Zurich Australian Insurance Limited v CSR Limited S188/2001 [2002] HCATrans 197 (19 April 2002)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S188 of 2001

B e t w e e n -

ZURICH AUSTRALIAN INSURANCE LIMITED

Applicant

and

CSR LIMITED

Respondent

Application for special leave to appeal

GLEESON CJ

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 19 APRIL 2002, AT 9.33 AM

Copyright in the High Court of Australia

MR D.F. ROFE, QC: If your Honours please, I appear with my learned friend, MR B. HULL, for the applicant. (instructed by Keddies)

MR J.D. HISLOP, QC: May it please the Court, I appear with my learned friend, MR R.C. TONNER, for the respondent. (instructed by Moray & Agnew)

GLEESON CJ: Yes, Mr Rofe.

MR ROFE: Your Honours, I understand that your Honours have called for some coloured photographs. Can I hand up a set. These are to replace the black and white photographs in application book 11 to 18.

GLEESON CJ: Thank you.

MR ROFE: Your Honours, the special leave questions are set out at page 81 of the application book. They involve a construction of the Motor Accidents Act 1988 and in the context of the Workers' Compensation Act. Your Honours will appreciate that this trailer was custom built by an expert in the field of designing and was built in conjunction with the requirements of the respondent employer - the applicant employer, who had this particular roller that it needed to transport by road trailer. As your Honours will see from the photographs, the trailer has the two ramps hinged permanently onto the back of the trailer. There are two separate ramps, as the photographs reveal, and they obviously can be lifted up and down separately.

GLEESON CJ: The trailer itself is by definition a motor vehicle?

MR ROFE: Yes, it is attached to a truck and under the Act, section 3B. Prior to the accident the trailer had no mechanical or other aids to assist it in lifting. Your Honours will have seen that each of the ramps is 79 kilos weight, so that to lift two - and presumably they would be lifted separately, but if you add the 79 together you get approximately 160 kilos to lift both. The injury to the workman, Langley, was, as the agreed facts indicate and was accepted, that it was the result of the applicant's system of work in requiring Langley by himself to manually lift each rack. Reasonable care would have required the provision of a lifting team for each ramp of two persons, because safe lifting should not exceed per person 55 kilos. It was our submission that the injury to Langley was therefore not caused by fault in the use of the trailer.

GLEESON CJ: The question was whether it took place during the course of the loading or unloading, was it not?

MR ROFE: Before we get to the amendment to the 1995 Act we are looking firstly, your Honour, at the 1988 Act which, as your Honours will recall, was passed in 1988 and the wide-ranging phrase, "caused by or arising out of the use of", was replaced with the formula, "caused by fault in the use and operation".

GLEESON CJ: Where do we most conveniently find that, Mr Rofe?

MR ROFE: The old definition?

GLEESON CJ: No, the relevant definition.

MR ROFE: Your Honour, that is in the application book. That is the definition of "injury" and that is at application book 84 line 32.

GLEESON CJ: Are we not concerned with the definition - - -

MR ROFE: Your Honours are concerned, with respect, with two things: firstly, the 1988 definition or formula as to whether the fault was in the use of the trailer or whether the fault which caused the injury was the provision of an unsafe system of work. The Parliament, in our submission, had attempted in 1988 with that substitution to limit the scope of the reach of the Act when it restored modified common law rights for damages. That attempted limitation, however, did not find favour with the New South Wales Court of Appeal.

Your Honours will see at application book 85 and 86 that there are there referred to a number of cases in which the Court of Appeal, particularly starting off with NRMA Insurance Limited v New South Wales Grain Corporation, tended to not limit, if I can use that expression, what we submit was the intention, by in fact referring to an unsafe system of work as being a fault in the use of a vehicle. There are a number of cases that follow that. They are set out at pages 85 and 86. We would submit that if this Court was of the view that that extension or interpreted construction was wrong, then it would affect the outcome of this case before we get to the 1995 amendment.

Turning then to the 1995 amendments, they were apparently intended, in our submission, to overcome the Court of Appeal interpretation by limiting the ambit of those persons sustaining personal and bodily injuries by fault in the use or operation of a motor vehicle. That intention, your Honours, as is apparent from the second reading speech of the Attorney-General, which is at page 85 of the application book, is less clear but in the explanatory note, which your Honours have in a separate set of papers - - -

GLEESON CJ: It is No 5 to your bundle; No 4 of the actual Amendment Act itself.

MR ROFE: Your Honours will see that:

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

So that by reason of that amendment, "personal . . . injury caused by the fault . . . in the use or operation of the vehicle" was no longer sufficient of itself to attract coverage. Additionally, it had to be:

a result of and is caused during:

(i) the driving . . .

(ii) a collision . . .

(iii) the vehicle's running out of control, or -

relevantly here -

(iv) such use or operation by a defect in the vehicle - - -

GLEESON CJ: So the question was whether or not an accident that takes place during the course of loading and unloading the vehicle is an injury, or gives rise to an injury as defined?

MR ROFE: Under the amendment?

GLEESON CJ: Yes.

MR ROFE: Yes. The only relevant one of course is "use or operation by a defect in the vehicle". It is the only one of those four subparagraphs that can encompass a stationary vehicle.

GLEESON CJ: But there is also a question of whether this is a defect.

MR ROFE: That is so, yes. That is what we move to now, your Honours.

McHUGH J: You already know. The Court of Appeal has told you.

MR ROFE: Yes, your Honour. We, with respect, say that that is wrong. We say it is wrong for a number of reasons. His Honour the Chief Justice who gave the leading judgment relied upon the Metcalf v Great Boulder Proprietary Gold Mines Ltd Case, particularly the passage where Chief Justice Griffith said, dealing with a West Australian legislation which talks about the defect and the condition - I do not suggest there is any real distinction:

the term "defect in condition" means a defect in original construction or subsequent condition, rendering the appliance unfit for the purpose to which it is applied, when used with reasonable care and caution.

Your Honours will see his Honour's reference to that case at application book 60 and following paragraphs.

If that is the test and it is applicable here, in our submission, the correct approach is to assume the use of a two-man lifting team, which would be proper work practice. The trailer was without defect and was fit for the purpose for which it was applied.

GLEESON CJ: Mr Rofe, can I just revert to the first question, that is the definition of "injury" in subparagraph (iv), leaving aside the defect question. The authorities that were followed in the present case were authorities under the unamended legislation?

MR ROFE: That is so, your Honour.

GLEESON CJ: Had there been any decision on the legislation as amended?

MR ROFE: I think this case, your Honour, is certainly one as to defect. There is another case - - -

GLEESON CJ: No, I am not talking about defect; I am talking about loading and unloading.

MR ROFE: No, other than this case.

GLEESON CJ: So this was the first case under the amended legislation?

MR ROFE: As far as we are aware, your Honour, yes.. There has been a subsequent case in the Court of Appeal but the facts are not really similar. In order for his Honour to establish the defect in the trailer, which is what he had to do, he concluded - - -

McHUGH J: I am sorry, Mr Rofe, but what about the NRMA Insurance v Grain Corporation Case and the Beatty Power Case? Were they not decided - - -

MR ROFE: Before the amendment.

McHUGH J: They were decided before the amendment?

MR ROFE: Yes. All the cases that are referred to in those cases on pages 84 and 85 are pre-1995 amendment.

McHUGH J: I am sorry, I was misled by the statement that appears, for example, at 86 about line 12. This is in discussing Balfour Beatty:

Once again no consideration was given to the new 1988 Act formula and the removal of the words -

Is that wrong, is it?

MR ROFE: I am sorry, your Honour is referring to the 86 - - -

McHUGH J: Page 86 line 12:

Once again no consideration was given to the new 1988 Act formula and the removal of the words "arising out of . . .".

MR ROFE: Yes, that is so. That was under the pre-1995 Act.

McHUGH J: Yes, but that statement implies that the court erred in not giving any consideration to it.

MR ROFE: We would say, your Honour, that the court erred in not giving sufficient consideration to the change in the formula from "caused by and arising out of" to "caused by the fault . . . in the use or operation". The "arising out of" was the phrase that this Court over the years has given the widest meaning to in cases that go back many, many years in this Court. As I say, that goes not to the defect point of course, which I am dealing with now.

If your Honours go to paragraph 70 of his Honour's reasons for judgment on page 62, your Honours will see that the Chief Justice concludes:

that the design of the trailer was such that it was intended to be used in circumstances where a single worker lifted each ramp. When this happened it was, in my opinion, the use or operation of a vehicle in which there was a "defect" for its intended use. It was not negligent use of a vehicle -

We have submitted that that conclusion was not open to him because it was based, firstly, upon an examination of the photographs which clearly reveal that each ramp had one handle only. Your Honours will see that from paragraph 40 of the Chief Justice's reasons at page 52. This feature was not the subject of submission by either party and there was no evidence that one handle ramp precluded team lifting by two or more. Indeed, it is quite well known outside this Court that ramps only have one handle and you have a team of two, one holding the handle, one lifting from the back. The point is that there was no evidence about that and there was no agreed fact about that.

Secondly, it seems to have been assumed also, based on a misunderstanding of, we say, the agreed facts 12 and 13 at pages 2 and 3, his Honour wrongly assumed that both ramps would be lifted together or that each ramp weighed 160 kilos. This misunderstanding appears to have been produced by his reasonings in paragraphs 37 and 39 on pages 51 and 52 respectively. Your Honours, we submit this is an important piece of legislation in this State and if the Court of Appeal has - - -

GLEESON CJ: I do not see that. On page 51 paragraph 37 he says:

each ramp weighed 79 kgs, the force required to lift a ramp to an upright position involved the equivalent of lifting 160 kgs.

He is distinguishing between the weight of a ramp and the force required to lift it.

MR ROFE: Your Honour, we would submit that there is really no basis for making that distinction. The terms of the agreed facts which his Honour actually sets out were that "The force required to lift the loading ramps" - that is plural.

GLEESON CJ: I cannot quite see why this matters, because you should not lift above 55 kilograms.

MR ROFE: One man, yes.

GLEESON CJ: And each ramp weighed 79 kilograms, so one man should not have been lifting one ramp.

MR ROFE: That is so. That was the negligent work practice. The test is you assume that a proper practice had applied, according to the Metcalf Case, and then you ask yourself, "Was there a defect in the piece of equipment?" His Honour did not approach it that way. It may be, as we say, a misunderstanding. We say, your Honours, it is more than just an error in applying the facts to a principle, that it is important that this Court lay down a proper construction of this amendment, or indeed lay down a proper construction of the limits of "caused by . . . the use or operation of the vehicle". The second matter is the matter of co-ordinate liability.

GLEESON CJ: Have you read the decision that was handed down yesterday in the case of Burke?

MR ROFE: No, I have not, your Honour.

GLEESON CJ: I was not a party to that decision but my quick reading of it would suggest to me that it would be dead against you.

MR ROFE: Yes, I knew it was under reservation, your Honour. I have not caught up with it yesterday. If it is, I can perhaps - - -

McHUGH J: I do not think it will help you.

MR ROFE: It will not help. Those are the matters of submission.

GLEESON CJ: Yes, Mr Hislop.

MR HISLOP: Thank you, your Honours.

GLEESON CJ: Could you just clarify the position about the line of authority in the Court of Appeal in relation to this first part of the first issue?

MR HISLOP: Yes, your Honours. As I would apprehend it, the point which is taken is that the loading or unloading of the motor vehicle should not have been held to be a use of the motor vehicle. Now, the law as decided in relation to the Motor Vehicles (Third Party Insurance) Act was that the words in that Act, "injury caused by or arising out of the use of a motor vehicle" included the loading and the unloading of a motor vehicle, such as a truck or a loader in this case. That was settled law and had been decided as such by this Court.

Then the Motor Accidents Act of 1988 was enacted. It used the words "use or operation". Now, the words "use or operation" were interpreted by the Court of Appeal in NRMA Insurance v New South Wales Grain Corporation in 1995 to have the same meaning as the word "use" had had under the old Motor Vehicles (Third Party Insurance) Act.

GLEESON CJ: Now, did the 1995 amendments affect that question?

MR HISLOP: No, it does not. It does not affect it, in our submission, in any way. So that one is left with that question. Determined by the Court of Appeal here, it clearly determined in relation to the 1988 Motor Accidents Act in accordance with pre-existing authority of this Court, the words being "use", which is common to each of them, and the additional words in the Motor Accidents Act "or operation", we would have thought being words widening it if anything.

So clearly, in our submission, the law as decided in the State of New South Wales is that "use" includes loading and unloading. That was a unanimous decision of the court and it has been followed since in the New South Wales courts. So we say there is really nothing in the point which my friend seeks to raise. It is a local statute. It has been interpreted unanimously by the court in this State and interpreted in a manner which is in accordance with previous High Court authority on a predecessor Act. That is as to that point, your Honour. We say there is no special leave point in that at all.

As regards the second matter, the defect point, what his Honour the Chief Justice determined was that defect arises where an item is not fit for the purpose for which it was designed or the use for which it was intended and he concluded that one person lifting a ramp was the intended mode of operation. He did that because of the photographs which quite clearly illustrate that that is what was intended. Obviously, it is not fit for that purpose as an item to be lifted by one man.

Your Honour, with respect, was correct in your interpretation. The lifting of a ramp required a force of 160 kilograms but, as your Honour the Chief Justice pointed out, it does not matter. He is lifting 79 kilograms which is more than a proper lift for one person. Furthermore, of course, it was a one-man lift that brought about the injury to Mr Langley. He was required and was lifting it as one person.

Now, the question of the meaning of "defect in the vehicle" is a matter of construction, again, of a local Act. As far as we understand it, there is no other Act that has a similar form of words in this country and whether the facts fitted within it or not is a question of characterisation and, in our submission, the characterisation by the Court of Appeal that there was a defect in the vehicle was a correct characterisation and, in any event, it involved a matter of fact and it is not a matter for special leave, in our submission, on any basis.

The third point which was raised by my learned friend in his written submissions, which I think has been abandoned in the face of the decision yesterday in Burke's Case, in our submission, was correct and is affirmed, really, by the decision of this Court in Burke. May it please the Court, they are the submissions.

GLEESON CJ: Yes, Mr Rofe.

MR ROFE: Only one matter, your Honour. With respect to the agreed fact, I would invite your Honours' attention to the relevant agreed fact which is set out by his Honour on page 51 where it talks about:

The force required to lift the loading ramps . . . was approximately 160 -

not ramp.

GLEESON CJ: Three issues are said to warrant a grant of special leave to appeal in this case. The first two issues concern the meaning and effect of the Motor Accidents Act (NSW). The first is whether an injury as a result of an accident that takes place during the course of loading or unloading a vehicle is an injury as defined in the Act. The second concerns what constitutes a defect in a motor vehicle.

As to the first issue, there is a consistent line of authority in the Court of Appeal of New South Wales that was followed in this case. There is insufficient reason to doubt the correctness of that line of authority to warrant intervention by this Court. As to the second issue, which involves a mixed question of fact or law, no issue arises which is appropriate to a grant of special leave. As to the third issue, which concerns a claim for contribution, the decision of the Court of Appeal was correct.

For those reasons, the application for special leave to appeal is refused with costs.

AT 9.56 AM THE MATTER WAS CONCLUDED