Fawcett v BHP By-Products Pty Ltd

The Caldwell mechanical loader with which we are concerned was the only vehicle covered by the policy issued by Lloyd's, which insured the owner and driver against liability in respect of bodily injury to any person caused by or arising out of the use of the loader and contained the following provisions: "Limitation as to use - premium has been paid only for the use of the motor vehicle for the purposes set out in item 17a of the schedule annexed hereto. The motor vehicle must not be used for any other purpose unless the policy is endorsed and extra premium (if any) paid". Item 17a was as follows: "Miscellaneous - Any tractor and any motor vehicle not included in item 12, 15 or 16 which comprises an excavator, road-grader, tar-boiler, street-flusher, chaff-cutter, crane or other machinery or apparatus and which is not constructed principally for the conveyance of persons or goods". The loader in question was not included in item 12, 15 or 16. The provisions I have quoted indicate that the Caldwell mechanical loader was regarded by the parties as a motor vehicle - as it clearly was - and that the use to which it was anticipated that it would be put extended to its use as a loader. Prima facie, therefore, Jacobs' injury was "bodily injury caused by or arising out of the use of the motor vehicle", but the contention for the appellant is that the Act does not relate to the use of the machine as a loader but only to its use as a vehicle and that the policy should be similarly understood.

It would be sufficient to dispose of this argument to deny that the policy should be restricted by reference to the Act, but I am prepared to examine the full operation of the Act in relation to a vehicle such as a Caldwell mechanical loader to determine whether the appellant's initial proposition has been made out. Such a loader is without question a motor vehicle for the purposes of the Act and it would be a contravention of s. 7 to take it upon a public street unless it were insured under a policy conforming with the requirements of s. 10. To comply with the requirements of s. 10 the third-party insurance policy to be issued by an authorized insurer must insure the owner and the driver against all liability "in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle in New South Wales" etc., so a conforming policy would have to provide indemnity against liability to a third person injured by the vehicle by reason of its movement whether on a road or not, including its moving back and forward between a heap of debris and a truck in the course of loading operations; furthermore, the indemnity could not be confined to liability arising while the vehicle was actually in motion, and it would perforce cover liability connected with its travelling, e.g., its being left upon a road by night without adequate lights. The policy would also have to cover liability arising out of the starting and stopping of the vehicle because these things are part of its use. So much the appellant does not really dispute and concedes that all liability of this sort can be properly described as liability caused by or arising out of the use of the loader as a vehicle. Mr. Reynolds contends, however, that the statutory obligations imposed by s. 10 would be satisfied by a policy which did not cover liability to a bystander for injury from a stone falling from the conveyor when the vehicle itself was stationary and, as I followed him, even if the vehicle were moving. Such injury, so the argument ran, would arise from the use of the machine as a loader and not as a vehicle and it is only when it is used as a vehicle that the statute is concerned. I cannot accept the distinction thus attempted. If, for instance, the loader were in operation upon a public street and while the conveyor was operating, although the vehicle was stationary, a stone fell from it upon a person passing it and injured him, it would be perfectly correct to say that the bodily injury so occasioned did arise out of the use of the vehicle. The same would be true if a collision occurred between the loader and some other vehicle upon the road which dislodged a stone in the bucket of the loader which fell upon a bystander and injured him. The Act is not, I think, concerned with fine distinctions but requires the issue of a policy that covers liability arising out of everything that falls fairly within the conception of the use of a motor vehicle. This does not mean that the words of s. 10 are to be regarded as not involving any limitation whatever. If, for instance, a man were to steal a car, park it outside the house of his enemy and use it as a fort from which to shoot that enemy as he emerged from his gateway, the injury so suffered would not give rise to a liability that had to be covered by a third-party policy, and this is so simply because the Act is not concerned with such a liability and the bodily injury so occasioned cannot fairly be described as arising out of the use of the motor vehicle. It arises out of the use of a rifle in a motor vehicle. It is easy, without elaborate explanation, to say that such a liability cannot properly be regarded as within the contemplation of the Act, but how can this be said of the use of a motor vehicle for the very purpose for which it was designed and constructed? To meet the circumstances that there are certainly some things that might be described as uses of a motor vehicle but are nevertheless outside the contemplation of the Act does not, I venture to think, require the implication of particular words in the statutory provisions; the proper course is to read the actual language as relating only to death or bodily injury that is caused by or arises out of what can fairly be described as the use of the motor vehicle itself. In the Supreme Court of New South Wales, there has recently been some difference of opinion upon the question whether any limitation upon the word "use" should be implied, similar to that adopted in the New Zealand cases of A. P. A. Union Assurance Society v. Ritchie and Barton Ginger & Co. Ltd. [1] , Commercial Union Insurance Co. Ltd. v. Colonial Carrying Co. of New Zealand Ltd. [2] , and State Fire Insurance Office v. Blackwood [3] . See King v. Government Insurance Office of New South Wales [4] , Quinn v. Government Insurance Office of New South Wales [5] . For the reasons I have given, although I think that not everything that could be called a use of the motor vehicle falls within the ambit of the Act, the reason why some things do not do so is to be found in the general scope and purpose of the Act rather than because of an implied limitation that is to be expressed by the implication of words qualifying or restricting the word "use".

1. (1937) N.Z.L.R. 414. 2. (1937) N.Z.L.R. 1041. 3. (1956) N.Z.L.R. 128. 4. (1959) 77 W.N. (N.S.W.) 164. 5. (1959) 77 W.N. (N.S.W.) 186.

Once, therefore, it is determined that a Caldwell mechanical loader is, as a whole, a motor vehicle, the Act requires a policy of insurance that covers its use as a loader. In my opinion, therefore, the appellant does not establish his first proposition - that is, that the Act only requires a policy covering the use of a Caldwell mechanical loader as a vehicle that moves and not as a vehicle that loads - because its use as a loader is part of its use as a motor vehicle. This makes it unnecessary to determine whether, if I had reached a contrary conclusion, it would have been proper to read the policy down to uses which the Act requires a policy to cover, notwithstanding that the policy issued is more widely expressed. I am, however, not disposed to think it would in a case such as this, where no question of invalidity under s. 10 (3) is involved.

This would conclude the case if it had been a person other than the owner or driver who had suffered bodily injury arising out of the use of the loader. But Jacobs was the driver and it is necessary to consider whether the indemnity of the owner covers liability for bodily injury to the driver which arises out of the use of the motor vehicle. Were it not for the decision of the House of Lords in Digby v. General Accident Fire and Life Assurance Corporation Ltd. [1] , I would have been prepared to decide that a policy issued in compliance with s. 10 of the Act would not provide the owner with indemnity against liability to the driver or the driver with indemnity against liability to the owner, but that the owner and driver should each have indemnity against liability to other persons, described as third parties, only. This seems to me to be the natural meaning of s. 10 (1) and such meaning receives some support from the provisions of ss. 20, 30 and 32. In Digby's Case [1] , however, it was decided that a policy issued in compliance with the corresponding English Act did provide the driver with indemnity against liability to the owner and the words "to any person" in the phrase under consideration does cover an owner who has established the liability of his driver for physical injury caused by the use of the motor vehicle. I see no valid basis on which to distinguish this decision when it is an owner who claims to be indemnified against liability to a driver, and the provisions of s. 10 (2) (a), although by no means clear, do seem to contemplate that without the exception thereby created, a policy would cover an owner's liability to his driver in respect of compensation under the Workers' Compensation Act. I am not, therefore, prepared to exclude from s. 10 (1) and a policy issued in compliance therewith the liability of an owner to a driver for injury caused by or arising out of the use of a motor vehicle.

It remains to say that I regard the bodily injury suffered by Jacobs in his attempt to free the grab of the Caldwell mechanical loader as one that arose out of the use of that vehicle as a loader.

For the foregoing reasons I consider that the judgment of Walsh J. should be affirmed and this appeal dismissed.

This is an appeal from a judgment in an action on a policy of insurance. The question depends upon the meaning of the policy not upon the meaning of the Act of Parliament. The policy recites that the insured "has made application and paid a premium for the issue of a third-party policy for the purposes of the Motor Vehicle (Third-Party Insurance) Act, 1942, in relation to the motor vehicle described". The motor vehicle is described as a Caldwell mechanical loader. It was argued that the extent of the indemnity given by the policy was to be ascertained from the Act, because the policy was taken out in compliance with the Act. This, no doubt, is a good reason for so construing it that it effects what the Act requires, in other words so that it complies with s. 10 (1) (b) (i) of the Act. But, provided it does not limit or modify the operation of any provision of the Act, and therefore does not contravene s. 19, it is no objection that it goes further than the Act requires. The policy is not an insurance against a statutory liability. It is an insurance that the statute requires shall be made against a common law liability. The risk that must be insured against is "all liability in respect of the death of or bodily injury to any person caused by or arising out of the use of the motor vehicle". The policy here insures the owner and any driver of the vehicle in those very terms. But it is the document that has to be construed and it is to be construed as a whole. Clause 5 provides that the premium has been paid only for the use of the motor vehicle for the purposes set out in item 17a of the schedule to the policy; and that it must not be used for any other purpose unless the policy be endorsed and an extra premium paid. So that only liabilities arising out of a use of the vehicle for the purposes set out in item 17 (a) were covered by the policy. That would be clear enough if item 17 (a) stated any purposes. In the form it bears in the renewal of the policy - it is slightly different in the original policy - it reads as follows: "Miscellaneous - Any tractor not being a tractor designed so that it is capable of being driven at a speed exceeding 18 miles per hour, and any motor vehicle not included in item 12, 15 or 16 which comprises an excavator, road-grader, tar-boiler, street-flusher, chaff-cutter, crane or other machinery or apparatus and which is not constructed principally for the conveyance of persons or goods". This is somewhat loosely drawn and elliptical. Items 12, 15 and 16 merely list fire engines, certain vehicles used in the motor trade and trailers and therefore may be disregarded. I take the effect of cl. 5 and item 17 (a) read together to be that insured excavators must only be used as excavators, road-graders as road-graders, tar-boilers as tar-boilers and so on; and that any other insured vehicle comprising any machinery or apparatus and which is not constructed principally for the conveyance of persons or goods may be used only for performing the normal function of such machinery or apparatus. That means in the present case that the mechanical loader might be used only as a mechanical loader. If a liability arose out of its use for some other purpose that liability would not be covered. But it is implicit in this that all liabilities caused by or arising out of its use as a mechanical loader were covered. That being so, the liability in question here was covered. Jacobs was engaged in using the mechanical loader to load road metal into a truck, a purpose for which it was designed. He was injured while he was trying to overcome a stoppage in the mechanism. The mishap occurred because of a defect in the mechanism. In the circumstances his injury could be said to have arisen out of the use of the mechanical loader. Walsh J. considered it had. It was a question of fact. His decision was in my view correct. The respondent incurred a liability to Jacobs by reason of the defective character of the loader that it had required him to use. The policy insures the respondent against "all liability" to "any person" arising out of the use of the mechanical loader for the purposes of a loader. The respondent's right by the terms of the policy to be indemnified against its liability to Jacobs is thus clear.

The appellant argued that word "use" in the expression "caused by or arising out of the use of the motor vehicle" and the expression "any person" appearing in the policy ought, by reason of what was said to be their meaning in the Act, to be given a restricted meaning in the policy. "Use" it was said, had a restricted meaning in the Act, a meaning that had been the subject of much debate in recent cases. And "all liability" to "any person" did not, it was said, include the liability of the owner to the driver in circumstances such as these. These propositions may be briefly examined.

As to the word "use": the Act is concerned with motor vehicles. The statutory definition in terms restricts the denotation of "motor vehicle" to "vehicles" mechanically propelled and to trailers. The reference to trailers appears to bring within the denotation anything on wheels towed behind a motor vehicle while it is being so towed (See Lynch v. Page [1] ). But a vehicle, in the sense the word has in relation to road traffic, properly means a carriage for the conveyance of passengers or goods or of some particular thing. Chaff-cutters, tar-boilers, concrete-mixers, mobile-cranes and the like may, as with the mechanical loader here, be called motor vehicles when they are mounted on wheels in such a way that, to use the expression in the insurance policy here, they are comprised in a vehicle. Strictly it is perhaps only so much of the total equipment as consists of the carriage by which the particular apparatus is conveyed that is the vehicle. But it is not inappropriate, when such a thing is considered as a unit in road traffic, to describe its totality as a vehicle (President &c. of the Shire of Tungamah v. Merrett [2] ). It is to the damages caused by or arising from the movement of vehicles as units in road traffic that the Act is primarily directed. In the case of a motor car it is said that to use it means, for the purposes of the Act, to employ it for what has been called its vehicular purpose. In that sense an injury caused by using a motor car to provide electric light, for example, could not ordinarily be said to be caused by the use of a motor vehicle in the sense that that expression is used in the Act. The Act, I think, does contemplate the "use" of a motor car as involving driving it or doing something to it or with it that is incidental to its normal use as a motor car. In the case of a vehicle not designed for the carriage of goods or passengers more difficulty may arise in applying the words of the Act. But the movement by road of any selfpropelled mobile plant is, in my view, clearly a use of it. Its mobility under its own power is one of its characteristics. Taking advantage of that characteristic is one of the ways of using it. That is so for the purposes of the Act and of the policy. Whether the static employment of such plant for the industrial purpose for which it is designed is a use of it within the meaning of the Act which primarily deals with vehicles on roads is, I think, a more difficult question. But it does not arise here, for, as I have said, the insurance policy governs the matter.

1. (1940) 57 W.N. (N.S.W.) 161. 2. (1912) 15 C.L.R. 407.

As to the question whether the Act contemplates proceedings by the driver against the owner or by the owner against the driver, here again if the policy goes beyond what the Act requires nevertheless it governs the matter. If it be necessary to go further I need say no more than that I agree with Walsh J. and with my brother Menzies as to the operation of the Act in this respect, although I recognize the force of the comments by Else-Mitchell J. in King v. Government Insurance Office of New South Wales [1] . This Act ought not, I think, to be given a narrow operation. We live as Lord Radcliffe has said "in a society which has been almost revolutionized by the growth of all forms of insurance" (Lister v. Romford Ice and Cold Storage Co. Ltd. [2] ). The system of compulsory third-party insurance against common law liability will, no doubt, continue to raise questions for the courts. In this case the judgment of Walsh J. was, in my opinion, right and the appeal should be dismissed.

1. (1959) 77 W.N. (N.S.W.) 164. at p. 183. 2. (1957) A.C. 555. at p. 591.