On the road again
In certain defined situations, the law imposes what is known as a non-delegable duty of care. A non-delegable duty effectively means that the person who owes the duty is under an obligation not only to take reasonable care themselves to avoid injury, but to see that others also take such care. In other words, that person cannot escape liability by delegating the performance of the duty (or some part of it) to someone else.
The best known example of this kind of duty is that owed by an employer for the safety of employees. But does a non-delegable duty exist in the case of a road authority carrying out repairs on a public road? The resounding answer from the High Court is “no”.
In April 2001, Roan Constructions, a contractor engaged by the appellant Leichhardt Municipal Council, was performing work on the footpath along Parramatta Road in Leichhardt. The specifications for the work required artificial grass or carpet to be placed over the top of the disturbed area to provide clean access to commercial properties.
The respondent (originally the plaintiff), Montgomery, was walking along the footpath where Roan had been working, and crossed some of the carpet its employees had laid. The carpet had been placed over a telecommunications pit which had a broken cover. Montgomery fell into the pit and suffered personal injuries.
He sued both Roan and the Council; but the claim against Roan was settled before hearing, and the case proceeded against the Council only. At trial and on appeal to the NSW Court of Appeal, Montgomery succeeded; both courts finding that the Council owed him a non-delegable duty of care. No findings of any actual negligent act were made against the Council, as both courts considered the non-delegable duty was enough to render it liable.
In a unanimous (5-0) judgment, the High Court found that the council, as a road authority, did not owe Montgomery a non-delegable duty of care. The High Court noted that the NSW Court of Appeal’s judgment relied heavily on a line of English cases. The approach adopted in those cases was however inconsistent with the High Court’s recent decisions on the liability of road authorities in the landmark cases of Brodie and Ghantous.
As Chief Justice Gleeson noted, those cases had established that road authorities did not owe a special duty nor did they have a special immunity against being sued. They owed a duty to take reasonable care that in exercising (or failing to exercise) their powers, they did not create a foreseeable risk of harm to road users. That being the case, it would be anomalous to create a “special duty” applying to highway authorities. In addition, in the circumstances of the case, the Council’s duty did not extend to making sure Roan’s employees were not careless.
Due to the way the lower courts approached the matter however, the possibility remained open that the Council might have been liable on some other basis. The matter was therefore remitted for further consideration.
Leichhardt Municipal Council v Montgomery [2007] HCA 6
Claim hits a pothole
In what might be seen as the “flipside” to the Montgomery decision, the NSW Court of Appeal has had to consider the liability of a council in a situation where it failed to repair a road.
In October 2001, Maria Roman was visiting her daughter in McMahon's Point. She had parked her car, and was walking around it to place a bag in the back seat when she fell in what was later discovered to be a pothole in the roadway. It was dark at the time. She sued the North Sydney Council for negligence in failing to repair the pothole.
By the time the action came on for hearing, the Civil Liability Act was in force. Section 45 of the Act required that, in order for the Council to be liable, it had to have “actual knowledge” of the risk posed by the pothole.
Roman argued that Council street sweepers, who regularly traversed the area and who were required to report such hazards, must have observed it; and that knowledge could be imputed to the Council. She also pointed to the fact that it had been repaired by the time of the trial. The Council did not call any street sweepers, but called the officers responsible for repairing potholes, all of whom said they were unaware of it. None of them was able to explain how the pothole came to be repaired, and no records about its repair were produced.
At trial, Roman succeeded and the Council appealed to the Court of Appeal. By a 2-1 majority, the court allowed the Council's appeal. Justices Basten and Bryson found that s.45 of the Civil Liability Act required that a plaintiff show actual knowledge by those officers of the Council responsible for repairing the pothole. Showing that someone in the Council knew (or at least, ought to have known) about the pothole was not good enough. As a result, the appeal was allowed and judgment was entered for the Council.
The decision represents (subject to any High Court appeal) a significant victory for local authorities and their insurers; as it means that “failure to repair” claims involving public roads will be more difficult for plaintiffs to prove.
North Sydney Council v Roman [2007] NSWCA 27
Car trouble
A vintage motor car sparked a long-running dispute that was recently decided by the Western Australian District Court. Ms Middleton, the plaintiff, ran a motor repair business from leased premises in York, WA. The landlord owned a number of vintage vehicles, including an 1899 Renault. Ms Middleton’s business performed some work on the Renault, but shortly after, a dispute arose with the landlord which resulted in the business being shut down. Ms Middleton removed the Renault from the premises, apparently pursuant to a workman’s lien.
The Renault then found its way into the hands of Ms Middleton’s solicitor, who also happened to be a car enthusiast. He began working on the vehicle at another location. Before the work was finished, the Renault was damaged by fire. The landlord sued the solicitor for the damage. When the solicitor informed Ms Middleton about the situation, she agreed to pay the expenses associated with the claim, in return for the solicitor not joining her into the action.
Eventually, the action was settled on the basis that the Renault was to be repaired and returned to the landlord. Ms Middleton agreed to pay the repair costs; but on the proviso that she was satisfied that there was no insurance cover on the vehicle.
Subsequently, Mr Verryt, a divisional manager of AON, the landlord’s insurance broker, provided an affidavit stating that there was no cover on the Renault because the policy held by the landlord only covered vehicles while stored at a local motor museum. Since the fire had occurred elsewhere, the vehicle was not insured against that damage. Relying on that affidavit, Ms Middleton paid the repair costs.
She persisted with her inquiries however, and subsequently determined that there was, in fact, a policy over the Renault which appeared to cover it “anywhere in the world”. She sued AON, claiming the affidavit of Mr Verryt amounted to a false representation.
Mr Verryt gave evidence that his affidavit had been based primarily on discussions he had with the insurer, SGIO; which were to the effect that the cover was limited to specific locations. On reviewing the policy itself however, Judge Martino noted that the policy appeared to provide cover “anywhere in the world”. The schedule to the policy listed various vehicles (including the Renault) and their “location”.
He noted the applicable legal principle as being that “[w]here movable property insured under a policy is described as being at a particular place the policy does not provide cover if the property is at another place if the description forms part of the description of the risk”. In this particular case however, he found that the inclusion of the “location” for the vehicle in the schedule was not part of the description of the risk. That was because the policy did not expressly state that cover was limited to those locations, and because the locations for many of the vehicles (which included “UK”, “France” and “Vic”) were so large.
As a result, the policy did cover the claim. Ms Middleton however lost the action because, despite the conclusion reached on the policy, the court accepted Mr Verryt’s evidence that he honestly believed the matters in his affidavit were correct at the time he provided it.
Middleton v AON Risk Services & Anor [2007] WADC 12
Extraneous factors lead to reversal
Differing legislation and interpretations between workers’ compensation law and tort law can sometimes lead to apparently conflicting results, as a recent decision of the NSW Court of Appeal illustrates.
In June 2001, Mr Beer sustained whiplash injuries in a motor vehicle accident in the course of his employment. The accident was the fault of the appellant Ms Sarkis. He later sustained additional injuries in a fall while visiting a doctor for treatment of his whiplash. Both incidents gave rise to workers’ compensation claims. In December 2001, Beer took his own life.
His de facto partner and infant daughter brought claims against his employer and their workers’ compensation insurer claiming compensation for his death. The claims were compromised, with the insurer agreeing to pay workers’ compensation, albeit less than the maximum allowable.
The employer then sued the negligent driver of the other vehicle under s 151Z of the Workers Compensation Act 1987 to recover the compensation paid to Beer’s dependants. The trial judge found that the suicide was a foreseeable consequence of the accident and that damages would have been recoverable under the Compensation to Relatives Act 1897. The driver appealed against that decision.
The NSW Court of Appeal unanimously allowed the appeal. Delivering the court’s judgment, Justice Handley noted that there was no evidence that Beer had symptoms of clinical depression, or had been contemplating suicide and there were a number of events subsequent to the accident that were unrelated to the injuries sustained in the accident.
In addition, although it might be reasonably foreseeable that a person suffering the effects of an injury might contemplate suicide, that (of itself) did not make a tortfeasor liable for the consequences of the suicide. The plaintiff had to prove that causation, which included showing that the damage was not too remote. In this case, there was evidence of new and extraneous factors which intervened between the accident and Beer’s suicide. As a result, the accident was not proved to be a “cause” of the suicide.
The employer was therefore entitled to recover only the workers’ compensation payments made directly to Beer following the accident, but not the payments made to his dependants.
Sarkis v Summitt Broadway Pty Ltd trading as Sydney City Mitsubishi [2006] NSWCA 358
Dinks and a fight
The latest round in the seemingly endless legal battle over injuries sustained on licensed premises has been played out – with a victory for hotel operators and their insurers.
On 3 May 2000, there was an altercation between Mr Wagstaff and another patron at the Greenhouse Tavern in Coffs Harbour. Mrs Wagstaff, the appellant, intervened and was injured as a result. Both claimed damages as a result of the negligence of the hotel’s occupier and its licensee. The District Court gave judgment in favour of both Mr and Mrs Wagstaff; but Mrs Wagstaff appealed against the assessment of damages. The defendants cross-appealed against the finding of liability in her case; but (perhaps strangely) did not appeal against the judgment awarded to Mr Wagstaff.
On the appeal, the NSW Court of Appeal noted that there was no doubt that the defendants owed Mrs Wagstaff a duty of care. The question however was whether that duty extended to protecting her against the deliberate wrongdoing of a third party.
That issue was to be resolved by looking at the level of control exercised by the defendants over those on the premises and their knowledge, or ability to know about, the condition of those patrons. While it was foreseeable that some people would become aggressive when drunk, it did not automatically follow that a publican had to treat every drunk patron as a potential source of unprovoked violence.
Similarly, the mere fact that someone was drunk did not give rise to a duty to immediately remove them in order to protect other patrons. The licensee had to know (or at least, ought to have known) that the person had an “aggressive character” when intoxicated. This knowledge could be based either on known characteristics or on the person’s conduct on the occasion in question. In this case however, such knowledge had not been established on the evidence, and the defendants were therefore not liable.
In any case, the court found that Mrs Wagstaff had not shown that, even if the licensee had taken steps to remove the assailants, it would have prevented the assault from occurring. As a result, even if she had established negligence, she would have failed on the issue of causation.
Wagstaff v Haslam & Anor [2007] NSWCA 27
Short cuts
An insurance agent (i.e. the agent of an insurer; as opposed to a broker, who is the agent of the insured) owes only limited duties to a prospective insured. Merely completing a proposal form for a prospective insured does not mean that the agent is required to give advice about the quality, extent and conditions of the cover being sought. In addition, without more, there is no general obligation on such an agent to explain exclusion clauses in a policy to the insured.
Caldwell v J A Neilson Investments Pty Ltd [2007] NSWCA 3
Death following chemotherapy treatment was caused by “violent, visible and external means” within the meaning of a life insurance policy. The word “violence” in insurance policies simply means the opposite of “without any violence at all”. The term merely requires that the injury be due to something other than purely natural causes, such as bodily weakness or disease. Here, the physical injuries were caused by external means, being the administration of chemotherapy, that was visible and that was violent in the way in which this phrase has been interpreted in the authorities.
MBF Life Ltd v Merchant [2006] NSWCA 363
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