Court of Appeal (Qld)|1994-12-21|Before: McPherson J, White J

Higton Enterprises Pty Ltd & ors v BFC Finance Limited [1994] QCA 14 (21 December 1994)

IN THE COURT OF APPEAL [1994] QCA 014

The plaintiff in District Court Action No. 2803 of 1992 was injured on 25 October 1990, according to the pleadings in that action. The appellants are the defendants in the action. Each has appealed against orders made in the District Court on 30 June 1993 striking out its Third Party Notice claiming indemnity or contribution from the respondent to this appeal, The Nominal Defendant (Queensland), and dismissing the respondent from the action.

At the material time, the first appellant was the owner of two motor vehicles, one a Toyota Four Wheel Drive which the plaintiff had been driving and near which he was standing when he was injured, and the other an unregistered Hino truck which was being driven by an employee of the second appellant. For the purpose of this appeal, it is to be taken that the plaintiff's injuries were caused by (i) the negligence of the first appellant as the plaintiff's employer; (ii) the negligence of the driver of the unregistered truck for which the second appellant is vicariously liable; and (iii) the contributory negligence of the plaintiff. The first appellant is not sued as the owner of either the registered Four Wheel Drive or the unregistered truck. Further, no direct breach of duty is expressly alleged against the second appellant. Nor is the driver of the unregistered truck sued. Nor is the respondent joined as a defendant in the action, although it might have been joined under subsection 4F(2) of the Motor Vehicles Insurance Act 1936 as amended. Had the plaintiff joined the respondent and recovered a judgment against it which the respondent satisfied, the respondent could have recovered the amount paid (and costs) from the first appellant as owner, or the driver of the unregistered vehicle, pursuant to subsection 4G(1)(b) of that Act, which is set out below.

The District Court Judge who dismissed the respondent from the action held that no claim for indemnity or contribution could be maintained against the respondent by either appellant because the plaintiff's damage was not suffered "as a result partly of the fault of a person or persons other than the owner or person in charge" of the unregistered Hino truck: see subsection 4F(3B) of the Motor Vehicles Insurance Act, which provides:

"(3B)Where, in respect of any claim which may be made to and enforced against The Nominal Defendant (Queensland) under subsection (2),(3) or (3A) of this section, the damage the subject of the claim was suffered by the claimant as a result partly of the fault of a person or persons other than the owner or person in charge of the motor vehicle in relation whereto such claim may be so made and enforced then, for the purpose of the recovery of contribution by or from The Nominal Defendant (Queensland), Part II of "The Law Reform (Tortfeasors Contribution, Contributory negligence, and Division of Chattels) Act of 1952" applies as if The Nominal Defendant (Queensland) were the owner of the motor vehicle in relation whereto such claim may be made so.

For the purposes of this subsection damage suffered by a claimant as a result partly of the fault of a person, other than the owner, who at the time in question was in charge of a motor vehicle, shall be deemed to have been suffered as the result partly of the fault of such owner."

While its meaning is by no means clear, for example with respect to the intended operation of the last paragraph, the general purpose of that provision is plain enough. It is to enable contribution to be sought, by or against the respondent, in specified proceedings in which it has been, or might have been, sued. However, there is an express limitation. Whether the third party proceeding is to be brought by or against the respondent, there must be a person partly at fault "other than the owner or person in charge" of the unregistered motor vehicle. There is no express requirement that such a person be a party to the litigation or directly involved in the proposed third party proceeding although ordinarily that may be the provision's practical effect. Subject to qualifications noted below, in terms of the subsection it is necessary but sufficient that the damage in respect of which the action is brought was "a result partly of the fault of a person ... other than the owner or person in charge of the unregistered vehicle."

Clearly, the first appellant is not such a person; although it was not sued as vehicle owner but as the plaintiff's employer, it was the "owner" of the unregistered truck: see the definition of "owner" in subsection 4F(1)(a) of the Motor Vehicles Insurance Act.

Further, the first appellant cannot bring a third party proceeding against the respondent and its appeal must fail. Subsection 5(c) of the Law Reform (Tortfeasors' Contribution, Contributory Negligence and Division of Chattels) Act of 1952 provides:

"5. Proceedings against and contribution between, joint and several tortfeasors. Where damage is suffered by any persons a result of a tort (whether a crime or not) -

(c) Any tortfeasor liable in respect of that damage may recover contribution from any other tortfeasor who is, or would if sued have been, liable in respect of the same damage, whether as a joint tortfeasor or otherwise, so, however, that no person shall be entitled to recover contribution under this section from any person entitled to be indemnified by him in respect of the liability of which the contribution is sought."

The first appellant is caught by the prohibition at the end of that subsection by virtue of subsection 4G(1)(b) of the Motor Vehicles Insurance Act, which materially provides:

"4G. Recovery from owner or driver. (1) Any amount properly paid by The Nominal Defendant (Queensland) in satisfaction of a claim made or judgment recovered against it and the amount of any costs and expenses properly incurred by it in relation to any such claim or to the action in which the judgment was obtained may be recovered by The Nominal Defendant (Queensland) as a debt -

(b) If the claim was made or the judgment was recovered in respect of a uninsured motor vehicle, from the person who, at the time of the occurrence out of which such claim arose or in respect of which such judgment was recovered, was the owner of the motor vehicle or, where at the time of such occurrence some other person was driving the motor vehicle from the owner and the driver jointly or from either of them severally;

The second appellant is not affected by the combined operation of those two provisions: it was not the owner or driver of the unregistered motor vehicle. It remains to be considered for the purpose of the second appellant's appeal whether a person partly at fault "other than the owner or person in charge" of the unregistered motor vehicle can be identified.

It was submitted for the appellants that the plaintiff's damages were "suffered ... as a result partly of the fault" of the plaintiff himself and that he is "a person ... other than the owner or person in charge of" the unregistered Hino truck. There was debate concerning the meaning of the word "fault", and whether its use is appropriate to describe the position of a plaintiff who has been contributorily negligent. There is no necessary reason why it should not do so: cf section 12 of the Law Reform (Tortfeasors' Contribution , Contributory Negligence, and Division of Chattels) Act. Nonetheless, although the plaintiff may be literally within the phrase "a person ... other than the owner or person in charge" of the unregistered vehicle, he is not such a person for the purpose of subsection 4F(3B) of the Motor Vehicles Insurance Act. The subsection distinguishes the "claimant" from the person at fault. Further, it is concerned with a claim for contribution under Part II of the Law Reform (Tortfeasors' Contribution , Contributory Negligence, and Division of Chattels) Act, and Part II does not deal with issues of contributory negligence, which are the subject of Part III of the Act.

The only other persons who might have been (i) at "fault" and (ii) "in charge of" the unregistered vehicle are the driver of that vehicle and the second appellant, his employer.

On the basis that he was negligent, which is assumed for present purposes, the driver of the unregistered vehicle was at "fault". However, as the driver he was apparently also "in charge of" that vehicle. The contrary was not argued, although the respondent submitted that the second appellant, as the driver's employer, was legally entitled to control his driving and therefore also "in charge of" the unregistered truck. In some respects this is a curious point for the respondent to raise since its effect, if correct, would not only be to limit the contribution proceedings which could be brought against the respondent but the contribution proceedings which it could itself bring.

It is difficult to perceive why theoretical control should be introduced into the essentially practical concept of being "in charge of" a motor vehicle, and there is nothing in the language or apparent policy of the provisions in the Motor Vehicle Insurance Act in which the phrase is used to require or support such a conclusion. While a person may be "in charge of" a motor vehicle although not at the time driving it (see, for example, subsection 3(2)), the concept of "being in charge" is less concerned with legal authority than with physical control. Indeed, the legislative use of the phrase in that sense in connection with motor vehicles is well-established in Queensland and elsewhere: see, for example, subsection 16(1)(c) of the Traffic Act 1949, which is concerned with the offence of being "in charge of" a vehicle whilst under the influence of liquor or a drug. Provisions to similar effect are to be found in other jurisdictions. There are numerous reported decision on such provisions, which not surprisingly provide no support for the startling proposition that an employer commits an offence if he or she is drunk at a time when an employee is driving a motor vehicle although the employer is nowhere near the vehicle. By way only of example, see Crichton v. Burrell (1951) SLT 365 and Pryor v. Morgan; ex parte Pryor (1970) QWN 13. In the absence of any persuasive argument to the contrary, no different meaning should be assigned to the phrase "in charge of" in the Motor Vehicles Insurance Act from its established meaning under the Traffic Act. At best for the respondent, the question whether a person is "in charge of" a motor vehicle is one of "fact and degree": D.P.P. v. Watkins (1989) 1 All E.R. 1127, 1129. See also Behrendorff v. Soblusky [1957] HCA 84; (1958) 98 CLR 619; Soblusky v. Egan [1960] HCA 9; (1960) 103 CLR 215, 227. This does not assist the respondent at this point in the proceedings; to succeed at this stage it would need to establish that there is a general principle that, for relevant purposes, an employer is "in charge of" a motor vehicle driven by an employee.

The remaining question is whether the plaintiff's damage was partly the "fault" of the second appellant. It was not suggested that the word "fault" in the Motor Vehicles Insurance Act meant either more or less than "fault" in accordance with the general law. A definition of "fault" in section 4 of the The Law Reform (Tortfeasors Contribution, Contributory negligence, and Division of Chattels) Act of 1952 was noted, but it was not suggested that the definition could assist in determining the meaning of the same word in the Motor Vehicles Insurance Act and, for that matter, the word is not used in Part II, but only in Part III, of the Act in which it is defined.

There are two theories concerning vicarious liability. One has it that the employer of an employee who commits a tort is under a separate and independent personal liability based upon a breach of its duty by the employer to which the employee's conduct is attributed: Darling Island Stevedoring and Lighterage Co. Ltd. v. Long (1957) 96 CLR 36, 61 per Kitto J.. See also p.54 per Webb J. and pp.67 ff per Taylor J.. If this is correct, then the second appellant was at "fault" in point of legal theory when its employee was negligent. The other theory asserts that the employer is not liable for the breach of its own duty but for its employee's breach of his duty: ibid, p.57 per Fullagar J.. If this is correct, then the second appellant seems not to have been at "fault" when its employee was negligent.

In Ramsay v. Pigram [1968] HCA 34; (1968) 118 CLR 271, Barwick CJ at p. 278 and Taylor J. (with whom Kitto J. agreed) at p.285 preferred the former view, while Windeyer J. at p.289 adhered to what he had said in Parker v. The Commonwealth [1965] HCA 12; (1965) 112 CLR 295, 300-301 which, while somewhat inconclusive, appear to favour the attitude which Fullagar J. had adopted. In L. Shaddock and Associates Pty. Ltd. v. Council of the City of Parramatta [1981] HCA 59; (1981) 150 CLR 225, Mason J. at p.251 appeared to accept the view of Kitto and Taylor JJ. in the Darling Island Stevedoring case, while Brennan J. found it unnecessary to choose between the alternate views. More recently, there have been two decisions of the New South Wales Court of Appeal which accept that Fullagar J. was correct: see Commonwealth of Australia v. Connell (1986) 5 NSWLR 218, 222-223 per Glass J.A., with whom Samuels and Priestley JJA agreed, and Cowell v. New South Wales Corrective Services Commission (1988) 13 NSWLR 714, 730-731 per Clarke JA., with whom Priestley JA. agreed. Neither Court of Appeal decision referred to either Ramsay or Shaddock.

While none of the authorities referred to is necessarily determinative of the meaning of "fault" in its present statutory setting, the weight of views expressed in the High Court favours the conclusion that the second appellant was itself at fault, that is, in breach of its own duty of care and not merely legally responsible for its employee's breach of duty. This perception of "fault" also squares with the apparent purpose of subsection 4F(3B) of Motor Vehicles Insurance Act, which seems to be to permit the apportionment of responsibility between joint tortfeasors, treating the respondent as a tortfeasor, as is the second appellant: cf Soblusky v. Egan at p.235. As earlier mentioned, the opposite view seems to exclude without obvious reason not only claims for contribution against the respondent but also claims by it against other tortfeasors.

Although the points raised in these appeals are not free form difficulty, in my opinion the second appellant was partly at fault while neither the owner nor person in charge of the unregistered motor vehicle and was entitled to bring third party proceedings against the respondent. Its appeal should therefore be allowed. For reasons given earlier, the appeal by the first appellant on the other hand fails.

The appeal by the first appellant is dismissed with costs to be taxed. The appeal by the second appellant is allowed and the orders made below in respect of the second appellant's third party proceeding are set aside. The respondent's application against the second appellant is dismissed. The respondent must pay the second appellant's taxed costs of the District Court application and this appeal.

CATCHWORDS: INSURANCE - Nominal Defendant - employee plaintiff injured in accident with unregistered work vehicle of first appellant - driven by employee of second appellant - whether nominal defendant liable to indemnity or contribution - Motor Vehicles Insurance Act 1936, s.4F(3B) - "fault" - "in charge of"

WORDS AND PHRASES - "in charge of" - Motor Vehicles Insurance Act 1936 s.4F(3B) - employee plaintiff injured in accident with unregistered work vehicle of first appellant - driven by employee of second appellant - reference to use of phrase in s.16(1)(c) of Traffic Act.

Counsel: Mr. K. Fleming Q.C. for the first appellant/first defendant

Mr. C. Newton for the second appellant/second defendant

Mr S.C. Williams Q.C. for the respondent/third party

Solicitors: W.H. Tutt and Quinlan for the first appellant/first defendant

Sly and Weigall for the second appellant/second defendant

Biggs and Biggs Francis and McGregor for the respondent/third party

Motor Vehicles Insurance Act 1936

Higton Enterprises Pty Ltd & ors v BFC Finance Limited [1994] QCA 14

At a glance

Court

Decision date

Before

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Judgment (35 paragraphs)

Higton Enterprises Pty Ltd & ors v BFC Finance Limited [1994] QCA 14 (21 December 1994)

Parties

Legislation Cited (2)

Cases Cited (8)