Telstra Corporation Ltd. v. Bisley [2005] NSWCA 128

Nelson v. John Lysaght (Australia) Ltd. (1975) 132 CLR 201 CASES CITED: Rickards v. Australian Telecommunications Commission [1983] 2 NSWLR 155

Telstra Corporation Limited - appeallant PARTIES: Richard Glen Bisley - respondent

Mr. G. Watson SC with Mr. N. Chen for appellant COUNSEL: Miss A. Katzmann SC with Mr. G. Rich for respondent

Henry Davis York, Sydney for appellant SOLICITORS: Merrick Spicer & Associates, Taree for respondent

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40343/04 DC 16/03

HANDLEY JA HODGSON JA BRYSON JA

Friday 22 April 2005 TELSTRA CORPORATION LIMITED V. BISLEY Judgment 1 HANDLEY JA: I agree with Hodgson JA. 2 HODGSON JA: On 13 February 2004, Phegan DCJ gave his decision in proceedings brought by the respondent (Mr. Bisley) against the appellant (Telstra), to the effect that there should be judgment for Mr. Bisley in the sum of $75,000.00 plus certain medical expenses. Telstra has brought an appeal from that decision. It appears that a document entitled Consent Orders was filed, in which the respondent consented to an extension of time in which to file the Notice of Appeal, and consented to leave to appeal being granted. I would not consider that the filing of such a document satisfactorily overcomes the need to obtain leave for such an appeal, but in my opinion the convenient course in this case is simply to proceed to deal with the appeal on its merits.

CIRCUMSTANCES 3 On 15 May 2000, Mr. Bisley was demolishing a fence at Wingham, working on a section of land between the fence line and Gloucester Road. The area was heavily grassed, and was used as a stock route. 4 Mr. Bisley was removing old wire from the fence and gradually moving backwards, when he fell into a pit which was 3 feet deep, 3 feet long and 18 inches wide, and which had been created there by Telstra. There was no cover over this pit, and the pit was, on findings of the primary judge which have not been challenged, hidden from ordinary view by grass. 5 In the Statement of Claim, Mr. Bisley alleged negligence in failing to cover the manhole, failing to provide any sign or warning of the existence of the manhole, and res ipsa loquitur. 6 Telstra led no evidence at the hearing.

DECISION OF PRIMARY JUDGE 7 Since the submissions on appeal depend partly on a textual analysis of what the primary judge said, it is convenient to set out verbatim the relevant part of the judgment. In this part of the judgment, the primary judge deals with a number of submissions made on behalf of Telstra by its Counsel at the hearing, Mr. Chen. It was also Mr Chen's submission that there was no evidence of what actually happened to the manhole cover and where it was at the time the plaintiff was injured. However, it is not for the plaintiff to adduce evidence on that particular matter. Had it been material, then this was, from an evidentiary point of view, a matter to be raised by the defendant. On the limited evidence available, I am entitled to infer that the cover was easily removed from its proper position, whatever its fate on this particular occasion and that was a matter of which the defendant should have been aware. Furthermore, I find that the exposed manhole without the cover constituted a risk of serious injury to a 'person who fell into it as the plaintiff did. As I have already found, the manhole in its exposed state was not readily visible in the long thick grass which had grown over it at the time and it had in those circumstances become a "hidden trap" in the sense in which that term is frequently used in a context such as that.

It was a further submission from Mr Chen that the plaintiff, given the condition of the ground which was, on the plaintiff's own evidence, uneven and therefore likely to contain holes which were not readily seen from a cursory observation, should have checked the area out more carefully before proceeding with the task which he was undertaking at the time he stepped into the manhole.

While that may very well be a valid observation, it is not in my view one which goes to the question of the defendant's liability, but rather goes to the possibility of some contributory negligence on the part of the plaintiff.

It was further submitted by Mr Chen that there was no reason for the defendant to anticipate that anyone would use the area where the plaintiff was injured. I find that proposition difficult to accept on the evidence in view of the fact that according to the plaintiff this was a stock route and also, as Mr Rich for the plaintiff observed, again based on the plaintiff's evidence, there were other facilities in the area such as the water meter for which the plaintiff had earlier been searching, which made it foreseeable that from time to time people would be on the area for one purpose or another. Presence of someone in the area therefore was reasonably foreseeable contrary to Mr Chen's submission in that regard.

Mr Chen further argued that the defendant had fulfilled any duty that might arise from the existence of the manhole by placing a cover over the hole and thus rendering it safe and that the defendant was not in those circumstances answerable for the subsequent intervention or interference by others over which he had had no control. It would have been entirely unrealistic to insist that the defendant should maintain constant vigilance of the manhole in order to ensure that the cover was not removed.

While I accept that last proposition this does not relieve the defendant of responsibility. In constructing the manhole in the way it was constructed and in using a manhole cover which was, on all of the evidence, relatively easily removed, there was a duty on the defendant to ensure that adequate warning was provided to anyone using the area, either by ensuring that the manhole remained visible, or if that was not practicable, to erect warning signs or warning or "location posts", of the kind which it did subsequently install at two corners of the manhole. The consequence of installing such posts as I noted earlier, was that, even if the area became overgrown, the top of the posts would remain visible and would provide an adequate indication of the existence of the manhole.

In this regard it was the plaintiff's evidence that he had encountered, in other locations, manholes similarly marked by posts. Although they were posts differently designed, they were essentially to the same effect. The defendant on its part had demonstrated by the subsequent action which it took, that such a precaution was both a possible, and again one is entitled to assume in the absence of any evidence to the contrary, not unduly or disproportionately costly means of eliminating the risk of serious injury of the kind which the plaintiff suffered.

In those circumstances I find, given the apparent ease with which the cover could be removed by some unknown person, that the open manhole was a foreseeable danger, especially disguised as it was by the long thick grass which had grown over it. It was a danger against which effective warning could have been provided at a relatively modest cost as demonstrated by the steps taken and depicted in photograph number 5. The defendant was in those circumstances negligent in failing to take such a precaution and is accordingly in breach of its duty to the plaintiff.

GROUNDS OF APPEAL 8 Telstra's grounds of appeal are as follows: 1. The trial Judge erred, in finding that the appellant was negligent in failing to consider: (a) the application of Civil Liability Act 2002; (b) whether, in all the circumstances, the appellant acted unreasonably. 2. The trial Judge erred in defining the duty of care owed by the appellant. 3. The trial Judge erred in deciding the case on an issue not pleaded nor relied upon at trial. 4. The trial Judge erred in concluding that discharge of the appellant's duty of care required it to warn the respondent, 5. The trial Judge erred in finding as a fact that the manhole cover was easily removed. 6. The trial Judge erred in finding that the respondent had proven causation.

SUBMISSIONS 9 Mr. Watson SC for Telstra submitted that the primary judge had erred in a number of respects. 10 First, he submitted, the primary judge did not consider the provisions of the Civil Liability Act 2002, especially ss.5B, 5E and Part 5, although these provisions were applicable. In any event, Mr. Watson submitted, the primary judge did not consider whether Telstra had acted unreasonably. Further, he submitted, the primary judge erred in saying that there was an onus on Telstra to lead evidence of what actually happened to the manhole cover: before Telstra had any evidential burden, there had to be some evidence sufficient for an inference to be drawn against Telstra (see Rickards v. Australian Telecommunications Commission [1983] 3 NSWLR 155 at 158). 11 Mr. Watson submitted that the primary judge erred in dealing with the question of warning: in saying that the duty was to ensure that an adequate warning was provided, he overstated the duty, and he also did not consider cost or inconvenience in relation to any need to give a warning. 12 Next, Mr. Watson submitted that the primary judge erred in finding that the pit cover was easily removed, and was removed by some unknown person; and in any event, Mr. Watson submitted, such a case would involve an allegation of deficiency in design, and no such case was pleaded. 13 Finally, Mr. Watson submitted that the primary judge erred in finding causation through lack of warning. Mr. Bisley had taken no steps to check the safety of the area, so an inference that a warning would have been effective was not justified, particularly where Mr. Bisley did not give evidence to that effect.

CIVIL LIABILITY ACT 14 Sections 5B and 5C of the Act are in Division 2 of Part 1A, entitled "Duty of Care" and are as follows: 5B General principles (1) A person is not negligent in failing to take precautions against a 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 a 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.

5C Other principles In proceedings relating to liability for negligence: (a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and (b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and (c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk. 15 Sections 5D and 5E are in Division 3 of Part 1A, entitled "Causation", and are as follows: 5D General principles (1) A determination that negligence caused particular harm comprises the following elements: (a) that the negligence was a necessary condition of the occurrence of the harm ( factual causation ), and (b) that it is appropriate for the scope of the negligent person's liability to extend to the harm so caused ( scope of liability ). (2) In determining in an exceptional case, in accordance with established principles, whether negligence that cannot be established as a necessary condition of the occurrence of harm should be accepted as establishing factual causation, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party. (3) If it is relevant to the determination of factual causation to determine what the person who suffered harm would have done if the negligent person had not been negligent: (a) the matter is to be determined subjectively in the light of all relevant circumstances, subject to paragraph (b), and (b) any statement made by the person after suffering the harm about what he or she would have done is inadmissible except to the extent (if any) that the statement is against his or her interest. (4) For the purpose of determining the scope of liability, the court is to consider (amongst other relevant things) whether or not and why responsibility for the harm should be imposed on the negligent party.

5E Onus of proof In determining liability for negligence, the plaintiff always bears the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation. 16 There was reference in the written submissions to ss.5G and 5H, but these sections were not relied on at the hearing of the appeal, in circumstances where it was clear that the pit could not be regarded as an obvious risk, within the meaning of these sections. 17 Part 5 of the Act deals with "Liability of Public and Other Authorities", and s.42, which has some relevance to this case, is in the following terms: 42 Principles concerning resources, responsibilities etc of public or other authorities 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.

DECISION 18 It appears that the primary judge assumed in Telstra's favour that a concrete cover had initially been placed over this pit, and had not been displaced by Telstra itself. It is not entirely clear why the primary judge made these assumptions in favour of Telstra, when it led no evidence to that effect, but no challenge is made on behalf of Mr. Bisley to those assumptions. The primary judge also accepted Telstra's submission that it would have been entirely unrealistic to require that Telstra should maintain constant vigilance of the manhole in order to ensure that the cover was not removed, and no complaint is made on behalf of Mr. Bisley about that finding. 19 The primary judge found that the pit without the cover was a hidden trap, and constituted a risk of serious injury to a person who fell into it, and these findings were plainly open to him. Furthermore, the primary judge found it was foreseeable that from time to time people would be on the area; and although the primary judge did not express this in terms of likelihood of the risk eventuating, it is plain from the tenor of his judgment that he accepted that there was a significant risk that persons present on the area, where this hidden trap existed, could fall into it. 20 In those circumstances, it was plainly open to the primary judge to conclude that Telstra had an obligation to exercise reasonable skill and care with a view to ensuring that the pit it created did not cause injury. In circumstances where "constant vigilance" was impractical, this might have been achieved by installing a robust cover that was difficult to move. It was plain from the evidence that, at the time of the accident, the cover was not over the hole, nor were fragments of it in the hole, nor was it obvious in a position immediately adjacent to the hole. In those circumstances, in my opinion the inference was open to the primary judge, in the absence of further evidence, that the cover had been removed. 21 When one has regard to the assumption favourable to Telstra that it had not been removed by Telstra, to the lack of attraction of such a cover to larceny, and to the circumstance that it did not appear to have been broken in place by vandals, it was in my opinion open to the primary judge to consider that the fact of its removal supported an inference that it was "easily removed", or at least that its removal was not so difficult as to make reasonable, in circumstances where there was no "constant vigilance", the lack of any warning of the presence of the pit. In so far as Telstra relied on the robustness and permanence of the cover to overcome any inference of negligence from its creation of the pit, it was open to Telstra to lead evidence of its robustness and permanence, which it did not do. In those circumstances, in my opinion the inference of easy removal could more readily be drawn by the primary judge. 22 Having drawn that inference, in my opinion it was open to the primary judge to reach the view that the exercise of reasonable skill and care by Telstra, in circumstances where the pit cover was readily removable, would have required the placing of warning signs. As submitted by Ms. Katzmann SC for Mr. Bisley, the evidence of similar markers on nearby pits, and the evidence that markers were subsequently put on this pit, coupled with the absence of evidence that the expense of doing so was unreasonable, could support the inference that the expense and inconvenience of installing such warnings was not such as to prevent it being a breach of Telstra's duty of care not to have installed such markers: cf. Nelson v. John Lysaght (Australia) Limited (1975) 132 CLR 201. 23 Turning to the particular submissions of Mr. Watson, in my opinion the matters raised by the various provisions of the Civil Liability Act relied on by Mr. Watson were taken into account by the primary judge. In terms of s.5B(1), the primary judge found the relevant risk was foreseeable, and not insignificant, and that a reasonable person in Telstra's position would have taken precautions which Telstra failed to take. In determining whether a reasonable person would have taken such precautions, the primary judge did take into account the probability that harm would occur if care were not taken, the likely seriousness of the harm and the burden of taking precautions to avoid the risk of harm. There was no explicit reference to the social utility of Telstra's activity, but there is nothing to suggest that the primary judge did not accept and act on the basis that Telstra's activity had substantial social utility. Similarly, in terms of s.5C(a), in finding that the taking of appropriate precautions was not unduly or disproportionately costly, there is nothing to suggest that the primary judge left out of account that similar precautions may need to be taken in relation to similar pits. The same general comment applies to s.42 of the Act. 24 In my opinion, the primary judge did in substance find that Telstra acted unreasonably. For the reasons given above, the primary judge was not in error to hold that there was an evidentiary onus on Telstra on the question of what happened to the pit cover. The primary judge's statement that there was a duty on Telstra "to ensure that adequate warning was provided" was not in my opinion an inaccurate statement as to the content of Telstra's duty, which plainly was a duty to exercise reasonable care; but rather, it was a statement of a conclusion as to what the exercise of reasonable care required in the circumstances of this particular case. In so far as it suggests an elevation of a duty of care into something like strict liability, it is no more than an infelicitous expression. 25 The primary judge did not decide in Mr. Bisley's favour on the basis of a deficiency in design. Rather, he found that, in circumstances where he inferred that Telstra had used a cover that was easily removable, Telstra's duty of care required the placing of some warning; and in my opinion, that view of the case was within the pleadings. 26 Finally, in my opinion the finding that, had such a warning been in place the accident would not have happened, was well open to the primary judge. The failure of Mr. Bisley to give evidence that, if such a warning sign had been in place, he would have avoided the pit, was of no significance because, as pointed out by Ms. Katzmann, that evidence that could not have been given, by reason of s.5D(3)(b) of the Civil Liability Act.

CONCLUSION 27 For those reasons, in my opinion the appeal should be dismissed with costs. 28 BRYSON JA: I agree with Hodgson JA.

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