Blayney Crane Services v Western Freight Management

3. Judgment in favour of the first and second defendants against the third and fourth defendants for the sum of $31,502.91 plus interest as per order 1.

4. Verdict for the plaintiff in respect of the third and fourth defendants' cross claim and for the first and second defendants in respect of the third and fourth defendants' cross claim and third party notice." 7 On 27 January 2004 the Magistrate amended the costs order so that: "Third and Fourth Defendants to pay the Plaintiff's costs on an indemnity basis from 6 May 2003 and on a party/party basis before hand. The Third and Fourth Defendants are to pay the First and Second Defendant's costs from 18 July 2003 on an indemnity basis and on a party/party basis before that." 8 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 69(2) of the Local Courts (Civil Claims) Act 1970 (NSW) (the Act) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156 and more recently in Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082. It cannot be said that the Tribunal member acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. 9 Section 69(4) of the Act provides that the court may determine an appeal by either (a) setting the judgment or order aside or (b) by varying the terms of the judgment or order or (c) by setting the judgment or order aside and remitting the matter for determination in accordance with the court's directions or (d) by dismissing the appeal.

Grounds of appeal 10 The plaintiffs' grounds of appeal are that the Magistrate erred in law by: firstly, failing to provide reasons or adequate reasons for her finding that the automatic power divider on the plaintiffs' crane was not working; secondly, that the Magistrate erred in law in failing to provide adequate reasons for her finding the plaintiffs were negligent in failing to engage the power divider on the plaintiff's crane; thirdly, finding that the plaintiffs were negligent in failing to engage the power divider on the plaintiffs' crane; fourthly, finding in the absence of evidence or sufficient evidence that the automatic power divider on the plaintiffs' crane was not working; fifthly, finding in the absence of evidence or sufficient evidence that the failure of the second plaintiff to engage the power divider caused the first defendant's truck to fall over and thereby suffer damage; sixthly, finding contrary to the first defendant's pleading that the failure of the second plaintiff to engage the power divider caused first defendant's truck to fall over and thereby suffer damage; and seventhly, failing to find that first defendant had failed to satisfy its burden of proof in establishing negligence against the plaintiffs. I have grouped these grounds into two main issues - namely, firstly, the Magistrate's findings on the automatic power divider; and secondly, the issue of foreseeability and negligence. 11 The cross-claimants to the cross-appeal's grounds of appeal are that firstly, the trial magistrate erred in law in finding that the third defendant/second cross-claimant (Mr Burden) was a party to the agreement (towage agreement) between the first defendant/third cross-defendant (Western Freight) and the second defendant/first cross-claimant (Johnson's Towing); secondly, further, and to the extent referable to Mr Burden in the alternative to ground 1, upon finding that Western Freight consented to Johnson's Towing and Mr Burden using the services of the first plaintiff/first cross-defendant (Blayney Crane) in the performance of the towage agreement, the trial magistrate erred in law in failing to find that the consent resulted in the towage agreement containing a term to the effect that Johnson's Towing and Mr Burden were permitted to engage an independent contractor, Blayney Crane, in partial discharge of the towage agreement and to the extent that part of the towage agreement was performed by Blayney Crane as independent contractor, Johnson's Towing and Mr Burden bore no vicarious responsibility; thirdly, further, and to the extent referable to Mr Burden in the alternative to ground 1, the trial magistrate erred in law in finding that Johnson's Towing and Mr Burden breached the towage agreement with Western Freight; fourthly, further and in the alternative to grounds 2 and 3, and to the extent referable to Mr Burden in the alternative to ground 1, the trial magistrate erred in law in finding that Johnson's Towing and Mr Burden breached the towage agreement with Western Freight in circumstances where her Worship (as she then was) found that there was an agreement between Western Freight on the one hand and Johnson's Towing and Mr Burden on the other, for Johnson's Towing and Mr Burden to exercise due skill and care in pulling Western Freight's truck out of the bog, safely and without damage to it and found no failure on the part of Johnson's Towing and Mr Burden to exercise due skill and care in the undertaking of that activity; and fifthly, the trial magistrate erred in not providing adequate reasons as to the basis upon which Johnson's Towing and Mr Burden breached the towage agreement with Western Freight. 12 A Magistrate has a duty to give proper reasoning for their decision, as a failure to do so is an error of law (see Pettitt v Dunkley (1971) 1 NSWLR 376 & Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247). As set out in Maynard v Dabinett [1999] NSWCA 295 per Stein and Giles JJA, at [16]-[18] and Digitech (Australia) Ltd v Brand & Ors [2004] NSWCA 58 at [282-291]. 13 At page 14 the Magistrate made the following findings of fact as to how the truck came to fall on its side. It is important to bear in mind that the truck was being pulled backwards from the rear out of the bog. Her Honour found: "The first defendant, Johnson's Towing, through the second defendant, Mr Burden contracted with the third defendant. Blayney Cranes, through the fourth defendant, Mr Scott, to use the third defendant's crane to pull the bogged truck out of the bog. Mr Scott attended the site with a crane. He stayed and operated the crane. He did not simply deliver the crane and leave, leaving the crane to be operated by Mr Burden. From this it can be inferred that the third and fourth defendants were contracted not simply to supply a crane but also to provide Mr Scott's expertise in operating the crane. Both Mr Burden and Mr Scott acted on this basis. Mr Scott did not request Mr Burden to use his tow truck jointly with Mr Scott's crane, to tow or stabilize the plaintiff's truck. Mr Burden considered the need to use his truck to stabilise the plaintiff's truck, but decided it was not necessary given the position and angle of the truck. Mr Burden connected his chain, with a certified and approved towing hook, to the rear of the plaintiff's trailer and to Mr Scott's crane truck. Mr Scott did not inspect the chain or Mr Burden's connection of the chain; he was in the cabin of his crane truck. The crane began to pull the truck, which began to move backwards out of the bog. During the towing attempt the chain did not break, the chain remained taut between the crane and the truck, and the crane did not lurch forwards. There was one continuous movement of the crane pulling the truck backwards out of the bog then a bang was heard, after which the truck and the crane moved together in the opposite direction from which they had been moving. The truck rolled forwards, back into the bog, then fell on its left side. Mr Vitnell, the driver, was in the driver's seat of the truck, attempting to drive the truck to assist in its removal from the bog, and holding the steering wheel of the truck, at the time it rolled back into the bog and fell on its passenger side. He fell from the driver's seat to the passenger door. The chain became slack, and became disconnected from the crane, after the truck rolled on its side. The "bang" heard by witnesses was not the sound of the chain breaking or rebounding against the metal of the crane, having become disconnected while the crane was pulling the truck. A rear axle of the crane broke. The crane could not be driven. Mr Scott confirmed to Mr Burden that he did not have his power divider engaged. He engaged the power divider, and was able to drive the crane. If the crane was fitted with an automatic power divider, it was not operating when the axle broke. The inference to be drawn is that the cause of truck rolling back into the bog, falling over and being damaged was that the axle on the crane broke, the crane's power divider was not engaged, the crane could not continue to drive forwards and pull the truck, and the truck rolled back into the bog. I am unable to say, on the unclear state of the evidence, what caused the axle to break, but I am satisfied it was not due to any action of the chain slipping, losing tension or becoming disconnected during the towing process."

The finding in relation to automatic power divider 14 It was submitted on behalf of the plaintiffs that the Magistrate failed to give reasons or adequate reasons for her finding that the automatic power divider on Blayney Crane's crane was not working and that the Blayney Crane were negligent. Blayney Crane's counsel submitted that the critical evidence of the expert Mr Garufi on this issue was ignored and that the finding "that if the crane was fitted with an automatic power divider, it was not operating when the axle broke" was perverse. In his written submissions, counsel for the plaintiffs suggested that the Magistrate in fact made a contrary finding and did not support her finding by any stated reasoning or reference to what, if any, evidence she relied upon. 15 At page 12 of her judgment, the Magistrate referred to Mr Garufi's evidence on the automatic power divider and summarized it as follows: 16 Her Honour stated: "He [Mr Garufi] said by reference to the component numbers in Mr Scott's crane it is fitted with an automatic power divider, which activates automatically without any operator intervention. Wheel slippage will automatically engage the power divider, which will automatically disengage when all wheels turn at the same speed. He agreed that when asked to prepare an earlier affidavit he had been asked to assume that the power divider in Mr Scott's truck needed to be manually engaged. He said there is a manual power divider as well, operated by a switch. The manual power driver can be used in the event of failure of the automatic power divider so that the vehicle can be driven. If the automatic power divider was not working the vehicle could not be driven, unless the manual power divider was engaged. If the automatic power divider was working he would expect the driver would be aware of that."

and "I note that Mr Ganufi did not observe the actual broken axle, but relied on Mr Scott's description. He agreed that he assumed that the chain became dislodged and that that caused sufficient force to snap one axle. When asked if that would occur if the power divider was on, he said that at the time the chain released the power divider would cease to operate and as the chain took up tension again a shock load would be put on the wheel. He said if the cabin came off altogether there was no reason for the axle to break. In his opinion a probable cause of the axle breaking was that the chain had slipped, as Mr Scott said in his statement. That part of Mr Scott's statement was not admitted in evidence Mr Scott said in evidence he did not see the chain move. He said it felt like the chain moved, but agreed that was an assumption and speculation on his part." 17 The Magistrate's summary of Mr Garufi's evidence contained in the first paragraph above is an accurate one. The plaintiff's counsel submitted that as Mr Garufi was an expert and as his evidence as to the existence of the automatic power divider was uncontested, it should have been accepted. However there was evidence by Mr Burden who after having described the function of a power divider (t 29.49; 30.26) went on to state that a vehicle can still progress forward with a broken axle if the power divider (manually operated) is engaged (t 39.21). Mr Burden also relayed the conversation he had with the second plaintiff Mr Scott, where Mr Scott admitted that he had not engaged the manually operated power divider and once the divider was engaged the crane moved forward off the road (t 41.6). 18 Mr Scott gave evidence that he was familiar with the function, operation and use of the manually activated power divider and that he had not engaged it until after the incident enabling him to drive the vehicle (t 63.21-64). His evidence was to the effect that his vehicle would not move until the manual power divider was engaged. Mr Scott was unaware at the time of the incident, that an automatic power divider existed in his vehicle, but he knew that he could obtain the best traction by engaging the manual power divider (t 74.58; 75.46). Mr Scott also admitted that his failure to engage the manual power divider caused the accident. 19 At page 15 of her reasons for decision the Magistrate held: "If the crane was fitted with an automatic power divider, it was not operating when the axle broke.

The inference to be drawn is that the cause of the truck rolling back into the bog, falling over and being damaged was that the axle on the crane broke, the crane's power divider was not engaged, the crane could not continue to drive forwards and pull the truck, and the truck rolled back into the bog. I am unable to say, on the unclear state of the evidence, what caused the axle to break, but I am satisfied it was not due to any action of the chain slipping, losing tension or becoming disconnected during the towing process." 20 It seems to me that it was open for the Magistrate to find that firstly, the automatic power divider would cease to function when the axle on the crane broke; secondly, even if there was an automatic power divider, the manual power divider provided the best traction; thirdly, if the manual power divider had been engaged regardless of whether or not there was an automatic power divider in existence, the manual power divider provided the best traction and would have continued to operate even when the axle broke; and fourthly, if the power divider had been operating when the axle broke the truck would not have gone forwards into the bog. The existence of the automatic power divider was one issue, the use to which it or the manual power divider should be put is another. It is my view that it was open to the Magistrate to reach the conclusion she did in relation to the power divider. There is no error of law.

Foreseeability; Negligence 21 The plaintiff submitted that the Magistrate found that the crane's broken axle caused the truck to roll back. According to the plaintiff the essence of the Magistrate's findings that was the failure to manually engage the power divider was negligent because it meant that when the axle broke, the crane could not be driven. Blayney Crane submitted that to justify that conclusion, Western Freight had the onus to prove that there was a reasonably foreseeable risk that the axle would break. According to the plaintiff, the Magistrate did not consider this in her finding of negligence as no reference is made to it at all in that context and/or alternatively there is a lack of reasoning which constitutes an error of law. 22 The plaintiff further submitted that it could not be inferred that the Magistrate made a finding of foreseeability, and such an inference would be contrary to her earlier finding at page 16 of her judgment. At p 16, the Magistrate made a finding that it was perhaps not foreseeable that Mr Scott's crane would break an axle, but it was foreseeable that in the course of pulling the truck backwards it may go forwards again and fall over. 23 The Magistrate made the following finding: "I am satisfied on the evidence that Mr Scott was negligent in not engaging the power divider on the crane, so that when the crane's axle broke, the crane could not move forward further and the truck, no longer being pulled by the crane, rolled back into the bog and fell over." 24 It is apt, I think to repeat the well established test of foreseeability by Mason J in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47 where his Honour says: "A risk of injury which is quite unlikely to occur… may nevertheless be plainly foreseeable. Consequently, when we speak of a risk of injury as being 'foreseeable' we are not making any statement as to the probability or improbability of its occurrence, save that we are implicitly asserting that the risk is not one that is far-fetched or fanciful. Although it is true to say that in many cases the greater the degree of probability of the occurrence of the risk the more readily it will be perceived to be a risk, it certainly does not follow that a risk which is unlikely to occur is not foreseeable."

And at para 48: "…a risk of injury which is remote in the sense that it is extremely unlikely to occur may nevertheless constitute a foreseeable risk. A risk which is not far-fetched or fanciful is real and therefore foreseeable." 25 As put by Fleming in The Law of Torts 9th ed at p 246: "For the sake of convenient analysis of cause problems, it has been a long-standing judicial technique to isolate certain intervening forces which, in combination with the defendant's fault, precipitate or aggravate the plaintiff's injury. The question then arises whether the original wrongdoer is to be held for loss contributed to by the external force or whether, in the favoured legal vernacular, it 'snapped the chain of causation'. An intervening force is one which actively operates in producing the harm after the actor's negligent act or omission has been committed." 26 Whether the breaking of the crane's axle was sufficient an intervening act to break the direct chain of causation (novus actus interveniens) between the original negligent act and the subsequent injury suffered is to be decided by tribunals of fact as a matter of commonsense and experience (see March v E & M H Stramare Pty Ltd (1991) 171 CLR 506 at 522; Bennett v Minister of Community Welfare (1992) 176 CLR 408 at 413; Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 6) but is very much a matter of circumstance and degree (see Chapman v Hearse (1961) 106 CLR 112). The Magistrate found that the axle breaking did not break the chain of causation because it was not foreseeable. The Magistrate also held that Blayney Crane was negligent because Mr Scott did not engage the power divider, which led directly to Western Freight's truck being damaged. It was foreseeable that in the course of pulling the truck backwards it may go forwards again and fall over. It was open to the Magistrate to make this finding on foreseeability and damage. There is no error of law.

The Johnson cross-appeal 27 In the Local Court, Johnson claimed from Blayney Crane an indemnity for any judgment in favour of the plaintiff against them on the basis of negligence or breach of contract by the third and fourth defendants, who deny any agreement with the plaintiff any agreement involving the fourth defendant, any breach of agreement, any duty of care or any negligence, although the third defendant did not dispute its vicarious liability for any negligence (which was denied) by Mr Scott in the course of his employment. 28 Johnson on appeal says that the Magistrate erred in her contractual analysis between the parties and the result flowing from it. According to Johnson's Towing the finding of liability was based upon a strict liability flowing from the fact that a contract continued between the parties without reference to the retainer of the independent contractor, and the Magistrate fell into error in failing to apply the principles of Stevens v Brodribb Sawmilling Company Pty Limited (1986) 160 CLR 16 that had been referred to earlier in the judgment. 29 Johnson's Towing submitted that while recognising the obligation to exercise "due care and skill" the Magistrate appears to have characterised the breach by Johnson's Towing merely on the basis that the truck was not pulled out of the bog, safely and without damage and that the Magistrate focussed on the result, without having regard to whether or not Johnson's Towing discharged its contractual obligations by the proper exercise of due care and skill. 30 The Magistrate referred to the principle in Stevens that a person will not be liable for the negligent acts or omissions of a competent independent contractor employed by him which cause injury or damage to third parties. There are exceptions to that proposition, one being that where precautions can be taken against loss or damage and the failure of a person to ensure his independent contractor takes those precautions amounts to an authorisation of the act or omission causing the harm then he or she will also be liable. 31 As noted in Halsbury's Laws of Australia at 165-1055, "a principal will not, in general, bear vicarious liability for the tortious acts of an independent contractor engaged by the principal to perform work on his or her behalf or for the tortious acts of employees of the independent contractor, where the work is such that, in the natural course of things, dangers are likely. However, where the principal bears a personal duty, it cannot be displaced by delegating performance to an independent contractor, where the principal authorises or directs the act constituting the tort or some act necessarily leading to it." 32 Her Honour made the following findings: "The first defendant, Johnson's Towing, through the second defendant, Mr Burden, contracted with the third defendant, Blayney Cranes, through the fourth defendant, Mr Scott, to use the third defendant's crane to pull the bogged truck out of the bog. Mr Scott attended the site with a crane. He stayed and operated the crane. He did not simply deliver the crane and leave, leaving the crane to be operated by Mr Burden. From this it can be inferred that the third and fourth defendants were contracted not simply to supply a crane but also to provide Mr Scott's expertise in operating the crane. Both Mr Burden and Mr Scott acted on this basis. (J 14) … Mr Burden, despite retaining control on the site was not obliged to remain Mr Scott, a competent and experienced crane driver, to engage his power divider in the conditions and was not negligent in not so doing. (J 16) and There was a contract between the plaintiff and the first and second defendants, to pull the plaintiff's truck out of the bog, safely and without damage to the truck, applying due care and skill. When the second and third defendants contracted with the third and fourth defendants to assist in that task, the contract between the plaintiff and the first and second defendants was not terminated or abandoned, but continued. It apparent from the evidence of the conversations between Mr Burden and Mr Peters after Mr Scott arrived at the site that both the plaintiff and the first and second defendants were proceeding on the basis that the contract between them was continuing. Mr Burden's actions in remaining at the site, contracting Mr Peters, guiding Mr Scott into position to be connected to the truck, connecting the chain to the crane, and directing the truck driver, Mr Vitnell, to assist in the removal of the truck, are indicia that the contract continued. That the contract was breached - the first and second defendants did not do what they were contracted to do, and are liable to the plaintiff for the damage to the plaintiff's truck." (J 17) 33 The Magistrate's reasoning was that Mr Scott on behalf of Blayney Crane was a competent and experience crane driver and would have been expected to engage his power divider and Mr Burden on behalf of Johnson's Towing was not liable for the acts of Blayney Crane. This finding falls within the principle that a principle (Johnson Towing) will not be liable for the acts of an independent contractor (Blayney Crane) which cause injury or damage to a third party (Western Freight). There is no error of law. 34 The appeal is dismissed. The Magistrate's orders dated 14 November 2003 are affirmed. The amended summons is dismissed. 35 Costs are reserved.

(2) The Magistrate's orders dated 14 November 2003 are affirmed.

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