Mayne Nickless Ltd t/as Mayne Nickless Logistics v D Symen & Anor

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 41009/00 DC 8076/98 MASON P IPP AJA SPERLING J

Friday 14 September 2001 MAYNE NICKLESS LTD t/as MAYNE NICKLESS LOGISTICS v DARIUS SYMEN & ANOR Facts: The first respondent was an employee of the appellant and suffered injuries when a ramp attached to the vehicle trailer collapsed. The ramp was not permanently affixed to the trailer instead it was attached to facilitate the loading and offloading of goods. The ramp was attached to the trailer by a synthetic webbing strap, which was secured to the trailer itself by a bolt and washer. There was a metal hook fitted to the strap, which was inserted into a slot in the trailer thereby securing the ramp in a position to allow loading of the trailer. This strap was damaged, causing it to break and the ramp to collapse.

The main question to be determined was whether the matter was to be resolved under the Motor Accidents Act 1988 or the workers Compensation Act 1987. At trial Garling DCJ held that the defective strap was not part of the vehicle and as such no liability arose under the Motor Accidents Act . His Honour instead found for the first respondent under the Workers Compensation Act. This decision denied the appellant a right to indemnification from the second respondent who was the insurer of the vehicle under the Motor Accidents Act . The appellant appealed against this decision.

HELD Allowing the appeal. (1) Per Ipp AJA, Mason ACJ and Sperling J agreeing Having regard to the purpose of the synthetic strap, the degree of its attachment to the trailer and the manner in which the vehicle was intended to operate the strap was an integral part of the vehicle. The defect in the strap was a defect in the vehicle thus bringing the matter within the Motor Accidents Act . As the Motor Accidents Act applies the appellant is entitled to indemnification from the second respondent. Zurich Australian Insurance Limited v CSR Limited [2001] NSWCA 261 applied, AMP General Insurance Ltd v Mayne Nickless Ltd (2000) 50 NSWLR 61 distinguished.

Cases cited: AMP General Insurance Ltd v Mayne Nickless Ltd (2000) 50 NSWLR 61 Zurich Australian Insurance Limited v CSR Limited [2001] NSWCA 261 James Nimmo & Company Limited v Connell [1924] AC 593 Walsh v Whiteley (1888) 21 QBD 371 Metcalf v The Great Boulder Proprietary Goldmines Limited (1906) 3 CLR 543

Legislation cited: Motor Accidents Act 1988 Motor Accidents Amendment Act 1995 Workers Compensation Act 1987 ORDERS

1. The appeal and cross appeal be allowed.
2. The verdict and judgment for the first respondent against the appellant be set aside and in lieu thereof there be a verdict for the first respondent against the appellant in the sum of $512,090 plus costs and judgment in the sum of $446,812 (taking into account the deduction of workers' compensation payments of $65,278).
3. The judgment for the second respondent on the appellant's cross claim be set aside and in lieu thereof there be judgment for the appellant against the second respondent in the sum of $512,090 together with all costs payable by the appellant to the first respondent in respect of the District Court proceedings, and all costs incurred by the appellant in the defence by it of the District Court proceedings.
4. The second respondent to pay the costs of the appellant and the first respondent relating to the appeal and the cross appeal.
5. No interest shall be payable on the balance of the judgment owing to the first respondent (namely, $24,840), provided that the balance is paid within 28 days from the date of this order.
6. There be liberty to apply within 28 days from the date hereof in regard to the effect of the workers' compensation payments on any of the orders made.

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 41009/00 DC 8076/98 MASON P IPP AJA SPERLING J

Friday 14 September 2001 MAYNE NICKLESS LTD t/as MAYNE NICKLESS LOGISTICS v DARIUS SYMEN & ANOR JUDGMENT 1 MASON P: I agree with Ipp AJA. 2 IPP AJA: The first respondent was employed by the appellant as a truck driver. On 21 December 1996 he drove a vehicle to premises to which he had been instructed to deliver certain goods. The vehicle was a prime mover with a refrigerated trailer attached. It was owned by the appellant. 3 The first respondent parked the vehicle outside the premises and began the offloading procedure. An aluminium ramp - on which the first respondent was standing while offloading the goods - fell to the ground, and he was injured. 4 The ramp was stored in a support frame under the trailer. Its purpose was to enable goods to be placed on and removed from the vehicle. The height of the trailer was such that without the ramp it was, practically speaking, very difficult to load and offload goods. 5 The vehicle was equipped with a trolley, and once the ramp was affixed to the trailer, the driver or other employee of the appellant would load the goods for delivery on to the trolley and the goods would be moved from or on to the vehicle by wheeling the trolley down or up the ramp, as the case may be. 6 A synthetic webbing strap was fixed to the edge of the trailer by a single bolt and washer. The purpose of the strap was to secure the ramp (once it was removed from the support frame and put into position at the back of the trailer). There was a metal hook fitted to the strap. The hook was designed to be inserted into a small slot on the face of the ramp. The idea was that, once the hook was inserted into the slot, the ramp would be attached to the trailer and loading could take place. 7 The support frame in which the ramp was stored was manufactured as part of the trailer and welded to the structure. The specific purpose of the support frame was to house the ramp. Neither the ramp nor the strap was made or supplied by the manufacturer of the vehicle. 8 Shortly before the accident occurred, the first respondent pulled the ramp out from the support frame under the trailer and attached it to the back edge of trailer by the strap, using the method for which the strap was designed. He then loaded the trolley (with which the vehicle was equipped) with the goods to be delivered and pushed the trolley onto the ramp so that the goods could be offloaded. As he was moving down the ramp with the trolley, the ramp collapsed. The first respondent fell to the ground and was injured. 9 The ramp collapsed because the strap had torn, or ripped, and this caused it to part from the securing bolt on the back of the trailer. There was then nothing to hold the ramp to the trailer, and it slid to the ground. 10 The first respondent sued the appellant for damages arising out of the personal injuries he had suffered. He relied on two alternate causes of action. Firstly, he rested his claim on the appellant's liability (as the owner of the vehicle) under the Motor Accidents Act 1988. In the alternative, he claimed under the Workers Compensation Act 1987. 11 The appellant cross-claimed against the second respondent, the insurer of the vehicle under the Motor Accidents Act, and sought a complete indemnity from it in respect of any damages the appellant might be ordered to pay the first respondent by virtue of that Act. 12 The first respondent's claim under the Motor Accidents Act was based on the argument that the appellant had negligently exposed him to a risk of injury by failing to provide a safe means of loading and unloading the trailer. There was evidence that the means of attachment of the ramp to the trailer was of inadequate and unsafe design. This does not appear to have been seriously disputed at the trial and was not disputed on appeal. 13 At the trial the main issue as regards liability was whether the appellant was liable to the first respondent under the Motor Accidents Act or under the Workers Compensation Act. Of course, the second respondent's obligation to indemnify the appellant rested entirely on whether the appellant was found liable under the Motor Accidents Act (and not under the Workers Compensation Act). 14 The precise quantum of damages to which the first respondent was entitled was also dependent on the source of the appellant's liability. The statutory provisions of the two statutes in regard to the assessment of damages differed to a limited extent. It is not necessary to examine this in any detail as the parties were in agreement as to the effect of the differences concerned. 15 Garling DCJ held that the appellant was not liable to the first respondent under the Motor Accidents Act. The basis of his Honour's decision was that the accident did not arise out of the use or operation of a defect in the vehicle, but out of a defect in the strap. His Honour held that the strap was not part of the vehicle and hence the Motor Accidents Act did not apply. 16 His Honour awarded a verdict in favour of the first respondent in an amount of $421,972.22. He held that the second respondent was not obliged to indemnify the appellant against its liability to the first respondent. Accordingly, he granted judgment for the second respondent against the appellant. 17 The parties are agreed that, were the appellant to be liable under the Motor Accidents Act, the first respondent would be entitled to damages of $446,812.22, that is, an increase of $24,840. The potential increase in the damages award had led to the first respondent cross-appealing. He supports the appellant's contention that it should be held liable to him under the Motor Accidents Act. 18 The sum of $446,812.22, according to the appellant, takes into account a deduction, from the total damages, of $65,278 in respect of worker's compensation payments. The respondents have not commented on the amount of workers compensation said to have been paid. I shall accept, provisionally, that $65,278 is the amount in question and the orders I propose are based on this acceptance. I would, however, give liberty to the respondents to apply in this connection. The parties are agreed that, in the event of the appellant being held to be liable under the Motor Accidents Act, it would be entitled to a complete indemnity from the second respondent. 19 Clause 1 of Schedule 1 to the Motor Accidents Act relevantly provides: "The insurer insures the owner of the motor vehicle and any other person who at any time drives the vehicle (whether or not with the consent of the owner) against liability in respect of the death of or injury to a person caused by the fault of the owner or driver of the vehicle: (a) … in the use or operation of the vehicle in any part of the Commonwealth (whether or not on a road or road related area), …" 20 It was not disputed that the operative definition of injury was that inserted in the Motor Accidents Act by the Motor Accidents Amendment Act 1995: AMP General Insurance Ltd v Mayne Nickless Ltd (2000) 50 NSWLR 61. Under the latter definition, injury is relevantly defined as meaning: "[P]ersonal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during: (i) the driving ot the vehicle, or (ii) a collision, or action taken to avoid a collision, with the vehicle, or (iii) the vehicle's running out of control, or (iv) such use or operation by a defect in the vehicle … …" 21 In Zurich Australian Insurance Limited v CSR Limited [2001] NSWCA 261 Spigelman CJ (with whom Mason P and Handley JA agreed), in construing the definition of injury, said that he had not found the Second Reading Speech of assistance in this task and observed: "The restriction adopted by Parliament was reflected in specific words which must be construed in the normal way".

Mr O'Connor QC, senior counsel for the second respondent, did not seek to argue that this approach should not be followed. 22 In its written submissions, the second respondent argued, in effect, that for the Motor Accidents Act to apply it would have to be established that the first respondent's injury arose out of the use or operation of the vehicle "as a vehicle", and not a "loading or unloading operation in respect of the vehicle". According to the second respondent, "injury" under the Motor Accidents Act means injury in the use or operation of the vehicle "in the ordinary sense of driving and management of a vehicle". 23 The second respondent did not persist with this submission in the course of oral argument. This is understandable in the light of Zurich Australian Insurance Limited v CSR Limited where Spigelman CJ held that: "The word 'such' in (iv) is, in my opinion, a reference to the preceding use of the precise words which immediately follow it, ie 'use and operation'". 24 In other words, the learned Chief Justice held that "use" in (iv) was the wide meaning of the word "use" in the phrase "in the use or operation of the vehicle" and not a use limited by the activities set out in (i), (ii) and (iii). Therefore, the Motor Accidents Act is capable of being of application where a vehicle is used in loading and offloading operations and is not restricted to use of a vehicle as a means of transport. 25 In his oral submissions, Mr O'Connor argued that the strap was not part of the vehicle and hence it could not be said that the first respondent's injury was a result of and caused by "a defect in the vehicle" as these words are used in the definition of injury. On that basis, he submitted, the evidence did not establish that the first respondent had sustained personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle as defined. 26 This argument was the same as that advanced by the appellant in Zurich Australian Insurance Limited v CSR Limited, namely, that there was no relevant defect in the vehicle. It is therefore helpful to repeat the following words of Spigelman CJ in that case: "The defect must be 'in' the vehicle. A vehicle is not 'defective' only because its operation in a particular manner may lead to injury. However, the manner in which it is intended to operate may determine whether there is a 'defect' 'in' the vehicle". 27 In Zurich Australian Insurance Limited v CSR Limited a trailer did not have hydraulic or mechanical assistance for lifting goods, when that was required for the safety of the worker operating the trailer. Hence, the trailer was held to be defective. In coming to this conclusion, Spigelman CJ obtained assistance from cases that suggested "that the absence of appropriate provision for the safety of workers was, of itself, a defect". In particular, the learned Chief Justice referred to James Nimmo & Company Limited v Connell [1924] AC 593 where Lord Atkinson at 606 said of Walsh v Whiteley (1888) 21 QBD 371: "This judgment supports completely my contention that it is the use to which a thing is intended to be put and is being put which must be considered when the question whether or not there is a defect in its condition has to be determined". 28 Spigelman CJ remarked that an appropriate perspective from which to regard the question of a "defect in the vehicle" for the purposes of the Motor Accidents Act was that adapted from the approach of Griffiths CJ (in a different but not entirely dissimilar context) in Metcalf v The Great Boulder Proprietary Goldmines Limited (1906) 3 CLR 543 at 552, namely, that there would be a defect in the vehicle if it was shown to be "unfit for the purpose for which it was applied when used with reasonable care and caution". Spigelman CJ observed that: "The manner in which it is intended to operate may determine whether there is a 'defect' 'in' the vehicle". 29 In this context, mention must be made of AMP General Insurance Ltd v Mayne Nickless Ltd. In this case the plaintiff was injured because he fell on the slippery surface of the floor of a truck. Fitzgerald JA (with whom Stein JA and Foster AJA agreed) said at 65: "For Mayne Nickless to succeed, that slippery surface must have been a 'defect in' the floor. There was no other 'defect in the vehicle'. The floor surface was unsafe because of its slippery surface. The cause of the slippery floor was a mixture of substances which were not part of the floor. The presence of those extraneous substances on the floor was not a 'defect in' the floor. Accordingly, there was no 'defect in the vehicle'". 30 There was nothing said in Zurich Australian Insurance Limited v CSR Limited that is inconsistent with AMP General Insurance Ltd v Mayne Nickless Ltd. In Zurich, the vehicle was held to be inherently defective because it lacked the necessary hydraulic or mechanical assistance for lifting goods. The missing equipment rendered the vehicle defective. In the AMP case, the vehicle was held not to be defective because the defect that caused the injury was extraneous to the vehicle. 31 In the present case, as I have noted, the cause of the injury was the defective strap and Garling DCJ held that the strap was not part of the vehicle. Counsel for all the parties involved accepted that the appeal turned on whether his Honour was correct in so holding. In my view, this approach is borne out by the authorities to which I have referred. 32 The strap was intended to be permanently fixed to the trailer by the bolt and washer system. Mr O'Connor pointed to evidence to the effect that it was common for the strap to become loose while goods were being unloaded. This, however, was because the strap was defective, not because it was not an integral part of the vehicle. I should say, moreover, that an object may be temporarily affixed to a vehicle and still be an integral part of it. A roof rack is an obvious example. Intended permanence of fixture is not an essential element of an object being part of a vehicle. 33 Whether a particular object is part of a vehicle will usually be a matter of fact and degree. The question that has to be answered is whether the object is so taken up within the vehicle that it becomes an integral part of it. Many factors may be relevant in determining this question and it is undesirable to attempt to catalogue them. It is sufficient to say that, ordinarily, the purpose of the object and the means by which it is affixed to the vehicle will be regarded as of paramount importance. Thus, any object fitted securely to a vehicle in order to facilitate the use for which the vehicle is intended will ordinarily be regarded as being part of it. The fact that the object was not installed or made by the manufacturer of the vehicle (factors that appeared to weigh heavily with Garling DCJ) will not usually be of significant moment. 34 The vehicle could not function as a delivery vehicle (which was its raison d'etre) without a mechanism for securing the ramp to the trailer. The strap, attached as it was to the trailer, was the means employed for this purpose. The strap enabled goods to be loaded on and off the trailer. It was an essential part of the loading mechanism of the vehicle. 35 Having regard to the manner in which the vehicle was intended to operate, the purpose of the strap, and the means by which it was affixed to the vehicle, I conclude that it was an integral part of the vehicle and as it was defective it constituted a defect in the vehicle. Thus, in my view, the first respondent's injury arose in the use or operation of the vehicle. 36 I would uphold the appeal. I propose the following orders:

(2) The verdict and judgment for the first respondent against the appellant be set aside and in lieu thereof there be a verdict for the first respondent against the appellant in the sum of $512,090 plus costs and judgment in the sum of $446,812 plus costs (taking into account the deduction of workers compensation payments of $65,278).

(3) The judgment for the second respondent on the appellant's cross claim be set aside and in lieu thereof there be judgment for the appellant against the second respondent in the sum of $512,090 together with all costs payable by the appellant to the first respondent in respect of the District Court proceedings, and all costs incurred by the appellant in the defence by it of the District Court proceedings.

(4) The second respondent to pay the costs of the appellant and the first respondent relating to the appeal and cross appeal.

(5) No interest shall be payable on the balance of the judgment owing to the first respondent (namely, $24,840), provided that the balance is paid within 28 days from the date of this order.

(6) There be liberty to apply within 28 days from date hereof in regard to the amount or effect of the workers compensation payments on any of the orders made. 37 SPERLING J: I agree with the orders proposed by Ipp AJA for the following reasons. 38 The plaintiff sued his employer Mayne Nickless Ltd claiming damages for personal injury which he received on 21 December 1996 in the course of his employment as a truck driver. The vehicle which he was employed to drive was fitted with a trailer. For the purpose of unloading the vehicle, an aluminium ramp was provided which, when in position for unloading, was attached to the rear of the trailer by means of a webbing strap. One end of the strap was fixed to the trailer by a bolt. When the ramp was in position, the other end of the strap was attached to the ramp by a hook. 39 The accident occurred when the plaintiff was on the ramp. The strap gave way, allowing the strap to come free from the bolt. The ramp slid away and the plaintiff fell to the ground. 40 It was not seriously disputed at the trial that the plaintiff was entitled to succeed against Mayne Nickless. 41 Mayne Nickless had joined as a third party, AMP General Insurance Ltd, claiming indemnity under a third party insurance policy issued to Mayne Nickless in respect of the vehicle. The policy covered Mayne Nickless in respect of injury as defined in section 3 of the Motor Accidents Act 1988. The term "injury" is defined in that statute as follows, so far as is material: "'injury' means personal or bodily injury caused by the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle if, and only if, the injury is a result of and is caused during… [s]uch use or operation by a defect in the vehicle". 42 The trial judge dismissed the claim against AMP, holding that the plaintiff's injury was not caused by a defect in the vehicle. His reasons for that determination were as follows: "I have concluded that this accident does not arise out of such use or operation by a defect in the vehicle, it arises out of a defect in the strap which was attached to the vehicle, this strap was not installed by the manufacturer of the vehicle, in my view it is not part of the vehicle and so is not subject to the provisions of the Motor Accident Act." 43 AMP has appealed against that determination. There is also an appeal by the plaintiff for an adjustment to the damages awarded against Mayne Nickless.

Appeal by AMP 44 This case is on all fours with Zurich Australian Insurance Ltd v CSR Ltd [2001] NSWCA 261, where a defect in relation to unloading equipment attached to a vehicle was held to be a defect in the vehicle within the meaning of the statutory definition. The trial judge and counsel did not have that decision at the time of the trial. It was handed down subsequently. The decision disposes of the argument that the defect in the strap was not covered by the policy because it was not, in some sense, "part of the vehicle". 45 The argument that the strap was not part of the vehicle as manufactured cannot be sustained as a matter of construction of the legislation. Vehicle components are commonly replaced, modified and added. Such items would, in the ordinary course, include replaced or modified steering and braking systems, replaced or added headlamps, added tow bars, replaced tyres and so on. In the context of a compulsory third party insurance scheme, the exclusion of injury caused by defects in relation to replaced, modified or added components cannot be read into the legislation. 46 The trial judge was in error in holding that the plaintiff's injury in this case was not covered by the third party policy issued by AMP. It was. The judgment in favour of AMP on the cross-claim should accordingly be set aside. A judgment against AMP should be substituted.

Appeal by the plaintiff 47 The plaintiff's appeal turns on the same point, ie whether the injury was covered by the definition in the legislation. The parties have agreed on the result in the plaintiff's appeal, in the event of the foregoing determination being made in relation to the cross-claim.

Conclusion 48 For these reasons, I agree with the orders proposed by Ipp AJA. **********

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