General Insurance Update

• Tree change not negligent
• A horse of a different colour
• "Criminal" conduct and compensation
• Shedding light on agents' responsibilities

With the environment a “hot topic” and governmental agencies at all levels becoming involved, the interplay between regulation of environmental matters and the law of negligence is sometimes ill-defined. That issue has however been directly addressed in a recent case from the NSW Court of Appeal, with the regulators coming out on top.

Ms Kerry Rhodes had lived for several years in a house at Booragul, owned by the Housing Corporation. A large gum tree was situated on a neighbouring property, also owned by the Housing Corporation, close to the boundary line between the two properties. The tree was about 18 metres high, and its branches overhung Ms Rhodes’ driveway.

Ms Rhodes had noticed over the years that branches would fall from the tree onto the front area of her house, including one which struck her daughter, causing a minor injury. She telephoned the Department of Housing and told them that the tree located near her driveway was dropping branches just about every day, especially in wind and rain, and that her daughter had been struck by a branch.

Her complaints continued between 2000 and 24 December 2005. She informed the Housing Commission of problems from falling debris from the tree; and asked that it remove the tree.

Her neighbours also complained that the tree was dangerous, and they were advised that an application would be made to the Council to have the tree removed.

In the five-year period, the council inspected the tree once, and it was trimmed on several occasions. In about 2004, instances of branches falling from the tree in storms were reported.

In February 2005, the Housing Corporation applied to the Council for permission to remove the tree on the grounds that it was unstable. In April 2005, an arborist who had authority from the Council to authorise removal of trees, attended the premises. In a subsequent report, the arborist checked a number of tree assessment criteria, including H/S (healthy/stable) for condition, 90 per cent for crown cover, no major deadwood, and P (prune) for recommendation. The notes to the report however indicated that, while the tenant did not want the tree there because it had been dropping “leaves and debris”, removal was not warranted.

The arborist sent a determination to the Housing Corporation, stating that the application was refused, because the tree appeared to be in a sound and stable condition and its removal would be inconsistent with Council’s Development Control Plan. He also stated however that there was no objection to pruning deadwood and crown thinning of the tree by 15 per cent, but height reduction was not permitted.

In June 2005, another arborist, Mr Miller, attended the premises, with instructions to lop 15 per cent of the tree and to clear deadwood. He and two others were there for about one to two hours, and they removed three large branches and deadwood.

On 24 December 2005, Ms Rhodes went to open the door of her car, which was then parked in the driveway of her property, and as she did so she was struck on the top of her head and fell to the ground. She managed to get to her neighbour’s house to seek help, and she was taken to hospital. She had a significant wound on her head, and a nurse at the hospital removed a piece of timber from the wound.
The same day, Mr Miller received a call advising that a branch had fallen on a lady, and requiring him to go to the premises and “make it safe”. He went to the premises. It was windy. He didn’t see any branches on the ground, but saw what he described as a large hanger in the tree which he said was “still live but had been broken in the wind”. He brought his truck underneath it, and brought it down. He inspected the tree, and there were no other hangers observed in it.

Ms Rhodes sued the Council and the Housing Commission. In the District Court, her claim was dismissed. She appealed to the NSW Court of Appeal.

Giving the court’s unanimous decision, Justice Hodgson found there was no basis on which to overturn the District Court’s finding in relation to the claim against the Council.

However, Justice Hodgson found that the trial judge had erred in relation to the claim against the Housing Commission. In particular, it was noted that the Housing Commission had the full history of complaints by Mr Rhodes and her neighbours over many years. This information had not been passed on to the Council in the application to remove the tree. The Court of Appeal found that a reasonable landlord would have passed on that information to the Council; and that the Housing Commission’s failure to do so represented a breach of its duty of care.

Crucially however, Justice Hodgson found that even if the information about the tree’s history had been passed on, there was no evidence to suggest that the steps recommended by Council’s arborist (and subsequently taken) to deal with it – namely pruning – would have been any different. Since it had not been shown that the Council would have acted any differently, and since the Housing Commission could not remove the tree without Council’s permission, it followed that Ms Rhodes had not shown that the Housing Commission’s negligence had caused her injury.

The appeal was therefore dismissed.

Rhodes v Lake Macquarie City Council & anor [2010] NSWCA 235

A horse of a different colour

Injuries suffered in the course of sporting contests often present difficult legal issues, not the least of which is what risks the participant in such a contest has consented to by taking part. In the notoriously dangerous sport of horse racing, a recent decision from the Supreme Court of Queensland provides some guidance as to where the line between inherent risks and negligence might be drawn.

In February 2004, Brendon Appo was riding a horse in a race at Mackay in Queensland.

Mr Appo was on a horse known as “Lough Key”. Two other jockeys were directly involved in the incident, David Simmons who was riding “Red Bay” and Justin Stanley who was riding “Kelso Reef”.
 
As the horses approached the 600m mark (i.e. they had 600m left to run) Lough Key was positioned between Red Bay and Kelso Reef, with Kelso Reef leading on the inside, Red Bay second and on the outside, and Lough Key third. Lough Key was about a three-quarter length behind Kelso Reef. At that point Lough Key had racing room; and Mr Appo was entitled to keep his horse in that position.

About 30m farther on, the horses came together. Lough Key was squeezed, and Mr Appo was forced to check his horse. Lough Key’s hooves clipped those of Red Bay and suddenly checked, ejecting Mr Appo into the air. He was injured as a result.

He sued the other two jockeys.

The matter came on for hearing in the Queensland Supreme Court before Justice McMeekin. Although the case was a first instance decision (and there is understandably much discussion about the evidence given), it is of some significance in that Justice McMeekin explored the nature and extent of the duty owed by one participant in a sporting activity to another.

It was accepted that jockeys owed a duty of care to those around them. In the course of a race, they were required to take reasonable care to avoid creating a foreseeable risk of injury to other riders. It was however also necessary to bring into account that they are engaged in a sport, that that sport has inherent risks, and that they are obliged to use their best efforts to win.

Justice McMeekin noted that voluntary participation in a sporting activity did not imply an assumption of any risk which might be associated with the activity, so as to negate the existence of a duty of care in any other participant or in any person in any way involved in or connected with the activity. He also noted the formulation of the duty as developed in another Queensland case (Kliese v Pelling) as follows:

“[T]he court ought not to be too delicate in its assessment of the defendant’s conduct which is said to have been negligent. Thoroughbred horse racing is a competitive business which is played for high stakes. Its participants are large animals ridden by small men at high speed in close proximity. The opportunity for injury is abundant and the choices available to jockeys to avoid or reduce risk are limited. It is, no doubt, for these reasons that claims for damages arising out of horse races have been rare and are likely to remain so. But where evidence reveals that a rider has failed to take reasonable care which could and therefore should have been taken, the court is required by law to make a finding of negligence.”

Justice McMeekin also noted that there was a “rule of thumb” adopted by all jockeys, as a safety measure, known as the “two lengths rule” – that is, that jockeys are not permitted to allow their horse to cross in front of another horse unless they were two lengths clear of that other horse.

It was noted that a breach of the rules of racing, or of a safety rule, was not the same as breaching the duty of care owed in all the circumstances; but by the same token, participation in a race did not eliminate all duty of care between the participants.

Based on the evidence given in the case, Justice McMeekin found that Mr Simmons’ riding involved a breach of the “two lengths” safety rule. His action in causing his mount to move in resulted in Mr Appo having no way to move out and avoid Kelso Reef as it came out. Mr Simmons had therefore exposed Mr Appo to “a risk to which his participation in the sport could not be said, necessarily or ordinarily, to expose a participant.”

The end result was that Mr Appo succeeded in his claim.

Appo v Stanley [2010] QSC 383

“Criminal” conduct and compensation

One newsworthy aspect of the passing of tort reform legislation in the various States was its attempt to remove rights of action from “criminals”; usually portrayed as burglars who were injured by homeowners. The legislation however was cast rather more widely than that; and its application is the subject of a decision from the Queensland Court of Appeal.

In May 2005, Mr Corliss was the publican of the Grand Hotel at Childers. On the night of 6 May 2005 Mr Gibbings-Johns had been drinking at another hotel, having commenced drinking there at around 8.00 pm to 9.00 pm. He left that hotel in a heavily intoxicated state after it closed at around midnight. He walked to the Grand Hotel, which had also closed.

Mr Gibbings-Johns’ evidence (which was essentially accepted at trial) was to the effect that as he was walking home he saw Mr Corliss through a window of the Grand Hotel and he asked the appellant to be let in. He was leaning against the window, which was in an open position, when Mr Corliss verbally abused him. He responded to that by slapping the window frame with the palms of both hands, causing the window above him to shatter. He stood back from the window and he then observed Mr Corliss throw a pot glass that had been resting on his knee straight at him through the window, striking him in the face and injuring him.

At trial, Mr Corliss defended the matter on the basis that he had not thrown anything at Mr Gibbings-Johns, and that he had been injured by the broken glass from the window. The trial judge found in favour of Mr Gibbings-Johns.

Mr Corliss appealed. In particular, he sought to rely on s.45 of the Civil Liability Act, which provides:

“A person does not incur civil liability if the court is satisfied on the balance of probabilities that –

(a) the breach of duty from which civil liability would arise, apart from this section, happened while the person who suffered harm was engaged in conduct that is an indictable offence; and

(b) the person’s conduct contributed materially to the risk of the harm.”

In the Court of Appeal, much discussion turned on the issue of whether Mr Corliss should be permitted to even raise s.45 (and a mirror provision in the Criminal Code); having failed to plead it at trial.

However, delivering the judgment for the unanimous Court of Appeal, Justice Applegarth considered the provision in the context of the claim.

The essential argument sought to be advanced was that since Mr Gibbings-Johns had committed the offence of wilful damage to property (by breaking the window), s.45 operated to excuse any subsequent action by Mr Corliss.

Justice Applegarth noted that s.45 spoke about a “breach of duty”. Following through the provisions of the Act, he found that the “duty” that was referred to involved a duty to take reasonable care. In other words, it essentially referred to the duty of care in negligence. In this case however, the trial judge’s finding had not been based on negligence, but on what was found to be an assault. Accordingly, Justice Applegarth doubted that s.45 even had application in the circumstances.

Even if it did however, even if Mr Gibbings-Johns’ actions in breaking the window meant he was “engaged in conduct that is an indictable offence” it could not be said that any breach of duty by Mr Corliss “happened while” Mr Gibbings-Johns was engaged in that conduct. The evidence indicated that the conduct that constituted the alleged offence had ceased before the glass was thrown. Therefore, the elements of s 45 could not be established.
 
As a result, the Court ruled that Mr Corliss should not be permitted to raise the “new” defence based on s.45 and his appeal was dismissed.

Corliss v Gibbings-Johns [2010] QCA 233

Shedding light on agents’ responsibilities

Commercial building owners often engage agents to manage their assets for them. But what does such an arrangement mean in terms of liability for accidents that occur on those premises? A recent judgment from the NSW Court of Appeal provides some guidance.

In June 2004, Mr Alan Clark was visiting a friend, Mr Rajasuriar, who rented a shop on the ground floor of a small retail and commercial building in Bankstown. Mr Rajasuriar had given Mr Clark a key so that he could use the toilet located on common property of the premises. It was about 9.40 p.m. at the time.

Mr Clark slipped and fell on a flight of stairs in an unlit area of this common property, resulting in injuries to him. The light in the area was operated by an automatic light switch that had turned the light out at 6.30 p.m. It was not possible for persons using the area to turn the light on manually.

Mr Clark sued Laresu Pty Ltd, the owner of the premises, claiming damages on the basis that it was also the occupier of the premises. Mr Clark also sued the managing agent of the building, W T Newey & Co, on the basis of an alleged breach of its duty of care.

At trial in the District Court, Laresu was found liable to Mr Clark for his injuries. The managing agent was not found liable. Laresu then appealed to the NSW Court of Appeal; both against the finding of liability and against the finding that Newey was not liable.

While the judgment dealt in some detail with the findings made by the District Court on liability (which were upheld), Justice Macfarlan, delivering the judgment of the unanimous court, also examined the position of the managing agent.

Laresu had entered into a longstanding arrangement with Newey for it to manage the premises. Justice Macfarlan found that Laresu was able to, and had in fact, delegated its duty of care to Newey.

The agreement required Newey “to manage all or any part of the premises”; and that extended to “the taking of, or recommending that [Laresu] take, reasonable steps to have the premises fit for the purpose for which they were used, namely, as a small retail and commercial complex. They would not be fit for that use if they were not safe for the use.”

However, Justice Macfarlan noted that the delegation to Newey was not “absolute” – it was subject to any direction or instruction from Laresu. In 1980, Laresu had given Newey an instruction about how the automatic light switch was to be set; and that had not changed at the time of Mr Clark’s accident.

Therefore, even though in a general sense Laresu had delegated management of the premises to Newey, the state of the lighting in the area at the time of the accident was something for which Laresu itself had some responsibility; because it had decided how the lighting would be set. Its general delegation of management responsibility could not absolve it of responsibility for the state of the premises to the extent that such a state reflected its express instructions.

However, by the same token, the instruction from Laresu did not relieve Newey of its obligations entirely, although the court found that its liability was “lessened” by the instruction.

Justice Macfarlan found that Newey should have recognised that there was a “not insignificant” risk of someone suffering serious injury by falling on the stairs when they were unlit after 6.30pm and should have responded to that risk by recommending to Laresu that the light be kept on until much later in the evening or be kept on 24 hours per day.

The end result was that Mr Clark’s injuries were materially contributed to by Newey as well by Laresu. Justice Macfarlan apportioned that liability 40% to Laresu and 60% to Newey.