Allianz Australia Insurance Limited v Renneberg

Allianz Australia Insurance Limited v Renneberg - [2007] NSWCA 112 - NSWCA 2007 case summary — Zoe

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Thursday 17 May 2007 Allianz Australia Insurance Limited v Sandra May Renneberg Judgment 1 IPP JA: I agree with Bell J. 2 McColl JA: I agree with Bell J. 3 BELL J: This is an application for leave to appeal against the determination of his Honour, Judge Delaney on 4 May 2006 granting leave to the first opponent, Sandra May Renneberg, under s 109 of the Motor Accidents Compensation Act 1999 (NSW) (the MACA) to commence proceedings against the third opponent, the Liverpool City Council (the Council), in respect of a motor accident which occurred on 23 November 2000 (the accident). 4 Stephen Arthur Renneberg, the husband of the first opponent, was killed in the accident. He was employed by the second opponent, Workforce Market Pty Ltd, (Workforce), a labour-hire company which had a contract with the Council. The truck that the deceased was driving, an Isuzu rigid tip truck, was owned by the Council. It had been modified by the addition of a water tank on a steel frame, which was bolted to the tip tray. 5 Shortly before the accident the deceased and a co-worker, Jeffrey Cooke, filled the water tank and were on their way to the site of some road construction works. They drove west on Greendale Road, Greendale for approximately four kilometres before the accident. At the point of the accident the deceased was negotiating an "S" bend on Greendale Road. He successfully executed the first left turn of the bend, but during the execution of the right-hand turn the truck rolled to its left leaving the road surface and ultimately coming to rest on its nearside. Mr Cooke, who was a passenger, survived the accident. 6 Ms Renneberg commenced proceedings against Workforce by ordinary statement of claim filed in the District Court at Penrith on 22 November 2001. The proceedings were brought under the Compensation to Relatives Act 1897 (NSW) on behalf of Ms Renneberg and the couple's two children. Ms Renneberg pleaded that the deceased was in the course of his employment at the time of the accident. The particulars of negligence included the failure to devise, institute or maintain a safe system of work; failing to ensure that the vehicle was driven at a safe speed; failing to instruct the deceased or fellow employees properly or at all as to the safe driving of the vehicle; and causing or allowing the vehicle to be driven when it was dangerously overloaded. 7 On 31 January 2003 the Council was added to the proceedings as the second defendant. None of the requirements of the MACA had been complied with at this date. 8 The proceedings were listed for hearing before the Penrith District Court on 29 October 2003. Before that date Ms Renneberg was advised that the MACA might apply and of the need for a claim form to be lodged with the insurer of the truck and an exemption sought from the Motor Accidents Authority in respect of the proceedings. 9 Ms Renneberg discontinued the proceedings against the Council in October 2003. 10 On 29 October 2003 Ms Renneberg served a motor accident claim form on the Council and on the claimant, Allianz Australia Insurance Limited (Allianz), as its compulsory third party insurer.

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11 On or about 1 April 2004 Workforce brought a cross-claim against the Council, pleading that at the time of his death the deceased, although employed by Workforce, had been lent out to the Council pursuant to a labour-hire agreement. Workforce claimed indemnity from the Council in respect of any liability that it may have to pay damages. Particulars of negligence in the cross-claim included: (e) Fail to provide a governor to ensure that the speed of the water truck was not excessive in all the circumstances, having regard to the weight of the water in the truck. (f) Fail to provide a warning in the truck to any driver of the truck that it should not be driven in excess of an appropriate speed, which speed was far less than a normal speed limit. (g) Fail to provide baffling within tanker to ensure that the movement of the water within the tank would not cause the truck to become unstable. (h) Fail to appropriately fabricate the tank on the back of the truck. (i) Fail to ensure the truck, including the tank, was safe in all the circumstances. (k) Fail to ensure appropriate construction of the water tank with adequate baffles to prevent surging of water inside the tank. 12 The Council, by its defence to the cross-claim, pleaded, inter alia, that its liability, if any, is to be measured in accordance with the MACA. 13 On 15 September 2004 Allianz denied indemnity to the Council on the ground that the circumstances of the death were not within the MACA. 14 On 28 April 2004 a claims assessor with the Motor Accidents Authority certified that the claim was exempt from assessment pursuant to the provisions of s 92(1)(b) of the MACA. 15 On 5 January 2005 Allianz filed a motion claiming orders under s 79 of the MACA that it be joined as a party to the proceedings. 16 On 14 September 2005 Ms Renneberg filed an amended notice of motion claiming an extension of time in which to bring proceedings against the Council under s 109 of the MACA and an extension under s 60D(2) of the Limitation Act 1969 (NSW) with respect to the balance of her claims against the Council. 17 Ms Renneberg's amended notice of motion came on for hearing before the District Court at Parramatta on 30 March 2006. On Ms Renneberg's behalf, three affidavits sworn by her solicitor were read which set out the history of the proceedings. Also in evidence were two reports prepared by John Jamieson, a consulting engineer. Workforce obtained an expert report from Dirk De Bakker, an automotive mechanic. Mr De Bakker's report, dated 14 October 2004, was tendered on Ms Renneberg's behalf in support of the motion. 18 Two reports by Colin Simpson, a consulting industrial and automotive engineer, were tendered on behalf of Allianz. 19 Allianz read the affidavit of Tom Lyons, the solicitor with the conduct of the matter on its behalf. Mr Lyons set out a number of enquiries that he made between 18 and 23 May 2005 concerning the truck and the water tank. In summary, Mr Lyons said that he had been advised that the truck had been sold at auction on 14 February 2001 to an entity which had on- sold it to a company located in Melbourne. Thereafter it had been sold to another Melbourne based business. It appeared that at the time of the initial sale in February 2001 the water tank was no longer attached to the truck. Mr Lyons made inquiries of the NRMA Salvage Centre in an endeavour to locate the water tank. These inquiries were unsuccessful. 20 The motion was heard on Thursday 30 March 2006. His Honour delivered judgment the following Tuesday, 1 April 2006. His Honour granted leave to commence proceedings against the Council under s 60D of the Limitation Act. In dealing with the application under s 109 of the MACA his Honour found for the purposes of subsection (3) that Ms Renneberg had provided a full and satisfactory explanation to the Court for the delay, and that the total damages of all kinds likely to be awarded to her, should her claim succeed, would be not less than 25 per cent of the maximum amount that may be awarded for non-economic loss under s 134 as at the date of the motor accident. Neither of these findings is challenged. 21 It was necessary for Ms Renneberg to satisfy the Judge that the Council (and Allianz) could still have a fair trial notwithstanding the delay. It is his Honour's finding in this respect that is the subject of challenge. 22 His Honour commenced his reasons noting that: [3] …It was common ground that in considering any application to extend time the onus was on the applicant to show that it was fair and just that the discretion should be exercised in her favour. Liverpool City Council submitted that the application should fail and pointed to the facts and circumstances revealed in the affidavit evidence and the reports from experts dealing with the manner in which the accident occurred (WB 20). 23 His Honour went on to refer to the expert reports at paragraphs [10] - [14] and then to say: [17] The Council claimed actual prejudice because the truck was no longer available for inspection. It seems to me that this is a problem affecting both the applicant and the respondent and that that prejudice is not so significant that a fair trial could not be had.

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His Honour also said: [25] The Council submitted: · The present whereabouts of the vehicle are unknown. · As a defect in vehicle was claimed it could not now be inspected. · There were no witnesses other than Jeffrey Cooke. [26] As I mentioned, the problem about the condition of the vehicle is one that is common to both parties. Neither the experts for the applicant nor the respondent had access to the vehicle and had made assumptions from the other evidence. [27] In those circumstances I am not satisfied that there has been established by the respondent that there is significant prejudice which would prevent a fair trial being held. 24 Mr Rewell SC, who appeared for Allianz, pointed in particular to paragraphs [17] and [26]. The onus was upon Ms Renneberg to satisfy the Court that there was no significant prejudice such as to prevent the Council (and Allianz) from having a fair trial. Mr Rewell submitted that it was an error to approach the application upon a view that the trial might be fair because each of the parties were equally disadvantaged. While a respondent to an application may carry an evidentiary onus to raise any matters telling against the exercise of the discretion, the onus of establishing that the extension should be granted is at all times upon the applicant: Sauer v Allianz Australia Insurance Limited [2006] NSWCA 364. 25 Mr Rewell also submitted that the Judge did not consider the evidence of prejudice to the Council and Allianz or, if he did, he failed to give reasons explaining his finding that any prejudice is not so significant that a fair trial could not be held. 26 Mr Heazlewood, who appeared for Ms Renneberg, submitted that his Honour's reference in paragraph [17] to the non-availability of the truck as a being problem that affected his client as well as the Council was mere surplusage and it was clear that his Honour understood the test was whether any prejudice was so significant that a fair trial could not be had. Reading the judgment as a whole, I am unable to accept this contention. His Honour returned to the absence of the truck as a problem common to both parties at [26] and mis-stated the onus at [27]. Paragraphs [26] and [27] are in that part of the judgment directed to the s 60D application. However, his Honour's reasoning, which is exposed somewhat more fully in these paragraphs, echoes the reasoning in paragraph [17] dealing with the application under s 109. 27 Allianz has demonstrated error in the Judge's approach to the exercise of the discretion. It is appropriate that leave be granted to appeal against the determination. The Court heard submissions in respect of the application for leave and, upon the assumption that leave may be granted, the appeal.

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In Sauer Beazley JA said at [38]: In my opinion, the trial Judge erred in the respects alleged by the appellant. In the first place, it is apparent that the test in relation to the limitation period is one that relates to prejudice caused by the delay, although other prejudice may be relevant. Secondly, in Holt v Wynter it was said that in the absence of significant prejudice there may be no good reason to refuse an applicant leave to commence proceedings. In this case, of course, the delay has not caused any prejudice - the prejudice of not having the evidence of the deceased was there from the outset. But in any event, no significant prejudice has been demonstrated. 31 Allianz submitted that, to the extent consideration is given to whether the prejudice arises by reason of the delay (a consideration which it did not concede to be relevant) a claim under the MACA is to be approached on the basis that the legislative scheme provides for notice to be given to the CTP insurer within six months of the accident. In its submission it is reasonable to consider that it may have been able to locate and inspect the truck and/or the tank had it commenced inquiries within this timeframe. I accept that is so. 32 In Mr Heazlewood's submission, as a matter of practical reality Allianz faces no prejudice because it must meet the issues raised by the MACA claim in any event. This is because Workforce's cross-claim against the Council includes the particulars of negligence that I have set out at [9] above, which raise the motor accident claim. The limitation on the commencement of proceedings by Ms Renneberg under s 109 does not apply to the cross-claim. 33 Mr Rewell submitted that Allianz faces prejudice if Ms Renneberg is given leave to proceed with her MACA claim against the Council, distinct from any risk that it faces in dealing with the same issues on the cross-claim. This is because Ms Renneberg must succeed against Workforce before any issue of liability under the cross-claim arises. Even if she succeeds against Workforce, there remains the question of whether Workforce, in turn, succeeds on its cross-claim against the Council and, in the event that it does, whether the Council's liability is as de-facto employer or under the MACA Act. 34 In the event Ms Renneberg succeeds against Workforce, it would seem from the pleading of the cross-claim and the Council's defence to it that the "motor accident" claim will inevitably be litigated. It remains, as Mr Rewell submitted, in the event that Workforce (the deceased's employer) is not liable to Ms Renneberg the cross-claim would fall away. 35 Mr Rewell commenced his submissions on the prejudice the Council and Allianz face in meeting the claim by drawing attention to the definition of "death" under s 3 of the MACA: "death" means death 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 death is a result of and is caused during: (a) the driving of the vehicle; or (b) a collision, or action taken to avoid a collision, with the vehicle; (c) the vehicle's running out of control; or (d) such use or operation by a defect in the vehicle. 36 Mr Rewell noted that, to the extent the case brought against the Council is to be made out under the MACA, it will be necessary for Ms Renneberg to establish that the accident was caused by a defect in the vehicle or that the vehicle ran out of control because of the way it was constructed or modified by the Council. In his submission the two probably come down to the same thing. Mr Rewell's point is that the case against the Council under the MACA will turn on whether the accident was caused by a defect in the truck; as distinct from a finding that the modification to the truck made it more difficult to drive, giving rise to a need for special training in handling it: Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261; 52 NSWLR 193; Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 79 ALJR 1079. 37 The actual prejudice on which reliance is placed in meeting any claim under the MACA arises from the fact that neither the truck nor the tank is available for inspection. The inability to examine both is relevant to the capacity to meet a case that the attachment of the tank to the truck, or the construction of the tank, or both, amounted to a defect in the vehicle that was causative of the accident.

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39 It is necessary to look at the way Ms Renneberg pleads her claim against the Council in the further amended statement of claim, which was filed on 28 June 2006 pursuant to the grant of leave. To the extent that the claim is one to which the MACA may apply, the particulars of negligence relied upon are: (e) Provided the truck which was unsafe in all the circumstances. (h) Failed to provide a governor to ensure that the speed of the water truck was not excessive in all the circumstances, having regard to the weight of the water in the truck. (i) Failed to provide a warning in the truck to any driver of the truck that it should not be driven in excess of an appropriate speed, which speed was far less than a normal speed limit. (j) Failed to provide baffling within the tanker of the truck to ensure that the movement of the water within the tank would not cause the truck to become unstable. (k) Failed to appropriately fabricate the tank on the back of the truck. 40 Particulars (e) and (k) are so general as to provide no information of the case that is to be advanced. Mr Heazlewood acknowledged that the particulars are inadequate and require amendment. Mr Rewell apprehends that if the claim is allowed to go forward, Ms Renneberg will seek to make a case that the truck with its water tank fully laden was an unusually high vehicle which was subject to rolling-over and that this, in fact, caused the accident. Allianz is said to be prejudiced in meeting such a case because in the absence of evidence of the dimensions of the tank, and its position on the tip-tray, the truck's centre of gravity at the time of the accident cannot be determined with precision. 41 No matter of prejudice was identified with respect to particulars (h) or (i). It is noted that none of the expert reports touch on any asserted failure to provide a governor to ensure that the speed of the water truck was not excessive in all the circumstances. 42 It was submitted that it is not possible to know whether the water tank became detached from the truck as the result of the truck overturning or whether it had begun to detach before the truck overturned. Mr Rewell put that a mechanical examination of the truck shortly after the accident may have enabled this question to be determined. It is to be observed that none of the expert witnesses identify this matter as a consideration essential to their investigations.

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47 Each of the expert witnesses touches on the truck's centre of gravity. In his first report Mr Jamieson states: From a physics viewpoint this crash was a relatively simple one to explain. The centre of gravity of this "hybrid" vehicle was unusually high which, by definition made its rollover threshold unusually low and thus made it vulnerable to rollover. In the context of the second curve on this crash site, if such a vehicle was travelling faster than about 40-45 km/h then it would be vulnerable to roll over. It would be possible to determine the exact rollover threshold of the vehicle but it would require a full examination of the vehicle and dynamic testing, particularly with respect to the internal baffle design of the mounted tank with the tipper section of the Isuzu. For the purpose of this investigation, it was not considered that such precise determination was necessary, given that the passenger suggested the driver may have been travelling at about 60 km/h when the incident occurred. Therefore, it is considered almost certain that at such a speed, the Critical Speed of this curve would not allow such a relatively high vehicle to successfully traverse such a curve (WB 130). 48 After he had completed his report Mr Jamieson was shown the photogrammetry plan and copies of the photographs of the truck and the tank which were taken at the scene. He prepared a supplementary report in which he said: The on-scene crash photographs confirmed the earlier statements reviewed from investigating police. The police photogrammetry plan noted that the truck left curve "yaw marks" of a radius of about 32 metres. This would "normally" mean that if a vehicle was supplied with the "expected" amount of friction supply on the road, combined with the 10 per cent superelevation measured by police, then the "critical" or slide-off speed would be attained at a speed of about 45 km/h. (Austroads, 1989). However, this case involved a specially modified vehicle carrying a laden water tank (see Appendix 1). Research supplied by Austroads (ibid) suggests that such "high" trucks would start to become unstable at the relatively low transverse acceleration figure of about 0.25 g. In other words, such a truck would rollover before it slid out. Using this relatively low transverse acceleration estimate, a rollover speed threshold was calculated to be 31 km/h. Therefore, based on this new material the conclusions of the earlier report remain unchanged (WB 183). 49 The precise determination of the centre of gravity does not appear necessary for Mr Jamieson's opinion, which is based on an acceptance of Mr Cooke's account, of the speed at which the truck was travelling at the time of the accident.

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The only material with which Mr Simpson was briefed comprised copies of the pleadings and copies of Mr De Bakker's and Mr Jamieson's reports. 54 Mr Simpson observes that since neither the truck nor the tank are able to be inspected he and other investigating personnel are at a disadvantage in accurately predicting the stability of the loaded truck in the condition that it appears to have been at the time of the accident (WB 268). He comments that this is a particular difficulty with respect to the water tank, the physical dimensions of which are not known. Mr Simpson does calculate the centre of gravity of the loaded truck. In doing so he makes a number of assumptions. These are set out (WB 268-274). They include the dimensions of the truck based on the manufacturer's specifications, which are attached to Mr De Bakker's report, and the information concerning the weight of the truck and the tank recorded by Mr Rottenbury. 55 Mr Simpson states that the known information and his experience enable him to calculate the likely overall weight of the truck and individual axle weights with reasonable accuracy (WB 270). He concludes that the truck was probably overloaded by reference to the legal axle loading requirements, but that it was not overloaded to any significant degree by reference to the manufacturer's specifications. Mr Simpson is able to discount the likelihood of the weight alone being a cause of the accident (WB 273). He says that these calculations do not take into account the propensity for vehicles to roll as the result of the centre of gravity height of the load (WB 273), and he moves to a consideration of this issue. 56 Mr Simpson assumes that the tank had a capacity of 8000 litres (this is the assumption Mr Jamieson made, it is based on Mr Rottenbury's statement) and that it was 3900 mm in length. The latter estimate is based on the assumption that the tank almost filled the length of the tipping body of the truck (WB 271), which may be thought consistent with the photographic and other evidence. Mr Simpson considers the height of the tank, noting that if it was rectangular in cross-section, it would be approximately 1.37 metres high whereas if it was elliptical with a major diameter of 1.5 metres it would have been 1.75 metres high. He comments that it is necessary to add the height of any legs (or the like) welded to the tank, which would serve to increase the overall length of the unit (WB 274). 57 Despite not knowing the shape of the tank, and having no information concerning whether it was attached to the tray by legs, or in some other fashion, Mr Simpson calculated that the truck's centre of gravity at the time of the accident was 800 mm to 900 mm above the tray level of the truck body. This is some 400 mm to 500 mm above the centre of gravity had the truck been loaded with soil to the top of the sides of the tipping body. In Mr Simpson's opinion, the centre of gravity of the tank loaded with water is significantly higher than normal, and, thus, the propensity of the truck to overturn through a given lateral acceleration would be increased. The loaded truck had a propensity to overturn on a given bend compared to its "normal" configuration, but in Mr Simpson's opinion, it is not possible to quantify the extra propensity for overturning. 58 Following receipt of a further letter of instruction, Mr Simpson prepared a supplementary report. In this he says that in the absence of accurate measurements of the truck and, more particularly the water tank, it is not possible to accurately predict or calculate the stability or otherwise of the loaded vehicle. It is noteworthy that despite the fact that Mr Simpson's first report made plain that he did not know the shape of the tank, or whether it was attached to the tray on legs or in some other way, those instructing him do not appear to have supplied him with copies of the photogrammetry plan or the photographs of the truck and the tray at the time of requesting a supplementary report. These materials would, at the least, have resolved the question of the shape of the tank and the likely increase in height, if any, brought about by its attachment by the steel frame to the tray of the truck. 59 Mr Simpson in his supplementary report does not resile from the opinions expressed in the first report, including his estimate of the truck's centre of gravity at the time of the accident.

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60 The opinions expressed by Mr Jamieson and Mr De Bakker include that the laden truck had a high centre of gravity, which affected its stability. Neither depends upon a precise calculation of the centre of gravity. Neither says that it is not possible to calculate the truck's centre of gravity. The weight of the tank is known, measurements of its weight before and after the water was emptied were recorded and there are photographs and a scale plan of it. The evidence does not establish that the centre of gravity of the laden truck cannot be determined with a reasonable degree of accuracy. 61 I do not consider, in light of the opinions expressed by each of the experts, that the inability to determine the precise centre of gravity of the laden truck at the time of the accident is a matter that will occasion significant prejudice to Allianz should the claim be permitted to proceed. 62 The second matter relied upon is the inability to inspect the tank to determine if it was fitted with baffles. In Mr De Bakker's opinion the absence of baffles was likely to have been a cause of the accident. Mr Simpson takes issue with this. He states: Internal baffling, however, is only of significance when the tank is partially filled. As the writer understands, Mr Cooke and the deceased filled the tank to its capacity whilst leaving a small amount of free space (known as ullage) in the top of the tank. Under these circumstances the writer is of the view that even if the tank was not fitted with internal baffling then that lack of baffling would have been of relatively minor significance as to the cause of the accident event (WB 275-286). 63 Mr Rewell submitted the fact that his expert discounted the absence of baffles as causative of the accident was no answer to the prejudice that Allianz faces in not being able to inspect the tank: Mr Simpson's opinion may not be accepted. 64 Mr Rewell pointed to Mr De Bakker's assertion that, "a tank of this size being constructed without baffles for use on the road is a recipe for disaster" (WB 215). It is not clear that this opinion is relevant to the MACA claim as distinct from the claim against the Council as defacto employer. The issue for the MACA claim turns on whether the truck, as modified by the attachment of the tank, was defective in that the uncontrolled movement of water in it (assuming that it was not fitted with baffles) was causative of the accident. There is a difference of opinion between Mr De Bakker and Mr Simpson on this question. The prejudice of which Allianz complains is the inability to establish, if it be the case, that the tank was fitted with baffles.

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