State Government Insurance Commission v Wagner

[1993] SASC 4354

COURT IN THE FULL COURT OF THE SUPREME COURT OF SOUTH AUSTRALIA KING CJ (1), MILLHOUSE(2) and OLSSON(3) JJ

CWDS
Vehicles and traffic - statutory compensation in respect of motor vehicle accidents - first respondent suffered bodily injury whilst attempting to operate a back hoe attached to front end loader - first respondent issued proceedings against the second respondent as his employer - second respondent issued third party proceedings against appellant as statutory third party insurer - consideration of Motor Vehicle Act - interaction between Fourth Schedule and s99(3) - whether any liability in respect of bodily injury arose out of the use of the vehicle - whether it has been demonstrated that the bodily injury is not a consequence of the driving of the vehicle - activity of operating back hoe required front end loader to be totally immobilised and first respondent unable to operate driving controls - operation of back hoe totally discrete activity from act of driving. Motor Vehicles Act, 1959s 99(3), Fourth Schedule. SGIC v Stevens Bros Pty Ltd (1984) 154 CLR 552; Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 and Norwich Winterthur Insurance (Australia) Ltd v State Government Insurance Commission
(1991) 56 SASR 165, applied. R v McDonagh (1974) QB 448; SGIC v Sweeny (1989) 52 SASR 139; R v Roberts (1965) 1 QB 85; National and General Insurance Co Ltd v Chick (1984) 2 NSWLR 86 and American Home Assurance v Saunders (1987) 11 NSWLR 363, considered.

HRNG ADELAIDE, 30 November 1993 #DATE 23:12:1993
Counsel for appellant:             Mr K McCarthy QC with
   Mr C Allen
Solicitors for appellant:         Phillips Fox
Counsel for respondent Wagner:     Mr C Kourakis
Solicitors for respondent Wagner: Duncan and Hannon
Counsel for respondent State:     Mr J Doyle QC with
   Mr N Hodgson
Solicitors for respondent State:    Crown Solicitor

ORDER
Appeal allowed.

JUDGE1 KING CJ The facts and relevant statutory provisions are set out in the judgment of Olsson J. 2. A question may arise in the future as to whether s.99(3) of the MotorVehicles Act is an interpretation clause which limits the meaning of the expression "caused by or arising out of the use of a motor vehicle" in Clause 1 of the Schedule policy or whether it effectually writes an exclusion clause into the policy. The characterization of the subsection may have an impact on the onus of proof. No question of onus arises or was argued in these proceedings as the relevant facts are clearly established. Questions of onus can therefore be left for another occasion. 3. The Solicitor-General submitted that the expression "in consequence of" in subsection (3) had a different and wider connotation than the expression "caused by or arising out of" in Clause 1 of the Schedule policy, and that the former expression focussed more on the notion of aftermath or upshot than on a causal link. It is difficult to understand why the drafter varied the expression. "In consequence of" may have been intended to embrace in a single expression the notions of "caused by" and "arising out of". It may be true that the expression "in consequence of" emphasises the sequential as distinct from causal nature of the required link to a greater extent than the expression "caused by or arising out of" but, despite examples advanced by the Solicitor-General, I find it difficult to envisage concrete examples in which bodily injury could be said to be "in consequence of" driving although it could not at least be said to be "arising out of" the driving. 4. I have no difficulty in accepting that injury is in consequence of driving if it is caused by some act, such as adjusting a seat belt, which is preparatory to driving and is immediately connected with the intended driving. The same can be said of actions subsequent to the driving but flowing from it and closely connected with it, such as applying a locking device or handbrake or closing windows immediately after bringing the vehicle to a standstill even after switching off the motor. The question is whether the relevant action in the present case is of such a nature. 5. I cannot regard the action which caused the first respondent's injury as sufficiently connected with the driving to be said to be "in consequence of" it. There was a distinct separation between the activity of driving, which had been completed, and the activity of preparation for the operation of the backhoe, which was in progress when the injury occurred. 6. In my opinion the appeal should be allowed and the declaration and order appealed from should be set aside. There should be determination of the preliminary issue by a decision that the incident referred to in the Particulars of Claim occurring on 9th March 1987 did not involve bodily injury caused by or arising out of the use of the motor vehicle within the meaning of Clause 1 of the Schedule and s.99(3) of the Motor Vehicles Act 1935.

JUDGE2 MILLHOUSE J I agree that the appeal should be allowed. The incident in which the first respondent was injured was separate from the driving: it did not involve bodily injury "caused by, or arising out of the use of, the vehicle", to use the words in the Fourth Schedule. I adopt what my brother Olsson has written, "The act of driving was no more than a precursor to setting up for a totally different activity." 2. The Solicitor General argued that a "consequence" in the phrase "if it is not a consequence of" in s99(3) of the Act may "occur while something is happening or after it has finished happening." I think it incorrect to say that, in this context, it may be after something "has finished happening." The first part of Mr Doyle's proposition is correct but the phrase should not be more widely interpreted. If it were then it would lead to uncertainty: as Mr Doyle conceded, if his interpretation be accepted, "it means you are going to have to look at the facts carefully case by case." A definite interpretation is preferable so that the law may be as certain as possible. 3. I agree with the Order proposed by the Chief Justice but in view of what my brother Olsson has said in the last paragraph of his Reasons I am happy to hear counsel as to the precise Orders we should make.

JUDGE3 OLSSON J This is an appeal by the State Government Insurance Commission ("SGIC") against a judgment entered against it in the District Court, on the issue of third party liability in respect of a claim by the respondent Wagner ("Wagner") against the State of South Australia ("the State") for damages for certain personal injuries sustained by him. 2. The relevant facts were never significantly in dispute and may simply be stated. 3. Wagner was, at all material times, a plant operator employed by the Engineering and Water Supply Department ("E and WS"). He normally worked from the Port Lincoln depot of the Department. In March 1987 he was engaged in work involving the laying of sewer mains in the Kirton Point area. 4. On 9 March 1987 Wagner was required to operate a JCB front end loader equipped with a back hoe ("the plant") in connection with the Kirton Point project. The plant was owned by E and WS and registered by it as a motor vehicle. It was mounted on four wheels with rubber tyres and was normally driven along the road by its own power, to deploy it to where it was to be used. 5. Accordingly, having reported to his supervisor at the depot at about 7.20 am to receive his instructions for the day, he drove his own private vehicle out to the worksite. On arrival he picked up the keys to the plant, carried out certain preliminary checks and maintenance and then started it and warmed up the motor. 6. At about 7.40 am Wagner drove the plant, from a location where it had been parked overnight on a vacant allotment in Velante Street, a distance of about 200 metres around into Matthew Place. He then positioned it, as required, at the site where a trench was about to be excavated. During that journey the plant was being driven, as a normal motor vehicle, along public roads. 7. On arrival at the trench site Wagner stopped the plant and went about preparing it for use in the trench digging configuration. That involved the use and operation of the back hoe. 8. I pause at this point to record that the plant, being multi-functional, was operated in two quite separate configurations. When the front bucket was being used for loading, unloading or moving material, the vehicle was simply driven on its four wheels as an ordinary motor vehicle, the driver manoeuvring it by means of controls operated from the driver's seat as he drove. When so used it clearly remained a motor vehicle for the purposes of the Motor Vehicles Act. 9. However, when it was desired to operate the back hoe in the digging configuration it was necessary to position the plant in a fixed position and stabilize the body of the equipment, as a firm base from which the back hoe was manoeuvred. This was normally achieved by lowering the bucket to the ground at the front, turning the driver's seat 180 (so that it faced to the rear of the plant) and then operating controls which lowered two hydraulic jacks to the ground. When this was done the jacks lifted the rear wheels of the plant off the ground, so that, for all practical purposes, the main body weight or thrust was taken on the two jacks and the front bucket. When this configuration was adopted the plant was incapable of being driven along a road or other surface as a motor vehicle. 10. On the morning in question Wagner positioned the plant in the desired location and set it up in the configuration which I have just described, for the purpose of operating the back hoe. 11. Having done so he then embarked on the further sequence of events necessary actually to put the hoe into motion. This required two, additional, basic actions on his part. 12. The first was to release and then raise a rear glass panel (in a metal frame) from the closed vertical position at the rear of the cabin of the plant behind the driver's seat to a position up above his head - rotating it up and through 90 , so that it snugged up against the roof of the plant cabin, parallel to the floor. 13. The second was to lean forward and, whilst jiggling the back hoe controls to free it, remove a retaining pin which held the back hoe boom and attached bucket in a secure, travelling position. This was essentially a safety device. It was impossible to remove the pin, or thereafter operate the back hoe in comfort, without unlatching and raising the rear cabin window. 14. It is not disputed that, in the course of attempting to open the rear window of the plant cabin, Wagner experienced a sudden severe pain in his lower back. It is accepted that, as a consequence of his physical activity in attempting to open the rear window, Wagner in fact sustained incapacitating bodily injury. 15. As a consequence, he instituted proceedings against the State, as his employer, claiming damages in respect of his injury. In essence he asserted an unsafe system of work and breach of statutory duty. The State filed a defence to the claim and then initiated third party proceedings against SGIC, alleging that, as statutory third party insurer of the plant, the latter was liable to indemnify it in respect of any liability to Wagner. SGIC denied that any relevant liability arose pursuant to its third party cover of the plant. 16. The proceedings eventually came on for trial before Pirone DCJ pursuant to the provisions of an order made by a Deputy Master of the District Court. That order was expressed as follows:- "That there be a trial at Adelaide on the 20th day of April, 1993 at 10.15 am of the preliminary issue of fact and/or fact and law namely whether the incident referred to in the Particulars of Claim occurring on 9 March, 1987 involved bodily injury to the plaintiff caused by, or arising out of the use of, the motor vehicle registered number SA UWY-325 within the meaning of section 99(3) of the Motor Vehicle Act, 1935 (as amended)." 17. For reasons expressed by him Pirone DCJ ultimately held that the question as formulated should be answered in the affirmative. He found SGIC, as third party insurer of the plant, liable to indemnify the State. 18. This appeal challenges the legal propriety of that conclusion. SGIC asserts that, on the facts as above outlined, no circumstances ever arose which, as a matter of law, gave rise to any liability under the statutory third party cover. 19. In examining that contention it is necessary first to go to the relevant statutory provisions. 20. The basic cover extended by SGIC to E and WS was that expressed in the Fourth Schedule ("the Schedule") to the Motor Vehicles Act, 1959, as amended ("the MVA") as under:-
    5 "1. The insurer insures the owner of the motor vehicle
    and any other person who at any time drives the vehicle,
    whether with or without the consent of the owner, in respect
    of all liability that may be incurred by the owner or other
    person in respect of the death of, or bodily injury to, any
    person caused by, or arising out of the use of, the vehicle
    in any part of the Commonwealth." 21. However, the Schedule falls to be construed in light of the provisions of subsection (3) of section 99 of the MVA, which expressly stipulate that:-
    "(3) For the purposes of this Part and the fourth schedule,
    death or bodily injury will not be regarded as being caused
    by or as arising out of the use of a motor vehicle if it is
    not a consequence of -
    (a) the driving of the vehicle;
    (b) a collision, or action taken to avoid a collision, with
    the vehicle when stationary;
    or
    (c) the vehicle running out of control." 22. It is at once to be observed that, in determining whether liability arises under the statutory cover in this case, a successive, two stage, process of evaluation necessarily arises. 23. In the first instance, apropos the particular fact situation, the question must be asked - "Did any relevant liability in respect of bodily injury 'arise out of the use' of the vehicle in question?" in the sense in which that phrase is used in the Schedule. 24. If the answer to that question is in the affirmative a second question must then be posed and answered. That question is - "Has it been demonstrated that the bodily injury is not a consequence of the driving of the vehicle?" 25. It is manifest that, in the context of these proceedings, the onus lay upon the State of proving that the factual circumstances were such as, initially, to bring the situation within the scope of operation of the Schedule i.e. that any relevant liability in respect of bodily injury sustained by Wagner did, indeed, arise out of the use of the plant. 26. On the hearing of the appeal it was readily conceded by all parties that, having regard to the published authorities bearing on the topic, that onus had been discharged and the initial question therefore had to be answered in the affirmative. (See, for example, SGIC v Stevens Bros Pty Ltd (1984) 154 CLR
552 at 555-6, Dickinson v Motor Vehicle Insurance Trust (1987) 163 CLR 500 and the summary contained in Norwich Winterthur Insurance (Australia) Ltd v State Government Insurance Commission (1991) 56 SASR 165.) Accordingly, there is no need to linger on that aspect. The real contention between the parties arises as to the answer proper to be given to the second question. 27. Although the question of onus does not loom large as a critical, practical feature of the instant case, it seems to me that, on well settled principle, the party who positively asserts the application of subsection (3) of section 99 of the MVA to a particular fact situation - once an affirmative response is given to the first question - necessarily accepts the onus of establishing that contention. The subsection is essentially an exclusionary provision. In the case at bar SGIC bears that onus. 28. It was pressed upon the Full Court that, on the undisputed evidence, it simply could not be said that the injury sustained by Wagner fell within the third party cover, because it was not, in the relevant statutory sense, "a consequence of the driving of" the plant. 29. The learned District Court Judge acknowledged that this issue was not free of difficulty. His eventual reasoning was expressed as follows:-
    "The question is one of fact and degree. In my opinion no
    one fact will be decisive. It would be unrealistic and contrary
    to the undisputed evidence in the case at bar, to isolate the
    opening of the window as if it were an event totally separate
    from what preceded it or indeed, what was to follow. My view is
    that the whole process was a continuum and that the question
    posed must be considered in that light remembering:-
    1. that the vehicle was one multi-functional integrated unit;
    2. that it had not been used and that it was not intended to
    be about to be used as a front end loader;
    3. that although the vehicle was intended to be used next in
    its function as a back hoe, other essential steps needed to be
    taken before that could be done and that at the material time
    therefore, the vehicle had not as yet been made fit for its
    intended ordinary use as a back hoe;
    4. that it had been used in its function as an ordinary motor
    vehicle actually being driven from one place to another, and had
    been parked where it was only a very few moments before the
    plaintiff suffered his injury;
    5. that at that time:-
    (i) its engine was still running;
    (ii) its cabin was hot; and
    (iii) ventilation was required;
    6. that ventilation could only be obtained by opening the
    window as the plaintiff attempted to do as he was injured.
    Whilst I readily accept that the situation with which I am
    confronted may well be susceptible of more than one legal point
    of view, and that judicial minds may well differ on the topic,
    at the end of the day, having interpreted the words of the
    Section and of the policy in a liberal fashion but subject to
    the caveats to which I have referred, and having reminded myself
    again that as it was said in Fawcett's case (supra):- '... in
    this field one should not be seeking subtleties but rather
    applying broad and practical conceptions' I have come to the
    conclusion that although the actual driving use of the vehicle
    was not, in fact, continuing at the relevant time, a sufficient
    coincidental nexus nevertheless existed in the circumstances of
    the case before me between 'the driving of the vehicle'
    (interpreting that expression as widely as the authorities
    permit it to be done) and the suffering of bodily injury by the
    plaintiff so as to enable it fairly to be said that the latter
    arose out of the use of the subject vehicle within the meaning
    of the policy in the sense that it was a consequence of the
    driving of that vehicle by the plaintiff within the meaning of
    Section 99(3) of the Act, and I so find." 30. I digress at this juncture to make the point that, with respect, what fell from the learned District Court Judge did not accurately reflect the evidence before him. As I understand the evidence the primary reason why Wagner sought to open the rear window when he did was because, unless and until he did so, it was impossible to access and remove the back hoe boom retaining pin. The issue of ventilation was only a secondary consideration. 31. In seeking to support the conclusion of the learned District Court Judge the Solicitor-General, having argued that the protection afforded by the statutory cover ought not to be construed narrowly so as, unduly, to restrict the public protection intended to be conferred, submitted that the notion of the word "consequence" is wide. It basically connotes an end effect or result - "a thing that follows as an effect or result from something preceding" (Shorter Oxford Dictionary). Thus, he contended, a consequence is an event which can occur either whilst a vehicle is actually being driven, or it can occur after that function has concluded, but as a result of it - in the sense that it was a direct effect or conclusion stemming from the action of driving (see Shorter Oxford Dictionary definition of "result"). 32. The Solicitor-General went on to argue that, on the facts revealed by the evidence, the injury occurred because, having driven the vehicle to a place to enable it to be used, the driver almost straight away opened a window in the course of preparing it for the planned use. This was, he said, a result of the driving - it flowed or resulted from it, on the facts of this case. 33. The riposte of Mr McCarthy QC, of senior counsel for SGIC, was that such a summation ignored the practical reality of the situation. 34. He contended that the notion of "driving" was that adverted to in authorities such as Reg v MacDonagh (1974) QB 448 at 451-3 and SGIC v Sweeny

(1989) 52 SASR 139. He argued that the notion of "driving" necessarily contemplated the use of the driver's controls in order to direct the movement of a vehicle, however that movement might be produced. What was in contemplation was the concept espoused by Lord Parker CJ in Reg v Roberts
(1965) 1 QB 85 that the alleged driver must be in the driving seat, or in control of the steering wheel; and the activities alleged to be those of driving must fall within the ordinary meaning of that word. 35. Acknowledging, as he did, the point made by Lord Widgery CJ in Reg v MacDonagh that it is impossible to formulate an exhaustive test as to what constitutes an act of driving, Mr McCarthy QC submitted that:-
    . by no stretch of the imagination could it be said, in
    this case, that Wagner was actually driving the plant in any
    relevant sense at time of injury; and
    . there is simply no logical basis for asserting that what
    transpired actually flowed or resulted from any relevant act of
    driving. Mr McCarthy QC invited attention to the reasoning in
National and General Insurance Co Ltd v Chick (1984) 2 NSWLR 86
and American Home Assurance v Saunders (1987) 11 NSWLR 363.
    These, he said, clearly illustrate that the word "consequence",
    as employed in subsection (3) of section 99 of the MVA,
    contemplates a situation in which the proximate cause of the
    subject injury was an act of driving. He argued that the
    evidence in the case at bar was quite contrary to such a
    proposition - there was, in fact, no relevant link between the
    prior act of driving and the activity which caused injury, other
    than a purely temporal nexus. 36. With all due respect I have great difficulty in accepting the thesis of the learned trial judge that the evidence in this case disclosed the existence of a single continuum of activities which, in their totality, constituted but the one act, an integral portion of which was the driving of the plant in the strict sense of that word. Whilst such a concept may well have a place in certain factual situations, it cannot be supported in the instant case. 37. As a matter of reality what was here involved were two quite separate, albeit successive, discrete activities. The first was to drive the plant from where it had been stored overnight to the actual worksite. The second was to operate it in what, on any view, was its quite separate and distinct, non driving, role as a back hoe operation. The plant had, physically, to be taken to the position where the back hoe was to be utilised. From the point at which Wagner rotated the driver's seat he was embarking on an activity which had nothing whatsoever to do with driving the plant. He was then incapable of operating the driving controls and had, by lowering the stabiliser jacks, actually immobilised it. He was in the throes of operating the equipment in its back hoe configuration. The act of driving was no more than a precursor to setting up for a totally different activity. It was, in no relevant sense, the cause of that activity. Nor did that activity, in the legal sense, result from the driving - as being the end product of it, in terms of proximate cause and effect. True it is that, in temporal terms, the two discrete activities were "end on" to one another, but that is not to the point in terms of the concept of legal causation. 38. In my opinion Mr McCarthy QC is plainly correct when he declaims that it is contrary both to common sense and legal concepts of causation to assert that, on the facts of this case, the injury to Wagner was the consequence of the driving of the plant. 39. It seems to me that the conclusion of the learned trial judge cannot be sustained, either on the basis of reasoning expressed by him, or on the wider footing espoused by the Solicitor-General and Mr Kourakis, of counsel for Wagner. 40. In so saying I do not overlook the submission of Mr Kourakis that the word "drive" is sufficiently broad to encompass ancillary activity such as acts immediately preparatory to the use of controls to direct the movement of a vehicle, or to acts necessary to make a vehicle safe and secure at the end of a journey. Indeed I have little difficulty with such a proposition. However what actually occurred in this case was a far cry from any such scenario. The activities in question were totally divorced from any act of driving. Rather, they were an integral portion of the quite separate back hoe operation. 41. I would allow the present appeal and set aside the declaration or order apparently made by the learned trial judge. In this regard I would suggest that, in any event, his order was settled, sealed and entered in most inelegant and almost meaningless terms. In essence there should be substituted for it a judgment declaring that, on the facts revealed by the evidence, the injury sustained by Wagner was not caused by and did not arise out of the use of the relevant motor vehicle. It seems to me that, in the result, there should be a consequential formal judgment dismissing the third party proceedings. However, I would hear counsel as to the precise formulation of the order of this Court, having regard to the conclusions above expressed.