Allianz Australia Insurance Ltd v Gsf Australia Pty Ltd

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: McHugh J,Gummow,Hayne,Heydon JJ,Callinan J
• Judgment Date: 19 May 2005
• Neutral Citation: 2005-0519 HCA A,[2005] HCA 26
• Docket Number: S247/2004
• Date: 19 May 2005

Allianz Australia Insurance Limited

Appellant

and

Gsf Australia Pty Limited & Anor

Respondents

[2005] HCA 26

McHugh, Gummow, Hayne, Callinan and Heydon JJ

S247/2004

HIGH COURT OF AUSTRALIA

Allianz Australia Insurance Limited v GSF Australia Pty Ltd

Insurance — Motor vehicles — Third party liability insurance — Truck and trailer provided by first respondent to convey packed containers of food to airport — Appellant insurer of vehicle — Second respondent an employee of first respondent — Second respondent suffered back injury while assisting in unloading containers after vehicle's lifting mechanism became inoperative — Whether second respondent's injury an ‘injury’ within the meaning of the Motor Accidents Act 1988 (NSW).

Insurance — Motor vehicles — Third party liability insurance — Causation — Whether second respondent's injury a result of and caused during use or operation of the vehicle by a defect in the vehicle — Utility of ‘common sense’ tests for causation and notions of proximate cause.

Statutes — Construction — Purposive construction — Where object of the Motor Accidents Act 1988 (NSW), as amended, to contain overall costs of compulsory third party insurance scheme within reasonable bounds — Whether consistent with an expansive notion of causation of injury.

Words and phrases: ‘a result of’, ‘caused’.

Motor Accidents Act 1988 (NSW), ss 3(1), 69(1).

Representation:

K P Rewell SC with P S L Dooley for the appellant (instructed by TL Lawyers)

L King SC with J W Catsanos for the respondent (instructed by Blake Dawson Waldron)

ORDER

1. Appeal allowed.

2. The first respondent (GSF Australia Pty Ltd — ‘GSF’) pay the costs of the appellant (Allianz Australia Insurance Ltd — ‘Allianz’).

3. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales made on 1 July 2003 and in their place order:

• (a) the appeal to the Court of Appeal is allowed;

• (b) GSF pay the costs of Allianz of the appeal to the Court of Appeal;

• (c) Orders 1, 4 and 5 of the orders of the District Court of New South Wales made on 14 June 2002 are set aside and in their place order:

  • (i) judgment for the plaintiff against GSF in the sum of $450,000;

  • (ii) judgment for Allianz against GSF;

  • (iii) GSF pay the costs of Allianz in the District Court.

1 McHugh J. The central issue in this appeal is whether an injury sustained by an employee while unloading containers from a vehicle whose unloading mechanism was defective was an ‘injury’ as defined by s 3(1) of the Motor Accidents Act 1988 (NSW) (‘the Act’) (as amended by the Motor Accidents Amendment Act 1995 (NSW)).

2 In my opinion, the injury that the employee suffered was not an injury for the purpose of the Act. That is because in an unloading case there is no ‘injury’ within the meaning of the Act unless the injury was the result of and caused by a defect in the vehicle. Whether or not a defect causes an injury for the purpose of the Act has to be evaluated in the light of the objects of the Act. Those objects demonstrate that the defective unloading mechanism did not cause the injury because the defect was merely a condition and not a cause of the injury. It was the unsafe system of the employer — not the defect in the vehicle — that caused the employee's injury.

Statement of the case

3 Garry Oliver sued GSF Australia Pty Ltd (‘GSF’), his employer, for damages in the District Court of New South Wales. The action was settled. GSF conceded that it was negligent in requiring Mr Oliver to work under an unsafe system of work. However, a dispute arose as to which of two insurers should indemnify GSF: the compulsory third party insurer of the vehicle, Allianz Australia Insurance Ltd (‘Allianz’) or the workers' compensation insurer, QBE. As a result, Mr Oliver and GSF made two agreements concerning the damages that Mr Oliver was to receive. If QBE was liable to indemnify GSF, Mr Oliver was to receive $450,000, based upon a notional assessment of damages under the Workers Compensation Act 1987 (NSW) (‘the Workers Compensation Act’). If Allianz was liable, Mr Oliver was to receive $460,000, based on a notional assessment of damages under the Act.

4 Allianz applied to be, and was, joined as a party to the District Court proceedings between Mr Oliver and GSF. The District Court (Delaney DCJ) held that Mr Oliver's injury gave rise to an indemnity by Allianz because the injury occurred in circumstances that made it an ‘injury’ as defined by s 3(1) of the Act. The injury was therefore covered by the motor vehicle policy issued by Allianz. His Honour entered judgment in favour of Mr Oliver for $460,000 and ordered that Allianz pay GSF ‘by way of indemnification’ the sum of $230,000 on the basis that it was a case of ‘dual insurance’.

5 Allianz appealed to the Court of Appeal on the ground that the injury was not an ‘injury’ within the meaning of that term as defined in s 3(1) of the Act. By majority (Mason P and Davies AJA, Santow JA dissenting), the Court of Appeal dismissed Allianz's appeal.

The material facts

6 GSF employed Mr Oliver as a maintenance technician. On 12 February 1998, it directed him to assist in unloading airline containers from the back of a truck owned by GSF. The truck had been specifically modified to facilitate the unloading of airline containers. Rollers had been installed on the floor of the trailer and a T-bar mechanism, which was an electric/pneumatic device, was used to push the airline containers to the rear of the truck, where they could be removed by a forklift truck. The T-bar mechanism was driven by a motor and a gearbox and was activated by pushing a button on a panel at the rear of the truck. The effect of the T-bar and roller system was that no manual effort was required to move the containers to the rear of the truck.

7 On 11 February 1998, the gearbox broke and the T-bar unloading mechanism became inoperative. GSF knew that the unloading mechanism had become inoperative but did not repair it. Instead, it directed Mr Oliver and another employee to perform the task of unloading the truck manually. GSF gave Mr Oliver no instructions as to how to unload the truck. Mr Oliver and his colleague used pinch-bars or crowbars to manoeuvre the containers along the rollers to the rear of the truck, where the containers would be lifted off by forklift. The containers weighed approximately one tonne each. It was not disputed that this was an unsafe system of work. In the course of this work, Mr Oliver suffered an injury to his lower back.

The legislation

8 The difficulty of the case arises from the failure of the Act to state expressly or inferentially that that Act does not apply if the Workers Compensation Act or, indeed, any other statutory public liability scheme, applies to the facts of the case. Part 6 of the Act governs the award of damages for injuries sustained in incidents involving motor vehicles. That Part is ‘concerned with controlling the amount of recoverable damage under the legislation to ensure that the scheme under the legislation is affordable.’ 1 Section 69(1) provides that the Part ‘applies to and in respect of an award of damages which relates to the death of or injury to a person caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle.’ Section 69(1) is the principal operative provision governing the award of damages under the Act 2.

For the purposes of this appeal the key term in s 69(1) is ‘injury’, which is defined in s 3(1) of the Act as follows:

‘ injury:

• (a) means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during:

  • (i) the driving of the vehicle, or

  • (ii) a collision, or action taken to avoid a collision, with the vehicle, or

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

  • (iv) such use or operation by a defect in the vehicle, and

• (b) includes:

  • (i) pre-natal injury, and

  • (ii) psychological or psychiatric injury, and

  • (iii) damage to artificial members, eyes or teeth, crutches or other aids or spectacle glasses.’

9 This definition of injury was inserted by the Motor Accidents Amendment Act 1995 (NSW) 3 (‘the 1995 Act’). The appeal concerns the application of par (a)(iv) of the definition of ‘injury’ in s 3(1) of that Act. It gives rise to the issue whether Mr Oliver's injury was ‘caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during … such use or operation by a defect in the vehicle’.

10 The definition of ‘injury’ mirrors the terms of s 69(1). The words of s 69(1) emphasise two basic requirements for the Act to apply 4: the injury must be caused ‘by the fault of the owner’ of the vehicle and the injury must be caused by the fault of the owner ‘in the use or operation of the vehicle’.

11 The rest of the definition of injury in s 3(1)(a) is then incorporated into s 69(1) by reference 5. For sub-par (iv) to apply, the injury must be ‘a result of and is caused during … such use or operation by a defect in the vehicle’.

Significance of definition sections

12 Except in rare cases, definitions are not intended to enact substantive rules of law. Their function is to aid the construction of those substantive enactments that contain the defined term or terms. Moreover, the meaning of the definition depends on the context and object of the substantive enactment. As I pointed out in Kelly v The Queen6:

‘[T]he function of a definition is not to enact substantive law. It is to provide aid in construing the statute. Nothing is more likely to defeat the intention of the legislature than to give a definition a narrow, literal meaning and then use that meaning to...