Pavlic v Abd Transport Pty Ltd - [2005] SADC 11

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
PAVLIC v ABD TRANSPORT PTY LTD
Judgment of His Honour Judge Clayton
14 February 2005
ADMINISTRATIVE LAW
MINOR CIVIL REVIEW
Applicant applied for review of decision of magistrate. Held: Section 59 Civil Liability Act did not apply to claim of employer against employee. Evidence did not establish employee was liable in contract for damage caused to employer's vehicle.
Wrongs Act 1936 s 27c; Civil Liability Act 1936 s 59, referred to.

PAVLIC v ABD TRANSPORT PTY LTD
[2005] SADC 11

ABD Transport Pty Ltd has claimed $1500.00 from Mr Matthew Pavlic as a “debt incurred as a result of truck accident”. The claim was heard as a minor civil action in the Magistrates Court. In his defence Mr Pavlic said:
“I deny the claim for the following reason:
I am employed by ABD Transport Pty Ltd as a driver. I have not been informed at any point since my start of employment that I am responsible for the excess premium or damage in case of an accident. Please also refer to the attached copy of “SA Consolidated Acts – Wrongs Act 1936 s –27c- Rights”. A copy of s 27c of the Wrongs Act was annexed.”
What provoked Mr Pavlic to make the statement that he had not been informed that he was responsible for the excess premium or damage in the case of an accident is not clear, but that statement in his defence brings into focus the precise issue upon which the resolution of this action depends.
The trial commenced on 12 July 2004. The court record indicates that evidence was taken and recorded on tapes, but the tapes were not available for this review. The court record indicates that the action was adjourned to the 18 August 2004 at 11.30am for determination. For some reason which is not apparent, on 16 August 2004, a note was made in the court record:
“HH finds that the defendant has a complete defence pursuant to the Civil Liability Act – therefore the defendant’s contention was, in fact, correct. The plaintiff’s claim will be dismissed – no further orders. Neither party needs to attend on 18/8/04 unless they particularly wish.”
On the 16 August 2002 the Court wrote to the parties advising:
“I refer you to the above action and advise that His Honour ….finds “that the defendant has a complete defence pursuant to the Civil Liability Act, and therefore the defendant’s contention was, in fact correct. The plaintiff’s claim will be dismissed, no further orders. Neither party needs to attend on 18 August 2004 unless they particularly wish”.
However, a record of proceedings on 18 August notes:
“Submissions tendered by Mr Sandercock (Plaintiff). HH withdraws his previous decision of 16.8.04 subject to the submissions tendered.”
On 18 August the learned Magistrate reserved his decision. The court record shows that on 18 August Mr Sandercock appeared for the plaintiff and the defendant appeared in person.
The Magistrates Court file contains a lengthy written legal submission on behalf of the plaintiff with respect to s 27c of the Wrongs Act and s 59 of the Civil Liability Act.
On 12 October 2004 the learned Magistrate delivered reasons saying :
“I have considered the matter in light of the plaintiff’s written submissions that he handed to me on the last court date. I think the argument is well made that what the plaintiff seeks, namely to recover the policy excess, is not precluded by s 59 of the Civil Liability Act.
The submission draws the important distinction between the current situation and one where the claim for the loss sustained through damage caused by the defendant.
Since all employees were informed of the terms of the Agreement, namely that they are personally responsible for loss they cause the plaintiff, I am satisfied that the plaintiff has made out its case. The claim falls outside the Vicarious Liability (sic) aspects of s 59.
Judgment in favour of the plaintiff in the sum of $1500.00, plus $74.00 filing fee.”
Mr Pavlic has sought a review of that decision. In the grounds he referred to the letter from the court of 18 August 2004. He complained that the written submissions are almost exactly the same as oral submissions which had been made to the Magistrate. He complained that there is no proof that he was negligent and raised other matters. Mr Pavlic also complained that the plaintiff had not produced any paperwork supporting the allegation that he had agreed to pay the damage.
The matter comes before this Court for review. Subsection 38(7) of the Magistrates Court Act provides that on a review this Court may inform itself as it thinks fit and is not bound by the rules of evidence, it may if it thinks fit rehear evidence taken before the Magistrates Court and may in determining the matter affirm the judgment or rescind the judgment and substitute a judgment that the Court considers appropriate.
In view of the unavailability of the record of the evidence in the Magistrates Court I determined to rehear the evidence of the parties.
The plaintiff did not assert negligence on the part of Mr Pavlic but relied solely upon an alleged express oral agreement.
An employer and employee can make a contract that requires an employee to indemnify the employer against specified causes. Macken O’Grady, Sapprideen and Warburton, The Law of Employment, 5^th ed. Lawbook Co., Sydney, 2002, p136. However, an express contract is required.
There is no condition implied in a contract of employment which would make Mr Pavlic liable for the damage. An employee is generally not treated as a bailee of the employer’s property. Palmer Bailment, 2^nd ed. p461 referring to Peter Jackson Pty Ltd v Consolidated Insurance of Australia Ltd (1975) VR 480, 484. In this case the plaintiff relies solely on the alleged agreement and no question of bailment or negligence arises.
Mr Sandercock gave evidence that at the time of giving evidence all of his drivers were employed with oral agreements. They now have written agreements as a result of the events which give rise to this case. Mr Sandercock said that at the time Mr Pavlic was engaged he told him that he was required to wear a company shirt, sign the log book in and out, that the pay week finished on a Wednesday, that he would be paid on a Friday and “I told him he would be responsible for any damages, truck or equipment or goods carried within that. That was the end of it. Mr Pavlic did not say anything but turned up for work a day or two later.” In elaboration Mr Sandercock said that Mr Pavlic would be “responsible for the truck and the goods carried within, provided that the insurance company didn’t have to pay out, or paid out. (sic) He would be responsible for the balance”.
Mr Pavlic was involved in a collision. The plaintiff’s insurer paid the cost of the damage except for an excess totalling $1500.00. The plaintiff now claims the excess from Mr Pavlic. The insurance claim related to the damage to the plaintiff’s vehicle, not the cost of the damage to other vehicles involved in the collision.
Mr Pavlic also gave evidence. He agreed he was informed how to sign on in the log book and sign off at the end of the day, he was informed how to fill up invoices for the customers and that he had to wear a company shirt. He said “that’s as far as I was told of anything really”. He said nothing was said about responsibility for damage to the truck or goods. He was referred to the evidence of Mr Sandercock that he had agreed that he would be responsible for damage to the truck and goods within the truck provided the insurance company did not pay and he said “that was never brought up at all in any time that I was employed there.”
After the accident Mr Sandercock showed Mr Pavlic a written contract which required Mr Pavlic to make weekly or fortnightly repayments, but after Mr Pavlic showed the document to his father he refused to sign.
There are other matters of disagreement between the parties which I need not consider.
The question is whether Mr Pavlic is liable on the basis of the alleged oral agreement to pay the insurance excess.
There is no allegation of negligence and no evidence of the circumstances in which the damage to the plaintiff’s vehicle was caused. By the alleged agreement, the plaintiff is seeking to put its employee in the position of an insurer in respect of any damage which might be suffered by the vehicle or the goods in the vehicle.
The plaintiff did not assert that a term that made Mr Pavlic liable for damage to the plaintiff’s vehicle should be implied into the contract of employment and there is no reason to imply such a term to give efficacy to the contract. Such a term is not implied into a contract of employment by custom or practice.
Accordingly the resolution of this case depends upon whether the plaintiff has established on the balance of probabilities the oral agreement upon which it relies.
Both Mr Sandercock and Mr Pavlic were credible witnesses.
While Exhibit D2, the document which Mr Sandercock asked Mr Pavlic to sign, would create a new agreement by Mr Pavlic to pay the debt, it does not refer to any pre-existing agreement.
Exhibit P3, a letter from Mr Pavlic’s father to Mr Sandercock, complains that upon the commencement of his employment the defendant was not provided with written material where the conditions and rules of employment were identified. Nothing is said about any oral term of the contract of employment. The letter also complains that warnings about other allegedly unsatisfactory aspects of the defendant’s employment were first given “shortly after Matthew had refused to sign to pay for the insurance excess”. There is no reference in the letter to any discussion about liability for damage to the vehicle.
Both Mr Pavlic and Mr Sandercock presented as reliable witnesses. There is no documentary or other evidence which corroborates the oral evidence of either of them. I have no reason to prefer the evidence of one over the evidence of the other. The result is that the plaintiff has not established on the balance of probabilities the oral term upon which its case relies.
So far as s 27(c) of the Wrongs Act 1936 (now s 59 of the Civil Liability Act 1936 as amended ) is concerned, I agree with the decision of the learned Magistrate. That provision is not determinative of this action but is concerned with the obligation of the employer to indemnify an employee against claims made by third parties. It does not deal with the position as between employer and employee for damage caused to the property of the employer.
In my opinion the evidence does not support the finding of the learned Magistrate that all employees were informed of the terms of the alleged agreement that they are personally responsible for loss they cause the plaintiff. In addition there is no evidence that the defendant had agreed to the alleged term.
In the circumstances I hold that the plaintiff has not established its case. The judgment of the learned special magistrate will be rescinded and in its place I substitute judgment in favour of the defendant dismissing the claim.