State Government Insurance Commission v Stevens Bros Pty Ltd

High Court of Australia|1984-07-01|Before: Dawson JJ, Deane JJ, Legoe JJ

High Court of Australia Murphy, Wilson, Brennan, Deane and Dawson JJ. State Government Insurance Commission v Stevens Bros Pty Ltd [1984] HCA 32

This is an appeal from a decision of the Full Court of the Supreme Court of South Australia. The question is whether a third-party insurance policy in force pursuant to the provisions of the Motor Vehicles Act 1959 S.A., as amended ("the Act") obliges the appellant insurer to indemnify the respondents in respect of damages paid or payable by them to one Dawson for personal injury suffered by him on their premises when a mobile compressor to which the policy referred was being unloaded from a truck. The Full Court, by majority (White and Legoe JJ., Mitchell A.C.J. dissenting), answered that question in the affirmative. Their Honours held that, within the meaning of the policy set out in the Fourth Schedule to the Act, the bodily injury suffered by Dawson arose out of the use of the motor vehicle.

At first sight, it would appear to be a simple task to decide whether, in the circumstances we have described, Dawson's injuries arose out of the use of the compressor. However, earlier decisions of this Court illustrate the difficulty that can attend the application of these words of the policy to particular cases and the futility of striving to enunciate a general proposition the application of which will provide a ready solution to every case. In Government Insurance Office (N.S.W.) v. R. J. Green & Lloyd Pty. Ltd. [1] Barwick C.J. voiced the experience of successive judges when he said:

After consideration, I have come to think it better to endeavour to apply the statutory expression as it is to circumstances as they arise, bearing in mind, as my brother Menzies has pointed out in Fawcett v. B.H.P. By-Products Pty. Ltd. [2] , that in this field one should not be seeking subtleties but rather applying broad and practical conceptions. 1. (1966) 114 C.L.R. 437, at p. 444. 2. (1960) 104 C.L.R. 80, at p. 87.

Nevertheless these earlier cases establish some important principles which are not in dispute in the present case. First, the cover provided by the policy is not limited by reference to the distinguishing characteristics which bring the thing within the definition of "motor vehicle". Thus, where a mechanical loader is such a vehicle, the policy will cover injury arising from the use of the loader as a loader as well as from its use as a motor vehicle: Fawcett . Similarly with a mobile crane which at the time of injury is in use in a fixed position on a construction site: Commercial and General Insurance Co. Ltd. v. Government Insurance Office (N.S.W.) [3] .

Secondly, the cover is not confined to an event occurring while the vehicle is being used on public roads: Green & Lloyd [4] ; Commercial and General Insurance [5] . So, in the present case, it extends to an event occurring while the vehicle is being used in any part of the Commonwealth.

(1966) 114 C.L.R., at pp. 441-442. 2. (1973) 129 C.L.R., at p. 379.

Thirdly, the expression "arising out of" must be taken to require a less proximate relationship of the injury to the relevant use of the vehicle than is required to satisfy the words "caused by": Green & Lloyd [6] .

The wide scope of a policy in similar terms was emphasized by Barwick C.J. in Green & Lloyd [7] , when, in referring to the statute in question in that case, he said:

the Act is not limited to the use of a vehicle in or upon public thoroughfares or to its use in movements: and that in choosing the expression "the use of the motor vehicle" as the basis for the requirement of a policy of insurance and for the delimitation of the area of the indemnity to be obtained, the Act indicates an intention to cover a very wide field, a field more extensive than what might be called the traffic use of the motor vehicle. This passage was cited with approval by the Court in Commercial and General Insurance. 1. (1966) 114 C.L.R., at pp. 441-442.

Notwithstanding the breadth of the phrase which is suggested by these principles, the conception of use of a vehicle is not without limits related to the character of the vehicle: see Harvey Trinder (N.S.W.) Pty. Ltd. v. Government Insurance Office (N.S.W.) [8] and Government Insurance Office (N.S.W.) v. King [9] . In the latter case Dixon C.J. said [10] :

But there is in my opinion a distinction between using a car and putting it in order for some subsequent use. This broad distinction may sometimes be difficult to apply because so many things are incidental to or arise out of the present use of a motor vehicle which if isolated from the circumstance might look as if the use of the vehicle had been abandoned or suspended for the purpose of repairing or adjusting it. But it must always be kept in mind that all the incidents attending the actual use of the vehicle form part of its use. 1. (1966) 114 C.L.R. 449. 2. (1960) 104 C.L.R. 93. 3. (1960) 104 C.L.R., at p. 96.

It is argued for the appellant that, when Dawson was injured, the compressor was not in use either as a compressor or as a trailer. It was simply a physical thing - or, as the learned trial judge described it, "a piece of freight" - which was in the course of being unloaded from the truck. Alternatively, in terms of the analogy provided by King , the collection and return of the unit from the respondent's depot were steps preparatory to and subsequent to its use as a compressor.

We are unable to accept the submission. It abandons the application of "broad and practical conceptions" in favour of a narrow conception of use and the range of matters which can fairly be said to be incidental to use. The injury arose out of the movement of the compressor. It was being moved in a manner for which its design provided just as much as if it were being pulled by a vehicle to which its tow-bar was attached. The loop fitted to the top of the machine was there to enable it to be lifted rather than towed. The lifting of the machine by the loop was a use of the machine in accordance with its design and construction. Had the machine been returned to the depot by being either pulled or towed on its wheels and the accident occurred as it entered the respondent's yard we would think that there could be no doubt that the compressor was being used not merely as a vehicle but equally as a compressor. It was in use as a compressor because its conveyance to and from the site where it was actually to compress air was relevantly incidental to the performance of that function. The accident occurred during the terminal stage of the compressor's actual use, the stage wherein the machine was returned to its depot following its use. To describe that movement as no more than preparation for use or disposal after use is to take too narrow a view. The use of machinery is not confined to the performance of the primary function for which it was designed. An essential ancillary to that performance is that it be mobile in order that it can be conveyed from place to place as required, including its return after actual use to its depot. To facilitate the achievement of that ancillary purpose this machine was designed to be either towed or lifted. It was in the course of being lifted before the cycle of actual use as a compressor was completed when Dawson was injured. Given that the policy is capable of application in these circumstances, it is not suggested that his injury did not arise out of such use.

The question which arises in this appeal is whether injuries which were suffered by a workman named Dawson were caused by, or arose out of the use of, a motor vehicle.

That question arises because the respondents claim to be insured against liability for the injuries under a policy of insurance which was in force in respect of a mobile compressor pursuant to s. 99a of the Motor Vehicles Act 1959 S.A., as amended. Under the terms of the policy, which are set out in the Fourth Schedule to the Act, the appellant " insures the owner of the motor vehicle and any other person who at any time drives the vehicle, whether with or without the consent of the owner, in respect of all liability that may be incurred by the owner or other person in respect of the death of, or bodily injury to, any person caused by, or arising out of the use of, the vehicle in any part of the Commonwealth".

Dawson, who was awarded damages against the respondents for his injuries, was employed by an earthmoving firm. That firm hired the compressor from the first respondent, which was in the business of hiring out equipment of that kind. The compressor, which was described as a trailer-compressor, was mounted on two wheels on a single axle. At the front it had a "Y"-shaped tow-bar which ended in a fitting with chains for attachment to a towing vehicle. When not attached to a vehicle, the tow-bar could be held in a horizontal position by the use of a jack. On the top of the compressor was a lug in the shape of an inverted "U" which was made from heavy metal rod. This lug was obviously designed so that the compressor could be lifted by means of a hook with its weight evenly distributed about the hook.

When his employer had finished with the compressor, Dawson was instructed to return it to the first respondent's premises. This he did by placing it on the tray of a truck and taking it there. At those premises there was a gantry comprising two vertical members connected across the top by a metal girder from which was suspended a chain and block and tackle. Attached to the end of the chain by means of a free running wheel was a hook. The design of this piece of apparatus was such that the truck carrying the compressor could be positioned under it. The compressor could then be hooked up and, by means of the block and tackle, lifted to enable the truck to be driven away. The compressor could then be lowered to the ground.

This operation was in fact commenced with the compressor in question. Dawson placed the hook on the chain through the lug on the compressor. He then turned to remove a chain on the compressor which had been attached to the tail-gate of the truck to prevent the compressor from rolling while the truck was moving. The gantry was operated by the second respondent, an employee of the first respondent. He commenced to take the weight of the compressor on the chain whereupon the tow-bar sprang up and struck the plaintiff on the back, knocking him to the ground and injuring him.

"Motor vehicle" is defined in s. 5 of the Motor Vehicles Act to include a trailer and "trailer" is defined to include "a machine on wheels, which machine is not self-propelled and is constructed or adapted for being drawn by a motor vehicle ". The effect of Pt IV of the Motor Vehicles Act is to impose an obligation upon an applicant for registration of a motor vehicle, as defined, to effect a policy of insurance in respect of the motor vehicle which complies with the requirements of that Part. In practice, no separate policy of insurance is issued and the terms of the policy are to be found only in the Fourth Schedule. Those are the terms of the policy which covered the compressor in this case.

As I have said, the question which arises under those terms is whether Dawson's injuries were caused by, or arose out of the use of, the compressor. No argument was advanced that the injuries were caused by the compressor and it is unnecessary to consider whether such an argument could have been made out. It is necessary only to consider whether the injuries arose out of the use of the compressor. That requires the application of a wider test which, although it involves some causal relationship between the use of the vehicle and the injuries, does not require the direct or proximate relationship between the vehicle and the injuries which would be necessary to conclude that the injuries were caused by the vehicle: Government Insurance Office (N.S.W.) v. R. J. Green & Lloyd Pty. Ltd. [11] . But in order to apply the wider test there must be a use of the vehicle and it is here that room for difference emerges. Although the cases establish that a broad view should be taken of what amounts to use of a vehicle in the context of the relevant policy, they also establish that there are limits and that not all acts upon or in relation to a vehicle involve the use of that vehicle.

(1966) 114 C.L.R. 437, at pp. 442-443, 445, 447.

In Government Insurance Office (N.S.W.) v. King [12] Menzies J. gave some clear examples:

At one extreme, to drive a motor vehicle, including the operation of its mechanisms preparatory to starting or consequent upon stopping, is clearly enough to use the vehicle: at the other, to break a motor vehicle up to recover spare parts is not to use the motor vehicle. Moreover, to wash a car, to grease it, to fill its tank with petrol, to repair it by taking down its engine or by fitting a new panel, all fall outside my conception of using the motor vehicle. The wrecker who crushes his finger in removing the engine, the washer who contracts dermatitis from using a detergent or from scratching his hand on a bumper bar, the greaser who is crushed by the car when a power hoist supporting it fails, the attendant who smokes a cigarette and fills a tank with petrol and is injured by the consequent explosion, do not suffer bodily injury caused by or arising out of the use of the motor vehicle that is being wrecked or serviced. There is, I think, in general a clear distinction of which every car owner is keenly aware between using his motor car and working upon it. To make a car ready for use is not to use it. 1. (1960) 104 C.L.R. 93, at pp. 99-100.

To discern what may amount to the use of a motor vehicle becomes more difficult when the motor vehicle in question is not really a motor vehicle at all. Ordinarily speaking, a motor vehicle is a vehicle which is used to transport passengers or goods and is powered by a motor. A compressor is only brought within the conception of a motor vehicle by means of the definitions in the Act. It is a machine on wheels which is not self-propelled and is constructed for being drawn by a motor vehicle. This brings it within the definition of a trailer which in turn brings it within the definition of a motor vehicle. It is provided in s. 6(2) of the Act that for the purposes of the Act a person driving a motor vehicle to which a trailer is attached shall be deemed to drive the trailer as well as the motor vehicle.

Whilst the policy contained in the Fourth Schedule to the Act is not to be restricted by the language of the Act, the statutory provisions may assist in determining the extent of the indemnity provided by the policy: Government Insurance Office (N.S.W.) v. Green & Lloyd Pty. Ltd. [13] ; Fawcett v. B.H.P. By-Products Pty. Ltd. [14] . It is immediately apparent that the terms of the policy are identical with the requirements of the Act which are set out in s. 104. Section 102 makes it an offence to drive a motor vehicle (which, as defined, comprehends a compressor being towed) unless a policy of insurance complying with those requirements is in force in relation to that vehicle. It is clear, therefore, that the policy is apt to cover compressors of the type in this case and is required if the compressor is to be towed as a trailer on a road. In other words, it is the use of the compressor on the road by transporting it from place to place which is the occasion for the insurance.

(1966) 114 C.L.R., at p. 441. 2. (1960) 104 C.L.R. 80, at p. 86.

However, it is established that this does not mean that the policy is restricted in its cover to this use. Not only is the Act not determinative of the extent of that cover, but the Act itself requires a policy which extends beyond what has been called the "traffic use" of a motor vehicle: cf. Government Insurance Office (N.S.W.) v. R. J. Green & Lloyd Pty. Ltd. [15] . The policy required covers the use of a motor vehicle whether on a road or not and, furthermore, covers the use of a motor vehicle which is stationary and is capable of use while in that position as was the compressor in this case: Fawcett v. B.H.P. By-Products Pty. Ltd.; Commercial and General Insurance Co. Ltd. v. Government Insurance Office (N.S.W.) [16] . In the latter case the Court held that, for the purposes of an Act in similar terms, injuries caused by a mobile crane arose out of the use of a motor vehicle notwithstanding that at the time the crane was in a fixed position on a construction site. It was pointed out [17] that to acknowledge that use for the purposes of the Act extends beyond the use of the motor vehicle as an integer of motor traffic may sometimes result in a person obtaining an indemnity against a liability which seems remote from the purposes of an insurance that is requisite only for vehicles which go upon public roads, but the Act itself points in that direction because of the scope of the insurance which it requires for such vehicles.

(1966) 114 C.L.R., at pp. 441-442. 2. (1973) 129 C.L.R. 374. 3. (1973) 129 C.L.R., at p. 379.

The trial judge in this case concluded that " the compressor on the day in question and in relation to the accident in question, was merely a piece of freight. It was being handled but was not being used." This conclusion was rejected by a majority in the Full Court. Although the question is not without difficulty, it seems to me that the Full Court was correct and that the injuries sustained by Dawson did arise out of the use of the compressor. As was said of similar legislation by Menzies J. in Fawcett v. B.H.P. By-Products Pty. Ltd. [18] :

The Act is not, I think, concerned with fine distinctions but requires the issue of a policy that covers liability arising out of everything that falls fairly within the conception of the use of a motor vehicle. Of course, in this case what falls within the conception of the use of the motor vehicle - a compressor in the form of a trailer - is twofold. Perhaps the primary function of the compressor is to compress air for use with ancillary equipment, but for present purposes it is even clearer that the compressor is also being used when it is being conveyed as a trailer by means of the attachments which are provided for that purpose. It is being used in these circumstances for the very purpose for which it is designed and constructed no less than when it is being used to compress air. It would seem to follow that it is no less being used when it is being wheeled into position for the purpose of being attached to a vehicle in order that it might be towed. Similarly, it is being used within the meaning of the policy when it is being detached and placed in position after being towed, whether for use in the compression of air or to await further use. But the compressor in question is designed and constructed to be moved not only by being towed but also by being lifted by means of equipment which forms part of the compressor itself and for the purposes which I have mentioned it is hardly possible to draw any relevant distinction between its movement upon the ground on wheels and its movement vertically by means of the lug provided to enable it to be lifted. At any rate, to say that the compressor was being used in the one instance and not in the other would be to draw a distinction which ignores practicality in favour of subtlety: cf. Fawcett v. B.H.P. By-Products Pty. Ltd. [19] . 1. (1960) 104 C.L.R., at p. 87. 2. (1960) 104 C.L.R., at p. 87.

It may probably be conceded that the compressor was not in use whilst it was being conveyed upon the truck rather than upon its own wheels. It may be that if it had not been provided with the means by which it could be lifted from the truck so that it had to be lifted by means of a sling or other lifting equipment it could not be said that it was being used in the relevant sense whilst it was being lifted. It is unnecessary to decide that point. But when the lug, which formed part of the compressor, was being used to convey it, it was being used, in my view, no less than when it was being conveyed by the use of its tow-bar and wheels. It was not merely freight; part of its very equipment was being used for the purpose for which it was designed. Had the lug broken whilst the compressor was being lifted and injuries been inflicted as a consequence it would, I think, have been a necessary conclusion that the injuries arose out of the use of the compressor. It is a conclusion which follows no less, in my view, when, as in this case, arising out of the lifting of the compressor by the same means, injuries were caused by a different action on the part of the compressor. I think that the Full Court was correct in concluding that those injuries were injuries arising out of the use of the vehicle within the meaning of the policy of insurance under the Motor Vehicles Act. The first respondent was entitled to judgment against the appellant as a third party in the action. I would dismiss the appeal.

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