Kennedy v Shire of Campaspe [2015] VSCA 215

Introduction and summary................................................................................

The dispute over the tripping incident..............................................................

The statutory scheme - policy defences ..........................................

The judge's reasons ......................................................................

Grounds of appeal ...............................................................................................

Notice of Contention ..........................................................................................

Analysis ...............................................................................................................

(1) Did the Shire comply with the plan (the ss 103/105 defences)?...

(2) Did the Shire have actual knowledge of the particular risk within the meaning of s 102?.......................................................

(3) What was the 'policy' of the Shire? .............................................

(4) Did the Shire's policy address the matter which was a cause of the incident within the meaning of s 105?..................................

(5) Did the Shire act in accordance with its policy for the purpose of the defences under ss 105 or 103?..........................................

(6) Would compliance with the plan and the Shire's policy have detected the particular risk?........................................................

(7) If detected, would the Shire have warned or taken other remedial action in accordance with the plan or its policy?

(8) What significance should have been attached to the Hitchcock inspection report?.........................................................................

(9) Did the Shire breach its duty to inspect under s 40(1)(a) and, if so, did that breach cause the incident?.........................................

(10) By operation of s 39(5), did the making of the plan satisfy any statutory or common law duty in relation to road management functions? ....................................................................................

Conclusion on the appeal...................................................................................

Conclusion on the Notice of Contention.........................................................

1 The Road Management Act 2004 ('the Act') imposes a statutory duty upon road authorities to inspect, maintain and repair public roads. It also provides for a variety of defences to allegations of breach of statutory duty and negligence in respect of alleged failures to remove a hazard, repair a defect, or give warning of a hazard, in a public road. The defences turn on the existence of a road management plan, or a policy, and compliance with the standards specified in the plan or policy. This appeal raises the question of the scope and operation of those statutory defences.

2 The circumstances giving rise to the appeal are that the appellant, Irene Kennedy ('Kennedy'),[1] was walking south on the footpath of Haverfield Road, Echuca ('the footpath') when she tripped over a lip ('the lip') created by uneven concrete paving sections ('the incident'). She sued the respondent, the Shire of Campaspe ('the Shire'). The trial judge held that, although Kennedy may well have had an arguable case against the Shire based upon negligence, the operation of the Act prevented her from succeeding.[2]

3 For the reasons that follow we would allow the appeal. We consider that the Shire breached its statutory duty to inspect, maintain and repair public roads and that the statutory defences are not available to it. However, in our view, it would not be open to find that there was a causal connection between the Shire's breach of statutory duty and the incident.

4 We consider, however, that the matter ought be remitted to the County Court for further hearing on the question of whether the Shire owed Kennedy a duty of care at common law (about which the judge made no findings) and whether, if breached, that breach was a cause of the incident. We consider that those issues remain open to be determined by the County Court judge who hears the remitted proceeding.

5 The incident occurred on 23 July 2007 on the western side of Haverfield Road to the south of Ogilvie Avenue (otherwise known as the Murray Valley Highway as it passes through Echuca). Kennedy tripped on the lip[3] at about 11:00am and the evidence was that the light was good and it was not wet. As a result of the incident, Kennedy sustained a distal radial fracture to the right wrist requiring internal fixation.[4]

6 Kennedy brought proceedings for damages arising from an alleged breach of duty under the Act and in negligence.[5]

7 By its Defence the Shire denied any breach of duty and further relied on defences under pt 6 of the Act (specifically ss 102, 103 and 105)[6] and s 83 of the Wrongs Act 1958 ('Wrongs Act'),[7] and pleaded contributory negligence. The Shire argued that the lip was obvious, there being no concealment, and that the fall was caused by Kennedy not lifting her right foot sufficiently high to clear the footpath.[8] It submitted that no common law duty arose because a duty only arises in circumstances where a plaintiff exercises reasonable care for his or her own safety,[9] and Kennedy failed to exercise that reasonable care.

8 Kennedy gave evidence that she came walking around the corner from her office where she carried out her work as a self-employed house and building designer and planner. Her office was located on the corner of Haverfield Street and Ogilvie Avenue. She kicked her toe on the footpath and fell over on to her right wrist. Though not sure exactly, she believed that the point where she tripped and fell was six to 10 metres from the corner of Ogilvie Avenue and Haverfield Street.

9 The area of Haverfield Street to the south of Ogilvie Avenue is a residential area. Located in the area of Haverfield Street to the north of Ogilvie Avenue are businesses.

10 Kennedy gave evidence that in the week after the incident, she attended the site of the incident with her friend Jean Bolitho ('Bolitho'). She took measurements of a railing on the fence next to the footpath, and took photographs of the footpath and the railing. On the basis of this information, she believed that the raised concrete was between 30 and 35 mm. In cross-examination, it was put to her that her method of measurement was unreliable. She was shown photographs taken of the site by the Shire two weeks after the incident (exhibits 1 and 2) showing the lip in the concrete to be 11 to 12 mm. She accepted that exhibits 1 and 2 accurately depicted the footpath as it was at the time of her fall. In re-examination, she conceded that her method of measuring the footpath was not accurate. The judge found the lip to be between 10 and 12 mm.[10]

11 By the time Kennedy and Bolitho returned to the footpath to take some photographs there were large white dots very close to the lip (exhibit E). The lip, and other nearby lips, were ground down by a contractor at the request of the Shire on 29 April 2008.[11]

12 Kennedy called evidence from Bolitho who said that Kennedy attended her house immediately following the incident and before visiting the doctor. She also said that she attended the scene of the incident with Kennedy to take measurements of the fence next to the footpath. Bolitho gave evidence that she had noticed that after the incident the footpath was repaired but could not say when.

13 Kennedy also called evidence from her estranged husband, Mr Hugh Kennedy, who said that Kennedy's mood and disposition deteriorated after the incident.

14 Kennedy tendered medical reports from Dr Dougal James,[12] Dr John Quale,[13] and Mr Steven Leitl.[14]

15 The Shire called evidence from its technical officer, Mr Glen Major ('Major'). Major said that he attended the scene of the incident and took photographs (exhibits 1-5) on 6 August 2007. He said that he took measurements of two areas in the footpath where there was a lip or deformation. He measured the lips using a steel straight edge and a tape measure. He measured the lip as being 10 to 12 mm. Major gave evidence about the Shire's road management plan (exhibit M) ('the plan'). The plan had been adopted by the Shire on 14 December 2004. The footpath was categorised as a 'secondary footpath' under the plan.[15] The plan provided that the standard for intervention (that is, the level whereby intervention by the Shire is warranted) in relation to secondary footpaths is a level of a 30 mm step in path surface levels.[16] The standard requires that the Shire intervene within 30 days from the date a known defect on a secondary footpath reaches the intervention level to effect repair or provide a warning.[17] Major said that after his inspection, he placed the site on the Shire's 'proactive list' for grinding. He was asked to explain the meaning of the 'proactive list':

It just means that because someone had fallen over on it we generally, just as a proactive measure and also a bit of customer satisfaction, we put it on a list and when we have got time or money we arrange to grind it when we have got someone in that area.

16 He was also asked about the relationship between the 'proactive list' and the plan:

Does the status of the lips in question, relevant to the road management plan, have any bearing on that?

No, it was just - that's basically our practice of what we do.[18]

17 Major was questioned further, by reference to a footpath maintenance report, on why work would be done below the intervention level:

Why was grinding done of what appeared to be lips of 10 to 20 mm?

By the dates [of the maintenance reports] it was towards the end of our financial year and we probably had - we had gone through and probably fixed anything that was larger and we had some money left so we went and did some proactive grading - grinding, sorry.

18 In 2007, the forms used for inspection reports specified each of the levels 20 to 30, 10 to 20, and then five to 10 mms as levels to be detected and reported by inspectors. Major elaborated that grinding down anything over 15 mm was something the Shire had always done to maintain a standard, for both safety and customer satisfaction, but that a 10 mm projection was not likely to be dangerous:

As a matter of practice it is fair to say that the Shire in fact grinds down anything over 10 mm, doesn't it?

Not always. It all depends on how our budget is going.

I was just looking at your footpath maintenance report and the inspection reports?

Yes.

Over 10 millimetres appears to get ground, doesn't it?

In some stages - in some cases it does.

Why does the shire grind down something that is less than 15 millimetres?

That is just something that we have always done just to try to maintain our footpaths in a standard - at a standard.

But there is a reason, isn't there? It makes it safer?

Yes, and customer satisfaction, yes.

Is it necessary in order to make them safer that you grind at 10 millimetres?

No.

Is it a projection of 10 millimetres dangerous?

I wouldn't have thought so.[19]

19 Major also gave evidence about the inspection reports conducted on the footpath prior to the incident. He had been asked to find out when the last inspection took place. He went to his office and brought out the inspection reports from 2006. He made a hand-written notation on a printed copy of an email dated 1 November 2007 (exhibit P)[20] stating that the last inspection of Haverfield Street before the incident was conducted on 4 January 2006. He later learnt that there had been another inspection carried out on Haverfield Street south of Ogilvie Avenue on 6 July 2007 (exhibit O) by Murray Hitchcock ('Hitchcock'), a retired inspection officer of the Shire ('the Hitchcock inspection report'). This was 18 months and two days after the previous inspection of 4 January 2006.[21] He did not know about the Hitchcock inspection report in November 2007. He was asked when he came to know about it: 'But you certainly didn't know about it in November 2007?' to which he responded: 'No, only when it came forward, we had it then'. There was uncertainty as to when the Hitchcock inspection report was received by the Shire.

20 The Shire also called evidence from Mr Gary Lemon ('Lemon'), unit leader of its technical services. Lemon said that he arranged for Major to inspect the site of the incident, and after the inspection instructed him to place the site on the Shire's proactive list of works. He also gave evidence about instructions he had provided to Hitchcock. He said that he asked him to record everything over 30 mm, and then from 20 to 30, 10 to 20, and then five to 10 mm. Lemon also confirmed that Hitchcock had prepared the Hitchcock inspection report.

21 He said that under the plan the Shire was required to conduct inspections of secondary footpaths every 18 months. He was also asked to explain what was the 'proactive list'. In response he said that the Shire would conduct proactive grinding works under the intervention level at the end of the financial year if the budget permitted and/or if there were contractors in the area. He said:

Okay, well, what it means is council aren't obliged to do anything over our intervention level, okay, so, but we want to be seen as being proactive in the public's eyes, in the ratepayers' eyes, and not only that because you may have a lip which in turn if you don't do anything about it could become worse. So we have got a proactive list where if we have got moneys left over it may not even be that. If we [have] got a contractor in the area carrying out works we might ask him to do an extra grind here or there. And that's what our proactive list is.

Yes, when we engage a contractor to do - I don't know, off the top of my head - some works in that area, he would have been asked to do this grinding as well. So he would have picked that up. We are not talking about a lot of money, $50 or $60 to do a grind such as this and usually it is seen in really good form for council because we have, you know, attended to something even if it was under our intervention level. So that is how we run with a good customer service like that.

23 Counsel queried why the Shire would grind things under the intervention level. Lemon responded:

To be proactive, to keep the ratepayers happy, to keep everybody happy and - and because if I don't spend all my money in this financial year the council will take it off me.

...

[I]f it was over 30 mil, we would immediately do something about it. If it was under that, 25 mil, 28 mil, we would take steps to do something as soon as we could. Now, normally anything over about 15 mil, 20 mil, we ring up and see where our contractors are to get them there. If there are things a bit lower than that we will put them on a list and have them do those works when they are in the area next or when we have got one here next.

24 He was questioned further over what the Shire did if a maintenance report indicated that there were no defects at or above the intervention level. He said:

I would come down to the - to the next size under which would be say 25 mil and then 20 mil, something like that. Because what we wanted to do in those days and we have successively - successfully done this, we have got our footpaths up to a state now which we are very proud of because we have been working towards where we are just about at now to get our footpaths in a really, really good state. And the only way to do that is to throw money at it and to keep it ongoing. So you get to your intervention level, do everything over that. You get to the ones just under intervention and the further you go down the more there is. So there might be, say, 20 which are over intervention so then you hit 25 mil. There might be 150 and then you do those and then you get to 20 mil and there might be 400 and then so the smaller the lip the more occasions there are where you need to have someone doing something and that's why we have been throwing money at these areas for the last - and I have been doing footpaths for a long time in the Shire, probably 18 years, something like that, more, and that is what we have been throwing money at all the time constantly to get our footpaths down to a really good state, a really good condition. And that's not just in Echuca, that's right through the whole council, through the whole Shire.

25 In cross-examination Lemon was unable to say why Major was not aware of the inspection report of 6 July 2007 in November 2007. He agreed that the lip on the paver where Kennedy tripped and fell should have been picked up in the Hitchcock inspection report but he did not know why it had not. He said:

I am aware of the photographs that Glen Major took with the tape measure and a straight edge which were about 10, 11 or 12 millimetres, yes.

Any reason why that would not have been picked up in an inspection?

Why it wouldn't have been picked up? No, well, I don't know why it hasn't been picked up, no, I don't.

It should have been picked up, you would agree?

Well, I reckon it would have been. It should have been picked up ... but I would reckon that because in this inspection sheet where you have got five to 10, why they didn't pick that one up, I don't know.

...

In fact anything 11 or 12 should have been discovered?

Well, you would reckon there would be. If there was an 11 or 12 in there you would reckon that probably would have been discovered as well, yes, and I don't know why it wasn't at that particular stage.

27 Hitchcock was not called to give evidence. The Hitchcock inspection report does not record any lip of five to 10 mm or 10 to 20 mm or any other sized lip on Haverfield Road in the vicinity of the incident although it does record a 'lip hazard' of 10 to 20 mm near nos 86-87 Haverfield Road with a reference to 'Grind - Color Bond FENCE (BEIGE) - EAST Side'. This is not relevant to the lip or the incident.[22]

28 The Shire also called evidence from Susan Walker ('Walker'), its risk management officer. Walker said that she received a telephone call from Kennedy on 1 August 2007 regarding the incident. She sent an email to Major requesting an inspection. She also sent a letter to Kennedy on 1 August 2007 (exhibit S) attaching a form to report a public incident for Kennedy to complete. Kennedy completed the public incident report dated 3 August 2007 and it was received by the Shire on that day (exhibit T).[23]

29 The Shire tendered two medical reports of Mr Damien Ireland.[24]

30 The Act provides for a range of defences that depend upon a road authority[25] making road management plans and policies and complying with them. It precludes certain defences based upon the existence of a policy if the policy is unreasonable in the Wednesbury sense;[26] that is, so unreasonable that no road authority in that road authority's position acting reasonably could have made that policy.[27] The Act also allows for a specific challenge to be brought to the failure of a road authority to remove a hazard, repair a defect, or give a warning, if the road authority had actual knowledge of the particular risk involved.[28]

31 Section 39 provides for a road authority to make a policy on the way in which it will manage the roads for which it is responsible.[29]

1. Road authority may make a policy or policy decision relating to road management functions

(1) Without limiting the decision making processes of a road authority, a road authority may make a policy or policy decision relating to the performance of a road management function.

(2) For the purposes of this Act, a decision made by a road authority is a policy decision if having regard to the broad range of activities of the road authority the decision is based substantially on factors or constraints which are financial, economic, political, social or environmental.

(3) Without limiting the generality of subsection (2), a policy decision includes decisions about -

(a) the circumstances in which a road management function is to be performed;

(b) the manner in which a road management function is to be performed;

(c) the standard to be achieved in performing a road management function.

(4) A road authority is to be taken to have made a policy or policy decision relating to a road management function if the road authority has made a road management plan that includes provisions relating to the performance of that road management function.

(5) For the purposes of any proceedings, unless a policy or policy decision made by a road authority is so unreasonable that no road authority in that road authority's position acting reasonably could have made that policy or policy decision, any decision or standard which is a policy or policy decision relating to the exercise of a road management function by the road authority is to be taken to satisfy the statutory duty and any common law duty of the road authority in relation to the exercise of that road management function.

Note

Section 27 enables a relevant Code of Practice to be used as evidence of the reasonableness of a road management plan.

(6) For the avoidance of doubt, the power of a road authority to make a policy or policy decision is subject to any direction given to the road authority by the relevant Minister in accordance with section 22.[30]

32 Section 40 imposes a statutory duty on road authorities to inspect, maintain and repair public roads:

40 Statutory duty to inspect, maintain and repair public roads

(1) Subject to Part 6, a road authority has a statutory duty to inspect, maintain and repair a public road -

(a) to the standard specified in the road management plan for that public road or a specified class of public roads which includes that public road; or

(b) if paragraph (a) does not apply, to the standard specified in a policy in respect of that public road; or

(c) if no standard is specified for that public road or in relation to a particular matter, to a reasonable level having regard to the matters specified in paragraphs (a) to (e) of section 101(1).

Note

Section 101 sets out principles for determining whether there is a duty of care and if there is a duty of care, the standard of care.

(2) The statutory duty imposed by subsection (1) does not create a duty to upgrade a road or to maintain a road to a higher standard than the standard to which the road is constructed.

(3) The statutory duty to inspect applies to any part of a public road which is -

(a) a roadway;

(b) a pathway;

(c) a shoulder;

(d) road infrastructure.

(4) The statutory duty to inspect does not apply to -

(a) a road which is not a public road; or

(b) any roadside or other area of a public road that has not been developed by a road authority for use by the public as a roadway or pathway; or

(c) non-road infrastructure which is installed in the road reserve.

(5) A road authority has a discretionary power to inspect, maintain or repair a road which is not a public road but this Act is not to be construed as imposing a duty to do so.

...

33 The statutory duty imposed by s 40(1) to inspect, maintain and repair a public road is a duty to act in accordance with a standard. The relevant standard is identified in alternative ways, either to the standard specified in a road management plan, or the standard specified in a policy. Where there is no relevant standard specified in a plan, or a policy, the duty is to act to a reasonable level having regard to the matters specified in s 101,[31] including the character of the road and the state of repair in which a reasonable person would have expected to find a road of that character. Significantly, the duty is cast in a manner that gives priority to the standards set in a road management plan. It is only if there is no relevant standard set in a road management plan that the road authority comes under a duty to act in accordance with a standard set in a policy. This is apparent from the opening words of s 40(1)(b) 'if paragraph (a) does not apply'. In other words, s 40(1)(b) will not apply where a standard for that public road is specified in a road management plan.

34 Similarly, it is only if there is no standard set in a plan, or set in a policy, for the relevant public road, or with respect to a particular matter, that a road authority has a statutory duty under s 40 to inspect, maintain and repair a public road to a reasonable level. This is apparent from the opening words of s 40(1)(c), 'if no standard is specified for that public road or in relation to a particular matter'.

35 Section 40 thus imposes a hierarchy of duties upon a road authority. It does not consist simply in a range of alternative obligations, the performance of any one of which will be sufficient to discharge the overall duty. The primary duty is for a road authority to act in accordance with the standard set in a road management plan. The standards specified in a road management plan are given priority over standards specified by way of policy. This has some significance for the operation of the statutory defences in ss 103 and 105 discussed below.[32]

36 Section 41 confers the power to determine standards, relevantly, in relation to inspection, maintenance and repair of defects reported or found on inspection, including the determination of when 'intervention' action should take place and the type of 'intervention action' to be taken. The standards may be determined as a policy under s 39 or set as part of a road management plan.

1. Power to determine standard of construction, inspection, maintenance and repair

(1) The relevant road authority may determine the standard to which the relevant road authority will construct, inspect, maintain and repair roadways, pathways, road infrastructure and road related infrastructure.

(2) Without limiting the generality of this section, the relevant road authority may determine -

(a) in relation to construction, the nature of the construction of any roadway, pathway, road infrastructure or road related infrastructure;

(b) in relation to inspection, the inspection of specified matters at specified intervals;

(c) in relation to maintenance -

(i) the maintenance programs;

(ii) the maintenance work to be performed in the course of regular maintenance;

(iii) the standard to which the maintenance is to be performed;

(d) in relation to the repair of defects reported or found on inspection -

(i) the matters which are to be treated as defects which require repair or a warning;

(ii) the circumstances in which intervention action is to be taken with respect to repair needs for defects;

(iii) the type of intervention action to be taken;

(iv) the period of time within which the intervention action is to be taken;

(v) the priority to be given to the intervention action.

(3) For the purposes of subsection (2), 'intervention action' includes any action to conduct repairs, erect warning signs or reduce or remove a risk.

(4) In determining standards under this section, a relevant road authority must have regard to -

(a) the principal object of road management; and

(b) the works and infrastructure management principles; and

(c) any relevant direction made under section 22; and

(d) any relevant Code of Practice; and

(e) any relevant policy or policy decision under section 39.

Examples

The relevant road authority may determine that a road is to be constructed -

• with an unmade roadway or a sealed roadway;

• if sealed, with a seal of a particular thickness or quality;

• with sealed shoulders or unsealed shoulders;

• with kerbs or drains or without kerbs and drains;

• with or without pathways for pedestrians or cyclists.

The relevant road authority may determine for the purposes of its duty to maintain public roads that -

• a particular class of roadway is to be inspected for potholes at specified intervals;
• footpaths are to be inspected for cracks at specified intervals;
• a defect such as a crack in a footpath is to be repaired if it reaches a particular size;
• a schedule be developed of priorities and targets for intervention action having regard to the relative risks of defects of various kinds and in various locations.

Note

Codes of Practice under this Act may give practical guidance about the exercise of these powers.

(5) A standard determined under this section may be determined -

(a) as a policy or policy decision under section 39;

(b) in a road management plan.

37 Section 49 provides that a road authority may make a road management plan.

49 The making of a road management plan is voluntary

A road authority may develop and publish a road management plan in accordance with this Division.

38 Section 50 identifies the purposes of a road management plan including establishing a management system for road management functions and the setting of standards.

The purposes of a road management plan are having regard to the principal object of road management and the works and infrastructure management principles -

(a) to establish a management system for the road management functions of a road authority which is based on policy and operational objectives and available resources; and

(b) to set the relevant standard in relation to the discharge of duties in the performance of those road management functions.

39 Section 51 provides for a road authority to determine standards for the discharge of duties in the performance of its road management functions by incorporating the standards in a road management plan.

51 Standards may be included in a road management plan

Subject to section 39 but without limiting section 41, a road authority may determine standards by incorporating the standards in a road management plan.

40 Section 52 identifies the content of a road management plan as including standards or policies:

52 Contents of a road management plan

(1) A road management plan -

(a) may set relevant standards or policies in relation to the discharge of duties in the performance of road management functions;

(b) may include details of the management system that a road authority proposes to implement in the discharge of its duty to inspect, maintain and repair public roads for which the road authority is the coordinating road authority or the responsible road authority;

(c) may specify the relevant policies and priorities adopted by the road authority;

(d) must include any matters that a relevant Code of Practice specifies should be included in a road management plan.

41 Part 6 of the Act addresses the issue of civil liability. Section 99 provides that div 2 of pt 6 (including ss 101, 103 and 105) applies to any claim for damages resulting from negligence whether the claim is brought, relevantly, in tort or as breach of statutory duty. Section 100 stipulates that div 2 does not derogate from pt XII of the Wrongs Act which concerns the liability of public authorities. Section 101 relevantly sets out a number of matters to which a court is to have regard in determining the existence of a duty of care, or a breach of that duty.

99 Application of Division

This Division applies to any claim for damages resulting from negligence in relation to the performance or non-performance of a road management function, regardless of whether the claim is brought in tort, in contract, under statute or otherwise.

100 Application of Part XII of Wrongs Act 1958

This Division is to be construed as being in addition to and not in derogation of Part XII of the Wrongs Act 1958.

101 Principles concerning performance of road management functions

(1) In determining whether a road authority, infrastructure manager or works manager has a duty of care or has breached a duty of care in respect of the performance of a road management function, a court is to consider the following principles (amongst other relevant things including the principles specified in section 83 of the Wrongs Act 1958) -

(a) the character of the road and the type of traffic that could reasonably be expected to use the road;

(b) the standard of maintenance and repair appropriate for a road of that character used by traffic of that type;

(c) the state of repair in which a reasonable person would have expected to find a road or infrastructure of that character;

(d) whether the road authority, infrastructure manager or works manager knew, or could reasonably be expected to have known, the condition of the road or infrastructure at the time of the relevant incident;

(e) in the case where the road authority, infrastructure manager or works manager could not have reasonably been expected to repair the road or infrastructure or take other preventative measures before the relevant incident, whether the road authority, infrastructure manager or works manager did display, or could be reasonably expected to have displayed, appropriate warnings.

42 The first of the defences the Shire relied upon, s 102 of the Act, removes liability for a breach of s 40 or for negligence in respect of a failure to remove a hazard, repair a defect or give warning of a hazard unless the road authority had actual knowledge of the particular risk which resulted in the harm. The defence does not extend to a breach of the duty to inspect.

102 Limitations on liability of road authority

(1) Subject to this section, a road authority is not liable in any proceeding for damages, whether for breach of the statutory duty imposed by section 40 or for negligence, in respect of any alleged failure by the road authority -

(a) to remove a hazard or to repair a defect or deterioration in a road; or

(b) to give warning of a hazard, defect or deterioration in a road.

(2) Subsection (1) does not apply if, at the time of the alleged failure, the road authority had actual knowledge of the particular risk the materialisation of which resulted in the harm.

(3) For the purposes of subsection (2), the road authority is to be taken to have had actual knowledge of the particular risk if it is proven in the proceedings that the deterioration in the road had been reported in writing to the road authority under section 115.

(4) This section does not affect any liability of a road authority arising out of a breach of the duty to inspect a public road imposed by section 40.

43 Section 103 provides a defence to an allegation of wrongful exercise or failure to exercise a function where the act or omission in question is consistent with a policy of road management.

103 Policy defence

For the purposes of any proceeding to which this Division applies, an act or omission which is in accordance with a policy -

(a) determined by the relevant Minister under section 22 does not constitute a wrongful exercise or failure unless the policy is so unreasonable that no Minister in that Minister's position acting reasonably could have made that policy;

(b) determined by the relevant road authority under section 39 does not constitute a wrongful exercise or failure unless the policy is so unreasonable that no road authority in that road authority's position acting reasonably could have made that policy.

Notes

1. One of the ways in which a road authority may determine a policy with respect to its road management functions is by a road management plan: see section 52.
2. Section 27 enables a relevant Code of Practice to be used as evidence of the reasonableness of a road management plan.

44 The third defence relied upon by the Shire, s 105, allows for a road authority to establish that it had taken such care as was required to ensure that a road was not dangerous for traffic by proving that it had a policy which addressed the cause of the incident and that it complied with the relevant part of the policy.

105 Defence to prove that reasonable care was taken

(1) In any proceeding against a road authority for damages resulting from a failure to maintain a public road it is a defence to prove that the road authority had taken such care as in all the circumstances was reasonably required to ensure that the relevant part of the public road was not dangerous for traffic.

(2) In any proceeding against an infrastructure manager or works manager for damages resulting from a failure to maintain non-road infrastructure it is a defence to prove that the infrastructure manager or works manager had taken such care as in all the circumstances was reasonably required to ensure that the relevant non-road infrastructure was not dangerous for traffic.

(3) For the purposes of the defence referred to in subsection (1), a road authority is to be taken to have established the defence if the road authority proves to the satisfaction of the court that -

(a) the road authority had a policy which addressed the matter which was a cause of the incident giving rise to the action; and

(b) the road authority complied with the relevant part of the policy.

Note 1. One of the ways in which a road authority may determine a policy with respect to its road management functions is by a road management plan: see section 52.

Note 2. Section 27 enables a relevant Code of Practice to be used as evidence of the reasonableness of a policy or road management plan.

(4) The defence referred to in subsection (1) or (2) does not prejudice any other defence or the application of the law relating to contributory negligence.[33]

45 A written notice of an incident is required before a person can commence a proceeding in court: s 115. This is also one of the ways by which a road authority may come to have 'actual knowledge' of an incident, as is provided for under s 102(3).

115 Notice of incident

(1) If a person proposes to commence a proceeding in a court based on a claim in relation to an incident arising out of the condition of a public road or infrastructure, the person must give written notice of the incident to the responsible road authority within the prescribed period of the incident occurring.

(2) In subsection (1), 'prescribed period' means -

(a) the period of 30 days; or

(b) a longer period as may be prescribed either in respect of all cases or a specified case or class of cases.

(3) A notice under subsection (1) must include the prescribed particulars so as to enable the responsible road authority to prepare a condition report under section 116.

(4) If a person fails to give notice under this section and a report is not prepared under section 116, a court may in any proceeding based on a claim in relation to an incident arising out of the condition of a public road or infrastructure take the failure into account in deciding the weight to be given to evidence about that condition at the time of the incident having regard to -

(a) the reason why notice was not given;

(b) the length of the delay;

(c) the extent of any prejudice caused to the road authority in the proceeding;

(d) any other matter relevant in the interests of justice in the proceeding.

46 Section 83 of the Wrongs Act identifies certain principles as relevant to an assessment of whether a duty of care exists, or has been breached. It provides:

1. Principles concerning resources, responsibilities etc. of public authorities

In determining whether a public authority has a duty of care or has breached a duty of care, a court is to consider the following principles (amongst other relevant things) -

(a) the functions required to be exercised by the authority are limited by the financial and other resources that are reasonably available to the authority for the purpose of exercising those functions;

(b) the functions required to be exercised by the authority are to be determined by reference to the broad range of its activities (and not merely by reference to the matter to which the proceeding relates);

(c) the authority may rely on evidence of its compliance with the general procedures and applicable standards for the exercise of its functions as evidence of the proper exercise of its functions in the matter to which the proceeding relates.

47 In delivering judgment in favour of the Shire, the judge found that the statutory defences available to a road management authority were made out pursuant to ss 102,[34] 103,[35] and 105[36] of the Act. He noted that there was no settled interpretation of these defences under the Act.[37] He made no findings, absent the statutory defences, on the issues of negligence, breach of duty, or contributory negligence at common law.[38] In particular, he made no finding that the Shire owed a duty of care at common law to Kennedy. He held that the statutory defences conferred an immunity on the Shire.[39] There was no challenge based on grounds of Wednesbury unreasonableness.

48 The judge found Kennedy to be a credible witness.[40]

49 The judge identified the 'policy' of the Shire with the plan. He said:

Pursuant to 39(4) of the Act, a road authority is to be taken to have a policy or policy decision relating to a road management function if the road authority has made a road management plan that includes provisions relating to performance of that road management function. Thus, by making its Road Management Plan, the defendant has made a policy.[41]

50 This was a critical finding and one that is challenged by Kennedy on the appeal.

51 The judge recognised that the footpath had been classified as a 'secondary footpath'. According to the plan, routine inspections of secondary footpaths had a frequency target of every 12 months with, as mentioned above,[42] a maximum period between inspections of 18 months.[43] It was clear that the footpath had been inspected on 4 January 2006. An 18-month period after that inspection would expire on or about 4 July 2007. With respect to the Hitchcock inspection record of 6 July 2007, the judge said:

This would indicate that there had in fact been an inspection on 6 July 2007 - that is, prior to [Kennedy's] fall and two days outside the 18 month inspection period specified in the ... Plan.

That this inspection had been carried out was alleged by the [Shire] to be established by a Footpath Inspection Record of 6 July 2007 (Exhibits O and 6). This document did not come to light for a period that is not entirely clear, but seems to have been in the order of at least a few months ... While some mystery surrounds the delayed production of the Record and where it had been, I am of the opinion that it is an issue of efficiency and organisation, rather than anything in the nature of dishonesty or fabrication.[44]

52 In the context of considering the defence under s 103, he took the view that the inspection of 6 July 2007, while it may have been two days outside of the maximum permissible period between inspections, cured that two-day delay, and meant that the permitted time for frequency of inspections under the plan started again. The alternative view would have meant that once a breach of the targeted frequency of inspections had occurred, the Shire would always be in breach and could not remedy the breach. This was an untenable interpretation. He said:

[T]he essential question immediately arising is whether the breach of the Road Management Plan caused by the inspection being carried out two days late in some way means that the defence pursuant to s 103 is not available.

I struggle with this concept. If the plaintiff had suffered her accident on, say, 5 July 2007, being one day after the inspection was due and before it was in fact carried out, the situation might be different. However, what has occurred is that the inspection was carried out. The offending lips were not noted, but they were not in breach of the Plan. For the plaintiff to succeed in this argument, it would have to be accepted that, once there was a breach of the requirements set out in the Plan, whatever happened thereafter would not be in accordance with the policy and therefore not attract the protection afforded by s 103. Once the defendant had been two days late in relation to one inspection, no number of subsequent inspections could remedy the situation. This is not an argument which appeals to me. The defendant had remedied the situation by carrying out an inspection, admittedly two days late. If it had temporarily departed from what is contained in the policy, the situation was soon remedied. It had returned to acting in accordance with the policy. The s 103 defence in relation to acts or omissions was again available to it.[45]

53 The judge's finding that the earlier delay was irrelevant meant that 'the inspection schedule in the Plan was "back on track"'.[46] Furthermore, he found that even if the failure to inspect within the permissible period was a breach of the plan, Kennedy had not established that this breach caused the incident. The 'breach' would have been causally irrelevant because it was unclear what the Shire would have done had an inspection taken place, and the lip reported to the Shire, for example, near the end of the permissible period. It may not have attended to the lip until well after the incident. The judge said:

[E]ven if it was accepted that there was some type of ongoing breach of the policy, and that therefore the act or omission of the defendant did not fall within s 103, there is no evidence that the breach was causative of the accident. An argument was advanced by Mr Nash that, for example, if the inspection had been carried out on 6 June, repair work might then have been done, as it was the habit of the defendant to carry out non-compulsory repairs towards the end of the financial year. If that had occurred, there might have been no accident. However, it is equally true to say that if, for example, the inspection had been carried out on 3 July, within the 18 month period, the non-essential repairs might not have been carried out until late in that financial year - that is, they might not have been carried out until well into 2008. There is simply no evidence that the carrying out of the inspection two days late and not within the period specified in the Plan caused the accident. The dimension of the lips was not such as to demand any, or any immediate, attention. Had Mr Hitchcock carried out his inspection on, say, 3 July 2007 and placed his report before the defendant on that day, and even included in that report reference to the two lips, there is no reason to believe that they would have received any immediate attention, because they were comfortably within the intervention level set out in the Plan.[47]

54 The need for Kennedy to grapple with the difficulties she faced with respect to establishing causation was also apparent on the appeal.

55 The judge concluded that the policy defence under s 103 had been made out:

The defendant has proved to my satisfaction the existence of a policy and that, for the purposes of s 39 of the Act, it has made a policy decision relating to road management functions. Wherever the burden may otherwise lie, I am not satisfied that the policy is so unreasonable no road authority in the defendant's position acting reasonably could have made that policy. I am not satisfied that, by being two days late with its inspection, the policy was in some way brought to an end and the defendant subsequently was acting either without or outside the policy. My conclusion is that the s 103 defence does operate to the detriment of the plaintiff and that, even if there was a breach of it, such breach was not causative of the accident and the resultant loss and damage suffered by the plaintiff.[48]

56 With respect to the defence under s 102, the judge noted that the defence is not available if the road authority has 'actual knowledge of the particular risk "the materialisation of which resulted in the harm"'.[49] However, he took the view that the Shire did not have actual knowledge of the particular risk.[50] He considered that the report in writing made by Kennedy under s 115 after the incident could not constitute the relevant actual knowledge under s 102(3), nor constructive or imputed knowledge, even if that had been sufficient.[51] He considered that, for sub-s (3) of s 102 to make sense, it must be confined to those reports under s 115 which had been made before the relevant incident; that is, where the deterioration in a road had been notified to a road authority previously. He said:

There was also some argument concerning the meaning of s 102(3). Pursuant to this sub-section, the defendant would be taken to have had actual knowledge of the particular risk if it was proven that the deterioration in the road had been reported in writing to the road authority under s 115. Section 115 concerns the notice which a person proposing to commence a proceeding in relation to an incident must give to the responsible road authority within the prescribed period. While s 102(3) is a poorly drafted provision, it does not seem to me that, if it is to make any sense, the report pursuant to s 115 to which reference is made could be the report of the actual incident the subject of the claim in question. Logically the situation cannot be that, immediately a report is made pursuant to s 115 in relation to an incident, the road authority is to be taken to have actual knowledge of the particular risk involved. It seems to me that the provision can only mean that, if deterioration in a road has previously been reported under s 115, the relevant road authority is then deemed to have actual knowledge of the particular risk. If a subsequent claim arises out of the same risk, the road authority cannot be heard to say that it knew nothing of that risk. In the present case, there is no evidence that, whilst the plaintiff reported what had occurred in accordance with s 115, any earlier report had been made. Accordingly, it seems to me that s 102(3) does not assist the plaintiff.[52]

57 He also rejected the view that the absence of Hitchcock as a witness entitled him to infer that Hitchcock, and thus arguably the Shire, had the relevant actual knowledge. He observed that Hitchcock 'is a witness of some potential importance and I would have thought that it could be expected that the defendant would call him'.[53] The judge considered that the circumstances entitled him to draw an appropriate inference based on Jones v Dunkel.[54] He noted that Lemon said he had been in touch with Hitchcock four days previously and Hitchcock had said he could not go to court because he would be in Dubbo or the northern part of Australia.[55] There had been a suggestion by Lemon that 'Mr Hitchcock was going to stop in Dubbo' and there may 'have been a telephone hook-up or something like that; I don't know'.[56] This did not eventuate. However, the judge concluded that the rule in Jones v Dunkel would not enable him to fill the void created by the absence of other evidence, the rule not permitting him to go that far.[57] This restraint was not specifically challenged on the appeal.

58 Accordingly, the judge held that s 102 precluded the Shire from any liability arising from failure to remove a hazard, repair a defect or give a warning other than liability arising from a breach of the duty to inspect.[58]

59 The judge returned to the question of causation in considering whether the defence under s 105 was open, causation being squarely raised by s 105(3)(a).[59] He acknowledged that the onus lay on the Shire to prove that it had a policy which addressed the matter which was a cause of the incident.[60] He considered that the Shire 'had a policy, namely the Plan, which addressed the matter which was a cause of the incident giving rise to the action. The Plan addressed footpath repairs and steps in levels.'[61] In assessing compliance, he understood the need to identify 'the relevant part'[62] of the policy and accepted that potentially that could mean the whole inspection regime, including both the timing of inspections and the intervention level.[63] However, he concluded that the timing of the inspections was causally irrelevant and thus that 'the relevant part of the policy' must, in this case, refer to the intervention level of 30 mm under the plan with which there was compliance for the purpose of s 105:

Generally speaking, it seems to me that the timing of the inspections could be just as much a relevant part of the policy as the intervention level concerning differences in levels of a footpath. However, the word 'relevant' is of sufficient breadth to lead one to the view that the situation must be assessed on a case-by-case basis. In the present case, an inspection had been carried out within a three week period before the occurrence of the accident. Therefore, as previously discussed, the inspection schedule in the Plan was 'back on track'. What then caused the accident was a lip or step in the footpath which did not breach the relevant part of the policy. If the issue of inspections is removed, the relevant part of the policy is the intervention level in relation to such steps. In the present case, that seems to me to be 'the relevant part of the policy'. The evidence satisfies me that there was compliance with it.[64]

60 He thus held that the defence under s 105 was also made out, although this was unnecessary for him to determine given his previous findings.[65]

61 The judge was aware of the 'proactive list'[66] but, having identified the policy of the Shire with the plan, he did not consider the question of whether there had been compliance with standards determined under the proactive list. This is one of the questions explored on the appeal.

62 As mentioned above, the judge made no findings on Kennedy's position at common law, although he described her as having an 'arguable' case in negligence.[67] However, he concluded that the defences under ss 102, 103 and 105 provided the Shire with a complete immunity. He said:

In the circumstances, it is not necessary for me to consider what could be described as the common law position in relation to this accident ... this unfortunate plaintiff may well have had an arguable case based upon negligence. However, the operation of the Act seems to me to prevent her from succeeding and to establish immunity on the part of the defendant.[68]

63 Kennedy relied upon six inter-related grounds of appeal:[69]

The judge erred in finding that the Shire complied with the plan.

(a) that the Shire failed to carry out inspections in accordance with the time lines set out in the plan;

(b) an inspection carried out within the appropriate time frames and within the maximum time frames and otherwise in accordance with the policies adopted by the Shire and the plan would have detected the fault which caused Kennedy's injury; and

(c) the Shire acting in accordance with the policies adopted by it and the plan would have repaired the defect or taken steps to warn pedestrians before the date of Kennedy's fall or otherwise taken appropriate remedial action to obviate the risk.

The judge erred in his construction of the policies of the Shire in holding that it was the policy of the Shire to grind down footpath lips only if they were over 30 mm in height when in fact its practice was to mark all lips beyond five mm and grind down lips over five mm using the budget available in the period immediately prior to 30 June in each year.

(a) conflated the Shire's policy in relation to footpath repair with the plan; and

(b) erred in failing to find that the Shire did not act either in accordance with its policy or the plan.

The judge erred in giving any weight to the report of the inspection of 6 July 2007 in circumstances where the Shire declined to call as a witness Hitchcock, who had carried out the inspection and made the report which was not obtained by the Shire until after the incident.

The judge erred in finding that that the Shire had made out defences provided by ss 102, 103 and 105 of the Act when:

(a) notice had been given by or on behalf of Kennedy in accordance with s 115 of the Act;

(b) the Shire had not complied with either the plan or its road management policy or both;

(c) purported inspections prior to the date of the incident were not carried out by the target date or the maximum time specified in the plan;

(d) the Shire had not obtained the Hitchcock inspection report by the time of the incident, and the Hitchcock inspection report was missing at the time of that incident;

(e) the reasons given by the judge did not establish that those defences were made out; and

(f) by s 102(4) of the Act the protection of s 102 does not extend to any liability arising out of a breach of the duty to inspect.

64 In our view, the grounds of appeal raise nine principal issues:

(1) Did the Shire comply with the plan (the ss 103/105 defences)?

(2) Did the Shire have actual knowledge of the particular risk within the meaning of s 102?

(4) Did the Shire's policy address the matter which was a cause of the incident within the meaning of s 105?

(5) Did the Shire act in accordance with its policy for the purpose of the defences under ss 105 or 103?

(6) Would compliance with the plan and the Shire's policy have detected the particular risk?

(7) If detected, would the Shire have warned or taken other remedial action in accordance with the plan or its policy?

(8) What significance should have been attached to the Hitchcock inspection report?

(9) Did the Shire breach its duty to inspect under s 40(1)(a) and, if so, did that breach cause the incident?

65 The Shire has filed a Notice of Contention that raises the question of the operation of s 39(5)[70] of the Act. The Shire relies upon its making of the plan, pursuant to s 39(4), and the effect of s 39(5), as deeming it to have satisfied any statutory or common law duty with respect to the exercise of road management functions. The Shire submits that this provides a further means by which the orders made by the judge should be affirmed. The ground relied on by the Shire is:

By operation of s 39(5) of the Act, where the Shire has a road management plan within the meaning of s 39(4) of the Act setting out the standard to which it was required to inspect, repair and maintain, inter alia, footpaths under its control, the Shire is to be taken, for the purposes of this proceeding, to have satisfied the statutory duty and any common law duty owed by it to Kennedy in relation to the inspection, maintenance and repair of the footpath where Kennedy fell.

66 The Notice of Contention gives rise to a further issue to be determined, in addition to those raised at [64], namely,

(10) By operation of s 39(5), did the making of the plan satisfy any statutory or common law duty in relation to road management functions?

67 We will consider each of the ten issues in turn.

(1) Did the Shire comply with the plan (the ss 103/105 defences)?

68 Relevantly, the plan has two standards: (1) the maximum permissible duration between inspections of secondary footpaths of 18 months; and (2) the intervention level of 30 mm for remedial action. Kennedy does not argue on appeal that the Shire failed to comply with the intervention level under the plan. She accepted at trial that although on her own measurement, the lip exceeded the intervention level, her measurement was not accurate and there was no challenge to the judge's finding that the lip was between 10 and 12 mm.[71] She argues on appeal that there was a breach of the maximum permissible duration between inspections, the inspection by Hitchcock not occurring until two days after the expiry of the 18 month period stipulated under the plan. Moreover, she argues that this breach was not 'cured', as the judge held,[72] by the fact that Hitchcock conducted an inspection on 6 July 2007, from which date time began to run again. She argues that to accept that the late inspection cured the earlier breach is to ignore the purpose for which an inspection occurs. The requirement for frequency of inspections is an important part of the plan. If the purpose of an inspection is to enable the Shire to maintain the footpaths free of hazards then a late inspection could only cure an earlier breach once the record of that inspection came to the notice of the Shire to enable it to make an informed decision to take any remedial action it saw fit. In this sense, the failure of the Shire to comply with the standard stipulated in the plan of a maximum permissible duration between inspections of 18 months was a 'continuing breach' which existed up until the date when the Shire had notice of the Hitchcock inspection report.

69 Kennedy does not accept that whenever an inspection occurs it allows time to run again. She accepts, only for the purposes of the argument, that a breach of a failure to inspect can be cured by a later inspection and thus, implicitly, that it would be absurd to argue that a breach could never be cured. However, she insists, this does not entail that a subsequent inspection, out of time, immediately cures a previous breach of the inspection regime. She argues that for an earlier breach to be cured, what is important is that the purpose of the inspection is achieved; that is, the earliest date on which a breach can be cured is the date on which a road authority acquires knowledge of the defects identified in the subsequent inspection to enable an informed decision to be made.

70 It follows, Kennedy submits, that the Shire remained in breach of the plan at least up until November 2007 (even putting to one side any carelessness associated with the failure of the Hitchcock inspection report to note the lip).[73]

71 The Shire responds to this submission in three ways. First, it says that the inspection that undoubtedly took place by Hitchcock on 6 July 2007 simply cured the failure to inspect by 4 July 2007. Secondly, the Shire says that the submission that there was a 'continuing breach' was never put below and should not be permitted to be raised on appeal as it could have led evidence about the practice of what occurred when inspection reports were received and what type of action, including remedial action, they triggered. Thirdly, it submits that the evidence did not reveal the date on which the Hitchcock inspection report was received and it did not concede that it had not been received until November 2007, or indeed that it had not been received before the date of the incident, 23 July 2007.

72 In our view, it is appropriate for this Court to determine on the appeal the question of whether a breach can be cured and, if so, whether it was in fact cured. Central to the issues at trial were the standard governing the timeliness of inspections, the existence of a breach, and the question of whether the breach as found could be remedied by the subsequent inspection of 6 July 2007. The submission with respect to whether there was a continuing breach is no more than a further response to those issues and, moreover, one to be determined having regard to the statutory construction of ss 40 and 103. The purpose for which standards are to be specified under a road management plan, or policy, including frequency of inspections, can be gleaned from the objects, scope and purpose of the Act. It is not a matter on which evidence would be relevant or determinative from one road authority, the Shire, on the practice it adopts towards the receipt of inspection reports, or what particular action those reports trigger.

73 The question of whether, or when, a breach can be cured is an important one. In our view, if a breach of the duty to inspect at a certain frequency, in accordance with a standard specified under a road management plan, can be cured by an inspection that occurs at any subsequent time, this would undermine the standard imposed under the plan. For example, if a failure to inspect every 18 months could be cured by an inspection that takes place after 18 months and two days, there is nothing to stop it being cured by an inspection that takes place after 19 months, or after 20 months, or after 24 months, or after 36 months. Time would always begin to run again from whatever date the inspection actually took place. In effect the period of 18 months would cease to be the standard. On the assumption that a breach of the time limit to inspect could be cured by conducting an inspection at any time, all that would be necessary for compliance with a plan would be for an inspection to take place at some time. The standard would become wholly elastic.

74 It is apparent from the statutory language of s 40(1) that the legislature attaches some significance to the specification of 'standards' in the plans and policies of road management authorities. It would undermine that intended significance to permit standards to become wholly elastic. While we agree with the judge that it would be untenable for a breach of a standard imposing frequency of inspections to mean that a road authority would always be in breach forever more, and that no number of subsequent inspections could remedy the situation, we do not agree that a breach can always be cured by a subsequent inspection at any time.

75 In our view, Kennedy is correct to argue that for a subsequent inspection to cure a failure to inspect in accordance with the standard, the breach must have been substantively remedied. This can only be achieved by ensuring that the purpose of the inspection has been met, namely, that defects and hazards in the footpaths have come to the attention of the road authority to enable it to make informed decisions about taking remedial action. This means that, where a standard governing the frequency of inspections has been breached, the breach could not be cured until a road authority has at least obtained the relevant inspection report. Time would not begin to run again until, at the earliest, the date of the receipt of the relevant inspection report.

76 On this view, it becomes critical to know when the Shire obtained the Hitchcock inspection report. As mentioned above, there was considerable uncertainty as to when the Shire received it. The judge made no finding as to the exact date of the receipt. He held that the report 'did not come to light for a period that is not entirely clear, but seems to have been in the order of at least a few months', which he attributed to 'an issue of efficiency and organisation'.[74] There was some evidence, however, relating to the likely date of receipt. Exhibit P, referred to above,[75] is an email created on 1 November 2007 by Walker to Major in which she asks Major to confirm 'the last routine inspection of Haverfield and Ogilvie Ave before the incident 23 July 2007'. In response, Major sets out in hand-writing:

This is a secondary footpath which are inspected every 18 months.

Please find copies of 'Inspection Record' attached.

77 Exhibit P constitutes a 'business record' of the Shire that, as at 1 November 2007, the last inspection report the Shire had of the footpath was the report of 4 January 2006. In accordance with the business record exception to the hearsay rule, pursuant to s 69 of the Evidence Act 2008, it can be relied upon as a representation of the fact that, as at 1 November 2007, the last inspection report the Shire had received was the report of the inspection of 4 January 2006. Major must be taken to be a person who might reasonably be supposed to have had personal knowledge of the asserted fact when he made the representation he did make on the email of 1 November 2007. Major accepted that as at 1 November 2007 the last inspection he was aware of was 4 January 2006.[76] Neither the evidence of Lemon nor that of Walker goes so far as to suggest that as at 1 November 2007 the Shire had received the Hitchcock inspection report. Their evidence does not displace the status of the email of 1 November 2007 as a business record. It is unclear precisely when the Shire obtained the Hitchcock inspection report. However, it appears that it can readily be inferred that the Shire had not received the Hitchcock inspection report by the date of the incident, 23 July 2007.

78 The failure of the Shire, without an adequate explanation, to call Hitchcock, who may have been able to give relevant evidence on when the Shire received the Hitchcock inspection report, means that, on the basis of the principle in Jones v Dunkel and the limited adverse inference that principle supports, one can infer that whatever evidence he could give would not assist the Shire with respect to the timing of its receipt of the Hitchcock inspection report.

79 It follows that, as at the date of the incident, the breach of the Shire under the plan had not been cured. The Shire was in continuing breach of the standard imposed by the plan for the timeliness of inspections of secondary footpaths. It was in breach of its statutory duty under s 40(1)(a) to inspect a public road.

80 On the finding made by the judge that the policy of the Shire is to be identified with the plan (a finding that is challenged and discussed below) it follows that the acts and omissions of the Shire were not in accordance with its policy. If the policy of the Shire is the plan, the 'policy defences' of ss 103 and 105 are not available to the Shire and the judge was in error in concluding that they were available.

(2) Did the Shire have actual knowledge of the particular risk within the meaning of s 102?

81 On appeal, Kennedy repeats the submission she made below, that the Shire had actual knowledge of the particular risk the materialisation of which resulted in the harm, within the meaning of s 102(2), with the consequence that the defence under s 102 was not available to it. She argues that the actual knowledge of the Shire came about by reason of the incident report made by Kennedy, pursuant to s 115 of the Act. She submits that the fact that Kennedy's s 115 report (exhibit T) was made after the incident (on 3 August 2007)[77] is of no consequence as s 102(3) should be construed as a deeming provision which deems the Shire to have had actual knowledge of the particular risk at all relevant times once the deterioration has been reported under s 115.

82 The Shire submits that the notice given by Kennedy on 3 August 2007 of the incident cannot constitute a report under s 115 which 'had been reported in writing'[78] to the Shire so as to constitute actual knowledge of the particular risk for the purpose of s 102(3). The use of the past tense 'had been' in s 102(3) makes it clear, on the ordinary meaning of the words and in accordance with common sense, that a report to a road authority of a deterioration in a road can only constitute knowledge of the risk posed by that deterioration if the report is provided before the particular risk resulted in the harm complained of in the report. Logically, a report that an accident has already occurred cannot constitute prior notice of the risk that led to the accident. Yet this is the incongruous position for which Kennedy contends.

84 The points in time referred to in s 102 are critical. The scheme of the section is to provide a defence to a liability that would otherwise flow from the failure to remove a hazard, repair a defect or deterioration,[79] or give warning of a hazard, defect or deterioration[80] unless, 'at the time of the alleged failure', the road authority had actual knowledge of the particular risk.[81] Section 102(3) is a deeming provision that in effect provides that receipt of an incident report under s 115 is to be taken to amount to actual knowledge of the particular risk concerned. Section 102(3) deems that the road authority is 'to be taken to have had' actual knowledge of the particular risk in certain circumstances; this must mean, actual knowledge of the risk at the time of the alleged failure.[82] The circumstances which must be satisfied for the deeming provision to apply are that the deterioration in the road 'had been reported' under s 115 to the road authority. In our view, the Shire is correct in arguing that the use of the past tense in the expression 'had been reported' must refer to some time prior to the time of the alleged failure. In other words, the operation of s 102(3) is confined to those circumstances where a road authority had received a s 115 report before the event that materialised in harm; the deeming provision is not to be read as going so far as to suggest that a road authority is to be taken to have had notice 'at the time of the alleged failure'[83] if it is given a s 115 report identifying the risk after the event.

85 This is not a matter of reading in the word 'previously' before 'reported'. It is rather a matter of giving effect to all the temporal indicia the legislature has included in s 102.

86 We consider that the judge was correct to conclude that s 102(3) does not assist Kennedy.[84]

87 However, in our view, s 102 also does not assist the Shire because sub-s (4) expressly excludes the s 102 defence in circumstances where the liability of a road authority arises out of a breach of the duty to inspect imposed by s 40. The primary contention of Kennedy's case, both at trial and on appeal, is that the Shire breached its duty, under s 40 of the Act, to inspect the footpath both because of the breach of time limits for inspections and also because of the carelessness with which the inspection by Hitchcock was carried out, namely, that it was carried out in a manner that failed to detect the particular risk the materialisation of which resulted in the harm. While Kennedy complains of the Shire's failure to repair the defect, and the failure to warn, these alleged deficiencies are premised upon the Shire's breach of its duty to inspect.[85] It is this particular duty in respect of which s 102 gives no assistance to the Shire.

88 It was common ground between the parties that there were no formal requirements specified in the Act that had to be met for a decision to constitute a 'policy' or a 'policy decision' of a road authority. In particular, there was no requirement under the Act for a formal ratification by a road authority of its policies with respect to road management. Nevertheless, the Shire submits that, although there is no authority on the point, a policy, or policy decision, would require the road authority to have a 'minute' of its decision and it could not be made by 'low level' employees. It points to s 39(2) of the Act which provides that a decision is a policy decision if it is 'based substantially on factors or constraints which are financial, economic, political, social or environmental',[86] taking into account the broad range of activities of a road authority. It notes that there was no minute of any policy adduced in evidence and submits that the judge was correct to conclude that the policy of the Shire was the plan.[87]

89 Kennedy argues that there are sufficient statutory indicia to demonstrate that a policy may be distinct from a road authority's plan. It is clear from s 39(4) that the Act allows for a road authority that has made a road management plan to be taken to have made a policy or policy decision.[88] For convenience we set out the terms of the relevant sections again. Section 39(4) provides:

A road authority is to be taken to have made a policy or policy decision relating to a road management function if the road authority has made a road management plan that includes provisions relating to the performance of that road management function.

90 However, while the Act allows for a policy to be no more than a road management plan, the Act also distinguishes between policies and plans in a manner that establishes that a policy may be something separate from a plan. For example, Kennedy relies upon s 41(5) as establishing that a policy or policy decision need not necessarily be the same as a plan:

A standard determined under this section may be determined -

(a) as a policy or policy decision under section 39;

(b) in a road management plan.[89]

91 As noted above,[90] s 40(1) also recognises that a policy and a plan may impose different standards:

... a road authority has a statutory duty to inspect, maintain and repair a public road -

(a) to the standard specified in the road management plan for that public road or a specified class of public roads which includes that public road; or

(b) if paragraph (a) does not apply, to the standard specified in a policy in respect of that public road;[91] ...

92 Section 52(1)(c) also contemplates that a road management plan may specify relevant policies but does not require it to do so.[92]

93 Kennedy submits that the evidence at trial supports the proposition that the Shire had a policy that was distinct from the plan, and that its policy consisted in the use of the proactive list. She relies especially on the evidence of Major that the proactive list was 'basically our practice of what we do'.[93] As described above, that practice involved grinding down lips on footpaths below the intervention level stipulated under the plan. Grinding down would occur on lips at 20 mm, 15 mm or between 10 and 15 mm if there was enough money left in the budget to accommodate that intervention and/or if the contractors were already in the relevant area.[94] The evidence would suggest that it happened more frequently towards the end of the financial year[95] but not exclusively so.[96] The proximity of the contractors to an area in need of repair appeared to be a relevant factor that was also taken into account.[97]

94 We agree that the Shire had a policy that was distinct from the plan, the policy being the proactive list.

95 In our view, there is considerable evidence that there was a systematic approach taken by the Shire to the grinding down of lips on footpaths below the intervention level specified in the plan. As Major said: 'That is just something that we have always done just to try to maintain our footpaths in a standard - at a standard'.[98] Lemon, the unit leader of the Shire's technical services, said that the Shire had been 'throwing money at all the time constantly to get our footpaths down to a really good state, a really good condition' for 18 years.[99] The inspections forms used in 2007 specified each of the levels 20 to 30, 10 to 20, and then five to 10 mm.[100] The specification of those levels would go unexplained if reference were made only to the plan. The reason for the inclusion on the inspection forms of levels below the intervention level in the plan is accounted for by the use of the proactive list. It also shows that the proactive list was not an inconsequential or unimportant matter for the Shire. The Shire required its inspectors to measure irregularities in footpaths below the intervention level in the plan, using the Shire's resources to do so, and did so for the express purpose of taking remedial action when circumstances allowed. Indeed, the terminology of 'proactive' confirms that the Shire sought to do more than what it was obliged to do under the plan.[101] In doing more than the plan requires the Shire is 'seen in really good form' because it is attending to something 'even if it was under our intervention level'.[102]

96 In our view, the proactive list was sufficiently embedded in the practice of the Shire, over a considerable period of time, with recognition in the protocols of the Shire, that it amounted to a policy of the Shire. We consider that the circumstances here demonstrate that the policy of the Shire on road management extended beyond the plan.

(4) Did the Shire's policy address the matter which was a cause of the incident within the meaning of s 105?

97 We have concluded that the proactive list was a policy of the Shire at the time of the incident. The proactive list specifically addressed lips of secondary footpaths that fell below that of the intervention level under the plan. In particular the policy addressed lips on secondary footpaths of 10 mm. This is confirmed by the levels identified on the inspection report forms in respect of which inspectors were obliged to report. As found by the judge, the lip, which was a cause of the incident, was between 10 and 12 mm.[103]

98 In our view, the Shire thus had a policy that addressed the matter which was a cause of the incident giving rise to the action, within the meaning of s 105(3)(a) of the Act.

(5) Did the Shire act in accordance with its policy for the purpose of the defences under ss 105 or 103?

99 The Shire submits that it acted in accordance with its policy for the purpose of the defences under ss 103 or 105. The submission was made on the basis that the policy of the Shire is to be identified with the plan. For the reasons set out above,[104] we reject that submission. It was conceded by the Shire on the appeal that if the proactive list is to be taken to be a policy of the Shire, it did not act in accordance with its policy.

100 We consider the concession to be appropriately made. There was evidence from Lemon that Hitchcock had been obliged in his inspection to report on any lips in excess of 10 mms (and, indeed, between 5 and 10 mm) but had not done so.[105] Lemon was unable to give any explanation as to why the lip had not been detected.[106] The failure to call Hitchcock supports the Jones v Dunkel inference that his evidence would not have assisted the Shire.

101 However, it follows from what we said above in relation to s 40(1), and the hierarchy of duties that it imposes, that the primary obligation upon the Shire was to act in accordance with the standard set in the plan. We have concluded that the Shire failed to act in accordance with the plan with respect to the standard set by the plan for frequency of inspections. The policy set no standard for frequency of inspections but even if it had the Shire would not have been under a statutory duty to comply with that standard under s 40(1). This is because, as we explained above,[107] the duty to comply with the standard specified in a policy only arises where there is no standard specified in a road management plan.

102 More relevantly, with respect to the standard set for the intervention level under the policy, we consider that the Shire was under no statutory obligation under s 40(1) to comply with that standard because there was a standard set under the plan for intervention. The plan set the standard of 30 mm for intervention and the Shire was under a duty to act in accordance with that, pursuant to s 40(1)(a). The Shire acted in accordance with that standard for intervention; it was not in breach of s 40(1)(a) by reason of any failure to intervene at the standard set by the plan. By contrast, the policy set a standard for intervention of 10mm. While the Shire failed to comply with the standard set by the policy, this did not place it in breach of its statutory duty under s 40(1) because the relevant duty could only arise under s 40(1)(b) and, in accordance with the hierarchy of duties imposed by s 40(1), the duty under s 40(1)(b) only becomes relevant where (contrary to the circumstances here) there is no standard set under a road management plan.

103 It follows that, where the policy of a road management authority is different from the authority's road management plan and sets different standards, a failure to act in accordance with the policy will not give rise to liability under s 40(1) where the authority acts in accordance with the standard set by its plan even if it does not act in accordance with the standard set by its policy. This construction of s 40 resolves the problematic consequences that might otherwise flow from the existence of inconsistent standards between a road authority's plan and its policy.

104 This has the consequence here that as the policy set different standards for intervention from those set under the plan, the Shire's failure to comply with its policy did not give rise to liability under s 40(1)(b) and there was no need for the Shire to have recourse to the policy defence under s 105. For the sake of completeness, we observe that had there been no intervention standard set under the plan, the Shire would have faced potential liability under s 40(1)(b) and the policy defence under s 105 would not have been available to it because, although it had a policy which addressed the matter which was a cause of the incident, it did not comply with the relevant part of the policy, namely, the inspection and detection of lips in excess of 10 mm.

105 Furthermore, these considerations also have implications for the 'policy defence' under s 103. We concluded above that, if the policy of the Shire was the plan, the Shire could not rely upon the defence under s 103 because its conduct was not 'an act or omission which is in accordance with a policy'[108] as at the time of the incident there was a continuing breach of the standard for frequency of inspections under the plan.[109] However, if the policy of the Shire is not the plan but rather the proactive list, and the relevant standard is the policy's standard for intervention, then for the reasons outlined, the conduct of the Shire was also not, in the words of s 103, 'an act or omission which is in accordance with a policy'. So much was conceded by the Shire and, again, we consider appropriately so. On the construction we adopt of s 40(1), however, there was no requirement for the Shire to act in accordance with the standards set in its policy. The potential liability under s 40(1)(b) does not arise. However, for the reasons we have given, if that liability had relevantly arisen, the Shire could not have relied upon the defence under s 103.

(6) Would compliance with the plan and the Shire's policy have detected the particular risk?

106 Kennedy submits that had there been compliance with the plan the lip would have been detected. We reject that submission.

107 The only breach of the plan established is the failure to inspect in accordance with the standard for the frequency of inspections. Given that the intervention level under the plan was 30 mm, in our view it cannot be concluded that an inspection that took place within the permissible period would have detected the particular risk. This is because, under the plan, there was no requirement to observe, measure or record lips between 10 and 12 mm.

108 On the other hand, if there had been compliance with the relevant part of the policy of the Shire, to observe, measure and record lips in excess of 10 mm, the lip would have been detected. In our view, the evidence of Lemon makes it plain that 'it should have been picked up'[110] had the policy been complied with, but it was not. Moreover, as the primary argument of the Shire is that the lip was obvious, there being no concealment, it would have been inconsistent for the Shire to submit that, even had there been compliance with the proactive policy, the lip would not have been detected.

(7) If detected, would the Shire have warned or taken other remedial action in accordance with the plan or its policy?

109 Kennedy submits that had the lip been detected many inexpensive and ordinary responses by the Shire would have avoided the incident. For example, Kennedy submits that the Shire could have marked the lip with a sign to warn pedestrians. Indeed, the painting of large white dots very close to the lip, as occurred after the incident (exhibit E), could have functioned as a warning. Alternatively, the Shire could have marked up the lip for grinding or fixed it. The Shire would have incurred little cost in doing so. As Lemon said, '[w]e are not talking about a lot of money, $50 or $60 to do a grind such as this'.[111]

110 In response the Shire maintains that any breach of its duty under s 40(1)(a) to inspect, maintain and repair the footpath to the standard specified in the plan[112] was not causative of the incident, as the judge found.[113] As noted, the only likely breach of the plan was the failure to inspect within the maximum permissible duration. Given that the intervention level under the plan is 30 mm, and given that the size of the lip was between 10 and 12 mm, it could not be inferred, so the submission goes, that the Shire would have taken any remedial action even had there been no breach of the plan and the footpath had been inspected within the required 18 months. The size of the lip was too small to trigger any remedial action under the plan, even a warning.

111 In our view, the Shire is correct in its submissions on causation with respect to any breach of statutory duty arising from a contravention of the standards specified under the plan.

112 The question arises whether Kennedy can overcome the difficulties she faces on causation on the assumption that the proactive list was a policy of the Shire and that the Shire failed to detect the lip that it ought to have detected had it acted in accordance with its policy. We have already explained why we consider that failing to comply with the policy did not relevantly give rise to any liability of breach of statutory duty under s 40(1). In any event, for Kennedy to succeed in this part of her appeal it is necessary for her to demonstrate that the incident occurred as a causal consequence of a breach of the proactive policy; in other words, she would need to show that had the Shire complied with its policy, the incident would not have happened and she would not have suffered the distal radial fracture[114] to her right wrist.

113 In our view, it cannot plausibly be inferred that the Shire's non-compliance with the proactive policy caused the incident. The inclusion of a lip or other hazard on the proactive list is clearly dependent upon the Shire coming to be aware of a lip or hazard. Most typically this would be through the process of inspections although this may not be the only way in which a lip or hazard comes to the attention of the Shire and included on the proactive list. However, it would seem that the primary means of inclusion on the proactive list is as a result of an inspection carried out in accordance with the standards specified under the plan. The use of the inspection forms, and their reference to lips five mm and above, would suggest that this is the primary way, or at least the primary systematic way, in which the Shire comes to be aware of those hazards that are then placed on the proactive list for remedial action. On this basis, the Shire could have conducted an inspection of the footpath at any time up to 18 months after the previous inspection of 4 January 2006. As noted, the last day for an inspection conformably with the plan was 4 July 2007.[115]

114 It is apparent from the evidence that the policy was inherently flexible and lacked stringency. The placing of a hazard on the proactive list gave no guarantee as to when it would be remedied. In particular, it gave no guarantee that any remedial action, including a warning, would be prompt. The evidence does not suggest that whenever the Shire became aware of a hazard below the intervention level under the plan it placed a warning sign or bollard around the hazard, or painted large white dots, or other markings, around the hazard. Rather, the evidence of the policy, as mentioned,[116] was that once a hazard was placed on the proactive list, remedial action occurs when contractors are in the area and/or there is money remaining in the relevant budget at the end of the financial year.

115 To establish that the failure of the Shire to include the lip in the proactive list caused the incident it would be necessary for Kennedy to establish that had an inspection occurred on 4 July 2007, and had the inspection detected the lip, as it ought to have done, some remedial action (even by way of a warning) would have been carried out by the Shire by the date of the incident, 23 July 2007. Unfortunately for Kennedy, the evidence does not support the inference that some remedial action would have been taken by the Shire in that short period of time that would have prevented the incident. There was no evidence that contractors were in the relevant area in the almost three weeks between 4 July and 23 July 2007. Nor was there any evidence of the state of the Shire's budget with respect to footpath repairs between those dates. In our view, the 'but for' test required by s 51(a) of the Wrongs Act[117] for factual causation to be made out has not been satisfied.

116 We consider that it would not be open to find that there was a causal connection between the Shire's failure to comply with its policy and the incident.

(8) What significance should have been attached to the Hitchcock inspection report?

117 The failure of the Shire to call Hitchcock as a witness has been mentioned several times above. We have also drawn attention to permissible Jones v Dunkel inferences.

118 We consider the judge was correct, despite the absence of evidence from Hitchcock, to take into account the Hitchcock inspection report. Indeed, ultimately on the appeal, it was Kennedy who relied upon the Hitchcock inspection report as revealing a failure to detect the lip in breach of the policy when Hitchcock, as an inspector, was obliged to detect irregularities of the size of the lip.[118]

119 We also consider that the judge was correct not to treat the absence of Hitchcock at trial as capable of supporting an inference filling the void created by the absence of other evidence, in particular that the Shire had actual knowledge of the particular risk the materialisation of which resulted in the harm, within the meaning of s 102.

(9) Did the Shire breach its duty to inspect under s 40(1)(a) and, if so, did that breach cause the incident?

120 We have concluded that the Shire breached s 40(1)(a) of the Act because at the time of the incident there was a continuing breach of its duty to inspect in accordance with the standard for frequency of inspection under the plan.[119]

121 However, we have also concluded that, on the evidence, it would not be open to infer that the lapses by the Shire caused the incident.[120]

(10) By operation of s 39(5), did the making of the plan satisfy any statutory or common law duty in relation to road management functions?

122 The terms of s 39 are set out above.[121] For convenience we set out sub-s (5) of s 39 again:

For the purposes of any proceedings, unless a policy or policy decision made by a road authority is so unreasonable that no road authority in that road authority's position acting reasonably could have made that policy or policy decision, any decision or standard which is a policy or policy decision relating to the exercise of a road management function by the road authority is to be taken to satisfy the statutory duty and any common law duty of the road authority in relation to the exercise of that road management function.

123 The Shire contended that the judgment below should be affirmed on the further ground that the defence under s 39(5) of the Act was available to it, there being no challenge to the reasonableness of either the plan or the policy.

124 The Shire had relied on s 39(5) in its Defence. In particular, it maintained that at all material times it had a policy contained in the plan which identified the manner in which it would inspect, maintain and repair roads in its municipality, including footpaths, and that this was a policy determined by the Shire under s 39 of the Act. It further maintained that as it complied with its policy and the manner in which it would inspect, maintain and repair roads in its municipality, including the footpath, there was no wrongful exercise or failure, by reason of ss 39(5) and 103 of the Act. Kennedy did not file any Reply.

125 The Shire submits on the appeal that in light of the findings made by the judge, including the findings that: (1) the Shire made the plan; (2) the Shire thereby made a policy under s 39(4); and (3) the Shire complied with the plan, the Shire should be taken to have satisfied any statutory duty or common law duty owed by it with respect to the inspection, maintenance or repair of the footpath.

126 We have already concluded that the Shire did not comply with the plan. We have also concluded that the policy of the Shire was separate from the plan, namely, the proactive list. We have further concluded that the Shire did not comply with the policy. These findings in themselves preclude reliance on s 39(5) on the Shire's own submissions.

127 It is noteworthy that although Ground 1 of the Notice of Contention identifies s 39(5) as the sole basis upon which the Shire seeks further to affirm the judgment below, both its Defence and its written submissions in support of the Notice of Contention refer not only to s 39(5) but also to s 103. It is s 103 which requires that the acts or omissions are in accordance with a policy while s 39(5) read literally would suggest that all a road management authority needs to do to escape liability for breach of statutory duty or at common law, with respect to a road management function, is to make a policy or policy decision relating to that road management function that is not Wednesbury unreasonable. In our view, if it is necessary to rely on s 103 in addition to s 39(5), the reliance on s 39(5) adds nothing further to the arguments made on the basis of s 103 which have been rejected.

128 Furthermore, it would be wrong, in our view, to construe s 39(5) alone as providing an independent basis of support for the Shire. A literal reading would not require the Shire to comply with its own policy. It would be a sufficient defence that a road management authority had made a policy or policy decision about the circumstances in which a road management function is to be performed; the manner in which a road management function is to be performed; or the standard to be achieved in performing a road management function, regardless of whether the authority acted in accordance with that policy. In our view this would prove too much. It would render otiose the other more specific defences that rely upon a road management authority having made a policy or policy decision, for example, ss 103 or 105, that require compliance with the policy. It would subsume all the policy defences because it would be the easiest policy defence to satisfy. That is, a road authority that could rely upon s 103 would already have satisfied the requirements of s 39(5) on a literal approach, as would a road authority that could rely upon s 105. In a sense, a literal reading of s 39(5) would contradict the more specific requirements of ss 103 and 105. This would be contrary to the principle that it is necessary to read a statute as a coherent whole[122] and to give meaning to each of its sections.[123] A literal reading of s 39(5) should be rejected.

129 In our view, s 39(5) is directed at resisting challenges to the policy decisions or policies of road authorities on road management functions as contrary to their statutory or common law duties with respect to those functions on any basis other than Wednesbury unreasonableness. In other words, s 39(5) is aimed at protecting road management authorities against findings of breach of statutory or common law duties simply on the basis of the policy, or policy decision, that a road management authority has adopted, with the exception of Wednesbury unreasonableness. Where a complaint arises as the result of a policy decision that addresses the allocation of resources based on factors or constraints that are financial, political, social or environmental, the road management authority can rely upon the policy or policy decision it has made in its defence. For example, if the lip here had been only three mm and Kennedy sought to complain that the Shire should have repaired a defect of that size or erected signage warning of the risk created by the defect, the Shire could properly rely upon the criteria of its proactive list as detecting and repairing only lips above five mm as arrived at on the basis of financial and economic constraints. The Shire could justifiably say that the failure to repair a three mm defect was the result of a decision about the public allocation of scarce resources and is not so unreasonable that no road authority in the Shire's position acting reasonably could have made that policy or policy decision. In this way the Shire could establish that its policy should be taken to satisfy the statutory duty and any common law duty owed to Kennedy in the exercise of the road management functions of repairing secondary footpaths. This is consistent with the recommendation of the Ipp Report[124] which led to many of the reforms to tort law in Australia:

[W]e think that Australian law should follow the lead of English law in this respect (see Stovin v Wise [1996] UKHL 15; [1996] AC 923) by providing that in a claim for negligently-caused personal injury or death against a public functionary, where the alleged negligence consists of the exercise or non-exercise of a public function, and the public functionary pleads that the failure to take precautions to avoid the relevant risk was the result of a decision about the allocation of scarce resources or was based on some other political or social consideration, liability can be imposed only if the decision was so unreasonable that no reasonable authority in the defendant's position could have made it.[125]

130 The Shire's failure to repair the lip, or erect signage with respect to it, was not the result of a decision about the allocation of scarce resources or based upon some other political or social consideration. It was, amongst other things, a failure to be aware of the lip because of the carelessness of inspection by Hitchcock who failed to comply with the requirements of the policy of detecting and reporting upon lips as low as five mm, and relevantly lips between 10 and 12 mm, which would have enabled the lip to be included within the proactive list.

131 The Shire placed reliance on the reasoning of Dalton J in Hamcor Pty Ltd v State of Queensland[126] that concerned s 36 of the Civil Liability Act 2003 (Qld), due to the commonality of that section with some of the elements of s 39(5) of the Act. Section 36 provides:

1. Proceedings against public or other authorities based on breach of statutory duty

(1) This section applies to a proceeding that is based on an alleged wrongful exercise of or failure to exercise a function of a public or other authority.

(2) For the purposes of the proceeding, an act or omission of the authority does not constitute a wrongful exercise or failure unless the act or omission was in the circumstances so unreasonable that no public or other authority having the functions of the authority in question could properly consider the act or omission to be a reasonable exercise of its functions.

132 In Hamcor Dalton J commented on the analogy of s 36 of the Civil Liability Act 2003 (Qld) with s 43 of the Civil Liability Act 2002 (NSW).[127] She held that s 36 only applies to proceedings for breach of statutory duty and did not apply to the case before her because it was not an action for breach of statutory duty.[128] In obiter comments, she remarked that, in her view, s 36 'drastically reduces the rights of persons to a remedy by very significantly lowering the standard of care owed by public or other authorities',[129] 'rather than establishing either an immunity or a defence'.[130] Her Honour concluded that the breach under s 36 must be 'such that it invalidates the exercise of power':[131]

[T]he words of s 36 require an act so unreasonable that no authority 'could properly' consider it to be a reasonable exercise of its power. In my view these words require the kind of unreasonableness which invalidates, or makes improper, the act or omission as an exercise of statutory power. The effect of the section is therefore in my view to make it extraordinarily difficult for a plaintiff to prove breach.[132]

133 It is clear that there is a difference between the statutory language of s 36 of the Civil Liability Act 2003 (Qld) and s 39(5) of the Act. The former provision focuses upon a specific act or omission of a public authority while the latter addresses a policy or policy decision and, for the reasons we have given, limits the type of challenge that can be made to a decision or standard that is a policy or policy decision. The defences available for specific acts or omissions under the Act include those under ss 102, 103 and 105. In our view, Hamcor is clearly distinguishable.

134 We have accepted many of the grounds of appeal.[133] We would allow the appeal.

135 We consider that the Shire breached its statutory duty under s 40(1)(a) of the Act to inspect, maintain and repair public roads. We consider that the statutory defences were not available to it. However, as we have sought to explain, it would not be open to find that there was a causal connection between the Shire's breach of statutory duty and the incident.

136 It is necessary to address the question of the proper disposition of this matter.

137 In our view, although Kennedy cannot establish the Shire's liability for her pain and suffering based on breach of statutory duty, this leaves open the possibility that she could yet be successful at common law. The judge has made no findings about whether a common law duty of care exists or, if a duty exists, whether it has been breached, or how it may have been breached (for example, by a failure to inspect the footpath and/or or the failure to warn pedestrians about the lip). The particulars of negligence alleged[134] are yet to be considered not as examples of breaches of the plan, or the policy, but as allegations at common law of negligent conduct. The judge has made no findings on whether a causal connection exists between any breach at common law and the incident. Kennedy is entitled to have any common law cause of action heard and determined.

138 We consider that the matter ought be remitted to the County Court for further hearing of Kennedy's common law proceeding in negligence.

139 For the reasons we have given,[135] we reject the Notice of Contention.

[1] Kennedy was granted leave to appeal on 23 March 2015: Kennedy v Shire of Campaspe [2015] VSCA 47 (Whelan and Ferguson JJA).

[2] Kennedy v Shire of Campaspe [2014] VCC 1833 ('Reasons'). The proceeding was heard without a jury.

[3] There was evidence that there were two pavers where lips existed. The judge found that it was on the more northerly of the two lips that Kennedy tripped: Reasons [12]. This was not challenged on appeal.

[4] This was not disputed: Reasons [13].

[5] The particulars of negligence and breach of duty included, for example, failing to properly repair the footpath; failing to use a material to repair the footpath so that the surface was reasonably level; failing to inspect the relevant section of the footpath properly or at all when the Shire knew or ought to have known that the relevant section of the footpath was hazardous, failing to take steps to warn pedestrians including Kennedy or to abate the hazard; failing to display appropriate warnings at the relevant section of the footpath when the Shire knew or ought to have known of the hazard; and failing to inspect the relevant section of the footpath within the timeframes set out in the applicable road management plan or, if inspection was in accordance with the timeframes, then failing to act on any inspection: Amended Statement of Claim (7 August 2013), [11].

[6] These are set out at [42]-[44] below.

[7] This is set out at [46] below.

[8] The Shire does not accept that the lip was a hazard; it says it was neither a hazard nor hidden.

[9] Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512, 581 [163]; Boroondara City Council v Cattanach [2004] VSCA 139; (2004) 10 VR 109; Greater Shepparton City Council v Davis (2004) VSCA 140. See Reasons [35].

[15] It was not in contest that the footpath is a secondary footpath.

[20] The email was from Sue Walker, the Shire's risk management officer, to Major asking Major to find the latest inspection reports.

[21] This was two days after the permissible duration, under the plan, between inspections of secondary footpaths of 18 months. See [21] below.

[24] Dated 1 June 2011 and 11 June 2014.

[25] It was not in dispute that the Shire is a 'road authority' under the Act.

[26] Associated Provincial Picture Houses, Ltd v Wednesbury Corporation [1947] EWCA Civ 1; [1948] 1 KB 223. On the use of an administrative law concept such as Wednesbury unreasonableness in the field of tort law see Roads and Traffic Authority (NSW) v Refrigerated Roadways Pty Ltd [2009] NSWCA 263; (2009) 77 NSWLR 360, 430-1 [343]-[346] (Campbell JA). See also Mark Aronson, 'Government Liability in Negligence' [2008] MelbULawRw 2; (2008) 32(1) Melbourne University Law Review 44, 79-81 who suggests that it may have been more straightforward to have used a standard of 'gross negligence'. See also [129] below.

[27] See, eg, ss 39(5), 103(a)-(b) of the Act.

[29] The Shire relies upon s 39(5) of the Act by means of a Notice of Contention to support the judge's reasons on an additional ground. See [65] below.

[30] Section 22 confers a power on the relevant Minister to direct a road authority, amongst other things, to perform a function or exercise a power of the road authority under the Act.

[31] See [41] below.

[32] See [99]-[105] below.

[33] The terms of s 105 (1) are somewhat different from those referred to by the judge in the Reasons at [44]. The terms as set out above reflect those that applied at the time of the incident (23 July 2007). The words 'a failure to maintain a public road' were later replaced by 'the performance or non-performance of a road management function in respect of a public road': see Road Legislation Further Amendment Act 2007 (Act No 74/2007). The relevant amendment commenced on 19 December 2007. A substantially similar amendment was made to s 105(2). On one view, the defence under s 105, as applicable at the time of the incident, might not be available with respect to a failure to inspect just as the defence under s 102 is not so available. It is unnecessary to determine this issue.

[42] See [21] above.

[43] 'Primary footpaths' had a target inspection frequency of 18 weeks with a maximum period between inspections of 26 weeks.

[44] Reasons [21]-[22]. There was no challenge on the appeal to the judge's observation that there was no dishonesty or fabrication with respect to the Hitchcock inspection report or its receipt.

[45] Reasons [99]-[100]. See also Reasons [52] where his Honour summarises the Shire's submissions on the point.

[51] Ibid. He considered that constructive or imputed knowledge would not be sufficient: ibid [112]. In arriving at this conclusion he relied upon (at [109]) North Sydney Council v Roman [2007] NSWCA 27; (2007) 69 NSWLR 240 with respect to the somewhat similarly worded s 45(1) of the Civil Liability Act 2002 (NSW), especially the judgment of Basten JA who held (at 271-2 [156]) that 'actual knowledge must be found in the mind of an officer within the council having delegated (or statutory) authority to carry out the necessary repairs'.

[54] [1959] HCA 8; (1959) 101 CLR 298.

[59] See [44] above.

[67] Ibid [134]. He also said (at [91]) that 'some might consider that an adjective stronger than "arguable" might be selected'.

[69] These have been adapted to reflect matters already defined.

[70] See [31] above.

[71] See [10] above.

[72] See [52] above.

[73] On the issue of the carelessness of Hitchcock's inspection, see [100] below.

[74] Reasons [22]. See [51] above.

[75] See [19] above.

[76] See [19] above.

[77] See [28] above.

[78] Section 102(3) of the Act (emphasis added).

[86] See [31] above.

[87] See [49] above.

[88] See [31] above.

[89] For the whole of s 41, see [36] above.

[90] See [33]-[35] above.

[91] For the whole of s 40, see [32] above.

[92] See [40] above.

[93] See [16] above.

[94] See [17], [18] above (Major); [21] (Lemon).

[95] See [17] above (Major); [23] (Lemon).

[96] See [21], [23] above (Lemon).

[97] See [21] above (Lemon).

[98] See [18] above.

[99] See [24] above.

[100] See [18] above.

[101] See [21] above.

[102] See [22] above (Lemon).

[103] Reasons [18]. See [10] above.

[104] See [88]-[96] above.

[105] See [26] above.

[106] See [26] above.

[107] See [33]-[35] above.

[108] See [43] above.

[109] See [79]-[80] above.

[110] See [26] above.

[111] See [22] above.

[112] See [32] above.

[113] Reasons [101]. See [53] above.

[114] Referred to at [5] above.

[115] See [51] above.

[116] See, for example, [21] above (Lemon).

[118] See [26] above.

[119] See [79]-[80] above.

[120] See [111] above.

[121] See [31] above.

[122] Metropolitan Gas Co v Federated Gas Employees' Industrial Union [1925] HCA 5; (1925) 35 CLR 449, 455; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, 381 ('Project Blue Sky').

[123] Commonwealth v Baume [1905] HCA 11; (1905) 2 CLR 405, 414; Project Blue Sky [1998] HCA 28; (1998) 194 CLR 355, 382.

[124] Panel for the Review of the Law of Negligence, Review of the Law of Negligence: Final Report (2002) 157, commonly known as the 'Ipp Report'.

[126] [2014] QSC 224 [198] ('Hamcor').

[127] Section 43 of the Civil Liability Act 2002 (NSW) is expressed as applying to breaches of statutory duty and sub-s (2) relevantly provides:

For the purpose of any such proceedings, an act or omission of the authority does not constitute a breach of statutory duty unless the act or omission was in the circumstances so unreasonable that no authority having the functions of the authority in question could properly consider the act or omission to be a reasonable exercise of its functions.

[128] Hamcor [2014] QSC 224 [192]-[193], [197]. She also held that, while she was critical of the Queensland Fire and Rescue Services, the conduct would not have breached s 36(2).

[133] Grounds 1, 2(a) and (b), 3, 4(a) and (b), and 6 (b), (c), (d), and (e).

[134] See the particulars of negligence and breach of duty set out at n 5 above.

[135] See [122]-[133] above.