Rickard & Ors v Allianz Australia Insurance Ltd & Ors [2009] NSWSC 1115 | Case summary

Rickard & Ors v Allianz Australia Insurance Ltd & Ors [2009] NSWSC 1115 | Case summary | Zoe

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JUDGMENT 1 HIS HONOUR: Nature of proceedings On the application of the parties, the Court ordered that the above matters should proceed together on the issue of liability. Except as specifically ordered, the evidence in one matter was to be evidence in all matters. 2 The claims arise from a motor vehicle accident which occurred at about 6.25pm on 4 February 2005. At that time Mr Rickard was driving a small truck on the Riverina Highway in an easterly direction from Corowa towards Albury. At a point near the entrance to a property called "Lyntods" Mr Rickard's vehicle collided with a Holden sedan being driven by Mr Kelly which had as its passengers Mr Dennison and Mr Wheeler. 3 It was common ground that there was water flowing across the Riverina Highway in the vicinity of the entrance to "Lyntods" and that this water caused the vehicle being driven by Mr Kelly to "aquaplane" so that he lost control of it, drove onto the wrong side of the road and collided with the vehicle being driven by Mr Rickard. Mr Kelly and Mr Dennison lost their lives as a result of the accident. Mr Rickard and Mr Wheeler suffered serious injuries. 4 Mr Rickard has brought proceedings against three defendants. He sues Allianz, the third party insurer of Mr Kelly, on the basis that Mr Kelly was negligent in failing to keep a proper lookout and in driving at an excessive speed in the circumstances. He sues the Roads and Traffic Authority of New South Wales (RTA) on the basis that it failed to properly position road signs and failed to properly maintain dish drains and construct a culvert outside the "Lyntods" property. He sues Brian Lavis and John Lavis, the owners of "Lyntods", in negligence and in public nuisance in that by virtue of the drainage system leading to the entrance to the property and the presence of a dam at that location, they allowed a situation to continue which caused water to flow across the Riverina Highway. 5 Ms Dennison has brought a claim for nervous shock and compensation to relatives against Allianz and against the RTA on the same basis as Mr Rickard. In the course of the trial, she was granted leave to discontinue the proceedings which she had commenced against the Lavis brothers. 6 Mr Wheeler has brought proceedings against Woolworths Limited and the RTA. Woolworths Limited was the owner of the car being driven by Mr Kelly and in these proceedings was represented by and was in the same interest as Allianz. Accordingly, Mr Wheeler relied upon the same allegations as Mr Rickard and Ms Dennison against those defendants. He also was granted leave in the course of the trial to discontinue against the Lavis brothers. 7 Ms Kelly is the widow of the driver of the car. She has brought proceedings under the Compensation to Relatives Act 1897 against the RTA and the Lavis brothers on the same basis as Mr Rickard. 8 The Lavis brothers have cross-claimed against the RTA and Allianz. Allianz have cross-claimed against the RTA and the Lavis brothers.

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Factual background 9 Except as otherwise indicated, I find the following facts to be have been established. 10 The Riverina Highway in the vicinity of the "Lyntods" property had a general east-west orientation with the road heading towards Corowa to the west and Howlong to the east. The road was of paved construction and was a single carriageway with provision for two lanes of traffic, one in each direction. The traffic lanes were delineated by means of painted road markings comprising edge or fog lines on the northern and southern sides of the carriageway and further painted markings in the centre of the road. In the immediate vicinity of "Lyntods" the centre line markings comprised broken white lines while approximately 135 metres west of the driveway leading to "Lyntods", the centre line markings changed to a combination broken white line and solid barrier line prohibiting overtaking for west bound traffic. 11 The general pavement width was about 7.5 metres increasing in width in the vicinity of the driveway leading to "Lyntods" to about 7.9 metres. The width of the traffic lanes was similar for both east and west bound directions with the east bound traffic lane in the vicinity of the driveway being approximately 3.4 metres wide, while the west bound traffic lane was about 3.25 metres. On the outside of each of the northern and southern fog lines, there was a narrow strip of paved surface generally measuring between 200 and 300 mm. The road surface at the time of the accident had no significant pavement defects other than moderate wear. 12 The horizontal geometry of the Riverina Highway was as follows. For a vehicle travelling west along the highway, there is a sweeping left hand bend of approximately 700 metres radius. This bend commenced at least 225 metres east of the driveway to "Lyntods" and terminated approximately 75 metres west of that driveway. West of the termination point of the left hand bend, the roadway was essentially straight and continued in that fashion for some considerable distance to the west. Associated with the bend was a super elevation (or bank) to about 3.5 degrees. Beyond the bend the roadway exhibited a normal crown near its centre with a cross fall varying between neutral and plus 2.5 degrees. The experts considered that this camber would be normal in the context of the nature of the highway and the terrain through which it travelled. 13 With respect to the vertical profile of the highway, on approach from the east and travelling west the entire length of roadway for 200 metres in either direction of the driveway into "Lyntods" was such that there was a shallow uphill grade towards the west commencing at about .3 degrees, around 200 metres east of the driveway, and rising to about .77 degrees around 200 metres west of the driveway. In the immediate vicinity of the driveway, the grade of the road was nearly flat. 14 It was generally agreed that the effect of the combination of the super elevation for the bend and shallow downhill grade to the east would mean that water flowing over the road surface at the driveway wound tend to run towards the south of the roadway and slightly to the east. 15 The terrain in the vicinity of where the accident occurred was relatively flat. There was a slight downhill slope towards the southeast with the terrain on the northern side of the highway being slightly elevated above the terrain on the southern side. On either side of the road and offset by about 2-3 metres were shallow earth formed open drains. The terrain on either side of these open drains was slightly elevated, such that the base of the drains was about 300-400 mm below the natural surface. These drains were described in the evidence as either table drains or dish drains. The condition of these table drains at the time of the accident is not known. 16 The driveway to "Lyntods" was a formed earth and gravel driveway of approximately 4-5 metres width, which flared at the intersection with the highway to a width of approximately 20 metres. The driveway itself exhibited a downhill slope towards the highway of about 1.1 percent over its length from the gate to the edge of the highway, which was a distance of about 25 metres. 17 The terrain adjacent to the driveway, on both the eastern and western sides, exhibited a similar slope to the natural surface with that slope falling towards the highway and slightly to the east. 18 The "Lyntods" property was fenced from the road reserve with a gate positioned at the southern end of the driveway leading into the property. The slope of the driveway between the fence and the highway was similar to that within the property and the driveway extended north for at least 100 metres. 19 With respect to that part of the driveway between the property fence line and the highway, there were no culverts or drains linking the eastern and western sides of the driveway to allow water to flow from the northwest towards the southeast. At the time of the accident, there was no culvert or drain linking the table drain to the west of the driveway to that on the east. There were no culverts or drains beneath the highway surface so as to provide a watercourse from the northern side of the highway to the southern side at that location. In effect, therefore, the highway created a form of barrier to any surface water flowing from "Lyntods" on the northern side. 20 Approximately 5 metres west of the driveway, and about 16 metres to the north of the boundary fence, was an earthen embankment being the wall of a farm dam. The width of the dam, in an east west direction, was approximately 50 metres and in a north south direction, was somewhere between 25 to 40 metres. The height of the embankment wall was about 3-4 metres. 21 It was a typical rural dam constructed by scraping a hole and using the spoil to build up the embankment sides. There was provision for an overflow at the north-eastern corner of the dam. Such an overflow would flow directly onto the driveway. I am satisfied from the evidence of Mr Nolan, the son of a former owner of "Lyntods" that the dam was built before 1972. I am also satisfied that the drainage system was set up before the Lavis brothers purchased the property. 22 A view of the accident site was conducted by myself and the parties on the afternoon of the first day of the hearing, 15 June 2009. The following observations were made at that time. Howlong is a small town to the east of "Lyntods". The distance between it and the site of the accident was approximately 12 kilometres. Over that distance I observed a number of entrances to properties directly from the Riverina Highway. These entrances appeared similar to that into "Lyntods". 23 At a distance of approximately 924 metres to the east of the driveway to "Lyntods" I was shown a location on the southern side of the highway where the RTA submitted that a sign "Water Over Road" was positioned on the afternoon of 4 February 2005. At that location, I made the following observations:

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(ii) Subject to further evidence I formed the opinion that a driver travelling west on the day of the accident at approximately 6.25pm who was keeping a proper lookout should have seen water across the highway at the entrance to the "Lyntods" property. 27 The view took place between 3pm and 4.20pm. The conditions were clear, the sky was slightly overcast. 28 In order to understand the various claims, it is necessary to briefly set out the sequence of events leading up to and following the accident. 29 There is uncontradicted evidence, which I accept, that the Lavis brothers purchased the "Lyntods" property on 25 October 2001. Records of rainfall in the area were placed before the court (exhibit 3D(4)). These records show that between 1 October 2001 and 5 February 2005 by far the heaviest rainfall occurred in the two days before the accident and on the day of the accident, 4 February 2005. I am satisfied that the quantity of rain which fell on 2, 3 and 4 February 2005 was unusually heavy and significantly heavier than any rain which had fallen in the area between October 2001 and 5 February 2005. 30 As a result of the heavy rain, on 4 February Mr McGregor, who at the time was an Acting Team Leader for the RTA based in Albury, had been directed to check for water across the Hume Highway and the Riverina Highway and if such water were found to erect "Water Over Road" signs. He was accompanied by another RTA employee, Mr Freyer, who was his driver. They completed those duties and returned to Albury at 3.30pm. 31 In the course of performing those duties, Messrs McGregor and Freyer had driven on the Hume Highway and the Riverina Highway. They had driven on the Riverina Highway between Corowa and Howlong on at least two occasions and travelled on that highway in order to return to the depot at Albury. They had not noticed any water over the road at "Lyntods" at that time and in particular, during their return journey to Albury. 32 Evidence was given by Dr Alwalee, who was travelling to Albury on the Riverina Highway on 4 February 2005. Dr Alwalee observed water flowing across the road at "Lyntods". When he was driving home from Albury, he came across the scene of the accident. His initial evidence was that he had driven to Albury at 10 or 11 in the morning when he made that observation. Under cross-examination, however, it was clear that he must have travelled to Albury much later in the day. This was established by questions directed to how long he had spent in Albury and by reference to when he arrived at the accident site on his way back from Albury. I am satisfied from that evidence that Dr Alwalee did not make his observation of water flowing across the highway at "Lyntods" before 3pm and it may have been later. 33 Mr Shelley was a person who ran a business in Corowa but lived in Howlong. He used travel along the Riverina Highway six days a week, to and from his home and business. He had been doing that for 25 years. On the afternoon of 4 February at about 4.15pm, Mr Shelley was driving from Corowa towards Howlong when he noticed water flowing across the road at "Lyntods". He described the water as being like a small creek and estimated its depth at between 2 and 4 inches in places. He made this estimate by observing how the water flowed against the wheels of his vehicle. He was driving a four-wheel drive Holden Rodeo. 34 Mr Shelley considered this to be dangerous. When he arrived at Howlong he telephoned the Corowa Shire Council to report what he had seen. The reason he waited until he arrived at Howlong was because he did not have the telephone number of the Shire Council. The Shire Council had already used all of its road signs and contacted the RTA for assistance. The person contacted was Mr McLellan, who was the Maintenance Works Supervisor responsible for the Holbrook/Albury areas. He could not remember precisely when he received the call, but it was some time between 4pm and 5pm. Mr McLellan was told that there was water over the road near "Lyntods" on the Riverina Highway. 35 Mr McLellan then contacted Mr McGregor who had finished work for the day and was at his home in Wodonga when he received the call. It is Mr McGregor's recollection that he received this call at approximately 4.30pm or shortly afterwards. Mr McLellan told Mr McGregor that there was water flowing over the Riverina Highway at "Lyntods". 36 Mr McGregor contacted his offsider, Mr Freyer, and arranged to meet him at the Albury depot. Mr McGregor believes that he arrived at the Albury depot at approximately 4.50pm at which time Mr Freyer had already placed signs on the truck. Mr Freyer said that he placed four "Water Over Road" signs on the truck. Mr McGregor and Mr Freyer then drove towards "Lyntods" which they reached at about 5.20pm. Mr McGregor was able to confirm that water was flowing across the road. He telephoned Mr McLellan and told him what he had seen. 37 It was Mr McGregor's evidence that after he had spoken to Mr McLellan, he and Mr Freyer drove towards Howlong and placed a "Water Over Road" sign on the southern side of the road facing westbound traffic. He and Mr Freyer then drove towards Corowa and placed another "Water Over Road" sign to the west of "Lyntods" on the northern side of the road facing eastbound traffic. It was Mr McGregor's evidence that he was then told about some water on the road towards Corowa and he and Mr Freyer drove towards Burraja, looking for that water but were unable to find it. That evidence was confirmed by Mr Freyer. 38 There was an issue as to whether in fact the RTA personnel had erected a "Water Over Road" sign to the east of "Lyntods" before the accident and if so, where that sign was positioned. The proposition put forward, particularly by Allianz, was that any such sign to the east of "Lyntods" had been placed in position after the accident. I will deal with that issue in due course. 39 Evidence was given by Mr Gee. He was the proprietor of Kooindah Coaches and was driving a 24-seater bus from Corowa to Albury on the afternoon of the accident. He left Corowa at approximately 6.10pm. He was travelling at a speed of between 90 and 100 kph. At that time the speed limit on the Riverina Highway at "Lyntods" was 100 kph. 40 Approximately two kilometres to the west of "Lyntods" the bus overtook the orange 1985 Toyota Dyna truck which was being driven by Mr Rickard. When he was approximately three or four hundred metres away from the "Lyntods" driveway, Mr Gee noticed water flowing across the road. Mr Gee slowed down in order to negotiate the water. 41 Mr Gee observed a Holden sedan approaching from the opposite direction through the water. Before the car had reached the other side of the water, it commenced to fishtail and head towards the bus. In Mr Gee's words: "Well I'd slowed right down and I'd moved over to the left-hand side of the road to give it more room to get past because he was straightening up at that stage." (Day 1 - T.36.42) 42 Mr Gee did not see the accident but heard a noise and when he turned around he saw that the sedan had struck the orange Toyota truck. Mr Gee brought the bus to a halt when it was level with the "Lyntods" driveway. He estimated the extent of the water in an east west direction to be wider than the driveway and 5 or 6 metres in length. By way of further description, he said that the extent of the water was about a metre and a half wider than the driveway on each side. He estimated the depth of the water at 2 inches. After he stopped the bus, he and the passengers rendered assistance to the injured. 43 It was common ground that the sedan was a 2000 model Holden Commodore being driven by Mr Mark Kelly (deceased). There were two passengers in the vehicle, Mr Matthew Dennison (deceased) seated in the front passenger seat and Mr Andrew Wheeler, seated in the left rear. 44 The overall dynamics of the accident were not controversial but specific matters were. At the time of the accident water was flowing across the Riverina Highway in a generally south east direction. The depth of the water and its extent in an east west direction are matters for further consideration. What was agreed was that both lanes of the Riverina Highway were covered with water and that the water extended in an east west direction for a substantial distance. The water was observed to be flowing down the driveway onto the highway. 45 It was common ground that what caused the driver of the Holden sedan to lose control of the vehicle was that it had either partially or fully aquaplaned (also known as hydroplaning). These concepts are defined in the "Guide to the Design of Road Surface Drainage" published by the National Association of Australian State Road Authorities (known as "Austroads") dated 1986 as follows: "Hydroplaning. Hydroplaning occurs when a tyre is separated from the road surface by a film of water which causes loss of control. A full description of this phenomenon can be found in Gallaway et al (1979). Full hydroplaning. This occurs when a tyre is completely separated from the road surface by a film of water resulting in loss of control. Oliver (1979) has indicated that for vehicles travelling within speed limits and with tyres in good condition, full hydroplaning is likely to be a rare event. Partial hydroplaning. This occurs when intrusion of water results in a reduced tyre contact area as speed increases. This will result in reduced friction. While reasonable control of the vehicle may apparently remain under conditions of constant speed and direction, it could become critical in locations where relatively high demands may be placed on either longitudinal or lateral friction." 46 The final positions of the Holden sedan and the Toyota truck were near to each other, approximately 77 metres to the west of the driveway to "Lyntods". The Holden sedan was facing in an easterly direction, positioned over the northern side of the eastbound lane, with the front nearside of the vehicle on the roadway. To the northwest of this vehicle was the Toyota truck. It was located off the road facing in a generally northerly direction. The damage to the Holden sedan was on the front and nearside. The damage to the Toyota truck was restricted to the front of the vehicle consistent with a "head on" collision. It was also common ground that at the time of the accident, and for some hours before, the weather was overcast but not raining. Mr Gee had no trouble observing the road ahead and had no difficulty in identifying the fact that water was across the road. The accident seems to have occurred at approximately 6.25pm. 47 Statements from some of the passengers on the bus were tendered. One of these was Mr McGillivray. He estimated the speed of the Toyota truck as quite slow and between 70 or 80 kph. He described the approach of the Holden sedan as follows: "About 2 or 3 minutes after we passed the tipper we headed towards a slight right hand bend in the road and I noticed a Commodore sedan coming around the bend and it lost traction as it went through water flowing over the road. From my seating position in the bus I had a clear view of the driver of the Commodore losing control of the car as it travelled through the water. The Commodore did not appear to me to be travelling excessively fast. I could see the driver of the vehicle attempting to get control of the vehicle from sliding sideways through the water on the road. The Commodore stayed on his side of the road but I have a memory of the car starting to go sideways and the driver of the Commodore attempting to correct the vehicle in an attempt to straighten the vehicle."

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He estimated the depth of the water across the road at 3 cms and he thought the water was flowing reasonably fast across the road. (Exhibit 1P(D).) 48 Mr Nigel Smith said the following: "The car appeared to be doing the speed limit but not sure if it was exceeding the speed limit. As the car came towards it then hit the water. I had a clear view of the car veering to his left and then to his right attempting to over correct the vehicle. The vehicle was out of control and started to fishtail. As the vehicle went past the bus I thought it was sliding towards the side of the bus and it must have just missed the rear of the bus as it went past." (Exhibit 1P(F)) 49 Ms Judith Smith said: "We travelled around the corner and I saw the silver sedan. My first feeling was that "this guy is flying". As he was coming around the bend, he has hit the water on his left side. I then saw the back of the car slide out and the rear of the car come into the oncoming traffic lane. The vehicle has continued to fishtail as it approached us initially. Somehow the vehicle was able to pass us without colliding with us. As the vehicle passed the bus it still seemed to be travelling fast. I did not see the vehicle after it passed me …" (Exhibit 1P(G) 50 Ms Ruth McGillivray said: "I saw an oncoming silver coloured sedan travel through the water. It appeared to be going too fast for the conditions. At this stage I did not see the vehicle out of control. I then noticed the vehicle travel past Frank Gee. The vehicle appeared to be on the correct side of the road. … I saw the silver coloured sedan pass the bus and at this stage it did not appear to be out of control … I saw the silver coloured sedan veer inwards as though it were travelling on the incorrect side of the road. I saw from the angle that the sedan went onto the incorrect side of the road. I attempted to view the vehicle as it passed us but from the rain on the rear window I could not properly see out the back." (Exhibit 1P(H) 51 A statement was tendered from Marcus Purcell. At approximately 6.30pm on 4 February 2005 he was driving a vehicle from Howlong to Corowa when he came across the accident scene. He observed water running over the road, which he estimated to be 3-4 inches deep and about 5 metres in width. He described it as running across the road fairly quickly out of the property "Lyntods". He did not remember seeing any "Water Over Road" sign to the east of the accident site (Exhibit 1P(E)). 52 As Mr McGregor and Mr Freyer were heading back towards Albury, they came across the accident. While they did not actually see the accident, they were only 400 or 500 metres behind the bus and Toyota truck when the accident occurred. Mr McGregor contacted Mr McLellan and told him what had happened. They remained at the accident site. He and Mr Freyer assisted in controlling traffic until the police arrived. 53 A statement from Constable McMillan was tendered (Exhibit 1P(K)). He was the first police officer to attend the accident. He received notification by radio at 6.30pm that an accident had occurred and appears to have arrived at the accident scene some 10 or 15 minutes later. He observed water streaming across the road from the driveway at "Lyntods". He estimated the depth of the water at 5 cms at its deepest part. He estimated the length of the road covered by the water to be approximately 20 metres. 54 Mr Rickard gave evidence. He had no recollection of what had occurred after the bus passed his truck. In relation to the speed at which he was travelling, he said: "And I can guarantee you that I wouldn't have been doing more than about 70 to 75 k's an hour because the old girl used to boil if I went any faster." (Day 3 - T.40.11) 55 Mr Wheeler gave evidence. On the day of the accident he and the other two occupants of the Holden sedan had been working at the Woolworths premises at Yennora. It was their intention when they left those premises to travel to Cobram in Victoria for a golf weekend. Mr Wheeler had never travelled with Mr Kelly as a driver before but he formed the opinion that Mr Kelly was a safe driver from his observations of his driving on that day. He and Mr Dennison consumed some beers on the trip but Mr Kelly had only consumed one or two. (This was confirmed by tests carried out at Mr Kelly's post mortem.) Mr Wheeler was not familiar with the road but he understood that Mr Kelly had travelled that route at least once before. He noticed that as they headed further inland, the weather became worse and the rain became heavier. He had no clear recollection of what had occurred after they passed through Holbrook. 56 In relation to the accident, his evidence was this: "I felt a - or saw a bend in the road and then I heard a gush of water underneath the car and I heard - I felt a tug on my shoulder and that's the last thing I can remember." (Day 3 - T.48.45)

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He was wearing Blundstone work boots at the time. His estimate was approximately 2 inches in depth. Two of the passengers on the bus gave estimates of approximately 3 cms and between 3 and 4 inches. Constable McMillan estimated 5 cms. Mr Freyer estimated 2 inches. 60 It is understandable that people's recollection would vary, particularly those who saw the accident or attended the site shortly after the accident occurred. Those persons would have had their attention directed to matters other than the depth of the water across the road. The description given by Mr McGregor of the water flowing over his boots, however, does provide a clear point of reference. On the basis of that evidence and the estimates generally given by other witnesses, I am satisfied that the depth of the water running across the road at the time of the accident was in places at least 2 inches (5 cms) in depth. This is despite the qualification expressed by Mr Stuart-Smith (Day 7, T.127.1). 61 The evidence as to the extent to which the road was covered in water in an east west direction, comprised the observations of Mr Gee, Mr Purcell, Senior Constable McMillan and the photographs taken by the police and Mr McLellan. It was the evidence of Mr Gee that the extent of the water was wider than the driveway by about a metre and a half on each side. The problem with that evidence is that it was common ground that the driveway widened significantly (20m) where it joined the Riverina Highway. When Mr Gee was shown one of the police photographs of the water across the road (exhibit 1D(7)) he accepted that the extent of the water flowing across the road was greater than his estimate (Day 1 - T.42.5). That photograph was taken approximately an hour and a half after the accident at a time when the water was not flowing across the road with the same force as it had at the time of the accident. 62 Mr Purcell estimated the width of the water at 5 metres. That evidence was in his statement and he did not give oral evidence. Accordingly the basis for that estimate is not known. It is not known whether that estimate is based upon a general observation or whether Mr Purcell took some steps to measure the extent to which the water covered the road. 63 Senior Constable McMillan in his statement said that the extent to which water covered the road was 20 metres. He did not give oral evidence and like Mr Purcell, the basis for this evidence is not known. I am prepared to accept, however, that as a police officer, particularly the first police officer on the scene, he would have had some experience in making such estimates and would have been aware of the importance of being as accurate as he could in providing such information in his statement. His assessment is consistent with the photographs taken by Acting Inspector Nugent, Sergeant Callister and Mr McLellan. 64 Acting Inspector Nugent arrived at the accident scene at 7.10pm, Sergeant Callister at 7.50pm and Mr McLellan between 7.30pm and 7.45pm. Their photographs taken some time after their arrival make it clear that the extent of water flowing across the road was considerably greater than 7 metres but the flow appears to have been deeper and more forceful immediately opposite the gate on the driveway. This may explain the difference in estimates. As indicated, it also needs to be kept in mind that the flow of water at the time of the accident was heavier than when the photographs were taken. For example, Acting Inspector Nugent took his photographs over the period 7.10pm and 9.30pm. 65 On the basis of that evidence, I am satisfied that the extent of water flowing across the road was considerably greater than 7 metres and close to the 20m estimate of Senior Constable McMillan. I am also satisfied that at the time of the accident the depth of water across the road was not uniform and that the deeper and more forceful flow covered a narrower width of road, probably closer to the estimate of Mr Gee. It was this narrower and more forceful flow which had a depth of at least 2 inches (5 cms). 66 This finding is consistent with the assessment of the traffic engineering experts, Messrs Keramidas, Stuart-Smith and Jamieson, who accepted that the extent of water across the road at the time of the accident exceeded 9 metres. This estimate appears to be implicit in their discussion of the speed at which the Holden sedan might have aquaplaned and is based on their estimate of the photographs taken by Mr McLellan and Sergeant Callister. Mr Stuart-Smith assessed the extent to which the water covered the road at 24m (Day 7, T.125.5). The other two traffic engineers did not accept that level of precision but agreed generally with that assessment. 67 In relation to the erection of a sign by RTA personnel, Mr McLellan gave evidence that he arrived at the accident site between 7.30pm and 7.45pm. The first thing he asked Mr McGregor was whether the signs had been placed in position and Mr McGregor said that they had. He then asked Mr McGregor to take him to where he had erected the sign to the east of "Lyntods". It was Mr McLellan's evidence that there was a "Water Over Road" sign in position as Mr McGregor stated and that he took a photograph of it. That photograph became Exhibit 2D(2). 68 In their oral evidence at trial Messrs McLellan, McGregor and Freyer agreed that the "Water Over Road" sign was positioned approximately 924 metres to the east of the "Lyntods" driveway. That measurement was accurately made during the course of the trial (Day 4 - T.1.41). All three witnesses were challenged in cross-examination on the basis that no such sign had been placed in position before the accident and that the sign, which was photographed by Mr McLellan, had in fact been positioned by Mr McLellan and Mr McGregor after the accident. 69 There were a number of bases for this challenge to the evidence of Messrs McLellan, McGregor and Freyer. There was the suspicion expressed by Constable McMillan. In his statement he said that he believed that he was not being told the whole truth by RTA personnel. There was a discrepancy between what those persons had said in their police statements and their evidence at trial to the effect that the sign had been erected 924 metres to the east of "Lyntods". 70 In his police statement of 8 February 2005 (Exhibit 4P(2)) Mr McLellan said: "When I arrived at the scene of the accident I put Andrew in my car and got him to show me what signage he had put up and asked him what had happened. Andrew directed me to a "Water Over Road" sign which was approximately 200 metres east of the accident site. Andrew stated that when he and Alan Freyer arrived at the "Lyntods" property they found water over the road and they erected the sign that he had shown me." 71 Mr McGregor in his statement to the police of 8 February 2005 (Exhibit 2D(3)) said: "We turned around and drove back towards Howlong as I saw water on the road further back towards Albury. I placed a sign on the road about 100-150 metres. I'm only roughly guessing. I can't be exactly sure. The sign was put on the west bound traffic side … we did not put any signs further back towards Howlong." 72 Mr Freyer in his statement (Exhibit 1D(12)) said: "I saw the water was running across the road. It was about an inch or two deep and running out of a driveway. We drove through it and put a sign on the Corowa side of the water and then a sign on the Howlong side of the water … Andrew definitely put a "Water Over Road" sign on the side of the road on the Howlong side of the accident before the accident happened. We usually put them on a rise about two or three hundred metres back from the water so that traffic can see the sign …" 73 The difference between their statements and their oral evidence was never adequately explained. I do not accept the explanation that the figures given in the statements were estimates only and that Messrs McLellan, McGregor and Freyer were simply mistaken in the estimates which they gave. I do not accept that such persons could confuse 924 metres with a distance of between 150 and 300 metres. 74 The issue was resolved in favour of the RTA on day seven of the hearing. Mr Parker, senior counsel for the RTA, advised the Court that as well as the photographs taken by Sergeant Callister and Mr McLellan, other photographs and a video had been taken by Acting Inspector Nugent, a police officer who attended the accident scene before Sergeant Callister. The RTA had only become aware of the existence of these photographs the day before. Those photographs, the circumstances leading to their creation and the reasons why they did not become available until late in the trial are contained in Exhibits 2D(14) and 2D(15). 75 In his affidavit, Acting Inspector Nugent said that he approached the accident site from the east and saw a "Water Over Road" sign to the east of "Lyntods". He took a photograph of that sign at 7.08pm. He then drove to the accident site. This sign is the same as that photographed by Mr McLellan. 76 The taking of this photograph at 7.08pm significantly predates the time at which Mr McLellan arrived at the accident site. It was never suggested that following their arrival at the accident site, Mr Freyer or Mr McGregor left that location until Mr McLellan arrived. I am satisfied that Mr McGregor did erect a "Water Over Road" sign 924 metres to the east of "Lyntods" as he said he did.

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Claim against Allianz (CTP Insurer of Mr Kelly) and Woolworths 77 There was overwhelming evidence that the water flowing across the Riverina Highway at "Lyntods" was visible from a distance of 125 metres to the east. Mr Jamieson confirmed this by a series of photographs taken at varying distances to the east of "Lyntods". His conclusions were supported by Mr Stuart-Smith. It was the opinion of Mr Stuart-Smith that the water across the road was visible from 250m to the east and would have been obvious at 150 metres. 78 Sergeant Callister, who drove to the accident from the east, said that the presence of the water was clear from a distance of 125 metres away. Those opinions were in accordance with the observations which I made at the time of the view on the first day of the hearing. Mr Gee, who was approaching "Lyntods" from the west, said that the water was visible from 200 to 400 metres away. Mr Shelley, who was travelling in the same direction, estimated that it was visible from 250 to 300 metres away. 79 There are other considerations which support this conclusion. Mr Jamieson said that flowing water of this kind would be easier to see than still water. Daylight saving was in operation and sunset did not occur until 8.50pm. The fog lines, which ran parallel to the northern and southern boundaries of the highway, were covered by the water. The dimensions and depth of the water support this conclusion. 80 The only evidence to the contrary was that of Mr Keramidas, the traffic engineer qualified on behalf of Allianz. He accepted that water across the highway would have been visible from a distance of 125 metres to the east but was not prepared to accept that a driver such as Mr Kelly would have known what it was. All he would have been able to observe, according to Mr Keramidas, was that there was something across the road. The other two traffic engineers strongly disagreed with that proposition. 81 I am satisfied that water which was flowing across the highway at "Lyntods", which covered both lanes and which extended in an east west direction for about 20 metres, would have been obvious to the driver of the white Commodore travelling west from a distance of 150 metres and certainly from a distance of 125 metres if he were keeping a proper lookout. 82 The traffic engineers agreed that the normal perception/reaction time in such circumstances was 1.5 seconds. A slow reaction time would be 2 seconds. Even with a slow reaction time, it followed that a driver travelling at 100 kph, who observed the water across the road from a distance of 125 metres, would have had ample time to slow his vehicle to below 60 kph which would have enabled it to safely negotiate the water. It is significant that many other drivers (some of whom gave evidence) who went past "Lyntods" after 3pm on the afternoon of the accident, saw the water, slowed down and passed through it safely. The white Commodore was the only vehicle to experience a problem. 83 The traffic engineers and Sergeant Callister agreed that the depth of water and its extent was sufficient to cause either aquaplaning or partial aquaplaning. Aquaplaning was regarded as an unusual phenomenon but in the circumstances of this accident, none of the traffic engineers was prepared to rule it out. Either mechanism, i.e. aquaplaning or partial aquaplaning, provides an explanation for how the accident occurred. 84 There is no clear evidence as to the speed at which the Commodore was travelling when it struck the water and Mr Kelly lost control. The evidence of the eyewitnesses on the bus is not decisive. Mr Smith thought the vehicle was doing the speed limit but he was not sure if it was exceeding the speed limit. Ms Judith Smith said, "This guy is flying". Ms McGillivary said, "Appeared to be going too fast for the conditions". Mr McGillivary "Noticed Commodore sedan coming around the bend and it lost traction as it went through water - had clear view of driver - did not appear to be travelling excessively fast". 85 The traffic engineers approached the question of speed from a different perspective. They sought to ascertain the lowest speed at which aquaplaning or partial aquaplaning could occur. This would then enable a range of speeds to be ascertained. 86 By reference to various studies, in particular that of Dr Navin, Mr Keramidas was of the opinion that the threshold speed for a vehicle to aquaplane was between 75 and 80 kph. Mr Stuart-Smith and Mr Jamieson agreed that this range appeared in the literature but they were more inclined towards 80 kph as the threshold. In particular Mr Stuart-Smith pointed out that for aquaplaning to occur within the range of 75-80 kph, certain special conditions had to prevail such as very low tyre pressures. He was of the opinion that although aquaplaning could occur at speeds as low as 80 kph, the normal range was between 90 and 100 kph. It was his opinion that this was probably the range of speeds at which the Commodore was travelling when it came in contact with the water. 87 Another matter which was referred to by the traffic engineers was the combined speed of the vehicles on impact. Mr Keramidas suggested a range of between 100 and 140 kph, whereas Mr Stuart-Smith suggested a higher range, i.e. between 140 and 160 kph, as the closing speed for the two vehicles. Those estimates were based on the assessment of damage to the vehicles as seen in the photographs. Both experts agreed that the error factor in this assessment was quite high in that it was extremely difficult to assess the "degree of crush" of each of the vehicles from photographs alone. 88 The traffic engineers agreed that between the time when the Commodore came in contact with the water and struck the Toyota truck, some of its speed would have been taken off by its passage through the water and by the fact that there was drag on the wheels as the Commodore yawed and went out of control. The estimate was that at least 10 kph in speed would have been lost by that process. 89 It seemed to me that, on this issue, the approach of Mr Keramidas was not entirely objective. His evidence sought to establish the lowest range of speeds for the Commodore. In that approach he seemed to be favouring the interests of Allianz, the party which had retained him. 90 On this issue I prefer the analysis of Mr Jamieson and Mr Stuart-Smith. Mr Stuart-Smith expressed his opinion as follows: "It is my opinion that that is probably more likely what, more likely the speed of the Commodore as it hit the water was 100 kilometres per hour. Our algorithm from Navin gives speeds down to 90. Assuming the car had normal tyre pressures, normal wheels, normal tread depth I think it would have been travelling at 90 to aquaplane, more likely a 100 … The key thing is the speed at aquaplaning. Mr Keramidas did not address the point that I made which was that Navin's equations and algorithm predict an aquaplane speed of 90 to 100. He once again was talking about what speed vehicles could aquaplane at." (Day 7, T.85.44, 89.24) 91 To the extent that any guidance is provided by the observations of the passengers on the bus, their observations are more consistent with the assessment of Mr Stuart-Smith and Mr Jamieson than with that of Mr Keramidas. It is also of some significance that Mr Rickard assessed his speed as being between 70-75 kph on the basis that his truck could not go any faster or it would overheat. When one also takes into account that the Toyota truck appears to have moved to the left of the road (gouge marks were found) and probably braked before impact, there is a strong likelihood that the Commodore was travelling faster than the Toyota at impact. 92 For those reasons, I am satisfied that the Commodore was travelling at a speed of at least 90 kph when it first came in contact with the water across the Riverina Highway. 93 It seems to me that there are only two explanations for why the Commodore was travelling at such a speed - either Mr Kelly did not see the water across the highway in time and reacted too slowly in reducing speed or having seen the water across the road, he did not consider that it presented a hazard and only slightly reduced his speed, if he reduced it at all. On either scenario, Mr Kelly breached the duty of care which he owed to his passengers and other road users. On the first scenario he clearly was not keeping a proper lookout and on the second scenario, he was travelling at an excessive speed in the circumstances and not behaving as a reasonable driver should. 94 In relation to that second scenario, all of the witnesses who gave evidence about observing water flowing across the highway at "Lyntods", said that they recognised it as a hazard and that they slowed down. I am of the opinion that a reasonable driver observing water flowing across the road, as has been described, would have recognised this as a hazard and reduced speed accordingly. Even if Mr Kelly did not recognise it as a hazard, it was clearly something unusual, the potential effects of which were unknown and again, the reasonable response for a driver in that position was to reduce speed. 95 Reduction in speed should have been to 60 kph or less. Even a reduction in speed from 100 kph to 80 kph would not, in my opinion, be an adequate response in the circumstances, i.e. wet conditions (although not raining at the time) when approaching a known hazard or if unrecognised as a hazard, approaching something which was unusual and unknown. It was accepted by the parties that if either scenario were established it was causally related to the accident. 96 On the basis of the above analysis, I am satisfied that negligence has been established on the part of Mr Kelly and therefore against Allianz.

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Case against RTA 97 The case against the RTA was put on two bases. The first was the failure on the part of RTA personnel to properly position a "Water Over Road" sign to the east of "Lyntods". The second basis was failure on the part of the RTA to maintain the table drains and to construct a culvert beneath the "Lyntods" driveway so as to allow water to flow from the west table drain to the east table drain without building up and flowing onto the highway. 98 For the reasons previously given I find that the RTA had erected a "Water Over Road" sign 924 metres to the east of "Lyntods" before the accident. The question then arises whether at common law the RTA was negligent in so placing that sign and if so, whether the defences available to it under the Civil Liability Act 2002 (CLA) have been made out. The RTA accepted the existence of a duty but disputed that it had breached that duty. 99 As a start point, the RTA recognised the need to erect a "Water Over Road" sign at "Lyntods" if the hazard was as had been reported to Mr McLellan. It was for that reason that he dispatched Messrs McGregor and Freyer to "Lyntods". In other words the RTA recognised that an appropriate response to the existence of such a hazard was the erection of a warning sign at an appropriate location. 100 The traffic engineers agreed that the principles applicable to the proper positioning of a warning sign of this kind was that it had to be sufficiently far away from the hazard to enable an approaching driver to appropriately react, but close enough so that the driver would recognise the hazard when he or she came to it. In this case the distance to the east of "Lyntods" suggested by them was somewhere between 150 and 300 metres. 101 They agreed that a distance of 924 metres to the east of "Lyntods" was inappropriate. It was too far away. On this issue I reject the evidence of Mr Stuart-Smith. He was clearly partisan and doing the best he could to assist the RTA which was the party which had retained his services. His suggestion that this sign, so positioned, would still have been effective but less effective than a sign positioned between 150 and 300 metres to the east of "Lyntods" should be rejected. Far from having a beneficial effect, such a sign was likely to mislead a motorist who would be looking for water across the road in proximity to the sign and when such a hazard was not seen, might well think that no such hazard existed. 102 The explanation offered by Mr McGregor for why the "Water Over Road" sign was positioned 924 metres to the east of "Lyntods" verged on the incredible. He said that he had observed a dip in the road approximately 100-125 metres to the west of where the sign was positioned, which to his observation had some water accumulating on the northern side of the road. He accepted that this dip had not yet become a hazard but said that it had the potential, if further rain fell, to become a hazard. The suggestion seems to be that by placing the "Water Over Road" sign at that location, it would be achieving a dual purpose, i.e. warning of the potential danger of water accumulating in the dip and also warning of the hazard at "Lyntods". 103 A surprising aspect of this explanation is that if there were a potential hazard developing in relation to that dip in the road, it would have first affected drivers travelling east on the highway, not those travelling west. Yet the sign was erected so as to face drivers travelling west and no sign was erected for drivers travelling east in respect of the dip. Another surprising aspect is that none of the witnesses who gave statements or oral evidence in the proceedings, who travelled west along the highway to the accident site, made any observation or comment about an actual or potential danger arising from water in the dip. Finally, one is left with the question as to why any RTA employee acting reasonably would erect a warning sign in respect of a potential hazard when there was a real and immediate hazard known to that employee further down the highway. 104 It is clear from the police statement of Mr McGregor that he was suggesting that there was a shortage of signs and that is why he decided to erect the sign where he did. That was also one of the assumptions given to Mr Stuart-Smith by those instructing him on behalf of the RTA and on which he was asked to prepare his report. The evidence at trial made it clear that such an assumption was false. The evidence of Mr Freyer (which I accept) was that he placed four signs on the truck. Two signs were placed either side of "Lyntods", which left two signs on the truck available to be positioned where appropriate. If as he said, Mr McGregor was concerned that the dip in the road some 800 metres to the east of "Lyntods" constituted a potential hazard for westbound drivers, he could have erected another "Water Over Road" sign to deal with that possibility. 105 The false and misleading statements by Messrs McLellan, McGregor and Freyer as to the position of the "Water Over Road" sign to the east of "Lyntods" made to the police following the accident, satisfy me that each of them was aware at the time they made those statements that the sign had been placed in an inappropriate location if it were intended to warn about a hazard at "Lyntods". The clear intention of those statements was to mislead the investigating police officers as to the true location of the "Water Over Road" sign to the east of "Lyntods". The likely motivation for all three RTA employees for providing such misleading information is that they were well aware of the mistake which had been made in placing the sign and were seeking to either protect themselves personally or their employer. 106 I suspect, but it is not necessary to so find, that Mr McGregor placed the sign in that location because he did not know where such signs should properly be positioned and had not been given any training or instruction in that regard. His lack of knowledge and training on that subject was clear. 107 I am satisfied that on this issue breach of duty has been established on the part of the RTA. The duty to which I refer is that set out in Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at 577. Public authorities such as the RTA which have statutory powers which enable and require them to erect warning signs are obliged to take reasonable care that their exercise or failure to exercise those powers does not create a foreseeable risk of harm to road users. The water flowing across the road at "Lyntods" was a hazard known to the RTA. The placing of the "Water Over Road" sign 924 metres to the east of the hazard was not an appropriate response in the sense set out in Wyong Shire Council v Shirt (1980) 146 CLR 40 at 47-48. 108 If there were any doubt on the question of breach of duty, it is resolved by an application by s 5B CLA. That section relevantly provides: "(1) A person is not negligent in failing to take precautions against the risk of harm unless: (a) The risk was foreseeable (that is, it is a risk of which the person knew or ought to have known) and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against the risk of harm, the court is to consider the following (amongst other relevant things): (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm." 109 Clearly the three preconditions in subsection (1) have been established. While subs (2) provides a non-exhaustive list of factors which the Court is required to take into account in deciding whether the third of those preconditions exists, it is clear from the facts of this case that those factors point towards breach of duty. 110 The next question is whether the defences relied upon by the RTA under the CLA have been made out. The first defence relied upon was s 43A. That section relevantly provides: "43(1) This section applies to proceedings for civil liability to which this Part applies to the extent that the liability is based on a public or other authority's exercise of, or failure to exercise, a special statutory power conferred on the authority. (2) A special statutory power is a power: (a) that is conferred by or under a statute, and (b) that is of a kind that persons generally are not authorised to exercise without specific statutory authority. (3) For the purposes of any such proceedings, any act or omission involving an exercise of, or failure to exercise, a special statutory power does not give rise to civil liability unless the act or omission was in the circumstances so unreasonable that no authority having the special statutory power in question could properly consider the act or omission to be a reasonable exercise of, or failure to exercise, its power. (4) In the case of a special statutory power of a public or other authority to prohibit or regulate an activity, this section applies in addition to section 44." 111 In determining whether s 43A applies, the first step is to determine whether liability is based on the RTA's exercise of a special statutory power conferred on it. If not the section has no application. 112 On that issue I accept the analysis of the RTA that a special statutory power was involved. That analysis proceeded as follows: "The power to erect warning signs is a power that is conferred on the RTA by Road legislation, and that legislation makes clear that persons are not generally authorised to erect such signs unless specifically authorised to do so by that legislation or by the RTA. … Traffic Control Facilities

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(c) Section 87(1) of the Roads Act 1993 (as in force at the time of the accident in February 2005) ("Roads Act") authorises the RTA to " carry out traffic control work on all public roads ... and on all roads or road related areas within the meaning of the Road Transport (General) Act 1999". (i) "carry out traffic control work" is defined in the Dictionary to the Roads Act in the definition of "traffic control facility": "traffic control facility has the same meaning as it has in Part 6 of the Transport Administration Act 1988, and carry out traffic control work includes carry out any activity in connection with the construction, erection, installation, maintenance, repair, removal or replacement of a traffic control facility." (ii) Section 45E of Pt 6 the Transport Administration Act 1988 (as in force at the time of the accident in February 2005) provided a definition of "traffic control facility", para (c) of which was as follows: "(c) any other sign, marking, structure or device that is intended to promote safe or orderly traffic movement on roads or road related areas or to warn, advise or inform the drivers of vehicles, or pedestrians, of any matter or thing in relation to vehicular or pedestrian traffic or road conditions or hazards ..." This definition is clearly broad enough to include a 'Water Over Road' sign, or for that matter a 'Reduce Speed' sign. (d) Under s 87(2) of the Roads Act , in the case of a "classified road", a roads authority may only carry out "traffic control work" (including erecting a traffic control facility) with the consent of the RTA. It is clear the Riverina Highway is a "classified road" , that expression being defined to include a State Highway. The fact that even another roads authority (such as a Local Council) needs the consent of the RTA before it puts up a traffic control facility indicate that the s 87(1) power is one which is of a kind which persons generally are not authorised to exercise without specific statutory authority. (e) It is important to appreciate that the RTA is not necessarily the owner of the land on which the road stands, and in particular it is not the owner of the Riverina Highway. The effect of s 145(3) when read with s 7(4) of the Roads Act is that all public roads within a local government area (other than freeways and Crown roads) are vested in fee simple in the council of that local government area. The RTA's power to carry out "traffic control work" is not an incident of ownership, but stems solely from s 87 of the Roads Act. Similarly, in the case of classified roads, the power of the local Council (which is the appropriate road authority) to carry out such traffic control work is subject to the consent of the RTA. (f) The object of the Roads Act includes to "set out the rights of members of the public to pass along public roads" (s 3(1)), and the public have only such rights in respect of a road as are set out in the Roads Act. Section 5(1) of the Roads Act provided: "(1) A member of the public is entitled, as of right, to pass along a public road (whether on foot, in a vehicle or otherwise) and to drive stock or other animals along the public road" (The only public right in respect of a road is to pass and repass; a member of the public has no right to do anything else. In particular a member of the public has no right to install traffic control facilities on a classified road such as the Riverina Highway. It would be absurd in the extreme if the 'owner' of the road (being the relevant Local Council) required the consent of the RTA, but a member of the public did not. (g) For the above reasons, it is clear that the power to carry out traffic control work (including erecting a "traffic control facility" such as a 'Water Over Road' sign) is one which is a special statutory power within the meaning of s 43A of the Civil Liability Act." 113 The next question is how to apply s 43A. This issue was considered by the Court of Appeal in Roads and Traffic Authority of NSW v Refrigerated Roadways Pty Limited [2009] NSWCA 263. Campbell JA, with whom McColl JA and Sackville AJA agreed, commenced his analysis of the section at [312] and concluded at [370]. For the purposes of this case, the following observations by his Honour are pertinent: " Construction of Section 43A

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114 Having reviewed the legislative history and in particular comments in the Ipp Report and parts of the Second Reading Speech, his Honour concluded: "359 It can confidently be said that the standard that section 43A imposes is not the same as that by which the reasonableness is assessed for the purposes of deciding whether there has been a breach of a particular duty of care. I say that because it is clear that by enacting section 43A the legislature was intending to alter what would otherwise be the law by which the negligence of public authorities was decided. 360 Consideration of the legislative history of section 43A confirms the reading of its text, that what was intended was to implement the sort of test that had been adopted as part of the English common law in Stovin v Wise . However, section 43A(3) does not purport to give an exhaustive account of when it is that there can be negligence in exercising or failing to exercise a special statutory power. What it does, by adopting a form of words that there is no civil liability unless … , is to state a precondition for the existence of civil liability in the sort of circumstances to which it is addressed. One would need to look to the pre-existing common law of negligence to ascertain when it was that there was a duty of care, and whether there had been what the common law would regard as a failure to exercise reasonable care. Section 43A(3) imposes an additional requirement, beyond those of the common law, before liability can be established." 115 In Precision Products (NSW) Pty Limited v Hawkesbury City Council [2008] NSWCA 278 Allsop P (with whom Beazley JA and McColl JA agreed) said in relation to s 43A: "175 A further important consideration is the content of sub-s 43A(3) and the meaning of the phrase "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 function." Such wording can be seen to have its source in what is often referred to as "Wednesbury unreasonableness" from Associated Provincial Picture Houses Limited v Wednesbury Corporation [1948] 1 KB 223 at 229-230. Regard could equally be had to the formulation of cognate concepts in Avon Downs Pty Limited v Federal Commission of Taxation [1949] HCA 26; 78 CLR 353 at 360; R v Connell; ex parte Hetton Bellbird Collieries Limited [1944] HCA 42; 69 CLR 407 at 430; and Buck v Bavone [1976] HCA 24; 135 CLR 110 at 118-119. Cognate ideas are also found in the law attending the responsibility of company directors. The Court there focuses on whether decisions made by boards are made honestly in the interest of the company or are of a kind which no reasonable person could have reached: see Shuttleworth v Cox Brothers and Co (Maidenhead) Limited [1927] 2 KB 9 at 23-24; Peters' American Delicacy Co Ltd v Heath [1939] HCA 2; 61 CLR 457 at 481; and Wayde v New South Wales Rugby League Limited [1985] HCA 68; 180 CLR 459 at 469-470. 176 While these are different areas of human endeavour, formulations of the kind used in these cases, whether it be in public law, the law of business or the law of torts are attempts to formulate more attenuated tests for legitimate activity than by reference to a fixed standard of reasonable care." 116 The approach suggested by Campbell JA is a two-step process. The first involves a finding of negligence against the public authority. The second step is the satisfaction of an additional test formulated in accordance with the observations of Lord Hoffman in Stovin v Wise [1996] AC 293 at 950, i.e. that in the circumstances of this case the placing of the sign by the RTA employee 924 metres to the east of "Lyntods" was so irrational that it could not be regarded objectively as a reasonable exercise of the RTA's special statutory power to erect signs of that kind. 117 Although the wording of s 43A(3) is couched in administrative law terms, it needs to be remembered that the section is being applied in the context of common law negligence. What the section is seeking to do within that context, is to specify a more stringent test before liability on the part of the RTA can be established. The difficulty with such a process (as Allsop P appreciated) is that potentially at least, the section is seeking to combine two incompatible concepts. 118 The hallmark of negligence is, of course, the standard of reasonable conduct. When one superimposes upon that concept another test, taken from another area of law, one is no longer looking at negligence but something different. Nevertheless, the context in which the section occurs, i.e. tortious conduct based at least initially on negligence, needs to be kept in mind. 119 By incorporating a test from another area of law (in this case "Wednesbury unreasonableness") there is a danger that the party seeking to rely upon the section will also seek to incorporate not only the test as such, but specific rules and restrictions which apply to that area of law from which the test was taken. This was what the RTA sought to do in this case. 120 Because of the context in which reliance upon s 43A arises, i.e. breach of duty having otherwise been established, I do not think it is appropriate that weight be given to administrative law concepts such as whether or not the actions taken by the RTA employees were taken in good faith, whether correct processes were followed and the irrelevancy of whether the tribunal of fact strongly disagrees with the decision maker's decision. I do not see those considerations, relevant though they are to the application of the "Wednesbury unreasonableness" test in an administrative law context, as appropriate matters for consideration in the application of an enhanced test of liability as provided for in s 43A. 121 On that approach and in accordance with the two-step process suggested by Campbell JA I have already determined that in accordance with the Shirt test and s 5B CLA, the placing of the "Water Over Road" sign to the east of "Lyntods" involved a breach of duty on the part of the RTA. The next step is to apply the enhanced test in s 43A. The question posed by s 43A is whether Mr McGregor's decision was so unreasonable that no authority having the necessary power could have properly considered it reasonable to so place the sign. Put another way, whether the decision to so place the sign was irrational. 122 As indicated, I consider the correct approach in applying that test, is to objectively assess the conduct against the criteria specified in the section without also incorporating other administrative law concepts. 123 The RTA submitted that the decision by Mr McGregor to place the "Water Over Road" sign 924 metres to the east of "Lyntods" was a "judgment call" and was not irrational or unreasonable in the sense required by s 43A. I do not agree. 124 Apart from the expressions of opinion by the traffic engineers (which I accept is not decisive), as to where such signs should be positioned in relation to the hazard, their conclusions are supported by simple common sense. A warning sign approximately a kilometre away from the specific hazard is unlikely to alert a driver to that hazard. Similarly, a warning sign positioned closer than 125 metres to a hazard on a highway with 100 kph speed limit is unlikely to provide an approaching driver with sufficient time to react to the hazard. These concepts are not rocket science, they involve basic common sense. 125 When there was no shortage of signs, the placement of a "Water Over Road" sign within 125 metres of a possible hazard which might or might not eventuate in preference to a known hazard which already existed is incomprehensible. This is particularly so when the hazard had been inspected, was patently dangerous and constituted the very purpose for which Mr McGregor and Mr Freyer had been called out. 126 As previously indicated, the explanation by Mr McGregor strains credulity. His description of the accumulation of water on the northern side of the highway, approximately 125 metres to the west of the sign, is not supported by Mr Freyer, who describes it in somewhat dismissive terms as "just a little bit, just off the shoulder" (Day 4, T.96.35). No one else identified this potential hazard or gave any evidence about it. In particular, Mr McLellan does not appear to have observed this potential hazard when he was driving to the accident scene, nor does he appear to have been told about it by Mr McGregor on the night of the accident. 127 Finally there is the web of deceit which is associated with the statements provided by Messrs McLellan, McGregor and Freyer to the police in respect of the position of the "Water over Road" sign to the east of "Lyntods". On this issue and in relation to the number of signs on the truck, Mr McGregor had either no recollection or was evasive in his responses. I was left with the distinct impression that there was something about the positioning of the sign to the east of "Lyntods" which the Court was not being told by the RTA employees. 128 Accordingly, for the reasons set out at [99-107] and [124-127], I am satisfied that the plaintiffs and Allianz satisfied the test prescribed by s 43A(3) and that the placing of the "Water Over Road" sign 924 metres to the east of "Lyntods" was so unreasonable that no road authority could properly consider it to be a reasonable exercise of its power to do so. 129 The RTA also relied upon s 44 CLA. This section provides: "44(1) A public or other authority is not liable in proceedings for civil liability to which this Part applies to the extent that the liability is based on the failure of the authority to exercise or to consider exercising any function of the authority to prohibit or regulate an activity if the authority could not have been required to exercise the function in proceedings instituted by the plaintiff. (2) Without limiting what constitutes a function to regulate an activity for the purposes of this section, a function to issue a licence, permit or other authority in respect of an activity, or to register or otherwise authorise a person in connection with an activity, constitutes a function to regulate the activity." 130 I am not satisfied that the erection of a "Water Over Road" sign constitutes an action to "prohibit or regulate" an activity as envisaged by s 44 CLA. This is particularly so when one has regard to the partial illustrative explanation in s 44(2). Words such "prohibit" and "regulate" have meanings which do not encompass the concept of "warning". Accordingly, I do not accept that the RTA can rely upon s 44 on this issue. 131 The RTA submitted that even if breach were established against it on the basis of a failure to properly position the warning sign, the claim by the plaintiffs and Allianz should fail because causation had not been established. I agree. 132 The cause of Mr Kelly losing control of the Holden sedan was that the vehicle came in contact with the water over the highway at an excessive speed causing it to aquaplane. Why Mr Kelly had not reduced the speed of the vehicle was not established. The alternatives relied upon by the plaintiffs were that he had not observed the water over the highway in time or having observed the water, he misjudged the situation and tried to drive through it at an excessive speed. 133 On the first of those alternatives, the failure to have a properly positioned warning sign may have contributed to the accident although even that is not clear. For example, if Mr Kelly were not keeping a proper lookout because of some distraction, the presence or otherwise of an appropriately positioned sign may not have made any difference. 134 A finding of causation in relation to the first alternative has to comply with s 5E CLA and with the principles identified by this Court in Flounders v Millar [2007] NSWCA 238 at [4-39] (Ipp JA) and Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153 at [29-39] (Giles JA) and [123-154] (Ipp JA). In this case while it was clear that the failure to appropriately position a warning sign to the east of "Lyntods" may have increased the risk of injury, there was no evidence that this risk came home in the relevant sense. (Seltsam Pty Limited v McGuiness; James Hardie & Co Pty Limited v McGuiness [2000] NSWCA 29; (2000) 49 NSWLR 262 (Spigelman CJ at [119]). 135 The question of causation in relation to the first alternative does not need to be further examined. This is because in relation to the other alternative, i.e. that Mr Kelly saw the water but misjudged the situation and failed to adequately reduce speed, the presence or otherwise of a warning sign was irrelevant. It would have made no difference to whether the accident occurred or not, since Mr Kelly on that scenario, was aware of the hazard but had not reacted appropriately to it. 136 The situation is the same as that considered in Luxton v Vines (1952) 85 CLR 352 where the majority made the following observation: "Of course, as far as logical consistency goes many hypotheses may be put which the evidence does not exclude positively. But this is a civil and not a criminal case. We are concerned with probabilities, not with possibilities. The difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while in the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture" ( p 358) "Many conjectures may be put forward which would explain these matters, but the fact that some of them imply negligence in the driver of the vehicle is not enough. Some of them clearly do not and there is no reason for rejecting the latter in favour of the former. There is no higher degree of probability on the one side than the other. … Any answer that you give to such questions is a guess. All lies in conjecture. The fact is that whatever reasons you can find for one explanation of the accident, reasons of equal sufficiency or insufficiency exist for other explanations.

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carry out roadwork means carry out any activity in connection with the construction, erection, installation, maintenance, inspection, repair, removal or replacement of a roadwork within the meaning of the Roads Act 1993 roads authority has the same meaning as in the Roads Act 1993 ." 144 The only evidence of "actual knowledge of the particular risk" came from the evidence of Mr Spokes. Mr Spokes had been employed as a team leader by the RTA for 36 years, working out of the Holbrook Depot. Mr Spokes was unable to remember the precise date but agreed that in late 2002 or early 2003 he and his team had been doing some patching work on the Riverina Highway between Holbrook and Corowa in the vicinity of "Lyntods". While he was doing that work, one of the Lavis brothers spoke to him. The evidence then proceeded as follows: "Q. He raised some topic of conversation with you while you were there? A. Yeah. He raised the topic about the culvert, him wanting a culvert put down on the highway. Q. Did he indicate where he wanted the culvert? A. Oh on his driveway, on the - yeah, as he joined the highway yeah. Q. Did he say something to you about why he wanted the culvert there? A. He just referred to water that comes down the highway, comes down the gutter, hits his driveway and goes across the road. Q. Was it unusual for an owner to make a request of you when you went to see him? A. No, not at all. Q. In any event did you have a look at the driveway? A. Yes. Q. Did you form a view about it? A. Yes I agreed with him, it needed something there because of that. Q. So did you do anything about it? A. I took the request back to my boss, my engineer at the time and told him about it, I left it at that, left it with him. Q. Just tell me this. Do you remember the engineer's name? A. No. Q. What was his title? A. Engineer. Q. Can you tell us, doing the best you can to remember now, using the words you actually used or words to their effect, what you said to the engineer about what Mr Lavis had said to you? A. I can't remember exactly, but I just - I remember telling him that the fellow out there at "Lyntods", I didn't tell him names or anything I don't think, that wanted a culvert across his driveway. Q. And did you tell him why? A. Yeah, I told him why, yeah. Q. What did you say about why? A. Because the water coming down the - from the road from the west towards his culvert was hitting his driveway which was built right up and going across the highway." (Day 4, T.65.32, 66.1) 145 Under cross-examination the following evidence was given: "Q. So when you went back to the RTA office and spoke to the engineer, I take it that you also told the engineer that you'd looked at it yourself and you thought that the culvert was needed? A. Yes, yes but it's not always up - as I told, not always up to the RTA to put these in for - for cockies, we get these requests, we've been getting them ever since I've been with the RTA. Sometimes the RTA just say "well it's up to the cocky to put his own culvert in", or "his own driveway" or whatever."(Day 4, T.67.2) "Q. I get the impression Mr Spokes that in this area people don't focus too much on paperwork, it's more word of mouth. If you want something done you speak to your superiors and you make the request? A. Most people when making that request ask who can they speak to themselves, and I'll give them a number in Wagga, but this - this never occurred at that time I remember, he just asked me, it was more or less just an off the cuff sort of thing as well, so." (Day 4, T.69.36)

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Although Mr Spokes had no clear recollection of dates and thought that the conversation may have occurred in the 1990's, I am prepared to accept that he did have a conversation with one of the Lavis brothers between 2001 when they purchased the property and the date of the accident. 146 The leading case on s 45 remains North Sydney Council v Roman [2007] NSWCA 27; (2007) 69 NSWLR 240. Despite a strong dissent by McColl JA and some adverse criticism from Tobias JA in Blacktown City Council v Hocking [2008] NSWCA 144, Roman remains the law in this State. Basten JA, with whom Bryson JA agreed, held that s 45 provides some statutory immunity to a roads authority for nonfeasance for its failure to carry out road works. For the authority to be liable in damage, pursuant to the proviso in s 45(1), there must be "actual knowledge" of the particular risk in the mind of an officer within the council having delegated (or statutory) authority to carry out the necessary repairs. His Honour said: "157 This conclusion is consistent with the language of s 45(1). The section confers an immunity on a roads authority where harm arises "from a failure of the authority to carry out road work". The exception only arises where "at the time of the alleged failure" the authority had actual knowledge of the particular risk. A purposive construction would require that the relevant knowledge exist in an officer responsible for exercising the power of the authority to mitigate the harm. The existence of the power is only coupled with a duty to act in circumstances where such knowledge exists. Accordingly, the knowledge must exist at or above the level of the officer responsible for undertaking necessary repairs. The knowledge of others without such responsibility will not, relevantly for the purposes of the provision, constitute "actual knowledge" of the roads authority itself; at best it could give rise to "constructive" or imputed knowledge. The use of the term "actual" precludes reliance on constructive or imputed knowledge. It follows that, even if a street sweeper having a duty to note and report defects, was aware of the pothole, the immunity is engaged absent proof on the balance of probabilities that the officer in charge of maintenance works received that information." 147 Applying that statement of principle to the evidence of Mr Stokes I am satisfied that the proviso set out in s 45(1) does not apply and that the RTA has the benefit of the immunity. 148 Clearly Mr Stokes did not have the necessary authority. Such was not contended by those seeking to establish liability against the RTA. I do not see how such authority could be said to exist in the unnamed engineer. There was no evidence as to that person's position in the RTA hierarchy and no evidence as to whether that person had the necessary authority. 149 Moreover, when one takes into account the process by which "ordered works" (which the construction of a culvert would be) were decided and prioritized as explained by Mr Glenn, even if the engineer had been a person of considerable authority within the RTA, he or she did not have the authority to make a decision as to "ordered works". Such a decision had to make its way through the system until it reached the Yass regional office and was decided upon as part of the monthly meeting at which such decisions were made. 150 It follows that s 45 provides a complete answer to this claim against the RTA. 151 The RTA relied upon s 42 CLA as a further answer to this claim. Section 42 provided: "The following principles apply in determining whether a public or other authority has a duty of care or has breached a duty of care in proceedings for civil liability to which this Part applies: (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 general allocation of those resources by the authority is not open to challenge, (c) 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 proceedings relate), (d) 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 proceedings relate." 152 Section 42 implicitly invokes the policy/operation distinction in that budgetary allocations have frequently been characterised by the Courts as policy matters which were not justiciable. Moreover, the section does not make it clear whether it is to be invoked at either the duty stage or breach stage. Since the submissions by the RTA were directed towards the question of breach, I propose to apply the section on that basis. 153 The other difficulty is that s 42 is so broadly worded that it fails to create clear limits. It refers to financial and other resources "reasonably available", the "general" allocation of resources, "general procedures" and "applicable standards". Nowhere in its terms is there an indication of whose general procedures and standards are referred to or where they are to be found. The meaning of s 42 was considered by Campbell JA in Refrigerated Roadways at [388 - 408]. I gratefully accept his Honour's interpretation and application of the section. 154 To give substance to the s 42 defence, the RTA called evidence from Mr Glenn. He was the Road Maintenance Planner located at the Southwest Regional Office of the RTA in Wagga Wagga. His specific function was asset management within the south west region of New South Wales. The south west region covered state roads and national highways in the shires of Yass, Tumbarumba, Tumut, all along the Murray River right out to South Australia up to and including Wentworth. It also included at the northern end of the boundary shires like Carrathool, Young, Bland and Harden. At that time the south west region included 4000 kilometres of carriageway. 155 Mr Glenn's evidence as to the prioritisation of work proposals in respect of the Riverina Highway was not challenged. He indicated that the Riverina Highway was a level two road and came under the direct supervision of the Yass office of the south western region. There were three such offices in the region. 156 His evidence established that the RTA had limited funds for expenditure on roads and numerous other priorities, including roads with equal or higher gradings. Funding received for roads was of two kinds - "routine maintenance" and "ordered works". Funding for the installation of culverts under driveways, would come under the heading of "ordered works" whereas the maintenance of table drains would be "routine maintenance". In that context there was no evidence adduced by the parties seeking a verdict against the RTA on this basis, that the RTA should have deferred one or other of the projects which it had in fact undertaken before the accident in favour of putting in a culvert at "Lyntods". There was no evidence that the need at "Lyntods" was any greater than at other locations where such works had been carried out. 157 In relation to the prioritisation of work on roads, the evidence was: "Q. Now, for the purposes of determining which of the proposals received funding do you distinguish between the different types of road in the area? A. Yes. Because - because our road network is - is so large we have a hierarchy of roads. And so we rank our roads from one to six, where six is the highest ranked road and therefore that road receives the highest level of service. And then the level of service decreases as you go down towards the rank - rank one. So there are six different types of road. Within six rankings within the whole of the RTA within our south west region we have rank six roads, we have rank five roads, we have rank - sorry we don't have five, we have six, we have four and three, two and one." (Day 4, T.77.8) 158 It was Mr Glenn's evidence that requests for "ordered works" always exceeded the funds available for those works and that is why the works had to be prioritised. The same applied in relation to money available for routine maintenance. For example, the figure for routine maintenance for the year ending 30 June 2004 for the whole of the south west region roads was only $2 million. 159 Even without s 42, I am satisfied on the evidence of Mr Glenn that the allocation by the RTA of limited funds for maintenance and the construction of "ordered works" on the Riverina Highway were appropriate. The plaintiffs and Allianz (who carried the onus) did not establish the contrary. The application of s 42 simply confirms that conclusion and does not add anything to it. I am satisfied that the RTA complied with general procedures and applicable standards in respect of the allocation of funds for the Riverina Highway, given that as a category 2 road, it was low on the list of priorities to be considered by the south west region of the RTA. Accordingly, if the RTA had not succeeded under s 45, s 42 would have operated as a significant obstacle to any verdict on this issue being entered against it. 160 Even if s 45 and s 42 CLA did not operate to create an immunity, this claim against the RTA would fail for causation reasons. The evidence of Mr Spokes only went to the construction of a culvert. The full case against the RTA was based not only on the failure to construct an east west culvert on the northern side of the highway through the "Lyntods" driveway, but also on a failure to properly maintain or construct the table drains. Nothing was said to Mr Spokes on that issue. The requirement of s 45(1) for the proviso to apply is that actual knowledge must be of the particular risk "the materialization of which resulted in the harm". This would include not only the culvert but the table drains. 161 Leaving aside s 45, there are also factual difficulties as to causation which would prevent the plaintiffs and Allianz succeeding on this issue. 162 The evidence of the traffic engineers established that aquaplaning can take place when in addition to a car travelling at a certain speed there is a certain depth and lateral extent of water on a roadway. That being so, causation would not be established unless the Court was satisfied that water overflowing from the table drains (and not from the "Lyntods" driveway) caused or contributed to the aquaplaning conditions being satisfied. 163 The only evidence on this issue was that of the hydrologists and the photographs, particularly those taken by Acting Inspector Nugent. Those photographs and expert opinion established that the western table drain overflow contributed to the water flowing across the road. None of the experts was able to specify the extent of that contribution and none of them was prepared to say that the overflow from the table drains on its own was sufficient to establish the conditions required for aquaplaning or partial aquaplaning. The estimates of 25 percent by Mr Bewsher and 10 percent by Mr Webb were unpersuasive and based more on speculation than established facts. 164 The photographs themselves and the evidence of those persons who were present at the accident site, both before and after the accident, made it clear that to an observer by far the majority of the water which flowed across the road came directly down the "Lyntods" driveway and not from the western table drain. While the photographs of Acting Inspector Nugent made it clear that the table drains were full and it can be inferred that some water from them was flowing onto the road, the extent of that flow simply cannot be established. There was no evidence in the trial which could establish the extent of water on the road at the time of the accident which came from an overflow of the table drains. 165 Mr Bewsher's estimate of a 25 percent contribution from the western table drain to the water flowing across the road was underpinned by the rate at which water flowed from "Lyntods". He assumed that water had been flowing across the road for most of 4 February 2005. Mr Bewsher accepted that if water did not start flowing across the road until after 2.30pm, his model required recalibration which would require a reduction in the water flow from "Lyntods". That recalibration was never carried out. For reasons previously indicated, I am of the opinion that water did not commence flowing across the highway until approximately 3pm. 166 It follows that even if the RTA did not have the benefit of s 45 and s 42 on this issue, I am not satisfied that causation has been established. Since this conclusion is based on factual findings, s 5D CLA would not alter the outcome. 167 The conclusion I have arrived at is that the two bases on which claims have been made against the RTA, i.e. the signage case and the failure to construct a culvert and maintain the table drains, both fail. In due course there should be judgment entered in favour of the RTA.

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Case against occupiers of "Lyntods" 168 The claim against the Lavis brothers, as occupiers and owners of "Lyntods", was primarily based on public nuisance. The Court was asked to find that the water flowing across the highway at the time of the accident was produced by an extended water harvesting and storage system used by them for the purpose of their farming activities on the property. It was alleged that the public nuisance consisted of the unlawful obstruction of the highway (by the water) which interfered with the common right of passage along it. It was not submitted that the Lavis brothers actually created the nuisance, rather that they continued or adopted it. 169 The secondary claim was in negligence. The submission was that the Lavis brother knew, or ought to have known, of the likelihood that in conditions of heavy rain, water would overflow the dam and flow down the driveway and across the road. Since that was a foreseeable risk, it was incumbent upon them to make an appropriate response to divert that water flow, or otherwise prevent it from flowing across the highway. It was submitted that they had in fact made no response to this foreseeable risk of injury and consequently the tort of negligence was established against them. 170 The Lavis brothers purchased "Lyntods" on 25 October 2001, i.e. approximately three and a half years before the accident. I am satisfied that between 25 October 2001 and the afternoon of the accident, there had not been a flow of water across the highway from "Lyntods". I base that conclusion primarily on the evidence of those persons who were familiar with the location. 171 It was common ground that there had been very heavy rain during the two days before and on the day of the accident. I have already found that this was the heaviest and most concentrated period of rain since the Lavis brothers acquired "Lyntods" ([29] above). Mr Shelley, who had driven past "Lyntods" twice a day, six days a week for 25 years, said that he had never seen water flowing across the highway at "Lyntods" before the day of the accident. He said: "Q. Why did you prepare to slow down to nearly a stop? A. Well because of the fact that I could see water running across the road which I'd never seen before so I presumed it was quite dangerous. (Day 2, T.35.32) … Q. Have you ever - I think you've told us you've never observed water running across the road like this before, is that correct? A. No, never, no. Q. Have you ever observed water on the road at that point before? A. I have seen water in puddling sections across the road in very heavy rain or consistent rain, yes. Q. Have you seen it covering the entire road? A. Yes, but not flowing. Q. How often had you seen it covering the entire road - A. It would take a very major downpour for that. Probably every couple of years. (Day 2, T.36.22) … Q. Mr Shelley on 4 February 2005 you saw water running from the gravel road leading into "Lyntods" across the highway didn't you? A. Yes. Q. And you'd never seen that before? A. Never. Q. And you'd never seen water pooling on the highway directly opposite the driveway before, had you? A. I'm sorry can you ask me that again? Q. You'd never seen water on the highway directly opposite the driveway before, it had always been to the east hadn't it? A. Yes that's correct. Q. You've been as you've told us travelling this road six days a week for 25 years up and down on the same day? A. Yes. Q. And you've told us that when you saw water pooling where you've marked it in exhibit 1(D)3 - perhaps if you just have a look at that? You've marked in red water ponding on the northern side of the Riverina Highway, is that right? A. Yes. Q. And you've said sometimes that encroached onto the northern, which is the east bound lane, is that right? A. Yes. Q. But the majority of the water that was ponding was lying in the table drain that's depicted as an open drain, wasn't it? A. Yes the majority of." (Day 2, T.53.20) 172 Mr McGregor in his police statement and in oral evidence said that he had never seen water flow across the road at "Lyntods" (Day 3, T.22.3). Similarly, Mr Spokes had never seen water running over the road at "Lyntods" (Day 4, T.66.32). 173 Neither of the Lavis brothers gave oral evidence but a statement of Brian Lavis made to the police on 5 February 2005 was tendered (exhibit 4P(1)). In that statement he said: "I checked the water gauge this morning and it showed 5½ inches of rainfall since about Wednesday night. Prior to this rain there was about 2½ - 3 inches of rain about two weeks ago. Normally at this time of the year there is very little rain or none at all for this area. I have seen water run across the highway between the entrance to "Lyntods" and a culvert down the road a bit but that has only been after a heavy downpour and it normally runs away quickly. The catchment area in front of "Lyntods" is about 250 acres or more and slopes down towards the highway. There is a dam at the front gate next to the track leading to the property, which is about 40-50 metres across which catches the majority of the water runoff. It would be no more than 3 metres deep. The dam was already constructed prior to my brother and I buying the land. It has probably been there for more than 20 years." 174 I do not accept and I do not understand it to have been submitted that this statement suggests prior knowledge on the part of the Lavis brothers of water having previously flowed across the highway so as to present a hazard to motorists before the occasion of the accident. It was common ground that neither of the Lavis brothers lived on "Lyntods". No witness called in the proceedings gave evidence of having seen water flowing across the highway at "Lyntods" before the occasion of the accident. The only exception to that was the evidence of Mr Nolan (Day 4, T.53.5). He gave evidence that before the dam was built (i.e. before 1972) water used to run off from "Lyntods" and flow across the highway at the point where the driveway met it. 175 It was submitted against the Lavis brothers that the water flowing over the highway at "Lyntods" had two sources. The first was water discharging from the "Lyntods" driveway and the second was water emanating from the table drain on the northern side of the highway to the west of the driveway. It was submitted that the topography of "Lyntods" had been modified to create a water harvesting system which would direct water on the property towards the dam. That water harvesting system also directed water towards the driveway. When the dam became full, water from it would overflow onto the driveway joining that water on it already flowing towards the highway. In relation to the water harvesting system, reliance was placed upon the opinion of Dr Webb. Of the two sources of water flowing over the highway, it was submitted that by far the most significant was that brought about by water flowing down the driveway. 176 Relying upon the opinion of Dr Webb, it was submitted that the catchment area serving the dam on "Lyntods" had been increased substantially by the water harvesting system. The natural catchment of the dam, without modification to the surrounding topography, would have consisted of two sub-catchments totalling 14.5 hectares. As a result of the construction of the water harvesting system the catchment area servicing the dam became 207.4 hectares. Dr Webb's evidence was that the location of the spillway at the north east corner of the dam diverted the flow from the spillway towards the driveway, thereby significantly increasing its quantity. It was the opinion of Dr Webb that if it had not been for the extended water harvesting and water storage system there would not have been any substantial flow across the highway at the time of the accident. 177 Allianz submitted that by increasing the flow of water over the highway in that way, a public nuisance had been created by rendering the highway dangerous for those passing along it. Allianz relied on State Government Insurance Commission v Trigwell (1978-1979) 142 CLR 617 at 638 and on Trevett and Anor v Lee and Anor [1955] 1 All ER 406 at 409 where Evershed MR said: "The law as regards obstructions to highways is conveniently stated in a passage in Salmond on Torts (11 th edn), at p 303: "A nuisance to a highway consists either in obstructing it or rendering it dangerous" and then a number of examples are given … The alternative in the text which I read ("or in rendering it dangerous") adds a different conception of wrongful interference, viz., the putting on a highway of something which, though it does not obstruct, that is, bar the highway in the sense that I have already mentioned, yet is liable to make it dangerous. Again, one example will suffice: If I make a small hole in the highway difficult to see, or put some greasy substance on it, so the treading in the hole or on the substance is liable to cause a man as a natural consequence to fall, then it may be that I have caused a nuisance to the highway, not by obstructing it, but by rendering it dangerous."

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At p 411 his Lordship said: "The question whether a householder is or is not obstructing the highway so as to give rise to a cause of action is to be judged by balancing, on standards of reasonableness the claims in conduct of the householder on the one side and the members of the public on the other." 178 Allianz also relied on the following extract from Professor Fleming - "Law of Torts" (9th edn) p 477: "Alternatively expressed in the esoteric idiom of nuisance, the occupier is liable only for "continuing" or "adopting" a nuisance. He "continues" a nuisance, if with knowledge or presumed knowledge of its existence he fails to take reasonable means to bring it to an end, though with ample time to do so: He "adopts" if he makes any use of the erection, building, bank or artificial contrivance which constitutes a nuisance." This was settled in Sedleigh-Denfield v O'Callaghan [1940] AC 880 at 894 where a local authority, without permission of the defendants as occupiers, laid a pipeline in a ditch on their land for the purpose of carrying off rainwater. They placed a grating on it so incompetently and the water flooded adjacent premises. The occupiers were held responsible, because, in the interval of three years since the unauthorised construction, they were deemed to have acquired knowledge of the dangerous condition, and therefore were liable for "continuing the nuisance"." 179 Lastly Allianz relied on Corbett v Pallas (1995) Aust Tort Reports 81-329 and the five propositions extracted by Priestley JA from Gartner v Kidman (1962) 108 CLR 12 and Kraemers v Attorney-General (Tas) [1966] Tas SR 113. Those propositions were: "1. Where the nuisance alleged is damage caused by water entering the plaintiff's land it is sufficient in order to establish a prima facie case for the plaintiff to allege and prove that material damage to his property has resulted from an increase in the flow or percolation of surface water due to the defendant's act in altering the conformation of land in the course of the defendant's use of it. 2. It is not for the plaintiff to allege or prove unnatural or unreasonable use of the land by the defendant. 3. So far as the conformation of the land is altered in the course of some specific use which may avoid liability, the burden of proof is on the defendant to allege and establish it as a distinct defence. 4. Unreasonable use is not an ingredient of the cause of action but certain types of user may amount to a "natural" and reasonable user of the land and afford a defence. 5. Whether a particular user of land is "natural" must be determined reasonably having regard to all the circumstances, including the purposes to which the land is being used and the manner in which the flow of water was increased." 180 There are factual difficulties in the way of a finding of liability against the Lavis brothers either in nuisance or in negligence. There is no evidence of actual knowledge on the part of the Lavis brothers that water would flow across the highway from "Lyntods" following heavy rain. There is no evidence of such an event having occurred during their period of ownership of "Lyntods". 181 There is no basis for a finding of constructive knowledge on their part of such a hazard. For constructive knowledge to be established, there would need to be some evidence of the nuisance, i.e. the flow of water from the driveway directly across the Riverina Highway during their period of ownership. Alternatively, there would need to be evidence of some other basis for them knowing or expecting that water would flow across the highway. There was no such evidence. 182 It could not be said that the potential nuisance was the type of hazard which was obvious or reasonably foreseeable. This is particularly so in circumstances where they had not constructed the dam or the "water collection system" or the driveway. There was no evidence, either expert or lay, to the effect that it should have been apparent to the Lavis brothers that the configuration of the dam and the driveway presented a hazard. The opinions of Messrs Jeffrey, Mostyn and Bewsher were to the effect that such a hazard would not be apparent. 183 The debate between the hydrology experts on day six of the hearing concerning levels, flow paths and catchment areas made it clear that predicting flow paths in this kind of terrain, which is generally flat with some undulations, is difficult. The debate between those experts, which was not resolved with any consensus, made it clear that the assessment of water levels and flow paths is far from obvious even for hydrology experts. There is no basis, other than hindsight, for concluding that the Lavis brothers ought to have known that stormwater runoff would flow down the driveway across the Riverina Highway, rather than into the table drains along the north side of the road. 184 There was unchallenged evidence from Mr Lucas, a consulting agronomist, (exhibit 3D(9)), as to the nature of the drainage and water collection system on "Lyntods". His report dated 27 April 2009, in addition to describing significant features such as the dam and driveway, made the following observations: "7. During the time of my inspection, a summer maize crop was observed in its "dry down" state and approximately one month from harvest. 8. From my observation, it appeared that the drain across the irrigated area was constructed to assist drainage of excess winter surface moisture to avoid water logging and crop yield reduction upon the installation of the centre pivot. A secondary dam was also observed as it was linked to the same drainage network to assist in the removal of excess water. 9. In my opinion based on my observation of similar drainage systems throughout southern NSW and Victoria, the drain size and construction was typical of that type of drainage system for centre pivot systems, especially considering that such a drain reduces the crop area that can be sown. In my opinion, any drainage located under a centre pivot irrigator is only implemented to drain wetter, low-lying areas and to increase the crop yields of crops sensitive to possible winter water logging. 10. Further, in my opinion, based on my observation of rural properties throughout southern NSW and Victoria, the farm dam construction on the west side of the road, the dish/spoon drainage network and size of the piping to transfer water direction is typical of comparable irrigation/drainage systems. 11. I also note that the centre pivot irrigation system on "Lyntods" is a similar system to many others observed by me in the Howlong area on similar mixed cropping/livestock operations. … 13. In my opinion, all of the earthworks observed were in line with standard agricultural practice to optimise crop yield and profitability, but with consideration of environmental factors such as reducing water logging and the impact of runoff in summer storm events." 185 Before considering the questions of nuisance and negligence on the part of the Lavis brothers, it is necessary to deal with a preliminary point which was raised by them. They submitted that the law of public nuisance had been subsumed into the more general law of negligence for all claims involving a public nuisance on land occupied by a highway authority. Reliance was placed on the following statement by the majority in Brodie v Singleton Shire Council [2001] HCA 29; (2001) 206 CLR 512 at 570: "(129) The time has now come, by parity with the reasoning in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520, to treat public nuisance, in its application to the highway cases, "as absorbed by the principles of ordinary negligence." In any event, as has been indicated above, the intrusion of nuisance into this field in the mid-nineteenth century lacked any firm doctrinal basis." 186 While there are good reasons for believing that this is a correct statement of the way in which the law is developing, in the absence of a clear statement to that effect by the High Court or an intermediate appellate Court, I am not prepared to accept the submission. Moreover, what was meant by their Honours when they referred to "highway cases" is not clear. Statements by the majority at other places in Brodie suggest a more limited application of the principle: "(50) These applications for special leave to appeal from decisions of the New South Wales Court of Appeal were heard consecutively and raise a fundamental question respecting the common law of Australia. This is the applicability of the principles of the torts of negligence and of nuisance in actions against public authorities on which statute confers powers for the construction, maintenance and repair of public roads, including bridges, culverts and footpaths" (emphasis added). 187 What I do accept, however, is that public nuisance in a case of this kind does not involve strict liability, but requires proof of knowledge, actual or constructive, of the public nuisance. This was made clear in Sutherland Shire Council v Becker [2006] NSWCA 344 where Bryson JA (with whom Mason P agreed) said:

[43]

If the defendant did not create the nuisance, he must, if he is to be held responsible, have continued it, which I think means simply neglected to remedy it when he became, or should have become, aware of it." 119 Although there may be some exceptions, fault of some kind is now usually necessary for liability in nuisance; see The Wagon Mound (No 2) at 639, and Montana Hotels Pty Ltd v Fasson Pty Ltd (1986) 61 ALJR 282 at 284. Humphries v Cousins (1877) 2 CPD 239, where the defendant was held liable for escape from a drain which began under his premises, passed under other houses and received their drainage and then returned under the plaintiff's premises, although he did not know of the existence of the drain under the plaintiff's premises, should probably be attributed to the principle in Rylands v Fletcher (1868) LR3HL 330, although that principle was not mentioned in Humphries v Cousins. The strict liability which was imposed in Humphries v Cousins is probably no longer good law, having regard to the absorption of the rule in Rylands v Fletcher by the principles of negligence in Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520." 188 As Lord Wright made clear in Sedleigh-Denfield, constructive knowledge for the purposes of nuisance does not equate with foreseeability in negligence. The test is not whether a risk is far fetched or fanciful, but whether there is evidence of facts, matters or circumstances from which the defendant ought to have known of the nuisance. In this case that means "ought to have actual knowledge of the fact of water flowing directly from the driveway across the highway", not, "ought to have foreseen the risk that water might flow directly from the driveway across the highway if a sufficiently severe rainfall event were to occur at some time in the future". 189 The pleadings in this case were expressed in terms of actual knowledge of the flow of water. As indicated, there is no evidence of actual or constructive knowledge of the fact of water flowing directly from the driveway across the highway. That is probably sufficient to deal with the nuisance claim. 190 In their submissions the Lavis brothers put their defence to the nuisance claim somewhat differently. They relied upon the line of authority stated by Windeyer J (with whom Dixon J agreed) in Gartner v Kidman (1962) 108 CLR 12 at 48: "The following propositions concerning surface waters relate only to water which came naturally upon the land from which it flows, as distinct from water artificially brought or concentrated there and allowed to escape as in Rylands v Fletcher .

[44]

With the above limitations in mind, the rights and obligations of the proprietors of contiguous closes, one on a higher level than the other, may be stated as follows:- The higher proprietor: He is not liable merely because surface water flows naturally from his land on to lower land. He may be liable if such water is caused to flow in a more concentrated form than it naturally would. It flows in a more concentrated form than it naturally would if, by the discernible work of man, the levels or conformations of land have been altered, and as a result the flow of surface water is increased at any particular point. If a more concentrated flow occurs simply as the result of the "natural" use of his land by the higher proprietor, he is, generally speaking, not liable. What is a natural use is a question to be determined reasonably having regard to all the circumstances, including the purposes for which the land is being used and the manner in which the flow of water was increased: as for example whether it is agricultural land drained in the ordinary course of agriculture, whether it is timbered land cleared for grazing, whether it is a mining tenement, or is used for buildings and so forth. " 191 The Lavis brothers submitted that it was apparent from what was said concerning "concentrated flows" that the earlier reference to "water artificially … concentrated there and allowed to escape as in Rylands v Fletcher" is to circumstances such as those which occurred in Rylands v Fletcher itself, namely, a dam bursting because it was negligently constructed, not to mere "concentration" by drainage. They submitted that overflow from a dam is not the same thing as a dam bursting or collapsing, which was the cause of the "escape" of water for the purposes of the rule in Rylands v Fletcher. 192 They submitted that the inquiry concerned only the reasonableness of the activity in relation to the use of the land. It did not extend to the consequences of that use for others. In the case of agricultural land, the proviso was only that the manner in which the flow of water is increased was appropriate for the particular agricultural use of the land. In the case of drainage, if the method of drainage was appropriate for usual agricultural purposes, then there was no liability notwithstanding that the increased concentration might have occasional adverse consequences for others. 193 The Lavis brothers relied upon Warne v Nolan [2001] QSC 053 where Muir J said: "[139] In a rural community, particularly on a flood plain, the normal operation and management of the farm has the potential to adversely affect the neighbour's enjoyment of his or her property. In accordance with the principles of law discussed earlier, the fact that something on or done on one's property has an effect on an adjoining property does not necessarily give rise to a cause of action. [140] Putting it broadly, an interference with the Nolans' of "Corella" resulting from the levee bank in its degraded state is within the range of those matters which in a rural community one neighbour ought be expected to tolerate from another."

[45]

That was a case which involved a levee bank which caused some additional concentration of water on a neighbouring property from time to time. 194 The Lavis brothers relied upon Bell v Pitt [1956] Tas SR 161 (which was quoted with approval in Gartner). At p 181 Burberry CJ said: "The owner of a farm is entitled to establish a reasonable system of drainage on his own farm by means of artificial channels for the purpose of its better cultivation and the owner of the lower lying property which in consequence of the establishment of that drainage system receives surface water in increased concentration and quantity has no cause of action. The establishment of a reasonable system of drainage in the ordinary use of a farm for the purposes of better cultivation constitutes in my opinion the natural user of farm property within the common law principle. The limits of that natural use cannot be defined by definition and each case must depend on its own circumstances. The right is clearly not absolute … If the operations are carried in the ordinary use of the property and are carried out with due care and skill the adjoining owner cannot complain if, as an incident of the artificial interference with the surface of the ground, water overflows onto his property through gravitation or other natural causes in a greater concentration or quantity." 195 The Lavis brothers submitted that the facts of this case insofar as the configuration of "Lyntods" was concerned, came within the principle stated in Gartner. They relied upon the unchallenged evidence of Mr Lucas as to the normality of the activities being carried on at the property. They relied upon the reports of Mr Jeffrey (exhibit 1D(13) at [57]), of Mr Mostyn (exhibit 3D(8) at [32]) and of Mr Bewsher (exhibit 3D(7) at [37]) to establish that the dam and its configuration was normal for the area. They relied upon the observations of neighbouring properties made generally at the time of the view. 196 I am of the opinion that the submissions of the Lavis brothers in relation to the Gartner line of authority should be accepted. Having regard to the locality, there was nothing unusual or unnatural in the way in which "Lyntods" was being used. There was nothing unnatural or unusual in its configuration. The more "concentrated flow" of water which occurred on the afternoon of the accident, did not occur as a result of any unnatural use of the land by the Lavis brothers. Also relevant to that question is that there was no evidence that the Lavis brothers were aware at any time before the occasion of the accident of the likelihood of such a "concentrated flow". 197 Whichever line of authority is applied, nuisance has not been established against the Lavis brothers. 198 In relation to the claim in negligence, none of the pleadings or submissions formulated the duty of care to which a private landholder was subject in relation to the state or condition of a public highway adjoining his or her land. In particular, no attempt was made to give that duty of care any content. It was simply assumed that a duty of care existed and submissions went directly to the question of breach. 199 Because of that approach, it was inevitable that the parties raising negligence against the Lavis brothers would seek to define the duty of care owed by them in terms of breach. This was the error identified in Graham Barclay Oysters Pty Limited v Ryan [2002] HCA 54; (2002) 211 CLR 540 at [106], [191 - 192]. 200 On the facts of this case, I am of the opinion that the duty owed by the Lavis brothers can be expressed with no greater particularity than a duty to act reasonably in the conduct of their agricultural activities on "Lyntods". Such a duty encapsulates the location of "Lyntods", its topography and significant surrounding features such as the Riverina Highway. After the accident when greater knowledge was acquired as to the effects of very heavy rainfall on the property, the duty may well have been expressed in different terms. That, however, is irrelevant to the present consideration. As the High Court has consistently stated since Rosenberg v Percival [2001] HCA 18; (2001) 205 CLR 434 such an inquiry of necessity has to be prospective based on the state of knowledge of the parties at the time. This highlights a further flaw in the reasoning of those parties seeking to establish negligence against the Lavis brothers, i.e. their reasoning was essentially retrospective and based on what actually happened. 201 Against that general statement of duty, the question of breach has to be considered in accordance with the process of reasoning in Wyong Shire Council v Shirt. As indicated, that test now has to be applied in conjunction with s 5B CLA. 202 When applying that test it is not at all clear that the risk of a significant flow of water across the Riverina Highway was something which the Lavis brothers knew or ought to have known. As the disagreement between the civil engineers and hydrologists made clear, the risk was certainly not obvious nor reasonably foreseeable. Since nothing like it had occurred during the time that the Lavis brothers owned the property, the likelihood of such an event occurring even if foreseeability were established, was low. In those circumstances I am not persuaded that there was any obligation on the part of the Lavis brothers to respond to a risk which was not reasonably foreseeable and which had a low probability of occurring. There was nothing in the way in which they were conducting farming activities on "Lyntods" which was unreasonable in the circumstances. 203 Finally, I am not persuaded that the "reasonable response" suggested would have been effective. The two responses suggested were to construct either a small dish drain at the top of the driveway, or a culvert beneath it so as to take water from the western side of the driveway to the east. Those solutions presupposed that the quantity of water flowing down the driveway would have been diverted by those measures and that the table drain to the east of the driveway on the northern side of the highway was able to cope with the additional quantity of water thus diverted. 204 There was no evidence as to the quantity of water flowing down the driveway, nor the extent to which such a culvert would be able, if at all, to cope with that water. The other difficulty is that the photographs, particularly those of Acting Inspector Nugent, made it clear that the table drain to the east of the driveway was full and partially overflowing onto the highway. The addition of a further substantial flow (assuming that could have been achieved by the proposed solution) would have inevitably increased the flow of water from that source across the road. There was no evidence on this issue nor as to how this proposed solution would have either prevented the accident or reduced the likelihood of its occurrence. The proposition was put in very general terms without any detailed analysis having taken place. 205 It should also be noted that there was no submission to the effect that the Lavis brothers should have undertaken any works on the public reserve outside the gates on the northern side of the highway. 206 It follows that I am not satisfied that the proposed solution would have either prevented or reduced the chance of the accident occurring. Even if breach of duty could be established, the claim in negligence would fail on causation grounds. Since this conclusion is based on factual findings, s 5D CLA would not alter the outcome.

Rickard & Ors v Allianz Australia Insurance Ltd & Ors

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