the part of a school master in relation to the pupil, and that is another reason why we submit it cannot be right because instead of limiting the operation of the legislation, that in fact expands it into areas that have never ‑ ‑ ‑

KIRBY J:   The submission is that they did not go far enough.  There was a very simple solution.  Justice McHugh I think refers to it in his reasons in this very factually different case of Allianz – very different fact – and that is simply saying if you have two policies, the one that responds is the employer’s policy, not the motor vehicle policy.

MR DEAKIN:   We submit that if our meaning is adopted, that is in fact what will happen because ‑ ‑ ‑

KIRBY J:   Yes, but if they want that they have to say it – not in speeches, not in memoranda, but in the statute.

MR DEAKIN:   But if your Honour’s fault is limited to fault “in the use or operation” in the meaning that we have suggested, namely that it be a negligent use of the vehicle, then what your Honour is criticising will in fact be achieved.  That is, we submit, what Parliament must have intended.

GLEESON CJ:   Is that a convenient time, Mr Deakin?

MR DEAKIN:   Yes, your Honour.

GLEESON CJ:   We will adjourn until 2.00 pm.

AT 1.05 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.05 PM:

GLEESON CJ:   Yes, Mr Deakin.

MR DEAKIN:   Thank you very much, your Honours.  If, on the other hand, your Honours are not persuaded that the phrase as we have construed it to mean is acceptable, namely injury caused by tortious or for relevant purposes negligent use or operation of a vehicle, we would nevertheless submit that on the facts of this case it falls outside the definition in any event.  We would submit that the definition is not satisfied by proof of a tort, an element of which is the use or operation of the vehicle.  That seems to be the Court of Appeal’s approach which, we would submit, with all due respect, is wrong.  Nor is it satisfied where injuries are connected in some way to the use of the motor vehicle.  That is what is referred to in the second reading speech and it is also referred to and expressly adopted in the judgment of Justice McHugh and I think in the joint judgment as well.

GUMMOW J:   This word “fault” is a bit of a legal chameleon, is it not?  Why does it mean tortious?  There might be all sorts of answers to a particular – it means you have to notionally try a case in tort.

MR DEAKIN:   Your Honour, we submit it means negligence in this case, which is all your Honours need to know about, but ‑ ‑ ‑

GUMMOW J:   What do you mean by “negligence”?

MR DEAKIN:   In answer to your Honour’s question, we thought the only explanation for why anything beyond negligent could have been contemplated would have been deliberate use of motor vehicle involving something like a trespass to a person, a deliberate running down case.  It could have been contemplated that it might need something more than negligence to be included within it, but for our purposes and for relevant purposes ‑ ‑ ‑

GLEESON CJ:   I thought that was comprehended by negligence.  I think we had a South Australian case a few years ago in which we had to look at that question and we thought that a breach of a duty of care could come within the tort of negligence even if it was a deliberate breach.

MR DEAKIN:   Yes.  The draftsperson may not have had the benefit of your Honour’s judgment at the time that this Act was drafted.  I cannot otherwise answer your Honour Justice Gummow’s question.  Of course we are only concerned ‑ ‑ ‑

HAYNE J:   Well, “fault” is a defined term:  “negligence or any other tort”.

MR DEAKIN:   It is defined, yes.  I am sorry, I thought Justice Gummow’s question was why it included negligence or other tort.

GUMMOW J:   You still have to notionally try the action in tort.  That is what mystifies me.  How do you work out if it is tortious?

MR DEAKIN:   That is why we have used “tortious use or operation” but, in our respectful submission, it is negligence for relevant purposes because it is defined, as Justice Hayne has pointed out, to include ‑ ‑ ‑

KIRBY J:   Where is that definition?

MR DEAKIN:   It is also in section 3, your Honour, earlier in the set of definitions.

KIRBY J:   I see.  It is in the reprint.  It is not in this document that was handed up, which is Reprint No 8.

MR DEAKIN:   Yes.

KIRBY J:   So it has been taken out.

MR DEAKIN:   No, it is in Reprint No 6 also, your Honours.

KIRBY J:   But it is not in Reprint No 8.

MR DEAKIN:   So, in answer to your Honour Justice Gummow’s point, I am not sure I fully comprehend it, but it does mean negligence ‑ ‑ ‑

GUMMOW J:   Caused by the tort in the use or operation.

MR DEAKIN:   I am sorry, your Honour, it does mean “negligence” according to the definition but it does include “or any other tort”.

GUMMOW J:   Yes, it means tort.  You can use the word “negligence” without having a cause of action in the tort of negligence.  This has to be tortious.

MR DEAKIN:   We understand what your Honour is putting to us.  It could be thought that because it says it means negligence that it is to be equated with negligence in circumstances where the only cause of action invoked is an action in negligence, which is this case.  But as to why the terminology has been used in that fashion we cannot ‑ ‑ ‑

GUMMOW J:   What if there was a defence to the tort?

MR DEAKIN:   If there was a defence to the tort, then I think, your Honour, it would follow that fault has not been proven.

KIRBY J:   Is your argument that you construe the definition of injury as meaning personal bodily injury caused by the fault of the owner in failing to provide a proper system of work as distinct from in the use or operation of the vehicle?

MR DEAKIN:   That is the first point we are making, yes, your Honour.

KIRBY J:   But what if it is both in the failure to provide a proper system of work in that the use or operation of the vehicle which was involved was inappropriate because of defects in the system of work?  That is what led Justice Hodgson to say in the facts of this case that unless there is something that takes that out for some reason of policy or principle the words of the statute do not do it.

MR DEAKIN:   Well, his Honour did say that.  That is correct, your Honour, and that is why this matter is before your Honours, but we submit that a finding of fault, as there is in this case, limited to a failure to provide a safe system of work is either outside the definitions, as we have put it, because it is not tortious use or operation, or even if we are wrong on that, on the facts of this case it does not fall within it because a finding limited to negligence in a failure to provide a safe system of work does not fall within the meaning of the words “use or operation of the vehicle”.  So that it is either as a matter of definition outside the terms or as a question of fact in this case it is outside the terms.  That is our submissions on the proper construction.

GLEESON CJ:   There is a decision, is there not, of the Court of Appeal – I think I remember seeing it on a special leave application – where the fault of the owner, which I think was the Roads and Traffic Authority or maybe it was the Department of Transport, consisted in the combined conduct of putting a bus sign too close to the kerb and then a bus driver negligently driving into a bus sign and the bus sign fell over and injured them.

MR DEAKIN:   No, that is Gunter, your Honour, and Gunter was expressly not followed in this Court in the Allianz Case.  The case your Honour has in mind is Gunter v The State Transit Authority (2004) 61 NSWLR 414 and it was exactly as your Honour recalls it and it was not followed expressly by Justice McHugh in the Allianz Case, paragraph [44], and criticised, I think is perhaps the highest I can put it, in the joint judgments, paragraphs 90 to 91.  Justice Callinan is also critical of it.

KIRBY J:   Mr Deakin, I can understand that criticism and I think, if I can say so with respect, that is fulfilling the purpose of the legislation, but the problem here is we do not have a sign falling on people or we do not have things that are completely divorced from “the use or operation of the vehicle”.  It is “the use or operation of the vehicle” that causes the tremors.  The vehicle is in motion, the vehicle is moving.  That was the system of work that was put in place.  What you have to do essentially is blast those words out of the Act.

MR DEAKIN:   No, your Honour, what we go back to is the word “fault”.  Whilst the factual material that your Honour has put to us is completely correct, it is not the character of the fault.  The fault is a very precisely defined fault in this case that is a breach of an employer’s duty.

KIRBY J:   But that is not a disembodied thing.  An employer’s duty has to be given content, it has to be given factual substance.

MR DEAKIN:   Yes, your Honour.  The findings we have taken your Honours to is the substance of those criticisms in failing to provide a safe system of work was failing to provide some means of safely removing the cartons out of this container.  It does not involve, we submit, on the findings that we have taken your Honours to, the use or operation of the forklift.  That was held to be a non‑negligent use.  There was nothing in the driving of the forklift that was held to be negligent, and that is the key to the case.

KIRBY J:   Nothing in the driving but it is in the very fact of driving at all to this container with this ramp.

MR DEAKIN:   Our submission is, and I hope we have made it plain, that the relevant use and operation of the vehicle in this case is the driving.  That is what the court has found.  That is how (i) is satisfied because it is a (i) case involving the driving of the vehicle.  That is “the use or operation”.

KIRBY J:   Yes, but you want to take “use or operation of driving the vehicle”, you want to then take out “[up a ramp that was not properly secured so that there would not be vibrations]”.

MR DEAKIN:   There are two limbs to it, as we have put it to your Honour.  Firstly, the relevant “use or operation” is the driving, and there has been a finding that there was no fault in that “use or operation”.  So that is the first limb to it.  Secondly, the converse proposition, namely the only fault has been fault limited to a breach of employer’s duty.

GLEESON CJ:   I realise you say it is not this case, but what would the position had been if Judge Delaney had found that there was no safe way in which you could have employed, to use a neutral expression, the forklift in connection with this unloading operation?  In other words, what if Judge Delaney had found that this operation was an unsafe system of work because a forklift was used in connection with it and that the only safe way to do it would have been to send people up and unload it by hand, or whatever the case may be.  I know you say it is not this case, but what would have happened then?

MR DEAKIN:   Your Honour, we accept – and I suppose this is in part an answer to your Honour’s question – that it is in each case a question of categorisation and it may be that on the factual scenario your Honour is putting to us that could be falling factually within the terms of the definition.  We submit that it does not because of our meaning that we attribute to the words, namely it must be negligent use or operation.  On the facts as your Honour has put it to us, that could remove the second limb of our argument that I outlined to your Honours, that on the facts of this case it does not fall within the definition.

We have both limbs in this case, but on the scenario your Honour has put to us that could remove the second limb and we would then need to fall back to the first limb, which says it must be negligent use or operation, and that is not.  But, as your Honour has fairly put to us also, that is not this case.  Again, we just do not need to be repetitive about it, but the objects – my friend’s construction requires your Honours to accept that the fault can be of any category, from any type of tort, from any duty of care, which is something I suppose that Justice Gummow was putting to us, and he gives instances of an occupier or a schoolmaster even.  Could we add to that, for instance, a supplier of petrol, a supplier of dangerous goods coming into a petrol station.  All of those categories of duties, multiple and almost beyond calculation, my friend says are embraced by the word “fault”.

KIRBY J:   That may be so, but it still has to be in “the use or operation of the vehicle”, which was the phrase that was inserted by Parliament to stop these cases that were ancillary, anterior, connected but not driving.  They wanted to, as it were ‑ ‑ ‑

MR DEAKIN:   But all of the instances my friend gives are cases in which he assumes and accepts that there must be a vehicle involved in it.  The example I was giving is the petrol tanker coming into the service station.  There may be a duty owed by the owner of the petrol station in relation to fittings and all sorts of things, but the effect of my learned friend’s submissions to your Honours are that the duty has been substantially expanded, and the scope of the legislation has been substantially expanded.  Far from limiting the scope of the compulsory third party policy and the operation of these legislative provisions, my learned friend’s submission would have your Honours accept that it has been substantially expanded.  So long as there is a use or operation of a vehicle involved, “fault” can embrace as wide a range of duties as that owed by a schoolmaster.

KIRBY J:   Given the statutory definition, it is a very wide word but the cutting back is to be done by the phrase that follows, it is an adverbial phrase of manner and time.  It has to be in the use of an operation of a vehicle.

MR DEAKIN:   But before the introduction of this Act, no one had ever, with respect to my learned friend, embraced a schoolmaster’s negligence as being a gateway to the compulsory third party policy provisions, so that whilst Parliament ‑ ‑ ‑

KIRBY J:   We just have to be a bit careful about this, Mr Deakin, because to the extent that we cut it back beyond these anterior outriders, the next case is going to be somebody who is a paraplegic who is left without any insurance, without any claim under this Act and nothing else.  I am sympathetic to your case but that is why I said it has to be a neutral interpretation. 

MR DEAKIN:   Well, the language that your Honour is using is coming close to what members of the Court of Appeal have used in other cases which has been criticised by this Court because ‑ ‑ ‑

KIRBY J:   I can understand that criticism where it is outriders, it is things that are happening when the vehicle is stationary and so on but that is not this case.

MR DEAKIN:   Your Honours, we submit that is the proper construction.  We submit that for those reasons that is why this phrase in the first limb of the definition is not satisfied.  Now, we have already drawn to your Honours’ attention that it did not arise directly for consideration in the Allianz Case but there are two passages in the judgment of Justice McHugh that we do rely upon to provide some assistance to our case because in two passages in the judgment of Justice McHugh he says that the changes to the Act have meant that loading and unloading cases fall outside the scope of this legislation except when there is a defect in the vehicle.  We wanted to take your Honours to those two passages.

Paragraph [30] in the judgment of Justice McHugh, page 392 in the ALR report, his Honour says after referring to the 1995 amendments:

The Act restricts the circumstances in which the Act governs an injury sustained during loading and unloading operations (the injury must be “a result of and is caused during . . . such use or operation by a defect in the vehicle”).  However, the Act neither expressly nor inferentially excludes all loading and unloading activities from the expression “use or operation” of the vehicle.  Its application is governed by the cause of the injury, but not by the activity in which the person injured was engaged when the injury was sustained.

To similar effect and perhaps in even clearer terms in paragraph [52] on page 397 in the very last three lines, again referring to the 1995 amendments:

However, the amendments bring about the result that the Act does not apply to injuries sustained during loading and unloading operations where there is no defect in the vehicle.

Now, what his Honour plainly had in mind was that where all you have is the driving of the vehicle, the collision or vehicles running out of control, those categories do not embrace loading and unloading cases and the only circumstances therefore where you can bring an unloading case into the legislation and into the definition is if there is a defect in the vehicle and we do rely on those two passages in Justice McHugh’s judgment.

KIRBY J:   But of course, this is not an unloading case.  This is a case of actual driving that causes the vibrations that causes the box to fall and that that is part of the bad system of work and the Act seems, in the definition of “injury”, to be focused on what actually happened, not what should have happened. 

MR DEAKIN:   We accept, of course, your Honour, it is not an unloading of the vehicle but it is an unloading case, with respect.  The injuries occurred in the course of the unloading of a vehicle.

KIRBY J:   No, it is not, it is a driving up the ramp case.  I have been a bit provocative to you, Mr Deakin, because I know you can take it.  I know from long experience, many cases, but I mean the bottom line is what Justice Hodgson said, in old days we would have been monks discussing this issue of causation in a monastery.  We would have been addressing much more ethereal things and you can cut the causation off at one point or you can let it run.  It is just a matter of doing the best you can with the statute but not with the second reading speech and not with the explanatory memorandum except as they help with the statute.

MR DEAKIN:   We accept, your Honour, that there is nothing in the Act beyond the definition of “fault” that provides direct assistance to your Honours in what the meaning of the full phrase is and we have put, I think, perhaps more times than I needed to what, we submit, is the appropriate construction of the phrase that is to be adopted.  We emphasise that even if we are wrong on that, on the facts of this case, even on the definition as interpreted by my learned friend, it falls outside the terms of the definition.  We do emphasise, again just going back to the second reading speech, that there was obviously no collision or impact in this case, no contact between the vehicle and the plaintiff ‑ ‑ ‑

KIRBY J:   That is down the line.  That is the second stage of the definition.

MR DEAKIN:   But it does go to “use or operation” of the vehicle in part but we accept it does primarily go to the second stage.  Your Honour is perfectly correct.  So “realistically and rationally”, which are the words used by Justice Callinan in the Allianz Case, this was an industrial accident falling outside the Act.  That is on the facts of Allianz and, we submit, applicable to this and a similar language was used both by Justice McHugh and in the joint judgment in concluding that that case was an incident arising from a defective system of work that fell outside the definition, although we accept of course that the Court was dealing with causation principally in that case.  We would therefore submit that those opening words in the first limb of the definition have not been satisfied.

GLEESON CJ:   Do you have an argument to the effect that the second limb throws some light on the meaning of the first limb?

MR DEAKIN:   It does, in our respectful submission.  We put an argument, and we do adhere to it, that “use or operation” should be limited by the matters referred to in (i) to (iv), namely, it needs fault in the respects identified in those subsections to fall within “use or operation”.  That needs to be qualified in one way because there is an expanded definition of “use or operation” in section 3(6) to include parking and maintenance of the vehicle, so it has to embrace parking and maintenance as well.  But we submit otherwise the “use or operation” of the vehicle as referred to in the first limb is governed by (i) to (iv).  Admittedly, in (iv), there is another reference to “use or operation”, but this Court did not disagree with the Court of Appeal’s construction of the second words when using “use or operation” as meaning the same “use or operation” as referred to in the first part of the definition.

So we submit that those subparagraphs do bear on the meaning that is to be attached to “use or operation” in the first limb.  We submit that is the correct construction of it but, even if we are wrong ‑ ‑ ‑

KIRBY J:   How does one then interpret – is that purely temporal, an adverbial clause of time?

MR DEAKIN:   No, it is not.  It is both temporal ‑ ‑ ‑

KIRBY J:   That it is caused during the driving of the vehicle – the man was driving a vehicle up the ramp.  How do you limit that to something different?

MR DEAKIN:   It is both temporal and causative, your Honour.  There are, as your Honours see, two references to “cause”.  We are straying into causation but I think we probably should.  Perhaps I can move to deal with the causation argument because I think it is important that we look at all the words.  There are essentially in dealing with the meaning of the words of this section two different aspects of causation, the first under the first limb where the words “caused by” are used and the second under the second limb those words appearing after the words “if, and only if” where there are words dealing with causation, “a result of” and the word “caused”.

It is true the word “caused” when second used is used ahead of the word “during”, and that clearly embraces a temporal aspect of the definition, but we submit “caused” when both used must sensibly have the same meaning, namely a causative sense, and it is the same meaning when first used as it is in the second used.  The temporal aspect, we have already explained to your Honours, we accept is satisfied because this injury occurred during a time when the vehicle was being driven, but we submit that neither of the limbs of the definition when dealing with causation have been satisfied. 

Can we expand on that submission.  The Court of Appeal adopted the Allianz construction when dealing with these questions and that has been rejected by the unanimous decision of this Court in Allianz.  What is clear is that mere connection in some way to the use of the motor vehicle is not sufficient to bring it within the definition.  I think we have already taken your Honours to passages in the judgment of this Court in Allianz that established that fact. As summarised in the language of the joint judgment at paragraph [95], adapting what your Honours there said to a (i) question, we submit the question that is to be asked is whether “the use or operation of the vehicle”, relevantly, as we have put it, the driving of the vehicle, is to be treated as causative in the relevant legal sense required by the Motor Accidents Act.

KIRBY J:   Of course, the other way to read it is you have to have two requirements:  (a) it has to be caused by the fault of the owner relevantly “in the use or operation of the vehicle”; and (b) the injury that results has to be the result of “caused during the driving of the vehicle”.  I suppose you could say that the alternative view that they are connected is more likely to fulfil the general objectives that the Minister revealed in the second reading speech.

MR DEAKIN:   Yes, your Honour.

KIRBY J:   Was this second part of the definition in the definition before?

MR DEAKIN:   No, your Honour. 

KIRBY J:   So all of that was added then, “if, and only if”.

MR DEAKIN:   The second part was all added after 1995.

KIRBY J:   So what was actually added?  Could you just identify what was added?

MR DEAKIN:   Yes.  What we have done to help your Honour on that is, if your Honour turns to our submissions in reply, we have extracted onto a single page both the 1988 version and the 1995 version, which may assist to answer your Honour’s concerns.  At the very back of that submissions in reply, annexure A, if your Honour turns that up, we have the pre‑1995 Motor Accidents Amendment Act with the definition of “injury”.  Very simple one might have thought to include four categories of injuries simply being described and then a substantially ‑ ‑ ‑

KIRBY J:   That is truly a definition of “injury”, but then they have added all these riders.

MR DEAKIN:   Yes, and in fairness ‑ ‑ ‑

KIRBY J:   I think that is an argument for your proposition that it is a whole package and that really is what the Chief Justice was asking you earlier; if the second limb cast light on the first limb.  You say it is all integrated.  It has to be fault and the fault has to be as a result of and caused during the driving of the vehicle.  You then latch onto the finding - they are co‑ordinate findings of fact at two levels that say there is nothing wrong with the driving.

MR DEAKIN:   And the point we make in criticism of the Court of Appeal - admittedly again the Court of Appeal did not have the benefit obviously of this Court’s decision in Allianz, but we put to the Court of Appeal, in dealing with issues of causation the line of authority that had said that approximate, direct cause was required and those submissions were not accepted by the Court and that is obviously a starting point in our criticism of the judgment of the Court of Appeal, because they adopted their earlier decision in Allianz, which had been set aside now by this Court in the Allianz decision, and they did not adopt what was put to them as the correct test which has been, not in absolute terms, adopted by the joint judgment but materially adopted in the joint judgment where this Court has referred to notions of direct or proximate causal links, or alternatively “notions of predominance and immediacy”, which is the other language used in the joint judgment, in paragraphs [102] especially. 

Now, Justice McHugh, it is true did adopt a different approach.  He emphasised what he described as a close physical connection between the conduct in (iv), of course, in that case, and satisfying the words “result of” and “caused” and we would respectfully submit again that that rephrasing is also consistent with what we put to the Court of Appeal which the Court of Appeal did not apply.

The driving of the vehicle in this case, even if your Honours are against us on our first proposition about the use or operation of the vehicle, does not satisfy that cause or connection, being required to be predominant and immediate because there was too much intervening between the driving of the vehicle, contacting the ramp, causing vibrations in the ramp to be transmitted to the landing, causing the landing’s vibrations to be transmitted to the container and then the container’s vibrations being transmitted to the cartons inside it and then causing one of them to overbalance and strike the plaintiff so that on the test that is laid down by this Court in Allianz the second limb dealing with causation is also not satisfied.

So neither the words “caused by” in the first limb we submit are satisfied and nor the words:

is a result of and is caused during:

(i)       the driving of the vehicle -

although, we accept, as we have put to your Honours, that the temporal aspect is satisfied.  I do not want to take your Honours to it in detail but could we just remind your Honours of what we have said on these issues, particularly from paragraphs 5.45 and onwards dealing with our criticism of the Court of Appeal and the application of the matters covered in this Court’s decision in the Allianz Case.

HEYDON J:   Do you mean 5.45 or do you mean 50 to 55?

MR DEAKIN:   In our written submissions.

HEYDON J:   Yes.

MR DEAKIN:   It starts at 5.38 dealing with causation.

HEYDON J:   No, I do not have decimalised paragraph numbers.

MR DEAKIN:   I apologise, your Honour.

HEYDON J:   It starts at paragraph 43 and the punchline is around paragraph 51.

MR DEAKIN:   Yes, it is.  I apologise, your Honours.  I was meant to be dealing with criticisms not matters that we have set out in ours.  That is directly borrowing the language of this Court’s decision in Allianz and dealing with those various adjectives.  It is a curious aspect of the Court of Appeal’s decision with respect to their Honours that whilst they set out our submission relying on the requirement of a direct and proximate connection - and could we just take your Honours to 341, paragraph 16, it is around line 30:

It was also submitted . . . that there was in any event no fault “in the use or operation of the motor vehicle”, because the use of the motor vehicle was not a direct or proximate cause of the accident –

Similarly, at 343 where we have referred to one of the cases earlier decided in the Court of Appeal, a decision of AMP v Brett.  The court does not deal with the question, with the greatest respect to their Honours, as to whether there was a direct or proximate connection between the driving of a vehicle and the injury.  They do set out – I think in fairness my friend has pointed it out that it is probably a restatement of our submissions rather than a comment by the court, but they do set out at the top of page 354 that:

In this case, it was at best an indirect and remote cause, in that the driving of the forklift vibrated the ramp, which in turn vibrated the landing –

et cetera, which is the point we have already made to your Honours.  But when they come to deal with the substantive issues in the case the only references to causation are a single sentence on 353, paragraph 49 at line 9:

There is no doubt that the plaintiff’s injury was caused by the fault of the owner of the forklift truck.

Essentially, they have said the reason for that is because the trial judge found that it was but was we have pointed out in our written submissions that assumes that the common law test of causation is to be equated with the statutory test of causation applicable under this policy and that is exactly what this Court has rejected in the Allianz Case.  That is the only reference to the opening requirements of causation.

Later when their Honours deal with what we have called the second limb, their Honours only say, at 355, line 10:

there is no doubt that the requirements of sub-paragraph (i) are satisfied, unless it can be said that the causal relationship is not close enough, for some reason.

Then all they say on that subject matter, further on after referring to the dissenting judgment of Justice Santow:

there is nothing of that nature that could be considered as making it inappropriate to treat the injury as truly caused by the driving of the forklift truck.  Accordingly, in this case the injury was as a result of and caused during the driving of the vehicle.

Your Honours, that does not deal with the submission, with respect to their Honours.  It does not deal with the question of whether there was a sufficiently direct or proximate connection between the injury and the driving and “use or operation of the vehicle”.  We submit, therefore, the court applied the wrong test, and we are certainly not aware of any case in which the words “truly caused” has been accepted as being an appropriate test to apply in cases of this kind.

So they firstly applied the wrong test, and we submit that they failed to deal with the submission that was squarely put to it, and although there are some differences between what we put to the court and what this Court has found in Allianz, they are materially indistinguishable, in our respectful submission, and applying the correct test as laid down by this Court in Allianz, we submit that as a matter of causation also the definition has not been satisfied.

If your Honours are against us on that and your Honours were to find that there was a causative role played between either the “use or operation of the vehicle” falling within the first limb or the driving of the vehicle falling within the second limb, then we fall back to the final submission on causation, which is that this Court has said it needs to be the predominant cause.  Even if there is more than one cause, one of which was the driving, in this case and on its facts, because the negligent system of work was held to be the foundation for the owner’s liability, it cannot be said that the predominant – or I think Justice Callinan used the words “the more significant fault” was one falling within the definition.

So this involves a sort of a qualitative judgment of the extent to which the relevant fault contributed.  Even if there are, if your Honours were to be satisfied, more than one factor involved in this case causative of the ultimate injury, the legally causative matter as a matter of value judgment, is the words of Justice McHugh at paragraph [55], and the predominant cause was the negligent system of work which was neither involving “use or operation of the vehicle” nor involving “the driving of the vehicle” for the reasons we have already put.

So as a matter of causation, neither “the use or operation of the vehicle”, in the general sense referred to in the first part of the definition, nor “the driving of the vehicle” in the particular sense referred to in (i) in the second part of the definition, were sufficiently closely connected to the injury to satisfy the requirements of the definition.  So for those additional reasons the appeal should be upheld, in our respectful submission.  Can we pass then to the costs order and ‑ ‑ ‑

KIRBY J:   Does this arise if you win the appeal?

MR DEAKIN:   The costs order arises win, lose or draw because it is not a party/party costs order and it is an important point to emphasise at the outset.  This is not a costs order that flows as a result of the proceedings.  It is a very particular order that was made in respect of the respondent’s own costs of defending the proceedings, not costs which they were ordered to pay.  The argument in the Court of Appeal was that harsh as it may seem on one view of the matter, but nevertheless, the wording that has consistently been used right through in the third party legislation before the introduction of the Motor Accidents Act and retained in the Motor Accidents Act, talking about a liability in respect of injury, does not embrace costs incurred by the insured in defending the action by the injured plaintiff.

HEYDON J:   Mr Deakin, is your win, lose or draw point correct because paragraph 66 says that if you succeed in your primary submissions:

all costs orders in favour of the respondent would in any event be set aside.

Does that not mean win, you win costs?

MR DEAKIN:   I fully accept what your Honour says ‑ ‑ ‑

HEYDON J:   But lose, you say the costs order at least must go.

MR DEAKIN:   The costs order must go and if we win the appeal, the costs order that would be set aside would be everything that we have been ordered to pay but it is probably not strictly correct to say that this is a costs order that follows the event because it has a different fons et origo arising from a breach of the statute.  The reason why I put it to your Honour rather glibly and I apologise for the loose language, “win, lose or draw”, is that we want this point decided, I suppose is what I really should have said to your Honour, because whilst it may not have a huge significance it is an important point for the operation of the Act.

So even if we are right on all of the submissions we have put to your Honours and even if we are successful in having the judgments of the court and orders of the Court of Appeal set aside, we want this point dealt with specifically because arguably it does not flow from costs following the event anyway and it is ‑ ‑ ‑

GUMMOW J:   Where is it in your notice of appeal?

MR DEAKIN:   Paragraphs 2.5 and 2.6.  Yes, 2.5 is where we say they erred and 2.6 is setting out the circumstances in which it was ordered and why it should be set aside. 

GUMMOW J:   But you do not press 2.6(a), is that right?

MR DEAKIN:   No, I do not, your Honour.  That is correct and it is in the written submissions and for the record can we also have it noted we have not pressed before your Honours 2.4.  We do not depart from the assertion we have consistently made but we do not ask your Honour to deal with that ground because the basis on which that proposition was advanced, namely the Allianz Case, has now been set aside by this Court.

GUMMOW J:   Where is the treatment of this point by the Court of Appeal?

MR DEAKIN:   Yes, can we take your Honours to it.  It perhaps needs to be looked at in a little detail?  It is the second judgment that your Honours have in the books commencing at 381.  The issue is perhaps most conveniently summarised, 384, paragraph 5, line 12:

However, if the claim is successful, and if it is established against the insurer that the relevant injury was in fact caused by the fault of the owner or driver of a motor vehicle, then it could be argued that the liability “in respect of” that injury extends not merely to the insured’s liability to the injured person for damages and costs, but also to the insured’s liability to the insured’s own legal advisers for costs reasonably incurred in defending the claim.

That is the issue.  We met that suggestion by reference to a series of cases culminating in Commercial and GeneralInsurance Co Ltd v Government Insurance Office of NSW (1973) 129 CLR 374 and Owen v State of New South Wales [2004] NSWCA 165, which I think has now been reported. I apologise, it is only in the MVRs, it is (2004) 41 MVR 167.

The reason why we do not need to take your Honours in any detail to those cases is because the Court of Appeal accepted them as establishing the proposition which we advanced.

GUMMOW J:   They fixed on section 45(1), did they not?

MR DEAKIN:   Yes.  I am sorry to belabour the point, but the starting point is that the Court of Appeal accepted the fundamental proposition we advanced on page 387 having considered those cases.  The court said:

In those circumstances, I think this Court should follow Commercial & General and Owen, and hold that the liability of an insured to the insured’s own lawyers incurred in defending a claim of injury caused by the fault of the owner or driver in the use of a motor vehicle is not within the words “liability in respect of” such injury.

So our argument was accepted.  That meant, in our submission, that the policy did not cover such costs and we should not have been ordered to pay it.  There were written submissions provided by both parties dealing with this issue.  What happened after the court adjourned and considered those written submissions is that the court, with all due respect, plucked section 45 out of the ether, found that the Nominal Defendant had breached section 45(1) and found that a consequence of a breach of section 45(1) was that costs otherwise falling outside the scope of the statutory policy should be paid in the circumstances. 

GUMMOW J:   Is section 45 a duty of imperfect obligation?’

MR DEAKIN:   No.

GUMMOW J:   What is it?

MR DEAKIN:   It is a qualified duty at its highest, your Honour.  As your Honour will see, it says it is a duty “to endeavour to resolve a claim”.

HEYDON J:   But what is the sanction?  Justice Gummow is asking – it postulates a duty but does it postulate a remedy or a sanction?

MR DEAKIN:   No, it does not.  If one looks at the next subparagraph:

Once liability has been admitted (wholly or in part) or determined (wholly or in part) against the person –

yes, I am sorry, Justice Gummow’s question should – perhaps as interpreted and assisted with your Honour Justice Heydon, subparagraph 3 does impose a penalty, I suppose, in fairness.  It is a condition of the insurer’s licence that the insurer must comply.

GUMMOW J:   That is right. 

MR DEAKIN:   There is an argument as to whether the Nominal Defendant is an insurer for the purpose of the section because we are certainly not a licensed insurer but, at the same time, it has to be conceded that we have invoked a provision of the Act that describes a right of an insurer to apply to intervene, so the argument may not be available to us.  But to deal with the merits of the point, firstly, it was decided without any notice to us.  We were not given any notice that this was going to be an issue in the case.

GUMMOW J:   Your point at the moment is a procedural fairness point.

MR DEAKIN:   Indeed, yes. 

GUMMOW J:   Is that disputed by your opponent?

MR DEAKIN:   No.  My learned friend’s answer to it is that when you read the judgment you knew what the basis of the decision was, which, in all due respect, hardly answers the complaint.  It was clear when the judgment was handed down the basis upon which the court had decided it but ‑ ‑ ‑

KIRBY J:   Stead’s Case says that if it is inevitable and if it is going to happen anyway you do not worry about it too much.

MR DEAKIN:   No, but therefore we do need to deal with the merits, but the decision should be set aside because of the procedural unfairness.

GAUDRON J:   We do not necessarily have to deal with the merits, Mr Deakin, I am afraid. 

MR DEAKIN:   No, your Honours do not have to.

GUMMOW J:   There may be questions of fact, might there not?

MR DEAKIN:   No, your Honour.

GUMMOW J:   Is not 45(1):

It is the duty of an insurer to endeavour to resolve . . . as expeditiously as possible.

MR DEAKIN:   There are questions of fact, we accept that, but the evidence does not enable any conclusion to be reliably drawn as to whether section 45(1), even in its qualified terms, was breached.

HAYNE J:   The statement about breach is at the first sentence of paragraph 16, page 388, you lost ergo, you were in breach, or do I misconstrue what their Honours are saying?

MR DEAKIN:   That is what their Honours are saying.  A denial or liability meant that we must have breached the section, even though there are clearly factual issues in this case that had to be explored before any decision could be made ‑ ‑ ‑

KIRBY J:   Well, your answer to Justice Gummow is there are factual questions.

MR DEAKIN:   Yes, there are, but the reason we are asking your Honours to deal with it is because we submit that section 45(1) could on no view of it justify such an order, even if it were to be breached.  We accept that there are factual issues to ‑ ‑ ‑

GUMMOW J:   That raises the question as to the source of the costs power, does it not?

MR DEAKIN:   Yes.

GUMMOW J:   What is that?

MR DEAKIN:   My learned friend says it was an exercise of the discretion in the court under general provisions dealing with costs, but the court does not say that is what it relied upon.

KIRBY J:   It never does.  It would rarely say – if you are disposing of costs in an appeal, you normally think you are doing it under general provisions.

MR DEAKIN:   Paragraph 17 says:

The probability is that, if the Nominal Defendant had not denied indemnity, it would have complied with its obligation under s 45, and also would have taken over the proceedings under s 47.  Costs incurred ‑ ‑ ‑

GUMMOW J:   Justice Hayne invites attention to paragraph 14:

This Court . . . has power to award costs, and can make orders based on its assessment as to the responsibility of parties for costs incurred by other parties.

MR DEAKIN:   Yes, your Honour, but they did not purport to invoke a general discretion; they purported to invoke a breach of section 45 justifying the imposition of these particular costs falling outside the scope of the policy.

GUMMOW J:   No, 14 is the necessary threshold of all that follows, is it not?  Otherwise, why is it there?

MR DEAKIN:   Except for what I have read to your Honours in paragraph 17.  What they say is after referring to section 45:

Costs incurred by GLG after 31 May 2002 are fairly regarded as being due to the Nominal Defendant’s incorrect denial of indemnity.

That does not invoke a general discretion; it invokes a specific breach of the section where we are said to have wrongly denied liability and therefore we were ordered to pay. 

The relevance of the 31 May date, as your Honours probably have ascertained, is that that was the date of a letter that was sent formally denying liability.  That is why it is dated from that date.  It is a matter for your Honours of course as to what course your Honours want to adopt in relation to it.  We submit the order manifestly should be set aside.  I think all parties would prefer this Court to deal with it if they can but if there are factual issues on your Honour Justice Gummow’s approach that this Court feels it cannot deal with, then we accept ‑ ‑ ‑

GUMMOW J:   Not cannot; should not have to.

MR DEAKIN:   Would prefer not to.

GUMMOW J:   No, not should not prefer; simply should not have to having regard to our role in the hierarchy of things and the provisions of the Judiciary Act.

MR DEAKIN:   But, your Honour, the fundamental point we make is that these costs either fall within the statutory policy and the indemnity provided by it or not.  As the Court has held, the authorities binding on it to the effect that they fall outside the statutory indemnity provided under the policy, then that should be an end of the matter.  There is nothing in section 45 or anywhere else in the Act that says that some breach of these provisions may have costs consequences exposing you to a liability in costs outside the scope of the statutory policy.  There is nothing that can be read into any of those provisions that can have that effect.  It is for that reason that we invite your Honours to deal with it on the basis that the order cannot be supported.  So we do invite your Honours to deal with it but if your Honours are not in a position to be able to deal with it, then it may need to be returned to be determined.

GUMMOW J:   Where is your written submission on procedural fairness?  Where do we see that?

MR DEAKIN:   It is in both, your Honour, our original submissions and ‑ ‑ ‑

GUMMOW J:   Well, just the one we have to look at.

HEYDON J:   Paragraph 61.

MR DEAKIN:   It commences at paragraph 58 on page 12 and the unfairness aspect is set out at paragraph 61.  Thank you, your Honour.

GUMMOW J:   Thank you.

MR DEAKIN:   It is only touched on in reply.  They are the submissions that we would be putting to your Honours, if the Court pleases.

GLEESON CJ:   Thank you, Mr Deakin.  Yes, Mr Maconachie.

MR MACONACHIE:   In our submission, there are two central findings of fact that will determine the outcome of these proceedings.  The first of them is in the judgment of the trial judge and is referred to in paragraph 3.2 of our written submission.  It is at appeal book 151, lines 5 to 10, where the learned trial judge found:

The plaintiff was then hit on the back when the forklift had just about reached him when the box or boxes fell.  He felt the box hit him just as the forklift was reaching the top of the ramp but the forklift was still moving.

Secondly, my learned friend wants me to read the second sentence, which is a conclusion that his Honour draws from that finding of facts, which we submit is wrong:

In my opinion this was not caused by the driving of the forklift in any negligent manner –

that is not a question that the insurance policy called for, as informed by the section –

but the pursuit of the system of work which was implemented by the second defendant.

The second finding of fact comes in the judgment of the Court of Appeal and is essentially directed to the question of causation.  It is to be found at appeal book 354 at line 35:

In my opinion, the way the vehicle was used was a necessary and important element in the fault of the owner of the vehicle.  The system of work was held to be unsafe because it was such that the container, in which boxes were stacked, was caused to vibrate; and it was the forklift truck itself that caused the vibration.

Of course the forklift truck, a registered vehicle, was the only vehicle relevant to the question that the trial judge and the Court of Appeal had to resolve.

GLEESON CJ:   That expression “the way the vehicle was used”, what exactly do you take that to mean?

MR MACONACHIE:   Well, it was deployed so that it had to be and was driven on a ramp that vibrated.  It was used by the owner in its activities, and that use involved, necessitated and required driving.  We say, with respect ‑ ‑ ‑

GLEESON CJ:   You really clarify the meaning of that sentence a little bit by inserting the words “by the owner” after the words “used”.

MR MACONACHIE:   Yes.  If necessary, your Honour, but we would say it is made abundantly clear that what the Court of Appeal found as a matter of fact was that the owner was using and operating the registered forklift, the only vehicle that you need to concern yourself with, in a way which was necessary and important in the fault of the owner of the vehicle.  Whichever construction my learned friend contends for, that finding of fact, in our respectful submission, is the answer to this case. 

Those for whom I appear are not interested institutionally in the way in which this policy should be construed, because it is the policy that is to be properly construed, informed admittedly by the Act and, more particularly, by the definition of injury, but it is the policy that is to be construed.  They paid for an insurance policy that gave them cover according to its terms, and the form of policy is attached to our written submission, in respect of liabilities occurring anywhere in Australia, whether on private property or otherwise.

KIRBY J:   What is your answer to the suggestion raised by the Chief Justice earlier that you have to read – first of all we have got AGFA‑Gevaert which says you do not take phrases in statutes out of context, you read the whole passage, maybe the part.  Well, here we would at least read the whole of the definition of “injury”.

MR MACONACHIE:   And you should, your Honour, as a definition but ‑ ‑ ‑

KIRBY J:   It does not say it means personal or bodily injury:  (i) caused by the fault of the owner; (ii) that is the result of and is caused during – so that it is a cumulative thing.  It is an integrated notion.  It has to be caused by the fault of the owner [effective system of work] if the injury is the result of and caused during the driving of the vehicle.

MR MACONACHIE:   Yes.  Not the negligent driving of the vehicle, just the driving of the vehicle.

KIRBY J:   Yes, but if you have an integrated interpretation of the definition, then the driving of the vehicle has to be integrated with the cause and that is a problem for you because you have concurrent findings of fact against that.

MR MACONACHIE:   Only if I have to rely on the negligent driving of the driver, and I do not.  We raise it by way of notice of contention as an alternative but our central submission is that it is the negligence, the fault, the tortious act of the owner in the use of the motor vehicle which, as a necessary and important element, involved the driving of the vehicle in circumstances which caused vibration which led to the injury to the plaintiff. 

So you have to read into (a)(i) negligent driving to get where my learned friend wants to go, and it is not in the statute.  The proper construction of the definition of “injury” has to be looked at with one’s eye on the history of it, your Honours.  It was in Grain Corporation that Justice Clarke in effect held – and I have given your Honours a reference to the precise point at which he dealt with the word “use” in then section 69 of the Motor Accidents Act and he said that is a word that has been used and employed for a very long time, since cases like R.J. Green & Lloyd under the 1942 Motor Vehicles (Third Party Insurance) Act, King’s Case and a brace of other cases where “use” was given a very broad reach.

On the very day that argument was had in the Court of Appeal in the Grain Corporation Case and in Moulding v Shanley the Parliament in the Legislative Council considered the Bill that became the 1995 Act and they referred, as my learned friend has told you, to cases involving unloading operations with somebody standing on the back of a vehicle – that was the Grain Corporation Case – and with a young lady being shot when putting a lamb into the front of a utility out in the paddock of some farm, which was Moulding’s Case.  They were considering the breadth of the reach of the statute in the context of what was decided at first instance and they anticipated the breadth that would be given to it by the Court of Appeal and what did they do?  They determined, as my learned friend has said by reference to the second reading speech, to qualify the breadth of the section – qualify injury by reference to its cause, not by reference to the nature of its duty.

GLEESON CJ:   Mr Maconachie, that first sentence in paragraph 54 on page 354, suppose it had been altered to read, “In my opinion, the driving of the vehicle was a necessary and important element in the fault of the owner of the vehicle”, would that have been an accurate way of describing what happened?

MR MACONACHIE:   It is a way.

GLEESON CJ:   It was the deployment of the vehicle, was it not, that involved fault on the part of the owner, not the driving of it?

MR MACONACHIE:   It was the use of it, your Honour, the use of it whilst it was being driven or necessitating it being driven.  The driving of the vehicle was a necessary and important element in the fault of the owner.  Even if the driver was not himself negligent in the way in which he drove the vehicle, the driving of the vehicle, the using of the vehicle by it being driven ‑ ‑ ‑

GLEESON CJ:   The second way you put it is closer.  It was the fact that the owner deployed the vehicle for use as part of this operation in circumstances where the owner did not provide a vibration resistant mechanism on which the vehicle could travel.

MR MACONACHIE:   That is one way of putting it, your Honour, but it is simply a matter of looking at the words in the section:  was there fault in the owner of the vehicle?  Yes, there was, because for his operations and systems he used a vehicle in circumstances where it ought not to have been used.

KIRBY J:   There may have been nothing wrong with using the vehicle so long as you battened down the hatches and provided a stable ramp.

MR MACONACHIE:   Perhaps, your Honour, but the driving of the vehicle was the necessary and important element in what was both the fault of the owner and the cause of the harm, so that it was direct, immediate, predominant, essential, whatever word you like to use, both in the use of the vehicle and in the cause of the harm.

It is put, I hope, a little more elegantly in the written submission which I rely on, but that is the essence of it, your Honour.  We say that in order to get where Mr Deakin wants to go, he has to limit this legislation which informs the insurance policy construction by saying it has to be negligent use, it has to be negligent driving.  That does not occur, it does not appear.

KIRBY J:   But it has not just to be negligent use, it has to be negligence or fault on the part of the owner “in the use or operation of the vehicle”.

MR MACONACHIE:   Yes.

KIRBY J:   Now, the appellant says, properly characterised, it is fault on the part of the owner in the operation or failure to operate a proper system of work and the use and operation of the vehicle is only incidental to what was the essence of the negligence in this particular case, which was the failure to establish a proper system of work.

MR MACONACHIE:   The Court of Appeal as a matter of fact said it was a necessary and important element in the fault.  The way I would put it is the way in which the Court of Appeal dealt with it in Zurich (2001) 52 NSWLR 193 where they considered this first limb and which this Court in the joint judgment in Allianz said they were not prepared to depart from it. The relevant passage commences at 200, line 26 and concluding at 201, line 34. The learned Chief Justice, with the agreement of others, said this:

Reference was made to the Second Reading Speech to the Motor Accidents Amendment Bill 1995 (Parliamentary Debates, Legislative Council, 16 November 1995 at 3320) –

that is what you have been taken to today by Mr Deakin.

Th[e] task of this Court is to construe the definition of “injury” for purposes of its application to the facts of this case.  It is plain from the words of the new definition that its purpose was to restrict the ambit of the definition as it had hitherto existed.

We accept that.  The removal of the words “arising out of” with their attenuated causative construct, it plainly intended to narrow but not entirely obliterate the cover under the policy.

The issue is to identify the operation of the section, in its new form, in its application to the facts before the court.  I have not found the Second Reading Speech of assistance for this task.  To accept that the Parliament intended to restrict the operation of the Act, does not mean that every word used by Parliament must be given its most restricted operation.  The restriction adopted by Parliament was reflected in specific words which must be construed in the normal way.

It was common ground that the part of the definition of injury which made the appellant’s policy respond, was (a)(iv) –

that is the defect provision.

The full context of this sub-paragraph is relevant to one of the appellant’s submissions and is set out above.

The first submission was, essentially, one of characterisation.  The appellant submitted that the injury was not caused “in the use and operation of” the trailer.  The injury was caused by an unsafe system of work or in the design of the trailer.

Then importantly his Honour says:

Nothing in the language used, or the scope, purpose or operation of the Act, suggests that a dual characterisation of “fault” is impermissible.  The definition applies so long as the fault may be characterised in the way set out within it.  It matters not that some other characterisation may also be appropriate.

And that is the approach that has been taken to the word “use” in this kind of legislation for 50 years or longer.

KIRBY J:   I see the force of that and I was originally of that view.  I am a little concerned that having read the second reading speech, having heard what the Minister said was the purpose of the legislature, having read Allianz, can we say that that is to take too verbal an approach to the statute and that when you take a purposive approach to the statute, its purpose was to cut back indemnity in cases where there was this dual feature, a fault and connected requirement of driving and so on.

MR MACONACHIE:   No, your Honour.  Can I just go on and then I will come back to that if I may.

This issue has been determined against the appellant in this Court:  see . . . Grain Corporation . . . Balfour Beatty . . . Brett . . . In my opinion the reasoning in these cases is correct and should be followed.

We say that the approach taken by the Chief Justice there is appropriate, it is proper.  The Zurich Case was specifically referred to in the joint judgment of this Court in Allianz and the Court was not prepared to disagree with the way in which it was put.  True it is that the first limb was not in contest in the Allianz Case.

HEYDON J:   I think, strictly speaking, the approval in Allianz related to what appears in paragraph 31, the second submission.  What you have been reading out is an earlier ‑ ‑ ‑

MR MACONACHIE:   I read it otherwise, your Honour, but that could be right.  In any event, the history ‑ ‑ ‑

GUMMOW J:   Paragraph [89] in Allianz, I would have thought.  Justice Callinan took another view.

MR MACONACHIE:   He did, your Honour.  Could I just return to what Justice Kirby put to me ‑ ‑ ‑

GUMMOW J:   At paragraphs [132], [133].

MR MACONACHIE:   Indeed, your Honour.  Your Honour Justice Kirby has to keep this in mind.  It is not only in 1995 but also in 1998 when the Motor Accidents Compensation Act was passed that the definition as we are presently concerned with it came before the Parliament.  The Parliament, as we have said in our written submissions, must be taken to have accepted the breadth of meaning to be given to the words “use or operation” in the Grain Corporation Case.

KIRBY J:   That is a bit of mythology but, anyway, let us accept it for the moment.

MR MACONACHIE:   Your Honour, what they did and what the Attorney‑General said they were going to do was to qualify “injury” by reference to its cause, not to the nature of the duty or the nature of the breach of duty.

KIRBY J:   This might be one case where they did direct their attention to a construction and then tried to cut it back.

MR MACONACHIE:   Indeed, and the words “if, and only if” are directed to matters of causation.  So that our submission, more extensively set out in the written submission, is that the Parliament, seeing how the courts dealt with the words “use or operation”, determined that they would leave those words there and would qualify the reach of them by reference to causative considerations which are to be found in the second limb.

As a matter of English, as a matter of history, as a matter of context that is how the definition as a whole ought to be construed.  It is not, plainly enough, intended to be a universal compensation system, as Mr Justice Young, the Chief Judge in Equity, said in Gunter and this Court disagreed with what he had to say in Gunter, but it is plain that it was intended to have a broad reach but be limited and qualified by the causation restrictions imposed by the second limb.

We say, both as a matter of English and as a matter of history, having regard to the way that the Parliament responded to the difficulties that were perceived from an over broad interpretation, it responded by saying, “Well, we’ll leave the broad reach in the first limb but we’ll qualify it by reference to causation in the second limb”.  There was “the use or operation of a motor vehicle”.  There was “fault” in that use, with respect to that use, as a consequence of that use, by reason of that use ‑ ‑ ‑

HAYNE J:   That is the difficulty, is it not?

MR MACONACHIE:   The word “in”, your Honour?

HAYNE J:   Yes, it is.

MR MACONACHIE:   It can be.

HAYNE J:   Well, in this case it is, is it not?  Is that not one of the principal areas for debate in the case?

MR MACONACHIE:   It probably is, your Honour.

HAYNE J:   Because you say you have here an owner who was negligent.

MR MACONACHIE:   Yes.

HAYNE J:   You say you have here “the use or operation of a vehicle”.

MR MACONACHIE:   Yes.

HAYNE J:   The negligence of the owner is what, using the forklift in these circumstances?

MR MACONACHIE:   Yes, your Honour.

HAYNE J:   And the bite comes because you have to add “in these circumstances”, and that is ‑ ‑ ‑

MR MACONACHIE:   But it is not a causative notion.  It is a circumstantial, temporal notion.  The causative component is to be found in the words “caused by” and it is to be found in the second limb “if, and only if” it is the result of and caused during.

HAYNE J:   Well, “fault” in use ‑ ‑ ‑

MR MACONACHIE:   The words “in the use” are not of themselves causative, we submit.  That is the construction that was given to it by the Grain Corporation Case.  We do not rely on the Grain Corporation Case as such.  We see it as a point in time where the words were given a longstanding meaning and the Parliament responded not by cutting down the words “use or operation” but by adding the words “if, and only if” in order to do what the Attorney‑General said the Bill was intended to do; that is, to qualify “injury” by reference to its cause, not by reference to the nature of the breach, the nature of the duty.  We say that that is the simple straightforward conclusion to be reached by reference to the history of the matter, the words chosen by the Parliament, and we respectfully adopt what Justice Kirby has had to say about being careful about the use of the second reading speech.

It is plain from the second reading speech itself – can I take you to it, it is attached to Mr Deakin’s submissions.  On the page numbered 1 of 10 at about point 7 on the page, it is the penultimate paragraph, your Honours:

Honourable members on the crossbenches have indicated that they consider a review of the third-party insurance scheme is necessary.  The Government agrees.  But if we are to prevent third-party insurance premiums from continuing to soar, there is insufficient time to conduct such a review before the passage of this bill through the Parliament.  Accordingly, the Government undertakes, if this bill is not delayed by referring it to the law and justice committee –

of the Parliament or the House –

and is passed by the Parliament without significant amendment, to conduct a thorough review of the Motor Accidents Act. 

Nothing could be plainer, we would submit, that this measure, the Motor Accidents Amendment Act 1995 which inserted the definition that we have been discussing was a matter of some political controversy and, accordingly, one needs to be very careful about giving too much weight to that which is said in these extra-legislative instruments because there were, plainly, a number of views. It is also important to remember that both the objects clause in 2A and 2B – 2A is the objects clause, 2B is how you use it – and the second reading speech identify a number of things. In the second reading speech it is put this way, firstly, primarily, to:

address the needs of the severely injured as a first priority; second, maintain premiums which are affordable . . . third, achieve this by limiting damages for non-economic loss in cases of minor injuries.

They were the stated priorities and there is comment about thresholds and the like.  Then, on the page numbered 2 out of 10,but on page 3322 of Hansard, the Attorney-General said, at about point 5 on the page:

It is therefore proposed to amend the definition of “injury” to adopt an approach similar to that taken in Queensland, South Australia and Western Australia, where “injury” is qualified in terms of its cause. 

It is plain they intended to restrict it.  The question is how they intended to restrict it and they did not intend to restrict it by a restriction of the breadth of the first limb, they intended to restrict it by the addition of the second limb which was limited to causal matters.  In this case, there are findings of fact by both the trial judge and the Court of Appeal that a cause and the predominant, immediate, necessary, important, real, true cause was the use of the motor vehicle.

KIRBY J:   I suppose you can say to some extent in support of that and in support of what Chief Justice Spigelman said in Zurich that it would have been open to Parliament to have said bodily injury caused by the fault and injury as a result of and is caused by driving the vehicle, et cetera.

MR MACONACHIE:   Yes, negligent driving of the vehicle.

KIRBY J:   Instead, they used the words “caused during” which is an adverbial clause of time.

MR MACONACHIE:   Yes, quite.  I think the expression was that textural contortion was used in the judgment of the majority in Allianz and the way in which that contortion was understood and explained by this Court in that case we adopt and we repeat again, on the facts of this case there was driving which was important and necessary in the fault.  We answer, or the facts answer, any sensible, plain, straightforward meaning of the first limb and is not disqualified for the reasons given more detail in our written submission by the second limb.  Could I then turn to the costs issue?

GLEESON CJ:   Could you just assist us by summarising the way in which this issue arose in the litigation?

MR MACONACHIE:   That is a big task, your Honour.

GUMMOW J:   That is what you are here for.

MR MACONACHIE:   It is, indeed.

HAYNE J:   But you say two sentences will quite suffice.

MR MACONACHIE:   It has had a very tortured history.  I am not sure that I can – it arose this way, I suppose.  Mr Tleyji was injured whilst he was working at premises owned and occupied by GLG Limited.  He was employed ‑ ‑ ‑

GLEESON CJ:   Or engaged?

MR MACONACHIE:   He was not employed by GLG but he was there on loan, I suppose, from a labour hire organisation and he was struck by some goods that became dislodged because of the shaking of the ramp transmitted to the container, that having been the direct and immediate cause.

KIRBY J:   Comma, as the vehicle was driving up the ramp, comma.

MR MACONACHIE:   And whilst it was driving up – and whilst it was driving ‑ ‑ ‑

KIRBY J:   I am surprised you did not add that.

MR MACONACHIE:   And whilst it was driving up.

GLEESON CJ:   Anyway, he sued everybody whose head appeared above the parapet.

MR MACONACHIE:   And CIC, and/or HIH – I cannot remember – he sued everybody and HIH, the insurers – CIC, the insurer – motor vehicle insurer ‑ ‑ ‑

GLEESON CJ:   So the Nominal Defendant ‑ ‑ ‑

MR MACONACHIE:    ‑ ‑ ‑ of GLG went into smoke and the Nominal Defendant, by reason of a number of sections which we can give your Honours if your Honours are desperately interested to know, became, in effect, and for all purposes, the insurer.

GLEESON CJ:   Yes.

MR MACONACHIE:   In short, the Nominal Defendant, as it is entitled to do, pursuant to section 47A, sought leave to be joined and was joined before Judge Delaney on the very day on which the case was to commence and argued for the proposition before Judge Delaney that the policy did not extend to cover the liability of GLG which arose in the circumstances that we have debated.  Then we went to the Court of Appeal where we were successful, where the principal issue ‑ ‑ ‑

GLEESON CJ:   But now just pausing, Judge Delaney found in favour of the Nominal Defendant on that issue?

MR MACONACHIE:   Yes, he did.

GLEESON CJ:   So at that stage, what, Judge Delaney has you paying the Nominal Defendant’s costs, has he?

MR MACONACHIE:   Yes, I am sure that is right, your Honour.

GLEESON CJ:   But we are not talking about those costs in this issue. 

MR MACONACHIE:   No, the costs that are sticking in my learned friend’s craw are the costs that were incurred by GLG in defending the claim by Mr Tleyji and prosecuting a claim against the insurer and I accept we did not recover pursuant to the policy. We recovered the costs on the exercise of the discretion, the equivalent of section 76 of the Supreme Court Act and my learned friend ‑ ‑ ‑

GLEESON CJ:   This is not some sort of Bullock order, is it?

MR MACONACHIE:   No.  The way in which the Court of Appeal approached it was to say you were driven to litigate because the insurer failed to grant you indemnity and the costs that were incurred were incurred because the insurer failed to grant indemnity having regard to the history of the matter, which they looked at with great care because of the “point not taken below” issue that was litigated there but not pressed here, you are entitled to all your costs because of the manner in which the insurer conducted itself, not to say that it was dishonourable in any way, but to say that it failed to do that which its contractual obligations required of it and the section 45 ‑ ‑ ‑

GLEESON CJ:   Is this all on the assumption that if the insurer had admitted liability Mr T would have settled?

MR MACONACHIE:   No.  That the insurer would have taken over the conduct of the proceedings as section 45 contemplates and would have ‑ ‑ ‑

GLEESON CJ:   I see, and you would never have ‑ ‑ ‑

MR MACONACHIE:   We would not have been involved.  It is not a breach of section 45 as such that led to the costs order.  It was, as we identify in our submissions at page 10, commencing at paragraph 5.56, but hopefully we identify the relevant point at 5.57, the real point of decision on costs was rejection by the Court of Appeal of the submission by Mr Deakin that GLG was in breach of section 46(1)(a) of the Motor Accidents Act.  Can I take you to appeal book 248, lines 30 to 35?  I think that is an incorrect reference.  I am sorry.  It is in the second judgment.  I will ask Mr Polin if he can find the passage where the Court of Appeal deals with Mr ‑ ‑ ‑

MR POLIN:   Page 388.

MR MACONACHIE:   I am grateful - 388, your Honours.  I apologise for that.  Yes, and following thereafter, paragraph 16 at line 45:

The decision in this case means that the Nominal Defendant’s denial of liability put it in breach of s 45(1).  It was submitted for the Nominal Defendant that GLG was in breach of s 46(1)(a).  However, once the Nominal Defendant had denied liability, GLG had no alternative.

That is the point, we would submit.

HAYNE J:   Well, what do we make of the first sentence in paragraph 16 and the first sentence in paragraph 17?

MR MACONACHIE:   The way we put it in our written submission is this, and this is how we say your Honours should deal with it.  All the Court of Appeal did was to conclude that which common sense suggests:

The probability is that, if the Nominal Defendant had not denied indemnity, it would have complied with its obligation under s 45 –

because, as a model litigant, as the Nominal Defendant, it would have taken over the conduct of the case and would have attempted to settle it or to otherwise deal with it efficiently –

and also would have taken over the proceedings under s 47.

It is not to make a finding against the Nominal Defendant to say that it was in breach of section 45; it is to recognise that it was a responsible litigant that would do that which the Parliament required it to do because of section 45.  My learned friend puts his submissions to some extent, as I read them – his written submissions anyway – on the basis that we recovered under the policy.  That is not so.  It was a question of ‑ ‑ ‑

GLEESON CJ:   What about a claim for damages for breach of the contract insurance?  Is that a way of putting this kind of a claim?

MR MACONACHIE:   Yes, it is.

KIRBY J:   But it is not really, is it?  Your point is that the entitlement to costs arose not under the policy of indemnity but by virtue of the order of a court exercising its power against a statutory corporation, namely the Nominal Defendant.

MR MACONACHIE:   Yes, your Honour.  It was not put on the basis of a breach of contract.

GLEESON CJ:   Could it be?

MR MACONACHIE:   Yes, it could, we would submit.

GLEESON CJ:   In the United States you would get triple damage or punitive damages or something, would you not, for this sort of thing?

MR MACONACHIE:   To the extent that I have ‑ ‑ ‑

KIRBY J:   We are not going to do that to Mr Deakin.

HAYNE J:   The Texas jury is sitting there, Mr Maconachie.

MR MACONACHIE:   With President Bush on it apparently, your Honour, yes.

GLEESON CJ:   From the point of view of an insured, if you have an insurer who is unjustifiably declining indemnity and the insured is then forced to defend the claim and incurs expense of doing that, where we all know that if the insurer had granted indemnity the insurer would have defended the claim at its own expense, a possible point of view is that the insured has suffered harm – it is not that the insured is entitled under the policy to be indemnified in respect of its costs, it is that the insured has suffered harm as a result of a wrongful refusal to indemnify.

MR MACONACHIE:   It gets a little difficult, your Honour, because in America it is not uncommon, and it is becoming more common here but it is far from being usual, that there are two promises in the policy; one is to indemnify and the other is to take over and defend.

Commonly in Australia in liability policies, there is an election given to the insurer to take over and defend; he does not have to.  So an analysis of it in terms of breach is complicated by that, and I have not thought it through.  It may be still capable of being so analysed because you have lost the opportunity of having the insurer determine whether he would or would not so elect.  It was put in the Court of Appeal firmly on the basis of the general discretion as to costs and it was put on the basis that we had to take the course that we did because of an anticipatory breach I suppose.

KIRBY J:   What is your answer to the complaint about procedural unfairness?

MR MACONACHIE:   Just that, your Honour, it was not – all the Court of Appeal was doing was saying because you took the course you did, and it was unambiguous, the Nominal Defendant sought to be joined before Judge Delaney to argue that it could not be liable for all of the reasons that my learned friend has adumbrated here today.  There was an unambiguous refusal to indemnify and accordingly, all that could be done on the part of GLG in order to protect its interests was to (a) defend the matter and (b) claim an indemnity under the policy.  The proceedings were made

necessary and the costs were incurred because of the approach taken by the Nominal Defendant and we say that they were matters properly to be taken into account by the Court of Appeal in exercising their discretionary judgment.

The reference to section 45 is not, “Bad boy, you are in breach of section 45” but rather, had you taken a different course and the one that this judgment says was appropriate, ie you were liable under the policy, then section 45 is there and common sense dictates that you would have done the things that section 45 and section 47 require.  Because you did not, costs were incurred that otherwise would not have been incurred.  It is in that sense, not breach as such but because you refused indemnity, all of these costs had to be incurred as a matter of discretion.  Costs should follow the event.  They are our submissions.

GLEESON CJ:   Thank you Mr Maconachie.  Yes, Mr Deakin.

MR DEAKIN:   Just briefly on that last aspect, your Honours, we have put what we wanted to about what the paragraphs in the judgment mean.  It is important for your Honours to recognise that there were no proceedings between the respondent in this case and the appellant.  There were no cross‑claims filed and this is not a question of costs flowing as a result of a cross-claim relying, if your Honour the Chief Justice’s point is to be taken on some breach of contract, nor a case in which the cross-claimant said you were in breach of your policy obligations, you should have indemnified us and costs and other consequences flow from that.

HAYNE J:   Well, so much is apparent, I think, from the form of order ultimately taken out at pages 391 and 392 where at paragraphs 6 and 7 you get disposition of the costs in the court below with the Nominal Defendant having to indemnify GLG in respect of the costs payable to the parties opposite to GLG but in paragraph 8 it is this additional order to indemnify GLG “with respect to its costs of the District Court Proceedings”.

MR DEAKIN:   Its costs; that is exactly it.

HAYNE J:   Its costs.

MR DEAKIN:   It is 8 only that we challenge, that is the point.  The others follow with the event of the appeal.  Obviously there is no argument about that.  It is 8 only that is in challenge, so that is what we put on that.  Can I just deal briefly with a few other aspects.  Nothing in the Act or the sections supports the imposition of a test such as that relied upon by my learned friend and expressed by the Court of Appeal of whether it is a necessary and important element.  In terms of certainty, predictability and what everyone needs in this area of the law, a test dependent upon elements as vague and uncertain as necessary important elements we would submit would be rejected by this Court as unhelpful and not called for by the terms of the section.

Can we deal with two authorities.  My learned friend referred lastly I think to the Zurich v CSR Case.  Your Honours will have observed that we have not sought to persuade your Honours that that decision was incorrectly decided.  Dual characterisation is permissible under this legislation.  Can we give your Honours a concrete example of it.  If the driver of this forklift had been held negligent in the manner in which he drove the vehicle, the owner would be vicariously liable by statute, quite apart from the ordinary principles of vicarious liability, for his negligence.  There would be dual characterisation of fault in this very case if that finding had been made.

Zurich is authority for nothing more than that proposition.  This is not a case of dual characterisation at all.  There are no two categories of fault, there is only one, and it falls outside the scope of the definition for the reasons ‑ ‑ ‑

KIRBY J:   The contrary argument is that there are two.  There is the lack of a safe system of work and a lack of a safe system of work in the use of the vehicle in the system of work that was provided.

MR DEAKIN:   That is one category, with respect, your Honour.  It has been held to be one category.  That is the basis of the finding of fault in this case.  I appreciate we are circuitous in a way but, your Honour, there are no two categories of fault in this case.  It is not a dual characterisation case.  There is a single category of fault in respect of a system of work ‑ ‑ ‑

KIRBY J:   Your trouble as it still seems to me, and I have to try and work it out, but your trouble is you have a disembodied notion of system of work, whereas the reality of life is the system of work is very fact intensive – very fact intensive.  It is all about the facts of what the employer did and should have done.

MR DEAKIN:   But there is a limited category of fault that falls within this definition and that falls outside of it.  I think we have put that ad nauseam.  My learned friend did at one stage say he did not rely on Grain Corporation but he quoted from it.  Grain Corporation really should be set to one side altogether because this Court decided in Allianz that part of the reason why the Parliament acted in the way it did in introducing the 1995 amendments was because the case law to that point, including what had been foreshadowed in the Grain Corporation Case, was an over-broad interpretation of the law as it then stood.  The 1995 amendments were, in part at least, introduced to get around what had happened in Grain Corporation and it certainly cannot assist my learned friend in advancing what he says the amendments which followed Grain Corporation should mean in the light of what Grain Corporation decided, so it ought to be set aside altogether.

It is important to realise that before the Grain Corporation decision was handed down, the Bill had already been presented to Parliament.  All that they knew was that the case had been lost but they did not know anything at the time the Bill was presented to Parliament as to what the reasons of the Court of Appeal were going to be when they were handed down in December of that year, so it cannot assist my learned friend in any way such as he seeks to invoke.  They are our submissions in reply, your Honours.

GLEESON CJ:   Thank you, Mr Deakin.

MR MACONACHIE:   Could I just say this, your Honours.  I meant to but I did it compendiously.  I rely on the notice of contention and the submissions put at page 11 of our written submissions but have nothing further to say.

GLEESON CJ:   Thank you.

MR DEAKIN:   I suppose I have to address it.  We submit that Justice Hodgson in this respect was manifestly correct.

KIRBY J:   This is on the concurrent findings of fact?

MR DEAKIN:   No, on the fact that my learned friend now says there should be a finding by this Court that the driver was negligent.  That is really what he is saying.

KIRBY J:   That is attacking the concurrent finding of facts?

MR DEAKIN:   Yes.

KIRBY J:   I am not stopping you.

MR DEAKIN:   I am glad your Honour thinks that way.

KIRBY J:   It is a hard barrow to be pushing up a ramp.  It is causing all sorts of vibrations.

GLEESON CJ:   Thank you, Mr Deakin.

MR DEAKIN:   The simple point is, your Honour, that he was following the directions of my learned friend’s client.  They were doing it the way

they required to do and there cannot be any negligence in the driver in that circumstance.  That is what the trial judge held and that is what the Court of Appeal confirmed and your Honours would reject the notice of contention.

GLEESON CJ:   We will reserve our decision in this matter and we will adjourn until 10.00 am tomorrow.

AT 3.47 PM THE MATTER WAS ADJOURNED