Allianz Australia Insurance Limited v GSF Australia Pty Limited

Court of Appeal (NSW)|2003-04-16|Before: Mason P, Santow JA

CITATION : Allianz Australia Insurance Limited v GSF Australia Pty Limited [2003] NSWCA 174 HEARING DATE(S) : 16 April 2003 JUDGMENT DATE : 1 July 2003

JUDGMENT OF : Mason P at 1; Santow JA at 17; Davies AJA at 58 DECISION : 1. Appeal dismissed; 2. Appellant to pay the respondent's costs.

CATCHWORDS : NEGLIGENCE - Whether "injury" under the Motor Accidents Act 1988 (NSW) or Workers Compensation Act 1987 (NSW) - Causation - Commonsense approach to causation - Which legislative regime applied. Motor Accidents Act 1988 (NSW) Pt 6; s3; s69; s47A LEGISLATION CITED : Motor Accidents (Amendment) Act 1995 Motor Accidents Compensation Act 1999 (Chapter 5 see ss122-123) Workers Compensation Act 1987 Chappel v Hart (1998) 195 CLR 232 Environment Agency (formerly National Rivers Authority) v Empress Car Co (Abertillery) Ltd [1999] 2 AC 22 Fitzgerald v Penn (1954) 91 CLR 268 CASES CITED : Halvorsen Boats Pty Limited v Robinson (1993) 31 NSWLR 1 March v E & M H Stramare Pty Limited (1991) 171 CLR 506 NRMA Insurance Limited v NSW Grain Corporation (NSW Court of Appeal, 15 November 1995, unreported) Zurich Australian Insurance Limited v CSR Limited (2001) 52 NSWLR 193 ALLIANZ AUSTRALIA INSURANCE LIMITED (Appellant) PARTIES : GSF AUSTRALIA PTY LIMITED (First Respondent) GARRY DAVID OLIVER (Second Respondent) FILE NUMBER(S) : CA 40586/02 K Rewell, SC/ PS L Dooley (Appellant) COUNSEL : J D Hislop, QC/ J W Catsanos (First Respondent) submitting appearance (Second Respondent) Thomas Laycock (Appellant) SOLICITORS : Blake Dawson Waldron (First Respondent) Adams & Partners (Second Respondent)

LOWER COURT District Court JURISDICTION : LOWER COURT DC 54/01 FILE NUMBER(S) : LOWER COURT Delaney DCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40586/02 DC 54/01

MASON P SANTOW JA DAVIES AJA

1 JULY 2003 ALLIANZ AUSTRALIA INSURANCE LIMITED v GSF AUSTRALIA PTY LIMITED & 1 ORS CATCHWORDS NEGLIGENCE - Whether "injury" under the Motor Accidents Act 1988 (NSW) or Workers Compensation Act 1987 (NSW) - Causation - Commonsense approach to causation - Which legislative regime applied.

FACTS The plaintiff, who was employed by the first respondent as a Maintenance Technician, was directed by his employer to assist in unloading airline containers from the back of a truck. The truck had been specifically modified to facilitate the loading and unloading of airline containers. On the day prior to the plaintiff's accident, the mechanism that facilitated the loading and unloading became inoperative. Instead of the employer repairing the truck's unloading mechanism, the plaintiff was directed, negligently, by the employer to perform the task of unloading the truck manually. Containers, each weighing in excess of one tonne, had to be moved by the plaintiff and a fellow employee. In the course of this work the plaintiff suffered an injury to his lower back. The trial judge concluded that the injury gave rise to indemnity under the Motor Accidents Act 1988 (NSW) ("MAA") as the circumstances gave rise to 'injury' as defined by s3(1) of the Act. The appellant challenged the trial judge's findings that the injury fell within the definition of the word "injury" in s3 of the Act and argued that the injury was a result of the employer's negligent direction. Held per Mason P:

There was a defect in the vehicle because one of the important things it was designed to do was not functioning (Santow JA and Davies AJA agreeing).
The definition of "injury" does not import any notion of fault of the owner (or driver) in the capacity of owner (or driver), thereby segregating off owners and drivers whose fault occurs in their "employer capacity", or in other conceivable capacities.
The definition speaks of the injury being "a result of" not "the result of"; a fortiori it does not have to be the "direct" or "effective" or "efficient" result of the defect.
The defect was a cause of the compensable injury. The injury was "a result of" the defective vehicle provided to the plaintiff in circumstances rendering its owner at fault. It does not matter that it was also a result of negligence in the same person's instructions to its employee. Either way, the language of the insurance policy responds. Held per Davies AJA:
Personal bodily injury was caused by the fault of the owner of the vehicle.
The employer's fault was a fault in the use or operation of the vehicle. The vehicle ought not to have been used to transport the employer's goods whilst its unloading mechanism was inoperable.
The injury was a result of and caused during the use or operation of the vehicle. The loading and unloading of the employer's vehicle were essential parts of the operation for which the vehicle was used.
The plaintiff's injury was a result of and was caused by a defect in the vehicle. That the injury was caused by the use of the defective vehicle but not by the defect itself has a subtlety about it that does not meld well with the Common Law's robust, commonsense approach to issues of causation.
The approach that should be taken to causation is one of a practical commonsense basis: Clarke JA in NRMA Insurance Limited v NSW Grain Corporation (NSW Court of Appeal, 15 November 1995, unreported); March v E & MH Stramare Pty Limited (1991) 171 CLR 506. The approach of looking for a "direct cause" or the "proximate cause" of the injury has long been rejected.
There is nothing in the content of the definition in s3 of MAA to require the term 'caused' to carry a meaning more limited than the term ordinarily bears in the law of negligence. The words in the definition "if, and only if", do not narrow the meaning of the subsequent words "caused…by a defect in the vehicle". Held per Santow JA in dissent:
It was only the employer's negligent direction not the antecedent defect, which "made the difference" in causal, or result, terms, when regard is had, to the purpose of establishing causation in the present context.
Even if both defect and negligence individually were "causal" of the injury, the injury was not "a result of" the defect alone but was a result of the defect coupled with the negligent direction, these being the necessary and sufficient conditions required for the injury to be "a result". The latter is far more significant because, as a matter of common sense, the injury could never be "as a result of" the defect alone but required the active and negligent intervention of the employer to occur. [Paragraph 22]
Before making a common sense judgment on causality, one must identify the purpose of establishing causality: Lord Hoffman in Environmental Agency (formerly National Rivers Authority) v Empress Car Co. (Abertillery) Ltd [1999] 2 AC 22 at 29.
Determining which "but for" antecedent is legally causative from a number of such antecedents, requires the making of value judgements and the infusion of policy considerations. The purpose of the enquiry here is whether the Motor Vehicles Accident Act or the Workers Compensation Act applies. The mere passive existence of the defect in the owner's vehicle is of little significance compared to the abnormal or extraordinary behaviour of the employer, in disregard of safety, directing the employees to carry out an unsafe system of work instead of first having it repaired.
The conclusion that the Workers Compensation regime applies, is strengthened by the Minister's Second Reading Speech, the successive narrowing of the legislative scope of MAA and by the announced cost saving purposes only in that Act and the obvious employee context.

ORDERS 1. Appeal dismissed 2. Appellant to pay the respondent's costs.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40586/02 DC 54/01

MASON P SANTOW JA DAVIES AJA

1 JULY 2003 ALLIANZ AUSTRALIA INSURANCE LIMITED v GSF AUSTRALIA PTY LIMITED & 1 ORS Judgment

1 MASON P: In my view the appeal should be dismissed with costs. 2 I have had the benefit of reading in draft the judgments of Santow JA and Davies AJA. They set out the facts and legislation. Their Honours' reasons have assisted me in sifting relevant from irrelevant considerations in my perception of the issues. 3 There was a defect in the vehicle because one of the important things it was designed to do was not functioning, i.e. was defective. I agree with the reasons of my colleagues. 4 The legislative history and the second reading speech show that the amended definition of "injury" was intended to be narrower than its predecessor. I draw no further assistance from these matters in the question at hand. Nor am I assisted by recognising that cost-saving considerations (so far as vehicle owners are concerned) informed the amendment. One could throw into the opposite scales the fact that compulsory insurance of motor vehicles continues as a beneficial reform enacted to ensure that victims of motor vehicle accidents have a deep-pocketed defendant to sue. The narrower the scope given to "injury" under the amendment, the narrower will be the ultimate umbrella of protection for victims, not all of whom can fall back on claiming against a defendant who is insured under the Workers Compensation Act 1987. 5 The ultimate issue in the present case is whether the fault of the owner of the vehicle, which occurred in the use or operation of the vehicle, led to injury which was "a result of and caused … by [the] defect in" the unloading mechanism. Santow JA explains the complicated exegetical process involved in coming to this point. 6 This statutory inquiry should be considered in context and, if the language permits, without the introduction of concepts not found in the text. 7 As Santow JA points out, Lord Hoffmann has enjoined courts not to overcomplicate or oversimplify causation, and he has emphasised that even "common sense" answers to questions of causation will differ according to the purpose for which the question is asked (Environment Agency (formerly National Rivers Authority) v Empress Car Co (Abertillery) Ltd [1999] 2 AC 22 at 29-30). 8 Here, the critical causation question arises in the context of determining whether the third-party policy responds. (The owner's negligence and its causal impact have already been established and can be put aside.) When such issues arise under contracts of insurance they involve canons of construction of contracts, insurance contracts in particular. They do not engage the notions of moral responsibility that underlie causation issues arising in tort law. But the context requires that the interests of potential victims (not all of whom are employees) in having access to an insured defendant must be kept in mind. 9 "Injury" is also the gateway that controls access to an award of damages under Part 6 of the Motor Accidents Act 1988 (see also s69 thereof) or damages under Chapter 5 of the Motor Accidents Compensation Act 1999 (see ss122-123 thereof). Whether this should have been seen as a benefit or burden to plaintiffs in the pre-Civil Liability Act 2002 era is debatable. Conceivably some such plaintiffs may have had an interest in pursuing a wealthy but ex hypothesi uninsured defendant for more generous "common law" damages for injuries falling outside the confines of the definition of "injury". But they would be few and far between. Issues such as the present are more likely to arise in the context of a dispute as to the third-party insurer's indemnity. Certainly that is the present context. 10 The starting point is therefore the plain meaning of the language of the statutory third-party policies. 11 With respect to Santow JA, I do not read the definition of "injury" as importing any notion of fault of the owner (or driver) qua or in the capacity of owner (or driver), thereby segregating off owners and drivers whose fault occurs in their "employer capacity", or presumably in other conceivable capacities. These words need not be inserted into the definition, which makes perfect sense without it. 12 If one accepted the reading I have just rejected, then it is possible that the case would be resolved in favour of the motor vehicle insurer because, the direction of the owner as employer (arguably) came later than the decision to provide the defective vehicle made by the owner as owner. In that sense at least, the later direction "made the difference" by being something abnormal or extraordinary, to pick up the concepts suggested by Professor Jane Stapleton in the work cited by Santow JA. Nevertheless, I think that one could as easily argue that it was only the combination of the employer's direction and the owner's provision that metaphorically caused the spark that injured the plaintiff. Alternatively, it could be said that the owner's decision to allow the vehicle to go to the job occurred after the employer's direction that the employee perform the task. 13 But assume for argument's sake that it is correct to search for what "made the difference" and assume that in this case it was the direction as employer, as Santow JA concludes. One could easily posit a different situation where the vehicle was provided to the employee with its defect undiscovered or yet to manifest itself and where, subsequently, the hapless employee (perhaps already at the job site) encountered the defect and tried to overcome it in a manner that caused injury. This could still happen in circumstances involving negligence on the part of the owner, for example due to its system of maintenance or through the casual negligence of an agent, or perhaps even negligence on the part of the driver at the site. These hypothetical situations would arguably fall on the opposite side of the categorical line suggested by Santow JA. One response would be "so be it", different factual cases will have different outcomes. But my response is that this type of difficult enquiry is an unproductive diversion that is not called for except by a forced reading of the definition of "injury". Ambiguities in insurance arrangements are not resolved in this way. 14 Accordingly, it matters not for me how Mr Oliver might have answered his hypothetical bystander's hypothetical inquiry about the cause of his injury. He might have said that he was moving the goods manually "because the gear box has broken and the T-bar is inoperable"; "because the boss told me to"; or "because the gear box has broken, the T-bar is inoperable and the boss told me to do the job manually". Any way, the answer was true and the definition was engaged according to its unadorned meaning. 15 The definition speaks of the injury being "a result of" not "the result of"; a fortiori not the "direct" or "effective" or "efficient" result of the defect. This reinforces the correctness of the conclusion reached by Delaney DCJ. The presence of "if and only if" does not undercut this, because those words have their own work to do. 16 Applying these principles, the defect was a cause of the compensable injury. Or, to use the language of the definition, the injury was "a result of" the defective vehicle provided to Mr Oliver in circumstances rendering its owner at fault. It does not matter that it was also a result of negligence in the same person's instructions to its employee. Either way, the language of the insurance policy responds. 17 SANTOW JA: INTRODUCTION The central issue before the trial judge, as also this Court, is which of two Acts provides indemnity to the plaintiff, the contest being essentially between the two insurers. Do the facts and circumstances leading to injuries suffered by the plaintiff below, concededly as a result of the defendant employer's negligence, give rise to indemnity under the Workers Compensation Act 1987 (NSW), or under the Motor Accidents Act 1988 (NSW) ("MAA"), in their respective current forms? That issue turns upon whether those facts and circumstances gave rise to "injury" as defined by s3(1) of the MAA in its current form. That definition since 1995 limits what is comprised within the statutory definition of injury. The relevant part of the qualification is as follows: " if, and only if, the injury is a result of and is caused during: (i) … (iv) such use or operation by a defect in the vehicle, … ". It is convenient that I now quote the definition in full, so that this qualification can be seen in context: "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

…." 18 The trial judge concluded that the MAA did apply. While in monetary terms little turns upon whether instead the Workers Compensation Act applies, that is only so far as the plaintiff is concerned. It was put that in a practical sense, the real issue is which insurer is liable to provide the indemnity, that is to say the appellant, Allianz Australia Insurance Limited ("Allianz"), which is the compulsory third party insurer of the truck, or alternatively the insurer with respect to the Workers Compensation Act (as Allianz contends). However, it is important to remember that while a statutory insurance scheme applies to those situations that come within the MAA, that legislation is first concerned with the imposition of statutory limits on recovery, on those cases within its ambit. 19 Allianz has sought and obtained an order pursuant to s47A of MAA to be joined as a party to the proceedings "in order to argue that in the circumstances of the case it has no obligation under the policy to indemnify the defendant". 20 In essence, injury occurred following an unloading mechanism having become inoperative the day before the injury. On the day of the injury the employer, aware of this, directed the plaintiff to perform the unloading task manually using pinch-bars or crow-bars to manoeuvre to the rear of the trailer heavy containers placed on the trailer so that they could be lifted off by forklift. This was a patently unsafe system of work. Yet this direction was given by the employer, instead of having the unloading mechanism repaired; and this notwithstanding the heavy weight of the containers to be unloaded. The plaintiff, not surprisingly, injured his back in the course of that work. There is no dispute that the employer, GSF Australia Pty Limited, the First respondent, was negligent in so directing an unsafe system of work in requiring that the removal task be carried out manually in that way. 21 In preparing these reasons I have had the advantage of reading in draft those prepared by Davies AJA. Though differing in our conclusions, the clarity with which he articulates his reasons has been helpful to me in identifying where we differ. Essentially our difference can be encapsulated in our differing answers to the following question. Was the bodily injury suffered by the plaintiff employees (driver and co-worker) a result of and caused by, the defective mechanism, or a result of and caused by the employer's negligent direction, or as Davies AJA would answer it, both? There is a connected subsidiary question, namely whether the bodily injury was caused "in the use or operation of the vehicle" and "during such use or operation". 22 I would answer the first question by saying two things: (a) it was only the employer's negligent direction not the antecedent defect, which "made the difference" in causal, or result, terms, when regard is had, as it must, to the purpose of establishing causation in the present context so only that direction was the legal cause of the injury; but (b) even if both individually were "causal" of the injury, the injury was not "a result of" the defect but was a result of the defect coupled with the negligent direction, both being essential conditions for that result, with the employer's negligence being far more significant; because, as a matter of common sense, the injury could never be "as a result of" the defect alone but required the active and negligent intervention of the employer to occur. 23 As to the second, I would conclude that the bodily injury which occurred only incidentally involved "the use and operation" of the vehicle. However, I would agree with Davies AJA, and contrary to the appellant's contention, that at the relevant time there was a "defect in the vehicle"; its unloading mechanism was not working. The appellant relied on that proposition, as an independent ground whilst also contesting causality, so far as the defect was concerned. It was however common ground that the injury was "caused by the fault of the owner … of a motor vehicle in the use or operation of the vehicle" (the words preceding the qualification). 24 While it was conceded by the appellant that the owner's "fault" occurred "in the use or operation of the vehicle", it was expressly not conceded that injury occurred within the terms of the qualification; that is to say, so as to satisfy the "if and only if" requirement reflected in the questions earlier posed. Essentially the appellant contended (Orange, 13 para 34) that "the Plaintiff's injury was not 'a result of and caused by' the fact that the bar mechanism was inoperative". Rather "the Plaintiff's injury was a result of the fact that his employer decided to unload the truck notwithstanding that the bar mechanism was inoperative; that system of work was patently unsafe; the Plaintiff's injury was caused by his participation in that unsafe system of work. The 'use' of the truck was incidental; the same injury would have occurred if the Plaintiff was required to manually push the containers across the floor of a warehouse." 25 By saying the "use of the truck was incidental" the appellant was submitting that the injury was not a result of, in any legally causal sense, such use or operation of the truck. Such use or operation of the vehicle as occurred, was, the appellant submits, merely incidental. The respondent contends that the defect in the vehicle was its defective unloading mechanism and that, as a matter of common sense, was a cause of the bodily injury, occurring in course of the vehicle's use or operation for unloading.

FACTUAL NARRATIVE -- SALIENT FACTS 26 The salient facts are not in dispute and are set out below.

The trial proceedings 27 (a) The proceedings appealed from were decided by his Honour Judge Delaney in the District Court of NSW at Penrith on 7 June 2002.

(b) The substantive proceedings, brought by the plaintiff, Gary Oliver, against his employer, GSF Australia Pty. Limited, had been settled. However, because there was a dispute as to which insurer should indemnify the employer, there were actually two agreements between the plaintiff and his employer as to the settlement sum. One agreed sum was based upon a notional assessment of damages under the Workers Compensation Act 1987. That would be the amount of the final settlement, in the event that the workers' compensation insurer was found liable to indemnify the employer. An alternative agreed sum was based on a notional assessment of damages under the Motor Accidents Act 1988. The difference was modest.

(c) Delaney DCJ found that the circumstances of the plaintiff's injury, fell within the (amended) definition of the word "injury", s3 of the Motor Accidents Act 1988, as operative from 1 January 1996. His Honour found that the truck which was being unloaded by the plaintiff at the time of the plaintiff's injury, had a "defect" which was causative of the plaintiff's injury.

(d) If the findings of Delaney DCJ are correct, the appellant, Allianz, which was the compulsory third party insurer of the truck, would be liable to indemnify the plaintiff's employer, for the agreed damages assessed under the Motor Accidents Act 1988.

(e) The plaintiff, Garry Oliver, was employed by the first respondent, GSF Australia Pty. Limited, as a Maintenance Technician.

(f) On 12 February 1998, the plaintiff was directed by his employer to assist in unloading airline containers from the back of a truck, registered No. UQY 281.

(g) The truck had been specifically modified to facilitate the loading and unloading of airline containers. The truck was fitted with a bar and roller system, enabling containers to be moved into and out of the bay area of the truck without manual effort. The bar, which was an electric/pneumatic device, was used to push containers to be unloaded to the rear of the truck, so being moved to where the containers could be removed by forklift. The bar mechanism was activated by pushing a button on a panel at the rear of the truck.

(h) On the day prior to the plaintiff's accident, the bar mechanism became inoperative. It had not been repaired by 12 February 1998.

(i) On 12 February 1998, the plaintiff was directed to assist in the unloading of airline containers from the truck. The plaintiff was directed by the first respondent to perform the task manually.

(j) Containers, each weighing in excess of one tonne, had to be moved by the plaintiff and a fellow employee. The two workers attempted the task by physically pushing the containers towards the rear of the trailer of the truck, using pinch-bars or crow-bars, to be from there lifted out by forklift. Not surprisingly, in the course of this work over the course of the day, the plaintiff suffered an injury to his lower back.

The Issue before the District Court (k) The issue for determination by Delaney DCJ was whether the circumstances of the plaintiff's injury were such as to fall within the definition of the word "injury" in s3 of the Motor Accidents Act 1988.

(l) Damages were agreed in alternative amounts, subject to determination of that issue.

(m) The appellant, Allianz Australia Insurance Limited, was the Compulsory Third Party insurer of the truck registered No. UQY 281.

(n) The appellant contended before Delaney DCJ, and contends on this Appeal, that the circumstances of the plaintiff's injury, did not fall within the definition of the word "injury" in s3 of the Motor Accidents Act 1988.

RESOLUTION OF APPEAL Legislative Background 28 The definition of the word "injury" which is applicable to the present case (and remains current) was introduced pursuant to the Motor Accidents (Amendment) Act 1995, and was effective from 1 January 1996. 29 In the second reading speech for the relevant Bill, the Attorney General made the following statement upon which the appellant relies, particularly as to the part emphasised. "The CTP policy and the Motor Accidents Scheme simply are not, and were never intended to be, a comprehensive accident compensation scheme providing substantial damages in all cases of injuries connected in some way to the use of a motor vehicle. Commonsense and community expectations generally demand that the CTP policy provide coverage in respect of injuries which arise from crashes and collisions on the roads or from vehicles running out of control. Over the years the Courts have interpreted the CTP policy as providing for a wide range of injuries often related to motor accidents. For example, the CTP policy has been held to cover injuries sustained during the loading and unloading of vehicles … It is therefore proposed to amend the definition of "injury" to adopt an approach similar to that taken in Queensland, South Australia and Western Australia, where "injury" is qualified in terms of its cause." [emphasis added] 30 While the appellant contends that it was plainly the intention of the Legislature to restrict the cover provided by CTP policies, including "loading and unloading cases", the respondent submits that the second reading speech is of no assistance in the task of determining whether the facts of this case come within the specific words used in the definition of "injury". 31 The relevant part of the definition of "injury" added in s3 of the Motor Accidents Act 1988, effective from 1 January 1996, is quoted earlier. 32 That new definitional provision is inserted into the Motor Accidents Act as it now stands, following these amendments coming into force on 1 January 1996. There is a degree of repetition in the way the definition of injury is incorporated both into the definition of "motor accident" in s3 and into the principal operative provision of s69(1). The latter is contained in Part 6 of MAA, which is concerned with controlling the amount of recoverable damage under the legislation to ensure that the scheme under the legislation is affordable. Section 69 is in the following terms: 69. Application (1A) ... (1) This 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. (2) …" 33 The compensation regime that came to replace Part 6 is that contained in the Motor Accidents Compensation Act 1999, with its attendant limitations on damages. 34 Thus the words of s69 "caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle" are simply a repetition of the opening words of the amended definition of "injury". They emphasise two basic requirements for the Act to apply, namely that the causation of the injury must be both by the fault of the owner (relevantly here) or the driver of the vehicle and be "in the use or operation of the vehicle". The remainder of the definition of "injury" is then incorporated by reference, starting with the important qualifying words "if, and only if that injury is a result of and caused during …". That second causal reference is to "caused during" and is really a temporal reference. It emphasises again that where sub-paragraph (iv) is to apply, the injury must be caused during such vehicle's use or operation. In addition where sub-paragraph (iv) applies, being the only possibly applicable subparagraph here, the injury must also be a result of and caused by a defect in the vehicle. 35 The foregoing shows that the injury must, in a sub-paragraph (iv) situation, satisfy three conditions, the first in three parts overlapping with the third. The injury must be: (a) (i) caused "by" the fault of the owner (or driver); (ii) "in" the use or operation of the vehicle; and (iii) "during" that use or operation; (b) it must also be a result of and caused "by" a defect in the vehicle, and (c) it must also be both as "a result of" and caused by such use or operation. 36 The Minister in his second reading speech looked to these words of causal qualification signalled by the emphatic "if and only if", as narrowing the scope of the indemnifying legislation. That narrowing purpose is only relevant if it comports with the language of the statute, where it may assist in resolving genuine ambiguity but not so as to override its plain words. The question here is whether the causal requirements of the legislation are satisfied where the owner's negligent direction compels the workers manually to unload their vehicle, itself stationary, and when the unloading mechanism was (as everyone knew) incapable of use or operation until repaired. 37 The third condition is a further causal condition. It is expressed in terms of the injury being not only caused by but also being as "a result of such use or operation". It is linked to the second condition. These cumulative conditions for sub-paragraph (iv) of the definition to apply emphasise the centrality of finding a sufficient causal connection between the use or operation of a defective vehicle, and the injury. They also emphasise that a mere "but for" condition will not suffice for injury to be a result of that condition, if another important condition must also be satisfied before the injury will occur. Here for the injury to result, there had to be not just the unremedied defect but the added negligent direction, made by the employer, to unload manually. 38 Accordingly, as a threshold matter, the fault of the owner causing the injury must be in the use or operation of the vehicle. It was not in dispute that this first condition was satisfied. I consider that use of the word "in" in that context means no more than "in relation to", or "in the course of". The initial focus is here on fault of the owner of the vehicle (or driver) qua owner (or driver) and not qua employer. It would be, I consider, satisfied simply by the owner's failure to fix the defect in the unloading mechanism. The later direction, essential for the injury to have resulted, was however made in the capacity of employer, not owner. Second, the injury must be caused during the use or operation of the vehicle. The latter is a temporal, not causal requirement. It depends here on whether a mere unloading operation on a stationery vehicle without use of the loading mechanism, is capable of being described as taking place "during" use or operation of the vehicle. This is when the vehicle's use or operation is only incidentally involved, because unloading took place on and from the trailer. For present purposes, I do not need to reach a concluded view on that, in light of my conclusion as to causality. 39 Third, the injury must be a result of such use or operation of the vehicle and be caused by, and be a result of, a defect in the vehicle. 40 If one views the matter simply as a conventional causal enquiry, the starting point in any such enquiry is to ask to what purpose is it directed. This is because the purpose of the enquiry conditions the outcome of any application of common sense to its answer, as Lord Hoffman cogently demonstrates in Environment Agency (formerly National Rivers Authority) v Empress Car Co. (Abertillery) Ltd [1999] 2 AC 22 at 29. He develops this theme in his lecture "Common Sense and Causing Loss", lecture to the Chancery Bar Association 15 June 1999. Such an approach is in no way inconsistent with the High Court's injunction to determine issues of causation by reference to practical common sense (March v E & M H Stramare Pty Limited (1991) 171 CLR 506 and cases following). That is to say, eschewing illusory metaphysical notions like "proximate cause" or "immediate cause". Such expressions were described by Sir Owen Dixon in his unpublished paper on "Causation and the Law", 1937 as "illusory in point of logic"; see "Owen Dixon" by Philip Ayres (the Miegunyah Press, 2003) at 88 fn 54, to whom I am indebted for access to the brief notes of that lecture. 41 The problem here is that there are a series of "but for" antecedent conditions, without which the accident would not have occurred. They pose the question which of these should be treated as causal in the legal sense. These antecedent conditions at least include: (i) the defect and break-down of the vehicle's unloading mechanism; (ii) the owner's failure to repair it; (iii) the action of the owner, now qua employer, of directing an unsafe system of work by requiring the unloading of heavy containers to take place manually; (iv) the heaviness of the containers; and (v) the susceptibility of the backs of those moving the heavy containers to injury. 42 One may readily relegate (iv) and (v) to background events, which are not therefore to be treated as causal. The owner's failure to repair the unloading mechanism (antecedent condition (ii)) satisfies the first part of the definition of "injury", namely, fault of the owner in use or operation of the vehicle. But until one answers the purpose question, one cannot determine whether condition (i) or condition (iii) has primacy as cause of the injury or indeed whether they are to be treated as equally causative. One certainly cannot resolve this by common sense alone. Indeed as Gummow J emphasises in Chappel v Hart (1998) 195 CLR 232 at [62] selection of the relevant "but for" antecedent as legally causative, requires the making of value judgments and the infusion of policy considerations. These are made first by identifying the purpose of establishing causality. Let us take a mundane example used by Lord Hoffman. Suppose one is establishing causation in the case of a stolen car radio from a carelessly unlocked car. The answer will differ depending on whether one is asking whether the thief is criminally liable. In that case, the thief is readily identified as the cause of the lost car radio, the other candidates becoming merely background. But if one is asking for purposes of tortious or contractual liability of a person left in charge of the car, say a parking attendant, the cause of the loss could well be the parking attendant's careless inattention. Finally, if one is asking for purposes of an insurance claim by the owner, the cause may become the owner leaving the car carelessly unlocked. 43 Here, the legal question is whether the circumstances brought the accident within the damage limitation regime of Part 6 of MAA or instead a workers' compensation statutory regime. This is with two consequences. First damages are recoverable only as so limited by the relevant Act. Second, such compensation as is payable is underpinned by a compulsory insurance scheme differing as between the two Acts. Thus the purpose of the enquiry is really which regime applies. It is not simply a contractual insurance question, whether the policy answer the claim. If it were, each Act might in theory apply; see below. Rather, it is whether the MAA legislation exclusively regulates this accident, with its statutory, not contractual consequences if it does, or otherwise the workers' compensation regime with its statutory and not contractual consequences. 44 The MAA thus provides that context. Moreover, consistently with the Minister's second reading speech, it announces its own purposes in s2A. Cost-saving is the predominant consideration, to which the breadth of its application is not irrelevant. If motor accident liability encompasses what is really employer liability, that purpose is clearly not served. Section 2B directs that construction of the Act which promotes its object to be preferred over a construction which does not. The intended constriction of the reach of the CTP policy under the Motor Accidents Scheme is clearly apparent from the Minister's second reading speech, quoted earlier. Any narrowing of its coverage readily supports the cost-saving objects of the MAA legislation. Any extension does the opposite. Thus the Minister emphasises that mere connection "in some way to the use of the motor vehicle" is not enough. The 1995 amendments were introduced to narrow the definition of injury and thus its reach. 45 No similar cost-saving purpose is announced in the Workers' Compensation Act, though for situations coming within its ambit, the scope of recovery is limited. It is simply concerned with a statutory employer compensation scheme for "a worker who has received an injury". The core statutory meaning of "injury" is injury "arising out of or in the course of employment". This injury clearly did so arise. That the employer happened also to be the owner of the car is coincidental and does not alter that fact. The negligent direction to carry out an unsafe system of work was clearly given in the capacity of employer, not truck owner. 46 When one's purpose for attributing causation is to determine whether a motor accident statutory regime should apply or a workers' compensation statutory regime, in relation to a particular physical injury, the mere passive existence of the defect in the owner's vehicle is of little significance compared to the abnormal or extraordinary behaviour of the employer, in disregard of safety, directing the employees to carry out an unsafe system of work. That is simply a matter of common sense, in the context of the statutory purpose identified. For as Lord Hoffman put it in Environmental Agency (at 34) "The true common sense distinction is …between acts and events which, although not necessarily foreseeable in the particular case are in the generality a normal fact of life, and acts or events which are abnormal and extraordinary". 47 We know that the unloading mechanism did break down from time to time. There was nothing extraordinary about that. It was moreover readily foreseeable. It was a "normal fact of life". What was extraordinary, what "made the difference" (as Jane Stapleton in "Perspectives on Causation" (OUP, 1999) puts it) was the abnormal, extraordinary direction of the employer. The fault of the employer was not merely failing to repair the defect qua owner. It lay in the employer's extraordinary and abnormal behaviour of insisting upon the unsafe mode of work to effect the unloading. The vehicle's "use or operation" in that unloading was incidental at best. 48 One may reach the same conclusion by another route. Where, as here the injury must be not only "caused by" the defect, but be "a result of" the defect, both defect and negligent employer direction are needed for the injury to "result". The defect alone could not suffice, where causality is expressed in this more demanding way. That is wholly consistent with the evident purpose of the MAA, expressed both in the Minister's speech and in the legislation itself.

CONCLUSION 49 I conclude that given the purpose and context of our causal enquiry, common sense renders the third and last antecedent, the employer's direction, legally causative, not the earlier antecedent defect. The defect should not be treated as legally causative, any more than the other background antecedents. The direction might not have occurred without the defect, but it was the direction that mattered. It constituted an abnormal and extraordinary intervention, without which the defect would not have produced any injury. But in any event, even if both defect and direction were causal in the sense that each materially contributed to the injury occurring, the injury was "a result of" both essential conditions in combination, though the negligent direction far more significant. The words "a result of" is more demanding in the way of causal connection than to be satisfied by the selection of one "but for" condition. This is more especially when the passive defect is clearly insufficient by itself and of far less significance than the employer's conscious intervention. The words "a result of" require identification of the conditions which were both necessary and sufficient to bring about the result (injury) and not merely one "but for" condition, here the defect alone. If someone had asked the workers, what caused your bad back, the commonsense answer is obvious, "Well, there was a defect in the unloading mechanism but nothing would have happened from that. What really mattered, was being ordered by our boss to unload manually instead of fixing the defect first". It follows that the definition of "injury" in the MAA is not applicable to the present case. 50 The appellant attempted to base its case on another ground. It contended that there was no "defect" in the vehicle, within the meaning of that word in sub-paragraph (iv) of the definition of "injury". Alternatively, it contended that if there were a "defect" in the vehicle, such defect was not causative of the plaintiff's injury, being directly caused by the use to which the employer put the vehicle, namely a use contrary to the intended mode of operation whereby the bar and roller system was intended to be used for mechanical unloading (rather than the manual unloading which was directed). 51 The first proposition, that there was no "defect" in the vehicle is, in my view, untenable. It appears to rely on a distinction made by Spigelman CJ in Zurich Australian Insurance Limited v CSR Limited (2001) 52 NSWLR 193 at 206 between what is a "defect" and what is "negligent user". This is notwithstanding that the Chief Justice described this as a distinction which "may not always prove helpful". The passage is as follows: "As these authorities suggest, fine issues of characterisation can arise in the application of the appropriate test to particular facts. The distinction between a "defect" and "negligent user" may not always prove helpful, as many sets of facts are capable of being characterised in both ways. The issue is unlikely to arise often under the (Motor Accidents Act), because one of the other subparagraphs of the definition of injury is likely to be applicable in the case of "negligent user"."

The Chief Justice went on to say (para [68]): "The defect must be "in" the vehicle. A vehicle is not "defective" only because its operation in a particular manner may lead to injury. However, the manner in which it is intended to operate may determine whether there is a "defect" "in" the vehicle." 52 The appellant attempted to argue that because there was here a negligent use of the vehicle by failing to use the out-of-repair lifting mechanism and instead doing the lifting manually, this was not a "defect" in the context of its "intended use". Alternatively it was not a "defect" in the sense of an inherent defect. 53 As a plain matter of language, a lifting mechanism that is out of repair, taking into account its intended use as a lifting mechanism, clearly represents a defect in the vehicle. Thus I would not accept the appellant's alternative proposition that there was no "defect" in the vehicle. 54 Turning to the second proposition, that if there were a defect in the vehicle, such defect fell outside the intended use and thus was not causative of the plaintiff's injury, it suffices to base my conclusion on the relevant injury not being causally a result of the use or operation of the vehicle. 55 The conclusion I have reached is supported not only by the second reading speech but by the earlier legislative history. It points to a legislative purpose, successively exercised, of narrowing the ambit of the Motor Accidents legislation since 1942. Thus the original Motor Accidents Act passed in 1942 provided for its application to injury which was "caused by or arose out of" the use of a motor vehicle; s35A. In the Act which replaced the 1942 legislation, the Motor Accidents Act 1988, the counterpart section 69 narrows its scope relevantly, to 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. 56 The Motor Accidents Amendment Act 1995 introduced by the second reading speech earlier quoted announced an intention further to amend the definition of "injury" so as "to adopt an approach similar to that taken in Queensland, South Australia and West Australia, where 'injury' is qualified in terms of its cause". The additional qualification added to the requirement of fault of the owner or driver is introduced by the emphatic "if, and only if". There is thus signalled by the language used as well as the Minister's speech, a legislative intention to narrow the scope of recoverable injuries. Spigelman CJ in Zurich Australian Insurance Limited at 200-1 clearly recognised that legislative purpose of restricting the operation of the motor accident legislation, while not elevating it to the point of prevailing over the plain language of the legislation. Here that language assists the narrowing purpose rather than stand in its way.

CONCLUSION 57 I would allow the appeal and propose the following orders. :

ORDERS 1. That the Appeal be allowed. 2. That the orders of Delaney DCJ be set aside. 3. In lieu thereof, that there be substituted a finding that the injury suffered by the Plaintiff did not fall within the definition of "injury" in s3 of the Motor Accidents Act 1988. 4. That there be judgment in favour of the second respondent, Garry Oliver, against the first respondent, GSF Australia Pty. Limited, in the sum of $450,000, such damages being agreed as assessed pursuant to the Workers Compensation Act 1987. 5. That there be judgment for the appellant against the first respondent in the proceedings between those parties in the District Court of NSW. 6. That the first respondent pay the appellant's costs of the proceedings in the District Court of NSW, and the costs of this Appeal. 58 DAVIES AJA: Mr Gary David Oliver was injured whilst working in his employment. The employer had a business in which food was packed for conveyance by airlines. The containers were too heavy for manual handling. The employer provided a truck with a trailer attached for the conveyance of the packed containers from the employer's premises to the airport. The trailer had rollers on the floor. At the employer's premises, the containers were put onto the rollers and pushed along the rollers by a forklift. At the airport, the containers were unloaded from the trailer by means of the trailer's motorised T-bar, which pushed the containers back along the rollers until they were discharged. On the day in question, the gearbox of the motorised T-bar was broken down and the T-bar was inoperable. 59 Mr Oliver, an employee who was not usually involved in the loading and unloading operations, was instructed to go to the airport with another employee and to assist to roll the containers to the rear of the trailer where they would be discharged. Mr Oliver and his co-worker were given pinch bars (crowbars) and were instructed to use these by inserting the bar between the rollers and levering the containers to the rear of the trailer. As each of the containers was very heavy (senior counsel for the appellant said 1.3 tonnes), the system of work which required the employees to use manual labour to move the containers along the rollers was hazardous. Not surprisingly, over the course of performing this work, Mr Oliver's back was injured. 60 The governing legislation is the definition of "injury" in the Motor Accidents Act, 1988 ("the Act") which provides: "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 … 61 The trailer, which was attached to the subject vehicle, was relevantly a part of the vehicle. cf Zurich Australian Insurance Limited v CSR Limited (2001) 52 NSWLR 193. 62 The definition first requires that the personal bodily injury be caused by the fault of the owner of the vehicle. Mr Oliver's injury was caused by the fault of the owner of the vehicle, the first respondent GSF Australia Pty Limited, which was Mr Oliver's employer. That is not in dispute. 63 The definition next requires that the fault be fault in the use or operation of the vehicle. The employer's fault was a fault in the use or operation of the vehicle. The vehicle ought not to have been used to transport the employer's goods whilst its unloading mechanism, the T-bar, was inoperable. The employer's goods were too heavy to be moved manually without a risk of injury of the type which Mr Oliver suffered. This point is also not in dispute. 64 The definition next requires that the injury be a result of and be caused during the use or operation of the vehicle. Counsel for the appellant, Mr K Rewell SC, with him Mr P Dooley of counsel, conceded that Mr Oliver's injury occurred during the use or operation of the vehicle. In my opinion, that concession is correct. The loading or unloading of a vehicle, such as the subject vehicle, which was designed to transport goods, may be a part of the use or operation of a vehicle. cf: NRMA Insurance Limited v NSW Grain Corporation (unreported, NSW Court of Appeal, 15 November 1995); Zurich Australian Insurance Limited v CSR Limited. The loading and unloading of the employer's vehicle were essential parts of the operation for which the vehicle was used, the transport of the loaded containers from the employer's premises to the airport. It was either conceded or not disputed that Mr Oliver's injury was a result of and was caused during the use or operation of the vehicle. 65 The final and significant issue is whether Mr Oliver's injury was a result of and was caused by a defect in the vehicle. I read the words "by a defect in the vehicle" as relating to and qualifying both words "result" and "caused". 66 It was submitted by Mr Rewell that the vehicle did not have a defect. That contention is without foundation. Once the gearbox to the T-bar had failed and the T-bar was inoperable, the vehicle was unsuitable for the function it was designed to perform, the transport of the employer's goods. See the examination of the concept of "defect" undertaken by Spigelman CJ in Zurich Australian Insurance Limited v CSR Limited at 202-7. 67 The final and crucial submission made by Mr Rewell was that Mr Oliver's injury was caused not by the defect in the vehicle but by the employer's negligence in directing that the defective vehicle be used and that the goods be moved manually during the unloading process. In my opinion, Mr Rewell's submission that the injury was caused by the use of the defective vehicle but not by the defect itself has a subtlety about it that does not meld well with the Common Law's robust, commonsense approach to issues of causation. 68 A similar and equally subtle argument was rejected by Clarke JA, with whom Priestley and Powell JJA agreed in NRMA Insurance Limited v NSW Grain Corporation. His Honour rejected the proposition that, because the employer had failed to employ a safe system of work, that meant that the employer's negligence was not negligence "in the use of the vehicle". Clarke JA rejected the contention that the issue of causation should be considered under the rubric of "efficient cause", "real cause" or "effective cause" holding that issues of causation should be determined upon a practical commonsense basis as laid down in March v E & MH Stramare Pty Limited (1991) 171 CLR 506, Halvorsen Boats Pty Limited v Robinson (1993) 31 NSWLR 1 and Fitzgerald v Penn (1954) 91 CLR 268. 69 I agree with the approach taken by Clarke JA. There is nothing in the content of the definition to require the term "caused" to carry a meaning more limited than the term ordinarily bears in the law of negligence. The words in the definition, "if, and only if,", do not narrow the meaning of the subsequent words "caused … by a defect in the vehicle". Indeed, the context of the definition is such as to attract the ordinary meaning of the term as it is used in negligence cases. I do not accept Mr Rewell's submission that the definition requires one to look for "a direct cause" or "the proximate cause" of the injury. Such an approach has long since been rejected. The definition requires one to determine whether, as a matter of fact, the injury resulted from and was caused by the defect in the vehicle. The approach enunciated in March v E & MH Stramare Pty Limited should be adopted. 70 It would be inconsistent with the terms of the definition if the employer's fault in the use or operation of the vehicle, which lay in its decision to use the vehicle for the transport of its goods when the vehicle was not fit for that use, was regarded as leading to the conclusion that the employee's injury, which was occasioned by and during such use and operation, did not result from and was not caused by the defect. The definition of "injury" contemplates that there will be both elements, injury caused by the negligence of the owner in the use and operation of the vehicle and injury resulting from and caused by a defect in the vehicle during the course of that use and operation. The definition contemplates that the relevant facts may satisfy all of these elements. 71 The definition operates in the context of claims for negligence. It defines those injuries to which the Act applies, the claims in respect of which are limited as the Act specifies. It follows that the concept of fault flows through all elements of the definition. The element "injury which is caused by the fault of the owner or driver" encompasses the element which follows, "injury caused … by a defect in the vehicle". In a case where sub-para (iv) of the definition applies, the defect will form part of the chain of events which led to the injury and will be one of the factors constituting the fault of the owner or driver. 72 Adopting a commonsense approach, the learned trial judge concluded that Mr Oliver's injury was a result of and was caused by the defect in the vehicle. I see no error in that conclusion. 73 I would dismiss the appeal with costs.

ORDERS OF THE COURT 1. Appeal dismissed 2. Appellant to pay the respondent's costs. **********

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