Nominal Defendant v Glg Australia Pty Ltd

• Jurisdiction: Australia Federal only
• Court: High Court
• Judge: Gleeson CJ,Gummow,Hayne,Heydon JJ,Kirby J
• Judgment Date: 05 April 2006
• Neutral Citation: 2006-0405 HCA A,[2006] HCA 11
• Docket Number: S329/2005
• Date: 05 April 2006

[2006] HCA 11

HIGH COURT OF AUSTRALIA

Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ

S329/2005

Nominal Defendant

Appellant

and

GLG Australia Pty Limited & Ors

Respondents

Representation:

P J Deakin QC with P J Nolan for the appellant (instructed by Sparke Helmore)

J E Maconachie QC with N J Polin for the first respondent (instructed by Curwood & Partners)

Submitting appearance for the second respondent.

Submitting appearance for the third respondent.

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

Nominal Defendant v GLG Australia Pty Limited

Statutes — Motor Accidents Act 1988 (NSW) (‘the Act’) — Scope of indemnity — Scope of definition of ‘injury’ under s 3(1) of the Act — A system of work involving forklift vehicle produced vibrations causing boxes in container to fall and strike worker — Whether injury ‘is a result of and is caused during … the driving of the vehicle’ under par (a)(i) of the definition of ‘injury’ — Whether Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 79 ALJR 1079; 215 ALR 385 required definition of ‘injury’ to be construed consistently with s 69(1) of the Act — Whether injury ‘caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle’ — Whether fault in failing to devise a safe system of work can be invoked as basis of claim for indemnity under the Act — Causation — Whether direct and proximate relationship between the driving of the vehicle and the injuries.

Statutes — Construction — Purpose of legislation — Extrinsic materials — Use of ministerial second reading speech — Whether any disparity between Minister's speech and law as enacted — Duty of courts to enacted law.

Practice and procedure — Court of Appeal (NSW) — Orders disposing of appeal — Inclusion of orders for costs and interest — Whether such orders involved procedural unfairness in the circumstances.

Words and phrases — ‘injury’.

ORDER

1. Appeal allowed.

2. Set aside the orders of the Court of Appeal of the Supreme Court of New South Wales dated 23 August 2004 and, in their place, order that the appeal to that Court be dismissed.

3. (a) The first respondent to repay the sum of $132,370.34 to the appellant plus interest calculated at $32.64 per day from 12 November 2004 until the date when this order takes effect.

(b) The order in paragraph (a) is suspended for seven days.

(c) In the event of the first respondent filing and serving written submissions within that period contending that the order in paragraph (a) is wrong:

• (i) it will remain suspended until further order; and

• (ii) the appellant is directed to file and serve written submissions in reply within a further seven days, and to apply within a further seven days to re-list the matter before a single Justice.

4. The first respondent to pay the appellant's costs of the appeal to the Court of Appeal and of the proceedings in this Court.

1 Gleeson CJ, Gummow, Hayne and Heydon JJ. In its primary aspect this is an appeal from orders of the Court of Appeal, Supreme Court of New South Wales 1, allowing an appeal against orders made by the District Court of New South Wales (Delaney DCJ) relating to the application of the Motor Accidents Act 1988 (NSW) (‘the Act’) to one of two defendants to a claim by a plaintiff for damages for personal injury.

Background facts

2 The trial judge found that on 24 August 1999, the plaintiff, Salim Fahd Tleyji, suffered an injury in the following circumstances. He was an employee of Ready Workforce Pty Ltd, a labour hire company (‘the employer’). That company supplied his services to GLG Australia Pty Ltd (‘the occupier’). The occupier occupied and operated a warehouse at which the unloading of containers of goods took place. For some months the following system, devised by the occupier, had been in operation. A container to be unloaded would be placed in the yard of the warehouse. The plaintiff and others would place boxes from the container onto a pallet placed on a landing in front of the open container. A forklift truck would go up a ramp to the landing, pick up the pallet, and reverse down the ramp. As the forklift truck went up the ramp it caused vibration which was felt through the ramp, the landing and the container.

3 On the day when the plaintiff was injured, the vibration generated by the forklift truck caused boxes stacked in the container to fall and strike the plaintiff as he stood about a metre inside the container.

4 The trial judge found that both the employer and the occupier were liable, having breached their respective duties of care to the plaintiff. He apportioned the damages between the employer and the occupier in the proportion 25:75. The factual findings just summarised and the conclusions drawn from them are no longer controversial.

The issues in controversy

5 The controversy in this Court stems from the fact that the occupier's forklift truck was insured by CIC Insurance Ltd 2. By the time of the trial that

insurer was in liquidation, and its liabilities under the policy were being dealt with by the Nominal Defendant.

6 Pursuant to s 47A of the Act, the Nominal Defendant applied successfully to be joined as a party ‘in order to argue that in the circumstances of the case [the insurer had] no obligation under the policy’ to indemnify the occupier. Pursuant to s 9 and Sched 1 of the Act, the policy insured ‘against liability in respect of … injury to a person caused by the fault of the owner or driver of the vehicle’. The relevant part of the definition of injury in s 3(1) of the Act was:

‘[I]njury:

• (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) …’

7 The interest of the Nominal Defendant served by the application ran in tandem with an interest of the plaintiff. If the plaintiff's claim were for ‘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’ (s 69(1)), Pt 6 of the Act would limit his damages to some degree. If the plaintiff's claim fell outside the quoted words, his damages would be higher. For the occupier, on the other hand, success for the Nominal Defendant and the plaintiff in their arguments would mean that it was without recourse against the Nominal Defendant and exposed to a higher level of damages to be paid to the plaintiff. Thus the issue whether the Nominal Defendant was obliged to indemnify the occupier, and the issue whether the plaintiff's claim against the occupier lay at common law unaffected by the restrictions in Pt 6 of the Act, turned on the identical question: did the plaintiff's injury fall within the definition of ‘injury’ in s 3(1) of the Act?

8 According to the Court of Appeal, the occupier urged on the trial judge a contention — and that it did so is no longer challenged in this Court — that par (a)(i) of the definition of ‘injury’ applied: the accident was caused by the owner (ie the occupier) or driver of the forklift, because it was a result of and was caused during the driving of the vehicle.

9 The trial judge held, however, that the plaintiff's injury ‘was not caused by the driving of the forklift in any negligent manner but the pursuit of the system of work which was implemented by [the occupier]’. The consequence of this conclusion was that the damages payable by the employer amounted to $281,770.30, and those payable by the occupier were $347,015.30. The reason for the difference lay in the fact that parts of the damages payable by the employer were subject to restrictions under the Workers Compensation Act 1987 (NSW), while the damages payable by the occupier were not. A further consequence of this conclusion was that the occupier was not entitled to indemnity from the Nominal Defendant.

10 The Court of Appeal allowed an appeal by the occupier 3.

11 The Court of Appeal started from the uncontroversial proposition that the plaintiff's injury was caused by the fault of the occupier, being the owner of the forklift truck.

12 The Court of Appeal held, first, that the fault was a fault ‘in the use or operation of the vehicle’ within the meaning of the opening words in par (a) of the definition of ‘injury’. It said that ‘the way the vehicle was used was a necessary and important element in the fault of the owner of the vehicle. The system of work was held to be unsafe because it was such that the container, in which boxes were stacked, was caused to vibrate; and it was the forklift truck itself that caused the vibration.’ 4

13 Secondly, the Court of Appeal held that the injury was caused during ‘the driving of the vehicle’ within the meaning of par (a)(i) of the definition of ‘injury’. It held that par (a)(i) could be satisfied even though the fault of the owner lay elsewhere, and for this it cited an earlier decision of the Court of

Appeal, Allianz Australia Insurance Ltd v GSF Australia Pty Ltd5. The Court continued 6:

‘Since it was the vibration of the container that caused the box to fall on the plaintiff, and since the vibration of the container was caused by the driving of the motor vehicle and occurred during the driving of the motor vehicle, there is no doubt that the requirements of subpara (i) are satisfied, unless it can be said that the causal relationship is not close enough, for some reason. The dissenting judgment of Santow JA in Allianz was essentially on the basis that the injury was not caused by the defect in the vehicle in that...