QBE Insurance (Australia) Ltd v Smith & Anor

[2005] HCATrans 749

[2005] HCATrans 749

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S242 of 2005

B e t w e e n -

QBE INSURANCE (AUSTRALIA) LIMITED

Applicant

and

SIMON JAMES SMITH

First Respondent

NATHANIEL MAXWELL SMITH BHNF SUE AVARD

Second Respondent

Application for special leave to appeal

GUMMOW J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 SEPTEMBER 2005, AT 2.12 PM

Copyright in the High Court of Australia

MR K.P. REWELL, SC:   If the Court pleases, I appear with my learned friend, MR B.G. SMITH, for the applicant.  (instructed by Moray & Agnew)

MR H.J. MARSHALL, SC:   May it please the Court, I appear my learned friend, MR. T.J. DIXON, for the first respondent.  (instructed by Beilby Poulden Costello)

MR P.R. HENNESSY, SC:   May it please the Court, I appear with my learned friend, MR M.G. GILBERT, for the second respondent.  (instructed by Stacks – The Law Firm)

GUMMOW J:   Yes, Mr Rewell.

MR REWELL:   Your Honours, this application for special leave concerns three issues of interpretation arising under the Motor Accidents Compensation Act 1999 which, as the Court is aware, is the legislation underlying the motor accidents scheme in this State. If special leave is granted, the applicant asks that this appeal be heard together with the appeal in Nominal Defendant v GLG Australia Pty Ltd, in which special leave was already granted.  A hearing date for that appeal is awaited.  This application was expedited for that reason.

Like GLG v Nominal Defendant, the decision of the New South Wales Court of Appeal in this case was delivered before judgment was handed down in Allianz Australia Insurance Limited v GSF ‑ ‑ ‑

GUMMOW J:   What is the date of the grant in the Nominal Defendant Case, do you know?

MR REWELL:   Yes, your Honour, the grant was 17 June 2005.

GUMMOW J:   Thank you.

MR REWELL:   Chief Justice Gleeson and Justice Heydon granted special leave in that matter.  It is a very short transcript.  The three issues of interpretation in respect of the motor accident legislation are identical in this case and in GLG v Nominal Defendant.

GUMMOW J:   Well, why do we not just stand this over?

MR REWELL:   Well, your Honour, what we propose to the Court is that this case, which has the same essential issues but a different factual background, will afford to the High Court an opportunity to consider these matters of principle and interpretation against a much broader ‑ ‑ ‑

GUMMOW J:   Now, this is the case in which the driver got out of the vehicle, is it not?

MR REWELL:   No, it is the case in which the infant son of the driver got out of the vehicle at his father’s direction and went to cross the roadway, but in doing so walked straight into the path of a passing vehicle.  There was no negligence found on the part of the driver of the passing vehicle, whose view of the boy was obscured.  Although there were other findings by the trial judge, the essential negligence considered by the Court of Appeal was the father’s failure to give proper instructions to his son as to how to cross the road safely in the context of the place where the father had put the vehicle and of course the location of the gate that the boy was supposed to open.

GUMMOW J:   What is the factual contrast with the other case?

MR REWELL:   GLG concerns a different set of facts altogether.  In GLG a forklift truck was driven up a wooden ramp into a shipping container.  The plaintiff in that case was working in the shipping container.  The entry of the forklift truck, by means of the ramp, caused the container, the ramp and everything in the container to vibrate and one of the boxes within the container fell on the plaintiff.  The factual matrices are therefore different, but the cases have these three issues in common:  first, whether the circumstances of the accident involve the use or operation of a motor vehicle.  Now, your Honours may recall in Allianz v GSF, that was a matter mentioned in the judgment of the majority but it was not a matter in issue in that appeal.  It had been conceded.

GUMMOW J:   Was there any dissent?

MR REWELL:   Is there any dissent in the Court of Appeal?

GUMMOW J:   In Allianz.

MR REWELL:   In Allianz, no.

GUMMOW J:   Well, it is not a judgment of the majority, is it?  You mean the plurality judgment, do you?

MR REWELL:   Yes, but the majority did mention the fact that there seemed to be some consternation about “in the use or operation of a motor vehicle” in its proper interpretation, but it was not in issue in that appeal and it was not necessary for the Court to consider it further.  In this case and in GLG it is necessary for the High Court to consider that matter further because the brief factual descriptions I have given, will it be sufficient to

inform the Court of a problem as to whether it was the use or operation of the motor vehicle that was the cause in the requisite sense of the injury suffered by the two plaintiffs.

The second issue which is identical between the two concerns the interpretation of the word “driving”.  Now, we are acutely aware of the decision of the Court in Insurance Commission of Western Australia v Container Handlers.  However, in both GLG and in this case the concept of driving has been taken well beyond the actual manoeuvring, driving, stopping and controlling of a motor vehicle, as your Honours would have discerned from the brief statement of facts.  Both accidents had something to do with the driving of a motor vehicle.  Neither accident directly concerned the driving of a motor vehicle.  Both invoke cases – the allegation for the purposes of appeal is that the New South Wales Court of Appeal unacceptably extended the concept of driving despite having access to your Honours’ decisions in Container Handlers.

The third is that the Court of Appeal in this case, as in GLG, not having the benefit of the decision of the High Court in Allianz v GSF, misunderstood the test of causation involved in the expression “a result of” and “caused during the driving of the motor vehicle”.  Your Honours may recall that the majority in Allianz v GSF mentioned the concept of proximate cause, an expression which did not find favour with Justice McHugh, although his Honour explained himself in a way that had the same effect.  Again, when one looks to the proximate cause of the accident in this particular case, we assert that the clear proximate cause was the negligent failure by the father, that is the driver, of the plaintiff to give the plaintiff proper instructions as to how to cross the road carefully for the purpose of opening a gate for him. 

Your Honours, I think I have explained sufficiently the factual background of both cases, but if your Honours need any further detail, they are set out clearly in the application books.

GUMMOW J:   Yes, thank you, Mr Rewell.  We will hear what your opponents have to say on this question of joinder with GLG or unsuitability of joinder with GLG.

MR REWELL:   Thank you, your Honour.

MR MARSHALL:   Thank you.  Your Honour, GLG involved a case where there was absolutely no negligence in the driving of the motor vehicle.  That was made very clear in the application for special leave.  I think the point Justice Heydon made to Mr Maconachie in which it was abundantly clear that how could that case stand where there was negligence on the part of the employer in requiring a particular system of work to be undertaken but there was absolutely nothing wrong with the manner in which the driving was undertaken.  That is a critical difference with this case, where the trial judge found three aspects of driving negligent on the part of the first respondent.

Those three aspects involved a failure to put on his right-hand indicator which would have alerted the other vehicle coming along which ultimately struck the boy; a failure to open his door or signal to the other oncoming driver that the boy was crossing the road.  The father was aware that his son was crossing the road.  He saw the other oncoming car and did nothing.  The trial judge found relevantly – and I will take your Honours to the passages – that each of those aspects were aspects involving the driving of the car. 

This Court has considered what matters are encompassed by the word “driving” and, in fact, this legislation defines “driver” as a person being in charge of a vehicle, which is within the definition or the examples that Justice Heydon, Justice McHugh and Justice Callinan gave in both Western Australia v Container and Allianz v GSF as well.  Those are both physical aspects involved in the driving, because the driver of the car was, whilst stationary, he had his engine ‑ ‑ ‑

GUMMOW J:   It is put against you that there are points of construction, of which driving is one, but there are other points as well.

MR MARSHALL:   I was about to come to those.  The third aspect of the finding of negligence against the driver was that he had devised this plan which was faulty.  The plan was that he would pull to the left-hand side of the road to reverse across the road, his son having opened the gate to enable this manoeuvre to take place.  The trial judge found that as a manoeuvre, as a plan to operate the vehicle, use the vehicle, it was flawed because it involved unnecessary risks.  In that respect, it is significantly different to GLG.

So my learned friend has said there are three points of similarity.  The first is use or operation.  Clearly, they are quite different because it could not be said with any conviction that a driver failing to do something which is part of the ordinary use of a motor vehicle for which the trial judge has found him to be negligent is not in the “use or operation”, such as the failure to put on an indicator, the failure to open the door to warn another driver or the negligent devising of a plan of driving a motor vehicle.  The second point is that unlike GLG ‑ ‑ ‑

GUMMOW J:   Look, the bottom line comes to this.  If we were to decide GLG one way, that could have the effect of achieving a result perhaps which is damaging to the decision taken by this case in the Court of Appeal but without special leave having been given in this case.

MR MARSHALL:   I understand the point, yes, your Honour.

GUMMOW J:   So whether the facts are precisely the same, or precisely not the same, does not matter.  Two questions arise:  whether this should be stood over pending the outcome of GLG or whether it should be heard with it.  It seems to me to be the ambit of it all.

MR MARSHALL:   Well, there is a third possibility which we would wish to canvass with the Court that special leave should not be granted at all in this case ‑ ‑ ‑

GUMMOW J:   I understand that.

MR MARSHALL:   ‑ ‑ ‑ because the facts are so fundamentally unusual and they would provide little assistance, in our submission, to the Court in determining GLG v Nominal Defendant, which does not involve facts similar to this in any event.  It would not provide a canvas upon which the Court could work, we say.  It does involve section 3 of the Motor Accidents Compensation Act and that is it, in our submission.  But then this Court has looked at those points – causation, driving and “in the use or operation of” – exhaustively in two previous cases.

GUMMOW J:   About to do it a third time it seems.

MR MARSHALL:   Well, it seems, but it is true in GLG, that case involved a negligence not of the driving but of the employer, and this is not that case.  The other cases that the Court has looked at do not involve the driving per se, in our submission.  They involve a defect in a vehicle, they involve the way in which an employer directs an employee to do various things, and the use of the vehicle is just a peripheral event.  This is not such a case.  The use of the vehicle and the manner in which it is being driven is critical, as found by the trial judge, as found by three judges of the Court of Appeal.  They did not get it wrong, with respect, your Honours.  They might not have had the benefit of what the Court said in Allianz, but Justice Hodgson at length discusses what the Court said in Western Australia v Container.  With respect to my learned friend, he did not do what your Honours had said, any injustice.

HEYDON J:   What has actually happened between the parties?  Judge Phegan’s conclusion was upheld by the Court of Appeal.  Does that mean some damages have been ‑ ‑ ‑

MR MARSHALL:   No, it has to go back ‑ ‑ ‑

HEYDON J:   For assessment.

MR MARSHALL:   ‑ ‑ ‑ for assessment.

HEYDON J:   Because of the age of the injured?

MR MARSHALL:   Yes.  His Honour stood the matter over, as I recollect, following the giving of the two judgments for six months.  In that time the applicant filed an application for leave to appeal.  The Court of Appeal granted leave and heard the matter at the same time and dismissed the appeal.

HEYDON J:   How old is the injured boy ‑ ‑ ‑

MR MARSHALL:   He is about 13 now and requires care, at least there was evidence before the trial judge that he was catastrophically injured.  Those are the points that we would ‑ ‑ ‑

GUMMOW J:   Thank you.  Mr Hennessy.

MR HENNESSY:   Thank you, your Honour.  Your Honours, it is understood that there is a case to be dealt with by this Court in relation to the particular section of the Act.  In our submission, however, this case – and that case may be said to be – since it is to be argued in this Court on the perimeter of liability under the policy, but, in our submission, this case is entirely different.  The determination of this case will not be dependent upon the High Court’s determination on the other case.  The facts in this case are, in our submission, as found by the Court of Appeal, basic and as to the liability under the policy clear.

The Court of Appeal acted upon these basic facts, that there was fault on the part of the driver in positioning his vehicle preparatory to driving through the gate in the circumstances.  Can I say this, that the driver essentially brought his vehicle to a halt not at the side of the road but towards the middle of the road.  I have forgotten whether the blinker was on or off but, in any event, preparatory to making a right-hand turn.  Having positioned his vehicle there, he dispatched the child to open the gate and of course it was contemplated that the boy would cross the front of his, the defendant’s, rig.  The negligence was in so positioning his vehicle he deprived an oncoming vehicle of the opportunity of seeing the boy and vice versa.  That was the negligence.

Now, I say this is basic, your Honours.  If we can just reflect, every day of the week we see school buses coming along with loads of children and even though they do not park in the middle of the road when they pull up to the side to let children out, they have a huge sign on the back “Be Careful – Children Crossing”.  Now, this defendant released the boy in exactly the same circumstances but with no warning at all, thereby depriving an oncoming vehicle of the opportunity of seeing the child.

They were the facts upon which the court acted and, your Honours, those basic facts, there could be no doubt, activate the terms of the policy.  What my learned friend, Mr Rewell, puts is that another fact is that this was a child who should have been told by his father, who happened to be the driver, “Be careful, son, crossing the road.”  Well, that may well be negligent on the father’s part and if that was the basis upon which this case stood or fell, then there may well be good argument as to whether in fact the section of the Act and the policy covers that piece of negligence.  Indeed, the failure to instruct may well be a cause.  So too if the father said nothing and the father merely let the boy out of the vehicle, as he did, that may be negligence. 

They may be all causes, but the one advanced by the plaintiff in this case was the one I have indicated to your Honours.  That was the one the Court of Appeal acted upon and our submission is that those set of facts are clearly facts that activate the policy.  They are clearly within the section.  So that is why we say there can be no suggestion otherwise than this comes – this is not on the perimeter of the terms of the policy but well within it.

Having said that, your Honour, as we understand it, Mr Rewell does not suggest otherwise.  There is no suggestion by him that does not.  What he does is stands here and says, “Now, your Honours, we say the negligence was the father dispatching a child and failing to instruct him as to how he should cross the road.”  Well, Mr Rewell may well be right, that that is a negligent act.  He may well be right, but that was not any cause advanced here, it was not a cause on which the Court of Appeal acted and, indeed, therefore it is not appropriate to debate that issue before this Court.

So in the end result, in our submission, this case ought not be held up.  It is a basic case on the facts as found and acted upon, it is basic as to principle and it ought not be held up pending any determination of a case which is indeed on the perimeter of liability under the section of the Act.

As to what happened at first instance, your Honour, clearly this debate arose and his Honour granted leave to the parties to pursue the liability aspect and stood the damage question over.  Having said that – and it is right, the boy is 14 or thereabouts – there is a level of urgency to get the case on.  That is indeed why the action was brought to a hearing when he was so young, because the quicker they can get some hands on some funds to manage the boy, the better.  Thank you, your Honours.

GUMMOW J:   Thank you, Mr Hennessy.  Anything in reply, Mr Rewell?

MR REWELL:   Yes, your Honour.  Firstly, might I respectfully correct a factual error in Mr Hennessy’s submissions?  He submitted to the Court that the vehicle driven by the father pulled up in the centre or towards the centre of the road as if to turn right.  That is incorrect.  As the trial judge recorded in his judgment in page 2 of the application book at line 55:

the truck –

that is the vehicle driven by the father –

pulled over to the southern kerb and came to a stop.

On page 3 at line 25 the trial judge recorded:

Given the width of the road, it is reasonable to conclude that a vehicle travelling west, once the truck had pulled over to the kerbside, could safely overtake the stationary vehicle without having to cross the marked centre line.

So it is simply an error to say that the vehicle was stopped somewhere towards the centre of the road.  It was by the roadside leaving ample room for something to overtake it.

Now, the second error is to suggest that the Court of Appeal and the trial judge did not place emphasis on the negligent lack of instructions by the father to the son.  On page 18 of the application book at line 36 the trial judge summarises his approach to the matter.  He says:

To summarise, therefore, I find that the second defendant –

that is the driver –

was negligent.  Most obviously, in my view, in failing to properly instruct the plaintiff to safely cross the road in the first place –

so that is the most obvious negligence according to the trial judge.  Then he goes on to say:

but that breach of duty was exacerbated by failure to adopt a measure, for example, by way of activating the right hand indicator –

et cetera.  In the argument before the Court of Appeal it was pointed out that an activation of the right-hand indicator by a vehicle pulled over to the kerbside of the roadway, not intending to turn immediately, would be in fact a breach of the road rules.  Not surprisingly, the Court of Appeal had little regard to that matter afterwards.  But if one turns to the judgment of Justice Hodgson, one sees what it was that was emphasised by the Court of Appeal, page 58 of the application book.  If I could start at paragraph 38, which begins on page 57, the first complete sentence on page 58 reads:

In this case, the positioning of the vehicle, on its own, would not have amounted to negligence if combined with proper steps to ensure that the plaintiff could safely cross the road; but the positioning of the vehicle . . . did create an unreasonable risk of harm if those proper steps were not taken, as in fact they were not.

The next paragraph makes it even plainer.  His Honour said:

In my opinion, it would be to take too narrow a view of what happened to limit the negligence of Mr Smith –

the driver –

to a particular failure to give instructions or warnings to the plaintiff.

Now, those excerpts make it perfectly plain that ‑ ‑ ‑

HEYDON J:   The proper steps that Mr Justice Hodgson twice refers to include a number of things.

MR REWELL:   They could include a number of things, but the Court of Appeal did not traverse the arguments about indicators.  The reason, I am instructed, is because it was pointed out that would breach the road rules in any event.

Now, it is true to say that the Court of Appeal considered the idea of a plan or process of driving which included things other than the actual control of the vehicle.  The same thing was considered in GLG when it was held that part of the plan, or process, designed by the employer involved the driving of the forklift truck.  The point of the matter is that in both cases it is asserted that to consider a plan or process or scheme, of which driving is only a part, falls foul of the restrictive approach to interpretation of the motor accidents legislation that was mandated by this Court in Allianz v GSF.  The whole point of both matters is that the Court of Appeal continued to give the broad interpretation to the Act that has been discouraged, in particular, by this Court in Allianz v GSF.  To make that plain, could I refer your Honours to the judgment of Mr Justice Young ‑ ‑ ‑

GUMMOW J:   Yes, we have looked at that, but that does not seem to be replicated in Justice Hodgson’s judgment, does it?

MR REWELL:   No, it is not, but it is indicative of the approach that Justice Young took in agreeing with Justice Hodgson.  His Honour referred to Gunter which, as your Honours will recall, was expressly disapproved in the sense that it is updated in Allianz v GSF.  In paragraph 48 Justice Young said:

The amendments made in 1995 were not made, it seems to me, as an intention to water down the scheme ‑ ‑ ‑

GUMMOW J:   We have read that, Mr Rewell.

MR REWELL:   Yes, of course.  Your Honours found the opposite in Allianz v GSF.

GUMMOW J:   Yes.  You have a red light too.

MR REWELL:   For all of those reasons it would be – could I just add one more thing, your Honour?  I am aware of the time.  It would be unproductive, we would submit, to stand this matter over pending the resolution by this Court of GLG because it would only lead to an argument that whatever the outcome of GLG it did not apply to the different facts of this matter and so we would be back again inviting the High Court to consider yet again this point where this case, together with GLG, offers this Court an opportunity to compendiously wrap up this troublesome issue or issues.  As your Honours please.

GUMMOW J:   Having regard to the careful factual analysis by Justice Hodgson in the Court of Appeal, we are not satisfied that any question of general importance as to the construction of the Motor Accidents Compensation Act 1999 (NSW) arises in this case. Accordingly, special leave is refused with costs.

AT 2.42 PM THE MATER WAS CONCLUDED